Achieve Life Sciences Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 9, 2023

There are 9 speakers on the call.

Operator

Greetings. Welcome to Achieve Life Sciences Third Quarter Earnings Conference Call and Webcast. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.

Operator

At this time, I will turn the conference over to Nicole Jones with Investor Relations. Nicole, you may now begin.

Speaker 1

Thank you, operator, and thank you to everyone for joining the call today. Today from Achieve, we have John Bensich, Chief Executive Officer Doctor. Cindy Jacobs, President and Chief Medical Officer and Jerry Won, Principal Accounting Officer. Achieve's management will be available 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.

Speaker 1

Please refer to Achieve's documents available on our website

Speaker 2

Thank you, Nicole, and thanks everyone for joining us today to review our Q3 highlights and the overall status of the cytisinicline program. Over the last quarter, as well as throughout the entire year, significant progress has been made in establishing the foundation For the 1st novel nicotine dependence treatment in almost 2 decades. So far this year, with a small and efficient team of only 22 full time employees, Achieve accomplished many significant milestones, including the announcement of positive results From our 2nd Phase 3 cytisinicline trial for smoking cessation and published results from our 1st Phase 3 trial in JAMA, Reported a statistically significant efficacy benefit in the Phase 2 ORCA V1 trial, the first ever randomized controlled trial for e cigarette cessation. We've completed 3 additional clinical studies of over 100 subjects required for NDA submission, Made significant progress on the compilation of the NDA, held numerous interactions and conducted 3 formal meetings with the agency To prepare for filing an approval in the U. S, including most recently a pre NDA discussion that occurred at the end of October and increased outreach And further discussions with potential commercial organizations on the cytisinicline U.

Speaker 2

S. And global marketing opportunity. We believe pending FDA approval CytosineClean holds promise for providing a fresh start to the millions grappling with quitting smoking and vaping. There remain over 1,000,000,000 cigarette smokers around the globe. In the United States alone, over 28,000,000 adults smoke combustible cigarettes And 11,000,000 adults face nicotine.

Speaker 2

The market potential for cytisinicline is substantial And its potential impact on global public health is unparalleled. We have strong confidence in cytisinicline's effectiveness In assisting individuals who are motivated to quit smoking, our Phase 3 clinical trial results demonstrate a significant advantage With smokers treated with cytisinicline being up to 8 times more likely to successfully quit smoking Compared to those receiving placebo. Notably cytisinicline stands out from existing treatments due to its excellent tolerability With the most common adverse events affecting fewer than 10% of trial participants, we Perceive a distinct opportunity with cytisinicline to reinvigorate the nicotine de addiction market and make a profound impact on public health. By introducing this new treatment option, we anticipate a higher number of individuals will be encouraged to embark on a new quit attempt. With a product that is well tolerated, we anticipate a high level of compliance and adherence to treatment, thereby enhancing their chances of successfully quitting.

Speaker 2

Our confidence in cytisinicline is reinforced by leaders in the smoking cessation community who have consistently shown their willingness to collaborate, Express interest in new research and assist us in disseminating these crucial findings. During our engagements with this influential community, They have expressed that the goal for a new therapy should be to double the likelihood of a successful quit compared to behavioral support alone. Cytisinicline vastly exceeds this threshold. The subjects in our ORCA studies treated with cytisinicline having odds of quitting Improved by upwards of 6 to 8 times. This quarter, our research of the optimized dosing and administration of cytisinicline In U.

Speaker 2

S. Subjects was published in the highly esteemed medical journal JAMA. This recognition has made a significant impact, Garnering thousands of online views and being featured in more than 40 media outlets. Furthermore, during this quarter, Doctor. Nancy Rigatti, an ORCA primary investigator and Professor of Medicine at Harvard Medical School And the Director of the Tobacco Research and Treatment Center at Massachusetts General Hospital presented for the first time Data results from the Phase 2 ORCA V1 trial of cytisinicline for e cigarette cessation at the Society For Research on Nicotine and Tobacco Annual European Meeting.

Speaker 2

ORCA V1 evaluated the safety and efficacy of cytisinicline treatment For 12 weeks compared to placebo in 160 adults who use nicotine e cigarettes. Cytisinicline treated subjects experienced statistically significant cessation rate of approximately 32% Compared to 15% in the placebo arm or 2.6 times higher odds of quitting vaping. As seen across our development program, Cytisinicline was very well tolerated and no treatment related serious adverse events were reported. Our endeavors to combat the vaping epidemic have been met with strong support from government agencies, clinicians and prospective commercial partners, highlighting the pressing unmet need in this area. ORCA V1 was the 1st randomized placebo controlled trial to achieve success in demonstrating the efficacy of a treatment For addressing this type of nicotine dependence.

