(Alliance News) - Marlboro cigarette maker Philip Morris International Inc on Friday said it has agreed to buy London-listed asthma treatment firm Vectura Group PLC as it looks to expand its reach beyond tobacco and nicotine.
Philip Morris will pay 150 pence per share in cash for Vectura, a Wiltshire, UK-based inhaled drug delivery devices maker. Including a 19p interim dividend, the deal values the FTSE 250 constituent at GBP1.04 billion.
Vectura shares closed 0.3% lower at 135.60p each in London on Thursday. In New York, PMI closed down 0.4% at USD98.37, but added 0.6% in the after-hours session.
Following the PMI offer, Vectura's directors withdrew their recommendation for a GBP958 million takeover by funds managed by private equity firm Carlyle Group Inc. PMI's offer is a 10% premium to Carlyle's 136p per share bid.
"PMI is expanding into products beyond tobacco and nicotine, as part of a natural evolution into a broader healthcare and wellness company," the New York-based company said.
In February, Philip Morris announced plans to generate at least USD1 billion of annual revenue from its Beyond Nicotine range by 2025. Respiratory delivery drugs are seen as key to that.
Vectura makes inhaled medicines, including the Flutiform asthma drug, and drug-delivery devices. Since 2019, it has been moving towards a contract business model in which it supplies services to pharmaceutical firms, rather than developing its own drugs.
"PMI intends for Vectura to operate as an autonomous business unit, forming the backbone of PMI's inhaled therapeutic business. PMI is supportive of Vectura's current strategy to become one of the leading contract development and manufacturing organisation in this segment and believes there are attractive opportunities to develop and launch proprietary inhaled therapeutic products together, and to expand the geographic reach of Vectura's business," Philip Morris said.
"The market for inhaled therapeutics is large and growing rapidly as technologies improve, with significant potential to expand into new application areas beyond the current market offering. Vectura is well positioned in this area."
Vectura was to hold general and court meetings on July 12 for shareholders to vote on the Carlyle deal. The company on Friday said it will adjourn the meeting.
Regulatory fears have long clouded the tobacco industry. In April, the Wall Street Journal reported US President Joe Biden was mulling cutting the amount of nicotine allowed in cigarettes. The WSJ explained the cut would leave the amount nicotine in cigarettes at levels which are no longer addictive.
Earlier in July, Philip Morris acquired Fertin Pharma AS, a developer and manufacturer of pharmaceutical and wellbeing products based on oral and intra-oral delivery systems, for an enterprise value of USD820 million.
"The acquisition of Fertin Pharma will be a significant step forward on our journey toward delivering a smoke-free future - enhancing our smoke-free portfolio, notably in modern oral, and accelerating our progress in beyond nicotine," Chief Executive Jacek Olczak said at the time.
By Eric Cunha; ericcunha@alliancenews.com
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