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PMI SCIENCE PH II_IP M OR RIS INTERN /ITI O NAL REDUCED-RI K PRODUCT SCIENTIFIC u p DAT E SEPTEMBE 2016 • ISSUE 01 Philip Morris International (PMI) is investing in th development and assessment of Reduced-Risk Products (RRPs)*, a range of non-co bustible alternatives to cigarettes with the potential to reduce individual ris and population harm in comparison with cigarette smoking.
This Scientific Update explains PM l's approach to product development and assessment, and prov±·, es an overview of the latest research, key peer-reviewed publications, and prese tations at scientific conferences.

More detailed information can be found at www.p iscience.com.
P.O INT ODUCTION P.O OU RRP PORTFOLIO P.O RECENT MILESTONES IN PM 'S RESEARCH P.O LAT~ST PUBLICATION HIGHLIGHTS P.~9 LATiEST EVENTS, INDEPENDENT RE11EWS AND STUDIES P.10 GLpssARY P.11 Bl LIOGRAPHY *Re uced-Risk Products ("RRPs") is the term we use to refer to roducts with the potential to reduce individual risk an d po ulation harm in comparison to smoki ng cigarette s. PM 's RRPs are in va riou s stages of development and co mercialization, and we are conducting extensive and rig r ous scientific studies to determine wheth er we ca n su port claims for such product s of reduced expo sure to ha mful and potentially harmful co nstitu ents in smoke, and ult mately claims of reduced disease risk, when compared to rnoking cigarettes.
Before making any such claims, we wil rigorously evaluate the full set of data from th e relevant sci ncific studi es to determine whether they substantial e re uced exposure or risk.

Any such claims may also be su ject to govern ment review and authorization, as is the ca e in the U.S. today.
Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SCIENTIFIC UPDATE SEPTEMBER 2016 • ISSUE 01 02 INTRODUCTION It is our pleasure to introduce the first Reduced -Risk Product (RRP) Scientific Update.

The report wi ll be pub lished on a regular basis to provide a summary of the latest research and developments relating to PM l's RRPs .
We recognize that cigarettes are a dangerous product, and it is well known that the best way to avoid the harms of smoking is never to start, or to quit.

Nevertheless, based on the World Health Organization's own predictions, there will be more than one billion smokers by the year 2025.'

Therefore, alternative products that significantly reduced ri sk of disease compared with cigarette smoking are a fundamental complemen t to the regulatory efforts aimed at reducing smoking prevalence.
WE HAVE BROUGHT TOGETHER OVER 300 WORLD-CLASS SCIENTISTS FROM 30 FIELDS OF EXPERTISE - INCLUDING TOXICOLOGY, SYSTEMS BIOLOGY AND MEDICINE - TO DEVELOP AND ASSESS PRODUCTS THAT HAVE THE POTENTIAL TO REDUCE INDIVIDUAL RISK AND POPULATION HARM COM PARED WITH SMOKING For this reason, PMI is investing in the development and rigorous assessment of a portfolio of potentially reduced-risk alternatives to cigarette smoking.

In fact, our objective is to replace cigarettes with RRPs as soon as possible.
The scientific work we're conducting is at the heart of this transformation.

Our approach is based on the acknowledgment that innovative products will benefit public health if they meet two conditions: first, they must significantly reduce risk of disease compared with cigarettes; and, second, they must be acceptable enough to smokers to encourage them to switch to such reduced-risk alternatives.
In order to demonstrate that switching to our RRPs results in a significant reduction in the risk of disease compared with cigarette smoking, we are following a rigorous scientific assessment program.

The program utilizes well-recognized practices of the pharmaceutical industry, as well as an innovative Systems Toxicology-based approach to risk assessment.
Our program is in line with the draft guidance fro m the U.S. Food and Drug Ad ministration for Modified-Risk Toba cco Products (MRTPs).2 Sharing and gathering feedback is an important element of ensuring that our research answers the questions society, scientific experts and regulators ask.
This Scientific Update is intended to complement our ongoing efforts to share our methodologies and findings through scientific publications, presentations at scientific conferences, and our R&D website (P MIScience.com).

We register all our clinical studies with ClinicalTrials.gov, and since 2011 we have published over 160 book chapters and articles in peer-reviewed scientific journals.

We recognize that our scientific work must also be assessed by independent experts.
We welcome such review and are committed to share scientific data for independent verification by qualified third parties.

Towards this end we are utilizing a very contemporary platform called sbvlMPROVER.com to foster the verification of both our methods and results by independent scientists.

As outlined in this issue, we have recently launched an Investigator Initiated Study program, a first step towards encouraging third parties to conduct studies with our RRPs.
In the following sections you will find summaries of some of our most recent scientific publications along with presentations made at scientific conferences and other events.

If you have any comments or questions about our science, be it about the methods we use or the results we have obtained, let us know.

We look forward to hearing from you.


Prof. Manuel C. Peitsch Chief Scientific Officer Michele Cattoni Vice President, Technology & Op erati ons RRP REFER ENCES 1 Bila no V, Gilmour S, Mo ffi et T, d'Espaignet ET, Stevens GA, Comm ar A, Tuyl F, Hudson I, Shibuya K. (20 15) Global trends and projecti ons for tobacco use, 1990- 2025: an ana lys is of sm ok in g indicators fro m the WHO Comprehensive In formatio n System s for Tobacco Control.

Lancet 385:966-76.
Lancet 385:966-76.

Food an d Drug Adm inistration (2012) Modified Ri sk Tobacco Prod uct Applications.

Vol.

