Shares in GSK PLC (LSE:GSK, NYSE:GSK) fell 6% on Thursday, wiping more than £3bn from its market value, after a US advisory committee delivered a serious blow to the drugmaker’s oncology ambitions.
The Food and Drug Administration’s (FDA) Oncology Drugs Advisory Committee (ODAC) voted against approving GSK’s multiple myeloma drug Blenrep in two separate phase III trials.
The panel voted 5 to 3 against approval for the DREAMM-7 regimen and 7 to 1 against the DREAMM-8 combination.
JPMorgan said in a note to clients that it now sees non-approval of both regimens as the likely outcome.
The bank expects the FDA to issue a complete response letter, effectively a rejection, within the next 30 days. It also expects GSK’s previous guidance for peak Blenrep sales of more than £3bn to be revised down.
"We see a very high likelihood the D8 regimen isn’t approved, and a high likelihood the D7 regimen is also not approved," said JPMorgan.
It had placed GSK on a negative catalyst watch ahead of the meeting, citing trial design issues and cautious comments from the regulator.
The FDA panel raised concerns about the lack of US patient enrolment in the two studies, as well as the choice of control arms.
JPM noted that these were flagged by the FDA during the review and could now weigh heavily in the agency’s final decision.
UBS echoed the negative tone, describing the ODAC vote as a “major setback”.
It noted that Blenrep was seen as a key growth driver between 2025 and 2031, with the US market accounting for roughly three-quarters of its modelled $2bn in potential sales.
Panel members who voted against approval acknowledged the drug’s activity but said GSK had not sufficiently explored lower doses that might have reduced side effects.
UBS said this “missed opportunity” to optimise dosing contributed to the negative outcome, particularly given concerns over ocular toxicity.
The vote on DREAMM-8 was especially unfavourable. UBS pointed to the lack of overall survival data and the use of a comparator arm (pomalidomide, bortezomib and dexamethasone) that is not widely used in the US.
"More voted negative on DREAMM-8 due to lack of OS and comparator regimen," the bank wrote.
Both banks now see US approval as unlikely, a major blow given Blenrep’s importance in offsetting expected pressure from the HIV franchise as patents expire.
While GSK had previously guided for global peak sales above £3 billion, JPMorgan now expects this to fall to a smaller contribution from markets where the drug is already approved, such as the UK and Japan.
Consensus currently assumes £1.5 billion of Blenrep revenue in 2031, equivalent to 4.4% of GSK’s top line, but, as JPMorgan pointed out, likely a far larger share of profit given the drug’s high margins.
GSK is due to report second-quarter results on 30 July. While the FDA decision may not arrive before then, JPMorgan expects revised guidance to come in the third-quarter update later this year.
The stock fell 87p to 1,326p.