In this week’s edition of InnovationRx, we look at the FDA’s new COVID-19 vaccine rules, Novartis’s acquisition strategy, Medtronic’s diabetes spinoff, Regeneron’s purchase of 23AndMe, and more. To get it in your inbox, subscribe here.
On Tuesday, the FDA announced that it’s adopting a new regulatory framework for COVID-19 vaccines. Under this guidance, published in the New England Journal of Medicine, recommendations for booster shots will be limited to those 65 and older and people with high risk for severe outcomes. Vaccine manufacturers that apply for approval beyond those groups will have to demonstrate clinical efficacy with new trials, rather than just relying on lab-based tests of effectiveness against new strains of the disease.
Dr. Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security, told Forbes that these new recommendations mirror those seen in other countries such as Canada and the U.K. They also follow what the CDC’s vaccine advisory committee recommended in 2021 before being overruled by then-CDC Director Rochelle Walensky, who opted for a more universal recommendation, he said. “There’s been a debate for some time about the value of lower-risk people getting annual shots,” he said. “Because the vaccines are primarily providing benefit against severe disease.”
Analysts at Jefferies called the new guidelines “in line with expectations” in a report issued Tuesday, and noted that the vaccine was already mostly being taken by those who fit in the FDA’s recommended groups. That would make its impact to the revenue of vaccine makers like Pfizer and Moderna negligible, they wrote. Shares of both Pfizer and Moderna rose sharply Tuesday, despite the overall markets’ decline.
Pfizer said in a statement stating that it was “evaluating the details shared and discussions with the FDA are ongoing.” The company added that they “continue to believe that broad vaccination programs are an essential tool for helping to prevent COVID-19-associated hospitalizations and severe disease, including death.” Moderna stated that it is “committed to working with the Agency to provide the data they need to ensure access for Americans.”
FDA Commissioner Dr. Marty Makary and Dr. Vinay Prasad, director of the Center for Biologics Evaluation and Research, wrote in the NEJM piece that 100 million to 200 million Americans, including people with cancer, heart disease, obesity and depression, would continue to have access to the vaccines under the new guidelines.
But the tighter recommendations could make it more difficult for people under age 65 who want a COVID-19 vaccine but aren’t considered high risk–including those who may live with someone who is immunocompromised–to get one. It’s also unclear how the new recommendations would impact insurance coverage for the shots. During the pandemic Makary and Prasad criticized vaccine mandates and other public health measures, while HHS Secretary Robert F. Kennedy Jr. has spent years campaigning against vaccines.
Johns Hopkins’ Adalja told Forbes that the new guidelines show the need for a more effective COVID vaccine. “We’re having a debate over the value of vaccinating low-risk people because vaccines in the current era don’t really provide more than transient protection against infection,” he said. “If there was one, then we wouldn’t be having this debate.”
Novartis’s U.S. President Victor Bulto On Tariffs, Acquisitions And China
Swiss pharmaceutical company Novartis (market cap $225 billion) is one of the largest drugmakers in the world with therapies in oncology, cardiology, immunology and neuroscience. Forbes recently caught up with Victor Bulto, president of Novartis U.S., to talk about tariffs, U.S. manufacturing, acquisitions and China.
Building up U.S. manufacturing: In April, Novartis announced it would invest $23 billion to build seven new facilities over the next five years in the U.S. as President Trump renewed his on-again, off-again threats of putting tariffs on imported pharmaceuticals. It disclosed then that two of the plants would be for radioligand therapy (a type of targeted radiation treatment for cancer) and would be located in Florida and Texas, while a biomedical research hub would be built in San Diego. While Bulto wouldn’t say where the other four plants might end up, he noted that the company is receiving “a lot of interest from states” that want to offer incentives to get those plants–and the jobs that come with them. “That is the best way to mitigate the impact of the tariffs long term,” he said.
Stockpiling medications: Shorter term, Novartis—like other drugmakers—has been stockpiling its medicines produced overseas. “We did increase that,” he said, adding, “We need to make sure cancer patients or multiple sclerosis patients have their medications.”
Searching for acquisitions: Regardless of what happens in Washington, expect Novartis—which signed 30 deals in 2024—to buy more companies this year. Bulto said so-called “bolt-on” acquisitions in the $1 billion to $5 billion range are “the sweet spot” for creating a future drug pipeline for the company. Already this year, the company announced an agreement to purchase Anthos Therapeutics, which has a clinical stage therapy to prevent stroke and embolism in patients with atrial fibrillation, for $925 million upfront with potential additional payouts of $2.2 billion; and Regulus Therapeutics, which is working on treatments for polycystic kidney disease, for roughly $1.7 billion. CEO Vas Narasimhan said earlier this year that the company was looking for next-generation obesity drug candidates, though the bar for doing such a deal was very high.
