Category: This Issue

  • Smoore’s Strong Success

    Smoore’s Strong Success

    Credit: Smoore

    Smoore International Holdings becomes the first vapor company to be
    listed on the Hong Kong Stock Exchange.

    By Timothy S. Donahue

    It was only a matter of time. It took more than a decade, but China finally has its first billion-dollar vapor company. Smoore International Holdings, parent to Shenzhen Smoore Technology, which houses Vaporesso, Feelm and several other house brands, is also the first vapor company to be listed on the Stock Exchange of Hong Kong (HK6969). Smoore is now the most valuable vapor company on the planet.

    On July 10, its first day of open trading, Smoore’s stock rose by nearly 150 percent above
    its initial public offering price of hkd12.40 ($1.60). Closing at hkd31, the success places Smoore’s valuation at hkd178 billion, or nearly $23 billion, according to Forbes. By comparison, Altria Group in January reduced the value of its investment in Juul Labs to around $12 billion, almost 70 percent less than the $38 billion that Altria assigned to the company when it bought Juul in December 2018.

    Smoore had locked in 10 cornerstone investors, which accounted for $340 million of the total raising, according to its prospectus. The largest of those investors were Huaneng Trust, which took $80 million worth of stock, and Prime Capital, which took $50 million. A prospectus is filed when a company is considering offering stocks, bonds and mutual funds.

    Smoore’s stock surge also created two new billionaires. Chairman and CEO Chen Zhiping, 44,
    held a stake worth nearly $8 billion; shares held by executive director Xiong Shaoming, 49, were worth $1.2 billion at the stocks’ close on its opening day, according to Forbes.

    “As the global leader in offering vaping technology solutions, Smoore’s mission is to build the world’s leading vaping technology platform to bolster the innovation and development of vaping technology with a wide range of applications,” a Smoore spokesperson told Vapor Voice. “In the next three to four years, Smoore plans to invest more in improving production capacity and upgrading equipment, including setting up new manufacturing facilities and a research institute of group level as well as installing automated production lines and IT equipment.”

    Chen first became involved in the manufacturing of vapor devices and research and development of vapor technology when he joined Shenzhen Simoer Technology Co. as minority shareholder in 2007. He then gradually increased his shareholding to 85 percent.

    Chen soon established Smoore in September 2009 through an entrustment arrangement as a platform to provide research and development of vapor and heating technology services together with manufacturing and in-house sales and marketing functions under ODM (original design manufacturer) and OEM (original equipment manu- facturer) business models, according to the prospectus.

    Smoore’s Chairman and CEO Chen Zhiping

    Since then, business has been principally conducted through Smoore and has been growing with a diversified product port-folio and an expanding international footprint. To streamline operations, Chen deregistered Simoer in November 2012 and directed resources to Smoore for its business development and expansion, according to the prospectus.

    According to Frost & Sullivan, a business consulting firm, Smoore is the world’s largest vapor device manufac-turer in terms of revenue, accounting for 16.5 percent of the global market in 2019. “In the past 14 years, we have been firmly grounded to focus on advanced R&D technol-ogy, strong manufacturing capacity, wide-spectrum product portfolio and diverse customer base. We are glad about what we have achieved and will take this as a new start,” said the spokesperson.

    Smoore earned cny2.1 billion ($300 million) in 2019 on sales that increased to cny7.6 billion from cny3.4 billion in 2018. About a fifth of its revenue comes from the U.S. and nearly half from mainland China and Hong Kong, according to Forbes.

    In its prospectus, Smoore labels itself as a “global leader in offering vaping technology solutions, including manufactur-ing vaping devices and vaping components for heat-not-burn (HnB) products on an ODM basis, with advanced R&D technology, strong manufacturing capacity, wide-spectrum product portfolio and diverse customer base.”

    Smoore operates two principal business segments: the corporate client-oriented business and the retail client-oriented business. Corporate business includes the research, design and manufacturing of closed system vapor devices and vapor components for several large international tobacco companies as well as some smaller independent vapor companies.

    In the retail arena, Smoore performs research, design, manufactur-ing and the sale of self-branded, open system vapor devices for retail clients. Some of Smoore’s corporate clients include Japan Tobacco, British American Tobacco, Reynolds Asia Pacific, Relx and Njoy, according to the prospectus.

    Smoore also has several of its own brands, including Vaporesso and Feelm. “All of our self-branded [devices] are open system vaping devices,” the prospectus states. “We sell our self-branded [devices] to distributors for resale to end consumers subsequently. We did not operate any retail stores or online platforms for the sale of our self-branded [devices] directly to end consumers.” The company also manufactures vapor components (cartridges and batteries) for HnB products.

    As its most prestigious brand, Vaporesso has inherited Smoore’s “spirit and incorporated it into its own mission to be ‘Beyond the Ordinary,’” according to the spokesperson. “Vaporesso’s business has spread to more than 60 countries and regions around the world and has established a substantial brand influence in Europe, America and emerging markets. Vaporesso’s products—such as Veco, Zero, Luxe and the Gen family—cover the full range of open system vapes and fulfill the various needs of vapers.”

    Smoore takes pride in its R&D capabilities. The company is one of the most innovative in the vapor industry, according to the prospectus. As of this writing, Smoore has applied for more than 1,600 patents in China and abroad, of which more than 700 patents have been granted.

    The company’s process of launching and producing new products starts with extensive research on market demands and figuring out if the product could be successful in the market. “Upon the project’s internal approval, our R&D team will proceed to design the new product,” the prospectus states.

    “After completing the design of the new product, we will manufacture the mold, evaluate the sample, file technical documents and conduct trial verification.” The last step of a product launch and production process is the mass production of the new product at Smoore’s production facilities.

    The company’s public listing opens new opportunities. “After being listed on the Hong Kong stock market, Smoore is prob-ably going to be able to invest more in the R&D and application of heating technology, for instance, in the medical atomization arena,” said the spokesperson. “Meanwhile, we are able to better serve our clients and provide a better life for our employees. As a leader in this field, Smoore is also able to play a more important role in shaping the industry and the whole of society.”

    In the vapor industry, staying innovative is key to a com-pany’s success. The prospectus states that Smoore’s R&D capabilities are critical to the growth and preservation of its market-leading position globally. The company uses its R&D platform to market some of its key technologies and expand its brand awareness.

    “We not only focus on scientific research but also its practical application to our products,” the prospectus states. “Our R&D development path has gradually evolved along with the industry trends and the enhancement in our R&D capabilities—from product application to prod-uct structure and further to core vaping technology.”

    Credit: Vaporesso

    Smoore’s R&D capabilities have made a major impact on the vapor industry. In 2016, the company launched its second-generation heating technology, Feelm, which com-bines metal films with ceramic conductors to “achieve improvements in material and structural science,” according to the Feelm website. “Feelm has been adopted widely by many of our corporate clients and exported to the U.S., South Korea, Germany, France, Belgium, New Zealand, South Africa and other countries.”

    Proof of Smoore’s R&D success is that the company has earned several accolades. In 2019, China’s National Intellectual Property Administration awarded Smoore the China Patent Excellence Award for its patent relating to the manufacturing technique and application of porous ceramic. The award is one of China’s most prestigious awards for patents

    Also in 2019, Smoore received the Laboratory Accreditation Certificate from the China National Accreditation Service for Conformity Assessment for the safety and quality of its laboratories. “The scope of the accreditation encompasses our laboratories’ ability to conduct chemical analysis, physical performance testing and product quality testing, among others,” the prospectus states. “Our ability to build up our own technology brands serves as an entry barrier to other competitors and also helps maintain our leading position in the vaping industry.”

    Earlier this year, Smoore was awarded the iF Design Award by iF International Forum Design for its disposable paper e-cigarette design. “Our disposable paper e-cigarette uses eco-friendly paper material instead of plastic and sig-nificantly improves its degradability,” a press release stated at the time.

    Moving forward, Smoore must still overcome several regula-tory hurdles. “For example, our closed system vaping devices and open system vaping devices marketed in the U.S. are sub-ject to premarket tobacco product application (PMTA) require-ments, and a large portion of our closed system vaping devices sold in the U.S. are subject to flavor bans in several states,” the prospectus states.

    “Moreover, Hong Kong may, in the future, enact law to prohibit the import, manufacture, sale, distribution and advertisement of vaping products. All of the changes in the regulatory landscape may materially and adversely affect our business and financial performance, including revenue, gross profit and profit margin as well as future growth.”

    However, Smoore’s outlook still looks promising. The global vapor market is large and competitive. According to Frost & Sullivan, there are more than 1,200 vapor device manufacturers globally. Though the top five players accounted for 30.5 percent of the entire market share in terms of revenue, the top 10 players accounted for less than half of the entire market share in terms of revenue in 2019, and most vapor device manufacturers are small-sized to medium-sized enterprises.

    The global market for vapor devices is expected to grow by more than 20 percent annually to $22.7 billion in 2024 from $6.7 billion in 2019, according to Frost & Sullivan. This represents an increase of more than 116 percent and is expected to continue increasing in the future. V

  • Winners and Losers

    Winners and Losers

    The e-cigarette industry continues to shift in the Covid-19 environment.

    By Maria Verven

    The market for nicotine in all its forms is undergoing seismic shifts. While sales of nicotine products have been up slightly in the first half of 2020, the greatest growth was in the sales of traditional cigarettes. And when traditional cigarettes win, e-cigarettes lose.

    A TROUBLING TREND

    Despite the fact that vaping is considered a much safer alter-native to smoking by reputable public health organizations, the data is showing a troubling trend: Some vapers are return-ing to traditional cigarettes.

    “Over the last several months, we’ve observed an increase in the number of age 50 and older smokers in the ciga-rette category,” said Altria CEO Billy Gifford in an April investor call.
    “We believe these smokers had previously switched to e-vapor products but recently returned to cigarettes due to negative publicity and regulatory and legislative developments in the e-vapor category.”

    These same factors were in evidence during Altria’s July investor call when they credited the U.S. Food and Drug Administration (FDA) flavor ban for “helping the overall cigarette category” and predicted that the FDA’s premarket tobacco product application (PMTA) process will pause the growth in the e-cigarette market for the reasonable future.

    “This is really unfortunate and a sign of serious misinfor-mation and misperceptions about the large risk difference between smoking and harm reduction nicotine products,” said Konstantinos Farsalinos, a cardiologist, clinical researcher with the Onassis Cardiac Surgery Center in Athens and an e-cigarette expert.

    “Drastic measures are needed so that smokers receive reasonable, unbiased and evidence-based messages to make informed decisions,” Farsalinos said.

    “This dramatic change in the market coincides with the concerted attacks on vaping over the past year,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette studies. “By undermining the low-risk alternatives to cigarettes, they protected the cigarette business.”

    STEADY DECLINE SINCE LAST SUMMER

    According to Nielsen data reported in July, traditional ciga-rettes represented 80 percent of all U.S. tobacco sales, with $60 billion in convenience store sales over the past 52 weeks.
    Meanwhile, U.S. sales of e-cigarettes represented only 5 percent of the market, with sales at $3.8 billion.

    In 2019, the global e-cigarette market reached a value of $13 billion and  was expected to reach $53 billion by 2024, according to VnyZ Research USA. The U.S. share of the e-cigarette market was predicted to reach $16.5 billion by 2024.

    These rosy projections now fly in the face of the steady decline in the growth of e-cigarette sales volume since Nielsen’s August 2019 report when it was up 60 percent year over year.
    Sales of traditional cigarettes have always eclipsed e-cigarette sales. But overall, e-cigarette sales have been down around 20 percent this year, according to Bonnie Herzog, managing director at Goldman Sachs and research analyst who has followed the tobacco industry for more than 20 years.

    Much of the decline in e-cigarette sales may be due to the dramatic decline in Juul’s market, which was down around 33 percent after concerted attacks and bans on popular offerings.
    However, several other factors have clearly contributed to the impact on the overall market, including the vaping scare last year, media reports of a youth “epidemic” and the FDA’s flavor restrictions on the refill market.

    In January 2020, the FDA announced it would enforce its policies banning unauthorized flavored e-cigarette products that it claims might appeal to youth—without regard to the appeal to adults who will otherwise smoke cigarettes—including fruit and mint flavors—indeed, any flavors except for tobacco and menthol.

