Heated Tobacco Technology: Science, Behavior and Avoiding Unintended Consequences

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Heated Tobacco Technology: Science, Behavior and Avoiding Unintended Consequences Global Forum on Nicotine 2017 Moira Gilchrist PhD Philip Morris International June 16th 2017

Important Information Reduced-Risk Products ( RRPs ) is the term we use to refer to products that present, are likely to present, or have the potential to present less risk of harm to smokers who switch to these products versus continued smoking. Our contact details We have a range of RRPs in various stages of development, scientific assessment and commercialization. Because our RRPs do not burn tobacco, they produce far lower quantities of harmful and potentially harmful compounds than found in cigarette smoke.

Heating Tobacco Rather than Burning It The Tobacco Heating System 2.2 (THS2.2, currently commercialized as IQOS in >25 countries) is designed and has been demonstrated to: Heat tobacco without combustion Preserve elements of the taste, sensory experience, nicotine delivery profile and ritual characteristics of cigarettes

PMI s Scientific Assessment Approach Post-Market Studies and Surveillance Consumer Perception and Behavior Assessment Clinical Trials Systems Toxicology Assessment Standard Toxicology Assessment Aerosol Chemistry and Physics Product Design and Control Principles Reduced Population Harm Correct Understanding, Usage and impact in Different Populations Reduced Exposure & Risk in Humans Reduced Risk in Laboratory Models Reduced Toxicity in Laboratory Models Reduced Formation of Harmful and Potentially Harmful Constituents Absence of Combustion Source: Smith, M.R., et al., Evaluation of the Tobacco Heating System 2.2. Part 1: Description of the system and the scientific assessment program. Regulatory Toxicology and Pharmacology (2016). http://dx.doi.org/10.1016/j.yrtph.2016.07.006 4

Reduced Harm / Risk Concept: What We Need to Demonstrate for Tobacco Heating System [Min] NRT THS Risk Continuum CC [Max] Minimize Risk to the Individual Maximize Current Adult Smoker Acceptance and Proper Use [Min] NRT Acceptance and Proper Use by Current Adult Smokers THS CC [Max] For Illustration Purposes Only

Reduced Formation: Rationale and Results 100% 75% 3R4F Reference Cigarette Measured 54 harmful and potentially harmful constituents and 4 additional analytes using validated methods in accredited facilities, both internally and at an independent laboratory. Health Canada list (total 47) 47 50% 25% > 90% reduction > 95% reduction Smoke Constituents with established Biomarkers of Exposure Smoke Constituents formed < 400 C Smoke Constituents formed > 400 C +2 +4 +5 0% FDA Priority List (18 chemicals) Carcinogens** (15 chemicals) THS2.2 THS2.2 produces an aerosol that contains on average 90-95% lower levels of harmful and potentially harmful chemicals than smoke from a reference cigarette. Source: Schaller et al.,(2016) Evaluation of the Tobacco Heating System 2.2. Part 2: Chemical composition, genotoxicity, cytotoxicity, and physical properties of the aerosol. Regulatory Toxicology and Pharmacology, in press. (PMID: 27720919).

Non-Clinical Evidence: Approach and Rationale High Level Adverse Outcome Pathway of Cigarette Smoking Chronic Cigarette Smoke Exposure Molecular changes Disruption of Biological Mechanism Cell / Tissue Changes Physiological changes Disease (CVD, COPD, Lung cancer) Population Harm Analytical Chemistry Biological Networks Systems Biology/Toxicology Medicine Public Health Biomarkers of Exposure Proteomics Transcriptomics Genomics Lipidomics Oxidative stress Inflammation Cell death Cell proliferation Body weights Plethysmography Lung Function Atherosclerotic Plaque formation Cytology Differential cell count Gross pathology Histopathology

Non-Clinical Evidence: Snapshot of Results Mechanistic Evidence for Reduced Harm to the Lung Non-clinical Evidence for Reduced Cardiovascular Disease Risk THS2.2 aerosol is over 10 times less active than reference cigarette smoke in key mechanisms leading to lung damage. in situ aortic arch plaque measurements (μct) In animal models, switching to THS2.2 aerosol from cigarette smoke reduces levels of cardiovascular disease risk markers to levels similar to those seen in a model of smoking cessation.

Clinical Evidence: Approach and Rationale High Level Adverse Outcome Pathway of Cigarette Smoking Chronic Cigarette Smoke Exposure Molecular changes Disruption of Biological Mechanism Cell / Tissue Changes Physiological changes Disease (CVD, COPD, Lung cancer) Population Harm Analytical Chemistry Biological Networks Systems Biology/Toxicology Medicine Public Health Biomarkers of Exposure: CO NNN NNK Benzene 1,3-Butadiene Acrolein Acrylonitrile 4-ABP B[a]P Pyrene 1-NA 2-NA ortho-toluidine Ethylene Oxide Crotonaldehyde sicam 11-DTX-B2 8-Epi-PGF2-α HDL White Blood Cell Count Lung Function (FEV1) COHb Total NNAL Population Impact Modeling Tobacco-related harm and disease is not defined by a single endpoint or even endpoints reflective of a single disease or biological mechanism. In the absence of epidemiological evidence, a set of markers that are effected by smoking, are linked to smoking-related disease and are reversible after smoking cessation are required.

