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| AstraZeneca's move south will leave the north-west without a vital element | AstraZeneca's move south will leave the north-west without a vital element |
| (6 months later) | |
| Sheep are nibbling the grass by the lanes of Alderley Park, a sprawling estate in Cheshire that looks like a country retreat. But the bucolic scene is misleading: Alderley Park is in fact the nerve centre for research and development at AstraZeneca, Britain's second largest pharmaceutical company. | Sheep are nibbling the grass by the lanes of Alderley Park, a sprawling estate in Cheshire that looks like a country retreat. But the bucolic scene is misleading: Alderley Park is in fact the nerve centre for research and development at AstraZeneca, Britain's second largest pharmaceutical company. |
| In this rustic hideaway, scientists pioneered anaesthetics and some of today's most commonly used breast cancer treatments, while pharmacologist Sir James Black developed beta blockers; a replica of his Nobel medal is proudly displayed at the entrance of the sandstone-and-steel research lab. | In this rustic hideaway, scientists pioneered anaesthetics and some of today's most commonly used breast cancer treatments, while pharmacologist Sir James Black developed beta blockers; a replica of his Nobel medal is proudly displayed at the entrance of the sandstone-and-steel research lab. |
| But the future of this scientific Eden is now under threat, after AstraZeneca announced earlier this month that all research and development at Alderley Park would cease by 2016, with the loss or relocation of more than 2,000 jobs. | But the future of this scientific Eden is now under threat, after AstraZeneca announced earlier this month that all research and development at Alderley Park would cease by 2016, with the loss or relocation of more than 2,000 jobs. |
| The move is a devastating blow to Cheshire, as well as a snub to the local MP, chancellor George Osborne, who vowed to start "a march of the makers" – a revitalisation of Britain's declining manufacturing and hi-tech industries, which have shrunk in the shadow of an outsize financial services sector. | The move is a devastating blow to Cheshire, as well as a snub to the local MP, chancellor George Osborne, who vowed to start "a march of the makers" – a revitalisation of Britain's declining manufacturing and hi-tech industries, which have shrunk in the shadow of an outsize financial services sector. |
| Despite the lofty talk, the march of the drugmakers seems to have stalled. Job cuts at AstraZeneca will see the company lose more than a tenth of its UK workforce. This follows close on the heels of a decision by US rival Pfizer to mothball a science park in Sandwich, Kent, shedding 1,500 jobs. | Despite the lofty talk, the march of the drugmakers seems to have stalled. Job cuts at AstraZeneca will see the company lose more than a tenth of its UK workforce. This follows close on the heels of a decision by US rival Pfizer to mothball a science park in Sandwich, Kent, shedding 1,500 jobs. |
| Some AZ scientists will get the chance to transfer to a £330m "strategic global R&D centre" in Cambridge. But locals are disappointed at AstraZeneca's decision to pull the plug on research at Alderley Park, home to half a century of scientific discoveries dating back to the now defunct British industrial giant ICI. | Some AZ scientists will get the chance to transfer to a £330m "strategic global R&D centre" in Cambridge. But locals are disappointed at AstraZeneca's decision to pull the plug on research at Alderley Park, home to half a century of scientific discoveries dating back to the now defunct British industrial giant ICI. |
| "It seems ridiculous they are taking it from Cheshire," says Colin Marlow, 65, a retired joiner who worked at Alderley Park for 34 years. "There are a lot of clever people round here. Why should they have to go down to Cambridge?" | "It seems ridiculous they are taking it from Cheshire," says Colin Marlow, 65, a retired joiner who worked at Alderley Park for 34 years. "There are a lot of clever people round here. Why should they have to go down to Cambridge?" |
| Richard Smith, 39, is worried the job cuts will damage local businesses, including his trade as an electrician. "It is not good for the area. Even if it doesn't affect you, it sets waves in motion. If people haven't got money in their pockets, they won't be spending." | Richard Smith, 39, is worried the job cuts will damage local businesses, including his trade as an electrician. "It is not good for the area. Even if it doesn't affect you, it sets waves in motion. If people haven't got money in their pockets, they won't be spending." |
