Why I am unable to shrug off my disappointment in GSK

In the quiet cool down to Christmas, I am keen to take a look at some of the companies that readers have been asking for some more detailed analysis on.

Thank you to johnsmith68 for your GSK (LON:GSK) request. This is the first company I analysed when I became a financial journalist and it taught me a lot about investing in the pharmaceutical industry.

Jargon like ‘blockbuster’ (a drug which makes more than $1bn in revenue in a single year) and ‘patent cliff’ (when big selling medicines are due to lose their patent protection) are crucial to those attempting to navigate the industry. Prior to studying GSK, I didn’t know that pharmaceutical patents only last ten years at which point the active ingredient in medicines becomes an open book, free to face competition from generic competitors. Big pharma companies can prolong their patent cliffs by investing in label extensions or protected delivery mechanisms for their top selling medicines, but innovation in new areas is better.

Back in 2014, the big trends within the pharmaceutical industry were biologics (medicines which use living components, rather than the traditional chemical ingredients found in pharmaceuticals) and genetics (the...