Business Overview and History
Achieve Life Sciences, Inc. (NASDAQ:ACHV) is a late-stage pharmaceutical company at the forefront of addressing the global nicotine addiction epidemic through the development and commercialization of its lead product candidate, cytisinicline. With a laser-sharp focus on transforming the treatment of nicotine dependence, Achieve is poised to deliver a groundbreaking solution that could significantly improve the lives of millions struggling with smoking and vaping addictions.
Achieve Life Sciences, Inc. was founded in 2017 with the goal of developing and commercializing cytisinicline, a plant-based alkaloid, for the treatment of nicotine addiction and smoking cessation. The company was incorporated in the state of Delaware and operates out of offices in Seattle, Washington and Vancouver, British Columbia. In 2015, Achieve acquired Extab Corporation and obtained the rights to cytisinicline through a license agreement with Sopharma, a Bulgarian pharmaceutical company. This was a critical milestone that provided Achieve with the core asset to advance its mission.
Over the years, Achieve has encountered various obstacles, including difficulties in securing adequate funding and uncertainty around the regulatory approval process. In 2021, the company faced a setback when it had to recall certain lots of cytisinicline due to the detection of elevated levels of nitrosamines, a potentially harmful impurity. This required Achieve to undertake a review of its manufacturing processes and work closely with regulators to address the issue.
Despite these challenges, Achieve has made steady progress in advancing the clinical development of cytisinicline. The company has conducted several Phase 2 and Phase 3 clinical trials evaluating the efficacy and safety of cytisinicline for smoking cessation in adults. These trials have demonstrated promising results, generating data that Achieve hopes will support the future regulatory approval and commercialization of the product.
Financial Overview
Achieve Life Sciences is a clinical-stage biopharmaceutical company, and as such, has not yet generated any revenue from product sales. The company’s financial performance has been characterized by ongoing research and development (R&D) expenses, which totaled $15.5 million for the nine months ended September 30, 2024, compared to $13.7 million for the same period in the prior year. This increase was primarily driven by the initiation and enrollment of the ORCA-OL open-label safety trial.
For the third quarter of 2024, Achieve reported a net loss of $12.51 million, compared to a net loss of $7.11 million in the same period in 2023. The increase in net loss was primarily due to higher R&D expenses, which rose to $7.61 million from $3.58 million in the prior year quarter. This increase was mainly attributed to the initiation and ramp-up of enrollment for the ORCA-OL open-label safety trial, partially offset by reduced costs associated with the completed Phase 3 ORCA-3 and Phase 2 ORCA-V1 trials.
General and administrative expenses for the third quarter of 2024 also increased to $4.86 million, up from $2.99 million in the same period in 2023. This rise was primarily due to higher employee expenses, including severance costs, consulting costs, and legal expenses associated with patent activities and general corporate activities.
As of September 30, 2024, Achieve reported a cash, cash equivalents, and short-term investments balance of $42.9 million, which the company believes is sufficient to fund its operations into the second half of 2025, including through the anticipated NDA submission for cytisinicline. This cash position was bolstered by a $20 million debt refinancing agreement with Silicon Valley Bank (SVB) completed in the third quarter of 2024, which extended the maturity date of the company’s outstanding term loans to December 2027.
Achieve has historically financed its operations through equity offerings and debt financing. In February 2024, the company raised approximately $56.1 million in net proceeds from a registered direct offering, further strengthening its financial position as it advances cytisinicline’s development and prepares for its potential commercialization.
Liquidity
Achieve Life Sciences’ liquidity position has been bolstered by recent financing activities and strategic financial management. The company’s cash, cash equivalents, and short-term investments balance of $42.9 million as of September 30, 2024, provides a solid foundation for its ongoing operations and development activities. The debt refinancing agreement with Silicon Valley Bank, extending the maturity of outstanding term loans to December 2027, has improved the company’s debt profile and provided additional financial flexibility.
The successful registered direct offering in February 2024, which raised approximately $56.1 million in net proceeds, has significantly strengthened Achieve’s liquidity position. This infusion of capital is expected to support the company’s operations through key milestones, including the anticipated NDA submission for cytisinicline.
Management’s assessment that the current cash position is sufficient to fund operations into the second half of 2025 demonstrates prudent financial planning and provides a runway for the company to potentially achieve critical regulatory and commercial objectives. However, as with many clinical-stage biopharmaceutical companies, Achieve may need to secure additional funding in the future to support long-term growth initiatives and potential commercialization efforts.
As of September 30, 2024, Achieve reported a debt-to-equity ratio of 0.3131, indicating a relatively low level of leverage. The company’s current ratio and quick ratio both stood at 6.78, reflecting strong short-term liquidity and the ability to meet its near-term obligations. Achieve’s positive working capital balance of $38.80 million further underscores its solid financial position.
