Shares of tobacco giant Altria Group Inc. have dropped nearly 10% in the past two days following a report on Monday that the U.S. government is considering a rule that would lower the nicotine content of cigarettes.
The Biden administration is mulling a requirement that nicotine be lowered to levels that aren’t addictive, the Wall Street Journal reported, citing people familiar with the matter. The Food and Drug Administration could also move to ban menthol cigarettes, the Journal reported.
Shares of Henrico County-based Altria — the parent company of Philip Morris USA, which sells Marlboro in the U.S. — slumped 6.2% on Monday and dropped an additional 3.85% on Tuesday to close at $47.19.
Philip Morris International Inc., which sells Marlboro and other cigarette brands outside of the U.S. and was spun off from Altria as a separate public company in 2008, fell 1.3% on Monday. But its stock rose 2.54% on Tuesday to close at $94 after reporting first-quarter results that exceeded Wall Street expectations.
Stock of 22nd Century Group Inc., which sells cigarettes with very low nicotine levels, jumped 18% on Monday and rose an additional 5.35% on Tuesday.
The FDA declined to comment on the report. Altria didn’t respond to an email request for comment
The FDA has been expected to state its position on whether it would still allow menthol cigarettes by April 29, under a deadline imposed by a lawsuit.
The case, brought by the African American Tobacco Control Leadership Council, had sued the government agency, saying it had taken an unreasonably long time to respond to a citizen’s petition filed years ago that sought to prohibit menthol as a flavor in cigarettes.
There also has been anticipation that the agency would make a decision about nicotine levels in cigarettes.
The agency had declared in 2018 that it intended to do so, but Altria had said it wasn’t clear whether that was “technically achievable” or would lead to reduced smoking.
Since then, 22nd Century Group, based in Williamsville, N.Y., has come out with reduced nicotine cigarettes.
Clifford B. Fleet, the president and CEO of the Colonial Williamsburg Foundation since early 2020, had served as president and CEO of 22nd Century Group and now serves as a board member. He had served as president and CEO of Philip Morris USA from November 2013 to June 2017.
Business Editor Gregory J. Gilligan contributed to this report.