Q3 2020 Achieve Life Sciences Inc Earnings Call
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Good afternoon, ladies and gentlemen, and welcome to the cheap life Sciences third quarter Tiny tiny earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time, if anyone should require assistance drained.
The conference. Please press Star then zero on your Touchtone telephone as a reminder, this conference call is being recorded I would now like to turn the conference over to your host executive Vice President of commercial at achieve life Sciences machine dizziness, ma'am the floor is yours.
Thank.
Laura and thanks, everyone for joining us.
On the call today for MACI, we have Jonathan This chief Executive Officer, Dr., Cindy Jacobs, President and Chief Medical Officer, Jerry Wan Principal Accounting Officer, Rick Stewart Executive Chairman of the board of Directors and Dr., Anthony Clark Chief Scientific Officer.
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 filed with the FCC concerning factors that could affect the company copies of which are available on our website I'll now call turn the call over to John.
Thank you Jamie.
We certainly had a very busy and exciting third quarter on todays call. We will discuss recently announced changes to our management team details of our phase three orca two trial that we initiated last month.
A review of data presented at the Society for research on nicotine and tobacco European meeting.
Including results from the route era head to head study of Citis, enabling versus Chantix.
And finally, Jerry will just.
To begin at the end of September we announced that I'd be transitioning from chief financial and operating officer into the role of CEO, Rick Stewart achieves co founder and former CEO.
So it's continuing to serve as our executive chairman of the board of directors and remain actively involved in the company's strategic operations.
Additionally, we announced that Dr. Cindy Jacobs.
She was chief Medical Officer will assume the role of President previously held by Dr. Anthony Clark.
Dr. Clark also a code.
<unk> founder of achieve looking.
We will continue to serve as our Chief Scientific officer, and finally, Jerry one former senior director of accounting operations has been promoted to the position of principal accounting officer.
While these changes were planned for some time they were expedited in part by the pandemic, which has restricted international travel for Rick.
Who are both based in the UK.
While our leadership structure has realigned our management team remains dedicated in our mission and in our conviction that situs into clean has great promise to change the lives of millions of smokers.
To that end I'd like to hand, the call over to Cindy to discuss perhaps the most compelling highlight of the quarter.
After initiation of our phase three orca two clinical trial Cindy.
Thanks, John Im excited to share that last month, we began enrollment in our phase three orca two study.
As a reminder, orca two is a double blind randomized placebo controlled phase three trial that will end.
Total 750 adult smokers.
15 sites in the us.
Participants in Orca, two will be randomly assigned to one of the three following arm.
Hey, who will receive 12 weeks, a placebo arm b will receive six weeks inside a semi clean.
Road by six weeks of placebo.
Or arm C, who received 12 weeks of Cytosorb in a clean.
There will be 250 subjects in each arm, receiving either placebo or situs in a clean threed.
Three times a day for 12 weeks and then followed monthly out to week 24.
For for a six month evaluation.
All subjects will receive behavioral support during the study.
Youre continued study has two independent primary endpoints that will be evaluated the primary endpoint outcomes, we'll evaluate the rate of smoking abstinence of cytosorb in a clean treatment.
Compared to placebo treatment at the end of both six weeks and 12 weeks of treatment.
For both primary endpoint comparisons smoking abstinence will be defined as continuous abstinence during the last four weeks of treatment.
That means for the six week treatment period.
Successful quitters must have smoked and zero cigarettes with weekly carbon monoxide biochemical verification at weeks 345, and six assessments for the 12 week treatment period successful quitters Mr. smoke zero cigarettes with the weekly carbon monoxide biochemist.
Oh verification at weeks 910, 11, and 12 assessments.
Importantly, the study will be considered successful if either or both of the site as cynically an arm show an efficacy benefit over the placebo arm.
The second endpoint outcomes will evaluate for continued smoking.
Absence from the end of six weeks said, a cynical country went to week 24.
