Juul Labs was on a deadline with the FDA, as we discussed in an earlier posting in February, set for May. Their assignment – and those of their rival vape manufacturers is to ” present scientific studies showing that their products are safer than cigarettes. They also must demonstrate that their e-cigarettes present a net benefit to public health—in other words, that the benefit of helping adult cigarette smokers switch to a safer alternative outweighs the potential harm of hooking young people on nicotine“. If you’ve done any reading into vaping you’ll know that’s a tall order. Covid-19, though, has given Juul a reprieve till September, thanks to a judge’s decision, as the Wall Street Journal reports on April 23, 2020.
We continue to be unsure how to value the $39.1mn of BDC first lien debt exposure held by sister BDCs BlackRock Capital and BlackRock TCP Capital (TCPC), which remains valued at par. Truth be told, we’re more pessimistic than before but maybe we’re under-estimating the influence of Big Tobacco, which owns a big stake in Juul. We’ll get back to this conundrum in September.