Philip Morris International Inc (PM.N) filed a much-awaited U.S. application to market a new type of cigarette that heats rather than burns tobacco and may carry fewer health risks.
The company's application is the first to seek U.S. approval to market a tobacco product as being less harmful than traditional cigarettes.
If approved by the U.S. Food and Drug Administration, the company's iQOS device could give it a significant marketing advantage over alternatives to tobacco products, including electronic cigarettes, which are not allowed to make such a claim.
The device electronically heats tobacco to produce a vapor without burning it, and the company claims the vapor has less than 10 percent of the harmful chemicals found in cigarette smoke.
"We are encouraged by the timeliness of PM's first FDA application submission...We continue to believe iQOS is a positive catalyst for both Philip Morris & Altria providing a unique competitive advantage," Wells Fargo analyst Bonnie Herzog wrote in a note.
Philip Morris, which was spun off from Altria Group Inc (MO.N) in 2008, sells brands such as Marlboro, Red and White and Longbeach in markets outside the United States.
The device is currently sold without a reduced harm claim in several countries, including Japan.
Most traditional tobacco companies are investing in tobacco alternatives as smoking in developed countries has declined.
(Reporting by Natalie Grover and Sruthi Ramakrishnan in Bengaluru and Toni Clarke in Washington; Editing by Anil D'Silva)