The National Institute for Health and Clinical Excellence rejected ipilimumab (Yervoy) for patients who have already received chemotherapy.
The guidance, which is subject to consultation, suggests problems with the clinical trial data submitted by the company and side effects as reasons for rejection.
It also points to the cost as being around £80,000 per patient.
Manufacturer Bristol-Myers Squibb expressed “disappointment” at the decision, adding that Yervoy is the first treatment licensed for advanced malignant melanoma in 30 years.
In a Phase III clinical trial of people with melanoma that had spread who had received prior therapy, 46 per cent of patients (63 out of 137) were still alive at one year if they were on the drug, compared to 25 per cent (34 out of 136) in another group given a vaccine called gp100.
Dr Pippa Corrie, of Cambridge University Hospitals NHS trust, called the decision disappointing.