    The agency gave companies 30 days to remove fruit-flavored and dessert-flavored products from their shelves and apply for marketing authorization by Sept. 9.
    The FDA’s restrictions on the refill market, which repre-sents nearly 90 percent of the total category, had an immedi-ate and dramatic effect on the e-cigarette market, according to Herzog.

    FDA THREATS CONTRIBUTE TO MARKET CONTRACTION

    For months after the FDA’s announcement, the sales of e-cigarettes continued to trend downward by at least 13 percent in June 2020, with the possible exception of R.J. Reynolds’ Vuse. Vuse swiftly rose in popularity, taking second place only to Juul with nearly 16 percent market share. But Vuse is not without problems of its own.

    Altria Group, which owns a 35 percent nonvoting stake in Juul Labs, which the Federal Trade Commission is seeking to scupper, filed a lawsuit in May against R.J. Reynolds Vapor Co. seeking “treble damages” (triple the damage amount) in its claim that Vuse violated nine of Altria’s patents involving heating technology, mouthpieces, batteries and liquid-filled pods.
    R.J. Reynolds had already filed its own patent infringement lawsuits against both Altria and Philip Morris International over the technology behind Marlboro HeatSticks, a competi-tor of Reynolds’ Eclipse line, that heats rather than burns the tobacco in cigarettes.

    While Juul continues to reign supreme in the convenience store market, representing roughly 60 percent of sales, its market share has declined about 10 percent over the past year.
    Juul has taken much of the heat around the teen vaping “epidemic,” causing the company to stop advertising its prod-ucts in the U.S. and cease production of most of its flavors. In two rounds of layoffs, Juul slashed about 40 percent of its workforce, a direct result of its declining sales.

    However, according to market research firm IRI, Juul remains the market leader in convenience stores and simi-lar outlets. Valued at $38 billion at the time of the Altria investment, Juul’s first-quarter sales reportedly reached $394 million. If the trend continues, Juul sales could fall somewhere between the $1.3 billion in sales reported in 2018 but significantly shy of the $2 billion in sales reported last year.

    Credit: Haiberliu / Pixabay

    Juul’s biggest hurdle may be this fall when the FDA starts reviewing Juul’s PMTA, which the company submitted in late July along with scientific studies showing its products are healthier alternatives for smokers as well as plans to prevent minors from using its products.

    DISPOSABLE MARKET GAINS TRACTION

    When one nicotine category slows, another tends to gain traction.
    This rule definitely holds true in the e-cigarette market where the contraction in the refill market allowed the much smaller disposable market to thrive.

    Disposable devices openly exploited the loophole in the FDA’s regulations that banned fruit and dessert flavors in refillable cartridge-based e-cigarettes.
    For example, Puff Bar, one of the market leaders in the disposable category, boasts more than 20 flavors, including pina colada, pink lemonade and watermelon cartridges that are compatible with Juul devices.

    Puff Bar, Stig and other small but fast-growing players like Fogg were the biggest winners, said Herzog, due to the fact that the disposable e-cigarette segment fell outside of the FDA’s flavor restrictions.

    Based on convenience store data and retailer data but exclusive of online and vape store sales, Puff Bar is reportedly selling over 300,000 sticks a week with weekly sales of over $3 million.

    However, pressure is mounting among House lawmakers to ban the fast-growing e-cigarettes that quickly replaced Juul as the most popular vapes among young people.
    And in July, the FDA sent warning letters to Cool Clouds Distribution (doing business as Puff Bar), HQD Tech USA, Myle Vape, Eleaf USA, Vape Deal, Majestic Vapor, E Cigarette Empire, Ohm City Vapes, Breazy and Hina Singh Enterprises (doing business as Just Eliquids Distro demanding they remove flavored disposable e-cigarettes that appeal to youth from the market because they lack the required premarket authorization.

    Credit: Sarah J- Pixabay

    The FDA also cited Puff Bar and HQD Tech USA for stating that their products were modified-risk tobacco products without having received FDA permission to make such claims.
    The FDA also recently blocked imports from EonSmoke and Relx, two Chinese manufacturers of flavored dispos-able e-cigarettes. Over the past several months, the FDA has banned at least 74 entries of disposable electronic nicotine-delivery system (ENDS) products from being sold in the U.S. that were in violation of the Federal Food, Drug and Cosmetic Act.

    “The FDA continues to prioritize enforcement against e-cigarette products, specifically those most appealing and accessible to youth,” said FDA Commissioner Stephen M. Hahn. “We want to make clear to all tobacco product manu-facturers and retailers that, even during the ongoing pan-demic, the FDA is keeping a close watch on the marketplace and will hold companies accountable.”

    NEGOTIATING THE ROADBLOCKS

    Clearly, the vapor market is being held hostage by the FDA as well as local regulatory bodies. Only those that can successfully navigate the regulatory roadblocks will be able to survive. A key deadline is approaching on Sept. 9, the date when manufacturers must submit a PMTA for FDA approval. After that date, the clock starts ticking; manufacturers will have up to a year from that date to secure FDA compliance or they must sell off their vapor products.
    The biggest hurdle for companies is the requirement that they must prove that their products demonstrate a net ben-efit to public health.

    Only those with deep pockets can possibly jump through the FDA’s hoops to demonstrate that their products provide a healthier alternative to smokers who make the switch.
    Despite the costs, at least  30 applications  for FDA approval of vapor products are pending—with no guarantee that these applications will be approved.

    It’s a safe bet that the e-cigarette brands associated with the tobacco giants, including Altria with its minority stake in Juul, R.J. Reynolds Vapor Company with its Vuse, and Imperial Brands, which owns Blu, will be among the first in line to seek FDA approval.
    Sweanor sees the situation in stark terms.

    “If we want to see low-risk alternatives destroy the exceedingly lucrative but devastatingly lethal cigarette business, policies that hand the market to Big Tobacco [are] like giving control of the alternative energy market to Exxon,” he said. V

    The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.

  • Applied and Accepted

    Applied and Accepted

    Credit: EAS

    It seems the vapor industry has a future after all. Several large tobacco companies, such as Vuse, Blu, Logic and Juul, have already filed premarket tobacco product applications (PMTAs) for their vapor products with the U.S. Food and Drug Administration (FDA).

    While several smaller companies have said they would file PMTAs, E-Alternative Solutions (EAS) is the only vapor manufacturer to announce that it has received both acceptance and filing letters from the FDA for its submitted vapor products.

    EAS’ Leap and Leap Go brands will now move on to the substantive review stage of the PMTA process. During this phase, the FDA will decide whether the EAS products are “appropriate for the protection of public health.”

    “This milestone represents an important step forward for EAS as we support our mission of producing high-quality vapor products that serve as an alternative to combustible cigarettes with our Leap and Leap Go vapor products,” said Jacopo D’Alessandris, president and CEO of EAS. “FDA acceptance and filing letters are a testament to the strength and thoroughness of our applications, which we believe will meet [the] FDA’s requirements.”

    Leap Vapor is a closed pod system designed for adult smokers. Leap Go is a line of disposable e-cigarettes. The Leap and Leap Go products can now stay on the market past the FDA’s PMTA deadline of Sept. 9. The products will be allowed to remain on the market for one year or until the FDA decides whether the products are a benefit to public health compared to combustible cigarettes.

    When asked why EAS publicly announced its accep-tance and filing letters unlike some other companies, Chris Howard, vice president, general counsel and chief compliance officer at EAS, said that many vapor wholesalers and retailers remain uninformed about the potential status for many of the vapor products they are selling. EAS wants to be “open and honest” about the process.

    “We’ve taken a different approach by providing informa-tion regarding the PMTA process and what it’s like to work with [the] FDA. This gives retailers an idea of what to look for, especially after Sept. 9,” says Howard. “A lot of retailers want to do the right thing. So, after Sept. 9, they don’t want to be doing something illegal. They definitely don’t want to be confused and unsure. We’re providing retailers with a tool to be certain that they are selling legally compliant products after the deadline.”

    Howard said that, unfortunately, he does not see a scenario where the FDA will allow a sell-through period for products already on store shelves. The FDA is most likely going to demand that all products that have not submitted a PMTA be removed. However, the FDA may face challenges in policing the more than 152,000 convenience stores operating in the United States, according to the 2020 NACS/Nielsen Convenience Industry Store Count.

    “We know [the FDA is] not staffed adequately to do that, and that’s unreasonable. So, in large part, [the] FDA relies on the people who want to be the good actors, to adhere to the regulations,” said Howard. “I think that most will—75 percent if I had to guess. A lot of them will immediately try to be compliant.”

    Many retailers wonder if they will be responsible for the products that can no longer be sold or if distributors will buy back the products. While many distributors will not buy product back, Howard says that EAS has always offered its products with a 100 percent guarantee for the retailers.

    “At EAS, we make it clear that our products are 100 percent guaranteed, and we do take product back. We’ve taken back all of the flavored pods that we had on the market and provided people with full refunds or credit in the form of other product,” he explains. “I personally believe that is the right thing to do, especially in an industry where the channel was burned multiple times by various vapor companies, and retailers got stuck with inventory that they couldn’t move. I think that some companies are aligned with my view on that, and they will take it back—but I wouldn’t say it’s the majority.”

    RAPID RESPONSE

    The FDA does not necessarily have a reputation for moving quickly. However, EAS received its acceptance and filing let-ters just over a week after submitting the application. Howard says that there isn’t necessarily a rational reason for why it was so fast. However, the FDA is committed to its timelines and is trying to move in an expedited manner.

    “When you have something that’s organized and it comes in and makes it easy for them, then yes, you’re likely going to get the benefit of a quicker review. Now, I don’t know if that translates into a quicker substance review, or scientific review,” Howard said. “I believe one of [the FDA’s] goals is to clean up this space and get their arms around the problem. One of the ways to do that is to make sure you get those acceptance and filing letters out quickly. And you reject the ones just as quickly that aren’t adequate to meet the standard.”

    Howard said that the EAS PMTAs for the Leap and Leap Go products together comprised 109,000 pages. EAS essentially filed two “buckets” of PMTA data with one being the Leap Go (which contained three SKUs) and the other the Leap (which contained 26 SKUs) for a total of 29 SKUs. The data contained more than 25 individual studies. The applications also contained several digital links to data.

    “The Leap application had about 45,000 links, and the Leap Go had about 46,000. We covered every discipline. We did behavioral testing. We did an assessment of popula-tion risk. We did clinical studies. You might have heard of PK [pharmacokinetic] studies to see how the body reacts to the products. We did those to show that the products have a lower abuse liability potential relative to cigarettes,” says Howard. “We did all of the required HPHC work to con-firm that our exposures are a lot lower than the combustible cigarette. We did toxicity testing. We did a comprehensive analysis of every ingredient that’s in the products. We did chemistry testing. We evaluated the products for stability and shelf life, and that’s still ongoing for the next two years. We did an environmental assessment.”

    Flavors in vapor products have been a controversial subject recently. When asked if EAS had submitted any flavors other than tobacco flavors for its PMTAs, Howard said the company approached the subject carefully and with much consideration of how flavors have been shown to help smok-ers make the decision to seek an alternative to cigarettes. He also acknowledged the open question as to whether flavors may contribute to youth experimentation but noted that companies like EAS, which prioritize compliance and limit-ing access and exposure to adults, are positioned to market flavored products responsibly moving forward.

    “For the Leap pods, we currently only sell tobacco and menthol, which were submitted. We also submitted all the flavors we had to remove from the market back in February. There were a handful,” said Howard. “For the Leap Go, which are disposables and flavors are permitted, we submit-ted a mango flavor as well as tobacco and mint. You have to make decisions when you’re spending millions of dollars trying to create some efficiencies, and this was one of the ways we tried to be prudent. It’s not to say that we wouldn’t file more Leap Go flavors later, but if you look at our rela-tive business model, the Leap is a more dominant product, so we had a heavy focus on its PMTA submission.”

    Jacopo D’Alessandris

    Howard said he could not share the total cost for the PMTA process; however, it was in the tens of millions of dollars for all 29 SKUs combined.

    WAITING FOR ANSWERS

    Howard says the letters are straightforward. They state that EAS’ application has been accepted and filed, respectively, and the applications are ready to move on to the next stage. This is the stage where the FDA may want a tour of the com-pany’s manufacturing facilities. “I could see this happening,” explains Howard.

    The process is now completely in the hands of the FDA, according to Howard. There could also be several different types of situations that present themselves before the FDA issues either a marketing authorization or denies the applica-tion. Howard said the acceptance and filing letters do provide some clarification, but it is still a “wait and see” process.

