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Philip Morris International has agreed to sell its Vectura asthma inhaler maker for only a third of what it paid, after PMI’s tobacco interests prompted pharmaceutical clients to shun the healthcare biotech.
PMI announced on Tuesday that Vectura, a UK-based pharmaceutical outsourcer specialising in making asthma inhalers and medicines, had been sold to Molex for up to £298mn. Molex’s pharmaceutical unit Phillips Medisize will operate Vectura, it added.
The deal comes just three years after PMI, maker of Marlboro cigarettes, paid £915mn enterprise value, including net debt, to buy the UK-based contract manufacturer, as part of an attempted pivot away from tobacco. PMI is set to receive an initial £150mn and then up to £148mn more, depending on Vectura achieving certain performance targets. As a result, at most PMI will recoup only a third of its original acquisition cost.
“Despite the investment and commitment to developing products and therapies vital to patients, unwarranted opposition to PMI’s transformation has impacted Vectura’s scientific engagement,” PMI said.
Vectura, which also develops products for smoking-related conditions, had faced strong backlash from doctors and other public health professionals following PMI’s takeover.
In August 2021, at the time of the takeover proposal, the British Thoracic Society issued a statement calling for the takeover to be prevented, because of the “unresolvable ethical conflict”.
The European Respiratory Society also said it was “very alarmed” by the deal, criticising PMI for obscuring its image as a company that profited from “getting people addicted to its dangerous products”.
Analysis by the Pharmaceutical Journal in June discovered the NHS had spent more than £430mn on inhalers from Vectura since PMI acquired the business in September 2021. The disclosure generated concern among some doctors prescribing its inhalers.
“Phillips Medisize is best placed to lead Vectura into the future — while releasing it from the unreasonable burden of external constraints and criticism related to our ownership,” Jacek Olczak, PMI’s chief executive, said.
The criticism drove PMI last year to postpone its target to derive $1bn of annual revenues from healthcare and wellness products by 2025. Its 2023 revenues from the category stood at $306mn.
Management departures delivered another setback for the inhaler company. Michael Austwick, who joined Vectura as chief executive from Novartis in 2022, stepped down the following year, with other senior executives following suit.
PMI said it would retain other elements of the Vectura Fertin Pharma business that it had assembled through other acquisitions. Those businesses focus on oral consumer health and wellness applications such as pain management and cardiac care. The retained business would be given a new corporate identity, PMI said.
