LONDON AstraZeneca has chosen a science park on the southern outskirts of Cambridge, England, next to the world-renowned Addenbrooke's Hospital, for its new $500 million global headquarters and research center.
Property industry sources told Reuters last month that the Cambridge Biomedical Campus (CBC) was the most likely site for the new facility, which will house some 2,000 employees - a decision confirmed by the drugmaker on Tuesday.
Transplanting the heart of the company to the university city is the centerpiece of a $2.3 billion restructuring plan unveiled by new Chief Executive Pascal Soriot in March, which also includes a 10 percent cut in overall staff numbers by 2016.
Soriot is trying to turn around the group's fortunes after a series of drug development disappointments by investing more in research and bolt-on acquisitions, while reining in costs.
AstraZeneca said at the time that it planned to establish a new global research and development center and corporate headquarters in the city by 2016, at cost of around 330 million pounds ($500 million), but did not disclose the exact location.
The group currently has its corporate headquarters in London, while its main research center is in Alderley Park, northwest England, where research will be shut down.
A smooth move to the new purpose-built Cambridge center is a key test for Soriot as he tries to change the culture at Britain's second-largest pharmaceuticals group to put science at the center of its activities.
"Moving to the Cambridge Biomedical Campus means our people will be able to rub shoulders with some of the world's best scientists and clinicians carrying out some of the world's leading research - that's a really exciting prospect," Soriot said.
In addition to Addenbrooke's Hospital, the CBC is also home to the Cambridge School of Clinical Medicine, the Medical Research Council Laboratory of Molecular Biology, the Wellcome Trust-MRC Institute of Metabolic Science and the Cancer Research UK Cambridge Institute.
AstraZeneca will occupy approximately 11 acres of the 70 acre campus, which is situated two miles from central Cambridge and its university colleges.
The decision to select CBC is a blow for Granta Park, the other main location option, which is outside Cambridge and already houses AstraZeneca's biotech unit MedImmune.
Science Minister David Willetts said AstraZeneca's move was excellent news and a vote of confidence in British science and the position of Cambridge as a center of academic excellence. It also underscores the growing economic importance of Cambridge, which is home to more than 1,500 high-tech firms.
Still, AstraZeneca management will have to work hard to ensure it retains its best scientists during the transition. Menelas Pangalos, the group's head of innovative medicines, said last month the drugmaker would offer enticing packages to make sure key staff relocated.
Whether the Cambridge's scientific "stardust" will rub off on AstraZeneca remains to be seen. The relocation process will take three years and the fruits of any new research will be even further down the road, making the shift a long-term bet.
(Editing by Jon Boyle)