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Vectura barred from major medical conference after Philip Morris takeover

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Inhaler
Inhaler

British inhaler developer Vectura has been barred from a major medical conference amid a growing backlash over its £1bn takeover by tobacco giant Philip Morris International.

The drugmaker had been listed as a sponsor and participant at an Oxford Global event on inhaled drug delivery in London next week, but has been banned from taking part after other speakers threatened to withdraw.

Philip Morris International, which makes Marlboro cigarettes, seized control of Vectura on Thursday after securing 74.8pc of the company’s shares, fending off a rival offer from private equity firm Carlyle Group.

One of Vectura’s largest shareholders, Legal & General Investment Management (LGIM), confirmed it had accepted the offer and vowed to “exert influence from within”. It has built a reputation for speaking out on the importance of ethical investing and in 2017 launched a tobacco-free pension fund for Cancer Research UK.

Nicholas Hopkinson, professor of respiratory medicine at Imperial College London, said the decision to remove Vectura from the event was “a clear and immediate example” of the firm being excluded from scientific activities.

Scientists working for Vectura were now likely facing a moral quandary over their future at the company, he added. “If you stick with Vectura you’re stuck with the tobacco industry possibly for the rest of your career.”

Oxford Global, the life sciences conference operators behind the event, declined to comment.

The Philip Morris takeover of Vectura has faced stiff opposition from the scientific community and anti-smoking charities.

Sarah Woolnough, chief executive of Asthma UK and the British Lung Foundation, accused Vectura of having “sold out millions of people with lung disease”, adding that it had “prioritised short-term financial gain” over its long-term viability as a business.

In a letter to the public health minister, Jo Churchill, 35 charities, public health experts and clinicians renewed calls on the Government to intervene, warning the merger could lead to greater tobacco industry influence over public policy.

“We think it clear that this deal is not in the public interest and that it creates perverse incentives for PMI to increase harm through smoking so they might then profit again through treating smoking related diseases,” they said.

Legal & General, which had been a top 10 shareholder in Vectura, said it had spent “considerable time” reviewing the environmental, social and governance factors and financials of the deal before backing the bid.

“During this highly sensitive bid process, we came to the conclusion that based on the information available to us, the sale of our shares was the optimal result for our clients, investors and the futures of both companies. As a responsible investor and steward of our clients capital, our approach is to engage with companies and exert influence from within,” a spokesman said.

Several high-profile respiratory organisations are now poised to cut links with Vectura due to ethical firewalls that prohibit work with the tobacco industry.

The British Thoracic Society said the deal was “inappropriate, unethical and should have been prevented”, adding that companies and individuals who have a relationship with Vectura now fell foul of its policies.

The European Respiratory Society said the merger was “not suitable, ethical, or in the best public interest”, adding that it was also considering the implications on its partnerships.

An industry source said further distancing by the medical community was inevitable, adding that it was a case of “when it happens not if it happens”.

Vectura’s ability to win future contracts from partners such as Novartis, Bayer and Recipharm will now also be in doubt due to ethical concerns. All three companies declined to comment on their future relationships with Vectura.

The takeover also raises questions over Vectura’s tie-ups with universities due to similar rules about academic institutions accepting funding from tobacco firms.

It is understood that Imperial College London, which has previously accepted funding from Vectura for research into viral lung inflammation, will not pursue any future partnerships once the deal goes through.

In a further blow to Vectura’s standing in the medical world, critics have warned that the link to PMI could prevent it from publishing articles in top publications such as the British Medical Journal and the Lancet.

PMI has defended the deal, insisting it fits with its strategy of expanding beyond tobacco and nicotine products into a broader healthcare company.

Chief executive Jacek Olczak told The Telegraph last month that opponents of the deal were “not interested in progress, but rather in settling old scores”.

On Thursday he pledged that the takeover would provide Vectura’s scientists “with the resources and expertise to grow their business”.

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