GSK's blood cancer drug fails to secure US FDA advisers' support

GSK's U.S.-listed shares declined nearly 5% after a U.S. FDA independent advisory panel recommended against the re-launch of its blood cancer drug Blenrep for multiple myeloma. The panel's decision, driven by persistent concerns over eye-related side effects outweighing benefits, particularly for its proposed combination therapies, signals a significant setback for GSK's oncology pipeline, as the FDA typically follows its expert advisers' recommendations despite the drug's prior approval by the UK regulator.

Analysis

GSK faces a significant regulatory setback in the U.S. after an FDA advisory panel voted decisively against the re-launch of its multiple myeloma drug, Blenrep. The panel's recommendation, which prompted a nearly 5% decline in GSK's U.S.-listed shares, was rooted in the conclusion that the drug's benefits in proposed combination therapies do not outweigh its risks, specifically citing persistent concerns over ocular toxicity. This negative verdict, with votes of 5-3 and 7-1 against two different combination regimens, follows a prior withdrawal of Blenrep from the U.S. market in 2022 due to a failed study and echoes concerns previously raised by FDA staff reviewers. Panelists also highlighted methodological weaknesses in the trials, including a U.S. patient enrollment below 5%. While GSK's management remains confident and the drug combination was approved in the UK, the FDA typically follows its panel's advice, making a formal rejection in the upcoming week a high-probability event that jeopardizes a key asset in the company's oncology pipeline.

Key Decisions for Investors

• Given the high likelihood that the FDA will follow its panel's advice, investors should anticipate continued negative sentiment and potential further downside for GSK's stock leading up to the final decision next week.
• The failure to re-launch Blenrep in the U.S. would represent a material blow to GSK's oncology revenue projections, warranting a downward revision of valuation models that had factored in a successful return.
• Monitor the final FDA ruling as a key catalyst; while rejection is the base case, a surprise approval would likely cause a significant short-term rally, whereas confirmation will shift focus to GSK's broader pipeline and its strategy to compensate for this loss.