Impact of NIH job cuts "better than feared" for life sciences firms, Leerink says

The job cuts at the National Institutes of Health is "better than feared" signaling a "less bad" year compared to prior expectations for tools and diagnostics firms, brokerage Leerink Partners says

The U.S. Department of Health and Human Services will cut about 10,000 full-time jobs and close half of its regional offices, and the NIH will see a reduction of 1,200 employees across its 27 institutes and centers

"Anything less than feared is a positive for the NIH and US academic spending sentiment, which remains at an all-time low," Leerink analysts say

The brokerage previously said it sees the worst sales impact for life sciences technology firms 10x Genomics TXG.O and Quanterix QTRX.O in Q1 on expected cost cuts at the NIH

"The proposed 1,200 cuts is significantly below the 3,500-5,000 previously reported and should reduce the burden of working through the grant backlog created by a temporary pause in advisory council meetings"- Leerink

However, the brokerage added that while the FY25 outlook is looking modestly improved, FY26 remains uncertain for life sciences technology firms