Analysts at William Blair expect drug developers will continue to perform “at least some animal testing” on their investigational products. Though the process to phase out animal testing will begin “immediately,” no specific timetable was given.
The FDA is phasing out its animal testing requirements for monoclonal antibodies and other therapies, replacing them with “more effective, human-relevant methods,” the agency announced Thursday.
This push is not new, William Blair analysts pointed out in a Thursday note to investors. In September 2022, for instance, Congress filed the FDA Modernization Act 2.0, which proposed a broader category of studies, dubbed “nonclinical tests,” which include animal testing but could also mean other biology-based approaches such as cell assays, bioprinted systems or computer models.
“That said, while the FDA Modernization Act 2.0 allowed for non-animal testing, the bill did not state any formal plans to refine, reduce, or completely replace animal testing over time,” William Blair added. Despite the new guidance—which the analysts anticipate the FDA to roll out “gradually over time”—the analysts expect drugmakers “will still want to do at least some animal testing.”
Meanwhile, Leerink analysts said “FDA’s announcement to phase out animal testing requirements is more public relations than a change in policy, in our view,” adding, “we expect minimal near-term impact on pharmaceutical preclinical testing.”
In its press announcement on Thursday, the FDA particularly pointed to “AI-based computational models of toxicity,” as an alternative that can be used in place of animal testing. “Software models could simulate how a monoclonal antibody distributes through the human body and reliably predict side effects based on this distribution as well as the drug’s molecular composition,” the regulator wrote.
Drug sponsors could also use what the FDA calls “human-based lab models,” including organ-on-a-chip systems, organoids and other models that can mimic human organs. The FDA will also use existing and real-world safety and efficacy data, including those from other countries, to better assess a drug.
The regulator did not give a detailed timeline for the elimination of its animal study requirements, but it did note that implementation of these new policies will begin “immediately.”
“By leveraging AI-based computational modeling, human organ model-based lab testing, and real-world human data, we can get safer treatments to patients faster and more reliably, while also reducing R&D costs and drug prices,” FDA Commissioner Marty Makary said in a prepared statement. “It is a win-win for public health and ethics.”
The FDA’s announcement triggered substantial stock movement across the contract research space. Charles River Laboratories, which provides animals for scientific testing and is already facing a major cash crunch, saw its shares tumble nearly 30% on Thursday, according to William Blair. Meanwhile, Nvidia-backed Recursion Pharmaceuticals, which is heavily invested in the AI-drug discovery space, surged almost 19% in after-hours trading, jumping to $5.36 from $4.51 at market close.
