The US Food and Drug Administration on Thursday banned Juul Labs Inc. from marketing its vaping products in the US and ordered the company to remove all existing products from the market.
The products in question are the Juul vaping device and four types of pods; Virginia tobacco flavored pods at 5.0% and 3.0% nicotine strengths, and menthol flavored pods at 5.0% and 3.0% nicotine strengths, the regulator said in a statement.
The action was expected after a Wall Street Journal report on Wednesday.
“Today’s action is a further step forward in the FDA’s commitment to ensure that all e-cigarette products and electronic nicotine delivery systems currently marketed to consumers meet our public health standards,” the commissioner said. of the FDA, Dr. Robert M. Califf, in a statement.
Juul has been under regulatory scrutiny since its fruity flavors and marketing were blamed for a surge in teen vaping about four years ago. The FDA had already banned it from selling flavors like creme brulee, which proved very popular with underage smokers.
fda marketing denial orders (MDO) does not restrict the possession or use of Juul vaporizers by the individual consumer, but the company can no longer distribute them to retailers. The FDA said the applications filed by the company “lacked sufficient evidence regarding the toxicological profile of the products to show that marketing the products would be appropriate for the protection of public health.”
Some of the findings in a company study “raised concerns due to insufficient and conflicting data, including those related to genotoxicity and leaching of potentially harmful chemicals from the company’s proprietary e-liquid pods, which were not addressed.” adequately and prevented the FDA from completing a full toxicology analysis. risk assessment of the products mentioned in the company’s applications,” the agency added.
Jefferies analyst Owen Bennett said Wednesday the news was a “big negative reading” for Altria Group Inc., which paid $12.8 billion in 2018 to acquire a 35% stake in Juul that valued the company at about 35,000 million dollars. Since then, Altria MO,
has wrote down the value of the bet at $1.6 billion as of March 31.
The FDA move comes at a time when US cigarette volumes are under pressure from worsening economic conditions and a shift to reduced-risk products, or RRPs, he wrote.
“Altria’s outlook is becoming more challenging due to its close to 50% share of cigarettes,” Bennett wrote in a note to clients. “At the same time, the FDA is seeking to introduce measures (such as the menthol cigarette ban in the US) to accelerate the switch to PVP. Altria is in a very tricky spot in this regard, as it needs to at least take its fair share of RRP. “
But in a new note published Thursday, Bennett said he awaits an appeal as the ban is based on insufficient toxicological evidence and not youth use, as he had hoped.
“Given this, we think it’s a good possibility that Juul could raise concerns with the court that the FDA has not adequately addressed its toxicological filing, or that it should be allowed to address the perceived perception. “insufficient and contradictory data,” he wrote.
“This may mean that the app is finally approved, with possible modifications, or, as we also suggested yesterday, it gives Juul time to merge the app with a new one with Juul2.”
Bennett pointed to other cases of suspension, such as when Turning Point Brands obtained MDOs on its e-vapor products in September 2021 that were rescinded after a court challenge.
“In addition, of the 262 MDOs listed on the FDA website under the current process, seven have been fully or partially terminated, and another eight have been suspended by a court or by the agency itself,” he wrote.
Shares of Altria trimmed early gains of as much as 2.6% to rise just 0.1% in morning trading. The stock lost more than 7% of its value on Wednesday and is down more than 12% year to date, while the S&P 500 SPX,
has fallen 21% and the Dow Jones Industrial Average DJIA,
has lost 16%.