From the end of 12 weeks cite a cynic clean treatment to week 24 compared to placebo treatment at both of these same timeframe.
The study sample size and specifications are over 95% powered to show statistical.
A couple interference at Inox ratio of at least 1.83.
In favor of flight ascend at clean Apt is 24 week assessment.
And additional secondary endpoint outcome will also look for a reduction in risk of relapse at week 24 in subjects, receiving 12 week side assuming.
Listening compared to those subjects, receiving six weeks situs in and clean.
EBITDA has reviewed our final protocol one last time in September prior to initiating the Orca two phase III trial and had only two minor recommendations that was to add an additional nicotine withdraw evaluation and to add.
The club group exploratory analysis related to relapse.
With this study now actively enrolling subjects, we look forward to updating you when all subjects have been randomized and again when all study evaluations have been completed.
I will now turn the call back over to John.
Thanks, Andy.
As you can see the design of the Orca two trial provides multiple shots on goal as it relates to the primary endpoints being investigated and the ability to have a successful trial results with improved efficacy at six weeks of treatment 12 weeks of treatment or both which is what we anticipate.
We believe offering.
Beneficial smoking cessation treatments that is half the duration of existing therapies is a key differentiator and.
And for those patients that need slightly longer treatment duration to stop smoking.
Or to reduce chances of relapse. They would have the option to continue on treatment for another six weeks.
The confidence that we have.
By the Senate Green's ability to help smokers quit comes not only from our own studies, but from the numerous clinical trials that have evaluated thousands of smokers and I've been conducted by external experts in the field of smoking cessation.
Most recently the result of the Rauer, a trial that compared cider cynically into Chantix.
Next were presented at the annual EPS are in key European meeting in September.
This was the first ever head to head study comparing these two treatments and enrolled a total of 679 smokers.
The railcar study was designed as a non inferiority trial to demonstrate that cited cynically and quit rates would.
Be no less than 10% lower than the quit rates for Chantix right.
Results showed that scientists in a clean not only met the pre specified non inferiority endpoint, but was trending towards superiority.
Absolute risk difference in the study was 4.29 in favor of Citis, cynically, which equates to a four point.
9% improvement and quit rates compared to Chantix more importantly, the relative risk was 1.55, indicating that subjects in the scientists in a clean arm were approximately one other half times more likely to quit smoking at six months compared to subjects who received chantix.
While we did not meet the threat.
Threshold for superior efficacy versus Chantix, we were encouraged with the trend towards statistical significance with less than one third of the target enrollment for the trial.
Notably these efficacy improvements were achieved using the historical 1.5 milligram dose of science in a clean and the downward titration schedule.
Well.
As discussed Orca two is using the higher three milligram dose administered on a simplified three times daily schedule, which was the most efficacious treatment arm in our phase to be Orca one trial.
We are optimistic that the simplified dosing will be more convenient for smokers and potentially result.
And even better smoking cessation rates than what was observed in row RF.
Also reported from our our.
And what we continue to observe the scientists in a clean is the favorable side effect profile when compared to chantix subjects treated with cited cynically interactive experience statistically fewer side effects.
Including significantly less Nadia insomnia and abnormal dreams.
We know from price patient research and claims data that a majority of chantix patients do not complete their full course of therapy and the number one reason is due to side effects.
In addition to Rouse data were also presented at the.
Certainty meeting that May help explain cited cynically and differentiated side effect profile right.
Research from the University of Cambridge, elucidated, the potential role of the five Ht Dthree receptor activity in the development of Chantix side effects.
By comparison decided cynically the study showed that.
Yes, six has a 2000 greater full binding affinity to the five Ht three receptor, which is believed to be the cause of increased rates of nozomi and vomiting that smokers can experience while on chantix overall.
Overall, we are very pleased with the recent clinical data.
That has been generated which continues to support.
The possibility of Citis into clean, having both best in class safety and efficacy.
