Vectura Group
Image from Vectura Group’s website

American-Swiss multinational cigarette and tobacco manufacturing company Philip Morris International (PMI) has offered to buy British pharmaceuticals business Vectura Group for an enterprise value of £852 million in cash, and Vectura’s board has agreed.

Under the terms of the acquisition, Vectura shareholders would be entitled to receive 150p per share, a 46% premium to the ex-dividend closing price per Vectura share of 103p on 25 May.

PMI, which is investing billions to move away from its core tobacco business, has offered more than that proposed by private equity group Carlyle in May. Vectura’s board had recommended shareholders accept Carlyle’s offer but withdrew that advice after receiving the higher offer from PMI.

Vectura provides inhaled drug delivery solutions that enable partners to bring their medicines to patients. The company has 13 key inhaled and 11ge non-inhaled products marketed by major global pharmaceutical partners, as well as a diverse portfolio of partnerships for drugs in clinical development. In 2020, Vectura generated net revenues of £191 million. The transaction value represents a multiple of around 14 times Vectura’s 2020 EBITDA.

PMI’s chief executive Jacek Olczak said: “PMI’s Beyond Nicotine strategy, announced in February, articulates a clear ambition to leverage our expertise in inhalation and aerosolisation into adjacent areas – including respiratory drug delivery and selfcare wellness – with a goal to reach at least $1 billion in net revenues by 2025.

“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.

“The market for inhaled therapeutics is large and growing rapidly, with significant potential for expansion into new application areas. PMI has the commitment to science and the financial resources to empower Vectura’s skilled team to execute on an ambitious long-term vision. Together, PMI and Vectura can lead this global category, bringing benefits to patients, to consumers, to public health, and to society at large.”

Jorge Insuasty, chief life sciences officer at PMI. Commented: “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. 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 commercialisation of innovative inhalable drug/device combinations.”

Date published: July 9, 2021

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