Philip Morris (PM) bought the patent and global rights to an aerosol nicotine-delivery system developed by Jed Rose, director of Duke’s Center for Nicotine and Smoking Cessation Research. The new technology delivers nicotine to users’ lungs but doesn’t involve smoking.

Management reported that the Center for Nicotine and Smoking Cessation Research at Duke University in Durham, N.C. where Jed Rose is working, does not have a role in Rose’s agreement with the company and won’t receive any money. Terms were not disclosed.

This technology will help the smokers to get the nicotine straight from the cigarette without generating the accompanied smoke and the toxic substances. This endeavor resonates the company’s effort to reduce death and disease associated with smoking.

Switzerland based Philip Morris will next develop a commercial product using the technology. The system differs from current medicinal nicotine inhalers available on the market as aids to stop smoking because it delivers nicotine more rapidly to hit the smokers just like a cigarette.

However, management has reported that it may take three to five years for the company to develop the commercial product.

Tobacco companies have been taking steps to venture into smokeless tobacco and other nicotine products as tax increases, health concerns, smoking bans and stigma cut into demand for cigarettes.

Last month, British American Tobacco Plc created a subsidiary called Nicoventures focused on nicotine alternatives. In 2009, Reynolds American Inc. (RAI) purchased Swedish company Niconovum whose nicotine gum, pouches and spray help people give up smoking.

We are encouraged as Philip Morris is strengthening its brand portfolio through innovation based on enhanced consumer understanding. Marlboro’s brand equity is being supported by the introduction of innovative packaging, new blends, and other line extensions, along with fresh execution of its iconic image. Similarly, the L&M brand is being revitalized with the introduction of products having a smoother taste and more attractive pack designs.

We currently have a Zacks #2 Rank on Philip Morris shares, which translates into a short-term Buy rating.

 
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