GSK: Accelerated pipeline investment and specialty focus drive growth amid key launches and margin stability

GlaxoSmithKline (GSK) plans to close its Dresden vaccine plant by 2028, affecting 641 jobs. The closure is part of GSK's 'Accelerate Growth' cost-cutting program, aiming for £1.9 billion in annual savings by 2029. GSK's share price rose 6% after the announcement. The company cites falling demand and strategic redirection as reasons. The works council and union are developing a 'plan for the future' to explore alternatives.

GSK forecasts £40B sales, driven by oncology and specialty medicines, which now account for 40% of its business. The company aims to reduce costs by £1.9B while increasing R&D investment. Key products like Excentia and BLENREP face launch challenges, with updates expected in Q3. GSK also highlighted progress in hepatitis B treatment bepirovirsen and launches from its Nuvalent acquisition.

GSK outlined a growth strategy at the Bank of America Global Healthcare Conference, focusing on cost savings and investment in its pipeline, particularly in oncology. The company aims for over 7% sales growth and 11% profit growth from 2021 to 2026, with specialty products expected to exceed 50% of its business by 2031. GSK identified 1.9 billion pounds in savings, mostly for pipeline funding, and reiterated its strong balance sheet.

GSK plans to invest £400 million in a new 300,000-square-foot R&D center at Cambridge Biomedical Campus, housing over 1,000 scientists. The facility will focus on areas like oncology and vaccines, with a phased move by 2029. GSK aims to strengthen its UK research network and collaborate with local life sciences clusters.

GSK issued €3.5 billion in notes, including four tranches with varying maturities and interest rates. The proceeds will repay acquisition debt and fund general corporate purposes. According to Sidley, the transaction reflects GSK's strong standing in debt markets and is the company's joint-largest single-day euro bond issuance.

GSK will acquire a TCE asset from Chimagen for up to $750m. GSK plans to develop the asset for multiple myeloma, with a phase I trial expected in 2027. GSK will make an upfront payment and additional milestone-based payments.