It has been three years since AstraZeneca announced the closure of its main UK research and development centre in Cheshire with the loss of 1,600 jobs. At the time, it was described by union leaders as a “massive blow” that would cause a “skills crisis” in the north-west of England. Yet, today, the mood regarding the 400-acre site south of Manchester is much brighter than the doomsday predictions of 2013. Instead of shrinking, the park’s new owners — a public-private partnership of local universities, councils and a property developer — last month received planning approval to increase office and laboratory capacity by 40 per cent.
The site is being redeveloped as a hub for smaller biotech companies, which can draw on the infrastructure and workforce left behind by AstraZeneca. Forty groups have moved in so far, creating 550 jobs, including several start-ups founded by former AstraZeneca scientists. “We can end up with something bigger than we had before,” says Glenn Crocker, chief executive of BioCity, the business incubator group that runs Alderley.
Cheshire is not the only place trying to turn the closure of a large pharmaceuticals facility to its advantage. BioCity also has sites in Scotland and Nottingham vacatedby Merck, the US drugmaker, and Boots, the pharmacy group, respectively. Another example is Discovery Park in Sandwich, Kent, where Pfizer developed Viagra before closing its R&D operations there in 2011.
The reinvention of these facilities reflects structural change in the industry. Big pharma is breaking up industrial-scale R&D processes after years of poor productivity. Instead of doing everything in-house, pharma groups are increasingly buying-in new drugs from biotech companies or working in partnerships.
“The business of science is changing,” says Simon Westbrook, a former Pfizer researcher who now runs a biotech company called Levicept in Sandwich. “R&D is being outsourced to nimbler companies which can locate anywhere in the world.” By far the greatest concentration of UK biotech activity is in the Golden Triangle between the elite research universities of Oxford, Cambridge and London. However, regional hubs are using economic incentives to compete. Several, including Sandwich and Alderley, have been made Enterprise Zones with tax benefits and fast-tracking planning processes.
Genea Biomedx, an Australian company that makes the solution used to nurture embryos in IVF clinics, chose Sandwich for its European manufacturing facility. “I went to Oxford and was given a flyer by an estate agent and asked to come back next week,” recalls Kim Giliam, the company’s commercial director. “When I came to Sandwich there was someone in the room from Locate in Kent [the development agency] asking what they could do to help.”
Sceptics say this experience reflects the desperation of places such as Sandwich for jobs and question if there are enough to fill the proliferating number of regional science parks. Authorities in Wales and Scotland are among others using public money to develop biotech clusters.
Steve Bates, chief executive of the UK BioIndustry Association, says different regions have different specialisms. Alderley, for example, has inherited strengths in oncology and anti-infective drugs from AstraZeneca. South Wales is focusing on cell therapy and medical technology. Together, Mr Bates says, the regions are helping build a strong national cluster capable of challenging the big US biotech hubs in New England and California.
Financing for UK life science companies has been running at record levels in the past two years and is ahead of other European countries but remains far behind the US. Among the companies that contributed to the UK tally last year was Redx Pharma, a Liverpool-based drug developer with an R&D centre at Alderley, which raised £15m in a London flotation.
Ned Wakeman, director of BioHub — the new brand name for Alderley Park — says regional clusters should be seen as an expansion of the Golden Triangle rather than a competitor. “In America it takes me two hours to get across Silicon Valley. From here I can be in London in that time.”
Alderley is still a long way from its goal of 7,000 jobs. AstraZeneca plans to keep 700 non-R&D roles there in the long term but this is a fraction of the 5,000 it employed at its peak. Sceptics question whether the new public-private owners will be able to sustain the investment needed to keep facilities up to date.
Mr Crocker says BioCity’s success elsewhere shows it can be done. The 700 people working at its original Nottingham site is 75 per cent higher than when the Boots facility closed 13 years ago. Business “boot camps” providing support for entrepreneurs has helped ensure a 91 per cent survival rate among companies there.
Alderley’s BioHub aims to harness similar mentoring benefits from the senior scientists and managers left behind by AstraZeneca. “Not all the companies will succeed,” Mr Crocker says. “But the risk is lower than being dependent on the whims of one company’s corporate strategy.”