77 FR 20026, Federal Register.

2 PROF. MANUEL C. PEITSCH CH IEF SCIENTIFI C OFFIC ER BIOGRAPHY Man uel Peitsch j oined PMI in 2008 after 15 years in the pharmace utical indu stry.

He obta ined hi s Ph .D.

in bioc hemistry from the Un iversity of Lausanne {Switzerland ) and sin ce 2002 is an Adjunct Professor for Bi oinfo rmatics at the University of Basel.
Additionally, Manuel co -fo unded several initiatives, including the Swiss Ins titute of Bi oinformatics w here he is Chairma n of the Boa rd.

He is an active sc ientific advisor to seve ra l aca demic a nd comme rcial entities and served as a member of the Swiss National Resea rch Council between 2004 and 2010.

Linked In MICHELE CATTONI VICE PRESIDENT, TECHNOLOGY & OPERATIONS RRP BIOGRAPHY Michele Cattoni obtain ed an engineering degree in Microtechno logy and j oined PMI in 1991.
In ove r 25 years he has acc um ulated a broad set of skills a nd experiences including engineering, pro duct developm ent, man ufactu ri ng scale up and com pl ex indu stri al production.

He has also led highly tech nica l teams of engineers and scientists in R& D as well as large multi -factory operations th ro ughout Euro pe.

Michele rece ntly led the developm ent and implementation of PM l's RRP prod uction capability and prod uct comme rcialization.
He was appointed Vice Pres ident, Technology & Operations Reduced Ri sk Pro ducts, in 201 S. Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SCIENTIFIC UPDATE SEPTEMBER 2016 • ISSUE 01 03 RRP DEVELOPMENT AND ASSESSMENT AT PMI A RIGOROUS STEP-BY-STEP PRODUCT ASSESSMENT PROGRAM Our aim at PMI is to develop a range of RRPs as alternatives to cigarettes that are both scientifically demonstrated to reduce the risk of smoking related diseases compared with cigarette smoking and sufficiently attractive to adult smokers to encourage them to switch completely.
To assess our RRPs we are taking a thorough and systematic stepwise approach which is inspired by the assessment methods used by the pharmaceutical industry and aligned with the U.S. Food and Drug Administration draft guidance for MRTP applications.'

We conduct our research in accordance with international standards and practices, such as the internationally accepted Good Laborato1y P1·actices (GLPs) and Good Cl inical Practices (GCPs).
The foundation of our assessment program consists of laboratory- based studies.

We start by demonstrating that our product designs do not cause combustion [see next section] of the nicotine-containing materials and then verify that the absence of combustion results in the formation of significantly lower levels of harmful and potentially harmful compoun ds (HPHCs) in the RRP aerosol generated.
Using long established laboratory-based tests, we then assess whether this reduced formation of HPHCs results in a reduced toxicity of the aerosol generated in comparison with cigarette smoke.

Sophisticated laboratory-based models of diseases help in determining whether a reduction in toxicity leads to a reduction in disease-relat ed endpoints as well as a parallel reduction of the impact on key biological mechanisms known to underlie smoking-related diseases.
Taken together, the laboratory-based study results permit the evaluation of the risk reduction potential of an RRP in laboratory models.

the reduced formation of HPHC in the aerosol of an RRP also leads to reduced exposure in adult s okers who switch, and whether this reduced exposure leads to the r versal of key clin ical risk markers in human subjects.
The results oft ese studies allow us to evaluate to what degree the effects of cessation re matched by switching to an RRP, both in terms of exposure reduction f nd clinical risk marker reversal.

The totality of the evidence coll~~ted in the laboratory and the clinic allows us to evaluate the risk re , uction potential of an RRP.
To evaluate the potential of our RRPs to benefit public health, we conduct perception and behavior studi~ that are designed to assess intention to use among never- and form r smokers, as well as assessing whether adult smokers correctly unders and potential product communications and have the correct perceptio of the health risks associated with switching to an RRP in compari on with ongoing smoking and cessation.
Finally, we conduct post-market studies to understand how RRPs are adopted and used once they ar introduced in the market.

These monitoring studies are supple ented with long-term clinical studies aimed at verifying that an RRP is in dee , reduced-risk compared with smoking.

REFERENCES Clinical studies conducted with adult smokers are a cornerstone of our assessment program.

These studies are designed to assess whether 3 In stitute of Medicine, 2012.
Scienti ic standards fo r studi es on modifi ed ri sk tobacco produ cts.

The National Academies Press, Was hington, DC.

FIGURE 1.
FIGURE 1.

THE RRP ASSESSMENT PROGRAM - - - - · - - - - REDUCED POPU LATIO N HARM RED UCE D EXPOS URE & RIS K REDU CED RISK IN LABORATORY MODE LS REDU CED TOX ICITY IN LABORATORY MO DELS REDUCED FORMATION OF HARMFU L AND POTENTIALLY HARMFUL CONSTITUENTS POST-MARKET SURVEILLANCE AND STUDIES Upon market introduction we m nitor product use in rea l life and conduct studies to verify that our products have a favorable impact on population harm.
CONSUMER PERCEPTION AND BEHAVIOR ASSESSMENT CLINICAL STUDIES SYSTEMS TOXICOLOGY ASSESSMENT STANDARD TOXICOLOGY ASSESSMENT AEROSOL CHEMISTRY AND PHYSICS PRODUCT DESIGN AND CONTROL PRINCIPLES We conduct extensive studie to understand an RRP's potential to benefit public health, including understan ing how different groups of people perceive an RRP's risk and the likelihoo of whethe r they will adopt and use the product instead of cigarettes.
We c n use this information to make predictions of the likely effect of commercial zing an RRP on population harm.

