Category: Heat-Not-Burn

  • Altria and JT to Sell Heated Products in U.S.

    Altria and JT to Sell Heated Products in U.S.

    Photo: ASDF

    The JT Group and Altria Group, through their Japan Tobacco International and Philip Morris USA subsidiaries, have established a joint venture to market and commercialize heated-tobacco sticks (HTS) products in the U.S. with Ploom-branded devices and Marlboro-branded consumables.

    The two groups also signed a long-term, nonbinding global memorandum of understanding (MOU) to explore commercial opportunities for a wide range of potentially reduced-risk products (RRP).

    “As part of our strategic focus on HTS, we’re very enthusiastic to launch our Ploom brand in the U.S., the world’s largest RRP market in value, through our partnership with the market leader, Altria,” said  Masamichi Terabatake, president and CEO of the JT Group’s tobacco business, in a statement.  

    “We also look forward to entering into a long-term strategic collaboration with Altria to further explore global commercial opportunities in the RRP category. I strongly believe that this cooperation will increase the global harm reduction possibilities for adult consumers and drive incremental value for the JT Group and Altria.”

    “We are excited to begin a new partnership with JT Group, a leading international tobacco company,” said Altria CEO Billy Gifford in a statement. “We believe this relationship can accelerate harm reduction for adult smokers across the globe.”

    “We believe moving beyond smoking in the U.S. requires multiple FDA-authorized products within each smoke-free category to appeal to a diverse range of adult smokers. We believe that our joint venture and pipeline of heated-tobacco products position us well to increase adoption of smoke-free products.”

    The joint venture establishes a new company, Horizon Innovations, for the U.S. commercialization of current and future HTS products owned and developed by either party. Horizon will commercialize HTS products in the U.S. under the Ploom and Marlboro trademarks.

    JTI will have a 25 percent economic interest in Horizon to reflect its HTS product contribution. PM USA will have a 75 percent economic interest, reflecting the company’s strong distribution network and infrastructure, as well as its initial capital contribution of $150 million to Horizon.

    Subsequent capital contributions made to Horizon will be split according to the parties’ respective economic interest. JTI and PM USA will both maintain independent ownership of their respective intellectual properties, including any IP acquired after the formation of the joint venture that supports the development of future HTS products.

    “I strongly believe that this cooperation will increase the global harm reduction possibilities for adult consumers and drive incremental value for the JT Group and Altria.”

    Masamichi Terabatake, president and CEO, JT Group’s tobacco business

    As part of the joint venture, JTI and PM USA will combine their scientific and regulatory expertise to jointly prepare U.S. Food and Drug Administration filings, including a premarket tobacco product application (PMTA) for the latest version of Ploom HTS products. The parties currently expect to submit the PMTA for these products in the first half of 2025. Upon PMTA authorization, JTI will supply HTS devices and PM USA will manufacture HTS consumables for Horizon. In addition, JTI and PM USA have agreed to commercialization milestones for Horizon, which include distribution requirements and minimum levels of cumulative marketing investments.

    “By forming this JV [joint venture], we are bringing together the marketing, innovation, R&D and science capabilities that JTI has developed over the years with Altria’s science, U.S. regulatory experience and vast infrastructure to create a very strong proposition for the U.S. adult smoker,” said JTI CEO Eddy Pirard.

    Separate to the JV, the JT Group and Altria also announced the mutual signing of a nonbinding MOU. Under this MOU, the parties aim to structure a strategic partnership over time to market and commercialize a wide range of potentially reduced-risk products and strengthen their shared development capabilities and geographic reach. The companies believe this collaboration will accelerate global tobacco harm reduction solutions and bring significant value to their respective businesses.

    Altria’s pipeline of heated-tobacco products includes tobacco-heating product formats and new-to-market technologies. “We believe HTC products can appeal to U.S. adult smokers who are open to novel smoke-free products but have not yet found a satisfying alternative to cigarettes,” the company wrote. “This audience includes the millions of U.S. adult smokers who tried, but ultimately rejected, e-vapor products.”

