U.K. Said to Gain Billions of Pounds in Health Investments
(Bloomberg) -- As many as 30 health-care companies will join with the U.K. to invest billions of pounds in projects as the government pledges to make the country more attractive for the life sciences industry, people with knowledge of the matter said.
Drugmakers, research outfits and biotechnology companies will all participate in the effort, called a sector deal, according to the people, who asked not to be identified because the information isn’t yet public. The U.K. government will make a cash infusion of as much as 500 million pounds ($673 million) in the plan, although final amounts haven’t yet been determined, one of the people said.
U.S. drugmaker Merck & Co. and Dutch diagnostics provider Qiagen NV earlier said that they will add to their investments in the U.K. as part of the sector deal, one of four between industries and ministers. The pharma sector’s efforts began developing after the preparation of a government-sponsored plan to increase spending on genomics, early stage research and other health-related activities to sustain the 64-billion-pound U.K. industry following Brexit.
A spokesman for the government declined to comment. Business Secretary Greg Clark said in an interview last month that “a pipeline of investments” was going to be made in the weeks ahead by companies in life sciences. That was days after U.K. Chancellor of the Exchequer Philip Hammond pledged in the Autumn Budget to boost the research and development tax credit to 12 percent, and to increase overall spending on R&D to 12.5 billion pounds annually by 2021-22.
The U.K.’s pending break from the European Union has raised questions about the framework for new regulations and trade between the two markets, and prompted concerns among local companies about issues ranging from funding and taxes to recruitment and sales. Drugmakers and biotechnology companies have said for instance that they depend on access to top researchers from other countries, and on government funding to promote science and medical research in universities and at start-ups.
John Irving Bell, an adviser to U.K. Prime Minister Theresa May on life sciences, in October said he had sought a grant of several hundred million pounds to support the growth of the industry. Bell has been advocating for sweeping investments to preserve the engagement of the biggest local companies such as GlaxoSmithKline Plc and AstraZeneca Plc, and to nurture smaller firms. Maintaining a low corporate tax rate and mining the research potential of national health data can also set the country apart from rival nations, he said in an August report.
A U.S.-based life sciences fund is planning to invest up to $1 billion to start up a large biotech company in the U.K., the Financial Times reported earlier. Glaxo will also invest tens of millions of pounds in early-stage research, according to a person familiar with the matter.
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