SANTA MONICA, CA / ACCESSWIRE / June 8, 2017 / Shares of 22nd Century Group, Inc. (NYSE MKT: XXII) experienced some fluctuations, but mostly consolidated in the $1.40 area for the past two months after rising from a low of 81 cents early in the year. With some positive developments in the last week or so, shares of XXII have been catalyzed again, soaring about 34% in only four trading sessions this month. With the run on Wednesday, shares touched as high as $1.85, a level last reached on December 5, 2014.
Fundamentals Driving XXII
22nd Century, headquartered about 20 miles east of Buffalo, NY, owns an extensive intellectual property portfolio facilitating regulation of biosynthesis of nicotinic alkaloids in plants through genetic engineering. In short, the company's technology allows the production of varying levels of nicotine in tobacco, from very high to extremely low. For context, consider that "extremely low" means 22nd Century's tobacco, appropriately called "Very Low Nicotine" (VLN), contains about 97% less nicotine than leading "light" cigarette brands marketed today.
Through a wholly-owned subsidiary, 22nd Century is applying similar technology to control constituents in production of cannabis plants.
The latest technological breakthrough for 22nd Century scientists came through a collaboration with North Carolina State University resulting in non-GMO VLN tobacco. This is qualified as the tobacco containing no foreign DNA and no trace of genetic modifications, making it ideally suited for use in several 22nd Century products, including a smoking cessation product in development currently known as "X-22."
Non-GMO has many benefits, namely sidestepping onerous regulations that come with products being genetically modified. It also means that 22nd Century can look to countries with GMO import restrictions, such as Japan, India and Korea, for new revenue streams. The company says it has moved immediately to contact marketers and distributors to explore new market opportunities.
At the end of May, the company noted a "dramatic surge" in attention relating to its Very Low Nicotine (VLN) cigarettes, including 25 independently funded VLN-related clinical trials ongoing. To put that in perspective, that's nearly three-fold the total number of studies completed in the last 10 years. Collaborators on the research of 22nd Century's proprietary tobacco technology include the National Institutes of Health (NIH), the U.S. Food and Drug Administration (FDA), the National Institute of Allergy and Infectious Diseases (NIAID), the National Institute on Drug Abuse (NIDA), and the National Cancer Institute (NCI).
Interest by the U.S. government was exemplified by an order disclosed at the start of June placed with 22nd Century Group subsidiary Goodrich Tobacco Co. for 2.4 million SPECTRUM research cigarettes. There are a variety of clinical trials in progress evaluating qualities and efficacy of the company's VLN cigarettes as related to smoking cessation, nicotine exposure and addiction, amongst other things. 22nd Century is the only company that can produce the SPECTRUM line, which have nicotine yields varying over a 50-fold range.
More than 24 million of the purely experimental (not for commercial sale) cigarettes have been ordered from Goodrich.
Speaking to the growing interest, 22nd Century pointed out that there have been 33 new scientific publications relating to its VLN tobacco technology. For 22nd Century, the timing of support, including nine recent publications urging policymaker to incorporate VLN cigarettes as a tobacco control policy tool, couldn't be much better. The company is slated to have a meeting with the FDA's Center for Tobacco Products to discuss 22nd Century's "BRAND A" cigarettes. The VLN cigarettes contain at least 95% less nicotine and nicotine yield than popular cigarettes today, such as Marlboro, Newport and Camel.
The company is seeking approval of a Modified Risk Tobacco Product (MRTP) application for the VLN cigarettes, which will allow the company to market and package the cigarettes with claims that they reduce a smoker's exposure to nicotine. Clinical studies have demonstrated that smokers who smoke VLN cigarettes containing 22nd Century's proprietary tobacco smoke fewer cigarettes per day resulting in significant reductions in smoke exposure, including "tar," nicotine and carbon monoxide.
Authorizing the application should give 22nd Century a competitive edge and establish the company as a market leader in the MRTP space.
A Strong Eight Days and 2017
Three influential press releases showing the company is growing fundamentally stronger and has the attention of scientists and government agencies in the advent of the important FDA meeting has Wall Street rallying around shares of XXII. After closing 2016 at $1.09, shares of XXII are up 68.8% in 2017 through Wednesday's close at $1.84.
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