A regulated device to administer an addictive drug may seem counterintuitive, and when it is to be sold by a tobacco company it sounds even stranger. The Voke nicotine inhaler, manufactured by Consort Medical and approved yesterday by the UK MHRA, delivers measured doses of nicotine and is to be available on prescription, in contrast to devices such as e-cigarettes and other inhalers.
Intriguingly, British American Tobacco’s Nicoventures unit is to sell the product despite the fact that as a means to wean smokers off the cigs, Voke will – in a small way – cause a dwindling of its overall consumer base. With sales forecasts of £15-20m ($24-32m) per year, this will not be a huge problem for BAT, but approval is a positive for Consort, driving its shares up 9%.
The first nicotine inhalation device to be approved as a medical product has an unusual indication, being approved both for use in smokers who want to quit, and for those who are quite happy with their habit. As well as being prescribed by doctors, it is expected to be made available in the same kinds of shops as cigarettes.
The strategy of gaining approval as a medical product – it should be noted that the approval is not the same as a CE mark for a medical device, and as such only covers the UK – is clever, as it positions the product in the same market as e-cigarettes and indeed old-style paper cigarettes, but additionally, and more importantly, alongside quitting aids such as nicotine patches, gum and over-the-counter inhalers.
Consort turned over £95m in 2013, so the new revenue stream, if it meets analysts' expectations, could be a significant contributor. But the device’s future in the UK turns on reimbursement: it is as yet unclear whether the NHS will fund the device. The usual anti-smoking products are available both on prescription and OTC, but when it comes to getting people to stop smoking it is suspected that e-cigarettes have a far higher success rate compared with patches and the rest.
Eddy Hargreaves, an analyst covering BAT at Canaccord Genuity, told EP Vantage that the UK e-cigarette market is worth around £200m – although the figures are slightly unreliable as much of the trade is via the internet and hence hard to trace – and is showing “strong double-digit” growth. However, he said most of Voke’s sales will come thanks to its medical use.
“Voke is unique at the moment in being a [medically approved] inhaler,” Mr Hargreaves said. “Voke is going to go up against patches and gum and cessation products in the way that it is advertised and sold … rather than up against e-cigarettes.”
Launch will in fact not occur for a few months as Consort and its development partner Kind Consumer intend to make a few tweaks to the design and resubmit a separate approval application. Analysts consider this do-over as little more than a formality, with launch coming in the first half of 2015.
Analysts believe that the product could capitalise on the growing concerns about relatively unregulated e-cigarettes. And Voke does not emit a vapour, eliminating concerns around passive smoking.
If Consort and its partners can convince the UK health system that Voke can appeal to smokers as strongly as e-cigarettes, and at the same time be safer, it might just make the £15-20m analysts predict.