Yahoo Finance Achieve Life Sciences, Inc. (NASDAQ:ACHV) Q1 2024 Earnings Call Transcript
Achieve Life Sciences, Inc. (NASDAQ:ACHV) Q1 2024 Earnings Call Transcript May 9, 2024
Achieve Life Sciences, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings. Welcome to Achieve Life Sciences’ First Quarter 2024 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would like to hand the call over to Nicole Jones, Investor Relations. Thank you. You may begin.
Nicole Jones: Thank you, operator. Good afternoon, everyone, and thank you for joining us today. From Achieve Life Sciences, we are joined by John Bencich, Chief Executive Officer; Dr. Cindy Jacobs, President and Chief Medical Officer; and Jerry Wan, Principal Accounting Officer. Management will be available for a Q&A session following today’s prepared remarks. Before we begin, I’d like to remind everyone that today’s conference call contains forward-looking statements based on current expectations. These statements are only predictions and actual results may vary materially from those projected. Please refer to Achieve’s documents available on our website and filed with the SEC concerning factors that could affect the company. I’ll now turn the call over to, John.
John Bencich: Thank you, Nicole, and thanks everyone for joining us today. Today, we will review our first quarter 2024 financial performance and discuss key highlights, including reaching agreement with the FDA on the long-term cytisinicline exposure data necessary for our NDA filing. Critically for the timing of the NDA submission, we agreed on the number of subjects required with six months exposure to enable the NDA filing. Cindy will provide an update on the ORCA-OL study and discuss the status of initiation in just a moment. Concurrently with the FDA decision, we successfully secured financing of up to $124 million enabling Achieve to execute the ORCA-OL trial and provide cash runway through the NDA submission, NDA approval and beyond.
The financing included participation from new fundamental healthcare investors, including our manufacturing partner Sopharma. The investor demand for the financing demonstrates the importance of cytisinicline in battling nicotine dependence and a growing confidence in cytisinicline’s market opportunity. The visibility of cytisinicline as a drug for nicotine dependence has been raised markedly during the quarter. And, as many of you will have read, the results from the Phase 2 ORCA-V1 trial of cytisinicline for vaping cessation were published in JAMA Internal Medicine earlier this week. The ORCA-V1 study included 160 adults who used e-cigarettes daily and desired to quit. There was incredible interest in this trial and has enrolled quickly in approximately four months.
The results showed that cytisinicline more than doubled the odds of quitting e-cigarettes compared to placebo, with 31.8% of cytisinicline treated participants achieving continuous vaping abstinence compared to just 15.1% of those receiving placebo. As seen in our other trials, cytisinicline was incredibly well-tolerated and compliance with study treatment was exceptional. The prevalence rates of vaping continue to increase and it is estimated that 11 million adults and 2 million middle and high school age students use e-cigarettes in the U.S. alone. More than half of adults who vape have reported interest in quitting and many who tried to quit struggled to do so successfully. If approved, cytisinicline would be the first FDA approved treatment specifically evaluated and approved for e-cigarette cessation.
We plan to further our discussions with the FDA on a label expansion for vaping cessation and expect to conduct an end-of-Phase 2 meeting later this year to discuss clinical requirements. Additionally, in the first quarter, we presented detailed trial results from our ORCA program at the Society for Research on Nicotine and Tobacco Annual Meeting. The ORCA-2 and ORCA-3 Phase 3 trials have consistently demonstrated cytisinicline’s efficacy in achieving smoking cessation with favorable safety and tolerability profiles. For the first time, we presented survey results from participants in our Phase 3 trials. Of the participants who responded, over 80% had been treated with cytisinicline. Of these cytisinicline treated subjects, 69% of them had successfully quit smoking and of those who did not quit completely, approximately one-quarter cut their smoking in half.
These respondents attributed their success in quitting to cytisinicline, noting that amongst other things, it helped reduce cravings. Nearly all participants of the survey were willing to recommend cytisinicline to others, and notably, 86% of participants, including those who did not quit completely, showed interest in using cytisinicline again if needed. This is a great segue into Cindy’s update on the ORCA-OL trial. Cindy?
Cindy Jacobs: Thank you, John. Our focus for the first quarter has been on preparations for the NDA submission, most importantly on the initiation of the ORCA-OL study. I’m pleased to update that plans remain on-track with our guidance and we expect to begin enrollment within the next few weeks. As a reminder, the ORCA-OL is a single-arm open-label study that will collect safety data on the long-term use of cytisinicline. Our agreement with FDA is to provide safety data on a minimum of 300 subjects treated with cytisinicline for a cumulative period of six months as part of the NDA submission. Subsequently and prior to product approval, we will provide data on at least 100 subjects treated for a total period of one year. Because FDA has allowed cumulative exposure, enrolling from the pool of subjects previously treated with cytisinicline for either six or 12 weeks in our smoking or vaping cessation trial will allow us to expedite the time required to generate this long-term exposure data.
