What GSK Doubters Got Wrong

If you watched GSK over the past year, one concrete flashpoint was its $10.6b move to buy Nuvalent for targeted lung cancer drugs already carrying FDA Breakthrough Therapy tags. For GSK shareholders, the return over the past year was 21.1%, including dividends. If you had been deciding whether to buy on 23 October 2025, what would you have needed to believe about those oncology bets and the existing pipeline to consider that outcome plausible?

This theme extends beyond GSK. See which of 8 healthcare AI stocks may still merit a closer look.

The Two GSK Stories Investors Were Arguing Over

The shares cost £16.46 at the start of the period, and GSK investors were effectively choosing between two very different stories about the next few years.

The bullish narrative pointed to a Fair Value of £23.63, a notional price implied by expectations, built on GSK's 66 clinical-stage assets and a belief that revenue could climb 8.5% a year with margins rising from 10.8% to 19.8% by 2028.

The bearish view anchored on a Fair Value of £11.2 and focused on tightening cost controls in the US and Europe, with concern that major HIV patent expiries from 2028 and legal risks, including Zantac, could drag on earnings and compress the multiple to a P/E of 8.0x.

What The Evidence Around GSK Actually Tested

The Nuvalent acquisition and subsequent FDA approval of Jideytro gave GSK clear support for the bullish oncology story. At the same time, Q2 2026 results showed revenue at £8,409m and net income at £435m, with net margin falling to 5.2%. That weak profitability kept the optimistic margin assumptions unproven, so the evidence cut both ways.

The key issue was not pipeline headlines but whether new drugs translated into stronger margins. For another pharmaceutical stock, track net margin and product-level approvals side by side to see if the story about higher quality revenue is actually showing up in the income statement.

What Today's GSK Price Already Assumes

GSK now trades at £18.94, with this Narrative’s Fair Value sitting below that level. The Narrative argues that a softer General Medicines arm and specific product setbacks make it harder for newer launches and pipeline assets to fully carry earnings.

A buyer today effectively leans on GSK turning pipeline momentum, mix shift and cost savings into lasting profit gains. The open question is how the pressures flagged in this Narrative affect that bet.

"Although GSK is pushing hard to lift its specialty medicines mix, the 9% decline in General Medicines sales in Q2 and the downgrade to full year guidance indicate structural pressure from aging brands and generic competition that could drag on revenue and dilute the margin uplift expected from higher priced therapies."

One Narrative disagrees with today's price. → See where this Narrative says GSK should trade

Looking Past GSK’s Oncology Story

If GSK sharpened your focus on cancer drugs, look one step wider. Your watchlist might also include businesses serving broader treatment needs.

Where GSK leans on pipelines of specialty medicines, another large healthcare group spreads its bets across many sizeable products. Its reach covers prescription therapies and medical hardware used in hospitals.

The common thread is complex disease. This other player is advancing treatments for multiple myeloma, autoimmune conditions and hard to treat psychiatric disorders.

It is also investing heavily in surgical tools and eye procedures that reshape work inside operating rooms and clinics.

As that mix evolves toward higher value therapies and equipment, its long term earnings profile could eventually diverge from GSK’s narrower drug centric push.

That argument has a Narrative and a number behind it. → See the company one Narrative values 21% above its price

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