| For when AstraZeneca moves out of its labs, it affect not only 1,600 scientists and technicians, but the small army of caterers and cleaners who serve the 400-acre site, as well as the dozen taxi firms that ferry AstraZeneca bosses from Manchester Airport to Alderley Park. Gary Owen, north-west regional officer at the Unite union, estimates 1,000 people working at Alderley Park as contractors, mostly living in Stockport, Congleton and Macclesfield, will be hit by the closure. | For when AstraZeneca moves out of its labs, it affect not only 1,600 scientists and technicians, but the small army of caterers and cleaners who serve the 400-acre site, as well as the dozen taxi firms that ferry AstraZeneca bosses from Manchester Airport to Alderley Park. Gary Owen, north-west regional officer at the Unite union, estimates 1,000 people working at Alderley Park as contractors, mostly living in Stockport, Congleton and Macclesfield, will be hit by the closure. |
| The ripples will also be felt in some of the richest parts of England, including Alderley Edge, a smart village that is home to Manchester United manager Sir Alex Ferguson and boasts a traditional high street with several fine wine shops and old-fashioned barber. "You can't lose a significant number of high-value jobs without missing the spending power, so it will have that knock-on effect," says Frank Keegan, conservative councillor for Alderley Edge, who is especially concerned about the effect on the local fee-paying school. | The ripples will also be felt in some of the richest parts of England, including Alderley Edge, a smart village that is home to Manchester United manager Sir Alex Ferguson and boasts a traditional high street with several fine wine shops and old-fashioned barber. "You can't lose a significant number of high-value jobs without missing the spending power, so it will have that knock-on effect," says Frank Keegan, conservative councillor for Alderley Edge, who is especially concerned about the effect on the local fee-paying school. |
| The Egerton Arms, a timber-beamed pub in nearby Chelford, sees good business from AstraZeneca workers. "The joke in the pub is 'we love AZ' because they account for 25% of our lunch business," says Jeremy Hague, 43, the landlord-owner, who is hopeful "an equally large company" will take the site. | The Egerton Arms, a timber-beamed pub in nearby Chelford, sees good business from AstraZeneca workers. "The joke in the pub is 'we love AZ' because they account for 25% of our lunch business," says Jeremy Hague, 43, the landlord-owner, who is hopeful "an equally large company" will take the site. |
| Alan Clarke, chairman of Nether Alderley parish council, home to the labs, says locals are upset at the company's decision to quit the "fabulous facilities" at Alderley Park. "Nether Alderley has just over 500 residents in 350 houses and up until recently 5,000 people worked in the parish. Taking that number of people out will have a tremendous effect on house prices and local shops." | Alan Clarke, chairman of Nether Alderley parish council, home to the labs, says locals are upset at the company's decision to quit the "fabulous facilities" at Alderley Park. "Nether Alderley has just over 500 residents in 350 houses and up until recently 5,000 people worked in the parish. Taking that number of people out will have a tremendous effect on house prices and local shops." |
| He understands that AstraZeneca has had its problems. "They need new drugs, they need new discoveries: but it is fairly drastic to move 200 miles away." | He understands that AstraZeneca has had its problems. "They need new drugs, they need new discoveries: but it is fairly drastic to move 200 miles away." |
| AstraZeneca's woes are no secret in Cheshire. The company has no new blockbuster drugs in its pipeline, while two of its biggest money-spinners, Nexium stomach-acid pills and the Crestor cholesterol treatment, will see their US patents expire in 2014 and 2016. With no big prospects on the horizon, AstraZeneca reported a 34% slump in profits to $8.1bn (£5.3bn), compared with $12.8bn in 2011. | AstraZeneca's woes are no secret in Cheshire. The company has no new blockbuster drugs in its pipeline, while two of its biggest money-spinners, Nexium stomach-acid pills and the Crestor cholesterol treatment, will see their US patents expire in 2014 and 2016. With no big prospects on the horizon, AstraZeneca reported a 34% slump in profits to $8.1bn (£5.3bn), compared with $12.8bn in 2011. |
