Category: News This Week

  • Marketing Denial Order for Turning Point Brands

    Marketing Denial Order for Turning Point Brands

    Turning Point Brands (TPB) received a marketing denial order (MDO) from the U.S. Food and Drug Administration in response to a premarket tobacco product application (PMTA) covering certain of the company’s vapor products.

    In a press note, the company said it stands behind the high quality of its PMTA, which it believes established that the products’ continued marketing would be “appropriate for the protection of public health,” the standard established by the Family Smoking Prevention and Tobacco Control Act of 2009. “These products are crucial to improving public health by helping adult smokers migrate to less harmful products,” the company wrote. “TPB will continue to engage with the FDA and other stakeholders as we consider options moving forward, including a formal appeal of the decision and potential legal relief.”

    The PMTA denied by this MDO included an in-depth toxicological review, a clinical study and studies on patterns and likelihood of use. According to TPB, the data demonstrated that TPB products do not appeal to never-users, youth or former users and that a significant majority of users of TPB products had completely ceased use of combustible cigarettes. “The scientific literature on lower risk nicotine-delivery systems shows that these products can significantly improve public health by providing alternatives that are much less harmful than combustible cigarettes,” the company stated.

    “While we believe the FDA’s current conclusion is misguided, we will continue our dialogue with the agency in search of a path forward,” said Larry Wexler, president and CEO of Turning Point Brands. “As we explore options for appealing this decision, we are hopeful that the agency reaffirms its commitment to science-based decision-making and to its announced Comprehensive Plan, which includes fully transitioning adult consumers down the continuum of risk in order to reduce the morbidity and mortality associated with combustible cigarette use by preserving the diverse vapor market.”

    The company says it continues to monitor regulatory developments and intends to take appropriate measures to manage and mitigate any risk exposure that may result from these and any future MDOs.

  • New Nicotine Pouch Hits Market

    New Nicotine Pouch Hits Market

    Photo: V&YOU

    V&YOU has launched a new Boost+ nicotine pouch that offers “a bold and bright burst of flavor balanced with a powerfully refreshing kick,” according to the company.

    “We’re incredibly excited to share this product with our fans,” says V&YOU co-founder Markus Bonke. “Boost+ is simply one of the best nicotine pouches we’ve ever made. The flavor combos, the nicotine content and flavors—even the can itself has been improved to deliver the ultimate in consumer satisfaction, not to mention the first-ever child-safe packaging.”

    “Our customers demanded a stronger nicotine pouch, and we’ve really delivered here,” says V&YOU co-founder Titus Wouda Kuipers. “With 15 mg of Swiss-made nicotine per pouch combined with our fantastic delivery system, this is for pure fans who love the nicotine sensation without the hang-ups of smoking, vaping or snus.” 

    Boost+ comes in a professional looking can with a beautiful metallic finish that matches style with substance, according to V&YOU.

  • Wanted: Nominations for FDA Advisory Group

    Wanted: Nominations for FDA Advisory Group

    Photo: Bill Gallery

    The U.S. Food and Drug Administration Center for Tobacco Products (CTP) is requesting nominations for individuals to serve as members on the Tobacco Products Scientific Advisory Committee (TPSAC). Nominees may be self-nominated or nominated by an organization.

    Nominations received on or before Nov. 8, 2021, will be given first consideration. Nominations received after Nov. 8, 2021, will be considered as later vacancies occur.

    The TPSAC advises the CTP in its responsibilities related to the regulation of tobacco products. The committee reviews and evaluates safety, dependence and health issues relating to tobacco products and provides appropriate advice, information and recommendations to the FDA commissioner.

    The committee shall consist of 12 members including the chair. Members and the chair are selected by the commissioner or designee from among individuals knowledgeable in the fields of medicine, medical ethics, science or technology involving the manufacture, evaluation or use of tobacco products. 

    Members will be invited to serve for overlapping terms of up to four years. 

    More information on the nomination process for TPSAC members is available at the Federal Register notice.

