- On February 1, 2022, Kaival Brands’ product partner, Bidi Vapors LLC was granted a judicial stay on the marketing denial order issued by the US FDA, enabling the company to resume sale of their products within the US market
- The legal action comes after the FDA moved to oust over 946,000 vaping products from the market through the issuance of blanket MDO’s whilst approving only 3 over the course of a year-long review
- Bidi Vapor LLC sought to contest the MDO, arguing that their near-285,000-page PMTA filing contained robust and reliable scientific data touting the benefits of their flavored BIDI(R) stick products relative to tobacco-flavored ENDS
- The company’s management believe the judicial stay will lead to a marked improvement in overall sales, with Bidi Vapor’s former distributors likely to resume prior orders
Following months of legal inertia, on February 1, 2022, the Eleventh Circuit Court of Appeals granted Bidi Vapor LLC a judicial stay on their marketing denial order (“MDO”) which was issued by the Food and Drug Administration (“FDA”) (https://ibn.fm/B65bR). In effect, the legal decision enables Bidi Vapor to continue marketing and selling their product while lawsuits remain active. Kaival Brands Innovations Group (NASDAQ: KAVL), a company dedicated towards fostering and incubating companies into mature, dominant brands and global distributor for Bidi Vapor LLC, hailed the decision which followed on from the FDA’s decision to deny and oust thousands of products from the marketplace through its new premarket tobacco product application (“PMTA”) process.
Originally conceived to determine whether a given product was “appropriate for the protection of public health” – an ambiguous concept understood to symbolize a given product’s likelihood to help adult smokers transition to safer alternatives, the FDA had set a deadline of September 2020 for vape companies to submit PMTA applications to support their respective products’ health bonafides. However, a year later and having only authorized a single vaping product and two tobacco-flavored cartridges in the interim, the FDA issued a near blanket denial decision, turning down thousands of applications from small- to medium-sized companies whilst simultaneously, delaying making decisions on companies with the largest market shares.
Following their original receipt of the FDA PMTA request in 2018, Bidi Vapor embarked on a near-two-year effort to assemble its PMTAs at a total cost of around $6.6 million. The company would go on to file 285,000 pages of information, “including health risk and toxicological data, marketing restrictions, and scientific literature reviews,” and “demonstrated [the] products provide substantial benefits in terms of lower relative health risks [compared with smoking]”, ahead of the deadline.
However, the efforts were apparently, largely in vain. The FDA, which had previously explicitly stated in writing that there were no requirements for a company to carry out clinical studies to support their PMTA or evaluate substitute products within their filing, allegedly went on to issue a MDO to any company which had failed to include at least two specific long-term studies within their PMTA application.
In a subsequent lawsuit filed by Bidi Vapor against the FDA, the plaintiff went on to argue, “Indeed, [the] FDA never said Bidi must compare the cessation benefits of its non-tobacco flavoured products to its tobacco flavoured product and [that] the absence of such a study would, without any scientific review, automatically result in an MDO.”
The Eleventh Court of Appeals has now granted judicial stays to three other manufacturers in addition to Bidi Vapor LLC, including the likes of Diamond Vapor, Johnny Cooper, and Vapor Unlimited – with all four companies permitted to market their products freely in the United States in lieu of a final court verdict. Meanwhile, the majority of the over 946 thousand flavored e-cigarette products subject to the original FDA-issued MDOs continue to languish out of the market nearly six months removed from the FDA’s decision whilst awaiting further court-ordered resolutions over the coming weeks and months (https://ibn.fm/reb4W).
Bidi Vapor and Kaival Brands expressed their satisfaction with the court order and reiterated their belief that the decision would result in a significant improvement in the companies’ sales effort.
“We expect this judicial stay will result in a rebounding of BIDI(R) Stick sales,” said Niraj Patel, president and CEO of both Kaival Brands and Bidi Vapor. “Many wholesale and retail partners had discontinued or slowed purchases of the BIDI(R) Stick, until we heard back from the courts on the likelihood of our merits case succeeding,” Patel said. “This is what our wholesale and retail partners have been waiting for.”
For more information, visit the company’s website at www.KaivalBrands.com.
NOTE TO INVESTORS: The latest news and updates relating to KAVL are available in the company’s newsroom at http://ibn.fm/KAVL
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