Recent reports indicate that the Food and Drug Administration (FDA) is preparing to shut down e-cigarette sales from Juul across the United States.
The Wall Street Journal (WSJ) reported that the FDA is preparing to order Juul Labs to remove its e-cigarette products from the US following a two-year investigation by the regulator of the benefits of Juul's e-cigarettes and if they are effective at getting smokers to quit. The investigation also took into account health impacts, and explored if Juul's e-cigarette products provide benefits that outweigh the health damage.
According to people close to the coming decision by the FDA, the regulator is expected to announce a decision as early as next week. Following the report by the WSJ, Altria Group, a tobacco giant that owns 35% of Juul Labs, saw its stock fall by 8.5%. Notably, the FDA declined to comment on the report from the WSJ, and Juul, along with Altria, didn't respond to any questions for comment.
Furthermore, the Food and Drug Administration cleared a Juul rival for sale in the US market - British American Tobacco's Vuse Solo e-cigarettes and its tobacco-flavored pods. This clearance by the FDA was the first vapor product to receive approval from the regulator.
Additionally, Altria's investment of $1.6 billion into Juul Labs as of March, paired with the company facing pressure from regulators regarding its profits, has led analysts such as Rae Maile to believe Altria has made a mistake.
"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.
Notably, Juul Labs will have the option of appealing the decision made by the FDA, and if it does the case will go to court.
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