Shares of tobacco companies Altria (MO) - Get Altria Group Inc Report and Philip Morris (PM) - Get Philip Morris International Inc. Report gained Wednesday afternoon after the Food and Drug Administration approved marketing of e-cigarette products for the first time.
The FDA issued marketing granted orders to R.J. Reynolds for its Vuse Solo device and three accompanying tobacco-flavored e-liquid pods.
"Today’s authorizations are an important step toward ensuring all new tobacco products undergo the FDA’s robust, scientific premarket evaluation," said Mitch Zeller, the FDA's director of the Center for Tobacco Products.
"The manufacturer’s data demonstrates its tobacco-flavored products could benefit addicted adult smokers who switch to these products," Zeller said.
The regulatory agency said that manufacturers must demonstrate that the marketing of the product will be appropriate for the protection of public health and that the approved products met this standard because those who used the R.J. Reynolds products were exposed to "fewer harmful and potential harmful constituents," compared to traditional cigarettes.
The agency also issued 10 marketing denial orders for flavored vaping products from R.J. Reynolds due to "confidential commercial information issues."
Last year, Altria distanced itself from vaping giant Juul after loosing billions on its own investment amid a federal ban on vaping due to claims that the products were marketed to kids.
Altria said in 2020 that it would no longer provide marketing or retail distribution services for the company. The company did leave the door open however for itself to make a vaping product on its own.
Meanwhile, Philip Morris sells numerous vaping products including its popular IQOS brand.
Shares of Philip Morris on Wednesday were up 2% to $97.47 a share, while Altria shares gained 1.6% to $47.92 a share.