OTCShowcase's  Instablog

Send Message
I am a long and short term trader that has been involved with the stock market for many years. Primarily a technical analyst to trade, I enjoy diving into the microcap stock world looking for hidden gems. I am looking for companies that meet a select criteria of strong management, products... More
  • 22nd Century Cigarettes Could Help Smokers Kick the Habit 0 comments
    Nov 2, 2011 1:42 PM

    Sound like a paradox?  Not upon a closer look at a recent NY Times article featuring 22nd Century Group, Inc. (OTCBB:XXII) and their genetically-altered tobacco.  22nd Century Group holds 98 patents for genetic manipulation of tobacco plants to reduce or increase the amount of nicotine in cigarettes.  The company’s technology can dramatically lower the nicotine levels in cigarettes while preserving all the other tastes and smells, giving those looking to quit a fighting chance against the lung and brain-gripping addiction.  On the flipside, it can also boost the nicotine levels, a quality that is being developed as a “modified risk” tobacco product because smokers can take fewer puffs to obtain the same amount of nicotine.

    22nd Century produces its cigarettes in varying tar and nicotine levels, many of which are actually being purchased by the federal government for research purposes.  With the passing of a law in 2009 (The Tobacco Control Act), the U.S. Food and Drug Administration cannot completely ban nicotine, but it does have complete regulatory authority over all tobacco products; meaning that it could mandate an extremely low level of nicotine in smokes if it deems it a benefit to public health.

    In fact, Harvard Professor of Public Health and former member of the FDA Tobacco Products Scientific Advisory Committee Dr. Gregory Connolly is publicly calling for the FDA to mandate a massive reduction of nicotine levels in cigarettes – to approximately 0.3 milligrams per cigarette.  At this date, XXII is the only company in the world capable of manufacturing tobacco cigarettes with this minute level of the addictive chemical.  And indeed, if the FDA does in fact mandate such extremely low levels of nicotine content in cigarettes sold in the U.S., tiny XXII could command a market cap well in excess of $2 billion (more than 100 times its current $18MM valuation).

    As the NY Times article goes on to explain,

    “The National Institutes of Health bought nine million of these [XXII] cigarettes, marked ‘for research purposes only,’ from the 22nd Century Group as part of a broadening scientific effort to find ways to regulate cigarettes so that they are non-addictive. The Spectrum brand test cigarettes have eight different levels of nicotine for research, from a nicotine content of 3 percent to 100 percent of the nicotine in the best-selling Marlboro Gold, though a 97 percent reduction is the most common level.”

    The experts all seem to agree that more research with larger groups is required to get a more thorough assessment of the cigarettes as a smoking cessation product and its potential benefits within the cigarette industry.  That data is coming, though.  22nd Century is near concluding a company-sponsored Phase II clinical trial testing the X-22 cigarettes as a smoking cessation product and plans Phase III trials in 2012 to test safety and efficacy.  Moreover, the F.D.A. and National Institute of Health are beginning a $118 million, multi-year study to track approximately 44,000 people and all things pertaining to their smoking habits.

    While there are certainly humanitarian benefits, it cannot be overlooked that this is business.  Big business, as tobacco represents an $80 billion industry.   Realizing the revenues that can be generated from smoking cessation products, many companies have chased their tails to a certain extent trying to develop products such as lozenges and gums with limited success.  22nd Century may be hitting the nail right on the head with its unique approach.  As 22nd Century Chief Executive Officer Joseph Pandolfino states, “No one has ever sought F.D.A. approval of a cigarette as a medical device.”  With multi-million dollar orders already having been delivered and a multi-year supply contract, 22nd Century Group seems to be moving its way toward the catbird’s seat of the industry.  With a current share price of just $0.60, Elemer Piros, PhD, puts a $5.00 near-term price target on XXII.   Given that the results of the company’s pivotal Phase II-B trials will be reported in December, it may be possible for investors to net strong gains in the short-term with this intriguing microcap.

    Neither www.otcshowcase.com nor its officers, directors, partners, employees or anyone involved in the publication of the website or newsletters (“us” or “we”) is a registered investment adviser or licensed broker-dealer in any jurisdiction whatsoever. Further, we are not qualified to provide any investment advice and we make no recommendation to purchase or sell any securities. The prior article is published as information only for our readers. otcshowcase.com is a third party publisher of news and research. Our site does not make recommendations, but offers information portals to research news, articles, stock lists and recent research. Nothing on our site should be construed as an offer or solicitation to buy or sell products or securities. This site is sometimes compensated by featured companies, news submissions and online advertising. Viper Enterprises, LLC (parent company of OTC Showcase) has received no compensation for this article from and owns no shares of the aforementioned company(ies).  Please read and fully understand our entire disclaimer at www.otcshowcase.com/?page_id=190.

Back To OTCShowcase's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • Momenta Pharmaceuticals (MNTA) & Sadoz (unit of NVS) - Judge Emmet Sullivan refuses injunction to stop generic of Sanofi-Aventis' Lovenox.
    Aug 26, 2010
  • Daytrade: GNVC. Long term: investing Cellceutix real heavy. I'm loving them as a long-term play from everything I see.
    Mar 30, 2010
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.