Philip Morris sells inhaler maker business Vectura for nearly £300m

Vectura Fertin Pharma, an affiliate of Philip Morris International (PMI), has on Tuesday announced the sale of its subsidiary Vectura Group to global electronics major Molex Asia Holdings for £298 million.

Vectura, based in Chippenham, UK, will be operated by Phillips Medisize, a Molex company and a leader in the design, engineering and manufacturing of pharmaceutical drug delivery, in vitro diagnostic and medtech devices.

PMI, which acquired Vectura in 2021 amid strident opposition from health groups, has also announced the establishment of master service agreements to develop Vectura Fertin Pharma’s inhaled therapeutics proprietary pipeline.

The tobacco giant created Vectura Fertin Pharma as an autonomous unit, bringing together Vectura and Danish company Fertin Pharma, which it acquired in 2020, as part of its plan to go ‘smoke-free’ and switch to healthcare and wellness products.

PMI, which fought off private equity firm Carlyle Group for the roughly 1-billion-pound buyout of Vectura, would receive an upfront cash consideration of £150 million, subject to customary purchase price adjustments, and potential deferred payments of up to £148 million.

Jacek Olczak, PMI chief executive, said Vectura has enabled them to develop a proprietary pipeline of inhaled therapeutics, adding that the business remains committed to driving innovation in this space “over the long-term”.

“With its experience in pharmaceutical drug delivery devices and its global manufacturing footprint, Phillips Medisize is best placed to lead Vectura into the future— while releasing it from the unreasonable burden of external constraints and criticism related to our ownership,” Olczak added.

During the takeover, PMI had faced resistance from public health experts who questioned whether a tobacco group should own a company that cures the respiratory illnesses which cigarettes cause.

PMI said the “unwarranted opposition” to its ownership has impacted Vectura’s scientific engagement and commercial CDMO (contract development and manufacturing organisation) relationships.

The remaining units of Vectura Fertin Pharma will continue to operate as a separate company under PMI’s ownership and will be given a new corporate identity. This business will focus on developing and commercialising oral consumer health and wellness offerings and inhaled prescription products for therapy areas that include pain management and cardiovascular emergencies.

Paul Chaffin, president of Phillips Medisize, said adding the Vectura team will enhance their ability to deliver a broader portfolio of inhalation combination drug devices and solutions to their pharmaceutical customers.

“With our global reach, manufacturing scale, and engineering expertise, Phillips Medisize is uniquely positioned to help Vectura in developing innovative new products for their customers, ultimately benefiting people who suffer with chronic and acute diseases such as asthma and COPD.”

Vectura brings to Phillips Medisize its unique inhalation expertise that includes formulation and device development for dry powder inhalers (DPI), pressurized metered dose inhalers (pMDI), nasal and nebuliser products for small molecules, biologics, complex combinations and generic products. The company also offers pharmaceutical analysis, process development, technical transfer, clinical trial supplies and regulatory services.

“The acquisition of Vectura is the latest step in building an industry-leading capability in medical. It also demonstrates Molex’s commitment to acquiring opportunities to better serve market needs across our portfolio,” said Joe Nelligan, chief executive of Molex, which acquired Phillips Medisize in 2016 to build a scale healthcare business.

“We are excited by the significant growth potential that comes with a wider range of formulation, device design, combination product development and manufacturing services to support the increasing need for inhalation therapies. We look forward to welcoming the Vectura team, who brings a celebrated reputation of inhalation expertise and experience.”

The acquisition is expected to close by the end of 2024, subject to regulatory approvals and other customary closing conditions.