July 28 (Reuters) - GSK launched a £1.9 billion ($2.52 billion) cost-savings drive on Tuesday to help fund the British drugmaker's expanded late-stage study roster, aiming to deliver on CEO Luke Miels' promise of faster drug development and boost investor trust.
Shares rose as much as 5% after it also beat second-quarter profit and sales expectations and said it would invest £400 million in the UK. They were up 1% at 1223 GMT.
Under Miels, GSK has stepped up acquisitions, including a record deal for
Nuvalent in June, as it rebuilds its cancer business and eyes faster development of its own drugs ahead of critical patent losses for HIV drug dolutegravir from 2028.
Analysts view these deals as crucial drivers for the firm's trajectory as the CEO seeks to convince investors that GSK can reach more than £40 billion in annual revenue by 2031, a target the drugmaker said it was on track for on Tuesday.
"We are starting a three-year cost-savings programme to simplify the organisation and to reallocate capital and resources. Savings will primarily be reinvested," Miels said in a statement.
LOOKING FOR THE NEXT GROWTH DRIVERS
Investors and analysts are looking beyond the second-quarter numbers for indications of which drugs will drive future growth. GSK had said some programmes were being scaled back when it announced the Nuvalent deal.
The company said it now expects to start more than 20 late-stage studies in 2026, up from a previous target of 10, after identifying pipeline accelerations across 18 indications for seven assets in oncology, respiratory, hepatology and vaccines.
It expects to incur costs of £2.4 billion linked to the plan, with savings expected from AI-led technology shifts, streamlining of support services and supply chains, and reallocation of resources to specialty medicines.
GSK reported second-quarter revenue of £8.41 billion and core profit of 50.5 pence per share, beating expectations of £8.24 billion and 47.1 pence in company-compiled consensus.
It maintained its full-year forecast ranges of 3% to 5% for sales growth and earnings per share between 7% and 9%, but said turnover would be towards the upper half with profit towards the lower half.
($1 = 0.7532 pounds)
(Reporting by Raechel Thankam Job and Sri Hari N S in Bengaluru, and Bhanvi Satija in London; Editing by Sherry Jacob-Phillips, Vijay Kishore and Joe Bavier)
