Q4 2023 Achieve Life Sciences Inc Earnings Call

Greetings and welcome to the achieve life Sciences fourth quarter and year end 2023 earnings conference call and webcast. At this time all participants are in a listen only mode.

Operator: Greetings. Welcome to the Achieve Life Sciences fourth quarter and year-end 2023 earnings conference call and webinar. At this time, all participants are in a listen-only mode.

Nicole P. Jones: A question-and-answer session will follow the formal presentation. As a reminder, this conference is being broadcast. I would like to hand the call over to Nicole Jones for diversity relations. Thank you. Thank you, Operator. Good afternoon, everyone, and thank you for joining us today.

A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

I would like to hand, the call over to Nicole Jones Investor Relations. Thank you you may begin.

Nicole P. Jones: Thank you operator, good afternoon, everyone and thank you for joining us today.

Nicole P. Jones: From Achieve Life Sciences, we are joined by John Bencich, Chief Executive Officer, Dr. Cindy Jacobs, President and Chief Medical Officer, and Jerry Wan, Principal Accounting Officer. Management will be available for a Q&A session following today's prepared remarks. 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.

Nicole P. Jones: The cheese Lifesciences, we were joined by 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 session. Following today's prepared remarks I'd.

Nicole P. Jones: 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.

John A. Bencich: Please refer to Achieve documents available on our website and filed with the SEC concerning factors that may affect the company. At this time, I will turn the call over to John. Thank you, Nicole, and thank you for joining us as we discuss Achieve's financial results for the fourth quarter and year ended 2023, along with providing key updates on the Cytosine Clean Development Program. 2023 was a transformative year for Achieve, marked by significant clinical, regulatory, and financial milestones. Our commitment to developing cytosineicline for smoking cessation and nicotine dependence has yielded remarkable progress, and we're excited for the year ahead. During 2023, we completed and announced results from the Phase III ORCA-III and Phase II ORCA-V1 trials, which have been instrumental in demonstrating cytosinocline's potential for treating nicotine dependence. The ORCA-3 trial again confirmed the promise of cytosineclean for smoking cessation, with significant efficacy and tolerability benefits observed in treated patients.

Nicole P. Jones: Please refer to achieve documents available on our website and filed with the SEC concerning factors that may affect the company.

Nicole P. Jones: At this time I will turn the call over to John.

John: Thank you Nicole and thank you for joining us as we discuss achieved financial results for the fourth quarter and year ended 2023, along with providing key updates on the status of the claim development program.

John: 2023 was a transformative year for achieve marked by significant clinical regulatory and financial milestones our commitment to developing cytosine it clean for smoking cessation and nicotine dependence has yielded remarkable progress and we're excited for the year ahead.

John: During 2023, we completed and announced results from the phase III Orca three and.

John: In phase two or could be one trials, which have been instrumental in demonstrating side a set of claims potential for treating nicotine dependence.

John: The Orca three trial again confirmed the promise of cytosine it clean for smoking cessation with significant efficacy and tolerability benefits observed in treated patients.

John A. Bencich: Furthermore, the ORCA V1 trial highlighted cytosineclean's effectiveness in treating nicotine dependence for vaping cessation, marking a pioneering step in helping to address this emerging public health challenge where currently, over 11 million adults and an additional 2.1 million youth have reported vaping in the United States alone. Late last year, we conducted our pre-NDA meeting with FDA to review NDA submission requirements and timings. During the meeting, agreement was reached on many of the expected requirements, including that we have sufficient data sets from an efficacy perspective to proceed with submission. However, at that time, the FDA indicated that they would need additional safety exposure data beyond 12 weeks to assess the long-term exposure risk for patients receiving multiple courses of treatment over a lifetime due to the repetitive and chronic nature of smoking cessation attempts.

John: Furthermore, the Orca one trial highlighted cytosine it claims effectiveness in treating nicotine dependence for vaping cessation, marking a pioneering step in helping to address this emerging public health challenge in which currently over 11 million adults and an additional $2 1 million youth have reported vaping and.

John: The United States alone.

John: Late last year, we conducted our pre NDA meeting with FDA to review NDA submission requirements and timing.

John: During the meeting agreement was reached on many of the expected requirements, including that we have sufficient datasets from an efficacy perspective to proceed with submission.

At that time, the FDA indicated that they would need additional safety exposure data beyond 12 weeks to assess the long term exposure risks for patients receiving multiple courses of treatment over a lifetime due to the repetitive and chronic nature of smoking cessation attempts.

John: In February of this year, we reached agreement with the FDA that are.

John A. Bencich: In February of this year, we reached agreement with the FDA that a single open-label study would meet the requirements for long-term cytosine to clean exposure data, which clears the path for driving forward the cytosine to clean program towards an NDA submission. I will now turn the call over to Cindy to go into further detail on our study design and planned initiation of this open-label safety study, which we are calling the ORCA-OL Cindy?

