Category: Business

Vectura Board Supports PMI Offer

Photo: sdecoret
The board of Vectura will support Philip Morris International’s £1.1 billion ($1.5 billion) takeover offer for the inhaled treatments manufacturer after the tobacco company outbid private equity firm Carlyle, reports Reuters.
PMI on Sunday sweetened its offer for the asthma drugmaker to 165 pence per share, surpassing Carlyle’s final 155 pence proposal.
Vectura said it considered the terms of the Philip Morris offer to be fair and reasonable, and its board planned to unanimously recommend the bid to shareholders.
“The Vectura directors recognize the superior cash price the final PMI offer provides Vectura shareholders,” the board wrote in a statement published on Aug. 12, according to Sky News.
“The Vectura directors also note that wider stakeholders could benefit from PMI’s significant financial resources and its intentions to increase research and development investment and to operate Vectura as an autonomous business unit that will form the backbone of its inhaled therapeutics business.”
Previously, the company had noted that being owned by a cigarette maker could present “uncertainties.”
PMI wants to use Vectura’s expertise with inhalable formulations and device design to produce respiratory therapies. The acquisition is part of the cigarette manufacturer’s ambition to move beyond tobacco and to derive at least $1 billion in sales outside nicotine by 2025.
The proposed transaction has been heavily criticized by health activists who object to ownership by a company whose primary products are a major contributor to the medical conditions that Vectura aims to treat.
After Vectura’s announcement on Thursday, the chief executive of Asthma U.K. and the British Lung Foundation called the move by PMI “unacceptable.”
“Along with representatives from more than 20 organizations, I wrote to the Vectura board today to urge them to reject the bid. They’ve decided to recommend, so now it’s over to the shareholders,” said Sarah Woolnough.
PMI needs the acceptances of holders of just over 50 percent of Vectura shares for the deal to go through.
August 13, 2021
Swisher Creates Matchbook Capital

Zack Crafton (Photo: Swisher)
Swisher has announced a major initiative to fund innovative, experiential and emerging brands through the launch of Matchbook Capital.
Matchbook Capital will be led by Zack Crafton, who also serves as vice president of Swisher’s Innovation Platform. Crafton has built companies in industries such as cannabis, wine and beer as well as held board and advisory roles in the for-profit and not-for-profit spaces. Building on a successful career scaling companies, including leading NakedWines to success as the largest online winery in the world and holding the first permit for a cannabis delivery service in California, Crafton brings a balance of analytical, M&A and value-creation experience to bear at Matchbook Capital’s helm.  
“Swisher has grown into the collection of iconic brands it is today by fueling an endless quest to uncover fresh ideas, innovative technologies, quality products and the people behind them,” said Crafton in a statement. ”Matchbook Capital will continue that tradition by making significant investments of capital and resources into new categories to build a robust portfolio of products for adult consumers.”
Joining Crafton at Matchbook Capital is a team of former entrepreneurs who bring a new and refreshing approach as they expand Swisher beyond tobacco through corporate venture. In addition to having the ability to scale brands through Swisher’s extensive retailer footprint, the team brings a level of empathy to the corporate venture process rooted in its members’ experience on “the other side” of the table, according to Swisher. 
“We have more than 250,000 distribution points and invest with cash,” Crafton added. “As a former entrepreneur, I know how exciting this value proposition is for new brands seeking rapid growth. We are uniquely positioned to be a strategic partner for founders who are in it for the long run. We want to help them build their legacies and launch their brands to iconic status.”
Matchbook Capital invests in or acquires companies that are in the test, build or scaling stages of growth and looks for leaders who have a passion for success.
“Given the climate of disruption from which the country is emerging, now is the time to find and fund the next big idea,” added Crafton. “During Covid, consumers were forced to change almost every part of their daily lives … from shopping and finding entertainment to communicating and learning. This represents a massive disruption and period of transformation that will bring about a ‘new normal’ for retailers and consumers alike. We can support this movement by assisting innovators with capital, strategic guidance and access to Swisher’s dominant distribution network.”
Matchbook Capital is most interested in emerging industries (such as cannabinoids) experimental categories and innovative consumer packaged goods.
For more information, visit the Matchbook Capital website.
August 13, 2021
No Auction After Carlyle Declares Bid Final

