Nicoventures is a company set up in 2010 by British American Tobacco (BAT) which focuses exclusively on the development and commercialisation of regulatory-approved, non-tobacco nicotine products. On the company website it says:
- Our goal is to help smokers on their journey to quitting by giving them an appealing, licensed alternative as a reduced-harm ‘smoking replacement product’. In other words, we want to enable smokers to stop smoking in their own way.
In August 2013, BAT merged Nicoventures with BAT Research & Development and CN Creative. The merger coincided with the launch of BAT's first e-cigarette Vype on line. BAT rolled out retail distribution in September and launched re‐chargeable Vypes in October 2013.
- 1 Collaborations
- 2 Exploring the Harm Reduction Market
- 3 A Tobacco Company, Or Not?”
- 4 New Holding Company: Bringing Nicoventures Closer to BAT
- 5 BAT as “Part of the Solution”
- 6 Notes
Kind Consumer Limited
In June 2011, Nicoventures announced it had entered into a distribution agreement with a UK-based company called Kind Consumer Limited, which had developed a non-tobacco based nicotine inhaler. The Times newspaper wrote in November 2013 that the company had hoped to overhaul its image and reach a healthier customer base by setting up a joint venture intended to sell nicotine inhalers, a supposedly medically superior version of electronic cigarettes.
- The device is a non-electronic nicotine delivery platform that delivers an aerosol of nicotine formulation from a cigarette-like stick via a breath-operated valve for oral inhalation. The technology is based around the pharmaceutical design concepts of metered-dose inhalers. The valve has been designed to actuate at low inhalation ﬂow rates similar to those of cigarette smoking. The inhaler contains no tobacco and does not involve combustion, electronics or heat of any nature in its operation.
In other words, the device will be marketed as a safer alternative to smoking, delivering a regulated dose of nicotine to the user.
Kind Consumer completed the first stage of a clinical trial to test the nicotine inhaler in June 2012, saying that the device had been "well tolerated and preliminary data indicate that as expected the aerosol from the inhaler results in the rapid delivery of nicotine to the circulation.”
Consort Medical Bespak
Nicoventures awarded Consort Medical Bespak a "multi-year exclusive contract" to manufacture the nicotine inhaler developed by Kind Consumer. The new product, which was named "Oxette", is scheduled to launch in the UK market in 2014, subject to regulatory approval.
Consort Medical produced samples for Kind Consumer to conduct clinical trials. The application for market authorisation is currently being considered by the MHRA, Consort Medical wrote in its Annual Report for 2013. Following regulatory authorisation, through a licensing agreement, the global commercial rights will pass to Nicoventures (and thus BAT).
Exploring the Harm Reduction Market
Nicoventures has developed an active policy to approach public health professionals, retailers and General Practitioners (GPs or family doctors) as well as academic researchers.
In 2012, the company set up a medical education plan called Smoking Harm Reduction Education Programme (SHARE). Events held so far include a Pharmacy Forum in June 2012, a GP Forum in November 2012 and a Stop Smoking Advisor Forum February 2013. The proceedings of the meetings were published in "appropriate Healthcare Professional journals". Pharmacy Magazine convened an advisory forum to discuss smoking and harm reduction and published a glossy report, GP published an 8-page report on the roundtable meeting Understanding Tobacco Harm Reduction, held in the Royal Academy of Medicine, while the health practitioners forum was captured in a report by the Advisor.
The purpose of the meetings was to facilitate a general agreement that there is a place for harm reduction strategies as part of a wider programme of tobacco control. Nicoventures also put a series of fact sheets with key messages on its website:
Although the link to BAT was never mentioned, Nicoventures involvement in the events is explicitly stated in all publications and emphasised in a banner with the following text:
- Nicoventures - in compliance with the Association of the British Pharmaceutical Industry’s (ABPI) Code of Practice - disclosed that the fees paid for healthcare professional consultancy in 2012 amounted to £1922.00 for two consultants.
However, since the reports were done as editorial articles in each of the magazines, some readers did get confused.
"The World’s First Consumer Healthcare Company" Approaching Health Care Officials
In June 2013, Nicoventures actively approached public health officials in various regions in the UK to discuss harm reduction and regulation. Information collected by ASH and the National Centre for Smoking Cessation and Training show that the method was very similar in most of the cases. A sales representative called Ian Stimson would introduce Nicoventures as a consumer healthcare company. In his interactions he either did not mention BAT, stressed that Nicoventures was not a tobacco company, or stated it that his company was an independent subsidiary of BAT.
