Philip Morris International is selling Vectura to Molex Asia Holdings for £150 million ($198 million) cash upfront and potential deferred payments of up to £148 million—about a third of the price it paid for the company three years ago. Vectura will be operated by Molex’ Phillips Medisize unit.
In 2021, PMI paid about $1.2 billion for the U.K. maker of asthma inhalers as part of its efforts to diversify into the pharmaceutical business.
The deal attracted heavy criticism from anti-smoking campaigners who said the cigarette manufacturer should not benefit from a company that offers treatments of ailments caused or worsened by tobacco products.
The fierce opposition played a roll in PMI’s decision to sell the unit at a loss. “Despite the investment and commitment to developing products and therapies vital to patients, unwarranted opposition to PMI’s transformation has impacted Vectura’s scientific engagement and commercial CDMO [contract developing and manufacturing organization] relationships.” PMI wrote in statement.
“With its experience in pharmaceutical drug delivery devices and its global manufacturing footprint, Phillips Medisize is best placed to lead Vectura into the future—while releasing it from the unreasonable burden of external constraints and criticism related to our ownership,” said PMI CEO Jacek Olczak.
Vectura is part of a “health and wellness” unit that also includes Fertin Pharma, the producer of a smoking-cessation aid, that PMI bought for about $820 million in 2021. Last year, PMI took a $680 million impairment charge on the unit after unsuccessful clinical trials and slower-than-expected development of other products.
Selling Vectura will allow PMI to “rid itself of a financially struggling unit,” said Kenneth Shea, a Bloomberg Intelligence analyst. “But it also represents a strategic backpedal to the company’s once-bold ambition to serve the inhaled therapeutics medical market,” he added.
Companies developing vape-like devices to ease medical conditions such as migraines and respiratory diseases continue to face skepticism from health authorities and the public, according to a Reuters article.
The piece details the efforts of Qnovia, MIIST Therapeutics and Greentank, which are exploring the potential of nebulizer technology or heating technology to deliver medications.
The companies say inhalation can relieve pain faster and with fewer side effects than pills. Federico Buonocore, a professor focused on alternative pulmonary drug delivery at Kingston University in Britain, told Reuters that existing inhaled drug delivery devices are clunky and difficult to operate, and so tend to be used wrongly. A vape-like design could solve such challenges, he was quoted as saying.
Qnovia plans to submit drug applications in the U.S. soon and the United Kingdom in 2026 for its device as a nicotine replacement therapy, and launch a clinical trial in September.
Greentank is looking for a pharmaceutical partner to support the development of its heating chip for medicine delivery.
Efforts by traditional tobacco companies to tap into the pharmaceutical market have been hampered by mistrust and opposition from health officials.
Philip Morris International last year scrapped a goal to earn over $1 billion in annual revenue by 2025 from its wellness and healthcare unit, which includes a business making asthma inhalers.
CEO Jacek Olczak said the company had been “too optimistic about how the external environment will accept… Big Tobacco” in industries outside of nicotine. An inhaled aspirin product developed by the unit was also deemed unsuccessful after a clinical trial last year.
Tobacco-backed companies developing Covid-19 vaccines using plant-based technology also faced stiff opposition from health groups, including the World Health Organization.
Buonocore said the stigma associated with tobacco and vaping companies would be difficult for the sector to overcome.
Ispire Technology and Aspire North America have signed a global licensing agreement with the U.S. lifestyle brand Hidden Hills Club.
Under the agreement, Ispire will globally manufacture, distribute and commercialize Hidden Hills’ branded nicotine products, including reduced-risk e-cigarettes. The initial Hidden Hills nicotine products are scheduled to roll out in the United Arab Emirates and South Africa in the coming weeks, followed by the United Kingdom and European Union over the next few months.
“Our partnership with Hidden Hills Club enables us to bring more innovative and reduced-risk nicotine products to a global audience,” said Ispire Co-CEO Michael Wang.
“The 30-year exclusive license will allow us to make significant investments in the Hidden Hills brand, ensuring robust distribution and a deep product portfolio that captures the essence of this iconic lifestyle brand. Hidden Hills’ popularity as a lifestyle brand—encompassing apparel, clothing and cannabis and hemp products—has grown at an exponential rate over the last two years. Partnering with Hidden Hill will help Ispire to capture this west-coast culture and energy, and infuse it into its nicotine product offerings globally, under the Hidden Hills brand flag.”
