Cigarette maker sells British inhaler enterprise after backlash
Marlboro cigarette maker Philip Morris has been forced to sell a British maker of asthma inhalers at a steep loss after a growing backlash from health groups opposed to its ownership.
Philip Morris International (PMI) bought Vectura Group three years ago as part of a plan to transform itself into a “broader healthcare and wellness” group but now says the shift has been derailed by “unwarranted opposition”.
Vectura makes treatments for respiratory illnesses caused by smoking, among other products. PMI’s ownership has prompted criticism from campaigners outraged that a cigarette maker could benefit from the treatment of smoking-related diseases.
The company had faced medical boycotts, including being barred from a major medical conference shortly after the takeover after other speakers threatened to withdraw unless Vectura pulled out.
Jacek Olczak, chief executive officer of PMI, on Tuesday said the sale would free Vectura from the “unreasonable burden of external constraints and criticism related to our ownership”.
PMI will suffer a steep loss on the deal after paying £1.1bn for Vectura.
The US company will sell the division to Molex, part of an US oil and chemicals conglomerate run by the billionaire Charles Koch, for an initial £150m plus potential payments of £148m.
PMI had already taken a $680m (£516bn) impairment against the unit and abandoned its growth plans.
The Marlboro owner’s controversial takeover of London listed Vectura came after the inhaler manufacturer’s board had already recommended a bid by private equity firm Carlyle.
At the time, PMI hinted at the short-termism of private equity owners, saying: “PMI’s business model and strategy is driven by a long-term commitment to the transformation of its business and not a search for short term gains and efficiency.”
But long-term ownership was seemingly not to be.
The deal quickly incurred the fury of anti-smoking activists.
When PMI’s bid was first announced in 2021, Mr Olczak claimed campaigners were “settling old scores” against the tobacco industry.
He claimed that health charities were “not interested in progress” and were seeking to prevent the company moving away from cigarette sales.
In July, the charity Asthma + Lung UK urged patients to tell doctors they did not want inhalers made by a tobacco company.
Sarah MacFadyen, the charity’s head of policy, said: “Addictive tobacco products cause and exacerbate lung disease, so Philip Morris’s takeover of Vectura has been widely condemned.
“If people feel uncomfortable using an inhaler brand linked to the tobacco industry, they should speak to their healthcare professional about trying an alternative device. For most people, there are a range of alternatives that are just as effective and safe.”
Deborah Arnott, chief executive of Action on Smoking and Health, on Tuesday said: “Philip Morris seems to believe that owning a pharmaceutical company combined with incessant repetition of its smoke-free mantra entitles it to a free pass but it doesn’t.”
Philip Morris International shares dropped 2.8pc this afternoon.
Read the latest updates below.
