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GSK to create 1,000 UK pharma jobs in £530m investment

Plans to launch new manufacturing facility in Cumbria and invest in Scotland, buoyed by UK budget aid for life sciences sector

GlaxoSmithKline (GSK) is to invest £530m into its manufacturing efforts in the UK, with the creation of 1,000 new pharma jobs.

This includes the setting up of a new £350m manufacturing facility in Ulverston, Cumbria, as well £100m to boost GSK's sites in Irvine and Montrose in Scotland, and £80m for its sites in Ware, Hertfordshire and Barnard Castle, County Durham.

The investment is prompted by the recent UK budget announcement that saw UK Chancellor George Osborne confirm the introduction of a 'patent box', an idea originally proposed by former Labour Chancellor Alastair Darling, that means companies will pay a 10 per cent corporation tax rate on income derived from patents held in the UK.

This compares to the standard rate of corporation tax in the UK of 24 per cent, which itself was reduced by one per cent more than anticipated in the 2012 budget.

GSK's CEO Sir 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.”

Artist's impression of proposed GSK manufacturing facility in Cumbria
Artist's impression of proposed GSK manufacturing facility in Cumbria

The commitment is in contrast to recent moves by a number of pharma companies to make cut-backs in the UK, including Sanofi, Pfizer, AstraZeneca and Novartis, and will please Prime Minister David Cameron whose efforts to support life sciences in the country include the launch of a £181m fund

He said: “It shows why we are right to cut business tax and focus on making the UK a dynamic and competitive place that can attract exactly this type of high tech investment. We have a world class life sciences industry, and I am determined not just to keep it here in the UK but significantly increase it too.”

Industry representatives also praised GSK's plans, with interim CEO of the BioIndustry Association (BIA) Glyn Edwards commenting that it was a “fantastic boost for the UK's life sciences sector”.

He said: “The investment recognises that the UK is one of the world's leading locations for life sciences discovery, development and manufacturing and that recent changes to the corporate tax system make the UK an increasingly attractive place for investment.”

There was praise too from the Association of the British Pharmaceutical Industry. Its CEO Stephen Whitehead said this commitment from GlaxoSmithKline would reinforce the UK's image as "a great place for companies to do business”.

“The ongoing support from government has been crucial for our industry and specific measures like the patent box have been instrumental in attracting new investment. Now we must build on this and ensure the long term success of our industry by creating a strong commercial environment where pricing rewards innovation and the uptake of new innovative medicines is ensured,” he added.

Construction of the facility in Cumbria will begin in 2014 or 2015, according to GSK, with the plant to be operational six years after development begins.

Further manufacturing investment at the site is also being considered by GSK, which could double the total investment at the site to £700m and create further jobs in the longer term.

The investment in Scotland will enable GSK's Montrose site to manufacture materials for the company's respiratory medicines and vaccines. The Irvine plant will have increased production capacity for antibiotics, with GSK aiming to export these products to emerging markets.

The facility in Ware, Hertfordshire, will have its manufacturing capacity increased to make a new respiratory inhalation device, with the Barnard Castle plant to manufacture dermatology products.

GSK also has several investment commitments on-going in the UK, including a £50m venture capital fund for early-stage healthcare companies; plans to reimburse 100 per cent of uncapped tuition fees for students recruited under the company's graduate scheme from 2015; and an apprenticeship scheme for 16-24 year olds.

22nd March 2012

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