Q2 2020 Achieve Life Sciences Inc Earnings Call

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I would know like China conference over to your first speaker for today [laughter] Genius, you know executive Vice President of commercial at the Keith. Thank you. Please go ahead.

Thank you and thanks, everyone for joining us on the call today from a cheap we have Rick Stewart, Chief Executive Officer, Dr., Cindy Jacobs, Chief Medical Officer, Dr., Anthony Clark, Chief Scientific Officer, and John benefits, Chief Financial and operating officer I'd like to remind everyone that today's conference call contain forward looking statements based on current expectation.

These statements are only predictions and actual results may vary materially from those projected please refer to achieve documents filed with the FCC concerning factors that could affect the company copies of which are available on our website.

I'll now turn the call Overtrick.

Thank you Jamie.

On today's call, we will review the second quarter highlights firstly, the exciting topline data from the New Zealand right wore a phase three clinical trial led by Dr. Natalie Walker.

Secondly, don't just Cindy Jacobs will review the continuing momentum on initiating the phase three well get to trial in the U.S. later this year.

Thirdly jump into which will review financial results plus the strengthening of our balance sheet. This deal with it you must also be okay. Two trial.

At the end of June we announced the successful topline results from the investigator led see three Noninferiority, Rob wore a trial.

So you see Mclean.

Takes into my worry or indigenous people a museum.

Hi, Congratulations to Dr. monthly Walker the University of Oakland conducting this landmark trial.

Right were trial, the body weight to the efficacy safety and cost effectiveness, I'm, sorry, cynically compared to translate to the smoking cessation aid.

Total study randomize 679 subjects.

The non inferiority trial. It was designed to demonstrate where the second cynically was at least as good as chantix for efficacy and safety.

In fact, you showed just like similarly in efficacy was similar to Chantix and the size of cynically, how the superior safety profile.

Rob warrant that cynically administered on a modest like scheduled over 25 days of time with dose integration followed by twice daily dosing for a total of 12 weeks against Chantix, which was administered on expanded dosing schedule I'm certain days up with time.

Gration one of my twice daily dosing for a total of 12 weeks.

The primary endpoint was a comparison of biochemist reconfirmed continues absolutes rights at six months.

The trial successfully achieved the primary endpoint.

During the psyche cynically, let's behavioral support was at least as affected the champix, what's behavioral supposed to six months. In addition, the trial showed that suddenly Mclean resulted in significantly fewer reported adverse events when compared to transics.

The positive top line results of the Raw War phase three trial, which is the first though right [laughter] I don't see study between second cynically in a chantix provides additional evidence. So if you sit between is at least as effective as chantix, while offering improved tolerability.

Excited about this outcome, but further strengthens the potential for selected cynically and that helps because quit.

Importantly, these benefits were cheap.

Using only the currently most did one of the home milligram dose of such as simply and the down would try to titration schedule.

Dosing generation was modified to 12 weeks in order to match Chantix Doshi dosing schedule.

Our upcoming U.S. cynically in phase three clinical trials will use the high a three milligram dose at a simplified three times daily dosing schedule.

Based on the results of the all in one place to be trial, we're optimistic that they simplified dosing schedule in combination with a three milligram dose.

I'll be easier for subjects and potentially yourself back to smoking cessation rights.

It was observed in the route work trial.

The final rule or trial results are being submitted by Dr., Matthew Walker Aromor crime investigation.

Integration of the society to research on nicotine tobacco European annual meeting will be held this September.

We look forward to sharing additional details on the ROE or trial results when presented.

Turning to the upcoming okay to double blind placebo controlled phase three trial.

Separations runs away for the trial Commencements in the fourth quarter.

These preparations include temple risk management assessments for any potential impact of the cobot 19 pandemic.

Oh continuous risk assessment dialogue with clinical trial sites I don't see a road still indicates the initiation of the old be two trial in the food water. This year remains feasible.

The health and safety about trying to participants healthcare providers and employees will continue to be all number one priority.

We continue to monitor the crisis in real time, taking advice and precautions to minimize risk to all involved.

Turning to go live Cindy to review the old two trial design and provide a regulatory update.

Thanks correct.

Orca two phase three trial builds on our experience in the successful Orca one trial valuable lessons learned which have been integrated into the trial design along with specific requirements requested by Sta.

We have consulted frequently with our key opinion leaders, who have given us the benefits there with them and we are now finalizing preparations to commence the trial in the fourth quarter.

