Category: Featured

Study Confirms HnB Harm Reduction
Photo: BAT
New research published today in Internal and Emergency Medicine provides the first real-world evidence that people switching from cigarettes to exclusive use of glo, BAT’s flagship tobacco-heating product (THP), can significantly reduce their exposure to certain toxicants and indicators of potential harm related to several smoking-related diseases compared with continuing to smoke.
The results, recorded at six months of a 12-month study, showed that switching completely to glo resulted in statistically significant changes across a range of “biomarkers of exposure” (BoE) and indicators of potential harm, known as “biomarkers of potential harm” (BoPH), compared with continuing to smoke.
For most biomarkers measured, the reductions seen in people using glo were similar to those in participants who stopped smoking completely.
Based on the toxicants measured, glo users showed a:
Significant reduction in a biomarker for lung cancer risk;
Significant reduction in white blood cell count, an inflammatory marker indicative of cardiovascular disease (CVD) risk and other smoking-related diseases;
Improvement in HDL cholesterol associated with reduced risk of CVD;
Improvements in two key indicators of lung health; and
Improvement in a key indicator of oxidative stress, a process implicated in several smoking-related diseases, such as CVD and hypertension.
“These are exciting results as they allow us to understand the potential for reduction of risk that switching completely to glo can deliver,” said David O’Reilly, director of scientific research at BAT, in a statement. “The study shows that smokers switching to glo can reduce their exposure to certain toxicants, which reduces their risk of developing certain smoking-related diseases.
“To have shown a significant reduction in measures of BoPH, some comparable to quitting completely, is very encouraging and provides further scientific substantiation of the harm reduction potential of glo and how it supports our ambition to build ‘A Better Tomorrow’ by reducing the health impact of our business.”
Read more about BAT’s glo trial in Tobacco Reporter’s July 2021 issue.
July 1, 2021
Philip Morris to Acquire Fertin Pharma
Photo: peshkov
Philip Morris International has entered into an agreement to acquire 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).
“The acquisition of Fertin Pharma will be a significant step forward on our journey toward delivering a smoke-free future—enhancing our smoke-free portfolio, notably in modern oral, and accelerating our progress in beyond nicotine,” stated Jacek Olczak, chief executive officer of PMI, in a statement.
“Both PMI and Fertin share a commitment to science and consumer-centric innovations for better living, and I am delighted we have reached this agreement. Fertin’s diverse portfolio of technologies, evolving business mix and world-class expertise will enrich our innovation pipeline and capabilities, providing speed and scale in oral delivery to support our 2025 goals of generating more than 50 percent of our net revenues from smoke-free products and at least $1 billion from products beyond nicotine.”
Fertin Pharma is a privately held company with more than 850 employees and operations in Denmark, Canada and India. It is a contract development and manufacturing organization (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 (NRT) solutions.
According to PMI, the company and its employees bring significant scientific experience and know-how to the development of innovative solutions, driving above-category growth across new and existing business areas. In 2020, Fertin Pharma generated net revenues of DKK1.1 billion. The transaction value represents a multiple of around 15 times Fertin Pharma’s 2020 EBITDA.

Fertin’s diverse portfolio of technologies, evolving business mix and world-class expertise will enrich our innovation pipeline and capabilities.
Jacek Olczak, CEO, PMI
Fertin Pharma is currently owned by the global investment organization EQT and Bagger-Sorensen & Co. Upon the completion of the acquisition, Fertin Pharma will become a wholly owned subsidiary of PMI. PMI will fund the transaction with existing cash and expects it to close in the fourth quarter of 2021, subject to approval by the appropriate regulatory authorities. PMI expects the impact of the acquisition on its full-year 2021 adjusted diluted EPS to be immaterial.
“Fertin Pharma has been on a fantastic journey with EQT and the Bagger-Sorensen family as owners,” said Peter Halling, CEO of Fertin Pharma, in a press note. “With the new ownership in place, Fertin Pharma will be in a great position to continue delivering on our vision and mission, including our work as a CDMO for our customers.
“PMI is going through an inspiring transformation as a company with an ambition to deliver a smoke-free future and building a beyond nicotine product portfolio. An ambition that perfectly matches that of Fertin Pharma, namely to enable people to live healthier lives. In PMI, we have found a new owner and partner who shares our vision, who is committed to science and who will enable Fertin Pharma to further accelerate and grow as a company.”
With the acquisition of Fertin Pharma, PMI will:
Gain substantial know-how for the development, formulation and commercialization of current and additional smoke-free platforms—including the ability to accelerate its presence in the fast-growing modern oral category, providing superior consumer experience through a broad range of smoke-free products such as nicotine pouches and lozenges.
Leverage on Fertin’s oral delivery platforms to access a range of promising technologies—complementary to PMI’s inhalation expertise—for scientifically substantiated botanicals and other self-care wellness products, including over-the-counter solutions and supplements that improve people’s lives in areas such as sleep, energy, calm and focus.
Further build its overall platform of R&D and manufacturing expertise in nicotine and beyond nicotine product areas through the addition of Fertin’s strong capabilities and skilled workforce, including 80 scientists.
Accelerate progress on key sustainability priorities, notably in broadening the reach and access of its smoke-free alternatives to adult smokers around the world to accelerate the end of smoking and building a strong beyond nicotine business.
Earlier this year, PMI announced its goal to generate more than 50 percent of its total net revenues from smoke-free products by 2025. In addition to its continued commitment to achieve a smoke-free future, PMI says it aims to leverage capabilities in life sciences, product innovation and clinical expertise to expand its portfolio beyond tobacco and nicotine with scientifically substantiated products and solutions that improve people’s lives and generate a net positive impact on society.
July 1, 2021
Study: Vaping Better Than NRT for Cessation

