Altria (MO +0.35%) stock couldn't quite make it over the hump of Hump Day. Investors traded out of tobacco titles generally on a media report that certain products in a regulator's fast-track approval program might not be approved quickly after all. While Altria wasn't as affected as other tobacco companies in the ensuing rout, it did suffer a share price decline of almost 1% on the day.
The problem with pouches
That fast-track program was devised by the U.S. Food and Drug Administration (FDA), which looks like it might be slow-walking the initiative. An article published Wednesday morning by Reuters, citing three unidentified sources, said that scientists at the regulator are hesitant to authorize the sale of nicotine pouch products currently under consideration.
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Such goods deliver nicotine to users in a small sack that's placed in the mouth. This represents something of an evolution from traditional "chew," in which a plug of tobacco is absorbed in this manner.
On the back of that report, investors understandably traded out of tobacco stocks eagerly. The main reason Altria wasn't hit as badly is that six varieties of its on! PLUS line were the first pouch products approved under that fast-track program.
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Regulatory push-back
So Altria effectively got in under the wire with those on! PLUS goods. Still, the Reuters report -- if accurate -- indicates that the folks in our government responsible for giving the nod to tobacco products aren't very keen to do so for certain offerings. This doesn't bode particularly well for any company in the business, even if they've benefited from the regulator's green light recently.
