AstraZeneca PLC, GlaxoSmithKline, Novartis AG and Roche React to Brexit and Its Possible Impact on Biotech
June 24, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – Shares of AstraZeneca are down more than 5 percent in early trading and shares of GlaxoSmithKline have slipped more than 4 percent hours after a slight majority of Britons voted to exit the European Union. Both companies have been on record as preferring to remain within the E.U.
What is unknown is how the political and economic fallout will impact business operations and scientific innovation overseas. London-based AstraZeneca said it would have been better had Great Britain remained in the European Union, an economic partnership it has been part of since the early 1970s, Reuters reported in a brief this morning. Despite the exit, popularly known as Brexit, AstraZeneca officials said the company “aims to safeguard competitiveness of life sciences industry and speed of patient access to innovative medicines,” Reuters said.
Pharma leaders in Europe have been critical of the Brexit vote, saying it threatened scientific research and drug regulation across the 28-nation member bloc.
On the continent itself, Swiss-based Roche told Reuters it was too early to determine what the potential impact of the Brexit will be. However, in the meantime, Roche said the “key priority is to ensure that UK environment continues to support scientific innovation and speedy access of innovative medicines for patients,” Reuters noted.
Novartis AG , also based in Basel, Switzerland, told Reuters that it was too early to determine how the Brexit would impact the industry. In the short term, Novartis said it “expects no significant impact on activities and businesses from Brexit vote as the mechanisms and measures for the exit still must be defined.”
As an interesting note, Switzerland is not a member of the European Economic Area, which provides for the free movement of goods and people throughout the E.U., but it does maintain a thriving pharma industry, the BBC noted earlier this week.
While there are questions as to what Brexit means for those companies, there will likely be some negative impact on pharma research as U.K. researchers lose access to E.U.-backed grants. According to Politico, Britain has been a net receiver of science funding from the E.U. Additionally, Politico noted there are numerous immigrant researchers working in British pharma companies who are in-country under E.U. migration laws. With Britain seceding from the E.U., the fate of those immigrant workers are up in the air.
Britain will also likely have to implement its own regulatory rulings as it will no longer be under the governance of the European Medicines Agency. That means companies will have to submit additional applications to the Medicines & Healthcare Products Regulatory Agency for regulatory approval in the world’s fifth-largest economy. Under the authorization of the European Medicines Agency, approved drugs could be marketed in all member states.
The European Medicines Agency is currently located in London and the Brexit vote means that body will most likely have to find a new home in another country.
The Brexit could also cause some companies to rethink establishing a British base and instead opt for a base in an E.U. member country.
"Pharmaceutical companies across Europe face considerable uncertainty at the prospect of the UK leaving the EU. Brexit has the potential to impact on regulation, the status of the EMA, finance, employment, the transfer of personal data and the European research ecosystem," the European Federation of Pharmaceutical Industries and Associations said in a statement to Reuters earlier this year.