AstraZeneca’s manufacturing will-they-won’t-they within its home country has swung back firmly toward the ‘they won’t’ camp after the British pharma confirmed that it’s ditching a major venture at one of its U.K. facilities.
AZ is pulling the plug on a 450 million-pound sterling investment at its vaccine production site in Speke, Liverpool in England, due in large part to the reduction of a planned financial contribution from the new U.K. Labour government, a company spokesperson told Fierce Pharma Friday.
“Following protracted discussions with the Government, we are no longer pursuing our planned investment at Speke,” the spokesperson said. “Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous government’s proposal.”
Despite the scrapped expansion project, AZ will continue to produce influenza vaccines at the Liverpool facility, the spokesperson added.
News of AZ’s decision was first reported by Reuters.
Plans to upgrade the vaccine manufacturing site first came to light last March, when the U.K. revealed that AZ planned to invest 650 million pounds (then around $827 million) in its home country.
Of that sum, 450 million pounds was slated to help build out R&D and manufacturing capabilities at the Liverpool site. The other 200-million-pound tranche was earmarked for an expansion of AZ’s presence near its global headquarters in Cambridge.
Whether AZ ultimately followed through with the outlay hinged on a mutual agreement with the U.K. and certain “third parties,” the British government, then led by the Conservatives, said at the time.
However, the Labour Party’s victory in the 2024 General Election—which took place just a few months after AZ unveiled its local expansion project—seems to have thrown a spanner in the works.
By August, Financial Times had reported that the U.K.’s new chancellor of the exchequer, Rachel Reeves, wanted to reduce the amount of government support for AZ’s vaccine plant from the 90 million pounds pledged by the previous Conservative Party to just 40 million pounds.
The original offer consisted of 70 million pounds in grants for facility development, plus 20 million pounds more in R&D support, FT said, citing people close to the matter.
In turn, AstraZeneca threatened to move the planned vaccine operation to Philadelphia or even India, the news outlet reported at the time.
This is hardly the first time AstraZeneca has bristled at the U.K.’s business environment for the life sciences industry.
Back in February 2023, AZ CEO Pascal Soriot attributed the company’s decision to build a $400 million drug ingredients plant in Dublin, Ireland, on the U.K.’s “discouraging” tax rate.
“We’re very committed [to the U.K.], but we need to see also supporting policies for the whole industry,” Soriot said at the time. The CEO also criticized the U.K.’s lopsided emphasis on discovery science over other aspects of the biopharma game, such as manufacturing.
“It’s all very nice to discover something in the lab [but] at some point, you need other types of people to progress the project,” he said. “Unfortunately, we’re not in an environment where we see that happen. What we see is price reductions, that are really, really very large and disincentivize companies.”
Still, the relationship between AZ and the U.K. hasn’t been all negative, and naturally, the drugmaker continues to maintain a sizeable presence in its home country.
In fact, when discussing the opening of AZ’s flagship 1-billion-pound R&D site in Cambridge last year, Soriot sung the praises of the work the government has done to facilitate clinical trials, plus tax policies that are “helping incentivize companies to invest.”