Q4 2020 Achieve Life Sciences Inc Earnings Call
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Ladies and gentlemen, thank you for standing by the welcome to the achieve Lifesciences fourth quarter and year end 2020 earnings conference call.
At this time all participant lines are in a listen only mode.
After the speaker's presentation, there will be a question and answer session and I ask the question. During the session you will need the press star one of your telephone. Please be advised that today's conference is being recorded if you acquire any further assistance. Please press star zero.
I'd now like to turn the conference you're speaking of the day Jamie.
Jacob Vice President of commercial and achieve thank you. Please go ahead and then.
Thank you Shannon and thanks, everyone for joining us on the call today is the machine, we have John <unk>, Chief Executive Officer, Dr. Cindy Jacobs, President and Chief Medical Officer, Gerry One principal accounting officer, and Rick Stewart Executive Chairman of the board of directors I'd like to remind everyone that todays 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 SEC concerning factors that could affect the company copies of which are available on our website I will now turn the call over to John.
Thank you Jamie.
Despite all of its unique challenges 2020 was a pivotal year for achieve while navigating the new normal of conducting business virtually we accomplished several key milestones, including multiple data announcements supporting cytosine of cleans differentiated product profile.
The significant progress on NDA supporting studies and regulatory activities required by FDA and initiated the phase III Orca two study and the U S smokers.
Notably we ended the year and the best capitalized position since the company's inception.
Today, we will provide an update on the side of the cynically and development program and discuss our key priorities for the coming months and year ahead.
Let's begin with Orca too.
As a reminder, orca to you was the double blind randomized placebo controlled phase III trial that is currently enrolling 750 adult smokers across 15 locations and the U S.
The trial is designed to evaluate the safety and efficacy of three milligrams cytosine of clean the three times of day over a period of six and 12 weeks versus placebo.
Trial was launched during the fourth quarter of last year.
Participants are being randomly assigned to one of the three arms and receiving either 12 weeks of placebo 12 weeks of side of the Senate clean or a combination of six weeks of side of the cynically followed by six weeks of placebo.
Behavioral support is being provided throughout the study and after the 12 week treatment period subjects are followed monthly out to 24 weeks.
There are two independent primary endpoints that we'll evaluate the rate of smoking abstinence of side of cynically compared to placebo at the end of both six weeks and 12 weeks of treatment.
Orca two will be successful if either or both of the site of cynically and arms show an efficacy benefit over placebo.
And importantly, and unlike the design of our previous Orca one trial smoking accidents here is defined as continuous abstinence during the last four weeks of treatment.
One of the primary changes we made going into Orca two was to extend the treatment period from 25 days to six and 12 weeks.
This now allows us to measure the FDA approvable endpoint of four weeks continuous abstinence, while patients are still on therapy.
This was not possible with the prior administration over 25 days and we know the quit rates are highest while subjects remain on treatment.
We believe these changes have the ability to improve on quit rates that we've seen historically.
Regarding enrollment we initially estimated our projections based on the rapid enrollment of Orca, one which completed ahead of schedule.
And this case, given the ongoing pandemic and more recently the winter storms that impacted numerous trial sites across the U S.
We are seeing slower weekly randomization that originally projected by our clinical sites.
We have implemented numerous recruitment initiatives to increase increase the pipeline of potential subjects to be screened and assist the centers and finding qualified subjects for the trial.
Based on the current rate of randomization, and we expect enrollment of work at two to be completed by the middle of the this year rather than by the end of March as we previously anticipated on.
Our entry criteria and pre randomization screening process clearly outlines the trial six months commitment and frequent and clinic visits so that we enroll subjects, who are motivated quitters willing to comply with study requirements and who are otherwise healthy.
Ensuring these entry criteria are met and and rolling the most appropriate and motivated subjects remains our first priority over speed of enrollment.
Overall, we are pleased with the conduct of the trial to date and the efforts being made by our clinical research centers across the U S.
As a reminder, the company will remain blinded until the completion of the trial and results have been analyzed.
We look forward to providing further updates on orca too as we move forward, including on our next quarterly earnings call.
As you May recall the society for research on nicotine and tobacco of annual meeting was held last month, where we had the opportunity to present findings on smoker and E cigarette user attitudes and perceptions on quitting.
The data collected from recent surveys of over 1100, smokers and 500 nicotine E cigarette users.
Further reinforced the need for effective new cessation of treatment options.
And the smoking population, specifically overall satisfaction and perceived efficacy of available treatments was low.
