22nd Century Group, Inc. (NYSE American: XXII) (“22nd Century” or
“the Company”), a leading plant-based, life science company driven
by next generation biotechnology, today provided a strategy update
letter from Chief Executive Officer, James A. Mish.
Dear Fellow Shareholders,
When I first spoke with you during our 2020 second quarter
earnings call, I had been CEO of 22nd Century for only three weeks
and was still evaluating the strategic ambition, opportunities, and
direction of our Company. Now, as my 100-day milepost approaches, I
am writing to provide you with an update on how the 22nd Century
leadership team is working very hard to capitalize on near-term
milestones as well as on exciting medium and long-term
opportunities to increase shareholder value.
On top of everyone’s mind is the Company’s historic Modified
Risk Tobacco Product (MRTP) application with the U.S. Food and Drug
Administration (FDA) and the tremendous commercial and public
health opportunities it represents. I have spent a great deal of
time studying and thinking about our MRTP candidate and am more
excited today than when I joined the Company: VLN® is a remarkable
product and addresses a very large market opportunity.
With 95% less nicotine than any leading brand – or any other
cigarette in the U.S. – FDA authorization of our VLN® MRTP
application would give 22nd Century the first and only Modified
Risk Tobacco Product designation for a combustible cigarette. VLN®
would also be the only FDA-authorized MRTP product not developed to
create or sustain addiction. After interacting with shareholders,
public health officials, and clinicians over the last ten weeks, I
have come to recognize how critical VLN® and our Company’s primary
mission really are. Reducing the harm caused by smoking is not only
what defines 22nd Century, it is also a mission of which we can all
be incredibly proud. According to the Centers for Disease Control
and Prevention (CDC), there are still 1,300 people in the U.S. and
22,000 people around the world who die each and every day due to
smoking. VLN® is 22nd Century’s solution – supported by independent
studies that were largely funded by the FDA, the National
Institutes of Health (NIH), and other federal government agencies –
to help drive these terrible statistics down. It is my pledge to
you that we will do everything in our power to bring VLN® to
market. That is why securing an FDA marketing authorization
for our MRTP reduced
nicotine content
cigarettes is my #1
priority.
To this end, we have increased the Company’s proactive efforts
with the FDA to authorize our MRTP application, as we believe that
there is an urgent public health need for a reduced nicotine
content combustible alternative like VLN®. We now believe it is not
a matter of if but when our application will be granted, and we
believe we are months, not years, away from securing our MRTP
designation. I am also proud to report that
we have plans in place to
commercialize VLN® in the
U.S.
90 days after we receive our
MRTP authorization. These plans include all
aspects of supply, manufacturing, sales, and a marketing campaign
that has been designed to introduce adult U.S. smokers to the
world’s lowest nicotine content cigarette.
What does all of this mean to 22nd Century shareholders?
Our consumer market research indicates that 60%
of smokers have an interest in
using VLN®
cigarettes. There are 34 million smokers in the US
and more than 1 billion worldwide. Indeed, having the only
combustible cigarette with a modified exposure claim authorized by
the FDA, the world’s preeminent life-sciences regulatory body,
could serve as a catalyst for 22nd Century’s commercial sales as
even achieving just one-quarter of one percent (0.25%) market share
of the U.S. tobacco market could result in revenues that may over
time, based on current market multiples, drive the Company’s market
capitalization more than 5 to 10 times higher than it is today. In
addition, FDA authorizing the marketing of 22nd Century’s modified
risk tobacco products with modified exposure claims would open
multiple licensing opportunities for 22nd Century’s proprietary
reduced nicotine content tobacco to accelerate the commercial and
public health potential. These opportunities could significantly
drive increases to 22nd Century’s market value.
While our tobacco technology and regulatory progress are taking
center stage, we will also grow beyond our current near-term
primary mission by advancing our considerable hemp/cannabis
technology to capitalize on both our proprietary plant lines and on
what we believe is among the highest quality, hemp/cannabis
reference genomes in the world. We plan to advance and gain market
share in this massive franchise with both our in-house capabilities
and strong strategic partnerships. 22nd Century’s partnership with
KeyGene has served as a key competitive advantage for us and we
plan to review and refine our focus with KeyGene in the coming
months to develop plant lines to serve pharmaceutical and consumer
packaged goods, including stable, ultra-high THC lines; rare
cannabinoids; and ultra-low terpene modulation to address mal odor
and taste in certain consumer and other products. Please also
understand that under my watch, 22nd Century will focus the
Company’s resources only on hemp/cannabis initiatives that have
strong consumer or clinical/medical benefits and highly accretive
commercial applications.