We conduct clinical stu les with adult smokers to assess whether the reduction in the le els or elimination of HPHCs leads to reduced exposure and, ultimat ly, reductions in disease risk markers (see clinical risk markers).
toxicity tests to assess whether the reduction in We use recognize the levels or elimi ation of HPHCs leads to a significant reduction in the toxicity of pr duct aerosol in comparison with cigarette smoke.

We employ adv need system s t oxicology methods to assess whether the re uction in HPHCs leads to a reduced impact of our product aeros I on biological mechanisms underlying smoking related disea es.

We desig our products to generate an aerosol without combus ion.
We then test our products to ensure that no combu tion occurs and that this leads to an overall and signific nt reduction in harmful and potentially harmful con sti uents (HPHCs) in the aerosol, in compari son with cigar tte smoke.

Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SCIENTIFIC UPDATE SEPTEMBER 2016 • ISSUE 01 04 A RISK FRAMEWORK FOR RRP ASSESSMENT FIGURE 2.
RISK FRAMEWORK F R RRP ASSESSMENT From epidemiology PM l's multi-tiered scientific program takes into account the wealth of epidemiological data, or population-level research, demonstrating that continued exposure to cigarette smoke leads to increases in the risk of developing smoking-related diseases, such as cardiovascular disease (CVD), chronic obstructive pulmonary disease (COPD), and lung cancer.
Epidemiology also demonstrates that this increasing health risk can be reduced gradually by smoking cessation.

This is conceptually depicted in Figure 2 by the red and green lines.

The United States Institute of Medicine states that cessation is the ''gold standard" for the assessment of an RRP, providing "an aspirational goal for risk and exposure."'
This sets the fundamental objective of an RRP: "switching to an [RRPJ must reduce the risk of developing smoking-related diseases with a risk profile approaching that of cessation," and is depicted in Figure 2 by the orange lines.

Using this framework, we are assessing the extent to which switching to our RRPs results in a reduction of exposure to HPHCs and risk of smoking-related diseases by evaluating how different they are from continued smoking and how similar they are to smoking cessation.
... SWI TCHIN G TO RRP TIME REFERENCES 3 Institute of Medicine, 2012.

Scientific standards for studies on modified risk tobacco products.

The National Academies Press, Washington, DC.

NOTE THAT THE STRAIGHT LINES USED IN THIS FIGURE ARE FOR ILLUSTRATION PURPOSES ONLY, AS THE ACCUMULATION OF DIS ASE RISK AND THE REDUCTION UPO N CESSATIO N AND SWITCHING TO AN RRP FOLLOW , IFFERENT TRAJECTORIES FOR SPECIFIC DISEASES.
Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SCI ENTIFIC UPDATE SEPTEMB ER 2016 • ISSUE 01 05 OUR PRODUCT PORTFOLIO Develop ing product s without combustion Our product development is based on technologies which produce a nicotine-containing aerosol without combustion, while continuing to deliver smokers a satisfying experience.

Experts agree that nicotine, while addictive, is not the primary cause of smoking-related diseases.
It is instead the harmful and potentially harmful constituents (HPHCs) found in cigarette smoke, most of which are associated with combustion.

The lit end of a cigarette can reach temperatures of up to 900 °c.

This high temperature causes a large number of chemical reactions to take place which breaks down the tobacco into the thousands of chemicals that appear in cigarette smoke.

Many of these chemicals are HPHCs.


If the tobacco is instead heated to temperatures of around 300 °c or lower, an aerosol is produced that is not the product of combustion.

At these lower temperatures, many of the chemical reactions associated with combustion don't take pla e. As a result, the tobacco aerosol contains significantly lower am unts of HPHCs than cigarette smoke.
We are currently developing our product platforms - two with tobacco and two without tob cco - which produce aerosol that significantly reduces or elimina es the formation of HPHCs when compared with cigarette smok , while preserving as much as possible the taste, satisfaction and ritua characteristics of cigarettes.
HEATED TOBACCO PRODUCTS NICOTINE-CO TAINING PRODUCTS PLATFORM 1 PLATFORM 2 PLATFORM 3 PLATFORM 4 ELECTRICALLY HEATED TOBACCO PRODUCT (EHTP) OR TOBACCO HEATING SYSTEM (THS) CARBON-HEATED TOBACCO PRODUCT (CHTP) NICOTINE DELIVERY SYSTEM E-VAPOR PRODUCTS DESCRIPTION Uses an electrically controlled heating mechanism to precisely heat a specially designed tobacco stick, at operating temperatures well below combustion, generat ing a nicotine-containing aerosol.
ASSESSMENT PROGRESS Laboratory-based studies have been completed.

Clinical studies are well advanced .

Perception and behavioral studies nearing completion .

Indoor air quality studies completed.

Post market surveillance and studies ongoing.

DESCRIPTION Uses a carbon tip heat-source to precisely heat tobacco at temperatures well below combustion.
A proprietary design separates the tobacco from the carbon heat source and provides an effective and controlled temperature transfer to generate a nicotine-containing aerosol similar to EHTP.

ASSESSMENT PROGRESS Lab oratory-based and clinical studies are ongoing with the current version.

The products depicted are subject to ongo ing development and therefore the visuals are illustrative and do not necessarily represent the latest stages of product development.
DESCRIPTION Based on technology we acquired from Professor Jed Rose of Duke University - co inventor of the nicotine pate - and other co-inventors in rray 2011.