Of the smokers, who had previously tried using of prescription medication, such as Chantix or Bupropion and only 26% stated they completed one month of treatment.
This is consistent with prescription claims data we have reviewed the show 76% of Chantix users do not complete the full three months of course of therapy.
The survey also showed the side effects risk of suicidal thoughts and perceptions about low treatment efficacy, where among the state of the reasons for discontinuation or lack of initiation of currently available medications.
These insights are incredibly relevant as we think about the future product positioning of site instead of claim.
We believe our tolerability profile with low levels of adverse events of shorter of course of treatment and a more selective mechanism of action will increase the number of quitters willing to try prescription therapy.
We expect these product features will lead to improve compliance and potentially better outcomes.
Moving on to the results of the data presented from vaping or E. Cigarette users. We conducted an analysis from over 500 users of nicotine based products, including roughly half of whom were former smokers and have considered dual users who both vape and continue to smoke.
The key findings that were reported indicate that regardless of current vaping behavior, both segments expressed an interest and quitting.
And total 73% stated that they intend to quit vaping within the next three to 12 months.
Of those who play and to quit within the next three months more than has stated that they would be interested and trying a new prescription treatment to help them do so.
These data.
Are of particular interest given our desire to initiate of vaping cessation trial of cytosine of clean and in the future.
As we have previously stated we have applied for non dilutive grant funding for our phase III <unk> study and expect to hear more on our application status and the second quarter.
And also what S RMT Dr. Natalie Walker of provided a review of the previously presented router of data.
As a reminder, <unk> was the first ever head to head trial of cider Scenically and compared to Chantix did enroll the total of 679 smokers and New Zealand.
The Rauer results showed that side of Scenically and not only met the pre specified non inferiority and point, but was trending towards superior efficacy with numerically higher quit rates for cytosine of clean.
In addition, the trial showed that subjects on side of the cynically and had significantly lower rates of adverse adverse events compared to those subjects on chantix Dr.
Dr. Walker commented that Rauer results would be published in the near future.
At this time I'd like to turn the call over to Gerry to discuss our recent financial results and Jerry.
Thanks, John.
I would like to provide and update on our cash balance as of December 31, and 2020 and also our operating expenses for the fourth quarter of 2020.
As of December 31, 2020, the company's cash cash equivalents and restricted cash were $35 9 million compared to $16 7 million as of December 31st 2019.
The increase in cash over the prior year was largely a result of capital raises during the second half of 2020.
In December we closed an underwritten public offering with gross proceeds of approximately $17 3 million.
Which included the full exercise of the underwriters over allotment option.
We received net proceeds of approximately $15 8 million after deducting commissions and offering expenses.
We believe our current cash balance is sufficient to provide runway into the middle of 'twenty 'twenty two.
Turning to our statement of operations.
The company incurred a net loss of $4 7 million for the quarter ended December 31, 2020, as compared to a net loss of $3 2 million from the same quarter of 2019.
Total operating expenses and the fourth quarter of 2020 increased to $4 7 million as compared to $3 2 million for the same quarter of 2019.
Operating expenses increased in line with initiation of the Orca two trial and the fourth quarter of 2020.
We anticipate our operating expenses to remain elevated during 2021 as we continued to execute on the Orca two trial.
That concludes the summary of our financial results I will now turn the call back over to John.
Thank you Jerry.
Over the past year, the management and board of worked extremely hard to position the company for success.
As Jerry discussed we are now well positioned to not only complete orca too, but to operate and a truly strategic fashion as we advance towards becoming the leader and smoking cessation and work towards realizing the value that we see inside of the set of claims.
We will continue to explore opportunities for partnerships and additional ways to expand the potential for side of cynically, including the expansion in the E cigarettes, and vaping decision, which we continue to believe is especially compelling.
In closing I'd like to remind everyone. If you haven't had a chance to encourage you to listen to our highly esteemed key opinion leaders discuss the cytosine of clean program and their personal viewpoints on its potential which were expressed during our virtual roundtable event last November the.
The link is available on the events page of our Investor Relations website.
We are appreciative and continue to be humbled by the caliber of experts who are helping us to move side of Scenically and forward and continue to believe inside of cynically and its potential to help people quit smoking.
That concludes our prepared remarks. Thank you again for joining US we will now open the line for questions operator.
And as a reminder to ask the question do we need the press star one of your telephone towards all of your question press the pound key please standby, while we compile the Q&A roster.
Our first question comes from Michael Higgins with Ladenburg Thalmann. Your line is open.
