- Altria and JT Group to pursue a global smoke-free partnership
to accelerate harm reduction.
- Altria and JT Group announce joint venture for the U.S.
marketing and commercialization of heated tobacco stick
- Altria provides update on wholly owned heated tobacco product
Altria Group, Inc. (NYSE:MO) today announces a strategic
partnership with JT Group (JT) and our expanded heated tobacco
portfolio. Our portfolio consists of a joint venture (JV) with a
subsidiary of JT for the U.S. marketing and commercialization of
heated tobacco stick (HTS) products and our expanded pipeline of
wholly owned products.
“We are excited to begin a new partnership with JT Group, a
leading international tobacco company,” said Billy Gifford,
Altria’s Chief Executive Officer. “We believe this relationship can
accelerate harm reduction for adult smokers across the globe.”
“We believe Moving Beyond Smoking in the U.S. requires multiple
FDA-authorized products within each smoke-free category to appeal
to a diverse range of adult smokers. We believe that our joint
venture and pipeline of heated tobacco products position us well to
increase adoption of smoke-free products.”
Global Smoke-Free Partnership with JT
Altria and JT announce the execution of a non-binding memorandum
of understanding, setting forth the strong commitment of both
parties toward a greater partnership to accelerate global harm
reduction. Through this partnership, we believe we can accelerate
global harm reduction by collaborating on product development and
the global commercialization of smoke-free products. We believe
this potential collaboration could bring significant value to our
Heated Tobacco Pipeline
The heated tobacco category remains largely undeveloped in the
U.S. and our extensive U.S. adult smoker research indicates that
heated tobacco products can appeal to adult smokers who are seeking
satisfying smoke-free products that contain real tobacco. We
believe that certain adult smokers will prefer the familiar tactile
and sensorial experience of a HTS product. We also believe that
other adult smokers interested in heated tobacco will prefer a
product format that is different from traditional cigarettes, such
as a heated tobacco capsule (HTC) product. As a result of our
research, our expanded U.S. heated tobacco portfolio includes a
pipeline of differentiated product platforms, including both HTS
and HTC formats.
Heated Tobacco Stick JV with JT
- PM USA has entered into a JV with a subsidiary of JT, Japan
Tobacco International (JTI), for the U.S. marketing and
commercialization of HTS products. HTS products are defined in the
JV as products that include both (i) a tobacco heating device
intended to heat the consumable without combusting and (ii) a
consumable that meets the definition of a cigarette under the U.S.
Federal Cigarette Labeling and Advertising Act.
- JT is a leading international tobacco company and currently
sells Ploom HTS products in four countries. JT launched its most
recent HTS device, Ploom X, in Japan last year and since its
introduction, JT has doubled its share of the Japanese HTS
- The JV is structured to exist in perpetuity and establishes
Horizon Innovations LLC (Horizon), which is responsible for the
U.S. commercialization of current and future HTS products owned by
- Financial Terms
- PM USA holds a 75% economic interest in Horizon, with JTI
having a 25% economic interest.
- PM USA is responsible for making an initial $150 million in
capital contributions to Horizon as charges are incurred; capital
contributions made to Horizon after the initial $150 million will
be split according to economic ownership.
- We expect to account for Horizon within our “All Other”
financial reporting category.
- Commercialization Agreement
- The parties expect to combine their scientific and regulatory
expertise to jointly prepare U.S. Food and Drug Administration
(FDA) filings for the latest version of Ploom HTS products, which
are not currently commercialized. The parties currently expect to
submit pre-market tobacco product applications (PMTA) for these
products in the first half of 2025.
- Upon PMTA authorizations, Horizon will become the exclusive
entity through which the parties market and commercialize HTS
products in the U.S.
- Given that we agreed to assign our U.S. commercialization
rights to the IQOS Tobacco Heating System® to Philip Morris
International Inc. in April 2024, we do not expect to have U.S.
commercialization rights to the IQOS products when Horizon’s
exclusivity requirements go into effect.
- JTI will supply the Ploom HTS devices and PM USA will
manufacture the Marlboro HTS consumables for U.S.
- Horizon will use our leading sales and distribution network,
which services over 200,000 U.S. retail stores.
- The parties have agreed to commercialization milestones for
Horizon, which include distribution requirements and minimum levels
of cumulative marketing investment.
- The parties will both maintain independent ownership of their
respective intellectual property (IP), including any IP acquired
that supports the development of future HTS products.
Wholly Owned Heated Tobacco Product
- Our wholly owned pipeline of heated tobacco products and
related IP include HTC product formats and new-to-market
technologies. We believe HTC products can appeal to U.S. adult
smokers who are open to novel smoke-free products but have not yet
found a satisfying alternative to cigarettes. This audience
includes the millions of U.S. adult smokers who tried, but
ultimately rejected, e-vapor products.
