GSK (LSE: GSK) shares are trading at levels last seen approximately a quarter of a century ago, a troubling milestone for one of Britain’s most prominent blue-chip companies.
Back in March 1999, the pharmaceutical giant’s shares hit an all-time high of 2,067p as the dotcom boom propelled the FTSE 100 to extraordinary heights, before markets subsequently collapsed.
GSK ended 2003 at around 1,274p, and more than two decades later the stock sits at just 1,790p, representing painfully slow progress for long-term shareholders.
The shares have been repeatedly hammered by patent expiries, drug development failures, and persistent concerns about the company’s pipeline of future medicines.
Emma Walmsley, who became chief executive in 2017, spent years attempting to turn the company around, with heavy investment in research and development intended to replace ageing treatments losing patent protection.
The full-year dividend was held at 80p in 2014 and then frozen for seven years before being rebased at 57.75p following the 2022 demerger of consumer healthcare giant Haleon, further denting investor confidence.
US litigation over heartburn drug Zantac added further pressure, with GSK eventually settling in 2024, handing over $2.2bn without admitting liability.
There are, however, genuine signs of operational progress, with GSK reporting £32.7bn of sales in 2025, up 4%, while core operating profit rose 11% to £9.2bn.
Second-quarter results showed sales grew 5% to £8.4bn and core operating profit increased 7% to £2.8bn, with GSK targeting more than £40bn of annual sales by 2031 and expecting 2026 core profit and earnings per share to grow 7% to 9%.
Despite these improving numbers, the shares have fallen approximately 8% over three months and sit around 21% below their 52-week high, reflecting lingering investor scepticism about the road ahead.
Key concerns include patent expiries on HIV treatment dolutegravir from 2028, the enormous cost and uncertainty surrounding drug development, and questions about whether GSK can consistently replace medicines it loses to patent competition.
The stock is still up 18.8% over one year and 32% over five years, and carries a trailing dividend yield of around 3.7%, with a price-to-earnings ratio of approximately 10.5 suggesting reasonable value on paper.
The difficulty is that GSK has looked cheap ever since Haleon was carved out, and that apparent discount has not proven to be the catalyst for meaningful share price growth that many investors had hoped for.
For those holding the stock primarily for diversification or in hope of it closing the gap with sector leader AstraZeneca, progress has so far been underwhelming, with the dividend respectable but not spectacular by FTSE 100 standards.