WINDSOR, ON / ACCESSWIRE / June 28, 2016 / The Wealthy Biotech Trader (or "WBT"), an investment newsletter focused on showing everyday investors new opportunities in rapidly growing, little-known, biotech, pharma and medical device stocks making news and subsequent market moves, would like to highlight a number of biotechs that are primed for a breakout as the market for smoking cessation products heats up.

Companies included: 22nd Century Group (XXII), Arena Pharamceuticals (ARNA), Gilla Inc (OTCMKTS: GLLA), Imperial Brands Plc (OTC: IMBBF)

According to a research report from Mintel, the United States smoking cessation market already exceeds $1 billion. Because an ever-increasing number of Americans are seeking effective ways to kick their nicotine habit, by 2017 smoking cessation products sales in the US are projected to top $1.2 billion and worldwide sales exceeding $3 billion. This should hardly come as a surprise as governments are tightening their smoking regulations, and more and more smokers are becoming aware of the long-term health effects of smoking.

For investors looking for a chance to cash in on the smoking cessation opportunity while it is still largely under the radar, 22nd Century Group (NYSE MKTS: XXII) is one company that should be carefully considered. This plant-based biotechnology company has come up with a revolutionary way of aiding smokers in their quest for a nicotine free lifestyle using the Company's proprietary genetic engineering and plant breeding technology. With more than 200 patents in 96 countries controlling the genes in the tobacco plant responsible for nicotine production, 22nd Century is the only company in the world able to significantly increase or decrease the level of nicotine in naturally growing tobacco plants.

Low nicotine cigarettes encourage smokers to quit

From this technology, 22nd Century Group has developed both low and high nicotine cigarettes; these products are marketed under the 'MAGIC' and 'RED SUN' brand names respectively. It is important to note that the company's Very Low Nicotine (VLN) smoking cessation cigarettes, code-named "X-22," contain 20x less nicotine than conventional cigarettes (95% less nicotine than regular cigarettes made by traditional "Big Tobacco" companies). In fact, as a result of the Company's monopoly on the genetic pathway in the tobacco plant responsible for nicotine production, 22nd Century is the only company in the world capable of producing combustible cigarettes containing naturally grown tobacco with non-addictive levels of nicotine.

In order to clearly appreciate the massive potential of these cigarettes, note that an independent clinical study - actually funded directly by the FDA last year - found that smokers who used 22nd Century's proprietary Very Low Nicotine cigarettes went on to smoke fewer cigarettes per day and significantly increased quit rates. The withdrawal symptoms were also minimal signaling that lower nicotine intake could indeed prove far more effective to helping people stop smoking. The company is currently pursuing regulatory approval from the FDA to market X-22 as a prescription smoking cessation aid. When the Company announces the start of its Phase III trials, the high-visibility milestone could provide enough momentum for the Company's stock to reach all-time highs (in excess of $6).

Modified risk cigarettes status will drive valuation

Apart from the huge opportunity in smoking cessation, 22nd Century Group also has another catalyst that will, without a doubt, play a significant role in increasing shareholder value. Like X-22, the company's BRAND A Very Low Nicotine over-the-counter cigarettes contain approximately 95 percent less nicotine than conventional tobacco cigarettes, while 22nd Century's BRAND B boasts of an extremely low "tar-to-nicotine" ratio. With these specifications, the company is seeking regulatory approval in the U.S. to market BRAND A and BRAND B as FDA authorized 'reduced exposure' or Modified Risk Tobacco Products (MRTP's). To date, no other company has been authorized by the FDA to label and market tobacco products as Modified Risk. 22nd Century intends to be the first company in the world to win this important designation which could generate hundreds of millions of dollars in near-term licensing and product sales revenue.

Considering that the FDA has put in place regulations that prohibit the sale of all tobacco products with implied health claims or even with package labels that include the terms 'light,' or 'ultra-light,' or 'low tar,' 22nd Century's Brand A FDA- authorized Modified Risk Tobacco Products labeling (which is expected this year) will be a major development to watch out for. According to research from the National Cancer Institute (NCI), before FDA banned the 'light' label, 'light' cigarettes commanded an impressive 83.5 percent of the tobacco market in 2005. This fact suggests that when 22nd Century group's BRAND A is authorized by the FDA to actually be labeled and marketed as a reduced exposure tobacco product, the brand has the potential to capture a very lucrative piece of the $70 billion US cigarette market.

More companies to put on the watchlist

Arena Pharamceuticals (ARNA) is a biopharmaceutical company focused on discovering, developing and commercializing novel drugs that target G protein-coupled receptors (GPCRs) to address unmet medical needs. The company recently developed Lorcaserin, an investigational product for smoking cessation that shows plenty of promise going forward. Lorcaserin is a serotonin 2C receptor agonist which has demonstrated statistically significant improvement in reducing the number of patients who smoke after 12 weeks of treatment.

According to Aena's CEO Jack Lief, the proof-of-concept trial provided what the company believes is the first clinical evidence that a selective serotonin 2C agonist may have a treatment effect for smoking cessation. The pre-clinical data suggest that Lorcaserin which selectively activates serotonin 2C receptors in the brain, may modulate the mesolimbic dopaminergic reward system helping smokers in their quite attempts.

Gilla Inc (OTCMKTS: GLLA) is a manufacturer, marketer and distributor of generic and premium branded e-liquid used in vaporizers, e-cigarettes, and other vaping hardware and accessories in Europe, Canada, and the U.S. While this company does not have a specific product tailored to help smokers quit, it does present a unique opportunity in the space that investors should consider. As mentioned earlier on, more smokers are looking for less harmful ways of getting their nicotine fix as they struggle to quit entirely which is where Gilla comes in. More smokers are turning to e-cigarettes and e-liquids for vaporizers to help them quit with the potential market rising to over $3 billion.

Imperial Brands Plc (OTC: IMBBF) is a well-known multinational tobacco company which has shown remarkable resilience in the face of a declining smoking population with the stock gaining 4 percent on an YTD basis. The company has solid growth prospects even as the tobacco industry comes under increasing government regulation with good reason. Imperial Brands is well exposed to the opportunity in reduced risk products with its e-cigarettes and with its massive financial power has the ability to acquire new innovative companies developing reduced risk tobacco products.

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