Link to video:
https://youtu.be/Rm8b-HOOFRg
In this video, I will share with you, what you need to know about the latest news on the Healthier Choices Management, ticker symbol HCMC, the Philip Morris Lawsuit. I’ll also share Breaking news about how the lawsuit is affecting the stock, key levels of support and resistance in HCMC’s stock chart, plus information on their new patents added for 2021.
But this is not financial advice, and for entertainment only.
Hi this is Lynn, and welcome back
Let’s dive into the article about Philip Morris meeting with the FDA and leveraging President Biden to make its case for Iqos in the patent dispute
Here are the article’s KEY POINTS
- Philip Morris International met with the FDA on Friday November 5th to present its argument for why they and Altria should be allowed to import and sell Iqos devices in the US
- This is the latest development in a patent dispute with R.J. Reynolds. But the outcome will potentially affect HCMC.
- The Biden administration is also conducting an administrative review on PMI’s plea.
Allegedly, Philip Morris told the FDA that their Iqos is unique, in its design and ability to convert smokers. They are also arguing that the U.S. International Trade Commission overstepped its bounds, blocking the products sales in the US, because the FDA is in charge of regulating which tobacco products and alternatives can be sold,
Previously In late September, the ITC had ruled that the Iqos device infringed on two of Reynolds’ patents. Now, The Biden administration is conducting a 60-day administrative review until Nov. 29.
Altria launched the Iqos device in the United States two years ago, but began development of the product more than a decade ago. The device heats tobacco without burning it, which is meant to give users the same rush of nicotine without as many toxins as smoking a cigarette.
Philip Morris sells the device in dozens of international markets and has granted Altria a license to sell it in the U.S. While Iqos doesn’t represent a large portion of Altria’s U.S. business, it’s part of the company’s shift away from traditional tobacco products, which have seen falling demand.
The U.S. Trade Representative will make a recommendation to President Biden after listening to input from agencies, including the FDA, which regulates tobacco products.
Phillip Morris believes they have a pretty strong case. The company’s argument to keep selling Iqos includes the public health benefit of the device. Altria says that 20,000 U.S. consumers are users of the device, that could revert back to cigarettes if Iqos disappears from shelves.
PMI’s argument is that they are pretty convinced that the vast majority of their IQOS users will go back to smoking cigarettes as their device provides an experience that comes close to the taste and ritual of a cigarette.
And, PMI plans to use this argument with President Biden.
The next step in the administrative review is a Trade Policy Staff Committee meeting, which will likely happen this week. The group includes federal agencies, like the FDA, U.S. Department of Agriculture and the Department of Commerce.
If the administration sides with R.J. Reynolds, Iqos could be off of U.S. shelves for months as it waits for a decision on a separate claim from Reynolds.
In the worst-case scenario for Altria and Philip Morris, the two companies would have to go back to the drawing board, moving production to the U.S. or changing up the design enough to avoid patent infringement claims.
Shares of Philip Morris have climbed 12% this year, giving it a market value of $145 billion. Altria’s stock is up 9% in the same time, raising its market value to $83.1 billion.
Just to give you a quick insight into the potential ban on Philip Morris and Altria related to the Iqos in the US. This article from September 30th provided excellent insight.
- The U.S. International Trade Commission had ruled that Philip Morris International and Altria must stop the sales and import of their Iqos tobacco device.
- The import and sales ban will take effect in two months after an administrative review.
- Philip Morris planned to appeal the trade agency’s decision.
As I mentioned earlier, this decision was the result of a patent case filed by rival R.J. Reynolds.
The Philip Morris IQOS® product is currently the subject of two other patent infringement proceedings filed by RJ Reynolds Tobacco Company. One proceeding is before the International Trade Commission and seeks to stop the importation of the IQOS® product into the United States; the other is a patent infringement action currently pending in the Eastern District of Virginia. RJ Reynolds’ patents are unrelated and not affiliated with the patents asserted in the HCMC case.
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The trade agency found that the cigarette alternative infringed on two of Reynolds’ patents.
The import and sales ban will take effect in two months after an administrative review that requires President Joe Biden’s signature.
Altria claimed that they continue to believe RJR’s patents are invalid and that IQOS does not infringe those patents.
Reynolds stated that the infringement of their intellectual property undermines their ability to invest and innovate and as a result reduces the health impact of their business.
It’s interesting to note that British American Tobacco, the parent company of Reynolds American, has already pursued similar legal action against Philip Morris in a handful of international markets. However, courts in the United Kingdom and Greece have sided with Philip Morris in those disputes.
Of course, this all concerns us regarding the HCMC lawsuit, because if PMI’s IQOS is banned in the US this would reduce the amount of damages that HCMC could collect. It would prevent the company from claiming future damages. But, HCMC could collect damages for the couple of years that the PMi product has been selling.
Now let’s look at how all of this is affecting HCMC’s stock performance.
As you can see, short sellers are continuing to pullback from this stock, they are retreating, as HCMC was showing an average of 32.6 percent of volume shorted over the past five days. This is still a significant amount, but a nice reduction from the previous month’s percentages.
HCMC’s year-to-date stock chart shows an extended base from late September.
The three-month chart gives us a closer look that this basing action, especially when viewed using the Heikin-Ashi candlesticks shown here. They give us a clearer, and easier to understand view into the general direction of price movements. To learn more about Heikin-Ashi candlesticks see the link in the description below this video.
In looking at HCMC’s Security Details, the market cap is now 203 million, with 750 billion Authorized Shares and 339 billion shares outstanding. The stock’s float is 7 billion, making it more difficult to move this stock on good news. This is especially difficult when noticing that the average volume of shares moved per day is 600 million per this Yahoo Finance profile.
While we are waiting on the lawsuit outcome, HCMC has been busy this year creating new product and filing patents. Out of their 35 patents on file, two were filed in 2021. You can see the complete list of their patents on this list, which is somewhat of an eye chart.
Here you can see HCMC’s filing for a vaporizer filter filed in February, and an electronic vaporizer cartridge with encased heat source, filed in July.
I’m assuming that these two elements work with the electronic vaporizer with laser heat source HCMC had filed in February of 2020.
A settlement or licensing deal could drive HCMC into a whole new stratosphere!
The final word is that if Philip Morris loses their case to sell IQOS product in the US, this would greatly impact the funds that HCMC could win in their lawsuit. There would then be no future product sales that HCMC could go after. Remember that Philip Morris has only been selling their IQOS product in the US for approximately two years.
Do notice that the court case for the three Reynolds businesses againgt Philip Morris has been going on for more than a year! So, likely HCMC’s case will also take quite a while yet. But as progress comes out for this case, it will likely have a big effect on HCMC’s stock price!
I always love hearing from you, so please let me know in the comments below, what your thoughts are about HCMC, or if there is anything I missed? I’d also love to hear about any other stocks that you are excited about right now. Go here to discover more hidden gems in our Penny Stock Video playlist