Tag: Philip Morris International

  • PMI to Record £220 Million Loss on Vectura Sale

    PMI to Record £220 Million Loss on Vectura Sale

    Image: Aliaksandr Marko

    Philip Morris International expects to record a record loss of about £220 million ($198 million) on the sale of its inhaled-therapeutics Vectura Group unit to Molex Asia Holdings in the third quarter, reports The Wall Street Journal, citing a securities filing.

    On Sept. 17, PMI’s pharmaceutical subsidiary, Vectura Fertin Pharma, announced it would sell its Vectura Group business to Molex. The company acquired Vectura Group in 2021 for $1.24 billion as part PMI’s drive to diversify beyond nicotine.

    The company now says that “unwarranted opposition” to its transformation has affected Vectura Group’s engagement with the scientific community and its commercial relationships.

    The remaining units of Vectura Fertin Pharma will continue to operate under a new corporate identity and develop oral consumer health and wellness offerings, as well as inhaled prescription products for pain management and cardiovascular emergencies.

  • Activists Slam IQOS Maker for Cellulose Heat Sticks

    Activists Slam IQOS Maker for Cellulose Heat Sticks

    Photo: Kuznyechova Yevgenia

    Anti-tobacco activists contend Philip Morris International is trying to circumvent the Dutch ban on flavored tobacco and vape products with its Levia heat sticks, reports Dutch News.

    Made with cellulose rather than tobacco, Levia heat sticks are considered an herbal product and are thus not covered by country’s tobacco legislation. The sticks retail online for €6.60 ($7.21) per pack of 20 and are sold in two flavors—”island beat,” which is menthol, and berry-flavored “electro-rouge.”

    The Netherlands banned menthol in cigarettes in May 2020 and outlawed flavored vape products in early 2024.

    Campaign group Rookvrije Generatie says Levia “a trick” to keep on selling smoking products with flavor. “They might not contain tobacco but they are packed with addictive nicotine,” spokesman Dave Krajenbrink was quoted as saying.

    Legislators are reportedly considering an amendment that would extend the flavor ban to tobacco-free nicotine products.

  • PMI Urges More Collaboration Against Illicit Trade

    PMI Urges More Collaboration Against Illicit Trade

    Photo: PMI

    International collaboration, stringent regulation and enforcement are the cornerstones in the fight against illicit trade, according to Rodney van Dooren, head of illicit trade prevention at Philip Morris International.

    Speaking at a trademark and brand protection conference, held in Delhi, July 23-24, van Dooren pointed out how prohibition has not been a viable option, while regulation and enforcement would be the solution to curb illicit trade.

    “Approximately 12 percent of the global cigarettes consumed are illicit, which impacts governments across the globe to the tune of $40.5 billion in tax losses, van Dooren said.

    “According to the Euromonitor report, one in four cigarettes consumed in India is illicit which translates to close to $2 billion in tax losses. There are various smuggling routes around the world for both counterfeit and contraband products, making this challenge not a domestic but a transnational issue that requires transnational solution.”

    Van Dooren urged authorities to better leverage the existing free trade agreements and provisions within the World Trade Organization to raise awareness with transit and source countries.

    “The next recommendation is to promote harmonization of existing gold standard regulations around ASEAN, supported by implementing rules, including the law enforcement agency that has jurisdiction and the related penalties,” he noted.

    “The adoption of the regulation requires manufacturers and exporters to ensure that the goods being exported comply with the destination market regulation. Additionally, in transshipment, adopt regulation that allows for inspection of suspicious shipments and exercise jurisdiction by Customs or any appropriate law enforcement agency on IP-infringing violations. Lastly, strengthen domestic enforcement effectiveness by enhanced cooperation with the legal industry and inter-law enforcement agency cooperation.”

  • PMI Mysteriously Postpones U.S. Launch of IQOS

    PMI Mysteriously Postpones U.S. Launch of IQOS

    Credit: F Armstrong Photo

    Philip Morris International has postponed the test launch of its IQOS heated tobacco device in the U.S. to the fourth quarter, reports Reuters. The company declined to say why.

