A little known NY-based biotechnology company, 22nd Century Technologies Inc., has taken the tobacco industry by surprise. The company with about 80 employees suddenly saw its popularity rise last week after an announcement claiming to have grown tobacco plants with just 3 percent of the nicotine in typical tobacco plans.
As stocks of cigarette giants plunged over the past week, 22nd Century’s shares are up 70 percent. On Friday, they gained 25 percent — the biggest one-day increase since March 2015.
Investors are now betting on this obscure biotech to supply Big Tobacco with low-nicotine cigarettes, but so far its technology is unproven. Investors’ hopes are pinned on 22nd Century’s technology becoming widespread, although none of the big tobacco makers has bought it yet.
“We genetically modify the tobacco. We’ve been working on this for 20 years,” said Henry Sicignano, chief executive of 22nd Century.
Producing a cigarette with low levels of nicotine, the addictive stimulant in cigarettes, has been a challenge for the industry since as far back as the 1960s. Large tobacco companies such as Philip Morris International Inc. have tried their hand at it and failed.
Previous efforts to make low-nicotine cigarettes failed in part because tobacco
varieties developed to meet the goal had lower yields, making them less desirable for farmers. They also tended not to have tastes or smells deemed desirable by industry and consumers.Low-nicotine plants can also attract pests that normal tobacco wouldn’t.
The US Food and Drug Administration has explored the issue for several years, though — in 2013 it held a listening session where the idea of cutting nicotine levels came up.
“Nicotine is a natural insecticide, if you will, so the lower the levels of nicotine, the less resistant the plants are to pests,” Sicignano said. That raises growing costs.
Genetic modification has emerged as a shortcut to some of the challenges, “Living things are complex,” said Ramsey Lewis, a biotechnology researcher at North Carolina State University, home to the U.S. repository of tobacco strains. “When you produce a lower nicotine variety using a genetics approach, other characteristics of the plant can change the plant, which may be bad for growers or undesirable for the industry.”
The technology uses both approaches — some of its low-nicotine varieties use lab-based genetic modification, while others are bred with traditional techniques. It’s licensed its nicotine-altering technology to British American Tobacco in a deal worth as much as $14 million.
The company is developing two products- a smoking-cessation cigarette that must go through a strenuous regulatory clearance and a cigarette that could be dubbed “modified risk.”
Sicignano said 22nd Century can make cigarettes with 95 to 97 percent less nicotine than conventional cigarettes, which have about 10 mg of nicotine each. It is the only company with tobacco that can be below the threshold of what health regulators say they believe to be non-addictive, he added.
The company also holds more than 200 patents, many which protect its low-nicotine tobacco plants from competition.
“It’s definitely a game-changer,” Sicignano said. “It’s very easy to bulk up production and grow low-nicotine tobacco in short order. We’re not out there investing tens of millions of dollars to do that yet, but we’re certainly at the ready.”
“We’re a public company so I guess at the end of the day everything’s for sale, but it’s not our intention to go sell ourselves,” he said.
