Tag: Juul Labs

Altria Slashes Juul Investment Value to $1.3 Billion

Credit: Steheap
Altria Group reduced the value of its investment in Juul Labs by nearly 70 percent, to $1.3 billion, following the Food and Drug Administration’s decision to order the e-cigarette company off the U.S. market.
The stake for which Altria paid $12.8 billion in 2018 is now valued at $450 million–below a level that allows Altria to exit a noncompete agreement and launch its own e-cigarettes. During a July 28 call with analysts and reporters, Altria said it had opted not to be released from that agreement because the arrangement was still beneficial to Altria.
On June 23, the FDA ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.”
A federal appeals court then granted Juul Labs a emergency stay of the order to give the judges time to evaluate the merits of Juul’s appeal. The e-cigarette company separately asked the FDA to stay its own order pending the appeal, and the agency complied.
In court filings last month, Juul said the FDA overlooked more than 6,000 pages of data the company had submitted on the aerosols that users inhale.
On July 5, the FDA temporarily halted its ban on Juul Labs products, saying there were scientific issues unique to the Juul application that warrant additional review.
The agency stressed that the stay suspends but does not rescind it the marketing denial order while the e-cigarette maker appeals the agency’s decision.
Altria’s revenue fell 4.1 percent to $12.44 billion in the first half of 2022, as consumers facing high inflation bought fewer cigarettes or switched from premium to discount brands.
Despite the challenges, Altria CEO Billy Gifford, was pleased with the results.
“Our tobacco businesses performed well in a challenging macroeconomic environment for the first half of the year,” he said in a statement. “The smokeable products segment delivered solid operating companies income growth behind the resilience of Marlboro, and our moist smokeless tobacco brands continued to drive profitability.
“Our financial plans for the year remain on track, and we reaffirm our guidance to deliver 2022 full-year adjusted diluted EPS in a range of $4.79 to $4.93.”
July 29, 2022
Juul Quarterly Revenues Drop 23%, Sources Say

Credit: Wirestock
Juul Labs Inc. had its first quarter revenues plummet 23% from the prior year, according to people with knowledge of the matter, according Bloomberg.
The company received $259 million of revenue for the quarter ended March 31, said the sources, who say they saw the company’s results as it seeks financing alternatives.
“As we continue to operate in the market and go through the FDA’s review process, we are in the early stages of exploring a variety of options including various potential financing alternatives to protect our business and to address the impact of the FDA’s now stayed order so we can continue offering our products to adult consumers who have or are looking to transition away from traditional cigarettes,” a spokesperson for Juul said in a statement when asked for comment by Bloomberg.
Juul Labs had a loss of $28 million in the period, compared with earnings of $29 million for the same period a year earlier, based on unadjusted results before interest, taxes, depreciation and amortization.
In June, the FDA banned Juul products on US shelves, citing a lack of evidence demonstrating the overall safety of the company’s products, and noting Juul’s “disproportionate role in the rise in youth vaping.” Then the company won an emergency court order temporarily blocking the decision, and the agency separately stayed its order, allowing the company to keep selling products.
As of the first quarter, Juul had $323 million of cash on hand, down from $428 million at the same point last year, according to people who asked not to be identified because results are confidential for closely held Juul, according to Bloomberg.
Its debt totaled approximately $2.15 billion, including a $394 million term loan due in August 2023 and around $1.7 billion of 7 percent notes due 2025 that “payment-in-kind securities,” allowing the company to delay interest payments.
July 22, 2022
FDA to Review Oversight Rules After Juul Debacle

Robert Califf / Credit: Modern Healthcare
The head of the U.S. Food and Drug Administration Tuesday said he has commissioned an independent review of the agency’s food and tobacco programs following months of criticism over its handling of the baby formula shortage and e-cigarette reviews, according to AP.
The announcement comes as FDA Commissioner Robert Califf attempts to push past several controversies that have dominated his second stint running the agency, including his issuing of a marketing denial order (MDO) to e-cigarette maker Juul Labs and later having to rescind that order.
“Fundamental questions about the structure, function, funding and leadership need to be addressed” in the agency’s programs, Califf said in a statement. The agency’s Center for Tobacco Products (CTP) is facing challenges navigating policy and enforcement issues from “an increasing number of novel products that could potentially have significant consequences for public health.”
Califf said the non-profit Reagan-Udall Foundation — a non-governmental research group created by Congress to support FDA’s work — would convene experts to deliver evaluations within 60 business days of both the food and tobacco operations.
July 19, 2022
Juul Labs Exploring Options, Including Financing

