UK Life Science Boom despite Brexit?
As a UK Parliament-select committee prepared for a public evidence session on Dec. 5, examining scenarios for trading arrangements with the UK post-Brexit, reports were circulating that investments worth “billions of pounds” were set to be announced for the country’s life sciences and healthcare sector in the near future.
Speculation was touched off last month by an interview with the government’s Business Secretary, Greg Clark, who said “a pipeline of investment” was about to materialize, as well as the unveiling of the Autumn Budget by Chancellor of the Exchequer, Philip Hammond.
To stimulate investment in life sciences, the Chancellor’s budget includes a provision to increase the tax credit for research and development by 12% as well as a plan to raise overall spending on R&D to £12.5 billion annually by fiscal 2021-2022.
According to the news agency Bloomberg, which quotes “sources,” as many as 30 healthcare companies will enter a “sector deal” that would be backed by a government cash infusion of up to £500 million. This is said to be a follow-up to a national plan to increase spending on genomics, early-stage research and other health-related activities post-Brexit.
At the heart of the plans, the newspaper Financial Times said, is the stated intention of an unnamed US fund to move a $1 billion biotech project across the Atlantic. Should this materialize, it would in part answer a question recently raised by publication of the UK government’s life sciences industrial strategy, which targets the creation of four biotech firms worth at least £20 billion over the next 20 years.
Apart from intentions, few concrete details of new projects have been announced. First to come forward was MSD, as Merck & Co is known outside North America. The drugmaker said it is “committed” to establishing a state-of-the art life sciences discovery research facility in London, focused on “early bioscience discovery and entrepreneurial innovation.”
MSD did not reveal an investment cost, but one report said it was expected to be just over $1 billion.
The new UK Discovery Centre is planned to create 150 new research jobs, along with providing “approximately 800 additional staff” for the UK domestic market and other European clinical functions currently based at the company’s Hoddesdon headquarters.
The US company said it is currently evaluating several potential locations in the region, with the new operation expected to be up and running by 2020. In the meantime, it will establish “a small temporary research facility” in the area.
MSD’s new UK operation would complement existing centers operated by Merck closer to home, in the San Francisco Bay Area and at Cambridge, Massachusetts. Locating a research base in London, the pharmaceutical giant said, could expand its opportunity to engage with leading researchers in the UK and Europe.
Earlier, Dutch diagnostics provider Quiagen said it would participate in the sector deal by building a new genomics and diagnostics campus in Manchester, in partnership with HealthInnovation Manchester. It expects the facility to create up to 800 new skilled positions.
In cooperation with a UK academic research think-tank, the country’s biggest drugmaker, GlaxoSmithKline, is reportedly poised to invest “tens of billions of pounds” in early stage R&D within its existing facilities, padding the spending figures the government hopes to see.
The UK chemical-pharmaceutical sector is the country’s largest goods exporter with sales of $35 billion of manufactured products annually. As much as 75% of the companies’ raw materials are sourced from the EU, which is expected to put a strain on resources in future, underscoring the concerns of industry players.
Up to now, the loss of the European Medicines Agency (EMA), which employs nearly 900 people and will move to Amsterdam due to Brexit, has been the biggest blows to hit the UK healthcare sector.
On the agenda for the Dec. 5 meeting were the consideration of submissions received from trade organizations or companies relating to future customs and trading arrangements with the EU and strategies that could be used by the UK government in negotiations.
In addition to the Association of the British Pharmaceutical Industry (APBI), Johnson & Johnson’s Belgium-based subsidiary Janssen Pharmaceuticals was due to appear before the committee.
A new opinion poll conducted by Survation meanwhile is said to show that 50% of the roughly 1,000 UK citizens questioned would like to see a public vote on the government’s final Brexit deal with the EU.