GSK is buying its way past the HIV cliff, and the early approvals are landing

The technology

GSK is a British drug and vaccine maker in the middle of a pipeline rebuild under chief executive Luke Miels. Its sales rest on HIV, respiratory drugs and vaccines, and its largest product block, the dolutegravir HIV drugs, sold £1.44 billion in the second quarter but loses exclusivity from 2028 to 2030.

The new pipeline has three clusters. In oncology, GSK bought two targeted lung cancer drugs with Nuvalent, licensed the B7-H3 ADC Ris-Rez from Hansoh, and won accelerated approval for Jemperli in mismatch repair deficient rectal cancer. In liver disease, it won US approval for Hibsago (bepirovirsen) in chronic hepatitis B on October 20. In HIV, ViiV's long-acting Cabenuva grew 33% to £453 million and beat daily pills in the CROWN trial in people with detectable virus.

The odds

Much of the near-term pipeline is already approved or filed. Jideytro was approved in July, and neladalkib has an FDA decision due November 27. Filed drugs reach approval 90.6% of the time, according to BIO, Informa and QLS data for 2011 to 2020.

Ris-Rez is the largest open question. Its Chinese phase 3 cut the risk of death by 54% against topotecan, and the first global data showed a 61% response rate at the dose chosen for phase 3. A positive phase 3 in one population raises the odds for the global trial above the 57.8% phase 3 base rate, but a global population and a more toxic dose add uncertainty.

Camlipixant shows the downside. After split results in CALM-1 and CALM-2, GSK stopped the chronic cough program and took a £1.334 billion write-down.

The money

GSK is profitable and paying for growth with debt and cost cuts. Second-quarter turnover rose 5% to £8.4 billion, core EPS rose 9%, and the company kept 2026 guidance for 7% to 9% core profit growth. Free cash flow was £2.0 billion in the quarter.

At June 30, GSK had £3.11 billion in cash and liquid investments and net debt of £15.13 billion. That was before GSK paid for Nuvalent at closing on July 15. It expects 70p in dividends for 2026 and has completed the £2 billion share buyback announced with its 2024 results. Cash generated from operations was £2.9 billion in the second quarter. The new cost program targets £1.9 billion in annual savings by 2029 at a cash cost of £2.1 billion.

The risks

The main risk is the HIV patent cliff. GSK expects operating margin to stay stable to improving through the dolutegravir expiry, but that depends on long-acting HIV drugs and new launches growing quickly. General Medicines is already shrinking, down 9% in the quarter, with Trelegy down 7%.

The second risk is cost. GSK now plans more than 20 phase 3 starts in 2026, up from 10. The Nuvalent deal dilutes core EPS until 2029. And Jemperli's rectal cancer approval is accelerated, with continued approval tied to more mature data from AZUR-1.

Our read

GSK has moved from defending a narrow portfolio to buying and accelerating late-stage assets, and the early results are good: three US approvals in four months across lung cancer, rectal cancer and hepatitis B. The bill is higher spending and more debt at the moment HIV exclusivity starts to end. The neladalkib decision on November 27, 2026 is the next dated test, followed by the pace of phase 3 starts and early Hibsago and Jideytro sales.