UPDATE 2-BAT\'s novel e-cigarette rival wins UK medical approval.
* Cigarette-shaped Voke Inhaler wins licence from MHRA
* Licensing amendment needed before probably 2015 launch
* No heat or visible vapour, in contrast to e-cigarettes
* BAT unit working with Kind Consumer, Consort Medical (Adds analyst comments, more on commodity , backers)
By Ben Hirschler
LONDON, Sept 12 (Reuters) - A new nicotine inhaler to be sold by British American Tobacco has been licensed in the UK as a medicinal commodity , marking the arrival of a novel alternative to the fast-growing market for electronic cigarettes.
The cigarette-shaped Voke Inhaler represents a further move by one of the globe 's largest tobacco companies to defend its turf in a rapidly changing market. Since it involves no heat, electronics or battery it is not classified as an e-cigarette.
As a medicinal commodity delivering a precise dose of nicotine, it could be prescribed by medics for patients trying to quit smoking. Industry analysts anticipate it to be launched in the primary half of next year.
The uptake of e-cigarettes, which use battery-powered cartridges to produce a nicotine-laced vapour, has rocketed in the past two years and the market is estimated to be worth $3.5 billion a year - but there is fierce discussion regarding the risks.
BAT, the globe 's second- largest cigarette maker with brands like Dunhill and Lucky Strike, already sells a conventional e-cigarette called Vype, which was promoted in the primary British TV adverts by a tobacco company in more than two decades.
The new Voke commodity was developed for BAT by Kind Consumer, a private company whose backers include previous Tesco boss Terry Leahy, one-time Sainsbury chairman Peter Davis and venture capitalist Jon Moulton.
While Voke has a licence from the Medicines and Healthcare products Regulatory Agency (MHRA), the authority is required to approve a modified licence to enable full-scale commercialisation by BAT's nicotine substitute division Nicoventures, the companies stated on Friday.
Kevin Bridgman, chief medical officer at Nicoventures, stated the additional licence was needed for automated manufacture and the further regulatory step was probably to take some months. Only after that will the commodity be ready for launch in Britain.
Eddy Hargreaves, an analyst at broker Canaccord Genuity, stated the improvement of Voke showed how 'Big Tobacco' was pursuing multiple nicotine alternatives, although he saw the new inhaler as smaller seller than e-cigarettes.
However, as the just e-cigarette-type device on the market with regulatory backing, Nicholas Keher of Investec stated it could be 'a game-changer'.
LOOKING TO OTHER MARKETS
Voke contains a breath-activated micro-valve that does away with the need for electronics or heat and is licensed for use to relieve nicotine craving in smokers who wish to quit the habit.
It consists of a cigarette-sized stick in a box the size of a pack of 20 cigarettes, which also contains a pressurised canister containing 20 refills of pharmaceutical grade nicotine.
Shares in BAT's partner Consort Medical, which has a manufacturing agreement for the commodity and whose Bespak unit has experience in making asthma inhalers, rose more than 9 percent on best news of the MHRA green light.
For BAT, whose shares were up 0.6 percent by 1200 GMT, the improvement of Voke is part of a strategy to hedge its bets as its core tobacco business declines in Western markets, where many customers are quitting smoking.
Bridgman stated Voke would suit many individuals who want to quit smoking but are still wary regarding e-cigarettes.
'The fact that it has been licensed by the medicines regulator provides the assurances around quality and safety that many smokers are looking for ,' he said to Reuters.
'I'm fairly confident that most e-cigarettes contain fewer toxins than conventional cigarettes, but the trouble is that without standards and without someone overseeing things then customers can't be sure.'
BAT is also looking at rolling out the Voke Inhaler in other markets, although Bridgman refused to go into details.
The device is seen as a competitor to both e-cigarettes and nicotine-replacement therapies, like gum and patches, too as Johnson & Johnson's current Nicorette Inhalator, which is not designed as an imitation cigarette.
The potential risks from e-cigarettes were highlighted by the World Health Organization past month , which pushed for stiff regulation too as bans on their indoor use, advertising and sales to minors.
It is ambiguous how widely BAT's new commodity will be accepted by customers , since it offers a different experience to e-cigarettes. Unlike an e-cigarette, the Voke does not produce a visible vapour when inhaled, although it does reproduce other aspects of smoking, including a typical 'throat catch'.
Bridgman refused to state how much the new commodity would expense , citing commercial considerations ahead of its launch, but stated it would be 'competitive' with ordinary cigarettes. (Additional reporting by Paul Sandle; Editing by Greg Mahlich and David Clarke)
