The biotech industry is facing a major hurdle as widespread layoffs at the U.S. Food and Drug Administration (FDA) disrupt the drug development process. Biotech firms—particularly smaller ones—are reporting delays in clinical trial approvals, regulatory feedback, and key decisions required to move life-saving treatments forward. These roadblocks are hitting at a time when many of these companies are already struggling to stay afloat in a tough funding environment.
The core issue stems from the FDA’s reduced capacity to fulfill its regulatory duties. With fewer staff to review clinical trial changes, approve testing procedures, and provide timely guidance, companies are left waiting in limbo—some indefinitely. The result? Promising drugs sit idle, patient access is postponed, and biotech budgets are pushed to the brink.
A Delayed Green Light for Daré Bioscience
California-based Daré Bioscience had planned to begin a late-stage clinical trial this year for a treatment targeting female sexual arousal disorder. But regulatory delays from the FDA derailed those plans.
Sabrina Martucci Johnson, CEO of Daré, said the agency twice postponed its guidance on how the study should measure its outcomes. When the FDA finally responded, the feedback was vague and opened the door to more questions rather than answers. Now, the trial is on hold indefinitely.
“We understand the system is under pressure, but we can’t afford to stay stuck,” Johnson said. In the meantime, the company plans to sell the drug as a compounded treatment while it continues navigating the stalled regulatory process.
Mass Layoffs Shake Up the FDA
These delays can be traced back to a sweeping restructuring of the Department of Health and Human Services, spearheaded by Secretary Robert F. Kennedy Jr. The overhaul led to the dismissal of around 3,500 FDA employees, including top figures like Chief Medical Officer Dr. Hilary Marston, drug approval lead Dr. Peter Stein, and vaccine chief Dr. Peter Marks.
The FDA says it is doing its best to maintain essential operations. “We remain committed to ensuring critical programs continue,” said an FDA spokesperson. Still, the agency’s reduced headcount is making it increasingly difficult to meet the biotech industry’s demands.
Small Biotechs Carry the Heaviest Burden
While all drugmakers rely on the FDA, smaller biotech companies are especially vulnerable. Unlike pharmaceutical giants with multiple drugs on the market and deep financial reserves, many biotechs are focused on developing a single product. Their ability to secure funding, attract investors, and stay in business often depends on hitting regulatory milestones on time.
Marc Scheineson, a former associate FDA commissioner, said these delays are particularly damaging. “The worst outcome isn’t just rejection. It’s doing everything by the book—spending millions—only to be blindsided by a last-minute regulatory hurdle that could have been resolved early on.”
Cancer Study Stalls Amid Confusing FDA Feedback
One biotech developing an experimental cancer antibody recently hit a frustrating wall. The company requested permission for a second biopsy during trials to help track tumor response over time. European regulators approved the procedure, but the FDA rejected it, citing guidance that hadn’t yet been officially adopted.
When the company agreed to reclassify the biopsy as a secondary objective—per the FDA’s suggestion—it received another quick rejection, this time stating the procedure wouldn’t benefit the patient. The back-and-forth and rapid decision-making raised concerns that the review might have been handled by less experienced staff. Rather than appeal and risk further delays, the company opted to pause.
Silence from the FDA Stymies Genetic Disease Trial
Another biotech firm, developing a treatment for a rare respiratory genetic disease, has been waiting since March for the FDA to respond to a minor amendment in its clinical trial plan. The company asked to allow participants to take steroids to ease side effects—a routine request that normally gets approved in days. By mid-April, no reply had come.
With the U.S. timeline uncertain, the company is now shifting focus to its European operations. It still hopes to begin the U.S. trial, but timing depends on whether—and when—the FDA finally responds.
The Industry Speaks Out
The mounting frustration is drawing attention from across the industry. Dozens of biotech executives, patient advocates, and investors sent a letter to Senator Bill Cassidy, chair of the Senate committee overseeing health and education policy, urging a review of the FDA’s current capacity. The letter, organized by advocacy group No Patient Left Behind, calls for swift action to restore the agency’s ability to operate effectively.
John Maraganore, a former CEO of Alnylam Pharmaceuticals and now a biotech investor, said rebuilding the FDA won’t be easy. “This is a full reboot of the agency,” he said. “Finding the right people to step in and lead through this recovery will be critical.”
A System Once Built to Avoid Delays Is Now Creating Them
Ironically, many of the FDA’s modern systems were designed to prevent exactly these kinds of regulatory delays. Industry-paid fees support fast-track review programs that are supposed to guarantee timely communication. Performance metrics are reported to Congress. But all that depends on having enough trained staff in place—and right now, the FDA is running short.
“When you slash the workforce but keep the same deadlines, it becomes an impossible task,” Scheineson said. “And when that happens, patients suffer.”
For biotech firms, the stakes couldn’t be higher. Every delay threatens to drain resources, discourage investors, and delay critical treatments that patients are waiting for. Without urgent action, these compounding challenges could stall the innovation pipeline and undermine years of medical progress.
