Today, with increasingly stringent tobacco regulations around the world and restrictions on the development of traditional tobacco markets, multinational tobacco companies are realizing that the only way to achieve sustainable growth is to actively promote innovation and transformation. Fimo International, British American Tobacco and other multinational tobacco companies are planning and laying out areas other than combustible tobacco products through the “beyond nicotine” strategy.
Enhancing research and innovation capabilities
Over the past 20 years, multinational tobacco companies have invested hundreds of millions of dollars in research and innovation to develop alternatives to combustible tobacco products. They have achieved a wealth of research results in related areas, some of which are beginning to be applied to related products.
In September 2021, British American Tobacco announced the establishment of an innovation center in Trieste, Italy. British American Tobacco is setting up an innovation lab and a digital transformation center, as well as a production site for new tobacco products and a boutique sales store. The center covers an area of approximately 20,000 square meters and has several production lines for the production of e-cigarettes Vuse, modern oral cigarettes Velo and heated cigarettes Glo, which will be sold to markets such as the European Union.
According to British American Tobacco CEO Kingsley Wheaton, British American Tobacco plans to invest 500 million euros (1 euro is about RMB 6.96) over five years in this innovation center, which plays a crucial role in the transformation of British American Tobacco. “The choice to build the innovation center in Trieste was made because globally, the city is in a dominant position in terms of science and research.” Wheaton said.
Like British American Tobacco, Filmore International is working to drive innovation transformation. in November 2021, Filmore International announced that it was relocating its corporate headquarters to Stamford, Connecticut, USA. where they plan to build a technologically advanced innovation center to support their “smoke-free future” strategy. The new headquarters will cover approximately 6,640 square meters and will house the company’s functions and staff from the Americas region. Filmore International’s operations will remain in Lausanne, Switzerland.
Expanding into healthcare
In 2008, Filmore International acquired part of the Canadian biopharmaceutical company Medicago, and in 2014, British American Tobacco acquired the Kentucky Bioprocessing Center in the U.S. Both Medicago and the Kentucky Bioprocessing Center are engaged in vaccine research. In January, Health Canada approved Medicago’s New Crown pneumonia vaccine.
British American Tobacco has been conducting clinical trials on the New Crown pneumonia vaccine. Earlier this year, British American Tobacco formed a new company, KBio, which will conduct research applications of plant protein technology to explore treatments for rare and infectious diseases.
Last summer, Filmore International acquired Denmark’s Feldin Pharmaceuticals for $820 million.
Ferdin Pharmaceuticals focuses on the research, development and manufacture of a variety of liquefiable tablets, solid oral products and other products, such as nicotine pouches. Through the acquisition, Filmore International gained access to Feldin Pharma’s expertise and nearly 200 research and development personnel. Ferdin Pharmaceuticals is able to help expand its presence in the nicotine pouch market, while providing Fermo International with experience in respiratory delivery systems and using this technology to develop scientifically proven healthcare products.
The acquisition of Feldin Pharmaceuticals was followed by the $1.2 billion acquisition of Viktura, a British manufacturer of asthma inhalers. Viktura specializes in respiratory medicine products and has 13 inhalation products and 11 non-inhalation products. The company brings more than 200 scientific experts to Fillmore International, who understand matters of product formulation, inhalation modalities, device manufacturing and management, and can bring new technologies as well as drug development capabilities to Fillmore International.
Filmore International plans to develop a product line of inhalation therapies and respiratory delivery systems. Viktura plays a key role in Fimor International’s “Beyond Nicotine” strategy, according to Fimor International.
The acquisition of OtiTopic, a U.S. respiratory drug company that has developed an inhaled acetylsalicylic acid drug for acute myocardial infarction and is currently in clinical trials, is another important recent transaction for Filmore International in the pharmaceutical industry. The product includes a new patented formulation of aspirin that releases its effects through a dry powder respirator and works more quickly than oral tablets. According to Filmore International, if the drug is approved by the U.S. Food and Drug Administration, it will be able to meet the needs of the 83 million people at risk of myocardial infarction in the United States.
According to Jorge Insusti, chief life sciences officer of Filmore International, Filmore International’s “Beyond Nicotine” strategy initially focused on respiratory delivery and botanical products to address problems such as poor sleep and low energy. In a recent issue of Fimoto International’s Science Update, Insusti explained that, compared to traditional drug delivery methods, delivering drugs through the respiratory tract allows for faster onset of action and fewer side effects, and requires lower doses than taking pills. In addition, Filmore International has gained a lot of technological know-how from its research on plant matrices and aerosols.
Filmore International is ambitious in the field of healthcare product development and is backed by venture capital companies. Filmore International has invested $150 million in innovative companies researching respiratory drug delivery systems, health monitoring technologies.
Filmore International plans to rely on new businesses to generate at least $1 billion in sales revenue by 2025. Jack Olczak, CEO of Filmore International, said, “Filmore International’s future will be tightly focused on health, science, technology and sustainable business practices, exporting innovative products and solutions to improve people’s lives while making a positive impact on society.”
Developing new types of products
British American Tobacco sees the development of new products as an opportunity to implement its “Beyond Nicotine” strategy. The company expects sales of new products, such as CBD, to grow. Fortune Business Insights estimates that the global CBD market will reach a market value of $3.68 billion in 2021 and is expected to grow to $55.79 billion by 2028, a compound annual growth rate of 47.49 percent.
British American Tobacco believes that their advantage lies in their knowledge of consumers. Early last year, British American Tobacco launched the company’s first aerosol CBD product, Vuse CBD Zone, in Manchester, England.
In March 2021, British American Tobacco acquired a 19.9% stake in a Canadian medical cannabis manufacturing company that grows and produces related derivative products for £126 million (£1 is about $8.05). The acquired business gives British American Tobacco access to medical cannabis research and development technology to support its further diversification. At the same time, British American Tobacco will establish a research center in New Brunswick to develop next-generation products.
British American Tobacco has received support from a venture capital firm in its transformation. Founded in 2020, Btomorrow Ventures sought to invest in functional products, sustainability and technology, and the firm and British American Tobacco hit it off immediately.
Today, multinational tobacco companies are just beginning their journey of transformation, which is slow but solid. They will encounter many difficulties and obstacles along the way, including public skepticism and resistance from some organizations, such as the World Health Organization. Recently, the WHO said that it rejected the new crown pneumonia vaccine developed by Medicago because the biopharmaceutical company was associated with Fimo International. It is safe to say that if multinational tobacco companies succeed in their transformation, it will certainly become an important case in the history of corporate development.
