December 26, 2024

Nasdaq: XXII

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OUR NEW PROFILE IS:  XXII

Hello Everyone,

While the markets are extremely turbulent right now, we are seeing several companies hit their 52 week low in the past week or so.  With that being said, this could be an opportunity to come in and look at a company that you previously wouldn’t have taken a look at because it had already made a huge move.

Turn your attention to XXII right now.

*****Breaking News This Morning*****

22nd Century Group (Nasdaq: XXII) Acquires GVB Biopharma, a Leading Hemp/Cannabis Company

  • Provides Transformational Platform to Rapidly Grow Hemp/Cannabis Franchise
  • Transaction Immediately Accretive and Will Double Company’s Total Revenue
  • Adds Significant Commercial Scale to Existing Hemp/Cannabis Franchise
  • GVB Biopharma has Achieved Strong Growth and Leading Market Share in Hemp-Derived Active Ingredients

BUFFALO, N.Y., May 13, 2022 (GLOBE NEWSWIRE) — 22nd Century Group, Inc. (Nasdaq: XXII), a leading agricultural biotechnology company dedicated to improving human health with reduced nicotine tobacco, hemp/cannabis, and hops advanced plant technology, today announced the acquisition of privately held GVB Biopharma. As a contract development and manufacturing organization (CDMO), GVB is believed to be one of the largest providers of hemp-derived active ingredients for the pharmaceutical and consumer goods industries worldwide based on total tonnage.

GVB has industry leading market positions and expertise in all facets of the hemp/cannabis industry, which include:

  • Research and genetics
  • Proprietary cryogenic hemp extraction
  • Refining, conversion, and product formulation technology
  • Leading supplier of Active Pharmaceutical Ingredients (API)
  • Low-cost, scalable manufacturing capabilities
  • Regulatory and compliance expertise
  • Industry trusted high-quality products
  • Current international capabilities

GVB’s strengths complement 22nd Century’s existing upstream and downstream value chains, which includes expertise in cannabinoid receptor science with CannaMetrix, plant research and proprietary genetics through its KeyGene partnership, breeding expertise with Extractas, and cultivation capabilities at Needle Rock Farms. The combination with 22nd Century establishes a global one-of-a-kind asset to serve the rapidly growing hemp/cannabis ingredient market.

GVB expects 2022 revenue of approximately $48 million, a 58% increase year-over-year, gross margin in excess of 44% and positive cash flow. Upon closing, the transaction is expected to more than double 22nd Century’s revenue, be immediately accretive to adjusted EBITDA, and generate positive cash flow from the acquired assets in the near term.

James A. Mish, chief executive officer of 22nd Century Group, stated: “GVB represents a transformational acquisition for 22nd Century that will enable us to rapidly grow our hemp/cannabis franchise. GVB is one of the largest CBD suppliers globally, possessing innovative, vertically integrated cannabinoid product manufacturing technologies driving industry leading scale and cost efficiency. In addition to immediately expanding our hemp/cannabis franchise capabilities, GVB represents an opportunity to double our revenue and internalize a comprehensive contract manufacturing and extraction platform which can be used to directly and exclusively monetize our differentiated and proprietary hemp/cannabis plant genetics and intellectual property. We are enthusiastic to begin working with the highly regarded and very experienced management team at GVB.”

“We are excited to combine with 22nd Century group, pairing our production and manufacturing capabilities together with the best hemp/cannabis plant science in the world,” said Phillip Swindells, Chief Executive Officer at GVB. “Since 2017, we have built a loyal customer base and continue to add new, rapidly growing customers as demand in our industry accelerates. We sold more than five billion doses of CBD in 2021, and we look forward to further scaling our business as a part of 22nd Century’s comprehensive platform.”

GVB is widely regarded as a best-in-class operator with an estimated 15% share of the hemp-derived active ingredients market. The company is a trusted supplier to leading CBD and cannabinoid brands, including Cookies, Nuleaf and Canaxis Pharma. GVB’s formulation capabilities and GMP certified facilities are uniquely suited to manufacture vastly improved pharmaceutical and consumer goods products that leverage and monetize 22nd Century’s proprietary plant genetics and research capabilities.

