Portfolio Update – XXII and PRPO

As is customary with any semi-active trader, periodic review of the companies in your portfolio is both critically and obviously important to maintain meaningful growth. In other words, I think of each portfolio dollar as an employee of my company. As manager, you want to move employees into areas where they each will continue to create the most productivity.

With that, the decision is to change gears and reduce my holdings in XXII and move those proceeds into PRPO. Here’s why. 22nd Century Group, Inc. has tremendous potential with both their hemp and tobacco technologies. Unfortunately, it seems as though the company is taking a passive approach in growing its market presence. Their tobacco arm, and its low nicotine technology we all know, is in the hands of the Food and Drug Administration. There’s no question here that any development will take years to bear fruit and translate into revenue for the company. Now turning to their hemp arm and its breakthrough technology; 0% THC industrial hemp. Industrial hemp of any THC level (not Mary Jane) has been approved to grow legally in at least 37 U.S. states so far and counting. However, not hearing a word from management, it seems the company maybe keeping the tech in New York with its infant hemp infrastructure. Outside of NY for example, North Carolina already has a seasoned infrastructure already built out supporting the end-to-end production cycle of hemp from growth to processing, yet farmers there and globally still run the risk of losing their crop due to some plants possibly containing more the 0.3%THC. This ‘inactivity’ regarding the company’s revolutionary technology leads me to think to not expect anything significant for the next 4 to 5 months.

In the same aforementioned timeframe however, I expect Precipio, Inc. (PRPO) will be making some significant progress in its’ business development which will soon be reflected in the company’s stock price. The potential announcement of a IV-Cell licensing deal in June and the potential release of new biopsy kits supporting additional tests should add appreciating share price growth which will bring it closer to my target price of $1.08. Time will tell! Always do your own research and best of luck!

22nd Century Group – XXII (update)

The FDA Center for Tobacco Products just did WHAT last week?!! If you haven’t heard by now, a low nicotine tobacco/cigarette policy initiative is being enacted by the FDA. The purpose, lowering nicotine in cigarettes to non-addictive levels which is the same purpose of XXII. Here’s a link. I wouldn’t be surprised if the “non-addictive” nicotine levels determined by the FDA are the same levels found in 22nd Century Group low nicotine products, such as Brand A, of less than one milligram.

If you have been following XXII, then you know how exciting this is as the company may have a monopoly on this technological ability and know the recent spike in share price is attributed to the market realizing the potential. Even Bloomberg has published an article highlighting the company. The question now is, can management turn this directive into a significant revenue generating opportunity? Of course, we will need to wait for specific details of how the FDA is to implement this initiative. In my opinion, I see a couple things that could possibly happen. One, tobacco companies will continue to sell both their regular brand and its low nicotine counterpart or two, cigarettes may be replaced altogether for electronic delivery systems. My guess is either of these transitions will happen over a long period of time. In this time, the tobacco arm of 22nd Century will continue its efforts on achieving FDA approval of their X-22 product and moving forward with clinical studies of their Brand B product.

I do not expect to see or hear much from XXII directly following this latest FDA development. Although it would be nice to hear that a partnership has been formed with another entity, for the purpose of financing the Phase 3 trial for X-22, and that just maybe the FDA announcement may have been an indirect driver. I still have some concern that currently the company may not find an agreeable partner for the phase 3 trial and may have to finance the trial with its own cash. If any developments are in the works, it should take at least a few months before a deal may be signed. Even with all that said there is still significant upside for any who may be contemplating an entry or adding more to their current position. I’m holding my price target of $3.50 until word of a possible deal becomes public. Time will tell…


A little fyi, regarding the Phase 3 “Strategies for Reducing Nicotine Content in Cigarettes” study, word is it may be a couple months (possibly October) before results are released.

22nd Century Group – XXII (continued)

This is the second continuation blog about 22nd Century Group to talk about their industrial hemp arm of the company. I recommend reading my earlier blog, if you haven’t done so already. Disclaimer plugin, I’m not a professional and don’t expect the investor jargon and lingo after every other word. I try to keep this as simple as possible. Always do your own research.

As I mentioned earlier, this company’s second globally disruptive breakthrough is its success in producing hemp with 0% tetrahydrocannabinol (THC) via genetic engineering. Oh wait, I forgot to add 0% “guaranteed.” No guessing for the farmers nor the regulatory agencies when using seed produced and certified from XXII. Today’s global hemp producers and especially in the U.S. must grow hemp crop that contains less than 0.3% THC. Any more than that threshold results in the destruction of the entire crop. Because of that requirement, many crop insurers do not yet provide insurance for hemp growers, a possible severe loss for the farmer. For example, recently in Kentucky approximately $20K was ordered to be burned for exceeding the THC limit. Many industrial hemp seed suppliers tout 0.2% THC or less but any farmer and business will find comfort in a 100% guarantee of 0% THC over a less than 100% guess.

