Executive departures and failed clinical trials hinder PMI’s push into pharmaceuticals

According to The Wall Street Journal, Philip Morris International (PMI) has faced greater-than-expected challenges in its pharmaceutical business.
In the most recent quarter, PMI recorded a $680 million provision for its wellness and healthcare business. According to public reports, this business began two years ago when PMI acquired inhaled drug manufacturer Vectura Group for £1 billion (about $1.31 billion).
After a failed clinical trial, Vectura decided not to submit its inhaled aspirin product to the U.S. Food and Drug Administration (FDA) this year.
PMI has therefore decided to postpone its original 2025 target of generating more than $1 billion in net revenue from health and wellness products. Despite these setbacks, PMI still sees growth potential in areas such as smoking cessation treatment and medical cannabis.
Recently, the departure of several senior executives at Vectura has further worsened the company’s difficulties.
According to The Times, Vectura CEO Michael Austwick will step down. He joined Vectura from Novartis in June last year. In addition, Thomas Gibbs, CEO of Vectura’s U.S. business, also left the company in 2023 to join Danish pharmaceutical company Lundbeck. The future of Vectura Group CFO Lizzie Knowles is also uncertain.
It is worth noting that shortly after PMI acquired Vectura, Austwick’s predecessor Will Downie and CFO Paul Fry also chose to resign.
PMI’s acquisition of Vectura triggered strong backlash in the public health sector, with some medical conferences even barring Vectura representatives from attending, which has undoubtedly added further pressure to PMI’s pharmaceutical business.