GSK Boosts Growth Outlook, Announces £2 Billion Share Buyback

GSK Plc has announced plans to buy back £2 billion ($2.5 billion) of shares as it raises its long-term growth outlook driven by optimism surrounding its drug pipeline.

Key Points:

* GSK has increased its 2031 sales forecast to over £40 billion, up from its previous projection of over £38 billion.
* The revised forecast reflects progress in late-stage drug development, particularly in oncology medicines.
* The share buyback follows GSK's Q4 earnings per share, excluding certain items, reaching 23.2 pence, exceeding analysts' estimates of 20 pence.
* GSK shares rose by as much as 6.7% in London, marking the largest intraday gain since October.
* Despite strong earnings, concerns over vaccine sales tempered the stock's performance, with turnover expected to decline by a low single-digit percentage this year.
* Specialty medicines, including cancer and HIV drugs, are anticipated to grow by a low double-digit percentage.
* GSK is facing competition from Pfizer Inc. and Moderna Inc. in the vaccine market and has seen a reduction in market potential for its RSV shot due to recommendations from US health officials.
* The drugmaker remains optimistic about the potential re-launch of its blood cancer drug Blenrep this year following positive results from a previously withdrawn trial.
* GSK has no or minimal exposure to potential US trade tariffs on Mexico, China, and Canada.
* The company plans to prioritize R&D investment in respiratory, immunology and inflammation, oncology, and HIV drugs, with spending increasing in line with sales.
* GSK has agreed to pay up to $2.2 billion to resolve the majority of court cases alleging contamination of its former reflux medication Zantac.
* The share buyback will be executed over the next 18 months.
* Analysts emphasize the need for further pipeline successes to bridge the gap between GSK's £40 billion 2031 sales target and consensus estimates of £34 billion.
* GSK's recent acquisition of cancer biotech IDRx Inc. and its focus on specialty medicines reflect its strategic shift towards oncology and broadening its pipeline.