Phillip Morris Buys Oral Drugmaker Fertin
In the deal valued at 5.1 billion Danish krone ($813 million), the erstwhile tobacco company with Marlboro as flagship brand is gaining control of a range of drug delivery technologies including chewing gums used in the administration of nicotine to help wean consumers off its earlier products. The takeover includes manufacturing and R&D sites in Denmark, Canada and India, where Fertin employs around 860 people.
When EQT acquired a 70% stake in Fertin in 2017, the company was focused on medical chewing gum. With the investor’s backing, it has since expanded its oral drug delivery portfolio to include controlled-release tablets, powders that dissolve under the upper lip and solid dosage forms that liquefy when chewed.
EQT’s investment has clearly paid off. Fertin’s EBITDA has grown almost 50% in the meantime. What’s more, the company now operates as a CDMO, providing technologies to pharma and healthcare companies.
Phillip Morris’s investment in the drugs sector is an obvious move to build a portfolio of products not associated with tobacco. “The acquisition of Fertin Pharma will be a significant step forward on our journey toward delivering a smoke-free future, enhancing our smoke-free portfolio, notably in modern oral, and accelerating our progress in beyond nicotine,” CEO Jacek Olczak acknowledged in a statement.
The erstwhile tobacco company now hopes to generate more than half of its net revenue from smoke-free products by 2025. Altogether, it aims for at least $1 billion of this revenue to come from products other than nicotine.
Author: Dede Williams, Freelance Journalist