The U.S. Food and Drug Administration (FDA) is set to order Juul Labs to take its electronic cigarette products off the market in the United States, according to a report by the Wall Street Journal. 

Following the report, shares of tobacco company Altria Group, which owns a 35% stake in Juul, have dropped by 8.5%. 

FDA could make the move this week, possibly on Wednesday, according to the report. 

In the past, Juul has experienced intense scrutiny from lawmakers, regulators and state attorneys for targetting adolescents as its key demographic. Due to the criticism, the company suspended its sales of several flavored products in the US in 2019.

Meanwhile, the FDA has refused to comment on the recent report.

“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,” Cowen analyst Vivien Azer said.

The decision comes after a two-year review of Juul, which appealed to continue the sale of its electronic cigarettes in the US.

The review of the FDA focused on whether Juul’s products can help smokers quit, and if their benefits outweigh the risk of health issues.

In October last year, the federal agency permitted Juul’s competitor British American Tobacco to market two products- the Vuse Solo e-cigarettes and the tobacco-flavored pod, which is the first vapor item to ever receive clearance from the FDA.

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Meanwhile, Altria invested $1.6 billion in Juul, as of the end of March 2022. The sum is a fraction of the $12.8 billion it invested in 2018.

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“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,” said Rae Maile, an analyst at Panmure Gordon.