Shares in 22nd Century Group Inc (NYSE:XXII) zipped higher after the bell on Thursday as the biotech posted another record quarter of sales.
The Clarence, New York-based company, which has developed a technology to regulate the levels of nicotine in tobacco plants, recorded net sales of US$6.12mln (1Q 17: US$2.23mln) the first three months of 2018.
The increase in net sales revenue was primarily the result of continued additional sales generated from a filtered cigar manufacturing agreement which began last spring.
22nd Century also managed to turn a profit thanks to the recognition of an unrealised gain on its investment in Anandia Laboratories of US$6mln.
For the quarter, the firm recorded net income of US$0.01 per share, compared to a net loss of US$0.03 per share in the year-ago period.
That surprise profit came despite a sharp increase in spending on securing regulatory approvals for its very low nicotine cigarettes.
The company had more than US$59mln in cash and short-term investments, which are sufficient reserves to meet regular operating expenses for a number of years.
Using its technology, 22nd Century has been able to grow tobacco with up to 97% less nicotine than conventional tobacco – as well as plants with relatively high nicotine levels.
The company says its very low nicotine tobacco has proven to be a very effective tool in helping those trying to give up smoking.
For smokers who do not want to quit, 22nd Century’s high nicotine tobacco enables it to produce a cigarette with what is claims is the world’s lowest tar-to-nicotine ratio.