March 23, 2011 / 3:12 PM / 8 years ago

UPDATE 1-Star Scientific says 2 products outside tobacco law, shares rise

* FDA clears way for Star to market its products

* Star shares rise as much as 16 pct to 21-month high (Follows alerts)

March 23 (Reuters) - Star Scientific Inc said U.S. health regulators informed the company that two of its products do not come under a federal law that restricts the sale of tobacco products, clearing the way for Star to market them.

Star shares were up 5 percent at $3.83 in morning trade on Nasdaq. Earlier in the session, they rose as much as 16 percent to $4.19, their highest in nearly two years.

Star, which makes dissolvable tobacco products, said it plans to move forward with the marketing and distribution of the products, Ariva and Stonewall.

The U.S. Food and Drug Administration is weighing the impact of menthol cigarettes in the wake of a 2009 law giving it regulatory power over the industry.

“It is clear from the notices we received that the Center for Tobacco Products does not believe these products are subject to regulation under FDC Act Chapter IX at this time,” Star said.

The measure specifically bans chocolate, fruit and other flavorings that lawmakers said enticed youth to start smoking.

Currently, only cigarettes, cigarette tobacco, smokeless tobacco and roll-your-own tobacco are subject to Chapter IX of Federal Food Drug & Cosmetic Act (FDCA), Star quoted the regulator as saying. (Reporting by Esha Dey in Bangalore; Editing by Gopakumar Warrier)

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