Sep 20, 2019 - Health

Altria's big bet on Juul is going horribly wrong

Data: Investing.com; Chart: Axios Visuals

Altria's $12.8 billion investment for a 35% stake in Juul is at risk of becoming one of the worst corporate investments of all time.

Driving the news: So far, vaping is suspected or confirmed as the cause of death for 8 people and 530 cases of pulmonary illness across 38 states, the CDC said, with a federal official saying that a criminal probe has begun.

Sens. Mitt Romney and Jeff Merkley proposed a bill late Thursday that would:

  • Ban e-cigarette flavors other than tobacco.
  • Create new design standards for e-cigarettes.
  • Apply existing tobacco taxes to e-cigarettes.
  • Urge the Department of Health and Human Services to oversee a campaign about the health risks of e-cigarettes.
  • Make it more difficult to refill vape cartridges with home-made tobacco pods.

"With nearly a quarter of high school students vaping regularly, we must take decisive action to prevent a new generation from addiction and serious health risks," Romney said.

Between the lines: "Sometimes it's darkest before the light, but right now it looks like Altria got smoked," Axios' Dan Primack writes.

The big picture: Juul keeps getting hit left and right — particularly after the recent spate of vaping-related lung diseases. The company is also facing a possible congressional subpoena after failing to provide documents in July.

  • Last week, President Trump proposed banning all flavored vaping pods from the U.S. market, including mint and menthol.
  • Earlier this week, Juul products disappeared from Chinese e-commerce sites JD.com and Alibaba's Tmall.com, without explanation.
  • India banned e-cigarettes entirely.

In the market: Altria's stock has been falling for much of this year and has been on a clear downward path over the past 6 months.

  • The recent blowback against e-cigarettes has sent shares down another 8% in just the past week.

Go deeper: The global anti-vaping tipping point

Go deeper

Altria's Juul investment goes up in smoke

Illustration: Lazaro Gamio/Axios

Altria's decision to pay $12.8 billion last year for a 35% equity stake in vaping giant Juul is turning into one of the worst strategic investments in memory.

Driving the news: Altria on Thursday took a $4.1 billion impairment charge on its Juul investment, mostly blaming the "increased number of legal cases pending against Juul," which it says have increased more than 80% since last November 2019.

Go deeperArrowJan 30, 2020

68 reported dead from vaping-related lung illness

Photo: Richard Baker / In Pictures via Getty Images

68 people have died from a lung injury associated with e-cigarette use in 29 states and the District of Columbia, the Centers for Disease Control and Prevention reports as of Feb. 18.

What's new: Because of the consistent declines in new EVALI cases since Sept. 2019, as well as the identification of vitamin E acetate as a primary cause of EVALI, Tuesday's report will be the final CDC update on the number of hospitalized EVALI cases and deaths nationally.

Go deeperArrowUpdated Feb 25, 2020 - Health

Congress wants vaping industry to pay for FDA oversight

A bipartisan group of senators wants the vaping industry to pay for more of the Food and Drug Administration's oversight of vaping products.

Driving the news: Six senators, led by Democrat Jeanne Shaheen, will introduce a bill today to charge e-cigarette manufacturers higher user fees, which fund many of the FDA's regulatory activities. A corresponding bill led by Rep. Cheri Bustos will be introduced in the House soon.

Go deeperArrowJan 22, 2020