Hi, guys. Thanks for taking the questions.
Couple of questions if I could on the on.
On the Orca two of you mentioned a slightly slower than expected.
Just hoping a little more color on that and if that's related to for example, higher screening failure rates, obviously COVID-19 or the way may be affected by that and also any characteristics of the patients. So far that of notable when you compare to the work on one population. Thanks.
Yeah, Thanks, Michael I'm going to hand that over to the Sydney to provide more color.
Here are the.
Slower enrollment than expected actually occurred in January where we had positioned if you remember we had slow enrollment gauged at the very beginning and then to open up in January and.
On the clinical sites actually said that the sore and morale enrollment was really based on hesitancy of participants to come into the clinic on a weekly basis. This is probably more COVID-19 related as well.
And obviously, having the winter weather storms down in the southeast of certainly didn't help as well we're now seeing here in March.
Really a pick up I think the fears of Covid with vaccinations and the income and the better weather and starting to help on enrollment and so we're actually seeing our increase enrollment and March where we were hoping to see it in January.
And interest.
And as far as the screen sales they are a little higher than our kind of one but I'm not.
Not the huge issue.
And of our so right now we're predicting full enrollment by the middle of the front this year.
Yeah, I think we're looking more of a Q2, so by middle of the years, maybe a month of so delayed interesting to hear that it actually is highest in March and have.
So you're expecting the big bolus to come on.
Back in January sales.
It looks like you're trending in the right direction of any case, absolutely and in fact, we're working with the sites, we have a media and interviews with the Pea is and the local areas have I'm actually really been quite successful and well over the last month.
Interesting.
And a couple of too much time.
I think another area of interest and <unk>.
King.
It has gotten a lot of attention from HR, Kew and I H F. D. A lot of the governmental bodies that really seem encouraging.
You have the survey work as well, but are there others like H, a American cancer Society.
And that could support the funding of the Vaping study.
And any feedback you can give us on the on the survey says Youre looking to fund this trial would be helpful too.
Yeah. Thanks, Michael.
This is an area that we continue to remain really interested in the one that really expanded quite substantially over the last three or four years of really over the last decade our.
Latest estimates show that there's near of $14 million E cigarette users and the U S.
And that compares.
To $34 million combustible cigarette smokers that numbers remained flat over the last three years.
Which is a bit surprising as well.
And I think this is an area that we see a real opportunity. We are looking at various ways to fund the phase III trial that we've designed and we think grant funding that we have.
<unk> identified currently.
And as it is the right approach for us at the moment.
We don't have control over the review process, we put our best foot forward, but.
Of an update on that here and the second quarter.
And I think regardless of where that goes in terms of grant funding I think this is an area that we will plan on.
Expanding into and the future.
When the timing is right and I think if theres opportunities with other organizations will continue to tease those out as well.
Thanks, that's great feedback so just to clarify it looks like and Q2, you should hear back on and the grant funding request is that right.
Correct.
Okay great.
Last one and maybe brief answer, but just trying to be complete here I know, there's other NDA, enabling activities underway and then past presentations you've listed the study and the status and so forth.
You know this maybe the day to day were 15 or so and here.
You've checked off a lot of these boxes.
So what other NDA, enabling studies are underway now.
Include here and the net.
Several months and quarters. Thanks.
Yes, and do you want to touch on that yes.
Many of them are and the non clinical program. So we just submitted dean on nine months of chronic Tox study.
And the required for the NDA. We are also will be completing here over the next few months, the Carson and one carcinogenicity study.
And we are currently and we submitted our second carcinogenicity protocol for F. D. A to review as the Spa and you should be hearing back on that and the next month and then after their agreement we would initiate that carcinogenicity study, which would be the second and final non.
Non clinical study really that is required at this point, we are looking and also starting of abuse liability studies that are required for the NDA and that would also start within the next.
<unk>.
Very helpful.
And I appreciate it thanks guys.
Yeah. Thanks, Michael.
Thank you. Our next question comes from Thomas Flaten with Lake Street Capital. Your line is open.
Hey, thanks for taking the questions.
And just.
John maybe if you could maybe explain to what extent the orca two wood and form or Q3, just doing some back of the envelope math, if let's call. It you know you're done by June and you probably won't have data till early first quarter of 'twenty two how dependent was the work of three on whatever learnings you took from work of too.
Yeah. Thanks, Thanks, Thomas I think in terms of the orca to informing future trials, including Orca three I think the way we've always looked at this as the Orca three would look largely similar to what we're running currently.
