The investment announced by MSD, known as Merck and co. in North America, will support a new life sciences discovery research facility in the UK, supporting a total of 950 jobs in highly skilled research roles.

The news comes as the government is set to unveil its industrial strategy, with a long-term plan for how Britain can build on its economic strengths and embrace technological change.

Business secretary Greg Clark said: “We are at one of the most important, exciting and challenging times there has ever been in the history of the world’s commerce and industry.

“Powered by new technology, new industries are being created, existing ones changing and the way we live our lives – as workers, citizens and consumers – transformed.

“In this Industrial Strategy we set out how we will maintain and enhance these and other strengths and deploy them to our advantage.”

Investments by pharmaceutical companies into the UK will form a key part of the sector deal, a central industrial strategy measure, set to be signed in the coming weeks by the life sciences sector and government.

Announcing the investment, business secretary Greg Clark said: “Our life sciences sector is one of the UK’s fastest developing industries, with a turnover in excess of £64bn, employing 233,000 across the UK.

“MSD’s commitment today, and the wider sector deal investment we have secured, proves the process outlined in the Industrial Strategy can give companies the confidence and direction they need to invest in the UK. It will ensure Britain continues to be at the forefront of innovation and represents a huge vote of confidence in our Industrial Strategy.”

Health secretary Jeremy Hunt said: “I want patients to continue to be at the front of the queue for the best treatments available. The NHS has a proud history of spearheading medical innovation and today’s investment in our strong and growing life sciences sector will see patients in the UK continue to benefit from world-leading research and pioneering medicines.”

MSD managing director in the UK and Ireland, Louise Houson said: “We believe the UK to be a unique bioscience centre of excellence and this investment presents a major opportunity for us to work in collaboration with the UK government to build on the forward thinking and ambitious Industrial Strategy white paper being published by the governmen.”