Q4 2022 Achieve Life Sciences Inc Earnings Call
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Hello, and welcome to the achieve Lifesciences fourth quarter 2022 earnings conference call and webcast. If anyone should require operator assistance. Please press star zero on your telephone keypad, a question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.
Now my pleasure to turn the call over to Nicole Jones with <unk> capital. Please go ahead Nicole.
Thank you operator, and thank you to everyone for joining the call.
Today from achieved we have John Benfits, Chief Executive Officer, Dr. Cindy Jacobs, President and Chief Medical Officer, and Jerry One principal accounting officer.
Management will be available for Q&A after the prepared remarks.
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 start Jackson.
Please refer to achieve documents available on our website and filed with the SEC concerning factors that could affect the company I'll now turn the call over to John .
Thank you Nicole and thanks, everyone for joining us today.
In 2022, we achieved significant milestones that were crucial to advancing cytosine, a clean and to meeting our key objectives for the year. We are proud to have executed successfully on numerous critical activities, including the completion of our first phase III trial for smoking cessation, which yielded highly positive efficacy.
And safety results.
This outcome confirmed our belief that our new site instead of clean dosage regimen has the potential to become the new gold standard for treating nicotine dependence.
We secured grant funding to initiate our first vaping cessation trial, which exceeded our expectations and completing enrollment early due to the great enthusiasm at the sites and with study participants who wanted to quit vaping.
We also strengthened our intellectual property position, concluding the year with a total of 15 granted patents and 46 pending patents, including explorations extending out until 2042.
Along with our partner so pharma, we completed the build out of our new API facility, expanding our global manufacturing capacity to meet expected commercial requirements.
In 2002, we also engaged in numerous productive strategic discussions with potential partners.
Finally, we secured capital to ensure completion of our upcoming development milestones.
We take great pride in completing these critical activities with a team of only 20 fulltime achieve employees.
These accomplishments speak greatly to the expertise of our team and the various roles and their commitment to advancing cytosine a claim to make a meaningful impact for public health. We are grateful for their efforts and for the support we continue to receive from our external stakeholders.
We made significant progress in 2022.
And now we look forward to the year ahead, which promises to be even more exciting.
With that our focus turns to the upcoming milestones and priorities for 2023 next.
Next quarter, we will have two trials reporting topline results first Orca V. One our phase II trial for nicotine vaping cessation, followed by orchid three our second phase III trial for smoking cessation.
Beginning with the work of the one.
In approximately four months of initiating enrollment or cause he won at randomized 160 adult users of nicotine E cigarettes across five clinical trial sites.
Partially funded through grant support from neither an NIH or can anyone aims to explore this population for two reasons.
First we believe that cider cynically well be as effective in vaping cessation as it isn't smoking cessation given its mechanism of action on the nicotine receptors in the brain.
And second there was a significant and growing unmet need in this area.
Our clinical trial findings, thus far demonstrate that cytosine acclaimed significantly improves smokers chances of overcoming their addiction to nicotine as compared to placebo.
We believe this effect will be applicable to other modalities of nicotine administration more broadly including vaping.
Additionally, we have demonstrated that cytosine to clean it has a very well tolerated side effect profile, which may be particularly important for treating treatment compliance that ultimately successful outcomes.
Use of E cigarettes in particular, among adolescents as a growing concern.
According to data released by the C. D. C. In November 2022, approximately two and a half million High school and Middle School students in the U S. We're using E cigarettes.
It has also been reported that adolescents, who use E cigarettes are seven times more likely to try combustible cigarettes in the future.
Our vaping study or Covid, one focuses on adult users of E cigarettes of which there are an estimated 9 million in the U S alone.
Well, we are not currently seeking a pediatric indication and maybe a potential consideration for future research presenting another opportunity for cytosine acclaimed to make a significant impact on public health.
The Orca one trial will be important it's showing the effects of <unk> treatment in adult vapors and understanding the issues around stopping nicotine E cigarette dependence.
This study population is clearly a younger one and we will learn a lot from the results of this trial.
Similar to the smoking cessation trials. The primary endpoint is biochemically verified continuous abstinence during the last four weeks of treatment.
And these trials the biochemical verification is based on systemic coatney levels, which is a metabolite of nicotine.