“Teaming up with Ispire was a strategic decision for us,” said Hidden Hills Club CEO Dre Liang. “Ispire’s expertise in vaping technology and its global distribution network provide the perfect platform to expand our brand into the nicotine products market. We believe this collaboration will redefine the market with products that reflect our brand’s commitment to quality and innovation.”
Over 600 illegal vape shops in New York City have been shut down during Operation Padlock to Protect, Mayor Eric Adams told media.
“Many of them have remained closed,” he said. “We’re gonna stay committed to closing down these shops.”
A Throggs Neck deli was shut down on Wednesday after illegal flavored THC and nicotine vapes were discovered, officials said. The Sheriff’s Office “likely seized $1 million” in illegal products and nine people were arrested, according to authorities, according to media reports.
Some of the products were marketed toward children, Adams said.
“I believe this is a well-organized, almost chain store-type distributer,” Adams said about where the illegal products are believed to be coming from. “They are really supplying not only here in the city, but probably throughout the entire state.”
That didn’t take very long. The global vaping company Plxsur reached its goal of reaching $1 billion in consolidated revenues from its partners in just two years. The company has now successfully partnered with 12 of the world’s leading vaping companies to form what may be the largest and fastest-growing group of independent vaping companies in the world. According to Nigel Hardy, CEO and founder of Plxsur, the company accomplished this with a focus on compliance, governance and reporting, with responsibility at its core.
“We believe having a portfolio of multiple brands is crucial for building a successful reduced-risk product (RRP) business at scale. Our retail sales across the group reflect the impact of Plxsur, which supports adult smokers who have switched to vaping,” explains Hardy. “We have sold products to about 4 million consumers, with retail sales by value of units sold at $1.835 billion. Additionally, our three North Star owned brands, Salt, Allo, and Flavour Beast, are expected to generate retail sales of more than $400 million in 2024.”
Plxsur also has 10 e-liquid manufacturing facilities in six different markets. With that comes the quality management systems to ensure the quality of the raw materials that are coming in and what’s going out. It’s not only about quality control (QC), but also about quality assurance. All e-liquids are manufactured in a minimum ISO 9001-certified facility. Plxsur’s QC program ensures that all products manufactured and distributed meet or exceed all regulatory and legislative requirements in the markets where the products are produced.
ISO 9001 is an international standard specifying quality management system requirements. Organizations use it to demonstrate their ability to consistently provide products and services that meet customer and regulatory requirements. Plxsur only produces its brands of e-liquids. The company does not do third-party manufacturing because the company’s focus is on its products.
Plxsur leadership says its partners have a combined market share representing an estimated 10 percent of the global $19.34 billion vaping market. Hardy said the company is targeting a 20 percent market share in the next five years. The companies include Hale Vaping (Ireland), UEG Holland (Netherlands), DampShop (Belgium), Pro Vape (Latvia), Puff Store (Italy), Nobacco (Greece), Ritchy Group (Czech Republic), Vape Empire (Malaysia), Pacific Smoke (Canada) and CK Complex (Poland).
“The past two years have seen a huge amount of financial and operational progress for Plxsur, and we have grown to become the world’s largest and fastest-growing group of independent vaping companies with consolidated revenues of over $1 billion,” said Hardy.
In 2021, Plxsur was founded by David Newns, Charlie Yates, and Nigel Hardy. The three entrepreneurs shared a vision for the vaping industry and discussed how they could work together to achieve their goals. They believed the key to success was respecting and supporting entrepreneurship while empowering local management teams. They planned to create a global network of independent vaping companies that were both the largest and the most responsible in the industry.
Plxsur, under Hardy’s leadership, believes in improving the businesses it brings on board by focusing on three key aspects of business strategy: governance, compliance, and reporting. Compliance involves adhering to various rules and regulations in the countries and communities where Plxsur businesses operate. This includes regulatory, communication, and marketing compliance, as well as legal compliance related to finance and jurisdiction.
