GSK (GSK) Q3 2026 earnings review
GSK's specialty drug sales jump, but vaccine revenue falls
GSK's specialty drugs for HIV, cancer and immune diseases carried the British drugmaker while its vaccine business shrank. Third-quarter sales rose 5% at constant currency as Specialty Medicines climbed 15%, offsetting a drop in shingles and respiratory virus shots. Chief executive Luke Miels kept the full-year outlook unchanged, which by our math points to revenue growth slowing to about 3% in the fourth quarter as early US vaccine and inhaler orders reverse.
| Revenue at constant currency | £8.89B +5% from a year ago (+4% in sterling) |
|---|---|
| Specialty Medicines revenue | £3.88B +15% at constant currency (44% of total) |
| Profit per share, excluding one-offs | 54.6p +1% at constant currency (-1% in sterling) |
| Full-year 2026 outlook | Unchanged by our math, implies ~3% Q4 sales growth |
⚖️ Verdict: ⚪ Neutral
The standing case is unchanged because clinical wins in cancer and liver disease balanced a new question mark over the HIV pipeline and rising debt costs. Three US drug approvals and global lung cancer data matching earlier Chinese trials reduced pipeline risk, but GSK delayed the US filing for its four-monthly HIV prevention shot into 2027 to analyse the formulation and warned that acquisition debt will lift 2027 interest costs toward £1 billion.
The question now is whether the extra review on the four-monthly HIV prevention shot is a minor regulatory check or a flaw in the drug formulation that also threatens the four-monthly HIV treatment trial. If the formulation works, GSK stays on track to replace its expiring HIV pills in 2028; if it falters, the post-2028 profit dip deepens. Regulators' feedback on the prevention data by year-end and the treatment trial readout in the second half of 2027 will decide it.
🐂 Bull Case
Specialty Medicines and Long-Acting HIV Shots Keep Driving Growth
Specialty Medicines, GSK's division for complex treatments in HIV, cancer and immune diseases, now brings in 44% of total revenue. The division grew 15% at constant currency to £3.88 billion in the third quarter, beating the tough comparison from a year ago and carrying the entire drugmaker while vaccine sales shrank.
- Cabenuva, an HIV treatment given as a shot every two months: £478 million, up 35% at constant currency
- Long-acting HIV shots (Cabenuva and prevention shot Apretude): 80% of total HIV growth and 35% of US HIV sales
- Respiratory and immune drugs: £1.14 billion, up 21% on chronic lung disease demand for Nucala
- Exdensur, a twice-yearly severe asthma shot: £27 million, with US new patient starts up 74% from last quarter
This shift matters because GSK loses US patent protection on dolutegravir, the chemical backbone of its daily HIV pills, in April 2028. Product strategy chief Nina Mojas said more than 75% of US patients switching to Cabenuva come from rival drugs, and a new trial showed the shot beat daily pills in patients whose virus was not controlled.
What to watch: Fourth-quarter US sales of Exdensur after Medicare published its reimbursement price list on October 1. A sharp step-up in revenue would prove that the 74% jump in third-quarter patient starts — which included free starter doses — is turning into paid prescriptions.
Three US Approvals and 18 Late-Stage Trial Starts Advance the Pipeline
“Over recent months we have received 3 new specialty medicine approvals in the US: Hibsago, which has the potential to transform the treatment of chronic hepatitis B; Jideytro in non-small cell lung cancer; and Jemperli in rectal cancer.” Chief executive Luke Miels backed that claim by starting 12 final-stage Phase III clinical trials in the quarter, bringing the year's total to 18 out of a planned 22.
The British drugmaker described Hibsago as having “data showing unprecedented functional cure rates and potential to redefine treatment of chronic hepatitis B”, and priced the finite course at just over £100,000 in the US. In cancer, its first global study of Ris-Rez, an antibody-drug conjugate licensed from China's Hansoh Pharma, shrank tumours in 61% of small-cell lung cancer patients, matching the 58% rate seen in Chinese trials.
Matching the Chinese trial results in global patients eases a key concern that drugs bought from Chinese developers might fall short in Western hospitals. Meanwhile, Jideytro — acquired in July's £7.1 billion buyout of Nuvalent — shrank tumours in 94% of newly diagnosed lung cancer patients with ROS1 gene mutations, setting up a US filing later this year for initial treatment.
What to watch: The US regulator's approval decision in November on neladalkib, the second lung cancer drug from the Nuvalent buyout. Approval would give GSK two commercial lung cancer drugs within four months of closing the deal.
Cost Cuts and Product Mix Fund a 22% Jump in Research Spending
GSK is funding its wave of 22 late-stage trial starts by trimming manufacturing and overhead costs. In the third quarter, research and development spending excluding one-offs jumped 22% at constant currency, rising 2.9 percentage points to 21.1% of revenue, yet operating profit excluding one-offs still grew 5% and the operating margin held nearly steady at 34.6%.
