Tag: Philip Morris International

Keagan Lenihan Joins PMI as Vice President

Photo: akub Jirsák | Dreamstime.com
Philip Morris International has appointed Keagan Lenihan as vice president of government affairs and public policy, and head of its D.C. office. Lenihan will serve as the Washington, D.C., lead for PMI’s U.S.-based external affairs efforts as the company continues to advance on its journey away from cigarettes, reporting to members of the company’s senior management team in the U.S. and globally.
Lenihan joins PMI from Altoida, a medical device company that uses artificial intelligence and augmented reality technologies to predict neurological disease, where she served as vice president of operations. Over the previous two decades, she worked in government and corporate and public policy, most recently as associate commissioner for external affairs and strategic initiatives and then chief of staff of the U.S. Food and Drug Administration.
In these positions, she oversaw daily management of the agency and provided strategic direction to senior leadership on policy priorities, including efforts to promote medical product innovation, tackle opioid abuse, identify solutions to prescription drug shortages, and pursue a comprehensive plan for tobacco regulation, with an emphasis on preventing youth use of tobacco products.

We are thrilled that Keagan will be joining us to further accelerate PMI’s journey toward a smoke-free future.
Deepak Mishra, president of PMI Americas
“We are thrilled that Keagan will be joining us to further accelerate PMI’s journey toward a smoke-free future,” said Deepak Mishra, president of PMI Americas. “Her passion for and expertise in healthcare, life sciences, and policy issues and her commitment to help our company reach the next phase in its ambitious transformation away from cigarettes make her an ideal addition to our global leadership team.”
Prior to serving at the FDA, Lenihan was senior counselor to the secretary of health and human services, overseeing an extensive portfolio of policy initiatives and reforms, including comprehensive drug pricing reform, price transparency, and regulatory reform. Before that, she was special assistant to the president, charged with managing hiring for the U.S. Department of Health and Human Services, Department of Education, Department of Housing and Urban Development, Department of Labor, and Office of Personnel and Management.
Earlier, Lenihan was senior director of government relations for McKesson Specialty Health. She also worked for almost a decade on Capitol Hill, serving three members of Congress who held positions in House leadership, as well as senior members of the Ways and Means and House Rules committees.
“Having spent two decades working to improve public health, I am delighted to join forces with PMI in their mission to move away from cigarettes and help current smokers who otherwise would not quit switch to less harmful alternatives while ensuring we protect youth,” said Lenihan in a statement. “PMI is not just transforming its business; with its smoke-free commitment, it is revolutionizing its industry and championing an unprecedented breakthrough for public health, including moving beyond nicotine to meet patient and consumer needs in the wellness and life sciences spaces. I’m excited to have been invited to play a role in making this happen even faster.”
May 3, 2022
Russian Tobacco Mogul Faces Scrutiny

Photo: GAlexS
Metro published a profile of Russian tobacco mogul Igor Kesaev, who has been sanctioned by the EU and the U.K. for aiding Russia’s invasion of Ukraine.
Listed by Forbes as Russia’s 35th-richest person last year, Kesaev’s holdings have included a major stake in the V.A. Degtyarev factory, which makes machine guns, anti-tank and anti-aircraft weapons, some of which have been used in Ukraine, according to sources.
Until recently, Kesaev was also the board chairman of Russia’s leading tobacco distributor, TC Megapolis. Kesaev resigned from the board on April 11, 2022, according to a Russian-language press release, which stressed that Megapolis was not subject to EU sanctions and Kesaev did not influence the company’s business.
Kesaev’s involvement in tobacco dates to the early 1990s. As the Soviet Union broke up into its constituent republics, he started an importing business that worked with international tobacco companies eager to get their products into the Russian market, according to a 2014 profile of the magnate published on Forbes’ Russian website.
Russia was—and continues to be—an attractive market for international tobacco companies, with its large population of around 145 million people and one of the highest smoking rates in the world. More than 40 percent of men there light up, according to the World Health Organization.
According to the Forbes profile, Kesaev graduated from Russia’s prestigious Moscow State Institute of International Relations. In the 1990s, he lived in Switzerland, where he developed personal connections with executives at Philip Morris International’s regional headquarters in Lausanne.
Over time, Kesaev built the largest tobacco distributor in Russia through acquisitions of regional competitors, according to Forbes’ Russian website. Today, Megapolis delivers to 160,000 retailers across the country, according to the firm’s website. In 2013, PMI and Japan Tobacco International both purchased 20 percent stakes in Megapolis’ holding company for $750 million each.
Kesaev has also been involved with the tobacco business in Ukraine. Following the toppling of Ukraine’s pro-Russian president, Viktor Yanukovych, in 2014 and Russia’s subsequent annexation of Crimea, Ukrainian officials began scrutinizing the role of Russian companies in various sectors of its economy.
At the time, Trading Company Megapolis-Ukraine controlled 99 percent of Ukraine’s tobacco distribution market, according to research from the Anti-Monopoly Committee of Ukraine.
Kyiv sanctioned Kesaev in 2016 for unspecified actions that it said threatened Ukraine’s national security. A top Ukrainian prosecutor later accused Kesaev of supporting “terrorist organizations” by supplying arms to Russian-backed separatist groups that have been fighting for nearly a decade to carve out two independent states—Donetsk and Luhansk—in eastern Ukraine.
April 26, 2022
PMI: Strong Quarter Despite Uncertainty

