GSK PLC Earnings - Q2 2026 Analysis & Highlights
GSK reported strong Q2 2026 operational momentum with accelerated R&D investment, portfolio transformation toward specialty medicines, and strategic cost reallocation to fund late-stage pipeline expansion while maintaining margin resilience through the dolutegravir loss of exclusivity period.
Key Financial Results
Sales grew 5% to £8.4 billion in Q2 2026, with continued operational momentum.
Core operating profit grew 7% and core earnings per share increased 9% in the quarter.
Cash generation remained positive at £4.3 billion in the first half of 2026.
Q2 dividend of £0.17 was declared.
Gross margin improved 250 basis points due to product mix benefits from Specialty and Vaccines growth, together with supply chain optimization charges taken in Q2 last year.
Share buyback completed with an average price of £16.13 over the 18-month period.
Business Segment Results
Specialty Medicines grew 14%, driven by Nucala's continued COPD launch and long-acting HIV treatment Cabenuva, as well as Dovato.
Vaccines grew 8%, with growth benefiting from global expansion of Arexvy (RSV vaccine), strong performance from Meningitis vaccines, and Shingrix in Europe.
General Medicines declined 9% in the quarter with declining sales of older established portfolio and challenging pricing comparators for Trelegy in the US due to a positive true-up in Q2 last year and softer inhaled respiratory market demand.
HIV sales grew 10% with double-digit growth reflecting continued execution of strategy and sustained market growth for long-acting injectable portfolio, which represented 80% of total HIV growth in Q2.
Cabenuva sales increased 33%, with 77% of new prescriptions in the US coming from competitor products, reflecting increasing confidence in long-acting treatment benefits.
Apretude sales increased 39%, supported by more than four years of real-world evidence and tolerability data.
Nucala achieved strong global growth with new-to-brand prescriptions in the US up 69%, with COPD driving more than 70% of growth, and international sales up 18% primarily driven by success in China.
Exdensur launch progressing with J-code going live on July 1, reducing logistical burden on prescribers, and more than 50% of insured patients now being covered.
Blenrep building in line with expectations with approval in 49 countries and recent reimbursement gains in Germany and Spain, now leading in new patient starts in the UK.
Capital Allocation
Nuvalent acquisition completed on July 15 at a net cost of £7.1 billion, increasing net debt to £22 billion or just under 2 times net debt to 2025 core EBITDA.
Accelerate Growth program announced targeting annual cost savings of £1.9 billion by 2029 with expected onetime cost of £2.4 billion (£2.1 billion in cash).
Majority of savings will be reallocated to late-stage pipeline, with some money also going toward strengthening margin through the dolutegravir loss of exclusivity period between 2028 and 2030.
Cash generated from operations of £4.3 billion in first half, up £0.5 billion versus last year, driven by operating profit, receivables, and CureVac settlement income.
Free cash flow improved by £1 billion, with around half driven by the business and around half driven by one-off cash receipts relating to linerixibat and ViiV.
Since start of 2021, GSK delivered more than £40 billion of cash generated from operations, deployed £18 billion to invest for growth through capital expenditure and business development, distributed £16 billion to shareholders through dividends and buyback, and reduced net debt by £6 billion.
Industry Trends and Dynamics
COPD represents largest remaining unmet need with 400 million patients affected globally, over 20 times more patients than rheumatology and 100 times more deaths annually, with only two advanced therapies in one subtype of COPD reserved for late-stage disease.
Vaccines make up less than 1% of healthcare budget in high-income countries yet deliver return on investment of roughly 19 times what is invested.
HIV market expected to be worth approximately £25 billion by 2035, with growth driven by uptake of new long-acting regimens despite daily oral generics entry and pricing pressure.
Prevention market for HIV expected to be worth approximately £6 billion by 2035, with long-acting injectables being the fastest growing segment.
Influenza vaccine effectiveness has varied from 20% to 60% over the past 15 flu seasons, illustrating true unmet need to improve flu vaccine effectiveness.
Herpes viruses, including herpes zoster, can influence cognitive decline, with growing body of evidence that shingles virus can spark local inflammation playing a role in cognitive decline over time.
Cardiovascular disease expected to nearly double by 2050, with costs in the US alone set to top over £400 billion a year.
Competitive Landscape
GSK positioned as leader in respiratory medicine, having pioneered multiple products across indications, notably asthma, and most recently with launch of Exdensur, the first ultra long-acting biologic to be launched in airways disease.
Cabenuva demonstrated superiority over oral standard-of-care in the LATITUDE study, delivering nearly two times lower regimen failure and four times lower virological failure, leading to early study termination due to overwhelming efficacy.
Ris-Rez marked first positive phase III overall survival data for a B7-H3 directed ADC in any tumor type, with partner Hansoh announcing ARTEMIS-008 phase III China study met its primary endpoint.
Mo-Rez delivered numerically higher anti-tumor activity with 62% response rate in platinum resistant ovarian cancer and 67% response rate in second-line plus endometrial cancer, with activity independent of B7-H4 expression level and no unique toxicities.
Velzatinib is only agent in TKI landscape targeting all primary and key secondary KIT mutations with lower rate of adverse events compared to other available treatment options or standard of care.
Blenrep's projected median progression-free survival of 101.8 months is competitive versus 100 months for CD38 quadruplet regimen and 62 months from CD38 triplet.
Jideytro shows 23.8 months median PFS compared with 9.7 months for taletrectinib in ROS1 positive non-small cell lung cancer post-TKI, with 96% of patients maintaining response for more than 12 months versus 74% for taletrectinib.
