Q1 2021 Achieve Life Sciences Inc Earnings Call

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Good day, and thank you free standing by while kind of to achieve life Science science, that's the first quarter 2021 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

Ask the question during the session you will need the press star one on your telephone keypad. Please be advised the today's conference is being recorded.

If you require any further assistance. Please press star zero I would now like to hand, the conference Oh free So Jamie seen us executive Vice President of commercial. Thank you. Please go ahead.

Thank you Charlotte and thanks, everyone for joining us on the call today from achieve we have Jon <unk>, Chief Executive Officer, Dr. Cindy Jacobs, President and Chief Medical Officer, Gerry One and 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'll now turn the call over to John.

Thank you Jamie.

On today's call. We will review the progress we've made on the phase III trial, and other NDA, enabling activities and provide an update on our Q1 financial results.

Let's begin with Orca two <unk>.

As a reminder, orca two is the double blind randomized placebo controlled phase III trial that is currently enrolling 750 adult smokers across 17 locations in the United States.

The trial is designed to evaluate the safety and efficacy of three milligrams cytosine of clean.

Dosed three times of day over a period of six and 12 weeks versus placebo.

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 set of clean followed by six weeks of placebo.

After the 12 week treatment period subjects are followed monthly out of 24 weeks the.

Behavioral support is being provided to all subjects throughout the study.

There are two independent primary endpoints that we'll evaluate the rate of smoking abstinence of cytosine of clean compared to placebo at the end of both six weeks and 12 weeks of treatment.

We're going to we'll be successful at either or both of the side of the Senate clean arms show an efficacy benefit over placebo.

We are pleased to share of the fork it too has reached over 80% of the 750 subject enrollment target and we look forward to completion of enrollment by the middle of the year.

As we discussed on our last call, we experienced slower than anticipated enrollment during the initial months of the study, which was primarily due to the pandemic and participants reluctance for in person site visits in.

In response, we implemented numerous recruitment initiatives to increase the pipeline of potential subjects to be screened and successfully assisted the sites and finding qualified subjects for the trial.

We also on boarded two new clinical sites in Atlanta, Georgia, and the Evansville, Indiana, bringing the total number of sites in the study to 17.

We are pleased to see the additional recruitment support the new sites have resulted in increased randomization and we remain on track to completing enrollment by the middle of this year.

Additionally, regarding orca two we've completed two data safety monitoring committee meetings.

The committee reviews General safety data and oversees the conduct of the trial in both meetings. They did not identify any safety concerns nor any study conduct issues and recommended that the study continue as planned.

We are pleased with the progress of the trial to date and the efforts being made by our clinical trial sites across the U S.

As a reminder of the company will remain blinded until the completion of all study follow up evaluations and until the database has been finalized and locked we.

We look forward to providing further updates on orca two when enrollment is completed.

Additionally, we have continued to make great progress numerous non clinical NDA, enabling regulatory requirements we.

We have completed and submitted to FDA both of the required long term chronic toxicology studies.

In addition, we are also near completion of one of the two required carcinogenicity studies and have completed a special protocol assessment with the FDA for the second required study.

By next year, we expect that all required non clinical toxicology studies for an NDA will be completed.

Also in the first quarter, we had two important cytosine of clean studies published in leading peer reviewed scientific journals.

First the results from achieve phase two orca, one trial, demonstrating superior quit rates for cytosine of clean compared to placebo and impressive safety of responses with published in nicotine and tobacco research.

As a reminder of this study was instrumental in the selection of the three milligram dose and three times of day administration that we've taken forward into phase III development.

Additionally, the New Zealand Rauer of study showing improved efficacy and lower rates of adverse events when comparing cytosine of cleaned. The Chantix was published in the journal of addiction.

We expect additional efficacy analyses from <unk> in the coming months and look forward to sharing that with you when available.

Finally, this quarter, we announced the appointment of two new directors to achieve the board Dr. Bridget Martell, the Doctor Cindy Jacobs Dr.