I will now turn the call over to Jerry to discuss the third quarter financial results.
Thanks, John.
I would like to first provide an update on our recent financing and cash position and then review our third quarter financials.
And the third quarter.
2020, we closed two public equity financings totaling $13.5 million in gross proceeds.
Both of these transactions were common stock only in July we closed a $6 million registered direct financing.
The financing with complete at no discount to the previous closing share price.
The financing provided net cash of approximately.
$3 million after deducting placement agent commissions and offering expenses.
In August we closed an underwritten public offering with gross proceeds of approximately 7.5 million, which included the full exercise of the underwriters over allotment option.
We received net proceeds of approximately $6.8 million after deducting commissions and offerings.
Pets.
In the third quarter, we saw outstanding warrant exercise that provided 2.5 million in cash proceeds.
Year to date for 2020.
We have received approximately 3.1 million proceeds from warrant exercises.
As of September Thirtyth 2020, the company's cash cash equivalents.
Short term investments and restricted cash was 22.4 million.
Our September Thirtyth 2020 cash balance reflects the two financings we completed during the quarter offset by our investments in the Orca two trial that allow it to be initiated in October.
Turning to our statement of operations the company incurred a net loss.
Cost of $3.8 million for the quarter ended September Thirtyth 2020, as compared to a net loss of $3.7 million for the same period in 2019.
Net loss for the nine months ended September Thirtyth 2020 decreased to $10 million compared to $13.2 million for the same period in 2019.
We expect our quarterly operating expenses to increase with the initial.
In addition of our phase three trial subjects are randomized into the study.
That concludes the summary of our third quarter financial results I would now like to turn the call back over to John.
Thank you Gerry.
As you can see we had an exciting and busy third quarter. Our continued focus will be on the execution of the phase three program while in parallel we could.
Year to explore opportunities for partnering and additional ways to expand the potential for cited cynically.
As discussed in previous calls we continue to seek nondilutive funding to initiate a trial in nicotine addicted E cigarette users and believe this could be a future indication of citis into clean to help address that beeping.
Terrific.
Finally in closing I'd like to remind everyone that we will be hosting a virtual KL round table next week on Tuesday November 17 at 12 PM Eastern time.
The event will feature five esteemed thought leaders in the field of smoking cessation, including Dr., Nancy Regazzi Professor of Medicine.
But at Harvard Medical School, and the Orca two primary investigator this.
This event will provide an excellent opportunity to hear first hand from experts on their perspective of Cytosorb to claim our development program and how it fits within the smoking cessation market.
Additional detailed and registration information can be found on the IR page of the achieve website.
That concludes our prepared remarks, we will now open the line for questions Laura.
Thank you same ladies and gentlemen, if you have a question at this time, please stop the style and the number one key on your Touchtone, California. If your question, hoping and think Oh, you will stand with yourself from the queue. Please press the.
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Your first question will come from the line of Michael Rollins.
Ladenburg Thalmann. Your line is now like go ahead.
Thanks, Operator, hi, guys. So are you.
Good.
Thanks for taking the questions.
Couple on.
Orca too congrats on the start.
Heavy lifting a lot going on there.
You mentioned in the press release in your comments.
With with Covance underway as well.
Just a couple of questions on on.
What's making it.
Hi, I guess its a.
Coas potential.
That makes it tougher to enroll on other hand, there's likely to be greater motivation amongst the patients that are keenly aware that there is heightened risks with covance.
How are the how is this on balance so far.
He seeing greater trepidation for patients and difficulty or are they seem to be more motivated and how are the.
So its behaving so far thanks.
Right.
All right.
The the sites actually has been.
Wanting to start even sooner than most of our sites have been designated essential businesses and they've asked.
So we've been open and running clinical trials and.
Enrolling patients.
Through the year.
And so they they have been very motivated to get this started.
They actually is some of these side. So all right I have been on co head vaccine trials.