John: A single open label study would meet the requirements for long term cytosine, a clean exposure data, which clears the path for driving forward the cider Sena clean program towards an NDA submission.

John: I will now turn the call over to Cindy to go into further detail on our study design and planned initiation of this open label safety study, which we're calling the Orca O L trial Cindy.

Cindy Jacobs: Thanks, John. The ORCA-OL study will be a single-arm, open-label study that will administer cytosineclin treatment with our novel 3-milligram TID administration to subjects who have already participated in our Phase II and Phase III cytosineclin trials, either for smoking or vaping cessation. The primary objective of the study will be to obtain longer-term cytosineclin exposure safety data for cytosineclin treatment for up to 1 year. FDA was clear that the long-term exposure safety data they require is cumulative exposure for the periods of 6 months and 1 year. Because this open-label study will enroll subjects who participated in our previous ORCA studies, and two-thirds of them have already received up to 6 or 12 weeks of cytosineclin treatment, this will allow for faster collection of cumulative exposure data to support the NDA submission.

Cindy Jacobs: Thanks, John you are Oh, well study will be a single arm open label study.

Cindy Jacobs: Administered side as cynical and treatment with our novel three milligram Tid administration.

Cindy Jacobs: Subjects, who have already participated in our phase two and phase III sided silicon trials, either for smoking or vapor cessation.

Cindy Jacobs: The objective of this study will be to obtain longer term sided silicon exposure safety data first of all it is cynical on treatment for up to one year F. D. A was clear that the long term exposure safety data they require us to me illative exposure for the periods of six months and one year.

Cindy Jacobs: <unk> it.

Cindy Jacobs: This open label study will enroll subjects, who participated in our previous Oracle studies and two thirds of them have already received up to six or 12 weeks' sided silicon treatment. This will allow for faster collection of teammate wages exposure data to support the NDA submission.

Cindy Jacobs: Based on our discussions with FDA. We have agreed to include safety data on a minimum of 300 subjects exposed decided silicon for a cumulative period of six months at the time of NDA submission.

Cindy Jacobs: Based on our discussions with FDA, we have agreed to include safety data on a minimum of 300 subjects exposed to cytosineglin for a cumulative period of 6 months at the time of the NDA submission, and then, prior to approval of the NDA, we will submit safety exposure data on at least 100 subjects with cumulative exposure for one year. This agreement follows the general ICH E1 guidance for products with chronic or repeated intermittent use for longer than six months and for the treatment of non-life-threatening diseases.

Cindy Jacobs: And then prior to approval of the NDA that we will submit safety exposure data on at least 100 subjects with cumulative exposure for one year.

Cindy Jacobs: This agreement follows the general I C. H E. One guy wins for products with chronic repeated intimate news for longer than six months and the treatment of non life threatening diseases.

Cindy Jacobs: We anticipate initiating the ORCA OL trial in the second quarter of this year at approximately 30 clinical trial locations in the U.S., all of which participated in our prior ORCA studies. All of these clinical sites have now been engaged and are actively conducting outreach to potential participants. As we have previously stated, there were more than 1,700 subjects who participated in the prior ORCA studies, with over 1,100 being previously treated with cytosineclin in those trials.

Cindy Jacobs: We anticipate initiating Orca O L trial in the second quarter of this year at approximately 30 clinical trial locations in the U S. All of which participated in a prior Oracle studies all of these clinical sites have now been engaged and are actively conducting outreach to potential.

Cindy Jacobs: All participants.

Cindy Jacobs: We have previously stated there were more than 1700 subjects, who participated in the prior Orca studies with over 1100 that were previously treated with site as silicon in those trials. We currently have enrolment in the protocol at up to 650 subjects to ensure that we have.

Cindy Jacobs: We currently have enrollment in the protocol at up to 650 subjects to ensure that we have sufficient subjects to quickly meet the long-term exposure for six months and, importantly, one year. We will obviously be monitoring enrollment and discontinuation rates closely as the study progresses to make a final determination on study enrollment. We have completed contracting and onboarding with our key contract partners and vendors to execute the ORCA OL study as quickly and efficiently as possible. These include our CRO, data management, lab services, safety monitoring, and drug distribution partners.

Cindy Jacobs: Subject to quickly meet the long term exposure for six months and importantly, one year.

Cindy Jacobs: We'll obviously be monitoring enrollment and discontinuation rates closely as the study progresses to make a final determination on study enrollment.

Cindy Jacobs: We have completed contracting and onboarding with our key contract partners and vendors to execute the ortho O L study as quickly and efficiently as possible.

Cindy Jacobs: These include our C. R O data management lab services safety monitoring and drug distribution partners and we are on track to begin enrollment in the second quarter of this year and based on our current expectations and believe we will be in a position to submit an NDA in the first half of 'twenty 'twenty.

Cindy Jacobs: And we are on track to begin enrollment in the second quarter of this year. And based on our current expectations, I believe we will be in a position to submit an NDA in the first half of 2025. Although the study objectives are specific to assessing safety results, such as the incidence of serious adverse events over exposure time, we will also assess cytosinical inefficacy with longer-term exposure. These assessments will be for observation purposes only and are not an FDA requirement or an endpoint to determine the success of the trial.

