GSK PLC Earnings - Q1 2026 Analysis & Highlights
GSK reported strong Q1 2026 results driven by specialty medicines and vaccine growth, with management emphasizing pipeline acceleration, strategic acquisitions, and disciplined capital allocation while maintaining full-year guidance despite near-term headwinds in certain segments.
Key Financial Results
Sales grew 5% to £7.6 billion in Q1 2026, with growth driven by Specialty Medicines up 14% and vaccines contributing through strong Shingrix sales.
Core operating profit grew 10% and EPS was up 9% in the quarter.
Gross margin improved 110 basis points due to the growth of Specialty and Shingrix benefiting product mix.
Cash generation was strong at £1.4 billion, with CGFO slightly ahead of last year despite adverse currency impacts.
Q1 dividend declared was £0.17 per share.
Business Segment Results
Specialty Medicines grew 14%, representing the primary growth driver for the quarter.
Shingrix delivered record quarterly sales of more than £1 billion, up 20%, with European sales up 51% following uptake in national immunization programs and US sales up 12% driven by inventory movements and the new prefilled syringe launch.
Jemperli delivered £232 million, up 40%, driven by significant overall survival benefit in endometrial cancer with 66% reduction in risk of death for dMMR/MSI-High patients.
Nucala delivered double-digit growth following expansion into COPD in the US, with total brand new patient starts growing 65% year-on-year and approximately 45% market share in COPD.
General Medicines was down 6% in the quarter, driven by declining sales of the older established portfolio, with Trelegy growth limited by increasing copay requirements due to Medicare redesign.
HIV sales grew 10% with double-digit growth driven by the long-acting portfolio in Dovato, with US sales growing 15% and market share outpacing competition.
Cabenuva grew 31% in Q1 fueled by patient demand, with accelerated switches from competitor products reaching 79% in the US.
Apretude grew 44% in the quarter, reinforcing the importance of the more than 99% effective single-shot long-acting injectable for HIV prevention.
Capital Allocation
Share buyback is on track to be completed at the half year, with shareholder returns totaling over £0.9 billion in the period.
Net debt at 1.4 times EBITDA, supported by strong cash generation and strategic actions.
BD investments primarily comprised £1.4 billion upfront to acquire RAPT Therapeutics.
Expected Q2 outflow of $950 million for the acquisition of 35Pharma, a potential best-in-class activin signaling inhibitor for pulmonary hypertension.
Portfolio optimization generating cash income to reinvest, including the ViiV special dividend of $250 million, divestment of the Rockville manufacturing site, and out-licensing of linerixibat for $400 million.
Transactions will positively impact net debt by $1.2 billion in the first half.
Industry Trends and Dynamics
Severe asthma represents significant opportunity with only 30% of eligible patients receiving a biologic, with Exdensur's ultra-long acting dosing showing 97% of patients preferring six-monthly dosing versus current options.
COPD market shows strong demand with approximately 100 million people living with COPD globally, with Nucala capturing around 1 in 2 new patients in China representing strong early launch signals.
HIV treatment market accounts for around 90% of the total HIV market, with approximately 85% of people globally on integrase inhibitor-based regimens.
Hepatitis B represents a significant unmet need with 57 million infected in China but only 16 million diagnosed, with much greater usage of pegylated interferon in China.
Discontinuation rates for short-acting biologics in respiratory are approximately 65% in the first 12 months, with compliance and frequent dosing requirements being significant factors.
Competitive Landscape
Nucala achieved approximately 45% market share in COPD with strong momentum and new patient starts growing 65% year-on-year.
Jemperli demonstrated competitive advantage through overall survival benefit, with data showing 66% reduction in risk of death for dMMR/MSI-High endometrial cancer patients.
Blenrep differentiated by community-ready administration with 70% of patients in the community, where accessibility to competitor options remains a challenge.
HIV portfolio transition to INSTI-led long-acting regimens with more than 70% of HIV growth and more than one-third of total US sales from these regimens.
Once-weekly oral HIV treatment option expected from competitors this year, though management believes long-acting injectables target a specific patient segment and will not be significantly impacted.
