GSK's Q3 2025 Earnings Call: Contradictions Unveiled in Blenrep's 2031 Outlook, Nucala COPD Sales, Shingrix Market Dynamics, and HIV Revenue Impact

Date of Call: October 29, 2025

Financials Results

• Revenue: GBP 8.5B (Q3), up 8% YOY
• EPS: 55p core EPS, up 14% YOY
• Operating Margin: Q3 operating margin improved 90 bps; year-to-date operating margin 33.9%, up 100 bps YOY

Guidance:

• Full-year 2025 sales guidance upgraded to growth of ~6%–7% (from prior ~3%–5%).
• Core operating profit guidance increased to growth of 9%–11%.
• Core EPS guidance raised to growth of 10%–12% (expecting fourth consecutive year of double-digit EPS growth).
• Gross margin to benefit from product mix; expect ~GBP 100m supply-chain charges in Q4.
• SG&A to grow low single digits with ~GBP 150m Q4 charges for productivity initiatives.
• R&D to grow ahead of sales; royalties now expected GBP 800m–GBP 850m.
• Tax rate around 17.5%.

Business Commentary:

* Strong Financial Performance and Sales Growth: - GSK reported total sales of GBP 8.5 billion for Q3 2025, up 8% for the quarter, with core operating profit up 11% and core earnings per share up 14% to 55p. - This growth was driven by sustained performance across specialty medicines, oncology, and HIV segments.

• R&D Progress and Regulatory Approvals:
• The company made excellent progress in R&D with four FDA approvals this year, including BLENREP in Q3.

• The strong R&D pipeline, strength in late-stage portfolios, and timely regulatory approvals contributed to this performance.

• HIV Portfolio Growth:

• The HIV portfolio delivered double-digit growth, up 12% in the quarter, primarily driven by strong patient demand for long-acting injectables.

• This demand is reflected in 10 points of strong demand growth for products like Cabenuva.

• ** Oncology Portfolio Expansion:**

• The oncology portfolio saw 39% growth, with notable contributions from Jemperli and Ojjaara.

• The expansion of oncology pipeline assets and strategic acquisitions, such as BLENREP and GSK'981, support future growth.

• Productivity and Cost Efficiency:

• Operating margin improved by 90 basis points, with a gross margin improvement due to product mix and efficiency gains.
• The company continues to leverage productivity improvements and reinvest royalty income in R&D, driving operational excellence.

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly cited upgrades and momentum: "Total sales were up 8% for the quarter"; "core operating profit up 11% and core earnings per share up 14% to 55p"; "upgrading our guidance for the year" and multiple pipeline approvals and R&D investments highlighted.

Q&A:

• Question from Peter Verdult (BNP Paribas Exane): There's a EUR 6bn revenue gap between market expectations in 2031 and your >EUR40bn target — which assets are being underappreciated? And will Luke reiterate or tweak the go-forward strategy at the full year results or do we wait until '26?
  Response: Management: Gap is largely due to oncology and respiratory/RI&I (notably BLENREP, Jemperli, and recently licensed ADCs); strategic detail to be provided at full-year—Luke reiterated confidence in the >GBP40bn target but deferred substantive changes until next year.

• Question from Matthew Weston (UBS): On Shingrix, was France a bolus that will wane in 2026 or can ex‑US keep growing? And for Julie, help with pushes/pulls on OpEx — R&D reinvestment and whether launches (depemokimab, Nucala COPD, BLENREP) require more spend next year?
  Response: Core takeaway: Shingrix growth near term driven by Europe/ex‑US with U.S. penetration slowing; company will continue to invest behind launches and R&D (R&D growing ahead of sales) while driving SG&A productivity to achieve >31% operating margin by 2026.

• Question from Michael Leuchten (Jefferies): For depemokimab, what's your phasing/likely source of business into 2026? And for BLENREP, what learnings from Europe help forecast the U.S. uptake curve given label and REMS?
  Response: BLENREP: ramp strategy emphasizes intensive support for initial physicians/patients and a simplified REMS to ease use; depemokimab: targeting bio‑naive patients with substantial unmet need and strong physician interest, but exact commercial phasing not disclosed.

• Question from Luisa Hector (Berenberg): On business development, what's appetite/capacity for further deals and any changes to size/area focus? And regarding J&J rilpivirine, should we assume they can supply what you need so it won't constrain filing/launch?
  Response: BD will remain an active, disciplined contributor (focus on RI&I and oncology); the Janssen rilpivirine supply delay was a one‑off for clinical trial supply and not expected to materially affect filing/launch timelines (Q4M start moved to H1 2026 but 2027 file / 2028 launch remains targeted).

• Question from Sachin Jain (BofA Securities): Commercial impact of Q4M delay versus Gilead's potential weekly oral LEN+islatravir; any color on U.S. policy engagement (Medicaid/MFN) and IRA dialogue; and directional color versus '26 consensus (~GBP200m) for BLENREP and depemokimab?
  Response: Management: Long‑acting injectables retain a differentiated value proposition versus weekly oral competitors and remain core to strategy; company is constructively engaging with U.S. policymakers on policy issues and has concluded IRA negotiations as factored into outlook; no specific 2026 revenue guidance given.

• Question from Simon Baker (Rothschild & Co Redburn): Thoughts on pushes/pulls to the >EUR40bn 2031 target and how the long‑acting HIV market will evolve across 2‑, 4‑ and 6‑month dosing options?
  Response: Management: Multiple duration options will expand the market rather than one winner — patient willingness rises with longer intervals (Q2M→Q4M→Q6M), and Q6M (with VH184 and partner agents) is expected to materially expand uptake while preserving patient choice.

