NJOY Raises $75 Million: Funding will be used for marketing, clinical trials, research and development, and international expansion.

FROM:  CONVENIENCE STORE DECISIONS 

Electronic cigarette brand NJOY, whose ‘NJOY King’ is the most popular e-cigarette in America, has raised $75 million in funding, NJOY CEO Craig Weiss announced today.

Investors include serial entrepreneur and investor Sean Parker; and Douglas Teitelbaum, Principal of Homewood Capital. Mr. Teitelbaum will join NJOY’s Board of Directors.

Funding will be used for marketing, clinical trials, research and development, and international expansion. “These individuals are among the world’s leaders in identifying paradigm-shifting consumer technology investment opportunities, and their investment represents confidence in NJOY’s model,” Weiss said. “The successful completion of this capital raise underscores the growth potential for NJOY as it continues to lead the electronic cigarette market, and our ongoing confidence in the huge promise of our business.”

“The electronic cigarette category, and NJOY in particular, show great potential,” Teitelbaum stated. “After lengthy study, Sean and I are convinced that NJOY will continue to innovate and lead the smoker away from all the negatives of combustion with their smoker familiar product. As a former smoker, and after trialing many products in search of a compelling alternative to cigarettes, I found the NJOY King to be in a league of its own in terms of flavor, brand, and product experience. There are 46 million US smokers, most all of whom are, for a variety of reasons, interested in an alternative to cigarettes that will provide the same flavor and brand reliability. NJOY’s standards firmly establish their leadership role in guiding the smoker towards a better future. We are honored to put the capital behind this worthwhile effort.”

“As an entrepreneur and investor I’m drawn to disruptive companies in explosive new markets,” Parker said. “The common thread between these companies is a missionary desire to leverage technology to change the world. I’m optimistic that the clever application of technology might someday obsolete the combustion cigarette and all the harm it causes.” Parker said. “Solving this problem takes a world-class leadership team that brings together executives across a range of disciplines from electrical engineering, to chemistry, to consumer marketing. The proof is in the pudding: NJOY’s King product has succeeded in capturing a market leadership position. Like every great technology company, NJOY has demonstrated a willingness to constantly iterate and reinvent itself. The result of this investment in innovation has been the most satisfying alternative ever created to combustion cigarettes. We are excited to be an investor in this company and to participate in the massive growth of this segment.”

NJOY has also demonstrated a commitment to advancing research and scientific understanding of the electronic cigarette category and recently announced that Former Surgeon General Dr. Richard Carmona was appointed a member of NJOY’s Board of Directors and Chair of the company’s Scientific Advisory Committee.

Reynolds- Are They Changing the Game? Not So Much! But that’s No Surprise!

Thursday, June 6, 2013, saw headlines throughout the tobacco world proclaim that Reynolds American was introducing an e-cigarette that would prove to be a “game-changer” in the burgeoning new industry.  Yes, the Reynolds Vuse was entering the market- first in Colorado on July 1- and then slowly and steadily throughout the rest of the nation.  Folks inside Reynolds and throughout the tobacco industry were right to herald this announcement as important, given what Reynolds’ entry in the marketplace with the Vuse is likely to mean- but, is it truly a “game changer?”

Videos and slide shows prepared by Reynolds and released concurrent with Thursday’s announcement revealed the Vuse and the various configurations in which it will be made available- a disposable and a unit with rechargeable batteries and replaceable cartridges, e-cigarette options that have been available online and in traditional tobacco retail environments in the US since 2008.  So, the Vuse is not really changing that game.  The Vuse will be using lithium chemistry to power their vaporizers- not really changing the power game.  The Vuse’s vaporization technology will be no different than the thousands of e-cigarettes currently being offered for sale in the US- not really changing the vaporization game.  The Vuse will be using a nicotine formulation composed of some combination of propylene glycol and/or vegetable glycerin- not really changing the “e-juice” game. The Vuse will retain the form factor of a traditional tobacco product- not changing the look of the product and not changing the game in that way.  The Vuse will have unique digital technology that will monitor the battery power and insure consistent “puffs”- not changing that game since that technology has been available from Chinese manufacturers going back to 2005 and the original Ruyan V-8 three-piece electronic cigarette- in retrospect a truly game-changing product and disruptive technology.