    “I think the next step should be that, if they’re going to do it, they’re going to ask for samples. I believe that is what really starts the 12-month timeline. We haven’t been asked for samples yet. We’ve immediately engaged to make sure we have the samples ready, even the flavored pods, which are not currently on the market,” said Howard. “Now, they’re going to have their hands full come Sept. 9; I’m sure they’re going to get a lot of applications, and that might slow things down.”

    Chris Howard
    Chris Howard

    The FDA may also need additional information, accord-ing to Howard. The agency may request additional details regarding studies EAS has already provided, for example. It’s also possible that EAS may have to complete additional stud-ies to be able to answer a specific question.

    “What I like to think is going to happen in that stage is a give-and-take and sort of a collaboration about what’s reason-able because, at the end of the day, these products are clearly appropriate for the protection of public health as compared to cigarettes,” Howard said. “Then you have this engagement, and that’s consistent with what [the] FDA has said, and then you’re on your way. Additionally, if you do get a request for additional information, that technically stops the clock, so that could extend your 12-month window. After the FDA receives any additional information it may require, the next phase is receiving the marketing authorization.”

    If EAS receives a PMTA, the next step for the company to consider is whether it wants to file for a modified-risk tobacco product (MRTP) application. The only products to have ever received an MRTP are snus products and Philip Morris’ IQOS heat-not-burn device. Howard says that EAS may consider going through the process, but he questions the value of an MRTP.

    “We now know it isn’t just some black box that nobody gets. I mean, it’s clearly possible. But we have to wait and see how this vapor category shakes out and whether or not an MRTP claim—whether it’s reduced harm or exposure—does that really add value in the eyes of the consumer?” Howard asks. “I don’t know the answer; so it’s a wait-and-see kind of decision.”

    To grant a PMTA, the FDA will have to determine a product is “appropriate for the protection of public health.” It can be interpreted that a tobacco product receiving a PMTA is less risky than a combustible cigarette. However, a company can make that claim only after receiving an MRTP. Even if granted, MRTP claims will still be limited. IQOS, for example, received an MRTP but can only make reduced expo-sure claims. The company cannot make a reduced-risk claim.

    “The MRTP is also super expensive. That’s many more millions of dollars on top of what we’ve already spent for the PMTA. We’re looking into the opportunity, but we haven’t decided,” says Howard. As far as advice for companies still preparing their PMTAs, Howard says to remain diligent.

    The Covid-19 pandemic has only made collecting the data more complicated. This may lead many companies to be nervous about submitting an incomplete application. Howard says he believes that companies must be open and honest with the regulatory agency.

    “If you’re in a position where you can’t do it all, you focus on the statutory requirements and making sure that those are robust and complete. And then areas where you do have gaps, you very clearly explain why you have a gap and what you’re going to do to fix it and when you’re going to be done. Don’t try to do a shortcut version,” says Howard. “I think [the] FDA will be understanding and receptive and ultimately work with you to make sure that all the data is complete. I mean, they don’t want to kick you out for not having finished your human factors testing. However, if you submit without an environmental assessment, they’re going to kick it out.”

    After the Sept. 9 deadline, Howard says he expects to see the industry become more streamlined. He says that there’s a strong possibility that numerous companies will go out of business. However, there will still be a sufficient amount of options at retail.

    “I think that there’ll probably be multiple variations of e-liquid, so it won’t be as many selections as there are today, but there will be open system options. I think because the products contribute so much to harm reduction that it’s not in [the] FDA’s best interest, or anyone’s best interest, for the cat-egory to be gone,” he says. “So anytime I hear someone say, ‘Oh, the vapor category is going to be gone,’ I completely disagree.” V

     

     

  • Cut Down to Size

    Cut Down to Size

    Neon Juul sign

    The rise and fall of Juul Labs

    By Stefanie Rossel

    It was the American Dream come true. In 2005, two frustrated smokers who had met at Stanford University developed an e-cigarette called Ploom and, two years later, started a business by the same name. In 2015, after the sale of Ploom and a name change to Pax Labs, they designed the Juul and established Juul Labs in San Francisco.

    The novel product was different from other vapor devices on the market at that time. Resembling a USB stick, the Juul looked sleek and discrete. It was made for easy, intuitive use. The cartridge-based system worked with nicotine salt instead of free-base nicotine thus providing the user with a level of satisfaction comparable to that of combustible cigarettes. It also came with one of the highest nicotine contents among vapor products. Juul was a product with disruptive potential.

    What followed was a story of rapid growth, the fairytale-like rise from a small company to a major player in the world’s largest vapor market that seemed too big to fail. Launched a year before the U.S. Food and Drug Administration (FDA) finalized its policy for regulating e-cigarettes as new tobacco products in 2016, Juul could develop with virtually no federal oversight. By the end of 2017, Juul became the most popular e-cigarette in the U.S. market. It was said to have revived the stagnating U.S. vapor market and became so popular that “Juuling” became a verb.

    Competitors began to mimic the product’s sleek design and nicotine salt-based pod system. According to statista.com, the brand accounted for 82.9 percent of U.S. nicotine vapor sales in 2019. The company grew from 200 employees in 2017 to 3,000 in April 2020. Privately held, it was valued at $15 billion in July 2018. A few months later, in December 2018, U.S. tobacco giant Altria bought a 35 percent stake in Juul Labs for $12.8 billion. According to Wells Fargo, the deal valued Juul Labs at $38 billion. At the time, the company had an annual revenue of approximately $2 billion.

    Yet soon after Altria’s entry, the tide began to turn. The company faced intensifying scrutiny from federal regulators and was flooded with legal challenges. With the colorful product design, discrete shape and a large variety of appealing flavors of its product as well as youth-oriented imagery and themes in its marketing, Juul Labs was held responsible for the steep increase in vaping among U.S. youth, which the U.S. Surgeon General in December 2018 labeled an “epidemic.” According to the 2019 National Youth Tobacco Survey, 5.3 million high school students were e-cigarette users, up from 3 million in 2017. With a share of 59.1 percent among high school vapers, Juul was by far the most popular brand among youths in 2019, the survey said. Something had gone wrong along the way for Juul.

    “I think the crucial mistake Juul made was in being too careless about its marketing and its controls over who could get hold of the product,” says consumer staples specialist Jon Fell, principal at Ash Park, a financial analysis group. “Despite supposedly closely studying the history of the tobacco industry, Juul didn’t learn the right lessons, and the consequence is that a very successful product—with the potential to create a lot of public health benefits—became mired in a ‘youth use’ controversy which now threatens to drag the whole business under.”

    Under attack

    Claims put forward against Juul are manifold. The company was scolded for making unsubstantiated claims that its product helps users stop smoking and is safer than cigarettes, for increasing addiction with its high dosages of nicotine salts, and for its aggressive marketing to teenagers.

    By Dec. 31, 2019, Juul Labs was a defendant in an estimated 340 legal cases. Several class action suits have been filed. There are complaints for damages, and on Feb. 25, 2020, 39 U.S. states announced an investigation into the marketing and sales of Juul vapor products. More lawsuits are to be expected.

    Considering this negative outlook, Altria in October 2019 announced it had written down its investment in Juul by more than a third, recording a $4.5 billion pretax charge against its third-quarter earnings. In late January 2020, the cigarette maker again slashed the value of its investment by another $4.1 billion, citing mounting lawsuits against Juul Labs. Altria also revealed that it had revised the terms of its agreement with Juul. The tobacco firm said it would continue to help Juul navigate regulatory affairs but would discontinue all other services that were part of the original investment agreement.

    Instead, Altria emphasized the U.S. rollout of iQOS and how this made its reduced-risk products (RRP) platform complete. One month later, Altria’s CEO Howard Willard said that he was “highly disappointed” in the performance of the company’s Juul investment. In April, Willard stepped down after 28 years with the company.

    “I don’t think Juul was ever worth $38 billion, and Altria buying a 35 percent stake in the business for that price was one of the worst blunders I’ve ever seen a company make,” says Fell. The high market share assumed for Juul, he explains, related to scanner data for pod-based systems sold in a relatively small universe of convenience outlets. “But if you include all U.S. outlets and all vaping devices, including open systems, Juul’s share is much lower: around 42 percent when Altria bought its stake, and now around 39 percent—and down from a peak of 47 percent in Q3 2019, according to Altria.”

    Fell believes it is sensible for Altria to have a portfolio approach to its RRP platform, which also includes nicotine pouches and traditional moist snuff products. “But I think Altria made a colossal mistake paying what it did for its Juul stake, and now Howard Willard has paid the price by departing the company,” he says. “It will be very hard, perhaps impossible, for Altria to make a good return on its initial Juul investment, but now the best it can hope for is to help Juul navigate the regulatory challenges it faces.”

    In April, the Federal Trade Commission filed a complaint to force Altria to sell its stake in Juul Labs, alleging that the two companies had entered a series of agreements that eliminated competition in violation of federal antitrust laws.

    Jon Fell

     

    A streamlining exercise

    Under pressure from regulators, Juul began to make internal changes. In October 2018, it pulled all flavors deemed attractive to youths, such as mango, fruit medley and creme brulee, from U.S. retail stores, a measure that had little effect on overall sales, a study by the American Cancer Society from April 2020 showed: Sales of the remaining menthol and mint flavors doubled while tobacco-flavored products also experienced a significant rise in popularity.

    In November 2019, Juul announced that it would also end sales of its mint-flavored pods. The company halted all broadcast, print and digital advertising in the U.S. and replaced its CEO, Kevin Burns, with K.C. Crosthwaite, an experienced Altria executive who had overseen the company’s expansion into cigarette alternatives, in September 2019. Several top executives left the company in October 2019 while the two co-founders stepped down from their positions of chief product officer and chief technology officer to take on advisory roles. In January 2020, the company named a “transformation officer.”

    To prevent its product from being removed from the market, Juul Labs and other e-cigarette manufacturers must retrospectively submit a premarket tobacco product application (PMTA) to the FDA by Sept. 9, 2020. Industry stakeholders have raised concerns about the success of Juul’s PMTA.

    While the stream of legal challenges, regulations and scandals does not yet pose an existential financial threat to Juul, it might negatively influence the surrounding social environment in the context of which regulators act, thus putting pressure on them to not approve the devices, a lawyer told Time.

    Fell is more optimistic. “Juul is putting a massive amount of resource into its PMTA application, and I think they will make it in a way which seeks to address the youth-use issues,” he says. “Given the baggage they bring, it will probably be a very difficult process. But in the end, the FDA’s PMTA decisions have to be evidence-based, and if Juul files an application that includes enhanced user age verification measures and more limited flavors, it could be very difficult for the FDA to turn down. But it could be a long process, and I wouldn’t rule out legal challenges.”

    Scaling back international expansion

    Meanwhile, Juul Labs has embarked on a strict cost-saving and restructuring program. In recent years, the e-cigarette company had tried to expand its business overseas, entering several EU markets including the U.K., France and Germany, and Russia, Ukraine and Southeast Asian markets.

    Credit: Michael Fallon

    In May 2020, the company announced that it would end operations in South Korea, a year after it had entered the market with a product portfolio specifically developed for the country. There were also reports that the company would soon exit Austria, Belgium, Portugal, France and Spain. The news came shortly after Juul had announced that it would cut between 850 jobs and 900 jobs.

    “I think there are a lot of reasons for Juul exiting various international markets, and the U.S. success was always going to be difficult to replicate,” Fell points out. “In the first place, I think talking up Juul’s international potential was one of the ways in which the owners of the business sought to get a higher valuation. But in many international markets, Juul faced significant competition from companies with powerful distribution. Because of its U.S. success, Juul also had to be sold at a price level which was quite high for several international markets—otherwise it ran the risk of the product being diverted back to the U.S. By the time Juul started to move more international, the U.S. youth use furor had already reached such a pitch that it also created quite a hostile public relations environment, sometimes with unhelpful regulatory consequences, such as a ban of Juul in Israel.”

    Expansion into Asia was a key growth strategy for Juul. In China, Juul sales stopped shortly after the launch in September 2019, and in November the Chinese government effectively banned the online sales of e-cigarettes. “I think they will struggle [in China] unless they can find a good distribution partner, and also find a way to make a product which is affordable for the local market without running the risk of it being diverted to the U.S. I think Chinese vaping companies will provide tough competition in this region,” says Fell.

