Summary
In summary, we have 80% of our L31.5 a expenditure on
R&D aimed at market-oriented goals. This is generating some
visible achievements for the Group and I believe, at this
level of effort, we are competitive.
On the S&H issues, I distinguish between activities
which are essential in response to those currently held
cientific views that determine Regulatory requirements
:nd influence consumer habits. Specific chemical
components and simple biological test standards fall into
this category. This accounts for IZZ of our expenditure.
Purposeful long term and truly fundamental research on
S&H, in my view, can only be done In collaboration with
edical scientists/molecular biologists. The majority of
:ur 7Z expenditure In this area is directed at the
*chin of diseases. In my view this Is appropriate
mechanism but may need to be escalated if any interesting
leads are identified.
I hope this talk has given the impression of &
business-like approach to R&D, closely managed and
cost-effective. Of course, our scientists have
'brainstorming' discussions and will occasionally advance
revolutionary ideas for radical product modification. One
uch example is based on a nicotine-carrying, synthetic
such *Xs So far there is little belief that this avenue
really represents a realistic direction to pursue.
C=>
N)
BATCo document for Province of British Columbia 21 April 1999

2
1. Other Noxse
4,000 chemicals, hundreds toxic in isolation and high
dose. In complex structure of smoke and generally low
conclusions - open question.
Generally Regulatory Authorities call simply for more
research.
Two approaches.
Complex list presents problems to all. Perhaps TLV
approach will be pursued.
0 T-Ft &9 r@ C) 14 Pc E
Alternatively, blanket reductions in components that
concern Authorities - major smoke mods v. selective
removal.
Suggestion that Regulatory Authorities may encourage
low ta.r/ high nic.
6@-JDC- 3 : TR(--t\JDG W C16-AR676 Nob
Route to low tar/high nic.
1. Breading. 2. Plant biotech.
2. Biological Indices
Chance discovery - Capri low specific activity based
on Ames - bacteria test! Pursue.
CD
NJ
BATCo document for Province of British Columbia 21 April 1999

Group allocation of R&D resources - broad
Six R&D centres - standard classification of projects -
uniquely reliable estimate of relative efforts
Cost 30 in + L.5 m external
!5U-D,G I : 'b15-1V(6VT1oJ OF 6&uP k@b 6 APO
Terms - market oriented v S&H.
5 year 'rolling' focussed v. unchartered
Category 1 - major Group effort. Market share or margins.
Smoke Quality Improvement - major.
Satisfactory low density products for many markets
Novel expansion and reconstitution of waste - very
significant cost savings.
Product Innovation - constant search.
Category 11 - new building-block3 - understanding aerosol
properties, fundamental to taste improvement.
Effective release/transfer of nicotine. New flavour
materials.
Category III - Evolutionary development of cigarette in
response to S&H issues - guided by Regulatory Authorities -
e.g. ISC.
We must have meaningful interaction and be ready to provide
appropriate products.
X- b C- - P40-1 1@; C)I- .
Almost entirely internal - blend, combustion, filtration,
etc., our expertise (including biological testing).
If R&D deficient here, serious problems. Project examples:
-r-hb
ON
BATCo document for Province of British Columbia 21 April 1999

3
3. Passive smoking
Short term action - clear targets. RET main thrust
poor epidemiology.
Internally:
Information gathering - reliable measurement of ambient
smoke concentrations, environmental rooms - nicotine
levels lower than sidestream suggests.
Also typical environment - surreptitious.
5 ki be 6 . CO MCE-e tJ J@J FA-MiLAAk E-NV&o&1M61QTS
For low sidestreas - burn less tobacco. Capri I
Otherwise expanded tobacco - puff number problem.
Category TV
So far, product evolution in response to or anticipation of
Regulatory requirements - reasonably clear targets.
Key question - are there more fundamental approaches to our
major S&H issues?
Scientific information today suggests few RSD directions
for cigarette modification.
Until we know we have a problem .........
Minor components no real pressure.
-Cie.
CD
CD
N)
BATCo document for Province of British Columbia 21 April 1999

- 4 -
Best approach to fundamental research is
(i) monitor all publications (SRG)
01) where information incomplete, support research at
external centres of excellence (SRG).
4.:)
Mechanism of disease - focus of interest.
Molecular biology - precise tools. Hitherto epidemiology
has suggested associations - weak science.
5k[D(z C. : @ V. CPIbr=kIOLOH
We can expect modern molecular biology to clarify many
I a 8 u e a .
Look at Dr. White's comments.
6, -+ : 44UI-iAt@J Ge
Essential we are thoroughly appraised.
We are sponsoring key projects.
,SkIDC- F . WCHAIIJI&HE or
Possible outcomes:
1. exonerate smoking from key disease processes
2. point to various components
3 . indicate individuals genetically disposed
4. provide a cure or prevention of such diseases.
Finally - benefits.
-111b
Summary
CD
k1ternative products
L4
co
BATCO document for Province of British Columbia 21 April 1999