Agreement Between BAT & 22nd Century Group Comes to an End

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Agreement Between BAT & 22nd Century Group Comes to an End

09/26/2017
Logo for 22nd Century Group Inc.

CLARENCE, N.Y. — 22nd Century Group Inc. and British American Tobacco Ltd. (BAT) have parted intellectual ways.

According to 22nd Century, the 2013 Research License and Commercial Option Agreement between the company and BAT has ended, giving 22nd Century sole control of its intellectual property portfolio relating to the ability to grow patent-protected very low nicotine tobacco plants.

In turn, 22nd Century has begun talks with other global tobacco companies and international pharmaceutical companies that have expressed interest in a business relationship with the company. The BAT pact restricted 22nd Century from entering into a licensing agreement with other firms.

Under the terms of the BAT agreement, annual royalties to 22nd Century were capped at $25 million a year. However, the company is now free to engage in licensing agreements and strategic partnerships with any and all tobacco companies — with no restrictions, limits or caps on licensing royalties, according to the company.

The change comes as the Food and Drug Administration shifts its tobacco regulation focus to nicotine levels and addiction, as CSNews Online previously reported.

Currently, 22nd Century is the only company capable of growing tobacco with just 0.4-milligrams/grams nicotine content which equals a 95-percent reduction in nicotine, according to the company.

Its modified risk tobacco product applications for its "Brand A" Very Low Nicotine tobacco cigarettes are currently under consideration by the FDA.

"It appears that BAT is so far behind Philip Morris International in its heat-not-burn product development that BAT has now myopically narrowed its focus to non-combustible devices instead of reduced exposure combustible cigarettes," said Henry Sicignano, III, president and CEO of 22nd Century Group.

"In this new world, where the FDA and the World Health Organization have called for mandated, dramatic reductions of nicotine in cigarettes, we are absolutely thrilled to once again be in sole and complete control of our technology and the incredible licensing opportunities that lay before us," he added.

Clarence-based 22nd Century is a plant biotechnology company focused on genetic engineering and plant breeding which allows the increase or decrease of the level of nicotine in tobacco plants and the level of cannabinoids in cannabis plants.