The British drugmaker beat second-quarter profit expectations and now expects to start 20 or more phase III trials in 2026
GSK unveiled a cost-reduction initiative on Tuesday with a target of £1.9 billion in annual savings by 2029, channeling those resources toward late-stage pipeline expansion while cushioning the business against an approaching patent cliff on one of its leading HIV treatments.
The program will cost £2.4 billion to execute, the company said. The bulk of the savings are earmarked for research and development reinvestment, while a portion will shore up profitability as dolutegravir faces generic competition between 2028 and 2030.
The announcement came alongside second-quarter results that exceeded analyst expectations. GSK reported turnover of £8.4 billion for the quarter, up 5% at constant currency, and core operating profit of £2.8 billion, up 7% at constant currency. Analysts had forecast turnover of £8.24 billion and core operating profit of £2.675 billion, according to Reuters.
GSK stock was up 4.2% on the news.
Specialty Medicines led the top-line performance, with sales of £3.8 billion, up 14%. HIV sales reached £2.1 billion, up 10%, while Vaccines sales came in at £2.3 billion, up 8%. General Medicines declined 9% to £2.3 billion.
GSK also said it now expects to start more than 20 phase III trials in 2026, up from a previous target of 10. The company identified seven assets for acceleration across 18 indications in oncology, respiratory, hepatology, and vaccines, the company said.
As part of a broader £400 million investment in its U.K. operations, GSK said it plans to open a new R&D center on the Cambridge Biomedical Campus in England.
Total operating profit fell 75% in the quarter, driven by a £1.3 billion impairment related to camlipixant, a drug the company said it will not advance further after phase III trial results. Core operating profit, which strips out such charges, rose 7%.
Chief Executive Officer Luke Miels said the cost program is designed to simplify the organization and reallocate capital. "Savings will primarily be reinvested, with some used to improve margins and profitability in the dolutegravir patent expiry period," Miels said in a statement.
GSK reaffirmed its full-year 2026 guidance, projecting turnover growth of 3% to 5% and core operating profit and core earnings-per-share growth of 7% to 9% each. The company said its longer-range ambition of surpassing £40 billion in annual revenue by 2031 remains intact.
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