The acquisition advances PMI’s goal to become a majority smoke-free business by 2025 and creates growth opportunities beyond nicotine
LAUSANNE, Switzerland–(BUSINESS WIRE)–Jul. 1, 2021– Philip Morris International Inc. (PMI) (NYSE: PM) announced today it has entered into an agreement to acquire Fertin Pharma A/S (Fertin Pharma), a leading developer and manufacturer of innovative pharmaceutical and well-being products based on oral and intra-oral delivery systems, for an enterprise value of DKK 5.1 billion (approximately USD 820 million1).
“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,” stated Jacek Olczak, Chief Executive Officer. “Both PMI and Fertin share a commitment to science and consumer-centric innovations for better living, and I am delighted we have reached this agreement. Fertin’s diverse portfolio of technologies, evolving business mix, and world-class expertise will enrich our innovation pipeline and capabilities, providing speed and scale in oral delivery to support our 2025 goals of generating more than 50% of our net revenues from smoke-free products and at least USD 1 billion from products beyond nicotine.”
Fertin Pharma is a privately held company with more than 850 employees and operations in Denmark, Canada, and India. It is a leading contract development and manufacturing organization (CDMO), specializing in the research, development and production of gums, pouches, liquefiable tablets, and other solid oral systems for the delivery of active ingredients, including nicotine, where it is a leading producer of Nicotine Replacement Therapy (NRT) solutions. The company and its employees bring significant scientific experience and know-how to the development of innovative solutions, driving above-category growth across new and existing business areas. In 2020, Fertin Pharma generated net revenues of DKK 1.1 billion (approximately USD 160 million2). The transaction value represents a multiple of around 15 times Fertin Pharma’s 2020 EBITDA3.
Commenting on this milestone, Taylan Suer General Manager of PMI Lebanon said: “The recent acquisition of Fertin Pharma marks a stepping stone in our journey towards a smoke-free future whereby we will gain substantial know-how for the development, formulation and commercialization of current and additional smoke-free platforms. Through this acquisition, PMI will be able to provide superior consumer experience through a broad range of smoke-free products and help reduce smoking prevalence globally and in Lebanon.”
With the acquisition of Fertin Pharma, PMI will:
- Leverage on Fertin’s oral delivery platforms to access a range of promising technologies—complementary to PMI’s inhalation expertise—for scientifically substantiated botanicals and other selfcare wellness products, including over-the-counter solutions and supplements that improve people’s lives in areas such as sleep, energy, calm, and focus.
- Further build our overall platform of R&D and manufacturing expertise in nicotine and beyond nicotine product areas through the addition of Fertin’s strong capabilities and skilled workforce, including 80 scientists.
- Accelerate progress on key sustainability priorities, notably in broadening the reach and access of our smoke-free alternatives to adult smokers around the world to accelerate the end of smoking and building a strong beyond nicotine business.
Earlier this year, PMI announced its goal to generate more than 50 percent of its total net revenues from smoke-free products by 2025. In addition to its continued commitment to achieve a smoke-free future, PMI aims to leverage capabilities in life sciences, product innovation, and clinical expertise to expand its portfolio beyond tobacco and nicotine, with scientifically substantiated products and solutions that improve people’s lives and generate a net positive impact on society.
Philip Morris International: Delivering a Smoke-Free Future
Philip Morris International (PMI) is leading a transformation in the tobacco industry to create a smoke-free future and ultimately replace cigarettes with smoke-free products to the benefit of adults who would otherwise continue to smoke, society, the company, its shareholders and its other stakeholders. PMI is a leading international tobacco company engaged in the manufacture and sale of cigarettes, as well as smoke-free products, associated electronic devices and accessories, and other nicotine-containing products in markets outside the U.S. In addition, PMI ships versions of its IQOS Platform 1 device and consumables to Altria Group, Inc. for sale under license in the U.S., where these products have received marketing authorizations from the U.S. Food and Drug Administration (FDA) under the premarket tobacco product application (PMTA) pathway; the FDA has also authorized the marketing of a version of IQOS and its consumables as a Modified Risk Tobacco Product (MRTP), finding that an exposure modification order for these products is appropriate to promote the public health. PMI is building a future on a new category of smoke-free products that, while not risk-free, are a much better choice than continuing to smoke. Through multidisciplinary capabilities in product development, state-of-the-art facilities and scientific substantiation, PMI aims to ensure that its smoke-free products meet adult consumer preferences and rigorous regulatory requirements. PMI’s smoke-free product portfolio includes heat-not-burn and nicotine-containing vapor products. As of March 31, 2021, PMI’s smoke-free products are available for sale in 66 markets in key cities or nationwide, and PMI estimates that approximately 14.0 million adults around the world have already switched to IQOS and stopped smoking. For more information, please visit www.pmi.com and www.pmiscience.com.