Marlboro manufacturer, Philip Morris to acquire UK pharma Vectura for $1.44 billion

Philip Morris International (PMI), the tobacco corporation that makes Marlboro cigarettes, has agreed to pay £1 billion ($1.44 billion) for Vectura, a British pharmaceutical company that is developing a respiratory treatment for Covid-19.

The effort by Philip Morris is the latest attempt by large tobacco firms to improve their image after years of negative news and litigation for promoting and selling cigarettes, a product that health campaigners and scientists say is still a top cause of avoidable deaths globally.

According to a release, Philip Morris intends to leverage Vectura's experience in inhalable formulations and device design to develop a variety of over-the-counter and prescription-based respiratory treatments.

PMI declared its target to earn more than 50 % of the total net sales from smoke-free goods by 2025 in February of this year. It has stated that it intends to earn at least USD 1 billion in net sales from “Beyond Nicotine” products by 2025.

“We are thrilled by today’s announcement and the prospect that Vectura will be joining the PMI family as an autonomous business unit, forming the backbone of our Beyond Nicotine inhaled therapeutic business,” said Jorge Insuasty, Chief Life Sciences Officer, said in a statement.

 “The proposed acquisition will significantly accelerate our development efforts. With the addition of Vectura’s expertise in the inhaled therapeutics space, PMI and Vectura will have the opportunity to undertake together with the development and eventual commercialization of innovative inhalable drug/device combinations.”

Vectura manufactures authorized inhaled medications and related devices to treat respiratory diseases such as asthma, and its clients include Novartis AG and GlaxoSmithKline Plc.

To date, the maker of the world's most popular cigarette brand has invested more than $8 billion (£5.8 billion) in diversifying its business away from harmful tobacco products as "part of a natural evolution into a broader healthcare and wellness company" to "accelerate the end of smoking," The Guardian reported.  

PMI intends to fund the deal with current funds and anticipates that it will conclude in the second half of 2021.

The company further spent $820 million for buying the nicotine gum manufacturer Fertin Pharma last week.

Picture Credits: New York Post