  • Poda to Change Name, Corporate Structure

    Poda to Change Name, Corporate Structure

    Ryan Selby (Photo: Poda)

    Poda Lifestyle and Wellness’ board of directors approved a proposal to change the company’s name from Poda Lifestyle and Wellness Ltd. to Poda Holdings Inc. The change remains subject to the approval of the Canadian Securities Exchange.

    There is no consolidation of the company’s share capital in connection with the planned name change. The proposed name change will not affect the company’s share structure or the rights of the company’s shareholders.

    In addition to the intended name change, the company also announced plans for a new corporate structure, whereby the company will create six strategic subsidiaries, each focused on specific growth areas of the company. The proposed names for the six subsidiaries are Poda (Tobacco), Poda (Alternatives), Poda (Therapeutics), Poda (THC), Poda (CBD) and Poda (Research and Development).

    “This proposed name change is consistent with our business objectives and our long-term strategy,” said Poda CEO Ryan Selby in a statement. “Our valuable intellectual property has applicability across a wide-ranging scope of applications, and I believe the name Poda Holdings Inc. more accurately serves the overarching vision the board has for the company.

    “In addition to the name shift, creating the six new subsidiaries will provide strategic focus and strong growth opportunities in each of the target opportunities. I look forward to sharing more information about our customized strategies for each subsidiary over the coming weeks.”

  • PMI Completes Fertin Pharma Acquisition

    PMI Completes Fertin Pharma Acquisition

    Photo: Tanusha

    Philip Morris International has closed its acquisition of Fertin Pharma, a leading developer and manufacturer of innovative pharmaceutical and well-being products based on oral and intra-oral delivery systems, for an enterprise value of DKK5.1 billion ($820 million).

    “As we build our pipeline of smoke-free products with the goal of phasing out cigarettes and expand our business for the long-term toward areas outside of tobacco and nicotine, such as self-care wellness, we welcome the contributions that Fertin Pharma, its management and its employees will bring to PMI,” said PMI CEO Jacek Olczak in a statement.

    “PMI’s future is centered on health, science, technology and sustainable business practices to deliver innovative products and solutions that aim to improve people’s lives and create a net positive impact on society. The world-class expertise of Fertin aligns perfectly with this vision and will be an important part of our future.”

    “We are excited to join PMI and start this new chapter for Fertin Pharma,” said Peter Halling, the company’s CEO. “By becoming part of PMI’s transformation, Fertin will be uniquely positioned to continue to innovate, grow and serve our customers as a leading CDMO [contract development and manufacturing organization]—delivering on our vision to enable people to live healthier lives. Our shared commitment to science and consumer-centric innovations forms a strong basis for a very successful future together.”

    The addition to Fertin Pharma’s technologies, capabilities and workforce—including around 200 R&D professionals—will provide PMI with speed and scale in differentiated and innovative oral delivery products to support its 2025 goals of generating more than 50 percent of its total net revenues from smoke-free products and at least $1 billion in net revenues from products beyond nicotine.

    With Fertin Pharma’s know-how, PMI plans to accelerate its presence in the fast-growing modern oral category through a broad range of smoke-free products, such as nicotine pouches, that can help more adults who would otherwise continue to smoke switch to better alternatives and stop smoking. In addition, Fertin Pharma’s oral delivery platforms—which are complementary to PMI’s inhalation expertise—can be leveraged for the development of scientifically substantiated self-care wellness products, including over-the-counter solutions and supplements for better living in areas such as sleep, energy, calm and focus.

    By becoming part of PMI’s transformation, Fertin will be uniquely positioned to continue to innovate, grow and serve our customers as a leading CDMO [contract development and manufacturing organization]—delivering on our vision to enable people to live healthier lives.

    Peter Halling, CEO, Fertin Pharma

    Fertin Pharma has more than 850 employees and operations in Denmark, Canada and India. It is a leading CDMO, specializing in the research, development and production of gums, pouches, liquefiable tablets and other solid oral systems for the delivery of active ingredients, including nicotine, where it is a leading producer of nicotine-replacement therapy solutions. In 2020, Fertin Pharma generated net revenues of DKK1.1 billion.

