update - comment from Unite

GSK says UK manufacturing cuts not Brexit related

By Gareth Macdonald

- Last updated on GMT

Related tags Life sciences Glaxosmithkline

GSK House in Brentford, UK (source GSK)
GSK House in Brentford, UK (source GSK)
GSK has announced a shakeup of its UK network, shelving plans for Ulverston biopharma plant, mooting the sale of its cephalosporin antibiotics business and pledging to invest in HIV and respiratory drug capacity.

The drug manufacturer said the plan was not a result of the Tory Government’s decision​ to withdraw the UK from the European Union (EU).

Instead, GSK cited other drivers for its decision. For example, the firm said it had decided not to build the Ulverston facility because it “no longer needs the additional capacity​.”

In contrast, GSK did not specify what prompted the review of its cephalosporins business, but did say it could sell the unit and associated facilities in Ulverston, Verona, Italy and part of its plant Barnard Castle, Co Durham.

A spokesman told us GSK does not have a buyer lined up, explaining “We believe the business and supply chain would be a very attractive proposition to the right buyer​” adding  “no final decisions will be made until the review is complete​.”

Capacity investment

GSK does not plan to sell the Barnard Castle facility outright. Instead, it will spend £140m (€181m) to increase production capacity at the site – along with facilities in Ware in Hertfordshire and Montrose, Scotland.

GSK said the investment – which is in addition to the £275m it said it would spend on the plants last year​ – would expand its capacity to make HIV medicines and respiratory drugs.

The final part of the plan will see GSK outsource some of the manufacturing work conducted at its facility in Worthing.

The spokesman declined to name the contractor but did say it would be an existing partner.

He explained that: “We are outsourcing some of the manufacturing from Worthing and simplifying the site. These moves are necessary to improve productivity and overall business performance in a very competitive market​.”

The reorganisation – which will also see GSK sell its Horlicks brand and close an associated facility in Slough – will result in 320 job losses over the next four years.

Post-Brexit plan

GSK also stressed its commitment to the UK.

The spokesman told us “We continue to believe the UK remains an attractive place for the life sciences industry as it has a competitive fiscal environment, high quality talent from universities and a strong science base.

He also echoed recent ABPI comments​ about the need to put market access and drug regulations at the heart of negotiations with the EU.

It is important as we go through the Brexit process that the Government maintains the UK as an attractive place for life sciences and we are working with the Government on the life sciences strategy to ensure that happens.

Specifically on Brexit, our key areas of focus are a stable and predictable medicines regulatory and safety system which patients can rely on; easy movement of the most talented people, particularly scientists; movement of goods without delays, constraints or tariffs​.”

Union response

UK union Unite, whose membership includes 185 employees at the Worthing facility and 18 staff at the Slough site, said it would meet with GSK management next week to discuss the situation in-depth.

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