Dive Brief:

• Philip Morris has taken control of inhaled medicine specialist Vectura after persuading most investors to sell their shares.
• After winning a tug of war with a private equity group for Vectura, the tobacco manufacturer has now "acquired or received valid acceptances" for just shy of 75% of its shares. Passing the 50% threshold makes the offer unconditional.
• Philip Morris has secured investor buy-in despite continued opposition to the takeover from clinicians and reports that Vectura staff are concerned about the change in ownership.

Dive Insight:

Philip Morris has made a string of healthcare takeovers in 2021, snagging inhaled aspirin developer OtiTopic and oral drug delivery specialist Fertin Pharma in back-to-back deals. The takeovers are part of Philip Morris' push to generate more than half its net revenues from smoke-free products by 2025. The Marlboro cigarette manufacturer identified Vectura as a company that can support that objective.

The attempt to buy Vectura has been more challenging and fractious than the other deals, though. First, Philip Morris needed to outbid private equity firm Carlyle Group. Then, having succeeded with a £1.1 billion ($1.5 billion) bid, Philip Morris faced concerted pressure from healthcare groups.

In July, the American Lung Association and the American Thoracic Society called Philip Morris' bid for Vectura "reprehensible" and last month 35 health charities, public health experts and doctors urged investors not to sell their shares.

That effort has failed, with Philip Morris revealing on Thursday that 74.77% of shares are now in its grasp. Philip Morris can delist Vectura once it owns 75% of the company and can force holdouts to sell once it passes the 90% threshold. 

However, the difficulties could continue even once Philip Morris has full ownership of Vectura. This week, U.K. newspapers reported internal and external challenges. The Formulation & Delivery UK conference has removed Vectura as a sponsor and participant. Vectura was listed as a bronze sponsor but is now absent from the conference website. A Philip Morris researcher is still listed as a speaker. The conference reportedly removed Vectura after clinicians threatened to boycott the event.

Philip Morris also faces potential internal unrest. A former senior Vectura executive told The Times "employees are concerned" about the change in ownership. Philip Morris has acknowledged the mood, with CEO Jacek Olczak asking Vectura staff to "allow us to demonstrate to you who we are as a company" even if they have "concerns about our intent."