Merck ditches plan for $1.4 bln research centre in UK

LONDON

Merck, the U.S. pharmaceutical group, has dropped plans to build a $1.4-billion research centre in Britain, blaming the country's "lack of investment" in the sector and its drugs prices.

The company said in a statement it would not go through with the construction, which had been slated for the King's Cross district in central north London.

The British government acknowledged the "concerning news" and was standing by to help Merck employees in the U.K. and others affected by the development, a spokesman told AFP.

Merck said it would no longer take possession of Belgrove House in King's Cross, ditching a project that was to have engaged 800 workers over the next two years.

It said the decision stemmed from a company evaluation of its research capabilities "and reflects the challenges of the U.K. not making meaningful progress towards addressing the lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines by successive UK governments".

It said it would also close down its activities in two London labs by the end of the year, leading to 125 job losses.

Merck's decision follows that of U.K. sectoral rival AstraZeneca to abandon plans to build a $540-million vaccine factory in Britain, in the Liverpool region, because of what it said were insufficient state incentives.

The world's biggest pharmaceutical groups have this year come under pressure from US President Donald Trump to invest in America or see their production in other countries be hit with swingeing tariffs.