Cindy Jacobs: Five.

Cindy Jacobs: Although the study objectives are specific to assessing for safety results such as the incidence of serious adverse events over expose your time, we will also assess for sided silicon efficacy with longer term exposure.

Cindy Jacobs: These assessments will be for observation purposes, only and are not an F D a requirement or an endpoint to determine success of the trial.

Cindy Jacobs: In addition to finalizing NDA submission requirements for the smoking cessation indication, we will continue our discussions with FDA regarding cytosineglin's role as a treatment for e-cigarette cessation. We anticipate conducting our end of Phase 2 meeting and finalizing a Phase 3 protocol this year. We will be discussing the adequacy of a single Phase 3 trial for obtaining a label expansion for an e-cigarette cessation indication. Since the Phase II ORCA V1 trial received grant support from NIH and NIDA, we will continue to explore non-dilutive funding support as we continue to advance our Phase III planning. I will now turn the call back over to John. Thanks, Cindy.

In addition to finalizing NDA submission requirements for the smoking cessation indication, we will continue our discussions with FDA regarding sided finnegans role as a treatment for E cigarettes cessation, we anticipate conducting our end of phase two meeting and finalizing our phase III Proto.

Cindy Jacobs: Called this year, we will be discussing the adequacy of our single phase III trial for obtaining a label expansion for an E cigarette cessation indication.

Cindy Jacobs: Since the change to our V. One trial received grant support from NIH and Cnida, we will continue to explore non dilutive funding support as we continue to advance our phase III planning.

Cindy Jacobs: I will now turn the call back over to John John.

John: Thanks Cindy.

John A. Bencich: In connection with the FDA's clarity on NDA requirements, we bolstered our financial strength significantly in February, announcing an equity financing of up to $124.2 million in gross proceeds that includes initial upfront funding of $60 million and up to an additional $64.2 million upon exercise of milestone-driven warrants. This initial funding positions us to advance our clinical initiatives, including the ORCA OL study and targeted NDA submission in the first half of 2025, all while ensuring a robust balance sheet as we continue strategic partnership discussions. I will now turn the call over to Jerry, who will provide additional details on the financing and an overview of our latest financial results. Thank you, John. Good afternoon, everyone.

John: In connection with the F D. A clarity on NDA requirements, we bolstered our financial strength significantly in February announcing an equity financing of up to $124 2 million in gross proceeds that includes initial upfront funding of $60 million and up to an additional $64 2 million upon exercise of miles.

John: Stone driven warrants.

John: This initial funding positions us to advance our clinical initiatives, including the Orca O L study and targeted NDA submission in the first half of 2025, all while ensuring a robust balance sheet as we continue strategic partnership discussions.

John: I'll now turn the call over to Jerry who will provide additional details on the financing and an overview of our latest financial results.

Jerry: Thank you John.

Good afternoon, everyone I would like to first provide an update on our recent financing and cash position and then review our fourth quarter results.

Jerry Wan: I would like to first provide an update on our recent financing and cash position and then review our fourth quarter results. As of December 31, 2023, the company's cash, cash equivalents, and restricted cash totaled $15.6 million. Down from $24.8 million as of December 31, 2022, although subsequent to the end of the fourth quarter. We announced a registered direct offering of common stock and a concurrent private placement of warrants worth up to $124.2 million that closed earlier this year. This transaction included initial upfront gross proceeds of $60 million and up to an additional $64.2 million upon exercise of milestone-driven warrants. After giving effect to the February 2024 equity financing, The company's pro forma cash, cash equivalents, and restricted cash as of December 31st, 2023 would have been approximately $71.8 million.

Jerry: As of December 31, 2023, the company's cash cash equivalents and restricted cash totaled $15 6 million.

Jerry: Down from $24 8 million as of December 31, 2022.

Jerry: Subsequent to the end of the fourth quarter.

Jerry: We announced the registered direct offering of common stock.

Jerry: The concurrent private placement of warrants worth up to $124 2 million that closed earlier this month.

Jerry: This transaction included initial upfront gross proceeds of $60 million and up to an additional $64 2 million upon exercise of milestone driven warrants.

Jerry: After giving effect to the February 2024 equity financing the.

Jerry: The company's pro forma cash cash equivalents and restricted cash as of December 31, 2023 would have been approximately $71 8 million.

This equity financing was key for the business and we were pleased with the support of new and existing fundamental health care investors, such as propel bio not to holler and Franklin Templeton to name a few.

