Philip Morris’ Recent Acquisitions Support its Beyond Nicotine Strategy

Philip Morris International Inc. (Philip Morris) outlined its Beyond Nicotine strategy at its most recent Investor Day. The company is focusing on selfcare wellness, including botanicals and inhaled therapeutics that are expected to have an addressable market of around $65 billion by 2025.

As part of its new strategy, Philip Morris has recently announced a number of acquisitions to build its capabilities in modern oral as a key enabler of broadening the reach and access of the company’s smoke-free alternatives to adult smokers around the world as well as striving to develop commercially successful products with a net positive impact on society. Recent acquisitions include:

• OtiTopic, a U.S. respiratory drug development company with a late-stage inhalable acetylsalicylic acid (ASA) treatment for acute myocardial infarction. If approved, the treatment can address the significant unmet medical need of the over 83 million people, in the U.S. alone, at intermediate to high risk for myocardial infarction. OtiTopic was founded in 2012 as an innovative pharmaceutical start-up company and holds several key patents, differentiated intellectual property, and has confirmed a 505(b)2 pathway through constructive interactions with the FDA.
• Vectura is a provider of innovative inhaled drug delivery solutions that enable partners to bring their medicines to patients. The company has thirteen key inhaled and eleven 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 GBP 191 million(approximately USD 245 million). The transaction value represents a multiple of around 14 times Vectura’s 2020 EBITDA.
• Fertin Pharma A/S(Fertin Pharma), a leading developer and manufacturer of innovative pharmaceutical and well-being products based on oral and intra-oral delivery systems, for an enterprise value of DKK 5.1 billion (approximately USD 820 million). Fertin Pharma is a privately held company with more than 850 employees and operations in Denmark, Canada, and India.

Takeaway: Philip Morris recently announced its goal to generate more than 50 percent of its total net revenues from smoke-free products by 2025