The company cites the current PMTA process, market reactions and the delay of the new Bidi Pouch product as factors for the downward revision of revenues.
Kaival brand innovation group, the exclusive global distributor of Bidi Steam‘s Bidi Stick, has released its fiscal third quarter (FY) 2021 results. Bidi Vapor is a disposable electronic nicotine delivery system (ENDS) intended exclusively for adult consumers 21 years of age and older.
Effects of the FDA review process
Kaival said in a statement that the company believes the tobacco pre-market application process (PMTA) undertaken by the United States Food and Drug Administration (FDA) has had a significant impact on the e-cigarette industry.
Prior to September 9, 2021, the court-set deadline for the FDA to make PMTA decisions for pending claims, Kaival assessed that many retailers and distributors were reluctant to accept new inventory.
âWe believe these retailers were concerned about the risk of ending up with inventory that, after September 9, 2021, could be deemed adulterated or mislabeled by the FDA and, therefore, illegal to sell,â the company said. “Separately, we believe there were other retailers willing to buy counterfeit or sub-optimal products from manufacturers who were selling these products at significantly reduced prices.”
These manufacturers were willing, according to Kaival, to significantly reduce selling prices because they realized that they would likely not receive PMTA clearance from the FDA on September 9, 2021, and were trying to recognize the revenue associated with this. that they thought was probably an unsaleable product after the deadline. “These tangential consequences of the PMTA process made the third quarter of fiscal 2021 an extremely difficult quarter for us,” said the Kaival press release.
Multiple factors in the delay of the Bidi pocket
The COVID-19 pandemic has also impacted Bidi Vapor’s ability to perform quality testing due to supply chain disruptions and to develop its new product, the Bidi Pouch, according to its release date. target, which hampered the company’s ability to begin distribution of Bidi Pouch.
âThese impacts ultimately affected our financial results for the quarter ended July 31, 2021,â said Kaival. âWe reported revenue of $ 3.4 million for the quarter ended July 31, 2021, compared to $ 32.4 million for the quarter ended July 31, 2020. We reported revenue of $ 59.5 million for the nine months ended July 31, 2021, down from $ 54.9 million. million for the nine months ended July 31, 2020. â
Bidi Vapor also urged a possible FDA ban on the marketing and distribution of synthetic nicotine in the United States, strongly arguing that synthetic nicotine should be classified as an unapproved drug and, therefore, subject to regulation. applicable pharmaceutical of the FDA.
Kaival expects the impact of the FDA’s continued scrutiny on the ENDS industry, as well as the start of Bidi Pouch distribution, initially outside the United States, to have a positive impact on longer term, but the momentum that affected the third quarter, as well as the delay in launching the Bidi Pouch in the United States, revenues for the full year ending October 31, 2021 will be lower than previously released forecasts. The company now expects revenue for the year to be around $ 68 million, compared to the previous forecast of $ 400 million.
âWhile our third quarter revenue fell short of our expectations, we remain true to our commitment to prevent NDT use among youth, to market responsibly to 21 year old adult tobacco users. and more, to work with law-abiding retailers and distributors and to comply with all federal and state laws and taxes applicable to the distribution of the BIDIÂ® Stick, including, but not limited to, the Act on family smoking prevention and tobacco control, the Food, Drugs and Cosmetics Act and the Prevention of All Cigarette Trafficking Act, âsaid Niraj Patel, Founder and CEO of Kaival Brands.
âFrom the start we, with Bidi Vapor, have been built on the foundation of an industry and regulation that exceeds compliance standards. Over the past 12 months, together, we have prepared for a post-PMTA regulatory environment and have maintained our focus on delivering a cutting-edge premium vape experience as well as establishing the best prevention programs and protocols. youth access.