National

Juul Labs on Thursday said it has secured enough new financing to avoid bankruptcy, but warned of an upcoming "reorganization" that will include layoffs.  

Why it matters: Juul had been preparing for a potential chapter 11 filing as it continues to battle federal regulators over selling its products on the open market.

Details: The company has received "an investment of capital from some of our earliest investors" a Juul spokesperson told Axios.

"This investment will allow Juul Labs to maintain business operations, continue advancing its administrative appeal of the FDA’s marketing denial order and support product innovation and science generation."

"Looking ahead, Juul Labs remains committed to advancing its mission of harm reduction for adult smokers while combating underage use," the spokesperson said.

Details of the new financing, which was first reported by the Wall Street Journal, were not disclosed.

What's next: The company also said it will be "undertaking a reorganization," which will include "the difficult but necessary step of separating from many valued colleagues," the spokesperson said.

The company told employees Thursday that it will look into cost-saving measures, which may include layoffs of about 400 people (or one-third of its global staff), according to the Wall Street Journal.

The big picture: Talks of bankruptcy began amid the company's ongoing dispute with the FDA, which ordered this past summer for Juul's e-cigarettes to be taken off the shelves in the U.S. market.

The FDA said at the time that Juul had not submitted enough information to prove that their products were safe for consumption.

In response, Juul filed a lawsuit against the FDA, saying the regulators withheld documents that supported its own order.

More than 2.5 million youth used e-cigarettes in 2022, study says

Americans can't stop searching "How to stop vaping"

Juul secures new funding to avoid bankruptcy, plans to cut jobs

The company had been preparing for a potential Chapter 11 filing as it continues to battle federal regulators over selling its products on the open market.

Juul Vape sign in convenience store window, Queens, New York. 

Juul Vape sign in convenience store window, Queens, New York. Photo:  Lindsey Nicholson/UCG/Universal Images Group via Getty Images

Juul

Vaping

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

Juul Labs on Tuesday filed a lawsuit against the Food and Drug Administration over the agency's refusal to disclose documents supporting its order to take Juul's e-cigarettes off the shelves in the U.S. market.

The big picture: The FDA in June ordered Juul to take its e-cigarettes off the market saying the company hadn’t submitted enough evidence that they were safe. But the ban was later suspended after a federal appeals court granted Juul a temporary stay on the order.

Details: Juul accused the FDA of violating the Freedom of Information Act by withholding a majority of the "scientific disciplinary reviews" underlying the sales ban, according to the complaint filed in a court in Washington, D.C.

Juul alleges the FDA denied the FOIA requests, invoking the deliberative process privilege to withhold the majority of those materials.

"Withholding the disciplinary reviews that would answer these questions impedes JLI’s ability to seek appropriate relief from [the] FDA’s decision and is also completely at odds with the purpose of FOIA and the transparency Congress expects from administrative agencies," the complaint alleges.

"The public deserves a complete picture of the scientific facts behind one of the agency’s most controversial and closely scrutinized decisions in recent years, especially where even FDA recognizes its order is suspect."

What they're saying: “We took this necessary action as we remain concerned about the inequitable treatment of our applications given the political pressure on the agency to reach a specific result," a Juul spokesperson told Axios in an emailed statement.

"This action will help us obtain information about the FDA review of our applications relevant to our continued appeal of the agency’s decision,” the spokesperson added.

The FDA declined to comment on ongoing litigation.

Go deeper: Juul asks court for temporary ban on FDA's e-cigarette order

Editor's note: This story has been updated with additional details. 

Juul sues FDA over documents supporting e-cigarette ban

The e-cigarette company alleges the FDA denied its Freedom of Information Act requests for documents.

Juul Labs tobacco- and menthol-flavored vaping e-cigarette products are displayed in a convenience store. Photo: Patrick T. Fallow/AFP via Getty Images

The Food and Drug Administration and Juul agreed Wednesday to suspend their court case while the governmental agency conducts a review of Juul's e-cigarettes.

Why it matters: The agreement between the two sides comes after the FDA on Tuesday temporarily paused its order banning Juul from marketing and selling its popular electronic cigarettes.

