GSK's Oncology Gambit: Navigating Blenrep's Setback and the Road Ahead

The recent FDA advisory panel vote against the approval of GSK's Blenrep (belantamab mafodotin) for relapsed/refractory multiple myeloma has cast a long shadow over the company's oncology ambitions. The decision, driven by concerns over severe ocular toxicity and suboptimal dosing regimens, has not only dented investor confidence but also raised urgent questions about GSK's ability to navigate the increasingly complex regulatory landscape for oncology therapies. Yet, beneath the immediate turbulence lies a broader story of resilience, diversification, and strategic recalibration.

The FDA's Calculus: Risk, Tolerability, and the Blenrep Dilemma

The FDA's Oncologic Drugs Advisory Committee (ODAC) delivered a verdict steeped in caution. While the DREAMM-7 and DREAMM-8 trials demonstrated statistically significant improvements in progression-free survival (PFS) for Blenrep-based combinations, the drug's profile was marred by unacceptably high rates of keratopathy and visual acuity changes. In DREAMM-7, 92% of patients experienced ocular toxicity, with 77% classified as severe or life-threatening. Similar patterns emerged in DREAMM-8. The panel's 5–3 vote against the bortezomib/dexamethasone combination and 7–1 rejection of the pomalidomide/dexamethasone regimen underscored the FDA's insistence on a more favorable risk-benefit ratio—a standard that Blenrep's current dosing fails to meet.

Critically, the agency highlighted the underrepresentation of U.S. patients in the trials and the practical challenges of managing Blenrep's side effects in community settings. These concerns were not merely academic; they reflected a broader regulatory shift toward prioritizing real-world applicability and patient safety, particularly in therapies targeting elderly or frail populations.

Market Reaction: A Sharp Downturn, but Not a Death Knell

GSK's stock price fell by approximately 5% in the immediate aftermath of the ODAC decision, closing at £1,402.5 on July 15, 2025. The decline, though significant, was not as severe as the 10–15% drops seen during past regulatory setbacks, suggesting that investors had already priced in some level of risk. The market's measured response reflects a recognition that GSK's oncology portfolio is not solely dependent on Blenrep.

However, the stock's trajectory will hinge on the FDA's final decision by the July 23 PDUFA date. If the agency follows the ODAC's recommendation, GSK will face a revenue shortfall, as Blenrep was projected to generate over £3 billion annually in the U.S. market. Yet, even in this scenario, the company's diversified pipeline and ongoing trials could cushion the blow.

Strategic Resilience: Diversification and the Path Forward

GSK's oncology pipeline is a testament to its long-term vision. Beyond Blenrep, the company is advancing a range of therapies across multiple indications, including dostarlimab (an anti-PD-1 antibody) for endometrial and gastrointestinal cancers, niraparib (a PARP inhibitor) for ovarian and glioblastoma, and belantamab mafodotin in earlier lines of treatment for multiple myeloma. The DREAMM-7 and DREAMM-8 trials, despite their toxicity concerns, have already provided valuable insights into optimizing dosing intervals and combinations—data that could inform future regulatory submissions.

Moreover, GSK's strategic collaborations and in-licensing initiatives, such as its $1.7 billion ADC partnership with Hansoh Pharma and the acquisition of IDRx's gastrointestinal stromal tumor candidate, signal a commitment to innovation. These moves are not merely reactive; they reflect a calculated effort to expand into high-potential areas while mitigating reliance on any single asset.

The company's R&D focus on immunotherapies, genomics, and targeted therapies also positions it to capitalize on emerging trends in precision oncology. For instance, dostarlimab's Phase III trials in endometrial and rectal cancers, and the exploration of novel combinations like belrestotug (anti-TIGIT) and nelistotug (anti-CD96), highlight GSK's ambition to redefine treatment paradigms.

A Rebound or a Reassessment?

The path forward for GSK—and its investors—depends on three key factors:
1. Regulatory Outcomes: If the FDA approves Blenrep with revised dosing guidelines, the stock could see a rebound. Even a conditional approval would validate the drug's efficacy and open the door for future iterations.
2. Pipeline Momentum: Positive data from ongoing trials, particularly in earlier-line multiple myeloma and endometrial cancer, could offset Blenrep's limitations. The success of dostarlimab and niraparib in pivotal trials would be critical.
3. Strategic Execution: GSK's ability to integrate in-licensed assets and maintain its R&D pipeline will determine its long-term competitiveness. The company's recent 98% year-on-year growth in oncology revenue (reaching £1.4 billion in Q4 2024) suggests that it has the operational heft to absorb short-term setbacks.

Investment Advice: Balancing Caution and Opportunity

For investors, the Blenrep setback is a reminder of the inherent risks in oncology R&D, where regulatory hurdles and safety concerns can derail even the most promising candidates. However, GSK's diversified pipeline and strategic agility offer a compelling counterbalance. The stock's current valuation, trading at a discount to its 52-week high, presents an opportunity for those willing to bet on the company's long-term prospects.

That said, prudence is warranted. The FDA's final decision and the performance of GSK's other trials will be pivotal. A short-term rebound is plausible if the agency approves Blenrep with modified dosing, but a deeper correction is possible if the decision is unfavorable and the pipeline fails to deliver. Investors should also monitor the competitive landscape, particularly in the antibody-drug conjugate (ADC) space, where rivals like Takeda and BMS are advancing their own candidates.

In the end, GSK's story is not one of decline but of recalibration. The Blenrep episode is a test of its resilience—a challenge it is likely to meet with a combination of scientific ingenuity and strategic foresight. For those with a long-term horizon, the company's oncology gambit remains worth the gamble.