So from the site perspective, there, they're just excited to finally get this study.
On on Rolling and.
Louis this screening activity ramped up really quickly. So I don't think there is a problem as far as the interest in subjects.
I should say, though that we are.
Metering enrollment right now is to make sure that all the procedures and processes are are there that the sites that are used to it that everything goes small smoothly and then we plan on ramping up after the new years, So were actually flat for us as a company metering.
Being that enthusiasm until after the first of the year.
Right, yes, it makes sense okay. Thanks.
Cindy will I have you here you mentioned in September the.
Check with the FDA that there were two adjustments I think at some secondaries I didnt quite hear all that.
It sounded like some nicotine withdrawal evaluations on some relapse measurements could you clarify what was our yes.
Yeah, we've actually so just to remind you in November we have the FDA say in a type B meeting we view the protocol all of the statistic analyses everything was fine we did send the.
But how about the final protocol to them for one laugh tree view in July letting them know that we planned on starting in that October timeframe and they really came back lets only two minor changes they asked us to do and nicotine withdrawal assessment at week seven.
And they asked us to add.
And.
Other exploratory objective for an analysis and that was it.
So we feel pretty confident that all issues, especially the primary endpoints and the assessments and the safety and the efficacy had been well vetted with just only those two minor changes and as we made them and.
Often run.
Running we went.
And then thank you for that and then one final if I could here.
It doesn't sound like there is a need.
Need to have any adjustments along the way.
For closing.
It sounds like in the design.
There could be a virtual if necessary.
Kind of walk us through how the Seo confirmation of biochemical confirmation happens I assume they have to have face to face meetings for that thanks.
Yes, they can actually do that if worst case scenario they could drive up in a car and actually have these assessments and we're also looking at.
So the subject.
Really came out to be covered positive that we have the ability to have home home evaluations in that we can send the seal monitors to their home.
Them to do it virtually on them on their own as well as sand.
Medication study drug to them.
The sites that we've looked at having virtual as well as home delivery.
For those subjects. So we've really looked at all aspects of trying to make sure we don't have missing data.
Now, even though you plan for that if we do have missing data.
They also have a plan to discuss any issues that we might have that missing data with FDA. Prior to final study analysis and data study data base lock.
Makes sense appreciate the insights thank you.
Okay.
Thank you your next question will come.
On the line of formal Swanson from Lake Street Capital markets. Your line is more right go ahead.
Hey, guys. Thanks for taking the questions just wanted to follow up on Rwanda.
During a doctor walkers presentation sovereignty. She mentioned there was an opportunity to perhaps go back and use some different statistical models and tools to.
Probably weight, whether or not there was another cut of the data that could be done that might show superiority is that is that ongoing do you know.
Thanks Thomas.
I think we're not aware of kind of the status of that and based on her comments during the presentation. There I think what we're currently looking for at the moment.
It is.
Ultimate publication of the data, we know thats in process and so we're looking forward to seeing murdered data coming out that is ultimately.
Published a manuscript.
Great and then just a follow up on the question about enrollment is it fair to assume you should be fully enroll.
Old kind of.
Partway through the second quarter of next year is that a fair assumption just trying to do the follow up timing and when we might when we might have data.
Yes, actually without any covert interference we were hoping that we could get this normal by the end of the first quarter. So if.
If there is some delay in enrollment then it would be the beginning of quarter two.
Okay great.
And then just one quick final one on a on orchids you won.
Have you guys made any progress in finding a non dilutive financing opportunities to advance that program.
So we are we are currently evaluating that weve identified an opportunity that we think we match up well with.
Getting grant funding for that for that trial.
And so that's what we're currently pursuing us at the moment.
The deadline for that is right at the beginning of next year.
So Oh go ahead.
Together, the documentation and the the thesis for why it makes sense currently and and get that submitted so I think as soon as we have further updates on that will happily provide.