Driving the news: The joint legal motion between the two sides will allow Juul to continue selling its product, according to court documents obtained by Axios.

"FDA does not intend to take enforcement action against the products subject to (Juul's) marketing denial order while the administrative stay is in place," the document reads.

What they're saying: “With this administrative stay from the FDA now in place, we continue to offer our products to adult smokers while we pursue the Agency’s internal review process," said Joe Murillo, Juul's chief regulatory officer, in a statement to Axios.

Catch up quick: The FDA said Tuesday it "has determined that there are scientific issues unique to the JUUL application that warrant additional review."

"This administrative stay temporarily suspends the marketing denial order during the additional review but does not rescind it," the agency added.

A federal appeals court had already blocked the FDA's marketing denial order in June, allowing Juul to continue selling its products while challenging the ban in court.

The big picture: The FDA's decision to ban the sale of Juul products came amid a push to cap nicotine in cigarettes. The move signals the Biden administration is trying to limit tobacco use in the U.S., Axios' Arielle Dreher reports.

The agency said last month that it denied Juul authorization to market its products because the company's application "lacked sufficient evidence ... to demonstrate that marketing of the products would be appropriate for the protection of the public health."

FDA commissioner Robert Califf added that Juul products played a "disproportionate role in the rise in youth vaping."

What we're watching: If the FDA decides to bring back the ban after its new review, Juul will have 30 days to seek another stay, the Associated Press reports.

FDA temporarily pauses ban on Juul e-cigarette sales

The FDA "determined that there are scientific issues unique to the JUUL application that warrant additional review."

Electronic cigarettes and pods by Juul, the nation's largest maker of vaping products, are offered for sale at the Smoke Depot on September 13, 2018, in Chicago.

Food and Drug Administration (FDA)

Juul is seeking a temporary ban on the Food and Drug Administration's order to remove its e-cigarettes from the U.S. market, writing in a court filing Friday that it was "extraordinary and unlawful."

Driving the news: Juul asked a federal appeals court for a temporary administrative stay until the court grants an emergency review of the order, according to the court filing with the U.S. Court of Appeals for the D.C. Circuit.

"FDA cannot credibly argue that there is a critical and urgent public interest in removing [Juul's] products from the market right now, rather than after this Court reviews FDA’s action," per the court filing.

"FDA's extraordinary and unlawful action ... warrants the emergency interim relief requested," Juul wrote.

State of play: The FDA's decision comes amid a broader push to limit nicotine in cigarettes and signals the Biden administration is escalating its attempt to curb tobacco usage in the U.S., Axios' Arielle Dreher reports.

Juul said hours after the FDA issued a marketing denial order that it would seek a stay and was exploring a possible appeal.

Go deeper... Americans can't stop searching "How to stop vaping"

Juul asks court for temporary ban on FDA's e-cigarette order

"FDA’s extraordinary and unlawful action ... warrants the emergency interim relief requested."

JUUL Labs Inc. Virginia tobacco and menthol flavored vaping e-cigarette products are displayed in a convenience store on June 23, 2022 in El Segundo, California.

JUUL Labs Inc. Virginia tobacco and menthol flavored vaping e-cigarette products in a convenience store on June 23 in El Segundo, California. Photo: Patrick T. Fallon/AFP via Getty Images

The FDA's decision to order Juul e-cigarette products off the U.S. market opens a new and grinding battle in the push to revamp the government’s rules for smoking and vaping. 

The big picture: With parallel efforts to cap nicotine in cigarettes and ban menthol cigarettes and flavored cigars, the Biden administration is pursuing a broad tobacco agenda not seen since the Clinton administration.

Yes, but: It could be a drawn-out and costly fight. Hours after the FDA issued its marketing denial order on Thursday, Juul said it would seek a stay and was exploring a possible appeal.

The tobacco lobby, e-cigarette makers and libertarian-leaning groups are digging in, portraying e-cigarettes as an effective cessation tool to wean adult smokers off cigarettes.

"The agency is hellbent on rigging the process to fulfill its prohibitionist agenda," said Amanda Wheeler, president of the American Vapor Manufacturers Association.

