Citi ups recommendation on GSK to 'buy'

In a note published on Tuesday, the bank said it had based its decision on "compelling" data about Blenrep, GSK’s novel treatment for multiple myeloma, as well as a range of other positive indicators.

It increased its earnings per share forecasts by 50%, reflecting the reinstatement of peak Blenrep revenues of around £2.5bn.

Citi said: "We have been teetering on the edge of upgrading GSK for several months.

"The compelling data with Blenrep in myeloma is the missing piece that pushes us over the line after the last seven years without a positive recommendation.

"Our upgrade is based not only on Blenrep’s under-appreciated revenue potential but also the cumulative impact of the multiple incremental positives ranging from Zantac liability outlook, RSV/Shingrix, astute business development and [the] increasingly positive ViiV outlook post dolutegravir loss of exclusivity.

"GSK’s recent commercial and pipeline wins put GSK in a stronger position to attract both external talent and pipeline assets."

As well as upgrading its rating from ‘neutral’, Citi upped its price target on the London-listed stock to 2,100p from 1,700p.

As at 0930 GMT, shares in GSK were up 1% at 1,636.4p.

GSK owns 78% of ViiV, an HIV specialist.