As GSK records $2.4 billion in impairment charges for the second quarter, the U.K. pharma has announced a sweeping restructure designed to save about the same amount of money over the next few years.
GSK is launching a $2.5 billion restructuring over the next three years, with the expected savings designed to keep funds flowing into its late-stage portfolio and pipeline.
The plan sets out to “simplify the organization and to reallocate capital and resources,” CEO Luke Miels said in a Tuesday earnings release. The U.K. pharma expects to save £1.9 billion ($2.5 billion) by 2029, money that will be largely reinvested into GSK’s late-stage pipeline. Some of the funds will also go toward improving margins and profitability amid HIV medicine dolutegravir’s patent expiry, which will occur in the U.S. in 2028.
The restructure will include global job cuts, though Miels did not share any color behind the number of roles that are expected to be impacted.
“We’re not going to give a number today in terms of people changes, and that’s because I want the chance, and I want my team to have the chance, to discuss this with our people first,” Miels said on a Tuesday media call. “I think the key theme, as I’ve said, is it’s about reallocation into new medicines, but we will update you in time once we’ve implemented those plans.”
GSK hopes the new plan will accelerate development across 18 indications for seven main assets, with the goal of launching more than 20 Phase 3 trials this year—doubling the 10 expected trials announced previously.
“Less pruning, more acceleration is how I would describe it,” the CEO said of the newfound strategy.
Since news of the restructuring broke, GSK shares have risen about 6%, resting around $55 per share as of 10 a.m. ET.
The reorganization is a significant change coming just seven months into Miels’ tenure as CEO, a role he took over from Emma Walmsley at the start of the year. GSK joins numerous other Big Pharmas—including Novartis, Pfizer, Takeda and Merck—that have implemented cost-savings initiatives over the last few years. For GSK, the move follows a series of expansions, including last year’s $30 billion commitment to U.S. manufacturing over five years.
Now, the company is committing £400 million ($531.12 million) to its home country to relocates its flagship R&D center from Hertfordshire to Cambridge, according to a separate Tuesday release. GSK will build a new 300,000-square-foot site, with Hertfordshire employees expected to migrate over to the new locale by 2029.
“We believe these plans, together with continued disciplined capital allocation, will drive strong operational performance and shareholder returns over the next five years, delivering our 2031 sales outlook and accelerated long-term growth,” Miels said.
Overall, the U.K. pharma reported £8.41 billion ($11.1 billion) in revenue for the second quarter—slightly up from expectations—and maintained full-year forecast ranges for both sales growth and earnings per share.
More R&D news
GSK also used Tuesday to share Phase 3 data for a program of renewed focus. The Hansoh Pharma–partnered risvutatug rezetecan (Ris-Rez)—a B7-H3-targeted antibody-drug conjugate (ADC)—significantly improved progression-free survival (PFS) for patients with bone cancer whose disease had progressed after at least two prior lines of systemic therapy.
The collaborators didn’t share specific data behind the osteosarcoma achievement but said “consistent benefit” was also recorded across secondary endpoints, including overall survival. No new safety signals were observed. The trial was conducted in China and Hansoh will use the findings to file for potential regulatory approval in the country. In the U.S., ris-rez has secured FDA Breakthrough Therapy Designation for relapsed or refractory osteosarcoma.
The late-stage data is part of a much larger development program for ris-rez, with the partners reporting earlier this month that the ADC extended overall survival for patients with small cell lung cancer, achieving the main goal of a Phase 3 trial. The partnership launched in 2023, when GSK paid $185 million upfront to secure exclusive global rights to ris-rez outside of China, Hong Kong, Macau and Taiwan.
Elsewhere, GSK has removed an early-stage asset for rhinovirus from its pipeline. The PI4K beta inhibitor, called GSK3923868, had also previously been tested in chronic obstructive pulmonary disease and asthma. The termination was a “business decision based on pipeline prioritization,” a company spokesperson told BioSpace.
The decision comes amid GSK’s broader reshaping of its research portfolio, with recent R&D challenges costing the company £1.8 billion ($2.4 billion) in the second quarter, as compared with £476 million ($633 million) for the same period last year.
The impairment costs were primarily driven by the £1.3 billion ($1.7 billion) charge tied to the discontinuation of camlipixant in chronic cough. The drug, which GSK secured in a $2 billion buyout of Bellus Health in 2023, “is unlikely to transform patient care,” the pharma said earlier this month after a Phase 3 failure. The recoverable amount of camlipixant is £104 million ($138 million), a value based on its potential use for irritable bowel syndrome, according to GSK.
The company also recently walked away from its partnership with Alector, with the termination of related assets costing the pharma £371 million ($493 million). The companies teamed up in 2021 to advance two antibodies for neurodegenerative diseases, both of which failed to show significant clinical benefit.