Jerry Wan: This equity financing was key for the business, and we were pleased with the support of new and existing fundamental healthcare investors, such as Propel Bio, Nantahala, and Franklin Templeton, to name a few, as well as strategic investor, SoFarm. Proceeds from the offering will be used to fund the clinical development of cytosine accline, including the upcoming Orca OL clinical trial, which is expected to be initiated in the second quarter of this year, as well as the anticipated NDA submission in the first half of 2025. It will also be used to fund other cytosine cleaning related research and clinical development activities, and for working capital and general corporate purposes. We expect that the initial net proceeds from the financing will fund us into the second half of 2025, including the potential repayment of our outstanding debt obligation under a contingent convertible term loan.

Jerry: As well our strategic Investor So pharma.

Jerry: Proceeds from the offering will be used to fund the clinical development of cider cynically.

The upcoming Oracle O L clinical trial, which is expected to be initiated in the second quarter up this year.

Jerry: As long as the anticipated NDA submission in the first half of 2025.

Jerry: It will also be used to fund other citizen Mcqueen related research and clinical development activities and for working capital and general corporate purposes.

Jerry: We expect that the initial net proceeds from the financing.

Jerry: You will find us into the second half of 2025.

Jerry: Including the potential repayment of.

Jerry: Our outstanding debt obligations.

Jerry: They are a contingent convertible term loan.

Jerry: If the milestone warrants issued as part of the recent financing are exercised in full we would anticipate these proceeds to extend runway into 2026 and through potential approval. It looks like the cynically the United States.

Jerry Wan: If the milestone warrants issued as part of the recent financing are exercised in full, we would anticipate these proceedings, to extend the runway into 2026 and through potential approval of cytosineclean in the United States, with respect to our statement of operations. Total operating expenses for the fourth quarter and year ended December 31, 2023, were $4.4 million and $27.3 million, respectively. The net loss for the fourth quarter and year ended December 31st, 2023 was $5.5 million and $29.8 million, respectively.

Jerry: With respect to our statement of operations.

Jerry: Total operating expenses for the fourth quarter and year ended December 31, 2023 were $4 4 million and $27 3 million respectively.

Jerry: Net loss for the fourth quarter and year ended December 31, 2023 was $5 5 million and $29 8 million respectively.

None: That concludes my portion of the call.

None: Ill turn the call back over to John.

John: Thank you Jerry.

John: It's certainly been an eventful and exciting start to the year. In addition to finalizing NDA plans with FDA and completing the financing to ensure we have adequate resources to complete the development of cytosine it clean.

John: We were privileged to deliver three presentations at last week's society for research on nicotine and tobacco annual meeting.

John A. Bencich: That concludes my portion of the call. I'll now turn the call back over to Jerry. Thank you, Jerry. It has certainly been an eventful and exciting start to the year.

John: Data from our completed phase III and phase II trials were shared with the prestigious audience of nicotine treatment specialists, and researchers who share our commitment and dedication to finding new solutions to address nicotine dependence.

John A. Bencich: In addition to finalizing NDA plans with FDA and completing the financing to ensure we have adequate resources to complete the development of cytosine A clean, we were privileged to deliver three presentations at last week's Society for Research on Nicotine and Tobacco Annual Meeting. Data from our completed Phase III and Phase II trials were shared with the prestigious audience of nicotine treatment specialists and researchers who share our commitment and dedication to finding new solutions to address nicotine dependence. Cindy presented data highlighting our impressive results from the Phase 3 ORCA 3 trial, which was consistent and reinforced our findings from the Phase 3 ORCA 2 trial. Dr. Nancy Rigotti, an ORCA primary investigator and professor of medicine at Harvard Medical School, reviewed findings from the Phase II ORCA V1 trial for vaping cessation.

John: Cindy presented data highlighting our impressive results from the phase III Orca three trial, which was consistent and reinforced our findings from the phase III Orca two trial.

None: Doctor Nancy regarding <unk>, and Oracle primary investigator and professor of Medicine at Harvard Medical School reviewed findings from the phase two or could it be one trial for vaping cessation.

None: Additionally, we delivered a presentation highlighting findings from our post trial patient experience survey.

None: Which provided insights directly from a small sample of participants in the orca two in Orca three trials, which showed high levels of reported smoking abstinence reductions in both cigarettes consumed and cravings for smoking and a strong willingness to recommend cytostatic clean to other smokers looking to quit.

None: If approved by FDA.

None: Importantly, almost three quarters of respondents felt the side effects were manageable or that they experienced very few side effects. We continue to believe this is one of the key differentiating benefits of cytosine acclaim as we no side effects remain the key reason that many smokers are not compliant with or are unwilling to take.

John A. Bencich: Additionally, we delivered a presentation highlighting findings from our post-trial patient experience survey, which provided insights directly from a small sample of participants in the ORCA-2 and ORCA-3 trials, which showed high levels of reported smoking abstinence, reductions in both cigarettes consumed and cravings for smoking, and a strong willingness to recommend cytosine to other smokers looking to quit if approved by FDA. Importantly, almost three-quarters of respondents felt the side effects were manageable or that they experienced very few side effects. We continue to believe this is one of the key differentiating benefits of cytosinuclein. As we know, side effects remain the key reason that many smokers are not compliant with or are unwilling to take currently available medication. As I wrap up my remarks, I would like to express my appreciation for your continued support and for the collaborative and ongoing efforts of our trial participants and their healthcare providers at our trial sites. So many of us have been personally touched by the devastating consequences of smoking and remain steadfast in our belief that cytosinuclein can truly make a profound impact to help the millions of individuals who have not seen any treatment advances in almost twenty decades.

