Yahoo Finance Block Vectura takeover, Philip Morris investors urged
The UK’s largest lung disease charity has urged shareholders to block a big tobacco takeover of drug maker Vectura ahead of a deadline on Wednesday.
Sarah Woolnough, chief executive of Asthma UK and the British Lung Foundation, urged investors to oppose the £1bn swoop by Philip Morris International (PMI) on Vectura, a company that plays a leading role in tackling diseases caused by smoking.
Writing for The Daily Telegraph (below), Ms Woolnough dismissed claims that the Swiss-headquartered Marlboro maker is seeking to end sales of cigarettes.
She said PMI’s past “actions speak louder than words” and that it “continues to aggressively market [cigarettes] across the globe to get successive generations addicted to smoking, with scant regard for the consequences”.
Vectura would be frozen out of the pharmaceuticals industry if the deal goes ahead, she said.
Vectura shareholders have until Wednesday to decide whether to back the takeover.
PMI has already bought 29.2pc of the company.
Vectura’s other major investors include Axa, Legal & General and Vanguard.
Vectura will not thrive if its backers accept a takeover by Philip Morris
The best thing the cigarette maker could do right now is use its vast profits to back a tobacco levy, writes Sarah Woolnough
This week, shareholders of healthcare company Vectura must decide whether to accept a takeover offer from the world’s largest manufacturer of cigarettes.
The acquisition by Philip Morris International of a company that makes treatments for people with conditions such as asthma and chronic obstructive pulmonary disease (COPD) has rightly attracted a lot of media attention. In this newspaper, Philip Morris’s chief executive Jacek Olczak described his opponents as being “not interested in progress” and claimed they are seeking to prevent the business from its goal of ending all cigarette sales.
As the UK’s leading lung health charity, we have worked for years to support people with diseases linked to a deadly addiction to tobacco. I ask shareholders to consider Philip Morris’s actions across the world over the past decades, which speak far louder than the words of their chief executive, and to think about the practical issues that could prevent a healthcare company such as Vectura flourishing if it is taken over by a tobacco giant.
We’ve known about the damage that cigarettes do to our health since the 1960s. Philip Morris continues to aggressively market them across the globe.
In the UK, it was only six years ago that Philip Morris tried to block a key tobacco control policy – standardised plain packaging for cigarettes – even though evidence showed that removing on-pack branding would reduce the appeal of cigarettes to young people, increase the impact of health warnings and reduce false health beliefs about the harmfulness of smoking. Despite Philip Morris’s opposition, the plain packaging law was successfully introduced in 2017.
In other parts of the world, Philip Morris has made no such efforts to transition away from tobacco. It continues to manufacture cigarettes (more than 2bn per day) and market them in many jurisdictions, especially in low and middle-income countries where large youth populations and lax regulations have led to widespread smoking uptake. In fact, it was only last month that the company bid for a new cigarette factory license in Egypt.
Every year in the UK, 90,000 people will die from conditions caused by smoking, such as COPD and lung cancer. Over 100,000 will be admitted to NHS hospitals for respiratory diseases linked to smoking.
Behind these figures are many human stories of loss and misery – all caused by an addiction to tobacco products. It’s a grandfather who dies from lung cancer before getting the chance to meet his granddaughter. It’s a child who develops asthma because his mother couldn’t give up cigarettes when she was pregnant.
On a practical note, shareholders will no doubt have seen warnings that should Vectura be taken over by a tobacco company, it would be excluded from key health and research networks to stop the cigarette industry having undue influence on public health policy.
This would hamper its ability to continue operating as a viable, research-oriented business. Many NHS clinicians and prescribers have also told us that they would seek to switch from prescribing Vectura products if the company became part of the tobacco industry. We want to see Vectura thrive and for it to continue to be an innovative company delivering ground-breaking treatments for those with respiratory diseases. This will be impossible if it is part of Philip Morris.
Philip Morris talks about a “commitment to a future without cigarettes”. But the best thing the company could do right now is use its vast profits to back a tobacco levy that would support people who have become ill as a result of using its products. That’s what we and many others have spent years advocating for.
The company’s opposition to this measure suggests it is not serious about supporting people with lung disease. Vectura shareholders should ask themselves whether Philip Morris’s actions will really deliver a “smoke-free future” or if its commitments are just hollow words.
Sarah Woolnough is chief executive of Asthma UK and the British Lung Foundation