This product creates ~c aerosol of nicotine salt form d by the chemical reaction of nicotine with a weak organi acid and replicates the feel and r tual of smoking.

ASSESSMENT PROGRESS Laboratory-based and clinic studies are ongoing.
DESCRIPTION Battery-powered devices that contain no tobacco and instead produce an aerosol by vaporizing a liquid nicotine solution.

Also known as e-cigarettes.

Besides current generation technology, we are also developing next generation technologies to address the challenges presented by products currently on the market, such as manufacturing processes and product performance consistency.

ASSESSMENT PROGRESS Laboratory-based studies are under way.

Indoor air quality pilot study completed.


Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SCI ENTIF IC UPDATE SEPTEMB ER 2016 • ISSUE 01 06 RECENT MILESTONES IN PMl'S RESEARCH Focus on: Red uced expos ure stud ies w it h the Electrica lly Heated Tobacco Product (E HTP) We recently completed two three-month reduced-exposure clinical studies in Japan• and the U.S.', which represent a core element of our clinical evidence program.
They serve as important additions to two shorter term five-day reduced exposure studies," as they were designed to test the sustainability of exposure reduction in ambulatory mode.

We have previously completed pharmacokinetic and pharmacodynamic clinical studies' demonstrating nicotine uptake and suppression of the urge to smoke similar to cigarettes.
Reduced exposure studies are designed to help us understand the extent to which adult smokers who switch from cigarettes to our Electrically Heated Tobacco Product (EHTP) reduce their exposure to measured HPHCs.
We compared these levels of exposure to those measured in smokers who continued to use cigarettes and those who quit smoking for the duration of the study, the "gold standard" for risk reduction .• These studies were carried out over three months, and each involved 160 healthy adult smokers who were split into three groups: one group of 40 who continued smoking; another group of 40 who were asked to stop smoking for the duration of the study; and a final group of 80 smokers who switched to EHTP.
The first five days of the study were spent in the clinic, and thereafter participants went home and were followed up at day 30, 60 and 90.

We measured biomarkers of exposure to HPHCs, the substances the body generates when exposed to chemicals found in cigarette smoke.

As is customary in clinical trials, PMI outsourced the studies to contract research organizations, which also conduct studies on behalf of organizations like pharmaceutical companies.
The Japan study, for example, was conducted by Osaki Hospital Tokyo Heart Center from August 2013 to July 2014, and the U.S. study was conducted from December 2013 to October 2014 in Daytona Beach, Florida, and Dallas, Texas, by Covance.

These studies, like our entire clinical program, were conducted according to internationally recognized Good Clinical Practices.
Biomarkers of exposure were selected based on well-established criteria, such as covering a broad range of chemical classes, their presence in cigarette smoke and their relationship to EHTP aerosol.

Importantly, participants were allowed to smoke cigarettes or use EHTP without limitation .
• RESULTS SHOW REDUCTIONS IN EXPOSURE TO HPHCS APPROACH LEVELS OBSERVED IN SMOKERS WHO QUIT REFEREN CES Information about th e Japan study can be fo und on Cli nicalTrials.gov under th e identifier NCTOl 97099 5, https://clinicaltrial s.gov/ct 2/show/NCT01970995?term =nct01 970995&rank= 1.

Information about th e United Stat es study can be found on ClinicalTri als.gov under the identifier NCTOl 989 156, https://cli nica ltrials.gov/c t2/show/record/NCT01989 156'term =ZR H M-REXA&rank= 1.
Reduced exposure five-day stud ies: http://www.clinicaltrials.gov/show/NCT01959932, http: //www.clinicaltria ls.gov/show/ NCTOl 970982.

Pharma co kin etic and ph armaco dynami c clinical studie s: http://ClinicalTrials.gov/sl1ow/N CT01967706, http://ClinicalTrials.

gov/show/NCTOl 959607, http://Clin ica lTrials.gov/show/N CT01 967719, http:i/ClinicalTrials.gov/show/NCTOl 967732.

U.S.

In stitute of Medi cin e, Scienti fic Standard s for Studi es on Mod ifi ed Ri sk Tobacco Prod ucts (2012).
STUDIES ARE WELL ADVA N CED REDU CED EXPOSURE STUDY 160 HEALTH Y ADULT SMOKERS INVOLVED IN EACH STUDY SMOKERS DIVIDED INTO THREE GROUPS: CONTINUED SMOK ING, SMOKING CESSATION AND SWITCHING TO EHTP THREE-MONTH STU DIES - IN ITIAL 5 DAYS SPENT IN THE CLINIC, FOLLOWED BY PATIENT FOLLOW UP AT HOME AT DAY 30, 60 AND 90 ALLOWED TO SMOKE CIGARETTES OR US E EHTP WI TH OUT LIM ITATION (DEPENDENT ON ASS IGNED GROUP) BIOMARKERS MEASURED WERE REPRESENTATIVE OF THE CLASSES OF HARMFUL CHEMICALS FROM SMOKING Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED -RISK PRODUCT SC IENTIFIC UPDATE SEPTEMBER 2016 • ISSUE 01 07 The re · ults of these studies all ow us to concluae that adu lt smokers who switched to EHTf reduced their exposure to a range of HPHC~W levels that approach those observed in adui smokers who stopped smoking for the du ation of the study.
Both switching and q itting resulted in substantial exposure red uc ions compared with adu lt smokers who contin ed smoking during the study.

In addition to the biomarkers of exposure, we also ~ easured six clini ca l ri sk mark ers closely associ ted with smoking-related diseases, all of h ich were chosen based on extensive literatGre reviews .