    Altria expects to finalize the design of its HTC platform 1 technology (HTC1) by the end of this year and then begin regulatory preparations for a PMTA submission by the end of 2024.

    The company also expects to partner with JT to launch the HTC1 technology in an international test market in late 2024 or early 2025 using JT’s sales and distribution network.

    Prior to the recent agreement with the JT Group, Altria terminated its noncompete agreement with Juul Labs and sold its exclusive U.S. commercialization rights for the IQOS tobacco-heating system to Philip Morris International for about $2.9 billion.

  • PMI Acquires U.S. IQOS Rights From Altria

    PMI Acquires U.S. IQOS Rights From Altria

    Photo: kalinichenkod

    Philip Morris International will pay Altria Group approximately $2.7 billion for the exclusive U.S. commercialization rights to the IQOS tobacco-heating system effective April 20, 2024.

    “We remain committed to creating long-term value through our vision,” said Altria CEO Billy Gifford in a statement. “We believe that this agreement provides us with fair compensation and greater flexibility to allocate resources toward ‘moving beyond smoking.’”

    In 2013, Altria entered into a series of agreements with PMI related to innovative tobacco products, which included exclusive U.S. commercialization rights of Altria subsidiary Philip Morris USA to the IQOS system. PM USA’s commercialization rights were subject to an initial five-year term, which began when the system received authorization from the U.S. Food and Drug Administration in April 2019 and continued through April 2024.

    As part of the 2013 agreement, PM USA had the right to maintain exclusive U.S. commercialization rights upon achieving an initial milestone by April 2022. Upon achieving additional milestones, PM USA had the option to renew for an additional five-year term through April 2029.

    While Altria believed it achieved the required milestones, PMI disagreed. The parties were unable to reach a long-term agreement and decided to enter into the agreement to transition and ultimately conclude their relationship.

    Altria received $1 billion from PMI upon entry into the agreement. Under the terms of the deal, PMI is obligated to make an additional payment of $1.7 billion (plus interest) by July 2023 for a total cash payment of approximately $2.7 billion (pre-tax). Altria expects to use the cash proceeds for several items, which may include investments in pursuit of its vision, debt repayment, share repurchases and general corporate purposes. Share repurchases, Altria said, depend on marketplace conditions and other factors and remain subject to the discretion of its board of directors.

    Altria expects to record the $2.7 billion pre-tax transaction amount as a deferred gain on its consolidated balance sheet in the fourth quarter of 2022. This gain will be recognized in earnings when the company assigns its rights to the IQOS system.

    IQOS and Marlboro HeatSticks are currently unavailable for sale in the U.S. due to orders imposed by the U.S. International Trade Commission that prohibit importation of IQOS and Marlboro HeatSticks into the U.S. relating to a patent dispute. PMI remains responsible for manufacturing the IQOS system and Marlboro HeatSticks and targets resumption of product supply in the first half of 2023. If supply of FDA-authorized product is available to Altria before May 2024, PM USA has the option to reintroduce the IQOS system and Marlboro HeatSticks for sale in the U.S. On April 30, 2024, U.S. commercialization rights to the IQOS system will transition to PMI. PMI will not have access to the Marlboro brand name or other brand assets, as PM USA owns the Marlboro trademark in the U.S.

    In a press note announcing the IQOS transition, Altria said it remains committed to its vision to responsibly lead the transition of adult smokers to a smoke-free future. “We believe in a portfolio approach to tobacco harm reduction and expect to compete in the major smoke-free categories. We have reinvested into our internal product development system, and we expect to finalize designs for two smoke-free products, including a heated-tobacco product, by the end of 2022,” the company wrote.

    “We are ready to invest behind IQOS to bring it to market at scale across the U.S., leveraging the proven capabilities of our outstanding commercial engine.”

    Jacek Olczak, CEO, PMI

    PMI, meanwhile, hailed the deal as a historic milestone in its journey toward a smoke-free future. “This agreement gives PMI full U.S. commercialization rights to IQOS within approximately 18 months and provides a clear path to fulfilling the product’s full potential in the world’s largest smoke-free market, leveraging PMI’s full strategic and financial commitment to IQOS’ success,” said PMI CEO Jacek Olczak in a statement. “The agreement also avoids what could have been an uncertain and protracted legal process that would have severely hindered the fast deployment of IQOS in the U.S.”

