22nd Century Group, Inc. (NYSE MKT:XXII), a plant biotechnology
company that is a leader in tobacco harm reduction, announced today
that the Company filed a Form 8-K to make available to the public
the following letter to shareholders:
Dear Fellow Shareholders:
As we approach the end of the year, I am writing to summarize
for you the many exciting developments occurring here at 22nd
Century Group. As you know, 2015 was the first year in which we
began to actively commercialize our significant intellectual
property portfolio. Our total revenues for 2014 were less than
$530,000. In contrast, we reported revenues of approximately $5.6
million for the nine months ended September 30, 2015, and we
believe that we will achieve more than $8 million in revenue for
the full year of 2015, which exceeds our prior financial
projections and will be the highest revenue in our history.
22nd Century is uniquely positioned as the only tobacco company
with the mission of reducing the harm caused
by smoking. In support of this mission, 22nd Century Group
has a dominant, global intellectual property portfolio that now
includes more than 200 issued patents and more than 50 pending
patents. Indeed, 22nd Century controls all the genes in the tobacco
plant needed to regulate and control nicotine, the addictive drug
in tobacco. Accordingly, 22nd Century has the unique ability to
produce Very Low Nicotine (“VLN”) tobacco for (i) commercial
cigarettes such as our MAGIC brand of “0.0 mg nicotine” cigarettes
currently sold in Europe, (ii) research cigarettes such as our
SPECTRUM brand of cigarettes which feature multiple levels of
nicotine (as highlighted in the October 2015 edition of The New
England Journal of Medicine), and (iii) X-22, the world’s only
combustible cigarette under development as a smoking cessation
product. Our expansive IP portfolio and our unique experience in
altering nicotine levels in the tobacco plant have given our
Company a strong competitive advantage in the billion dollar
smoking cessation market and in the premium specialty tobacco
products markets.
Capturing a mere fraction of a percent of the U.S. cigarette
market – or a nominal percentage of the billion dollar smoking
cessation market – would catapult the value of our Company. Indeed,
management is confident that our proprietary technology
will enable us to do exactly that.
As a result of our recent accomplishments – in the laboratory,
in our MSA-authorized factory, and in the marketplace – we have
assembled all the crucial elements of a Modified Risk Tobacco
Product (MRTP) application that will soon be submitted to the U.S.
Food and Drug Administration (FDA) for reduced exposure labeling of
our BRAND A Very Low Nicotine cigarettes. We believe 22nd Century
will be the first company in the world to achieve MRTP designation
for a combustible cigarette. Indeed, we believe that 22nd Century
is closing 2015 with a very strong foundation for continued success
and growth in 2016. Below are highlights of our achievements from
the past year. In 2015, we:
- Completed the BRAND A Modified Risk
Tobacco Product (MRTP) application and plan to submit this
application to the FDA this month.
- Expanded our IP portfolio, enhancing
its value to our shareholders with our global ownership or
exclusive control of more than 200 issued patents and more than 50
pending patent applications.
- Appointed a full-time FDA expert, Gregg
Gellman, as our new Director of Business Development and Regulatory
Affairs.
- Hired Paul Rushton, Ph.D., as Vice
President of Plant Biotechnology. Paul was a unique find as he is
one of the world’s foremost experts on tobacco genome sequencing
and he has completed extensive work on our proprietary tobacco
plants as part of a research team at the University of Virginia
that conducted sponsored research studies for 22nd Century.
- Identified and met with several
potential strategic partners towards funding Phase III clinical
trials for our X-22 prescription smoking-cessation aid in
development.
- Received an order for approximately 5
million SPECTRUM research cigarettes from the U.S. federal
government for ongoing research.
- Commenced new cannabis research with
Anandia Laboratories in Canada.
- Launched the RED SUN super-premium
cigarette brand in the first quarter of this year and have grown
our retail store count to more than 600 locations nationwide.
- Launched MAGIC cigarettes in more than
900 state-licensed retail shops in Spain.
- Expanded our third-party contract
manufacturing base with the addition of six new contract
partners.
Pending receipt of final third party analysis and prior to the
end of December, we plan to submit a Modified Risk Tobacco Product
application to the FDA for our BRAND A VLN tobacco cigarettes.
There are several independent clinical trials that support our
submission. Of notable importance, an independent clinical study
using our SPECTRUM research cigarettes, funded in part by the FDA,
and published in October 2015 in The New England Journal of
Medicine (http://www.nejm.org/doi/full/10.1056/NEJMsa1502403),
found that smokers of our VLN cigarettes (95% less nicotine than
conventional brands) consumed far fewer cigarettes per day and
doubled their quit attempts versus smokers of conventional
cigarettes, all with minimal withdrawal symptoms and without
compensatory smoking or any serious adverse events. Because of the
compelling results of this and six other independent Phase II and
Phase III independent clinical studies using our VLN tobacco, we
believe the FDA will approve our claim of reduced exposure to
nicotine and approve BRAND A as the first
Modified Risk Tobacco product in the United States. We
believe that this reduced exposure designation will likely lead to
important licensing opportunities for our Company.
