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Tag: Philip Morris International

  • WHO Likely to Reject Medicago Covid Vaccine

    WHO Likely to Reject Medicago Covid Vaccine

    The World Health Organization is unlikely to grant emergency approval Medicago’s tobacco plant-based Covid-19 vaccine due to the company’s ties to the tobacco industry, the CBC reported on March 17.

    The global health body has reportedly paused the process for pre-qualification of Medicago’s new Covifenz shot due to its link to Philip Morris International, which owns about one-third of the Canadian biopharmaceutical company.

    “Due to its connections [to PMI], the process is put on hold,” said Mariangela Simao, the WHO’s assistant director-general for drug access, vaccines and pharmaceuticals, at a March 16 media briefing.

    “The WHO and the U.N. have a very strict policy regarding engagement with the tobacco and arms [industries], so it’s very likely it won’t be accepted for emergency use listing,” she said.

    In February, Health Canada approved Covifenz for adults 18 to 64 years of age, making it the world’s first vaccine approved for human use that utilizes a plant-based protein technology. The Canadian government floated CAD173 million ($136.74 million) to help the company develop the jab and is so far the only country to approve it.

    In October 2020, Canada signed a deal to buy 76 million doses of Medicago’s vaccine, and the shot is expected to be made available to the public in May.

    In a statement published by the CBC, Medicago said it believes authorization decisions should be based on the quality, efficiency and safety of the vaccine, not who owns shares in the manufacturer.

    “It is our understanding that the WHO has made a decision to pause the approval of the vaccine and that this decision is related to Medicago’s minority shareholder and not to the efficacy and safety of the vaccine, which was demonstrated with the approval by Health Canada,” the statement reads.

    Derek Yach, a global health consultant, was aghast by the WHO’s  suggestion that it would reject Medicago’s vaccine based on the company’s relationship with PMI.

    “‘Pikuach nefesh’ is the ethical principle in Jewish law that the preservation of human life overrides virtually any other religious rule,” he said. “Most other religions support a variant of this. WHO violates this ethical principle when it denies people access to a lifesaving vaccine.”

    If the WHO follows through, the vaccine would be the first Western-manufactured Covid-19 shot to be rejected by the global health body, according to Bloomberg.

  • Reduced-Exposure Claim for IQOS 3

    Reduced-Exposure Claim for IQOS 3

    Photo: PMI

    The U.S. Food and Drug Administration has issued a modified-risk granted order authorizing Philip Morris Products to market the IQOS 3 system holder and charger with the following reduced-exposure information:

    • The IQOS system heats tobacco but does not burn it.
    • This significantly reduces the production of harmful and potentially harmful chemicals.
    • Scientific studies have shown that switching completely from conventional cigarettes to the IQOS system significantly reduces your body’s exposure to harmful or potentially harmful chemicals.
    • This reduced-exposure information is the same as the information previously authorized by FDA in July 2020 for an earlier version of the device.

    Today’s action follows the FDA’s review of a new modified-risk tobacco product (MRTP) application submitted by the company for the IQOS 3 system holder and charger. This MRTP application primarily cross-referenced the supplemental premarket tobacco product application for this device, which was authorized for legal sale and distribution in the United States in December 2020, as well as the MRTP application for the previous version of the device.

    The IQOS 3 device is similar in design to the previous version (with mainly aesthetic changes), uses the same tobacco source, and the company requested to use the same exposure reduction claim as authorized for the previous version of the device. Given these similarities, FDA largely relied on its past evaluations of the IQOS 3 device and previous version of the device in determining that the IQOS 3 device meets the authorization criteria to be marketed as an MRTP.

    Headquartered in Switzerland, Philip Morris is currently banned from importing the product into the United States following an adverse ruling in a patent dispute with BAT’s Reynolds American subsidiary.

    In an interview with Bloomberg, PMI CEO Jack Olczak said the company plans to manufacture IQOS in the U.S. to get around the import ban.

  • J.P. Morgan: War Could Thwart PMI’s Smoke-Free Ambitions

    J.P. Morgan: War Could Thwart PMI’s Smoke-Free Ambitions

    Photo: Sergey

    The war in Ukraine could seriously impact sales of Philip Morris International, reports MarketWatch. Earlier this week, J.P. Morgan downgraded the multinational’s shares to “neutral” from “overweight,” citing the company’s exposure to Russia and Ukraine.

    PMI derives about 8 percent of group sales from Russia and Ukraine combined, according to the investment bank. The two countries account for about 23 percent of PMI’s heated-tobacco unit (HTU) volume. Heated-tobacco products are key to PMI’s next-generation growth strategy as they are reportedly less harmful than cigarettes.

