GlaxoSmithKline ($GSK) is not planning to exit the U.K. just because the U.K. is exiting the European Union. As if to emphasize its commitment, the drugmaker today said it intends to put a big chunk of money into expanding its manufacturing there.
GSK will invest £275 million ($360.3 million) in its sites at Barnard Castle in Durham County, Montrose in Scotland and Ware in Hertfordshire to expand production of new respiratory drugs and biopharmaceuticals. The company said it expected the expansion to lead to some unknown number of new jobs and provide further work for the 2,750 people already working at the three sites.
The company said there were plenty of reasons to feel good about new U.K. investments. It lauded the U.K.’s place in the pharma world and the benefits of the so-called patent box tax legislation from several years ago which taxes at a lower rate profits on new intellectual property created in the U.K.
“It is testament to our skilled U.K. workforce and the country’s leading position in life sciences that we are making these investments in advanced manufacturing here,” GSK CEO Andrew Witty, who will retire next year, said in a statement.
Specifically, GSK said it will invest £92 million at Barnard Castle to build an aseptic sterile manufacturing plant for biologics, £110 million to expand API production for HIV drugs and vaccines at the Scotland plant and £74 million at the Ware site for expansion of production of inhalers for its Ellipta respiratory drug.
While an outlay of £275 million is not much for a company with nearly £25 billion in annual revenues, Nigel Driffield, a professor of international business at the Warwick Business School said in an emailed statement that the GSK announcement “will doubtless be seized upon by supporters of Brexit that the U.K. is still good for business,” particularly since Witty was a fierce supporter of staying in the E.U.
According to Reuters, Witty addressed the Brexit business in a call with journalists today saying that the fundamental competitiveness of the U.K. is no different today than before last month’s vote to bail out of the E.U. He acknowledged there may be some disruption in drug oversight with the E.U. drug regulator, the European Medicines Agency, leaving London as a result of the U.K.’s decision. He also that said that the risk that the country’s top scientific minds might leave the country to seek better opportunities is a "question-mark we should all be concerned about."
- read the GSK announcement
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