Photo: Vitezslav Vylicil
Philip Morris International reported net revenues of $7.75 billion for the first quarter of 2022, up 2.1 percent over that reported for the 2021 first quarter. Its operating income was $3.3 billion, compared with $3.44 billion in the previous year’s quarter. PMI reported adjusted operating income of $3.34 billion, down 4.4 percent from the comparable 2021 period.
The company’s operations during the quarter were heavily impacted by the war between Russia and Ukraine, two important markets for PMI.
On Feb. 25, PMI announced the temporary suspension of its operations in Ukraine, including at its Kharkiv factory. While activities in the east of Ukraine remain the most heavily impacted, the company said it has seen some resumption of retail activities where safety allows.
In 2021, Ukraine accounted for around 2 percent of PMI’s total cigarette and heated tobacco unit shipment volume and under 2 percent of PMI’s total net revenues. As of March 31, 2022, PMI’s Ukrainian operations have approximately $400 million in total assets.
In March, PMI announced it would significantly scale down its operations in Russia, discontinuing a number of cigarette products, including Marlboro and Parliament, and reducing its manufacturing activities accordingly. According to PMI, the discontinued products represent approximately one-quarter of the company’s domestic cigarette SKUs.
PMI also canceled all product launches planned for 2022 in Russia, including the launch of its flagship heated tobacco product IQOS Iluma, which was originally planned to take place in March 2022. In addition, PMI canceled plans to manufacture its Terea heated tobacco units for IQOS Iluma in Russia and the related ongoing investment of $150 million.
PMI is currently working on a plan to exit Russia in an orderly manner. In 2021, Russia made up almost 10 percent of total shipment volumes and around 6 percent of PMI net revenues. As of March 31, 2022, PMI’s Russian operations have approximately $1.4 billion in total assets.
“The recent months have been an extremely challenging time for many in the PMI family given the war in Ukraine,” said PMI CEO Jacek Olczak in a statement. “Our primary concern is for our people and their families, and we are doing everything in our power to help them.”
“Despite this tragic situation, we were able to deliver a very strong performance in the first quarter—reflecting the hard work and dedication of our employees globally—with organic net revenue and currency-neutral adjusted diluted EPS growth coming ahead of our expectations.
“The re-acceleration of our IQOS business continued in the quarter, highlighted by a sequential increase of over 1 million total IQOS users, excluding Russia and Ukraine, and the superb performance of Iluma in initial launch markets. This was complemented by the robust performance of our combustible business, which exceeded our objective of stable category share in the quarter and delivered positive shipment volume and organic net revenue growth.
“We expect to deliver robust top- and bottom-line growth this year on a pro forma adjusted basis, including full-year adjusted diluted EPS growth of 9 percent to 11 percent, excluding currency. This gives us confidence in achieving our 2021 to 2023 compound annual growth targets, on a pro forma basis, and our ambition to become a majority smoke-free company by 2025.”
April 21, 2022
Heading for the Exit

Photo: Matvey Salivanchuk
Following Russia’s invasion of Ukraine, tobacco companies to retreat from one of the world’s top cigarette markets.
By Stefanie Rossel
Amid growing pressure, the four leading international tobacco manufacturers have joined the exodus of U.S. and European companies that has followed Russia’s invasion of Ukraine. In early March, after the United States, the European Union and Great Britain imposed economic sanctions, all major cigarette makers announced that they would suspend operations or pull out of Russia altogether—although some did so less enthusiastically than others.
After initially announcing it would merely suspend its planned capital investments in Russia, BAT quickly made a U-turn, signaling a far greater retreat. On March 11, the company announced that its ownership of the business in Russia was no longer sustainable in the current environment, which it described as “highly complex, exceptionally fast-moving and volatile.” BAT is in advanced talks to transfer its Russian business to the SNS group of companies, its distributor in the country since 1993. According to SNS, the level of production and the supply and distribution chain would be maintained with a transfer. As a result of the withdrawal, BAT reduced its annual revenue growth outlook to between 2 percent and 4 percent from the 3 percent to 5 percent announced in February.
BAT’s move came a day after a Russian government commission approved the first step toward nationalizing the assets of departing foreign companies. On March 10, Russia’s economic development ministry published a draft bill that would give state-owned Vnesheconombank and the state export guarantee agency the right to seize the property of foreign firms that left Russian markets of their own accord. The proposed law would treat a corporate decision to exit the business as a criminal bankruptcy and empower authorities to initiate criminal justice proceedings against local management, BAT Chief Marketing Officer Kingsley Wheaton told Reuters in an interview.
After announcing plans to scale down its operations in Russia on March 9, Philip Morris International in late March specified the concrete steps it would take, saying it was working on options to exit the Russian market “in an orderly manner.” The company stated that it had discontinued some of its cigarette brands offered in the market and suspended its marketing activities. Furthermore, it had canceled all product launches planned for this year in Russia, including the introduction of its new tobacco-heating product (THP), IQOS Iluma, and its plans to manufacture more than 20 billion Terea sticks, the consumables for IQOS Iluma. Production of the latter would have involved an ongoing investment of $150 million, which the company also canceled.
JTI, meanwhile, limited its withdrawal from Russia to a suspension of all new investments and marketing activities along with the launch of its most recent THP, Ploom X.
Imperial Brands, which has a relatively small footprint in Russia, announced on March 15 that it had started negotiations with a local third party about a transfer of its Russian assets of operations. “We believe that, in the current circumstances, an orderly transfer of our business as a going concern would be in the best interests of our Russian colleagues,” Imperial Brands wrote in a statement.
In addition to their actions in Russia, all four cigarette manufacturers temporarily closed their production sites in Ukraine to protect their workforce and have pledged to continue paying the salaries of employees in the affected countries.