Photo: bedya
A new study by Queen Mary University of London, published in Addiction, shows that e-cigarettes are more effective in achieving long-term smoking reduction and cessation than nicotine-replacement therapies (NRT).
The study randomized 135 smokers who had been unable to stop smoking with conventional treatments into two groups—one received an eight-week supply of their choice of NRT and the other received an e-cigarette starter pack with instructions to purchase further e-liquids of their choice of strength and flavor. Products were accompanied by minimal behavioral support.
After six months, 27 percent of those in the e-cigarette group had reduced smoking by at least half compared to 6 percent in the NRT group. Of the participants in the e-cigarette group, 19 percent had stopped smoking altogether versus 3 percent in the NRT group.
“These results have important clinical implications for smokers who have previously been unable to stop smoking using conventional treatments,” said Katie Myers Smith, lead researcher and health psychologist, in Eurasia Review. “E-cigarettes should be recommended to smokers who have previously struggled to quit using other methods, particularly when there is limited behavioral support available.”
“This study shows e-cigarettes can be a very effective tool for people who want to stop smoking, including those who’ve tried to quit before,” said Michelle Mitchell, CEO of Cancer Research U.K., which funded the study. “And research so far shows that vaping is far less harmful than smoking. But e-cigarettes aren’t risk free, and we don’t yet know their long-term effects, so people who have never smoked shouldn’t use them.”
July 1, 2021
New Tobacco Producers’ Association in Croatia

Photo: Branex
Industry stakeholders have formed a new tobacco producers’ association in Croatia, reports Total Croatia News.
The new association, called Tabacum, aims to provide members with better and safer conditions for tobacco production. To date, 57 Croatian tobacco producers, farming about 667 hectares of tobacco in the Podravina and Slavonia regions, have joined the new group.
“We want a secure future for our investments and our work in production,” said Mihael Colak, president of Tabacum. He noted that Tabacum will promote more intensive dialogue with the Ministry of Agriculture, the Croatian Chamber of Commerce, the Croatian Chamber of Agriculture, and it will aim for a more stable and better situation for tobacco producers on the Croatian market.
“Given that tobacco is one of the most profitable agricultural crops in all of Croatia, where the annual value of production exceeds 100 million kuna [$15.85 million], we believe that in our efforts, we will be supported by counties in which tobacco is primarily produced,” said Colak. “We’re convinced that the further strengthening of production is in the interest of all Croatian tobacco producers.”
July 1, 2021
Washington, D.C., Flavor Ban Moves Forward

Photo: lenscap50
The Washington, D.C., council voted to ban the sale of flavored tobacco products, including menthol cigarettes, reports The Washington Post. The vote passed with an eight-to-five majority after a long debate around concerns that the ban could create more opportunities for police to harass Black smokers and that the ban would be “unfairly targeting a smoking choice preferred by Black residents.”
The bill will now head to Mayor Muriel E. Bowser, who is expected to sign it into law.
With this legislation, D.C. joins Massachusetts and other cities across the country in banning menthol cigarettes and other flavored tobacco products.
The bill bans the sale of flavored products but does not criminalize smoking menthol cigarettes. The council approved a change to the bill stating that city police do not have the authority to act on their own to enforce the ban. The Department of Consumer and Regulatory Affairs could still call police for assistance, though.
There is one exception: Hookah bars that already have an exemption from the city’s indoor smoking ban can continue offering flavored hookah for use on their premises.

