Achieve Life Sciences, Inc. (NASDAQ:ACHV) Q1 2023 Earnings Call Transcript May 9, 2023
Achieve Life Sciences, Inc. beats earnings expectations. Reported EPS is $-0.5, expectations were $-0.69.
Operator: Thank you. Good day, ladies and gentlemen, and welcome to the Achieve Life Sciences First Quarter 2023 Earnings Conference Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Nicole Jones, Investor Relations at CG Capital. Ma’am, the floor is yours.
Nicole Jones: Thank you, operator, and thank you to everyone for joining the call. Achieve, we have John Bencich, Chief Executive Officer; Dr. Cindy Jacobs, President and Chief Medical Officer; and Jerry Wan, Principal Accounting Officer. Achieve management will be available for Q&A after the prepared remarks. 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 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 thank you to all for joining us. Just a few weeks ago, we reported positive top line results from our groundbreaking Phase II ORCA-V1 clinical trial, the first-ever randomized placebo-controlled trial for vaping cessation. cytisinicline treatment resulted in a statistically significant benefit for nicotine e-cigarette cessation compared to placebo. Results for the primary endpoint showed that study participants who received cytisinicline were approximately 3x more likely to quit vaping compared to those who received placebo. Cytisinicline also continued to demonstrate exceptional safety and tolerability. We are very pleased with another win for cytisinicline and for people who are seeking options to overcome their nicotine dependence.
Nicotine e-cigarette use continues to be a growing concern. With recent reports from CDC indicating vaping rates in the U.S. are increasing. Data recently published indicated that roughly 11 million adults and 2.5 million high school and middle school students use e-cigarettes to vape nicotine. The CDC indicated in recent weeks, the percentage of use has increased by 2.5%. As this segment of nicotine use continues to grow an increasing number of people who use e-cigarettes, they start to look for solutions to quit. And currently, there are no medications specifically indicated for vaping cessation. We completed a survey in people using e-cigarettes and found that 73% of participants desired to quit vaping in the next 3 to 12 months, and the overwhelming majority would be interested in using a naturally derived prescription treatment to help them do so.
Based on this unmet need for treatments, the SWIFT enrollment we observed in the ORCA-V1 trial and the statistically significant results from the recent top line data announcement, we believe that cytisinicline has a unique opportunity to become a solution to help address this growing vaping epidemic. To touch more on the recent clinical data, I will now hand the call over to Cindy to go through the Orca-V1 results in more detail.
Cindy Jacobs: Thanks, John. As mentioned, the Orca-V1 top line results that we shared last month showed a statistically significant benefit for cytisinicline as a treatment for nicotine vaping cessation, even though this Phase II proof-of-concept study was not powered to do that. Similar to our Phase III designs, ORCA-V1 evaluated 3 milligram cytisinicline dose 3 times daily for 12 weeks. ORCA-V1 randomized subjects at 5 clinical sites in the U.S. in a 2:1 ratio such that a total of 160 subjects were randomized with 107 receiving cytisinicline for 12 weeks and 53 receiving placebo. ORCA-V1 enrollment was completed in approximately 4 months. The average age of ARCAV1 subjects was 34 and all of them wanted to quit vaping on the study.
Approximately half of the subjects had previously tried to quit vaping by self-attempt methods. Subjects were stratified based on past smoking history with 72% identifying as former or past smokers. Dr. Nancy Rigotti of Harvard Medical School served as the primary investigator of the study, and ORCA-V1 was supported via grant funding from NIDA and the NIH. The primary endpoint results for vaping cessation showed subjects who received cytisinicline had 2.6x higher odds or likelihood to put vaping during the last 4 weeks of treatment compared to subjects who received placebo. This endpoint was statistically significant with a p-value of 0.035. The 4 weeks continuous vaping cessation rate during weeks 9 through 12 was 31.8% for cytisinicline-treated subjects compared to 15.1% for those who received placebo.
Importantly, cytisinicline benefit was also observed across all clinical trial sites and demographics, such as participant age, gender, race and whether they had been past smokers or not. Regarding safety, cytisinicline was very well tolerated with 50.9% of subjects who received cytisinicline reporting adverse events compared to 54.7% of subjects in the placebo arm. Adverse events were as expected, mainly mild to moderate, and there were no serious adverse events reported during the study. As these are top line results, we are continuing to analyze the data and look forward to providing additional details on our findings as we learn more. I will now turn the call back over to John.
