GlaxoSmithKline Pledges £200m To Upgrade UK Production Sites

GlaxoSmithKline, Britain's biggest drugmaker, proposes to invest an additional £200m ($328m, €239m) to equip two UK manufacturing sites and a new research facility with state-of-the-art equipment, underscoring the lure of a tax break designed to support research and development.

Britain's so-called "patent box" scheme, which offers a lower rate of corporation tax on profits derived from patented inventions, has been hailed by GSK for transforming the UK as a place to invest. Similar schemes also operate in the Netherlands, in France, Spain, Belgium and Hungary.

The GSK move will help the firm increase its output of new lung drug Relvar, manufacture the established antibiotic Augmentin and develop intelligent drug product formulations that minimise side-effects and enhance efficacy, the company said in a statement.

Roger Connor, GSK's president of global manufacturing and supply, said: "Last year we announced we were building our first new factory in the UK for 40 years. The investments announced today are in addition to that and will allow us to harness new technologies that have the potential to deliver a step-change in how we make medicines. These new technologies could...enable the manufacture of medicines in weeks rather than years and I am delighted that we have been able to bring these investments to the UK".

Britain's health minister, Jeremy Hunt, welcoming the new investment, said: "GSK's decision to invest in the UK shows we are creating the right conditions for global investment, leading to job creation and growth, as well as maintaining the UK's place as a world leader in innovation".

Scottish Expansion

GSK revealed in November it would invest £25m in an expansion of its Montrose site in Scotland to support the delivery of its new pipeline of medicines.

The pharmaceutical giant's move would create 25 new jobs for process technicians, engineers and chemists - boosting the total GSK workforce in Scotland to more than 750.

The expansion would also mean an additional 50 contractors would be employed during its construction phase.

VC Fund

The drugmaker said in August it would increase its focus on bioelectronic medicines with a new venture capital fund, mandated to invest in companies developing the so-called "medicines of the future".

The $50m (£32m, €37m) fund - called Action Potential Venture Capital - would complement the work of GSK's bioelectronics research division, created in 2012. It will invest in five to seven companies over the next five years, GSK said in a statement.

Patent Box Criticism

Not all of Britain's European partners are as excited about the "patent box" tax breaks. Earlier in the year, Germany called for a ban on patent boxes, saying they promote unfair competition for foreign investment.