Bio-investment boasts do not diminish Brexit uncertainties

The result of the referendum held last year, followed by the triggering of Article 50 of the Lisbon Treaty in February, launched the UK on a two-year unchartered journey to exit the European Union (EU).

With exit negotiations ongoing, the UK government has published a white paper​ setting out a long-term plan to boost the productivity and earning power, and high-lighted the life sciences sector as a current area of strength it thinks can grow post-Brexit.

“The UK is home to world-leading businesses such as GSK and AstraZeneca, a strong small and medium-sized business sector, major health charities such as the Wellcome Trust and Cancer Research UK, and the globally-admired NHS,”​ the roadmap states.

“We must build on our strengths, as exemplified by sectors such as… life sciences. Their success has often been enhanced through collaboration – by businesses, the government, research institutions, universities and colleges – to align policies, enhance investments and create sector-wide institutions.”​

UK Investments ​

During this transition period, the government has been eager to publicise examples of Biopharma investment, referencing Novo Nordisk’s £115m ($154m) planned research centre in Oxford and two new deals in this week’s white paper.

MSD (known as Merck & Co. in North America) is planning to open a life sciences discovery research facility bringing 950 jobs to London, while Qiagen is partnering with Health Innovation Manchester to develop a genomics and diagnostics campus.

In a statement, Mike Thompson, chief executive of the Association of the British Pharmaceutical Industry (ABPI), said: “These deals are just the first steps but will be instrumental in securing the future strength of the UK life sciences industry, helping the UK economy prosper and allowing NHS patients to get better and faster access to world-class medicines discovered and developed here in Britain.”​

Still in discussions​

But while the investments were hailed as “a huge vote of confidence”​ ​by UK business secretary Greg Clark, they are not quite as transparent as they seem.

It turns out the Qiagen partnership is yet to be finalised as a tweet Monday revealed the molecular diagnostics firm is still in discussions with Health Innovation Manchester:

“We appreciate the enthusiasm and support of the UK government, and their announcement about the new industrial strategy, but note that discussions are not yet completed,”​ the firm said.

Business as usual?​

Moreover, some of the examples heralded as evidence of boosts for the economy had been in the works long before the non-binding vote of June 2016.

Novo Nordisk was pushing through with a pledge made before the June 2016 referendum, encouraged in part through the generous ‘patent box’​ incentive. Introduced in 2013, the incentive offers a generous R&D tax credit and cuts corporation tax rates on income generated by products patented in the UK.

Similarly GlaxoSmithKline’s announcement that it was investing £275m into its UK manufacturing network weeks after the referendum​ was just the continuation of its strategy at the time, rather than a specific “boost to post-Brexit economy”​ as touted by pro-leave media​ outlet The Daily Telegraph​.

(In August​, GSK shelved plans for a new facility in Ulverston and considered the sale of its cephalosporin antibiotics business, but said the UK’s decision to withdraw from EU did not play a decisive factor).

Wait and see strategy​

And furthermore, the uncertainty surrounding the UK and its attractiveness once it leaves Europe has actually halted investment and collaboration.

Fellow UK-headquartered Biopharma giant AstraZeneca has chosen to wait on the outcome​ of Brexit negotiations before committing to mid-to-large scale investments in the country. Like others, it has also voiced its concerns​ around regulatory matters in a non-EU Britain, and last week’s decision to move the EMA​ out of London only brings the certainty that European drug regulations will come out from Amsterdam.

And this morning, The Telegraph​ (once again) reported Johnson & Johnson has pulled out of plans to build a JLabs R&D innovation site near Cambridge “over concerns that the UK is both politically and economically weak while negotiations to leave the European Union are ongoing.”​