Key PhaseIIb clinical trial results await smoking cessation player this week

A recent article in the New York Times pointed me to 22nd Century Group XXII. After reading it and doing some of my own research, I'm convinced that the firm's “very low nicotine” tobacco represents disruptive technology that could transform the $80 billion US tobacco market as well as the $1 billion smoking cessation industry.

I recently interviewed the management team at 22nd Century Group XXII and my take away is that I’m very intrigued because of the multi-billion dollar opportunities and a key near term catalyst for the stock which should play out this week.  Factor in that both GlaxoSmithKline GSK and Novartis NVS signed $500million+ licensing deals in the not too distant past for nicotine addiction treatments /vaccines and the XXII story gets really interesting. 

XXII is a plant biotechnology company that has developed a number of proprietary tobaccos using plant biotechnology to modify (decrease or increase) the nicotine content in tobacco plants through genetic engineering.  This proprietary technology allows tobacco to grow and be processed as conventional tobacco without changing the other leaf compounds that are important to a cigarette’s taste and aroma.   The company’s flagship “very low nicotine” (VLN) tobacco has the world’s lowest nicotine content:  97% less nicotine than the tobacco in leading “light” cigarette brands.  On the IP front, 22nd Century owns or exclusively controls 99 issued patents in 79 countries where at least 75% of the world’s smokers reside.

Why should consumers want cigarettes with modified nicotine content?  What can be done to commercialize the technology?  

In short, modifying the nicotine content of cigarettes facilitates two game-changing product lines:

1. VLN cigarettes as a prescription smoking cessation aid.  The company’s X-22 smoking cessation aid in development is quite possibly the most effective – and most consumer-acceptable smoking cessation product in the world.  Phase II-B Clinical Trial results due out in this week and could be a big catalyst for the stock.
2. “Safer” cigarettes.  The company’s patented tobacco has been incorporated into two 22nd Century “safer” cigarette brands that reduce smokers’ exposure to whole tobacco smoke and will appeal to a large segment of the U.S. market.  (According to a JP Morgan Equity Research proprietary survey of 600 smokers, 90% of U.S. smokers report that they would switch brands if a safer cigarette were available.)