GSK Makes $800M Commitment To Biopharmaceutical Manufacturing In The UK

By Lori Clapper, Editor

GlaxoSmithKline (GSK) confirmed last Thursday that it will invest over £500 million ($800 million) in biopharmaceutical manufacturing sites across the United Kingdom. The company will build a new £350 million ($560 million) facility in Ulverston in North West England, to expand production of active pharmaceutical ingredients for vaccines and other drug products, and will make approximately £180 million ($290 million) in improvements to four existing GSK manufacturing plants in the UK — potentially creating up to 1,000 new jobs.

Construction on the Ulverston factory — the first new GSK manufacturing plant built in the UK in almost 40 years — is slated to start in 2014 or 2015; however, the facility won't be operational until at least 2020. The company also said it would contemplate doubling its investment in the Ulverston site (to £700 million) if the innovation climate continues to prosper in the UK.

In the meantime, GSK will also step up API and device manufacturing at four of its other locations in the UK. The company designated more than £100 million ($158 million) for its Scotland sites, enabling its Montrose plant to manufacture key ingredients for GSK's respiratory medicines and aluminum adjuvants used in vaccines, and to increase production of antibiotics in Irvine, due to the growing demand for these medicines in emerging markets. In addition, the company will spend about £80 million ($128 million) to increase production of its next-generation respiratory inhalation device at its Ware facility in Eastern England, and to establish a dermatology manufacturing center of excellence at Barnard Castle in Northern England.

This announcement comes a day after the UK government confirmed it will implement a "patent box" — a plan to lower corporation taxes on profits generated from UK-owned intellectual property. GSK CEO Andrew Witty said, "The introduction of the patent box 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."

After suffering roughly 10,000 job losses from closures of Pfizer's Kent site and AstraZeneca's Charnwood and Lund sites in the past two years, the British government is determined to woo pharma back to the isles. Prime Minister David Cameron commented that GSK's decision to invest in UK life sciences validated the government's tax cut plan, saying its "strategy and patent box are already making a difference."

Read the GSK announcement.

Find out more from the Reuters report.