The last subject to Vulcan V. One received their final dose in February and the last subject visit was completed earlier this month.
As previously stated we are on track to report topline results in the second quarter.
Also expected next quarter, our results from our second phase III trial of <unk> for smoking cessation.
The work at three trial randomized 792 subjects across 20 clinical trial locations in the U S.
We announced in January that the last Orca three subject had been dosed.
The orca three mirrors, our previous phase III Orca, two study evaluating efficacy safety and Tolerability of three milligrams cytostatic clean dosed three times daily for either six or 12 weeks compared with placebo.
Subjects are being monitored through 24 weeks post randomization and receiving standard behavioral support for the duration of the trial.
Identical to Oregon to the primary endpoint is biochemically verified continuous abstinence during the last four weeks of treatment.
Each treatment arm will be compared independently to the placebo arm and the trial will be determined to be successful if either or both of the cider scenically and treatment arms show a statistical benefit compared to placebo.
Similar to or could do orca three was designed with approximately 95% power to be able to demonstrate a continued abstinence benefit compared to placebo at the long term follow up comparison at 24 weeks.
The Orca three trial aims to replicate the positive results observed in the Orca two trial, which continued to be well received and have been submitted for publication.
Earlier this month additional analyses from Orca two were presented by Dr. Nancy regarding at the Society for research on nicotine and tobacco annual meeting or.
Her presentation highlighted the successful abstinence rates observed by smokers, who received <unk> compared to placebo.
Absent this benefit was observed in subgroups of smokers, who received cytosine a clean regardless of age gender smoking history previous quit attempts or prior treatments.
Point prevalence data was also presented and provided an additional insights on the consistent abstinence behavior at multiple time points throughout the 24 week study subs.
Subjects, who received cytostatic claim demonstrated consistently higher rates of abstinence when compared with placebo at all time points measured throughout the trial.
Due to this study being under review for publication, we are not able to provide more specific details outside of the medical Congress. However, these data continue to affirm our belief in the potential of both six and 12 week dosing of cytosine a clean for a wide demographic of smokers, who are at various stages of their quick.
Ernie.
Moving beyond the highly anticipated trial Readouts. Our team is also fully engaged in preparations for a cytosine acclaimed new drug application or NDA filing in the U S.
To lead the two lead and organized this process. We have recently hired a full time regulatory team member who possesses significant experience with NDA filings.
With a robust amount of data in hand, particularly non clinical we are be getting to draft select sections of the NDA, while we await final clinical data.
At this time I'd like to turn the call over to Jerry for a financial update.
Thanks, John .
As of December 31, 2022, the company's cash after equivalents short term investments and restricted cash were $24 8 million.
As compared to 18.2 as of September 32022.
The increase in cash over the prior period, what did you do a private placement, which closed in November 2022, providing incremental net proceeds of approximately $17 9 million.
As stated at the time of the financing.
We continue to believe our current cash balance is sufficient to provide runway until late 2023.
Now turning to our statement of operations.
The company incurred a net loss of $11 2 million for the.
Quarter ended December 31, 2022.
As compared to a net loss of $7 2 million for the same quarter of 2021.
Total operating expenses in the fourth quarter of 2022.
Increased to $10 9 million as compared to $7 1 million for the same quarter of 2021.
Operating expenses increased for the quarter ended December 31 2022.
As we fully enrolled in both the Orca two phase III trial and it could be one phase II trial we.
We anticipate our operating expenses to remain elevated during the first quarter of this year and then decline in the second quarter in line with the completion of both people history and what could be one trial.
As a reminder, approximately half the cost from the Orca one trial are expected to be funded through a grant from the NIH.
That concludes my financial remarks, I will now turn the call back to John .
Thanks Jerry.
To wrap up we made great strides in advancing cytosine are clean in 2022 months I had promised to be even busier and more exciting for achieve we will maintain focus on delivering top line results from two important trials during the second quarter of this year.
Continuing our preparations for the NDA and furthering partnering discussions once data is in hand.
Like many of you we have faith in the potential of our product to make a significant impact in the lives of smokers, who are struggling with nicotine dependence and searching for alternative solutions the impact of smoking affects millions each year, resulting in over 400000 deaths in the U S alone.
