Market Overview

Juul Proposes 'Age-Locked' E-Cigarettes To Win FDA Approval

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Juul Proposes 'Age-Locked' E-Cigarettes To Win FDA Approval

Juul is planning to propose e-cigarettes that only unlock for persons above the legal age of smoking to the Food and Drug Administration as it seeks to remain in business in the United States, the Wall Street Journal reported Monday.

What Happened

The e-cigarette makers have the chance to demonstrate if their products present a net health benefit to American people over traditional tobacco products to the FDA by May 12.

According to the Journal, Juul is planning to submit a proposal for a next-generation age-locked vaping device to convince the regulatory body that its products wouldn't be used by teenagers.

The San Francisco-based company also plans to submit more than 250,000 pages on the matter, including scientific research, marketing material, and its proposal on curbing illegal underage use, a Juul official told the Journal.

Veteran tobacco products maker Altria Group Inc. (NYSE: MO), which has about 35% stake in Juul, is helping the startup with its application.

"Altria is working day by day with us, side by side, helping us extensively," the Juul official told the Journal.

Why It Matters

A National Institute of Health survey published in December last year found the use of e-cigarettes among teenagers is rising.

The FDA banned all flavored e-cigarettes in January this year, as it sought to control underage use of the vaporizers.

Juul's competitors Reynolds American Inc. and NJOY Holdings Inc. are fighting to bring their flavored products back on the market, but Juul has focussed on working around the FDA regulations rather than directly challenging them.

The company's e-cigarettes in Canada and the United Kingdom come with the ability to connect to a mobile application that verifies their age and tracks their nicotine consumption. Its planned U.S. device would be age-locked, but wouldn't be able to track nicotine consumption, according to the Journal.

Price Action

Altria's shares closed 4.55% lower at $43.8 on Monday. The shares inched higher in the after-hours session at $44.10.

 

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