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From the Craig-Hallum Morning Call today:
“XXII* - Alex Fuhrman is bullish on the tobacco harm reduction company and expects meteoric growth for its very-low-nicotine cigarettes in 2023, which first launched in Spring 2022 at 150+ Circle K stores in Chicago. Fuhrman notes XXII’s VLN cigarettes have attained ~1.5% share in the initial pilot locations, and expects the new product to be sold in states representing about half of the American smoking population by the end of this year. Shares rated Buy.”
I do - I’m on there as well - pretty much exactly the same info that I post here.
FDA CTP Dir. Brian King:
- menthol ban progressing
- issuing reduced nicotine mandate for combustible tobacco products is an FDA priority
https://www.publichealthlawcenter.org/webinar/future-priorities-federal-commercial-tobacco-regulation-conversation-dr-brian-king
It was live at 1:30pm CST today - sponsored by the Public Health Law Center at Mitchell Hamline School of Law. They said the transcript of the webinar would be made publicly available tomorrow.
Webinar Moderator: “Nicotine reduction certainly feels like an inevitability.”
CTP’s Dr. Brian King: The FDA would not announce their intent to issue the nicotine product standard without the appropriate science backing the standard.
It’s certainly a priority for the Biden Administration; it’s been added to the Unified Agenda.
The next step is for the FDA to issue the proposed rule followed by a comment period. The rule would have a profound impact - millions of lives saved.
The nicotine product standard is a priority of Dr King’s; Dr. King says that when something is priority of his, he gets it done.
Final summary slide from CTP Director Dr Brian King’s webinar:
“Rules/Guidance: Issued proposed rules on menthol cigarettes and flavored cigars, and INTENDS TO PROPOSE A NICOTINE PRODUCT STANDARD FOR COMBUSTIBLE TOBACCO PRODUCTS” (my all caps…)
Full transcript will be publicly available tomorrow.
I’m listening to the webinar “Future Priorities for Federal Commercial Tobacco Regulation: A Conversation with Dr Brian King (Director of FDA’s Center for Tobacco Products)”. At the beginning of the presentation Dr. King emphasized that:
- the menthol ban/menthol product standard remains a key priority for Dr King and the FDA/CTP; FDA is still going through the 250K comments received; no crystal ball on timing, but they’re moving forward.
- ** the FDA proposing a “maximum nicotine level product standard” for combusted tobacco products is “close to being a reality”; Dr King said that the FDA “intends to propose the rule” and that it’s a “high priority” for the FDA. He described the nicotine product standard as having a profound health benefit in terms of preventing initiation of smoking and promoting cessation for current smokers. He says the nicotine product standard has a “huge potential for the impact on public health.”
“Might some people smoking #reducednicotine (VLN) cigarettes keep smoking them?
After 18 weeks of an RCT, participants were offered a choice:
a.return to smoking own brand
b.try to quit
c. keep smoking VLN research cigarettes.
36% of those on VLN continued.”
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0275522
Already posted previously, but I love this recent Convenience Store News marketing to retailers encouraging them to start stocking and selling VLNs. Should definitely help the state-by-state rollout. Love how momentum is building.
https://csnews.com/22centurygroup-the-next-evolution-in-tobacco
XXII investment opportunity in one sentence: In a $90 billion U.S. market, XXII is the only company in the world with $150M in government-funded clinical studies – and FDA approval – that support a great-tasting combustible cigarette that actually “helps people smoke less”.
Mitch Zeller – former FDA CTP Director and now a private citizen who says he can now “speak more freely” about the FDA’s current focus - says that:
- The reduced nicotine (VLN) mandate is the “cornerstone of the FDA’s policies”
- The reduced nicotine (VLN) mandate is a “key piece of the puzzle” in preventing 8M annual deaths from smoking
- The FDA’s Comprehensive Plan (mandating VLN for all combustible tobacco + moving adults to ENDs products) is “more real than ever”
1% market share (per Chicagoland pilot results) = XXII is a $10 stock
1% market share + menthol ban (with menthol VLN exemption) = $35+(?) stock
1% market share + VLN mandate across the board = $50+(?) stock
Dawson James webcast link one more time:
https://wsw.com/webcast/dawson7/xxii/2064294
Now we know why management has been describing the Chicagoland VLN pilot results as “exceeding expectations”. Great to see management coming out swinging.
