Achieve Life Sciences Inc. Q1 2023 Earnings Call
Ladies and gentlemen, thank you for your patience. Please remain on the line. Your conference will begin momentarily again, we do appreciate your patience. Please remain on the line your conference will begin shortly thank you.
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Good day, ladies and gentlemen, and welcome to the achieve life Sciences first quarter 2023 earnings conference call. All lines have been placed on a listen only mode and the floor will be opened for questions and comments following the presentation.
If you should require assistance throughout the conference. Please press star zero on your telephone keypad to reach a live operator.
At this time it is my pleasure to turn the floor over to your host Nicole Jones Investor Relations at CG capital Ma'am the floor is yours. Thank.
Thank you operator, and thank you to everyone for joining the call.
J P. J, we have John <unk>, 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 projected please.
Please refer to achieve document 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 thank you to all for joining us.
Just a few weeks ago, we reported positive top line results from our groundbreaking phase two <unk> clinical trial.
The first ever randomized placebo controlled trial for vaping cessation.
So I just cynically and treatment resulted in a statistically significant benefit for nicotine E cigarette cessation compared to placebo.
Results for the primary endpoint showed that study participants who received <unk> were approximately three times more likely to quit vaping compared to those who received placebo.
It is clinically and also continued to demonstrate exceptional safety and Tolerability. We are very pleased with another win for <unk> and for people, who are seeking options to overcome their nicotine dependence.
Nicotine cigarette use continues to be a growing concern with recent reports for CDC, indicating vaping rates in the U S are increasing.
Data recently published indicate that roughly 11 million adults and $2 5 million High school and Middle School students use E cigarettes debate nicotine.
The CDC indicated in recent weeks the percentage of used has increased by two 5%.
As this segment of nicotine use continues to grow and increasing number of people who use E. Cigarettes may start to look for solutions to quit and currently there are no medications, specifically indicated for bathing cessation.
We completed a survey and people are using E cigarettes, and found that 73% of participants desire to quit vaping in the next three to 12 months and the overwhelming majority would be interested in using a naturally derived prescription treatment to help them do so.
Based on this unmet need for treatments the Swift enrollment we observed in the Orca one trial and the statistically significant results from the recent top line data announcement, we believe that <unk> has a unique opportunity to become a solution to help address this growing vaping epidemic.
To touch more on the recent clinical data I will now hand, the call over to Cindy to go through the Orca one results in more detail.
Thanks, John .
As mentioned the Oracle <unk> topline results that we shared last month showed a statistically significant benefit for <unk> as a treatment for nicotine vaping cessation, even though this phase II proof of concept study was not powered to do that.
Similar to our phase III designs or it can be one evaluated three milligram side of the Senate Glenn dose three times daily for 12 weeks.
Or it could be one randomized subjects at five clinical sites in the U S.
In a two to one ratio such that a total of 160 subjects were randomized with 107, receiving <unk> for 12 weeks and 53 receiving placebo.
It can be one enrollment was completed in approximately four months.
Average age of <unk> subjects was 34 and all of them wanted to quit vaping on this study.
Approximately half of the subjects had previously tried to quit vaping by self attempt methods.
Subjects were stratified based on past smoking history, with 72% identifying as former a past smokers.
Dr. Nancy <unk> of Harvard Medical School served as the primary investigator of the study and I'll give you one was supported via grant funding from Nader and the NIH.
The primary endpoint results from Vaping Sortation showed subjects, who received <unk> had two six times higher odds or likelihood to quit vaping. During the last four weeks of treatment compared to subjects who received placebo.
This endpoint was statistically significant with a P value of zero point zero sweetheart.
The four weeks continuous savings cessation rate during weeks nine through 12 with 31, 8% precise senigon treated subjects compared to 15, 1% for those who received placebo.
Importantly, <unk> benefit was also observed across all clinical trial sites and demographics, such as participant age gender race and whether they had been passed smokers or not.