    In the U.S., the company will move its headquarters from San Francisco to Washington, D.C., reportedly to be closer to regulators and to distance itself from “Silicon Valley’s growth-at-all-costs culture.”

    “I think a certain arrogance in the Silicon Valley culture was responsible for a portion of Juul’s problems but also part of its success,” says Fell. “The company will probably become more conservative following the latest moves, and that might be necessary, but will it be able to maintain the spirit and culture of innovation which will be necessary if it is to succeed over the longer term? Five years from now, I expect Juul to have an important but perhaps smaller portion of a U.S. vaping market which, I hope, is itself considerably larger than it is now. I think its international business is likely to remain relatively small unless it can find a partner to help with distribution.”

  • Coordinated Confusion

    Coordinated Confusion

    Credit: Tumisu – Pixabay
    “We know beyond reasonable doubt that vaping and other smoke-free nicotine products are very much less risky than smoking and that those who switch completely see rapid improvements in their health. Yet the WHO continues to promote the outright prohibition or extreme regulation of these products. How can it make sense to ban the much safer product when cigarettes are available everywhere?”
    David Abrams
    “[The] WHO is treating vaping products as though they are part of a ploy by Big Tobacco. But they have this 100 percent wrong. In fact, the new products are disrupting the profitable cigarette trade of the tobacco industry and driving down cigarette sales. It is exactly what we need from innovation, but [the] WHO and its private funders have lined up to oppose it with calls for prohibition. Though they don’t seem to realize it, they are siding with the cigarette interests of Big Tobacco, erecting barriers to entry to new technology and protecting the incumbent cigarette oligopoly.”
    David Sweanor
    “When smoking is by far the dominant cause of disease caused by tobacco, why would the WHO use World No Tobacco Day to target one of the most effective and popular alternatives to smoking? We rarely see the vaping industry advertise to adolescents and we never see kids used in commercial vaping ads—but on World No Tobacco Day we have the absurd spectacle of [the] WHO promoting adverts with children vaping. What on Earth do they think they are doing?” – Clive Bates
    Clive Bates
    “Unless it does something different and embraces innovation in tobacco policy, [the] WHO will miss the targets for reducing cancer [and] heart and lung disease by some distance. Encouraging people to switch to low-risk alternatives to smoking could make a large difference to the burden of disease by 2030 if [the] WHO got behind the idea instead of blocking it.”
    Robert Beaglehole
    “On World No Tobacco Day, the WHO should be driven by one overriding question: How do we get smoking down for the greatest number at the greatest rate? We know [the] WHO embraces harm reduction in other areas of public health, including for illicit drugs and sexual health. If [the] WHO wants to even come close to meeting its targets to reduce disease, it needs a strategy for smokers who can’t or won’t quit nicotine, and the rise of smoke-free products since 2010 makes that a practical option. [The] WHO’s ‘quit or die’ approach to smokers and opposition to harm reduction makes no sense.”
    John Britton
    “When [the] WHO set out to build an international treaty for tobacco control from 2000, the goal was clear—it was trying to tackle the worldwide epidemic of smoking-related disease. Somewhere along the way, [the] WHO seems to have lost its sense of purpose and developed a closed mentality that is leading it to take unworkable, nonnegotiable or counterproductive positions that are not backed by sound science. It seems to have neglected its core mission, ‘the highest possible level of health for all people,’ including the 1 billion smokers globally, most of whom want to avoid disease and premature death.”
    Tikki Pangest

    Experts say the spread of misinformation about vapor has a negative effect on public health.

    By Timothy S. Donahue

    It can be confusing for even the experts. During the pandemic, the vapor industry has struggled under conflicting reports about whether vaping makes you more susceptible to catching Covid-19. Several media stories have speculated that vaping could make having the illness even more severe (see “Up in the Air,” page 16). Anti-tobacco groups quickly began to claim smoking and vaping could even help spread the disease although no studies have found this to be true.

    In the U.S., these news stories have prompted politicians to demand that the U.S. Food and Drug Administration (FDA) temporarily ban e-cigarettes. Several states are either considering or have passed vaping regulation as part of their coronavirus response. Globally, the World Health Organization (WHO) has accused the tobacco (and vapor) industry of creating doubt about the risks of nicotine and tobacco product and Covid-19. One country, South Africa, went as far as to ban tobacco products altogether as part of its coronavirus lockdown.

    The controversy grew in April and May as researchers noted a remarkable underrepresentation of smokers among Covid-19 patients who had been admitted to the hospital. “This has led some scientists to hypothesize that there may be some protective effect from nicotine specifically to do with coronavirus,” said Guy Bentley, director of Consumer Freedom Research at the Reason Foundation, a libertarian think tank. Currently, clinical trials are underway investigating the effects of nicotine patches in France and now in Wales.

    During a webinar held by the Reason Foundation in mid-May, a panel of harm reduction experts weighed in on the supportive new research as well as the misinformation being disseminated and the impact these factors have on both the vapor industry and overall public health.

    Sally Satel, resident scholar at the American Enterprise Institute, an influential right-wing think tank, noted that every observational study concerning Covid-19 has seen that smokers are underrepresented in patients who are admitted to the hospital. These included thousands of patients in more than two dozen studies from several countries, including Italy, France, China and the United States. She also said that many of these studies have not been peer-reviewed, and concerns about data collection exist. “Nevertheless, they’re exciting, and they are especially exciting … because they are so counterintuitive,” said Satel.

    Satel pointed to one study conducted by Konstantinos Farsalinos, a cardiologist and research fellow at the Onassis Cardiac Surgery Center in Athens, Greece. Farsalinos found that across 13 studies from China, only 6.5 percent of all hospitalized patients with Covid-19 were smokers whereas 26 percent of the population smokes cigarettes. If smoking made no difference, you would expect a 26 percent representation, according to Satel. “If smoking was harmful [relating to Covid-19] you certainly wouldn’t expect lesser representation,” she said. “So that was very eye-catching. This pattern has since been found in many of the studies. They’re all in the same ballpark … a U.S. study found [the same] … A French study also found similar results.”

    Satel explains that the research has shown two ways nicotine could have an impact on Covid-19 with one being more plausible. The first theory is, very basically, that nicotine blocks the entry of the virus into receptor cells. The more plausible theory, however, is that nicotine has a suppressing effect on the cytokine pathway, says Satel. The immune system depends on cytokine signaling to keep the human body healthy.

    “Now, cytokines are chemicals produced by white cells in the body or the infection-fighting cells. And specifically, in this case, a macrophage is one of those cells, and macrophages literally eat viruses,” explains Satel. “Anyway, briefly, there is a receptor on the macrophage called the citicoline receptor or a neuronal type, and nicotine also can attach to that receptor and influence the release of those cytokines, and the mechanism of that is called a cytokine storm.”

    WHO is to blame?

    Tobacco may also be potentially part of a Covid-19 cure. British American Tobacco (BAT) researchers announced in May that BAT’s potential Covid-19 vaccine was moving to human trials after it generated a positive immune response in preclinical trials. The vaccine candidate uses proteins from tobacco leaves. Yet rather than welcoming BAT’s effort to help tackle the pandemic, the WHO cautioned health authorities against engaging with the tobacco industry.

    Many experts believe that even if BAT is successful in creating a vaccine, organizations such as the WHO would ignore the science and possibly put lives at risk. It would not be the first time, explains Tim Andrews, executive director for the Taxpayers Protection Alliance, a group that monitors federal spending. He says the WHO has a long history of hostility to alternative nicotine products.

    Andrews says that the WHO’s failures “have cost millions of lives,” not just because of the Covid-19 issues but because its track record of trying to prevent the acceptance of reduced-risk tobacco health alternatives has led to more people smoking and more people dying from combustible cigarettes. “The more I looked over the last few years, the more horrified I was by how [the WHO’s] actions are actively harming and not helping public health,” said Andrews.

    Since the electronic nicotine-delivery system (ENDS) came to market, the WHO has attempted to block its advance at every turn. As early as 2008, the WHO has stated that it “does not consider [ENDS] to be a legitimate therapy for smokers trying to quit.” Andrews said that as studies started to show that vapor products were “95 percent safer than combustible cigarettes” and ENDS products became accepted by Public Health England (PHE), the WHO had to make a choice: admit failure and accept ENDS as part of tobacco harm reduction plans or ignore science.

    “Unfortunately, they have doubled down on their position contrary to all available evidence. And in fact, not only are they now … working towards further restrictions on e-cigarettes, they’re actually going out spreading deliberate misinformation,” says Andrews. “And it seems the more evidence [that] is coming out on the fact that they’re an effective harm reduction tool, the more the WHO is going to try … to call on countries to do large-scale campaigns against them.”

    As an example of WHO dishonesty, Andrews pointed to a large-scale social media campaign started by the health body in January suggesting that ENDS can cause lung injuries and increase the risk of heart disease. According to Andrews, there is not a shred of evidence for either claim.

    The WHO campaign included statements such as, “The liquid in e-cigarettes can burn skin and rapidly cause nicotine poisoning if absorbed through the skin,” and “The liquid is also highly flammable.” Not a single thing in those sentences is true, according to Andrews. “It is completely 100 percent made up. These aren’t stupid people. They aren’t writing this out of ignorance. This is a deliberate lie. And then you can see all of these people on Twitter responding by taking vape liquid and lighting [it on] fire. It does not light on fire. It does not burn your skin if you get it on your skin. This is blatant misinformation to scare people. And what is the result of this? If people are scared of something that is 95 percent safer than smoking, they will end up sticking to combustible cigarettes, which are much more deadly for them.”

    Numerous public health professionals have joined Andrews in criticizing the WHO’s approach to harm reduction. In June, an international group of independent experts with no conflicting links to the tobacco or vapor industry criticized the WHO for its “backward-looking” approach to innovation and new technology, such as vapor products. The experts say they are exasperated by the WHO’s “dogmatic hostility” toward new technology and fear the U.N. health agency will squander the opportunity to avoid millions of premature deaths that will be caused by smoking.

    Iowa state Attorney General Tom Miller, who was the first to publicly release the collaborative letter, said the WHO has lost its sense of mission and purpose. “It’s as if the WHO has forgotten what it is there to do—to save lives and reduce disease,” Miller said. “We can do that by helping and encouraging consumers to switch from cigarettes to lower risk products. This means being honest about the much lower risks and by using smarter regulation to make switching more attractive.”

    The group criticizing the WHO includes David Abrams of the School of Global Public Health at New York University; Tikki Pangestu, visiting professor of Lee Kuan Yew School of Public Policy at the National University of Singapore; John Britton, professor of epidemiology at the University of Nottingham; Rajesh Sharan of North-Eastern Hill University in Shillong, India; David Sweanor of the Centre for Health Law, Policy and Ethics at the University of Ottawa; and Clive Bates, director of Counterfactual Consulting.

    While making no mention of tobacco control policies, U.S. President Donald Trump in late may announced the U.S. would terminate its relationship with the WHO. He said that the U.N. agency failed to adequately respond to the coronavirus because China has “total control” over the global organization. He also said Chinese officials “ignored” their reporting obligations to the WHO and pressured the WHO to mislead the world when the virus was first discovered, according to a story by The Associated Press.

    United against vapor

    While the WHO does carry a portion of the blame for the misinformation about vapor products, Michelle Minton, senior fellow at the Competitive Enterprise Institute, another libertarian think tank, says the problem isn’t limited to one or more organizations. She believes that public health across the board has been suppressing evidence.

    “This is something I’ve been writing about for many years, and I think really what we are seeing is the worst of it expressed at the time when we need our public health institutions to be at their most effective,” said Minton.

    A lot of the evidence has been coming out showing that e-cigarettes are far less harmful and extremely effective as a smoking cessation tool, according to Minton. Studies are showing that ENDS are more efficient than other available nicotine-replacement therapies. However, this is not the message disseminated by the FDA.

    “In April 2019, the FDA put out a warning … that they had noticed that in 10 years, from 2009 till 2019, there were 35 seizures reported while somebody was using an e-cigarette,” explains Minton. “And given the fact that there are 70,000 people in this country or more, I believe, that have seizure disorders, and a lot of [people] also vape, it would make sense that at one point or another someone [who also vaped] might actually have a seizure. Thirty-five in 10 years is really a minuscule figure. And as far as I can tell, nothing really came of that.”