So, how is the game being changed with respect to the product itself?  Well, perhaps in the same way that Reynolds has changed the game in the past: in the same way that its Premier and Eclipse cigarettes changed the game; in the same way that its Camel Orbs and Sticks changed the game and in the same way that its Niconovum acquisition in 2009 has resulted in new and innovative smoking alternatives to reach and penetrate the US market.  That is to say- not at all.  Just saying . . .

Former US Surgeon General Joins NJOY Board of Directors

By Associated Press, Sunday, March 24

RICHMOND, Va. — Former U.S. surgeon general Dr. Richard Carmona, who highlighted the dangers of secondhand smoke and supported a ban on all tobacco products, is joining the board of directors for NJOY Inc., the nation’s leading electronic cigarette company — a move that could bring increased legitimacy to e-cigarettes as a viable alternative to traditional cigarettes.The country’s senior public health official under President George W. Bush from 2002 to 2006 will advise the Arizona-based company on public health and regulatory issues. He’ll also spearhead its research of the battery-powered devices that heat a liquid nicotine solution and create vapor that users inhale. The private company’s flagship NJOY KING product is the top-selling e-cigarette.
The 63-year-old Carmona serves as president of the health and wellness nonprofit Canyon Ranch Institute in Tucson and is a public health professor at the University of Arizona.In 2006, he published a comprehensive report that concluded that breathing any amount of someone else’s tobacco smoke harms nonsmokers and was instrumental in smoking bans around the country. And in testimony to a Congressional committee in 2003, Carmona was critical about the possibility of safer tobacco alternatives to smoking.“Definitely there’s an argument that can be made for harm reduction, but clearly more research needs to be done,” Carmona said in an interview with The Associated Press. “I’m probably going to be (the company’s) biggest critic. … I still look at my job as being a doctor of the people and I’m going to look at the science. … If we can find a viable alternative that gave us harm reduction as people are withdrawing from nicotine, I’m happy to engage in that science and see if we can do that.”There are two approaches to regulating tobacco use: one that says there’s no safe way to use tobacco and pushes for people to quit above all else. The other supports lower-risk alternatives like smokeless tobacco and other nicotine delivery systems like gum or even electronic cigarettes as methods to improve overall health.

Devotees insist e-cigarettes address both the addictive and behavioral aspects of smoking. Smokers get their nicotine without the more than 4,000 chemicals found in regular cigarettes. And they get to hold a cigarette, while puffing and exhaling something that looks like smoke. More than 45 million Americans smoke cigarettes, and about half of smokers try to quit each year, according to the Centers for Disease Control and Prevention.

“When he comes on board, it’s very hard for anti-tobacco people who see themselves as health campaigners to simply oppose e-cigarettes. They have to deal with the fact that one of the leaders of their community not only is supporting e-cigarettes but is willing to be on the board of directors of the biggest e-cigarette company,” said David Sweanor, a Canadian law professor and tobacco expert who consults with companies and others on industry issues.

In an interview with the AP, NJOY’s CEO Craig Weiss said the addition to Carmona to its board is a “very powerful step forward” in its mission to “obsolete cigarettes.”

The company did not disclose how much Carmona was being compensated for his new role.

The market for e-cigarettes has grown from the thousands of users in 2006 to several million worldwide. Analysts estimate sales could double this year to $1 billion, and consumption of e-cigs could surpass consumption of traditional cigarettes in the next decade. Some companies, including NJOY, have even started running TV commercials.

Some of the nation’s largest tobacco companies have moved to grab some of the growing revenue in the e-cigarette market. Reynolds American Inc., the second-biggest U.S. cigarette maker, has begun limited distribution of its first electronic cigarette under the Vuse brand. Lorillard Inc., the nation’s third-biggest tobacco company, acquired e-cigarette maker Blu Ecigs last April. Some e-cigarettes are made to look like a cigarette with a tiny light on the tip that glows like the real thing.

