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(Sharecast News) - GSK unveiled sweeping cost-saving plans on Tuesday as part of moves to ramp up research and development, including a 400m investment in the UK.
The blue chip pharma announced a three-year programme targeting 1.9bn of annual savings by 2029. Chief executive Luke Miels said the drive, which will be used to fund investment in GSK's late-stage portfolio and R&D, would "simplify the organisation and...reallocate capital and resources" as well as supporting margins. It is expected to involve job cuts, although full details were not provided.
Miels said: "We have identified late-stage pipeline accelerations - across 18 indications - for seven key assets in oncology, respiratory, hepatology and vaccines.
"We have also decided to establish a new flagship R&D centre in the UK's Cambridge Biomedical Campus, an investment that will further integrate GSK into one of the world's leading ecosystems for life sciences."
New prime minister Andy Burnham said GSK's proposed 300,000 sq ft centre on the Cambridge hub - one of the largest biomedical campuses in Europe - would be "a boost for home grown innovation and expertise". GSK will shut its current Stevenage hub under the plans, with around 1,000 scientists expected to transfer to the new campus.
Rival AstraZeneca reversed an earlier decision to halt investment in large-scale British projects earlier this year, when it announced a 300m investment.
The update came as London-headquartered GSK posted above-forecast second-quarter numbers. Turnover rose 5% to 8.41bn, ahead of consensus for 8.24bn, while core earnings per share were 9% stronger at 50.5p. Analysts had been expecting EPS closer to 47.1p.
Full-year guidance was reaffirmed, although it noted that while turnover would likely come in at the top end of the forecast 3% to 5% range, core EPS - anticipated to be grow by between 7% and 9% - would likely be in the lower half.
Longer-term, and Miels - who took over the top role at the start of this year after several years as chief commercial officer - is targeting annual revenues of 40bn by 2031.
As at 1415 BST, the stock was 3% at 2,027p.
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