Thats great. Thanks for taking the questions.
Thank you.
Your next question will come from the line of Jason Mccarthy from Maxim Group. Your line is more likely to happen.
Hi, guys. This is Joanne late on the call for Jason Mccarthy, Thanks for taking the questions and congratulations on the continued progress.
I know you guys just started enrolling patients into the phase three or cost study last month, but.
I was wondering if there are any update you guys could provide at this time and if we could look forward to any sort of preliminary data at the upcoming Caillois later this month. Thank.
So in terms of update on enrollment so far and we don't have anything else to report outside of Cindy's update earlier rather than.
We can.
Tended to be on target, we are metering enrollment between now and the end of the year.
And again, our target has been to complete enrollment by the end of the first quarter, but I think if there are some cove it related delays that might push that out into the second quarter of next year, but so far everything is on.
Pardon.
Great. Thank you and you just mentioned enrollment could be completed by first quarter 21 could you just give us a lid on how you guys were able to mitigate our timing delays in relation to covert rising and in general how smoking cessation was impacted by COVID-19ien because they seem to be at a time when people don't.
We want to stop smoking.
Cindy you want to grab that one sure well actually it's a double edged sword because.
Individuals who are smokers can actually have worse symptoms, especially if they are hospitalized.
In fact, we are going to be going into this and.
Far more detail on Apoquel event next Tuesday. So this is a perfect timing to plug that if you're interested in more of that and hearing it from the experts.
Tuned into that KNL event next week.
Okay got it thank you so much.
It relates to him.
Thank you. Your next question will come from the line of John as one of the most from Zacks SCR. Your line is now like go ahead.
Good afternoon, everyone and congratulations John in Sydney on your promotion and welcome to the call Jerry.
Wanted to build off some of the initial questions on.
On the enrollment for Orca two are all 15 sites ready to enroll oval, our do only have a few of them up and now with the rest opening as at the beginning of the year I know all of them are open and screening at this time.
Okay, Great and then also want to recognize the great results from the Roaring trial that we're quite close.
Those two showing superiority.
I think that doesn't get enough attention and that that was really a big positive from from Zacks point of view.
I also wanted to look at see the baking trial.
I saw that it looks like the the protocol for that was out I guess in the in the previous presentation that.
That had been put out.
You talked a bit about how that that will be structured.
When it goes live assuming you're able to obtain that financing.
Are you talking about this general study design.
Yes, exactly for the Vaping trial, Yeah. This study is 150 subjects.
Who are vaping, only so they're not vaping and smoking cigarettes. So most of these subjects will have been frankly.
Prior smokers, who are raping.
Of the 150, it will be a one to two randomization with 50, receiving placebo and 100.
Grid, receiving site a cynic Glenn for 12 weeks, so everyone will.
Go for 12 week treatment you will have 50 with getting 12 weeks of placebo in a 100 getting 12 weeks of cyber cyclin, but we'll be looking and comparing.
Measuring six weeks and 12 weeks.
Some vaping cessation as the endpoint is very similar to actually with the Orca two is doing but not with three arms, because we're really not going to be comparing a reduction in risk of relapse in the vaping study. This is much more of a pilot study.
Okay Oh.
Okay, yes that maybe that kind of gets to my next.
My question was just going to be if I think it's a phase two.
That could possibly be used in conjunction with the orca two trial to perhaps get additional.
Approval or way to get that.
You know approved so that it could be used for that as well.
Well obviously it's.
150 subjects, but you can bet that that if there is statistical significance, we'd be discussing with the FDA, having that as a supportive trial for them a one phase III for vaping as an additional indication follow on indication.
Okay great.
Great well Thats all for me.
Okay. Thank you guys.
Hi, John.
Thank you and good morning.
Good afternoon, ladies and gentlemen, if you have a question. Please press Star then the number one key on your Touchstone telephone. Your next question will come from the line as it Jim Molloy from Alliance Global Your line is now like they'll help.
