GSK to invest £500m in UK R&D and manufacturing

By Gareth Macdonald

- Last updated on GMT

Related tags Glaxosmithkline Venture capital United kingdom

GSK has announced plans to invest £500m in its UK R&D and production operations with a particular focus on boosting biomanufacturing capacity.

The investment fits with the deal GSK announced with Lonza earlier this year​ and, more generally, with the direction in which the UK drug major's business is moving, given that biopharmaceuticals represent about 20 per cent of its clinical pipeline.

GSK also said it will add manufacturing capacity at its existing facility in Ware, Hertfordshire for respiratory disease treatments and solid-dose tablet products.

A new dermatology-focused production centre of excellence in Barnard Castle, County Durham and, in partnership with the University of Nottingham, a “green chemistry” unit are also planned as part of the investment programme.

GSK will also establish a £50m venture capital fund that will invest in small specialist firms and academic spin-outs which are “pursuing innovative, breakthrough science​.”

Overall, the firm expects to create more than 1,000 new jobs over the next few years.

Patent box

News of the investment follows just a day after the UK government announced the introduction of its “patent box,” which will reduce the tax rate on income generated by patented products by some 10 per cent.

However, a GSK spokesman told in-Pharmatechnologist that tax was not the key motivation for the firm's plan, explaining that: “As a global company, GSK is already able to access this kind of tax rate elsewhere in the world.

“[The patent box],” ​he continued “doesn’t necessarily change GSK's tax rate; it simply means we will be able to do work in Britain rather than having to move it to other countries in the way that we have for the last 20 or 30 years​.

"Over the last 20 or 25 years, GSK has not built any new manufacturing capacity in Britain. We have built many new factories but they have been all over the world, in countries such as Ireland, Singapore and Belgium.

"Yesterday's announcement will start to change that approach by putting the UK on a level playing field with some of the more competitive countries with whom we operate around the world. Therefore, the UK will now move to the top of the list when thinking about where to invest.

This echoes comment by CEO Andrew Witty who said: “The introduction of the patent box is a bold and forward-thinking measure which builds on the UK’s strength as a global centre of excellence for science and R&D​.”

AstraZeneca welcomes patent box

The Government’s announcement was also welcomed by AstraZeneca CEO David Brennan, who told Dow Jones Newswire​ that it “Will make the UK a far more attractive place to invest in developing new medicines.

"In response to the implementation of a competitive patent box, we plan to increase our U.K. investment in intellectual property in diabetes, cancer and respiratory disease.​"

The decision follows just days​ after the drug industry issued a warm response to the Irish Government’s commitment to maintain the country’s 12.5 per cent corporate tax rate.

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