GVB is also well positioned to lead international expansion, including multiple international joint ventures in Europe to co-develop and co-own processing and distribution companies aligned to market needs. GVB currently has offices in the United Kingdom and Brussels.

The company operates three manufacturing facilities in Oregon and Nevada, including a 30,000 sq. ft. hemp ingredient manufacturing facility in Central Oregon, a 40,000 sq. ft. white-label, finished product manufacturing facility in Las Vegas, and an industrial-scale hemp extraction facility in Prineville, Oregon.

The aggregate consideration for the transaction consisted of (i) the assumption of approximately $4.5 million of debt, (ii) GVB’s closing costs, and (iii) the issuance to GVB of 32,900,000 unregistered shares of common stock of the Company.

Cowen served as exclusive financial advisor to GVB. Grant Thornton provided an independent valuation for 22nd Century. Dorsey & Whitney LLP served as legal counsel to GVB, and 22nd Century’s legal counsel was Shulman Rogers PC.

At the moment, there are about 1.3 billion cigarette smokers all over the world. (Source 28)

Combined, they’re puffing away at about 5.7 trillion cigarettes a year, generating about $817 billion in yearly revenue for tobacco companies. (Source 29)

Many want to give up the habit.

Unfortunately, it’s become nearly impossible because of the nicotine.

Fortunately, there may be a solution – with strong US FDA backing.

In December 2021, the US FDA authorized the marketing of biotech company 22nd Century Group’s (NASDAQ:XXII) King and VLN Menthol KIng reduced nicotine content cigarettes as modified risk tobacco products. (Source 31)

“Every drug of abuse, including nicotine, releases dopamine, which makes it pleasurable to use,” said Dr. Neil Benowitz, a nicotine researcher at the University of California, San Francisco, as quoted by the American Heart Association. “And when you stop smoking, you have a deficiency of dopamine release, which causes a state of dysphoria: you feel anxious or depressed.” (Source 30)

VLN is now the world’s first and only combustible cigarette to receive US FDA MTRP designation.

Not only do the XXII cigarettes smoke, taste, and smell like conventional cigarettes, but they contain about 95% less nicotine than conventional and highly addictive cigarettes. (Source 31)

In doing so, the US FDA found that XXII cigarettes can “help reduce exposure to, and consumption of, nicotine for smokers who use them.”

In fact, according to the US FDA: (Source 31)

“The data also showed it is reasonably likely that using these products reduces nicotine dependence, which is anticipated to lead to long-term reductions in exposure to the smoking-related toxicants associated with morbidity and mortality by reducing smoking. Published studies have shown that significantly reducing the number of cigarettes smoked per day is associated with lower risk of lung cancer and death, with greater reductions in cigarettes per day resulting in less risk. Additionally, as required for authorization, the FDA found that the applications supported consumer understanding of the claims that VLN® cigarettes contain much lower levels of nicotine than other cigarettes.”

Again, all beneficial for 22nd Century Group, Inc. (NASDAQ: XXII) – a nearly $500 million company

22nd Century Group, Inc. NASDAQ: XXII) leads the world with cutting-edge agricultural biotechnology and intellectual property. It is leveraging modern plant breeding, gene-editing, and molecular breeding technologies. It has created new, proprietary to-bacco, he-mp/can-na-bis, and hop plants with optimized alkaloid and flavonoid profiles. Moreover, it has improved yields and valuable agronomic traits for customers in the life science and consumer products industries. (Source 1)

In layman’s terms, it’s like this.

Let’s break those catalysts down even more.

It Could Be Upending an Estimated $817 Billion Global To-bacco Industry(1)

22nd Century Group, Inc. (NASDAQ: XXII) is a revolutionary biotech disruptor with a historic chance to truly upend a global to-bacco industry that has been a lucrative juggernaut for generations

As of 2018, the global to-bacco market was worth approximately $817B, with cig-garettes consisting of roughly $714B of this market- or about 90%. (Source 1)

This industry, though, is undergoing some shape-shifting changes, and XXII is right at the forefront.

