Entrepreneur planning and marketing data for investment analysis.
I GSK (LSE:GSK) share price has dropped from its position. So it may be a good time to research and consider a stock opportunity.
I think the global biopharma company has been pulling the trigger for a long time and it looks like a growth-oriented proposition for its shareholders.
A pipeline of R&D prospects
The business has ambitions to bring operational progress through its research and development (R&D) efforts. So it can continue to perform like its peers AstraZeneca have you done in the last decade or so? It is possible.
GSK’s news flow has been steadily increasing. It is common for a company to release positive reviews about drugs and treatments it is developing.
However, unlike AstraZeneca, the company has not made enough progress in commercializing new drugs. However it may reach some of the best sellers in the future, and the revenue flow may start to increase. I hope such performance improvements will drive the stock higher.
Here is what a stock price chart looks like.
Currently, GSK is still dealing with legacy issues. For example, in October the directors announced an agreement to pay $2.27bn to settle the US lawsuits.
This program should address approximately 93% of well-reported lawsuits related to legacy heartburn medications. Zantac. So moving will put a large part of the problem behind the business, allowing it to move forward.
The growth agenda is not affected
It is a costly consequence. But the company said it can subsidize the cost of the residences with existing facilities. That means there will be no change in the growth agenda or R&D investment plans.
Such legal battles are unusual for companies the size of GSK. When I read the notes at the end of the financial reports of large firms from various sectors, the list of ongoing legal issues is often long.
Many types of business operations can be risky, and legal work is often part of what is needed to keep things going. Still, one specific uncertainty for GSK shareholders is that another drug in its stable could attract litigation.
Another risk is that the company’s R&D pipeline could disappoint and fail to produce any best-selling drugs.
Still, chief executive Emma Walmsley was upbeat in the October third quarter results report. The R&D pipeline is strengthening and there have been 11 positive phase III trials so far in 2024. In addition, the company plans five new ones. “product endorsement opportunities” next year.
Good idea and benefits now
Directors are sticking to previous guidance for 2024 and Walmsley is no different “more confidence” about the vision for the coming year and beyond.
Meanwhile, City analysts expect average wages to rise by around 11% this year and around 8% by 2025.
But one of the main things I like about GSK is the decent dividend for shareholders. With the share price close to 1,333p, the forward yield to 2025 is around 4.8%.
Given the potential for the business to grow for many years, I think the yield level suggests some serious valuations here that investors should consider.
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