    The pilot was earlier scheduled to run in Austin, Texas, in the second quarter, for which the company reported results on the day.

    Anti-tobacco activists have been seeking to derail the U.S. introduction of IQOS, arguing among other things that PMI exaggerates the number of people who have quit smoking regulator cigarettes using IQOS.

    In a joint letter to the U.S. Food and Drug Administration dated June 27, six health groups cited yet-to-be published independent studies contradicting PMI’s findings about how many IQOS users completely switch to the device from cigarettes.

    Meanwhile, PMI said the impact of the EU ban on flavored heated tobacco in the European Union has had a “slightly greater” impact on IQOS sales than previously assumed.

    This led the company to temper its expectations for volume growth in the heated tobacco category to around 13 percent for the full year, down from between 14 percent and 16 percent expected earlier.

  • Vapes, Modern Oral Product Sales Boost PMI Income

    Vapes, Modern Oral Product Sales Boost PMI Income

    Photo: PMI

    Philip Morris International’s operating income jumped 34.2 percent to $3.44 billion for the quarter that ended June 30. On an adjusted basis, operating income rose 3.5 percent to $3.66 billion. Net revenues were $9.47 billion, compared with $8.97 billion in the comparable 2023 quarter.

    During the quarter, PMI shipped 157.6 billion cigarettes, 35.5 billion heated tobacco units and 4.2 billion oral smoke-free products, a category that excludes snuff, snuff leaf and U.S. chewing tobacco.

    The smoke-free business accounted for 38.1 percent of PMI’s total quarterly revenues, up 2.7 percentage points from the comparable 2023 period. Oral smoke free products experienced the largest volume gains, growing by 20 percent from second quarter last year.

    This growth was driven by primarily the popularity of Zyn nicotine pouches in the U.S., where shipments reached 135.1 million cans, representing growth of 50.3 percent versus the prior-year quarter. The company expect Zyn sales to reach 580 million cans in 2024.

    Scrambling to fulfill ferocious U.S. demand for Zyn, PMI recently announced a $600 million investment in a new nicotine pouch factory in Aurora, Colorado.

    Quarterly heated tobacco product sales were strong in Japan, following an expansion of the IQOS product range, as well as Greece, Hungary and Spain. In Japan, Philip Morris grew its market share for heated tobacco by more than 3 percentage points to more than 29  percent.

    The company will begin a trial of IQOS in Austin, Texas, USA, in the fourth quarter of this year, according to Chief Financial Officer Emmanuel Babeau.

    “The excellent momentum of our smoke-free business continued with an outstanding second-quarter and first-half performance,” said PMI CEO Jacek Olczak in a statement.

    “The powerful combination of excellent underlying performance and proactive measures across all categories enabled our business to outperform once again, and we are on track for a strong 2024. As a result, we are raising our full-year guidance, despite currency headwinds.”

  • Health Groups Contest IQOS Quit-Rate Data

    Health Groups Contest IQOS Quit-Rate Data

    Photo: Arkadiusz Fajer

    Anti-tobacco activists are questioning Philip Morris International’s figures on the number of people who have quit smoking using the company’s bestselling heat-not-burn device, IQOS, reports Reuters.

    The move comes as the U.S. Food and Drug Administration is considering PMI’s application for renewal of its IQOS3 exposure modification order, along with the company’s premarket tobacco product applications for IQOS Iluma and request for permission to make reduced exposure claims for that product.

    In a joint letter to the U.S. Food and Drug Administration, dated June 27, six health groups, including the Campaign for Tobacco-Free Kids, the American Academy of Pediatrics and the American Lung Association, cited yet-to-be published independent studies contradicting PMI’s findings about how many IQOS users completely switch to the device from cigarettes.

