Merck has abandoned plans for a £1 billion drug research centre in London, marking a significant setback for the UK government’s growth strategy. The US pharmaceutical company will also lay off 127 employees, having originally intended to open the facility in King’s Cross by 2027. Merck has warned that unless the UK becomes a more attractive environment for investment, it will continue to fall behind other European countries in health research spending.
The company stated, “Unless a change is made to the operating environment, the undervaluation is corrected, and the investment is put back in the right places, more and more companies will be making these sorts of decisions.” Merck further remarked, “Simply put, the UK is not internationally competitive.”
This decision echoes a similar move by AstraZeneca earlier this year. The Cambridge-based drugmaker cancelled a £450 million expansion of its vaccine production facilities in the UK, subsequently announcing a $50 billion investment in the US for manufacturing and research and development. AstraZeneca’s shift in focus underscores its confidence in the US as a hub for biopharmaceutical innovation. Additionally, the company is reportedly contemplating relocating its primary listing from London to New York, which would further impact the UK’s standing in the sector.
Merck, also known as MSD, first announced its plans for the King’s Cross facility in 2017 as part of a new UK headquarters, with construction slated to begin in 2023. The project was expected to create numerous scientific roles before its opening.
The Labour government, which prioritised growth upon taking office last year, has faced numerous challenges, including plant closures and significant job losses nationwide. This includes the shutdown of a Trafigura-owned biodiesel plant in Lincolnshire and a nearby bioethanol facility owned by ABF. A chemicals plant in Teesside also closed, resulting in hundreds of job losses, while the Lindsey oil refinery entered insolvency.
In a further indication of the challenges facing the government’s investment strategy, former Darktrace CEO Poppy Gustafsson resigned as the UK’s investment minister last week after only a year in the role.