The new $20 million debt refinancing agreement with Silicon Valley Bank provides additional financial flexibility. The first tranche of $10 million was drawn at closing, with an additional $5 million available upon FDA acceptance of the NDA for cytisinicline and a final $5 million tranche subject to SVB’s discretion. This structured financing approach aligns well with Achieve’s development milestones and potential future cash needs.
Regulatory Milestones and Strategic Initiatives
The cornerstone of Achieve’s efforts is the development of cytisinicline as a novel treatment for nicotine dependence. The company’s clinical program has achieved several key milestones, including the successful completion of the pivotal Phase 3 ORCA-2 and ORCA-3 trials, which demonstrated cytisinicline’s superior efficacy compared to placebo in helping smokers quit.
In addition to the smoking cessation indication, Achieve has also made significant strides in exploring cytisinicline’s potential for the treatment of nicotine e-cigarette, or vaping, cessation. In the third quarter of 2024, the FDA granted Breakthrough Therapy designation for cytisinicline in this indication, recognizing the urgent need for new treatments to address the growing public health crisis of vaping addiction, particularly among the adolescent population.
To support the upcoming NDA submission for cytisinicline’s smoking cessation indication, Achieve has been diligently working to complete the ORCA-OL open-label safety trial. The company successfully enrolled 479 participants across 29 clinical trial sites in the United States, ahead of its initial target, demonstrating its strong execution capabilities. Achieve expects to have the necessary long-term safety data from the ORCA-OL trial to support the NDA submission in the second quarter of 2025.
Beyond the clinical development efforts, Achieve has also been actively strengthening its leadership team and commercial readiness. In October 2024, the company promoted Jaime Xinos to the role of Chief Commercial Officer, tasking her with overseeing all commercial operations and leading the strategic preparations for the anticipated U.S. launch of cytisinicline. Xinos, who has nearly 25 years of experience in the pharmaceutical industry, will be instrumental in positioning cytisinicline as a promising new treatment option for both smoking and vaping cessation.
Achieve is targeting the second quarter of 2025 for the NDA submission of cytisinicline for the smoking cessation indication. The company expects FDA acceptance of the NDA submission within 74 days of the submission, followed by a potential product approval approximately 12 months after that. Additionally, Achieve plans to commence the Phase 3 clinical trial for the vaping cessation indication in the third quarter of 2025.
Risks and Challenges
As a clinical-stage biopharmaceutical company, Achieve faces several risks and challenges inherent to the industry. The successful development and regulatory approval of cytisinicline are critical to the company’s future success, and any delays or setbacks in the clinical trial process or regulatory review could significantly impact Achieve’s prospects.
Additionally, Achieve’s reliance on a single product candidate, cytisinicline, exposes the company to heightened risks. The failure to obtain regulatory approval for cytisinicline or any issues with its commercialization could have severe consequences for Achieve’s business.
The company also faces competition from other nicotine dependence treatments, both approved and in development, which could impact cytisinicline’s market share and commercial potential. Achieve’s ability to effectively market and distribute cytisinicline, if approved, will be crucial to its success.
Lastly, Achieve’s financial position and access to capital are critical factors that could impact the company’s ability to execute its strategic plans. Any challenges in securing additional funding or managing its cash resources could hamper Achieve’s long-term growth and development efforts. The company expects its quarterly operating expenses to remain elevated as it continues to progress the ORCA-OL trial, which may put pressure on its cash reserves.
Outlook and Conclusion
Achieve Life Sciences is poised to make a significant impact in the treatment of nicotine dependence, a global public health crisis that affects millions of lives. With the promising clinical data for cytisinicline in smoking cessation and the recent Breakthrough Therapy designation for vaping cessation, the company is well-positioned to potentially become a leader in this underserved therapeutic area.
As Achieve prepares to submit its NDA for cytisinicline’s smoking cessation indication in the second quarter of 2025, the company is also strategically positioning itself for a successful commercial launch. The appointment of Jaime Xinos as Chief Commercial Officer and the ongoing commercial readiness activities reflect Achieve’s commitment to ensuring that cytisinicline reaches the patients who need it most.
With a strong financial position, a focused pipeline, and a seasoned leadership team, Achieve Life Sciences is navigating the path towards potentially transforming the landscape of nicotine dependence treatment. The company’s current cash balance of $42.9 million is expected to provide runway into the second half of 2025, including through the potential NDA submission. This financial stability, coupled with the strategic debt refinancing and potential access to additional capital, positions Achieve well to execute its near-term objectives.
As the company continues to execute on its strategic initiatives, investors and the broader healthcare community will eagerly await the outcome of Achieve’s regulatory and commercial endeavors in the years to come. The successful development and potential approval of cytisinicline could mark a significant milestone in addressing the global nicotine addiction epidemic, offering hope to millions of individuals struggling with smoking and vaping addictions.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.