| Navid Malik, head of life sciences research at Cenkos Securities, thinks AstraZeneca must take care not to disrupt the workforce that is the backbone of its R&D infrastructure. "[The workforce] have got to feel that they are part of the whole process … and that is not easy, because people are worried about their jobs." | Navid Malik, head of life sciences research at Cenkos Securities, thinks AstraZeneca must take care not to disrupt the workforce that is the backbone of its R&D infrastructure. "[The workforce] have got to feel that they are part of the whole process … and that is not easy, because people are worried about their jobs." |
| A number of people might be confused about why going south will have a positive impact on the company's performance, Malik said. "It is becoming quite crowded around places like Cambridge. I think what they have to demonstrate is that, wherever they are located, they can collaborate with the academic groups. | A number of people might be confused about why going south will have a positive impact on the company's performance, Malik said. "It is becoming quite crowded around places like Cambridge. I think what they have to demonstrate is that, wherever they are located, they can collaborate with the academic groups. |
| "The only way to grow," he added, "is to bring really innovative products to the market that meet an unmet or poorly met medical need in a radical way." | "The only way to grow," he added, "is to bring really innovative products to the market that meet an unmet or poorly met medical need in a radical way." |
| A spokeswoman for AstraZeneca said the company "will continue to have a strong presence in the north-west" with 3,000 employees remaining at a manufacturing and packing plant in Macclesfield. Around 700 people will remain at Alderley Park in non-research jobs. | A spokeswoman for AstraZeneca said the company "will continue to have a strong presence in the north-west" with 3,000 employees remaining at a manufacturing and packing plant in Macclesfield. Around 700 people will remain at Alderley Park in non-research jobs. |
| Lee Hopley, chief economist at EEF, the manufacturers' organisation, is optimistic that the UK remains a "pretty attractive proposition" for hi-tech R&D. Pharmaceuticals would play an important role in rebalancing the economy, she said, but it, like other manufacturing industries, had been facing tough times – "it has been a massive uphill challenge for these makers". | Lee Hopley, chief economist at EEF, the manufacturers' organisation, is optimistic that the UK remains a "pretty attractive proposition" for hi-tech R&D. Pharmaceuticals would play an important role in rebalancing the economy, she said, but it, like other manufacturing industries, had been facing tough times – "it has been a massive uphill challenge for these makers". |
| So far, she sees no compelling evidence that the revitalisation of manufacturing is happening quickly enough. "Some of that is down to the world economy and our biggest export markets in Europe, which have been really struggling over the last few years, but there is also a need for much more of a relentless push on the kind of policies that are going to support that investment, export and rebalancing." She singles out uncertainty about energy policy, as well as lack of focus on developing "the pipeline for skills for industry for the future", as particular weak points. | So far, she sees no compelling evidence that the revitalisation of manufacturing is happening quickly enough. "Some of that is down to the world economy and our biggest export markets in Europe, which have been really struggling over the last few years, but there is also a need for much more of a relentless push on the kind of policies that are going to support that investment, export and rebalancing." She singles out uncertainty about energy policy, as well as lack of focus on developing "the pipeline for skills for industry for the future", as particular weak points. |
| In Alderley Edge, local councillor Keegan is confident that the skills-rich workforce will lure a new tenant to the science park: "It is undoubtedly a blow that a major group will be relocating to the Cambridge area … but we have still got a terrific amount to offer for companies that want to come." | In Alderley Edge, local councillor Keegan is confident that the skills-rich workforce will lure a new tenant to the science park: "It is undoubtedly a blow that a major group will be relocating to the Cambridge area … but we have still got a terrific amount to offer for companies that want to come." |
