AstraZeneca pledges £650M in UK investments to boost vaccine capabilities, expand near HQ

AstraZeneca CEO Pascal Soriot, who has been critical of the U.K.’s business environment for the life sciences industry, is directing a big chunk of money into the Big Pharma’s home country.

AZ plans to invest £650 million ($827 million) in the U.K., Chancellor Jeremy Hunt announced Wednesday.

The money will be divided into two tranches. About £450 million will go to AZ’s manufacturing site in Speke, Liverpool, to build out the company’s R&D and manufacturing capabilities for vaccines.

The remaining £200 million will be used to expand AZ’s presence near its global headquarters in Cambridge. The plan includes a facility that will house around 1,000 employees.

AZ’s spending is contingent upon a mutual agreement with the U.K. government and undisclosed "third parties," as well as the clearance of regulatory hurdles, according to Wednesday’s press release. 

“AstraZeneca’s planned investment would enhance the U.K.’s pandemic preparedness and demonstrates our ongoing confidence in U.K. life sciences,” Soriot said in a statement.

The investment will help the Liverpool site respond to the threat of future pandemics and meet the growing demand for vaccines, an AZ spokesperson told Fierce Pharma. The exact vaccines to be made there will be determined as the company’s pipeline progresses, the spokesperson added.

As for the Cambridge site, the facility was already included in development plans for AZ’s newly opened innovation center. The site will primarily support commercial and regular business operations, the spokesperson said. 

AZ’s refreshed commitment to the U.K. comes about a year after Soriot blamed the country’s “discouraging” tax rate for his company’s decision to build a $400 million active pharmaceutical ingredient facility in Ireland at the Alexion campus in Dublin.

“We’re very committed [to the U.K.], but we need to see also supporting policies for the whole industry,” Soriot said at the time.

In his statement Wednesday, U.K. Chancellor Hunt touted the U.K. as “one of the most competitive business tax regimes of any major economy.”

“AstraZeneca’s investment plans are a vote of confidence in the attractiveness of U.K. as a life sciences superpower and strengthen our resilience for future health emergencies,” Hunt added.

Late last year, amid tensions between the industry and government, U.K. officials and industry representatives reached an accord on a voluntary drug rebate scheme. Soon after, though, the Association of the British Pharmaceutical Industry (ABPI) lashed out at a separate statutory scheme that’s designed to control drug costs.

At that time, the ABPI said the rebate levels included in the statutory program “have damaged the U.K.’s international standing with global life science companies."

Nevertheless, the U.K. remains AZ’s home base. The drugmaker last year opened its flagship £1 billion R&D site in Cambridge, Soriot noted during a press briefing in February. The chief executive also pointed to the work the British government has done to facilitate clinical trials, as well as tax policies that are “helping incentivize companies to invest.”

There’s still more to do, but the U.K. is moving in the right direction toward offering a better environment for the life sciences field, he said.

In addition to Liverpool, AZ will also open a new manufacturing facility to make a cancer drug at its Macclesfield manufacturing and development campus later this year as part of a £380 million investment, according to the U.K. government.

For a global company like AZ, manufacturing investments are certainly bound to be scattered in different parts of the world. Last month, AZ announced it will plow $300 million into a new facility in Rockville, Maryland, for its cell therapy programs.

At the same time, the firm is investing in a facility in the Chinese city of Qingdao to manufacture inhaled medicines.

“We continue to invest in manufacturing around the world, and each time we look at, what is the environment,” Soriot said during the February press conference.

“More often it’s more general environment in terms of, is the ecosystem attractive for investment in innovation?” Soriot explained. “Is it a country where there is clearly an understanding that incentives have to be created through appropriate tax policies, but also importantly, access to innovation?”