British pharmaceutical giant GSK has suffered a sharp drop in its share price after a U.S. Food and Drug Administration (FDA) advisory committee recommended against the approval of its blood cancer treatment, Blenrep. The setback dealt a blow to the company’s ambitions to strengthen its oncology portfolio and sparked investor concerns about its long-term growth strategy.
GSK’s shares plunged by more than 6% on Friday, marking one of the steepest declines on London’s blue-chip FTSE 100 index. At 0807 GMT, the stock was down as much as 7%, trading at 1,315 pence, while the broader FTSE 100 index edged up by 0.2%.
The FDA panel’s negative recommendation follows the drug’s earlier withdrawal from the U.S. market in 2022, after it failed to meet endpoints in a pivotal late-stage trial. GSK had reapplied for approval based on data from two additional late-stage studies, which suggested that combination therapies involving Blenrep could reduce the risk of death and delay disease progression.
However, analysts at major investment banks including JPMorgan, Berenberg, and Barclays believe the FDA is unlikely to diverge from the panel’s stance, although the regulator is not legally bound to follow its advisory committee’s recommendations. A formal decision from the FDA is expected next week.
The advisory panel raised concerns about the drug’s safety profile, specifically citing side effects such as blurred vision, light sensitivity (photophobia), and dry eyes. The committee also questioned the dosing regimen and highlighted a lack of U.S.-based patient representation in the clinical trials.
The setback is significant for GSK, which is relying on new drug launches to compensate for anticipated revenue declines from its leading vaccines and HIV treatments, some of which face patent expirations starting in 2028. The company has previously forecast peak annual sales of over £3 billion for Blenrep and set a long-term target of surpassing £40 billion ($53.7 billion) in total annual revenue by 2031.
Analysts now expect GSK to revise its sales expectations for Blenrep and potentially adjust its 2031 revenue target, given that the U.S. was projected to be the drug’s primary market.
Despite the setback, GSK has expressed confidence in Blenrep’s overall benefit-risk profile and indicated its commitment to working closely with the FDA during the ongoing review process.
The pharmaceutical firm is scheduled to release its second-quarter earnings report on July 30, which will likely provide further insights into how it plans to navigate this latest regulatory hurdle.