Corporate too is a multicenter double blind randomized placebo controlled phase three study that will randomized 750, adults who are daily cigarette smokers, intending to quit smoking and are willing to set a quick date within seven days for the starting treatment.

Participants will be randomly assigned with equal probability to one of three arm.

On April received 12 week placebo treatment arm B will receive six weeks upside to send it Glenn and then be switch to placebo for the latter six weeks and arm C will receive 12 weeks inside the Senate claim.

There will be 250 subjects in each arm receiving either with people are status and acclaim three times a day for the 12 week study treatment period.

And then followed monthly out two week 20, 446 month evaluation.

All 750 subjects will receive behavioral support during the entire 24 week.

Similar to Ark, one each smoker will start study drug treatment the day after being randomized and will have their quit date sat with him. The following five to seven days or at least by the end of the first week of treatment.

Starting after their quit date at week two of treatment assessments for smoking absence will begin by weekly self reporting of the absence or not with biochemical verification I've asked as bye bye fails carbon monoxide level.

These weekly assessments occur through the 12 weeks of blinded study treatment.

Then monthly follow up assessments will occur for smoking Aston said, we 16 20, and finally, we 24.

He architecture study has two independent primary endpoints that will be evaluated.

The primary endpoint outcomes will evaluate the rate of smoking absence of cytosorb in treatment at both the end of six weeks and 12 weeks treatment periods compared to the placebo treatment.

For both primary endpoint comparison smoking abstinence will be defined it's continuous assets during the last four weeks of treatment.

That means for the six week treatment period.

So quitters must have smoke zero cigarettes with weekly seal biochemical.

Verification at week, 345, and six assessment.

For the 12 week treatment period successful quitters must have smoking zero cigarettes with weekly CEO biochemical verification and weeks 910, 11 and 12 assessments.

The secondary endpoint outcomes will evaluate for continued smoking absence from the end of FICC Weakside isn't it couldn't treatment two week 24 and from the end of 12 weeks side to Santa Clara treatment, two week, 24 separately and compared to placebo treatment within these same timeframe.

An additional secondary endpoint outcome.

Well look for a reduction in risk of relapse family six to 24 in subjects, receiving satisfy any plans for six weeks versus 12 week.

The size of the sample size for this study is specified and 250 subjects per arm distance him a difference of 12% benefit for side of Santa Clara over placebo with 96% power.

Welcome to will enroll at approximately 15 clinical sites across the U.S. Each site will have specific covered 19 protection operating procedures in place.

We are preparing for potential restricted psych interactions if a site needs to be corn team with remote testing are monitoring.

And procedures for missing data per ft, a guideline if a subject becomes infected with coven 19 and cannot be evaluated.

From a regulatory update perspective, we have now completed all required nonclinical submissions to initiate our phase three program.

This has included submitting Kathy all the Nonclinical data required to support the six and 12 weeks of side, it's in Atlanta treatment in the phase three trial.

In addition, we have submitted the final protocol for New York, a two phase three trial as discussed last fall. We reviewed the phase three protocol Institute and the statistical plan with the FDA.

In a type B meeting in November of 2019, and have incorporated ft input from that meeting into that final protocol. We are now proceeding with the fine operational planning and logistics to initiate the phase three in the in the fourth quarter.

So in summary, we intend to initiate orchid too in the fourth quarter. This year and this trial will address three key factors.

Devaluation of the higher three milligram dose of status in Atlanta for both six and 12 weeks of treatment.

The simplification of the dosing schedule, given only three times daily.

Leading to ease of use regardless of treatment duration.

And the extension of the treatment duration of six and 12 weeks to potentially increase quit rate and yields more durable efficacy results.

The extension of the dosing period in the phase three trials have significant benefits. It will allow us to measure the primary endpoint of four weeks of continuous Aston well subjects are still receiving status in England treatment.

It's wasn't possible with of 25 day treatment period in the Orca one trial.

As document on in the literature measuring efficacy while subjects are and remain on treatment typically result in higher quite right.

I'll now turn the call over to John to discuss recent fine financing activities and our second quarter results.

Thanks Cindy.

The first provide an update on our recent financings and cash position and then review our second quarter financials.

Post the end of the second quarter, we have enough to public equity financings totaling 13.5 million in gross proceeds.

So these transactions are common stock only there were priced at stepped up valuations from the previous.

Last month, we announced the closing of a 6 million registered direct financing.

