GSK Plans UK-Based R&D and Manufacturing Investment

GlaxoSmithKline (GKS, London) outlined a plan to invest EUR 500 million ($649 million) in research and development (R&D) and related manufacturing in the United Kingdom conditioned on the successful implementation of a so-called “patent box” measure by the UK government. The patent box measure is designed to encourage investment in R&D and related manufacturing in the UK by introducing a lower tax rate on corporate profits generated from UK-owned intellectual property. Specific details of how the mechanism will work are the subject of consultation, according to a GSK press release.

“The introduction of the patent box is a bold and forward-thinking measure which builds on the UK’s strength as a global center of excellence for science and R&D,” said GSK CEO Andrew Witty in the press release. “In the current challenging and uncertain economic environment, this is a welcome step by the government to improve the attractiveness of the UK as a place for the private sector to locate and invest.”

With a patent-box tax incentive in place, Witty said that GSK will make a series of investments in the UK. Specifically, GSK said that successful implementation of the patent box will:

• Enable the company to invest in the manufacture of GSK’s next-generation respiratory inhalation device for asthma and chronic obstructive pulmonary disease at its facility in are in Hertfordshire. 

• Locate a biopharmaceutical manufacturing plant in the UK. In 2011 the company will conduct a feasibility study on the location of this facility. Current GSK manufacturing sites in Montrose in Scotland, and Ulverston and Barnard Castle in northern England will be considered first.

• Invest in continuous tablet-manufacturing technology at Ware and a new topical (creams and ointments) manufacturing center of excellence at Barnard Castle, County Durham, in support of GSK’s global dermatology franchise.

• Launch a new £50 million ($78 million) UK Venture Capital Fund focused on investments in early-stage healthcare companies and spin-outs from academia in the UK. The new fund will be a dedicated element of GSK’s existing corporate venture capital arm, SR One. Currently, approximately 70% of the companies invested in by SR One are US-based.

• Construct a new facility at the University of Nottingham focused on the development of green-chemistry technology. The facility will support academic teaching and encourage related R&D in green chemistry.  The building will also be a carbon-neutral laboratory facility and will serve as a prototype for similar projects elsewhere in the world. The proposal will go through proof-of-concept in 2011 and be built at the University of Nottingham’s Jubilee Campus.

GSK estimates that the proposed projects will result in 1000 new jobs during the lifetime of the projects.