Hey, guys.
Thanks for taking my question and a quick question on the QM points on the trial.
People always still point to 500 Boes per day.
Im sorry quickly, it's either or both for a successful trial.
And then maybe a follow up on that would be if you had to pick one I know all the kids are beautiful, which one given Americans reconciling cynically.
As more likely to hit.
Oh, that's right well, yes, we do think both of them are beautiful. So [laughter]. When you look at P value of <unk> 0.05, it's a two sided so you have to understand I talked one sided P values. So obviously for site is cynical and being better than placebo. The P value EPS to be 0.0 to five or less.
And so if both of those endpoints meat of 0.25 or less this study is.
Statistically successful at both end points now.
Now if you have one endpoint to that does and does not make that significance level than the other endpoint.
It does have to have a lower P value of 0.01 to five to be significant I guess, if you looked at that you would think the chance of six weeks might be less than 12 weeks more treatment is.
So in a week might be that the one that would be sick.
Don't forget but.
Our bad if were betting we're bidding both of them are going to be significant.
Under that it will give them flexibility that some individuals who only want to take six weeks of treatment can take six weeks those it might take longer to stop smoking or the redux.
Ignition of risk of relapse actually is significant those more.
Factory.
Chris might choose to go 12 weeks in there.
Okay. Thanks for that answer then I'll need to follow up on that.
No problems trial, which you think plays to the strength of a set of.
Excellent.
The short duration of therapy or the lower side effects.
Well certainly the lower side effects are going to be very helpful. Because no one really likes to have side effects, if youre trying to quit smoking on top of.
Of the nicotine withdrawal, so I think that.
Six weeks, if you stop smoking.
That is a success.
Well first of all can drill thanks for taking the questions.
Thanks, Jeff.
Thank you I'd say that we do have a follow up question coming from Mr., Michael Higgins. Your line is more like that.
<unk>.
Thanks, just a follow up to get some insights from you guys as to what we'll see you next week.
I understand the the event is happening of course, I'm very happy to be moderating, but is there a certain.
Sure information, we should look for that's new next week, obviously, a year ago hasn't Mckay wells there.
The event was really spectacular and you've got a great list come in most of those are coming back again this year.
Anything new from Aurora anything.
Different from ebay seem a bit more information there obviously, we're asking gets some depth of of the Brent.
Vernakalant studies versus the designs.
Yes, so there's an acclaimed by.
Anything, particularly Bishop's report for next week. Thanks.
Great that's great.
Yes, I think in terms of new information I think we are planning on doing a deeper dive into the phase three.
Well in some of the mechanics around that.
Kind of further analysis of the endpoints.
As you know some of the pieces in place related to mitigating the effects of the pandemic.
I think in terms of new data coming out of our or prior information.
We're not planning on on anything there.
Hey, guys you noted before.
A great group.
A key opinion leaders in this space.
And I know we.
We got a lot of positive reviews, when we got some of these folks together last September in terms of.
No.
Elucidating what is going on in the smoking cessation landscape and why a new treatment option really is needed in this space.
Well.
And I think you know letting.
The experts in the field.
Their time to talk about the space I think is always always helpful to get.
Just more more information out in terms of why this is important so I think all in all should be a real great event I hope that everyone gets a chance to tune in for that.
Okay, that's great and likely some further discussion on ebay thing opportunity I soon.
Yes.
Great look forward to it thanks guys.
Thank you.
And I'm showing no further questions at this time.
Well I'd like turn the conference back to Mr. density for any closing remarks.
Great. Thank you and thanks, everyone again for joining us on the call a call today.
Many of you will get a chance to tune in next Tuesday for our KL round table, we look forward to providing additional updates as we progress in the near future. Thank you again.
Thank you Sir thank you so much business and again. Thank you everyone for participating. This concludes today's conference you may now disconnect. They have left the bank.
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Hi.
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