Jacek Olczak, CEO of Philip Morris International, defended the tobacco company’s intentions to buy British pharmaceutical company Vectura Group, telling CNBC that it is steadfastly committed to eliminating cigarette smoking.
“We can stop and continue selling cigarettes, or we can at least do something with science and technology to significantly reduce the damage caused by smoking,” Olczak said on Closing Bell. “I believe that what we are doing is absolutely right. … Nothing and no one will stop us in our transformations from quitting smoking.”
Earlier this month, Philip Morris announced a purchase agreement for Vectura for an enterprise value of $ 1.2 billion. However, the proposed acquisition has met with hesitation and criticism from anti-smoking groups and the UK government, who consider a collaboration between a tobacco company and a company specializing in inhalation medicines such as asthma to be unsuitable. Tobacco smoke is a “powerful cause of asthma,” according to the Cleveland Clinic.
Philip Morris’s offer for Vectura outperformed a previous offer from private equity firm The Carlyle Group. Olczak said critics of the proposed deal for Vectura are “against the transformation of the tobacco industry”.
Philip Morris, who makes and sells cigarettes and smoke-free nicotine products outside the United States, is trying to change its image. In February, the company announced its goal of generating more than 50% of its total net sales with smoke-free products by 2025. The company also aims to have net sales of at least $ 1 billion by 2025 from its “Beyond Nicotine” products alone. such as the administration of respiratory drugs and “self-care wellness”.
Philip Morris shares fell about 3% Tuesday after the company released its second quarter financial results. Sales of $ 7.59 billion fell short of Refinitiv’s forecast of $ 7.69 billion. Still, the stock is up nearly 15% since the start of the year.
Olczak said he thought it was a “very strong second quarter”. He also said the company was more optimistic about global economic reopening, especially in the European market, than it was at the beginning of 2021.