GSK Q2 Earnings Call Highlights

Key Points

• GSK reported solid second-quarter results, with sales up 5% to more than £8.4 billion, core operating profit up 7% and core EPS up 9%. Specialty Medicines and Vaccines led growth, while General Medicines declined 9%.
• GSK raised its 2026 sales and operating-profit expectations toward the upper half of its previous ranges, but expects EPS in the lower half because of interest costs from the £7.1 billion Nuvalent acquisition, which increased net debt to £22 billion.
• The new three-year Accelerate Growth program targets £1.9 billion in annual savings by 2029, with most savings reinvested in late-stage research and development. GSK plans to accelerate more than 20 Phase III starts in 2026, focused on oncology, respiratory disease and long-acting HIV treatments.

GSK NYSE: GSK reported second-quarter sales growth of 5% at constant exchange rates to more than £8.4 billion, supported by Specialty Medicines and Vaccines, while outlining a new cost-savings and investment program intended to accelerate its late-stage pipeline and support growth beyond 2031.

Luke told investors that core operating profit rose 7% and core earnings per share increased 9% during the quarter. Cash generated from operations totaled £4.3 billion, and the company declared a second-quarter dividend of £0.17 per share.

The company also updated its 2026 outlook following what it described as a strong first half. GSK now expects sales and core operating profit growth toward the upper half of its prior guidance ranges, while core EPS is expected in the lower half of the range, primarily due to interest costs associated with its Nuvalent acquisition.

Specialty medicines and vaccines drive quarterly growth

Nina said Specialty Medicines sales increased 14% in the second quarter, led by the continued launch of Nucala in chronic obstructive pulmonary disease, as well as HIV medicines Cabenuva and Dovato. Vaccines sales rose 8%, helped by international expansion of Arexvy, meningitis vaccines and Shingrix in Europe. Arexvy also benefited from a two-year supply tender in Australia.

Nucala new-to-brand prescriptions in the U.S. rose 69%, with COPD accounting for more than 70% of that growth, according to Nina. International Nucala sales rose 18%, driven in part by China, where the company said the product has gained a majority share of biologic-naive COPD patients.

Exdensur, GSK’s twice-yearly IL-5 treatment for severe asthma, received a U.S. J-code effective July 1. Nina said more than 50% of insured patients are now covered, with most new patients coming from the biologic-naive population.

Blenrep, the company’s antibody-drug conjugate for multiple myeloma, has been approved in 49 countries and recently received reimbursement in Germany and Spain. In the U.K., where it launched first, GSK said Blenrep has become the leading treatment in new second-line patient starts.

General Medicines sales declined 9%. Nina attributed the decline to reduced sales of older established products, a difficult U.S. pricing comparison for Trelegy and softer demand in the inhaled respiratory market. The company expects some of those pressures to improve in the second half.

Deborah said ViiV Healthcare’s HIV portfolio delivered 10% sales growth, with long-acting injectable products accounting for 80% of HIV growth. Cabenuva sales rose 33% and Apretude sales rose 39%. ViiV raised its 2026 HIV sales-growth outlook to high single digits from a prior mid- to high-single-digit range.

Nuvalent acquisition and financial outlook

GSK completed its acquisition of precision oncology company Nuvalent on July 15 at a net cost of £7.1 billion. The transaction increased net debt to £22 billion, or just under two times 2025 core EBITDA, according to Julie.

Nuvalent has already contributed an approved product to GSK’s portfolio. Jideytro was approved in the U.S. for previously treated ROS1-positive non-small cell lung cancer. GSK expects an FDA decision on Nuvalent’s ALK-positive lung cancer candidate, neladalkib, by Nov. 27.

Julie said operating-profit growth is expected to be significantly weighted toward the fourth quarter of 2026. Third-quarter results will be affected by Nuvalent consolidation costs, acquisition-related interest expense and a difficult tax comparison, she said.

Accelerate Growth program targets £1.9 billion in annual savings

GSK introduced its three-year Accelerate Growth program, which is designed to generate £1.9 billion in annual cost savings by 2029. About 90% of the savings are expected to be delivered by 2028.

The company expects to incur £2.4 billion in one-time costs, including £2.1 billion in cash costs. Savings are expected to come from redesigned processes, technology and artificial intelligence, streamlined support functions, procurement actions, reallocation from mature brands, and supply-chain automation and simplification.

The majority of the savings will be reinvested into research and development, particularly late-stage programs. A portion will support operating margins during the anticipated loss of exclusivity for dolutegravir between 2028 and 2030.

Julie said GSK now expects operating margins to be “stable to improving” through that period, compared with its previous outlook for stable margins. The company reiterated its goal of more than £40 billion in sales in 2031, with Specialty Medicines representing more than half of revenue. Management said any future business-development transactions would be incremental to that target.

Pipeline acceleration emphasizes oncology, respiratory and HIV

Tony said GSK has more than doubled the number of Phase II and Phase III assets with blockbuster potential since 2022 and has improved pipeline speed by 25%, placing it in the upper quartile of peers based on recent CMR benchmarks. The company now expects more than 20 Phase III starts in 2026, more than double its initial commitment of 10.

In oncology, Hesham Abdalla highlighted accelerated development of two antibody-drug conjugates: Mo-Rez in ovarian and endometrial cancers and Ris-Rez in small-cell lung cancer, prostate cancer and other solid tumors. GSK plans to initiate five Phase III studies for Mo-Rez and multiple Phase III studies for Ris-Rez.

Hesham said GSK’s partner Hansoh reported that a Phase III study of Ris-Rez met its overall-survival endpoint in second-line small-cell lung cancer in China. GSK plans to present the data before the end of 2026.

In respiratory medicine, Kaivan Khavandi said GSK is accelerating an ultra-long-acting TSLP program by nine months across asthma, nasal polyps and COPD. The company expects to begin six pivotal Phase III studies by year-end. GSK is also preparing an IL-33 program for COPD and non-cystic fibrosis bronchiectasis, including a planned cardiorespiratory outcomes study beginning next year.

Charlotte Allerton outlined ViiV’s long-acting HIV pipeline, including a three-times-yearly treatment regimen now in the Phase III QUATTRO study, which could support approval in 2028. ViiV also plans to start Phase III development of a twice-yearly treatment regimen in 2028, targeting approval by the end of the decade. A three-times-yearly HIV prevention candidate is expected to produce registrational data in the second half of 2026, with a potential approval targeted for 2027.

GSK also said it plans to relocate its Stevenage research operation to Cambridge, U.K., with the move expected in early 2029. Tony said the Cambridge site is intended to strengthen access to academic partnerships, patient-related data, biotechnology companies and artificial intelligence capabilities.

About GSK (NYSE:GSK)

GSK (GlaxoSmithKline plc) is a London-headquartered, multinational pharmaceutical and healthcare company formed through the 2000 merger of Glaxo Wellcome and SmithKline Beecham. The company is dual-listed and operates globally, developing, manufacturing and commercializing prescription medicines, vaccines and specialty treatments. Over its history GSK has evolved through portfolio reshaping and strategic transactions to focus on science-led pharmaceuticals and vaccines.

GSK's core activities include research and development of therapies and vaccines across a range of therapeutic areas, commercial manufacturing, and global marketing.

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