Philip Morris to Buy UK Manufacturer of Respiratory Treatments

Tobacco giant Philip Morris International (PMI) has signed an agreement Vectura (VEC.L) giving the U.S. firm access to the British drugmaker's respiratory ailment treatments and inhaling device technology.

Diane Caruana

January 8, 2022

The global market share for Heets, excluding the US, was up by 1.7 points to 7.6% in the first quarter.

Earlier this month, PMI agreed to buy Vectura for 1.05 billions pounds ($1.44 billion). The move by Philip Morris is one of a recent number of efforts by the company to change their image to one that has the public’s health interests at heart, by slowly moving from selling deadly cigarettes to safer alternatives.

In April, PMI told investors that it had posted net revenues of $7.5bn in the quarter, up 6% on the same period a year ago, with smoke-free products accounting for 28% of total net revenue. Global shipment of heated tobacco units was up by 29.9% at 21.7bn units.

In Europe, the tobacco manufacturer shipped 6.4bn Heets for Iqos in the first quarter of 2021, up from 4.6bn in the same period of 2019, with Germany and Italy being behind the figures. Eastern Europe (up 29.1%), and East Asia and Australia (up 28.3%) also performed very well, while in Latin America and Canada, the growth of the category was much lower at 2.8%.

PMI revised its full-year 2021 guidance from 4-7% to 5-7%

Interestingly, the tobacco company did not release any figures related to the performance of its smoke-free portfolio in the US. It did say that the global market share for Heets – excluding the US – was up by 1.7 points to 7.6% in Q1. Moreover, it revised its full-year 2021 guidance from 4-7% to 5-7% due to the popularity of its heated tobacco products.

An article on Reuters disclosing details about the agreement with Vectura, said that investors’ shares have risen. “The offer of 150 pence per share to investors in Vectura topped a previous 136 pence proposal by investment firm Carlyle Group (CG.O), and was 11% higher than the drugmaker’s closing share price on Thursday. Vectura, whose shares rose as much as 14% to 154 pence, said it was withdrawing its recommendation for Carlyle’s proposal and was adjourning a shareholder meeting it had convened on Monday.”