Juul, the Stanford-started e-cigarette maker, sees its US market share vaporized – TechCrunch

It’s almost Shakespearean.

Juul, the e-cigarette company that conquered the US five years ago — and was valued at $38 billion — is about to be kicked out of the country, according to the WSJ. According to the store’s report earlier today, the Food & Drug Administration may announce later today that the San Francisco-based company is no longer allowed to sell its products in the US.

The “marketing denial order,” the WSJ writes, would follow a nearly two-year review of data presented by Juul, which in 2019 said it was suspending all print, broadcast and digital advertising in the United States after parents across the world country complained that their children were becoming exposed to – and addicted to – Juul products.

The company also agreed to stop selling its sweet-flavored e-liquid capsules, including fruit, cream, mango and cucumber flavors.

Since then, Juul — which sold a 35% stake in its business to tobacco giant Altria in 2018 for $12.8 billion — has spent millions of dollars lobbying the federal government in hopes of continuing to sell its flavored products. of tobacco and menthol. in the North American market.

According to a New York Times report last summer, Juul also submitted a 125,000-page order to the agency; spent $40 million to settle just one case; and paid $51,000 for the entire May/June 2021 issue of the American Journal of Health Behavior to be devoted to 11 company-funded studies aimed at showing that Juul products help smokers quit traditional cigarettes.

Juul, which faced thousands of lawsuits until they were combined into multi-district litigation overseen by a single federal judge, also agreed to pay $22.5 million in April to settle a lawsuit filed by Washington state that alleged the company intentionally targeted teenagers with its products and tricked users into being addicted to its products.

As reported at the time, under the terms of the settlement, Juul did not admit any wrongdoing or liability, saying it set out “for the purpose of compromising” and avoiding further litigation (disputes that could hamper the progress it hoped to make with the FDA.)

Evidently, all this effort was too small and too late, even as the FDA apparently allows Juul’s biggest rivals, Reynolds American and NJOY Holdings, to continue selling their own tobacco-flavored e-cigarettes on the market.

Assuming its days in the U.S. are over, the chapter caps an incredible ride for the now seven-year-old company, which has easily captured over 75% of the U.S. e-cigarette market in its third year of business, thanks in large part to stylish design of your nicotine vaporizer.

Indeed, in 2018, the company was on track to earn at least $1 billion in revenue and had the backing of wealthy investors including Tiger Global and Fidelity Investments, money it planned to spend internationally to capture the billions of smokers who live outside the US

The FDA, led at the time by then-commissioner Scott Gottlieb – who is also a physician and VC – would derail these plans. Under Gottlieb’s stewardship, the FDA has spoken religiously about year-over-year use of vaping pens by high school students, as well as a smaller but alarming percentage of school-age children who have started vaping.

Juul initially backtracked on the data. At an event hosted by this editor in Fall 2018 — the only public speaking event where Juul co-founders and Stanford design alumni Adam Bowen and James Monsees appeared together — the two were still discussing the benefits of vaping with flavor of Juul, saying they made it easier for smokers to switch to their product and “reduced harm.”

At the time, flavor removal was “certainly on the table,” Monsees said. But he went on to say that “we have not seen evidence that there is necessarily a cause for flavors to be a lead-in for underage consumers. Cigarettes have been a big problem for underage consumers for some time now. What we see strong internal evidence is a much stronger correlation for adult consumers staying away from cigarettes as they move away from everything that reminds them of cigarettes in the first place, which includes the taste of cigarettes.”

It took another 13 months for Juul to suspend sales of these flavored products.

Monsees and Bowen first presented their product design thesis on the “future of smoking” at Stanford in 2004. Three years later, in 2007, the graduates founded Ploom, which produced a cannabis vaporizer. The company later came to Pax Labs, sold the rights to that Ploom product to an investor in the company (Japan Tobacco International) and began focusing on the Juul e-cigarette. In 2017, he created Juul Labs as his own company.

Juul has spoken publicly early on about the health benefits of switching from combustible cigarettes to e-cigarettes, but according to doctors and researchers, while vaping is less harmful than smoking, it is just as addictive and many unknowns.

For example, the data suggest links to chronic lung disease and asthma, as well as associations between dual e-cigarette use and smoking with cardiovascular disease, says Michael Blaha, MD, MPH, director of clinical research at the Johns Hopkins Ciccarone Center for Prevention of heart disease on an online explainer hosted by the medical center.

If the FDA orders Juul to withdraw its products from the US market as expected, the company still has a few options, the WSJ notes. It could “pursue an appeal through the FDA, challenge the decision in court, or file a revised order for its products.”

Meanwhile, it’s unclear how much success Juul has had overseas. Juul’s sales in China were halted just days after its launch in the country in 2019.

During the pandemic, Juul also planned to significantly reduce its presence in Europe and stop selling in Austria, Belgium, Portugal, France and Spain, according to BuzzFeed News. Europe, as BuzzFeed noted at the time, has stricter regulations on e-cigarettes than the US, including more aggressive nicotine limits.

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