Photo: GDM photo and video
The takeover battle between Philip Morris International and private equity firm Carlyle Group for the British inhaled treatments maker Vectura will avoid an auction sale after Carlyle declared its £958 million ($1.33 billion) bid final, reports Reuters.
On July 9, PMI offered £852 million for Vectura as part of the company’s ambition to leverage its expertise in inhalation and aerosolization into adjacent areas.
The Carlyle Group then raised an earlier offer to £958 million. Carlyle had struck an agreement to buy Vectura in May until PMI emerged with its offer in July.
In response, PMI raised its offer to £1.02 billion while stressing that Vectura would operate as an autonomous business unit under its umbrella.
The bidding war prompted Britain’s takeover regulator to intervene, saying that it would enter a rare head-to-head auction here if the bidders did not make final bids by Aug. 10.
PMI’s bid unleashed a storm of criticism from public health advocates who dislike the idea of a tobacco company investing in the lung health business.
The Vectura directors on Friday acknowledged reports of uncertainties relating to the possible impact on Vectura stakeholders if the company were owned by PMI.
Founded in 1997, Vectura makes inhalers and nebulizers, which enable patients to breathe in medication as a mist, either through a mouthpiece or a mask. Its customers have included Novartis and GlaxoSmithKline.
PMI is counting on Vectura to help achieve its goal of at least $1 billion in sales outside nicotine by 2025. Its $820 million acquisition of Fertin Pharma, a maker of nicotine chewing gum and oral drugs for pain, gives the company expertise in oral deliveries, but it would take Philip Morris longer to develop inhaled therapies without Vectura.
A deal with either one of the U.S. companies would require shareholder approval.
August 11, 2021
TPB Increases Stake in ReCreation Marketing

Photo: Negro Elkha
Turning Point Brands has increased its equity stake in ReCreation Marketing, a Canadian distribution company, from 50 percent to 65 percent.
ReCreation Marketing is a specialty marketing and distribution firm focused on building brands in the Canadian smoking accessories, vaping and alternative products categories. As part of this transaction, ReCreation will transition its company name to Turning Point Brands Canada Corp. over the next 90 days.
ReCreation has significantly expanded the reach of Zig-Zag papers, which now has presence in 75 percent of the volume-weighted distribution within the private dispensary channel. As a result of the ReCreation partnership, TPB expects to continue to expand its presence in Canada, creating an avenue for its broader portfolio of products to enter the Canadian market.
“Increasing our stake in ReCreation Marketing was a logical move as Turning Point Brands continues to invest in the cannabis and tobacco-related sectors,” said Larry Wexler, CEO of Turning Point Brands, in a statement.
“Our partners at ReCreation Marketing are significantly expanding the distribution of our brands while also gaining market share in Canada, most notably capitalizing on Zig-Zag’s strong market position in the country. The increased stake and renaming into Turning Point Brands Canada signify the commitment to our strategy in Canada. We look forward to continuing to work closely with this accomplished team to strengthen our prominence in the market.”
“Turning Point Brands’ robust portfolio of leading brands, coupled with ReCreation Marketing’s proven ability to support distribution in traditional and alternative channels, is a natural expansion of our work together,” said Chris Riddoch, president of ReCreation Marketing. “This transaction will provide both companies the opportunity to penetrate the market and to increase our visibility and accessibility to Canadian retailers and consumers alike.”
August 11, 2021
PMI to Buy Respiratory Drug Developer OtiTopic

Photo: ASDF
Philip Morris International announced the acquisition of OtiTopic, a U.S. respiratory drug development company with a late-stage inhalable acetylsalicylic acid (ASA) treatment for acute myocardial infarction.
“The acquisition of OtiTopic is an exciting step in PMI’s ‘Beyond Nicotine’ ambitions,” said Jacek Olczak, CEO of PMI, in a statement. “We have world-class expertise in the research, development and commercialization of aerosolization and inhalable devices to help speed the delivery of this exciting product to market.”
This acquisition is part of PMI’s plan to leverage its expertise, scientific know-how and capabilities in inhalation to grow a pipeline of inhaled therapeutics and respiratory drug delivery beyond nicotine products. Following the completion of clinical trials and pending approvals by the U.S. Food and Drug Administration, PMI can leverage its expertise and the capabilities of other companies in the “Beyond Nicotine” portfolio to bring Asprihale to market.
Asprihale is a patented, dry powder inhalation of ASA delivered through a unique self-administered aerosol—it is expected to move from clinical trials to filing with the FDA for approval in 2022. Early clinical trials have shown that the product system catalyzed peak plasma concentration and the desired pharmacodynamic effect, i.e., inhibition of platelet aggregation in two minutes compared with 20 minutes for coated chewable aspirin, according to PMI. This speed is unprecedented and has significant potential implications for improving the survival of patients at risk of heart attacks.

