Tag: Philip Morris International

E-Cig Recycling Center Opens in Budapest

Photo: alexlmx
Philip Morris International inaugurated a HUF3 billion ($10.16 million) e-cigarette recycling center on the outskirts of Budapest this week, reports the Budapest Business Journal, citing state news wire MTI.
The center can recycle 150,000 electric tobacco devices a month, but capacity can be increased, according to PMI Sustainability Director Miguel Coleta.
The company picked the site because of Hungary’s economic stability and the favorable investment environment, he added.
State Secretary Tamas Menczer said the investment created 100 jobs, noting that PMI has just one other recycling center, in Japan.
PMI earned more than HUF230 billion in Hungary last year.
August 31, 2021
Transformation Framework Published

Emmanuel Babeau (Photo: PMI)
Philip Morris International published its business transformation-linked financing framework, which integrates the company’s smoke-free transformation into its financing strategy.
“To strengthen our commitment and further highlight to stakeholders the seriousness of our smoke-free ambitions, we wish to link our most material sustainability priorities to our financing,” said Emmanuel Babeau, chief financial officer, in a statement. “We believe that a business transformation-linked financing framework not only helps reinforce our commitment to reinvent our company but will also allow investors and lenders to engage with and support our industry-leading transformation as we work to accelerate the end of smoking and use our strong capabilities to develop products that go beyond nicotine and have a net positive impact on society.”
The framework outlines the guidelines that PMI will follow in issuing business transformation-linked financing instruments in the debt capital and loan markets, which may include public notes offerings, private placements, loans and other relevant financing instruments.
The key performance indicators (KPIs) selected for the framework directly measure and respond to the focus of PMI’s sustainability and corporate strategy and the company’s most material sustainability topic: addressing the health impact of its products.
The framework includes two sustainability performance targets (SPTs), with an observation date of Dec. 31, 2025: Increase PMI’s full-year 2025 smoke-free/total net revenue percentage to more than 50 percent from the 2020 baseline of 23.8 percent; and increase the number of markets where PMI’s smoke-free products are available for sale to 100 markets by the end of 2025 from the baseline of 64 markets on Dec. 31, 2020.
The framework was validated by S&P Global Ratings, which provided a second party opinion (SPO). The SPO recognized the chosen KPIs and related SPTs as material, measurable, ambitious, regularly reported and externally verified—in line with the June 2020 Sustainability-Linked Bond Principles administered by the International Capital Market Association (ICMA) and the May 2021 Sustainability-Linked Loan Principles administered by the Loan Market Association (LMA). The SPO is also available on the PMI website.
“The framework builds on our genuine commitment to transform,” said Jennifer Motles, chief sustainability officer, “reflecting: a Statement of Purpose issued by the Board of Directors; concrete KPIs for reporting and compensating executives on that purpose (Business Transformation Metrics); business transformation-linked financing instruments tied to targets for select KPIs; and transparent, periodic disclosures on our progress through integrated reporting. I hope this can serve to inspire something bigger within our industry and set an example for other industries also undergoing transformations.”
August 31, 2021
‘PMI Considered Selling Marlboro Business’

Jacek Olczak (Photo: PMI)
Philip Morris International considered selling its Marlboro business to exit the cigarette industry, CEO Jacek Olczak told The Daily Mail.
In the end, however, the company decided to keep the business to help finance its growth in “wellness” products, according to the British tabloid.
“Yes, we had this discussion [about selling Marlboro]. Our conclusion was, if we retained cigarettes, actually it would accelerate our journey [from traditional tobacco revenues] because I can allocate resources,” Olczak was quoted as saying.
According to Olczak, three-quarters of PMI’s resources go to finding cigarette alternatives.
Olczak’s comments come as PMI faces a growing backlash from health campaigners over its plans to buy British inhaler company Vectura. Earlier this month, the board of Vectura said it would support PMI’s £1.1 billion ($1.5 billion) takeover offer after the cigarette manufacturer had outbid private equity firm Carlyle.
Medics and health experts have warned that the deal could spoil Vectura’s key contracts and government grants. A group of 35 health experts wrote an open letter earlier this month saying a takeover by the tobacco company would “significantly hamper” Vectura’s strategy of operating as a research-focused pharmaceutical company.
PMI has said its bid for Vectura is part of its shift from cigarettes to a “smoke-free” future where it sells less harmful e-cigarettes and “wellness” products. The cigarette manufacturer aims to generate 50 percent of its income from smoke-free products by 2025.
Philip Morris needs more than 50 percent of shareholders to support its Vectura bid by Sept. 15.
August 30, 2021
PMI Launches Bladeless IQOS in Japan