Clinical Evidence: Reduced Exposure 0 o-tol 1-OHP % Reduction in Biomarkers of Exposure After Switching for Three Months 3-HPMA THS2.2 vs. Cigarette Cessation vs. Cigarette Total NNAL HEMA HMPMA COHb B[a]P 4-ABP CEMA NNN 2-NA S-PMA MHBMA 1-NA (20) (40) (60) (80) (100) (41) (32) (48) (45) (46) (61) (77) (85) (55)(56) (50)(48) (48)(47) (67)(66) (76) (79) (91)(90) Levels of exposure to harmful and potentially harmful chemicals when smokers switch to THS2.2 approach the levels observed in those who quit smoking during the study (71) (94) (85) (82) (87) (87) (81) (81) (94)(92) Note: These data alone do not represent a claim of reduced risk. Source: PMI Research and Development; Registered on clinicaltrials.gov: NCT 01970995

Clinical Evidence: Favorable Changes in Smoker s Health Profile in a 3-Month Study Disease Mechanisms Lipid Metabolism (HDL-C) Inflammation (WBC) Expected Direction of Change Effect of Cessation Effect of Switching to THS2.2 Increase 6.4 mg/dl 4.5 mg/dl Decrease -0.40 10 9 /L -0.57 10 9 /L Direction of Change Same direction as cessation Same direction as cessation These studies measured the levels of 6 clinical risk markers closely associated with cardiovascular and lung disease. Airway Impairment (FEV 1 ) Endothelial Dysfunction (sicam-1) Oxidative Stress (8-epi-PGF 2α ) Clotting (11-DTX-B 2 ) Increase 1.93% pred 1.9% pred Decrease 10.9 % 8.7 % Decrease 5.9 % 12.7 % Decrease 19.4 % 9.0 % Same direction as cessation Same direction as cessation Same direction as cessation Same direction as cessation Measurements of these markers in smokers who switched to THS2.2 showed that the majority of beneficial effects that were seen in the smoking cessation arm were preserved. Note: These data alone do not represent a claim of reduced risk. Source: PMI Research and Development; Registered on clinicaltrials.gov: NCT 01970995

Adult Consumer Perception and Behavior: Approach and Results Designed to measure Risk Perception, Comprehension and Intention to Use in a Pre-Market Setting: Non-intended audiences express negligible intention to use Adult smokers correctly understand the tested reduced risk communication Effect on Tobacco Use Behavior Among Adult Smokers Effect on Tobacco Use Initiation Among Adult Non-Smokers Effect on Consumer Understanding and Perceptions Adult smokers correctly understand that THS2.2 is not without risk and is not an alternative to quitting Adult smokers react positively to the THS2.2 proposition and express sizeable intention to use

Avoiding Unintended Consequences: Dual Use, Never Smokers and Former Smokers December 2016 Adult Smoker Conversion Rates (%) 69 71 Predominant (70%-95% IQOS) Converted ( 95% IQOS) 78 78 79 80 54 56 66 65 65 72 High rates of IQOS purchasers who have either fully or predominantly converted to the product Negligible interest from unintended audiences Results from our first launch markets show non-smokers and former smokers are not purchasing the product in large numbers 15 15 12 13 14 Switz. Russia Italy Romania Portugal Japan 8 Note: Switz. is Switzerland Source: Switzerland / Russia / Italy / Romania / Japan IQOS User Panels

Avoiding Unintended Consequences: Principles for Engagement with Consumers The data indicate that THS2.2 (IQOS) has the potential to provide a risk reduction benefit for adult smokers relative to the status quo continued smoking. We are committed to responsible commercialization to ensure there is an overall benefit to public health. Our principles are: Offer the product to adult smokers who want to continue enjoying tobacco products do not offer the product to people who have never smoked or who have quit smoking. Support adult smokers in their conversion journey through education and guidance Communicate accurately and clearly to adult smokers the product is not an alternative to quitting. The best choice for consumers concerned about the health risks of smoking is to quit tobacco products altogether. to experience the benefit of the product, adult smokers should switch to it completely and abandon cigarettes permanently. The product is not risk free or a safe alternative to cigarettes, but it is a much better choice than smoking

Source: Philip Morris International Acknowledgements: Aerosol Chemistry Team Lead: Dr. Serge Maeder Standard Toxicology Team Lead: Dr. Patrick Vanscheeuwijck Systems Toxicology Team Lead: Dr. Julia Hoeng Clinical Team Lead: Dr. Frank Luedicke Chief Scientific Officer Dr. Manuel Peitsch Market Research and Consumer Behavior Team Lead: Antonio Ramazzotti