  • PMI’s Vectura Offer Becomes Unconditional

    PMI’s Vectura Offer Becomes Unconditional

    Photo: danielabalan

    PMI Global Services’ offer for inhaled drug delivery solutions provider Vectura Group has become unconditional, having received valid acceptances for or acquired 74.77 percent of Vectura shares, in excess of the 50 percent required under the acceptance condition, as well as confirming that all other conditions to the offer have been satisfied or waived. PMI has extended the offer to allow for the tender of further shares.

    “We have reached an important milestone in our acquisition of Vectura and are pleased to have secured over 74 percent of the company’s shares, in excess of the 50 percent required to make our offer unconditional and PMI the majority shareholder,” said PMI CEO Jacek Olczak in a statement.

    “We are very excited about the critical role Vectura will play in our ‘beyond nicotine’ strategy and look forward to working with Vectura’s scientists and providing them with the resources and expertise to grow their business to help us achieve our goal of generating at least $1 billion in net revenues from Beyond Nicotine products by 2025.”

    PMI’s proposed acquisition of Vectura is part of its long-term strategy to move beyond nicotine and will provide support for Vectura’s continued growth. The tobacco firm intends to build on Vectura’s scientific capabilities to develop products and services that go beyond nicotine. PMI aims to achieve at least $1 billion in annual net revenues from non-nicotine sources by 2025.

    PMI’s acquisition follows a bidding war with the private equity firm Carlyle.

    PMI’s bid unleashed a storm of criticism from public health advocates who dislike the idea of a tobacco company investing in the lung health business.

  • Aaron Gwinner Named CIO of the Year

    Aaron Gwinner Named CIO of the Year

    Aaron Gwinner

    Aaron Gwinner, senior vice president of digital business solutions and the chief information officer (CIO) for the Reynolds American Inc. group of companies, was selected as the winner of the CharlotteCIO of the Year ORBIE Award within the Large Enterprise category.

    The ORBIE Awards, presented by CharlotteCIO, recognize chief information officers who have demonstrated excellence in innovation, technology leadership, business value creation and community involvement.

    “Aaron continues to consistently provide exceptional leadership and outcomes that are accelerating the digital transformation of our business,” said Guy Meldrum, CEO at Reynolds, in a statement. “All of us at Reynolds congratulate him on this well-deserved achievement.”

    “I am honored to be chosen as a CharlotteCIO of the Year and grateful for the team that has made this achievement possible,” Gwinner said. “The acceleration of our digital transformation and ability to leverage technology to drive our business is a direct reflection of the amazing people in our teams and the support of our executive leadership. Thank you, CharlotteCIO, for this incredible recognition.”

    Gwinner was recognized among 23 finalists representing leading technology professionals in the Charlotte, North Carolina, region. Finalists and winners are selected through an independent peer-review process led by prior award recipients.

  • Swedish Match to Spin Off Cigar Business

    Swedish Match to Spin Off Cigar Business

    Photo: Swedish Match

    Swedish Match intends to separate its cigar business via a spin-off to shareholders and to completely exit the manufacturing of combustible tobacco products. Swedish Match has initiated preparations for a separation and a subsequent listing on a major U.S. securities exchange, with a final decision on execution subject to various considerations. The separation is expected to be completed during the second half of 2022 at the earliest.

    Swedish Match started transforming its business model two decades ago with the divestiture of its cigarette business in 1999. Later, it spun off its pipe tobacco, premium cigars and its non-U.S. machine-made cigar businesses. Going forward, smoke-free products such as nicotine pouches and snus will play the leading role in building a stronger company in line with societal trends, the company explained in a press note.

