Electronic cigarette manufacturer Juul Labs is reportedly preparing to raise funds amidst a series of consumer lawsuits and regulatory uncertainty. The US Food and Drug Administration (FDA) is attempting to force the company to withdraw from the American market. Juul is exploring its options, which may include filing for bankruptcy and awaiting further action from the FDA and the outcome of consumer lawsuits. It faces potential compensation claims amounting to hundreds of millions of dollars.
Bloomberg News reports, citing unnamed sources, that the company has hired Centerview Partners as its banker to assist with financing, and has also enlisted Kirkland & Ellis and Alvarez & Marsal to provide litigation and restructuring advice.
A spokesperson for Juul stated in an email to Axios that they are currently in the early stages of exploring various options, including potential financing choices, to protect their business as they continue to operate in the market and pursue an appeal with the FDA.
We have confidence in our science and evidence, and believe that we can demonstrate that our product does meet the legal standards for 'fit for protecting public health'.
Overall, as one of the more popular brands of electronic cigarettes, Juul's fate is closely watched as it may have an impact on the broader $23.6 billion electronic cigarette market.
What's next: It's a waiting game as the FDA conducts its review and the courts consider Juul's appeal of the ban.
In order to remain in the market, companies must demonstrate that their electronic cigarettes are beneficial to public health. In practice, this means proving that adult smokers who use electronic cigarettes may quit or reduce their smoking, while teenagers are unlikely to become addicted to electronic cigarettes.
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