With its acquisition of OtiTopic, PMI looks forward to completing the planned Asprihale registration program and bringing this important treatment to market to address a significant unmet medical need in a clinical condition where every second counts.
Jorge Insuasty, chief life sciences officer, PMI
OtiTopic will complete its assessment program and filing with the FDA using the FDA’s 505 (b)(2) pathway, a pathway designed for drugs already available on the market but requesting approval either for a new indication, dosage form or regimen, strength, combination with other products, or other unique traits. This pathway will allow PMI to build on existing data available for ASA reference products and focus on delivering the evidence that the inhalable form, Asprihale, outperforms the current standard of care—oral delivery—of ASA.
“In the United States alone, someone has a heart attack every 40 seconds. With its inhalable version of acetylsalicylic acid, OtiTopic has developed an asset that promises to have a much faster onset of effect compared to oral ASA,” said Jorge Insuasty, chief life sciences officer for PMI. “With its acquisition of OtiTopic, PMI looks forward to completing the planned Asprihale registration program and bringing this important treatment to market to address a significant unmet medical need in a clinical condition where every second counts.”
“This transaction aligns well with OtiTopic’s goals of unlocking what we believe to be a significant opportunity in inhaled therapeutics science,” said Kambiz Yadidi, CEO of OtiTopic. “We are entering this transaction to accelerate Asprihale’s FDA filing with the goal of delivering innovative therapies for people with intermediate to high risk for myocardial infarction.”
OtiTopic was founded in 2012 as an innovative pharmaceutical startup company and holds several key patents, differentiated intellectual property, and has confirmed a 505(b)2 pathway through constructive interactions with the FDA.
The acquisition follows other nontobacco acquisitions by PMI. Earlier, the company purchased British drug maker Vectura and Fertin Pharma, a manufacturer of nicotine chewing gum.
August 9, 2021
Philip Morris Raises Vectura Bid

Photo: danielabalan
Philip Morris International has raised its bid to buy Vectura to more than £1 billion ($1.4 billion) reports the BBC.
PMI increased its offer to £1.65 per share after U.S. private equity firm Carlyle offered £958 million Friday.
Vectura previously stated that it was backing Carlyle’s offer and withdrawing its recommendation for PMI’s earlier bid. Vectura argued it could be better positioned under Carlyle’s ownership due to “reported uncertainties relating to the impact on Vectura’s wider stakeholders arising as a result of the possibility of the company being owned by PMI.”
“The PMI increased offer values the entire issued and to be issued ordinary share capital of Vectura at approximately £1.02 billion,” PMI said in a statement. “PMI intends to operate Vectura as an autonomous business unit that will form the backbone of its inhaled therapeutics business.”
PMI’s bid unleashed a storm of criticism from public health advocates who dislike the idea of a tobacco company investing in the lung health business.
In July, U.K. Business Minister Kwasi Kwarteng asked officials to monitor PMI’s proposed takeover of drugmaker Vectura Group.
August 9, 2021
22nd Century Secures Manufacturing Deals

Photo: Mongkolchon
22nd Century Group has secured a substantial new agreement with a prominent tobacco industry partner that specializes in exporting cigarettes to countries outside the United States. As a result, the company will make investments to optimize margins and improve efficiencies by hiring additional staff at its tobacco manufacturing facility in North Carolina and by installing new equipment at the site to increase efficiencies. 22nd Century says it will also leverage this new relationship and others through its contract manufacturing operations to establish additional distribution channels in preparation for the launch of its VLN reduced-nicotine content (RNC) cigarettes.
“Last year, we were successful in optimizing our contract manufacturing operations. Our net sales and gross profit margin increased year-over-year, and we demonstrated to the industry that we are well positioned as a tobacco manufacturer,” said James A. Mish, CEO of 22nd Century Group, in a statement. “We continue to invest in efforts to prepare for the FDA’s [U.S. Food and Drug Administration] authorization of our modified-risk tobacco product (MRTP) application for our VLN reduced-nicotine content cigarette. With these new agreements and our expanding investments, we are opportunistically using this time to ramp up our operations ahead of authorization as we prepare to make VLN available globally.”
Earlier this year, 22nd Century signed on a new cigar contract manufacturing customer, and it is currently in advanced negotiations with two other significant tobacco industry partners that could further expand 22nd Century’s sales domestically and internationally. 22nd Century will leverage these newly established trade relationships to expand distribution of VLN after the cigarettes are introduced.
In addition to the planned installation of new equipment to reduce waste at its manufacturing facility, the company recently completed an expansion of testing capabilities at the site, which will allow for rapid, in-house analysis of its tobacco. This will improve the production cost per VLN sample by more than 90 percent while significantly reducing the lead time to uncover key data, according to the company. Internal testing of the VLN leaf is scheduled to begin at the facility in August using the newly installed testing equipment.
The company is confident that it is in the final stages of the FDA’s application process to obtain MRTP designation for its VLN cigarettes. The FDA has already authorized 22nd Century’s RNC tobacco technology under the premarket tobacco product application (PMTA) pathway, saying that it is “appropriate for the protection of public health” and concluding that it offers “among several key considerations, the potential to reduce nicotine dependence in addicted adult smokers, who may also benefit from decreasing nicotine exposure and cigarette consumption.”
MRTP designation will allow 22nd Century to communicate and market the key features of its RNC cigarettes, including the headline claim of 95 percent less nicotine. Although VLN contains just 0.5 mg of nicotine per gram of tobacco, the cigarettes taste, smell and smoke like traditional cigarettes, according to 22nd Century. The company says it is prepared to launch its VLN cigarettes within 90 days of receiving authorization.
The FDA has proposed a plan to require all cigarettes sold in the U.S. to be made minimally and nonaddictive. 22nd Century says it is prepared to license its patented RNC tobacco technology to every cigarette manufacturer in the industry to enable compliance with the FDA’s plan.
July 22, 2021
Taat Expands Production/Warehousing

