Bull vs Bear: GSK’s big oncology bet just got bigger

Key points

• GSK’s new CEO is making a splash with a big acquisition of US cancer biotech Nuvalent
• The $10.6bn all-cash deal sees GSK place an increasingly big bet on oncology to build $40bn in annual revenues by 2031
• Shares have flatlined this year but are still +23% over the last 12 months

The deal is central to GSK’s target of achieving $40bn in annual revenues by 2031. The loss of exclusivity from the Dolutegravir family has been an important driver for action. In 2025 these drugs generated $5.65bn in sales – about one-sixth of total revenues. Replacing these volumes won’t be easy, while GSK also faces headwinds from its vaccines business, which make up close to a third of sales, from Trump administration pushback.

But oncology is growing – sales rose 43% last year to £2bn and is set to grow further, potentially accounting for as much as half of its largest division, speciality medicines.

As I noted in February, this makes acquisitions important. GSK recently acquired RAPT Therapeutics for $2.2bn billion, which provides access to the growing market of food allergy sufferers. Last year it bought a liver drug from Boston Pharmaceuticals. 

And there was the $1.2bn acquisition of cancer biotech IDRx. There have been more deals besides focused on oncology – the $1.9bn deal for Sierra Oncology and a $1.5bn licensing deal with China’s Hansoh Pharma. And then 2025’s $12bn deal with China’s Hengrui Pharma which sees GSK develop 12 drugs across various areas of medicine including cancer.

There are already positive signs from the acquisition strategy – for instance positive results in trials for Hansoh’s Mo-Rez and Riz-rez drugs. Investment bank Jefferies thinks GSK’s oncology pipeline is underappreciated – last week it reiterated its buy rating and 2,500p price target on the stock, noting that oncology is on track to make a significant contribution to sales by 2031. Jefferies estimates Nuvalent could add $5-7bn in peak sales.

GSK has over 50 products in its pipeline, with two major approvals expected this year. The company also had 5 major FDA approvals in the last year, including the blood cancer drug Blenrep and Exdensur, a twice-yearly drug for treating severe asthma. Each of these are seen generating peak annual sales of $3bn; 2026 was always going a test of how the business can commercialise and execute these drugs, and now it's increasingly about how much the market buys into the push into oncology.