22nd Century Group Inc (XXII)

[Atlanta1]

$XXII opinion from SA author:

What is 22nd Century worth today?

I could not find any comparable publicly traded plant biotech companies, because most of the small plant biotech's have been acquired by larger companies like Monsanto (MON), Syngenta, (SYT), and Dupont. So I attempted to find some clinical stage biotech companies that demonstrated 22nd Century's strong fundamentals, which include:

Profitability.
Successful phase 2 clinical trials. (It's important to note that in the biotech world, multibillion-dollar buyouts and licensing deals begin happening after positive phase 2 trials.)
Strong balance sheet.
Potential monopoly a portion of a $700 billion market.
Multiple sources of revenue.
Good relationship with the FDA.
Licensing agreement with industry leader.

After reviewing all the companies I was familiar with, I could not come up with any biotech's that possessed all these qualities, until I got into valuations considerably higher than 22nd Century's.

I challenge all my readers to find an equivalent clinical stage biotech, valued under $100 million. If you do, email me, and I will initiate a thorough due diligence process. These are the kind of situations that I look for, but are very difficult to find.

So that begs the question, what is 22nd Century Group worth today? In my opinion, at the very least, the company is worth 2 to 3 times today's valuation. With just one positive catalyst, that number could be amplified. Also, 22nd Century's fundamentals are so compelling, that it would not be surprising if the company went from today's undervaluation, to a level of extreme overvaluation.


http://seekingalpha.com/article/1849101-22nd-century-is-worth-twice-todays-shareprice