3 Reasons Philip Morris Could Still Receive FDA Approval For Its 'Safer' Cigarette

Philip Morris International Inc. (NYSE: PM) hopes to market the IQOS cigarette as a less harmful alternative to cigarettes, but it

The Analyst

Height Securities' Stefanie Miller.

The Thesis

The Tobacco Products Scientific Advisory Committee rejected the claim that IQOS device can reduce the risk of tobacco-related diseases. Despite the negative news, the analyst said she expects that

Philip Morris' request is in-line with FDA Commissioner Scott Gottlieb's tobacco agenda. 

She doesn't find the TPSAC's vote surprising, because the questions they were asked Thursday were "specifically phrased." 

Center for Tobacco Products and Philip Morris can use the feedback they received Thursday to work together and make revisions to the company's application.

The hearing was focused only on whether the company will be allowed to make claims of reduced risk if IQOS gets approved for the U.S. distribution, said Miller. Whether it will be permitted to sell the product is going to be decided at a different hearing next month, the analyst said. It is important to understand that TPSAC has no regulatory jurisdiction and it only advises the CTP on various questions it may have, according to Height Securities. 

The Price Action

Philip Morris jumped 2.50 percent Friday after dropping 2.81 percent Thursday.

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Photo courtesy of Philip Morris.