GSK said it is launching a three-year program to cut costs and reinvest in its drug pipeline, seeking to protect profitability from the patent expiration of a key HIV drug later this decade.

The U.K. drugmaker on Tuesday outlined plans to build a new research-and-development center in Cambridge, England, moving into the biomedical campus of the university town where rival AstraZeneca has its headquarters. GSK also said it would conduct more clinical trials for the most promising medicines in its pipeline, hoping to find new growth drivers.

To fund its plans, the company is targeting annual savings of 1.9 billion pounds ($2.52 billion) by 2029, it said. The program will come at a cost of 2.4 billion pounds, the company added.

Shares in GSK jumped on the news and were up 4% in European afternoon trading.

The moves are part of GSK Chief Executive Luke Miels's strategy to steer the company toward its target of generating more than 40 billion pounds in sales by 2031 and accelerating growth from then onward.

Since Miels took the helm in January, the company has stepped up dealmaking and made its biggest acquisition in years, the $10.6 billion purchase of cancer-drug developer Nuvalent. But some investors and analysts still have doubts about whether GSK can hit its 2031 target considering that one of its top-selling products, HIV drug dolutegravir, is due to go off patent between 2028 and 2030.

Miels said on a call with reporters that a review of GSK's portfolio identified seven late-stage drugs, spanning 18 indications, for which the company wants to speed up development because of their potential. GSK now expects more than 20 late-stage clinical trials to start this year, up from 10 previously.

A small amount of the funds freed up by the savings plan is expected to support the company's operating margin during the dolutegravir patent-expiry period, but the bulk will be reinvested in R&D, the company said.

Miels said the savings would come from cutting procurement and support-function costs, from a shift in its portfolio to speciality products from more mature general medicines, and from its supply chain.

As part of the move to Cambridge, GSK said it would close its research-and-development site at Stevenage, England, and upgrade its existing labs in Ware, England. The company said it plans to spend 400 million pounds over three years on the changes.

For the second quarter, GSK reported turnover of 8.41 billion pounds, up 5% at constant currency, with growth in specialty medicines and vaccines offsetting a decline in its general-medicines segment.

Analysts had forecast turnover at 8.24 billion pounds, according to consensus estimates provided by the company.

Core operating profit came to 2.8 billion pounds, up 7% excluding currency movements, against consensus expectations of 2.675 billion pounds.

Net profit plunged to 435 million pounds from 1.44 billion a year before due to higher R&D expenses.

GSK reiterated its full-year outlook, but said it now expects turnover and core operating growth at the upper half of its prior guidance ranges while core EPS to be at the lower half.