By Josh Nathan-Kazis
President-elect Donald Trump's choice of a radically untraditional director of the National Institutes of Health could bring a payday for companies that sell tools to life-sciences researchers.
Trump said late Tuesday that he would appoint Dr. Jay Bhattacharya, a medical doctor and economist known as a harsh critic of public-health agencies' response to the Covid-19 pandemic, to lead NIH. The selection is of a piece with the rest of Trump's choices to lead the government's health agencies, many of whom have been ardent critics of the organizations they will likely lead.
It won't change the outlook for the healthcare sector. The industry is already bracing for significant disruption following Trump's choice of Robert F. Kennedy Jr. to lead the Department of Health and Human Services.
But an outsider at NIH could change the policies that guide the distribution of the billions of dollars of scientific research grants the agency's dozens of institutes and centers distribute each year. "He doesn't have the traditional hard science background you generally see leading the NIH, which makes him unconventional," says Chris Meekins, a healthcare policy analyst at Raymond James.
Though Bhattacharya has a medical degree, he isn't a practicing physician, and his research is in economics. Prior NIH directors have often been physician-scientists with experience conducting their own scientific research.
"I think that Republicans have felt there needed to be reforms at the NIH, and I think an outsider is more likely to implement those reforms than a traditional insider," Meekins said.
One change Republicans have called for at NIH, Meekins said, has been limiting the number of grants NIH will give an individual scientist each year. The agency adopted such a limit in 2017, during the first Trump administration, but then quickly dropped the plan.
Limiting the number of grants per scientist would free up money to fund work by scientists not receiving grants. "Institutions that might not have many, or any, NIH grants may now be getting some, and as those people get funded they need to set up a lab," Meekins said.
That would mean they would need to buy equipment sold by lab tools companies like Illumina, 10x Genomics, and other firms.
Shares of 10x Genomics, whose CEO said at an investor event this month that spending funded by NIH grants accounts for between 20% and 25% of its revenue, were up 3.5% on Wednesday.
The S&P 500 Life Sciences Tools & Services industry index, which tracks the sector, was up 1.7%. The S&P 500 was 0.5% lower.
Weighing against the lab tools makers are Kennedy's comments that he will seek to fire a significant chunk of NIH staff. Any cut to NIH research spending, however, would be up to Congress, not to Kennedy.
Bhattacharya has done some writing on NIH in the past. In 2018, he was co-author of a National Bureau of Economic Research working paper that argued that the NIH had "become more conservative" in its approach to funding cutting-edge science.
"Ou results show that, while the NIH continues to provide support for work on new ideas in biomedicine, its support for the most novel ideas has waned in recent decades," Bhattacharya and his co-author wrote at the time.
It is his public stance against lockdowns during the Covid-19 pandemic, however, with which Bhattacharya is now most associated. In March 2020, in the earliest days of the outbreak, Bhattacharya co-wrote an op-ed in The Wall Street Journal arguing that estimates of the disease's lethality were far too high.
"This does not make Covid-19 a nonissue," he wrote at the time. "But a 20,000- or 40,000-death epidemic is a far less severe problem than one that kills two million."
Covid-19 has been the underlying or contributing cause of death for 1.2 million people in the U.S. alone, according to the Centers for Disease Control and Prevention. The World Health Organization estimates that the global death toll associated directly or indirectly with the pandemic in 2020 and 2021 was 14.9 million.
He was a prominent signatory of the October 2020 Great Barrington Declaration, which opposed lockdown policies before the approval of the Covid-19 vaccines.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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November 27, 2024 14:26 ET (19:26 GMT)
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