E-cigarettes could be more heavily regulated in the near future. A recent CDC study found that one in five current smokers reported having used an e-cigarette, evidence the agency says that more oversight is needed. And the Food and Drug Administration is expected to assert regulatory authority over e-cigarettes later this year to treat them the same as traditional cigarettes and other tobacco products.

“We still have one out of five people in America smoking … there’s a lot more work to do,” Carmona said. “To dismiss (e-cigarettes) and not even consider it … would be a disservice to the public who are looking for alternatives.”

Battle of the Brands?

Most Retail Consumers Have No Idea What Brand of E-cig They Are Buying and Using

Recently, I sat in a restaurant across a table from an excited acquaintance.  He was showing me his e-cigarette- a small device, no bigger than a “real” cigarette and clearly intended to resemble a traditional tobacco product.

“It’s great,” he said.  “I can use it anywhere where I can’t smoke.”

And, then to prove it, he inhaled deeply, held the vapor briefly in his mouth and then opened his mouth to show me that a minimal amount of vapor escaped.

“See,” he said, “I can be really discrete with this.  It’s great!”

Because I know quite a bit about this product, the technology and the ways in which it can be used, I acknowledged the demonstration and the practicality of it.

“Yes,” I affirmed, “It’s a pretty cool product and it’s a potential game-changer when it comes to tobacco.”

But then I conducted an experiment.  I reached across the table and took the e-cigarette from him, completely enclosing my hand over it.

“Can you tell me the brand of this particular e-cigarette?” I asked.

“Brand?” he asked.

“Yes.  Is this an NJOY, a Blu Cig, a Metro, a Mistic, or a LOGIC?  What brand did you buy?”

He couldn’t answer the question.  He couldn’t tell me the brand, the density of the nicotine or how many “puffs” he was promised he would get.  He was able to tell me that it was menthol flavored and he was able to tell me where he got it and what he paid for it.

“It was on the counter of the C-store where I usually buy gas and cigarettes.  I’ve bought them there before,” he informed me.

To further illustrate my point, a recent survey, conducted by a Minneapolis-based e-cigarette consultant, revealed that 68% of e-cigarette buyers could not name the brand of the last two disposable e-cigarettes they bought at a traditional retail store.

And, there in a nutshell, is one of the great challenges of the nascent e-cigarette industry.  With literally hundreds of brands and hundreds of companies fighting for space in traditional tobacco outlets and C-stores, the retail consumer of this product has demonstrated little, if any brand loyalty.  (On the other hand, internet consumers of this product have a great deal of brand loyalty- but, eventually, that’s destined to be a smaller piece of a larger pie and that business model is in serious jeopardy as the FDA, FTC and various states gear up to regulate this product.)

Retailers have been quick to realize this lack of brand loyalty.  A store manager of a well-known Midwestern chain recently told me, “I have had six different brands on my counter in the last nine months as the companies and the distributors have come and gone and our terms and pricing have gotten progressively better.  Every time we make a switch we require that these new guys provide us one or two rounds of free fill and ‘kick-ass’ POS.”

“Consumers don’t ask for e-cigarettes by brand,” he continued. “They ask if we have e-cigs and they ask what flavors we have.”

So, let me state the obvious.  The claims of a number of large e-cigarette companies about the market share that they have achieved have come at considerable cost and with limited return on investment.  Most consumers don’t know what they are buying and they don’t care.

So, why don’t they care?  They don’t care because there’s not a whole lot of differentiation between any of these brands:  they look alike, they work alike, they taste alike and they all fail in similar ways: bad batteries, messy leaks and inconsistent flavoring.  Consumers buy them and use them for two reasons- as an alternative where and when they can’t smoke and as a method to try to quit smoking altogether.

And, I can’t blame them.  Because, despite all of the activity and excitement in the market- projected sales of $1 billion in 2013, according to the January 21, 2103 issue of TIME magazine- there really is very little to distinguish one brand of e-cigarette from another.