John Bencich: Thank you, Cindy. Our next key milestone is rapidly approaching, as we eagerly await results from our second NDA-enabling Phase III study, which we expect to report later this quarter. The ORCA-3 trial mirrors the design of the previously reported and highly successful ORCA-2 trial. ORCA-3 is evaluating the efficacy and tolerability of 3 milligrams cytisinicline dosed 3 times daily for either 6 or 12 weeks compared with placebo. Biochemically verified continuous abstinence is the primary endpoint, and similar to ORCA-2 will be evaluated during the last 4 weeks of treatment. Each arm will be compared independently to the placebo arm and success will be determined if either or both of the cytisinicline treatment arms show a statistical benefit as compared to placebo.
Our efforts are now focused on preparing for the data readout later this quarter and continuing our preparations to support a new drug application, or NDA, for cytisinicline in the U.S. At this time, I’ll now turn the call over to Jerry to review our financial results for the quarter.
Jerry Wan: Thanks, John. Looking at our statement of operations, the company incurred a net loss of $9 million for the quarter ended March 31, 2023, as compared to a net loss of $7.6 million for the same quarter of 2022. Total operating expenses in the first quarter of 2023 increased to $8.6 million as compared to $7.2 million for the same quarter of 2022. Operating expenses were higher for the quarter ended March 31, 2023, as both the ORCA-3 Phase III trial and the ORCA-V1 Phase II trial were fully enrolled during the quarter and had their last subject last visit completed in March 2023 as compared to the same period in 2022, where only our Phase III Orca-2 was fully enrolled. We anticipate our operating expenses to decline in the second quarter, in line with the completion of the 2 clinical studies.
As of March 31, 2023, the company’s cash, cash equivalents and restricted cash were $16.6 million as compared to $24.8 million as of December 31, 2023. We believe our current cash balance is sufficient to provide us with one way until late 2023. I’d now like to turn the call back over to John.
John Bencich: Thanks, Jerry. A final highlight from the first quarter before we conclude today’s call. In March, we announced a refresh to our Board of Directors to support the future direction of the company. We are pleased to welcome Mr. Stuart Duty, Mr. Thomas King and Mr. Tom Selling to the Board. They each bring extensive leadership in the pharmaceutical and life science industries across capital markets, strategic transactions, sales and marketing as well as manufacturing. We would also like to thank Mr. Don Joseph, Dr. Martin Mattingly, and Mr. Jay Moyes for their years of service and strategic guidance to achieve as they will not be standing for reelection at our upcoming Annual Shareholder Meeting on June 7. We have achieved many milestones within the first quarter of 2023, and we expect to continue this exciting year with the upcoming ORCA-3 readout. We appreciate your continued support, and I will now turn the call over to the operator for questions.
Q&A Session
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Operator: [Operator Instructions] And our first question comes from Thomas Flaten from Lake Street Capital.
Operator: And our next question comes from François Brisebois from Oppenheimer.
Operator: Our next question comes from Michael Higgins from Ladenburg Dolman.
Operator: [Operator Instructions] And our next question comes from John Vandermosten from Zacks.
Q – John Vandermosten: Johnson Bean Jerry. As you guys are going to the final stages, are there any preparations that you’re making for commercialization? Our belief is that you’re going to work with a partner to do that. But I know sometimes that it makes sense to reach out and work on some perhaps labeling, packaging pricing or outreach to key stakeholders in order to kind of prep to work with the partner also help your negotiating position. Is that something that you’re planning to do or make sense to do?
Q – John Vandermosten: And regarding labeling, what’s the time line lift for that discussions with the FDA in preparation there?
Q – John Vandermosten: Got it. And finally for me, any work done on a branding yet or directions in terms of how you’re going to eventually market then?
Q – John Vandermosten: Yes, exactly. Is that anything you’ve worked on yet? I mean, I know it’s probably a challenging thing to do with all the other names out there. But any work down there yet, any indications of where that might go?
Operator: And that appears to be the last question at this time. I would now like to turn it back to management for any closing remarks.
John Bencich: Thanks, operator, and thanks, everyone, for joining us today. It’s been an exciting first portion of 2023. We look forward to rejoining you soon with results from the ORCA-3 trial later this quarter. So appreciate the continued support, and we’ll talk to you soon. Thanks.
Operator: Thank you. This does conclude today’s conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.+
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