Philip Morris International's Chief Global R&D Officer met with China's State Tobacco Monopoly Administration deputy director in Beijing last week, coinciding with China's advancement of mandatory standards for heated cigarettes and nicotine pouches. BTIG analyst Owen Bennett suggests the meeting could signal a potential patent dispute or licensing deal, as China Tobacco's heated product iRod uses induction technology similar to Philip Morris's Iluma, potentially infringing on PMI patents. Bennett speculates Philip Morris might negotiate a quota for selling IQOS and Zyn in China or a licensing fee on international or domestic sales to avoid lawsuits. The development is seen as potentially significant for PM shareholders, given China's large market and the ongoing global push of China Tobacco.
Philip Morris International IncPotential patent deal or licensing with China Tobacco could open large market for IQOS/Zyn.
China Tobacco International HK Co LtdChina Tobacco's iRod may infringe PMI patents, but potential licensing deal could benefit or cost them.