So, until the FDA decides how and when they want to regulate this product and product category- or even if they can, for that matter- there will be significant barriers to establishing brand acceptance and brand loyalty.  While the acceptance of the product is likely to grow from the roughly 6% of the smoking population who now claim to use them on a regular basis, brand building will take a lot longer and that will take a major commitment from manufacturers, distributors and retailers- a commitment few free compelled to make at this juncture.

Time will tell.

Despite Best Efforts of Anti-Smoking Groups, Electronic Cigarettes are Here to Stay

By Dr. Michael Siegel- November 26, 2012

The Food and Drug Administration along with at least seven national anti-smoking groups made a valiant effort to remove electronic cigarettes from the market. In 2009, the FDA exerted what it purported was its jurisdiction over electronic cigarettes under the Food, Drug, and Cosmetic Act and effectively banned these products. At the same time, seven national anti-smoking groups promoted the removal of electronic cigarettes from the market. These seven groups, along with the amount of money they received from Pfizer and GlaxoSmithKline between 2009 and 2012, are as follows:

Pfizer

American Academy of Pediatrics: $720,800
American Cancer Society: $252,750
American Heart Association: $136,000
American Lung Association: $190,250
Campaign for Tobacco-Free Kids: $100,000
American Medical Association: $857,500
American Legacy Foundation: $300,000
Action on Smoking and Health: $200,000

GlaxoSmithKline

American Cancer Society: $602,010
American Lung Association: $143,461
Association for the Treatment of Tobacco Use and Dependence: $5,000
Campaign for Tobacco-Free Kids: $400,000
American Heart Association: $115,000
American Medical Association: $15,000
American Academy of Pediatrics: $65,075
American Legacy Foundation: $10,000

The Rest of the Story

Today, I am happy to opine that despite the best efforts of these anti-smoking organizations, electronic cigarettes are here to stay. The FDA failed in its efforts because the courts ruled that its jurisdiction over these products falls under the Tobacco Act, not the Food, Drug, and Cosmetic Act (in the absence of therapeutic or drug claims made by electronic cigarette companies). The anti-smoking organizations failed in their efforts because the state legislatures which considered bans on electronic cigarettes were swayed by an outpouring of protest from vapers who testified that they would most likely return to cigarette smoking if these devices were taken off the market.

Today, because of a number of subsequent developments in the electronic cigarette market, I can assert that these products are here to stay and that they will form the basis of a competitive and expanding market in the years to come.

Among the important developments (in addition to the D.C. District Court’s decision on the FDA’s regulatory authority) is the entrance of the major cigarette companies into the electronic cigarette market. I have already discussed the acquition of Blu cigs by Lorillard. Today, I report the efforts of Reynolds American to enter the electronic cigarette market.

According to an article in the Business Journal, Reynolds American has formed a subsidiary called the R.J. Reynolds Vapor Company which is test-marketing what it calls a “digital” cigarette, which is similar to but more advanced technologically than most electronic cigarettes on the market.

According to the article: “Reynolds American President and CEO Dan Delen said during Investors Day presentations Monday morning that the company is focusing over the long-term on emerging smoke-free products such as snus and its new electronic cigarette Vuse that offer larger margins and greater potential for growth. “Everything we’re working on from an innovation standpoint has a higher margin than cigarettes,” Delen said. “I think we’re very well positioned in an evolving market.” … In the growing electronic cigarette category, which offers users a nicotine-infused vapor to inhale, Delen said RAI subsidiary R.J. Reynolds Vapor Co. is preparing to make a “big splash” after a limited launch of its Vuse product earlier this year.
Delen said Vuse is more of a “digital cigarette” than merely an electronic one given its use of computer chips that Delen said help offer an experience closer to that of actually smoking. Delen said Vuse is also set apart by being produced domestically, while most electronic cigarettes are produced abroad. “We’re not looking to make a little splash in the category,” Delen said. “We’re looking to make a big splash in the category.” … Delen said … Reynolds American is focusing on markets centered around emerging products.”

