Decision blamed on declining competitiveness of UK market
US pharmaceuticals giant Merck has pulled out of AHMM’s life sciences building outside King’s Cross station, casting doubt over the viability of future schemes in the sector.
The drug maker, which is known as MSD in Europe, said the UK was uncompetitive and paying too little for medicines.
“Simply put, the UK is not internationally competitive,” the company told the FT.
The 10-storey building is being developed by Precis Group and is being built on a former Access self-storage warehouse on the Euston Road.
Precis has previously said laboratories make up around 40% of the building’s total floorspace with associated office, research and ‘write-up’ space at levels four to nine.
Arcadis head of strategic research and insight Simon Rawlinson said Merck’s decision “points to a more fundamental shifting in the investment strategies of pharma firms around trade barriers associated with the US”.
“Merck are directly blaming UK competitiveness, so that has to be a consideration, although it acts as cover also.”
The move follows Astra Zeneca’s decision in January to scrap plans for a £450m expansion of a vaccine manufacturing plant in Merseyside, and focus $50bn of investment in the US.
Rawlinson said: “Merck’s original announcement was a vote of confidence in the UK’s life science sector. Yesterday’s announcement highlights how competitive the environment and how complex investment decisions have become. Clearly the UK cannot rely on pre-existing strengths to maintain continuing competitiveness.”
The scheme’s main contractor Mace is still set to complete its shell and core work on the scheme, which is due to finish next spring as planned.
Sisk won the £125m fit out contract last year and was due to move onto the job after Mace completed its work, but this part of the job is now understood to be on hold as a result of Merck’s decision.
Mace, Sisk and Precis have been contacted for comment.
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