Credit: Piter2121
Juul Labs on Friday said it is in the early stages of exploring several options including financing alternatives, as the company deals with lawsuits and a potential ban on sales of its e-cigarettes by U.S. health regulators.
Bloomberg News earlier reported, citing sources, that Juul’s bankers at Centerview Partners are sounding out investors for a possible $400 million first-lien term loan due August 2023.
The proceeds would help refinance an existing term loan, which has around $394 million outstanding and matures on the same date, the report added.
A spokesperson for Juul told Reuters that the company is looking at options to protect its business and to address the “impact of the FDA’s now stayed order so we can continue offering our products to adult consumers who have or are looking to transition away from traditional cigarettes.”
Bloomberg News in its report said Juul was also considering a new $150 million second-lien term loan, which may have an August 2024 maturity, to help pay down some of the first-lien term loan and to increase liquidity, the report said.
Financing proposals for either loan are due July 21, according to the report.
Last month, the Food and Drug Administration (FDA) blocked sales of Juul e-cigarettes and said the applications “lacked sufficient evidence” to show that sale of the products would be appropriate for public health.
However, Juul appealed the agency’s order and earlier this month FDA put on hold its ban saying it would do an additional review of the company’s marketing application.
July 16, 2022
Retailers: Potential Juul Ban will Boost Other Brands

Even in the slow summer months in a college town, Aj’s Liquor in Ames, Iowa, sells roughly 160 Juul pods a week to customers between the ages of 21 to 24.
But convenience store shelves could be stripped of Juul products, depending on a decision by the U.S. Food and Drug Administration about the products’ safety, according to a story in the Iowa Capital Dispatch.
Will Montgomery, sales representative for Aj’s Liquor, said customers are already transitioning to alternative brands for nicotine products as the FDA considers a marketing denial order against Juul. Even if the ban is successful, Montgomery said he doesn’t expect electronic nicotine delivery systems to decrease in sales.
“People are still going to need nicotine,” Montgomery said.
Taylor Boland, director of communications for Kum & Go, said all Kum & Go stores ceased sales of all Juul products on June 23 but resumed sales following the federal court’s block.
“Kum & Go remains committed to selling age-restricted products responsibly and complying with local, state and federal laws, orders, and mandates,” Boland said in an email response to Iowa Capital Dispatch.
Montgomery said the majority of customers who buy Juuls aren’t using them to stop smoking. If they were, they’d buy lower-nicotine products, he said.
Payton Hartz started vaping because of how convenient the products were. After Juul limited their flavors, Hartz transitioned to an alternative disposable vape brand.
The potential ban has “opened the door for other companies to push to the front,” Hartz said. “I feel like the throw-away vapes hadn’t existed until the Juul really came around. I feel like with the laws, all it has really done is push more companies to be even with Juul.”
July 11, 2022
FDA Suspends Juul Market Ban Pending Court Appeal

Photo: steheap
The U.S. Food and Drug Administration has temporarily halted its ban on Juul Labs products while the e-cigarette maker appeals the agency’s decision, the FDA announced on Twitter.
On June 23, the FDA ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.”
A federal appeals court then granted Juul Labs a emergency stay of the order to give the judges time to evaluate the merits of Juul’s appeal. The e-cigarette company separately asked the FDA to stay its own order pending the appeal.
In a series of Twitter messages, the FDA said it had determined that there are scientific issues unique to the Juul application that warrant additional review. The agency stressed that the stay suspends but does not rescind it the marketing denial order (MDO).
The FDA initially rejected Juul’s request for a stay, prompting Juul to seek a stay of the ban in court, according to The Wall Street Journal.
In its court filing challenging the FDA ruling, Juul said the agency had overlooked more than 6,000 pages of data that the company had submitted to the FDA on the aerosols that users inhale. Juul also suggested that the FDA’s decision was influenced by political pressure.
The FDA’s marketing denial order for Juul surprised many in the vaping business, especially in the wake of marketing authorizations for vapor products manufactured by competitors such as Reynolds American Inc. and NJOY Holdings. A pioneer in the vaping segment and backed by Altria Group—a company boasting decades of experience with regulatory compliance—Juul labs appeared in a better position than most to meet the agency’s exacting standards.
Public health advocates criticized the stay of the FDA ruling.
“It is deeply disappointing and harmful to our nation’s kids that the FDA has issued an administrative stay of its marketing denial order for Juul’s e-cigarette products,” wrote Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, in a statement.
“This decision will allow the continued sale, at least for now, of the brand most responsible for creating and fueling the youth e-cigarette epidemic. We are nearly 10 months past a court-ordered deadline for the FDA to complete its review of e-cigarette marketing applications and can’t afford more delays by the FDA in removing kid-friendly products from the market.”
July 6, 2022
Bentley: Juul Exit Threatens Progress in Harm Reduction