We are first focusing on recruitment from those subjects who have already received three months of prior cytisinicline treatment as they would only need another three months of treatment on the open-label study to fulfill the six month exposure requirement for the NDA submission. As an update, ORCA-OL is planned to be conducted at 29 clinical sites all of which participated in our previous studies, all contracts and planning have been completed with our clinical operations’ partners and vendors. We have also completed the packaging of the drug product and are preparing for shipments to the site. Meanwhile, of the 1,700 participants from our earlier trials, the sites have been conducting outreach to more than 1,100 subjects who were previously treated with cytisinicline and are scheduling initiation visits for those who are interested.
We have received feedback that there is high enthusiasm for participation from those who are eligible. Interestingly, the primary reason for not being eligible for the open-label trial is that about 25% of the previously cytisinicline treated subjects continue to be smoke or vape free, even after completing their treatment on the prior trial over one to two years ago. Even only 7% to 9% of subjects have been lost to contact or not interested, the remaining two-thirds who have been contacted want to be considered for the trial. Thus, we believe the planned enrollment should be achieved swiftly in 2024. So in summary, we are moving forward as expected and continue to anticipate an NDA submission in the first half of 2025 and look forward to providing an update in the coming weeks once enrollment has been initiated.
Now, I’ll turn it over to Jerry, for a review of the financials for the quarter.
Jerry Wan: Thank you, Cindy. Good afternoon, everyone. I’d like to provide an update on our financial activities this quarter, focusing on the financing and strategic implications for our operations and then review our current financial status and forward outlook. Echoing John’s earlier points, this quarter we successfully secured a significant financial boost with a registered direct offering of common stock and a concurrent private placement of warrants collectively worth up to $124.2 million. The initial amount raised was $60 million with the potential to receive up to an additional $64.2 million upon the exercise of milestone driven warrants. This recent cash infusion ensures that we have the necessary resources to continue our clinical development plans effectively, including the pivotal ORCA-OL trial and our anticipated NDA submission.
As of March 31, 2024, our cash, cash equivalents and restricted cash were $66.4 million. Looking forward, we anticipate that the initial net proceeds from this financing will sustain our operations well into the second half of 2025. If the milestone driven warrants are fully exercised, we anticipate it will extend our financial runway into 2026 and through potential approval of cytisinicline in the U.S. In regards to our Statement of Operations, total operating expenses in the first quarter of 2024 decreased to $6 million as compared to $8.6 million for the same quarter of 2023. The company incurred a net loss of $6.5 million for the quarter ended March 31, 2024, as compared to a net loss of $9 million for the same quarter of 2023. We expect our operating expenses and net loss to increase over the coming quarters as we initiate the ORCA-OL study.
In summary, this quarter has strengthened our position both financially and strategically. With a strong cash position and a clear path forward, we are well-prepared to meet our upcoming milestones and continue our journey towards bringing cytisinicline to market. That concludes my update. I’ll now turn the call back over to John, for closing remarks.
John Bencich: Thank you, Jerry. We’ve had a dynamic start to 2024, advancing FDA discussions on NDA submission requirements and securing capital to provide resources for the execution of those required activities, in particular for the ORCA-OL trial. The recent positive reception of our clinical data published in JAMA and presented at SRNT not only reinforces the scientific validity of our findings, but also highlights the medical community’s recognition of cytisinicline as a potentially promising treatment for smoking and vaping cessation. Smoking remains the leading cause of preventable death, killing more than 8 million people globally each year, with nearly half a million of those deaths in the U.S. Smoking and exposure to secondhand smoke contribute to various cancers, as well as other pulmonary and cardiovascular diseases, creating devastating consequences to patients and their families.
Cytisinicline’s future role in disease reduction is perhaps highlighted by chronic obstructive pulmonary disease, or COPD, a lung disease primarily caused by cigarette smoking. According to the CDC, 38% of the nearly 16 million U.S. adults diagnosed with COPD report current smoking. COPD is the sixth leading cause of death in the U.S. with estimated annual patient related costs of $31 billion which is expected to nearly double by 2029. Providing people with better options to quit smoking has the potential to reduce overall rates of COPD and offset the associated rising costs in the future. Additionally, smoking is a major cause of cardiovascular diseases such as heart attacks and stroke. According to the American Heart Association, cardiovascular disease accounts for about 800,000 U.S. deaths every year, making it the leading cause of all deaths in the United States.
Of those, nearly 20% are due to cigarette smoking. These statistics and the importance of disease reduction validate the urgent need for effective cessation treatments, particularly as there has been no new approved smoking cessation agents in nearly 20 years and currently no FDA approved treatment for e-cigarette cessation to mitigate the broad public health impacts of smoking and vaping. It is clear the complexity of nicotine dependence increases healthcare costs and necessitates specialized interventions. We believe cytisinicline can play a critical role in this preventable health crisis and help achieve better long-term outcomes for patients. For the balance of 2024, our priorities are clearly defined. We will continue our focus on initiation and completion of enrollment of the ORCA-OL study, continue preparations for the NDA submission for smoking cessation and obtain further FDA guidance for expansion into e-cigarette cessation indication.
In closing, I want to express my gratitude to our shareholders for your continued support and the dedication of our trial participants and their healthcare providers. We remain committed to providing a new therapeutic option that can significantly impact the lives of those affected by nicotine dependence. Thank you again for joining us today. We are eager to continue our progress and we’ll now open up the line for questions.
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