- Price
- $49.34
- Fair value
- $58.00
- Discount
- 14.9%
- Uncertainty
- Medium
- LSEG rating
- 2.18
- Moat
- Wide
- Next earnings
- 2026-10-28
- Next earnings is estimate
- Yes
- Company name
- GSK
- Sector
- Pharmaceuticals
- About
- GSK is a UK pharmaceutical company that develops, makes and sells medicines and vaccines. It reports three product groups. Specialty Medicines, about 45% of sales in Q2 2026, includes HIV medicines from its ViiV Healthcare unit, respiratory and immunology medicines, and cancer medicines. Vaccines, about 27% of sales, includes Shingrix for shingles, meningitis vaccines and Arexvy for RSV. General Medicines, about 27% of sales, includes older inhaled medicines such as Trelegy, whose sales fall. Sales were £8.4 billion in Q2 2026. GSK earns most of its profit from patented medicines, so it must replace medicines that lose patent protection with new ones from its research or from acquisitions. Its main HIV medicine, dolutegravir, loses exclusivity from 2028 to 2030.
- Thesis
- GSK trades at a discount because the market doubts that its new medicines can replace the HIV sales it will lose when dolutegravir patents expire from 2028 to 2030. General Medicines sales also fall, by 9% in Q2 2026, and a late-stage failure in July 2026 added to the doubt: GSK stopped camlipixant for chronic cough and took a £1.3 billion impairment. US drug-price pressure is a second concern, although GSK's December 2025 agreement with the US government gives it relief from Section 232 tariffs through January 20, 2029. GSK now buys growth with debt, for example Nuvalent for about $10.6 billion in July 2026, and it plans more than 20 phase III trial starts in 2026. For the gap to close, GSK must win approvals and fast launches for its new medicines, keep its 2026 guidance of 7% to 9% core EPS growth, stay on track for its target of more than £40 billion of sales in 2031, and keep its operating margin stable through the dolutegravir patent expiry. The near-term tests are the FDA decision on bepirovirsen for chronic hepatitis B, expected by October 26, 2026, the Q3 2026 report, expected at the end of October 2026, and the FDA decision on neladalkib for lung cancer, with a target date of November 27, 2026. The gap can close only over several years, as new launches grow before and through 2028 to 2030. The main risk is that new medicines grow too slowly to replace HIV sales.
- Risks
- Dolutegravir, GSK's main HIV medicine, loses exclusivity from 2028 to 2030. HIV sales were £2.1 billion in Q2 2026, about a quarter of group sales. If new HIV medicines and other launches do not grow fast enough, sales and margins fall in that period.
New medicines can fail late in development. In July 2026, camlipixant failed to show enough benefit in phase III, and GSK took a £1.3 billion impairment. GSK now plans more than 20 phase III trial starts in 2026, and some of them will fail.
US drug prices are under political pressure. GSK agreed with the US government in December 2025 to lower some prices in exchange for relief from Section 232 tariffs through January 20, 2029, and GSK and ViiV joined the Generous Model of the Centers for Medicare and Medicaid Services from June 15, 2026. More US price rules can lower sales.
Debt rises with acquisitions. Net debt was £15.1 billion at June 30, 2026, before the Nuvalent purchase of about £7.1 billion net of cash, which GSK funded mainly with debt. GSK expected core interest costs of about £800 million in 2026.
Zantac lawsuits continue. The Delaware Superior Court granted summary judgment for the remaining cases filed on or before December 1, 2025, on April 13, 2026, and an appeal of about 14,000 dismissed federal cases waits for a decision expected in the second half of 2026.
- Balance sheet
- Cash: £3.1B
Debt: £18.2B
Net debt: £15.1B
Interest cover: 10×
Debt due within 12 months: £4.3B
GSK had £18.24 billion of borrowings at June 30, 2026, including lease liabilities: £13.95 billion long-term and £4.29 billion short-term. Cash and liquid investments were £3.11 billion, so net debt was £15.13 billion, up from £14.45 billion at December 31, 2025. Net debt rose because of the purchases of RAPT Therapeutics and 35Pharma (£2.08 billion), dividends (£1.37 billion) and the end of the £2 billion share buyback (£634 million in the first half). After June 30, GSK completed the Nuvalent purchase on July 15, 2026, for about £7.1 billion net of cash acquired, funded mainly from new and existing debt facilities and cash, so net debt is higher after that date. Interest cover is total operating profit divided by net finance expense of £269 million for the first half of 2026; the £1.3 billion impairment lowered this operating profit. Free cash flow was £2.81 billion in the first half. GSK expects a full-year dividend of 70p per share for 2026.
As of 2026-06-30.
- Checkpoints
- Oct 26, 2026: FDA decision on bepirovirsen for chronic hepatitis B. Pending. Watch: US approval by October 26, 2026 passes; a rejection or a delay fails.
Oct 28, 2026 (estimate): Q3 2026 results and Nuvalent accounting. Pending. Watch: Core EPS growth in line with 7% to 9% for 2026 and growth in Specialty Medicines at a low double-digit rate pass; a guidance cut or a further pipeline impairment fails.
Nov 27, 2026: FDA decision on neladalkib for ALK-positive lung cancer. Pending. Watch: Approval by the November 27, 2026 target date passes; a rejection or a delay fails.
Feb 2027 (estimate): Full-year 2026 results and 2027 guidance. Pending. Watch: 2027 guidance with sales and core profit growth and a stable margin outlook through the dolutegravir patent expiry passes; lower guidance fails.
- Recent events
- 2026-09-15: GSK agreed to buy a trispecific T cell-engager for multiple myeloma from Chimagen Biosciences. The programme should enter phase I trials in 2027.
2026-09-13: GSK's licensor Hansoh Pharma reported that Ris-Rez lowered the risk of death by 54% against topotecan in relapsed small cell lung cancer in a phase III trial in China. Median survival was 18.5 months against 10.3 months.
2026-08-24: Japan approved Hibsago (bepirovirsen) as the first functional cure for chronic hepatitis B. The FDA decision in the US is expected by October 26, 2026.
2026-07-28: GSK reported Q2 2026 results. Sales were £8.4 billion, up 5% at constant exchange rates, and core EPS grew 9%. Specialty Medicines grew 14%, Vaccines 8%, and General Medicines fell 9%. Total operating profit fell 75% because of a £1.3 billion impairment, mainly for camlipixant. GSK kept its 2026 guidance, started a three-year plan that targets £1.9 billion of annual savings by 2029 at a cost of £2.4 billion, and raised its plan to more than 20 phase III trial starts in 2026.
2026-07-17: GSK stopped development of camlipixant in refractory chronic cough. Only one of two phase III trials met its main goal, and only at the higher dose.
2026-07-15: GSK completed its purchase of Nuvalent for an equity value of about $10.6 billion (£8.0 billion), or about $9.4 billion net of cash acquired, funded mainly with debt. The deal adds two lung cancer medicines: zidesamtinib, which the FDA approved as Jideytro in July 2026, and neladalkib, under FDA review.