Philip Morris raises its bid on Vectura

Tobacco giant Philip Morris International (PMI) raised the bid on UK-based respiratory drugmaker Vectura over the weekend above its initial offer of £1 billion, effectively entering a bidding war with private equity firm Carlyle.

PMI has risen its bid to £1.65 per share - roughly £1.02 billion without the dividend - after Carlyle offered £958 million for the drugmaker as the creator of Marlboro cigarettes hopes to use Vectura's expertise in respiratory drugs in a bid to reinvent itself in a world that is cautious over health concerns associated with smoking.

Read more: Philip Morris offers £1bn to buy Vectura

However, shareholders and anti-smoking campaign groups have expressed concern over the fact the US company may soon own Vectura. The UK drugmaker currently specialises in medicines and devices to treat asthma and other respiratory diseases.

The auction between the two bidders is set to commence on August 11 and will last for five days.

Vectura hasn't officially responded in any capacity to the new offer but did express support for Caryle's bid on Friday (August 6) stating it would be better off under the equity firm's control. It withdrew this recommendation on Monday morning.

The company is also rumoured to be working on an inhaled treatment for Covid-19 with UK-based pharmaceutical company Inspira.

Campaigns on social media and in various press columns have called on the company's shareholders to veto the bid from PMI over "ethical concerns" over a tobacco company owning a majority stake in a company pledged to treat respiratory illnesses.

There are also fears it could "legitimise" PMI's role in creating these same respiratory issues.

Meanwhile, PMI has pledged to a smoke-free future - by reshuffling its portfolio to mainly accommodate tobacco alternatives, such as e-cigarettes and has hinted it may be expanding into initiatives to stop smoking - but the company still makes 75% of its profits from its main brand, Marlboro.

The group has called for a ban on cigarettes within a decade in order to facilitate this new market, as part of a greater shift to change its image following years of negative press and lawsuits for marketing and selling cigarettes.

In a statement, PMI revealed it "intends to operate Vectura as an autonomous business unit that will form the backbone of its inhaled therapeutics business."

It has also stated it plans to "phase out" the sale of Marlboro cigarettes in the UK by 2030 in accordance with its new scheme.

Read more: Marlboro cigarettes to disappear from UK shelves "within 10 years"

The British Thoracic Society (BTS) highlighted "the inappropriateness of this deal and calling for this takeover to be prevented, given the unresolvable ethical conflict that would be generated by such an arrangement", in a statement issued on Friday.

A spokesperson said the institute would continue to "combat misinformation about, and the active promotion of, tobacco products", as well as shedding light on the "tobacco industry funding for academic institutions or research". 

Professor of Respiratory Medicine at the University of Central London, John Hurst described the event as an "abhorrent, egregious takeover" in a tweet on Saturday.

"Tobacco companies should not profit further by treating diseases they themselves have caused," he added.

Back to Homepage

Back to Healthcare

Back to Consumer Goods