GSK's Specialty Medicines Unit on a Strong Footing: Here's Why

GSK plc’s GSK Specialty Medicines segment includes medicines that prevent and treat diseases like HIV, cancer, asthma and immune-inflammation diseases like lupus. Specialty Medicines now represents close to 40% of GSK’s sales.

The company is witnessing increased sales growth of its Specialty Medicines unit, particularly reflecting successful new launches in Oncology and long-acting HIV medicines. Sales are rising in all areas, HIV, Immunology/Respiratory as well as Oncology. Sales of the Specialty Medicines unit rose 17% in the first quarter of 2025.

In the segment, while products like Nucala and Dovato are key top-line drivers, new long-acting HIV medicines, Cabenuva and Apretude, as well as new oncology drugs Jemperli and Ojjaara, are also witnessing strong patient demand and contributing to top-line growth.

GSK is also increasing R&D investment in promising new long-acting and specialty medicines in Respiratory, Immunology & Inflammation, Oncology and HIV areas. Blujepa/gepotidacin for treating uncomplicated urinary tract infection (“UTI”) was approved in the United States in the first quarter of 2025. Its blockbuster drug Nucala was approved for treating chronic obstructive pulmonary disease or COPD, its fifth indication, in May 2025.

Regulatory applications seeking approval of the Blenrep combination for relapsed/refractory multiple myeloma and depemokimab for two indications (chronic rhinosinusitis with nasal polyps or CRSwNP and asthma with type II inflammation) are under review in the United States and some other countries. FDA decisions on all these filings are expected in 2025. Blenrep combinations were approved in the United Kingdom and Japan in April/May 2025.

Backed by its existing portfolio of medicines as well as new drugs, GSK expects sales in the Specialty Medicines segment to rise in a low double-digit percentage at CER in 2025, despite the impact from the Inflation Reduction Act or IRA. Specialty Medicines, which now accounts for around 40% of GSK’s sales, is expected to be more than 50% of GSK’s total revenues by 2031.

Competition for GSK’s Specialty Medicines

In the Specialty Medicines segment, most of GSK’s products are up against significant competition from small as well as large pharmaceutical companies like AstraZeneca AZN, Merck MRK, Sanofi SNY, Gilead, Pfizer, J&J and Novartis, among others.

In the respiratory market, Advair is facing stiff competition in the COPD and asthma markets from AstraZeneca and Merck’s respiratory disease drugs. The launch of AstraZeneca’s Fasenra and Sanofi’s Dupixent has raised competitive pressure for Nucala. Continued competitive and pricing pressure is hurting sales of GSK’s ICS/LABA class of medicines. In HIV, GSK’s medicines face competition from Gilead and MRK’s drugs. AstraZeneca, Pfizer, Merck and Lilly are GSK’s key competitors in the oncology space.

GSK’s Price Performance, Valuation and Estimates

GSK stock has risen 16.3% year to date compared with an increase of 0.3% for the industry.

GSK’s stock is trading at an attractive valuation relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 8.34 on a forward 12-month basis, lower than 14.93 for the industry. The stock also trades below its 5-year mean of 10.21.

The Zacks Consensus Estimate for earnings has risen from $4.38 to $4.41 per share for 2025 but declined from $4.82 to $4.81 per share for 2026 over the past 60 days.

GSK has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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