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Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) Technology Boosts Prospects for Smoke-Free Nicotine Future

  • New FDA restrictions on Big Tobacco take effect
  • Tobacco manufacturers turning to ‘reduced-risk’ products
  • No edible nicotine products currently available
  • DehydraTECH improves bio-absorption of nicotine taken orally

Smoking may be a dying trend, but consumption of nicotine is not only very much alive; its longevity is assured by Big Tobacco’s foray into alternative tobacco and ‘reduced-risk’ products. Driven by increased public awareness and government policy, the pressure has been turned up on smokers to quit, and cigarette manufacturers are feeling the heat, as well. New regulations mandating warnings against the adverse health effects of smoking and the addictive power of nicotine have already gone into effect, and the FDA is mulling a plan that would require manufacturers to cut nicotine levels in cigarettes so that they are essentially non-addictive, a proposal that the tobacco industry fears will substantially curtail sales. It is responding by turning to lower-risk technologies that deliver nicotine without the deadly effects of traditional cigarettes, like that developed by Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP). The company, recently uplisted to the OTCQX, has developed technology that allows nicotine to be absorbed without smoking.

The tobacco industry is disentangling itself from cigarettes and smoking, after fighting (and losing) a rearguard action that lasted for 18 years. In 1999, in order to recover funds spent on treating smoking-related health issues, the federal government sued tobacco companies. After hearings that lasted for seven years, a federal district court ordered the companies involved in the suit ‘to make “corrective statements” about addiction and the adverse health effects of smoking using television, newspapers, store displays and corporate websites’ (http://cnw.fm/3hCYt). The industry challenged the ruling, but now, after exhausting the appeals process, has been forced to start the anti-smoking campaign. It has, since 1971, been barred from advertising on TV and radio advertising.

Adding to the pressure are the plans under consideration by the FDA. The agency ‘recently finalized a rule that extends its regulatory authority to all tobacco products, including e-cigarettes, cigars, and hookah and pipe tobacco, as part of its goal to improve public health’ (http://cnw.fm/7C12v). Previously, such products could be sold without any review of their health risks. The agency says that it is encouraging ‘manufacturers to explore product innovations that would maximize potential benefits and minimize risks.’ It has already approved a number of such products, including nicotine gum, nicotine skin patches, nicotine lozenges, nicotine oral inhaled products and nicotine nasal spray, as well as non-nicotine medications called varenicline and bupropion, reinforcing the consensus that it is smoking and not nicotine that is the problem.

This bodes well for Lexaria, which has developed and is already licensing technology, known as DehydraTECH™, that could allow nicotine to be ingested orally. This is an important development. The human GI system struggles to process nicotine in the forms in which it is presently offered, presenting one reason why there are currently no edible nicotine products available. However, DehydraTECH employs a patented, cost-effective delivery mechanism that improves the bio-absorption and bioavailability of ingestible substances, as well as their taste and smell. It does this by enabling delivery of lipophilic active agents present in such substances. As Big Tobacco casts about for ‘reduced-risk’ products, DehydraTECH may have a role to play.

Application of the technology extends beyond nicotine to non-psychoactive cannabinoids, vitamins and non-steroidal anti-inflammatory drugs (NSAIDs), and Lexaria has licensed the technology to a number of companies, including chocolate maker Nuka Enterprises; cannabis beverage manufacturer GP Holdings; and Biolog, which markets hemp-based, cannabidiol (CBD)-infused products and vitamins. Lexaria is expected to sign 6-12 more licensing agreements in 2018. These are typically six-figure contracts in the first year and potentially seven-figure contracts over the life of the deals. Licensing is a lucrative business model that typically yields 90-100 percent of revenues as profit. The tobacco industry generates about 20 times more revenue than the cannabis industry, and Lexaria’s strategy of disrupting nicotine delivery methods could reasonably be many-fold more impactful than its cannabinoid licensing business.

At present, Lexaria is the only company in the world that has been awarded a patent for the improved (oral or ingestible, including pills) delivery of all non-psychoactive cannabinoids. Patents have been awarded in the U.S. and Australia and are pending in 40 more countries. This puts the company in the unusually advantageous position of owning proprietary technology that can deliver a vast range of non-psychoactive cannabinoid-based drugs. Rather than being a competitor to clinical stage biotech companies, Lexaria is in effect an enabler and partner.

For more information, visit the company’s website at www.LexariaEnergy.com

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