GSK Stock Rises After Berenberg Upgrade and $750M Chimagen Deal
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.
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