    In August of 2019, a mysterious lung disease began to appear in the U.S. Then, on Sept. 29, 2019, the first case of e-cigarette or vaping-associated lung injury (EVALI) was announced. “These lung injuries, which at first were described by news reporters—who were getting their information from [the] CDC [Centers for Disease Control and Prevention] and [the] FDA—as vaping,” says Minton. “So vaping-associated pulmonary injury, which suddenly by September changed to EVALI. I even asked [the] CDC about what was the choice of the change putting e-cigarettes up front even at that time as the information [was widely known at the time] that it was linked to illicit THC vaporized products on the black market. So vaping was already too broad of a term, and then when New York started reporting that every single one of their patients admitted or tested positive for THC, and then when they went to test the THC products they were using, they all contained vitamin E acetate. That’s when [the] CDC suddenly decided to use the term ‘EVALI,’ emphasizing e-cigarettes.”

    The data now shows that many of the lung injuries occurred in people who are too young to legally purchase marijuana products, according to Minton. EVALI also occurred frequently in states that didn’t have legal marijuana. The CDC waited until late-October 2020 to give that information to the public. As late as Nov. 1, the CDC still advised: “Because the specific compound or ingredient causing lung injury is not yet known, and while the investigation continues, persons should consider refraining from the use of all e-cigarette or vaping products.”

    The CDC narrative is still that e-cigarettes had something to do with the EVALI outbreak. However, there continues to be zero evidence that nicotine vapor products were ever found culpable in the lung injuries, says Minton, adding that “the messaging is perfect for [the] CDC who wants to continue this [image] of vaping as an epidemic.”

    Ultimately, says Minton, organizations like the WHO, FDA and CDC are losing their credibility because of the way the agencies are handling vaping and ignoring the science. “It really damaged their credibility. On the eve of a crisis, a real crisis, where we would have had or we should have been able to rely on the CDC, their credibility took a major hit,” says Minton. “So that’s what we have going on here. It’s bad all around. But, I’m an optimist, so I think that one of the best things that might be able to come out of this is that Congress and other entities take a look at our public health system and try and narrow the focus of some of these agencies, maybe reign them in a little bit, maybe bring them back to talking about actual science.”

  • Reaction Time

    Reaction Time

    Credit: Avail Vapor

    Avail Vapor and its subsidiaries are returning to near-normal operations, but several challenges remain.

    By Timothy S. Donahue

    The challenges in the vapor industry are many. Anti-vaping rhetoric is at an all-time high. After an outbreak of lung disease wrongfully blamed on electronic nicotine-delivery systems (ENDS) coupled by the Covid-19 pandemic, the U.S. Food and Drug Administration (FDA) still wants its premarket tobacco product applications (PMTAs) submitted by Sept. 9, 2020. While the 90-day reprieve was welcomed, at least one industry expert says the industry will struggle to meet the deadline.

    James Xu is the founder of Avail Vapor and chairman of two other businesses that recently grew out of Avail—Blackbriar Regulatory Service (BRS) and Blackship Technologies. Avail started out in 2014 as a retailer, and the company continues to concentrate on retail operation. Avail has 99 stores spread out in 12 different states from Detroit, Michigan, to Atlanta, Georgia. BRS centers around providing the FDA PMTA service, laboratory work and contract manufacturing mostly for the vapor industry, and Blackship Technologies provides research and development service for the next-generation vapor device.

    With retail operations in several localities, Xu said that, as of March 14, only 49 Avail stores were still fully operating. In those environments, store employees have limited contact, practice social distancing, have less than 10 people in the store and follow all local rules relating to the pandemic. The stores have also implemented strict sanitizing protocols, according to Xu. “We have very detailed guidelines for our employees. And we were able to secure some of the [personal protective equipment] supply before everything ran out … I believe we are one of the very first few businesses that required all our employees to wear masks,” says Xu. “We also very, very early on stopped the sampling [of e-liquids] because that’s one of the areas we identified that could spread the disease … when a customer leaves, there will be a detailed cleaning procedure. And then every single hour, we’re going to do another deep clean.”

    Avail has a combined 460 employees between its three entities with most concentrated in retail operations. During the TMA digital conference “Unsteady Ground: Shifting Landscapes” in May, Xu told attendees that he has been able to preserve most of his staff and has had limited layoffs. He also said that he believed vape shops should have been labeled as essential businesses in more communities.

    “The safety of our employees is the number one concern. And the second one is our customer safety. We definitely try to put those things in the most important positions,” he said. “That’s how we evaluate whether to open stores or not to open stores [when local laws allow]. Questions and answers from the seminar have been edited for space.

    Vapor Voice: How have sales been for the stores that are open; was there a huge uptick before the businesses closed?

    James Xu: We are already at a half capacity right now. And for the business leading to the lockdown, yes, we did see an uptick with the business because everybody tried to [get] stocked up. And then, of course, with some of the store shutdowns, we definitely saw a major drop. But overall, I will say that the stores [that] remain open, it’s pretty consistent at the normal level right now.

    What were your business goals for 2020 before the pandemic, and how have they changed?

    Well, before the pandemic, of course, the number one biggest event for the industry is [the] PMTA … we were going to see what exactly [the] FDA is going to police to the industry to truly execute their vison after the PMTA. We do have a major expansion plan once the FDA’s PMTA [submission requirements] become clear. Right now, the PMTA date is delayed, but the focus hasn’t changed any. We’re still concentrating on submitting our PMTA before the deadline and then to see how everything works out.

    How is the company going about gathering the required data? There are a lot of labs that are closed. I imagine that you have started to see complications.

    Well, the delay on [the] PMTA is not surprising to anybody because most of the hardware to support the vapor industry is coming from China. And since [the] Chinese New Year, which is the end of January, and China was in a lockdown stage … that definitely complicated many of the abilities to have product shipped. And now with the U.S.-based lab and business in the lockdown stage, that definitely delayed everything. So, postponing the PMTA deadline to September, it’s not a surprise to any of us. And it definitely makes it more challenging because right now … we all know [the] PMTA deadline got shifted five or six times. And with all the shifting, we’re already working with a very, very tight deadline. Everything has to work perfectly to be on time. And now, even with China reopening, we are facing a lot of uncertainty here.

    Are there other challenges related to the PMTA and the pandemic?

    Well, mostly it’s the challenge in the lab, right? Lots of the labs shut down and also with the [slow shipping] back and forth, it becomes very, very challenging right now. So each CRO [contract research organization], it’s a unique case. It definitely makes a PMTA submission process very challenging to this point.

    We know you are working with your own brand, Avail, as well as some other companies such as Charlie’s Chalk Dust. Is there enough time to be able to do these PMTAs? Do you think that the FDA is going to have to extend the deadline again?

    We work with about 10 different companies to handle their PMTA work. We have a balanced approach between the cost versus the data … because [the] PMTA is very, very vague. How much material do you submit? We don’t have [an] unlimited budget like many of the other business, so luckily, at [BRS], we can still have the best combination for the cost and the scope of work. We do handle most of the very well-known brands, both from the manufacturing side to the hardware side and also the e-liquids.

    Is [the] FDA going to extend it again? I don’t know. That totally depends on how this pandemic evolves. And at this point, everybody is kind of waiting to see. The bulk of the work is already completed. The added time will kind of give us a little bit more time to better review it. We absolutely can use the extra time that we got …. For us, we definitely are not going to wait for the September deadline. We are going to submit as soon as we are ready.

    How close are you to being able to make a submission for one of the brands?

    That depends. And again, that’s a moving target each day because, again, right now we’re working in a very unpredictable environment … each contractor is facing their unique challenges during this pandemic. So, for us to put all of those puzzle pieces together, it’s definitely challenging. The deadline is kind of like what we have to evaluate every day. But as soon as we are ready, again, we’re not going to wait until the last minute. We are going to submit very quickly.

    When we talk about vapor products, we typically associate the idea that the PMTA is based on vapor products and their potential for harm reduction. How do you address this in stores with customers when you as the retailer or even the manufacturer cannot make any health claims?

    Well, we are in a very tough spot because other people can make all kinds of claims against the industry, and many often could be false. But our hands are tied because we cannot make any health claims, right? Even if we endorse some customer’s testimony or refer to other studies, that also could be a gray area, right? So, it really put us—the whole industry—in a very compromised position.

    What we usually tell our employees when customers come in is [to] try to use their personal experience instead of a statement [about] a company. That’s how we usually communicate. Then we will [also] point out all the resources available so the customer can get a balanced view [of] the pros and cons of vaping. It’s a very fine balance that we work. We wish the agency [the FDA] would just kind of like give us a clear guideline. I believe that the government, they have a huge role in this. Lots of misinformation was spread, especially during the vaping [lung disease] epidemic [from black market THC products]. A huge amount of damage was done to the industry.

    A lot of people are under the impression right now that vaping is a lot more deadly than smoking. And that’s very dangerous. So, I believe the government has the responsibility to at least educate people where vaping is compared with cigarettes as a harm reduction product. For us, we face the customer every day. So, we should have more power to really be able to talk to a customer, and it needs to be scientifically based, but we need to be able to give the customer a balanced view.

    James Xu

    What are the conversion rates right now? Are most Avail customers smokers or former smokers?

    Well, the rate continues to change, and right now, the conversion rate is still too low, and we calculate it to a little bit below 20 percent. This is because the product is still not user-friendly enough because … the vaping industry is still less than 10 years old … so there are a lot of those kinds of obstacles for people who [want to] stick with a vaping product. For example, taste. And leakage is another major issue.

    There has been talk about supply chain disruptions and product not coming from China as quickly as it should. What’s going on with the Chinese vapor market?

    We have constant contact with the Chinese manufacturers. Most of the U.S. distributors and the retailers bought about four weeks of supply to last the normal Chinese New Year [slowdown]. And then because China went into complete lockdown because of the coronavirus … [there was only] one month that most of the retailers or distributors didn’t prepare for. That caused a major disruption with the supply chain, but right now, everything in China is back to normal, but shipping still has issues.

    Most of the hardware is being shipped from China, and when the commercial airlines stopped all their operations—commercial airlines account for about 45 percent of the cargo volume—half of that volume has disappeared. UPS and DHL, they just couldn’t catch up to ship the product fast enough. That’s the bottleneck we’re facing right now. The Chinese factories are at full capacity—they’re back to work—but they [do] have a major problem actually delivering the product into our hands right now.

    Yes, it’s bad. But, if you allow an extra 10 days then you shouldn’t have that problem. So instead of counting on product leaving the factory to get to your store in about a week, right now, I would count on two weeks or a little bit more.

    Considering this pandemic and what’s going on with the PMTAs alongside flavor bans and other types of regulation being enacted differently in different U.S. states and countries, where do you see the future of the vapor industry?

    In five years, no matter what, you cannot dial back the clock. We’re going to see more people vaping instead of smoking. We’re going to see that the truth eventually will come out. More smokers are going to convert to vaping. There is a lot of misinformation out there … and that’s why I wake up each morning and go to work … because I believe in this industry.

    The FDA’s enforcement will be key because if no enforcement happens, like the first round [of guidelines], it’s going to be the Wild West again. It’s actually going to put the industry in an even more compromised position than ever. The good players are going to get punished—the good players that play by the book and waste all the money on PMTAs but have zero benefits. That’s the worst-case scenario. If PMTA enforcement is too strict, that definitely is going to limit the competition.

    How is [the] FDA going to balance all that, allow better, safer product come to market? They also need to make sure the integrity of the product is there to ensure the safety of the customer. It’s a fine balance. Long term? We absolutely believe in a bright future. But how is everything going to play out? We have to wait and see.

  • Never Waste a Crisis

    Never Waste a Crisis

    Credit: Matt Tsir

    Scaremongers are using the pandemic’s powerful backdrop of anxiety to spread fear among vapers.

    By George Gay

    Offensive as it no doubt appears to most people, it is clearly the case that while the SARS-CoV-2 pandemic is devastating lives around the world, it is also providing opportunities for those cynical enough to take advantage of it. When I say opportunities, I don’t mean those that open up new areas of research and robust debate necessary in the fight against Covid-19, the disease caused by the SARS-CoV-2 coronavirus, and the prevention or amelioration of future pandemics. I mean those, for instance, that allow people to make unseemly profits by trading in personal protective equipment currently in short supply, or to push as universal truths their unproven, sometimes reckless ideas, often in disingenuous ways.