Reports in the media claim that the government is actively considering moving forward with the Advance Notice of Proposed Rulemaking (ANPRM). Under this regulation, Big To-bacco firms will be required to reduce the number of toxins in all combustible cig-garettes sold in the United States to be “minimally or non-addictive.” (Source 3)

Fortunately, long before the ANPRM proposal was even a thing, 22nd Century had the foresight to think outside the box and realize how lucrative and underserved a market for non-addictive smokes was. It wasn’t just the government demanding “something new.” It was the people.

Of the approximately 1 billion adult smokers in the world today, and roughly 34M U.S. adult smokers, about two-thirds, want to quit, with less than an estimated 10% successfully doing so. (Source 1)

That’s why the company developed its proprietary VLN product- a unique and roughly 95% reduced toxin combustible smoke alternative. All while having a familiar combustible product format that replicates the conventional ci-garette experience, including the sensory and experiential elements of taste, scent, smell, and “hand-to-mouth” behavior. (Source 1)

The best part? VLN contains 0.5 mg of nic-otine per gram of to-bacco, an amount cited by FDA, based on clinical studies, to be “minimally or non-addictive.” (Source 1)

Benefits from VLN can potentially include: (Source 1)

There’s been blue-sky potential for some time with VLN. But now, with demand reaching a fever pitch, government regulations promoting its potential growth, and even more subsequent tailwinds, we could be at the start of a to-bacco revolution of biblical proportions.

With nearly $100M in funding, mainly from U.S. government agencies, since 2011, 22nd Century’s reduced nic-otine content ci-garettes have been used in more than 50 independent scientific clinical studies conducted by universities and institutions. (Source 1)

Back in 2019, an FDA PMTA press release stated, “Authorizing these reduced nicotine products for sale in the U.S. is appropriate for the protection of public health.” (Source 1)

The future is now, and significant moves are being made in the U.S. and overseas to fully commercialize.

The company already has FDA authorization to sell VLN in America. Now, with US FDA authorizing the marketing of XXII’s King and VLN Menthol KIng reduced nicotine content cigarettes as modified risk tobacco products, the company could be launch-ready for commercial sales within 90 days. (Source 31)

Already, the company has identified both initial pilot and subsequent markets for launch. It is also in advanced discussions with multiple trade and retail partners. It is advancing marketing materials and other vital aspects of the launch. (Source 1)

Beyond this, as potential regulations and crackdowns start, 22nd Century has a massive opportunity to license its reduced toxin technology to “Big To-bacco” firms such as Philip Morris. (Source 3)

In fact, Philip Morris just announced an earnings beat on Oct 19, 2021, thanks to its smokeless non-to-bacco product sales. In fact, Philip Morris said that ci-garette and heated to-bacco unit shipment volume reflected a 0.4% drop in shipment volumes. In comparison, non-heated shipment volume was up by 23.8%, driven mainly by the company’s smokeless IQOS product. (Source 5)

Even better, even without recent US FDA authorization, the company appears strong.

In its third quarter, XXII reported: (Source 32)

Reason #2- It’s Also Right In Thick Of The Potential $100 Billion+ “Green Rush” (Source 1)

Don’t think for a second that 22nd Century Group, Inc. (NASDAQ: XXII) is limiting itself to a smokeless to-bacco revolution. It’s also positioning itself right in the thick of a potential $100 Billion+ “Green Rush.” (Source 1)

You’re already probably well aware of how the he-mp/can-na-bis space has seen unprecedented momentum over the last few years. Canada was the first domino to fall when it became the first G20 country in the world to fully legalize it almost exactly three years ago. (Source 7)

In the U.S., 36 states & D.C. have now legalized medical can-nabis use, while 18 states & D.C. have approved recreational use. (Source 1)

Now that New York has fully legalized green leaf, (Source 8) this could be the start of imminent full federal legalization.