Philip Morris has also entered the “non-tobacco” cigarette market, after having purchased the patent to a new nicotine aerosol technology, although it is not clear how closely this new nicotine aerosol system resembles a cigarette rather than an inhaler.

British American Tobacco has also entered the electronic cigarette market. Its Nicoventures division is working on a nicotine inhaler to be launched within the next two years and it is supporting the development of what is apparently some type of non-tobacco, electronic cigarette. According to this same Financial Timesarticle, Imperial Tobacco and Japan Tobacco are also preparing to enter the electronic cigarette market.

All of these tobacco companies realize something that the major anti-smoking groups fail to realize: It is no longer 1954 and the cigarette companies have not just issued their Frank Statement. Nor is it the 1960s, 1970s, 1980s, or 1990s. It is 2012, and the major cigarette companies have – unlike the major anti-smoking groups – begun to embrace the concept of harm reduction in the form of non-tobacco cigarette alternatives that deliver nicotine without the tar, toxins, and carcinogens and which therefore promote smoking cessation with an approach that may be more effective than traditional pharmacological methods.

A second major development is the increasingly effective voice of the vaping community. Vapers are letting their voices be heard, and after hearing the truth from vapers, policy makers are just not able to take the anti-smoking groups’ advice and remove these products from the market. The electronic cigarette consumer advocacy and trade groups, internet forums, and vapers themselves have changed the dynamics of the playing field. The voices of the anti-smoking groups and pharmaceutical companies are not the only ones being heard. The true stories being shared by vapers who have successfully quit smoking or greatly reduced the amount they smoke thanks to electronic cigarettes, and who have experienced dramatic improvements in their health, are outweighing the financially conflicted and ideologically-driven voices of the anti-smoking movement. This is not to say that the battle is over, but I do believe that in the U.S. at least, the battle is now going to be over the nature of regulation, not the presence or absence of electronic cigarettes on the market.

An article published yesterday in the Financial reports that the electronic cigarette industry is currently a $2 billion global market. According to the article:

“after an initial fad period where the product was available exclusively on-line, e-cigs are now gaining acceptance as repeat usage products available through a variety of popular distribution channels, including convenience stores and supermarkets (for example, Tesco in the UK has signed a deal to stock E-Vapes) and the product is now no longer the preserve of specialists. … Little wonder then that Tobacco and Pharma players have begun to sit up and take notice. In the world’s biggest e-cigarette market, the US, two leading tobacco players have entered the e-cig market by either buying an established e-cig brand (as in the case of Lorillard buying Blu for US$135mn in April 2012) or by launching their own e-cigarette brands on the market (eg Swisher’s eponymous e-cigarettes and e-cigars, also in 2012). Larger tobacco companies with more sizeable financial outlay have decided to develop their own alternative cigarette-mimicking nicotine delivery devices, such as global no.2 tobacco player, BAT, which in 2011 set up a company called Nicoventures to develop modified risk and nicotine delivery products. According to its product developer, Kind Consumer, its lead product will be a “pharmaceutically regulated substitute cigarette”. … Globally, the NRT retail market is worth US$2.4bn (excluding prescription sales), and enjoying stable overall growth, but how long before it is eclipsed by the already US$2bn-strong e-cigarettes market?”

Euromonitor International recently projected that by the year 2050, the non-tobacco cigarette market (which is dominated by electronic cigarettes) will account for 4% of the entire tobacco market.

Sadly, if electronic cigarettes do take off as a more effective tool for getting smokers off their cigarettes and helping to save their lives, it will not be thanks to the efforts of the national anti-smoking groups. It will be despite their best efforts.

 

Dr. Michael Siegel Writes: Federal Government Wastes $10 Million on Nicotine Vaccine Studies; Money Would Have Been Better Spent Investigating Potential Role of Electronic Cigarettes

In 2009, the federal government awarded Nabi Pharmaceuticals a$10 million stimulus grant to conduct a clinical trial of NicVax, an injectable vaccination intended to help people quit smoking.

