22nd Century Group Inc (XXII)

[kjgaro]

The difference between XXII and a traditional small cap biotech is that XXI is not hemorrhaging money running clinical trials. I believe their last dilution put them in place to be self sufficient for the next ~5 years or so. They burn less than ~12 million a year and with the MRTP filed that will get rid of a huge cost.

I'm trying to be more realistic than optimistic. I didn't intentionally avoid a question. XXII does not have to educate doctors and work with health insurers to get their product on the market, or go against the standard-of-care drugs that are currently out there. They need very little of the market to be profitable. What do you expect the COGS are for making a cigarette? Some dried tobacco leaves and a thin piece of paper. Manufacturing cigarettes has been around for 100+ years and XXII has facility for doing so. Approval of the MRTP or the NPRM would be a huge boost for them. Being pre-revenue is not a bad thing as long there is growth. If the NPRM goes through then loyalty is irrelevant since BT will need to use VLN, which they have admitted they do not have. It will not take substantial revenue to make XXII profitable.

We differ on the opinion about the mandate. I believe there will be one this year. I agree that the FDA will not allow the advertisement of VLN as a smoking cessation drug since you are still inhaling all of the carcinogenic compounds of a normal cigarette. For both reasons I think VLN will be mandated. Keep cigarettes out of main stream advertisement but keep people from becoming addicted. That is the goal.