So we don't think there is a.
And I need to read it out on the on Orca two first if we were to get going on on Orca. Three obviously of every additional data point you have is gonna be be beneficial.
But I think we have and hand, what we need to appropriately power and and initiate that and so I think overall and our focus currently will remain on the executing on the the orca two trial, but.
No real impact on our thinking on Orca three of the moment.
Got it and then.
The sites was the slowdown or the maybe the the slower than expected and enrollment uniform across the sites and with a particular particular geographies that debt contributed most of the slowdown.
Yes, and do you want to touch on that sure.
It did vary with the sites I mean, a lot of the slowdowns were and this and the southeastern part, especially with the winter storms, but there are some sites and they're doing very well and others that were a little slower.
And you know and each area to little little different as far as the COVID-19 infections and rates and concern. So we did see a bit of a difference on per sites.
Got it and then maybe if you could just provide some additional color on the the strategies and tactics that were put in place to to maybe.
Get some acceleration in those enrollment rates.
What they were and then how long you are planning on continuing those of you might be continuing through enrollment I'm not sure, but just wanted to ask.
Do you want me to take that John.
Police of it yes, so the actually the biggest health is the band with the interviews radio interviews with the Pis and the local areas that has brought a lot of participants into the study is just of acknowledgment as far as the trial and awareness of the trial. We also have.
And on the website ads driving traffic to the various sites and.
And those are actually picking up as well and being beneficial and a lot of the of participants or just.
And I'm coming in and I think it's mainly the the awareness of the trials, it's quite helpful and those all of the websites and continue media interviews are planned over the next few months.
Great I appreciate you taking the questions. Thanks, so much.
Based on us.
Our next question comes from Ted Hughes Zacks small cap research your line is open.
Good afternoon, everyone of my name is Ted you I'm in for John Bender, most and today.
Thanks for having us.
And the did you.
Ported in the result from the surveys presented at S. R and T cell.
On the smokers that attempted to quit by vaping ended up unfortunately doing both and consuming almost double the nicotine.
And the dosing regimen being evaluated and orca to be suitable for creditors of all of these levels.
Yeah, our thinking at the moment it would be the same dosage and administration to that's currently three milligrams three times of day. So we think about kind of moving into E. Cigarette users and dual users. We would look at the same dose that administration.
Okay. Thank you and.
And to Piggy I'll piggyback off the previous question regarding the vaping trials.
And the hypothesis regarding whether citizen of the twin might be more effective and vapors of smokers.
Well I think if you look at the mechanism of action for the products, we specifically target the nicotine receptors and the brain. So I think the the product should have broad applicability across the nicotine addiction, whether that cigarette consumption.
The cigarettes or through a <unk> or electronic cigarettes. So I think our belief is that it should work in this area as well.
Okay sounds like it's the.
It's got broad efficacy and that are in that regard.
Also if you.
And you guys kind of.
Approach or at least the pursue of aping trial with the carbon monoxide based endpoint be useful or would another be required.
Yes, that's of Great question, so typically in our smoking cessation trials, we do look at expired carbon monoxide, and we look for below 10 parts per million.
And that doesn't hold true and the the vaping setting so and that we would be looking for code named which is a nicotine metabolite.
As a as a proxy for continued usage.
Okay very interesting. Thank you guys for clicking the our question and I appreciate it.
Yeah. Thanks, Tim.
Thank you. Our next question comes from Chen Lin with Lin asset management. Your line is open.
Yes, Hi, Hi, John Thank you for taking my question on most of my question has been answered just a curious about the NIH grant if.
If you get the money how soon can you start the phase two trial.
Do you expect the grind will cover the full phase two or is there any.
Possibility to be on phase two thank you.
Yeah. Thanks, Jed so are the like we indicated will get further guidance and the second quarter.
Any funding on that the soonest it would occur as the back half of this year and <unk>.
As we move forward and get better clarity on if we are getting some funding on this we'll be able to narrow in on timing, but I think overall you can look at this is.
More of a 2022 sort of sort of activity at the moment.
Okay. Thank you.
Thank you and I'm currently showing no further questions at this time I'd like to turn the call back over to John vintage for closing remarks.
Great. Thanks Shannon.
Thanks, everyone for joining us today, and I think as.
And as we talked about we.
We had a very productive two.
2020, and I think we're off to a great start here in 2021.
With the the kickoff of the Orca two trial and I look forward to providing additional updates as we move forward. Thanks again for joining us today.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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