Approval of side of the Senate clean would introduce the first new treatment option in nearly 20 years with the potential to positively transform the lives of millions we remain committed to advancing our mission.
We look forward to sharing our data results with you soon and sincerely appreciate your ongoing support. Thank you for joining us today and we'd now like to open the line for questions operator.
Thank you well now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one at this time.
Press Star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing star one one moment. Please while we poll for questions. Our first question today is coming from Thomas Flaten from Lake Street Capital. Your line is now live.
Great. Thanks for taking the question John I was wondering if you could maybe map out for us what a realistic timeline, assuming no unexpected wrinkles from.
<unk> data readout on Orca three to NDA submission.
Yeah. Thanks Thomas.
As we outlined on the call today, we're looking at.
Both Orca V. One in Orca three results here in the second quarter and as we've guided our.
Or because the one is going to be the first that comes online.
And that's likely first half of the second quarter, if we're going to parse things out and then orca three coming in.
The second half of Q2, and I think once we get you know that's just topline data results.
And I will still need to get our the rest of the data pulled together behind the scenes as we kind of March things forward to N D. A but right now we're looking at first half of 2024 for NDA submission and that's something we'll continue to interrogate.
In terms of further refining those timelines.
Got it.
And then.
With respect to the debt you have coming due in December .
Particularly in light of everything that's happened over the last week or so with FCB any any thoughts on on your ability to maybe move that out to the I think the contract or the agreement allows for that to be bumped out of years, if I'm not mistaken and then your thoughts on that.
Yeah. So obviously the situation with SCB continues to evolve, but our what we know as of today is that you know all of our deposits first and foremost our 100% backstopped by the fed and the FDIC, which is a great result over the weekend are on the low.
An agreement in particular, yeah, we will have to have further discussions with the bank Ah as you rightly call out we do have the ability.
To extend the maturity by one year.
Based on our.
Discussions with the bank in an internal approvals, but that's something they have been open to and I think we will continue those dialogues and from everything we're hearing.
Including our early this week.
<unk> continues to operate as it did before the disruptions over the weekend.
So you know we haven't seen any interruptions in terms of our ability to access our cash in everything. We're hearing is that are on the credit side of the bank everything is proceeding as well. So I think we'll continue the discussions that have been ongoing oh with SBB previously.
And then one final one if I might and I know, we're we're a ways away from it but anything kind of critical path item with respect to our sole pharma being ready for a potential FDA inspection post NDA submission or are they are they you know.
Are they moving along your timeline or are they already ready just some sense of their status with respect to the new facility.
Okay.
Yeah, Great question. So we continue to work hand in hand, with so pharma are in the early part of this year, we've already completed a another mark F. D. A inspection of the facility out there and Sofia and so are they continue to make progress and we'll continue working with them.
M. As we March forward to an NDA submission and a likely FDA inspection. So that work will continue but we are encouraged by what we're seeing there are and will continue to work with them to make sure that they're ready for an FDA inspection down the road.
Excellent I appreciate you taking the questions. Thanks John .
Thank you as a reminder, that star one to be placed in the question queue. Our next question is coming from Michael Higgins from better Burger Pardon Me. Your line is now live.
Hey, guys. Thanks for taking the questions. Congrats on completing enrollment to studies that once I look forward to seeing the data.
Question for for you guys in Sydney for available since 2018, you've had an agreement with the FDA on servicing the cleanest pediatric study plan.
Since obviously <unk> has become more important as you have or could be one results coming up next quarter. Just curious if the agreement with the FDA on your pediatric plan has changed in any way if you still expect to get a six month extension following approval.
Yeah, Thanks, Michael I'll hand that one over to Cindy.
No. It has not changed in regards to approval and with her indication of smoking cessation.
If we get positive data with our V. One and we move forward with that as a possible additional indication I'm sure that that will have follow on discussion, but not for smoking cessation at this time.
Okay very good and a question for Jamie is available or John maybe you can help too.
Anything notable youre seeing in generic Chantix products out there he had incentives cleans likely entry. Thanks.
Yeah, Yeah, great question.
Okay I got that.
Got it.
Yeah, I was just going to say I, just as respect to generic sales.
I think we've been updating folks out over the course of 2022, we did see endo as year end earnings results our results and they had over 300 million of generic Chantix sales for year end 2022. So I think it continues to demonstrate just how robust this market.