Speaker 2

These results are highlighted as there are currently no approved treatments tailored Specifically for vaping cessation. The overall e cigarette market continues to expand rapidly with the most recent prevalence rate in the U. S. Indicating a 20% annual increase of adult users. While e cigarettes can serve as a helpful tool For some transitioning away from combustible cigarettes, the long term effects remain unknown and many individuals aspire to quit nicotine altogether, Which is precisely where cytisinicline can step in.

Speaker 2

We are assessing our clinical development strategy to pursue an on label indication For e cigarette cessation and plan on holding an end of Phase 2 meeting with FDA in 2024 to discuss the requirements for approval. As there are no treatments approved for e cigarette cessation, this is a recognized area of high unmet need and we will position it as such Our goal is to expand the label of cytisinicline for specific promotions for e cigarette cessation, Even though many healthcare providers may consider cytisinicline a viable option for treating various forms of nicotine dependence. As you may recall, ORCA V1 was partially financed via non dilutive grant funding from NIDA and NIH. We believe there may also be non dilutive funding opportunities available to support a future basing study. Our aspirations of changing public health hinge on the regulatory filing and successful approval of cytisinicline.

Speaker 2

To that end, we have been focused on continuing the work needed to support an NDA filing targeted in the first half of twenty twenty four. We are pleased to share that we have completed all of the in clinic treatment portions of 3 NDA enabling Clinical trials that have been running over the course of this year. Specifically, these trials have been run to evaluate QT interval prolongation, Steady state pharmacokinetics in smokers and pharmacokinetic parameters in subjects with renal impairment. We expect final study reports from these trials to be available in early 2024. Additionally, Last week, we held a pre NDA meeting with the FDA.

Speaker 2

The FDA encourages this pre submission engagement to solicit comments and clarification from the agency On the acceptability of key data, including information that might become available for submission during NDA review. This initial discussion was constructive An agreement was reached on many of the submission requirements. Dialogue with the FDA is ongoing and because of this, we aren't able to provide additional details at this time. We will be in a position to provide an overview once discussions are finalized. The output of the pre NDA discussion is critical to clarifying the final regulatory path Cytisinicline in the U.

Speaker 2

S. And will set the stage for how this product will progress through future market approvals around the globe. Additionally, these data points are important to furthering the discussions we are having with potential commercial organizations. Since ORCA V1 and ORCA III have been released and ORCA II was published in JAMA, we have seen significant additional commercial interest In the cytisinicline program, as we have stated previously, we continue to believe that this asset in the hands of a larger organization We'll maximize the full commercial opportunity. So what are we looking for exactly?

Speaker 2

Our ideal partner would have global capabilities Given the substantial U. S. Market opportunity, strong U. S. Sales and marketing capabilities are an important attribute that we are seeking in our selection process.

Speaker 2

We are pleased with the dialogue and engagement with potential commercialization partners and are focused on continuing to move this process forward expeditiously. At this time, I'll hand the call over to Jerry to review our financial highlights and

Speaker 3

results. Thanks, John. I will be providing an update on our cash position as of September 30, 2023 and reviewing our operating expenses for the Q3 of 2023. As of September 30, 2023, the company's cash, cash equivalents, short term investments and restricted cash were $20,000,000 Compared to $24,800,000 as of December 31, 2022, we believe our current cash balance is sufficient To provide us runway into the second half of twenty twenty four, with respect to our statement of operations, net loss to $7,100,000 for the quarter ended September 30, 2023 compared to $13,100,000 for the same quarter of 2022. Net loss for the 9 months ended September 30, 2023 decreased to $24,300,000 Compared to $31,100,000 for the same period of 2022.

Speaker 3

In line with expectations, operating expenses continued to decrease For the Q3 of 2023, with the completion and wind down of both the ORCA-three Phase 3 trial and the ORCA V1 Phase 2 trial, We expect our quarterly operating expenses to remain lower in the Q4 as compared to the first half of twenty twenty three. The decrease in costs will be partially offset by an associated increase in NDA supporting activities, including the finalization of 3 NDA supportive clinical trials and other NDA preparation activities. That concludes my financial remarks. And I will now turn the call back over to Joe.

Speaker 2

Thanks, Jerry. As I stated at the beginning of the call, 2023 has been a remarkable year for Achieve Finalize discussions with preferred strategic commercial organizations. 2nd, complete preparations to finalize the NDA submission. And third, define the regulatory pathway for cytisinicline label expansion in e cigarette cessation. We maintain our confidence in CytosinacLean's ability to change the face of public health, and we appreciate your As we work diligently to bring forward this important treatment.

Speaker 2

At this time, I'd now like to turn the call over to the operator for questions.