In his persistent efforts to meet up with public health officials, he argued that the company complied with the regulatory standards required of a pharmaceutical company and that their product 'Quit Direct' was being considered by the Medicines and Healthcare products Regulatory Agency (MHRA).
Sometimes emails were followed-up by phone calls. In August 2013, the salesman approached several public health officials for a second time. In Hackley, he turned up at the local hospital facility unannounced pushing for a meeting - a few days after his email addressed to the local tobacco control team had remained unanswered.
It is not known how many Public Health officials and organisations Nicoventures has approached, nor how many of those officials had reservations over engaging with a company over its links to BAT.
In November 2013, The Times revealed that Nicoventures had terminated the contract with a team of about 14 salespeople to market the devices to NHS public health officials. The team had contacted public health directors and local authorities with a view to doctors prescribing the inhaler to patients. However, soon after the summer, BAT changed its strategy and now no longer works with the supplier of drugs sales company Pharmexx. 
A Tobacco Company, Or Not?”
Nicoventures has been promoted as "a stand-alone company" within BAT, providing "a range of alternative products... without the real and serious health risks of smoking" - as such "a natural extension of BAT's approach to tobacco harm reduction".
Despite being publicly promoted as "a company managed separately from the BAT tobacco business", Nicoventures reported to Kingsley Wheaton, BAT's Director Corporate & Regulatory Affairs from the very beginning.
The background of Nicoventures staff shows that the company is, in fact, integral to BAT. Of the staff members listed on the Nicoventures website in October 2013, six previously held senior positions with BAT.
New Holding Company: Bringing Nicoventures Closer to BAT
In early 2013, BAT created a new role on the Management Board appointing Des Naughton as "Managing Director Next-Generation Products" encompassing non-tobacco companies Nicoventures and CN Creative. According to the company, the new role was “in line with the Group’s strategy of pursuing and developing a pipeline of next generation nicotine products to complement its core tobacco business.”
In August 2013, BAT created a new holding company called Nicoventures Holdings Limited, bringing together Nicoventures, BAT’s Research and Development (R&D) department, and CN Creative (the e-cigarette company acquired by BAT in December 2012). The merger coincided with the launch of BAT's e-cigarette Vype. The merger saw BAT Director Des Naughton replacing Nicoventures general manager Adrian Marshall. Three other directors had their appointment terminated in August 2013: Roy Chambers and Steven Dale who had been with the company since the start, and Steve Burton who had been a director of both Nicoventures and CN Creative since December 2012. Four directors now hold directorships of the three companies involved: Nicoventures Limited, CN Creative and Nicoventures Holding Limited. (With a fifth director not on the board of CN Creative. Apart from BAT director Naughton, none of the new directors had anything to do with Nicoventures or CN Creative before. 
- For more detail on the reshuffle, see Nicoventures, a Tobacco Company, or Not?
Discontent and Confusion over BAT's Strategy
Kind Consumer, who designed the nicotine inhaler that BAT will market and distribute once it has been giving the green light by the MHRA, appears to be unhappy about the recent restructure which sees Nicoventures move closer under the wings of BAT.
Kind Consumer’s Chief Executive, Paul Triniman, was quoted by The Times as having said that he had gone into the deal with BAT because of "checks and balances" created to distance Nicoventures from BAT, and “I didn’t want to be dealing with a cigarette operation”, he said, adding that Mr Marshall was an important part of the relationship. As the directorships show, Nicoventures had never been independent of BAT. In the few years of its existence (since 2010), BAT has consistently been roping in Nicoventures, tying it into main structure.
While the departure of Managing Director Adrian Marshall and a team of sales representatives throws into doubt Nicoventures’ move into the medical nicotine market, BAT's November Corporate Social Responsability report is aimed at emphasising the importance of the so called “reduced-risk nicotine products” for the future.
Nicoventures is still working on bringing innovative inhaled nicotine products to market, but BAT will no longer have them categorised as medical products, as ‘nicotine replacement therapy’ (NRT) and sold as aids to help people quit smoking.
- We think this approach positions smokers as patients. Research shows that smokers don’t perceive themselves as having a disease and we don’t think these NRT products meet their needs.
BAT as “Part of the Solution”
BAT’s Sustainability Focus Report, published in November 2013, focuses entirely on harm reduction; the subtitle is: “How we address the public health impact of our products”. In this report BAT profiles Nicoventures as its responsible face for the future, eager to play “a significant role in helping to reduce the public health impact of tobacco use.” The sudden success of the e-cigarette offers BAT a myriad of opportunities, as the following quotes from the report show.
