Can Specialty Meds Offset GSK’s $2.2B Legal Charges and Sizzling R&D Setbacks on Oct. 28?

GSK (NYSE:GSK | GSK Price Prediction) reports third-quarter results on October 28. A $2.2 billion Zantac settlement hits the books this quarter and a failed cough program is still fresh, so this report tests whether specialty medicines can carry the load.

Strong First Half Gives Way to a Messier Third Quarter

Last quarter, GSK grew sales 5% to more than £8.4 billion, and core EPS rose 9%. EPS of $1.36 exceeded the $1.27 estimate. Specialty Medicines grew 14% and Vaccines grew 8%, while General Medicines fell 9%.

Q2 also brought setbacks. Results included a camlipixant impairment after the CALM-2 readout, and the £7.1 billion Nuvalent deal pushed net debt to £22 billion. Management now projects 2026 EPS in the lower half of guidance, mainly from about £160 million of added interest.

Shares closed at $50.75, up 6.26% year to date. Meanwhile, the Q3 EPS consensus slipped from $1.4141 90 days ago.

Consensus Calls for Lower EPS on Higher Sales

Last year’s Q3 included a £268 million CureVac patent settlement, which makes the comparison harder.

Exdensur, Long-Acting HIV and the Zantac Charge Set the Tone

The Zantac settlement resolves 93% of outstanding U.S. state court cases. It creates a large charge this quarter, but it also ends years of legal uncertainty. The focus will be on how management separates the charge from core results.

HIV remains the engine. In Q2, Cabenuva rose 33%, Apretude rose 39%, and long-acting injectables drove 80% of ViiV’s growth. That shift matters because dolutegravir, about 17% of sales, loses U.S. patent protection in 2028.

Exdensur is the launch to track. Its J-code went live on July 1, and more than 50% of insured patients now have coverage. The key metric will be a clear step-up in new patient starts.

Vaccines need a closer look. Arexvy sales fell 18% in Q1 before an Australian tender helped Q2. Trelegy abandonment is also expected to ease in the second half. On the pipeline, bepirovirsen faces an FDA decision date of October 26, and a neladalkib decision is expected by November 27.

A Clean Legal Slate Raises the Bar on Execution

With Zantac largely settled, the focus moves to the growth engine. Management still targets more than £40 billion in 2031 sales and expects operating profit growth to be significantly Q4-weighted. If specialty growth holds and Exdensur gains traction, the camlipixant failure should look like a contained setback. If either one falters, expect the 2028 dolutegravir patent cliff to dominate the discussion again.

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