(Reuters) – The U.S. Food and Drug Administration neurosciences head Billy Dunn will retire from his role effective immediately, the health regulator told Reuters on Tuesday.
Wall Street analysts said Dunn’s departure could impact the regulator’s stance on neurological drug decisions in the near term, sending down shares of Reata Pharmaceuticals Inc 30% on Monday when media reports on the exit surfaced.
Texas-based Reata is expecting FDA’s decision by Tuesday on its drug to treat a rare neuromuscular disorder called Friedreich’s ataxia.
The departure of Dunn, 53, was announced in an internal message to the agency’s employees on Monday. Newly appointed deputy director Teresa Buracchio will also serve in Dunn’s role on an interim basis at the Office of Neuroscience, the agency told Reuters.
Jefferies analyst Maury Raycroft said in a research note that while Dunn’s departure may have already been in the works, his immediate exit ahead of the agency’s decision on the Reata drug raised suspicion about the timing.
The FDA declined to comment on the speculation, which hit the stocks of some neurological drugmakers on Monday – Biogen had fallen marginally and Amylyx Pharmaceuticals declined 2.5% in the previous session.
Shares of Reata fell nearly 6% on Tuesday before reversing losses.
Dunn was integral in the FDA’s controversial decision to approve Biogen Inc and Eisai Co’s Alzheimer’s drug Aduhelm last year despite a lack of evidence that it worked at slowing the effects of the disease.
He also backed the approval of Amylyx Pharmaceuticals Inc’s Relyvrio last year, telling a panel of outside advisers that the amyotrophic lateral sclerosis drug could be pulled from the market if it failed in a larger trial underway.
(Reporting by Sriparna Roy in Bengaluru; editing by Caroline Humer and Shinjini Ganguli)