Go deeper: The FDA on Thursday said Juul's marketing application didn't have enough evidence to show the sale of the company's products would be appropriate for the protection of public health.

FDA commissioner Robert Califf also said Juul products may have played a "disproportionate role in the rise in youth vaping."

Public health groups like the American Heart Association said the decision marks a dramatic step to discourage youth smoking.

The popularity of the company's products led a new generation of teens to get hooked on smoking, driven by fruit and mint-flavored cartridges that fit in small vaping devices, research in the journal Pediatrics showed.

The burst in youth vaping led the FDA to ban most flavored cartridges products in a bid to cut off an alternative nicotine source.

The road ahead: The FDA has authorized 23 e-cigarette products and continues to work through a slew of pending applications.

These include numerous bottled vaping liquids sold to adults in different flavors and nicotine strengths, per the Washington Post.

The agency has rejected applications for close to 1 million products, but last October granted tobacco giant R.J. Reynolds permission to sell three of its Vuse vaping products.

The bottom line: Anti-tobacco advocates say Thursday's decision didn't address the continued role of flavored e-cigarettes, including menthol-flavored products, in sustaining youth e-cigarette use. 

"These remain critical issues requiring FDA to deny marketing applications for all flavored e-cigarettes, including all menthol-flavored products and the flavored disposable products like Puff Bar that have become so popular with kids," said Matthew Myers, president Campaign for Tobacco-Free Kids.

But the decision still could ease some pressure on the agency from Democrats in Congress, who had accused the FDA of moving too slowly and giving big tobacco companies a free pass.

Juul decision triggers broader tobacco fight

FDA's Juul ban could trigger grinding fight over smoking rules

Photo: Patrick T. Fallon/AFP via Getty Images

Public health

The Food and Drug Administration is poised to sweep Juul e-cigarette products off store shelves, the Wall Street Journal reported on Wednesday, in what could be a major turning point for an agency that's taken a sluggish, at times disjointed approach to regulating the vaping industry.

Why it matters: The move, coming amid a push to cap nicotine in cigarettes, may signal the Biden administration is ready to try to put tobacco use behind us.

Where it stands: The FDA is ready to deny Juul a marketing order for its menthol and tobacco-flavored products after a two-year review that weighed the products' benefits for adult smokers against risks to teens, the WSJ reported, citing people familiar with the matter.

Juul has been in regulatory limbo for several years, even while its market share swelled, driven in part by flavored products popular among teens.

Now, all e-cigarette products must go through pre-marketing reviews at the FDA, which missed a court-ordered deadline last fall to decide which products could be sold. 

The agency reviewed many smaller manufacturers' products, denying close to 1 million, but hasn't yet ruled on Juul. 

What they're saying: The FDA wouldn't confirm or deny the WSJ report or provide a status on its Juul deliberations. 

Juul did not respond to emailed request for comment.

Groups that oppose youth smoking say taking the company off the market would mark a dramatic step to discourage youth smoking.

"This is a most-welcomed and a long-overdue decision," Erika Sward, assistant vice president of advocacy for the American Lung Association, told Axios.

"FDA should have acted years ago, but if it acts now and we do more to educate young people, this is a reversible epidemic," Matt Myers, president of the Campaign for Tobacco-Free Kids, told Axios.

Background: A 2016 FDA rule required makers of tobacco products to submit applications for products made after 2007.

A court ordered the FDA to make decisions by September 2021. After the agency missed the deadline, the American Lung Association and other advocacy groups and pediatricians successfully sued to speed up the process. 

Now, all e-cigarette manufacturers have to show products are "appropriate for the protection of public health," per the FDA.

Congress also recently gave the FDA the authority to regulate synthetic nicotine products, which are subject to the same application requirements.

Flashback: The FDA banned Juul flavored products as part of a bigger crackdown on flavored vapes, prompting many teens to use disposable e-cigarettes and menthol-flavored products that are still sold.

From February 2020 to February 2022, disposable e-cigarette sales increased by 215.4%, data from the CDC Foundation show, and more than half of youth who reported smoking in 2021 used disposable e-cigs.

Public health groups say it's important for the FDA to finally have a clear, consistent policy on vaping, without loopholes.

