Philip Morris International is contemplating selling a stake in its largest pharmaceuticals unit.
The tobacco giant, known for Marlboro cigarettes, expanded into the health care and wellness sector in 2021 by acquiring Vectura, a U.K.-based pharmaceutical company specializing in inhaled medicines and inhaler devices.
However, the division has recently faced challenges, leading Philip Morris to look into various strategies for its wellness and health-care sector, according to The Wall Street Journal.
The company is seeking a new partner to support Vectura’s growth and is considering several options, including licensing or royalty agreements, commercial partnerships, or the sale of a majority or minority stake in the business.
Philip Morris has also acquired Fertin Pharma, a nicotine gum manufacturer, and OtiTopic, a respiratory drugmaker, in recent years.
These acquisitions, totaling over $2 billion, were part of Philip Morris’s broader shift towards developing smoke-free products and treatments for respiratory diseases related to cigarette smoking.
The acquisitions have faced criticism from the public health sector. In the second quarter of this year, Philip Morris recorded a $680 million impairment charge related to its wellness and health-care division.
Initially, the company stated that the Vectura acquisition would bolster its “Beyond Nicotine” business and help the division achieve its goal of generating at least $1 billion in net revenues from these products by 2025.
However, following recent setbacks, Philip Morris has revised this goal and plans to scale back its investments in the division.
Despite these challenges, the company affirmed its commitment to developing its wellness and health-care business, stating it would focus on accelerating Vectura’s growth and looking into potential partnerships.
This development comes amid ongoing resistance from public health groups. Recently, Philip Morris had its CEO removed from the lineup of the Concordia Annual Summit, an event held alongside the United Nations General Assembly in New York.
Health experts had refused to participate in the summit due to his scheduled appearance, leading Concordia to revoke Philip Morris’ membership in the conference effective immediately.