Photo: steheap
The Food and Drug Administration’s order to remove Juul products from the U.S. market threatens progress in tobacco harm reduction, according to Guy Bentley, director of consumer freedom at the Reason Foundation.
Guy Bentley
Writing on the foundation’s website, Bentley reminds his audience that e-cigarettes are not only less harmful than their combustible counterparts, but they are also more effective in helping smokers quit than FDA-approved therapies such as nicotine gum and patches
The FDA, he writes, acknowledged as much when it authorized Vuse e-cigarettes in 2021 and claims it recognizes the role these safer nicotine alternatives can play in reducing smoking.
If the Juul order is implemented, says Bentley, many Juul users will likely return to smoking, while a portion of smokers who would have transitioned to Juul will continue to light up.
Bentley says the FDA Juul denial makes a mockery of the claim that it’s evaluating science in the best interests of public health. A study published in the New England Journal of Medicine found e-cigarettes to be twice as effective as traditional nicotine replacement therapies.
According to Bentley, the decision also punctures a hole in the logic of the FDA’s recently announced policy to reduce nicotine levels in cigarettes to minimally or non-addictive levels. Without an acceptable legal alternative, smokers may simply smoke more cigarettes to get their nicotine fix.
“By banning the most popular e-cigarette among adults, the agency’s commitment to transitioning smokers to safer alternatives rings hollow,” writes Bentley.
June 30, 2022
Reynolds’ Vuse Continues Market Gains Over Juul

The R.J. Reynolds Vapor Co. and its Vuse brand e-cigarette continues to gradually grow its U.S. market-share lead over Juul.
Vuse’s market share rose from 35.1 percent to 35.5 percent, compared with Juul declining from 33.1 percent to 32.9 percent, according to the latest Nielsen analysis of convenience-store data that covers the four-week period ending June 18.
It is the first Nielsen report since the U.S. Food and Drug Administration announced Thursday that Juul Labs would be required to remove all of its e-cigarette products from U.S. shelves. The U.S. Court of Appeals for the D.C. Circuit on Friday granted Juul Labs an emergency administrative stay of enforcement.
For the latest report, NJoy dropped from 3 percent to 2.9 percent, while Fontem Ventures’ blu eCigs slipped from 1.9 percent to 1.7 percent.
The decision to remove the No. 2-selling electronic cigarette in the country will likely to lead to a dominant market share for Vuse products. However, for the past 52 weeks, Juul remains ahead 35.1 percent to 31.2 percent, according to the Winston-Salem Journal.
“Having received the emergency temporary stay, we are now seeking the ability to continuously offer our products to adult smokers throughout our appeal with the court and science- and evidence-based engagement with our regulator,” Joe Murillo, Juul Labs’ chief regulatory officer, said Tuesday. “We remain confident in our science and evidence and believe that we will be able to demonstrate that our products do in fact meet the statutory standard of being ‘appropriate for the protection of the public health.’ “
Nielsen largely covers larger chain stores and doesn’t track local vape shop sales. For the smaller chains, the group extrapolates trends, which is why trend changes don’t appear immediately in Nielsen, such as the rise of disposable products.
Nielsen determined that Vuse recaptured the top market share in the April 23 report. That was the first time Vuse held the top market share in the Nielsen report since November 2017.
Juul’s four-week dollar sales in the latest report have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to a 12.2 percent decline in the latest report.
By comparison, Reynolds’ Vuse was up 40.5 percent in the latest report, while NJoy was down 14.1 percent and blu eCigs down 27.9 percent. Goldman Sachs analyst Bonnie Herzog has said that NJoy “refutes Nielsen’s data and methodology.”
Another factor is that e-cigarette sales overall have slumped since February 2020, when the FDA implemented its latest round of heightened regulations on the products.
June 29, 2022
Juul: FDA ‘Overlooked’ 6,000 Pages of Aerosol Data

