Juul e-cigarettes to be ordered off U.S. shelves - WSJ

Juul e-cigarettes to be ordered off U.S. shelves – WSJ

A woman holds a Juul electronic cigarette as she walks in New York, U.S., September 27, 2018. REUTERS/Brendan McDermid

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June 22 (Reuters) – The U.S. Food and Drug Administration is preparing to order Juul Labs Inc to withdraw its e-cigarettes from the U.S. market, the Wall Street Journal reported on Wednesday, citing people familiar with the matter. .

Shares of tobacco giant Altria Group (MO.N), which owns a 35% stake in the vaping product maker, fell 8.5% after the report. A decision could come as soon as Wednesday, according to the report.

Juul has faced increased scrutiny from regulators, lawmakers and state attorneys general over the appeal of its nicotine products to teens. Under pressure, in late 2019 the company halted US sales of several flavors.

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The FDA declined to comment on the report, while Altria and Juul did not respond to Reuters requests for comment.

“This is clearly a surprise to the market … we expect Juul to appeal the decision and stay in the market through that process, which will probably take a year or more,” said Vivien Azer, an analyst at Cowen.

The impending verdict comes nearly two years after Juul sought approval to continue selling e-cigarettes in the country.

The FDA’s review of the applications was based on whether e-cigarettes are effective in getting smokers to quit and, if so, whether the benefits to smokers outweigh the harm to the health of new users. including teenagers.

In October, the FDA had allowed Juul’s rival, British American Tobacco Plc (BATS.L), to market its Vuse Solo e-cigarettes and tobacco-flavored pods, the first vapor product to gain clearance from the health regulator. read more

The estimated fair value of Altria’s investment in Juul was $1.6 billion at the end of March, a fraction of the $12.8 billion it paid in 2018, as the crackdown on vaping has upended the once-fast-growing industry.

“The investment in Juul was always a mistake, the company paid a lot of money for a business that was already clearly (on) the wrong side of regulators,” said Rae Maile, an analyst at Panmure Gordon.

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Reporting from Praveen Paramasivam and Deborah Sophia in Bengaluru; Edited by Devika Syamnath and Sriraj Kalluvila

Our standards: the Thomson Reuters Trust Principles.

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