U.S. drug reviewers questioned whether a proposed leukemia drug from GlaxoSmithKline PLC and Genmab provides enough benefit to warrant approval, documents released on Wednesday said.

Shares of Danish biotech company Genmab fell 17.5 percent in Copenhagen, while shares of much larger Glaxo gained 0.9 percent on the New York Stock Exchange.

Food and Drug Administration staff said the magnitude of anti-cancer activity from the drug, Arzerra, was "difficult to quantify" in tests of patients with chronic lymphocytic leukemia, a common type of blood cancer in adults.

"The major issue regarding this application is whether the effect sizes ... are reasonably likely to predict clinical benefit," FDA staff said in a memo prepared for an FDA advisory panel that meets Friday.

The FDA will ask the panel for input on the companies' data. The agency usually follows panel recommendations when deciding whether to approve a drug, but does not have to.

Analysts believe annual sales of Arzerra could eventually top $2 billion, although the drug is unlikely to reach its full potential until the middle of the next decade. The makers are studying larger populations beyond CLL.

Initially, the companies are seeking approval for CLL patients who have failed two other treatments — fludarabine and alemtuzumab — and others who have failed fludarabine and for whom alemtuzumab, sold by Genzyme as Campath, was inappropriate because of their bulky tumors.

FDA staff said Glaxo would need to conduct another study to support approval for the latter group.

Sydbank trader Ole Jensen said the FDA staff comments were "a shock to the market" and were causing uncertainty about the drug among Genmab investors.

"It's very natural that the shares fall this much because this is Genmab's big product," Jensen said.

Nordea analyst Lars Hatholt said the companies may need to do another study but that "does not necessarily mean a delay of the product being launched into the market."

"Uncertainty about the outcome of this has increased, which the share price reflects, but this (FDA) document does not mean the project has been buried," Hatholt said.

Jeffries International analyst Peter Welford said in a research note the share drop was "overdone" and he felt the drug would ultimately be approved for CLL. He reiterated a "buy" recommendation on Genmab.

Glaxo, in a summary prepared for the panel, said Arzerra offered better safety and effectiveness for CLL patients who have failed alternatives and the drug should be approved.

A clinical trial showed a 58 percent response rate to Arzerra in patients who failed the two prior chemotherapy regimens, a higher level than the normal 25 percent level, GlaxoSmithKline spokeswoman Lisa Behrens said.

But FDA reviewers questioned how the responses were measured. An agency clinical reviewer estimated the response rate to Arzerra at about 41 percent, the staff documents said.

Infections, including fatal ones, were seen frequently in the study but it was not possible to determine how much infection risk was due to the drug, FDA staff said. Heavily treated CLL patients normally have high infection rates.

Genmab spokeswoman Helle Husted said the company had no comment ahead of the meeting.

London-based Glaxo bought global rights to Arzerra in a December 2006 deal worth up to $2.1 billion, a record sum for a biotech product agreement at the time.