The FDA must gain approval from other federal agencies before being able to implement any of its latest policy recommendations. That process could take at least a year.

“We have been aware of regulatory proposals to reduce nicotine content for many years, and we have a full and active research and development programme in the nicotine science space, currently working on a number of projects with a range of third parties,” BAT said in a statement.

“We have notified (22nd Century) that we will be bringing this agreement to an end as we believe we have more beneficial options available to us going forward.”

22nd Century said annual royalties from BAT were capped at $25 million.

If the FDA is successful in implementing very-low-nicotine standards in traditional cigarettes, the end result could be 22nd Century having a sharp increase in revenue and a potential buyout by a global tobacco manufacturer.

However, some anti-smoking advocates have questioned how viable very-low-nicotine cigarettes will be in the marketplace. They wonder whether smokers will just consume more cigarette sticks or go to a black market to buy cigarettes with current nicotine levels made outside the U.S.