Operator

Thank you. We'll now be conducting a question and answer session. Our first question is from the line of Thomas Flaten with Lake Street. Please proceed with your question.

Speaker 4

Hey, guys. I appreciate you taking the questions. John, with respect to timing of the NDA submission, given that the data from 3 supportive studies will be out in the Q1. Is 2nd quarter most likely? I know you're guiding to first half, but

Speaker 3

Just some thoughts on all.

Speaker 2

Yes, Thomas, thanks for the question there. So given that the discussions are ongoing with the agency As we conclude the pre NDA meeting and we look to get final agreements and minutes out at the other end, We're not able to refine anything further on that. So we'll have a future update as we kind of get through that final process and dialogue with the agency.

Speaker 4

And coming out of that October meeting, was there anything surprising, any incremental studies that they requested? Or was it pretty straightforward?

Speaker 2

I think in terms of the output, I think as we mentioned, the discussion was constructive. We did get agreement on many of the items that we were looking for. And there's a few other pieces that we're looking to get finalized and written document allocation on. And so we'll be able to provide a further update on that as We get through those final discussions.

Speaker 4

And then just one final question for me. Could you give us maybe a little assistance in mapping out Spending between today and the submission?

Speaker 2

Yes. So I think if you look at The Q3 in terms of kind of the decrease in burn that we saw from the first half of this year, I think you I expect that will continue through the Q4 of this year as well. So we will see that decline Carry forward, if you're looking at kind of projecting that ahead, I think that'd be a good way to think about it at the moment.

Speaker 4

Excellent. Appreciate taking the questions. Thank you.

Speaker 2

Yes. Thanks, Amit.

Operator

Our next question is from the line of Michael Higgins with Ladenburg Thalmann. Please proceed with your questions.

Speaker 5

Thanks, operator. Hi, John. Hi, guys. Congrats on the continued progress, including your iron expenses. That's Notable here in Q3 results and thanks for taking some questions here.

Speaker 5

If I could ask a bit more on the feedback and your progress with potential commercialization partners, Wondering how that's coming along and if you believe your discussions with the FDA will be wrapping up In 1st part of 2024, do you expect to have feedback from NIDA and NIH regarding vaping before you complete those Potential commercialization conversations.

Speaker 2

Hi, Michael. Yes, thanks for the question. So on the vaping indication, What we've been guiding to is holding an end of Phase 2 meeting next year. In terms of further refining our timing on that, we really provide that at the moment. Our focus will continue to be on the smoking cessation, NDA as kind of that initial priority Make sure that that's moving forward expeditionally.

Speaker 5

Is it fair to say the partnering discussions would be separate for cigarette versus vaping?

Speaker 2

On the partnering discussions, I think we have seen a fair amount of interest Coming from the vaping side of the opportunity, smoking cessation will continue to be the core of that. And so I think in terms of the initial opportunity, that's going to be the first piece to launch. And so Both are important, but I think the smoking given kind of the near term nature of it is going to be done as the majority of the focus there.

Speaker 5

That's fair. Thanks. And then just to clarify for everyone on board here, the gating factors ahead of the NDA filing, obviously, you have With the agency, you've got some 3 studies reading out early next year. Are those the 2 primary drivers, obvious discussion with the agency, but anything else besides those 3 that you're waiting on?

Speaker 2

Yes. So those 3 are obviously critical In terms of having those key components that we knew were going to be needed for the NDA, I think as we finalize the pre NDA discussions and get those file written minutes, we'll be able to clarify further timing on the NDA piece. I think the key piece of this is getting clarity going forward and that feeds back into the partnering discussions and making sure that The path towards approval is fully clarified and that's exactly what we're getting out of the pre NDA meeting.

Speaker 5

Makes sense. Appreciate it. Thanks, guys.

Operator

Thank you. Our next question is from the line of Francois

Speaker 6

taking my questions. Firstly, congrats on the JAMA publication, also the ORCA V2 presentation and the V1 presentation at the Can you give us a sense of the KOL feedback that you're hearing from these conferences? Anything in particular in terms of That is in a clean features, tolerability, efficacy that is standing out that is coming up. Any color there?

Speaker 2

Yes. Thanks for the question. I'll hand this over to Cindy.

Speaker 7

Yes. Well, with Nancy Rigatti actually presenting, and our other KOLs are pretty As far as the efficacy that cytisinicline shows, but actually they're even more impressed and excited about the safety profile, Which allows then individuals to stay on treatment and get the benefit. So it's really a combination of the efficacy and safety They are the most excited for smokers and in the future, vapers You actually have a new therapy to help with their nicotine dependence.

