GSK Stock Drops 6% After FDA Panel Rejects Blood Cancer Drug

GlaxoSmithKline's (GSK) stock price experienced a significant decline following the potential rejection of its blood cancer drug, Belantamab Mafodotin, by the U.S. Food and Drug Administration (FDA). The FDA's advisory committee voted against the approval of the drug due to early concerns about eye-related side effects. This decision comes as a setback for GSK, which had been attempting to revive the drug after it was pulled from the U.S. market in 2022 due to a failed late-stage study. GSK had resubmitted its application for approval based on two late-stage trials that showed the drug, when used in combination with other treatments, could improve overall survival rates for patients.

The FDA's advisory committee's vote is a blow to GSK as the company focuses on expanding its research and development pipeline to offset declining sales of its top drugs and vaccines. The company's stock price fell by more than 6% following the news, making it the worst-performing stock in the FTSE 100 index, which rose by 0.2% on the day. The FDA is set to make a final decision on the drug next week, with analysts from Berenberg Bank and JPMorgan predicting that the regulatory body is unlikely to approve it. While the FDA typically follows the recommendations of its advisory committees, it is not obligated to do so.

In a statement released on Thursday, GSK expressed confidence in the benefit-risk profile of Belantamab Mafodotin and stated that it would continue to work closely with the FDA to complete its review of the drug. The company had previously projected that the peak annual sales of Belantamab Mafodotin could exceed 3 billion pounds (approximately 4 billion dollars). Currently, the therapy is under review in more than 10 countries. Despite the recent decline, GSK's stock price has fallen by approximately 2% year-to-date.