FDA Amends NRT Rules (revised) - Analyst Blog

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Americans should find it easier to quit smoking following a recommendation by the U.S. Food and Drug Administration regarding over the counter Nicotine Replacement Therapy (NRT).

The FDA has recommended that those keen to quit smoking can now opt for the over the counter NRT on the day they chose to quit smoking even if it is not immediate.

The over the counter NRTs usually come in the form of gum, lozenge or patch. Although previously the products could not be used for more than 12 days, the modification of the rule by the FDA allows users to do so now.

Nicotine is addictive and has been tied to cardiovascular problems, high blood pressure and diabetes. But unlike tobacco, it hasn't been linked to cancer.

The recommendation is expected to boost sales of NRTs. Tobacco giants who are putting more and more focus on alternate tobacco products will benefit from this move. Tobacco companies have to turn to alternate harmless tobacco products as per the evolving demand.

In accordance with such needs, Reynolds American Inc. 's ( RAI ) subsidiary Niconovum USA has developed a nicotine replacement therapy. The Zonnic gum brought into the market by the company looks like cigarettes in many ways. It does not pass on the harmful effect of tobacco to its users. The idea is supportive to the consumers who are trying to quit cigarettes

Moreover, in May 2012, Altria Group Inc. ( MO ) introduced a non-dissolving, lozenge-shaped nicotine disc called Verve - a mint-flavored disc that provides nicotine extracted from tobacco. The other tobacco giant Philip Morris International ( PM ) has purchased the patent and global rights to an aerosol nicotine-delivery system. It will develop the aerosol technology into a smokeless product that it says could be less harmful than traditional cigarettes

The recommendation is another step forward in FDA's anti smoking campaign. The FDA is committed to reduction of cigarette smoking in the U.S. with its stronger anti smoking campaigns. The watchdog has designed warning labels with graphic design of a dead body, cancerous lungs and rotten teeth to be used on cigarette packets. It is intended to scare tobacco lovers each time they pick up a packet of their favorite brand.

Tobacco biggies are worried about the anti-smoking campaigns of FDA. Five tobacco giants across the globe have registered a protest against the forceful use of such graphic labels on the cigarette packets. Reynolds American Inc., Lorillard Inc. ( LO ), Ligget Group, Santa Fe Natural Tobacco, and Commonwealth Brands have gone to the extent of filing a case against the FDA for imposing labels that are intended to reduce smokers rather than helping consumers make a free choice.

While Altria and Lorillard hold a Zacks Rank #2 (Buy), Reynolds America and Philip Morris International hold a Zacks Rank #3 (Hold).

(We have revised this article to correct a mistake. The previous version, published on Apr 05, 2013, should not be relied upon.)



LORILLARD CO (LO): Free Stock Analysis Report

ALTRIA GROUP (MO): Free Stock Analysis Report

PHILIP MORRIS (PM): Free Stock Analysis Report

REYNOLDS AMER (RAI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: LO , MO , NRT , PM , RAI

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