Currently available medications.

As I wrap up my remarks, I'd like to express my appreciation for your continued support and for the collaborative and ongoing efforts of our trial participants and their health care providers at our trial sites.

None: So many of us have been personally touched by the devastating consequences of smoking and remain steadfast in our belief that cytosine a clean can truly make a profound impact to help the millions of individuals who have not seen any treatment advances in almost two decades.

None: Our priorities for the balance of this year remain clear.

None: Complete the Orca O L study.

None: <unk> NDA submission preparations.

None: Finalize the path forward for expansion into E cigarette cessation.

None: And continue productive dialog with prospective commercial partners.

None: Thank you again for joining us today, and we will now open the line for questions.

None: Thank you at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

None: A confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.

None: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star.

None: And one moment, while we poll for questions.

None: Okay.

And our first question comes from the line of Thomas Flaten with Lake Street Capital. Please proceed with your question.

Operator: Our priorities for the balance of this year remain clear. Complete the Orca OL study. Continue NDA Submission Preparations. Finalize the path forward for expansion into e-cigarette cessation, and continue productive dialogue with prospective commercial partners. Thank you again for joining us today, and we will now open the line for questions.

Thomas Flaten: Hey, Thanks for taking the questions Cindy in your comments there seemed to be an implication that you would not do anything on the vaping program in the absence of non dilutive funding was that a correct read.

Cindy Jacobs: Well, we're looking at them getting additional non dilutive funding I don't think we're gonna be able to complete the phase III trial with only non dilutive grant funding.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is in question. You may press star two if you would like to remove your question.

Cindy Jacobs: So we'll probably have to have a mixture of both but it was very similar to what we had with the phase two half of it was paid with Knight of grant funding and half by us so there'll be some mixture of that.

None: Got it and then just two quick ones on the ol study.

Is there anything being done to monitor compliance of patients with the dosing instructions.

Thomas Flaten: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the. And our first question comes from the line of Thomas Flaten with Lake Street Capital. Please proceed with your question. Hey, thanks for taking the questions. Cindy, in your comments, there seemed to be an implication that you would not do anything on the vaping program in the absence of non-dilutive funding. Was that a correct reading?

None: Oh, you mean as far as making sure. They're compliant we have the same compliance kind of tactics at and with T. O. L study as we did with our phase III.

None: It'll have text messaging, we will be giving out packets, they will need to bring them in and we'll review that the the tablets taken so all of that is being applied similarly that was done in the phase III.

None: With the O L study.

None: And then kind of related to that what burden is being placed on the patients how often they have to come in for a visit some follow ups and things like that.

Cindy Jacobs: Well, we're looking at getting additional non-dilutive funding. I don't think we're going to be able to complete the phase three trial with only non-dilutive or grant funding. So we'll probably have to have a mixture of both. But it was very similar to what we had with the Phase II. Half of it was paid for with NIDA grant funding and half by us. So there would be some mixture of that

None: Well that is the one nice thing there instead of coming in weekly, which they did for the first 12 weeks and then monthly afterwards, they start out and there are only coming in monthly through the O L study.

None: Got it I appreciate you taking the questions. Thank you.

None: Thank you. Our next question comes from the line of Francois versus why with Oppenheimer and company. Please proceed with your question.

Cindy Jacobs: Got it. And then just two quick ones on the OL study. Is there anything being done to monitor compliance of patients with the dosing instructions? Oh, you mean as far as making sure they're compliant?

Francois: Alright, thanks for the questions.

Francois: Can you help us understand the timeline here for the first half 'twenty five NDA filing to potential.

Francois: Approval and launch.

Francois: Sure. Thanks for the question Frank So you know right now is as Cindy indicated on the call. We're really driving forward towards initiating the open the Orca O L trial in the second quarter of this year, we think God again, depending on enrollment of those subjects that could put us in a position to have.

Cindy Jacobs: We have the same compliance kind of tactics with the OL study as we did with our Phase 3. We will have text messaging. We will be giving out packets. They will need to bring them in.

Cindy Jacobs: We'll review whether the tablets were taken. So all of that is being applied similarly to what was done in Phase 3 with the OL. And then, kind of related to that, what burden is being placed on the patients? How often do they have to come in for visits and follow ups and things like that?

Francois: The requirements for NDA submission at least completed in the clinic late this year or early next and so that would put us in a position to.

Francois: To get the NDA on file first half of 2025 right. Now this would be a standard review cycle. So two months to accept 10 months for review.