    PMI views IQOS as a substantial growth opportunity in the U.S. smoke-free market, whose retail value represents around 60 percent of that for the rest of the world, excluding China. “The U.S. opportunity for IQOS is particularly significant given the clear demand from American adult smokers for credible smoke-free alternatives to cigarettes and the limited success to date of current offerings to fully switch adult smokers away from cigarettes. Furthermore, in the U.S., there are ample opportunities to build adult smoker awareness and understanding of smoke-free products, something that is particularly true for IQOS given its modified-risk tobacco product (MRTP) authorizations,” the company wrote in a press note.

    “We are ready to invest behind IQOS to bring it to market at scale across the U.S., leveraging the proven capabilities of our outstanding commercial engine, which we will deploy domestically during the transition period to April 30, 2024,” said Olczak. “The route to market is clear given the well-established distribution and retail channels in the U.S., and we are well prepared to proceed autonomously to develop IQOS and the rest of our smoke-free portfolio should the offer for Swedish Match fail.”

    PMI says it is already well advanced in its plans for the commercialization of IQOS in the U.S., as it prepares for domestic manufacturing, important regulatory submissions—including premarket tobacco product applications (PMTAs) for ILUMA in the second half of 2023—as well as the development of U.S. sales, distribution, retail, consumer engagement and support capabilities over the next 18 months.

    “Our commercial plans include full-scale launches in key cities and regions with rapid progression to a national presence, and we believe that IQOS heat-not-burn products could account for around 10 percent of total U.S. cigarette and heated-tobacco unit volume by 2030,” said Olczak. “We estimate the industry profit pool for the U.S. at over $20 billion in 2021, underpinned by superior per-unit margin compared to PMI’s international market average. We see an accelerated path to profitability with an attractive payback period enhanced by the absence of a PMI domestic combustible tobacco business.”

    Olczak said PMI looks forward to replicating its international success in switching adults who would otherwise continue to smoke to better alternatives. “According to 2022 U.S. Centers for Disease Control and Prevention (CDC) data, the U.S. is home to around 31 million adult smokers, and I believe that IQOS—the only inhalable smoke-free nicotine product to have received an MRTP authorization from the U.S. Food and Drug Administration and thus be recognized as appropriate for the [protection] of public health—can play a meaningful role in further reducing smoking rates,” he said.

  • Retailers: HTPs Require Commitment

    Retailers: HTPs Require Commitment

    Photo: VPZ

    While offering various benefits, heated-tobacco products (HTPs) require lots of dedication from tobacco retailers to be successful, according to an article in the U.K. publication Better Retailing.  

    Although vaping has rapidly taken off since its introduction in the U.K. two decades ago, HTP is a younger technology that has taken some time to build momentum. Philip Morris Limited (PML) entered the market in 2016 with IQOS, and Japan Tobacco International debuted its Ploom device in the U.K. in 2020.

    In 2021, HTPs represented 18.6 percent of the total reduced-risk product market in the U.K., up 86 percent compared to 2020, suggesting considerable gains for retailers who can invest the time, energy and research that this category demands.

    The retailers interviewed by Better Retailing reported hit-or-miss success with heat-not-burn products, with one shop owner keeping IQOS Heets in store for a single customer and another bringing in more than £1,000 ($1,183) per week with the product.

    JTI advises retailers to maintain good stock levels and to have devices available for in-store demonstrations and for using platforms, such as JTI’s trade website jtiadvance.co.uk, to generate repeat sales.

    Kate O’Dowd, head of commercial planning for U.K. and Ireland at PML, urges retailers to not limit themselves by a “stock-and-sell” mentality. “Build connections with customers to understand their preferences so you can offer a smoke-free alternative that meets their needs,” she says.

  • Ukraine Redefines ‘Tobacco Product’

    Ukraine Redefines ‘Tobacco Product’

    Photo: Dmytro

    The government of Ukraine has changed the definition of “tobacco product” to include heated-tobacco products (HTPs), making HTPs subject to the same restrictions as combustible cigarettes, according to the Framework Convention on Tobacco Control.