    PMI entered the Ukrainian market in 1994. In 2021, Ukraine accounted for around 2 percent of PMI’s total cigarette and HTU shipment volume and under 2 percent of PMI’s total net revenues. The company has one factory and approximately 1,300 employees in the country.

    Russia accounted for almost 10 percent of PMI’s total cigarette and HTU shipment volume and around 6 percent of PMI’s total net revenues in 2021. PMI opened its first representative office in Russia in 1992 and has more than 3,200 employees in the country.

    PMI’s cigarette shipments to Russia in 2021 fell to 52.5 billion units from 55.6 billion units in 2021, and the percentage of total cigarette shipments fell to 8.4 percent from 8.8 percent, according to a company filing with the U.S. Securities and Exchange Commission.

    For HTUs, Russian shipments rose to 16.3 billion units from 13.6 billion units while the percentage of total HTU shipments slipped to 17.2 percent from 17.9 percent.

    Meanwhile, PMI’s HTU market share in Russia improved to 7.4 percent from 6.3 percent while the company’s overall HTU market share increased to 3.5 percent from 3 percent.

    On March 9, PMI announced the suspension of its planned investments in Russia, including all new product launches and commercial, innovation and manufacturing investments. PMI has also activated plans to scale down its manufacturing operations in Russia amid ongoing supply chain disruptions and the evolving regulatory environment.

  • Firms Scale Back in Russia and Ukraine

    Firms Scale Back in Russia and Ukraine

    Photo: BAT

    The leading tobacco companies are adjusting their strategies in Russia and Ukraine following the war between those countries.

    Philip Morris International announced the suspension of its planned investments in the Russian Federation, including all new product launches and commercial, innovation and manufacturing investment. PMI has also activated plans to scale down its manufacturing operations amid ongoing supply chain disruptions and the evolving regulatory environment.

    “We have watched with shock the war in Ukraine and condemn the violence in the strongest possible terms. We stand in solidarity with the innocent men, women and children who are suffering,” said PMI CEO Jacek Olczak in a statement. “We join the many voices calling for an immediate end to the war and the restoration of peace.”

    Olczak said PMI had helped evacuate more than 800 people from the most impacted areas; provided critical aid to employees who remain in Ukraine; and provided those who have left the country with logistical, medical, financial and other practical support in neighboring countries. PMI is continuing to pay salaries to all its Ukrainian employees during this period, the company said.

    Ukraine accounted for around 2 percent of PMI’s total cigarette and heated-tobacco unit shipment volume and under 2 percent of PMI’s total net revenues in 2021. The company has one factory and approximately 1,300 employees in the country.

    In 2021, Russia accounted for almost 10 percent of PMI’s total cigarette and heated-tobacco unit shipment volume and around 6 percent of PMI’s total net revenues. The company employs more than 3,200 people in the country.

    BAT, which employs more than 1,000 people in Ukraine and around 2,500 people in Russia, said it had suspended all business and manufacturing operations in Ukraine and suspended all planned capital investment into Russia.

    “In Ukraine, we have suspended all business and manufacturing operations and are providing all the support and assistance we can to our colleagues, including relocation and temporary accommodation. Our businesses bordering Ukraine are providing assistance to the humanitarian relief effort,” the company wrote on its website.

    “In Russia, we have a full establishment of our people right across the country, including substantial local manufacturing. Our business in Russia continues to operate. As a key principle, we have a duty of care to all our employees at this extremely complicated and uncertain time for them and their families.”

    Japan Tobacco International, which has four factories and nearly 4,000 employees in Russia, announced the suspension of all new investments and marketing activities as well as the planned launch of its Ploom X heated-tobacco product in Russia, citing the unprecedented challenges of operating in Russia at this time. “Unless the operating environment and geopolitical situation improve significantly, JTI cannot exclude the possibility of a suspension of its manufacturing operations in the country,” the company wrote in a press statement.

    Imperial Brands also suspended all operations in Russia, halting production at its factory in Volgograd and ceasing all sales and marketing activity.

    “We have already suspended our operations in Ukraine in order to prioritize the safety and well-being of our 600 employees in that country,” the company wrote in a statement.

    Russia and Ukraine are relatively small markets for Imperial Brands, representing around 2 percent of net revenues and 0.5 percent of adjusted operating profit in 2021.

  • PMI to Make IQOS in the U.S. After Import Ban

    PMI to Make IQOS in the U.S. After Import Ban

    Photo: Mariakray

    Philip Morris International plans to manufacture IQOS in the United States to get its tobacco-heating device back on that country’s store shelves, reports Bloomberg.

