10-Q: Achieve Life Sciences Reports Q3 2024 Results, Highlights Progress in Cytisinicline Development

Achieve Life Sciences' Q3 2024 report details financial results and progress in clinical trials for cytisinicline, including the completion of enrollment for the ORCA-OL safety trial.

Summary

• Achieve Life Sciences reported a net loss of $12.5 million for the three months ended September 30, 2024, and a net loss of $27.5 million for the nine months ended September 30, 2024.
• The company's cash, cash equivalents, and short-term investments totaled $42.9 million as of September 30, 2024.
• Research and development expenses increased to $7.6 million for the three months and $15.5 million for the nine months ended September 30, 2024, primarily due to the ORCA-OL trial.
• The ORCA-OL open-label safety trial completed enrollment of 479 subjects in October 2024, with data expected in the first quarter of 2025 to support an NDA submission in the second quarter of 2025.
• The company received Breakthrough Therapy designation from the FDA for cytisinicline for nicotine e-cigarette cessation.
• A new convertible debt agreement was entered into with Silicon Valley Bank for $10 million, with potential for an additional $10 million based on certain milestones.
• The company has a going concern uncertainty and will need to raise additional capital to fund operations for the next 12 months.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While there is positive progress in clinical trials and regulatory designations, the company's financial situation and going concern uncertainty temper the overall sentiment. The need for additional capital and the reliance on a single supplier are also concerning.

Positives

• The ORCA-OL trial completed enrollment, which is a key step towards NDA submission.
• The FDA granted Breakthrough Therapy designation for cytisinicline for e-cigarette cessation, which could expedite the development and review process.
• The company has a positive working capital balance of $38.8 million.
• The company has completed three Phase 1 clinical studies and two Phase 2 clinical studies for cytisinicline.
• The company has completed two Phase 3 clinical trials for cytisinicline for smoking cessation.

Negatives

• The company has incurred significant net losses, with a net loss of $27.5 million for the nine months ended September 30, 2024.
• The company has a going concern uncertainty and will need to raise additional capital to fund operations for the next 12 months.
• The company is dependent on a single supplier, Sopharma, for the manufacture and supply of cytisinicline.
• The company has no products approved for commercial sale and has not generated any revenue from product sales to date.
• The company is subject to various risks related to the development and commercialization of cytisinicline.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern, dependent on raising additional capital.
• The company is reliant on a single product candidate, cytisinicline, and a single supplier, Sopharma.
• There is no guarantee that the FDA will approve cytisinicline without additional clinical or nonclinical studies.
• The company faces substantial competition from other pharmaceutical and biotechnology companies.
• The company may not be successful in obtaining or maintaining necessary rights to cytisinicline, product compounds, and processes.
• The company has incurred substantial debt, which could impair flexibility and access to capital.
• The company is subject to risks related to regulatory approvals, manufacturing, and commercialization of cytisinicline.

Future Outlook

The company anticipates data from the ORCA-OL trial in the first quarter of 2025 to support an NDA submission in the second quarter of 2025. The company expects to incur significant expenses and increasing operating losses for at least the next several years as it continues clinical development, seeks regulatory approval, and commercializes cytisinicline.

Management Comments

• The FDA expressed support for an NDA submission based on adequate data to assess for efficacy from our two completed randomized and controlled Phase 3 trials.
• The FDA advised that long-term exposure data to assess for safety beyond 12 weeks would be needed to adequately assess safety risks.
• We reached agreement with the FDA that a single, open-label study evaluating the long-term safety effects of cytisinicline will be sufficient to complete the requirement and enable an NDA submission anticipated in the second quarter of 2025.

Industry Context

The company is addressing the global nicotine addiction epidemic, with a focus on both combustible cigarettes and e-cigarettes. The FDA's Breakthrough Therapy designation for cytisinicline for e-cigarette cessation highlights the unmet need in this area. The company is positioning cytisinicline as a differentiated treatment option with robust efficacy, minimal side effects, and a shorter course of therapy.

Comparison to Industry Standards

• The company's Phase 3 trial results for smoking cessation show comparable or better efficacy than existing treatments like varenicline (Chantix) and bupropion (Zyban), with cytisinicline demonstrating a 30.3% quit rate at 12 weeks compared to 9.4% for placebo in the ORCA-3 trial, and 32.6% compared to 7.0% for placebo in the ORCA-2 trial.
• The company's Phase 2 ORCA-V1 trial for e-cigarette cessation showed a 31.8% quit rate for cytisinicline compared to 15.1% for placebo, which is a significant improvement over placebo and is a promising result in a market with no FDA approved treatments.
• The company's focus on a shorter course of therapy (6 or 12 weeks) is a potential advantage over some existing treatments that require longer durations.
• The company's reliance on a single supplier, Sopharma, is a risk compared to companies with more diversified supply chains, but is common for smaller biotech companies in early stages of development.
• The company's cash position of $42.9 million is relatively low compared to larger pharmaceutical companies, but is typical for a clinical-stage biotech company, and the company has raised significant capital in the past.

Management Changes

Stakeholder Impact

• Shareholders face the risk of dilution and potential loss of investment due to the company's need for additional capital.
• Employees may be affected by potential changes in the company's operations and financial stability.
• Patients may benefit from the development of cytisinicline as a new treatment option for nicotine addiction.
• Suppliers and creditors may be impacted by the company's financial situation and ability to meet its obligations.

Next Steps

• The company will continue to monitor the ORCA-OL trial and expects data in the first quarter of 2025.
• The company plans to submit an NDA for cytisinicline in the second quarter of 2025.
• The company will continue to seek additional funding to support its operations and development programs.

Key Dates

Keywords

cytisinicline, nicotine dependence, smoking cessation, e-cigarette cessation, clinical trials, FDA, NDA, ORCA-OL, Breakthrough Therapy, Sopharma, convertible debt, going concern