The U.S. Food and Drug Administration overlooked a key part of Juul’s premarket tobacco product application (PMTA) when the agency ordered Juul Labs’ products off the U.S. market, according to court documents.
In court filings Tuesday, Juul said the agency overlooked more than 6,000 pages of data that the company had submitted to the FDA on the aerosols that users inhale, according to the Wall Street Journal.
Juul also said the agency failed to consider the totality of Juul’s evidence, which the company said established that the public-health benefits of Juul products significantly outweighed the potential risks.
“FDA’s order acknowledged that ‘exposure to carcinogens and other toxicants present in cigarette smoke were greatly reduced with exclusive use’ of Juul products compared with combustible cigarettes,” Juul Labs stated in court documents.
The company added that the decision was reached “against a backdrop of immense political pressure” from Congressional lawmakers who “tainted the entire agency process” by pushing for a Juul ban. Juul officials say its products are held to a different regulatory standard than those made by rivals.
“If the court does not intervene, [Juul Labs] products will disappear from store shelves and politics will have won over sound science and evidence,” the filing said.
A federal appeals court last week granted Juul Labs a temporary stay of the FDA’s marketing denial order that requires the vaping company to pull its e-cigarettes off the U.S. market.
“The purpose of this administrative stay is to give the court sufficient opportunity to consider petitioner’s forthcoming emergency motion for stay pending court review and should not be construed in any way as a ruling on the merits of that motion,” the court wrote.
The FDA has until July 7 to respond to Juul’s motion and Juul Labs has until July 12 to reply to the FDA response if submitted.
“Having received the emergency temporary stay, we are now seeking the ability to continuously offer our products to adult smokers throughout our appeal with the court and science- and evidence-based engagement with our regulator,” said Joe Murillo, Juul Labs’ chief regulatory officer.
Last week, the Wall Street Journal reported that the company is mulling a potential bankruptcy filing if the FDA ban is upheld.
June 28, 2022
Motley Fool: Juul Removal Would Crown BAT King

Photo: BAT
The removal of Juul products would hand the U.S. market to BAT (formerly British American Tobacco), according to Motley Fool.
Juul, which is partly owned by Altria Group, had been the undisputed e-cigarette leader, with a near-80 percent share of the market at the height of its success. The latest Nielsen data puts Vuse’s share at 35.1 percent compared to 33.1 percent for Juul. Third-place NJOY has a 3.1 percent share.
Last year, the U.S. International Trade Commission ruled that Philip Morris International’s IQOS heated tobacco device infringed on BAT’s patents, and that device was prohibited from being imported and sold in the U.S. Altria had partnered with PMI to market and distribute IQOS in the U.S., but the ITC ruling disrupted those plans.
Because Altria shelved its MarkTen e-cigarette brand in favor of partnering with PMI, the ITC ruling leaves it without a vapor product. The FDA has all but wiped out the rest of its investment in Juul. In 2018, Altria paid $12.8 billion for a 35 percent in the vapor company. As of the end of the first quarter of 2022, Altria had reduced the fair value of its Juul position to just $1.6 billion.
If the FDA is successful in eliminating Juul, BAT will essentially have no roadblocks in its way to market dominance.
Vuse turned profitable in the U.S. for BAT in the second half of last year, and it’s been able to grow its share because it discounted the device and the consumables to attract users. Earlier this month, BAT said it was now ready to raise prices on both. With a major competitor removed from the market, this should provide the company with a big boost in profits.
BAT’s vapor revenue grew 59 percent last year to £927 million ($1.14 billion), while its own heated tobacco products, marketed under the Glo brand, saw a 46 percent rise in sales to £853 million.
June 27, 2022