The stake Altria bought for $12.8 billion in 2018 is now worth $450 million.
Altria reduced the value of its investment in Juul Labs by about 70%, valuing it at $1.3 billion, after the U.S. Food and Drug Administration decided to pull the e-cigarette company out of the U.S. market.
The stake Altria bought for $12.8 billion in 2018 is now worth $450 million — below the level that would have allowed Altria to withdraw from the non-compete agreement and launch its own e-cigarettes. In a July 28 conference call with analysts and reporters, Altria said it had chosen not to unwind the agreement because the arrangement remained in Altria's favor.
On June 23, the FDA ordered Juul Labs to remove its e-cigarettes from U.S. stores, saying the e-cigarette maker had submitted insufficient evidence that they were fit to protect public health.
A federal appeals court then granted Juul Labs an emergency stay order to give a judge time to assess the merits of Juul's appeal. The e-cigarette company separately asked the FDA to keep its own order during the appeal.
In court filings last month, Juul said the FDA ignored more than 6,000 pages of data the company submitted about the aerosols users inhaled.
On July 5, the FDA temporarily halted the ban on Juul Labs' products, saying the Juul application had unique scientific issues that required additional review.
The agency stressed that the marketing denial order will be suspended but not revoked when e-cigarette makers appeal the agency's decision.
Altria's revenue fell 4.1% 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 business performed well in the challenging macroeconomic environment in the first half of the year," he said in a statement. "Behind Marlboro's resilience, the smokable products segment delivered solid revenue growth for the operating company, while our moist smokeless tobacco brands continued to drive profitability."
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