Recent announcements from Ipsen and AbbVie of multimillion Euro investments into Irish manufacturing plants underline the Celtic nation’s continuing attractiveness to pharma multinationals. While an upcoming hike in Ireland’s famously low corporate taxation rates could dampen investor enthusiasm, industry insiders are bullish on the country’s continuing attractiveness.
Banking on Ireland
For its part, French mid-cap Ipsen recently unveiled a EUR 52 million (USD 49.9 million) into an existing active pharmaceutical ingredient (API) manufacturing facility in Dublin, with a further EUR 15 million (USD 14.1 million) in technology and sustainability upgrades slated for the next three years, as reported by Endpoints.
In a statement, Ipsen CEO David Loew said, “The Irish market plays an important role as part of Ipsen’s international network and Ipsen is committed to continued investment and innovation in Ireland to support improved care for patients across the therapeutic areas we serve – oncology, rare disease, and neuroscience. This new investment in Dublin is a milestone in our ongoing journey of innovation and our growing footprint in Ireland.”
AbbVie, now the world’s second largest pharma company, is also bolstering its Irish footprint via a EUR 60 million (USD 59.3 million) investment in its Cork aesthetics facility. Ireland is already home to eight AbbVie sites, according to Fierce Pharma. Recent significant investments from the US firm in Ireland have included a USD 139 million expansion for one of its Sligo sites producing cancer drugs in 2018 and a USD 115 million investment on oral hepatitis C drug production capacity back in 2014.
Other significant recent Irish investments from pharma multinationals include a USD 415 million layout from Lilly on a new biopharmaceutical facility in Limerick, Janssen’s USD 155 million on expanding its biopharmaceutical supply chain in Cork, and the USD 360 million spent by AstraZeneca on a new next-gen API commercialisation and manufacturing facility for small molecules in Dublin.
Irish Fundamentals
Writing in Pharmaceutical Executive, Damien O’Brien of the Irish government’s foreign direct investment agency, the IDA, highlights a number of the fundamentals that keep multinationals investing in Ireland.
O’Brien points to the fact that Ireland – unlike its close neighbour the UK – is a committed member of the EU, which gives companies access to both the single market and its talent base. One of the youngest populations in the EU, Ireland also boasts relative regulatory stability and a pro-business administration, along with globally renowned industry institutions such as the National Institute for Bioprocessing Research and Training (NIBRT), which provides sector-specific training to more than 4,000 people annually.
Life sciences companies with operations in Ireland also have access to various financial supports and incentives, including a 25 percent R&D tax credit for companies that undertake new or additional research, development, and innovation activity in Ireland. Other important sources of capital include Science Foundation Ireland (SFI)’s research fund, and the Disruptive Technologies Innovation Fund (DTIF).
Not Too Taxing
Perhaps most significantly, Ireland has long held a highly competitive corporate tax rate of 12.5 percent, attracting both investment and the re-domiciliation of multinational pharma companies and contract manufacturing organisations (CMOs).
While a recent 136-country OECD agreement to raise the minimum tax rate for multinational companies to 15 percent from 2023 may threaten this positioning, experts are sanguine on it having a significant impact. Fintan Clancy, partner at the law firm Arthur Cox, as reported by GlobalData Healthcare, notes that most pharma companies feel this 2.5 percent jump to be largely acceptable.
Moreover, the Irish tax regime will remain more attractive than some of its main international competitors including the UK (19 percent in 2021, 25 percent in 2023), the USA (21 percent), Germany (30 percent) and France (28 to 32 percent).
