Why is Juul worth $ 16 billion? It's more like a cigarette than you think

The Juul E-cigarette start-up raises $ 1.2 billion against a $ 15 billion valuation – which will increase the company's value to more than $ 16 billion, Bloomberg reported last week. Why is it so precious? The sale of nicotine has been a good business model for a long time, and Juul manufactures a product that releases nicotine as a cigarette.

The video director of Verge Christian Mazza, began vaping after leaving the cigarettes that he had smoked for 15 years. At first, he did not like Juul compared to the low-nicotine e-cigs he started with. But over time, he says, "It just got the upper hand, and everything else was stored in a shelf – and the Juul became the daily driver." It's tiny, unobtrusive, and fluid e-cig does not leak. Plus, he says, "I do not know what's happening at the molecular level, but it's smoother and it's much more satisfying when you crave that nicotine."

Dieter Bohn, The Verge [Lerédacteurenchefde is in agreement. "I feel a lot more nicotine shot than other e-cigs," he says. "The fact that nicotine seems to feel a little more effective or direct than other vows means, for me at least, that it's been remarkably hard to kick it."

A nicotine shot that looks a lot more like smoking a cigarette than any other e-cigs, and it's not really a secret: the company is very proud of its patented JuulSalts approach for the delivery of nicotine. These JuulSalts are compounds called nicotine salts, which are also formed in the heat-dried tobacco leaves used to make most cigarettes.

These nicotine salts are harder to inhale than nicotine "freebase" vape nicotine – the same type of nicotine you get from smoking the air-dried tobacco used for pipes and cigars. Nicotine Freebase can be absorbed through the mouth – but it is also much less pleasant to inhale because of its 'greater physiological impact (throat and chest) and its toxicity', according to a report from the tobacco industry. 1970s.

So you can think of regular vows like cigars, and Juul like a cigarette: a lot of vape juice use nicotine freebase, but Juul, which was "created to be a satisfying alternative to cigarettes, "at these JuulSalts the nicotine easier to inhale. Juul combines free base nicotine with benzoic acid in its e-liquid, creating a chemical reaction that produces nicotine salts. Each JuulPod e-liquid cartridge contains as much nicotine as a pack of cigarettes, says the company – and it's in a form as easy to inhale as a cigarette.

For adult smokers who want to quit smoking and who still need a nicotine shot, "this is not necessarily a bad thing," says Gideon St Helen, a professor at the University of Toronto. University of California at San Francisco. "You just do not want young people to use it." The company warns of the same. "Juul is intended only for adult smokers who want to switch fuel cigarettes," said spokeswoman Victoria Davis, who calls the fight against minor vaping "a top priority for the company." To that end, Juul has pledged $ 30 million for research and education. to prevent young people from vaping. "We can not be more categorical on this point: no young or non-nicotine user should ever try Juul," she says. But the young use the Juuls, according to a wave of reports from New York Times and New Yorker . Although smoking has declined overall since 2011 for teens and teens, there is still a "worryingly high number of young people using e-cigarettes and vaping products," says FDA in a statement. . And the FDA has asked Juul Labs Inc. to give details of its products.

Juul's products contain higher doses of nicotine and lower levels of hard seed nicotine than other e-cigs, according to a new study. Chemistry professors David Peyton, Jim Pankow and graduate student Anna Duell of Portland State University tested 11 different electronic liquids. They also tested the aerosols produced by three of these liquids. To catch enough plume droplets to measure their contents, the team had to basically milk the vape with a syringe pump.

They discovered that Juul's Flavored Fluid & # 39; Fruit Medley & # 39; and 'Creme Brulee' had the highest nicotine content, but almost the lowest levels of free nicotine base, according to their recent article published in Chemical Research in Toxicology . A single fluid, called Placid, had lower levels of nicotine free base and a significantly lower nicotine content overall.

Essentially, Juul packs a bigger nicotine punch in a nicer package that other products tested by the team.

"If you've never smoked and you're trying Juul for a few days, it's a recipe for addiction," says Peyton, who calls Juul a double-edged sword. "You could make someone who has never been a smoker – or, for someone who is addicted to nicotine, this could be a way to get rid of cigarettes."

Juul's nicotine salts are patented – the patent belongs to Pax Labs, the company from which Juul was spun. And this patent is clear on why Juul uses nicotine salts: it delivers nicotine to users almost exactly like a cigarette. "[N] icotine salt formulations provide satisfaction in an individual superior to that of nicotine-free base and more comparable to satisfaction in an individual smoking a traditional cigarette," the patent states. "The maximum levels of nicotine in the blood and the total amount of nicotine delivered seem comparable to those of a traditional cigarette." Indeed, the company presented graphs illustrating its claims that nicotine salts closely match the amount of nicotine given in the blood. by a Pall Mall cigarette, compared to nicotine free base.

Pax Labs Patent Image

The Peyton and Pankow study did not compare Juul to cigarettes, but the team measured the amount of free nicotine in cigarettes there Years ago, and the levels are quite similar to those of Juul, the study reports.

Scientific research published in patents does not necessarily have to be peer reviewed, but scientists like St. Helen of UCSF are working on comparing Juul to cigarettes in independent studies. You have to "bring someone into a research department, you give him a product, and you monitor nicotine levels in the blood over time," says St Helen. Such a study would serve to verify the map published in the Juul nicotine salts patent, which show nicotine salts corresponding to the nicotine absorption curve of a Pall Mall.

Need more independent data is a common theme: vaping is so new that there is one we do not know yet, which means that people who use these products are most often left to them themselves to determine the risks and benefits. Through a massive study of the National Academies of Science, Engineering and Medicine, we know that vaping probably exposes fewer toxic chemicals than tobacco and can also reduce the risk of health problems. short term.

But, for young people, there is substantial evidence that vaping can also be an entry point for smoking ordinary cigarettes, the report says. Davis, spokesman Juul, retorts that "the use of electronic cigarettes, including Juul, has not been shown to be causally related to the use of cigarettes." But the way the most obvious to conduct a causal study – by giving a group of teens e-cigs and another nothing, then see if someone picks up cigarettes for months or years – is not ethics.

helping people quit smoking, there simply was not enough evidence for national academies to say whether vaping works better than FDA-approved disapproval aids like gum, lozenges, patches, or just cold turkey. Juul is a "switching tool" for smokers, to keep them away from combustible cigarettes, says Davis, the company's spokesperson.

According to the report of the National Academies, there is substantial evidence that the use of the electronic cigarette may result in dependence on them. In fact, The Vents of The Verge report that once they've moved on to Juul, they have a hard time stopping. "It was supposed to be a transition to get rid of what vapers call analogs – cigarettes – but it's been over two years, and we're still vaping," says Mazza of his wife's efforts and of his resignations. "When does transition completely remove nicotine?"

Part of the problem is that it's hard to start reducing the dose, says Bohn. "If you want to give up Juul, you just have to start using it less," says Bohn. "And this fucking thing is custom-designed to make you want to start using it more." The company plans to start selling weaker pods this year, according to the New Yorker but Davis Davis declined to comment on the dose that these pods would contain, or the schedule for their deployment.

Meanwhile, selling a nicotine-based product protected by a patent that users find extremely difficult to quit is a good business model. You only have to look at the last round of business financing to see how good it is.

Update July 3, 11:55 AM ET: Update to clarify the value and valuation of Juul, based on Bloomberg reports.