22nd Century Group Inc (NYSEAMERICAN:XXII) reported that the 2013 Research License & Commercial Option deal between the firm and British American Tobacco Limited is now completed. BAT no longer has any rights to any assets or intellectual property of 22nd Century.
22nd Century is in sole control of the firm’s distinct, highly disruptive intellectual property pertaining to the ability to cultivate patent-protected Very Low Nicotine tobacco crops. Accordingly, the firm has recommenced talks with global tobacco firms and international pharmaceutical firms that have shown strong interest in a business association with 22nd Century but were, until now, failed to enter into a licensing deal with company due to restrictive covenants enclosed in the BAT deal.
Under the restrictive terms of the deal, annual royalties to 22nd Century were restricted at $25 million per year. Now that the deal has been closed, the firm can engage in strategic partnerships and licensing agreements with any and all tobacco firms, with no limits, restrictions, or caps on licensing royalties. This advancement is particularly significant in light of the update made at the end of July by the U.S. FDA.
On July 28, 2017, the USFDA publicly reported that it is exercising its privilege under the Family Smoking Prevention & Tobacco Control Act to make compulsory lower nicotine at non-addictive or minimally levels in all combustible cigarettes offered in the U.S.
22nd Century is the only firm in the world capable of cultivating tobacco with nicotine content of just 0.4mg/g, which shows a 95% decline in nicotine. As a result of the U.S.FDA’s newly reported plan, non-addictive or minimally Very Low Nicotine tobacco will be a must ingredient of every cigarette offered in the U.S. This unparalleled FDA action represents a major shift for the tobacco market and, as per Professor Robert N. Proctor, Ph.D. has the potential to save more lives as compared to any other act of a government body in all of human history.