BAT is moving into this new market, because e-cigarettes have a “significant role in helping to reduce the public health impact of tobacco use”.
- E-cigarettes deliver nicotine without smoke toxicants. Consumer research suggests that, due to being closer to the experience of smoking tobacco, they are the first product with the potential to encourage meaningful numbers of smokers to reduce or stop smoking conventional cigarettes.
The new market offers a chance to improve the company’s tarnished reputation while at the same time it means a potential to increase profits:
- We think that further product development can build on the success of e-cigarettes, achieving greater public health benefits and providing us with a commercial opportunity.
Getting recognition externally is of importance too, BAT's Scientific Director David O'Reilly says in the report. Answering the question Can scientific research by tobacco companies ever really be credible? he admits that this is contentious. "I truly believe we’re making a significant and valuable contribution to that science."
Additionally, further development of “reduced-risk nicotine products” could increase the company’s influence on regulation – crucial to increase acceptance and market share:
- More collaboration between the tobacco industry, academia and tobacco research centres is also key to establishing an evidence-based regulatory framework to assess new products.
BAT sought the endorsement of Dr Delon Human, a global health consultant and a consultant to the tobacco company on harm reduction, to summarise the significance of the migration to e-cigarrettes, a “shift has the potential to prevent hundreds of millions of premature deaths and chronic tobacco-related disease”:
- Whatever people think about ‘big tobacco’, it can’t be denied that they understand the needs of smokers and can deliver alternative products at a large scale. BAT and its subsidiaries can play a pivotal role in the innovation of less harmful nicotine products, which are affordable and accessible to adult smokers. Through this public commitment to tobacco harm reduction, the Group makes itself accountable to its consumers and society. This should be applauded and, if successful, BAT could become part of the solution to addressing the epidemic of tobacco-related disease.
- C. Cookson, BAT aims to smoke out nicotine lovers who find cigarettes a drag. Financial Times 5 April 2011, accessed March 2012
- Kevin Brigdman, Viewpoint: Helping smokers unwilling or unable to quit, Nicoventures website, undated, accessed 19 March 2013
- Des Naughton, Winning in Nicotine Products, 10th September 2013, accessed October 2013
- Nicoventures, Nicoventures announces global licensing agreement with Kind Consumer Limited, press release undated, accessed August 2011
- Alex Ralph, BAT rethinks plan to overhaul image with 'medicinal' cigarette, 23 November, 2013, accessed November 2013 (pay wall)
- Moyses, C, Hearn, A and Redfern, A, Arterial Pharmacokinetics of Orally Inhaled Nicotine from a Novel Nicotine Inhaler Device, Part A of Clinical trial KC001, presented at 19th Annual International Meeting of the Society for Research on Nicotine and Tobacco, Boston, MA, USA; 15 March 2013, accessed October 2013
- Kind Consumer, Kind Consumer Completes Dosing in its First Clinical Trial, 20 June 2012, accessed 3 December 2012
- Consort Medical, Company News, Mon 3rd Dec 2012 Major contract award - innovative nicotine inhalation device, accessed 3 December 2012
- Nick Fletcher, Consort Medical climbs after deal with British American Tobacco for safer smoking product, The Guardian 3 December 2012, accessed 3 December 2012
- Consort Medical, Annual Report & Accounts for the year ended 30 April 2013, accessed October 2013
- Nicoventures, Reporting under the ABPI Code, no date, accessed 2013
- ASH and the National Centre for Smoking Cessation and Training started collecting experiences after receiving worried calls and emails from Public Health officers in the London area, personal emails, June - Aug 2013
- New BAT company has harm-reduction focus, Tobacco Reporter, 5 April 2011, accessed 20 December 2011
- British American Tobacco, Board retirement and appointments, News release 21 November 2011, accessed 28 November 2011
- BAT, Management board, Corporate Governance, February 2013, accessed October 2013
- , Companieshouse Nicoventures Ltd, Webcheck, latest entry 2 December 2013, accessed January 2014
- Companieshouse, Nicoventures Holding Ltd, Webcheck, latest entry 21 January 2014, accessed January 2014
- BAT, , How we address the public health impact of our products, November 2013, accessed November 2013
- according to BAT’s Sustainability Focus Report, Delon Human is the author of Wise Nicotine, President and CEO of NicoLife, a global health advisory and consulting practice on tobacco harm reduction and former Secretary-General and CEO of the World Medical Association