GSK has unveiled a sweeping three-year cost-savings programme worth £1.9 billion, equivalent to around $2.5 billion, aimed at reshaping how the British drugmaker allocates its resources.
The plan, announced by chief executive Luke Miels, is designed to fund the company’s expanding late-stage research and development pipeline while navigating a significant patent cliff on the horizon.
The programme targets annual savings of £1.9 billion by 2029, set against a one-time implementation cost of £2.4 billion, or approximately $3.2 billion, which the company views as a necessary investment.
“To fund investment in the late-stage portfolio and R&D, we are starting a 3-year cost-savings programme to simplify the organisation and to reallocate capital and resources,” Miels said in a statement.
The largest portion of the savings, around 45%, will come from improved procurement practices, with Miels telling journalists on a second-quarter earnings call that the focus would target areas away from frontline laboratory operations.
He specifically cited “all sorts of systems and consultants and various other partners [and] support functions” as areas where the company intends to reduce expenditure significantly.
A further 40% of savings will come from what Miels described as the “evolving portfolio,” reallocating resources away from mature products and directing them toward specialty and novel treatments.
Additional savings are expected to flow from redesigned processes, artificial intelligence, supply-chain automation, streamlined support functions, and simplification of the company’s broader operational structure.
A portion of the funds will also be directed toward improving margins and profitability ahead of the patent expiry of HIV medicine dolutegravir, which is due in the United States in 2028.
GSK said it now expects to begin more than 20 late-stage studies in 2026, a significant increase from a previous target of just 10, following pipeline accelerations across 18 indications for seven assets in oncology, respiratory, hepatology, and vaccines.
The restructuring will include global job cuts, though Miels declined to specify the number of roles affected during the announcement, citing his desire to consult with employees first.
“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 media call.
Shares of GSK rose as much as 7% following the announcement, as the company also raised its mid-term margin forecast and reported second-quarter profit and sales above analysts’ expectations.
The restructuring represents a major strategic move by Miels to reassure investors that GSK can successfully manage the looming patent cliff for dolutegravir, which is expected to weigh on revenues between 2028 and 2030.