Two expense lines paid for the research surge: cost of sales (the cost of making the medicines) fell 1.1 percentage points to 23.0% of revenue as high-margin specialty drugs grew, and selling, general and administrative expenses fell 1.0 percentage point to 24.2%. Under its Accelerate Growth restructuring plan — initiated to “Simplify, and match GSK’s organisation and cost base to its evolving product portfolio, notably in Specialty Medicines” — GSK booked £328 million in third-quarter charges, which cut total reported operating profit by 16% to £2.13 billion.
What to watch: Full-year 2027 operating margin targets when GSK reports fourth-quarter results in February. Finance chief Julie Brown lifted expected 2026 restructuring charges from £700 million to £1 billion because cuts are running ahead of schedule, which should help offset next year's research bill.
🐻 Bear Case
Four-Monthly HIV Prevention Shot Faces Unexplained Data Questions
GSK relies on longer-lasting HIV injections to replace revenue when its dolutegravir pill patents expire in 2028. For its four-monthly prevention shot (a new version of cabotegravir tested in the EXTEND 4M trial), the drugmaker now has the study data in hand, but stated in the release that “Analyses are underway to fully characterise the new formulation ahead of sharing the data package with regulators.”
In the pipeline timetable, GSK quietly pushed the US regulatory filing for this four-monthly prevention shot from the second half of 2026 into the first half of 2027. On the call, corporate development chief David Redfern and research chief Tony Wood refused to say whether blood-level targets or injection reactions caused the extra review, while insisting the issue has no impact on the CUATRO trial testing the exact same four-monthly cabotegravir formulation for HIV treatment.
That reassurance is hard to accept without data, because both trials use the same four-monthly cabotegravir shot. While the treatment trial measures viral suppression directly rather than relying only on drug levels in the blood, any flaw in how the body absorbs the four-monthly shot would threaten the centerpiece of GSK's post-2028 HIV bridge.
What to watch: The outcome of GSK's meeting with the US Food and Drug Administration on the EXTEND 4M prevention data, promised before the end of 2026. If regulators require an extra clinical trial rather than accepting the filing in early 2027, confidence in the four-monthly HIV treatment launch will falter.
Vaccine Sales Shrink Even With a Boost From US Pharmacy Stockpiling
Vaccine revenue fell 2% at constant currency to £2.58 billion in the third quarter, reversing the first half's recovery. Shingrix, the flagship shingles shot, dropped 5% to £780 million, which the release said was “driven by lower sales in International, primarily China, partly offset by US pricing and inventory build in the quarter”.
- Shingrix excluding US pharmacy stockpiling: down about 7% at constant currency by our math, as US inventory added 2 percentage points to global growth
- Shingrix in International markets: £201 million, down 26% at constant currency as Chinese distributor Zhifei worked down stock from 4.3 million doses last summer to 1.4 million
- Arexvy, the RSV shot for older adults: £195 million, down 24% overall and down 60% in the US
- US adult vaccine market: overall prescription volume down about 18% from a year ago, according to Miels
This matters because the 14% constant-currency jump in US Shingrix revenue came from pharmacies stocking up ahead of a late flu season — holding 2.3 million doses versus 1.7 million a year ago — while actual US prescriptions fell 14%. Both the US pharmacy build and a tough fourth-quarter comparison in China will weigh on vaccine sales at the end of the year.
What to watch: Fourth-quarter US Shingrix sales and whether Chinese shipments resume in early 2027. If US patients do not show up for flu and shingles shots in the fourth quarter, pharmacies will burn off their extra 600,000 doses by ordering less from GSK.
Medicare Rules Will Cut Inhaler Prices Next Year
General Medicines, GSK's portfolio of older respiratory inhalers and primary-care drugs, held flat at constant currency at £2.43 billion in the third quarter, beating expectations as its top inhaler Trelegy grew 8% to £787 million. However, Brown noted that third-quarter revenue benefited from order timing for Ventolin inhalers, and Miels detailed a steep US government price cut taking effect in 2027.
Under Medicare price negotiations in the US Inflation Reduction Act, the government set Trelegy's 30-day price at $175 starting in 2027, a 73% discount to its 2024 list price. Even after accounting for existing rebates, Miels said this will force a one-off revenue reset next year alongside price cuts on the Breo inhaler, while the October 2027 expiry of Biktarvy HIV royalties will strip out £70 million of pure profit per quarter.
What to watch: Full-year 2027 sales outlook for General Medicines, to be issued with fourth-quarter results. A forecast for a steeper drop than this year's low-to-mid single-digit decline would show that Medicare price cuts outweigh growing inhaler volume outside the US.
Buyout Debt Lifts Interest Costs and Slows Next Year's Profit
GSK spent £9.25 billion in cash on biotech buyouts over the first nine months of 2026 — £7.14 billion for Nuvalent, £1.40 billion for RAPT Therapeutics and £700 million for 35Pharma — while completing its £2 billion share buyback in June. That spending pushed net debt up 44% from a year ago to £20.74 billion.
Higher debt is already creating a gap between operating profit and bottom-line earnings: third-quarter net finance costs excluding one-offs jumped 50% at constant currency to £197 million, holding profit per share growth to 1% despite 5% operating profit growth. Brown warned that a full year of Nuvalent debt and tougher interest rates will push net interest charges from £700–750 million this year to £900 million–£1 billion in 2027.