D.C.’s projection that it will lose just $3 million in taxes by banning flavored tobacco products is a heroically wishful one.
Guy Bentley, director of consumer freedom research, Reason Foundation
Critics said the legislation’s safeguards against racial injustice are insufficient. “The police remain responsible for arresting those selling untaxed cigarettes,” wrote Guy Bentley, director of consumer freedom research at Reason Foundation. “If the bill passes, all flavored tobacco products illicitly sold in the district will be untaxed. Those selling or purchasing these products are vulnerable to police interactions.”
Bentley also pointed to likely loss of tax revenues. “D.C.’s projection that it will lose only $3 million in taxes by banning flavored tobacco products is wishful thinking,” he wrote.
According to Bentley, Massachusetts lost more than $140 million in tax revenues from menthol cigarette sales in the 11 months following its June 2020 ban on tobacco flavors. “Eighty-eight percent of Massachusetts’ lost tobacco sales were made up for by increased tobacco sales in nearby Rhode Island and New Hampshire,” he wrote.
June 30, 2021
Pyxus Releases Full-Year Financial Results

Photo: snowing12
Pyxus International announced results for its quarter and fiscal year ended March 31, 2021.
Combined sales and other operating revenues were $1.33 billion, down 12.8 percent from the prior fiscal year. Combined gross profit as a percent of sales was 12.1 percent, which decreased 2.6 percent from the prior fiscal year.
Combined selling, general and administrative expenses were $197.9 million, which decreased $1.1 million, or 0.6 percent, from the prior fiscal year.
Combined net loss attributable to Pyxus International was $117.7 million, which decreased $147 million, or 55.5 percent, from the prior fiscal year.
Combined adjusted EBITDA was $93.5 million. Total long-term debt was substantially reduced when compared to the prior fiscal year. Year-end uncommitted inventory was the lowest it has been since fiscal 2016.
“In what was an unprecedented and challenging year, our company adapted to constant change as we navigated the Covid-19 pandemic,” said Pieter Sikkel, Pyxus’ president and CEO, in a statement. “During fiscal 2021, we implemented a series of restructurings and process changes that allowed our business to continue to operate through the Covid-19 pandemic while also positioning us for success in fiscal 2022 and beyond. Through these actions, we substantially reduced our debt and costs throughout our supply chain. We also made the strategic decision to exit our cash flow negative Canadian cannabis businesses, which further supports our SG&A cost containment efforts.”

Based on expected first-quarter results, we are optimistic about fiscal 2022.
Pieter Sikkel, president and CEO, Pyxus International
“Although our production facilities continued to operate through the pandemic, certain facilities experienced lower production levels than planned due to smaller crop sizes in Africa and the implementation of social distancing requirements and safety practices to reduce the spread of Covid-19 and protect our employees. In addition, the Covid-19 pandemic-related shipping delays of leaf tobacco for certain customer orders resulted in a shift of between $170 million and $180 million of expected revenue and $30 million and $34 million of expected EBITDA from fiscal 2021 into fiscal 2022. However, the impact of Covid-19 on our business yielded innovative changes that will enable us to be more flexible in the future and accelerate certain activities in the crop cycle. Covid-19 has also pushed the tobacco industry to continue to look for ways to reduce supply chain complexity in a responsible manner.
“For the full year, we are expecting fiscal 2022 sales to be between $1.65 billion and $1.8 billion, SG&A expense to be between $140 million and $145 million (excluding nonrecurring items and potential changes in foreign currency exchange rates) and adjusted EBITDA to be between $150 million and $170 million. Based on expected first-quarter results, we are optimistic about fiscal 2022. Lastly, we are also excited about sharing more information about our enhanced global environmental, social and governance strategy, which supports our ability to deliver on our expected results for fiscal 2022.”
June 30, 2021
Pyxus Chief Financial Officer to Retire

Photo: bortnikau
Joel L. Thomas will be retiring from his position as executive vice president and chief financial officer at Pyxus International upon the appointment of his successor. Thereafter, Thomas will continue to serve as a strategic advisor to facilitate the transition of his responsibilities until he retires from that position on or before June 30, 2022. The company has initiated an executive search for Thomas’ successor.
“On behalf of Pyxus and the board of directors, I would like to thank Joel for his dedication and contributions to the company,” said Pieter Sikkel, president and CEO of Pyxus International, in a statement.
“Throughout his time with the company, Joel has provided financial leadership and implemented innovative financing structures to meet our evolving global requirements. His leadership and dedication were critical over the past year as we navigated the impact of the Covid-19 pandemic and implemented significant restructuring efforts that have positioned our business for long-term success. Joel’s passion for the business, our shareholders, our employees and our customers is evident to anyone who interacts with him, and I wish him all the best in the next chapter of his journey.”
Thomas has spent the past 16 years of his career with Pyxus International, including serving the last seven years as CFO.
“It has been a privilege to work and serve alongside our talented global team,” said Thomas. “I’m proud of the steps we have taken to create a solid foundation for the company that will enable it to achieve long-term success.”
June 30, 2021
TAAT Revenue Triples Over Previous Quarter