Approximately 60% of oncologists use KEYTRUDA for endometrial cancer despite Jemperli's overall survival benefit, indicating significant opportunity for market share gains.
Macroeconomic Environment
Adverse currency impacts partially masked strong cash generation in Q1.
Medicare redesign creating pronounced copay requirements particularly in Q1 for respiratory products like Trelegy, expected to be less relevant in the rest of the year.
ADAP program facing budget pressures with states restricting formularies, including Florida's recent restrictions on BIKTARVY and DESCOVY, though a court case reversed threshold reductions.
Growth Opportunities and Strategies
Pipeline acceleration through aggressive prosecution of opportunities with seven phase III trials started in 2025 and 10 more starting in 2026.
ADC portfolio expansion with ris-rez (B7-H3 ADC) in small cell lung cancer with EMBOLD-SCLC-301 recruiting well and planned expansion to genitourinary cancers.
Mo-rez (B7-H4 ADC) showing encouraging anti-tumor activity with confirmed ORR of 62% in platinum-resistant ovarian cancer and 67% in advanced endometrial cancer, with five pivotal trials planned to start this year.
Efimosfermin in MASH with two pivotal studies (ZENITH-1 and ZENITH-2) started and recruiting well, with NEBULA program for advanced MASH on track to start later this year.
Bepirovirsen (bepi) for chronic hepatitis B showing positive phase III data with statistically significant and clinically meaningful increase in functional cure rate, with Breakthrough Designation in the US and PDUFA date of October 26.
Three times yearly Cabenuva for HIV treatment with CUATRO phase III registrational study on track and expected launch in 2028.
Three times yearly Apretude for HIV PrEP with registrational study data anticipated in H2 2026 and H1 2027 launch.
Twice yearly long-acting injectable HIV treatment with VH184 (third-generation INSTI) and VH499 (capsid inhibitor) showing promising potential, on track to launch by end of decade.
Exdensur expansion in severe asthma with J code expected early July, after which access is expected to be unrestricted, currently with only 20% of commercial patients having access.
Nucala COPD expansion outside the US including Europe and China with similar strong initial signals.
Blenrep expansion with second-line approval in 19 markets and launches progressing in major markets including UK, Germany, and Japan.
Acquisitions of ozureprubart in food allergies and HS235 in pulmonary hypertension both with clinically validated mechanisms of action and potential to be best-in-class.
Shingrix dementia study with approximately 30,000 individuals in Shingrix versus placebo with three-year follow-up through registry basis.
Pipeline and R&D Strategy
Camlipixant in refractory chronic cough with CALM-2 data expected mid-year, with 15% to 20% reduction relative to placebo at 24 weeks considered significant.
Velzatinib in GIST with StrateGIST 3 phase III trial for second-line started less than 12 months after asset acquisition, with second phase III trial in first-line population starting in second half.
Four further phase III readouts expected in second half for Jemperli in rectal cancer, camlipixant in refractory chronic cough, Exdensur in EGPA, and three times yearly PrEP for HIV.
R&D spend driven by accelerated investment in pipeline including efimosfermin and velzatinib pivotal trials, with continued investment as multiple late-stage trials initiate across Specialty portfolio.
Financial Guidance and Outlook
Full year guidance confirmed with expectations for another year of profitable growth.
Vaccines growth in Q1 benefited from US Shingrix pre-filled syringe stocking, with annualization of publicly funded programs in Japan and certain EU countries beginning in Q2.
GenMed growth expected to be half two weighted, with Q2 facing tough comparators due to prior year true-up benefits and international markets expected to remain challenging.
Operating profit growth expected to be predominantly half two weighted given phasing of productivity benefits and comping the RSV IP settlement received in Q2 last year.
Target of more than £10 billion of CGFO with cash flows weighted as normal towards second half.
Q2 results will include comprehensive portfolio and pipeline update instead of separate HIV-only event in June, with discussion of mid-term and longer-term opportunities.
Shingrix penetration opportunities remain with around 11% of eligible population immunized in top ten markets outside the US.
Trelegy expected to face tougher comparators in Q2 due to prior year true-up benefits.