    The move follows an adverse ruling against the company and its U.S. partner, Altria Group, in a patent dispute with British American Tobacco.

    In September 2021, the International Trade Commission (ITC) upheld an initial determination from May 2021 that IQOS infringes on two patents owned by BAT subsidiary Reynolds American Inc. (RAI).

    The ITC instituted an import ban and issued a cease-and-desist order, barring Altria Group from importing PMI’s IQOS 2.4, IQOS 3, IQOS 3 Duo products into the U.S. By declining to intervene, the U.S. Trade Representative upheld the ITC finding in November, leaving PMI with the options to produce IQOS domestically or tweak the design.

    A design change, however, would require authorization from the U.S. Food and Drug Administration again.

    In an interview with Bloomberg, PMI CEO Jacek Olczak, said the company had planned to manufacture IQOS in the U.S. all along. “From the very beginning of us going to the FDA, we had in mind that IQOS would one day not only be sold in the U.S., but manufactured there, if you take into consideration the size of the market and the opportunity for IQOS,” he said. “It’s just happening sooner because of the ITC decision.”

    In July 2020, the FDA authorized PMI and Altria to market IQOS with certain modified-exposure claims, giving the company a leg up over its rivals.

    PMI has not specified where it will be manufacturing IQOS but said it plans to sell IQOS in the U.S. again in the first half of 2023.

  • PMI Reports Strong Fiscal 2021

    PMI Reports Strong Fiscal 2021

    Photo: PMI

    Philip Morris International reported net revenues of $31.41 billion in 2021, up 9.4 percent over those reported in 2020. The company’s operating income was $12.98 billion, compared with $11.67 billion in the previous year. The company’s net revenues were $246 million lower than they could have been due to a 2021 customs assessment in Saudi Arabia.

    For the fourth quarter of 2021, PMI reported net revenues of $8.1 billion, up 8.9 percent over those reported in the corresponding 2020 quarter. The company’s operating income was $2.95 billion in the fourth quarter, compared with $2.91 billion in the comparable period of the previous year.

    PMI shipped 624.88 billion cigarettes in 2021, down 0.6 percent from 2020. The volume of heated tobacco units was up 24.8 percent to 94.98 billion. In the fourth quarter of 2021, the company shipped 158.38 billion cigarettes and 25.4 billion heated tobacco units, up 2.4 percent and 17 percent, respectively, from the 2020 fourth quarter.

    “Our business delivered excellent performance in 2021, with strong underlying momentum driving total volume growth, high single-digit organic net revenue growth and double-digit adjusted diluted EPS growth against the pandemic-affected prior year,” said PMI CEO Jacek Olczak in a statement.

    “We were especially pleased by the reacceleration of our business in the fourth quarter to deliver better-than-expected results. This included a step-up in sequential IQOS user growth, as well as the outstanding initial performance of IQOS ILUMA. We also achieved essentially stable category share for cigarettes in the quarter, as our portfolio initiatives bore fruit and pandemic-linked restrictions receded in many markets.”

    “We enter 2022 with strong fundamentals, underpinned by IQOS, and exciting innovation to come across our broader smoke-free product portfolio. We are forecasting organic top-line growth of 4 percent to 6 percent and currency-neutral adjusted diluted EPS growth of 8 percent to 11 percent, which prudently incorporate the continuing uncertainty on full IQOS device availability and the pace of the ongoing pandemic recovery.”

  • Publishing Ban for Industry-Owned Firms

    Publishing Ban for Industry-Owned Firms

    Photo: PixieMe

    A group of international respiratory societies has banned researchers associated with tobacco companies from publishing papers in their journals following Philip Morris International’s acquisition of the U.K.-based pharmaceutical firm Vectura, reports Nature. The measure comes on top of the groups’ decade-long publishing ban on researchers directly funded by tobacco companies.

    In a joint statement, the groups describe PMI’s purchase of Vectura as “highly unethical and inappropriate.”

    Scientists at Vectura produce drugs that treat asthma and chronic obstructive pulmonary disease, including some smoking-related respiratory illnesses. “That is the ultimate conflict of interest,” said Gregory Downey, a pulmonologist at the University of Colorado Denver and president-elect of the American Thoracic Society, which co-signed the statement.

    “The issue is that ‘Big Tobacco’ could use, and will use, this technology not only to potentially enhance delivery of tobacco-containing substances and nicotine devices but to addict more people.”