Just a feeling, but I think FDA will be announcing the proposed reduced nicotine mandate soon.
“The public-health return on investment on this is on an almost unimaginable scale,” said Mr. Zeller.
https://www.wsj.com/articles/the-science-behind-bidens-nicotine-plan-11655814600
Great article; nice Q&A and great responses from Pritchard.
https://tobaccoreporter.com/2022/06/01/in-the-catbird-seat/
22nd Century Expects Their VLN Menthol Cigarettes to be Excepted from FDA’s Me this Ban
https://www.xxiicentury.com/investors/news/press-releases/detail/481/22nd-century-group-nasdaq-xxii-expects-vln-menthol
Public comments on the proposed rule (which will formally be published on May 5) will be due July 5th. FDA on the media call seemed inclined not to delay finalizing the rule. Sure, Big T will always attempt to delay, but even if there is a 2-year implementation timeline, XXII will be in pole position to license out its technology to the extent it doesn’t get acquired during that time period.
Proposed menthol ban rule - with the FDA specifically asking for public comments on a potential exception for VLN menthols - is huge for XXII.
New Zealand’s SmokeFree Action Plan (with nice mention of XXII).
https://www.stuff.co.nz/science/127803331/low-nicotine-cigarettes-could-cut-smoking-significantly
“In addition, the agency said last April it would propose a ban on menthol cigarettes. The FDA also is considering requiring tobacco companies to reduce the amount of nicotine in cigarettes to nonaddictive levels — which Califf has previously indicated he supports. And some congressional Democrats are pressing the agency to do more on synthetic nicotine amid reports vaping manufacturers may be switching to lab-made products in an attempt to sidestep the agency. ‘Never before has there been a more urgent need for FDA to have a permanent commissioner ready and prepared to not just act, but drive a vision for the future,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids.’ ”
Califf narrowly confirmed for FDA commissioner, providing beleaguered agency with its first permanent chief in 13 months
By Laurie McGinley and Rachel Roubein
https://www.washingtonpost.com/health/2022/02/15/califf-fda-commissioner/
Reminder: Califf was one of the four former FDA commissioners from March 2020’s STAT News panel who came out strongly in favor of the reduced nicotine mandate for ALL tobacco products/FDA’s “Comprehensive Plan”. Califf also was very disappointed in Nov 2019 when the FDA’s proposed nicotine mandate suddenly was de-prioritized from the Unified Regulatory Agenda.
(FDA’s Comprehensive Plan: (1) mandating a non-addictive amount of nicotine in combustible tobacco products, and (2) moving adults to ENDs products.)
https://www.statnews.com/2021/03/12/former-fda-commissioners-push-strong-tobacco-regulation/
BREAKING: After a contentious lead-up, Rob Califf likely to be confirmed as FDA commissioner next week – Endpoints News
https://endpts.com/breaking-after-a-contentious-lead-up-rob-califf-likely-to-be-confirmed-as-fda-commissioner-next-week/
Dr Califf - soon to be FDA’s new Commissioner: The regulatory trifecta would be to: 1) require the tobacco industry to LOWER THE AMOUNT OF NICOTINE in its products to subaddictive levels (if nicotine can be dialed up using irradiation and selective breeding, it can also be dialed down, even if the law forbids regulation that reduces the level to zero); 2) ban over-the-counter vaping products; and 3) support prescription vaping so that the 30 million current tobacco users do not go through acute withdrawal all at the same time. Such a regulatory regime could eliminate over 400,000 tobacco-related premature deaths per year.