The maj ority of the bene ficia l qffects of cessation were also observed in smokers who switched to EHTP within three months.
We plan to submit this study for p er-reviewed publication in a scientific journal th is year .

Our ext step is to fina lize a larger and more long- erm exposure response study that is curre t ly ongoing.

Th is study is aimed at mea uring the b iological changes in smokers who w itch to EHTP.
RESULTS FROM THE JAPAN STUDY FOR FOUR KEY BIOMARKERS OF EXPOSURE Adu lt smokers randomized to cigarettes or EHTP were free to use the product as often as they wished, in the cli n ic (5 days) and then ambulatory (85 days).

• Continued smoking • Smoking cessation • EHTP CARBON MON OXIDE - COH B (% ) BE NZENE - S-PM A (PG/MG CREATI N INE) ... e= 5 4 L 3 2 7 6 0 • • 2,000 • 1,600 • 800 1,200 C • 400 0 DAYS 012345 30 60 90 DAYS 012345 30 ________.
• 60 • 90 ACROLEIN - 3-HPMA (NG/MG CREATINI N E) 1,3-BUTADIENE - MHBMA (PG/MG CREATININE) 1,000 800 600 400 200 0 • • _______.
• • • 6 • DAYS 0 12345 30 60 90 1,200 1,000 800 • • • 400 t 600 200 0 DAYS 0 12345 30 • .. 90 • 60 I I I Is 90-95% less toxic · laborato~-based tests coml)ared wit reference cigarette smoke Reduces the risk o~ smoking- elated d1 I I • "' I • a I • I I • "'I I I "' • In two three-month clinical studies recently carried out in Japan and the U.S., the average reduction in 15 biomarkers of exposure to corresponding HPHCs measured in smokers who switched to EHTR apj)roached those observed in smokers who quit smoking fo~ tlie duration of the study ... .
• • I I I .. • I I I Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SCIENTIFIC UPDATE SEPTEMBER 2016 • ISSUE 01 08 LATEST PUBLICATION HIGHLIGHTS COMPARISON OF THE IMPACT OF EHTPs AND CIGARETTES ON INDOOR AIR QUALITY m PUBLISH ED IN REGULATORY TOXICOLOGY AND PHARMACOLOGY ' PMI used a purpose-built room to perform studies on EHTP's impact on indoor air quality according to European ventilation standard s for office, residential and hospi tality environments.10 Using ISO-accredited methods, 11 the levels of 18 chemicals typically found in environmental tobacco smoke were compared .12 Over the course of four hours, adult smokers smoked cigarettes, used EHTP or did not use any product.
The 18 chemicals were measured before any product was used to capture initial background levels, then monitored throughout and at completion .

The use of the EHTP resulted in similar levels of substances in the air to the levels measured when no product was used, well below all measurements for cigarettes.
Only acetaldehyde and nicotine levels were increased above background concentration s, at a level 40 and 270 times lower respectively, than regulatory limits for indoor exposure in the EU .13 This study therefore concludes that use of PM l's EHTP indoors has no negative impact on overall indoor air quality.
A REPRESENTATI ON OF THE PURPOSE-BU ILT ROOM TO TEST INDOOR AIR QUALITY More information: https://www.pm iscience .com/ li brary/compar ison-impact-tobacco-heating-sys tem-22-a nd-ciga rette-i nd oo r-ai r-qua I it y REFERENCES See Bibliography, number 1.

9 10 CEN Europea n Standard EN 1S2S1.

Indoor Environmental Input Parameters fo r Design and Assessment of Energy Performance of Buildings Add ressing Indoo r Air Qu ality, Th erm al Environment, Lighting and Aco ustics.

2006.
2006.

11 All m eth ods we re accredited in 201 4 (Accreditation number STS 0045) according to ISO 17025 (Internatio nal Organization for Sta ndardizati on, 2005) by t he Swiss Accreditation Service (SAS, Bern, Switze rland).

12 The 18 substances selected for measure ments are typical markers of Environmental Tobacco Smoke (ETS) as defined by ISO standards (ISO 15593, ISO 18144, an d ISO 18145).
13 For Acetaldehyde, th e relevant reg ulation is the EU Indoor Air Qua lity guidelin e; for Nicotin e, EU's eight·hour indicative occupational exp osure limit.
SYSTEMS TOXICOLOGY-BASED ASSESSMENT OF THE CANDIDATE MODIFIED-RISK TOBAC CO PRODUCTTHS2.2 (THE COMMERCIALIZED VERSION OF THE EHTP) FOR THE ADHESION OF MONOCYTIC CELLS TO HUMAN CORO NARY ARTERIAL ENDOTHELIAL CELLS m PUBLISHED IN TOXICOLOGY" Smoking is known to accelerate the formation of atherosclerosis - a disease in which plaque builds up inside arteries - which over time can lead to severe cardiovascular disease.
An RRP must therefore be significantly less effective than cigarette smoke in triggering key mechan isms leading to development of atherosclerotic plaque.

One of the first steps leading to plaque formation is the adhesion (fusing) of monocytes - a type of white blood cell - to the cells lining the inner wall of blood vessels - known as endothelial cells.

