GSK said the plant, which will cost about £350m to build, will be its first new manufacturing facility in the UK in about 40 years. Work will start at the site (which actually already employs 240 people, manufacturing materials for antibiotics) in 2014/15, and the new factory won’t be up and running until at least 2020. It will manufacture biopharmaceuticals including vaccine components.
So if the recovery continues as the Government hopes it will, that means the company’s contribution will be minimal. But it’s nevertheless excellent news for the sector: the UK’s pharmaceutical industry is still reeling from the decision by US drug company Pfizer, which last year decided to close its Sandwich-based research and development facility, losing the industry about 1,500 jobs.
GSK said it had made the decision after the Chancellor confirmed in the Budget yesterday that he was introducing a ‘patent box’, which allows companies to pay a lower rate of tax on any profits they generate from intellectual property held in the UK. Thus, any drugs developed at the facility will be cheaper to manufacture here than else where (or that’s the idea) . The company’s CEO, Sir Andrew Witty, was very impressed: ‘[It] has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain,’ he said. If things go according to plan, he hinted that investment could rise to £700m.
Witty added in an interview on the Today programme this morning that GSK had also been impressed by Osborne’s decision to reduce corporation tax to 24%, with a further 2% to come. ‘The combination of the patent box, combined with falling corporation tax has really changed the position [of the UK].’
So it seems Osborne’s got at least part of the nation on-side – even if half the papers today reckon he’s nothing more than a granny-basher…