Dr. Martell is board certified in both internal and addiction medicine and is an experienced executive leader in the pharmaceutical industry Dr.

Dr. Jacobs serves as achieves the president and Chief Medical Officer, and in addition to our board duties will continue in her current role leading achieves regulatory and clinical development efforts.

The appointment of doctors Martell, and Jacobs strengthens both our board diversity as well as our clinical and regulatory expertise.

At this time I'd like to turn the call over to Gerry to discuss our recent financial results.

Yeah.

Yes.

Yeah.

Maybe having an issue with Jerry's connection so let me jump in.

I'd like to provide an update on the cash balance as of March 31, 2021, and our operating expenses.

For the first quarter of 2021 as of March 31 of the company's cash cash equivalents short term investments and restricted cash.

$29 6 million compared to $35 9 million as of December 31, 2020.

We believe our cash balance of sufficient to provide runway into the middle of 2022.

Turning to the statement of operations the company incurred a net loss of $8 million for the quarter ended March 31, 2021, as compared to a net loss of $3 3 million from the same quarter of 2020.

Total operating expenses in the first quarter of 2021 increased to $8 million as compared to $3 4 million for the same quarter of 2020.

As expected and highlighted during our call in March operating expenses were elevated in the first quarter as enrollment and the Orca true trial increased.

We anticipate our operating expenses to remain elevated during 2021 as we continue to execute on the Orca two trial.

In closing, we continue to make excellent progress on advancing cytosine of clean through the required clinical and regulatory development process.

In the first quarter, we saw significantly increased interest in momentum in Orca, two and look forward to the completion of enrollment in the middle of this year.

Additionally, we continue to execute on the required NDA, enabling activities and publication of key data to expand awareness of cytosine of claims potential across the new audiences.

That concludes our prepared remarks. Thank you again for joining US we will now open the line to questions operator.

Oh, Sorry reminder, to ask a question you will need the cash I one on your telephone keypad, that's I want to ask the question.

Sorry, your question press the pound key.

Please stand by while we compile the Q&A roster.

Your first question comes from Michael Higgins Your line is now open.

Thanks, operator, and congrats guys great to hear the 80% of enrollment looks like Youre on track for a mid year enrollment.

Just wanted to ask the.

If I could on that pace.

Typically you see kind of a hockey stick shape and the enrollment however, with the with smoking cessation January of new year's resolutions are so impactful.

Can you comment on the recent trends in the recent pace of.

Of the enrollment.

Sure. Thanks, Thanks, Michael Yeah, I think in terms of enrollment.

We actually didn't see that uptick like we had anticipated and out of the gate in the first part of the year, we actually saw that uptake really happened kind of late February into March and April and so what we continue to see on the ground is encouraging and more in la.

<unk> with where we had anticipated to be a bit earlier in the year. So I think everything we're seeing continues to.

The indicate we're on track for completing enrollment in the middle of the year.

That's that's that's great.

And then just maybe a more maybe more of a comment possibly but.

Just a few weeks ago, Jim ahead of publication about COVID-19, the last year for smokers trying to quit.

The American quit lying ahead of publication out in March seeing the calls.

Dropped significantly last year.

So it seems like people were spoken quite a bit.

This has been a topic the last six plus months or so we've talked about is trying to get a handle on that and this is anecdotal is that would suggest that it's.

Reduced.

A bit and maybe the smoking rates were.

We're up a bit rather.

Has that impacted enrollment in any way and what do you think of that when you think of the market opportunity.

Yes, I think overall of the market opportunity hasn't hasn't changed for us and I think the pandemic has created some challenges that.

We saw the in the trial and I think the it's really been the result of people being.

The more reluctant to leave their homes.

So we clearly saw that and I think that's played out across.

Across the space as people have been more reluctant to go in to make quit attempts or to even access some of the behavioral support that's available.