    As a result, it is now illegal to smoke HTPs in public places. Moreover, the new rules prohibit smoking rooms on company premises and empower local authorities to establish additional smoke-free places.

    Smoking of tobacco products, hookahs and e-cigarettes has been prohibited in Ukrainian workplaces since 2012, but until recently, smoking areas were still permitted.

    The new law holds both smokers and businesses responsible for compliance.

    Earlier this year, Ukraine started requiring manufacturers of e-cigarettes and e-liquids to print health warnings covering 30 percent of the packaging.

    Starting on July 11, 2023, it will also become illegal to promote e-cigarettes, e-liquids and HTPs or to sell such products with flavors.

    From Jan. 11, 2024, traditional, combustible cigarettes will be required to carry pictorial health warnings covering 65 percent of both sides of their packaging.

    According to the World Health Organization, up to 85,000 Ukrainians die from smoking-related diseases each year. Experts estimate smoking to result in annual economic losses equivalent to 3.2 percent of Ukraine’s GDP, in part due to the cost of treating smoking-related illnesses.

  • Nicotine And The Weirdness Of Harm

    Nicotine And The Weirdness Of Harm

    Photo: artefacti

    The availability of nicotine with minimal harm justifies a complete rethink of our approach to this legal recreational drug.

    By Clive Bates

    Whisper it quietly, but people use nicotine for a reason. Nicotine has psychoactive effects that provide functional benefits and pleasurable sensations to its users. Neal Benowitz, a global authority on nicotine, writing in the U.S. Annual Review of Pharmacology and Toxicology in 2009, summarized the effects: “In humans, nicotine from tobacco induces stimulation and pleasure and reduces stress and anxiety. Smokers come to use nicotine to modulate their level of arousal and for mood control in daily life. Smoking may improve concentration, reaction time and performance of certain tasks.”

    Writing in the journal Nicotine & Tobacco Research in 2018, the neuroscientist Paul Newhouse described the cognitive benefits of nicotine: “Cognitive improvement is one of the best-established therapeutic effects of nicotinic stimulation. Nicotine improves performance on attentionally and cognitively demanding vigilance tasks and response inhibition performance, suggesting that nicotine may act to optimize attention/response mechanisms as well as enhancing working memory in humans.”

    With such characteristics, one is tempted to ask why nicotine has so few users. It turns out this is a serious question with some interesting implications. The answer is that nicotine use is strongly associated with the harms of smoking and an addiction so powerful that former U.S. Surgeon General C. Everett Koop compared it to heroin or cocaine. The iron grip of nicotine addiction keeps people smoking even though they are well aware of the lethal consequences.

    Nicotine seems to provide valuable benefits for people whose lives are difficult and stressful, those prone to anxiety or distraction or those who just enjoy the strange mixture of its stimulating and calming effects. Perhaps that could mean most of us? At one point, it did. In the decades before the health implications of smoking were widely understood, smoking prevalence was very high. In the United Kingdom in 1948–1952, smoking prevalence was about 80 percent for men and 40 percent for women. That compares to a combined total of around 14 percent today. But the overwhelming driver of this decline has been intense concern about harm to health and the introduction of policies to reduce these harms by making smoking less appealing, more expensive and more difficult to do. But maybe our concerted public health efforts to reduce disease and death caused by smoking deterred people who would otherwise have benefited from or enjoyed the mood-regulating and cognitive benefits of nicotine had it been available in safer forms.

    So, here is the interesting question. What if nicotine use is no longer all that harmful? What if the real problem was always the inhalation of toxic smoke while trying to consume nicotine for its benefits? As early as 1991, the leading medical journal The Lancet reflected on how the nicotine landscape might look after the year 2000: “There is no compelling objection to the recreational and even addictive use of nicotine provided it is not shown to be physically, psychologically or socially harmful to the user or to others.”