The other side: The e-cigarette industry is worried regulators will take a carte blanche approach to policing its products.

Juul's application process involved nearly two years of submitting data and evidence to the FDA, WSJ reported, and industry leaders say its data was sound.

"If that level of science isn't sufficient, it begs the question of what is," Tony Abboud, executive director of the Vapor Technology Association, told Axios.

E-cigarette industry groups are calling on the FDA to go after bad actors that are skirting the review process.

The industry also claims its products are used successfully to wean adult smokers off cigarettes, and that removing e-cigarettes from the market will force people to return to cigarettes again.

"FDA's staggering indifference to ordinary Americans and their right to switch to the vastly safer alternative of vaping will surely rank as one of the greatest episodes of regulatory malpractice in American history," American Vapor Manufacturers Association President Amanda Wheeler said in a statement.

Context: Juul's rise in popularity from 2017 to 2019 coincided with more than a million teens getting hooked on nicotine, while flavored vape cartridges and pods were still available.

A study in Pediatrics assessed found most new tobacco use during that time was among teens using e-cigs.

"There was no evidence that [older] smokers were using them," John Pierce, one of the study authors, told Axios.

What's next: The FDA still has many products to review and a bipartisan group of lawmakers in Congress is calling on the agency to expedite the process and take aim at addictive products marketed towards teens.

The bottom line: If Juul is pulled from the market, health risks to youths will have trumped arguments for using e-cigarettes as cessation products.

FDA may toss Juul e-cigs from store shelves

With pressure from Congress and health groups mounting, FDA may order Juul to take its products off the market this week.

Illustration of a juul device forming a "no" symbol with a cloud of vapor around it

Under a new law that took effect this week, the Food and Drug Administration can crack down on vaping companies that use synthetic nicotine, the AP reports. 

Driving the news: The new law closed a loophole that certain companies had exploited to avoid oversight of their products, including flavored e-cigarette company Puff Bar.

Background: Originally, FDA oversight of cigarettes and related products pertained solely to tobacco-based nicotine. Some companies pivoted to using synthetic nicotine in e-cigarette liquid cartridges and nicotine pouches.

The change, which Congress passed in March, gives the FDA the authority to regulate all forms of nicotine. 

While the measure doesn’t outlaw synthetic nicotine products automatically, companies are now required to register with the FDA and submit their products for review within 30 days.

The new law also subjects synthetic nicotine products to the same age limit and sales restrictions as natural tobacco products.

The FDA banned all flavors in cartridge-based e-cigarettes except menthol and tobacco in 2020. However, the ban didn’t apply to disposable e-cigarettes and other vaping devices.

What they’re saying: FDA Commissioner Robert Califf tweeted that the new law gave the agency the authority to "hold e-cigarette companies using synthetic nicotine to the same public health standards we’ve implemented for other tobacco products.”

FDA increasing oversight of synthetic nicotine products

The new law closed a loophole that certain companies had exploited to avoid oversight of their products.

A photo illustration of Puff Bar e-cigarettes

Puff Bar E-Cigarette products sit on a counter. Photo: Joe Raedle/Getty Images

E-cigarette

E-cigarette giant Juul Labs will pay Arizona $14.5 million as part of a settlement for a lawsuit alleging it illegally targeted young people in its marketing.

Why it matters: The company faces over 2,000 lawsuits related to its marketing practices, which included fruit-flavored liquid pods and ad buys on youth websites like Cartoon Network, per Reuters. State and local governments have said it fueled a vaping epidemic among teens.

Details: $12.5 million of the settlement will be allocated to anti-addiction programs, while the remaining $2 million will help cover litigation expenses and go to a general consumer protection fund.

Though Juul has admitted no wrongdoing, it called the settlement "another step in our ongoing effort to reset our company."

"We will continue working with federal and state stakeholders to advance a fully regulated, science-based marketplace for vapor products."

"As part of that process, we will continue to support Tobacco 21 and enforcement against illicit and illegally marketed products, such as certain disposables, that jeopardize the harm reduction potential of alternative vapor products," the company added.

