XXII is starting to pick up the page and is now trending green.

SmallCapFirm

(XXII) Follow-up: New High Of Day Achieved, Potential Bounce Could Be Getting Triggered

$7.00 Price Target From Dawson James Provides Over 100% Potential Upside From Wednesday's Close

September 2nd

SCF Readers,

XXII is starting to pick up the page and is now trending green.

Hitting a new high of day of $3.42, XXII is now trading above its 200-Day Simple Moving Average.

Check it out on XXII's 6-month chart.

If potential support starts to grow at the level... Watch out.

Remember, Barchart is reporting its "TrendSpotter" composite indicator as a "BUY."

Plus, take a second and read the big company news from Monday: 22nd Century Group Enters Global Specialty Hops Market

Read my initial report below on XXII right now and get this profile on your screen quickly today.

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Let's get to it quickly because there isn't a second to waste today.

The market just opened and due multiple potential catalysts I'll highlight in this report, there is one big biotech breakout idea you need to get on your radar quickly:

*22nd Century Group, Inc. (Nasdaq: XXII)*

22nd Century Group, Inc. is a leading plant biotechnology company focused on technologies that alter the level of nicotine in to-bacco plants and the level of canna-bin-oids in he-mp/can-na-bis plants through genetic engineering, gene-editing, and modern plant breeding.

22nd Century’s primary mission in to-bacco is to reduce the harm caused by smoking through the Company’s proprietary reduced nicotine content to-bacco smokes – containing 95% less nicotine than conventional smokes.

HUGE BREAKING NEWS - XXII Enters New Mega-Growth Oriented Market

This week, the company announced a major new market they've entered that could become a true-gamechanger for XXII moving forward.

No. 1 Potential XXII Catalyst - Company Enters The Global Specialty Hops Market

22nd Century Group Enters Global Specialty Hops Market

Geographic Expansion into Europe via the Netherlands

BUFFALO, N.Y., Aug. 30, 2021 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), a leading plant biotechnology and intellectual property company focused on improving health and wellness through plant science, today announced entry into the global specialty hops market, its third and newest plant franchise. The Company released an update letter to shareholders from CEO James A. Mish describing its opportunities and plans in this market. The Company also posted an overview deck describing its entry into the hops market in the Investor Relations section of the corporate website [...].

Following the exciting progress in our to-bacco and he-mp/cann-a-bis franchises detailed on our second quarter results conference call earlier this month, I am proud to announce our third plant-based franchise – the global specialty hops market. Like our existing franchises, the hop plant market is ripe for disruption and offers opportunities for 22nd Century to provide unique and significant competitive advantages to commercial partners. The addition of hops, a critical input for the $500Bn global brewing industry as well as a growing source of medically-important molecules, expands our total addressable markets to an estimated $1.3Tn.

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Specialty Hops Market

The key hops market participants are located in Europe and many of our commercial partnerships will be in that continent. To reinforce our presence there, we are establishing a new subsidiary in the Netherlands, 22nd Century Group Europe B.V., to open new revenue opportunities in hops, as well as serve our to-bacco and he-mp/cann-a-bis plant franchises through an expanded global footprint. The proceeds of our recent common equity financing are being used to accelerate advancements in this new market and each of our plant franchises.

Ninety-five percent of global hop flowers are used in the brewery industry, with the remainder of the market being a small but rapidly growing segment for active ingredients used in the flavor and fragrance, dietary supplement, and pharmaceutical markets. The rising demand for microbrew and craft beers is driving a large segment of the specialty hops market where distinctive flavors, aromas and nutritional uses are particularly important in creating unique and differentiated products. Additional growth drivers in mainstream specialty hops include demand for yield optimization to reduce input costs for brewers, increase of active ingredients for dietary supplements/pharmaceutical companies, and the need for improvement in disease and pest resistance. Demand for organically grown hop plants is increasing, accelerated by new European regulations limiting the use of traditional pesticides and insecticides, which makes new disease and pest resistance traits, as well as other valuable agronomic traits, critically important to the future of the hop plant industry. Importantly, the global hop plant market is not as highly regulated as to-bacco or he-mp/cann-a-bis, thereby providing a faster path to commercialization than those two plant franchises.

Hop and he-mp/cann-a-bis plants have many similarities. Both are part of the Cann-a-baceae family of alkaloid flowering plants. They share many similarities, including gene families, cultivation methods, dioecious traits that distinguish male and female plants, flowering organs that create similar alkaloids, and an emphasis on terpenes that produce distinctive tastes and flavors. In addition to their widely-known uses in consumer products, the active ingredients found in both plants offer potential health benefits for managing anxiety, inducing calm, addressing sleeping disorders and resolving stomach problems, among other wellness applications.