Cindy Jacobs: Well, that is the one nice thing there. Instead of coming in weekly, which they did for the first 12 weeks and then monthly afterwards, they start out, and they're only coming in monthly through the OL study. Got it. Appreciate taking the question. Thank you. Our next question comes from the line of Francois Brisebois with Oppenheimer.

Francois: It would put a approval first half of 2026.

None: Okay, great and in terms of the O L trial why.

None: Bush on looking at efficacy here is there what's the upside of doing that.

None: Yeah. So.

None: With respect to the F. D. A you know they specifically told us they don't need efficacy out of this trial. This is solely for longer term exposure safety data, which.

Francois Brisebois: Please proceed with your, Alright, thanks for the questions. Can you help us understand the timeline here from first half 25 NDA filing to potential approval and launch? Sure.

None: Which is fine for F D a but from our perspective, we think efficacy is interesting.

John A. Bencich: Thanks for the question, Frank. So, you know, right now, as Cindy indicated on the call, we're really driving forward towards initiating the ORCA OL trial in the second quarter of this year. You know, we think, again, depending on enrollment of those subjects, that could put us in a position to have the requirements for NDA submission at least completed in the clinic late this year or early next. And so that would put us in a position to get the NDA on file in the first half of 2025. Right now, this would be a standard review cycle, so two months to accept, 10 months for review, which would put approval in the first half of 2020.

None: We think theres a lot of data points that could come out of this trial that could be leveraged for publication for payers. You know brother, a future trial planning you know for example, you know you know.

None: If a if a patient had quit in a previous study, but relapsed you know how likely are they to quit again going back on to treatment as well as what happens with longer duration does that get to more robust efficacy.

None: Again could lead into a newer lifecycle management play of extending dosing beyond 12 weeks at some point in the future. So I think from an efficacy perspective, there are some interesting learnings that we could get out of the Orca O L trial.

John A. Bencich: Okay, great. And in terms of the OL trial, why the push on looking at efficacy here? Is there, what's the upside of doing that?

None: Yes.

None: Thanks.

None: Okay.

None: Thank you.

None: Our next question comes from the line of Michael Higgins with Madden Madden Berg Taubman. Please proceed with your question.

John A. Bencich: Yeah, so with respect to the FDA, you know, they specifically told us they don't need efficacy data from this trial. This is solely for longer-term exposure safety data, which is fine for the FDA. But from our perspective, we think efficacy is interesting. We think there are a lot of data points that could come out of this trial that could be leveraged for publication for payers, for other future trial planning. For example, if a patient had quit in a previous study but relapsed, how likely are they to quit again, go back on treatment, as well as what happens with longer duration?

Michael John Higgins: Thanks, operator, thanks, guys for the taking the questions. Congrats again on the agreement with the FDA.

Michael John Higgins: John if you can give us some feedback as to how the patients are responding so far it sounds like the sites have begun their outreach you.

Michael John Higgins: You mentioned 30 U S sites and gives us some some feedback as to how many are opening how many are reaching out and what the patients are responding likes it mark.

Michael John Higgins: John you want me to get that.

John: Yeah, I'd be great city.

John: So the 30 sites they've all started to reach out this month to the participants and they are getting a lot of enthusiasm for them coming back in to an open label study.

John A. Bencich: Does that get to more robust efficacy? That again could lead into a lifecycle management play of extending dosing beyond 12 weeks at some point in the future. So I think from an efficacy perspective, there are some interesting learnings that we could get out of the ORCA OL trial. Thank you.

John: I guess, we were not surprised by this because we did do surveys of the phase threes afterwards, and that's some of the data that was presented at the ASRM T meeting.

John: Last week that said they were very satisfied and they thought the treatment was very helpful and so with that positive survey probably indicates that yes. They are we are getting positive responses.

John: Participating in this open label study.

Michael John Higgins: Please proceed with, Thanks, Epper. Thanks, guys, for taking the questions. Congratulations again on the agreement with the FDA. Cindy or John, if you could give us some feedback as to how the patients are responding so far. It sounds like the sites have begun their outreach. You mentioned 30 U.S. sites.

None: That's great Yeah, we saw that a presentation last week.

None: And so I'm not surprised to hear that I'm curious if you've had a chance to see news from the FDA last December to have discussions with payers.

None: In light of that news and how that May guide, what you're doing here in the open label trial, what kinds of efficacy information, which apparently fda's not looking for but certainly may help with your your reimbursement scenarios post approval.

Cindy Jacobs: If you could give us some feedback as to how many are opening, how many are reaching out, and what the patients are responding to. John, do you want me to get that? Yeah, it'd be great, Cindy.

None: The thing that you can share with us from the discussions as to what you may be looking for in terms of efficacy from the stroke.

None: Sure. Thanks, Michael Yeah on the payer front you know we've had a number of discussions with payers payers over the last two or three years and I think one thing to keep keep in mind is that the affordable care Act is mandate that all F. D. A approved smoking cessation medications be covered so from an access perspective. This is one of the better categories.

