22nd Century Group (Nasdaq: XXII) Issues Annual Letter to Shareholders
BUFFALO, N.Y., April 28, 2022 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), a leading agricultural biotechnology company focused on tobacco harm reduction, reduced nicotine tobacco, and improving health and wellness through modern plant science, today announced that the Company has issued its annual letter to shareholders as part of 22nd Century’s 2021 Annual Report. The 2021 letter to shareholders is reprinted below.
In addition, 22nd Century Group will be hosting its annual meeting of stockholders on Thursday, June 16, 2022, at 10 a.m. ET. The live virtual meeting and archived webcast will be accessible on the Events web page in the Company’s Investor Relations section of the website at www.xxiicentury.com/investors/events.
Dear Fellow Shareholders,
“Helps You Smoke Less.” These four words from the U.S. Food and Drug Administration (FDA) on December 23rd, 2021, capped off an amazing year at 22nd Century Group and ushered in what may be the most disruptive new tobacco product of our generation – our VLN® reduced nicotine content combustible cigarettes.
VLN® is designed specifically to help smokers smoke fewer cigarettes. In doing so, we can fulfill our primary mission to reduce the harm associated with smoking.
Our VLN® authorization reflects years of scientific research, federally funded clinical studies and regulatory persistence to secure the first and only Modified Risk Tobacco Product (MRTP) authorization granted to a combustible cigarette. It also signifies a new starting line as we bring VLN® to the $800 billion global tobacco market – 85% of which is focused on combustible tobacco cigarettes.
With more than 34 million smokers in the U.S. and more than a billion smokers around the world, this tremendous global market is ripe for disruption. In the U.S., we know that more than three out of four adult smokers want to quit and 50% attempt to quit each year. Yet less than 10% of smokers are able to successfully quit. More and more, smokers are actively seeking alternatives to addictive, conventional cigarettes, most of which are other addictive nicotine delivery systems.
We offer adult smokers something different – a way to reduce their smoking; a way to reduce their nicotine consumption. We are encouraged by data from our own consumer perception studies showing that 60% of current adult smokers are likely to use VLN®, and from extensive federally funded studies showing that reduced nicotine cigarettes like VLN® are effective in helping smokers truly smoke less.
And now, for the first time, adult smokers will have the opportunity to make that choice. VLN® will be positioned as a premium product in the market, alongside top global brands. But right on the front of our pack will be a clear and compelling statement giving every adult smoker a reason to try our product: “Helps You Smoke Less.”
We have kicked off our pilot launch in Chicago at more than 150 Circle K stores, making VLN® available to over 1.2 million smokers within the greater Chicago market. The pilot launch is intended to hone our VLN® marketing messaging and plan, setting the stage for the broader launch of the product. As the second-largest convenience store chain in North America, Circle K is an ideal launch partner. They bring more than 7,000 stores of distribution capability, international reach, and extensive customer engagement and data tracking capabilities.
But the positive winds don’t stop with just our markets and our corporate resources. We believe the recent appointment of Dr. Robert Califf as FDA Commissioner and the FDA’s continued focus on pursuing a menthol ban for cigarettes signals a favorable regulatory environment for 22nd Century’s VLN® products. Dr. Califf is known to be a longtime proponent of innovative tobacco control programs and strong supporter of the Agency’s Comprehensive Plan for Tobacco and Nicotine Regulation. The FDA’s decision to move forward with the rulemaking process to ban menthol in cigarettes signifies the Agency’s intent to take significant action toward dramatically reducing tobacco-related disease and death in the U.S. – and we are on the forefront of this effort.
We are also launching in our first international market, South Korea, where there is a strong public interest in alternative tobacco products and smoking reduction. We have shipped our first Korean labeled packs to our local partner and are actively looking at additional international markets in Asia and Europe where regulations facilitate bringing our VLN® to market. 22nd Century also continues to develop its next-generation VLN® 2.0 tobacco portfolio, including non-GMO technology that will allow us to rapidly introduce reduced nicotine traits into virtually any variety of tobacco.