The decision to leave Russia not only has financial consequences, but it also presents practical challenges. (Photo: Tobacco Reporter archive)
Between a Rock and a Hard Place
In deciding their course of action, cigarette manufacturers faced a dilemma of choosing either to leave and protect their reputations or to stay and continue to benefit from the world’s fourth-largest tobacco market.
The decision to leave not only has financial consequences, but it also presents practical challenges, according to Jon Fell, partner at Ash Park Capital. “It’s one thing to say, ‘we’re no longer going to send our luxury handbags or fashionable training shoes to Russia,’ but if, in addition to factories or distribution centers, you have hundreds or thousands of employees in the country—who up until now have been seen as an integral part of your international company—then you have to take difficult and complex decisions, and there’s no obvious easy, right answer,” he says.
“Sorting the mess out takes time, and you can’t just abandon employees,” adds Fell. “I don’t think the approach of the tobacco industry overall is very different to that of other consumer packaged goods companies, quite a few of whom are continuing to operate in Russia right now—and drawing criticism because of that.”
Russian cigarette makers sold 206 billion cigarettes with an estimated value of $717 billion in 2020, according to Euromonitor International. The market has been declining at a 6 percent compound annual rate over the past 10 years and almost 7 percent over the past five years.
At the same time, the country has developed into a promising market for THPs, which, according to Moningstar, accounted for 11 percent of the total tobacco market in 2021, making the country one of the largest markets for these products outside of Asia.
With a volume share of 38 percent in 2021, JTI has the greatest exposure to Russia of the tobacco multinationals, according to Euromonitor. The company, which in 2018 acquired Donskoy Tabak, has four factories and 4,000 employees in the country. It has invested over $4.6 billion in the past 20 years. In 2020, its tax payments accounted for 1.4 percent of Russia’s state budget. Russia represented almost 16 percent of group volume in 2021, according to Morningstar.

It’s one thing to say, ‘we’re no longer going to send our luxury handbags or fashionable training shoes to Russia,’ but if, in addition to factories or distribution centers, you have hundreds or thousands of employees in the country, then there’s no obvious easy, right answer.
Jon Fell, partner at Ash Park Capital
Costly Exits
For PMI, Russia accounted for almost 10 percent of cigarette and THP unit shipment volume and around 6 percent of its total net revenues in 2021. With a market share of 26 percent, the company has three factories, more than 100 sales outlets and approximately 4,100 employees in the country. Ukraine, where PMI runs a factory in Kharkiv with around 1,300 employees, represents about 13 percent of PMI’s regional volume and contributed almost 2 percent to PMI’s total net revenues in 2021.
Morningstar expects PMI’s tobacco volume from Eastern Europe to decline by 45 percent in 2022 with a slow recovery thereafter as the collapse of the ruble is likely to create translational foreign exchange pressure.
Both Russia and Ukraine are important markets for IQOS, accounting for about 23 percent of PMI’s THP sales. PMI’s shipments of THP consumables in Russia increased from 13.6 billion units to 16.3 billion sticks in 2021 while shipments of cigarettes continued to fall. Considering Russia’s worsening economic outlook in the wake of international sanctions, however, a J.P. Morgan analyst doubted that PMI would still be able to achieve its next-generation product growth targets. Morningstar assumes that PMI’s write-down in case of a market exit could be approximately $7 billion, corresponding to 5 percent of the company’s market capitalization.
Ukraine and Russia combined accounted for 3 percent of BAT’s group revenue in 2021 and a slightly lower proportion of adjusted profit, the company said on its website. Morningstar estimates that the bulk of net revenue from these two countries, 2.5 percent, was generated by Russia, where BAT, according to Euromonitor, held 25 percent of the market in 2021. Employing some 2,500 people in Russia, BAT has a factory in St. Petersburg and 75 regional offices. Since the company entered the market in 1991, it has invested more than $1 billion in Russia. Morningstar reckons that the value of BAT’s operations will depreciate by around $2.2 billion, or about 2.4 percent of its market capitalization, as a result of its withdrawal from Russia.
Among the four players, Imperial Brands is a distant fourth, holding 8 percent of the Russian cigarette market. It operates a production site in Volgograd and has a workforce of 1,000. In 2021, the company said, Ukraine and Russia represented in total around 2 percent of net revenues and 0.5 percent of adjusted profits. Due to the limited profit contribution of the two markets, Imperial Brands explained it expected “a relatively small impact” on its constant currency adjusted profit.