    The opportunity that I am most concerned with here is that being taken up by some of those opposed to people smoking tobacco or vaping nicotine. By now, we have all seen the stories about how smoking and vaping can lead to worse outcomes in the case of smokers or vapers contracting Covid-19. But at this stage of the pandemic, when we are still learning about the virus, you don’t have to be a scientist or even terribly smart to figure out that such stories must be based on speculation rather than evidence. There hasn’t been the time to gather irrefutable proof. The people who peddle these stories are clearly using the pandemic’s powerful backdrop of anxiety to spread fear among smokers and vapers.

    But if you can step aside from this anxiety (not easy if you are a smoker or vaper, I admit), you notice something odd about the message being given out by the anti-smokers and anti-vapers. Basically, they are saying that if you don’t give up your habit, you will contract a terrible disease and possibly die. This, of course, is the same message they have been giving out all along, before the onset of the pandemic. So what has changed with the arrival of Covid-19? Why the emphasis at this time? Well, the messengers are taking advantage of the fact that Covid-19 has potentially changed death’s timeframe. What is being pointed up here is that while it takes a long time to die from a smoking-related disease, or many other diseases, it takes but a short time to die from Covid-19. So surely, the lesson to be learnt here is not to quit smoking or vaping, but not to contract Covid-19. Basically, smokers and vapers are in the same boat as everybody else.

    Or not the same boat, but weathering the same storm, because everybody has a different risk profile when it comes to Covid-19. It is too simplistic to lump smokers and vapers into one or two separate categories. What we have learned so far is that the high-risk categories that were useful guides at the outset of the pandemic need to be subdivided to take into account a myriad of factors. And interestingly, one of the most important factors will perhaps turn out to be the “loading” of your exposure to the virus. That is, if you are a front-line health worker the chances seem to be that you carry a much greater risk of contracting Covid-19 than other people not so exposed. In speculation that perhaps mirrors the passive-smoking debate, the idea that you can contract the virus from walking past an infected person in the street is tending to be played down.

    Humanity as aspiration

    It is interesting that the pandemic has put the spotlight on a number of important issues that in normal circumstances get little—certainly not enough—airing. Foremost among these must be the relationship between human and non-human animals, because this relationship, controlled almost entirely by humans, goes right to the heart of what most people seem to believe was the reason for the outbreak of Covid-19. The virus apparently crossed from a non-human wild animal to a human in what was perhaps a chain of events that centered on a ‘wet’ market in Wuhan, China, but it could have made the jump in and around markets of this type in other countries – markets that sell both live and butchered animals, some of them “exotic.” And it could have made the jump at an intensive factory farm or simply where growing numbers of humans have been forced into closer, regular contact with wild animals.

    The way in which farmed and wild animals are often treated is shameful and demonstrates clearly the idea expressed by William McIlvanney that humanity is merely an aspiration; though I would add, if that. But surely, post-Covid-19, even those callously inured to the suffering of these animals will at least reflect on whether it is wise from the point of view of their own physical and economic wellbeing to treat sentient beings with such disregard and, in doing so, take such risks. I wouldn’t bet on it, however. That would take imagination, something that is in short supply—something, or at least a form of which, is increasingly being cooked-up in remote “think tanks” and delivered through what are misleadingly called “smart” phones.

    Imagination, or at least, the lack of it, is another issue that has been raised by the pandemic. The coronavirus and the chaos that it is now inflicting was something that could and should have been predicted—expected even. And strategies to deal with it should have been in place, but, again, that would have required imagination. Unfortunately, many of the world’s leaders have allowed themselves to be dumbed-down by the idea that the market economy is the only answer, no matter the question: that there is no alternative—and it is clear where that has taken us. Dare I say it? It’s time for thinking people to take back control from those who have long given up on thinking, pulled down the brain’s shutters and given in to the lazy idea that there is no alternative. There are always alternatives if you are willing to look for them. Switch off your “smart” phone for a while and engage your brain.

    Lack of leadership

    Another issue that the pandemic has brought into focus is the lack of leadership in countries around the world. Having sold us the idea of globalization, many of the leaders of major countries have, instead of cooperating as one would expect in a globalized world, been reduced to squabbling over who is to blame for the pandemic and the chaos it has caused. Well, even I can settle those disputes. All of the leaders are responsible. The buck stops with them.

    Or at least it should. It has become apparent that those in power have been keen to try to shift the responsibility—read blame—for the shambles that has followed in the wake of the pandemic onto the shoulders of scientists and science. In the U.K., where I’m currently in lockdown because of the failures of leaders around the world, we have been told by the government that it is following the science and, even, in one excruciating, but, I have to admit, imaginative announcement, that the science had changed.

    Perhaps some people believe this baloney, but I shouldn’t think that anybody who has worked in the tobacco or nicotine industries for any length of time would be taken in. When responsibility for tobacco products was handed to the U.S. Food and Drug Administration in 2009, we were promised a new era of science-based strategies. What we were served up was an administrative nightmare punctuated by political interference.

    Don’t get me wrong. I’m not anti-science. I’m pro-science. But science, in its many guises and when properly applied, doesn’t provide certainties about what should be done, simply a rough heading to follow; a heading that has to be constantly adjusted as new sightings are taken. This is particularly so when it comes to a novel virus, about which we firstly knew nothing and now know little.

    But you wouldn’t think this were the case given the assault being made on smoking and vaping in the name of Covid-19. In a report on page 16 of The Guardian (an excellent newspaper; one that I read every day and on whose reports I believe I can generally rely to be broadly correct, but one that is sniffy on tobacco issues) on May 4, the chairman of Ash, Nick Hopkinson, was quoted as saying: “Smoking harms the immune system and our ability to fight off infections. Evidence is growing that smoking is associated with worse outcomes in those admitted to hospital with Covid-19.” Further on in the report, Ruth Tennant, the tobacco lead for the Association of Directors of Public Health, was quoted as saying: “There are so many reasons to quit smoking but never a more important time than right now during the coronavirus pandemic.”

    One of the things that struck me about this report, which, admittedly, was a short PA Media piece, was that Hopkinson’s evidence was not cited and Tennant’s multiple reasons were not given. Okay, you might say that what was said by these two didn’t need back-up because it was common sense, and that, while Douglas Clyde MacIntosh pointed out that common sense is merely the metaphysics of savages, since we have proved in our relationships with non-human animals that we are savages, common sense was enough.

    Credit: Nick Fewings

    Selective science

    But there is more. No mention was made in the report that some scientists have noted that according to a number of studies, smokers have made up a proportion of patients admitted to hospital with Covid-19 that is smaller than would be expected given the proportion they make up within the overall population. This has led to studies being carried out into whether nicotine is providing some kind of protection, something that would be very interesting in respect of vaping. Clearly, there is no evidence that nicotine provides protection and the figures could be explained perhaps by the fact that smokers are so badly affected by Covid-19 that they never make it to hospital. Nevertheless, I think The Guardian should have mentioned this issue, especially since previously it had carried a report about scientists in France looking into what part nicotine was playing in the Covid-19 pandemic.

    What really made me take note of the report in which Hopkinson and Tennant were quoted, however, was that on page 14 of the same newspaper there was a story headed “Early evidence links air pollution to Covid-19 risk,” a report that was treated in a different way. This report, by Damian Carrington, said that studies had shown that air pollution might be important in three ways, which he went on to explain. But his report, unlike that associated with Hopkinson and Tennant, makes the point that the studies have not yet been endorsed by independent scientists through the peer-review process. And later in his piece he says that researchers warn that plausibility is far from proof, and correlation does not mean causation, as many other factors might be important.

    These are valid points, but why are they not made in the case of smoking? There cannot possibly have been time to conduct the science that says categorically that smoking is associated with worse outcomes in those admitted to hospital with Covid-19. So where are the caveats? Nowhere to be seen. We are left hanging onto the metaphysics of savages.

    A last point. Carrington mentions that one of the ways in which air pollution might be important in relation to Covid-19 is that the virus might be carried further afield by pollution particles (though it is not known if the virus survives such transmission). Surely, even though this might be little more than speculation at the moment, its importance outweighs that of smoking by a huge amount. People can choose whether or not to smoke. Indeed, the report quoting Hopkinson and Tennant, is headed “Covid-19 fears may have helped more than 300,000 [U.K.] smokers quit.” You cannot choose whether or not you come into contact with a virus being borne on the wings of a pollution particle.

    By always concentrating on smoking, which people can avoid but which it is easy for governments to take action against, and largely ignoring pollution, which people cannot avoid and which governments find difficult to take action against, we let those governments off the hook.

  • Up in the Air

    Up in the Air

    Credit: Itay Kabalo

    Are vapers at a higher risk of contracting Covid-19?

    By Maria Verven

    While there’s little doubt that a history of smoking poses a higher risk of serious consequences for those who contract Covid-19, the risks are less well known for vapers.

    We simply don’t have enough data on Covid-19 and vaping… yet. While e-cigarette use is popular among younger people, it’s much less prevalent among older adults who are more likely to visit a hospital with Covid-19, where data such as age, smoking and/or vaping history as well as underlying health conditions can be captured and examined for trends.

    Clearly, a key mitigating factor is the relatively low rate of e-cigarette use. In China, the epicenter of Covid-19, a 2018 survey of 10,233 individuals in five cities found that only 0.9 percent had used e-cigarettes within the past 30 days.

    In the U.S., only 1 percent of those over 65 years reported they currently used e-cigarettes of the 32,931 adults who completed the 2016 National Health Interview Survey. Less than 1 percent of adults over age 65 responded “Yes” when asked, “Have you smoked any e-cigarettes or ‘vaped’ in the past week?” in a more recent Gallup Poll conducted last October.

    Another issue is that most vapers switched after years of smoking, where the links between Covid severity are much clearer.

    Short of any evidence linking e-cigarette use and Covid severity, both the World Health Organization (WHO) and the Food and Drug Administration (FDA) walked back previous unsubstantiated statements that spread fear and confusion and set off alarm bells in the vaping community.

    While scientists continue to study the data and come up with hypotheses about who is most at risk of serious Covid consequences, public health agencies are singing the same old song encouraging people to quit both smoking and vaping.

    As always, the truth will eventually come to light.

    Smoking and Covid-19: clear links

    The most recent analysis of data by researchers at the University of California in San Francisco (UCSF) found that smoking significantly worsens Covid-19.

    The study, published in the May issue of Nicotine & Tobacco Research, included 11,590 Covid patients hospitalized in China, Korea and the U.S. The researchers found that the risk of more serious consequences and death nearly doubled if the patient was a current or even a former smoker.

    Smoking increases the risk and severity of pulmonary infections in general, although until this study, the correlation between smoking and Covid-19 were less clear. However, this data corroborates previous research showing that smokers ran a higher risk of infection and mortality from a different coronavirus, MERS-COV.

    The researchers examined 19 peer-reviewed scientific papers published before April 2020 in PubMed. Of the 11,590 patients, around 30 percent of smokers experienced “disease progression” compared with around 18 percent of non-smoking patients.

    The WHO warns smokers of the risks of serious Covid-19 consequences in a Q&A on its website: “Available research suggests that smokers are at higher risk of developing severe Covid-19 outcomes and death. Covid-19 is an infectious disease that primarily attacks the lungs. Smoking impairs lung function, making it harder for the body to fight off coronaviruses and other respiratory diseases.”

    However, the WHO stops short of warning vapers that they run the same risks: “There is no evidence about the relationship between e-cigarette use and Covid-19.”

    FDA stance elicits swift rebuttal

    While warning that smoking cigarettes appears to increase the risks of serious complications and consequences from Covid-19, the FDA admits there’s no evidence showing that vapers are at higher risk.

    “E-cigarette use can expose the lungs to toxic chemicals, but whether those exposures increase the risk of Covid-19 is not known,” the FDA wrote in an emailed statement to Bloomberg News after the media outlet ran a story on March 27 with the headline, “Vaping could compound health risks tied to virus, FDA says.”

    The article evoked a quick response from a large cadre of distinguished doctors, scientists, professors and policy experts from the U.S., Canada, the U.K. and Greece.

    Their letter to the FDA severely critiqued its stance on Covid-19 and vaping, and asserted three important points regarding the 12 million vapers and 34 million smokers in the U.S.:

    1. Advice should be validated for veracity: “If the federal government is going to provide advice, it should be available via FDA and CDC websites, validated for its veracity and clarity, tested for unintended consequences, and made widely available through recognized and trusted health professionals.”