In this publication, PMI reports on the relative impact of EHTP aerosol and cigarette smoke on thi s key mechanism of atherosclerotic plaque formation .
The study results show that for these endpoints 10 to 20 times more EHTP aerosol is required to cause effects that are similar to those caused by cigarette smoke.
EVALUATION OF BIOMARKERS OF EXPOSURE IN SMOKERS SWITCHING TO A CARBON-HEATED TOBACCO PRODUCT {CHTP): A CONTROLLED, RAN DOMIZED, OPEN -LABEL 5-DAY EXPOSURE STUDY IN VIT O SYSTEMS TOXICOLOGY ASSES MENT OF A CANDIDATE MODI IED-RISK TOBACCO PRODUCT SHOW REDUCED TOXICITY COMPARED TO A ONVENTIONAL CIGARETTE m P BUSHED IN CHEMICAL RESEARC/1 IN TOXICOLOGY " The bi logical impact of EHTP aerosol in com parisoc with cigarette smoke on human cells derivet:l from the inner lining of the bron chus irway in the respiratory tract con- - the i ducti g air into the lungs - was investigated.
Towa ds this end a platform that enables the analy is of multiple cellular toxicity endpoints was u ed, as well as a systems toxicolo gy-bat ed approach to gain deeper insights into t e molecular mechanisms underlying these endpoints.

Cells exposed to cigarette smokF showed sign ificant dose-dependent resp 9nses in most toxicity endpoints, as well as th t ir underlying biological mechanisms.
In contr st, when cells were exposed to EHTP at the s • me doses as cigarette smoke, no toxic effec s were observed.

The impact on the biolo~ical mechanisms was also significantly redu { ed following EHTP exposure compared to cidarette smoke exposure at equivalent dosef.. Taken together, the data suggest that /EHTP aerosol is significantly less toxic tha cigarette smoke.
A FR MEWORK FOR IN VITRO SYSTEMS TOX COLOGY ASSESSMENT OF E-LIQUIDS m PUBLISHED IN NICOTINE AND TOBACCO RESEARCH" m PUBLISHED IN TOXICOLOGY MECHANISMS ND METHODS " Similar to the reduced exposure clinical studies above in the Recent Milestones in PMl's Research section, exposure to HPHCs were observed for smokers switching to a prototype of the carbon heated tobacco product (CHTP) over five days in a clinic.
Healthy adult smokers were split into three groups (112 in total): continued smoking, smoking abstinence and switching to the CHTP prototype.

They remained in the controlled clinical environment for the five-day study and were allowed to use the products freely.

The nine selected biomarkers of exposure were measured once daily.
Switching to the prototype CHTP resulted in marked decreases from pre-switching to Day 5 in all biomarkers of exposure measured; reductions following switching approached the reductions experienced following smok ing cessation for the duration of the study.

See more: https://www.

pmiscience .com/l ibrary/ eva lu ati on-b ioma rke rs -exposure-smoke rs -switch i ng-ca rbon-heated-to bacco-prod uct-control led 14 See Bibliography, number 2.

15 See Bibliography, number 3.

16 See Bibliography, number 4.


17 See Bibliography, number 5.

To e able a more rigorous and con sistent ass~~sment of e-cigarettes, PM I has recently pro ~osed a framework for the in vitro sys tem toxicology assessment of e-liquids and thei aerosols.

This framework is intended to complement the analytical chemistry invlstigations of thee-liquid and aerosol conf positions and the battery of assays used in standard toxicity assessments.
Th J framework comprises three main layers: (1) ~ igh-throughput toxicity screening of e-li ~uids using primary human cell culture sysf.ems; (2) toxicity-related mechanistic an11ysis of e-liquids, and (3) toxicity-related mef hanistic analysis of aerosols using human airr ay tissue cultures grown at the air-liq uid interface.

A systems toxicology-based ap , roach is used for the in-depth analyses of t he toxicity-related mechanisms of both e-l'lquids and their aerosols.
The publication pr sents cases to demonstrate the suita- bil ty of the framework for a robust in vitro asf essment of e-liquids and their aerosols.

P~ I is now applying this framework to the as;;essment of our Nicotine Delivery System antl E-Vapour products.
· Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SCIENTIFIC UPDATE SEPTEMBER 2016 • ISSUE 01 09 LATEST EVENTS, INDEPENDENT REVIEWS AND STUDIES \NOE ENDENT REVIEWS: EXPERT OPIN ONS CONFIRMING LACK OF COM UST\ON IN THE ELECTRICALLY HEAT D TOBACCO PRODUCT l without combustion, widely recog PMl's RPs are designed to generate an aerosi nized s the main origin of harmful chemicals in cig rette smoke.
EHTP heats tobacco to aroul d 300°C, Well belOW the 900°C in the lit end o a combustible cigarette.

PMI scientists have , eveloped a series of tests that have consi tently demonstrated that no combus tion occurs during use of the EHTP.

In ord er to obtain independent verification of ou conclusion that no combustion takes place in EHTP, we commissioned a variety of indivi dual scientists and institutions - whose 1 expertise lies in combustion and the prop ertieJ.
of heated substances - to review our me] ods and measurements.

These include Prof. Osamu Fujita, Vice President of the Com ustion Society of Japan and committee me ber of the International Combustion ln stitu e, as well as other experts from the U.S., Italy nd Poland .

All of these experts conclud ed t at no combustion occurs during the use f PM l's EHTP.
See ore: https://www.pmiscience.com/news/ abse ce-combustion-pmi%E2%80%99s-heated-to- SOCIETY FOR RESEARCH ON NICOTINE AND TOBACCO ANNUAL MEETING ® CHICAGO, ILLINO IS, U.S.

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:l LJ 2- 5 MARCH 2016 The Society for Research on Nicotine and Tobacco (SRNT) is the leading association focused on tobacco specific research.