Neladalkib shows 14.5 months median PFS compared with 6.6 months achieved with lorlatinib in ALK-positive non-small cell lung cancer post second generation TKI, with 91% of patients maintaining response for more than 12 months versus 70% with lorlatinib.
GSK holding market share in fast-growing PrEP market with Apretude growing 39%, and continuing to grow in HIV market versus competitors.
Macroeconomic Environment
General Medicines under pricing pressure with declining sales of older established portfolio and challenging pricing environment.
Softer inhaled respiratory market demand contributing to Trelegy pressure, expected to improve in second half of 2026.
Trelegy experiencing increased abandonment rates in the US, with abandonment trajectory going down but at higher level than previous years, expected to be removed in second half.
Growth Opportunities and Strategies
Over 20 phase III starts in 2026, more than double the expectations set at start of year when company committed to 10.
Seven assets identified for acceleration across 18 indications and 25 studies since portfolio reviews started in January.
Accelerated development of ADC portfolio with five phase III studies for Mo-Rez in gynecological tumors and four for Ris-Rez in lung and prostate cancer.
Six phase III trials across indications planned for ultra long-acting TSLP/GSK '283, representing significant acceleration of development path.
Efimosfermin program accelerated to include F4 patients in addition to F2 and F3, with F4 program recruiting first patient only last week.
Velzatinib phase III studies underway with StrateGIST-3 for second-line GIST and StrateGIST front-line for first-line GIST, both exploring velzatinib as monotherapy with recruitment progressing strongly ahead of schedule.
Blenrep clinical development program targeting all patient segments of newly diagnosed multiple myeloma with DREAMM-10 and PrECOG studies investigating combinations.
Jideytro recently approved by FDA for second-line treatment of ROS1 positive non-small cell lung cancer, with FDA decision for neladalkib second-line ALK positive expected by November 27.
First-line studies for Jideytro and neladalkib ongoing with enrollment in neladalkib's first line ALKAZAR phase III trial already more than 30% complete.
Bepirovirsen achieved 19% functional cure in ITT population and 26% in those with surface antigen at baseline less than 1,000, compared with zero patients achieving functional cure with standard of care.
Efimosfermin showing fastest observed signal for antifibrotic benefit of any in class with fibrosis biomarkers improving as soon as four weeks after treatment.
ZENITH studies for F2/F3 MASH initiated with both recruiting since earlier this year, and F4 cirrhotic MASH program (Nebula studies) initiated only in last two weeks.
Phase II study in alcohol-related liver disease (ALLSTAR) just had IND approved and will start this year.
Cabenuva phase III registrational study (CUATRO) for three times a year treatment in suppressed-switch patients has begun, supporting potential approval in 2028.
VH4524184 currently in phase IIb clinical study with rapid patient recruitment reflecting community interest in third-generation INSTI profile.
VH4011499 differentiated capsid inhibitor will commence phase IIb study in second half of 2026 with bold plan to get to phase III in 2028 and approval by end of decade.
Three times a year prevention candidate builds on Apretude's greater than 99% efficacy with registrational study data from EXTEND 4M anticipated in second half of 2026 and approval in 2027.
Shingrix phase III randomized control trial launching to test whether cardiovascular benefit is causal, not just correlational, with study expected to start soon.
mRNA flu vaccine positive phase II results to be presented at options meeting next month.
Cambridge biomedical campus hub establishment announced to accelerate R&D changes, with early 2029 timeframe for moving whole group.
Four key R&D locations identified on East Coast of US, UK, Europe and China, each with important academic partnerships.
Business development strategy focused on accessing derisked mechanisms with high likelihood of success, allowing jump directly to testing for product differentiation.
Three deals executed so far this year with majority of assets acquired progressing to phase III.
Ozureprubart acquisition providing materially broader eligibility for IgE targeting in food allergy and CSU with three monthly dosing.
HS235 activin-trap acquisition for pulmonary arterial hypertension with improved molecule that can remove liabilities of incumbents.
Phase IIb starts initiated for both Group 1 and Group 2 pulmonary hypertension with HS235.
Financial Guidance and Outlook
2026 sales guidance updated toward upper half of range with operating profit now expected in upper half of range.
2026 EPS expected in lower half of range following Nuvalent acquisition, predominantly due to additional interest of around £160 million.
HIV 2026 sales growth guidance raised to high-single digit growth from mid- to high-single digit growth.
Operating profit growth expected to be significantly Q4 weighted with Q3 impacted by consolidation and phasing of Nuvalent costs and acquisition-related interest together with tough tax comparator.
2031 sales target of more than £40 billion with more than 50% of business in Specialty medicines.
Operating margin expected to be stable to improving through dolutegravir loss of exclusivity period (2028-2030), supported by specialty growth, productivity gains, and savings from Accelerate Growth program.
Growth expected to accelerate from 2031 onwards given portfolio of products and opportunity for further business development.
Accelerate Growth program will deliver incremental sales from 2030 with very strong IRR.
90% of cumulative annual savings expected to be delivered by 2028 from Accelerate Growth program.
Payback period of 2.5 years before reinvestment for Accelerate Growth program.
R&D investment increased more than 50% to now more than £7 billion, supporting doubling of phase III starts in 2026.
Margin guidance for 2026 more than 31% at 2025 average exchange rates.
Margin will be stable to improving through dolutegravir loss of exclusivity with Accelerate Growth program generating additional savings of £1.9 billion by 2029.
