LONDON (Reuters) - Novo Nordisk, the world’s top maker of diabetes drugs, is investing 115 million pounds ($145 million) in a new research centre in Britain, undeterred by Brexit.
The Danish company said on Monday it would invest the money over 10 years in the centre based at the University of Oxford, which will employ 100 scientists hunting for new ways to treat type 2 diabetes.
Britain’s vote last year to leave the European Union was disappointing but did not undermine the case for working with a renowned centre of science, said Mads Krogsgaard Thomsen, Novo’s chief scientist.
“There’s no doubt that Brexit created uncertainty for a period in our deliberations,” he told Reuters.
“It is unfortunate, but we’ve passed that challenge and I’m convinced we’ve no need to worry...Oxford is a worldwide powerhouse in medicine.”
The decision was welcomed by the government of Prime Minister Theresa May, who last week highlighted life sciences when she laid out a new industrial strategy designed to rebalance Britain’s heavily services-based economy after it leaves the EU.
Treasury minister David Gauke said Novo’s move was “a vote of confidence in the UK’s position as a world-leader in science and research”.
Brexit has raised concerns in the life sciences sector, with academics fretting over a potential gap in funding currently provided by the EU and drugmakers concerned over future medicine regulation.
The European Medicines Agency - based in London for now, but likely to move after Brexit - currently offers a one-stop-shop for drug approvals, smoothing the sale of pharmaceuticals across borders.
Given these challenges, some drug company executives have warned that Britain could lose its appeal as a centre for research and manufacturing.
Novo’s move is therefore reassuring, although the bulk of the company’s work in producing new diabetes treatments, including large-scale drug development and manufacturing, will still be done in Denmark.
Significantly, Britain’s two big domestic drugmakers have both committed to new investments in the country recently.
AstraZeneca is finishing a $500 million headquarters and research centre in Cambridge, while GlaxoSmithKline pledged $360 million to expand manufacturing in Britain in July, just five weeks after the Brexit vote.
Novo Nordisk has built a booming business over the last two decades by focusing on diabetes, which is a growing problem worldwide, driven by obesity and sedentary lifestyles. More recently, however, it has struggled with squeezed prices in the key U.S. market.
It said James Johnson, currently a professor at the University of British Columbia, had been appointed head of the Novo Nordisk Research Centre Oxford. Johnson is an expert on pancreas biology, insulin action and diabetes.
The new set-up will allow for daily interactions between academics at Oxford and Novo’s industrial scientists.
Editing by Ruth Pitchford/Keith Weir