Why 22nd Century Group Stock Soared Today
22nd Century Group's (NASDAQ: XXII) stock is up more than 22% as of noon ET today as a result of a new rule proposed by the Food and Drug Administration (FDA) that would limit the amount of nicotine contained in cigarettes. The move would reduce their addictiveness and therefore their potential to harm members of the public.
The proposal is the product of years of federally funded research that found cigarettes with lower nicotine levels led to lower cigarette consumption and higher utilization of safer ingestion methods, like nicotine gum.
22nd Century Group already makes FDA-authorized reduced-nicotine-content cigarettes that would still be sellable if the new standards are ultimately adopted, so it could expect higher revenue without needing to spend any money on research and development for the sake of bringing their products into a state of regulatory compliance.
Source Fool.com
