22nd Century unit signs overseas deal

April 26, 2013 Updated Apr 26, 2013 at 7:58 AM EDT

By Tracey Drury, Buffalo Business First

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22nd Century unit signs overseas deal

April 26, 2013 Updated Apr 26, 2013 at 7:58 AM EDT

Goodrich Tobacco Co., a subsidiary of Clarence-based 22nd Century Group Inc., has signed an exclusive distribution agreement to distribute their low-nicotine brands in the Benelux region, including The Netherlands, Belgium and Luxembourg.

The deal announced April 16 with Wilshire Marketing BV covers distribution in Europe of the company's Dutch Magic brand, including two cigarette brand styles and two roll-your-own brand styles.

22nd Century Group Inc. (OTCBB: XXII) manufactures specialty tobacco products. Dutch Magic cigarettes fall into the "very low nicotine" category, and contain approximately 95 percent less nicotine than typical "ultra light" and "light" cigarettes.

Founded in 1998, 22nd Century develops and commercializes both smoking cessation aids and "modified risk" tobacco products that reduce exposure to toxins. Goodrich Tobacco is focused on commercial tobacco products and potential modified risk cigarettes; while Hercules Pharmaceuticals LLC, another subsidiary, focuses on X-22, a prescription smoking cessation aid in development.

The company has operated at a loss since 2006, including a $6.74 million net loss in 2012 and $1.35 million loss in 2011. Shares of its stock are currently selling for 70 cents apiece, compared to 85 cents a year ago.

The new deal with Wilshire marks the first time VLN tobacco products will be available to consumers in Europe.

With an initial order due to ship in July for 450,000 packs, with minimum annual purchases by Wilshire that peak at $3 million in 2015. Wilshire is also investing marketing funds to launch the Dutch Magic brand in the Benelux region.

Earlier this month, the company received approval from the United States Patent and Trademark Office on a new patent for its gene technology for producing tobacco plants with either reduced or increased nicotine levels. 22nd Century's patent portfolio consists of 15 issued U.S. patents and 9 pending U.S. patent applications. Globally, 22nd Century owns or is the exclusive licensee of 109 issued patents in 78 countries plus an additional 39 pending patent applications.