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R.J. Reynolds hopes to spin nicotine into drugs

After 120 years of selling tobacco users their daily fix of nicotine, R.J. Reynolds Tobacco Holdings is now working to sell its nicotine know-how for use in drugs.

Armed with decades of sophisticated research on nicotine, the maker and marketer of Camel and Winston cigarettes has launched a venture to develop new drugs that can mimic nicotine's potent effects on the brain but without the deadly baggage of cigarette tars connected with smoking.Reynolds' new unit, called Targacept, is competing head-on with drug industry giants to develop an emerging class of powerful drugs, known as nicotinic compounds, which scientists believe can provide numerous benefits, from relieving pain to improving memory.

Nicotine is the addictive ingredient that keeps smokers coming back for more. But during the past decade, researchers, observing that diseases such as Alzheimer's and Parkinson's affect smokers a lot less than nonsmokers, realized nicotine might also have untapped potential as a useful drug. Recently, scientists have learned how to identify exactly which brain receptors are affected by nicotine, allowing the creation of compounds that target selected receptors while bypassing others, to effectively pick and choose from nicotine's many effects.

Launching the unit with a name derived from "target" and "receptors," Reynolds describes Targacept as a natural outgrowth of its many years of research. "The reason Targacept exists is the fact that we have a lot of knowledge and expertise on nicotine," says Seth Moskowitz, a spokesman at Reynolds, of Winston-Salem, N.C. "We decided it would be worth our while to apply our expertise."

The concept of tobacco titans competing with drug companies isn't a new one. In 1992, executives at British American Tobacco PLC examined the idea of getting into the nicotine patch business. Still, some scientists are surprised by Reynolds's audacity, particularly given its proclamations on nicotine just a few years ago.

In a 1996 submission to the Food and Drug Administration, which had begun its effort to regulate cigarettes on grounds that they are drug-delivery devices, Reynolds and the other tobacco companies said the pharmacological effects of nicotine "are not substantial." The submission compared nicotine with caffeine, carrots, white flour and even television and pinball machines in terms of its ability to produce an effect on the body.

Mr. Moskowitz denies the company has changed its position. "We have for a very long time acknowledged that nicotine has mild pharmacological effects, and among those effects are improvements in memory and concentration," he says. The Supreme Court has agreed to consider whether the FDA has jurisdiction over tobacco products.

While the tobacco industry has a history of keeping its scientific data under wraps, Reynolds is lifting the veil on its nicotine knowledge. At an Annapolis, Md., conference last month, Targacept scientists presented data showing that one of its patented chemicals, a nicotinic compound dubbed RJR-2403, improved both short- and long-term memory in rats -- a trait potentially useful in treating such diseases as Alzheimer's. But unlike nicotine itself, which affects many different kinds of brain receptors and has many different side effects, Targacept says RJR-2403 has "minimal" effects on heart rate, blood pressure and the digestive system. (Mr. Moskowitz says Reynolds has "published research for many years on what it knows about nicotine.")

Although Reynolds says Targacept is not a full-fledged drug company, the tobacco giant is entering a field already crowded with pharmaceuticals giants, further blurring the lines between the industries. One rival, Sibia Neurosciences Inc. of La Jolla, Calif., also has been working on nicotinic compound-based drugs to treat Alzheimer's and Parkinson's. Sibia recently inked a joint-research deal with Eli Lilly & Co. of Indianapolis, to develop drugs to treat these and other central-nervous system-disorders. Abbott Laboratories, based in North Chicago, Ill., is working on a nicotinic compound-based pain reliever it says is as effective as morphine in animals.

It will likely be years before any of these drugs reach the market, and researchers say it is too early to tell whether Reynolds will bring anything new to the party. But France's Rhone Poulenc SA signed a joint research and commercialization deal with Targacept in February. The two-year deal gives the drug giant exclusive global rights to Targacept compounds designed to treat Alzheimer's and Parkinson's diseases. Further down the line, the Reynolds unit also hopes to strike licensing agreements for its nicotine research into other areas, such as attention deficit disorder.

Reynolds is close-mouthed about Targacept's financial details, but the company is steering clear of one potentially lucrative area: Using its nicotinic compound to help the nation's 50 million smokers kick the habit. Reynolds's Mr. Moskowitz notes there are already numerous smoking-cessation products on the market.

To date most of these aids have simply provided smokers with regular nicotine in a different form. But these products still produce nicotine's negative side effects, and success rates for quitting smoking have been disappointing. (George Quesnelle, an executive at SmithKline Beecham PLC, maker of the nicotine gum and patch, says success rates for all smoking-cessation products have been similar whether they contain nicotine or not. He adds that the side effects for their products are "very minor.")

Smoking-cessation researchers are excited about the possibilities for nicotinic compounds, describing early studies that show that some can block the feeling of pleasure a smoker gets when lighting up, lessening the smoking temptation for those trying to quit.

"In the last few years there's been an explosion of knowledge about the molecular receptors of nicotine, and we're finally going to bet coming up with a whole new class of medications in the next six to 10 years," says Jed Rose, a psychopharmacologist and chief of the nicotine-research program at both the Durham, N.C.-based Veterans Affairs Medical Center and Duke University Medical Center. Mr. Rose helped invent the original nicotine patch. "As our understanding of what nicotine does in the brain improves, the treatments will accelerate."

Some top nicotine researchers applaud Reynolds' efforts with Targacept, saying it represents an opportunity for the nation's No. 2 cigarette marketer to put its nicotine savvy to socially responsible uses. "I support this endeavor 100 percent and hope RJR moves all its efforts to this area," says Neal Benowitz, chief of clinical pharmacology at the University of California at San Francisco School of Medicine and one of the country's top experts on nicotine.

But other scientists wonder whether Targacept's mission will be co-opted by the agenda of its parent, which sold $5.6 billion in tobacco products last year. The critics point out, for example, that many kids trying cigarettes for the first time are turned off because of the nausea created by the nicotine -- a negative side effect that Targacept is working to eliminate.

"How can a unit of a company have a primary goal of health improvement when its parent is Reynolds?" says Jack Henningfield, associate professor of behavioral biology at Johns Hopkins University and a drug industry consultant. "I don't understand how they can do that, especially when the parent is creating tobacco addicts."

Reynolds' Mr. Moskowitz counters that Targacept's goals are independent from those of its parent. "Targacept is totally separate and apart from our cigarette business," he says. "We're not doing any work in Targacept with an eye to applying any of it to our cigarette business."