AstraZeneca, Britain's largest pharmaceutical company, has announced a surprise £300 million investment in the United Kingdom, reversing its previous decision to pause large-scale projects. The drugmaker had halted investments after expressing dissatisfaction with the business environment, including NHS drug pricing and access to new medicines.
Investment Details
On Wednesday, the company confirmed it would invest in two existing locations: unfreezing a paused £200 million expansion in Cambridge and allocating £100 million to its Macclesfield site. Prime Minister Keir Starmer announced the investment in the House of Commons, emphasizing its role in protecting jobs.
In Cambridge, AstraZeneca will complete the construction of an office building called the Disc on its campus, near its headquarters. Named after Rosalind Franklin, whose X-ray crystallography was crucial to understanding DNA structure, the building will house scientists involved in data analysis and molecular research. The company will relocate employees from several other buildings into this new facility.
At the Macclesfield site, AstraZeneca will build a "lab of the future" that utilizes digital and data tools to advance drug development. This project is expected to create new scientific jobs, though the company has not specified the exact number.
Context and Reactions
Last September, AstraZeneca paused the £200 million Cambridge investment, following the cancellation of plans to invest £450 million in a vaccine manufacturing facility in Speke, Merseyside, in January. The company attributed these decisions to reduced government support after prolonged negotiations.
AstraZeneca employs approximately 10,000 people in the UK, including over 4,000 in Cambridge, a similar number in Macclesfield, 2,000 across London and Luton, and 400 in Speke.
Prime Minister Starmer stated that the investment was "made possible by the pharmaceutical arrangement we have struck with the United States to future-proof thousands of jobs in Macclesfield and in Cambridge. That is a major vote of confidence in the UK, and Labour's plans to strengthen our economy."
The UK and US reached a pricing deal in December, leading to lower prescription drug prices in the US and increased NHS spending on medicines. In exchange, UK pharmaceutical companies will be exempt from trade tariffs.
AstraZeneca CEO Pascal Soriot thanked the UK government "for their effort to improve access for patients, including four new drug approvals since the beginning of the year, and we look forward to further enhancing the access and the reimbursement environment and build a strong life sciences sector."
Science Secretary Liz Kendall commented: "This investment is another significant vote of confidence in our science community and backs British research to do what it does best – develop the drugs, treatments and innovations that improve lives."
Susannah Streeter, chief investment strategist at Wealth Club, remarked: "This is super encouraging and it does seem as though there is a sense of momentum returning to the pharmaceutical industry in the UK. The restart of the Cambridge expansion … is highly symbolic. It demonstrates how the government has been working hard behind the scenes to try and make the UK more attractive to big pharma."
Comparative Scale
Despite this investment, it is dwarfed by the $50 billion AstraZeneca is investing in US research and manufacturing, announced last October, and its $15 billion drive in China.
Financial Performance
Earlier on Wednesday, AstraZeneca and GSK both reported strong sales of cancer drugs. AstraZeneca posted an 8% increase in revenues to $15.3 billion in the three months to March, including 16% growth in oncology and a 15% rise in rare disease treatments. Cancer drugs now account for nearly half of total sales. The company aims for 25 blockbuster medicines generating over $1 billion annually by 2030, targeting $80 billion in sales.
GSK reported a 5% rise in sales to £7.6 billion, with 28% growth in cancer drug sales, such as Jemperli for womb cancer. Vaccine revenues increased by 4%, with the shingles jab Shingrix achieving £1 billion in sales for the first time. However, GSK forecasts that vaccine revenues may fall slightly or remain stable this year due to slower uptake in the US, where health secretary Robert F Kennedy Jr, a vaccine sceptic, has promoted unproven treatments.
Streeter noted: "Lower vaccine uptake in the US is a real headwind and a more sceptical public health environment could dampen demand further and increase uncertainty about the rollout of future vaccine programmes."
GSK expects total turnover to grow between 3% and 5% this year, with a target of £40 billion in sales by 2031. New CEO Luke Miels has reorganized lab teams, describing a "Darwinian process" to boost R&D, and has announced several deals since taking over from Emma Walmsley.
Industry Impact
The Association of the British Pharmaceutical Industry called it a "remarkable month for UK life sciences." Since the UK-US drug pricing deal, companies have invested £1.4 billion in UK life sciences, including £500 million by Belgium's UCB and $500 million (£370 million) by Bristol Myers Squibb. Last week, German pharmaceutical company Boehringer Ingelheim announced a £150 million AI centre in King's Cross, London, with the first 50 AI experts expected by the end of 2027.
