The U.S. Food and Drug Administration banned Juul Labs Inc. on Thursday. marketed its spray products in the US and ordered the company to withdraw all existing products from the market.
The products in question are the Juul spray device and four types of pods; Virginia tobacco-flavored pods at nicotine concentrations of 5.0% and 3.0%, and menthol-flavored pods at nicotine concentrations of 5.0% and 3.0%, the regulator said in a statement .
The action was expected after a report in the Wall Street Journal on Wednesday.
“Today’s action is a further step in the FDA’s commitment to ensuring that all e-cigarette products and electronic nicotine delivery systems currently marketed to consumers meet our public health standards,” he said. said FDA Commissioner Dr. Robert M. Califf in a statement.
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Juul has been under regulatory scrutiny since its fruity flavors and marketing were blamed for an increase in teen vaping about four years ago. The FDA had already banned it from selling flavors such as creme brulee, which was very popular with underage smokers.
FDA marketing refusal (MDO) orders do not restrict the possession or use of Juul vapors by consumers, but the company can no longer distribute them to retailers. The FDA said the applications submitted by the company “lacked sufficient evidence regarding the toxicological profile of the products to show that the marketing of the products would be adequate for the protection of public health.”
Some of the findings of a company study “raised concerns due to insufficient and contradictory data, including genotoxicity and potentially harmful chemicals that were leached from the company’s patented e-liquid pods, which are not “They have been properly addressed and prevented the FDA from completing a full toxicological study. Risk assessment of the products named in the company’s applications,” the agency added.
Jefferies analyst Owen Bennett said Wednesday that the news was a “big negative read” for Altria Group Inc., which paid $ 12.8 billion in 2018 to acquire a 35% stake in Juul that went valuing the company at about $ 35 billion. Since then, Altria MO,
has lowered the value of the stake to $ 1.6 billion as of March 31.
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The FDA move comes at a time when U.S. cigarette volumes are under pressure from worsening economic conditions and switching to low-risk products, or PRR, he wrote.
“Altria’s outlook is becoming more challenging given its share of cigarettes close to 50%,” Bennett wrote in a note to customers. “At the same time, the FDA is looking to introduce measures (such as a ban on cigarette menthol in the United States) to accelerate the change to RRP. Altria is at a very difficult point in this regard, as it must at least its fair share of PR. ”
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Altria shares reduced early gains by up to 2.6% to only 0.1% increase in morning trading. The stock lost more than 7% of its value on Wednesday and fell more than 12% during the year to date, while the S&P 500 SPX,
has fallen 21% and the Dow Jones Industrial Average DJIA,
has lost 16%.
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