    In my view, we have reached the position where smoke-free nicotine products, such as e-cigarettes, heated tobacco, smokeless tobacco or nicotine pouches, can provide nicotine at acceptably low risk. By acceptably low risk, I don’t mean perfect safety, but within society’s normal risk appetites for consumption and other recreational activities. If continuing innovation in the design of the products ultimately leads to smoking cigarettes becoming obsolete, then the vast burden of smoking-related disease will decline and fade away.

    So why is there so much opposition to low-risk nicotine products? Why do so much effort and money go into trying to demonstrate that these products are harmful? I call this the weirdness of harm, and it takes several forms.

    First, perhaps good science shows these products are very harmful and should be treated no differently than cigarettes? We can rule out this explanation quite easily. The toxicants found in users’ blood, saliva and urine are far fewer, and the levels are far lower than in smokers. Credible data show a range of benefits in switching from smoking to smoke-free products, and there is little convincing evidence to suggest material risks at present. We might be concerned about currently unknown long-term effects, but these are more likely to be trivial than severe and may be tackled if and when they emerge, which they haven’t so far. Yet the ferocity of the backlash against safer products goes far beyond doubts about safety or concern for the welfare of consumers. It looks more like a reaction to a threat.

    Second, much safer products pose an existential threat to a powerful interest group. As a profession, tobacco control exists only because of a need to control severe harm to health. A significant part of the professional tobacco control field could ultimately be rendered irrelevant and unemployed by safer forms of nicotine. The whole edifice of careers, grants, university departments, journals, conferences, advocacy campaigns and the personal prestige of anti-tobacco warriors has harm as its foundation. Otherwise, it becomes the equivalent of “coffee control,” which barely exists. That creates strong, perverse incentives to find (or fabricate) harms to sustain the profession. That conflict of interest is large and pervasive, yet it is paradoxically invisible and never acknowledged or discussed. But for many, it means good news is unwelcome, and bad news is good news. Take, for example, the muted reactions to the recent sharp decline in U.S. teen smoking compared to the apparent enthusiasm that has greeted the long list of (unfounded) scares about nicotine vaping, such as e-cigarette or vaping use-associated lung injury, popcorn lung and seizures.

    Third, without harm, the case for a nicotine-free society falls apart. Harm is the primary reason for abstinence from nicotine. Gallus and colleagues found that about 80 percent of smokers quit because they currently experience harm, expect harm in the future, have taken a doctor’s advice about harm or worry about harming others. Only 2.8 percent mentioned “loss of pleasure or desire to smoke.” But if the products are no longer harmful, where does that leave those who feel we should aspire to be a “nicotine-free society”? That goal likely arises from a mixture of motives: a loathing of the tobacco industry and a sense that “harm reduction” is an unfair escape from its inevitable destruction, an instinctive disgust about the drug choices of others or just the stoical sentiment that if people can be abstemious, they should be. Harm has always been the trump card of the proponents of a nicotine-free society, but their case is greatly diminished if it rests mainly on moral instincts.

    Fourth, it is possible that nicotine use will increase without the deterrent effect of harm. This arises from a basic but unsettling economic argument. The underlying demand for nicotine was once very high but has been suppressed by harm to the user and related policies. The harms of smoking are part of the overall nonmonetary costs (health, stigma, welfare) of using nicotine to the individual. Low-risk products and proportionate regulation will reduce or eliminate these costs. All other things being equal, lower costs mean that nicotine use should increase. Many will be uncomfortable with the prospect of nicotine use rising after years of sustained decline. But we should recall that the effort to reduce nicotine use was driven by the harms of smoking not by opposition to the effects of nicotine as a drug. If we successfully address the public health goal, these smoking-related deterrence effects will no longer apply.

    Fifth, harm is integral to the definition of addiction. The casual and sloppy use of the word addiction is pervasive in public health. It is always worth asking what is meant by “addiction.” In the formal Addiction Ontology, serious harm is integral to the definition of addiction: “A mental disposition toward repeated episodes of abnormally high levels of motivation to engage in a behavior, acquired as a result of engaging in the behavior, where the behavior results in risk or occurrence of serious net harm” (emphasis added).