Our strategic new hires are experienced experts who will work to
bring our unique intellectual property and scientific know-how to
commercial success. Gregg Gellman is charged with shepherding FDA
submissions for our modified risk cigarettes in development (BRAND
A and BRAND B) and X-22, our smoking cessation product in
development. Paul Rushton, our Vice President of Plant
Biotechnology, is uniquely qualified to grow and commercialize our
impressive patent portfolio relating to each of tobacco and
cannabis.
We are also excited that a new research agreement with Anandia
Laboratories in Vancouver, Canada to develop, protect and
commercially produce proprietary cannabis strains will lead to
exciting commercialization opportunities. The primary goals of our
current research activities relating to cannabis are to develop,
protect and commercially produce plant varieties that include (i)
plants with low to no amounts of THC for the commercial hemp
industry and (ii) plants with high levels of cannabidiol, or CBD,
and other non-THC cannabinoids for the legal medical marijuana
markets.
Growth Trajectory into 2016
In recent months, management has identified and met with several
pharmaceutical companies, national retail chains and other
significant potential strategic partners in our on-going efforts to
contract with a third party to fund Phase III clinical trials for
X-22. We believe X-22 is more effective than any current NRTs on
the market and presents smokers with no new side effects and
minimal or no withdrawal symptoms. Best of all, smokers who wish to
quit overwhelmingly prefer the choice of smoking cessation using… a
cigarette! In early 2016, we anticipate entering into a joint
venture with a significant third-party company to bring 22nd
Century’s hugely important VLN tobacco-based smoking cessation
product to market.
The vertical integration of our manufacturing facility in North
Carolina allows us to promptly and accurately produce our own
proprietary and highly specialized products. The factory gives us
the independence and self-determination to produce our proprietary
products in a very competitive, increasingly regulated retail
marketplace. We are continuing to grow RED SUN sales, to fulfill
our contracts to produce SPECTRUM research cigarettes, and to bring
in new contract manufacturing business. These revenues are expected
to provide a stable platform of sustainable, profitable work for
our factory and our Company.
Though we have not yet signed an Asian joint venture agreement,
we have entered into discussions to launch our proprietary VLN
products in Asia and in the Middle East. In January 2016, a
contingent of scientists and business people from Asia are
scheduled to visit our NASCO manufacturing operations in North
Carolina. Additionally, several other important regional
distributors have already inquired about securing distribution
rights for our VLN products in the Middle East. Both Asia and the
Middle East represent significant markets for 22nd Century's
tobacco products.
Dr. Eric Donny (the lead author of the study published in The
New England Journal of Medicine), explained in an article posted
on www.usatoday.com, "The evidence is getting stronger that
reducing nicotine reduces smoking and makes people less addicted to
cigarettes and, in doing so, might make them more likely to quit."
As the nuances of this and other clinical studies coalesce into
accepted fact, we believe that multiple commercial uses of 22nd
Century’s remarkable Very Low Nicotine tobacco will be recognized
as critical elements of a global tobacco harm
reduction strategy.
Indeed, we are well positioned to capitalize on the
multi-billion dollar smoking cessation and broad tobacco market
opportunities that I have described above and we are extremely
excited about the future ahead.
Best wishes to you and your family for a happy holiday season.
Thank you for your investment in our Company and for your continued
support as a 22nd Century shareholder.
Sincerely,
Henry Sicignano, IIIPresident and Chief Executive Officer
About 22nd Century Group, Inc.
22nd Century Group is a plant biotechnology company focused on
technology which allows it to increase or decrease the level of
nicotine in tobacco plants and the level of cannabinoids in
cannabis plants through genetic engineering and plant breeding. The
Company’s primary mission is to reduce the harm caused by smoking.
22nd Century currently owns or exclusively controls more than 200
issued patents and more than 50 pending patent applications around
the world. The Company’s strong IP position led to a licensing
agreement with British American Tobacco (“BAT”), the world’s second
largest tobacco company. Visit www.xxiicentury.com for more
information.
Cautionary Note Regarding Forward-Looking Statements:
This letter contains forward-looking information, including all
statements that are not statements of historical fact regarding the
intent, belief or current expectations of 22nd Century Group, Inc.,
its directors or its officers with respect to the contents of this
press release, including but not limited to our future revenue
expectations. The words “may,” “would,” “will,” “expect,”
“estimate,” “anticipate,” “believe,” “intend” and similar
expressions and variations thereof are intended to identify
forward-looking statements. We cannot guarantee future results,
levels of activity or performance. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date that they were made. These cautionary statements should
be considered with any written or oral forward-looking statements
that we may issue in the future. Except as required by applicable
law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform
these statements to reflect actual results, later events or
circumstances, or to reflect the occurrence of unanticipated
events. You should carefully review and consider the various
disclosures made by us in our annual report on Form 10-K for the
fiscal year ended December 31, 2014, filed on February 5, 2015,
including the section entitled “Risk Factors,” and our other
reports filed with the U.S. Securities and Exchange Commission
which attempt to advise interested parties of the risks and factors
that may affect our business, financial condition, results of
operation and cash flows. If one or more of these risks or
uncertainties materialize, or if the underlying assumptions prove
incorrect, our actual results may vary materially from those
expected or projected.
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version on businesswire.com: http://www.businesswire.com/news/home/20151216005801/en/
Investor Relations:IRTH CommunicationsAndrew Haag,
866-976-4784xxii@irthcommunications.comorRedington, Inc.Tom
Redington, 203-222-7399
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