Philip Morris acquires nicotine replacement specialist Fertin Pharma

July 5, 2021

Par: National Committee Against Smoking

Dernière mise à jour: July 5, 2021

Temps de lecture: 5 minutes

Philip Morris International (PMI) announced on Thursday 1^er July to have reached an $813 million deal to acquire Fertin Pharma by the end of 2021[1]. PMI is thus gaining a foothold in the pharmaceutical world and will have a significant fund of oral delivery products.

Fertin was originally a Swedish company specialising in chewing gum (V6 brand), which was bought in 1978 by the Danish group Bagger-Sørensen, also a specialist in the field. Founded in 1915 by Holger Sørensen, the company Vejle Caramel- og Tabletfabrik marketed its first chewing gums in 1927, before taking the name Dansk Tyggegummifabrik A/S and, in 1939, the trade name Dandy[2A major player in the confectionery sector, the group, which later became Gumlink, is behind the Stimerol, Dandy and Virol gum brands, which it sold to the Cadbury-Schweppes group in 2002.

From chewing gum to nicotine substitutes

It was in the early 1990s that Fertin ventured into the pharmaceutical field by developing its first nicotine substitutes in the form of chewing gum, which quickly became its flagship products. Now known as Fertin Pharma, the company distanced itself from the Gumlink group in 2001; the Bagger-Sørensen family will nevertheless keep 30% of Fertin Pharma's capital in 2017, when the latter was taken over by the investment fund EQT Mid Market.

Fertin Pharma grew strongly during the 2010s and invested in India: a research and development center was opened in Mumbai in 2011, and a production unit was set up in Goa in 2014. It was also in 2014 that Fertin Pharma founded its Nicotine Research Center, which aims to develop new nicotine delivery systems.

Innovations in oral treatments

These infrastructures will allow Fertin Pharma to design its current products, which are of particular interest to Philip Morris. In its catalog, Fertin Pharma offers not only chewing gum, but also lozenges (under the name "lozenges"), lozenges ("pouches"), double-layer compressed gums, as well as rapid-release tablets (under the name Zapliq). These different systems designed to deliver nicotine have also been adapted for other pharmaceutical uses, such as vitamins, painkillers, allergy treatments, or gums to prevent the "dry mouth" syndrome associated with certain anticancer treatments (radiation against neck and brain tumors)[3]. Fertin Pharma has also filed numerous patents, including two for medical or "wellness" cannabinoids that have been approved in Canada for its subsidiary NordicCan[4].

A wealth of opportunities for SMEs

The wide range of products held by Fertin Pharma interests PMI for more than one reason. In addition to offering it a stepping stone to the pharmaceutical world, it will allow it to expand its range of non-smoked nicotine products, which can be extended to other areas than just nicotine, and to benefit from valuable expertise for many oral delivery products. Whether it is "pouches" or double-layer gums, Fertin Pharma has in fact developed different techniques for more or less rapid diffusion of substances (including caffeine or analgesics), but also for masking tastes or undesirable effects, in particular to reduce irritations due to the delivery of nicotine.

Fertin Pharma's work in intellectual property or in the argumentation on "residue-free" products, adapted to non-smoking or anti-vaping laws, also has something to seduce the cigarette manufacturer. Fertin Pharma's positioning on medical and well-being also opens the way to numerous possibilities for product development and could provide new opportunities for PMI's current commercial discourse, anchored on a promise of risk reduction.

In the cannabis niche, PMI, which had until now restricted itself to investing in the therapeutic cannabis segment, could thus extend its range of non-smoked products to recreational cannabis.5]. It can be assumed that the heavy investments made in Canada by the Altria and British American Tobacco groups in the therapeutic and recreational cannabis sector do not leave PMI indifferent. The gradual reduction in the market for smoked cigarettes is sufficient reason for tobacco manufacturers to look at all other nicotine delivery systems – or other substances. PMI, which until now had only fifty employees in Denmark, is establishing itself strongly in this country where it already acquired the Danish snus producer AG Snus Aktieselskab in May 2021[6].