WASHINGTON D.C.: The U.S. Food and Drug Administration (FDA) is preparing to order Juul Labs to stop selling its e-cigarettes in the U.S., according to the Wall Street Journal.
Following the report, shares in tobacco giant Altria Group, which owns a 35 percent stake in the vaping products maker, fell 8.5 percent.
The decision could be announced within days, the report said.
Due to the appeal of its nicotine products to teenagers, Juul has faced heightened scrutiny from regulators, lawmakers and state attorneys-general.
In 2019, the company stopped U.S. sales of several flavors of tobacco products due to growing pressure.
"This clearly comes as a surprise to the market. We would expect that Juul would appeal the decision, and remain on the market through that process, which would likely take a year or more," said Cowen analyst Vivien Azer, as quoted by Reuters.
The verdict came some two years after Juul applied for approval to keep selling e-cigarettes in the U.S.
The FDA reviewed whether e-cigarettes are effective in getting smokers to quit and if the benefits to smokers outweigh the health damage to new users, including teenagers.
In October, the FDA approved the first-ever vapor product in the country, Juul rival British American Tobacco's Vuse Solo e-cigarettes and tobacco-flavored pods.
As of the end of march, the estimated fair value of Altria's investment in Juul was $1.6 billion, a fraction of the $12.8 billion it paid in 2018.
"The investment in Juul was always a mistake, the company paying top dollar for a business which was already clearly on the wrong side of the regulators," noted Rae Maile, analyst at Panmure Gordon, as reported by Reuters.