Speaker 6

Great. And just any updates on the FDA inspection readiness on the So Pharma front? And also Any updates regarding preparations with regard to supply chain getting the registration batches? Are all those processes on track?

Speaker 2

Yes. Thanks for the question there. So I think the So Pharma and CMC attributes are going to continue to be Our focus as we move forward through NDA submission, as we've indicated historically, we've been working very closely with Still Pharma In their readiness efforts, including numerous mock FDA inspection audits. So that work will continue as we progress and So Pharma continues to be confident that they can be ready for a future Inspection, but it will continue to be a high area of focus for us as we proceed.

Speaker 6

Thank you. Thanks for taking my questions.

Operator

Thank you. The next question is from the line of John Vandermosten with Saks. Please proceed with your question.

Speaker 8

All right. Thank you. Is there any reason to think that the Potential vaping Phase 3 trial would be much different from ORCA-three. Are there any considerations there? Might it be smaller?

Speaker 8

Or I know it's kind of early, but just thinking ahead on that.

Speaker 2

Yes. So in terms of overall I think looking back at Orchid 2 and Orchid 3 is probably a good proxy in terms of overall Sample size, as we've indicated before, our belief is that a single Phase 3 trial is what would be required for on this invitation, but ultimately, we'll need to get guidance from FDA on that. But the ultimate design, we'll still be working on In terms of what that looks like, but yes, that sort of size is what you should anticipate.

Speaker 8

Okay, great. And I was doing some reading on varenicline and there's

Speaker 2

thoughts that

Speaker 8

it could be used for other types of addiction, perhaps cocaine and things like that. Is that something That you might consider as well to pursue beyond nicotine addiction?

Speaker 7

This is Cindy. So we've had a lot of interest from our KOLs and other investigators of Pursuing DAS once obviously approved for smoking cessation through grants. And so we're supportive in those types of investigator sponsored Try to kind of look at the other areas of addiction that cytisinicline could be helpful. And with that then, watch and see what we should pursue as a company.

Speaker 8

And is that something that you talk to with Potential buyers at this point, I think, might get split off and you pursue that on your own and they Lift out the nicotine addiction part? Or is that would that kind of all go together, do you think? I mean, again, I know it's early, but just I'm wondering kind of how The thought would be on that and maybe conversations that you've had?

Speaker 2

Yes. So I think in terms of discussions with commercialization I think this is really looking at the totality of this. We're not looking at splitting this apart in terms of multiple pieces. Like as we Indicated on a larger scale before, we've had term sheets ex U. S.

Speaker 2

From parties, in particular, a lot of interest coming out of Asia. Our continued belief is that this asset belongs in the hands of a single Global partner, one that does have strong U. S. Capabilities to maximize the opportunity here in the U. S.

Speaker 2

And so That's what we're looking for. We think that really kind of resolves around the entirety of the asset, not carving it up into specific indications.

Speaker 8

Okay. And then looking at the potential sales force that might work the best for this after approval, are there any characteristics that you Kind of look forward and I'm sure you have a number of suitors that you're talking to. And obviously on your side, you want to see something that's attractive there To know who you can target and negotiate hardest with, what are some of those features that you look for in a sales force that It would allow cytisinicline to kind of layer on easily and have them be very effective.

Speaker 2

I think when we look at this overall indication, like historically and where we see it moving forward, it will continue to be a primary care Call point. So from our perspective, having reps on the ground that can hit that call point, This could be an asset that's basically plugged and played into an existing sales force out there. We think that's kind of the easiest path forward. But there could be other opportunities when you look at more specialty companies that have either a CNS focus or addiction focus. So I think there's a number of angles, but I think strong overlap with the call point is one of the key considerations for us.

Speaker 8

Okay. And then any hints on a brand name that you guys might be working on or looking for?

Speaker 2

We do. Good question. This is something that we've pre cleared with the agency already. Obviously, it's not fully blessed until the NDA You get through the end, but that's one of the components we did preclear early just to make sure that we have that ready to roll.

Speaker 4

Great. All right.

Speaker 8

Thank you, John. Thank you, Sandy.

Operator

Thank you. At this time, I'll turn the floor back to management for closing remarks.

Speaker 2

Yes. Thanks, operator, and thanks, everyone, for joining us today. We appreciate all the continued interest. It's been a Tremendous year with data coming out of not only our 2nd confirmatory Phase 3 trial, but also the first ever Randomized placebo controlled trial in vaping and publication of our first Phase 3 trial in JAMA. So really excited about where the program sits today and the interest that we continue to see from commercialization organization.

Speaker 2

We look forward to driving this forward expeditiously and providing updates as we proceed. So thanks everyone again for joining us today.

Operator

Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

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Earnings Conference Call
Achieve Life Sciences Q3 2023
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