Finding drug candidates in China: One place the search for new drugs has brought the company is China. The trend of U.S. companies licensing drugs from that country has accelerated in recent years. “We have seen a spike of good quality companies emerging from China,” Bulto said. Last January, Novartis did a deal with Chinese firm Shanghai Argo for cardiovascular assets. Then in October, it struck another one with Chengdu Baiyu Pharmaceuticals for a small molecule to treat cancers. “As a global pharmaceutical company, we will go where the innovation is,” he said. “But we would not want to see the U.S. innovation system disrupted by policies that are not helpful because China is ready to take the baton and become the next epicenter of pharmaceutical development.”
BIOTECH AND PHARMA
China’s Jiangsu Hengrui Pharmaceuticals aims to raise up to $1.3 billion in a Hong Kong IPO. Hengrui, which is one of China’s biggest pharmaceutical companies and controlled by billionaire Sun Piaoyang (worth $11.1 billion), is already listed in Shanghai. If the Hong Kong listing goes through, Hengrui would join a wave of Chinese companies looking to tap that market. As U.S. companies and biotech investors have increasingly looked to license clinical-stage drugs from China, Hengrui’s candidates have been highly sought after.
DIGITAL HEALTH AND AI
Los Angeles-based digital health startup Akido Labs raised $60 million at an undisclosed valuation led by Oak HC/FT. The company plans to use the money to build out its main product, Scope AI, an AI-powered digital assistant that speaks to patients to understand their symptoms, then creates a preliminary report and possible diagnosis for review by a physician.
MEDTECH
Medical device maker Medtronic plans to spin off its diabetes business into a new publicly traded company. It announced its intent Wednesday morning during its fourth-quarter earnings call. The unit accounted for $2.8 billion in sales, out of Medtronic’s total $34 billion, for the 2025 fiscal year ended in April.
“Medtronic and the new diabetes company will benefit from this,” Medtronic CEO Geoff Martha told Forbes.
The diabetes unit has struggled following a 2021 product safety warning by the FDA regarding its MiniMed insulin pumps. “It had fallen behind and needed to get to a healthy place, and doing that as a standalone company is not a good way to go,” Martha said. “We invested in it and sheltered it. It is ready now—it is on the offense now.”
The spinoff will let Medtronic focus on its more profitable businesses, such as heart devices.
Medtronic is based in Ireland, but operates out of Minneapolis. The new company (currently unnamed) will be based in Northridge, California. Que Dellara, who has led the diabetes business since joining Medtronic three years ago, will become CEO of the new company. “We are a higher volume business,” she said. “Our [profit] margins are in line with our peers, but they are lower than Medtronic’s. This allows us to focus and it allows us to move faster.”
In Wednesday morning trading following the announcement, Medtronic shares fell 2% to below $85.
Plus: Regeneron Pharmaceuticals will purchase 23andMe for $256 million, pending approval of the bankruptcy court. It intends to use 23andMe’s genomic data for drug discovery.
PUBLIC HEALTH AND HOSPITALS
What happens to elderly people living in nursing homes when those facilities go bust? A new working paper by researchers at Harvard, UCLA and Stanford found that residents of bankrupt long-term care facilities are more likely to be hospitalized within 30 days of being admitted. They’re also more likely to be physically constrained and to suffer from bedsores due to less experienced nurses and staff.
Plus: A study published in The Lancet found that long-term exposure to air pollution is tied to menstrual cycle irregularities—a possible sign of hormone disruption.
WHAT WE’RE READING
A baby boy with a rare genetic disorder received a personalized gene-editing treatment that corrected the defective gene. The technique, which was funded by the National Institutes of Health, could help others with rare genetic diseases.
A widely available drug for urinary tract infections sold over the counter, has never been approved by the FDA and has potential cancer risks, according to a Bloomberg investigation.
The U.S. charged Harvard scientist Ksenia Petrova, a native of Russia, with smuggling after failing to declare that she was carrying frog embryos used in her research on re-entering the U.S. The Trump Administration has moved to deport Petrova, who has lived and worked in the U.S. legally and has expressed fear of being arrested in Russia for her previous political protests.
An Endpoints investigation of major drug compounder Empower, whose business exploded with the popularity of GLP-1 weight loss drugs, found that it used poor-quality ingredients, skirted regulations and pushed out or sued employees who raised concerns.
The CEO of Pain MD faced 20 years prison time for giving hundreds of thousands of questionable injections to patients as part of a decade-long scheme to defraud Medicare and other insurers. He got just 18 months.
The CEO of Novo Nordisk, maker of Ozempic, was pushed out after eight years leading the company. The Danish drugmaker has lost ground in the weight-loss market and its stock price has fallen sharply.
A little-known sports medicine doctor who’s skeptical of COVID vaccines is now the top advisor to the FDA’s leader.
The Lilly endowment’s assets surged to $80 billion–topping those of the Gates Foundation–on the popularity of the drugmaker’s weight-loss injections.
Former President Joe Biden’s diagnosis of late-stage prostate cancer has fueled conspiracy theories that he covered up his health issues during his presidency—but doctors say his diagnosis timeline is plausible.