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MOCKSVILLE, N.C. - 22nd Century Group, Inc. (NASDAQ:XXII), currently trading at a Price/Book ratio of 0.28 and showing negative gross margins of -7.88%, issued a statement Tuesday regarding the FDA’s proposed Tobacco Product Standard that would limit nicotine content in cigarettes and certain combusted tobacco products to less than 0.7mg per gram of tobacco. According to InvestingPro analysis, the company appears undervalued despite facing significant operational challenges.
The company highlighted support from the American Academy of Family Physicians (AAFP), which represents over 128,300 family physicians and medical students, for finalizing the proposed standard. The AAFP recommended establishing the maximum nicotine yield at 0.7 milligrams per gram and extending the standard to other nicotine products like e-cigarettes. While InvestingPro data shows the company faces near-term challenges with cash burn and debt obligations, analysts anticipate sales growth in the current year.
According to the press release, 22nd Century Group’s VLNⓇ cigarettes, which contain 95% less nicotine than traditional cigarettes, already comply with the proposed FDA standard. The company’s product line includes partner brands such as Smoker Friendly VLNⓇ and Pinnacle VLNⓇ.
"The commercial launch of our low nicotine VLNⓇ products demonstrate the commercial viability for cigarettes which are already compliant with the new standard," said Larry Firestone, Chief Executive Officer of 22nd Century Group, in the statement.
The company noted that smoking causes more than 480,000 deaths annually in the United States, costs over $600 billion, and reduces life expectancy by 10 years.
22nd Century Group describes itself as a nicotine harm reduction company that has developed proprietary non-GMO reduced nicotine tobacco blends through patented technologies that regulate nicotine biosynthesis in tobacco plants.
The information in this article is based on a press release issued by 22nd Century Group. For comprehensive analysis including 22+ additional ProTips and detailed financial metrics, explore the full company profile on InvestingPro, where you’ll find exclusive research reports and expert insights.
In other recent news, 22nd Century Group, Inc. has announced significant developments surrounding its VLN® reduced nicotine content cigarettes. The company has secured new partnerships with brands such as Smoker Friendly VLN® and Pinnacle VLN®, aiming to expand the availability of its cigarettes, which contain 95% less nicotine than conventional products. Additionally, 22nd Century Group plans to introduce a 100mm version of its reduced nicotine cigarettes, with an FDA submission expected in the fourth quarter of 2025. This new product would complement its existing line of FDA-authorized 84mm king size VLN® cigarettes.
In a move to enhance its market presence, the company is set to launch Pinnacle VLN Gold and Menthol VLN cigarettes in approximately 1,700 stores across 27 states, with sales anticipated to start in late summer and early fall of 2025, pending state approvals. Furthermore, stockholders have approved an increase in the number of authorized shares of common stock from 250 million to 500 million. This amendment to the company’s Articles of Incorporation has been filed and became effective with the Secretary of State of Nevada. These developments reflect 22nd Century Group’s strategic efforts to capitalize on the FDA’s proposed Tobacco Product Standard, which aims to limit nicotine content in cigarettes.
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