Backlash builds over £1bn Vectura sale to Marlboro Man: Health experts and MPs question ethics of inhaler firm’s takeover
Vectura’s £1billion takeover by the makers of Marlboro cigarettes faced a growing backlash from medical experts and politicians last night.
Philip Morris International sealed its buyout of the Chippenham-based inhaler company this week after almost 75 per cent of Vectura’s investors backed the deal.
Philip Morris – which also sells Parliament and Chesterfield cigarettes – only needed 50 per cent backing for the 165p-per-share offer to go through.
Anger: Philip Morris International sealed its buyout of the Chippenham-based inhaler company this week after almost 75 per cent of Vectura’s investors backed the deal
The company said the Vectura takeover would speed up its efforts to become a broader ‘healthcare and wellness’ group.
But the deal triggered outrage among health professionals, campaigners and politicians, who warned the inhaler-maker could be blacklisted and shut out of industry research.
Tory MP Bob Blackman, chairman of the All Party Parliamentary Group on Smoking and Health, said it was ‘deeply disappointing’ that shareholders had backed the deal.
For years, major City institutions have said they are only keen to invest in companies committed to high environmental, social and governance (ESG) standards.
The Vectura takeover was seen as a key test of this ethically minded approach, which many now think the big battalion investors failed.
Blackman said: ‘It is deeply disappointing that institutional shareholders have fallen for Philip Morris’s rhetoric, rather than examining the facts.
‘Philip Morris continues to make the vast majority of its profits from selling cigarettes, and marketing them to young people, particularly in low and middle-income countries where 80 per cent of smokers now live.’
Bosses to share £5m bonanza
Windfall: Vectura chief executive Will Downie (pictured) could pocket around £1.5million
Vectura’s bosses stand to make close to £5million from the sale to Philip Morris.
Chief executive Will Downie could be in line for around £1.5million for his holding and the more than 900,000 shares he has in an unvested, long-term performance plan detailed in the company’s annual report.
Downie – a fan of 1970s punk bank Joy Division who started his career as a medical sales representative – joined Vectura in 2019.
Finance boss Paul Fry, who has been at the group since 2018, could earn £3.3million.
A City source said: ‘Social – or the “s” in ESG – has always been the ugly duckling and principles on social issues often fall by the wayside.’
Danni Hewson, financial analyst at AJ Bell, said: ‘However good Philip Morris’s intentions the bottom line is with this acquisition it’s playing both sides, making money from tobacco which makes people sick and inhalers which help them feel better.
Philip Morris, which is worth £115billion and traces its origins back to 1847, still makes 75 per cent of its revenues from selling cigarettes.
Vectura makes inhalers and nebulisers – but it also works with major pharmaceutical companies to convert their medicines into powdered forms that can be inhaled.
The group was founded in 1997 by students from the University of Bath and joined the stock market in 2004.
The backlash against Vectura being owned by a tobacco group has already become clear after a major medical conference barred it from taking part.
Vectura had previously been listed as a sponsor and participant at an Oxford Global event on inhaled drug delivery next month.
The British Thoracic Society last night said it would never engage with Vectura and that the company would never be able to attend its conferences and events.
Axa, a top ten investor, said it agreed to sell its 4 per cent because it did not want to be a minority shareholder.
Axa said it was ‘uncomfortable with the ethics behind a tobacco group’s purchase of an inhaler manufacturer’.