Photo: Taat Global Alternatives
Taat Global Alternatives reported revenue of CAD691,484 ($558,692) for the three months that ended on April 30. The figure was up more than 300 percent over the previous quarter, reflecting a faster-than-anticipated rollout and strong uptake of the company’s products at both the distributor and end customer levels.
The company said it made several key accomplishments during the period, which was the first full quarter in which Taat was sold at retail. Highlights of the quarter included the launch of e-commerce to complement retail sales, the upgrade of its common shares to the OTCQX Best Market and the landing of its first major sporting event sponsorship.
The company was also featured in Forbes during the quarter.
Taat is now sold by more than 300 Ohio retailers, with new store placements in both Illinois and Georgia. The company also has international distribution relationships in the United Kingdom and Ireland.
“I am pleased to say that the rollout of Taat is ahead of schedule as reflected in our second-quarter financial and operating performance,” said Setti Coscarella, Taat CEO, in a statement. “We generated outstanding quarter-over-quarter revenue growth, and we expect that the trend will remain highly positive in the quarters to come as customer awareness and demand steadily increase.”
June 30, 2021
Malawi Child Labor Case to Proceed

Photo: AA+W
British American Tobacco and Imperial Brands failed to persuade the U.K. high court to throw out a case alleging they are responsible for the exploitation of farm families and child labor in Malawi, The Guardian reported on June 25.
The case was brought following a Guardian investigation in June 2018.
Lawyers at Leigh Day allege the working conditions on Malawi tobacco farms breach the definition of forced labor, unlawful compulsory labor and exploitation under Malawian law. They also say they breach the U.K. Modern Slavery Act, Article 14 of the European Convention on Human Rights, and the International Labor Organization definition of forced labor. They say the companies have unjustly enriched themselves at the expense of Malawi farming families.
British American Tobacco and Imperial Brands deny the allegations. They argued that the Malawian families could not prove that the tobacco they grew had ended up in the companies’ cigarettes.
In the high court, Justice Martin Spencer said the companies’ application to strike out the case had been “misconceived.” The judge said lawyers for the farmers were not required to offer proof at the beginning of a legal action, only when it came to full trial.
A spokesperson for Imperial said they could not comment further because the litigation was ongoing, “other than to reiterate that we will continue to defend the claim.”
BAT said it had “a longstanding commitment to respect the human rights of our employees, the people we work with and the communities in which we operate. We will continue to vigorously defend the claims, and we are unable to provide further comment while this case continues.”
June 29, 2021
Next Generation Labs Receives Patent

Photo: tashatuvango
Next Generation Labs has received a European Patent (No. 3209653) for its proprietary technology related to the preparation of R-S isomer nicotine.
“This patent grant by the European Patent Office is a significant milestone for Next Generation Labs, as it solidifies our tobacco-free synthetic nicotine intellectual property portfolio across a number of European countries, allowing the company to better enforce its rights against violators and counterfeiters of its industry-leading TFN branded synthetic nicotine,” Next Generation Labs wrote in a statement.
“Alongside our announcement of patent grants in China, Australia and Canada and the enforcement efforts of our strategic partner NextEra in South Korea, we are now even better positioned to take direct action against companies violating our patented nicotine production process in an additional 38 countries.”
Next Generation Labs says it was the first company to successfully scale the bulk manufacture of nontobacco synthetic nicotine for use in novel nontobacco products, such as vape liquids and pens, in heat-not-burn devices and in many modern oral nicotine products as well as in innovative pharmaceutical nicotine cessation products.
“Our company believes that consumers have a right to access nontobacco-derived nicotine as a matter of choice,” Next Generation Labs wrote.
“There are many adult consumers who wish to enjoy nicotine but want to do so without the lingering and potentially detrimental effects of long-term tobacco use. The introduction of TFN branded synthetic nicotine has created a liberating opportunity for consumers, who as a result of Next Generation Labs’ nicotine technology, are now able to achieve a complete break from tobacco as they enjoy many of the leading brands available on the market today that use TFN.”
June 29, 2021