Cindy Jacobs: Yeah. So the 30 sites, they've all started to reach out this month to the participants, and they are getting a lot of enthusiasm for coming back into an open label study. I guess we were not surprised by this because we did do surveys of the Phase III patients afterwards, and that's some of the data that was presented at the SR&T meeting last week, that they were very satisfied and they thought the treatment was very helpful, and so that positive survey probably indicates that yes, they are, and we are getting positive responses from participating in this Open Label Study. That's great. Yeah, we saw that presentation last week, and I'm not surprised to hear that.

None: Out there.

None: With that being said.

None: The open label trial, I think will have the ability like I mentioned before to to look at what happens with repeat administration. So you know both success. Initially and then you know recruitment again or perhaps lack of success in an initial treatment and having success a second time around.

None: All of those sorts of data points can be used with payers as we have those discussions.

John A. Bencich: I'm curious if you've had a chance since the news from the FDA last December to have discussions with payers. Michael Higgins, Franois Brisebois, John Bencich, Nicole Jones, Unknown Executive, Thomas Flaten, Cindy Jacobs, Jerry Wan, Achieve, Sure, thanks, Michael. Yeah, on the payer front, you know, we've had a number of discussions with payers over the last two or three years. And I think 1 thing to keep in mind is that the Affordable Care Act does mandate that all FDA-approved smoking cessation medications be covered.

None: Leading up to and on the other side of approval of this product. So I think those are probably the most important pieces, but I think as we kind of dig in further.

None: With the datasets that we get there could be other interesting learnings that we can leverage with the payer community.

None: That makes sense. Thanks for that feedback one quick follow up if I could use the the monthly visits if you find because it's different than the weeklies before that patients just aren't as compliant as they were in the previous trials are you able to adjust along the way and seeing that tried to reach out to them more often.

None: Yes, and that's one of the things we will be monitoring in that regard.

None: Very good I appreciate it thanks, and congrats again.

None: Thanks, Michael.

John A. Bencich: So, you know, from an access perspective, this is 1 of the better categories out there, with that being said, you know, the open-label trial. We'll have the ability, like I mentioned before, to look at what happens with repeat administration. So, you know, both success initially and then, you know, retreatment again, or perhaps, you know, lack of success in an initial treatment and having success a second time around, all those sorts of data points can be used with payers as we have those discussions leading up to and on the other side of approval of this product. So I think those are probably the most important pieces, but I think as we kind of dig in further with the data sets that we get, That makes sense.

None: Thank you.

Speaker Change: Our next question comes from the line of John Van der Boston with Zacks.

Speaker Change: Proceed with your question.

Speaker Change: Great. Thank you and Hello, John Cindy and Jerry good.

Speaker Change: Good afternoon, how many since theres a delay a relative to the first expectations on the on the trial how does this affect the work with so far about preparing for the FDA inspection and all the other work that you were planning to do with them.

Yeah, Hi, John Thanks for the question, So you know as well as <unk>.

None: Looking about further you know one of the key areas of focus for us will be and continue to be working with so pharma are two insurer F D. A inspection readiness.

None: So that will continue this gives US you know effectively another 12 months of preparation and timing with respect to that.

Michael John Higgins: Thanks for that feedback. One quick follow-up question, if I could, is the monthly visits. If you find, because it's different than the weeklies before, that patients just aren't as compliant as they were in the previous trials, are you able to adjust along the way in seeing that and trying to reach out to them more often? Oh, absolutely.

None: One of the items that we are working with so far I'm on is looking at additional C. D M OS that could.

None: B side by side with so pharma groups from both the drug substance and drug product perspective that have already been F. D. A approved historically that could continue to minimize our you know any risk from an inspection perspective. So that's something that we're working with are in addition to the continued work.

Cindy Jacobs: And that's one of the things we will be monitoring in that regard. Very good. I appreciate it. Thanks and congrats again.

None: So pharma and their side.

John A. Bencich: Thank you. Our next question comes from the line of John Van. Zach, please proceed to: Great, thank you. And hello, John, Cindy, and Jerry.

None: Great and then.

None: We saw.

None: I guess, an explosion of a generic options for Varenicline recently and I don't know if you had seen any news on that or had any update for us I know you are keeping an eye on that I'm on the generic side and how that's progressing any any new observations over the last several months.

John A. Bencich: Good afternoon. How many, you know, since there's a delay relative to the first expectations for the trial, how does this affect the work with Sopharma preparing for the FDA inspection and all the other work that you were planning to do with them? Yeah, hi, John, thanks for the question. So, as we've spoken about further, one of the key areas of focus for us will be and continue to be working with Zofarma to ensure FDA inspection readiness. So that will continue, and this gives us effectively another twelve months of preparation timing with respect to that. Uh, 1 of the items that we are working on so far is looking at additional that could be side by side with existing groups from both a drug substance and drug product perspective that have already been FDA approved historically. Um, you know, that could continue to minimize, uh, you know, any risk from an inspection perspective.

