GSK PLC (LSE:GSK, NYSE:GSK) shares dropped 6% on Friday, erasing over £3 billion from its market value, after a panel of experts advising the US Food and Drug Administration voted against the company’s Blenrep drug combinations for advanced multiple myeloma.
The advisory committee concluded that the benefits of Blenrep, also known as belantamab mafodotin-blmf, did not outweigh the risks at the proposed dosage used in clinical trials.
The decision casts doubt over the drug’s approval ahead of a key FDA ruling due by 23 July.
Blenrep is already approved in the UK, Japan and other markets, based on results from two late-stage studies.
But a rejection in the US, the world’s largest pharmaceutical market, would be a major blow to GSK’s oncology ambitions.
The company said it remains confident in Blenrep’s benefit-risk profile and will continue engaging with regulators. Applications for approval are still under review in the EU and China.
Analysts at Shore Capital said the FDA panel’s rejection could put a significant chunk of future Blenrep sales at risk.
GSK had hoped the drug could eventually generate over £3 billion a year, mainly from use in patients who have already tried other treatments. Shore believed it could even bring in closer to £5 billion globally, with around half of that from the US.
The Shore analysts estimate the decision could leave up to £1 billion in annual sales now in doubt.
More broadly, they said Blenrep had been seen as one of the drugs that might help GSK reach its longer-term revenue goal of more than £40 billion by 2031.
Without it, closing that gap may be harder, particularly given that current market forecasts are several billion pounds short of that target.
The stock fell 87p to 1,326p.
"At these levels, we still remain buyers," said the Shore analysts. "But events like this ODAC only reinforce the ‘accident-prone’ perceptions which have persistently weighed on GSK’s share price and held back the earnings multiple."