Philip Morris buys inhaler maker Vectura

Philip Morris International (PMI) said Friday that it has agreed to buy Vectura, a UK company making breathing inhalers, as part of a push into healthcare.

The Marlboro-maker will pay 150 pence per share in cash, valuing Vectura at £1 billion, the pair said in a statement.

The deal trumped a £958-million bid from private equity firm Carlyle that was agreed in May.

PMI said Friday's move was part of its expansion "beyond tobacco and nicotine" and into "a broader healthcare and wellness company".

The group had in February identified respiratory drug delivery as a key focus, under broader plans to generate at least $1bn in annual net revenues from nicotine-free products by 2025.

“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 selfcare wellness—with a goal to reach at least $1 billion in net revenues by 2025,” said Jacek Olczak, chief executive.

“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.”

Since 2008, the cigarette giant has invested more than $8bn (£5.7bn) in smoke-free products, "with the aim of disrupting its own traditional business", the statement added.

The US group wants to concentrate more on smoke-free products like vaping "that are less harmful than smoking", it said.

Vectura is a provider of innovative inhaled drug delivery solutions that enable partners to bring their medicines to patients. The company has thirteen key inhaled and eleven non inhaled products marketed by major global pharmaceutical partners, as well as a diverse portfolio of partnerships for drugs in clinical development.

“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.”

The deal is expected to close in the second half of 2021, subject to a shareholder vote and approval by the appropriate regulatory authorities.