I think to your point, we may very well see an uptick in the number of smokers when 2020 as reported so I think it's been an unusual year, it's clearly a great time to quit because of the.

The pandemic, which is the respiratory disease and we know the smokers have worse outcomes. If they do get the virus, but I think it's been a challenging year for people to actually make those quite of tests.

Yes.

Well said.

And then just to switch it up a bit.

But also kind of of topical story as we've seen in the last few weeks and months the current administration being much more aggressive against smoking.

Some of the products that are out there et cetera, I'm wondering if that is going to have any impact on the potential for an E. Cig study.

They have that funded by NIH and others.

Because of this administration seems to be a bit more aggressive about.

Kind of attacking so to speak the.

Cigarette industry.

Any updates on that from you guys.

Yeah on the E cigarette grant application, we don't have any update to provide yet we still remain on track for getting an answer back by the end of this quarter.

So that's something we continue to be excited about is that a segment of the market that's grown.

The leaps and bounds over the last 10 years, but we think theres a real opportunity to go to market and make a make a difference there.

Hopefully this administration.

Is providing some additional support internally behind the scenes, but it's always a difficult thing to.

To actually monitor from the outside so we remain hopeful and we'll keep everyone posted.

That's great so low.

The stay in the southern tier hoping for the best there to one last question.

You mentioned, a Bayesian analysis actually I think I read this in the press release of Bayesian analysis of the primary efficacy outcome is ongoing any of.

Dates for us as to when we'll see more from Dr. <unk> study.

Yes, we're still waiting on that as you are.

And I think it's something that we would expect to see in the second half of this year. So I think as soon as we get additional details on that we'll be happy to share with everybody.

Thanks for all of the feedback thanks, guys.

Thanks, Michael.

Your next question comes from a franchise based on volume.

Yeah. Thank you for taking the question.

A quick one here I was just wondering John is there any thought about doing another head to head trial here with Chantix or is the safety potential advantages here too.

To give this a good commercial push.

Yeah. Thanks for the question Frank from our perspective, the going in position has always been of product with.

At least as good of efficacy as the market leader with significantly better safety and a shorter course of treatment.

Is going to be sufficient to garner.

The market share in this indication I think we continue to get more data points, both from our hour on will get.

Obviously further data points out of Orca, two that could potentially set up the future head to head trial against Chantix.

Would run I think at the moment, we don't see that as something that's going to be commercially.

Necessary.

Obviously helpful. If we were to do it but I think for us the.

Current planning remains the same which is placebo controlled trials to get this thing to approval.

Okay, great. Thank you and then in terms of the timing so middle of the year of complete enrollment can you just remind us between completion of enrollment and data what that timeline like and then when you added sites here is there any issue in a trial like this with ads.

Added variability between sites or.

Is that not the big issue here.

Yes. Thanks for the question Frank I'm going to turn this one over to Cindy to take that.

Sure first for the timing enrollment by mid of the year would put that all subjects would be completing the six months follow up by the end of the year, obviously than we need time to close and lock the database and analyze so will it be.

Close to the end of the first quarter beginning of the second quarter most likely.

As far as the two sides now we don't think adding to the site. So that the total the now 17.

Instead of 15, we will have that much effect on the variability most of the sites are you now at least doing 30 40 subjects. So there are a few sites of doing better than other than some that are just going to be doing 30 or 40. So it will be a good distribution between the 17th.

Right.

Okay, Great. That's it from me thank you very much.

Thanks, Greg.

Okay.

Okay.

Your next question comes from Vernon Bernardino.

Hi, guys. Thanks for taking the question then.

Congrats on the other.

Progress so far.

John I was just wondering if you could remind us.

The the makeup of the clinical sites, what kind of sites.

Hey.

Yeah. So these are predominantly professional clinical trial centers.

Got to academic centers as part of those 17, ASU as well as Harvard Mass General.

But otherwise these are professional sites that have it.