PMI presented 11 posters, including an analysis of pre-market data from five countries on how consumers use the EHTP, as well as results from our latest systems toxicology studies.
SRNT was founded in 1994 to coordinate and advance research on a broad array of topics ranging from the pharmacology of nicotine to the societal influences on use of tobacco.

It has over 1,100 members from more than 40 countries around the world.

Find out more about PMl's presence at the event here: htt ps://www.pmiscience.

com/events/society-research-nicotine-and tobacco-srnt-2016-annual-meeting SOCIETY OF TOXICOLOGY ANNUAL MEETING ® NEW ORLEANS, LO U ISIANA, U.S.

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!.l LJ 13-17 MARCH 2016 At the Society of Toxicology Annual Meeting, the largest global gathering of toxicologists - attended by more than 6,500 toxicologists from over 50 countries - PMI showcased three presentations and six posters, which included our latest results from our standard and systems toxicology programs.

Learn more about PM l's presence at the event here: https://www.pm iscience.com/ events/sot-2016-annual-meeting-and-toxexpo GLOBAL FORUM ON NICOTINE ® WARSAW, POLAND.

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:l LJ 17-18 JUNE 2016 At the Global Forum on Nicotine;one of the most well-known events on policy, science and innovation in the field of nicotine products, PMI presented its findings to date for EHTP.

Over 300 policy analysts, regulators, academics, public health professionals, consumer advocates and alternative nicotine product enterprises attended the event this year.

The theme of the conference was "Evidence, Accountability and Transparency."
PM l's Director of Scientific Engagement, Dr. Moira Gilchrist, presented the latest results on EHTP and focused on our latest research on cardiovascular disease risk assessment (as described in the Recent Milestones in PMl's Research section covering clinical risk markers).

PMI also presented five scientific posters to encourage discussions.
Learn more about PM l's presence at the event here: https://www.pmiscience.com/events/ global-forum-nicotine-2016 Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3 REDUCED-RISK PRODUCT SC IENTIFIC UPDATE SEPTEMBER 2016 • ISSUE 01 10 GLOSSARY AEROSOL COMBUSTION A gaseous suspension of fine solid or liquid parti cles.
Cigarette smoke is the result of comb ustion and contains carbon-based solid particles, whereas PM l's RRPs produce an aerosol either by heating or other technologies which do not involve combustion and do not contain solid particles.

Both cigarette smoke and noncombustible RRP emissions are aerosols, but with very different profiles.

Given the lack of a term for a liquid-only aero sol to distinguish an RRP emission from smoke, we refer to the emissions of our RRPs as aerosol.
Combustion is the process of burning a substance in oxygen.

When a cigarette is lit, the combination of tobacco (fuel) and oxygen in the air generates a se lf-susta ining combustion process that co nsumes the tobacco.

The combustion of tobacco results in the formation of smoke (which conta ins a range of chemica l constituents), heat and ash.
The high heat associated with combustio n leads to the thermal breakdown of the tobacco when it is burned, resulting in the production of many of the harmful or potentially harmful constituents (HPHCs) found in cigarette smoke.

BIOLOGICAL MECHANISM A causal chain of biological events - occurring at the molecular or ce llular level - that produce one or more effects, e.g., the various causal chains (mechanisms) in volved in the onset of smoking-re lated diseases.
If the mechanisms of a smoking-related disease are identified, and the necessary ca u sa l links in all these mechanisms' chains are missing, then the disease will not manifest.

Many biological mechanisms involved in the onset of smoking related diseases have been represented by biological network models ar:id include in fl ammation, cell stress and cell proliferation.

BIO MARKERS A biomarker is used as a measure of how well the body responds to a treatment for a disease or condition.
Biomarkers can be classified into biomarkers of exposure and clinical risk markers.

Biomarkers of exposure: indicates exposure to a potentially hazardous substa nce.
In our case, the biomarker may be a cigarette smoke constituent or metabolite th at is measured in a biological fluid or tissue and that can provide a measure of internal dose (i.e., the amount of the constituent taken up into the body); Clinical risk markers: a measurable biochemical, physiological, behavioral, or other alteration within an organ ism that, depending upon the magnitude, can be recognized as associated with an established or possible health impairment or disease.
CLINICALTRIALS.GOV Registration of clinical trials and disclosure of results is deemed an ethical obligation.

One of the most widely used registries for clin ica l trials is the U.S. government's ClinicalTrials.gov, a website maintained by the U.S. National Institutes of Health (NIH).

PMI is registering its clinical studies on ClinicalTrials.gov.

The website provides information on publicly and privately supported clinical stud ies on a wide range of diseases and condi tion s conducted in 185 countries.
CLINICAL RISK MARKERS See Biomarkers.

EXPOSURE RESPONSE STUDY Designed to assess whether switching to an RRP leads to favorable changes in clinical risk markers that are benchmarked to smoking cessation.

Thi s is a longer-term study conducted with adu lt smokers.
FDA'S DRAFT GU IDANCE FOR INDUSTRY ON MODIFIED-RISK TOBACCO PRODUCT (MRTP) APPLICATIONS Issued in March 2012, the Draft Guidance provides details to manufacturers on the process and content for app li cation to market a modified risk tobacco product.

Th e Draft Guidance includes details on "how to organize and submit an MRTP application, what scientific stud ie s and analyses should be submitted, and what information should be collected through post-market surveillance and studies."
Although the document is a draft, the details provide direction as to the FDA's views.

GOOD CLIN ICAL PRACTICES (GCPs) GCPs are used in clinical trials throughout the globe with the aim of protecting people participating in research and ensuring quality data.

