Big Tobacco's Multi-Million Dollar Investment in Advanced Medical Marijuana Inhaler Technology
Phillip Morris Ventures into Medical Cannabis with Syqe Medical Acquisition
In a strategic move aimed at diversifying its product portfolio, global tobacco giant Phillip Morris has ventured into the flourishing medical marijuana sector. The company has reportedly acquired Syqe Medical, an Israeli med-tech firm, for a substantial $650 million investment. This marks Phillip Morris' second engagement with Syqe, having previously invested $20 million back in 2016. Syqe Medical specializes in a cutting-edge pharma-tech innovation – a metered-dose inhaler tailored for pain relief treatment using medical cannabis.
Coinciding with this acquisition is a notable collaboration between Syqe and Israel's National Insurance Institute (NII), aimed at providing comprehensive coverage for medical marijuana treatments involving the innovative metered inhaler, particularly for individuals affected by acts of terrorism or criminal violence. While the precise details of the acquisition are yet to be officially disclosed, insiders suggest the deal encompasses several significant milestones.
Phillip Morris' Strategic Shift: Seizing Future Opportunities Through Innovative Investments
The rationale behind this unexpected move lies in Phillip Morris' strategic pivot toward "Beyond Nicotine" products. With cigarette sales on a continuous decline, the tobacco industry leader is exploring avenues for revenue and sales expansion. The booming global marijuana market, despite its federal illegality in the United States, presents an enticing opportunity as regulatory landscapes evolve. Phillip Morris appears to be anticipating the future, positioning itself as a key player by investing in technology and patents related to measured-dose inhalers. This calculated long-term investment aims to dominate an emerging market with the potential to be worth billions in the years to come.
Phillip Morris plans to allocate a substantial $130 million to support Syqe's quest for FDA approval for its inhaler. Upon successful FDA clearance and positive clinical trial outcomes, Phillip Morris intends to acquire the entirety of Syqe's shares for the previously mentioned $650 million. The transaction will be conducted through Phillip Morris' subsidiary, Vectura, a UK-based company specializing in inhaler products for precise medication delivery. Vectura's expertise is anticipated to play a pivotal role in securing FDA approval, making Syqe the pioneering company to obtain such clearance for using raw cannabis inflorescence in medical treatment.
Should the acquisition transpire at the stipulated $650 million, Syqe Medical would join the ranks of the top ten largest cannabis companies globally. Presently, renowned names like Tilray Brands Inc and Aurora Cannabis lead this sector with substantial market capitalizations. This monumental sum would surpass the total investments amassed by Syqe thus far, which stand at a mere $80 million.
Related article: Chronic Patients Hit ‘Sweet Spot’ With Cannabis Inhaler
The impending exit carries considerable significance for all of Syqe's investors, including founder and CEO Perry Davidson, who holds a significant stake of over 10%. Other notable investors include OurCrowd, GlenRock, Shavit Capital, and Bank Discount. Established in 2011, Syqe has garnered around 120 patents through eight years of development. Its unique inhaler stands out by utilizing raw inflorescence from the cannabis plant, providing accurate dosing for individual patients while avoiding psychoactive effects associated with overdosing.
Syqe's Innovative Inhaler: Redefining Medical Cannabis Consumption and Paving the Way for FDA Approval
Although currently available in limited markets, such as Israel and Australia, Syqe's inhaler offers a safer alternative to the majority of medical cannabis consumers who rely on smoking and vaping products. These traditional methods can lead to potential overdoses, whereas Syqe's inhaler ensures controlled dosing and effective relief without undesirable side effects.
Syqe's primary focus extends beyond its current markets, particularly targeting FDA approval in the United States. This milestone is crucial for the company's growth, with Vectura's expertise contributing significantly. If successful, Syqe could become the first-ever company to gain FDA approval for utilizing raw cannabis inflorescence as a medical treatment.
Phillip Morris, boasting a valuation of $154 billion, is known for its Marlboro brand and its recent strategic shift toward a "beyond nicotine" strategy. The company has diversified its product range to include botanicals and relaxation aids. Despite market shifts, the medical cannabis sector remains an appealing growth avenue for tobacco corporations. According to Phillip Morris, the medical cannabis industry's value is projected to reach $24 billion, with an annual growth rate of 15% until 2030.
As market dynamics evolve, Phillip Morris and Syqe stand at the forefront of innovation, capitalizing on shifting consumer preferences. The potential acquisition of Syqe Medical marks a significant step for Phillip Morris into the thriving medical marijuana landscape, while Syqe's innovative inhaler could revolutionize medical cannabis treatments. This partnership has the potential to reshape the cannabis industry and set new benchmarks for global medical cannabis solutions.
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