BAT Seeking to Have New Tobacco Alternative Available on NHS

Source from:  Bloomberg 09/15/2014

Nicoventures, a company formed by British American Tobacco Plc (BATS) to develop substitute nicotine products, is seeking approval for its Voke inhalation device to be made available on the U.K. National Health Service as it seeks an edge in the growing market for cigarette alternatives.

Voke has gained approval from the U.K. Medicines and Healthcare Products Regulatory Agency to be prescribed by doctors and will become the unit's first licensed product, Nicoventures said today. The NHS accounts for about 90 percent of the British health care market. The company is also looking for it to be available in stores, said Des Naughton, managing director of Nicoventures, set up by BAT in 2010, in an interview Friday.

Tobacco companies globally are developing cigarette alternatives amid government clampdowns and people quitting smoking. BAT has been selling Vype e-cigarettes for more than a year in the U.K., while rival Imperial Tobacco Group Plc (IMT) is acquiring Blu, the world's biggest e-cigarette maker.

"This is better than an e-cigarette for BAT, because it can be prescribed by doctors and there is no debate over its safety," said Erik Bloomquist, an analyst at Berenberg in London. "We don't know how many they would sell, but it shows that BAT really does take leadership on lower-harm products."

Nicoventures will require a further license to allow the cigarette-shaped Voke to be manufactured via an automated process. Naughton declined to say when he expected that to be granted and when BAT would start selling the product.

Medical Device

The regulation of e-cigarettes and whether they are safer than traditional cigarettes was reignited last month when the World Health Organization called for them to be banned indoors and said sales to minors should be prohibited.

Voke will be able to circumvent the indoor ban now that it licensed as a medical device. The inhaler, based on asthma inhaler technology, delivers a nicotine formulation via a breath-operated valve in a cigarette-sized medical device and contains no electronics, heat or combustion.

It's designed to relieve and prevent craving and nicotine withdrawal symptoms associated with tobacco dependence, according to its developer Kind Consumer, a company backed by former Tesco Plc Chief Executive Officer Terry Leahy.

"The product is far more appealing than what is currently in the market" such as nicotine patches, gum or inhalers developed by pharmaceutical companies, Naughton said.

BAT's share price rose 0.5 percent to 3,639 pence at 2:10 p.m. in London, giving the company a market capitalization of 67.8 billion pounds ($110 billion). Enditem