GSK has made good on its promise to invest in the UK, confirming plans to spend £500m ($789m) on new manufacturing capacity in the country just a day after the Government introduced a tax ‘patent box.'
In a statement issued today the UK drug major said it would spend £370m on a new plant in Ulverston, Cumbria – which will produce active pharmaceutical ingredients (API) for drug and vaccine products
The remainder of the money will be used to expand two existing production facilities in Montrose and Irvine in Scotland.
GSK has been talking about making this investment for several years while simultaneously encouraging the UK Government to cut corporation tax rates on income generated by products patented in the country as of April 2013.
Whether this impacted UK chancellor George Osbourne’s decision yesterday to introduce the so called ‘patent box’ – which sets a 10 per cent levy on revenue from UK generated IP – is unclear, but the lower rate was certainly central to recently knighted GSK CEO Andrew Witty’s comments about the investment.
“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.
“Consequently, we can confirm that we will build GSK’s first new UK factory for almost 40 years and that we will make other substantial capital investments in our British manufacturing base.”
GSK said it expects to start work on the Ulverston plant in 2014 or 2015 and predicts that the project will take at least six years to complete, meaning the facility is unlikely to be operational before 2020.
The firm – which expects the investment to create 1,000 new jobs - said it may also consider further investment at the facility “depending on continued improvements in the environment for innovation in the UK.”
In addition to UK job seekers - GSK’s decision may also be good news for Swiss life sciences supplier Lonza which has been working with the UK drugmaker on the development of biomanufacturing facilities since September 2010 .