If you’ve been under a rock recently, let me be the first to tell you the medical marijuana and hemp industries have been re-emerging into the mainstream here in the US. Growing industrial hemp is still illegal at the federal level but many states have removed legal barriers to permit growing of hemp. Kentucky is the state that produces the most hemp today leading Colorado, Oregon, North and South Carolina, and New York just to name a few. The uses for hemp include a large range of products. In fact, the market for hemp products is projected to increase by as much as 700% by 2020 and includes medical marijuana uses. The revenue potential for 22nd Century group, through its Botanical Genetics subsidiary, could exceed hundreds of millions of dollars if their technology becomes the sole global source for industrial hemp.

In the position detail section, I have readjusted my target price to $3.50 from the previous $1.60 which has already been surpassed. The potential with XXII is extremely enormous in the short term from both the tobacco and hemp technologies! More details to come…


22nd Century Group – XXII

Disclaimer, first as always. I’m not a professional and don’t expect the investor jargon and lingo after every other word. I try to keep this as simple as possible.

22nd Century Group is hands down my favorite company to date in all the markets in regards to growth potential. I’ll go into detail below but, dare I say, this company has the potential to obtain monopolies, yes monopoly status, in two different billion-dollar industries across the globe with its’ technologies. The first being in the global tobacco & smoking cessation market and the second in industrial hemp. In this post, we’ll focus on the tobacco and nicotine technology potential.

If you’re not familiar with this company, allow me to catch you up on the buzz. Who is 22nd Century Group? In a nutshell, quoted from Yahoo Finance, they are a plant biotech company, providing technology that allows for the level of nicotine and other nicotinic alkaloids in tobacco plants to be decreased or increased through genetic engineering and plant breeding. It develops smoking cessation products and modified risk tobacco products for smokers who are unable or unwilling to quit smoking and who may be interested in cigarettes, which reduce exposure to nicotine or to certain tobacco smoke toxins and/or pose a lower health risk than conventional cigarettes. The results of these efforts has produced products such as Magic 0, very low nicotine (VLN) cigarettes sold in countries overseas, Red Sun, high nicotine cigarettes sold in the states and overseas, Spectrum, VLN research cigarettes sold to the gov’t and accredited research organizations, and the potential global blockbuster product X-22, their smoking cessation product in development. In fact, one of the objectives for 2017 is the pursuit of authorization from the FDA and regulatory agencies in other countries to introduce the X-22 smoking cessation aid in development into commerce as a prescription-based smoking cessation medical product. Basically, smokers will now have the first option to quit smoking by using a cigarette, with reduced levels of nicotine for dependence and it comes with no additional side effects, rather than using products like Chantix or Nicoderm CQ patches. The company has a meeting with the FDA this month of June regarding the path forward for X-22 and the company expects to submit a more robust  Modified Risk Tobacco Product (MRTP) application to the FDA for X-22 sometime in the following months. Also, XXII is also working towards finding a partner to conduct a Phase III smoking cessation clinical trial for X-22. It is anticipated that this will mean receiving a cash infusion of approximately $25 million or more from that partnership agreement for the trial and eventual distribution of X-22, an important catalyst for the stock.

In addition, here are more facts to consider about 22nd Century Group:

  • Yearly revenue growth above 40%, on track for same EOY 2017.
  • Cash on hand anticipated to last through April 2018.
  • Hedge fund Blackrock Inc. discloses new position in latest 13F holding.
  • Recent insider buying from Management, see latest SEC Form 4 filings.
  • Recent addition to Russell 2000 to be confirmed June 23, 2017

I classify 22nd Century Group as a relatively young company starting at when its current CEO Henry Sicignano, III first took the reigns. From what I gather in research, XXII’s previous leaders failed in guiding the company towards a profitable path. Henry has concrete experience from his time at Sante Fe Natural Tobacco Company and the current share price is reacting to the progress of his vision. Going forward, we can continue to expect very interesting and lucrative developments to come from 22nd Century Group and its transparent management. Upcoming catalysts should be the announcement of a partner for X-22 and possible industrial hemp deals, which I will discuss in my next blog. The current price target of $3.50, established by Chardan Capital Markets, will be due for an upgraded review once these catalysts have surpassed. Certainly more details to come.