| In the short term, those vanishing jobs, against the backdrop of a gloomy economy, concerns locals. "There is no question that the desirability of Alderley Park is huge," said Nick Rowcliffe, 65, a retired estate agent. "In the next 10 years Alderley Park will probably be filled in some sort of glorious form or other. But the period between AZ going and all those people with disposable income losing their jobs is worrying." | In the short term, those vanishing jobs, against the backdrop of a gloomy economy, concerns locals. "There is no question that the desirability of Alderley Park is huge," said Nick Rowcliffe, 65, a retired estate agent. "In the next 10 years Alderley Park will probably be filled in some sort of glorious form or other. But the period between AZ going and all those people with disposable income losing their jobs is worrying." |
| SEEKING A CURE | SEEKING A CURE |
| AstraZeneca typifies the problems crowding in on the pharmaceuticals industry. The company's drug pipeline has dried up after failed ventures that never made it from the laboratory to the medicine cabinet inflicted heavy losses: it wrote down $445m (£293m) on failed treatments for respiratory problems in 2010 and $382m when it discontinued research into an ovarian cancer drug the following year. | AstraZeneca typifies the problems crowding in on the pharmaceuticals industry. The company's drug pipeline has dried up after failed ventures that never made it from the laboratory to the medicine cabinet inflicted heavy losses: it wrote down $445m (£293m) on failed treatments for respiratory problems in 2010 and $382m when it discontinued research into an ovarian cancer drug the following year. |
| Chief executive Pascal Soriot, who joined in October 2012, has vowed to spend big to recharge the pipeline by prioritising treatments for cancer and cardiovascular disease – the top two killers in rich countries – as well as respiratory problems. But bringing a new drug to market can cost $1.5bn. And while analysts like Soriot's plan, they caution it will be easier said than done. | Chief executive Pascal Soriot, who joined in October 2012, has vowed to spend big to recharge the pipeline by prioritising treatments for cancer and cardiovascular disease – the top two killers in rich countries – as well as respiratory problems. But bringing a new drug to market can cost $1.5bn. And while analysts like Soriot's plan, they caution it will be easier said than done. |
| Navid Malik at Cenkos Securities says Astra Zeneca's big competitor – the UK's largest pharmaceuticals company, GlaxoSmithKline – took a decade to overcome a similar problem. "It has taken Glaxo 10 years … and now they are growing at 1% … I think that demonstrates how difficult this process is." | Navid Malik at Cenkos Securities says Astra Zeneca's big competitor – the UK's largest pharmaceuticals company, GlaxoSmithKline – took a decade to overcome a similar problem. "It has taken Glaxo 10 years … and now they are growing at 1% … I think that demonstrates how difficult this process is." |
| Meanwhile, John Ansell, an independent consultant, adds: "AstraZeneca has been spending as much as anybody. But it is about the quality of the R&D as well as a bit of luck. Other big companies, such as Pfizer, have also had difficulties, while GlaxoSmithKline is in better shape. But that took years of reorganising its R&D into smaller and smaller units. I think with AstraZeneca it might have been a bit complacent and suffered from a lack of vision at the top." | Meanwhile, John Ansell, an independent consultant, adds: "AstraZeneca has been spending as much as anybody. But it is about the quality of the R&D as well as a bit of luck. Other big companies, such as Pfizer, have also had difficulties, while GlaxoSmithKline is in better shape. But that took years of reorganising its R&D into smaller and smaller units. I think with AstraZeneca it might have been a bit complacent and suffered from a lack of vision at the top." |
| AZ faces multiple pitfalls as it seeks to develop new money-spinning drugs and get into new markets in east Asia while cash-strapped governments in developed markets try to trim their drugs bills. There are so many moving parts and multiple challenges that could stall or derail AstraZeneca's plans to overhaul its business, Ansell says. | AZ faces multiple pitfalls as it seeks to develop new money-spinning drugs and get into new markets in east Asia while cash-strapped governments in developed markets try to trim their drugs bills. There are so many moving parts and multiple challenges that could stall or derail AstraZeneca's plans to overhaul its business, Ansell says. |
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