Health experts, medics and charities warn \u00a31.1bn tobacco firm deal could cost inhaler maker access to government grants<\/p>\n
Shareholders in the asthma inhaler maker Vectura have been urged to reject a \u00a31.1bn takeover by the tobacco company Philip Morris International (PMI), in an open letter signed by 35 health charities, public health experts and doctors from around the world.<\/p>\n
Investors in the Wiltshire-based respiratory medicine specialist have until 15 September to decide whether to sell their shares to PMI, which has touted its ambitions for a \u201csmoke-free\u201d future but still derives 75% of its revenue from cigarettes.<\/p>\n<\/p>\n
Vectura\u2019s board members have already recommended that investors accept the offer, which surpassed an earlier \u00a3958m bid from US private equity group Carlyle, pointing to PMI\u2019s ability to fund research and development.<\/p>\n
But signatories of the open letter written directly to shareholders, led by Asthma UK and the British Lung Foundation, warned the company\u2019s investors that accepting PMI\u2019s money would \u201csignificantly hamper Vectura\u2019s ability to continue operating as a viable, research-oriented business\u201d.<\/p>\n
They warned that Vectura may lose access to government grants due to a UN tobacco control treaty under which 180 countries agreed to curb the influence of the tobacco industry on health policy.<\/p>\n
Distaste for ownership by a tobacco firm could also sever crucial ties between Vectura and the medical community, the signatories said.<\/p>\n
\u201cMany university and hospital collaborations are likely to be rejected and participation in clinical trials blocked, disrupting crucial drug development \u2013 one of Vectura\u2019s major business activities,\u201d it said. \u201cA takeover by PMI is therefore likely to cause significant disruption to Vectura\u2019s operations and future profitability for its shareholders.\u201d<\/p>\n
The signatories also warned that Vectura\u2019s ability to publish research in medical journals and attract talented staff could be diminished.<\/p>\n
They asked Vectura shareholders \u201cto consider both the business risks and the moral conflict of the proposed takeover. Tobacco companies should not profit from treating the illnesses their products cause.\u201d<\/p>\n
The company\u2019s main shareholders are a series of American investment funds. The largest, with a 6.7% stake, is Brown Capital Management, a Baltimore firm with $18bn (\u00a313bn) assets under management. Started in the 1980s by Eddie Brown, it is one of the oldest African American-founded asset management companies in the US.<\/p>\n
None of the individual funds at the top of Vectura\u2019s shareholder list appear to screen out tobacco, although the fund management companies behind them offer other products targeted at ethical investors.<\/p>\n
The shadow health secretary, Jonathan Ashworth, has previously called on the government to block the takeover.<\/p>\n