Tobacco Giant Phillip Morris To Buy Marijuana Inhaler Producer For $650M, Aiming For FDA Approval

One of the largest tobacco companies in the world, Phillip Morris PM is slowly but steadily getting putting its toe in the booming marijuana industry. The tobacco giant is allegedly buying an Israeli med-tech company Syqe Medical in a deal that could be worth a whopping $650 million, first reported Calcalist.

This is not the first investment Philip Morris made in Syqe. Back in 2016, it invested $20 million in the pharma-tec company, whose prime product is a metered-dose inhaler for pain reduction treatment using medical marijuana.

The news of Morris' possible acquisition comes on the heels of Israel's National Insurance Institute (NII) partnering with Syqe to fully cover medical marijuana treatments with a metered inhaler for victims of terrorism or criminal violence.

Deal Highlights

While the official terms of the deal weren’t disclosed the tech outlet reported it contains several milestones.

First, Phillip Morris will invest $130 million to finance the process of obtaining FDA approval for Syqe’s inhaler.

If it obtains the approval and after positive results of clinical trials, the tobacco behemoth would acquire all of Syqe's shares for $650 million. The transaction would be run via Phillip Morris’ subsidiary Vectura, a UK company specializing in inhaler products to deliver medicines. Vectura's expertise could be the key to the FDA’s approval. If that happens, the Israeli company will be the first ever to gain FDA approval for using raw cannabis inflorescence as medicine.

Why it matters: If completed this would be one of the biggest acquisitions in Isreal’s medical technologies sector in recent years, writes the outlet.

Furthermore, if Syqe ends up sold for around $650 million it will become one of the ten biggest cannabis companies, such as Tilray Brands Inc TLRY, which has a market cap of $1.1 billion, and Aurora Cannabis ACB with a market cap of CA$250 million ($190 million). The amount compares to total investments to date made in Syqe, which amounts to only $80 million.

Continue reading on Calcalist. 

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Photo: Courtesy of SimonDes via Wikimedia Commons