GSK Plans A $2.5 Billion Restructure to Expedite the Development of New Medications

As CEO Luke Miels strives to fulfill his pledge of accelerated drug development, GSK (GSK.L) opened a new tab on Tuesday, launching a £1.9 billion ($2.52 billion) cost-savings drive to help support the British drugmaker’s increased late-stage study roster.

In order to ensure investors that GSK can handle an impending patent cliff for its popular HIV medication, dolutegravir, between 2028 and 2030, Miels made a significant move with the restructure.

After a portfolio review revealed seven novel drugs that it will explore across 18 indications, GSK said it now anticipates beginning 25 late-stage studies by the end of 2026, more than doubling its prior goal of 10.

As the pharmaceutical company reported second-quarter earnings and sales that above analysts’ estimates and increased its mid-term margin forecast, its shares increased by as much as 7%. On Tuesday, the stock finished at 2,041 pence, up 4%.

In contrast to its earlier projection of “stable,” GSK upgraded its operating margin expectation for that period to “stable to improving.”

As it rebuilds its cancer business, GSK has also increased its acquisitions under Miels, including a record $10.6 billion buy for Nuvalent in June. Cancer medications made up three of the seven medications that were designated for expedited development.

Profit this year will be impacted by additional expenses associated with the Nuvalent transaction. GSK now projects growth in core earnings per share to be in the lower half of its range of 7% to 9%.

The company stated that turnover would probably fall into the higher end of its full-year sales growth projection of 3% to 5%.

GSK anticipates spending £2.4 billion ($3.19 billion) to carry out its savings plan. AI-driven technological advancements, optimizing supply chains and support services, and reallocating funds to specialized medications will all contribute to the savings.

The number of employment that would be impacted was not specified by the company. “We’re not going to give a number today … because I want my team to have the chance to discuss this with our people first,” Miels said to reporters during a conference call.

The late-stage studies and the relocation of GSK’s R&D operations from Stevenage to Cambridge—a £400 million investment in the UK—will be financed in large part by the savings.