A Vectura Group logo is seen on a smartphone and a PC screen.
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Philip Morris International is exploring the possibility of divesting a portion of its leading pharmaceuticals division.
The tobacco company, renowned for its Marlboro cigarettes, ventured into the healthcare and wellness industry in 2021 through its acquisition of Vectura, a UK-based pharmaceutical company specializing in inhaled medicines and inhaler devices.
However, the division has encountered recent difficulties, prompting Philip Morris to engage in discussions with Deutsche Bank to explore various growth opportunities for its wellness and healthcare unit, as first reported by The Wall Street Journal.
The company is actively seeking a new partner to assist in boosting Vectura and is considering potential options such as licensing or royalty agreements, commercial collaborations, or the sale of a majority or minority stake in the business.
Over the past few years, Philip Morris has made notable acquisitions, including Fertin Pharma, a manufacturer of nicotine gum, and OtiTopic, a respiratory drugmaker.
These acquisitions, which totaled over $2 billion, represented the company’s strategic shift to develop smoke-free products and medications targeting respiratory diseases commonly associated with smoking.
Nevertheless, these acquisitions faced backlash from the public health sector. In the second quarter of this year, the company incurred a $680 million impairment charge related to its wellness and healthcare division.
At the time of the Vectura acquisition, Philip Morris expressed its intention to expand its “Beyond Nicotine” business and achieve a minimum of $1 billion in net revenues from these products by 2025. However, following setbacks, the company has adjusted its goals and announced plans to reduce investments in the division.
During its Q2 earnings call, the company reiterated its commitment to developing its wellness and healthcare business, emphasizing its intent to accelerate Vectura’s growth and explore potential partnerships.
This development occurs amidst ongoing resistance from public health groups. Recently, Philip Morris faced opposition from health experts, leading to the removal of its CEO from the lineup at the Concordia Annual Summit, a side event to the United Nations General Assembly held in New York every September.
In response to the expert’s refusal to participate in protest against the CEO’s presence, Concordia promptly rescinded Philip Morris’ membership in the conference.
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