“We’re at a very important and exciting stage in our journey. The companies in that group are not only the best at what they do in their respective markets, but importantly, they share our values.
“They put the consumers first, think big, and take responsibility seriously. All our companies want to make a real difference in the lives of adult smokers by contributing to a smokeless society. We now have a presence in Europe, Asia, and North America, covering the full vaping value chain from manufacturing, wholesale, distribution, and direct-to-consumer, both online and through our global network of over 800 specialist vaping stores.”
In 2023, group revenues increased 40 percent on the previous year to more than $1 billion, with an adjusted EBITDA of over $200 million. The outlook for the global vaping market is strong, and last year, Plxsur commissioned an independent research report that Hardy said is the “most comprehensive consumer study conducted on vaping to date”, using data from an online panel of over 30,000 consumers in six of Plxsur’s markets.
“The opportunity available for RRP across our 12 markets is significant, and I am pleased that our Global Vaping Market Snapshot vindicates the belief that not only will this sector continue to grow at pace, but that vaping is quickly becoming the most popular form of RRP in the market, with adult smokers who switch to vaping likely to remain loyal by navigating the regulatory framework,” he explained. “Our team has established a center of excellence leading a program of capability development to ensure management teams at a local level of the skills to deliver sustained value growth.”
Plxsur and its partners continue raising the bar as a responsible vaping group. All its companies have now committed to the six Plxsur standards (product compliance, manufacturing safety, responsible marketing, youth access, child protection and third-party product compliance) that address the biggest issues the vaping industry faces today. The company has also supported local teams across the group and guided companies in engaging with governments on policy development, particularly around preventing youth access.
“We’re focused on migrating consumers from disposable vapes to rechargeable pod and open systems. This is a key priority for Plxsur and our companies are already delivering huge results. In Q3 of 2023, I’m delighted that our Italian business, Puff, successfully migrated many of their consumers to pod and open devices through its launch as an exclusive distributor of new-to-market pods and e-liquids,” said Hardy. “To keep the momentum going, our portfolio companies have exciting plans to expand their range of pod systems in the first half of this year.”
Unlike traditional business acquisitions, Hardy explained that the company’s partners are not selected based on their financial worth. Plxsur is highly selective in its choice of partners, and financial size is not the only factor determining whether a company is suitable to join the Plxsur team. Hardy cited the example of Pro Vape, a company headquartered in Riga, Latvia, which started its business in late 2016 and met all the necessary criteria to become a Plxsur partner.
“The Baltic market is not particularly a huge market for vaping. What Pro Vape has is a significant presence in Europe,” said Hardy. “Only 40 percent of their business is domestic, and 60 percent is across the rest of Europe.”
Plxsur has specific criteria that businesses must meet before partnering with them. Firstly, the company must be a leader in its channel, whether it is business-to-business or business-to-consumer, or a leading player in its market. Currently, all of Plxsur’s partners meet this benchmark. Secondly, having a healthy balance of company-owned brands within the portfolio is essential, with Plxsur aiming for at least 50 percent of its revenues to be driven by such brands. Thirdly, the most crucial criterion is people.
“Our ability to retain our unique entrepreneurial spirit while growing at a rapid pace has been pivotal to our success over the past two years,” said Hardy. “We remain committed to achieving long-term value for all stakeholders, with responsibility at the core of everything we do. Supported by several tailwinds, including evolving market dynamics and customer preferences, we remain confident in Plxsur’s medium-term prospects and our ability to continue our trajectory to promote responsibility in the sector, achieve our target of over $15 billion in revenues by 2033.”
To achieve the lofty goal, Hardy said Plxsur is well placed to capitalize on the growing trend of vaping across the globe, unlock future value, and play a leading role in shaping the sector’s future on a platform of responsibility. He said Plxsur excels at creating a distinctive, innovative business leadership environment while growing at a pace pivotal to the company’s success over the past two years.
“We continue to see increasing regulation around vaping, particularly disposables, flavors, and marketing,” said Hardy. “At Plxsur, we see regulation as a force for good and encourage appropriate regulation and enforcement to tackle illicit and irresponsible trading behaviors. Last year, we submitted Plxsur’s response to the UK government’s open consultation on creating a smoke-free generation, and we continue to engage with regulators worldwide.
