The US Food and Drug Administration (FDA) on Thursday banned the sale of all Juul Laabs-branded e-cigarettes in the United States in a bid to curb teenage vaping, a blow to the company it plans to say.
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The FDA found that the start-up, which had phenomenal success in the late 2010s with its USB-shaped vaporizers and fruity nicotine refills, had failed to demonstrate that the marketing of its products was “appropriate to protect public health.” . .
As a result of this decision, the company “must stop selling and distributing the products” for which it is currently licensed, and the products already in stores “must be withdrawn from sale.”
The agency had previously banned the marketing of Juul refillable vapes with flavored flavors in 2020, only allowing tobacco and menthol flavors.
She’s also been tasked with reviewing vaping products to ensure the benefits for adults, including helping people smoke with smoking traditional cigarettes, outweigh the risks for younger people.
As part of this review, she challenged the vapers of several companies, but also gave the green light to certain products presented by the companies RJ Reynolds (subsidiary of British American Tobacco), Logic or Njoy.
The ban, announced Thursday, demonstrates the FDA’s commitment to “ensure that all e-cigarettes and other products that deliver nicotine through an electronic device currently on the market meet public health standards,” the agency chief said. Robert Califf, in the press release.
To combat the effects of smoking, the FDA also announced on Tuesday that it would significantly reduce the nicotine content of cigarettes sold in the United States.
The agency doesn’t believe Juul’s products pose an “immediate risk,” but says the company hasn’t provided enough data to assess “the potential toxicological risks.”
The San Francisco-based startup says it has “provided enough information and data” to resolve all the issues raised by the agency.
She plans to seek a stay of the decision and to explore all options available to her, including an appeal.
The start-up has been accused of being instrumental in the surge in vaping among youngsters with advertising and marketing campaigns aimed particularly at high school students.
Back in 2019, under pressure from the authorities, Juul Labs suspended sales of its flavored refill packs, which are popular with young people, and committed to reviewing its marketing strategy.
The company currently holds 36% of the market share of electronic cigarettes in the United States, worth about $5.3 billion a year, according to figures from Nielsen, cited in a Goldman Sachs statement. That’s down from 2019’s 70%, but it remains number one.
According to analysts at Goldman Sachs, not only could she seek a stay of the FDA’s decision or appeal, but she could also file an amended dossier.
If the ban stays in place, Juul Laabs “still has a promising presence in other markets,” for example in Asia or Europe, they add.
The American tobacco company Altria, which owns a 35% stake in Juul Labs, fell by more than 9% on Wednesday after initial press reports about an imminent decision by the FDA. However, the stock was up about 1% as of Thursday afternoon.
The company made a big bet on Juul Labs in 2018, investing more than $12 billion in a deal that valued it at $38 billion. After that she wanted to diversify her business, sales of classic cigarettes had been declining in the USA for a long time.
But in the face of new restrictions imposed by health authorities and costly litigation, Juul Labs’ value has since melted. Altria, which already has more than $11 billion in charges on its books for the ill-fated investment, estimates the start-up was worth less than $5 billion at the end of March.