As the U.S. vaping crisis has continued to escalate, members of Big Tobacco have admitted that they have called off a potential merger discussion.

Phillip Morris International and Altria confirmed they were in merger discussions in late August before nixing a potential deal in September. PMI Chief Financial Officer Martin King told analysts on a call discussing the company’s third-quarter earnings that the meetings were “a natural outgrowth” of Altria and PMI’s work together launching Iqos, PMI’s heated tobacco device, in the U.S.

“One big thing was the environment was developing rather rapidly as we were in these discussions with all the news around e-vapor and the regulatory approach from FDA,” PMI Chief Financial Officer Martin King said on the call.

Over the past few months, more than 1,200 people have become ill from vaping, and 29 have died from a mysterious acute lung disease. This has led national, state, and local politicians to insist on banning e-cigarettes to protect public health, often imploring emergency powers to implement them.

As tobacco companies look to mitigate the damage caused by the vaping scare, new tobacco product IQOS, which was recently granted permission to be sold in the U.S., has now moved to the forefront.

The Food and Drug Administration determined in April that Philip Morris International could begin marketing and selling the heat-not-burn device IQOS, the first product of its kind to be sold in the U.S. Heat-not-burn tobacco products, also called heated tobacco products, are electronic devices that heat tobacco leaves to produce an inhalable aerosol, rather than burning tobacco like traditional cigarettes.

While IQOS is an electronic device, the FDA has classified it as a cigarette, which means the product is subject to all the same existing restrictions for traditional cigarettes, Philip Morris claims these products are safer than cigarettes.

IQOS grew 37% last quarter globally, although it currently accounts for only 5% of the company’s overall sales.

“We chose the path to focus on the big opportunity we have with Iqos, so let’s go down that road,” King said. “It’s right in front of us and we see that opportunity being even bigger than before the discussions.”

An Altria spokesman in an email said the company is “excited” about its “strong partnership with PMI and being able to introduce IQOS to adult smokers in the U.S.”

Investors who are concerned about the effects of vaping and tobacco in general could consider healthcare ETFs like the Fidelity MSCI Health Care ETF (FHLC) or the Vanguard Health Care ETF (VHT), while those who would like to invest in rising tobacco technology trends could consider the Consumer Staples Select Sector SPDR Fund (XLP) or the iShares Global Consumer Staples ETF (KXI).

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