Astra boss ditches UK expansion plan to build new plant in Ireland as jabs row with Government escalates
Vaccine row: Astrazeneca Chief executive Pascal Soriot (pictured)
Pharma giant Astrazeneca has ditched plans for fresh investment in Macclesfield and will build a plant in Ireland instead after a dispute with ministers.
The row was triggered by the Government’s decision to order booster Covid jabs from its rival, Pfizer. Chief executive Pascal Soriot ‘threw his toys out of the pram’ after the decision, according to a Government source.
Ministers were lining up £55million of subsidies for Astra for the project before the rift. This was intended to convince the FTSE 100 company to invest in the UK rather than Ireland. The plans were discussed with officials on the fringes of the G7 summit, which included Boris Johnson visiting one of its sites. But Soriot was so incensed by the booster vaccine snub that it has now reverted to its original plan to build a site in Ireland, where there are more favourable tax breaks.
It comes as Britain starts a booster vaccine programme for priority groups including care home residents, health and social care workers, people over 50 and those aged between 16 to 49 more at risk of catching Covid.
The Frenchman, 62, is credited with leading a turnaround at Astra that has transformed its image from laggard to pioneer. The father-of-two saw off a £69bn raid in 2014 by US rival Pfizer, which wanted to buy Astra and use the UK as its headquarters for tax purposes.
Soriot bet big on innovation, selling the rights to old medicines to boost revenues while pumping billions of pounds into research and development of cancer drugs.
Today Astra is valued at £133billion, after a near-200 per cent rise in its share price since Soriot took over in 2012.
Yesterday, shares rose 6.2 per cent, or 496p, to 8559p after its breast cancer drug – enhertu – was found to reduce the risk of death or disease progression by 72 per cent compared to an existing treatment.
Missing out: Astrazeneca’s manufacturing base in Macclesfield (pictured) was due for fresh investment
In July, Soriot sealed the £29billion takeover of Boston-based Alexion in the largest deal in Astra’s history– as it strives for a foothold in potentially lucrative treatments for rare diseases, particularly those caused by problems in the immune system.
The US company is already known for its blood disease drug – soliris – and has followed this with another that was approved two years ago, and has seen sales quadruple to £572million in the first nine months of 2020.
But Soriot attracted criticism this year for an £18million pay packet, with his bonus rocketing to £11.9million, up from £2.3million the previous year. He had previously grumbled that he was the ‘lowest-paid CEO in the whole industry’ after bosses of rival biotech firms earned more.
Astra’s headquarters is in Cambridge but it has a manufacturing base in Macclesfield in Cheshire, with 3,500 staff there.
In May construction began in Macclesfield on a sterile production plant for a cancer drug, which is used to treat patients with prostate, breast and gynaecological disorders.
Work is set to be completed by the end of next year. It teamed up with Oxford University to create the Covid jabs, and began work on a booster vaccine over the summer.
But its jab was focused on the Beta variant, which first emerged in South Africa, which has been less prevalent in recent months, as Delta has taken hold.
The company is not selling its Covid vaccine at a profit, an unprecedented move by a multinational business. This prompted the World Health Organisation to hail the jab as a ‘vaccine for the world’.
Critics in the EU have rounded on it over supply chain problems and blamed it for the bloc’s handling of the vaccination programme. Astra was also hammered after it emerged in January that its vaccine was causing blood clots in a miniscule proportion of people.
It prompted some nations to shun the jab – and in the UK it is only given to the over-40s – though some studies indicate it is no less likely to cause severe blood clots than Pfizer’s.
The company declined to comment.