FDA to order Juul to take e-cigarettes off the market in the US – report
The US Food and Drug Administration is preparing to order Juul Labs to take its e-cigarettes off the market in the United States, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.
Shares in the tobacco giant Altria Group, which owns a 35% stake in the maker of vaping products, fell 8.5% following the report. The decision could come as early as Wednesday, the Journal report said.
Juul has faced heightened scrutiny from regulators, lawmakers and state attorneys general over the appeal of its nicotine products to teenagers. In late 2019, under pressure, the company halted US sales of several flavors.
The FDA declined to comment on the report, while Altria and Juul did not respond to requests for comment.
“This clearly comes as a surprise to the market … we would expect that Juul would appeal the decision, and remain on the market through that process, which would likely take a year or more,” said Vivien Azer, an analyst with Cowen.
The looming verdict comes nearly two years after Juul applied for approval to keep selling e-cigarettes in the country.
The FDA review of the applications was based on whether the e-cigarettes are effective in getting smokers to quit and if so whether benefits to smokers outweigh health damage to new users, including teenagers.
In October, the FDA had allowed a Juul rival, British American Tobacco, to market its Vuse Solo e-cigarettes and tobacco-flavored pods, the first vapor product to get clearance from the health regulator.
The estimated fair value of Altria’s investment in Juul was $1.6bn as of March, a fraction of the $12.8bn it paid in 2018, as a crackdown on vaping has upended the once fast-growing industry.
“The investment in Juul was always a mistake, the company paying top dollar for a business which was already clearly [on] the wrong side of the regulators,” said Rae Maile, an analyst at Panmure Gordon.