“This engagement with responsibility at the core of everything we do places Plxsur in a prime position to continue to grow, lead the industry, and shape the future of vaping.”
Ispire Technology has partnered with Touchpoint World Wide, parent to Berify, a platform that links physical products to the digital world, digital engagement, and brand protection, and Chemular International, a multi-disciplinary regulatory consulting firm to form a joint venture.
The group hopes to expedite innovation in the e-cigarette technology space, including developing secure, user-friendly solutions for age verification and age-gating nicotine vapor devices.
“The U.S. market is ripe for technological disruption that addresses age-verification, safety, and counterfeit issues,” said Berify Founder and CEO Dan Kang. “Our mission is also to create smart products that generate a new level of consumer satisfaction. We plan to achieve this by leveraging our blockchain authentication, tokenized rewards, and creating true decentralization while keeping companies in control of their products and data.”
Leveraging Berify’s multi-patented technology, Chemular’s regulatory consulting and PMTA expertise, and Ispire’s hardware capabilities, the joint venture’s goals are to introduce an industry-standard age-verification solution for vapor devices as well as the submission of PMTA applications that incorporate new technologies across the U.S. e-cigarette market.
“Our commitment is not only to create next-gen vapor devices but also to elevate market education. This venture includes additional partnerships that will bring together biometric identity and access control, ensure the solution is embedded into vapor devices during manufacturing, and provide safety, security, and privacy for consumers,” Kevin Burd, CEO of Chemular, added. “It is also a testament to our dedication to positively shaping the future of vape hardware innovation.”
Some of the possible solutions include:
Next-generation e-cigarette hardware with a user-friendly point-of-use age-verification and geo-fencing capability that eliminates the use of hardware in certain designated areas such as schools and sensitive areas;
E-cigarettes with end-to-end a range of dynamic features such as authentication, direct-to-consumer engagements, and exclusive offerings all built on the foundations of blockchain technology;
A real-time biometric identity platform for user access controls, creating added security and reliability that deters counterfeiting.
“By combining our collective expertise in hardware, blockchain and regulatory consulting, we aim to set a new standard for age verification, security and overall quality in the e-cigarette space,” said Ispire Technology Co-CEO Michael Wang. “Our hope is that this JV will be a large step forward in innovative device control, safety, counterfeit prevention and enhanced user experiences that increase overall market and consumer satisfaction.”
Chemular and IGEN have formed a strategic alliance to create a new Compliance as a Service (CaaS) platform focused on streamlining the burden of compliance to small-sized and medium-sized companies who need turnkey solutions for Prevent All Cigarette Trafficking (PACT) Act, excise tax reporting and registration services.
“The time and effort required to stay compliant with federal, state and local laws is increasingly burdensome for small-[sized] to mid-sized companies in regulated categories,” said Jason Carignan, chief commercial officer of Chemular, in a statement. “Except for larger players, most companies don’t have a dedicated compliance officer who can ensure every regulatory detail is addressed so their products can stay on the market—especially in industries like ours, where the rules change rapidly. Chemular, now powered by the IGEN backbone, will be able to significantly scale its turnkey compliance service offering to a growing portfolio of tobacco manufacturers and distributors.”
In addition to saving time, utilizing the new CaaS platform can provide regulated companies with many other benefits, according to a company press release, including: streamlined remittance and reporting for excise tax, PACT Act, state registrations, and license capture; optimized growth opportunities by allowing employees and leadership to focus on what they do best: developing products and services; avoiding penalties with scaled compliance efforts that easily adapt to new markets with potentially different laws and regulations as the company grows; and reducing risk by monitoring real-time data and evolving regulations while establishing automated procedures that can minimize errors and detect fraud.
Failure to adhere to compliance guidelines can be costly for companies, leading to large fines and expensive sanctions, regulatory scrutiny and loss of trust in the marketplace. In some cases, noncompliant companies can have their products removed from store shelves, giving space to competitors who were able to better adjust to changing regulations.