Seeking a Backdoor
How the multinationals’ retreat will impact Russia’s illicit cigarette market is anyone’s guess. “It’s very hard to know how demand and supply of tobacco products will evolve in Russia given all that’s going on with sanctions, ownership of the industry and, presumably, local purchasing power,” says Fell. “I would certainly think that an increase in the size of the illicit market is a risk, and that’s also going to depend on how long this situation lasts.” Illegal cigarette sales represented 10.7 percent of the total Russian tobacco market in 2021, up from 4.6 percent in 2017, according to Statista.
Much will depend on how long the conflict continues. Considering the large amounts invested in Russia over the past 20 years, it’s safe to assume that cigarette manufacturers will do their best to minimize their losses. The companies have built strong positions in the Russian market, and there is demand for their products.
“I’d be surprised if any of the companies—not just the tobacco manufacturers—now exiting Russia are doing so in a way that would prevent their going back in the future, assuming that the war stops at some point, relations are normalized and reentry becomes conceivable,” says Fell. “But arranging that in a way which allows you to say you have exited the country for the time being is no doubt very tricky and is likely to be contributing to decisions taking some time to reach and to be implemented.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

April 13, 2022
Vectura Directors Step Down

Photo: Charnchai saeheng
Vectura CEO Will Downie and Chief Financial Officer Paul Fry have stepped down from their roles with the company following the £1 billion ($1.31 billion) takeover by Philip Morris International, reports The Times.
PMI acquired Vectura last year as part of the company’s “beyond nicotine” strategy. This move caused controversy in the healthcare industry as Vectura is a producer of inhalers and medicines for smoking-related conditions. Critics said the takeover represented a conflict of interest.
Following the takeover, Vectura was banned from many pharmaceutical industry conferences due to the company’s new ties to the tobacco industry.
The tobacco industry’s involvement in pharmaceutical businesses is facing increasing scrutiny. In March, the World Health Organization said it would deny an emergency use listing to Medicago’s Convifenz Covid-19 vaccine, because of the company’s tobacco ties.
PMI owns a minority stake in Medicago, which now faces pressure to seek a different shareholder.
April 1, 2022
The Virtuous Weed

Artwork: Dan Kurtz
When tobacco heals instead of hurts
By Taco Tuinstra
The health consequences of tobacco use have been well documented. According to the World Health Organization, more than 8 million people worldwide succumb to tobacco-related illnesses, such as lung cancer, heart disease and chronic obstructive pulmonary disease, every year. For every person who dies due to tobacco, at least 30 people live with a serious tobacco-related illness, according to a 2019 policy brief by Tobacconomics.
Tobacco also carries a significant economic toll. A report prepared by the World Bank Group Global Tobacco Program expected the worldwide economic cost of smoking to reach $1.4 trillion in 2017, equivalent to 1.8 percent of the world’s gross domestic product that year. Little wonder, then, that many view the tobacco plant as evil.
Yet there is another, decidedly more benign, side to the Wicked Weed. When dried, set on fire and inhaled, the tobacco plant wreaks havoc; when deployed as a “green bioreactor,” the golden leaf has the potential to help address some of the world’s most vexing public health challenges, including, ironically, certain respiratory afflictions.

Baiya Phytopharm is currently developing a new generation of its vaccine for the omicron variant of Covid-19 and expects to conduct Phase 1 trials in April 2022.
(Photo: Baiya Phytopharm).
Among the most striking examples of tobacco’s potential to heal rather than hurt are recent endeavors to develop an inoculation against the novel coronavirus. In February, Health Canada approved Covifenz, a tobacco plant-based Covid-19 vaccination developed by pharmaceutical giant GlaxoSmithKline and Medicago, a biopharmaceutical company backed by Philip Morris International. According to Health Canada, Covifenz is the world’s first vaccine approved for human use that utilizes a plant-based protein technology.
As it turns out, plants—and especially tobacco plants (see sidebar)—lend themselves exceptionally well to developing pharmaceutical compounds. In many ways, they are better suited to the task than the man-made bioreactors used in traditional vaccine development.
To create a vaccine, scientists must produce antigens—molecules that trigger an immune response to a specific virus or bacteria. Antigens for conventional vaccines are made by infecting cells from insects, monkeys, hamsters or other sources in the laboratory with a virus or a bit of viral genetic code that tricks the cells into making copies of the virus or antigen. The cells incubate in bioreactors for extended periods of time and then undergo a complex purification process before being packaged into vials.
Bioreactors are expensive, however, and their operation requires trained personnel. They are also susceptible to contamination, forcing vaccine developers to keep bioreactors growing different types of antigens far apart and under sterile conditions.
Dahlia Garwe
Plants are natural bioreactors, according to Dahlia Garwe, the former CEO of the Kutsaga Tobacco Research Station in Zimbabwe. “They are able to perform eukaryotic post-translational modifications that are often essential for biological activity of many mammalian proteins,” she explains. When infected with DNA from Covid-19 or other viruses, plant cells will make millions of copies of virus-like particles that can serve as antigens without being infectious.
Using plants instead of mechanical bioreactors offers many benefits, notes Garwe. Plants are cheap to grow, easy to manipulate and resistant to contaminations that could present problems for humans. “Green bioreactors do not suffer the same risk of pathogen contamination as seen in mammalian cell culture as there are no known cross-kingdom pathogens,” she says.
With light as their primary energy source, plants are less expensive to work with than traditional cell culture systems, allowing for inexpensive and nearly unlimited scalability. Because plant systems are robust and inert, they are also easier to handle and purify than other systems.

