By Anita Hamilton

New wording to describe potential health risks that come from using Zyn nicotine pouches could help reignite sales of the popular smoke-free alternative to cigarettes.

On Tuesday, the Food & Drug Administration said Zyn pouches can be marketed with a modified risk claim that says "using ZYN instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis."

Deutsche Bank analysts wrote in a Tuesday note that the move "should help the business re-accelerate growth in the U.S." by about 5% in the second quarter and 20% in the second half from an inventory-adjusted base.

Shares of Philip Morris, which makes the smokeless product, were down 2.4% on Wednesday after falling 1.1% Tuesday when the announcement came out. Tuesday's muted reaction likely reflects the fact that the move was widely expected after the FDA greenlit the sale of new Zyn products in May, Jefferies' tobacco analyst Andrei Andon-Ionita told Barron's.

"Today feels more like confirmation than a surprise," added Baptista Research founder Ishan Majumdar. "It's a real commercial win but not a new revenue stream out of nowhere."

Philip Morris has said that retail sales of Zyn, as estimated by Nielsen, rose 10%, in the first quarter, compared with the same period in 2025. However, Zyn shipments fell 23.5% to 155 million cans during the same period. The company attributed that drop to supply-chain issues and promotional activities last year.

The announcement could also help Philip Morris win back market share that it has lost to competitors "with broader flavor and strength lineups," Baptista added. Those include rival Rogue's mango-flavored pouches and Velo's wild berry and dragon fruit flavors. Velo is made by British American Tobacco, while Rogue is from privately held Swisher. Another nicotine patch line from Altria, called on!, stands out for its smaller size option.

While the new labelling is a positive step for Zyn sales, the U.S. is a relatively small part of Philip Morris' overall revenue, Morningstar consumer analyst Kristoffer Inton noted. For 2025, sales in the Americas accounted for just 12% of revenue, while Europe had the largest share of 42%.

Philip Morris' smoke-free business accounted for $17 billion of its $40 billion total revenue in 2025, with most of that coming from its IQOS heated tobacco line. The company shipped 155.1 billion units of its heated tobacco products last year versus 20.7 billion of oral smoke-free products including Zyn.

Shares of Philip Morris are up 10.3% this year versus the S&P 500's 9.5% rise.

Write to Anita Hamilton at anita.hamilton@barrons.com

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