Life Sciences blow as AZ snubs UK

In a blow to the life sciences sector in the UK, The Times and others are reporting that AstraZenca has chosen Ireland, rather than the UK, for its new £320 million drug factory.  Chief Executive Pascal Soriot has blamed the UK tax regime, which he described as "disappointing".

This comes following a period where the Rishi Sunak goverment has again been talking up the life sciences sector as key to "Global Britain".  In the autumn statement, his government reaffirmed its commitment to raise R&D spending by a third to £20bn a year by 2024-25. However, it also cut R&D tax credits for smaller companies.  Then just this week, the appointment of Michelle Donelan to head a new Department for Science, Innovation and Technology was widely seen as a positive step towards prioritising the sector and giving it exposure at senior levels, with Ms Donelan taking a seat in Cabinet.  

Industry experts have welcomed the new department and the implied priority that the Government is placing on science and innovation.  In the life sciences sector, the call for reform of the tax-relief system for research and development and access to European research programmes are two major issues the new department needs to tackle. However this all now appears to have come too late for AZ. Soriot says that they had hoped to build the new plant close to existing sites in the North West of England - a move that would have had a side "levelling up" benefit.  

Their choice of Ireland is likely to be a significant disappointment both to the life sciences sector and to the Government, coming as it does from a company that so identifies with the fight against covid in the UK, following the vaccine partnership with Oxford University. Ms Donelan will need to hit the ground running to ensure that this is a one off, rather than a trend that results in lasting damage to the UK's ambition to be a life sciences superpower.