“Compliance can be a long-term strategic advantage, yet most emerging businesses don’t have the resources and expertise to keep up with the growing complexity in regulatory requirements,” said Ryan Padget, president of IGEN. “We’re excited to bring our technology to Chemular, whose clients are regularly faced with regulatory hurdles, like PACT and excise tax reporting. This is just the beginning for our partnership—one that we see as a win for the industry as a whole.”
Along with this announcement, the Chemular and IGEN teams will be appearing at the tobacco industry’s largest trade show, TPE24, providing resources and education to the show’s retail attendees. Chemular will be hosting the “Fortify Your Future” educational sessions of the show from Jan. 30, 2024, to Jan. 31, 2024, and will be available to speak with attendees at their second-floor meeting room located next to the educational session.
Companies interested in becoming compliant or streamlining their current processes can visit www.chemular.com for more information.
Vaporesso announced it won more than 130 international and authoritative awards from several industrial organizations and media outlets.
In 2023, China-based Vaporesso, one of the largest open-system vaping hardware manufacturers in the world, received recognition from media outlets such as Ecigclick, Vapouround and VersedVaper, winning more than a dozen best international brand awards.
“This achievement marks a significant milestone in the brand’s journey to become a global leader in the sector of open-system vaping devices,” the company announced in a statement. “Through consistent efforts in research, development, and customer satisfaction, the brand has garnered recognition and acclaim for its high-quality products and cutting-edge technology.”
Vaporesso also won several professional international design awards, including the MUSE Design Awards, the German Design Awards, the London Design Awards, and the French Design Awards.
In addition, several of the brand’s innovative products, such as the XROS 3 series, LUXE X series, ARMOUR, and Vaporesso COSS, have won numerous authoritative media awards. Notably, COSS, won a Golden Leaf Award for Innovation during the Global Tobacco and NIcotine Forum (GTNF) 2023 held in Seoul, Korea.
“These numerous awards represent not only Vaporesso’s remarkable achievements but also its contributions to the overall growth and advancement of the industry. Vaporesso remains true to its original aspiration, believing that actions create the extraordinary,” the release states. “It’s committed to adhering to its three core brand values of innovation, reliability and style.”
Juul Labs has announced a company restructuring aimed at reducing operating costs and positioning the company to continue to advance its mission during a period of regulatory and marketplace uncertainty.
According to a press release, the principal aim of this restructuring is to enable the company to maximize profitability and cash-flow generation while continuing to invest in its core priorities, which include delivery of high-quality products to its commercial partners, ongoing development of next-generation products, engagement with the U.S. Food and Drug Administration regarding Juul’s pending and possible future market authorization applications, and commercial growth consistent with compliance with all applicable laws and regulations.
With these operating cost reductions, Juul Labs says it is positioned to increase its adjusted EBITDA margins and generate meaningful free cash flow before litigation settlements. In doing so, the company will reduce its need to access capital pre-premarket tobacco product application, extend its time horizon to continue its pursuit of market orders from the FDA and generate positive equity value as the company pays down liabilities over time.
Juul says it remains fundamentally optimistic about the prospects for Juul Labs Inc.—“a view rooted in our belief that our technology and our pipeline of new innovations represent the most valuable ever brought forward to transition adult smokers away from cigarettes while combating underage use,” the company wrote on its website.
The West Indian Tobacco Company (WITCO) is planning to introduce vaping products and is researching cannabis use, reports Trinidad Express.
“The research is clear, [vaping is] 95 percent safer than cigarettes, so the same risk profile does not exist,” said Raoul Glynn, WITCO’s managing director. “That is why you have Public Health in the United Kingdom giving vaping products to 1 million consumers in the U.K. We saw it in T&T for Carnival, where people felt more comfortable vaping than smoking cigarettes.”
“It’s not one or the other because we will continue to have cigarettes for consumers who want to smoke, but we also want to have the vaping products for those consumers as well,” Glynn said.
Glynn said WITCO is actively researching the effects cannabis can have on users. “It has very relaxing elements and then you have some elements that do not have a positive effect on people. So we have to be careful, and WITCO would not bring something to market that would put people at risk. The group has done extensive research and concluded one in the U.K. with consumers. We will take those learnings and see if it is ready to go to market, but at this stage, I think it is a bit far off,” he said.