    The inclusion of serious net harm in the definition of addiction is intended “to limit the class to things that merit a treatment and public health response.” A similar reference to harm is also included in other definitions, such as those of the U.S. National Institute on Drug Abuse and the American Psychiatric Association. So, it could be argued that without the associated harm from exposure to smoke, nicotine would no longer be classified as addictive and would simply join the short but growing list of psychoactive chemicals people enjoy and society accepts, like caffeine, alcohol and increasingly, cannabinoids. C. Everett Koop’s 1988 comparison of nicotine to heroin was a powerfully provocative statement, but in the context of safer nicotine products and the U.S. opioid epidemic, the comparison is not convincing.

    The emerging range of smoke-free consumer tobacco and nicotine products means much more than tobacco harm reduction or an elegant way to help smokers quit. The availability of nicotine with minimal harm justifies a complete rethink of our approach to this legal recreational drug.

    Clive Bates is the director of Counterfactual Consulting and the former director of Action on Smoking and Health (U.K.).
  • BAT Launches Glo Hyper X2

    BAT Launches Glo Hyper X2

    Photo: BAT

    BAT unveiled its Glo Hyper X2 tobacco heating device in Tokyo on July 21.

    Building on the technology of Glo Hyper+, which launched in 2020, the Hyper X2 incorporates advanced induction heating technology encased in a smaller, lighter weight device. A separate boost function for faster heating, battery status LED indicator, a protective iris-shaped shutter and bold new colors complete the new hyper X2 offer, according to BAT.

    Hyper X2 works with existing consumables from the Glo Hyper series.

    “The launch of Glo Hyper X2—our newest, state-of-the-art heated tobacco product—marks another key milestone in our transformation as we build the brands of our future,” said Kingsley Wheaton, chief marketing officer at BAT, in a statement. “Since launching our first Glo product in Japan in 2016, we have built Glo into a billion-dollar global brand through our deep consumer insights, science and innovation.

    “Our multi-category portfolio offers the industry’s widest choice of scientifically substantiated, less risky and enjoyable products for adult smokers who are looking to switch. This is a further big step in accelerating our transformation into a consumer products business that defines itself by the consumer needs that we meet, rather than the products we sell.”

    “In addition, final results from our landmark one-year clinical study of Glo have provided important new data that adds to evidence supporting Glo as a reduced-risk product. In the study, people switching completely to Glo achieved significant and sustained improvements across many exposure and potential harm measures compared to those who continued to smoke, with many indicators similar to quitting.”

    Glo hyper X2 will be available in Glo stores across Japan and on the Glo and Velo official online store from July 25, 2022, and in convenience stores in Japan from August 2022.

    Glo products are available in 25 countries. The global rollout of Glo Hyper X2 will take place over the coming months.

  • Poda Completes Asset Sale to Altria

    Poda Completes Asset Sale to Altria

    Photo: Poda Holdings

    Poda Holdings has completed the sale of substantially all of the assets and properties used in the company’s business to Altria Client Services for a total purchase price of $100.5 million, subject to certain adjustments and holdbacks, pursuant to a definitive agreement dated May 13, 2022.

    Pursuant to the Asset Purchase Agreement, Poda will change its name to Idle Lifestyle and its trading symbol to IDLE.X. The company expects to trade as an inactive issuer under the policies of the Canadian Stock Exchange.

    “The completion of this sale represents the culmination of a tremendous amount of effort from the entire Poda team, and I am extremely proud of what we have accomplished,” said Poda Director, CEO and Chairman Ryan Selby in a statement.

    I believe this transaction provides maximum value for the company and its shareholders, and I know our innovative technology is now in good hands with Altria.”

  • Taat and E1011 Labs Partner in HnB Tech

    Taat and E1011 Labs Partner in HnB Tech

    Photo: Taat Global Alternatives

    Taat Global Alternatives has joined E1011 Labs’ Pilot Partnership Program (P3), an initiative by the California-based heat-not-burn innovator to leverage the capabilities and resources of third-party firms to advance its efforts in the tobacco and tobacco-adjacent categories.

    In a press release dated May 17, 2022, Taat announced the release of its sales materials for a heat-not-burn offering made in collaboration with E1011 Labs using the company’s proprietary and patent-pending base material Beyond Tobacco, which contains no tobacco or nicotine.