Medicago is not the only company that has grasped the promise of plants in the development of vaccines and therapeutics. At least three other organizations are using Nicotiana benthamiana, a close relative of the tobacco plant used in cigarettes, to develop Covid-19 vaccines. In December 2020, the U.S. Food and Drug Administration approved an investigational new drug application for a Covid-19 vaccine by BAT subsidiary Kentucky Bioprocessing (KBP, now part of KBio). The company is currently conducting Phase I clinical trials, which are the first steps in testing the safety and side effects of a pharmaceutical in humans.
According to BAT, plant-based vaccines have several advantages over serums developed with conventional technologies, including speed and thermostability. Whereas traditional methods can take months to yield the desired vaccine ingredients, KBP’s tobacco plants do so within six weeks. And unlike some of the existing Covid-19 vaccines, KBP’s vaccine candidate has the potential to be stable at room temperature, an important benefit, especially for public health networks in countries with warm climates and few refrigerated trucks and warehouses.
Fearing supply constraints and “vaccine nationalism” at the start of the pandemic, scientists in Thailand have joined the race as well. Baiya Phytopharm, a plant-produced biologics company, is working with tobacco in part because that crop can be easily and inexpensively cultivated domestically, thus reducing Thailand’s reliance on foreign-made vaccines. According to the Bangkok Post, Thailand has more than 10,000 tobacco growers.
Waranyoo Phoolcharoen
In an email exchange, Baiya Phytopharm co-founder Waranyoo Phoolcharoen told Tobacco Reporter that the company had finished Phase 1 clinical trials and was happy with the data. Baiya Phytopharm is currently developing a new generation of its vaccine for the omicron variant of Covid-19 and expects to conduct Phase 1 trials this month (April). If the vaccine candidate does well in subsequent trials, it could be available in Thailand by the end of the year, according to Phoolcharoen.
Meanwhile, Akdeniz University in Turkey is using a protein produced by tobacco plants to develop a Covid-19 vaccine. Its technology is based on an angiotensin-converting enzyme 2 and can be administered as an injection or through a spray. According to an April 2021 report in Hurriyet Daily News, tests on mice have demonstrated a high level of inhibition of the Covid-19 virus from entering the cell. At the time of publication, Akdeniz University was seeking funding to conduct clinical trials in humans.
In addition to Covid-19, scientists have sought to tackle many other diseases with the help of tobacco. In response to concerns about bioterrorism following the September 11 attacks in the United States, researchers at the University of Central Florida used tobacco plants to create a protective antigen against anthrax. According to an article published in Environmental Health Perspectives, mice immunized with the agent survived anthrax injections of 1.5 times the deadly dose.
In 2014, KBP, working in cooperation with the U.S. Biomedical Advanced Research and Development Authority, developed, tested and used ZMapp, an antibody cocktail to treat infection from the Ebola virus, which was raging in west Africa at the time. In under six weeks, KBP completed cGMP manufacturing of each of the three monoclonal antibodies comprising the ZMapp cocktail, which received temporary emergency authorization from the FDA.
Pushing the envelope further still, Collplant of Israel is using tobacco to generate human tissue and organs. Collplant’s technology allows for the production of large quantities of medical grade human collagen, which is a primary building block for the human body and essential for tissue repair. Physicians use collagen products to treat chronic wounds, burns and other afflictions. Deriving collagen from tobacco rather than from traditional sources, such as cadavers, cows or pigs, offers several advantages, including stable fibrillates, pure molecular structures and no immunogenic responses, according to Collplant.
While the endeavors described above are only a sample of the many ways in which tobacco is deployed to produce pharmaceutical and other useful compounds, they vividly illustrate the potential of the golden leaf to help solve rather than create problems—a side that is often overlooked due to the health toll extracted by smoking.
The Green Bioreactor
While despised in the court of public opinion, tobacco is highly valued among plant scientists.
For starters, the species has good physiology for research. “Seeds are easily sterilized, and germination is very quick, so generating experimental material is easy,” says David Norman, senior scientist at Demeetra AgBio, a company that is using gene editing for crop trait development and that also works with tobacco (see “Genetic Scissors,” Tobacco Reporter, August 2021). “Tobacco grows fairly fast compared to many plants, to where flowering and mature seeds can be attained in just a couple months.”
The soft tobacco leaf is ideal for transfection, allowing researchers to easily introduce DNA or RNA into its cells. What’s more, regeneration mechanisms from callus in tobacco are extremely efficient. In addition to allowing genetic modifications on leaf material, tobacco is also easily propagated as a cell culture or protoplast culture.
The fact that tobacco is neither a food nor a feed crop makes it even more attractive as a plant for conducting research, according to Dahlia Garwe, the former CEO of the Kutsaga Tobacco Research Station in Zimbabwe. Using tobacco, she says, reduces the likelihood of transgenic material contaminating food or feed supply chains—an important consideration when many consumers remain wary of genetically manipulated foods.
Tobacco is also well understood from a genetic engineering and molecular biology standpoint; it has been more characterized than any other plant system. Scientists have been researching and genetically modifying tobacco since the early 20th century.
Meanwhile, biochemists have been able to produce many recombinant proteins in tobacco, with the plants serving as bioreactors for largescale production of pharmaceutical and industrial compounds. “Tobacco can easily take in DNA to produce these compounds when injected into the leaf or through vacuum infiltration of whole plants,” says Norman.
The vacuum infiltration method, in particular, can be scaled up to infect many plants at one time, according to Norman. “After infiltration, tobacco transiently expresses the DNA introduced for a short while and makes the protein of interest in the leaves.
