(Reuters) – Philip Morris International is considering a possible stake sale in its biggest pharmaceutical unit, as the Marlboro maker searches for a new partner to help it make the business work, the Wall Street Journal reported on Tuesday.
In 2021, the tobacco giant agreed to acquire three pharmaceutical companies for a total of more than $2 billion as part of a plan to pivot away from cigarette sales. The deals inserted Philip Morris into the market for inhalers and other treatments for respiratory diseases that are linked to cigarette smoking.
Philip Morris had acquired Vectura in 2021, giving the cigarette maker access to the British drugmaker’s respiratory ailment treatments and inhaling device technology. It also acquired nicotine gum maker Fertin Pharma and respiratory drug development company OtiTopic in the same year.
The tobacco giant has had discussions with Deutsche Bank on a range of options to grow its healthcare and wellness division, the WSJ report said, without specifying the name of the pharma unit.
The tobacco company said it is looking to bring on a partner to help operate and grow Vectura’s drug manufacturing outsourcing business, possibly through a sale of a majority or minority stake in that business, the report said, citing people familiar with the matter.
A Philip Morris spokesperson said the company did not have any comment to provide on the WSJ story.
Chief Financial Officer Emmanuel Babeau had said in July earnings call that the company is committed to developing its healthcare business, the report added.
“Our ambition to build and monetize our product pipeline are unchanged. We also aim to accelerate Vectura’s growth and will be exploring potential partnership to enhance its CDMO business.”
(Reporting by Chandni Shah in Bengaluru; Editing by Sherry Jacob-Phillips)