Altria reported a $4.1 billion write-down on its Juul Labs investment on Thursday, another sizable charge as the vaping crisis continues to roil the e-cigarette industry.
The company now values its 35 percent stake in the e-cigarette company at $4.2 billion, a significant drop from the $12.8 billion it paid in December 2018. Three months ago, Altria, one of the world’s largest tobacco sellers, devalued its investment in Juul by $4.5 billion.
Altria, the maker of Marlboro cigarettes, said its fourth-quarter charge was largely due to the growing number of legal cases pending against Juul, which had increased more than 80 percent since the end of October.
Howard Willard, chief executive of Altria, said that despite “the unexpected challenges” Juul faced, the company had made progress in its noncombustible platform with the IQOS e-cigarette and on nicotine pouches.
“We enter 2020 with continued focus on harm reduction,” he said in a statement.
Thousands of Americans have been sickened by lung illnesses tied to vaping, and at least 59 people have died, prompting the American Medical Association to call for a ban on the products. The Centers for Disease Control and Prevention reported that the vast majority of patients who developed the vaping-related lung disease had vaped THC, the high-inducing chemical in marijuana.
Altria bought its stake in Juul as it was looking to shift away from cigarettes. The e-cigarette start-up, at the time experiencing explosive growth, was valued at $38 billion.
Then came the vaping backlash. Juul has been hit with lawsuits by federal agencies and state attorneys general, who contend that the company targeted young people with deceptive marketing, including nicotine pods with flavors like mango.
The Food and Drug Administration announced a partial ban on flavored pods this month, forbidding the sale of most flavors but exempting menthol and tobacco flavors.
K.C. Crosthwaite, the chief executive of Juul, said the company was focused on “preparing high-quality, scientifically rigorous premarket tobacco product applications to earn authorization in the U.S.”
“As we continue to reset the vapor category, we are committed to advancing the long-term potential for harm reduction for adult smokers while combating underage use,” Mr. Crosthwaite said in a statement.