    According to letter writers, the International Tobacco Control Project (ITC) at Canada’s University of Waterloo found a far lower rate of IQOS users had quit smoking in Japan and Korea than estimates from PMI.

    PMI estimates more than seven out of 10 of its registered IQOS customers globally have quit cigarettes. A 2023 PMI application to the FDA emphasized that the majority of IQOS users were using IQOS exclusively.

    However, the ITC’s researchers put the percentage of all IQOS users that had quit smoking at just 15 percent in Japan and 30 percent in Korea in 2021.

    Users most commonly used IQOS and cigarettes simultaneously, often leading to an overall increase in tobacco consumption, the ITC researchers found.

    PMI pointed to a 2019 Japanese government health survey, where 75 percent of respondents who reported using heated tobacco said they did not smoke.

    However, a paper published this year, led by researchers from Georgetown University, highlighted flaws in the government’s survey, including changes to the question format that can lead to under-reporting of smoking.

    Other surveys have also found higher rates of dual use than the government, it said.

    In addition to questioning the smoking cessation rates quoted by PMI, the health groups accused the multinational of making deceptive statements wrongly suggesting that the FDA has found IQOS reduced the risk of disease, citing examples of such statements in the U.S., Kazakhstan, the Philippines and Mexico.

    A PMI spokesperson told Reuters the language flagged by campaigners was, in the company’s view, compatible with the FDA’s orders.

    “Wherever we discuss our science and our products, we do so in accordance with all applicable laws,” the spokesperson was quoted as saying.

  • PMI to Invest Millions in Colorado Zyn Production

    PMI to Invest Millions in Colorado Zyn Production

    Photo: PMI

    Philip Morris International will invest $600 million in a factory in Aurora, Colorado, to help meet U.S. consumers’ growing appetite for the company’s Zyn nicotine pouches. The factory is poised to begin operations by the end of 2025 with regular production starting in 2026.

    “PMI and its U.S. affiliates are accelerating their mission to move adults who smoke away from cigarettes in the U.S. by investing in new U.S. manufacturing capacity to meet the increasing demand for nicotine options that are scientifically substantiated as better alternatives,” said PMI Americas President and U.S. CEO Stacey Kennedy in a statement.

    “We believe Colorado is likeminded in its commitment to innovation, economic opportunity and public health, and we’re eager to work with the state and its talented workforce as we expand our U.S. manufacturing presence.”

    Sales of Zyn jumped 80 percent in the first quarter, leaving PMI struggling to keep up with demand. Retail stores have been experiencing Zyn shortages, with some even limiting the number of cans customers can buy each month.

    Supply was further constrained after the company decided to halt online sales nationwide in June following a subpoena in the District of Columbia asking for information on the sale of flavored pouch products that are banned there.

    PMI is also increasing production of Zyn at its factory in Owensboro, Kentucky. In addition to meeting U.S. demand, the investments will also help create capacity for exports, according to PMI.

    Zyn accounted for more than 70 percent of the $8.6 billion nicotine pouch market in 2023, according to sources. Given the relatively young age of the category, there is little brand loyalty, and analysts believe continued supply constraints may prompt some consumers to defect to other brands.

  • PMI Suspends Online Zyn Sales Due to DC Probe

    PMI Suspends Online Zyn Sales Due to DC Probe

    Photo: Swedish MAtch

    Philip Morris International halted sales of Zyn nicotine pouches on its U.S. website as Washington, D.C., officials investigate the company’s compliance with the district’s ban on the sale of flavored tobacco products, reports The Wall Street Journal.

    On June 17, the company’s Swedish Match North America division announced it had received a subpoena from the District of Columbia’s attorney general, requesting among other things information about the unit’s compliance with local restrictions on flavored tobacco.

    A preliminary investigation by the company indicated that there had indeed been sales of flavored nicotine pouch products in the district. According to PMI, these related predominantly to certain online sales platforms and some independent retailers.