    2. There’s no evidence on vaping and Covid-19: “Many older adult vapers will have underlying conditions… through many years of smoking… that increase their vulnerability and likelihood of severe or fatal Covid-19 symptoms. We know of no relevant and informative evidence on vaping and Covid-19 and the evidence on smoking and Covid-19 is inconclusive and contradictory.”

    3. Pronounced differences in risk between smoking and vaping: “We believe that advice to smokers should be consistent with the longstanding public health imperative to quit smoking using whatever methods work, and that includes by switching to vaping.”

    In conclusion, the authors wrote, “It is important that the FDA does not assert or imply an equivalence in risk between smoking and vaping.”

    Ultimately, they raised two critical questions: “On what basis is the FDA confident that it is right to discourage people with underlying smoking-related conditions from vaping at this time, given the likely alternative for many is a return to smoking?”

    And, “Where is the evidence-based reasoning that advising adult smokers against vaping is appropriate for the protection of public health at any time, but especially during this Covid-19 crisis?”

    This isn’t the only snafu the agency has faced.

    When people started coming down with a mysterious lung illness last summer, it took months for the FDA and the Centers for Disease Control and Prevention (CDC) to finally acknowledge that THC cartridges, most likely tainted with vitamin E acetate were to blame—and not legal e-liquids.

    But by the time they finally connected the obvious dots, the damage was already done. News stories that blamed deaths on “vaping” delivered a major setback to the vaping industry, potentially scaring away vapers and anyone even remotely interested in switching to vaping.

    In one silver lining, the pandemic prompted the agency to delay its original May 12 deadline for companies to submit their premarket tobacco applications (PMTA) for vaping products until Sept. 9. This could come as a relief for many companies that were scrambling to meet the May deadline, although the postponement is unlikely to help those who weren’t prepared for the original due date.

    Credit: Paul Merki

    Still a better option

    “To date, there is no conclusive and clear data on the effects of electronic cigarettes on cardiovascular and general health, especially from a longitudinal perspective,” wrote the authors of an article on e-cigarettes and cardiovascular risk published December 2019 on the National Institutes of Health website.

    “While waiting for more evidence, it seems reasonable to consider electronic cigarettes as a better option when compared with conventional tobacco products, but at the same time it should be fairly obvious that no smoke is better than electronic smoke,” the authors concluded.

    There’s even a hypothesis that nicotine, which has anti-inflammatory properties, may benefit patients with Covid-19 by preventing the immune system to overreact.

    Konstantinos Farsalinos, a cardiologist, clinical researcher with the Onassis Cardiac Surgery Center in Athens and expert on e-cigarettes, noticed that very few Covid-19 patients hospitalized in China were smokers, even though about half of Chinese men smoke.

    In a paper published in May 2020 in the European Respiratory Journal, Farsalinos and his colleagues walked a fine line on the question of whether smoking reduces or increases the risk of contracting Covid-19.

    “Through analysis of the pooled prevalence of current smoking across 11 case series determined that current smoking status was significantly lower than expected gender and age-adjusted prevalence in Covid-19 patients,” the authors wrote.

    “While we do not dispute that the prevalence of smoking in Covid-19 cases has been surprisingly low across the world, we would echo the World Health Organization’s advice based on emerging evidence that outcomes in Covid-19 are worse in patients who do smoke.”

    Difficulties in obtaining vape supplies

    At least one thing is known: the chances that e-liquids or devices could transmit Covid-19 are slim to none, according to experts in microbiology and immunology. While the virus may be able to live on surfaces for two to three days, by the time the products arrive in the U.S., the possibility of contamination is virtually nil.

    However, it’s already becoming apparent that Covid-19 may interrupt the vaping supply chain, as most of the the world’s vaping and e-cigarette hardware is produced in Shenzhen, China. While larger vaping companies such as JUUL Labs that have facilities in Shenzhen, may be able to weather the storm, small- and medium-size businesses may experience shortages in hardware, coils and other vaping supplies.

    The supply chain is only one in a perfect storm of issues surrounding the industry. Many of these issues are coming to a head in the U.S., which continues to ban flavored vaping products, fuel hysteria over teenage vaping and pass prohibition laws in some counties and states.

    In January, the Trump Administration announced that it would prohibit the sale of flavored e-cigarette products except tobacco and menthol in the U.S. Fortunately, the new policy applies only to cartridge-based e-cigarette products made by JUUL Labs and other companies, which are more popular with youth. Refillable, tank-style e-cigarette that are primarily sold in age-restricted vape shops are exempt.

    And the new policy is less draconian than the original plan, which was to remove all flavored vaping products, even menthol, from the market until they received FDA clearance.

    The state of New York recently passed a new measure prohibiting the sale of tobacco and vaping products in pharmacies, banning all online sales, and restricting vape shops from selling anything but tobacco flavored e-liquids.

    And while “essential” services such as convenience stores, pharmacies and gas stations have been allowed to remain open during state-wide shutdowns, vape shops have not been allowed to remain open. So it’s much easier to buy traditional cigarettes than e-cigarettes, e-liquids and vaping supplies, much to the chagrin of both vape shop owners and their customers.

    Other countries have deemed vape shops as essential even in pandemic hot spots such as Italy and Spain, France and Switzerland. However, the U.K. has also forced vape shops to close, despite their stance that vaping is a safer alternative to smoking.

    Life-saving advice

    Vaping devices should be in the same category as nicotine replacement products, like patches or gums, maintained Michael Siegel, a Boston University School of Public Health professor with more than 30 years’ experience in tobacco control including two years at the CDC’s Office on Smoking and Health. “It would make sense to treat them in a similar way to pharmacies,” he said.

    “While there is no question that smoking puts individuals at greater risk of serious consequences from Covid-19, it is plausible, but not proven yet, that vaping—which can cause mild, acute respiratory irritation and inflammation—could also impair the respiratory system’s ability to fight off Covid-19 infection,” Siegel said.

    “However, any impairment caused by vaping is certainly much less than that caused by smoking. Most importantly, our advice to the public does not really change regardless: If you smoke, it is urgent that you quit. If you can’t quit cold turkey or using FDA-approved medications, then switching to vaping is absolutely indicated and could be lifesaving,” Siegel said.

    The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.

  • A Welcome Message

    A Welcome Message

    Credit: Troy T

    Buried under the Covid-19 headlines, a recent Public Health England report reiterates the value of vaping for smoking cessation.
    By George Gay

    Amid the unfolding tragedy and chaos on March 11, when the World Health Organization (WHO) declared that the spread of Covid-19, the disease caused by the SARS-CoV-2 coronavirus, had reached pandemic proportions, it was easy to lose sight of the fact that the world was in the grip of a number of pandemics, one of which, according to the WHO, is the “smoking [tobacco] pandemic.”

    I have never understood how smoking can sensibly fit into the definition of a pandemic, but then it seemed to me that Covid-19 had been of pandemic proportions for a while before it was declared to be so. What do I know? I’m just some mug in lockdown whose rights have been taken away by the people who should have avoided the necessity to do this by having been part of a global initiative to prevent the emergence of such viruses or at least to deal with their effects far more efficiently than has been the case. Still, you know me—I don’t like to complain.

    Is there some reason why I have drawn attention to the existence of the two pandemics, I sense you asking? Well, since you raise the issue, the two are loosely connected, at least in England. About a week before the WHO bestowed pandemic status on Covid-19, Public Health England (PHE) had issued its latest vaping report in March (“Vaping in England: An Evidence Update Including Mental Health and Pregnancy”), and vaping, as I think any fair-minded person would admit, has the power, in the parlance of our times, to help flatten the curve of smoking and no doubt, along with other initiatives, to eventually eliminate this pandemic.

    PHE, which is an executive agency sponsored by the Department of Health and Social Care, has long said that vaping regulated nicotine products poses a small fraction of the risks of smoking and that vaping such products, in conjunction with other interventions, will greatly increase the chances of tobacco smokers stopping smoking. And these comments were confirmed in its latest report.

    So everything is hunky-dory? Smokers can gradually move to vaping and other activities associated with next-generation nicotine products once those products meet their expectations, and at least one pandemic will have been dealt with? Of course, as anybody reading this magazine will be aware, things are not that simple. Ever since vaping came onto the scene, there have been no end of people willing to condemn it as smoking by another name, and their voices have been amplified in much of the media, which has reveled in running questionable headings to scare the pants off smokers and would-be vapers without the necessity of producing any evidence as to why they should be scared of vaping. “Is vaping riskier than smoking?” is the type of heading often used. Of course, the short answer to the question is “no,” but if you’re paid by the word …

    Given these circumstances, the sane voice of organizations such as PHE are vital, and it is a pity that its latest report probably received much less coverage than it might have done if the media had not been preoccupied with the Covid-19 pandemic rather than, as usual, the smoking pandemic. After all, from what we are told, the former is not going to cause anything approaching the death toll attributed to the latter.

    Certainly, British American Tobacco (BAT) welcomed the report. David O’Reilly, the company’s director of scientific research, was quoted on its website as saying, in part, that it was encouraging to see PHE continuing to highlight that “regulated vapor products are much less harmful than cigarettes and that vaping continues to help those U.K. smokers seeking an alternative to make the switch.”

    So let’s try to give a little airing to the PHE’s March 4 report, the summary of which, to my mind, is admirable for combining science with common sense in a clearly written document that is easily digestible by ordinary smokers and vapers and by people, such as me, who are not scientists. The document confirms in part that the conclusions of PHE’s previous reports are still “important messages for preventing harm” and that these conclusions, broadly summarized, are as follows:

    • Vaping regulated nicotine products has a small fraction of the risks of smoking, but this does not mean it is safe.
    • Smokers should be encouraged to try regulated nicotine vapor products along with smoking cessation medications and behavioral support. This will greatly increase their chances of successfully stopping smoking.
    • People who have never smoked should be encouraged not to smoke and not to vape.
    • Vapers should be encouraged to use regulated nicotine products only and stop smoking completely.

    To my mind, it is one of the smallest figures within the PHE report that needs to be given the most airing—that needs to be used as a strap line on every vaping story. “Vaping remains most common among smokers and former smokers, with less than 1 percent of people who have never smoked currently vaping,” the report says. Less than 1 percent. That figure completely undermines a common claim made by those implacably opposed to vaping: that vaping will draw a wave of nonsmokers to nicotine addiction. In fact, taken together with other figures in the report, it demonstrates that vaping is a means to improving the health outcomes of individuals and the population at large. As PHE says, most adults use vapor products to help them quit smoking.

    Growing misperceptions

    It has to be of concern, therefore, that those opposed to vaping have been successful in getting their messages across. “Perceptions of harm from vaping among smokers are increasingly [my emphasis] out of line with the evidence,” PHE reports. “The proportion who thought vaping was less harmful than [smoking] cigarettes declined from 45 percent in 2014 to 34 percent in 2019. These misperceptions are particularly common among smokers who do not vape.”

    O’Reilly was quoted on the BAT website as saying that the growing misperceptions regarding the relative risks of vaping and smoking were deeply concerning and likely to be contributing to a huge missed opportunity from a public health point of view. “It’s key that smokers have access to accurate facts regarding these important products in order to make an informed choice,” he said. “As one of the world’s largest vaping companies, which puts science, product safety and testing at the heart of everything we do, we are committed to working with public health bodies, harnessing our global resources and expertise, to help educate smokers regarding the potential benefits of vaping.”

    Such misperceptions, which are not the results of accidents, have their consequences because “stop smoking services in England suggest that when a vaping product is used in a quit attempt, either alone or with licensed medication, success rates are comparable to, if not higher than, licensed medication alone,” according to PHE.

    Such quit attempts have been largely stalled for the past five years, however. PHE reports that current vaping prevalence (any current use) among adults in England has remained stable since 2014, and in 2019, it was between 5 percent and 7 percent. At the same time, current vaping prevalence among smokers varied between 14 percent and 20 percent across the surveys studied, again showing little change since 2014. But current vaping prevalence among former smokers has continued to rise and was 12 percent to 13 percent in 2019. Vaping prevalence is said to be highest among people in more disadvantaged socioeconomic groups, reflecting their higher levels of smoking.

    Meanwhile, the proportion of current smokers who have not even tried vapor products apparently remained at 37 percent between 2018 and 2019, suggesting that those “Is vaping riskier than smoking?” headings have been doing their job in creating an atmosphere of unfounded fear around vapor products.

