TLDR
- Berenberg upgraded GSK from “hold” to “buy,” raising its price target to £22 from £20
- GSK stock rose 0.4% to £18.62 in early London trading
- GSK currently trades at a 23% discount to European pharmaceutical peers
- GSK signed a deal to acquire a trispecific T cell-engager from Chimagen Biosciences for up to $750 million
- The Chimagen program targets multiple myeloma and is expected to enter Phase 1 trials in 2027
GSK stock climbed 0.4% to £18.62 in early London trading on Tuesday after Berenberg upgraded the drugmaker from “hold” to “buy” and raised its price target to £22 from £20.
The upgrade comes as Berenberg pointed to a stronger late-stage pipeline and a pickup in dealmaking as reasons the current valuation discount is no longer warranted.
GSK trades at 9.6 times 2027 adjusted earnings. That is a 23% discount to European pharmaceutical peers, which trade at 12.4 times. Berenberg argues that gap has become too wide.
The broker noted that 10 of GSK’s 11 novel Phase 3 assets were sourced externally. Six of those late-stage assets are seen capable of generating at least £2 billion each in peak annual sales.
Berenberg forecasts GSK sales of around £39 billion by 2031. That sits above the Street consensus of roughly £36 billion and edges closer to GSK’s own guidance of more than £40 billion.
Pipeline Catalysts on the Horizon
Newly launched products Exdensur and Blenrep are expected to contribute to growth. Berenberg also sees further upside from bepirovirsen, Nuvalent’s lung-cancer assets, and GSK’s oncology antibody-drug conjugates with Hansoh.
The broker flagged two near-term regulatory decisions to watch. A U.S. decision on bepirovirsen for hepatitis B is expected by October 26, and a ruling on neladalkib for second-line ALK-positive lung cancer is due by November 27.
Phase 3 and proof-of-concept data are also expected over the next 12 months across small-cell lung cancer, HIV, asthma, food allergy, and bronchiectasis programmes.
GSK’s cost-saving programme targets £1.9 billion in annual savings by 2029. Berenberg said this should help protect research spending and keep margins stable even as high-margin oral HIV products face erosion from 2028.
Patent erosion on dolutegravir remains a known headwind. Berenberg’s above-consensus forecast suggests confidence that pipeline assets and cost discipline can absorb that impact.
GSK Adds Multiple Myeloma Asset With Chimagen Deal
Separately, GSK announced it has agreed to acquire a trispecific T cell-engager from Chimagen Biosciences. The deal covers full global rights and carries a total potential value of up to $750 million, including development and commercial milestones.
The T cell-engager simultaneously binds T cells while targeting two tumor-associated antigens. The program is expected to enter Phase 1 trials in 2027.
Multiple myeloma is the third most common blood cancer globally, with around 180,000 new cases diagnosed each year. The disease is treatable but not currently curable.
Hesham Abdullah, GSK’s Global Head of Oncology R&D, said the deal “advances GSK’s leadership goals in blood cancer” and adds a new potential option for patients.
The Chimagen agreement builds on an existing relationship between the two companies. GSK previously agreed to acquire CMG1A46, a dual CD19 and CD20-targeted T cell-engager currently in Phase 1 trials for B-cell malignancies.
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