“While the protein production in plants may not be that impressive on a per plant scale, up to a few percent depending on the protein of interest, you have to consider the yield per acre for tobacco. On an average acre of tobacco, the yield can be several tons of leaf material. With that scale of leaf material per acre, suddenly those small protein yields add up to being significant and potentially economically viable.”–T.T.
The Plant-Based Vaccine: A Late Bloomer?
In February, Medicago’s Covifenz Covid-19 vaccine received the green light from Health Canada, making it the world’s first plant-based vaccine approved for human use. Considering how long scientists have known about the potential of plant-based vaccines—the proof of concept dates back some 30 years—it may seem surprising that the first regulatory approval for such a product was granted only this year.
While the U.S. Department of Agriculture in 2006 gave the thumbs-up to a plant-derived vaccine to inoculate chickens against the lethal Newcastle disease, most of the projects targeted at human vaccines never even made it to end-stage clinical trials. The FDA did approve Protalix’s plant-based drug to treat Gaucher’s disease in humans in 2012 and in 2014 gave emergency authorization to ZMapp, a plant-based biological medicine manufactured by KBP (now part of KBio) to treat Ebola, but the first was not a vaccine, and the second was approved under special conditions.
Dahlia Garwe, the former CEO of the Kutsaga Tobacco Research Board in Zimbabwe, suspects the “delay” in approving plant-based vaccines is due to regulatory issues and public perceptions of genetically modified organisms (GMOs). “Most vaccines produced in plants would most likely be classified as GMOs, which automatically makes them ‘undesirables,’” she ventures.
Kathleen Hefferon, who teaches microbiology at Cornell University, acknowledges that public perception may be part of the problem but believes that many consumers would accept plant-made vaccines just as they have accepted vaccines produced in eggs and mammalian cells. “They are familiar with the GM technology when used for medical purposes,” she says. “It is when it comes to genetic modification in food products that some people seem to raise concerns.”
Hefferon suspects that the absence of a clear regulatory path represents the greatest obstacle as it may have made pharmaceutical companies wary of investing in this technology. The carrot suspension cell culture that Protalix used for its Gaucher’s disease drug somewhat resembles Chinese hamster ovary cell culture, she notes. “That made it a little easier for regulators.”
Patrick Doyle, CEO of KBio Holdings, a company set up by BAT to accelerate the development and production of novel treatments with plant-based technology, says it is important to remember that in a normal R&D cycle, medicines and vaccines on average take over 10 years, even when using a proven technology or approach.
“In fact, as a result of the global health crisis presented by Covid[-19], development, regulatory review and approval timelines were accelerated to support the delivery of much-needed vaccines,” he says. “Before gaining approval for any vaccine, manufacturers must generate sufficient data to demonstrate the efficacy and safety of the candidate and technology, which takes time. For example, the mRNA platform, first discovered in the early 1960s, was a genetic technology that had long held huge promise but only received the first FDA [Food and Drug Administration] emergency use authorization for the prevention of Covid-19 disease in individuals 16 years of age and older on Dec. 20.”
According to Doyle, the positive data generated and the subsequent approval of Medicago’s vaccine is both a positive in terms of creating another approved treatment option for Covid-19 and reinforcing the potential of plant-based vaccines.
Hefferon agrees that Medicago’s success could set the stage for plant-made pharmaceutical commercialization in future years, and her optimism appears to be shared by others. Research and Markets expects the value of the global plant-based vaccines market to reach $2.62 billion by 2028—more than double the 2021 figure. Tobacco companies seem well attuned to the potential as evidenced by PMI’s investment in Medicago and by BAT’s creation of KBio. Doyle says KBio will explore new opportunities to develop its plant-based production system, which has the potential to offer greater speed, thermostability and scale-up opportunity and.
Hefferon says she’s very happy about the growing momentum for plant-based vaccines. “Too bad it took a pandemic to make it happen.” –T.T.
Uphill Battle: Tobacco-Backed Vaccines Continue To Face Skepticism From Health Authorities
While tobacco plants lend themselves exceptionally well to the creation of pharmaceutical compounds, vaccinations and treatments developed by tobacco-backed organizations still face an uphill battle as demonstrated by recent World Health Organization actions.
During a March 16 media briefing, the WHO’s assistant director-general for drug access, vaccines and pharmaceuticals, Mariangela Simao, said the global health body had paused the process for pre-qualification of Medicago’s new Covifenz Covid-19 shot due to the biopharmaceutical firm’s link to Philip Morris International, which owns about one-third of the Canadian company.
“The WHO and the U.N. have a very strict policy regarding engagement with the tobacco and arms [industries], so it’s very likely it won’t be accepted for emergency use listing,” said Simao. The WHO persists in its opposition despite Health Canada’s February approval of Covifenz for adults between the ages of 18 and 64.
In a statement published by the CBC, Medicago said it believes authorization decisions should be based on the quality, efficiency and safety of the vaccine, not who owns shares in the manufacturer.
“It is our understanding that the WHO has made a decision to pause the approval of the vaccine and that this decision is related to Medicago’s minority shareholder and not to the efficacy and safety of the vaccine, which was demonstrated with the approval by Health Canada,” the statement reads.
Derek Yach, a global health consultant, was aghast by the WHO’s suggestion that it might reject Medicago’s vaccine based on the company’s relationship with PMI.
“‘Pikuach nefesh’ is the ethical principle in Jewish law that the preservation of human life overrides virtually any other religious rule,” he said. “Most other religions support a variant of this. WHO violates this ethical principle when it denies people access to a lifesaving vaccine.”
If the WHO follows through, the vaccine would be the first Western-manufactured Covid-19 shot to be rejected by the global health body, according to Bloomberg. —T.T.
Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

