UK Chancellor trumpets £650m AstraZeneca investment

A £650 million investment package by AstraZeneca in the UK has been held up by Chancellor Jeremy Hunt as a “vote of confidence” in the country’s life sciences sector.

AZ is preparing to invest £450 million at its manufacturing site in Speke, Liverpool, to boost research, development, and manufacturing of vaccines, including the construction of a new plant that will be powered by renewable energy, according to a government statement.

The other £200 million will go towards expanding AZ’s already large presence in Cambridge – the site of its flagship Discovery Centre (DISC) R&D facility, which opened three years ago – with a new facility that could add 1,000 researchers to its current headcount of 2,300.

The announcements follow earlier reports that AZ was in line for a significant financial aid package to support the project, possibly as much as £100 million, according to rumours circulating earlier this year. The government said the investments were contingent on "mutual agreement with the UK government and third parties."

AZ’s chief executive, Pascal Soriot, said the investments “would enhance the UK’s pandemic preparedness and demonstrate [...] ongoing confidence in UK life sciences,” adding that the company “will continue to support the UK in driving innovation and patient access.”

It is unsurprising that the government has latched onto the programme, given that Soriot was quite vocal last year about AZ’s decision to site a new $360 million manufacturing facility in Ireland, rather than near its existing production hubs in Warrington and Speke.

At the time, he made allusions to the high level of corporate tax rates in the UK compared to Ireland, but there was speculation over other reasons for the decision, including problems with the voluntary scheme of rebates on branded medicines – now apparently resolved – access to green energy, which has become a priority for AZ under Soriot, and a decline in the UK’s clinical research sector.

In a related development, AZ will also work with the UK Health Security Agency (UKHSA) on a framework for developing and evaluating vaccines – using technology from both AZ’s Speke site and the UKHSA’s Vaccine Development Evaluation Centre (VDEC) at Porton Down.

“Our £108 billion life sciences sector provides over 300,000 high-skilled jobs across the UK and is crucial for the country’s health, wealth, and resilience,” said Hunt. “We are sticking to our plan to make the UK one of the best places in the world to invest in developing and manufacturing new, innovative medicines.”

Other developments in the budget of interest to the life sciences sector included £3.4 billion for NHS digital infrastructure – in return for pledges to improve productivity – and a £45 million pot for charitable medical research, said the Association of the British Pharmaceutical Industry (ABPI).

“The UK’s life sciences industry continues to be one of the country’s highest potential growth sectors – and it is great to see some of that potential demonstrated today,” said ABPI's chief executive, Richard Torbett.

“AstraZeneca’s investment shows that, if we get the policy environment right, we can reinvigorate medicine manufacturing in this country, creating new jobs and prosperity across the country,” he added.

The BioIndustry Association also welcomed the AZ news, and welcomed, too, a new expert advisory panel at the HMRC that will be able to help small and medium-sized enterprises (SMEs) seeking R&D tax relief support and a move to unlock capital from pension funds for the life sciences sector.

“Successive policy changes to the R&D tax regime over the past several years have created uncertainty and additional red tape for SMEs, putting at risk the UK’s reputation as a location for innovative businesses,” according to BIA's CEO, Steve Bates.

“We are therefore looking forward to a period of stability and bedding-in for the new rules,” he said, adding: “HMRC will need help to ensure the R&D tax relief claims process is streamlined and robust, making it straightforward and quick for genuine innovative companies and catching fraudulent ones.”