Biotech company 22nd Century Group (NASDAQ:XXII) must be smiling today after a recent U.S. Food and Drug Administration (FDA) designation has investors celebrating. Indeed, news broke today that the FDA approved marketing for 22nd’s reduced nicotine cigarettes. Consequently, XXII stock is up nearly 40% today on the promising news.
22nd Century announced that the FDA has authorized labeling its line of VLN King cigarettes as “modified risk tobacco products” (MRTPs). Supposedly, VLNs smoke, taste and smell like traditional cigarettes but with 95% less of the addictive chemical, nicotine. This is in line with 22nd Century’s stated goal of ending “tobacco-related disease and death.”
As per an FDA news release, products like 22nd Century’s give options to those struggling with cigarette addiction. Mitch Zeller, director of the FDA’s Center for Tobacco Products, commented on the products’ viability in tobacco harm reduction.
“Having options like these products authorized today, which contain less nicotine and are reasonably likely to reduce nicotine dependence, may help adult smokers. If adult smokers were less addicted to combusted cigarettes, they would likely smoke less and may be exposed to fewer harmful chemicals that cause tobacco-related disease and death.”
What else do you need to know about XXII stock today?
XXII Stock Set to Explode Over Exclusive FDA Designation
The exposure modification order that authorizes 22nd Century’s marketing plan outlines specific claims protected by the FDA. Indeed, the company can now market with phrases such as “95% less nicotine,” “helps reduce your nicotine consumption” and “greatly reduces your nicotine consumption.”
Additionally, the FDA also requires that the company includes “Helps You Smoke Less,” in the labeling or advertisement of any product containing the protected claims. However, the FDA’s designation does not imply FDA approval for the product itself. Moreover, the regulatory agency explains that there are virtually no safe tobacco products, regardless of nicotine content.
While seemingly pragmatic, the FDA’s exclusive MRTP designation may offer a substantial competitive advantage for the agricultural biotech company.
“This is the first, and most likely will be the only, combustible cigarette to ever carry the FDA’s MRTP designation,” said 22nd Century Chief Executive James A. Mish. He continued, “Having secured this FDA marketing order, we are fully prepared to launch VLN® with select retail and marketing partners in our pilot markets in the U.S. within the next 90 days and in the first of several global markets by the end of the first quarter of 2022.”
Today’s spike alone has XXII stock positive on the year, after trading relatively flat the past few months. While it’s certainly too early to say, this could launch 22nd Century to the top of cigarette consumables. For the sake of patient 22nd Century investors, hopefully its share price will rise with it.
On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.