    According to Swedish Match, the intended separation of the cigar business provides even greater focus on building the company’s presence in the growing modern oral category while also providing opportunities and greater flexibility for the standalone cigar business to execute its own strategic plans toward delivering strong value as an independent company. “As a standalone company, the cigar business will be able to explore a broader scope of growth opportunities and to optimize its operational setup and capital structure, among other benefits,” Swedish Match wrote.

    According to Swedish Match, the cigar business has solid positions in both the natural leaf and homogenized tobacco leaf segments of the U.S. mass market cigars category and holds the No. 2 market position with approximately 23 percent of the market measured by number of sticks. Since 2015, volumes have grown at a compounded annual rate of close to 10 percent from more than 1.2 billion sticks to more than 1.9 billion sticks in 2020, driven by robust growth for natural leaf varieties. During the same period, revenues have also grown by close to 10 percent on a compounded annual basis from $313 million to $493 million, while operating profit has grown by 54 percent to $195 million. During the first six months of 2021, compared to the same period of 2020 and measured in local currency, sales grew by 25 percent as a result of improved pricing and double-digit volume growth, and operating profit increased by 44 percent.

    The natural leaf cigar portfolio includes such iconic brands as Garcia y Vega, Game and 1882, while its White Owl brand of HTL cigars is recognized nationwide for its quality and heritage. Its portfolios of both nonflavored and flavored cigars are among the broadest in the industry. The business has efficient and modern manufacturing presence in both the U.S. and in the Dominican Republic.

    In addition to its cigar business, Swedish Match operates its Smoke-free and Lights product segments. For the full-year 2020, the Smoke-free and Lights product segments reported combined revenues of SEK11.8 billion and combined operating profit of SEK5.36 billion. Measured in constant currencies, sales and operating profit for these segments combined grew by 21 and 32 percent, respectively, for the full-year 2020. For the first six months of 2021, these segments combined reported revenues of SEK6.4 billion and operating profit of SEK3.06 billion. Measured in constant currencies, sales and operating profit for these segments combined grew by 20 percent and 30 percent, respectively, during the six-month period. Growth continued to be driven by the strong momentum for nicotine pouches. In the U.S., the ZYN brand of nicotine pouches is the clear market leader and has enjoyed tremendous growth, with volumes exceeding 140 million cans for the 12-month period ending June 30, 2021.

    This announcement is another milestone toward achievement of our aspiration to become an entirely smoke-free organization.

    Lars Dahlgren, president and CEO, Swedish Match

    “This announcement is another milestone toward achievement of our aspiration to become an entirely smoke-free organization with a clear leadership position in oral reduced-risk products, including ZYN, the largest modern oral brand in the U.S. and globally,” said Lars Dahlgren, president and CEO of Swedish Match. “The cigar business continues to perform very well and is seeing positive industry dynamics, which we believe will make it an attractive standalone company, balancing strong cash flow generation with attractive growth.

    “The new cigar company will have the ability to explore a wider scope of growth opportunities within its autonomous and focused strategic agenda and to establish efficient and tailored operational and legal structures geared for long-term value creation.

    “Subject to market conditions, we expect that the new standalone cigar business, with its strong cash flow profile, could be capitalized at a higher level of leverage than has been the case for Swedish Match historically, which would create the opportunity for Swedish Match to use financing proceeds upon separation to further enhance shareholder returns. Until a separation is complete, Swedish Match will continue to operate as a single company and will continue business as usual for our customers and employees.”

    Following the potential separation of the cigar business into a new standalone company, Swedish Match expects to provide commercial and administrative support to the new standalone entity during a transitional period. The completion of the intended separation, the resulting structures and other related considerations are subject to final board and shareholder approvals, a thorough review of market and other business conditions, required documentation and other customary and necessary approvals and consultations.

    Goldman Sachs is acting as exclusive financial advisor to Swedish Match on the intended spin-off of its cigar business.

  • Bidi Vapor to Market Product Despite MDO

    Bidi Vapor to Market Product Despite MDO

    Bidi Vapor will continue to manufacture and market its Artic (menthol) Bidi Stick in the United States despite receiving a marketing denial order (MDO) for the product, according to a trading update issued by Kaival Brands Innovations Group, the exclusive distributor of Bidi Vapor products.

