Up Next for Sottera

Sottera Inc. talks next steps, following FDA decision on e-cigarettes

Linda Abu-Shalback Zid, Senior Editor

SCOTTSDALE, Ariz.-- The mood at the Sottera Inc. offices in Scottsdale, Ariz. last week was a cheerful one.

And understandably so. After nearly two years in court and "millions of dollars," the company got the outcome it was seeking: For the FDA to regulate e-cigarettes as tobacco products, and not as drug delivery devices.

A letter issued to stakeholders last week by Dr. Lawrence Deyton of the FDA's Center for Tobacco Products detailed the case:

"Between 2008 and 2010, the FDA determined that certain electronic cigarettes (e-cigarettes) were unapproved drug/device combination [image-nocss] products and detained and/or refused admission to those offered for import by Sottera, Inc. and other manufacturers. Sottera, Inc. challenged that determination in court."

The letter goes on to say that the U.S. Court of Appeals for the D.C. Circuit held that e-cigarettes and other products made or derived from tobacco can be regulated as "tobacco products" under the Act, and are not drugs/devices unless they are marketed for therapeutic purposes.

And Craig Weiss, president of Sottera now can almost quote by heart what he calls his favorite part of the letter: "The government has decided not to seek further review of this decision, and FDA will comply with the jurisdictional lines established by Sottera."

Calling the decision "enormously satisfying," Weiss told Tobacco E-News his company now looks forward to a relationship with the FDA that can evolve from conflict to camaraderie.

While it is too early to know what regulations will affect e-cigarettes, he said his company already has made efforts to ensure it is "gold standard" in being a responsible electronic cigarette company, and has put in place efforts to comply with FDA regulations that exist in other categories.

For example, the company doesn't sell flavors, other than regular and menthol--complying with recent regulation around cigarettes.

Sottera also ensures that both online and brick-and-mortar retail sales of its NJOY e-cigarettes are age-verified. It also has spent more than $100,000 testing its vapor, to quantify what's in the substance, verify that there is no tar and measure constituents against the legal standards for harm.

The company also uses food-grade "good manufacturing practice" facilities to produce its liquid. "It's still a process going forward, and it's a process that's going to take some time and require a high level of sophistication, which I'm confident that our team has," Weiss said.

Weiss credits his company's legal team and internal team for its efforts with the FDA. Matt Salmon, senior vice president of external affairs, is one of those members.

Salmon, former CEO of Sottera, has taken on his new role at the company as he runs for Congress. "Having someone with Matt's stature and credibility to help facilitate that process can be extraordinarily beneficial," Weiss said.

Salmon told Tobacco E-News he is "just ecstatic" about the FDA decision, and added, "I think this industry is going to explode; I'm just really happy that we're at the front of it."

Weiss said the response from the industry thus far has been "bittersweet." Several manufacturers have thanked Sottera for "paving the way for [e-cigarettes] to be a credible industry." Others have said they "made a calculated decision not to participate in the litigation, and would sit on the sidelines and benefit from it."

As for the company's relationship with the FDA going forward, Weiss said, "We very much look forward to working with the FDA on a going-forward basis to help shape and promulgate the regulations that are forthcoming--and ultimately, of course, for us to be able to adhere and conform to them."

Salmon added, "We want to work with the FDA in a proactive, positive way that's beneficial in the regulatory process, because everybody wins then."

And the company is looking forward to what it hopes will be a bright future, anticipating a significant increased demand for its NJOY e-cigarettes and ramping up production in China, as well as ensuring quality controls to "increase the quality of the product, while increasing the supply."

"We're full steam ahead," Weiss said, adding with a laugh: "Or should I say full-vapor ahead?"