    Swedish Match is currently conducting a full review of its sales and supply chain arrangement in D.C. and other U.S. localities where flavor bans apply.

    Pending the investigation, PMI has suspended all online sales on Zyn.com. Sales on this platform have represented “a very small” percentage of the company’s U.S. Zyn volumes, according to PMI.

    In the March quarter, Philip Morris’ shipment volumes of oral smoke-free product volumes surged by 40 percent, mainly driven by Zyn nicotine pouches in the U.S., where shipment volume reached 131.6 million cans.

    Zyn has been available in the U.S. since 2014, but its sales have skyrocketed over the past year and a half, and its parent company is investing in Zyn capacity in the U.S.

    Philip Morris bought Swedish Match in a $16 billion deal in 2022 as the company looked to reduce its reliance on cigarettes amid stricter regulations and a consumer shift toward alternatives to tobacco and traditional cigarettes.

  • IQOS MRTP Renewal Application Filed for Review

    IQOS MRTP Renewal Application Filed for Review

    Photo: elenavah

    The U.S. Food and Drug Administration on May 9 filed for scientific review modified risk tobacco product (MRTP) renewal applications submitted by Philip Morris Products for the following IQOS products: 

    • IQOS 2.4 System Holder and Charger
    • IQOS 3.0 System Holder and Charger
    • Marlboro Amber HeatSticks (formerly named Marlboro HeatSticks)
    • Marlboro Green Menthol HeatSticks (formerly named Marlboro Smooth Menthol HeatSticks)
    • Marlboro Blue Menthol HeatSticks (formerly named Marlboro Fresh Menthol HeatSticks)

    In 2020 and 2022, the FDA issued modified risk granted orders for products. These orders are valid for a fixed time period. To continue marketing the MRTPs after the authorized term, the company submitted MRTP renewal applications to FDA.

    Starting May 10, 2024, people may submit public comments on these applications on regulations.gov to docket FDA-2021-N-0408 for the IQOS 3.0 device and docket FDA-2017-D-3001 for the IQOS 2.4 device and the Marlboro HeatSticks products.

    The FDA will post application documents, including amendments; given that the documents will need to be redacted for any confidential information, they will be posted on the Center for Tobacco Products’ website on a rolling basis.

    Once all materials for these MRTP applications, including amendments, have been made publicly available, FDA will announce a closing date for the comment period. The closing date will be no earlier than 180 days from the date of the Federal Register notice and at least 30 days from the date FDA posts the last application materials.

  • U.K. Misleading Public on Relative Risk: Gilchrist

    U.K. Misleading Public on Relative Risk: Gilchrist

    Mora Gilchrist (Photo: PMI)

    Philip Morris International has accused the U.K. Department of Health of spreading misinformation about heated-tobacco products after a social media post warning that “all forms of tobacco are harmful,” reports The Grocer.

    A tweet posted by the department in a thread of “myths” about vaping and tobacco contained false and misleading statements and risks driving consumers back to cigarettes or dissuading current smokers from making the switch to alternatives, according to the multinational.

    “What hope do adult smokers have when seeking out accurate information on smoke-free products if it’s the government that’s spreading misinformation?” said PMI Chief Communications Officer Moira Gilchrist.

    “All forms of tobacco are harmful, and there is no evidence that heated-tobacco products are effective for helping people to quit smoking,” the tweet stated.

    “Laboratory studies show clear evidence of toxicity from heated-tobacco products. Unlike vapes, there is no evidence they are effective for helping people to quit smoking,” the post continues, citing a 2017 report by the Committee on Toxicity.

    According to Gilchrist, such statements “distort the scientific evidence base” and “seriously misleads the public.”

    While acknowledging that heated tobaccos are not risk-free, Gilchrist said it is misleading to imply that all forms of tobacco are equally harmful.

    A Public Health England report in 2018 said that available evidence suggested that heated-tobacco products “may be considerably less harmful than tobacco cigarettes” but “more harmful than e-cigarettes.”

    The Grocer