GSK targets £1.9bn savings after profit slump

British pharmaceutical company GSK said Tuesday it is targeting £1.9 billion ($2.5 billion) in annual savings by 2029 after second-quarter net profit fell 70 percent to £435 million.

GSK said the drop followed a £1.3 billion hit from its decision not to proceed with camlipixant, a chronic cough treatment, after final-stage trials. The company said earlier this month that the latest tests showed "limited efficacy" and that the treatment was unlikely to transform patient care.

The London-headquartered company said it was starting a three-year cost-savings programme to simplify the organisation and reallocate capital and resources. Chief executive Luke Miels said GSK would not give a number for possible "people changes" before discussing the plan with staff.

Excluding the camlipixant hit, GSK said core operating profit rose 7 percent in the quarter to £2.8 billion. Revenue rose 5 percent to £8.4 billion.

Miels said in the earnings release that GSK had delivered another quarter of strong core results, with its key growth drivers performing well. Oncology sales rose 18 percent.

GSK said in June that it had agreed a $10.6 billion deal for Nuvalent, a Boston-based cancer treatment specialist, as part of its push into oncology and the United States.

GSK also said Tuesday that it plans to invest £400 million in a new major research and development centre in Cambridge, eastern England. The company said the site is expected to be operational by 2029 and will support its UK research and development with the help of more than 1,000 scientists.

UK Prime Minister Andy Burnham called the investment "a vote of confidence in British business" and a boost for innovation. GSK said it invests more than £6 billion in research and development each year, about a quarter of it in the UK.