Our Value Proposition in Hops Market

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Our value addresses both scientific methodology and speed to market. We will leverage our existing know-how with the to-bacco and he-mp/cann-a-bis plants along with the proprietary tools and technologies possessed by our upstream partnerships with CannaMetrix and KeyGene to bring hop breeding into the 21st century. Our relationships with the world’s leading alkaloid plant producer-breeders, including Extractas Bioscience, Sawatch Agriculture, and Folium Botanical, will facilitate year-round growing capabilities at locations in both the southern and northern hemispheres.

Our R&D program objectives include creating new proprietary hop plants and valuable IP using our know-how and technologies, utilizing double haploids, gene-editing, molecular breeding, and other non-GMO technology. Non-GMO products are critical for success in international markets where such products are preferred or GMO products are banned.

We are well-positioned and advancing disruptive hop plant varieties and valuable IP in a fraction of the time it takes using traditional plant breeding methods still used by virtually all hop breeding companies today. This traditional process typically takes more than a decade to create a new hop plant variety, entailing high cost and risk due to this extended time and uncertain outcome – whereas our approach can reduce this development time to two years for the underlying plant technology and IP, similar to our he-mp/cann-a-bis program.

We are advancing commercial partnerships rather than competing with global hops producers, beer developers and marketers, flavor and fragrance suppliers, and nutritional/pharmaceutical companies in the hop plant space. The market participants are very well recognized brands, with Germany and the United States being the dominant global hops producers. The largest suppliers of hop plants include several large international growers in this market space that is uncrowded, namely Hopsteiner, Barth-Haas Group, Yakima Chief, Kalsec, and HVG. The largest manufacturers and marketers of beer are Anheuser-Busch InBev, Carlsberg, Molson Coors, and Tsingtao.

Progress To Date in Hops Market

We are approximately six months into our initial hops two-year development cycle and expect monetization of hop plant varieties and IP with upfront license fees beginning in 12 to 18 months.

We are advancing programs with established global hops producers, beer developers and marketers, flavor and fragrance suppliers, and nutritional/pharmaceutical companies in the hop plant space, and accelerating the development of disruptive hop plants and IP on applications delivered to consumers in traditional product formulations as well as in revolutionary new ingredients for functional foods and beverages such as “smart beer.”

In summary, we will not make your beer, we will make it better. The high interest among hops growers and their customers for new proprietary varieties with enhanced alkaloid profiles and specific agronomic traits, yield optimization, and disease/pest resistance is a perfect match to 22nd Century’s expertise in plant science and modern plant breeding, which will allow us to rapidly develop new, proprietary hop plants with distinctive flavors, aromas, and other valuable traits. We believe this significant expansion of our addressable market with the addition of hops as our third plant franchise is an exciting opportunity to leverage our capabilities and partnerships, accelerate the development of new revenue sources, and expand our global footprint.

[...]

Read the full article here.

Grab the full company hops presentation here.

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No. 2 Potential XXII Catalyst - Joining The Nasdaq Capital Market

22nd Century Group to Begin Trading on Nasdaq on August 16, 2021

BUFFALO, N.Y., Aug. 05, 2021 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc., a leading plant-based, biotechnology company focused on to-bacco harm reduction, reduced ni-co-tine to-bacco, and he-mp/cann-a-bis research, announced today that its common st-ock has been approved for uplisting to the Nasdaq Capital Market effective as of the market open on August 16, 2021. The shares will continue to trade under the ticker symbol “XXII.”

While remaining dedicated to our primary mission to reduce the harm caused by smoking, uplisting to the Nasdaq also aligns 22nd Century with other high-achieving, innovative, and growth-oriented global science and technology companies,” said James A. Mish, chief executive officer of 22nd Century Group. “We believe that joining the Nasdaq will enhance our visibility to a wide audience of institutional in-vest-ors and increase our exposure to he-mp/cann-a-bis in-vest-ors at this important time of industry progression toward mass production.

Read the full article here.

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No. 3 Potential XXII Catalyst - $7.00 Price Target From Dawson James Securities

On June 11th, 2021, James McIlree of Dawson James Securities provided XXII with a $7.00 price target.

From Wednesday's close, that provides this Nasdaq profile with over 100% potential upside.

Here are some key highlights from the report:

  • 22nd Century raised $40Mn in gross proceeds, $38.2Mn net, from the sale of 10 million shares to one in-vest-or, bringing pro forma cash to almost $70Mn, or over 5 years of cash at recent burn rates. However, we believe the burn rate can decline with successful monetization of the company’s to-bac-co IP and initiatives in he-mp and can-na-bis. The stronger balance sheet will, in our view, provide greater negotiating leverage to the company in the case where a low-nicotine mandate is implemented, provide greater resources to roll out a VLN cig-a-rette if and when the MRTP is approved, build out the he-mp/can-na-bis franchise and acquire additional IP in the existing or new franchises.
  • The company reiterated its expectation of licensing and revenue to begin in the second half of this year from the IP it shares with Aurora Can-na-bis (NASDAQ: ACB, $9.89, Not Rated). Recently, Aurora announced the formation of a Science & Innovation Business Unit to commercialize technology that enables canna-bin-oid biosynthesis in plants and microorganisms. Aurora and 22nd Century Group share the global intellectual property (IP) rights to certain patents and patent applications relating to genes in the he-mp/can-na-bis plant required for the production of canna-bi-noids in the cann-a-bis plant. The two are working closely together to enforce their IP against infringing parties and explore commercial development opportunities.
  • A new Canadian subsidiary has been created to allow the company to pursue opportunities in recreational and medical cann-a-bis. 22nd Century has exclusive rights in the U.S. and co-exclusive rights, with Aurora, everywhere else in the world (except Canada) to patents and patent applications of genes required to produce canna-bin-oids in the cann-a-bis plant. This subsidiary allows greater flexibility to pursue R&D projects given the changing legal status of he-mp and cann-a-bis globally.
  • Valuation: Our $7 price target is the sum of: $3.08/share for the VLN asset, $3.18/share for the low-nicotine mandate and $0.74 for the he-mp/cann-a-bis franchise.

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No. 4 Potential XXII Catalyst - The Creation Of VLN

22nd Century could be disrupting an approximately $817Bn to-bacco market and catering to an underserved segment of the population looking to quit.

Of the approximately 1 billion adult smokers in the world today, and roughly 34Mn U.S. adult smokers, about ⅔ want with less than an estimated 10% successfully doing so.

So, what did 22nd Century do? Created VLN.

VLN is a unique, proprietary, approximately 95% reduced toxin combustible smoke alternative. It is simply unlike any other to-bacco product in the market today. Don’t take my word for it, though. Talk to the consumers. According to 22nd Century’s consumer perception studies, about 60% of adult smokers indicated a likelihood to use VLN.

What seems to be exciting people so much about VLN?

For one, VLN has a familiar combustible product format that replicates the conventional smoking experience, including the sensory and experiential elements of taste, scent, smell, and “hand-to-mouth” behavior.

VLN also contains approximately 0.5 mg of toxins per gram of to-bacco. Based on clinical studies, the FDA cited this amount to be “minimally or non-addictive.”

Plus, since 2011, 22nd Century’s reduced toxin smokes have been used in more than approximately 50 independent scientific clinical studies conducted by universities and institutions and primarily funded by U.S. government agencies at over an estimated $100Mn.

These science-backed clinical trials already show encouraging results. Many of these results include the following:

  • Reduced toxin exposure and dependence
  • Partake in fewer smokes per day
  • Experience reduced withdrawal symptoms
  • Minimal or no compensatory smoking
  • Increase number of smoke-free days
  • Double quit attempts
  • No increase in adverse effects in persons with mental health disorders

Because of these encouraging results, VLN might be on the cusp of receiving final FDA approval for an MRTP designation.

The FDA has already authorized 22nd Century to sell its reduced toxin content smokes in the U.S. However, with an MRTP designation, VLN could carry the headline claim of “95% less toxins” on packaging and market the product under the brand name VLN, distinguishing the product from conventional smokes.

An MRTP designation can potentially unlock multiple U.S. and international licensing and partnership openings for reduced toxin content to-bacco technology and IP. This type of FDA authorization is considered the gold standard in public health by regulators around the world.

The company is highly confident that the FDA is in the final stages of the review process. For now, though, it will continue working with legal advisers, regulatory consultants, and government affairs specialists to highlight the public health importance of MRTP application.

Because the company knows it could be on the cusp of something groundbreaking, it’s already prepared for a full commercial launch. In fact, if/when the FDA grants that MRTP application to 22nd Century, it’s fully prepared to already manufacture approximately 1% of the U.S. to-bacco market share through an entire company-owned manufacturing facility. If the company wants to, they could potentially triple manufacturing capacity with minimal investment, too.

Within 90 days of receiving MRTP authorization, the company expects an initial roll-out of VLN in select markets, with a plan to position VLN in the premium pricing segment of the smokes market.

The company is already in advanced discussions with many independent, regional, and national retailers. 22nd Century is also developing plans to build and scale VLN through licensing opportunities and strategic partnerships and plans to accompany the launch with a strong marketing campaign.

Find Key VLN Details Here.

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Top 4 Potential Catalysts Recap: What To Know About XXII

No. 1 - Company Enters The Global Specialty Hops Market

No. 2 - Joining The Nasdaq Capital Market

No. 3 - $7.00 Price Target From Dawson James Securities

No. 4 - The Creation Of VLN

Coverage is officially initiated on XXII. When you have a second, do this:

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If there are any more updates today, I'll get them out to you quickly.

Sincerely,

Axel Adams

Editor, SCF


(Always Remember The Stock Prices Could Be Significantly Lower Now From The Dates I Provided.)​

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