• Question from Sarita Kapila (Morgan Stanley): Can you give more detail on the Nucala COPD rollout — where usage is concentrated by eosinophil subgroups — and Jemperli penetration in endometrial cancer and sustainability (can it reach >$2bn in current indications or need pipeline)?
  Response: Nucala COPD: uptake is broad across the label (including lower eos counts), with strong early market share gains; Jemperli: strong momentum in endometrial (particularly DMMR) with expanding use and ongoing trials to broaden indications—existing indications drive growth but pipeline expansion will support larger peak sales.

• Question from Zain Ebrahim (JPMorgan): For BLENREP, how much growth do you expect from the U.S. third‑line label versus ex‑US and how much depends on the expected 2028 indication expansion? And how do you view General Medicines (Trelegy) midterm after IRA negotiations?
  Response: BLENREP: management expects meaningful growth from both U.S. and ex‑US markets with further upside from earlier‑line indication expansion, though initial U.S. ramp may be measured; General Medicines: Trelegy continues to grow and 2025 expectations remain broadly stable with IRA outcomes factored into guidance.

Contradiction Point 1

Blenrep's Impact on 2031 Outlook and M&A Plans

It involves the potential impact of Blenrep's approval and launch on the company's long-term financial outlook and strategic plans, which are critical for investor expectations.

What assets are materially undervalued that contribute to the gap between market expectations for 2031 and your EUR 40 billion revenue target? Will you reiterate or adjust your forward-looking strategy with the full-year results, or will you unveil it later in 2026? - Pete Verdult (BNP Paribas Exane)

2025Q3: The outlook for Blenrep remains strong, and we are prepared to launch, then grow and scale as fast as possible. - Emma Walmsley(CEO)

1. Does the 2026 "report" for camlipixant refer to full data, and will there still be a CALM-1 headline press release in 2025? 2. How does the Blenrep delay affect the 2031 outlook, the GBP 40 billion composition, and your M&A plans? - Simon P. Baker (Redburn Europe Limited)

2025Q2: We remain optimistic about the U.S. approval and delivery outside the U.S. The outlook for Blenrep remains strong, and we are prepared to launch, then grow and scale as fast as possible. - Emma Walmsley(CEO)

Contradiction Point 2

Nucala COPD Peak Sales Expectations

It involves changes in financial forecasts, specifically regarding the expected peak sales of Nucala in the COPD market, which are crucial for revenue projections and investor expectations.

Can you discuss Nucala's progress in COPD and Jemperli's performance and sustainability in endometrial cancer? - Sarita Kapila (Morgan Stanley)

2025Q3: Nucala's launch is broad and aimed at preventing severe exacerbations. - Luke Miels(Chief Commercial Officer)

How will supply chain costs and product mix impact H2 gross margin? Has Nucala COPD peak sales reduced from GBP 0.5 to GBP 1 billion? - Michael Leuchten (Jefferies)

2025Q2: Regarding Nucala COPD, the expectation remains GBP 0.5 billion, with positive market research and execution. - Julie Brown(CFO)

Contradiction Point 3

Shingrix Sales and Market Dynamics

It involves differing perspectives on the market performance and factors affecting Shingrix sales, which are crucial for revenue projections and investor expectations.

What factors will drive or challenge Shingrix's performance in 2026? How do you balance R&D reinvestment needs with upcoming launches like depemokimab and BLENREP? - Matthew Weston (UBS Investment Bank)

2025Q3: Shingrix will benefit from France's strong performance and European expansion. U.S. will continue to be challenging due to vaccination factors. - Luke Miels(CMO)

How is vaccine demand in the U.S. being impacted by the new administration's rhetoric? - Kerry Holford (Berenberg)

2025Q1: Shingrix, where we are obviously doing really well outside of the U.S. In the U.S., it's a bit of a challenge at the moment. - Luke Miels(CMO)

Contradiction Point 4

Respiratory, Immunology, and Inflammation (RI&I) Segment Performance

It involves differing expectations and performance assessments of a significant segment within the company's portfolio, impacting strategic focus and investor perceptions.

What underappreciated assets are contributing to the gap between 2031 market expectations and GSK's >EUR40B revenue target? Will the go-forward strategy be reiterated/tweaked at full-year results or unveiled later in 2026? - Pete Verdult (BNP Paribas Exane)

2025Q3: We remain very confident in the underlying fundamentals for respiratory, immunology and inflammation, and we continue to see significant opportunities to build on the strong momentum that we've got. - Luke Miels(CMO)

What are the expectations for Nucala COPD and Blenrep launches? Will they be strong in H2 or by 2026? Are there barriers to a rapid Blenrep launch? - James Gordon (JP Morgan)

2025Q1: We do anticipate a more challenging commercial environment for the respiratory, immunology and inflammation segment this year as we lap strong performance from last year. - Luke Miels(CMO)

Contradiction Point 5

Impact of HIV Market Dynamics on Revenue

It involves differing statements on the impact of HIV market dynamics on revenue, which is crucial for financial projections and investor expectations.

What factors are influencing the trajectory of Shingrix into 2026? How do you balance R&D reinvestment needs with upcoming product launches like depemokimab and BLENREP? - Matthew Weston (UBS Investment Bank)

2025Q3: R&D continues to grow ahead of sales. Launches like BLENREP, depemokimab, and Nucala COPD are major investments. SG&A leverage remains a priority, with continued productivity improvements. - Julie Brown(CFO)

What is driving the positive impact from the channel mix in HIV? Has Blenrep's guidance been reduced? - Rajan Sharma (Goldman Sachs)

2024Q4: HIV channel mix remains stable, with no significant changes expected in 2025. - Julie Brown(CFO)