Photo: Taat Global Alternatives
Taat Global Alternatives has finalized a lease agreement for new facilities to expand the company’s manufacturing and warehousing capacities in Las Vegas, Nevada, USA. Combined with the company’s existing facility, the new facilities will considerably increase the company’s total operating space and can allow for the creation of new internal departments for purposes such as digital content production and event management.
With new U.S. launches of Taat in motion and fulfillment underway for the company’s first international order to a distributor in the United Kingdom, this facility expansion is a proactive effort to ensure the company has sufficient capacity to meet foreseeable demand. Over the past nine months, Taat has been placed in more than 300 U.S. retail stores, and cartons of Taat have been shipped to smokers aged 21 and up in 37 states through e-commerce sales.
Although its existing facility can produce enough base material for approximately 680,000 10-pack cartons of Taat per year, the company believes it to be prudent to increase this manufacturing bandwidth as product launches are occurring in new markets.
In the company’s new warehouse facility, it will be possible to store approximately 181,400 kg of the Beyond Tobacco base material (compared to approximately 68,000 kg at the current facility) after it is finished and awaiting shipment to a contract cigarette manufacturing partner. In addition to standard climate controls, this storage space also has humidity control functionality, which can be used to keep the base material fresh, thereby extending its shelf life.
To efficiently facilitate the fulfillment of direct-to-consumer e-commerce orders as well as wholesale purchase orders of finished Taat products, the fulfillment station at the company’s new warehouse will be over 200 percent larger than its current size in the existing facility. The new fulfillment station will also have four loading doors at “dock height,” which can reduce pickup and drop-off times for logistics providers. The company is also evaluating technologies and solutions that could further optimize in-house order fulfillment with this additional space.
“Expanding and upgrading the company’s operating facilities after barely three calendar quarters of selling Taat at retail is an excellent indicator of our progress in my opinion,” said Taat Chief Executive Officer Setti Coscarella in a statement.
July 18, 2021
U.K. to Scrutinize PMI’s Vectura Purchase

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U.K. Business Minister Kwasi Kwarteng has asked officials to monitor Philip Morris International’s proposed takeover of drugmaker Vectura Group, reports The Times.
PMI agreed on Friday to buy Vectura for £1.05 billion ($1.45 billion), giving the U.S. firm access to the British drugmaker’s respiratory ailment treatments and inhaling device technology.
The deal sparked outrage from anti-smoking groups, including Cancer Research U.K. and Action on Smoking and Health.
Kwarteng has asked officials to find out what plans PMI has for FTSE 250-listed Vectura. The British government is reportedly uncomfortable that a cigarette company would seek to profit from conditions such as asthma and lung disease.
Jon Ashworth, Labour’s health spokesman, and Ed Miliband, the Labour business spokesman, wrote to Kwarteng over the weekend, urging the government, under the Enterprise Act 2002, to intervene “to mitigate the effects of public health emergencies.”
Vectura is one of the U.K.’s leading respiratory disease companies.
It has been targeted by Philip Morris as the company tries to diversify its business away from harmful tobacco products.
July 14, 2021
Philip Morris Makes Offer for Vectura Group
Photo: Art_Photo
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.

PMI has the commitment to science and the financial resources to empower Vectura’s skilled team to execute on an ambitious long-term vision.
Jacek Olczak, CEO, PMI
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.
July 9, 2021