    As of Sept. 10, the U.S. Food and Drug Administration has issued MDOs for some 992,000 electronic nicotine-delivery system (ENDS) products from 168 companies. Bidi Vapor received an MDO for its nontobacco flavored Bidi Sticks, including its Artic (menthol) Bidi Stick.

    The company, however, insists the FDA mischaracterized the Artic (menthol) Bidi Stick as flavored. Because its Arctic Bidi Stick is menthol, Bidi Vapor believes that this product is not subject to the MDO.

    “This position is aligned with the FDA’s public statements and press releases stating that tobacco and menthol ENDS are not deemed flavored products subject to the MDOs,” the company wrote in a press note. “Accordingly, along with the Classic (tobacco) Bidi Stick, Bidi intends to continue to manufacture and market its Arctic (menthol) Bidi Stick for distribution by us.”

    The company, which has historically derived nearly all its revenues from sales of flavored Bidi Sticks, appears willing to accept the risk of enforcement.

    “If the FDA disagrees with Bidi Vapor’s position, issues a warning letter or takes other action against Bidi Vapor resulting in us not being able to distribute the menthol (Arctic) Bidi Stick in the United States, or consumers do not purchase the tobacco (Classic) or menthol (Arctic) Bidi Sticks, our revenues and, thereby our financial results and condition, would be materially adversely affected,” Kaival Innovations Group wrote in its news release.  

    For the three and nine months ended July 31, 2021, the Arctic (menthol) Bidi Stick constituted approximately 15.2 percent and 18.5 percent, respectively, of the company’s total Bidi Sticks sales.

  • BAT Suspends Belarus Manufacturing

    BAT Suspends Belarus Manufacturing

    Photo: Tobacco Reporter archive

    BAT has suspended manufacturing of its brands at a state-owned factory in Belarus accused of fueling cigarette smuggling and helping finance the country’s oppressive regime, reports Inews.

    The multinational said it had stopped ordering from the Grodno Tobacco Factory (GTF) Neman, which has a longstanding agreement to manufacture some of BAT’s best-selling brands for the Belarusian market.

    Belarus has come under heavy international criticism for its heavy-handed suppression of protests against the outcome of last year’s disputed presidential elections.

    Last month, the United States announced sanctions targeting individuals and entities it accused of supporting Belarus’ de facto dictator, Alexander Lukashenko, and his cronies by providing funds for sustaining the violent crackdown.

    Accounting for 70 percent of domestic cigarette sales, Neman effectively has a monopoly on the Belarusian tobacco market. Washington says it is one of several entities that receive preferential treatment from the regime in return for providing funds to Lukashenko.

    “This patronage network sustains [his] violent regime at the expense of the Belarusian people,” according to the U.S. Treasury.

    “Following the recent imposition of international sanctions against several Belarusian persons and entities, including GTF Neman, as well as restrictions targeting tobacco manufacturing materials, we have taken steps to ensure all activities remain compliant,” BAT was quoted as saying by Inews.

    “BAT has suspended its operations with GTF Neman and currently does not order manufacturing of its product from this factory.”

    The company added, however, that as a result of the sanctions, it was now unable to complete a planned on-site independent audit of workplace conditions at GTF Neman, where there have been allegations of human rights abuses against workers who took part in anti-regime protests.

    The Neman factory has also been fingered as a major source of illicit cigarettes in the EU. Around 10 percent of the 5.5 billion cigarettes sold illegally in the U.K. annually are believed to have originated in Belarus.

    There is no suggestion that BAT is aware of any illicit trade, and the firm says it has “strong controls” to stop its products entering the black market.

    “We are satisfied that BAT Belarus applies all the relevant BAT group policies and procedures with regard to combating illicit trade to ensure that products manufactured by GTF Neman under BAT Group’s trademarks are consumed in the Republic of Belarus,” a BAT spokesperson was quoted as saying by Inews earlier this year.