The funny thing was completed at no discount to the previous closing share price. The financing provided net cash of approximately 5.5 billion after deducting placement agent commissions and operating expenses.

This week, we announced the pricing of an underwritten public offering with gross proceeds of approximately 7.5 million.

This was also a common stock offering that included the full exercise of the underwriters' overallotment option and will provide estimated net proceeds of approximately 6.8 million after deducting commissions and offering expenses.

In addition, subsequent to the end of the second quarter. We have also seen outstanding warrants exercised that are provided an additional 2.3 billion in cash proceeds.

In total we have received approximately 2.9 billion and proceeds from warrant exercises since the start of the second quarter.

The additional capital will help to maintain momentum on sided cynically development and sets us up with a strong balance sheet going into the second half of the here as we initiated the orca two phase three trial.

As of June Thirtyth 2020, the company's cash cash equivalents short term investments and restricted cash were 12.2 million.

On a pro forma basis, including the July and August financings as well as warrant exercises will be starting the third quarter of 2020 with approximately 26.7 billion of cash on hand.

Turning to our statement of operations the company incurred a net loss of 2.9 billion for the quarter ended June Thirtyth 2020, that's compared to a net loss of 3.6 million for the quarter ended June Thirtyth 2019.

Net loss for the six months ended June Thirtyth 2020 decreased to 6.3 million.

Compared to 9.6 billion for the six months ended June Thirtyth 2019.

As noted previously we expect expect our quarterly operating expenses to remain lower in advance of initiating the phase three trial.

That concludes the summary of our second quarter financial results.

I would like to now turn the call back over to Rick.

Thank you John.

The second quarter highlighted the true potential of such as soon as clean as a future leader in the smoking cessation market with the result was the release of successful topline results from the ROE or a phase three trial comparing scientists in the clean on the current market leader Transics.

Additionally, we continue to make excellent progress preparing for the commencement of the old could to 750 subjects receive a controlled phase three trial.

Of course, we took the opportunity to add additional capital during the quarter to further reinforced our balance sheet.

Robert trial results are leinbach, because this is the first direct [laughter] comparison, aside you syndicating efficacy and safety compared to the current monkeys, either Chantix, which reported 2019 global sales just shy of one point.

I was.

We're pleased and so I sit between show these potential to complete strongly we chantix and clinical data continues to indicate a potential best in class profile, so actually cynically into smoking cessation.

We are well prepared to stop the upcoming phase three wouldn't have FDA requirements fully met.

Non clinical data required by after getting to commence the open two phase three trial has now been submitted bids for a review preparations for the storms or the phase three trial progress with the aided leading carrier wells and the seals and we remain optimistic.

This phase three trial will commence in the fourth quarter from 2020, Terabit 19 commencing.

Finally, I'd like to briefly discuss the impact that Toby 19, specifically on smokers.

And why we believe it's like you said between we'll have a t. Rowe could play an aging smokers to quakes in the future.

Advice from the regulatory agencies, such as the CDC and WH.

Has never been stronger or more vical about quitting smoking.

The impact at Cobiz, 19, and individuals pre existing conditions, such as Paul machinery, cardiovascular and the other smoking related diseases.

Amplified the agency to quit smoking now.

There are two key cobot 19 implications with smokers.

Firstly the impact from cigarette smoking among health is incredibly damaging.

Believed to lead to more susceptibility to the Cobiz 19 virus I'm most severe symptoms.

And secondly, it appears that smoking rates are on the rise as a result to changing social dynamics reports of vaping related lung disease, and the banning of flavoring products.

There has never been the more critical time to smoke just a quick for good we believe sninety cynically and they can play an important role in helping them do so.

Thank you again for joining us today that concludes our prepared remarks, we will now open the line to questions.

Please open the line.

As a reminder to ask a question you will need to press star one on your telephone keypad. If your question that's been answered or you wish to remove yourself from the Q. Please press the pound <unk>. Please standby Bobby compiled the clean their roster.

First question is from the line as Michael Higgins Ladenburg Thalmann. Your line is helping.

Hi, guys. Thanks for taking my questions are congratulations on the continued progress we've seen if he going along and here closed the chances of here.

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Question for he is looking ahead to certain key.

Okay and service or is he.

That's being posted online this year, how should we look for their care wells and ourselves learn about your results give them a life formats conference.

Taking a weapon or specific to these results to be fighters. She may for sure how should we place.

How about whether it'd be too Cindy.

