PHARMACEUTICAL giant AstraZeneca has scrapped plans for a £450m (US$559m) upgrade to its vaccine manufacturing facility in Speke, Liverpool following discussions with the UK government. The news has been met with disappointment from industry and political figures.
AstraZeneca announced the major investment last March when the then government pledged to commit £90m (US$111.8m) in funding. The Labour government reduced this to £40m upon taking office in July, although the Financial Times reports that AstraZeneca rejected a £78m government offer last week in what the newspaper describes as a “tense meeting”, hours after chancellor Rachel Reeves called AstraZeneca one of the UK’s “great companies”.
AstraZeneca had initially intended to invest £150m of the £450m in R&D at the Speke facility, but the government reduced support after learning the company planned to decrease this to £90m.
In an official statement, AstraZeneca cited “several factors” that led to their decision, “including the timing and reduction of the final offer compared to the previous government’s proposal”. It is also understood that the company was embittered by the NHS’s rejection of its breast cancer drug Enhertu last March, which the then government said was not offered for a “fair price”.
Sharon Todd, CEO of the Society of Chemical Industry, said AstraZeneca’s decision “is a real concern for industry, sending out the wrong message at a time government is shaping its new industrial strategy.
“If life sciences are going to be a major pillar of the UK’s new industrial strategy, then the UK needs to make some bold steps forward to ensure it is competitive for life sciences investments.”
AstraZeneca have said the Speke facility will remain open and continue producing its nasal flu vaccines, and that the latest decision will not affect the 450 employees who work there.
AstraZeneca is the UK’s biggest publicly listed company and has significant political leverage. The pharmaceuticals industry has been frustrated with the investment landscape in the UK, complaining that other countries have “more favourable conditions” such as in Singapore, where AstraZeneca has recently announced plans to invest US$1.5bn, along with other major investments in the US and Canada.
One industry figure, who did not want to be named, told TCE that AstraZeneca’s U-turn was “not unexpected”, and that there was likely to have been “a bit of political gamesmanship” contributing to their decision. They added that they expected AstraZeneca to redirect their investment to southern Ireland, as has been the trend in recent years.
The UK’s science minister, Chris Bryant, said AstraZeneca’s decision was “deeply disappointing”, responding to an urgent question in parliament yesterday from shadow science secretary Alan Mak. Bryant said: “Since the spring budget AstraZeneca confirmed a significant change in the composition of its proposed investment, resulting in a smaller level of research and development being conducted in the UK.
“As the shadow minister would expect, that change in AstraZeneca’s UK investment resulted in a corresponding change in government support.”
Mak accused the government's October national insurance hike of making the UK less attractive to major business investments. He said: “That has destroyed the business case for expanding the factory and the deal is now off.” He added: “Labour promised growth but delivered failure and let Britain down again.”
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