According to an NIH press release: “Successful completion of the study will bring the vaccine closer to final approval. Already given fast track designation by the U.S. Food and Drug Administration, NicVAX passed initial regulatory hurdles showing the basic idea is sound. Patients in the trial get six monthly shots in the arm. … The award continues a public-private partnership between NIDA and NABI that started in 2001 with a grant to support the basic science that led to NicVAX. The effort continued in 2005 with a grant to help support early clinical trials to test the safety and efficacy of the vaccine.”

At the time, the director of the National Institute on Drug Abuse (NIDA) predicted that the nicotine vaccine would be a powerful tool to promote smoking cessation: “A vaccine that limits the ability of nicotine to enter the brain, and that is effective for six to 12 months following vaccination will give smokers a fighting chance to end the addiction/relapse cycle that plagues the great majority of smokers trying to quit.”

For several years, I have been arguing that the tobacco control movement’s obsession with nicotine as the sole element involved in smoking addiction has been problematic and has hindered the search for a truly effective tool to promote smoking cessation. I have repeatedly pointed out that smoking addiction involves far more than just nicotine. There are many other aspects to the addiction, including physical stimuli, behavioral aspects, and even social aspects. The hand motions, blowing of smoke, holding of the cigarette, and many other physical, behavioral, and social stimuli serve as reinforcements of the overall smoking experience. A sole focus on just nicotine is not an effective strategy for finding a workable strategy.

I have also pointed out that for the first time, we now have a tool that does address the behavioral aspects of the addiction, not just the pharmacologic aspects. That tool is called the electronic cigarette. Because it looks like, feels like, and is used like a cigarette, in addition to supplying nicotine, the electronic cigarette addresses all aspects of the smoking addiction. It simulates the smoking experience. That is precisely why it has been helpful to so many smokers in quitting and why the product’s use has been growing exponentially.

The Rest of the Story

As I predicted, the nicotine vaccine turned out to be a dismal failure. Yesterday, Nabi Pharmaceuticals reported the results of a phase II clinical trial in which the nicotine vaccine in combination with Chantix was found to be no more effective than Chantix alone: “Smokers who received both products quit smoking at the same rate as those treated with a placebo and varenicline, according to an initial evaluation of the study’s data, Nabi reported. Those rates were similar to those involving smokers in other studies who had received only varenicline”.

These results come on the heels of the revelation that the phase III clinical trial funded by the federal government was a complete failure: “the primary end point was not met and there was no statistical difference between the NicVAX and Placebo groups. As in previous trials, NicVAX was well-tolerated with a clinically acceptable safety and tolerability profile. These results are not different from the results of the first Phase III trial that were reported in July 2011, which had a similar design and protocol.”

In  my opinion, the federal government put its eggs in the wrong basket. At the same time that the federal government was spending $10 million on the nicotine vaccine, it was engaging in a campaign to discourage smokers from using electronic cigarettes to quit – scaring them by grossly exaggerating information about trace levels of carcinogens detected in these products and trying to convince them that all electronic cigarettes may have anti-freeze in them.

So while the FDA gave “fast track” status to a drug that I believe was clearly doomed to failure, it essentially tried to pull off the market a new device which is perhaps the most promising innovation ever developed to treat not just nicotine addiction, but the smoking addiction as a whole.

To make matters worse, the anti-smoking researchers who had put their own eggs in the nicotine vaccine basket – showing poor judgment in their ability to evaluate the most promising strategies for smoking cessation because of their history of Big Pharma funding – were given prominent positions guiding federal smoking cessation strategy.

For example, the panel chair of the Joint Commission panel which established hospital standards for the treatment of smoking cessation was Dr. Michael Fiore. However, Dr. Fiore was receiving grant funding from Nabi Pharmaceuticals, whose nicotine vaccinehad been given fast track status by the FDA “for use as a therapeutic for smoking cessation.'”

Clearly, it would have been to Nabi Pharmaceutical’s great financial interest to have in place as it begins to market this drug a hospital standard requiring all smokers to be prescribed at discharge an FDA-approved smoking cessation drug. This is precisely the requirement that Dr. Fiore and his panel established.