California legalized adult use in 2016 (Source 9), and Illinois legalized adult use in 2019. (Source 10) This means that three of the five most populous U.S. states have now fully legalized green leaf!

On top of the various potential health benefits of green leaf and the multitude of consumer products now available, this appears to be one of the only topics of conversation with widespread American support.

According to a Gallup Poll, for example, 68% of U.S. adults support legalization. (Source 33)

“Americans are more likely now than at any point in the past five decades to support the legalization of marijuana in the U.S. The 68% of U.S. adults who currently back the measure is not statistically different from last year’s 66%; however, it is nominally Gallup’s highest reading, exceeding the 64% to 66% range seen from 2017 to 2019,” notes Gallup.

The green era has arrived, the game has changed, and 22nd Century is leveraging its plant science expertise to revolutionize it.

Better, 22nd Century Group may have a solution to a severe industry problem- existing plant genetics result in low quality and unreliable yield for large-scale commercial production. (Source 1)

The company can potentially create disruptive, proprietary plant lines showing stability and higher crop yields for commercial use. (Source 1) How? Thanks to decades of experience and expertise in plant biotechnology and genetic engineering, a strong track record in developing disruptive valuable plant lines, and the ability to increase crops’ value by improving genetics to optimize desired traits.

22nd Century plans to accomplish the following: (Source 1)

Because this market is growing so explosively, monetizing key plant lines is a significant priority for the company. 22nd Century has established a leadership position in genetic IP critical to he-mp/can-na-bis achieving its full commercial potential. Moving to monetization in 2H ‘21 is looking more and more realistic because of: (Source 1)
Judging by the company’s expertise, transforming the entire industry could happen sooner than anyone thinks.

Reason #3- Hops Have $500 Billion Potential and 22nd Century Group, Inc. (NASDAQ:XXII) Is Bringing Transformative Global Value (Source 1)

On Aug. 30, 2021, 22nd Century Group, Inc. (Nasdaq: XXII) announced its formal entry into the global specialty hops market, its third and newest plant franchise. (Source 16)

The global hops industry could be a $500 billion​​ opportunity. (Source 1) This is a sizable global growth market with well-established hops providers and consumer brands. 95% percent of global hop flowers are used in the brewery industry. The remainder is a small but rapidly growing segment for active ingredients used in the flavor and fragrance, dietary supplement, and pharmaceutical markets. (Source 16) What’s really causing rising demand for hops is the surge in the popularity of microbrew and craft beers. There’s also major demand for yield optimization to reduce brewers’ input costs, increase active ingredients for dietary supplements/pharmaceutical companies, and to improve disease and pest resistance. (Source 16)

That’s where 22nd Century comes into play.

The company intends to leverage its experience with to-bacco and he-mp/can-na-bis. After all, hops are a close relative. By doing this, the company aims to accelerate the development of proprietary specialty hop varieties or valuable traits.

Leveraging research findings from closely related he-mp/can-na-bis plants supports the development of specialty hop varieties with: (Source 1)

The hops market is ripe for disruptive new plant technologies, especially new accelerated molecular breeding technologies and gene-editing tools that only 22nd Century can potentially provide. Hops also has lower regulatory barriers than the to-bacco and he-mp/can-na-bis markets.(Source 1)

Therefore, this is what the company intends to do about it: (Source 1)

Strategic partnerships could enable 22nd Century to deliver valuable, commercial-scale plant lines and IP in way less time than the traditional 10+ years in the Hops industry. It could very well transform a booming hops industry by accelerating the commercialization of new disruptive hops plants.

By applying its 5-step technique identifying the Plant Profile/Roadmap, Plant Biotechnology, Plant Breeding & Trials, Plant Cultivation, and Ingredient Extraction & Purification, 22nd Century’s innovative upstream alkaloid plant value chain is critical to unlocking new disruptive hop plant lines and IP at large-scale. (Source 17)

Reason #4- The XXII Stock Uplisted to the NASDAQ (Source 18)

The company officially uplisted to the NASDAQ on August 16, 2021. According to James A. Mish, chief executive officer of 22nd Century Group,

“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. We believe that joining the Nasdaq will enhance our visibility to a wide audience of institutional investors and increase our exposure to he-mp/can-na-bis investors at this important time of industry progression toward mass production.”

