FDA Panel Not Friendly Towards Lorillard

Deutsche Bank has published a research report on Lorillard Inc. LO after the company experienced a difficult day of hearings that reaffirm the menthol risk in company products. In the report, Deutsche Bank writes "We come away slightly more concerned, and believe recommendation of menthol restrictions/ban remain very much on the table. Underage/initiation again presented the most negative data, and in questioning it is clear TPSAC is very attuned to age/race stratifications, which are unfavorable. Switching study also asserted menthol may be a starter product, and low switching rates. Presentations on cessation/dependence fairly benign. No explanation by FDA of Dr Connolly resignation. What we can say is it has not improved the dynamics. Other members (esp Benowitz) were more active and critical with questioning, and there are no friendly panel members here." Deutsche Bank maintains its Hold rating and $87 price target. Lorillard Inc. closed yesterday at $77.86.