Worth noting: In 2018, over 3.6 million youth in America, including 1 in 5 high school students and 1 in 20 middle school students, used e-cigarettes, according to the Centers for Disease Control and Prevention.

In 2020, these numbers declined to about 20% of high schoolers and 5%, according to the FDA, which notes: "3.58 million youth currently using e-cigarettes is still far too many."

The big picture: Juul stopped selling popular flavors in its stores and shut down social media channels after facing pressure from regulators in 2018. 

It agreed to a $40 million settlement with North Carolina in June to resolve a similar suit.

The Food and Drug Administration is still weighing whether to ban Juul products in the U.S., though it has barred sales of nearly 950,000 lesser-known e-cigarette products, ABC News reports.

Editor's note: This article has been updated with further statistics on youth e-cigarette use. 

Juul reaches $14.5 million settlement in Arizona vaping suit

State and local governments have said the company helped fuel a vaping epidemic among teens.

A sign advertising Juul products displayed in a store in New York City. Photo: Stephanie Keith via Getty Images

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Pro Rata

Axios Pro Rata

Philip Morris International (NYSE: PM) won a shareholder vote to take control of British asthma inhaler maker Vectura Group (LSE: VEC) for £1.1 billion ($1.5 billion), having previously outbid The Carlyle Group.

Why it matters: The world's largest maker of cigarettes, a major contributor to respiratory disease, will now make products that treat respiratory disease. Some health advocates have asked Britain's competition authority to intervene, asking it to consider what they refer to as "monopolies of harm."

Details: Carlyle, whose European health deals are led by a former GlaxoSmithKline exec, had kept its lower-priced offer on the table, hoping that shareholders wouldn't approve the sale.

Bottom line: "Philip Morris, whose name has long been associated with Marlboro, the world's best-selling cigarette brand, says the deal is part of its plan to diversify its portfolio beyond tobacco and nicotine, with an emphasis on 'inhaled therapeutics.'" — Bill Chappell, NPR

Philip Morris wins control of inhaler maker Vectura

The world's largest maker of cigarettes will now make products that treat respiratory disease.

Illustration of an arm in a business suit making a gun sign with smoke coming out of the fingertips.

Big Tobacco

Stock market

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

The Food and Drug Administration said Thursday it will delay its decision on top-seller Juul, but thousands of other electronic cigarettes will be ordered off the U.S. market.

Why it matters: The stalled decision prolongs the agency's determination on whether there is enough data to show if adult cigarette smokers switching to a less harmful option outweighs the detrimental costs of young people getting hooked on nicotine by vaping. 

The companies with the most to lose are Vuse, owned by Reynolds American and Juul, with Altria having a 35% stake. 

The big picture: The FDA rejected applications for about 950,000 flavored e-cigarettes and related products. The reasoning was their flavor profiles and appeal to underage teens could be problematic. 

Vaping in the last few years has been a huge concern by parents, politicians and anti-tobacco advocates who have pushed the agency to ban high-nicotine devices, products Juul has mainly been blamed for.  Still, the agency said it would need more time to rule on  company’s products.

Zoom out: In September 2020, the agency required all U.S. e-cigarette manufacturers to take their vaping products off the market or submit them for FDA review. The FDA was facing a Thursday deadline to decide whether vaping has a net positive or negative effect on American public health. 

The companies were required to show through scientific evidence that each product was less harmful than traditional cigarettes and that cigarette smokers would be more likely to stop smoking if they used it.

Since then, more than 500 companies have filed applications for about 6.5 million products. Another government agency in June had asked the FDA for more time considering the application size. 

The FDA in August already blocked the sale of 55,000 flavored vape products from three companies. More individual bans could be under consideration. 

Noteworthy: In April, the FDA announced plans to propose banning menthol cigarettes and flavored cigars. It is also reportedly considering whether to seek limits on nicotine levels in cigarettes to reduce their addictive potential.

The agency did enact temporary restrictions on some sweet and fruity-flavored products in an effort to curb youth vaping.

The bottom line: Both tobacco companies and special interest groups planned on moving forward with court battles depending on the outcome of the FDA review. 

FDA needs more time on Juul e-cigarette ban decision

The products with the most to lose are Vuse and Juul.

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