In my opinion, it was inappropriate for Dr. Fiore to have accepted the position as chair of this panel, given his financial conflict of interest. The recommendations from the panel were clearly biased because of this financial conflict.

Another example is the appointment of not one, but two Nabi Pharmaceuticals-conflicted scientists as members of the Tobacco Products Scientific Advisory Board (TPSAC).  Dr. Neal Benowitz has consulted for Nabi Pharmaceuticals and Dr. Dorothy Hatsukami has received grant support from Nabi Pharmaceuticals for investigation of the effectiveness of NicVax.

Are these conflicted scientists really the ones we want on a panel that is supposed to be making objective, big picture recommendations on the best strategies to reduce smoking-related morbidity and mortality? NIH advisory panels are not supposed to have members with financial conflicts of interest in the first place. Why this special exception for the tobacco products advisory panel?

The rest of the story is that the detrimental effects of the financial relationships between Big Pharma and many of the leading scientists in the anti-smoking movement as well as with the federal government itself are now starting to show. The taxpayer money spent on the nicotine vaccine was a waste of money as I predicted before the trial had even begun. The bias towards a narrow “nicotine only” strategy for smoking cessation has inundated the FDA and the NIH, which has actually partnered with Big Pharma to waste taxpayer money on a strategy that was doomed to failure from the start. And now, a scientist who put her eggs in the wrong basket as well is serving as a member of a national advisory panel to the FDA on tobacco products. In the mean time, the FDA has done everything but place a formal ban on electronic cigarettes, the one product which shows promise because of its ability to address both the pharmacologic and behavioral aspects of smoking addiction.

E-Cigarettes Pose No Risk Of Heart Disease, Study Finds

By Mehreen Khan – Aug 25, 2012 5:40 AM CT

Electronic cigarettes used by smokers who want to kick the habit show no connection to heart disease, according to a study that adds to evidence of health benefits of switching from tobacco to smokeless alternatives.

E-cigarettes, electronic tubes that simulate the effect of smoking by producing nicotine vapor, prompted no adverse effects on cardiac function in the study, researchers from the Athens- based Onassis Cardiac Surgery Center said in a report presented at the European Society of Cardiology annual meeting in Munich today.

Investigators examined the heart activity of 20 young daily smokers after one ordinary cigarette against 22 people who smoked an electronic cigarette for 7 minutes. Whereas tobacco smokers showed “significant” disruptions of functions such as heartbeats or blood pressure, the effect of e-cigarettes on the heart was minimal, Konstantinos Farsalinos, one of the researchers, said in the presentation.

“Currently available data suggest that electronic cigarettes are far less harmful, and substituting tobacco with electronic cigarettes may be beneficial to health,” Farsalinos said.

Previous studies have found that the electronic devices would have to be smoked daily for four to 12 months to achieve the levels of nitrosamines, a carcinogen, that are present in a single tobacco cigarette, the researchers said. Industrywide e- cigarette sales this year are likely to double from $250 million in 2011, according to UBS AG.

Psychological Effects

Electronic cigarettes, which mimic the look and feel of traditional versions without generating smoke and ash, are one of the few smoking alternatives that provide users with their chemical need for nicotine and reproduce the psychological effect of holding and smoking a cigarette, the researcher said.

Makers of the battery-powered devices include Lorillard Inc. (LO), a Greensboro, North Carolina-based producer of standard cigarettes, which acquired Blue Ecigs for $135 million in April. The U.S. Food and Drug Administration has yet to impose rules on the testing and production of e-cigarettes.

About 2.5 million people use e-cigarettes in the U.S., according to an estimate by the Tobacco Vapor Electronic Cigarette Association.

Although nicotine is present in the devices’ vapor, it is absorbed by the blood at a far slower rate than tobacco smoke, accounting for the lower levels of toxicity, Farsalinos said. No traces of nitrosamine were found in the e-cigarettes in the study, he said.

To contact the reporter on this story: Mehreen Khan in London at mkhan108@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

Tobacco Groups Win Challenge To FDA Cigarette Label Rule

By Tom Schoenberg – Aug 24, 2012 12:37 PM CT

Tobacco companies defeated a U.S. law forcing cigarette packaging and advertisements to display images such as diseased lungs, persuading a federal appeals court that the requirements violate their free speech rights.

