Philip Morris in Inhaler Deal

Top cigarette maker Philip Morris is venturing into pharmaceuticals, joining with a biotechnology firm to develop therapies for respiratory problems of premature infants and adults, the companies said Monday.

The licensing deal allows Discovery Laboratories Inc., of Warrenton, Pa., to use inhaler technology invented by Philip Morris to deliver treatments for breathing-impaired newborns and people with asthma and chronic obstructive pulmonary disease.

“We think we’ve been given an opportunity with this technology to help hundreds of thousands of babies and adults around the world,” said Robert Capetola, Discovery’s president.

The deal is a breakthrough for Chrysalis Technologies, a Philip Morris division that has sought to commercialize an invention first conceived as a smoke-free nicotine delivery device.

Discovery plans to use it to deliver respiratory therapies without the discomfort and injury that can be caused by breathing tubes.

“We’re pleased that this alliance offers us the opportunity to develop our aerosol generation technology with a new class of pulmonary medicine products,” said Jennifer Golisch of Philip Morris USA, a unit of Altria Group Inc.

Capetola said Discovery expected approval in April from the Food and Drug Administration for its lead product, Surfaxin -- a liquid replacement for naturally occurring substances, called surfactants, that cover air sacs in healthy lungs and are required for proper breathing.

Capetola said Discovery would next seek approval to combine the medicine with the Philip Morris technology -- allowing nasal inhalation of the drug. He said it could take three years before that product, Aerosurf, hits the market.

Philip Morris will have little active role, with Discovery in charge of regulatory approvals, distribution, and manufacture of drugs and equipment. The companies said Chrysalis would get royalties at an unspecified rate that would increase if net sales topped $500 million.

Philip Morris remains free to strike similar licensing deals, though drug delivery is unlikely to become a core business.

In a note to investors, Citigroup tobacco analyst Bonnie Herzog called the deal “interesting and exciting,” but said, “We don’t expect the royalties from this strategic alliance to be material for many years.”

Dr. Norman Edelman, chief medical officer for the American Lung Assn., called the deal “image buffing” and said “the tobacco industry is still killing over 400,000 Americans a year.” On the other hand, Edelman said, “if it turns out to be a useful product and saves lives, I assume physicians will use it.”

Capetola said Discovery, a 9-year-old company, only sought the best technology, and “it just so happens that they have it in terms of our product.... The pedigree of the technology was secondary.”

The Philip Morris inhaler was called the “capillary aerosol generator” when company scientists invented it in 1994. It features a small heated tube that converts drugs from liquid to a vapor that is condensed to form an aerosol mist of controlled particle size.

The Times reported Oct. 30 that the device was created as a means to deliver minute particles of nicotine deep into the lungs -- the way cigarettes do -- but without the baggage of toxic gases, metals and carcinogens that make smoking so dangerous.

But with the industry then under siege over the addictiveness of smoking, the focus of the work appeared to shift from nicotine replacement to developing the device for therapeutic drugs.

Altria shares rose 30 cents to $72.51. Discovery shares climbed 7 cents to $7.20.