    Credit: Ciprian Tudor

    No epidemic

    Some of the most surprising aspects of the report have to do with vaping among young people, which seems to be at a low level, contrasting starkly with what we are often led to believe in England and what we are told is an “epidemic” of vaping among young people in the U.S. It is worth noting here that PHE points out in its report summary that comparisons across countries are hampered by inconsistent questions and survey methods, though it also says that “[o]ne survey that compared vaping among 16-[year-olds] to 19-year-olds from 2017 to 2018 using consistent methods found lower levels of vaping in England compared to [those in] Canada and the U.S.”

    PHE reported that current vaping prevalence (weekly or less than weekly) among young people in England has remained reasonably steady with the best recent estimates putting it at 6 percent of 11-year-olds to 15-year-olds in 2018 and 5 percent of 11-year-olds to 18-year-olds in 2019. No surveys were said to have reported much increase in vaping prevalence.
    As you would expect, the older a youngster is, the more likely she is to vape; so current use among 11-year-olds was estimated at less than 1 percent in 2018 compared with 11 percent of 15-year-olds.

    Again, as you could expect, current vaping is mainly concentrated in young people who have experience smoking. In fact, less than 1 percent of young people who have never smoked are current vapers, and PHE noted that current smoking prevalence (weekly or less than weekly) among 11-year-olds to 15-year-olds halved between 2009 (11 percent) and 2018 (5 percent), though it had remained relatively steady since 2014.

    PHE reported that young people’s perceptions of the relative harms of vaping compared with smoking are increasingly out of line with the evidence, reflecting, but not as starkly, the situation among adults. The proportion of 11-year-olds to 18-year-olds who thought that vaping was less harmful than smoking declined from 68 percent in 2014 to 52 percent in 2019. Just over a third of 11-year-olds to 15-year-olds thought it was OK to try vaping, and just under a quarter thought it was OK to vape once a week. Most young people who have tried vaping did so out of curiosity.

    Almost 60 percent of 11-year-olds to 15-year-olds who vaped regularly (more than once a week) reported being given vapor products, mostly by friends. But many also reported buying vapor products from other people, shops and the internet, and PHE believes that “enforcement of age of sale regulations needs to be improved.” Tank models remain the most popular type of vapor device used by young people in England.

    The March-issued report, which presents updates on the prevalence of vaping among young people and adults and reviews literature on vaping among people with mental health conditions and pregnant women, is the sixth in a series of independent reports commissioned by PHE to summarize evidence on e-cigarettes to inform policies and regulations. PHE says that a “comprehensive e-cigarette safety review will be the focus of a future report.”

    In setting out the aims of the report, PHE said that despite reductions in smoking prevalence, smoking remained the biggest single cause of preventable death and disease and a leading cause of health inequalities. “So, alternative nicotine-delivery devices that are less harmful could play a crucial role in reducing this health burden,” it said.

  • Licensed to Help

    Licensed to Help

    Credit: Voke
    The Voke has no batteries and no electronics and therefore generates no heat and no chemical reactions.

    By George Gay

    This story it is not about vaping nor about a vapor device. Vapor devices can be described as electronic nicotine-delivery systems (ENDS); however, Voke is a nicotine inhalation device and does not fit into such a classification, except in the limited sense that it delivers nicotine.

    Licensed by the U.K. Medicines and Healthcare products Regulatory Agency (MHRA) as a medicinal product that is a safer alternative to smoking, Voke can be usefully described as an alternative nicotine-delivery system that uses pharmaceutical-standard inhaler technology but offers it in a device that closely resembles a traditional cigarette in both the way it looks and in the way a consumer, in using the device, mimics most of the rituals of smoking. Voke has no batteries and no electronics and therefore generates no heat and no chemical reactions. It produces no smoke or vapor, just an invisible, odorless aerosol.

    In theory at least, Voke should be a game-changer. It will be interesting to follow its fortunes on the market—to see how committed smokers and vapers are to the pursuit of reduced risk. It will also be interesting to watch the reaction of those opposed to smoking and, especially, those opposed to smoking and vaping. In the case of smokers and vapers, for instance, will they prove to be willing, in the name of risk reduction, to move from inhaling warm smoke or vapor to inhaling a cool aerosol? And what will tobacco control make of a device that is licensed to save lives?

    Credit: Voke
    TESTING THE COMMITMENT

    For the time being, that commitment to risk reduction is being tested just among U.K. smokers. Alan Sutherland, the CEO of Kind Consumer, the independent, London-based healthcare research and development company that launched Voke in November, told Vapor Voice that the device was being made available only online at voke.com to people based in the U.K. who were over the age of 18. The online-only launch had been a deliberate choice, said Sutherland in an email reply. In that way, Kind could track and monitor initial consumer response and feedback, as well as ensure its manufacturing capability was able to keep abreast of demand as the company ran various consumer media tests.

    Already, Kind has been promoted through a number of communication channels. “We have used this launch phase to test and trial various media vehicles from out of home (buses/train stations/bus shelters) to regional and national radio and most recently TV,” said Sutherland. “We have also now been cleared to advertise on Facebook as well as the London Underground where we just ran a campaign.”

    While I have no experience in marketing, I would guess that Kind is hitting at least some of the right buttons. I learned about its launch from the man who owns the garage where I have my car serviced. He doesn’t smoke or vape but he is interested in the welfare of his mechanics, some of whom do smoke, vape or both.

    Certainly, while these are early days, Kind is pleased with the response. “We are very happy with the results so far and especially by the growing level of repeat purchases,” said Sutherland. “Despite Covid-19, we are still seeing good online sales performance for Voke. In particular, people like the fact that Voke is licensed as a medicine by the Department for Health and Social Care as a safer alternative to smoking. Customers are also commenting positively on how quickly Voke reduces their nicotine cravings.”

    In respect of sales, Sutherland said Kind was delivering ahead of its expectations, even though it had chosen to start cautiously. “We have had half a million visits on our site,” he said. “Conversion rates are good, and already, 23 percent of revenues are coming from repeat purchases, which is why we are confident to start scaling up now.”

    In the short term, Kind’s capacity is about 5 million packs annually, but it could increase that to 35 million packs next year. The Voke pack, which has an underlying plastic structure and a paperboard cover that looks and feels like a cigarette pack, includes a canister containing a gas under pressure in liquid form that comprises medicinal-standard nicotine and slight menthol flavor masking along with a cigarette-like device. This device, which is filled from the canister, provides for a period of consumption that aligns with that of a traditional cigarette while one canister provides for about 20 “cigarette” refills, so there is plenty of continuity for cigarette smokers.

    Also, in the short term, Kind says, it is focusing on expanding its U.K. business and, especially, trying to help smokers who are said by some to be more at risk than nonsmokers if they contract Covid-19. And there would seem to be a ready-made consumer base for Voke. “Research tells us more than 50 percent of smokers try to quit and fail, and more than one in five won’t try anymore because they believe it is too difficult,” Sutherland said. “We want to help them.”

    There can be little doubt that Voke has some advantages over cigarettes and electronic cigarettes when it comes to sales channels. While the product has a medicine license that allows it to be prescribed by a doctor in the U.K., it also has an over-the-counter or general sales list label, so it can be sold anywhere from pharmacies to major retailers, corner shops and garage forecourts.

    Additionally, despite the fact that Voke is not a vapor device, vape shops could prove to be an important sales channel since anyone who walks through the door of such an outlet is a person who has already decided to replace her smoking habit, or part of it, or who has at least decided to investigate doing so. And vape shops provide a space in which issues, such as Voke’s cool delivery, can be discussed.

    BEYOND CESSATION

    In the meantime, Kind is laying the groundwork for future international expansion, with a strong focus on the U.S., Europe and New Zealand, which aims to be smoke-free by 2025. Its U.K. medicine license can probably be leveraged in some other countries—with the notable exception of the U.S.—and, at the same time, there is no reason why Voke, under another name and possibly modified, could not be sold in other jurisdictions simply as a consumer product.

    However, Kind’s ambitions go way beyond smoking cessation. It says it is intent on pioneering new technologies to improve public health and address some of the most significant global healthcare challenges in the 21st century. “Vaporless valve technology (VVT) presents an exciting new way of administering medicines into the body with a potential to reach into a range of therapeutic areas beyond smoking cessation alone,” said Sutherland.

    It is not surprising that Kind wants to expand its areas of interest. The gestation period of Voke has been long and costly and has required a steep learning curve. Indeed, its appearance on the market can be seen as a remarkable act of faith.

    A HARD SLOG

    Kind was founded by Alex Hearn in 2006 with the aim of developing a safer alternative to cigarettes that would also address smokers’ psychological and physiological needs. Hearn is something of a polymath. He studied classics at Oxford University, is well read in science and has the sort of business acumen that led him to start an entrepreneurial body at Oxford whose model was adopted by other major universities in the U.K. and the U.S.

    In 2009, Kind set out in earnest on the development of Voke, and, though it did not yet have a product, it soon found itself in a commercial bind. At that time, when e-cigarettes were still something of a novelty, it was believed that, under the then forthcoming revised EU Tobacco Products Directive, all vapor products sold in the EU would need to have a medicine license, but such a requirement fell by the wayside. So Voke, a device being developed at great expense within the constraints necessary to make it conform with a medicine license, was going to have to compete with devices developed at less expense without such constraints, a situation that one close observer described as “commercially challenging.”

    It goes without saying that obtaining a medicine license, which Voke was granted only in 2014, was beyond challenging. And yet another major challenge arose in January 2017 when Kind and British American Tobacco, which had partnered with Kind in developing Voke, announced that they were going their separate ways. Kind, according to an announcement at the time, was going to take back ownership for the commercialization of Voke, allowing it to “embrace the full economics of the opportunity.”

    It was an opportunity but also a challenge because Kind needed to find another partner, one that could help it scale up the manufacturing process, an undertaking that was bound to be costly given that the medical license meant the company’s processes, manufacturing operations and products were subject to the strictest protocols, were under the tightest scrutiny and had to be fully traceable.

    Given this, it was not surprising that, in August 2018, Kind announced that Voke had been delayed getting to market by issues surrounding the scaling up of its manufacturing process, though the good news was that the company had raised further funding from existing and new investors—funding that would be used to complete the setup of state-of-the-art manufacturing capacity for Voke, which was and still is centered on two pharmaceutical facilities at Runcorn in the U.K. and Waterford in Ireland.

    Having gone through so many challenges in getting Voke to market, it was something of a cruel irony that shortly afterward, the world was struck by a deadly coronavirus. But all is by no means lost. Kind has built up a three-month reserve of Voke in case manufacturing has to be interrupted. And though it seems callous to say so (and while Kind did not make any mention of this in its email), the coronavirus could have an upside in respect of demand for Voke simply because of the huge number of stories that are being published suggesting—with, I imagine, little evidence—that a smoker or vaper is more at risk than others of contracting Covid-19.

    BECAUSE IT WORKS

    In truth, Voke seems destined to be accepted because it works: It delivers a fast, effective and discreet craving relief that—and this surely is most important—can be enjoyed anywhere, anytime. This is a licensed medical device that produces no visible exhalation and produces no odor, so, a person could use it in the office, while on public transport, including airplanes, and while visiting a hospital. Of course, there is always a possibility that a business, perhaps an airline, might want to try to ban its use, though it is difficult to discern a rational reason why it might want to do so.

    Unfortunately, however, this powerful use-anywhere argument is also perhaps the device’s weakest point because it is the point where it will be attacked by some in tobacco control concerned that a smoker will be able to use it to maintain his or her addiction in places where otherwise she or he would not be able to do so.

    But this argument, often used against e-cigarettes, will surely be less effective in the case of Voke than in the case of other next-generation products. Firstly, because of the way that it delivers nicotine, Voke has to deliver only a low dose, 0.45 mg, from which, if the U.S. Food and Drug Administration is correct, it could be inferred that the new device creates a significantly lower risk of sustaining addiction than cigarettes or e-cigarettes.

    Secondly, any addiction maintenance effect will surely be more than offset by the product’s use by some smokers to substitute completely for cigarettes and by others to transition away from tobacco and nicotine products altogether.

    Finally, it is worth noting that Voke also offers a considerable advantage over lower risk tobacco/nicotine products and devices when it comes to the environment. As is mentioned above, Voke uses no battery, and it is a relatively simple device made of metal, card and plastic: materials that can be recycled. There’s no butts about it.

    Picture of George Gay

    George Gay