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Investing.com -- Merck & Company Inc (NYSE:MRK) is abandoning its early drug research operations in the United Kingdom and canceling plans for a £1 billion research hub in London, according to the company.
The company cited insufficient government investment in the life sciences sector and inadequate payment for new drugs as key reasons for the decision.
The U.S. pharmaceutical company will not move forward with occupying a new London building that would have provided jobs for 800 people.
Merck had signed a long-term lease on the facility in 2022, and construction had progressed significantly, with the final steel beam put in place in July.
In addition to scrapping the new research hub, Merck plans to leave its laboratories at the Francis Crick Institute by the end of 2025, resulting in the elimination of 125 jobs.
The decision comes as part of Merck’s broader cost-cutting initiative, which aims to reduce annual spending by $3 billion. This effort includes decreasing real estate holdings worldwide.