WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--22nd Century Group, Inc. (OTCBB: XXII), a company focused on smoking cessation and tobacco harm reduction products, today filed its report on Form 10-Q for the second quarter of 2011 with the Securities and Exchange Commission (SEC). The company reported second quarter 2011 revenue totaling $249 thousand, including net sales of $155 thousand, compared with de minimis revenue for the same quarter in 2010.
Revenue for the six months ended June 30, 2011 totaled $416 thousand, including net sales of $272 thousand, compared with de minimis revenue for the same six-month period in 2010. The 32% increase in second quarter 2011 net sales over first quarter 2011 net sales of $117 thousand was mainly due to increased sales related to SPECTRUM, a research cigarette manufactured for the U.S. government containing 8 different nicotine levels with 22 brand styles. Net sales of SPECTRUM contributed to 60% of second-quarter 2011 revenue. Subsequent to June 30, 2011, the company received payment of approximately $304 thousand ($150 thousand of which was previously recognized as revenue during the second quarter) for the first shipment of SPECTRUM cigarettes.
The company reported a second quarter 2011 net loss of approximately $1.1 million or $0.04 per diluted common share, compared to a net loss of $649 thousand for first quarter 2011 or $0.03 per diluted common share and a net loss of $385 thousand for second quarter 2010 or $0.03 per diluted common share. The 144% increase in second quarter 2011 net loss of $452 thousand over first quarter 2011 net loss was due in large part to increased research and development (R&D) expenses of $364 thousand, primarily for the ongoing X-22 phase II-B smoking-cessation clinical trial, and non-cash stock-based compensation expense of $278 thousand incurred in April 2011, offset by a reduction of other expenses and increased revenue.
The company reported last week that 22nd Century Limited, LLC (22nd Century), enrolled the first patients in its Phase II-B clinical trial for X-22, a prescription smoking cessation aid in development. X-22 consists of a kit of very low nicotine (VLN) cigarettes made from 22nd Century’s proprietary tobacco. X-22 cigarettes contain 97% less nicotine than Marlboro® Gold, the U.S. cigarette market leader, formerly known as Marlboro Lights®. In the Phase II-B protocol, subjects are assigned to smoke X-22 (or active control cigarettes with conventional nicotine content) during a 6-week treatment period to facilitate the goal of quitting by the end of 6 weeks. Four weeks of continuous abstinence from smoking is the primary endpoint of the trial and two and three-month follow-up quit rates (from the end of treatment) are also being evaluated.
The Food and Drug Administration (FDA) has advised the company that it will decide by September 2011 whether to grant “Fast Track” designation to X-22. The FDA’s Fast Track Development Program is designed to facilitate development and expedites the review of drugs undergoing clinical trials that treat serious or life threatening diseases and that demonstrate the potential to address unmet medical needs.
Today’s Form 10-Q for the second quarter of 2011 is the company’s second quarterly report filed with the SEC that incorporates the operations of its wholly-owned subsidiary, 22nd Century, which became a subsidiary of the company as a result of a merger on January 25, 2011. Accordingly, the assets and liabilities and the historical operations reflected in financial statements for periods prior to the merger are those of 22nd Century and are recorded at the historical cost basis of 22nd Century. The second quarter per-share losses are based on the weighted average shares outstanding of 27,204,701 for 2011 and 11,193,668 for 2010 (pre-merger). The company currently has 27,909,646 shares of common stock issued and outstanding.
About 22nd Century Group, Inc.
Founded in 1998, 22nd Century is a plant biotechnology company whose proprietary technology allows for the level of nicotine (and other nicotinic alkaloids) in the tobacco plant to be decreased or increased through genetic engineering and breeding. The company owns or is the exclusive worldwide licensee of 98 issued patents in 79 countries where at least 75% of the world’s smokers reside. 22nd Century is committed to developing and commercializing (i) the world’s most effective and acceptable smoking cessation aid and (ii) for those smokers who refuse to quit smoking, consumer-acceptable modified risk tobacco products that reduce exposure to smoke toxins, as compared to conventional cigarettes.
For additional information, please visit: www.xxiicentury.com