Reason #5- The XXII Stock is Technically Attractive

Over the last year and a half, the XXII stock has been explosive. (Source 34)

Since bottoming out around 57 cents in September 2020, the stock popped to about $6.07 a share– good for about 965%. Shortly after, the XXII did pull back to double bottom support of about $2.07. However, with recent US FDA authorization news, the XXIIstock could potentially re-test its prior hig of $6.07.

From here, should we begin to see solid earnings growth, and adoption of the company’s VLN cigarettes, the XXII stock could see higher highs.

In summary, XXII could help:

Sincerely,

The Viral Stocks Team

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Source List:

Source 1: https://d1io3yog0oux5.cloudfront.net/xxiicentury/files/pages/xxiicentury/db/328/description/XXII_Investor_Overview_Website_100621.pdf

Source 2: https://fknol.com/list/best-performing/biotech-stocks.php

Source 3: https://finance.yahoo.com/news/22nd-century-fully-prepared-deliver-200000882.html

Source 4: https://bit.ly/3jfwV3g

Source 5: https://www.thestreet.com/investing/earnings/philip-morris-ekes-out-third-quarter-earnings-beat

Source 6: https://finance.yahoo.com/news/22nd-century-stands-fully-prepared-215600267.html

Source 7: https://bit.ly/3voRHSC

Source 8: https://nyti.ms/3poMuZY

Source 9: https://bit.ly/3urd1Wb

Source 10: https://bit.ly/2Pu9veu

Source 11: https://www.census.gov/newsroom/press-releases/2015/cb15-215.html

Source 12: https://bit.ly/2WBfpO6

Source 13: https://bit.ly/3B74KJX

Source 14: https://pewrsr.ch/3DoOvu1

Source 15: https://www.globenewswire.com/news-release/2021/08/05/2275328/0/en/22nd-Century-Group-Reports-Business-Highlights-and-Financial-Results-for-the-Second-Quarter-2021.html

Source 16: https://www.xxiicentury.com/investors/news/press-releases/detail/447/22nd-century-group-to-begin-trading-on-nasdaq-on-august-16

Source 17: https://d1io3yog0oux5.cloudfront.net/xxiicentury/files/pages/xxiicentury/db/328/description/XXII+Hops+Overview+Website+082921.pdf

Source 18: https://www.xxiicentury.com/investors/news/press-releases/detail/447/22nd-century-group-to-begin-trading-on-nasdaq-on-august-16

Source 19: https://finbox.com/NASDAQCM:XXII/explorer/altman_z_score

Source 20: https://www.investopedia.com/terms/a/altman.asp

Source 21: https://finbox.com/NASDAQCM:XXII/explorer/current_ratio

Source 22: https://finbox.com/NASDAQCM:XXII/explorer/quick_ratio

Source 23: https://finbox.com/NASDAQCM:XXII/explorer/total_rev_cagr_5y

Source 24: https://schrts.co/rxHaisDW

Source 25: https://finbox.com/NASDAQCM:XXII/explorer/analyst_target_upside

Source 26: Dawson James Report August 6

Source 27: Dawson James Report August 31

Source 28: https://bit.ly/3evloKh

Source 29: https://bit.ly/3FN64EZ

Source 30: https://www.heart.org/en/news/2018/10/17/why-its-so-hard-to-quit-smoking

Source 31: https://www.xxiicentury.com/investors/news/press-releases/detail/462/fda-authorizes-marketing-of-22nd-century-groups-vln-as

Source 32: https://finance.yahoo.com/news/22nd-century-group-reports-business-100000669.html

Source 33: https://bit.ly/3Et4JS1

Source 34: https://stockcharts.com/h-sc/ui?s=xxii