Merck scraps plans for £1 billion London research centre in blow to life sciences sector

US pharmaceutical company Merck, known as MSD in Europe, has withdrawn a planned £1 billion investment in a new discovery centre in London, citing the UK’s challenging environment for life sciences. The decision will result in the closure of discovery research operations in the country and the loss of 125 jobs, although other research activities will continue. The facility, a 25,000 square foot headquarters in the Knowledge Quarter near King’s Cross, had been under construction and was due to open in 2027. The cancellation comes at a time when the government has identified life sciences as a key growth sector in its industrial strategy, with ambitions to make the UK Europe’s leading life sciences economy by 2030 and the third most significant globally by 2035.

Merck said the withdrawal “reflects the challenges of the UK 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.”

The announcement coincides with a critical report from the Association of the British Pharmaceutical Industry, produced with PwC, which warns that the UK is “losing the race” for global investment due to an uncompetitive operating environment. The study highlights declines in clinical trials, foreign direct investment and access to new medicines compared with other leading economies.

Industry concern is not limited to Merck. Eli Lilly has also paused part of its UK investment, citing uncertainty in the operating environment. Senior figures, including Sir John Bell, have warned that the UK risks being seen as “uninvestable” without policy changes.

Tensions have been heightened by the collapse of talks between the government and the pharmaceutical industry over reform of NHS pricing for branded medicines. The sector argues that current arrangements undervalue innovation and discourage long-term investment.

In response, the government has pointed to recent commitments, including up to £600 million for the Health Data Research Service and £520 million for the Life Sciences Innovative Manufacturing Fund, aimed at attracting further private sector investment. A government spokesperson said the UK remained “the most attractive place to invest” and that it was committed to working with industry to support growth.

The loss of the London facility is being seen as a significant setback for the government’s strategy and raises broader questions about the competitiveness of the UK’s life sciences sector at a time of growing global competition for research and investment.