GSK (GSK.L) launched a new three-year cost savings program as it delivered an annual increase in second-quarter sales, although its profits were dragged down by a rise in impairments.
The UK-headquartered pharmaceutical group's total turnover for the three months ended June 30 climbed year over year to 8.41 billion pounds sterling from 7.99 billion pounds, according to a Tuesday earnings release.
By segment, GSK's turnover in specialty medicines recorded a 14% jump at constant exchange rates to 3.78 billion pounds, bolstered by double-digit growth in HIV, Respiratory, Immunology & Inflammation, and Oncology. The group's vaccine sales rose 8% to 2.28 billion pounds, mainly driven by increased demand for Shingrix and strong outbreak-related demand for its meningitis vaccines, while general medicines saw a 9% decline to 2.34 billion pounds.
Profit attributable to shareholders fell to 435 million pounds in the quarter from 1.44 billion pounds a year before. Total operating profit also dropped over the period to 481 million pounds from 2.02 billion pounds, weighed down by higher impairments and contingent consideration liability charges.
GSK booked intangible asset impairments of 1.9 billion pounds, higher than the year-ago 476 million pounds, primarily related to camlipixant following a decision not to move forward with further development of the investigational treatment for refractory chronic cough after the group's two late-stage clinical trials showed limited efficacy.
For the first six months, the British drugmaker's turnover reached 16.04 billion pounds, up from the year-ago 15.50 billion pounds, while attributable profit fell to 2.17 billion pounds from 3.07 billion pounds.
Looking ahead, GSK reaffirmed its full-year 2026 guidance of 3% to 5% turnover growth, at the upper half of the range, and 7% to 9% core EPS growth, at the lower half of the range, both at constant currency. Core operating profit is also still expected to come in between 7% and 9%, at the upper half of the range and at constant exchange rates.
The group also initiated a new "Accelerate Growth" program, targeting 1.9 billion pounds sterling in annual savings by 2029, for expected total costs of 2.4 billion pounds.
"To fund investment in the late-stage portfolio and R&D, we are starting a 3-year cost savings programme to simplify the organisation and to reallocate capital and resources. Savings will primarily be reinvested, with some used to improve margins and profitability in the dolutegravir patent expiry period (2028-2030)," said Chief Executive Officer Luke Miels. "We believe these plans, together with continued disciplined capital allocation, will drive strong operational performance and shareholder returns over the next five years, delivering our 2031 sales outlook and accelerated long-term growth."
GSK shares rose 1% in afternoon trading in London.
