Philip Morris International has made a £852 million ($1.2 billion) offer for Vectura Group, a provider of inhaled drug delivery solutions.
“PMI’s ‘Beyond Nicotine’ strategy, announced in February, articulates a clear ambition to leverage our expertise in inhalation and aerosolization into adjacent areas—including respiratory drug delivery and self-care wellness—with a goal to reach at least $1 billion in net revenues by 2025,” said PMI CEO Jacek Olczak in a statement.
“The acquisition of Vectura, following the recently announced agreement to acquire Fertin Pharma, will position us to accelerate this journey by expanding our capabilities in innovative inhaled and oral product formulations in order to deliver long-term growth and returns.”
“The market for inhaled therapeutics is large and growing rapidly, with significant potential for expansion into new application areas. PMI has the commitment to science and the financial resources to empower Vectura’s skilled team to execute on an ambitious long-term vision. Together, PMI and Vectura can lead this global category, bringing benefits to patients, to consumers, to public health and to society at large.”
Vectura is a provider of innovative inhaled drug delivery solutions that enable partners to bring their medicines to patients. The company has 13 key inhaled and 11 noninhaled products marketed by major global pharmaceutical partners as well as a diverse portfolio of partnerships for drugs in clinical development. In 2020, Vectura generated net revenues of £191 million. The transaction value represents a multiple of around 14 times Vectura’s 2020 EBITDA.
In a press note, PMI listed the benefits it expects to derive from the Vectura acquisition:
- Access to differentiated proprietary technology and pharmaceutical development expertise to deliver a broad range of complex inhaled therapies.
- The addition of highly complementary human capital, technology, high-quality infrastructure and deep know-how of inhalable formulation and device design development and analysis, drug/device combination and pharmaceutical management processes and systems. The combination will fully leverage PMI’s existing capabilities in life sciences, product innovation and clinical expertise.
- An experienced management team—supported by more than 200 scientists in formulation, devices, inhalation, regulatory teams and clinical manufacturing—that will help PMI accelerate the development of its healthcare and wellness operations.
- Together with the announced agreement to acquire Fertin Pharma, the acquisition will give PMI a comprehensive portfolio of development capabilities—covering innovative inhaled and oral product formulations—to fulfill its “Beyond Nicotine” ambitions in line with its key sustainability priorities.
PMI believes that, together, the companies can create a fully owned pipeline of products across a broad range of sectors in the prescription drug and over-the-counter categories that will complement Vectura’s CDMO business and service to its existing client base. PMI further believes that its “Beyond Nicotine” aerosolization technologies and development pipeline will provide additional predictability, stability and security for Vectura’s future.
In February of this year, PMI announced its goal to generate more than 50 percent of total net revenue from smoke-free products by 2025. PMI also announced its aim to generate at least $1 billion in net revenues by 2025 from “Beyond Nicotine” products.
“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. “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 the development and eventual commercialization of innovative inhalable drug/device combinations.”
PMI will fund the transaction with existing cash and expects it to close in the second half of 2021, subject to a shareholder vote and approval by the appropriate regulatory authorities. PMI expects the impact of the acquisition on its full-year 2021 adjusted diluted EPS to be immaterial.