GlaxoSmithKline is planning to sell more than one-third of its 92-acre R&D site in Stevenage, U.K. The proposed sale, which comes amid criticism of GSK’s historically low R&D investment, is part of a plan to turn part of the site into a life science campus.
GSK currently occupies 92 acres of land in Stevenage, a town around 29 miles north of London. Now, GSK is looking to sell 33 acres of the site and unlock up to £400 million ($554 million) of investment from a private sector developer that wants to build a campus for biotechs and other early-stage life science companies. The new campus could deliver 100,000 square meters of new floor space.
While GSK wants to sell around 35% of the land, it said its existing R&D operations at Stevenage are unaffected by the new development plans. Stevenage, one of GSK’s global hubs, is the focal point of the £1 billion the company invests in R&D in the U.K. each year.
The site is already home to the Cell and Gene Therapy Catapult and the Stevenage Bioscience Catalyst, the latter of which is home to more than 40 companies. Turning 33 acres into a life science campus would significantly increase the number of startups that could be based in Stevenage.
“Our goal is for Stevenage to emerge as a top destination for medical and scientific research by the end of the decade,” Tony Wood, senior vice president for medicinal science and technology at GSK, said in a statement.
The first step is to select a development partner. GSK plans to make that decision by the end of the year and start master planning for the new campus in 2022. Over the next five to 10 years, GSK sees the developer investing up to £400 million in the site and creating up to 5,000 jobs, depending on the finalization of the proposals and planning consent. GSK has worked with the local council and national government on the plan for the campus.
With GSK saying its existing R&D operations at Stevenage will be unaffected by the plans, the sale gives the company a chance to raise money, potentially forge connections with biotechs based on the campus and retain its own ability to discover and develop new medicines.
The potential cash injection is the only near-term benefit, though, at a time when GSK needs wins to ease the pressure being applied by Elliott Management. The activist U.S. hedge fund has criticized GSK for its historically low R&D investment.