Well, we know the I am sorry, he meeting will be virtual so we expect to that nobody will Natalie will be on narrating her slide I'm in detail for that presentation.

I think we have discussed whether we would have a web nor afterwards going it's interesting that you asked that question because that would be then something we could do afterwards within that month time period very similar to what we did with he orca one results.

I see so kind of an analyst day post screening for instance.

<unk>.

Yes, we'd have to work that in with a Natalie schedule as well, obviously, it's a it's a little bit more problematic when you're looking at the New Zealand, but yes, we've talked about how sadly some of that might have to be doing this in the middle of the night.

[noise] alright, well, obviously, we're hoping for during the day for the so [laughter] yeah. The east Coast definitely I think yes, west coast people that it won't be in the Middle Tonight My guess is.

Understood.

So any progress for US I think you gave piece I think it's you can.

It relates to us I didn't hear a lot on that.

Works, but obviously that's something.

Something we're all Oh, there as well.

Once again to ask a question. Please press star one on your telephone keypad.

Your next question I found the minus John Vandermosten. Its docs your line is open.

Good afternoon, guys and thanks for taking my questions and also congratulations on the capital raise great to see that almost $30 million balance you have there and you know I if I remember correctly I think the it was allocated about 15 million for the first orca or I'm, sorry, Arca too and then and then another 15 for the second if I if I'm.

Remembering correctly, but can you just give me a sense of how much more capital you'll need to finish off both the trials given your current status on the cash side of things.

John John John to them.

Yep Yep, absolutely. Thanks for the question, John and Yes, you're you remember is correct.

The phase three trials is approximately $15 million study, a which I think as we've described on the call you know having got close to 27 million on the balance sheet puts us in a a great position to execute on that trial.

The second phase three will be approximately the same capital requirements.

Okay, great. So so you're pretty.

You're pretty close to having what you need to finish this off that's that's great news.

Let's see so.

Or just an update on when we might see generic competitor for Chantix thinking about at discuss this last time I think there was just a little uncertainty on.

Much the patent protection was providing for them.

What is the latest view on on that in terms of think chantix competitor or chantix generic coming out.

Yeah, I'll take that one.

What we're looking at the moment is really the expiry of the.

More important looks like its roundabout may June.

2022, she went on like she person is gonna be additional.

Protection from a pediatric.

Extension, so we're anticipating seeing some generic competition probably early part of 2023.

Okay got it thanks for that that's great that's correct.

And then.

You mentioned this a rich Rick just a little bit about changes and smoking behavior. I mean has has there been any observations of how that has changed or at the current of ours. Just started I mean, you know people picked up a lot of different habits, I think people wasn't drinking more alcohol, but I you know I don't know about trends for smoking I.

I know, there's been a big health trend as well, but have you seen any data out there on actual smoking and how that might have changed since you know Marcia this year to to present.

Yeah, well, it's really a shift from vaping back into a cigarette smoking <unk>.

<unk>, we've all we've always maintained the incident risk reduction or harm reduction vaping is a around about a 95% improvement this is cigarette smoking.

But I think with some of the lock down crashes that people have experienced plus some of the ER issues and concerns around but the lung disease.

Associated with vaping, you've seen people, who were attempting to quit move back towards a cigarette smoking. So yeah. There is those days are out there which is supporting the idea that is more in that area. I mean, the 11 million vapors right now.

Roughly half of those you, but it's the other hall, who.

Once more.

Yeah Reformed smokers doing that seem to be moving at least back towards a cigarette smoking.

Okay interesting interesting shifts there and last question on err on the on the Vaping study that you guys were working on any any progress there and any any closer to getting that grant money or for the study in that area.

Yeah, I mean, it's a highly competitive process and frankly, we didn't make the cox as far as easily N.X. I know I actually is concerned.

But we continue to believe that abating study will add substantial value and we're seeking alternative funding sources.

It's an area that with a significant interest then okay wells are interested in.

Pursuing that but yeah. Our capital is focused on the phase three clinical trials. So we're looking at alternative sources of Grom funding cool for that Vaping study.

Okay, great. Thank you I'll get back in Q.

Yeah.

I'm showing no further questions at this time I would now like to turn it back on French back to Mr. Baxter it feel about sheets.

Well, thank you again.

Joining the call and Youre, continuing interest and support and achieve and we look forward you're talking to you again with a third quarter results. Thank you.

Ladies and gentlemen. This concludes today's conference. Thank all for participating you may now disconnect.

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