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04/11/2022

FDA Issues Denial Orders to First Major Vapor Brand

The parent company of Fontem US is appealing the decisions.
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SILVER SPRING, Md. — The Food and Drug Administration (FDA) is one step closer to completing its review of premarket tobacco applications (PMTAs) for vapor products, moving past smaller companies to major brands.

On April 8, the agency issued marketing denial orders (MDOs) to Fontem US LLC for several myblu electronic nicotine delivery system (ENDS) products after determining the applications lacked sufficient evidence to show that permitting the marketing of these products would be appropriate for the protection of the public health.

Greensboro, N.C.-based Fontem US submitted the applications two years ago in April 2020. The company is an affiliate of Imperial Brands.

The currently marketed products receiving MDOs include: 

  • myblu Device Kit
  • myblu Intense Tobacco Chill 2.5 percent
  • myblu Intense Tobacco Chill 4.0 percent
  • myblu Intense Tobacco 2.4 percent
  • myblu Intense Tobacco 3.6 percent
  • myblu Gold Leaf 1.2 percent
  • myblu Gold Leaf 2.4 percent

To date, the agency DA has completed the review of and made determinations on more than 99 percent of the nearly 6.7 million products for which applications were submitted by the Sept. 9, 2020 deadline. This the first time the FDA has handed down denial orders for a major vapor brand.

Imperial issued a statement saying it will appeal the agency's MDOs and it expects the products to remain in the market during the appeal process, reported Owen Bennett, analyst with Jeffries.

According to Bennett, Imperial Brands has less than a 2-percent share of the U.S. vapor market, and U.S. vapor sales for 2021 were only 0.7 percent of overall sales for the group. However, "the U.S. is the world's biggest reduced risk market, and the world's biggest vape market, so for any material future success in global vape, Imperial has to be successful in the U.S," he said, adding the company recently had a strategic reset of its U.S. vapor business and was using this to establish credibility for future success in other markets.

The FDA's denial of the PMTAs could be a negative signal for broader tobacco sentiment, Bennett said.

"The immediate read here is likely to be that we could see rejections of other big tobacco applications. This is a fair take. The one positive we would take here is that we don't think we will have to wait long to find out," he said. "With the Imperial decision today, we think the others could come very soon, and this would confirm what the FDA outlined just a couple of weeks ago when it said it 'was close' to Big Tobacco vapor PMTA decisions."

On March 24, the agency said it "is close to making additional decisions on applications for popular ENDS products that account for a large part of the market. The continued marketing of these products has the potential to have a substantial public health impact — either positively or negatively — as they hold an overall large market share and are used by a lot of people."