...And A Drug May Help Smokers Quit

Obviously, widespread health concerns over cigarette smoking is a big part of the reason why RJR's stock has not done better. It is also one reason why DynaGen, a small, emerging biotech company, has attracted some big players. The company, which has yet to earn a nickel, has developed a product that it hopes will enable smokers to say no to cigarettes without having to use nicotine-based antidotes, such as the patch.

Like other biotechs, DynaGen shares have been clobbered, from 7 1/4 in January to 5 3/4 on Mar. 31. But some fund managers have taken advantage of the drop to buy into DynaGen.

Dr. Daniel Hamilton, a biotech consultant to RAS Securities, predicts that the company's antismoking product, NicErase, will be a blockbuster drug. He expects DynaGen to start by May the final clinical test for NicErase, a non-nicotine and nonaddictive smoking-cessation product. The test will be conducted by Dr. John Hughes, professor of psychiatry and director of the Alcohol & Drug Abuse Clinic at the University of Vermont.

In the phase-two test, NicErase showed no adverse effects even among patients who continued to smoke, notes Hamilton. NicErase is administered through weekly injections for six weeks. It has several advantages, he says. "Health-care clinics and physicians will prefer the NicErase over nicotine-based products, particularly for patients with coronary and arterial disease problems that could be aggravated by an exposure to nicotine." NicErase, he says, contains an ingredient that binds itself to the brain's nicotine receptor, which eventually suppresses the craving for nicotine.