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The tobacco in BRAND A contains approximately 95% less nicotine than tobacco in leading cigarette brands. Clinical studies have demonstrated that smokers who smoke very low nicotine (“VLN”) cigarettes containing our proprietary tobacco smoke fewer cigarettes per day resulting in significant reductions in smoke exposure, including “tar,” nicotine and carbon monoxide. Compensatory smoking does not occur with VLN cigarettes containing our proprietary tobacco (Hatsukami  et al. 2010).

In a June 16, 2010 press release, Dr. David Kessler, the former FDA Commissioner, recommended that “[t]he FDA should quickly move to reduce nicotine levels in cigarettes to non-addictive levels. If we reduce the level of the stimulus, we reduce the craving. It is the ultimate harm reduction strategy.” Shortly thereafter in a  Washington Post  newspaper article, Dr. Kessler said that the amount of nicotine in a cigarette should drop from about 10 milligrams to less than 1 milligram. BRAND A  contains approximately 0.7 milligrams of nicotine per cigarette.

A Phase II smoking cessation clinical trial at the University of Minnesota Masonic Comprehensive Cancer Center (Hatsukami  et al. 2010) also measured exposure of various smoke compounds in smokers from smoking a VLN cigarette containing our proprietary tobacco over a six (6)-week period. Smokers significantly reduced their smoking as compared to their usual brand of cigarettes. The number of VLN cigarettes smoked per day on average decreased from 19 (the baseline number of cigarettes of smokers’ usual brand) to 12 by the end of the six (6)-week period, even though participants were instructed to smoke  ad libitum  (as many cigarettes as desired) during treatment. Furthermore, besides significant reductions in other biomarkers, carbon monoxide (CO) levels, an indicator of smoke exposure, significantly decreased from 20 parts per million (baseline) to 15 parts per million. Cotinine, a metabolite and biomarker of nicotine, significantly decreased from 4.2 micrograms/mL (baseline) to 0.2 micrograms/ml. All differences were statistically significant (P<0.05).

A recently completed study led by the University of Pittsburgh directly compared perceptions of and smoking behavior with  SPECTRUM  research cigarettes of different nicotine content produced by us for NIDA in a total of 840 subjects (ClinicalTrials.gov Identifier: NCT01681875). The study included groups of 120 smokers who received VLN cigarettes with the same nicotine level as used in the initial X-22 Phase II-B study or the nicotine level used in the University of Minnesota and Queen Mary University trials.

Utilizing the results of these and other independent clinical trials, we intend to submit to the Center for Tobacco Products (“CTP”) of the FDA an application for  BRAND A  as a Modified Risk Cigarette.

We believe these and other results and future exposure studies the FDA may require will result in a modified risk cigarette claim for  BRAND A. We further believe smokers who desire to smoke fewer cigarettes per day while also satisfying cravings and reducing exposure to nicotine will find  BRAND A  beneficial. There is, however, no guarantee that  BRAND A  will be classified as a Modified Risk Cigarette by the FDA.