In a 2-1 decision, the U.S. Court of Appeals in Washington today ruled that Food and Drug Administration regulations mandating visual-image warnings of smoking’s health risks, along with the telephone number 1-800-QUIT-NOW, are “unabashed attempts to evoke emotion” and “browbeat consumers” to stop buying the companies’ products.

Commonwealth Brands Inc., Liggett Group LLC and Santa Fe Natural Tobacco Co. sued the FDA last year, claiming the mandates for cigarette packages, cartons and advertising violated the First Amendment. Photographer: Daniel Acker/Bloomberg

“These inflammatory images and the provocatively named hotline cannot rationally be viewed as pure attempts to convey information to consumers,” U.S. Circuit Judge Janice Rogers Brown wrote in her majority opinion.

Commonwealth Brands Inc., Liggett Group LLC and Santa FeNatural Tobacco Co. sued the FDA last year, claiming the mandates for cigarette packages, cartons and advertising, passed as part of the Family Smoking Prevention and Control Act, violated the First Amendment.

The companies said in court papers that complying with the requirements would cost them a total of about $20 million. The mandate, scheduled to go into effect next month, was put on hold by a lower-court judge while the appeals court considered its legality.

Selected Images

The government argued in court papers that nine images selected by the agency to be placed on packages and advertisements are true depictions required by Congress in thelaw to show the negative health consequences of smoking.

The graphics were supposed to cover the top half of the front and back of cigarette packages and 20 percent of print advertisements. The FDA estimated the visual warnings would help lower the smoking rate by about 0.212 percentage points, according to the lower court judge who also ruled against the FDA.

Jennifer Haliski, an FDA spokeswoman, said the agency doesn’t comment “on possible, pending or ongoing litigation.”

The Campaign for Tobacco-Free Kids, an anti-smoking group, urged the government to appeal the ruling, noting that a federal appeals court Cincinnati upheld the packaging requirements in March.

“The split decisions make it likely the U.S. Supreme Court will settle the issue,” the group said in an e-mailed statement.

Charcoal Warnings

During a Feb. 1 hearing before U.S. District Judge Richard Leon, Mark Stern, a Justice Department lawyer, compared the FDA’s proposed cigarette warnings to those on charcoal that advise people to not use it indoors, noting that 28 people a year die from carbon monoxide poisoning from using charcoal inside their homes.

With cigarettes, there are 440,000 deaths, Stern said.

“It’s very unusual to sell a product that when used as intended will kill you,” Stern said.

He said that the image of a man with cigarette smoke coming out of a tracheotomy hole in his throat conveys addictiveness.

Brown said the image could be misinterpreted to suggest that the procedure is a common consequence of smoking.

In a dissent, U.S. Circuit Judge Judith Rogers said Brown’s opinion applied the wrong level of First Amendment scrutiny and disregarded the tobacco companies’ history of deceptive advertising.

Noel Francisco, a lawyer for R.J. Reynolds, a unit of Reynolds American Inc. (RAI), argued that “the purpose of the warnings is not to inform, but to scare consumers into adopting the government’s course of action.” He said during the February hearing that the government was using “threats and fear” to motivate people to stop using a lawful product.

‘Smoking Rates’

FDA “failed to present any data” showing that the proposed graphic warnings “will accomplish the agency’s stated objective of reducing smoking rates,” Brown said in the opinion.

“The First Amendment requires the government not only to state a substantial interest justifying a regulation on commercial speech, but also to show that its regulation directly advances that goal,” she said in the ruling.

On Aug. 15, the High Court of Australia upheld that country’s requirement that cigarettes be sold in uniform packages barring display of company trademarks. New Zealand and the U.K. are among countries whose governments have indicated interest in implementing similar legislation, which takes effect in Australia Dec. 1.

The case is R.J. Reynolds Tobacco Co. v. U.S. Food and Drug Administration, 11-5332, U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington attschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.