    Moira Gilchrist, vice president of strategic and scientific communications at PMI in Lausanne, Switzerland, says the idea that the company would use Vectura’s technology in this way is “false and without basis.”

    “We openly welcome and encourage legitimate critique and debate about our business transformation, but when this morphs into actively ostracizing scientists and attempting to prevent the prescribing of proven medicines for patients, we should pause and think of the implications,” Gilchrist adds.

    Signatories of the statement include The European Respiratory Society, International Union Against Tuberculosis and Lung Diseases, Asian Pacific Society of Respirology, Asociacion Latino Americana De Torax, and the Global Initiative for Asthma.

  • PMI Included in 2022 Gender Equality Index

    PMI Included in 2022 Gender Equality Index

    Photo: Formatoriginal

    Philip Morris International has been included in the 2022 Bloomberg Gender Equality Index (GEI) for the second year running. This is in recognition of the progress PMI has made in increasing gender equality globally. Currently, 39.2 percent of management positions are held by women, an increase of more than 10 percent since 2014 and still growing.

    “I am delighted that PMI has made the GEI for the second year running, particularly given that the threshold for inclusion within this index has grown since last year,” said Silke Muenster, chief diversity officer at PMI, in a statement. “While we still have a long way to go, I am very proud of the progress we have made to date, and I am confident about achieving more in the future.”

    As part of PMI’s commitment to gender parity, a global company-wide target was set to improve gender balance to at least 40 percent female representation in management by the end of 2022 and measuring and reporting progress against it.

    Other achievements and initiatives to further gender equality by PMI have included: becoming the first EQUAL-SALARY globally certified company; addressing gender bias in talent assessments; introducing global inclusive parental leave guidelines; celebrating top female talent; and launching a women in leadership program.

    The GEI is a modified market capitalization-weighted index that aims to track the performance of public companies committed to transparency in gender data reporting. It measures gender equality across five pillars: female leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, anti-sexual harassment policies, and pro-women brand.

    “We are proud to recognize PMI and the other 417 companies included in the 2022 GEI for their commitment to transparency and setting a new standard in gender-related data reporting,” said Peter T. Grauer, chairman of Bloomberg and founding chairman of the U.S. 30 Percent Club. “Even though the threshold for inclusion in the GEI has risen, the member list continues to grow. This is a testament that more companies are working to improve upon their gender-related metrics, fostering more opportunity for diverse talent to succeed in their organizations.”

    All companies included in this year’s index scored at or above a global threshold established by Bloomberg to reflect disclosure and the achievement or adoption of best-in-class statistics and policies.

  • RAI Heating Technology Declared ‘Unpatentable’

    RAI Heating Technology Declared ‘Unpatentable’

    Photo: tashatuvango

    The U.S. Patent Trial and Appeal Board (PTAB) has determined as unpatentable several claims by RAI Strategic Holdings relating to tobacco-heating technology, reports The Winston-Salem Journal.

    According to federal law, a claim is unpatentable if “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”

    The board’s rulings are the latest developments involving several patent infringement lawsuits between RAI and Philip Morris International.

    In November, the U.S. Trade Representative affirmed a legal victory by RAI’s parent company, British American Tobacco, against rival Philip Morris International and its U.S. partner, Philip Morris USA.

    On Sept. 29, the U.S. International Trade Commission issued a final determination of a violation of the Tariff Act of 1930 by Philip Morris USA and Altria Client Services as it related to two BAT product patents.

    Altria Group, parent of PM USA, asked trade representative Katherine Tai to overturn the ban. The U.S. Trade Representative’s office confirmed no action was taken by Tai.

    As a result of the ITC ruling, PM USA is barred from importing PMI’s IQOS 2.4, IQOS 3 and IQOS 3 Duo heat-not-burn cigarette products into the United States.

    PMI welcomed the PTAB ruling. “We are extremely pleased with the well-reasoned PTAB decisions, which further demonstrate the futility of RJR/BAT’s efforts to litigate this patent family,” a PMI spokesperson said.

    Reynolds said in a statement that “we disagree with the decision finding (the ‘915’ ruling) invalid partially contradicting the International Trade Commission’s ruling, which was based on a highly developed evidentiary record, including a six-day trial with live witnesses.”

    Reynolds said an ITC panel and the full commission “agreed with Reynolds’ position regarding the patent.”

    PTAB decisions can be appealed for review to the U.S. Court of Appeals for the Federal Circuit, which Reynolds has indicated it will pursue.

    Another option for Reynolds, according to the patent board’s ruling, is for Reynolds to amend its patents in dispute or request a reexamination of the challenged patent.