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Vaccines

Merck Abandons £1 Billion London Investment, Highlighting UK's Undervaluation of Life Sciences

Strategic Insights

— 2 min read

US biopharmaceuticals company Merck has dropped plans for a £1 billion investment in a major new London life sciences lab, citing the UK's failure to make meaningful progress in addressing the lack of investment in the life science industry and the undervaluation of innovative medicines and vaccines by successive UK governments. This move follows an evaluation of Merck's global discovery research capabilities, which has led to a shift in strategy and plans to vacate laboratories in London by the end of 2025, impacting approximately 125 positions.

Key Takeaways:

  • Merck's decision to abandon its £1 billion London investment is a significant blow to the UK's life science sector, highlighting the country's failure to attract and retain large-scale businesses.
  • The UK's life science sector has been missing out on £15 billion a year over the last decade due to its lack of competitiveness, according to research published by the Society of Chemical Industry.
  • The UK's ranking in life sciences foreign direct investment has dropped from second place in 2017 to eighth place, trailing behind major economies such as the US, Germany, and France.
  • The decline in clinical trials has resulted in an incremental gross value added of £2.6 billion every year, and returning to 2018 export levels could drive incremental GVA to the UK of £10.8 billion every year.
  • Life sciences employment in the UK has been flat over the last decade, while the UK's share of global pharmaceutical exports has dropped from 5.4% in 2018 to 3.8% by 2023.
  • The UK's high energy prices have led to the shutdown of industrial plants, resulting in loss of jobs and competencies, and the government has been criticized for failing to address these issues.

Statistics:

  • Merck UK employs over 100 scientists with expertise spanning chemistry, pharmacology, neuroscience, and immunology.
  • The planned £1 billion London lab was due to host 800 employees, including 180 scientists, alongside staff in business development, regulatory affairs, clinical, and business roles.
  • The UK has lost £15 billion over the last decade due to its lack of competitiveness in the life science sector.
  • The decline in clinical trials has resulted in an incremental gross value added of £2.6 billion every year.
  • Life sciences employment in the UK has been flat over the last decade.
  • The UK's share of global pharmaceutical exports stood at 5.4% in 2018 but had dropped to 3.8% by 2023.
  • Returning to 2018 export levels could drive incremental GVA to the UK of £10.8 billion every year.

Sources:

  • Society of Chemical Industry (SCI) press release
  • SCI report: "Unlocking Value in Life Sciences"
  • Association of the British Pharmaceuticals Industry report
  • Merck press release
  • AstraZeneca press release

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