Remains and that's with virtually no sales and marketing expenses there.
But they are deploying their just a pure substitution play.
And that's only about half of the the unit sales that Pfizer was making with Chantix before it was withdrawn. So I think overall you know we're encouraged from what we're seeing on the generic side and Jamie feel free to jump in with anything else you'd like to add.
No I think you covered it thanks John .
If I could just a quick follow up if.
The unit sales are roughly half of Pfizer's, where do you think patients are going to they're just not getting.
Getting the treatment that they did prior.
Yeah, I think our inclination is that when a pfizer was having issues with the manufacturing and carcinogen problem with Chantix. There was a number of docs that just frankly stopped writing it.
And I think.
Well, we have heard from Endo is that they are gonna be back out into the market with a bit of reminders that there is a product back available to see if they can start to penetrate those 50% that did drop off.
It was a manufacturing issue.
Interesting I appreciate it thanks guys.
Yeah.
Thank you next question is coming from Francois <unk> from Oppenheimer. Your line is now live.
Hey, John Thanks for taking the questions.
Just in terms of E cigarettes will be coming out first.
You talked about the mechanism of action, making you comfortable debt claims should work.
As well or at least should work and and E cigarette users.
In terms of odds ratio I guess the question is do you think it should work as well or any just any more color on the mechanism and why it should work in E cigarettes, especially given that that trial will read out first thank you.
Yeah. Thanks, Frank So I mean, just to remind everyone that the mechanism for cytosine a clean is specific to the nicotine receptors in the brain. So we do believe there should be broad applicability across.
Smoking vaping chewing tobacco news kind of any form of nicotine addiction, I think when we look at E cigarettes in particular.
You know I think it is difficult to triangulate exactly whether we should expect you know lower or higher odds ratios. There. This is our first foray into this.
<unk> you know what I think we often hear from our thought leaders and key opinion leaders around the difficulty.
Of getting off of these products.
I think you know our inclination is likely that it could be a bit more challenging just given.
He's an accessibility of of basically.
Consuming more nicotine in a simplified manner than what you see with traditional cigarettes.
But I think that's kind of the beauty of this trial, yeah, it'll give us a affirm best baseline of.
How we would need to power future trials in this category. So no I think you know.
Any any activity here is going to be positively received and I think you know for over an odds ratio of two <unk>, which.
Which is what we see with existing smoking cessation products as kind of the minimum entry points to think anything there or above would be considered a win in this category.
Okay. That's helpful and then maybe on the commercial front.
In terms of you know, it's a very large market you talked about partnering discussions but is there any way to attack this market by yourself or you know, it's like well I guess, what I'm asking is are the prescribers are kind of concentrated in certain areas where.
Or is it a certain amount of prescribers actually do most of the market and it's it's approachable or it's just too big to take gone along.
Yeah. Thanks for the question Frank So you know our belief has always been that this product are you know is best suited in the hands of our pharma large biotech group that already has an existing primary care footprint in place you know and I think that's something that we have been in discussions with our potential partners.
And that will continue with with data we think that are the datasets in Q2, we're gonna be instrumental in furthering those discussions with that being said you know if this is in our hands.
As we get to market, we do see a real opportunity to move this ahead.
An efficient cost efficient manner.
And there is I think as you're alluding to.
Quite a bit of efficiency at the top three deaths aisles. So if we look at kind of this category overall.
30% are at least looking at historical Chantix scripts were being written by about <unk> <unk>.
7% of the physicians in this category of about 11000, and we think that and addressing them and addressable segment to go after them and just looking at that alone would be a three to 400 million dollar opportunity before you know reinvesting in expanding beyond that so so we do think.
There is a path, but at the end of the day you know we think this is best suited in the hands of a large pharma.
Understood Alright, thank you Alastair.
Thank you we reached end of our question and answer session I would like to turn the floor back over to management for any further or closing comments.
Great. Thanks, Kevin and thanks for everyone for joining us today and we appreciate all the support over 2022, we're very excited about what's ahead of us and we look forward to bringing further updates as we move into the second quarter and through both Orca V. One and Orca three top line results.
So thanks, everyone for joining us today.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.
Yeah.