By MATTHEW PERRONE
AP Health Writer
WASHINGTON (AP) — Cigarette maker Altria’s $13-billion investment in the troubled vaping company Juul has gone up in smoke — now worth less than 5% of its original value as U.S. regulators move to ban its e-cigarettes.
Altria slashed the value of its Juul investment again Thursday, pegging its value at under $500 million as it reported second-quarter earnings. Previously, the Marlboro maker had valued its stake in the company at $1.6 billion.
Despite the losses Altria said it was maintaining its investment deal with Juul, including an agreement not to market competing vaping products.
“At this time, we continue to believe that these investment rights are beneficial to us,” Altria said in a prepared statement.
Altria, based in Richmond, Virginia, is Juul’s largest investor with a 35% ownership stake. Altria executives signed the $12.8-billion pact in 2018, betting that Juul’s popular vaping devices represented a lucrative new opportunity in the vaping market.
But last month the U.S. Food and Drug Administration announced plans to ban the small cartridge-based e-cigarettes, saying Juul had failed to provide key information about potentially harmful chemicals in its nicotine formula. The decision surprised industry observers and experts given that the FDA has authorized several competing e-cigarettes and Juul spent years gathering data to support its application.
In yet another twist to the company’s fortunes, the FDA reopened its review of Juul’s application earlier this month after a federal court blocked the ban from immediately taking effect. For now, Juul is able to continue selling its products while the FDA review continues.
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