Regarding safety.
<unk> was very well tolerated with 59% of subjects, who received quite a cynical and reporting adverse events compared to 54, 7% of subjects in the placebo arm.
Adverse events were as expected mainly mild to moderate and there were no serious adverse events reported during the study.
As these are topline results, we are continuing to analyze the data and look forward to providing additional details on our findings as we learn more.
I will now turn the call back over to John .
Thank you Cindy.
Our next key milestone is rapidly approaching as we eagerly await results from our second NDA, enabling phase III study, which we expect to report later this quarter. The Orca three trial mirrors. The design of the previously reported and highly successful Orca two trial.
Three is evaluating the efficacy and tolerability of three milligrams cytosine, a clean dosed three times daily for either six or 12 weeks compared with placebo.
Chemical verified continuous abstinence is the primary endpoint and similar to Orca two will be evaluated during the last four weeks of treatment.
Each arm will be compared to independently to the placebo arm and success will be determined if either or both of the cider cynically and treatment arms show, a statistical benefit as compared to placebo.
Our efforts are now focused on preparing for the data readout later this quarter.
And continuing our preparations to support a new drug application or NDA for <unk> in the U S.
At this time I will now turn the call over to Jerry to review, our financial results for the quarter.
Thanks, John looking at our statement of operations the company incurred a net loss of $9 million for the quarter ended March 31 2023.
As compared to a net loss of $7 6 million for the same quarter of 2022.
Total operating expenses in the first quarter of 2023.
Increased to $8 6 million as compared to $7 2 million for the same quarter of 2022.
Operating expenses were higher for the quarter ended March 31, 2023, as both the Orca three phase III trial, and the Orca one phase II trial fully enrolled during the quarter.
And had their last subject last visit completed in March 2023.
As compared to the same period in 2022.
Only our phase III <unk> two was fully enrolled.
We anticipate our operating expenses to decline in the second quarter in line with the completion of the two clinical studies.
As of March 31, 2023, the Companys cash cash equivalent and restricted cash were $16 6 million.
As compared to 24 eight as of December 31, 2023.
We believe our current cash balance is sufficient to provide us with runway into late 2023.
I'd now like to turn the call back over to John .
Thanks Jerry.
A final highlight from the first quarter before we conclude today's call.
In March we announced a refresh to our board of directors to support the future direction of the company.
We're pleased to welcome Mr. Stuart duty, Mr. Thomas King and Mr. Tom sell it to the board.
They each bring extensive leadership in the pharmaceutical and life science industries across capital markets strategic transaction sales and marketing as well as manufacturing.
We would also like to thank Mr. Dan Joseph Dr. Martin Mattingly and Mr. Jay Moyes for their years of service and strategic guidance to achieve as it will not be standing for reelection at our upcoming annual shareholder meeting on June seven.
We have achieved many milestones within the first quarter of 2023, and we expect to continue this exciting year with the upcoming Orca three readout. We appreciate your continued support and I will now turn the call over to the operator for questions.
Thank you the floor is now open for questions. If you do have a question you May press star one on your telephone keypad at this time. If your question has been answered you could remove yourself from the queue by pressing one.
Again, ladies and gentlemen at Star one to ask a question and our first question comes from Thomas Flaten from Lake Street Capital Go ahead Thomas.
Great I appreciate you guys, taking the questions John .
John our city with respect to completing Orca three and then moving forward could you give us some sense of what you think realistic timing for an NDA submission would be and if there are any critical path items, there that we should be aware of it.
NDA meeting with FDA or anything like that any any preclinical data that you still need to generate.
Thanks for the question Thomas I'm going to hand, this one over to Cindy.
Sure. So we've been waiting for our Q3 results with Argus II results now we can coordinate a pre NDA meeting with FDA.
We're going to target that for this year timing, though we would need to request. The meeting so we kind of figure is going to be.
