Tobacco stocks surge as FDA announces crackdown on e-cigarette companies over teen use

Tobacco stocks surged Wednesday after regulators threatened to pull e-cigarettes from shelves if manufacturers do not control "widespread" teen use.

Shares of Altria rose 5 percent.British American Tobacco shares increased nearly 6 percent, and Philip Morris International shares increased 4 percent.

Across the entire e-cigarette category, the FDA is considering restricting manufacturers from selling flavored nicotine liquid or making the products undergo an agency review. Gottlieb extended an Obama-era deadline that would have required e-cigarettes on the market by 2016 to be reviewed starting this year.

The FDA is specifically ordering five brands — Juul, Vuse, MarkTen, Blu E-cigs, and Logic — to submit plans within 60 days detailing how they will prevent teens from using their products. The agency may require the companies to revise their sales and marketing practices, to stop distributing products to retailers that sell to kids and to stop selling some or all of their flavored e-cigarette products until the companies clear the application process.

While British American Tobacco and Altria own two of the brands targeted in Wednesday's announcement, the companies are both asking the FDA to review new "heat-not-burn" products. These devices warm tobacco instead of burning it, which may make it less harmful than smoking conventional cigarettes and unappealing to teens because the products deliver an experience that's similar to traditional smoking.

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