My take: AstraZeneca’s quarter century in Delaware

3
Advertisement

The announcement that AstraZeneca will spend $300 million on a cancer cell therapy research and development site outside Washington, DC, came with a Wilmington dateline. That’s because the UK-based pharmaceutical company has its US headquarters in Talleyville, just outside Wilmington.

AZ is celebrating its 25th anniversary this year, an occasion noted by CEO Sir Pascal Soriot in an upbeat year-end earnings report. That milestone brought back memories of the company’s up-and-down history in Delaware.

It started with the merger of Swedish-based Astra with Zeneca, a company spun out of the now-defunct British giant ICI (Imperial Chemical Industries).

All out effort from the state

ICI-Zeneca had a large campus off Route 202 and seemed a good fit for consolidating with Astra, which also had a US headquarters in nearby Pennsylvania.

Advertisement

It triggered an out-out effort by the administration of Gov. Tom Carper to lure the merged company at a time when the state was struggling with the long-running downsizing of DuPont Co. Delaware won, thanks in part to an incentive package that included beefed-up access to Interstate 95.

Rendering of AstraZeneca’s Maryland research site.

AstraZeneca’s operations grew rapidly at first, with a satellite campus near the Talleyville complex and employment believed to have topped out at around 4,000.

In what turned out to be bad news for Delaware, AstraZeneca went on to acquire MedImmune, a vaccine-pharma company based in a Maryland suburb of Washington D.C. AZ, at the time, was facing a “patent cliff,” with blockbuster drugs losing protection and little in the pipeline.

The board turned to Soriot, a tough-minded French-Australian exec who took a scalpel to AstraZeneca. It led to Delaware jobs moving to the former MedImmune campus in Maryland. Despite pleas from Delaware officials hoping to attract another company, the labs were razed. It was one more headache for Gov. Jack Markell, who had earlier been faced with the loss of the state’s two auto plants 

AZ went on to sell off the sprawling Talleyville campus with  JPMorgan Chase adding a technology hub, and Delaware developer Ernest Delle Donne acquiring the rest of the site, redeveloped as Avenue North. 

The economic impact

There was some blowback over the cost of roadwork in the I-95- Route 202 area around the former AZ campus. It turned out that the work were needed to handle a growing volume of cars and trucks in the area, although the fast-track project might have delayed other construction..

Soriot went on to focus the company on selected areas, including cancer, while exiting the mental health drug business. The ditched drug Seroquel, developed in Delaware, had side effects and was over-prescribed, according to lawsuits.

AstraZeneca ended up with a smaller footprint in Delaware, but at last, the report employed 1,500. Its headquarters and administrative offices are on Avenue North, and it has a logistics and packaging site outside Newark.

The office tower going up at the former AstraZeneca campus – Courtesy of Delle Donne and Associates)

The stability has been fueled by AZ’s success in rebuilding its drug pipeline with new blockbusters in cancer and other areas. It has also snapped up companies in areas such as rare diseases. But as the Maryland announcement indicated, we’ll never see investments on that scale in Delaware.

Soriot’s tenure at AstraZeneca has not been smooth as the company saw cost overruns at its futuristic new headquarters-research site in the British university town of Cambridge and headaches from the UK’s Brexit departure.

More recently, AZ’s Covid-19 vaccine saved millions of lives worldwide, leading to Soriot being dubbed knight. However, manufacturing and regulatory concerns over side effects led to the vaccine never being used in the US. Along the way, Soriot has been rumored to be departing AstraZeneca for another pharma company. That hasn’t happened – yet. Still, pay packages in the UK are lower than compensation at companies in other countries. Then again, where else would you earn the title “sir?”

Enter Hoppenot

During the past decade, fellow Frenchman Hervé Hoppenot, has led Delaware-based Incyte, now a company with $4 billion in annual revenue and about 1,500 jobs in Delaware and adjacent areas of Pennsylvania.

That growth helped life sciences remain a major force in the Delaware economy. The sector is populated with start-ups, a federally funded research center, and expansions at current companies.

After the latest Incye expansion plan ran into neighborhood opposition that cited AstraZeneca’s downsizing as one reason to oppose the project, rumors began to surface about Incyte moving jobs to a new high-rise under construction at the nearby former AstraZeneca campus. After all, Hoppenot made it clear last month that he would like to see PA jobs move closer to the mother ship.

Such a move makes sense, and an Incyte sign on the Avenue North building would add a nice touch.- Doug Rainey, chief content officer.

Advertisement
Advertisement