At the end of quarter three year quarter, three at some time, but we'll find that out when we get that scheduled.
We actually have three phase one studies for finishing up things that we need for the NDA like.
PK study on renal impairment, we actually have another PK study looking at steady state concentrations.
Concentrations.
With the three milligram three times, a day and also finishing up.
<unk> study. These are all things that are required in the NDA and all of them will be completed by the end of this year.
So we're looking at the first half of next year at some time for the NDA coming together.
Excellent.
John any any update on the potential for debt refinancing because I know that debt repayment is looming at the end of the year as well.
Yes, Thanks Thomas.
On the <unk>.
<unk> side, so we've been in dialogue with the folks that are at FCB, formerly SUV now citizens Bank and we do think there is a path towards getting some.
Im movement on an extension or refi of that facility. So nothing to announce today, but we do think at least the discussions we've had so far are positive on that front.
And then just one quick final one maybe for Jerry there was.
A bit of a sequential uptick in G&A I was curious if there are any one timers in there stock based comp or bonuses or anything like that.
Gary you want to take that one.
Oh, yes, sorry, I was just on mute there.
Yes. It was just the one time stock based comp grants that we have annually at the beginning of January .
Excellent I appreciate it guys. Thanks, so much.
Thanks Thomas.
Thank you and our next question comes from Francis Bruce Bruce.
Oppenheimer go ahead.
Thank you for taking the question.
The first one here in terms of the.
Work at three.
We're expecting to read out this quarter I was just wondering any any.
Thoughts on what you would expect maybe odds ratio wise is this something where we should compare it to the data that you have shown in.
The previous phase III Orca trial.
Yes.
Yes. Thanks for the question Frank I think in terms of odds ratios, yes, I don't think we have a firm expectation in terms of what.
<unk> might look like and I think when we look at the market today, and where odds ratios fit for the existing products that are in the range of two to three when you go kind of at the low end of NRT to Varenicline at the higher end. So I think anything in that range or above we see as being a win in the.
Orca program, so far at least for smoking cessation, we've seen odds ratios between five and.
And eight we've exceeded kind of those benchmark requirements, but from the.
The discussions we've had with the key opinion leaders in this space anything over an odds ratio of two is going to be a meaningful clinical benefit in this setting.
Okay. That's helpful. And then in terms of manufacturing is where we're getting to that stage here any.
Can you give any color on what's going on on the manufacturing side any.
Obstacles to overcome or just the process, where you stand right now thank you.
On the CMC side, so we've been working hand in hand, with our colleagues over at so pharma, who will be the manufacturers of record on that front. So the focus has been I would say in two parallel tracks. One is just FDA inspection readiness. So that's something we will continue.
To focus on as we March forward to.
<unk>, an NDA filing.
And then the other track would be preparations on supply chain getting registration batches up at on stability, and then making sure kind of all the way through the supply chain through final packaging assorted and those activities are all in process as well.
Okay, Great and then lastly, maybe if I can ask you about vaping, sorry, if you mentioned it but.
Steps going forward is this kind of a label expansion, how many trials, where we need to potential potentially get to approval here on the vaping side. Thank you.
Yeah.
Yes, Thanks Frank.
The vaping side as we indicated.
A couple of weeks back when we released the Orca one results our belief currently is that.
A single Phase III trial is likely what the FDA would expect for approval in this indication that would be under the guise of already being on the market are having an approval for smoking cessation. So we're effectively just expanding the indication and I think by having a statistical significant result.
<unk> from Orca would be one that reinforces our belief.
Thank you.
Yeah.
And our next question comes from Michael Higgins from Latin Berg Thalmann go ahead Michael.
Thanks, operator, good evening guys. Congrats on the progress with that it's been a clean including where it could be one we're certainly eager here to see the second phase III <unk> III here in Q2.
Question on the on Orca three.
Can you give us any sense for the timing here in Q2 as investors start to look out and look at the calendars.
