GSK (LSE: GSK) shares have fallen 12% over the past three months, turning a £13,000 investment into roughly £11,440 on paper.
That represents a paper loss of around £1,560, though over a 12-month period the GSK share price remains up an impressive 27%.
The FTSE 100 pharmaceutical giant had attracted investor interest after years of underperformance, with a price-to-earnings ratio of around eight making the valuation look tempting.
Former CEO Emma Walmsley froze the dividend and directed cash into research and development in an effort to rebuild GSK’s weakening drugs pipeline over several years.
Concerns about patent expiries, legal battles over its Zantac heartburn treatment, sluggish vaccine sales, and fears over lagging rivals in obesity drugs all weighed heavily on sentiment.
Walmsley stepped down in December 2025, and full-year results published on 5 February showed sales rising 7% to £32.7bn while core operating profit climbed 11% to £9.7bn.
Free cash flow surged 41% to £4bn in those full-year results, though net debt crept up to £14.5bn, higher than some had anticipated.
First-quarter results on 30 April showed free cash flow rising a further £100m to £800m, supporting a forward dividend yield of 3.6% and leaving room for share buybacks.
However, net debt climbed again to £15.6bn, and forecast sales growth of 3% to 5% across 2026 underwhelmed investors looking for stronger momentum under new CEO Luke Miels.
HIV medicines represent a growing concern, with lucrative patents set to begin expiring within the next two or three years, adding further pressure to the outlook.
US tariffs remain a risk for the business, although GSK has expanded its manufacturing investment in America specifically to reduce exposure to that threat.
Management has kept its long-term 2031 sales target of above £40bn intact, providing some reassurance that the company’s strategic direction has not shifted under new leadership.
Ageing populations and rising global healthcare demand are expected to create significant long-term opportunities, with the US market alone generating roughly half of GSK’s total revenues.
At a current price-to-earnings ratio of 11.15, the shares are still considered good value by some investors who favour a long-term approach to holding the stock.