GSK cuts 1,200 Belgian jobs as vaccine revenue slips

GSK shares dropped 3.8% on Wednesday, marking the second-largest decline among companies on the FTSE 100 index. The sell-off occurred despite the British pharmaceutical giant reporting earnings that exceeded analyst forecasts for the July through September quarter.

The company recorded a 19% decrease in pre-tax profit, landing at £1.9 billion. This decline was driven largely by softer sales in its vaccine division, which saw revenue slip 2% to £2.6 billion. Core operating profit, however, rose 5%, and core earnings per share increased by 1%, both figures outperforming market expectations.

Specific product performance highlighted the mixed results. Arexvy, the respiratory syncytial virus vaccine, saw sales fall 24% due to difficult year-over-year comparisons. The shingles vaccine Shingrix also declined 5%. In contrast, sales of the meningitis vaccine rose 12%, and GSK’s HIV, cancer, and lupus medicines helped push total third-quarter turnover to £8.9 billion, a 5% increase from the same period last year.

Chief Executive Luke Miels, who assumed the role in January, defended the performance of Arexvy. He stated that the company maintains market share leadership against Pfizer and is receiving strong orders outside the United States. Miels indicated that a fuller picture of market trends would emerge over the next few months.

To streamline operations, GSK announced a restructuring program designed to save £1.9 billion annually by 2031. The initiative will cost £2.4 billion, with the majority of expenses incurred in the current and next fiscal years. The plan includes cutting approximately 1,200 positions in Belgium through the increased use of digital tools and automation. The country will continue to produce the bulk of the company’s vaccines.

Miels noted that the restructuring’s impact on the United Kingdom will be relatively limited, affecting some support roles in human resources and procurement at the London headquarters. He emphasized a strategic shift toward placing more personnel in laboratory settings rather than administrative functions. The company expects to begin 22 late-stage studies of new medicines by the end of the year and aims for annual revenue exceeding £40 billion by 2031.

The restructuring follows several acquisitions, including a £7.9 billion purchase of a US cancer specialist. Miels also pointed to ongoing research into Shingrix, noting two major studies examining its potential to reduce the risk of dementia and major cardiovascular events. Data from these studies is expected in 2027 and 2029. Retailers in Britain have reported increased consumer demand for the shingles vaccine following recent studies linking it to lower dementia risk.

Investors remain focused on the upcoming expiration of patent protection for dolutegravir, a key HIV drug, which will allow competitors to introduce generic versions toward the end of the decade. GSK has maintained its annual forecasts, with research and development spending projected to grow faster than overall sales.