https://www.aamc.org/news-insights/how-stop-epidemic-vaping-associated-lung-illness
Robert Califf is one step closer to becoming the new head of the Food and Drug Administration after a Senate panel Thursday voted to advance his nomination.
https://news.bloomberglaw.com/health-law-and-business/bidens-fda-nominee-moves-to-full-senate-on-committee-vote
Altria is on watch with BofA pointing to regulatory risk on menthol
Bank of America drops its rating on Altria Group (NYSE:MO) to Neutral from Buy as the firm points to a regulatory headwind this year with menthol rulemaking plans expected by April. The firm notes that historically heightened regulatory uncertainty has weighed on the share prices of U.S. tobacco stocks, especially on the topic of menthol.
Read in Seeking Alpha: https://apple.news/AoDi6HHKqQHmKCssUMHeIzg
Timing in terms of short term (today) share price move isn’t ideal - 2 days before Xmas and market closing early - but I’d much rather have MRTPA approval than not. The number of short-, medium- and long-term doors that this opens is huge.
Japan, Korea, European countries - many were waiting for MRTPA approval before moving forward with VLN. FDA requiring(!) the packaging to state that VLN “helps you to stop smoking” is…phenomenal. XXII couldn’t be in a better position. These next few months will be extremely good for shareholders.
Manchin (and Blumethal & Markey) didn’t approve of Califf last time either; Califf still was confirmed 89-4. Not worried about Manchin holding up Califf’s confirmation at all.
“We also urge Dr. Califf and the FDA to move forward with the important proposal to limit nicotine in cigarettes to non-addictive or minimally addictive levels.”
https://www.tobaccofreekids.org/press-releases/2021_11_12_califf
Robert Califf still moving forward as likely next FDA Commissioner. His nomination and confirmation would be significantly positive for XXII. (Nov 15th deadline to officially nominate the next commissioner.)
https://www.politico.com/news/2021/10/22/biden-meets-with-top-fda-candidate-516840
Watch this Mitch Zeller (head of FDA’s Center for Tobacco Products) talk about FDA’s proposed reduced nicotine mandate for combustible tobacco products. IT SURE SEEMS LIKE THE FDA IS LINING UP THEIR DUCKS TO ANNOUNCE A REDUCED NICOTINE MANDATE SOON. First they approve ENDs products (the off ramp); next up is XXII’s VLN MRTP; then the reduced nicotine mandate.
UMichigan/Georgetown CAsToR 2021: Keynote Lecture with Mitch Zeller, JD (June 2021). See at 15:40-21:30 mark.
Robert Califf (presumptive new FDA Commissioner): “The regulatory trifecta would be to: 1) require the tobacco industry to lower the amount of nicotine in its products to subaddictive levels (if nicotine can be dialed up using irradiation and selective breeding, it can also be dialed down, even if the law forbids regulation that reduces the level to zero); 2) ban over-the-counter vaping products; and 3) support prescription vaping so that the 30 million current tobacco users do not go through acute withdrawal all at the same time. Such a regulatory regime could eliminate over 400,000 tobacco-related premature deaths per year.”
https://www.aamc.org/news-insights/how-stop-epidemic-vaping-associated-lung-illness
Here’s Califf (and Gottlieb and two other former FDA Commissioners) strongly advocating this past February for the FDA to move forward with the reduced nicotine mandate. If nothing more, Califf seems very much in favor of VLN and the FDA’s Comprehensive Plan (VLN + ENDs for adults). Pieces are falling into place…
https://www.statnews.com/2021/03/12/former-fda-commissioners-push-strong-tobacco-regulation/
Great news for XXII - White House zeroes in on Robert Califf to head FDA as deadline nears
https://www.washingtonpost.com/health/2021/10/14/fda-commissioner-califf/
FDA still considering the reduced nicotine mandate - our bases loaded home run - according to this publication.
https://www.fda.gov/tobacco-products/health-effects-tobacco-use/nicotine-why-tobacco-products-are-addictive