When might we see that that data come through.
Yeah.
The timing for Orca three we've guided to the second quarter and I think.
The closest we can get to firming that up would be second half of this quarter.
Anytime after kind of the middle of May.
That trial result would be in play.
Okay. That's helpful. Also on the Phase III Cindy question for you on the 24 week data that was presented and tea.
You noted 82% compliance at 24 weeks curious how that compares to Brendan clean or your expectations for et cetera, It clinically and both orca pivotal thanks.
Yes, I think compliance is actually quite good I think it may be a little higher than what Brian Ocwen reported.
It obviously is.
Is probably a component of being in a clinical trial as well as you have the behavioral support component that continues actually throughout the follow up period.
That's helpful and then one on vaping.
Honestly, that's an area of increased interest across society curious in your conversations with investors, how theyre seeing Beijing relative to their interest in cigarette smoking.
Yes interesting question I think.
The bread and butter of what we've been doing has been on the smoking cessation side.
And I think people are beginning to appreciate.
What we just validated here with Orca would be one which has the potential to expand in.
<unk> segment that currently has no available treatment options and is growing we just saw the latest update of E. Cigarette users here in the U S increase.
About $9 million up to $11 million. So this is a growing segment with no available options and we think this is the right course to draw it as we move ahead.
That's resonated quite strongly as we've.
Been able to socialize the results.
Yeah.
Look forward to seeing Oracle III I appreciate the question. Thanks, guys.
Thanks, Michael.
Okay on to ask a question on the phone it is star one and our next question comes from Jon Vander milestone from <unk>.
<unk> go ahead.
Thank you and good afternoon, Jonathan Gary.
As you guys are going into the final stages are there any preparations that youre, making for commercialization. Our belief is that youre going to work with a partner to do that but I know, sometimes that it makes sense to reach out and work on some perhaps labeling packaging pricing or outreach to key stakeholders.
And in order to kind of craft.
Work with the partner also help your negotiating position is that something that you are planning to do or makes sense to do.
Yeah. Thanks for the question John on the commercialization prep one of the key areas as supply chain, making sure that we've got all the blocking and tackling together all the way through final packaging and into potential distribution.
So again, we're in the early phases of a lot of that planning to make sure Thats on track I would say the other piece that we're looking at to make sure. It is moving ahead would be on the market access side now we know that this is a very favorable category given the affordable care Act mandates that all FDA approved smoking cessation.
<unk> be covered.
But theres still a fair amount of work that's required to make sure that we can get all the pieces in place. So we're we're ready to move ahead with those contracting discussions. So I'd say those are the two primary areas of focus.
Okay.
Regarding labeling whats the timeline lift for that.
Discussions with the FDA in preparation there.
On the labeling front, so we've already began.
Working with some outside advisers on what the label would look like so that's early days Orca three will feed into that so we'll need that in hand, but.
But that's an important piece that we will submit with the NDA. So the bulk of that work will be done over the course of 2023.
Got it and finally for me any work done on our brand name yet.
Directions in terms of how are you going to essentially market Paul.
Sorry was the question around a brand name.
Yes, exactly is that anything you've worked on yet I mean, I know it's probably.
A challenging thing to do with all the other names out there, but any any work down there yet any indications were that like that.
Yes, we have been through an exercise to hone in on our brand name and we did get preliminary clearance from FDA on that.
Wouldn't get final approval until it's submitted with NDA.
But we have gone through that process. So that is another piece at least on the commercialization front that we're ready for.
Great.
Thank you Dana.
Thanks, John .
And that appears to be the last question at this time I would now like to turn it back to management for any closing remarks.
Thanks, operator, and thanks, everyone for joining us today.
Been an exciting first portion of 2023, and we look forward to.
Rejoining you soon with results from the Orca three trial later this quarter. So I appreciate the continued support.
We will talk to you soon thanks.
Yeah.
Thank you. This does conclude today's conference. We thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
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