£450m Liverpool Vaccine Project Scrapped, AstraZeneca Raises Concerns
AstraZeneca has made waves in the pharmaceutical sector by pulling back on its £450m Liverpool Vaccine Project expansion—a decision that left many disappointed. While the drugmaker reported a significant 38% increase in annual profits, its CEO, Pascal Soriot, has denied any tension with the UK government over the move. What went wrong, and what does this decision signal for the future of pharmaceutical investments in the UK?
AstraZeneca “Very Disappointed” Over Difficult Business Case
Speaking to reporters, Soriot expressed the company’s regret about the decision, stating that they were “very disappointed” they could not justify the economic viability of the project. “We needed a certain level of support to make this economically viable, and that was not possible for the government to justify. On our side, we cannot justify this either,” said Soriot.
The plant expansion plan, initially approved under the previous Conservative government with promises of £90m in grants, faced hurdles after the new Labour administration sought to cut public spending. Science Minister Chris Bryant called the drugmaker’s U-turn “deeply disappointing,” even as he stated that the gap in funding discussions between AstraZeneca and the government was “remarkably small.”
Soriot clarified there were no lingering tensions with the government. He emphasised that the company had intended to increase its investment in the facility to over £500m but was ultimately unable to make it work. “It’s a very competitive world, and we make investments in many countries,” he added.
Shift in Investments Towards Singapore
Instead of expanding their UK operations, AstraZeneca is turning its focus to international markets. The company is investing $1.5bn (£1.2bn) in a new facility in Singapore dedicated to producing antibody drug conjugates, next-generation cancer treatments. Soriot noted “very substantial support” from Singapore for this strategic venture.
He also called upon the UK government to further incentivise pharmaceutical investments, suggesting that an increase in the drug rebate scheme, which requires pharma companies to return a percentage of their sales to the NHS, would not “encourage people to invest.”
A government representative defended the decision to reduce funding for the Liverpool project, stating that all government funding must demonstrate clear value for taxpayers—a benchmark the revised terms of the agreement failed to meet.
Record-Breaking Annual Results Boost AstraZeneca’s Shares
Despite the Liverpool setback, AstraZeneca emerged strong in its annual financial report. The company announced a 21% rise in revenues, reaching $54.1bn in 2024, while pre-tax profits jumped 38% to $8.7bn on a constant currency basis. Strong sales of its cancer, respiratory, and immunology treatments have largely driven this performance.
Following the announcement, AstraZeneca’s shares rose nearly 6%, marking their biggest daily gain since April 2024. The drugmaker’s success also pushed the FTSE 100 to a new record high, exceeding 8,700 points.
Nonetheless, challenges remain. AstraZeneca faced a sharp market drop in November after the detention of its China-based president, Leon Wang, over allegations of importing cancer medicines illegally. Although these allegations wiped £14bn off the company’s market value, AstraZeneca provided reassurance to investors, stating that the case involved unpaid importation taxes amounting to $900,000—a figure that could result in a fine of up to five times this amount.
The Future of AstraZeneca
While the Liverpool Vaccine Project has been scrapped, AstraZeneca remains determined to achieve $80bn in total revenue by 2031. The company intends to build on its successes in cancer and respiratory treatments, which reported revenue growth of 24% and 25%, respectively, last year.
With seven new medicines nearing late-stage results this year, AstraZeneca is poised to maintain its role as one of the globe’s leading pharmaceutical innovators. However, the Liverpool decision casts a shadow over its UK operations, raising questions about how the country can remain competitive in attracting and retaining major pharmaceutical projects.
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