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Altria, Philip Morris Slip After Ban on Sales of Iqos Tobacco Device By

© Reuters.

By Dhirendra Tripathi – Stocks of Altria (NYSE:) and Philip Morris (NYSE:) fell around 5% and 3.5%, respectively, Thursday after an adverse ruling in the import and sale of the Iqos tobacco device by the companies.

The U.S. International Trade Commission held Wednesday that the cigarette alternative infringed on two of R.J. Reynolds’ patents.

Iqsos heats tobacco by heating it without burning, which is supposed to provide the same high-quality nicotine rush as a regular cigarette, without any of the harmful chemicals.

Philip Morris has licensed Altria to market the Iqsos device in the United States. While Iqos’s U.S. sales aren’t significant, the order is upsetting for the companies given their efforts at shifting towards products seen as better alternatives to tobacco-based items which have seen falling demand amid negative public sentiment.

Altria spun out Philip Morris so that it could focus on the U.S. while Philip Morris took care of overseas sales. Both companies had discussed merging, but they decided to postpone the talks.

The ban needs President Joe Biden’s stamp, and he has two months to review it. Philip Morris told CNBC it plans to appeal the trade agency’s decision. Altria said that both companies have been working with Altria on contingency planning.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.