Philip Morris ups bid for inhalation CDMO Vectura

Aug. 9, 2021

Tobacco company Philip Morris increased its offer for respiratory CDMO Vectura to $1.42 billion (£1.02B) — $2.29 per share — after U.S. private equity firm Carlyle offered $1.3 billion (£958M) last week.

On Friday, the Carlyle Group outbid Philip Morris (PMI) in the takeover battle for Vectura, in what has turned into a bidding war for the Chippenham, UK-based CDMO. Vectura, which makes respiratory treatments, initially backed Carlyle's offer but now has withdrawn its intention to recommend accepting Carlyle's offer.

The original offer came from Carlyle in May but in July, Philip Morris threw its hat in the ring.

Philip Morris wants to acquire Vectura as part of its new "Beyond Nicotine" strategy, as the cigarette giant looks to evolve into a broader healthcare and wellness company. By 2025, PMI aims to generate at least $1 billion in net revenues from products beyond tobacco and nicotine. PMI — which was spun off by parent company Altria Group in 2007, in order to clear the international tobacco business from the legal and regulatory constraints facing its domestic counterpart, Philip Morris USA — says it plans for Vectura to operate as an independent unit at the center of its inhaled therapeutics business.

Vectura has partnered with drugmakers such as Sandoz, Bayer, and GSK to bring 13 inhaled medicines and associated devices to market. It has also agreed to develop a potential inhaled treatment for COVID-19 with Inspira, a UK-based pharmaceuticals company that focuses on developing therapies for respiratory and infectious diseases.

A U.K. regulatory body said today that it will now start an auction process for Vectura Group, beginning tomorrow. The auction will last for five days of public bidding, and Vectura, Carlyle and Philip Morris have each agreed to the procedure.