Photo: Kuznietsov Dmitriy
Philip Morris International has launched IQOS Iluma, the brand’s first tobacco-heating system based on induction-heating technology, in Japan.
The device’s Smartcore induction system heats the tobacco from within the new Terea Smartcore Stick. These newly designed sticks are to be used only with IQOS Iluma, which features an auto-start function that detects when the Terea stick is inserted and automatically turns on the device.
According to PMI, the bladeless IQOS devices offer a cleaner way to heat tobacco from the core without burning it. They also provide a more consistent experience and leave no tobacco residue, eliminating the need to clean the device. Additionally, the devices generate no combustion and no smoke. PMI says its market research indicates that IQOS Iluma provides a more pleasurable experience compared to previous IQOS generations.
“IQOS Iluma is our most innovative offering to date and the new flagship in our portfolio of science-backed, smoke-free products. Its breakthrough induction-heating technology heats tobacco from within, without burning, so there’s no smoke, no ash and, like previous IQOS devices, it emits, on average, 95 percent lower levels of harmful chemicals compared with cigarettes,” said Michele Cattoni, vice president of heated-tobacco platforms at PMI, in a statement.
“However, unlike our previous tobacco-heating systems, IQOS Iluma has no blade. That means no tobacco residue or cleaning—ever. With this, and other product features, we aim to address consumer pain points that may have hindered some adult smokers from beginning or maintaining their journey away from cigarettes in the past.”
IQOS Iluma is available in two versions—IQOS Iluma Prime and IQOS Iluma. Both devices use new induction-heating technology but offer different designs. IQOS Iluma Prime and IQOS Iluma are available in Japan for pre-order on IQOS.com beginning Aug. 17, 2021, and for purchase at IQOS stores on Aug. 18, 2021.
As of June 30, 2021, PMI’s smoke-free products are available in 67 markets. The company has stated its ambition to be present in 100 markets with its smoke-free products by 2025. There are more than 20 million users of the IQOS tobacco-heating system globally, and PMI estimates that more than 73 percent (approximately 14.7 million) of these men and women have switched completely to IQOS and stopped smoking with the balance in various stages of switching. PMI’s ambition is that by 2025, at least 40 million PMI cigarette smokers who would otherwise continue to smoke will have switched to smoke-free products. Furthermore, the company’s ambition is that more than half of its net revenues will come from smoke-free products by 2025.
August 17, 2021
PMI Enters Tender Period with Vectura

Photo: Tobacco Reporter archive
Philip Morris International has published an offer document with U.K.-based Vectura Group in connection with the recommended cash offer to acquire the inhaled therapeutics company. Under the terms of the acquisition, Vectura shareholders would be entitled to receive 165 pence per share, a 60 percent premium to the ex-dividend closing price of 103 pence per Vectura share on May 25, 2021.
“PMI’s acquisition of Vectura is part of our long-term strategy to transform PMI by investing in scientific excellence and leveraging its capabilities and expertise,” said PMI CEO Jacek Olczak. “Our investment will accelerate the development and delivery of inhaled therapeutics to address many of today’s unmet medical needs. We look forward to working with Vectura’s great people as we embark on the next stage of our transformation.”
In a press note published on its website, PMI also detailed the ways in which it would support Vectura’s growth. Among other things, the cigarette manufacturer intends to build on the company’s leading scientific capabilities to develop products and services that go beyond nicotine.
August 17, 2021
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
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
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
IQOS Pauses Expansion After Patent Ruling

Photo: Kuznietsov Dmitriy
Philip Morris USA has paused U.S. expansion of its IQOS heat-not-burn (HnB) cigarettes following an unfavorable U.S. International Trade Commission (ITC) ruling, reports The Winston-Salem Journal, citing the company’s second-quarter report.
In April 2020, British American Tobacco subsidiaries R.J. Reynolds Tobacco Co., RAI Strategic Holdings and R.J. Reynolds Vapor Co. filed a patent infringement lawsuit against Philip Morris USA.
The complaint focuses on three HnB technology patents held by the company. An additional two patents are involved in a separate legal proceeding before the patent and trademark office.
In May, an ITC administrative law judge found that the IQOS system infringes two of the plaintiff’s patents and recommended imposition of a ban on the importation of the IQOS system.
On July 27, the ITC accepted review of the administrative law judge’s findings and recommendations on certain issues, including issues relating to the patent infringement claims and potential remedies, including a ban on the importation of the IQOS electronic device, Marlboro HeatSticks and component parts into the United States and on the sale of any such products previously imported into the United States.
The ITC’s ultimate order is subject to review by the U.S. Trade Representative and federal court. Due to this uncertainty, PM USA has delayed further expansion of IQOS and Marlboro HeatSticks.
IQOS is the only HnB product authorized for sale in the U.S., where it is sold by Altria. Last year, the U.S. Food and Drug Administration allowed the company to market IQOS as reducing consumers’ exposure to harmful chemicals found in cigarettes.
The IQOS products debuted in test markets in Atlanta, Georgia, in October 2019 and Richmond, Virginia, in November 2019.
During the second quarter, PM USA expanded retail distribution of Marlboro HeatSticks into the Triad and other metro areas of North Carolina as well as northern Virginia and Georgia.
The expansion contributed to Marlboro HeatSticks’ retail sales volume jumping by nearly 40 percent, including reaching a 0.8 percent market share for overall cigarettes in Atlanta as well as 0.5 percent in Charlotte.
July 30, 2021