Philip Morris Acquires Syqe Medical in $650 Million Deal to Expand Cannabis Technology
Philip Morris International is acquiring Syqe Medical in a deal worth up to $650 million, marking a major expansion into cannabis technology
Key Points
- 1Philip Morris to acquire Syqe Medical for up to $650 million
- 2Syqe's inhaler uses raw cannabis flowers for precise dosing
- 3Initial investment of $120 million for FDA approval process
- 4Vectura, a Philip Morris subsidiary, will manage the deal
- 5FDA approval would make Syqe a leader in medical cannabis
Philip Morris International, the global tobacco giant, is set to acquire Israeli company Syqe Medical in a deal potentially worth $650 million, according to Calcalist. Syqe Medical is renowned for its innovative inhaler designed to deliver precise doses of cannabis for pain management. This acquisition marks a significant step for Philip Morris as it diversifies into medical cannabis technology
The agreement between Philip Morris and Syqe Medical involves multiple stages. Initially, Philip Morris will invest $120 million to facilitate the U.S. Food and Drug Administration (FDA) approval process for Syqe's inhaler. Should the FDA grant approval following successful clinical trials, Philip Morris will proceed to purchase the remaining shares of Syqe Medical, completing the acquisition at the agreed $650 million valuation
This transaction will be conducted through Vectura, a Philip Morris subsidiary that specializes in inhalation technology. Notably, Philip Morris had previously invested $20 million in Syqe Medical back in 2016, underscoring a long-standing interest in the company's potential. The acquisition is one of the largest in Israel's medical technology sector in recent years, and if successful, will position Syqe among the top global cannabis companies
Syqe Medical, founded in 2011 by Perry Davidson, who remains its CEO, holds approximately 120 patents stemming from over eight years of research and development. The company's inhaler is unique in its use of raw cannabis flowers rather than processed products, allowing for precise dosage control. Currently, the inhaler is available in Israel and Australia, but FDA approval would open the doors to the crucial U.S. market
The potential FDA approval would be groundbreaking, making Syqe the first company to gain such endorsement for the use of raw cannabis flowers in medicine. This milestone would significantly enhance Syqe's market reach and impact, as well as provide a substantial return on investment for its stakeholders, given that total investments in Syqe have only reached $80 million to date