The International Conference on Harmon ization (ICH) is an international body that defines standards for designing, conducting, recording and reporting clinical trials involving human subjects.
Many countries have adopted GCP principle s as laws and/or regu lations.

PM l's clinical stud ie s are designed and conducted in line with the requirements of the ICH GCPs.

GOOD LABORATORY PRACTICES (GLPs) GLPs embody a set of principles that provide a framework within which nonclinical studies are planned, performed, monitored, recorded, reported and archived.
GLPs help assure regulatory authorities that the data submitted are a true reflection of the re sults obtained during the study and can therefore be relied upon when making ri sk/ safety assessments.

Our nonclinical assessment facilities in Switzerland and Singapore are certified by the relevant authorities as GLP compliant.

CLIN ICAL STUDIES Clinical research is research that involves humans (or material of human origin).
PMI is conducting clinical research following well-designed protocols, focusing on exposure to harmful and potentially harmful constituents (HPHCs) and biomarkers that are relevant to assessing the risk of smoking- related disease.

Evidence from both short- and long-term studies wi ll be the key evidence used to supp ort claims that switching from cigarettes to our RRP products reduces the risk of smoking-related diseases and approaches the risk profile of cessation.
HARMFUL AND POTENTIALLY HARMFUL CONSTITUENTS (HPHCs) Th e constituents in tobacco products and tobacco product emissi ons that ca use or have the potential to cause harm.

Organizations such as the FDA have identified lists of harmful and potentially harmful constituents (HPHCs) in tobacco and cigarette smoke.

These include acrolein, benzene, carbon monoxide, tobacco specific nitrosamines, cadmium and arsenic.

Many (but not all) of the HPHCs are associated with combustion.
MODIFIED-RISK TOBACCO PROD CTS (MRTPs) Th e term used to classify reduced-risk products in the U.S. Tobacco ontrol Act, which granted to the ·mA authority to regulate obacco products and to authorize claims of reduced risk.

The tatute defines modified-risk tobacco products as "any tob cco product that is sold or distributed for use to reduce harm or he risk of tobacco-related diSease associated with commer 'ally marketed tobacco products."
PEER REVIEW ArticlesJ eviewed by independent experts in the appropriate field bef re the article is published in order to ensure the article's redibility and quality of science.

RED CED-RISK PRODUCTS (RRPs) Redu ce<j!-Risk Products (RRPs) is the term PMI uses to refer to prodbcts with the potential to reduce individual ri sk and population harm in comparison to smoking cigarettes.
PM l's R8Ps are in various stages of development and commlcialization, and PMI is conducting extensive and rigorou scientific studies to determine whether we can suppo claims for such products of reduced exposure to harmfu and potentially harmful constituents (HPHCs) in smoke nd, ultimately, claims of reduced disease risk, when compa ed w ith smoki ng cigarettes.
Before making any such claims, e will rigorously evaluate the full set of data from the rel vant scientific studies to determine whether they substa tiate reduced exposure or ri sk.

Any such claims may also b subject to government review and authorization, as is the ca e in the U.S. today.

REF RENCE CIGARETIE A sta n ard cigarette for laboratory testing provided by the Unive sity of Kentucky.
The current version is known as 3R4F nd is used for non-clinical investigations by tobacco manu acturers, contract and government laboratories, and acade ic institutions.

STA DARO TOXICOLOGY To co pare whether the reduction in HPHCs reduces the toxicf· · of the aerosol generated by our RRP s, we perform a rang of standard toxicological assays.

For example, we have cond!

c.ted a number ofwid.ely used in vitro assays comparing the t x1C1ty of our RRPs to ogarette smoke.
These include, but are n t limited to: • T e Neutral Red Uptake cytotoxicity assay (measuring m mmalian cell toxicity) • T~e Ames bacterial mutagenicity assay (measuring bacteria c411 mutations) T~e Mouse Lymphoma mammalian mutagenicity assay ( easuring mutations in mammalian cells) We ave also conducted in vivo assays of different durations, inclu ing acute and repeated dose inhalation studies in acco dance with Organization for Economic Co-operation and Dev lopment (OECD) Test Guidelines.
SY TEMS TOXICOLOGY rther refine our understanding of the biological impact To t of o r products, PMI uses an approach known as systems tax i ology," which integrates standard toxicology with adv need experimental and computationa l methods (including larg -sca le molecular measurements, imaging technologies, ma hematical modeling and computational biology) to identify the iological mechanisms triggered by exposure to toxic sub tances and quantify their biological impact.
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Systems toxicology assessment of the b ological impact of a candidate Modified Ri sk Tobacco Product on human organotypic oral epithelial cultu res.

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(@PMI Science : Pubmed ) - doi:10.4137/GRSB.539076 This Scientific Update is issued for the purpose of publi shing and disseminating scientific information and not for advertising or mark eting , urposes regarding tobacco or nicotine containing produ cts.
The content of this Scientific Update is not and shou ld not be regarded as an offer to se ll, or a solicitation of an offer to buy, any.droctuct of PMI or its affiliates.

Th e content on this Scientific Update is also not and should not be regarded as a promise, warranty, characterization or guarantee regarding any prod uct of P/ 1 or its affiliates.
FOR PRESS I NQU I RIES FO R SCI ENTI FIC INQUIR IES FOR M ORE INF OIRMATIO N FO LLOW US ON MED IA@PML COM +41 (0)58 242 4500 CONTACT@PMISCIENCE.COM PMISCIENC .CO M TWITTER LINKED IN Vaporised Nicotine Products Bill 2017Submission 64 - Attachment 3