As exciting as our tobacco advances are, they are just one aspect of our success in 2021. 22nd Century also made significant progress in our hemp/cannabis franchise, where we acquired a showcase farm facility in Needle Rock Farms, secured USDA Organic Certification, and recorded our first biomass and license revenue. Our focus on the upstream segments of the cannabinoid value chain in this $100 billion global market is paying off as we continue to prove out the unique capabilities of our proprietary hemp/cannabis plants. Our specific capabilities and intellectual property include alkaloid profiling/mapping, genetic engineering, and gene editing, breeding and cultivation, and ingredient extraction and purification. With these capabilities, we look to provide the hemp/cannabis industry with enabling IP and plant lines featuring optimized cannabinoid and terpene profiles as well as stable genetics for higher commercial yields. Following a successful 2021 demonstration, we are expanding our 2022 planting and all of our biomass is spoken for with off-take commitments from our partners.
Last August, we announced our entry into the $500 billion global specialty hops market as our third plant franchise, leveraging our extensive alkaloid plant technologies and capabilities in this close relative to hemp/cannabis. We have expanded our research agreement with KeyGene to identify specific traits which, if appropriately engineered, could benefit consumers of hop products in both the beer and nutraceuticals segment of the industry. We have also initiated business development efforts to further identify opportunities moving forward. As with our other franchises, the global hops market is currently reliant on expensive and risky traditional breeding techniques that can take a decade or more to show results. We believe that our approach is highly attractive to industry customers, as it can shorten this process to just a matter of a few years, bringing truly disruptive new plant technologies to market in a fraction of the time and cost.
The Company also strengthened its balance sheet during 2021, including a $40 million registered direct offering and $11 million in proceeds from the exercise of warrants. (We are warrant free.) We completed an uplisting to the Nasdaq Capital Market, which we believe will enhance 22nd Century’s visibility to life science and agricultural technology-focused institutional investors and secured new research analyst coverage at several top firms in our industry.
As we look to the year ahead, we expect 2022 will be truly transformational as we complete our VLN® pilot in Chicago and move to full, nationwide market launch. We have expanded our planned hemp crop at Needle Rock Farms for 2022 and look forward to exciting developments in hops as we scale up our efforts in that franchise. In closing, I thank you for your continued support of 22nd Century and its initiatives and look forward to our continued progress in these exciting markets.
James. A. Mish
Chief Executive Officer
About 22nd Century Group, Inc.
22nd Century Group, Inc. (Nasdaq: XXII) is a leading agricultural biotechnology company focused on tobacco harm reduction, reduced nicotine tobacco and improving health and wellness through plant science. With dozens of patents allowing it to control nicotine biosynthesis in the tobacco plant, the Company has developed proprietary reduced nicotine content (RNC) tobacco plants and cigarettes, which have become the cornerstone of the FDA’s Comprehensive Plan to address the widespread death and disease caused by smoking. The Company received the first and only FDA MRTP authorization of a combustible cigarette in December 2021. In tobacco, hemp/cannabis, and hop plants, 22nd Century uses modern plant breeding technologies, including genetic engineering, gene-editing, and molecular breeding to deliver solutions for the life science and consumer products industries by creating new, proprietary plants with optimized alkaloid and flavonoid profiles as well as improved yields and valuable agronomic traits.
Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Forward-looking statements typically contain terms such as “anticipate,” “believe,” “consider,” “continue,” “could,” “estimate,” “expect,” “explore,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “preliminary,” “probable,” “project,” “promising,” “seek,” “should,” “will,” “would,” and similar expressions. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in “Risk Factors” in the Company’s Annual Report on Form 10-K filed on March 11, 2021. All information provided in this release is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law.
Investor Relations & Media Contact:
22nd Century Group, Inc.
Director, Communications & Investor Relations
Darrow Associates Investor Relations
Released April 28, 2022