Philip Morris has bought oral drug delivery specialist Fertin Pharma for 5.1 billion Danish krone ($813 million). The takeover will give the Marlboro manufacturer control of a range of drug delivery technologies including chewing gums used in the administration of nicotine.
Denmark’s Fertin was focused solely on medicated chewing gum when EQT Private Equity bought a 70% stake in the business in 2017. With the support of EQT, Fertin has expanded its oral drug delivery portfolio over the past few years, adding controlled-release tablets, powders that dissolve under the upper lip and solid dosage forms that liquify when chewed to its toolkit.
Fertin provides the technologies to pharma and healthcare companies as a contract development and manufacturing organization. Yet, Fertin is being acquired by a company that made its name in cigarette and tobacco manufacturing. Philip Morris’ interest in Fertin reflects a pivot designed to establish a portfolio of smoke-free products.
“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,” Philip Morris CEO Jacek Olczak said in a statement.
Olczak framed the acquisition as a way for Philip Morris to further its ambition to generate more than half of its net revenues from smoke-free products by 2025. Philip Morris is aiming for at least $1 billion of those revenues to come from products other than nicotine.
The takeover includes manufacturing and R&D sites in Denmark, Canada and India where Fertin employs around 860 people. Fertin said its earnings before interest, taxes, depreciation, and amortization have grown almost 50% since EQT acquired its stake in the business.