    In its June 14, 2022 press release, E1011 Labs announced the second edition of its patented Elon combustion-free device using precision heating technology with unique features including a touchless “pause” function with which a user can suspend a session by blowing into a circular sensor.

    E1011 Labs stated the wide range of applications for heat-not-burn technology includes use cases in the pharmaceutical, cannabis and tobacco categories. As the very first participant in E1011 Labs’ P3 ecosystem, Taat will work closely with E1011 Labs to commercialize a novel heat-not-burn option with no tobacco or nicotine.

    “E1011 Labs is proving to be a very strong partner for us, and we are honored to be the first in their P3 program for collaboration to advance their initiatives in the heat-not-burn space,” said Taat founder Joe Deighan in a statement.

    “Our primary focus is on developing, manufacturing and commercializing our flagship combustible product, which is why E1011 Labs’ reach, R&D bandwidth and marketing capabilities are invaluable to us as an upcoming entrant to the heat-not-burn space. We are thankful to E1011 Labs’ management for their confidence in us, and we are very excited to be working together for our respective pursuits in the $812 billion global tobacco category.” 

  • Altria Buys Poda’s Assets and Properties

    Altria Buys Poda’s Assets and Properties

    Photo: Poda Holdings

    Altria Client Services will pay $100.5 million for assets and properties used in Poda Holdings’ business of developing, manufacturing and marketing multisubstrate heated capsule technology, according to a Poda press release. The deal includes the owners’ associated patents and the company’s license of certain of those patents pursuant to an amended and restated royalties agreement dated April 12, 2019.

    “This agreement represents a significant milestone for Poda and its employees,” said Ryan Selby, Poda’s CEO, director and chairman of the company’s board of directors. “Our teams have worked diligently on this technology since the company’s inception, and we believe these agreements maximize its value for the company and its shareholders.”

    Poda’s multisubstrate heated capsule technology uses proprietary biodegradable single-use capsules. The design of the technology prevents cross-contamination between the heating devices and the capsules, which eliminates cleaning requirements and provides users with a convenient and enjoyable experience, according to Poda Holdings.

    This agreement represents a significant milestone for Poda and its employees.

    Ryan Selby, CEO, director and chairman, Poda Holdings

    Poda’s technology is fully patented in Canada and is patent pending in over 60 additional countries, covering almost 70 percent of the global population.

    Tobacco Reporter profiled Poda Holdings in January 2022 (see “Making its Mark”).

    Altria Client Services’ parent company, Altria Group, currently holds a license to distribute Philip Morris International’s IQOS HnB product in the United States. That product, however, has been subject to an import ban in the wake of an intellectual property dispute with BAT.

    Analysts have also speculated on the likelihood of the IQOS distribution deal being renewed when it expires in 2024. PMI and Altria currently disagree about whether Altria has thus far met the milestones to earn the renewal option for an additional five-year deal.

  • Poda to Manufacture in North America

    Poda to Manufacture in North America

    Photo: Poda Holdings

    Poda Holdings has signed a purchase agreement with its Chinese manufacturing partner to acquire Poda Pod manufacturing equipment, 15 patent applications related to Poda Pod technology and three Chinese trademarks for approximately CDN3.45 million ($2.7 million).

    The manufacturing equipment is comprised of all proprietary custom-built equipment for Poda Pods production capable of producing an estimated 5 million Poda Pods per year. All manufacturing equipment will be shipped to Vancouver, British Columbia. The 15 patent applications were filed in China and represent unique product design and manufacturing methods applicable to the development and large-scale production of Poda Pods.

    “Given the general unrest of the geopolitical situation around the globe, the company has determined it will manufacture Poda Pods in North America,” said Poda Holdings CEO Ryan Selby in a statement.

    “This will reduce the amount of lag time from manufacturing to customer delivery and will provide a significant reduction in tariffs, allowing the company to be more competitive. The acquisition of the manufacturing equipment and patent applications is an important step in the growth and value of Poda, which the company believes outweighs the resulting delays in production.”