- We expect to finalize the design of our HTC platform 1
technology (HTC1) by the end of this year and then begin regulatory
preparations for a PMTA submission to the FDA by the end of
- We also expect to partner with JT to launch the HTC1 technology
in an international test market in late 2024 or early 2025 using
JT’s sales and distribution network.
Financial Advisor and Legal Counsel
We were advised by Perella Weinberg Partners L.P. as financial
advisor and Wachtell, Lipton, Rosen & Katz as legal
We have a leading portfolio of tobacco products for U.S. tobacco
consumers age 21+. Our Vision by 2030 is to responsibly lead the
transition of adult smokers to a smoke-free future (Vision). We are
Moving Beyond Smoking™, leading the way in moving adult smokers
away from cigarettes by taking action to transition millions to
potentially less harmful choices - believing it is a substantial
opportunity for adult tobacco consumers, our businesses and
Our wholly owned subsidiaries include leading manufacturers of
both combustible and smoke-free products. In combustibles, we own
Philip Morris USA Inc. (PM USA), the most profitable U.S. cigarette
manufacturer, and John Middleton Co. (Middleton), a leading U.S.
cigar manufacturer. Our smoke-free portfolio includes ownership of
U.S. Smokeless Tobacco Company LLC (USSTC), the leading global
moist smokeless tobacco (MST) manufacturer, and Helix Innovations
LLC (Helix), a leading manufacturer of oral nicotine pouches.
Additionally, we have a majority-owned joint venture, Horizon
Innovations LLC (Horizon), for the U.S. marketing and
commercialization of heated tobacco stick products and, through a
separate agreement, we have the exclusive U.S. commercialization
rights to the IQOS Tobacco Heating System® and Marlboro HeatSticks®
through April 2024.
Our equity investments include Anheuser-Busch InBev SA/NV (ABI),
the world’s largest brewer, Cronos Group Inc. (Cronos), a leading
Canadian cannabinoid company, and JUUL Labs, Inc. (JUUL), a U.S.
based e-vapor company.
The brand portfolios of our tobacco operating companies include
Marlboro®, Black & Mild®, Copenhagen®, Skoal® and on!®.
Trademarks and service marks related to Altria referenced in this
release are the property of Altria or our subsidiaries or are used
Learn more about Altria at www.altria.com and follow us on
Twitter, Facebook and LinkedIn.
Forward-Looking and Cautionary Statements
This release contains certain forward-looking statements with
respect to our pipeline of wholly owned products and the JV with JT
for the marketing and commercialization of heated tobacco stick
products in the U.S., which are subject to various risks and
uncertainties. Such forward looking statements relate to, among
other things, the expected timing of finalization of the HTC1
heated tobacco platform, the expected timing of a HTC1 technology
international test launch, the perpetual nature of the JV, the
preferences of U.S. adult smokers, the appeal of HTS and HTC
products to U.S. adult smokers, and the future partnership between
Altria and JT and its potential to accelerate global harm
reduction, transition adult smokers away from cigarettes and bring
significant value to their respective businesses. Factors that may
cause actual results to differ include receipt of regulatory
authorizations, risks relating to our ability to realize the
expected benefits of the transactions and future partnerships in
the expected manner or timeframe, if at all, prevailing economic,
market, regulatory or business conditions, or changes in such
conditions, negatively affecting the parties or their plans for
future collaboration and partnerships, changes in market and other
conditions resulting in unanticipated delays in the design and
development of future products or the commencement of test
launches, the outcome of any legal proceedings or investigations
that may be instituted against the parties or others related to the
transaction, changes in the preferences of U.S. adult tobacco
consumers, significant changes in price, availability or quality of
raw materials or component parts, including as a result of changes
in macroeconomic, climate and geopolitical conditions, the failure
to meet commercialization milestones, the ability of Altria and JT
to enter into future partnerships (including with respect to a HTC1
international market test) on terms acceptable to both parties and
in the expected manner or timeframe, if at all, and the risk of an
extended disruption at a facility of, or of service by, a supplier,
distributor or distribution chain service provider of our
subsidiaries or of JT. Other risk factors are detailed from time to
time in our quarterly reports on Form 10-Q and most recent Annual
Report on Form 10-K filed with the U.S. Securities and Exchange
Commission. These forward-looking statements speak only as of the
date of this press release. We assume no obligation to provide any
revisions to, or update, any projections and forward-looking
statements contained in this release.
version on businesswire.com: https://www.businesswire.com/news/home/20221026005706/en/
Altria Client Services Investor Relations 804-484-8222
Altria Client Services Media Relations 804-484-8897
Historical Stock Chart
From Dec 2022 to Jan 2023
Historical Stock Chart
From Jan 2022 to Jan 2023