Danish pharma company Novo Nordisk will invest £115m ($145m) over the next 10 years in a new diabetes research unit in Oxford, but admitted Brexit had made it a harder decision.
The world's largest producer of insulin products said the new R&D unit will employ 100 people at a facility on the University of Oxford campus in Headington and focus on the discovery and development of new drugs for type 2 diabetes and complications such as kidney and nerve damage.
The new unit will be led by Prof James Johnson, a researcher in the fundamental biology of pancreatic islets, insulin action, diabetes and related conditions, who is currently at the University of British Columbia.
It is one of the first major investments by an international pharma group since the UK voted to leave the EU last year and David Gauke, chief secretary to the Treasury, said the decision was "a vote of confidence in the UK's position as a world-leader in science and research."
Last July, GlaxoSmithKline (GSK) pledged a £275m investment in its UK manufacturing facilities, while Alnylam has said it will set up its European headquarters in the country. AstraZeneca (AZ) is in the midst of setting up a new headquarters and R&D campus in Cambridge, although that project began ahead of the referendum.
Speaking to the BBC, Novo's chief science officer Mads Thomsen said the EU referendum result had given the company "pause for thought" but bringing the "great academic science in Oxford and the translational capabilities and molecular science at our company together is a win-win situation that is not really changed by Brexit".
The investment is all the more encouraging given that Novo recently unveiled plans to cut 1,000 jobs, saying that intensifying competition in the US diabetes market means it has to reduce costs.
The UK government is putting up £12m in funding towards the creation of laboratory facilities that will house Novo staff as well as start-up companies created to develop Oxford University research.
Novo said the structure of the facility will "encourage cross-fertilisation of ideas between academic researchers…and researchers employed by Novo”, tying in with the ongoing trend among big pharma companies to locate R&D in close proximity to research hot spots.
The drugmaker will fund the collaborative research. Oxford University's medical sciences division is one of the largest biomedical research centres in Europe, with over 2,500 people involved in research and more than 2,800 students.
Sir John Bell, Oxford University's professor of medicine, said the collaboration will allow for daily interactions between academic and industrial scientists and "underlines the importance of sharing research and cutting-edge science across boundaries”.
The UK's vote to leave the EU has raised concerns about the future of the life sciences sector, with researchers worried about the continuity of funding currently provided by the EU and industry concerned about trade freedoms and the regulation of medicines.