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Dublin Looks To Capitalise On Big Pharma Cash Injection

Dublin's life sciences sector could capitalise on the UK tax environment.

Ireland continues to punch above its weight when it comes to the burgeoning life sciences sector, with AstraZeneca’s recent decision to snub the UK for Dublin the latest deal to bolster the sector.

And just as the tech sector is attributed with boosting many other sectors in the city, so big pharma’s reach is beginning to spread outside life sciences and bolster everything from specialist logistics to professional support services.

The Irish life sciences industry already directly employs over 50,000 people across medical devices, pharma and biotechnology and exports are estimated to exceed €45M annually. All but one of the world’s 25 largest biotech and pharma companies have established a physical presence in Ireland, and large-scale investment continues.

Given the contraction among the tech giants, it has arguably never been more important for Dublin to grab the opportunity around life sciences and to be aware that the UK government may respond if it gets another shock like AstraZeneca.

Supply Constraint

Potentially the biggest obstacle to the biomedical sector is supply constraint and PayPal’s instruction to agent CBRE to find a buyer for its main office campus in Blanchardstown, Dublin 15 has alerted the life sciences industry.

The Campus at Ballycoolin Business Park is being offered to market at a guide price of €26M and consists of four separate buildings extending to 171K SF, with the larger of the two sites consisting of three interlinked office buildings covering a combined area of 142.6K SF. Two of these buildings recently underwent an extensive refurbishment and CBRE said they would be suitable for a life sciences tenant.

Indeed, the expansion in life sciences is also bolstering other sectors. Global delivery specialist UPS is to launch a dedicated 64.5K SF global healthcare facility in Dublin to help connect Ireland's pharmaceutical industry with the UPS global logistics network when it opens in late 2023 at a time when temperature-controlled facilities are in short supply.

According to UPS Healthcare, by the time its Dublin site launches the company will have doubled its logistics space from 2020 and the new facility will be situated less than 10 minutes away from Dublin Airport and close to Dublin Port.

In late July 2022, logistics giant Kuehne+Nagel Ireland also opened a temperature-controlled facility near Dublin Airport and Dublin Port and, along with three existing healthcare warehouses, it expanded Kuehne+Nagel’s healthcare footprint in Ireland to more than 430K SF. 

Halo Effect Of Industry

Similarly, professional services company Cognizant plans to expand its operations in Ireland, aimed mainly at its life sciences division to serve its pharma clients. The multinational plans to create 320 jobs across its Irish operations over the next three years, which will bring its workforce in Ireland to more than 1,800.

In 2019, Cognizant acquired financial services software company Meritsoft and Zenith Technologies, a Cork-based life sciences tech company and there are plans to fill 100 new positions by the end of 2023, supporting global pharma companies across their value chain including manufacturing, research and development, and commercial operations.

“Ireland is an incredibly important market for us, and it has established itself as an international hub for life science manufacturing,” Cognizant Head of UK and Ireland Rohit Gupta said.

For Dublin, time may well of the essence. At Bisnow’s conference in London on life sciences on 8 March Katie Nelson, Kadans senior asset manager for the UK and Ireland, said it would be at least three or four years before supply came anywhere near exceeding demand, given the amount of demand for space even in this new market environment and the known pipeline of space coming through.

That being the case, a number of potential tenants could look across the Irish Sea and for Dublin to miss out through lack of development opportunities would be a bitter pill to swallow. Because demand is clearly there.

Pfizer, Boston Scientific and Merck are just some of those to have announced fresh rounds of major investment and AstraZeneca’s top leadership thumbed a nose at the UK’s “discouraging” tax rate for the company’s decision to build a €374M active pharmaceutical ingredient facility at the former Alexion campus in Dublin rather than near its existing sites around Macclesfield, Cheshire.

Almost all of the global pharma companies are already in Ireland.

Speaking on a conference call on 9 February, CEO Pascal Soriot said that despite the UK government’s desire to transform the country into a life sciences powerhouse, punitive tax rates are forcing decision-makers to look elsewhere.

And that’s where Ireland’s tax environment has attracted significant foreign direct investment.

“We've made a €374M investment in the state-of-the-art manufacturing facility, which we wanted to make in this country [the UK], and we've made in Ireland because the tax rate was discouraging,” Soriot said. “We’re very committed [to the UK], but we need to see also supporting policies for the whole industry.”

In truth, AstraZeneca had been warning the UK authorities for some time not to take the country's life sciences sector for granted, and predicted the country would lose out on investment to more competitive nations. It unveiled plans for the Dublin facility in September 2021 with what was then a €337M price tag for a site.

And it is far from the only major pharmaceutical company to see Dublin as the ideal staging post for manufacture.

Pfizer is plugging €1.2B into its manufacturing site at Grange Castle in Dublin, where it also plans to add between 400 and 500 new jobs by 2027. The company has said the project will “significantly expand” its production and laboratory capacity and will bring Pfizer’s overall Irish headcount to around 5,500.

The project will see Pfizer build a new facility on its existing Grange Castle campus. The upgrade is expected to double capacity for biological drug substance manufacturing at the site. Under its current plan, Pfizer will begin work at the site in 2024, with the goal to complete the project within the next five years.

Pfizer already has a significant footprint in Ireland, where the company has additional sites in Kildare and Cork.

Specialist logistics is growing around life sciences.

Life Sciences Development

Pfizer’s latest manufacturing push comes at a busy time for the Irish biopharma scene. In September 2022, AbbVie said it was investing €60M in its site on the outskirts of Cork, outlining a new facility to bolster its aesthetics business with 70 new roles across sterile manufacturing, quality control and engineering roles.

U.S. pharma giant Gilead Sciences has also received planning permission for a €45M expansion of its plant in Carrigtwohill in Cork. The new 55.7K SF warehouse represents a significant expansion of the facility's storage capacity at the site, which is among several locations in Dublin and Cork which, including the new facility, will bring investment in Ireland close to €300M.

The new building is projected to be complete for November 2024 and, with 500 staff, Ireland is the California company’s largest EU operation, dating back to 1999.

In 2018, Gilead opened a €9.5M facility at its Cork site and in 2020 it invested €7M to expand its Cork and Dublin operations, including its global Pediatric Centre of Excellence in Dublin.

Aiming to boost its presence in Ireland, Ipsen has spent €52M to upgrade its Dublin manufacturing site. The expanded site in Blanchardstown will allow Ipsen to increase its production of active pharmaceutical ingredients and the company plans to invest €15M more in the site between 2023 and 2026 as part of its growth strategy for the Irish market.

Ireland “plays an important role as part of Ipsen’s international network. This new investment in Dublin is a milestone in our ongoing journey of innovation and our growing footprint in Ireland,” Ipsen CEO David Loew said.