GSK Upgrades 2025 Guidance After Strong Q3 Performance

GSK lifts 2025 guidance after a punchy Q3 showing

GSK has posted a confident third quarter and nudged guidance higher for 2025. The quarter was driven by double‑digit growth in Specialty Medicines, solid Vaccines outside the US, and a strong contribution from royalty income. There are headwinds in US Vaccines and some pricing pressure from the US Inflation Reduction Act (IRA), but the overall trajectory looks better than the market expected.

Q3 2025 snapshot: the numbers that matter

Quick glossary: CER strips out currency swings; AER shows actual reported growth. “Core” excludes big one‑off items (like major legal charges and acquisition adjustments) to show underlying performance.

Where the growth came from: products and therapy areas

Specialty Medicines – the main engine

Specialty Medicines rose to £3.4 billion (+16% CER). HIV, Oncology, and Respiratory/Immunology all delivered double‑digit growth, with several notable standouts:

• HIV sales £1.9 billion (+12%): the long‑acting franchise did the heavy lifting. Cabenuva hit £357 million (+48%) and prevention option Apretude £120 million (+75%). Oral 2‑drug regimen Dovato was £695 million (+24%).
• Respiratory, Immunology & Inflammation £954 million (+15%): Nucala £499 million (+14%) and Benlysta £447 million (+17%).
• Oncology £511 million (+39%): Jemperli £230 million (+79%) continued to scale after broader endometrial cancer approvals, while Ojjaara/Omjjara £146 million (+51%) gained in myelofibrosis. Zejula fell to £137 million (-4%) amid label and pricing pressures.

Vaccines – ex‑US strong, US softer

Vaccines posted £2.7 billion (+2% CER). The mix was mixed: Shingrix £830 million (+13%) and Arexvy £251 million (+36%) grew strongly outside the US, but US demand and channel build were softer.

• Shingrix: Europe was the star, helped by the France launch and wider funding. The US declined 15% as penetration into harder‑to‑activate cohorts slowed. Year‑to‑date, ex‑US now represents 66% of Shingrix sales.
• Arexvy (RSV): robust in Europe and International on new recommendations and tenders; the US saw lower pre‑season inventory build and slower uptake.
• Influenza £216 million (-22% CER) and Established Vaccines £840 million (-8% CER) weighed, reflecting competition and CDC stockpile movements.

General Medicines – Trelegy offsets legacy erosion

General Medicines delivered £2.5 billion (+4% CER). Trelegy stood out at £736 million (+25%), with favourable US pricing mix and class growth. Elsewhere, respiratory and other mature products continued to face generic erosion, especially in Europe and International.

Guidance upgraded: what GSK now expects for 2025

On a CER basis, management now guides to:

• Turnover growth of 6% to 7% (previously towards the top end of 3% to 5%).
• Core operating profit growth of 9% to 11% (previously towards the top end of 6% to 8%).
• Core EPS growth of 10% to 12% (previously towards the top end of 6% to 8%).

Drivers behind the uplift: continued momentum in Specialty Medicines, disciplined SG&A (low single‑digit growth), and royalty income now expected at £800‑£850 million, including income from an IP settlement and the CureVac/BioNTech mRNA settlement in Q3. R&D is set to grow ahead of sales as GSK leans into pipeline acceleration, particularly in Oncology and Vaccines.

Note: the company flags “ongoing challenges for Vaccines in the US” as the key swing factor for full‑year turnover within the range. Currency remains a headwind on AER with a stronger Sterling; guidance is given at CER.

Cash, buybacks and the dividend

Free cash flow came in at £1.2 billion in Q3, with £2.5 billion of cash generated from operations. Year to date, GSK has spent £1.1 billion on its £2 billion buyback programme (to end of Q2 2026) and paid £1.9 billion in dividends. The board declared a 16p Q3 dividend and still expects 64p for 2025. Net debt rose to £14.4 billion, reflecting the IDRx and efimosfermin acquisitions, dividends and buybacks, partly offset by £3.1 billion of year‑to‑date free cash flow.

Pipeline and catalysts: why the medium‑term story is getting denser

This year has already delivered four major approvals: Blenrep (US) in multiple myeloma, Penmenvy (US launch) in meningitis, Blujepa (gepotidacin) for uUTIs, and Nucala for COPD in the US. A US decision on depemokimab for asthma with type 2 inflammation and nasal polyps is expected in December 2025. Management now counts 15 “scale opportunities” with peak year sales potential of over £2 billion collectively launching between 2025 and 2031, with pivotal starts under way in ADCs, MASH, COPD and GIST.

Commercially, watch the roll‑out of Blenrep combinations, the continued globalisation of Jemperli, Shingrix’s ex‑US expansion, and the RSV label expansion work for Arexvy. On anti‑infectives, regulatory progress for gepotidacin in gonorrhoea and a US submission for tebipenem pivoxil in cUTIs are near‑term milestones.

Balanced view: what’s good and what to watch

Positives

• Quality of growth: broad‑based, with HIV long‑acting, Nucala, Benlysta, Jemperli and Trelegy all compounding.
• Margins and cash: Core operating margin of 34.9% and £1.2 billion of free cash flow support dividends and buybacks.
• Guidance upgrade: revenue, profit and EPS all raised at CER, with higher royalty income and disciplined opex.
• Pipeline momentum: multiple approvals in 2025 and a thick slate of upcoming decisions.

Watch‑outs

• US Vaccines softness: Shingrix and Arexvy dynamics in the US remain the main uncertainty for the Q4 run‑in.
• Pricing pressure in the US: IRA Medicare Part D redesign weighed on several products and could continue to bite.
• Zejula decline: ongoing competition and label changes continue to drag Oncology mix.
• Higher net debt: £14.4 billion after dealmaking and capital returns; manageable but worth tracking if rates stay elevated.
• Tariff risk: the ongoing US Section 232 investigation and indicated potential European tariffs are included in guidance but remain an external risk.

Regional colour: US mixed, Europe strong

By region, US turnover was £4.5 billion (+7% CER), Europe £1.9 billion (+13% CER) and International £2.1 billion (+6% CER). Europe benefited from Shingrix’s rapid uptake in France and strong trajectories for Bexsero and Arexvy in Germany. The US showed robust Specialty Medicines growth and an excellent quarter for Trelegy, offset by weaker US Vaccines and stockpile movements.

What this means for investors

GSK’s Q3 shows a healthier growth engine than in previous cycles, with multiple franchises pulling together and fewer one‑off crutches. The upgraded guidance, resilient margins and improving pipeline execution support the equity story into 2026. The flip side is clear: keep an eye on US Vaccines demand, IRA‑related pricing pressure, and the debt line as M&A and R&D stay active.

Net‑net, this is a solid set of numbers that leans positive. If execution on depemokimab, Blenrep combinations and the anti‑infectives push lands as planned, the medium‑term set‑up looks better than it has for some time. For income investors, the 64p full‑year dividend remains on track, with buybacks adding up to 1% to EPS in 2025 as guided.