Lorillard Wins First FDA Clearances of Tobacco Products

Lorillard Inc., the largest U.S. maker of menthol cigarettes, won the first two clearances to market new tobacco products among 500 requests, under authority given in 2009 to U.S. health regulators.

The Food and Drug Administration cleared two of Greensboro, North Carolina-based Lorillard’s Gold Box cigarettes for sale in the U.S. They are the first rulings handed down by the agency since lawmakers gave it the power to determine which current tobacco products can remain on the market and which new ones can be introduced.

The FDA cleared the cigarettes through a “substantially equivalent” determination that makes a judgment as to whether products have the same characteristics as existing ones or raise new public-health questions. The agency denied four other requests for the determination, it said today in a statement.

“It is important to emphasize that an SE decision does not mean that the agency considers a product to be safe,” wrote Mitch Zeller, head of the FDA’s Center for Tobacco Products, in a blog post on the agency’s website.

Lorillard rose less than 1 percent to $43.53 at the close in New York.

“We are proud to be the first company in the industry to receive authorization to begin marketing these new products in the U.S. through the FDA’s substantial equivalence pathway,” Murray Kessler, Lorillard’s chairman and chief executive officer, wrote in an e-mail. The agency “carried out its evaluation process in a deliberate manner reflecting sound science,” he said.

New Products

The FDA couldn’t reveal which substantially equivalent requests they denied for legal reasons, Jennifer Haliski, an agency spokeswoman, said in an e-mail.

The decisions announced today were the first time a federal agency declined to allow a tobacco company to market a new product because of the threat it poses to public health, the Campaign for Tobacco-Free Kids said in a statement.

“Today’s actions are a start: They involved a small number of the applications that have been filed by the tobacco industry,” Matthew Myers, president of the Washington-based group that advocates for reducing tobacco use, said in the statement. “But today, the federal government was able to rule on some products tobacco companies wanted to sell –- and that is no small new reality.”

The new products cleared were Newport Non-Menthol Gold Box 100s and Newport Non-Menthol Gold Box, according to Zeller’s blog.

‘Overhang’ Remains

“While today’s development is a positive step, there is still work to be done,” Bonnie Herzog, an analyst at Wells Fargo & Co. in New York, said today in a note to clients. The lack of FDA substantial equivalence rulings “has been an overhang,” she said.

Congress granted the FDA authority over tobacco products in 2009 and the new regime has created a backlog of requests at the agency. As of earlier this month, there were 500 requests to approve products not currently sold and 3,500 for products already in stores, Zeller said in a June 6 interview.

“Today’s decisions are just the first of many forthcoming product review actions to be issued,” Zeller said in the agency’s statement.

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