Ultimately, 22nd Century is a plant-based, life science
biotechnology company that utilizes both its internal
expertise and external strategic resources to create disruptive and
proprietary technology with important commercial applications. We
currently own or control the rights to commercialize over 200
issued and pending patents. To date, our primary focus has been on
nicotine modulation in tobacco. Going forward, we plan to expand
our efforts within the tobacco and hemp/cannabis franchises to
penetrate additional global markets in pharmaceuticals and consumer
products. And, finally, we have recently identified a third
franchise that we plan to share with shareholders and the
investment community in the coming months.
With all the science already undertaken and that which is in
development for the future, the present is a remarkable time of
commercial opportunity for 22nd Century. The world is set to
witness the fruits of more than a decade of our research and
development and more than $100 million of independent clinical
studies – that have shown that our proprietary VLN® cigarettes
contain 95% less nicotine than the leading brands in the United
States. We believe that our MRTP application is in the very final
stages of the FDA authorization process.
It is an exciting time for 22nd Century, and it is my privilege
to serve as the Company’s CEO during this time in our Company’s
history. I hope this letter finds you well and that it reminds you
of how special 22nd Century really is. Thank you for your support
as a Company shareholder, and I look forward to sharing exciting
Company developments in the weeks and months to come.
James A. MishChief Executive Officer, 22nd Century Group
About 22nd Century Group, Inc.22nd Century
Group, Inc. (NYSE American: XXII) is a leading, plant-based, life
science company that develops and provides unique, commercial
solutions to the life science, consumer products, and
pharmaceutical markets. Using plant genetic engineering and modern
plant breeding techniques to create new, proprietary plants and
intellectual property, 22nd Century seeks to enhance and broaden
the consumer experience by providing natural, plant-derived
ingredients to product formulators and manufacturers. In the
tobacco plant, 22nd Century is able to modulate the levels of
nicotine that naturally occur in the plant. With this technology,
22nd Century is poised to disrupt the global tobacco market with
its proprietary reduced nicotine content tobacco cigarettes
containing 95% less nicotine than conventional tobacco and
cigarettes. 22nd Century is applying its plant genetics expertise
to the hemp/cannabis plant as well to develop new and proprietary
varieties of hemp/cannabis with unique cannabinoid and terpene
profiles and desirable agronomic traits. 22nd Century also owns
or controls the rights to commercialize over 200 issued and
pending patents related to the tobacco and hemp/cannabis
plants.
Learn more at xxiicentury.com, on
Twitter @_xxiicentury and on LinkedIn.
Cautionary Note Regarding Forward Looking
Statements
This press release contains forward-looking statements
concerning our business, operations and financial performance and
condition as well as our plans, objectives and expectations for our
business operations and financial performance and condition that
are subject to risks and uncertainties. All statements other than
statements of historical fact included in this press release are
forward-looking statements. You can identify these statements by
words such as “aim,” “anticipate,” “assume,” “believe,” “could,”
“due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,”
“plan,” “potential,” “positioned,” “predict,” “should,” “target,”
“will,” “would” and other similar expressions that are predictions
of or indicate future events and future trends. These
forward-looking statements are based on current expectations,
estimates, forecasts and projections about our business and the
industry in which we operate and our management’s beliefs and
assumptions. These statements are not guarantees of future
performance or development and involve known and unknown risks,
uncertainties and other factors that are in some cases beyond our
control. All forward-looking statements are subject to risks and
uncertainties and others that could cause actual results to differ
materially from those contained in our forward-looking statements.
Please refer to the “Risk Factors” in our Annual Report on Form
10-K filed on March 11, 2020 and in our subsequently filed
Quarterly Report on Form 10-Q. We undertake no obligation to
publicly update or revise any forward-looking statement as a result
of new information, future events or otherwise, except as otherwise
required by law.
Contacts:Mei Kuo22nd Century
Group(716) 300-1221mkuo@xxiicentury.com
John MillsICR(646)
277-1254john.mills@icrinc.com
Deirdre ThomsonICR(646)
277-1283deirdre.thomson@icrinc.com
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