Late and over budget, AstraZeneca R&D hub nears finish line

A computer-generated image of AstraZeneca's new facility.

AstraZeneca has taken another step toward the completion of its new headquarters and R&D hub in Cambridge, U.K. But progress has been slower and cost more than anticipated, with AstraZeneca saying it will move in two years later and spend £170 million ($218 million) more than planned.

Reuters picked up on the shift in expectations at an event to mark the completion of the building’s concrete frame. The current expectation is that employees will start moving into the building next year and the site will be fully operational by 2019. When AstraZeneca first revealed it would swing its U.K. center of gravity from Alderley Park to Cambridge in 2013, it had hoped to establish its new location by 2016.

That target has come and gone, although AstraZeneca has met its objective of having 2,000 staff working in the Cambridge area by now. As the relocation has completed, the task now is to finish the building that will become the long-term home of many of the staff and AstraZeneca’s largest center for oncology research.

By the time that happens, AstraZeneca anticipates it will have spent £500 million on the facility, notably more than the £330 million budget it laid out in 2013. Budget overruns affect many large building projects. The Scottish Parliament Building was expected to cost as little as £10 million when it was proposed in 1997. By the time it opened three years behind schedule in 2004, the budget had ballooned to £414 million.

Yet, AstraZeneca claims its 50% overrun is the result not of the unrealistic estimates or poor planning that lie behind many over-budget construction projects. Rather, the Big Pharma is framing the extra outlay as a strategic decision to strengthen the capabilities of the facility.

“We are bringing more capability to the new building than originally planned. This includes increased investment in new technologies and robotics equipment,” a spokesperson for the company said.

Other aspects of the project are unchanged. AstraZeneca is still pitching the building as a bid to connect its operation to the broader science environment in Cambridge. Aspects of that idea have gathered pace since AstraZeneca first unveiled its relocation plans in 2013.

In 2014, the Medical Research Council signed up to fund and work with AstraZeneca on up to 15 screening projects a year. Academics and AstraZeneca staffers will work together on the project in the Cambridge building and use the Big Pharma’s two million molecule library. AstraZeneca is also collaborating with Cancer Research UK in Cambridge, although that translational antibody research work will stay in the nearby Granta Park after the headquarters open.

These initiatives are small parts of a bigger bet that connections to Cambridge will justify the cost and disruption of moving from Alderley Park, a well-regarded site located 120 miles northwest of AstraZeneca’s new home in a less scientifically active part of the country. AstraZeneca’s bet on a hub in a scientific hotspot at the expense of an out-of-the-way campus is being mirrored across the industry. In Cambridge, the Big Pharma thinks it has a home that can make the bet pay off.

“Cambridge offers a tremendously vibrant academic and life-sciences ecosystem that can truly catalyze discovery and innovation, making it an ideal location for our new global headquarters and R&D center,” a spokesperson for AstraZeneca said. “The proximity and high concentration of leading scientific organizations at the Cambridge Biomedical Campus, across Cambridge and the region create the optimal conditions for sharing knowledge, skills and expertise.”