FAVOR - a status review
A. L. Board
Background
FAVOR I* a smokeless cigarette developed and launched In September
2985 in Texas 'by Advanced Tobacco Products Inc. The product
consists of pure nicotine and selected volatile flavorants
adsorbed au a sua.11 porous polytbene plug set In a white plastic
tube simulating, La appearance. a cigarette. The nicotine and
flavorants are drawn as vapours Into the lung* an Inbalacian,
producing typical reactions of nicotine satisfaction.
Imperial Tobacco Canada and BAT have together tentatively explored
with ATP the possibility of a commercial arrangement to develop
and exploit FAVOR if the product neat& raSulatery standards of
performance and above sufficient potential in Its market launch.
ATF would consider working with the BAT Group *Inc* tbay believe
our skills and resources would be appropriate for the development
of their product and its markets.
Consumer Reaction
1. The reaction of consumers to the concept of a smokeless
cigarette Is universally high.
2. The initial reaction of almost all casual samplers of FAVOR Is
of unpleasant taste and south/throat irritations.
3. A small-scale detailed study of VK smokers which Included a
four hour period during which FAVOR but no conventional
cigarettes more available, produced results shaving a high
Initial support which fell during the five days of the full
study.
4. Some other key findings of this study were:
a) a small core of consumers shoving a sustained high
potential for use of FAVOR
b) most users point to product weaknesses, some of which are
aesthetic (or related to Its potential as a source of
personal ridicule) but mainly hiShILIghtod, draw effort,
taste and satisfaction as serious shortcomiuSs
5. Information supplied by AT? corroborated by field comments by
Z&V sales force. show that after Initial high sales levels
reaching 12 In *on* regions, lntor*st drops. ATT claim. tkat
their latest products should sustain consumer Interest but, so
far. we have no evidence.
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BAT Co LTD - MINNESOTA TOBACCO LITIGATION

Patent Position
We have taken Q.C. legal advice on the patent position. It
appears that the currant product. although falling within the
claims of the various FAVOR patent&, will not find protection
sine* those patents ore likely to prove invalid due to prior art.
Final opinion from our US patent counsel is awaited before we
Inform ATF.
Toxicology
ATP have supplied on w1th a summary of the toxicology of nicotine
and of FAVOR devices which suggest no serious cause for concern
with the current product. However, this product dots not fall
within the exclusions to the U.K. Statutory Instrument rtlatLug to
nicotine as a poisonous material (unlike tobacco, cigarettes,
aerosol dispensers and chewing Sues - subject to agreed nicotine
maxina). Consequently, It Le biShly uncertain bow this device
would be created by regulatory authoriti*s.
Addiction
The lawyers at ITL and BATCc bay@ ezpr*astd concern for the
potential spotlight that any success of FAVOR night throw on the
specific function of nicotine. Lf, for Instance, FAVOI usage
became a dependence, the contribution of n1cot1ne to this
phenomenon might come under attack with consequent harmful
side-effects on the conventional tobacco products.
Future
At present, BAT/ITL have a good relationship with ATP (with no
commicuenc). Whilat the possibility of any joint activity with
ATP In relation to FAVOR looks Increasingly renote, there Ls much
to be gained by keeping contact for three roasonst
I. a detailed monitor of the Taman market Ls currently beLuS
completed which will finally clarify consumer/trado response
2. we need to know more about issue* relating to alternative
nicotine delivery systems and we con learn a lot by
challenging ATP on various issu*@ r*lsting mainly to
legislation
3. there la a potentially Interesting as* of the FAVOR nicotine
element In the fllt*r of conventional cigarettes - offering
the opportunity of fortifying nicotine level for a given tar C=)
level.
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ALEIDET _@D
15th April 1986 C=>
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cx:)
BAT Co LTD - MINNE@OTATOBACCOLITIGATION