Benzinga | Sep 16, 2021 06:00AM EDT

Philip Morris Reports Unconditional Offer For Vectura Group

- PMI has acquired or received valid acceptances for 74.77% shares in Vectura, and all other conditions have been satisfied or waived, making PMI's offer unconditional in all respects

- PMI reaffirms commitment to using its resources and expertise to help Vectura grow its business and help PMI achieve its Beyond Nicotine ambitions

LAUSANNE, Switzerland--(BUSINESS WIRE)-- PMI Global Services Inc. (PMI) (NYSE:PM) today announced that its offer for Vectura Group plc (Vectura) (LSE: VEC) has become unconditional, having received valid acceptances for or acquired 74.77 % of Vectura shares, in excess of the 50% required under the acceptance condition, as well as confirming that all other conditions to the offer have been satisfied or waived. PMI has extended the offer to allow for the tender of further shares.

"We have reached an important milestone in our acquisition of Vectura and are pleased to have secured over 74% of the company's shares, in excess of the 50% required to make our offer unconditional and PMI the majority shareholder," said PMI's Chief Executive Officer, Jacek Olczak. "We are very excited about the critical role Vectura will play in our Beyond Nicotine strategy and look forward to working with Vectura's scientists and providing them with the resources and expertise to grow their business to help us achieve our goal of generating at least $1 billion in net revenues from Beyond Nicotine products by 2025."

PMI's proposed acquisition of Vectura is part of its long-term strategy to move Beyond Nicotine and will provide support for Vectura's continued growth.

- PMI will build on its leading scientific capabilities to develop products and services that go Beyond Nicotine. PMI aims to achieve at least $1 billion in annual net revenues from Beyond Nicotine sources by 2025.

- PMI's business model and strategy are driven by a long-term commitment to the transformation of its business. Since 2008, PMI has invested $8.1 billion in the research, development, and commercialization of new smoke-free products for adults who would otherwise continue to smoke. PMI's track record of investing in innovation exemplifies its commitment to invest the time and resources it takes to allow for scientific innovation of better products. In its Statement of Purpose released in 2020, PMI reaffirmed its commitment to transformation and serving stakeholders.

- PMI's commitment to transform itself requires an evolution into adjacent business areas while applying its significant expertise in inhalation science to address unmet medical and consumer needs by delivering medical and wellness products that improve people's lives. This is a change that, like for so many other companies, reflects the need to transform to address the impacts of business on society and to move towards a net positive future, taking ESG as a key input into a sustainable strategy.

- PMI's Beyond Nicotine strategy is built on two key growth areas: (1) inhaled therapeutics, where it has already committed resources to its development pipeline of inhaled over-the-counter and prescription drugs; and (2) developing and commercializing scientifically substantiated consumer health products and solutions that improve people's lives in areas like energy, sleep, calm, and focus.

- PMI has the resources, commitment, and patience to advance Vectura's existing strategy, further it geographically, and extend into the development of proprietary inhaled therapeutic products, alongside the existing contract development and manufacturing organization (CDMO) business. The market for inhaled therapeutics is growing rapidly, with significant potential to expand into new application areas beyond the current market offering. With PMI's support, Vectura is well-positioned to address this market growth.

- PMI intends to ensure Vectura remains a trusted partner in the pharmaceutical industry for the development of inhaled therapeutic products, providing the best possible treatments for providers, prescribers, and their patients. PMI strongly supports and is aligned with Vectura's strategy of delivering drugs through inhalation using innovative technologies that can effectively address many of today's unmet medical needs recognizing that the inhalation mode of administration allows for fast systemic absorption, potential fast onset of effect, and a better safety profile due to the lower dose needed compared to the standard of care today.

- PMI intends to increase the total level of expenditure on research and development and believes that this will further benefit Vectura's differentiated technologies and development expertise for the delivery of complex inhaled therapeutics, helping to bring the initial pipeline of Beyond Nicotine concepts that PMI has developed or acquired to market. This will exemplify PMI's strategy and give increased confidence in its transformation to the scientific community and to the public. Beyond supporting Vectura's growth, PMI believes these investments will support the scientific ecosystem in the U.K. for the longer term, in line with the U.K.'s life sciences strategy and in keeping with the U.K.'s position as a major scientific innovator.

- Operating Vectura as an autonomous business unit forming the backbone of its inhaled therapeutics business, PMI believes Vectura will have the opportunity and tools to undertake the end-to-end development of inhalable drug-device combinations and will provide access to PMI's capabilities in areas such as pre-clinical safety, clinical development, regulatory affairs, drug safety, market access, and global reach.

- We look forward to working with Vectura's scientists to establish a governance structure that supports its ongoing scientific efforts.

Vectura is a provider of innovative inhaled drug delivery solutions that enable partners to bring their medicines to patients. The company has 13 key inhaled products and 11 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 $245 million). The transaction value represents a multiple of around 15 times Vectura's 2020 EBITDA.

PMI expects the impact of the acquisition on its full-year 2021 adjusted diluted EPS to be immaterial.