What to watch: Any further debt-funded acquisitions before net debt falls back from 1.8 times earnings before interest, tax, depreciation and amortisation. Another multi-billion-pound buyout would push 2027 interest costs above £1 billion and eat into the earnings lift from specialty drugs.
👓 Other Themes
Stronger Sterling Trims Reported Sales and Profit Growth
Because GSK reports in British pounds but earns 55% of its revenue in the US, a stronger pound against the US dollar and Japanese yen reduced third-quarter reported revenue growth by 1 percentage point (4% in sterling versus 5% at constant currency) and profit growth excluding one-offs by 2 percentage points. If September 30 exchange rates hold, currency swings will trim full-year 2026 sterling revenue growth by 1% and operating profit growth excluding one-offs by 3%, an improvement from the 2% sales drag estimated in July.
💲 Other KPIs
Free cash flow — the cash left after capital spending, interest and partner payouts — rose 67% from a year ago in the third quarter and 59% over nine months to £4.89 billion. Nine-month operating cash flow of £7.38 billion gained 9% by our math after stripping out last year's £688 million Zantac legal payouts and CureVac settlement cash.
Contingent consideration liabilities — future milestone and royalty payouts owed to former deal partners, chiefly £5.30 billion to Shionogi for ViiV Healthcare's HIV drugs — edged down from £6.73 billion at year-end. Higher HIV sales forecasts triggered a £240 million non-cash charge for Shionogi in the third quarter, while GSK paid out £435 million in cash.
Weighted average diluted shares fell 0.7% from a year ago (down 29 million shares) and rose slightly from 4,062 million in the second quarter. GSK finished its £2 billion share buyback in June after repurchasing 124 million shares, and management has announced no new buyback as cash goes toward biotech acquisitions.
🔮 Guidance
Unchanged. The drugmaker still expects full-year constant-currency sales growth in the upper half of 3% to 5%, supported by a low double-digit rise in Specialty Medicines, flat to low single-digit growth in Vaccines, and a low-to-mid single-digit drop in General Medicines. By our math, a 4.5% full-year rate leaves about 2.9% growth for the fourth quarter, down from 5% in the first three quarters as vaccine and inhaler order timing reverses.
Unchanged. Management kept its forecast for operating profit growth excluding one-offs in the upper half of 7% to 9%, with overhead costs broadly flat and research spending growing well ahead of sales. By our math, an 8.5% full-year rate implies about 16% growth in the fourth quarter, up from 5% in the third quarter because the business laps £250 million of restructuring and supply-chain charges from late 2025.
Unchanged. Profit per share excluding one-offs is still set to grow in the lower half of 7% to 9% at constant currency, lagging operating profit because of acquisition interest and a tax rate around 17.5%. By our math, a 7.5% full-year rate points to roughly 17% growth in the fourth quarter after a 6% rise across the first nine months.
Raised. The British group lifted its full-year royalty forecast to the top of the prior range on stronger sales of Novartis's multiple sclerosis drug Kesimpta. It is the second raise this year: the middle of the target range moved from £825 million in February to £875 million in July and £900 million today, leaving about £243 million for the fourth quarter.
Cut. Management lowered its expected full-year net interest bill by £75 million at the middle of the range after locking in financing for the Nuvalent buyout, which still accounts for £160 million of second-half interest. With £461 million booked in the first nine months, the plan implies £239–289 million of net interest expense in the fourth quarter.
Raised. GSK specified 22 final-stage trial starts for 2026, up from an initial target of 10 at the start of the year and more than 20 in July. With 18 trials already recruiting patients after 12 starts in the third quarter, four remain for the fourth quarter.
Unchanged. The board declared a third-quarter dividend of 17p per share and kept its full-year expectation at 70p, up from 66p paid for 2025, implying a 19p payment for the fourth quarter.
❓ Key Questions
What delayed the four-monthly HIV prevention shot filing?
Management has the EXTEND 4M blood-level data in hand but pushed the US filing into the first half of 2027 to 'fully characterise the new formulation'. Investors need to know whether drug absorption fell short or injection reactions rose, as the treatment trial uses the same formulation.
How will weekly HIV pills affect long-acting shot targets?
Competitors are developing weekly and monthly oral HIV pills that could appeal to patients who dislike needles. Neither executives nor analysts mentioned oral competition on the call, leaving open how much share GSK assumes its four- and six-monthly shots can keep after 2028.
What will Medicare inhaler cuts cost in pounds next year?
Miels revealed a 73% list-price cut on Trelegy in US Medicare for 2027 alongside Breo price pressure, while Brown noted existing rebates soften the blow. Without a net pound figure, investors cannot size the 2027 drop in General Medicines.
How much of the £1.9 billion cost savings lifts profit in 2027?
GSK raised its 2026 Accelerate Growth restructuring charges to £1 billion as cuts run ahead of schedule, but will also pay £900 million to £1 billion in 2027 interest and fund 22 Phase III trials. Management has not said how much net savings will reach the 2027 operating margin.