April 1, 2022
‘Medicago and PMI Talk About Disinvestment’

Photo: Leigh Prather
Medicago is talking to its shareholder Philip Morris about disinvesting to clear the way for the biopharmaceutical company’s Covid-19 vaccine, reports The Globe and Mail, citing Canada’s innovation minister, Francois-Philippe Champagne.
In a briefing last week, the World Health Organization suggested it would reject Medicago’s Covifenz inoculation because of the company’s ties to the tobacco industry. Philip Morris Investments owns about one-third of the Canadian biopharmaceutical company.
Earlier, Health Canada approved Covifenz for use in adults 18 to 64 years of age.
On March 24, a WHO spokesperson told The Globe and Mail that Medicago’s request for an emergency use listing has been denied. He said the decision was made “because of the linkage with the tobacco industry and WHO’s strict policy on not engaging with companies that promote tobacco.”
An emergency use listing is required in order for vaccines to be used by COVAX, a global initiative to share vaccines with low-income and middle-income countries.
The WHO Framework Convention on Tobacco Control prohibits collaboration with the tobacco industry. According to The Globe and Mail, Health Canada believes the treaty does not preclude investment in vaccine development.
But according to the WHO’s treaty implementation guidelines, signatories shouldn’t let any branch of government accept contributions from the tobacco industry or those working with it. The implementation guidelines also state that signatories should not “endorse, support, form partnerships with or participate in activities of the tobacco industry described as socially responsible.”

The WHO will punish industry by preventing sale of less hazardous products and declining distribution of a vaccine tangentially connected to a tobacco company, both of which will inevitably cause even more disease and death.
Martin Cullip
Tobacco harm reduction advocates were aghast by the WHO’s rejection of Covifenz. Cameron English of the American Council on Science and Health described the global health body’s attitude as “shameless moral preening” that potentially puts many millions of people at risk.
Cameron noted that the tobacco industry has a long history of investing in companies that sell smoking cessation aids. “Is the WHO going to publicly oppose the use of nicotine gum because cigarette makers have a vested interest in selling it?”
Martin Cullip, an international fellow at The Taxpayers Protection Alliance’s Consumer Center, said the WHO is engaged with points-scoring against industry rather than saving people from dying of the disease in low-income and middle-income countries.
“Their unethical and depraved reasoning seems to be that because cigarettes have caused so much harm, the WHO will punish industry by preventing sale of less hazardous products and declining distribution of a vaccine tangentially connected to a tobacco company, both of which will inevitably cause even more disease and death,” he wrote for Townhall.
March 28, 2022
Medicago Urged to Ditch Philip Morris