At least some experience in smoking cessation programs in the past with behavioral support counselors on staff.

The mix of sites that were using.

Okay.

I missed it.

What is the distribution of the South Korean.

So currently I believe all of the Cindy can correct me, but I think we don't have any duplicate centers.

Ross the states. So we're really across 17 different states. So they are geographically dispersed really across the U S. Let's say.

With the focus perhaps with the.

Through the south of it up the eastern Seaboard.

Okay predominantly in major cities.

Yeah, not not necessarily all major cities the there around.

Urban urban centers, but not necessarily large cities.

And then last question.

Again, if you could remind us.

As.

The most periodic ways that the clinical trial sites interact with the study participants.

The new you want to take that one.

Are you are you, saying as far as once theyre in the study or are you talking screening.

Once the there in the study because the wondering how closely the.

Participants are monitored share they come in weekly into the clinic, while they're on treatment and then afterwards they come in monthly.

For a follow up of <unk>.

And completing at six months.

And anecdotally I'm, sorry of my follow up.

Are you seeing any change in their behavior because of the pandemic and the restrictions.

As far as the monthly visits.

No I think that's where we had a slower enrollment at the beginning and in January and February because subjects were not willing to come weekly into the clinic where from <unk>.

Definitely saw that easing up in March April and then this month.

So.

That has been a lessening of an issue as far as the weekly clinic visits for the first 12 weeks.

So other than the hesitation of scientists.

So far with the.

Our participation in the study.

Alright, because when they signed the inform consent is pretty clear all of the all of it they're expected to come in and do as far as testing and their parts. So in signing that consent farm, it's laid out exactly when they come in and what is happening.

Okay.

Thank you for taking my questions on the on the insight into the study I appreciate it.

Thanks Brent.

Your next question from came from the line of Chad. Your line is now open.

Thank you very much Hello, John and team. This is Ted you sitting in for John vendor list in today.

Thank you for taking my question.

During the last update achieve indicated that it was seeking.

Non dilutive funding to support our trial in vaping any advancements on that front.

Yes, Thanks, Ted Yeah, we're we're still waiting for feedback. This is you know of.

Grant application, we submitted at the very end of last year.

And based on the timelines, we're expecting to get an answer back by the end of this quarter. So stay tuned on that front.

Okay best of luck on that and the just.

Out of curiosity.

How large is the the vaping segment of nicotine users are the majority of nicotine users still smokers or are the is it starting to go 50, 50 or what does that free.

That looked like.

Yeah. Good question. So when we look at the rates of smoking in the U S combustible cigarettes that as.

It's been roughly 14% of the population.

It actually hasn't shifted and.

Over three years since 2017, the number of smokers remained flat at roughly $34 million.

Now over the last decade, we've seen an expansion of the market with E cigarette use.

The recent estimates we've seen are upwards of $14 million U S E cigarette users.

Some of these do overlap we do know that a number of folks that have moved over to E cigarettes, werent able to quit smoking. So now they're dual using both products.

You've got a handful of folks just using E cigarettes alone as well as a large segment of youth who have picked up those products in large part because of the popularity of products like juul.

So I think overall there has been what I would call a likely market expansion compared to where we were three or four years ago. So it hasn't been an erosion.

There has been some shift, but I think largely it's expanded.

Okay. So it does sound like many of the use of great users actually just added to the population of nicotine users.

Okay, well. Thank you very much that does it for me today.

Thanks, Ed I appreciate it.

Yeah.

I'm, sorry remind day to ask a question you will need to press star one on your telephone keypad.

There are no further question at this time I will now hand, the call back to John benthic free closing here Mike.

Thanks, Charlotte and thanks, everyone for joining us today. We appreciate everyone's continued support of the company. It's been an exciting time as we've been moving forward well.

With the enrollment look forward to completing that here in the middle of the year of continuing to provide updates to everyone as they come in so thanks again for taking the time.

Okay.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

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