NEW YORK, NY / ACCESSWIRE / January 26, 2018 / It was a grim day for shares of Philip Morris and its parent company Altria Group after FDA advisors remarked that Philip Morris' iQOS electronic tobacco product may not live up to the company's claims. Philip Morris claims that the product reduces the risk of tobacco-related diseases and is likely to switch adult cigarette smokers.
RDI Initiates Coverage on:
Altria Group, Inc.
Philip Morris International Inc.
Altria Group, Inc. shares closed down 2.31% yesterday on nearly 12.7 million shares traded. The stock closed down following a negative announcement about Philip Morris's iQOS electronic tobacco product. Altria Group is the parent company for Philip Morris USA so it's no surprise the stock also saw red after FDA panelists expressed worries over the iQOS product not being less harmful than cigarettes. The panel rejected a claim from the company that iQOS is less risky than continuing to smoke cigarettes in a eight-to-one vote. Philip Morris had told the committee that with FDA approval to market the system as less risky than cigarettes, they expect 6 million adults will switch from smoking to the product. The sentiments from the advisors were mixed overall and the FDA may still approve the product.
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Philip Morris International Inc. shares closed down 2.81% on Thursday with around 11.8 million shares traded. The stock took a tumble after U.S. health advisors said that the company should not claim that its iQOS electronic tobacco product is less risky than cigarettes. Traders were concerned over the announcement, but it doesn't mean that the FDA may stop from allowing the company to make the claim. Philip Morris Spokesman Corey Henry remarked, "We are confident in our ability to address the valid questions raised by the Committee with the FDA as the review process for our application continues." According to the panelists however, they have "identified that serious questions remain." The panel has said that the company has not proven that the device reduces harm compared to cigarettes. The company has shown data that shows an overall exposure reduction of around 95% but the panelists are worried that not all of the harmful or could be harmful chemicals in the product are lower than in cigarettes.
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