Cigarette and tobacco manufacturing company Philip Morris International has raised its bid to acquire respiratory drug company Vectura to $1.4 billion. The company increased its offer for Vectura to beat the $1.3 billion bid made by U.S. private equity company The Carlyle Group last week.

Philip Morris increased its offer for the company to $2.29 per share. The bid resulted in an increase of Vectura's shares by 2.5% in early trading as investors expect the bidding war to continue.

Vectura, which counts GSK and Novartis as customers, mainly produces inhaled drugs and inhalation devices to treat respiratory diseases. After Carlyle made its bid last week, the company has indicated its intention of accepting the offer.

The company said, last week, that it would withdraw its recommendation to accept Philip Morris' earlier bid in light of Carlyle's latest offer. The company added that it also believes it will be in a better market position if it was acquired by Carlyle as opposed to the Marlboro cigarette maker.

Ventura cited business "uncertainties" related to being owned by Philipp Morris. The statement came after the company received widespread criticism from medical experts who expressed concerns about it being owned by a major tobacco company.

Carlyle first announced its plans of acquiring Vectura in May before Philip Morris emerged with a counter offer.

The increased bid highlights Philip Morris' determination to acquire the Vectura as part of its long-term goal to reinvent its business. Philip Morris CEO Jacek Olczak said developing its own inhaled therapies would take too long and acquiring a company that is already a leader in the space would make much more sense.

As more people around the world quit smoking, Philip Morris has been trying to shift into new business segments outside of producing cigarettes. The company, previously, said it plans to generate at least half of its total net sales from offerings not linked to nicotine by 2025.

Philip Morris said, if its offer is accepted, the company will operate Vectura as an autonomous business. The company said it plans to make Vectura the backbone of its future inhaled therapeutics business.

Some analysts have expressed pessimism about the company's long-term goal given that it currently produces and sells about a tenth of all cigarettes around the world.