Wells Fargo Securities LLC weighed in on highlights from the National Association of Tobacco Outlet (NATO) Show in Las Vegas last week where Mitch Zeller, director of the FDA’s Center for Tobacco Products, presented on a panel.
“Overall, Director Zeller’s tone and comments were consistent with those made at previous conferences and we believe the agency remains committed to working with the industry,” said Bonnie Herzog, senior analyst with Wells Fargo Securities LLC.
During the panel, Zeller discussed the FDA’s current strategic priorities. Wells Fargo noted the following key takeaways:
(1) FDA’s biggest opportunity remains a comprehensive nicotine regulatory policy and Zeller is optimistic there is an opportunity to start looking at nicotine differently;
(2) FDA’s final rule on e-cigs/vapor regulation is a huge undertaking and according to Zeller, “the No. 1 thing the FDA needs to do is to finalize deeming.” In terms of timing, Zeller stated “it really is close and it will happen in this administration;’
(3) FDA remains very focused on reducing tobacco and nicotine use by kids with a goal of demoralizing the products; and
(4) Potential menthol regulation is not expected any time soon IF ever.
“We remain bullish on e-cigs/vapor long term, but cautious near term given the heightened uncertainty. While we’re encouraged that final deeming regulations could be released soon giving industry participants long-awaited clarity, we believe some uncertainty will remain and there will likely be a transition period given the regulations won’t be effective immediately and there will likely be litigation,” Herzog noted.