Philip Morris acquiring Cannabis inhaler developer Syqe Medical for up to $650 million
Philip Morris is acquiring Syqe Medical, an Israeli company, for up to $650 million. Syqe Medical’s main product is a metered-dose inhaler for pain reduction using medical cannabis. Initially, Philip Morris will invest $120 million to support FDA approval for Syqe’s inhaler. If the inhaler passes clinical trials and receives approval, Philip Morris will purchase all the shares of Syqe for $650 million. The transaction will be carried out through Philip Morris’ subsidiary Vectura, which specializes in inhalers. In 2021, Philip Morris acquired Vectura, a British company, for one billion pounds as part of its smoke-free smoking strategy. Philip Morris previously invested $20 million in Syqe in 2016. The acquisition of Syqe is one of the largest transactions in Israel’s medical technologies field in recent years. If the $650 million valuation is achieved, Syqe will become one of the ten largest cannabis companies globally. Syqe’s founder and CEO, Perry Davidson, holds a share of over 10% of the company, with other investors including OurCrowd, former Retalix founders Barry Shaked and Brian Cooper, GlenRock, Leon Recanati’s investment firm, Shavit Capital, and Bank Discount. Founded in 2011, Syqe holds around 120 patents resulting from over eight years of development. The main innovation in Syqe’s inhaler is the use of raw inflorescence of the cannabis plant, not its processed products, and the ability to measure an exact dose for the patient. Currently, over 80% of medical cannabis consumers use smoking and vaping products, leading to potential overdoses. Syqe’s inhaler provides relief without psychoactive effects. Syqe’s inhaler is available in Israel and Australia, serving approximately 50,000 medical cannabis patients. The inhalers were previously distributed through Teva but now have independent marketing agreements with the Ministry of Defense and the Meuhedet HMO. Syqe’s primary target market is outside of Israel, with FDA approval in the United States being a critical milestone. Philip Morris aims to reinvent itself amid decreasing cigarette popularity and now derives over a third of its revenue from smokeless products. It has expanded its product range into botanicals and sees the cannabis market as a potential growth engine. According to Philip Morris, the medical cannabis market is worth $24 billion with a growth rate of 15% until 2030. The wellness market, including cannabis-based sedatives and sleep aids, is estimated at an additional $4 billion with a growth rate of 8%. Syqe declined to comment.
