MO Altria Group Inc

By Jennifer Maloney 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 1, 2019).

The Food and Drug Administration said it would allow two of the world's biggest cigarette makers to start selling in the U.S. a hand-held device that heats but doesn't burn tobacco, though the agency hasn't yet ruled on whether they will be allowed to market it as safer than cigarettes.

Philip Morris International Inc. has spent years and billions of dollars developing the product, called IQOS, which is already sold in dozens of other countries. It has been waiting for FDA approval for its U.S. partner Altria Group Inc. to market IQOS to adult smokers. Altria sells Marlboro cigarettes in the U.S.; Philip Morris sells them everywhere else. The companies split in 2008.

Since IQOS doesn't burn tobacco, the device doesn't produce smoke when users inhale. It heats tobacco sticks that come in regular and menthol flavors. It differs from other smoking alternatives such as e-cigarettes that produce vapor from nicotine-laced liquid.

The FDA said it found that the aerosol produced by IQOS contains fewer toxic chemicals than cigarette smoke. In a separate application to the FDA, Philip Morris is seeking authorization to say in marketing materials that switching from cigarettes to IQOS reduces the risks of tobacco-related disease.

Newport maker British American Tobacco PLC is waiting on FDA authorization for a similar product, called Glo, although that company hasn't sought U.S. approval to market it as safer than cigarettes.

"While the authorization of new tobacco products doesn't mean they are safe, the review process makes certain that the marketing of the products is appropriate for the protection of the public health," Mitch Zeller, director of the FDA's Center for Tobacco Products, said in a news release.

IQOS marketing will be restricted under the same rules that apply to cigarettes, the agency said. Cigarettes can't be advertised on TV, billboards or other media where they are likely to be seen by children.

Philip Morris already sells IQOS in more than 40 countries, often in sleek boutiques.The product has made big strides in Japan though demand has cooled recently, prompting the company and rivals to reduce prices and step up marketing.

"The FDA's decision to authorize IQOS in the U.S. is an important step forward for the approximately 40 million American men and women who smoke. Some will quit. Most won't, and for them IQOS offers a smoke-free alternative," said Philip Morris CEO André Calantzopoulos.

Altria plans to launch the product this summer in Atlanta, where it will open its first IQOS retail store along with several mobile retail units. It will also distribute the accompanying tobacco sticks under the Marlboro brand in about 500 convenience stores including Circle K, QuikTrip and Speedway. Other markets will follow soon, a spokesman said.

In Atlanta, the tobacco giant hopes "to learn as much as possible, as quickly as possible, and intends to make the most of the company's first-mover advantage in heated tobacco," said Altria Chief Executive Howard Willard.

IQOS is one of a wave of smoking-alternative products the tobacco industry is counting on for growth as sales of conventional cigarettes decline.

Altria also has invested $12.8 billion to buy a stake in Juul Labs Inc., a controversial startup whose e-cigarettes currently dominate the U.S. market. Sales of Juul have surged in the past two years while Philip Morris and Altria awaited the FDA's review.

Write to Jennifer Maloney at jennifer.maloney@wsj.com

(END) Dow Jones Newswires

May 01, 2019 02:47 ET (06:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.