22nd Century Group Inc (NYSEAMERICAN:XXII) has reported revenues of $7.1 million in Q1 2020. It is a growth of 12.1% when compared to the same period last year. The company has accrued incremental revenues from the contract manufactured cigarettes. Its net operating loss has narrowed to $4.1 million in Q1 2020 when compared to $5.4 million in Q1 2019.
Manufacturing facilities are open
Chief Operating Officer and President of 22nd Century, Mike Zercher, said the company has started Q1 with a solid increase in revenues by 12.1%. 22nd Century is on track to execute its defined business strategies despite the challenges posed by the ongoing coronavirus pandemic. Its manufacturing facilities are open and fulfilling the orders without any backlog.
A 16% reduction in operational spending
Improvements in 2019 in its cost structure are paying the results in Q1 2020. According to Zercher, the company saved 16% of the operating expenses in Q1 when compared to the same period last year.
The US FDA has set a deadline for public comments for the MRTP (Modified Risk Tobacco Product) application of the 22nd Century. Therefore, the company is inching closer to obtaining FDA authorization for its reduced nicotine content and proprietary cigarettes. It marks an important milestone for the company to bring MRTP to the market and reduce the health impact on consumers.
22nd Century has submitted data to TPSAC (Tobacco Products Scientific Advisory Committee) of FDA on February 14, 2020, supporting its MRTP application for its tobacco cigarettes with reduced nicotine content. The company seeks an FDA authorization to market its tobacco cigarettes with reduced nicotine content under the brand – VLN. According to the advertisement, the product contains 95% less nicotine when compared to traditional tobacco cigarettes. The acceptance of MRTP application by TPSAC is vital for the company to sell its reduced nicotine tobacco cigarettes.
In alliance with KeyGene, 22nd Century has established a proprietary and innovative hemp/cannabis bioinformatics platform in just three months. According to a news release on March 11, 2020, the company also assembled two high-quality genome sequences of cannabis/ hemp lines.
22nd Century, along with North Carolina State University, has validated innovative non-GMO techniques that reduced nicotine levels in tobacco plants.