Photo: evannovostro
A coalition of health groups have called on the Canadian government to replace Philip Morris International as a major shareholder in Medicago.
In late February, Health Canada authorized Medicago’s Convifenz Covid-19 vaccine, which is manufactured with the help of tobacco plants. Soon after, the World Health Organization signaled it was unlikely to grant the vaccine emergency approval due to Medicago’s ties to the tobacco industry. PMI owns about a third of the biopharmaceutical company.
“There is a simple pathway to get this vaccine approved. Our governments should stand up to Philip Morris,” said Flory Doucas, co-director of the Quebec Coalition for Tobacco Control.
“Instead of asking the WHO to contravene its own tobacco control treaty, which was ratified by Canada and 181 other countries, the federal Minister of Health and his Quebec counterpart should focus their energies on convincing the tobacco giant to withdraw as a shareholder of Medicago.”
According to the health groups, Medicago has already signaled that it is seeking alternative investors. The Canadian and Quebec governments, they say, should help facilitate such a transition.
The health groups cite Article 5.3 of the WHO Framework Convention on Tobacco Control, which obliges parties to ensure that their policies are protected “from commercial and other vested interests of the tobacco industry.”
“Guidelines for implementing this obligation make clear that ‘the tobacco industry should not be a partner in any initiative linked to setting or implementing public health policies, given that its interests are in direct conflict with the goals of public health,’” the organizations wrote in a press release. “Parties are directed that they ‘should not endorse, support, form partnerships with or participate in activities of the tobacco industry described as socially responsible.’”
March 25, 2022
PMI Scaling Down Russian Operations

Photo: Matvey Salivanchuk
Philip Morris International today announced the concrete steps it has taken to suspend planned investments and scale down its manufacturing operations in Russia, following that country’s military invasion of Ukraine.
PMI said it has discontinued a number of its cigarette products offered in the market and is reducing its manufacturing activities accordingly. It has also suspended marketing activities in the country and canceled all product launches planned for 2022 in Russia, including the launch of its flagship heated tobacco product IQOS Iluma, originally planned for March 2022. In addition, PMI has canceled its plans to manufacture more than 20 billion Terea sticks (for IQOS Iluma) in Russia and the related ongoing investment of $150 million.
PMI’s board of directors and senior executives are working on options to exit the Russian market in an orderly manner, in the context of an increasingly complex and rapidly changing regulatory and operating environment.
“Our focus and all our efforts over the last four weeks have been to ensure the safety and security of our Ukrainian colleagues. We stand in solidarity with the innocent men, women and children who are suffering,” said PMI CEO Jacek Olczak in a statement. “We employ more than 3,200 people in Russia. We continue to support them, including paying their salaries, and we will continue to fulfil our legal obligations. We will continue to make decisions with their safety and security as a priority.”
Russia accounted for almost 10 percent PMI’s total shipment volumes and around 6 percent of PMI’s net revenues in 2021.
March 25, 2022
WHO Likely to Reject Medicago Covid Vaccine
The World Health Organization is unlikely to grant emergency approval Medicago’s tobacco plant-based Covid-19 vaccine due to the company’s ties to the tobacco industry, the CBC reported on March 17.
The global health body has reportedly paused the process for pre-qualification of Medicago’s new Covifenz shot due to its link to Philip Morris International, which owns about one-third of the Canadian biopharmaceutical company.
“Due to its connections [to PMI], the process is put on hold,” said Mariangela Simao, the WHO’s assistant director-general for drug access, vaccines and pharmaceuticals, at a March 16 media briefing.
“The WHO and the U.N. have a very strict policy regarding engagement with the tobacco and arms [industries], so it’s very likely it won’t be accepted for emergency use listing,” she said.
In February, Health Canada approved Covifenz for adults 18 to 64 years of age, making it the world’s first vaccine approved for human use that utilizes a plant-based protein technology. The Canadian government floated CAD173 million ($136.74 million) to help the company develop the jab and is so far the only country to approve it.
In October 2020, Canada signed a deal to buy 76 million doses of Medicago’s vaccine, and the shot is expected to be made available to the public in May.
In a statement published by the CBC, Medicago said it believes authorization decisions should be based on the quality, efficiency and safety of the vaccine, not who owns shares in the manufacturer.
“It is our understanding that the WHO has made a decision to pause the approval of the vaccine and that this decision is related to Medicago’s minority shareholder and not to the efficacy and safety of the vaccine, which was demonstrated with the approval by Health Canada,” the statement reads.
Derek Yach, a global health consultant, was aghast by the WHO’s suggestion that it would reject Medicago’s vaccine based on the company’s relationship with PMI.
“‘Pikuach nefesh’ is the ethical principle in Jewish law that the preservation of human life overrides virtually any other religious rule,” he said. “Most other religions support a variant of this. WHO violates this ethical principle when it denies people access to a lifesaving vaccine.”
If the WHO follows through, the vaccine would be the first Western-manufactured Covid-19 shot to be rejected by the global health body, according to Bloomberg.
March 17, 2022