None: Yeah with respect to generic Varenicline I believe their sixth generics on the market now so over the last 12 months that has expanded beyond Endo, who was the first to market.

None: So something we continue to monitor as we as we proceed and we have seen some data points I believe theres. Some recent IQ via data that was suggesting the generic market for Varenicline was on an annual run rate of roughly $450 million and from what we're seeing in the marketplace, you know that somewhere north.

None: Of a 30% discount to where chantix the brand left off.

Okay, great. Thank you John I appreciate it.

None: Yeah.

None: Thank you our next.

None: Next question comes from the line of Yoga Zuko with Freedom broker. Please proceed with your question.

Yoga Zuko: Good afternoon. Thank you for taking my question notable event I think its own sovereignty annual meeting could you share any feedback received from the professional come into your own debt presented results of worker program.

John A. Bencich: So that's something that we're working with in addition to the continued work that we have done so far in there. Great. And then, you know, we saw, I guess, an explosion of generic options for varenicline recently, and I don't know if you've seen any news on that or had any update for us. I know you're keeping an eye on that on the generic side and how that's progressing. Any new observations over the last several months? Yeah, with respect to generic Varenicline. I believe there are six generics on the market now.

None: And have their eyes, and the concerns about potential chronic use of the drug.

None: Yeah. Thanks for the question. So you know as we talked a bit on the call.

None: We did have a very strong reception at the R&D meeting last week.

None: We were able to present three different datasets are you know two from the Phase III program and then New York It'd be one trial results presented by Dr. Nancy regarding from Harvard Mass General.

John A. Bencich: So over the last 12 months, that has expanded beyond Endo, who was the first to market. So something we continue to monitor as we proceed. And we have seen some data points, I believe there's some recent IQVIA data that suggested the generic market for Varenicline was on an annual run rate of roughly 450 million.

None: Say overall very well received and I think we continue to see signs of Santa clean is the lead compound driving to market, there's really not much else going on behind it that's anywhere near that phase of development that we have with our product candidate here.

John A. Bencich: And from what we're seeing in the marketplace, you know, that's somewhere north of a 30% discount from where Chantix the brand left off. Great. Thank you, John.

None: So I think that's refreshing I think overall the perspective is that this is a viable treatment option.

John A. Bencich: Thank you. Our next question comes from the line of Ilya Zulko with Freedom Broker. Please proceed with your question. Good afternoon.

None: A very needed treatment option in a category that hasnt seen any new new options in nearly two decades.

Ilya Zulko: Thank you for taking my question. A notable event, a week ago, was the SRMT annual meeting. Could you share any feedback received from the professional community on the presented results of the FORCAP program, and have there been any concerns about potential chronic use of the drug? Yeah, thanks, Ilya, for the question. So, you know, as we talked a bit on the call, we did have a very strong reception at the SR&T meeting last week. We were able to present 3 different data sets, 2 from the Phase 3 program, and then the ORCA V1 trial results presented by Dr. Nancy Rigotti from Harvard Mass General. I would say overall, very well received, and I think we continue to see cytosine clean as the lead compound driving to market. There's really not much else going on behind it.

None: So I think overall.

None: A very warm reception from a you know a lot of the folks that we look to for input as we develop this program over the last several years.

None: Yeah.

None: Thank you and one more from me. Please could you elaborate on the safety endpoints requested by FDA for our open label trial have any changes to the protocol been maintenance extra parameters comparing to the previous studies.

None: So I'm sure. They we have kind of a primary one of looking at to just serious adverse events and then after that it would be any related serious adverse events, just general treatment emergent adverse events related treatment emergent adverse.

None: Vince any clinically significant laboratory abnormalities and.

None: After that are looking at any problematic vital signs I mean.

None: Most of these we haven't seen in the phase III is but we have all of those.

John A. Bencich: That's nowhere near the phase of development that we have with our product candidate here. So I think that's refreshing. I think overall, the perspective is that this is a viable treatment option and a very needed treatment option in a category that hasn't seen any new options in nearly 2 decades. So I think overall, a great, very warm reception from a lot of the folks that we look to for input as we've developed this program over the last several years. Thank you. And one more from me, please.

None: Objectives are and point them in the open label as similarly, as we did in the phase III studies.

Got: Got it thank you.

None: Thanks Julia.

Julia: Thank you and our next question comes from Michael Higgins with Atlanta Dominic. Please proceed with your question.

Michael John Higgins: Thanks again, guys for taking a few more follow ups here.

Michael John Higgins: Can you help us with.

Michael John Higgins: Your conversations with the FDA and NIH and what that May look like throughout this year I know you want to get that going you got your hands.

Michael John Higgins: Full with with with only and all that's been happening there, but just trying to get a better sense for the timing with because they can program and your discussions. Thanks.

Cindy Jacobs: Could you elaborate on the safety endpoints requested by FDA for the open label trial? Have any changes to the protocol been made in terms of safety parameters compared to the previous studies? Sure, we have kind of a primary one of looking at just serious adverse events, and then after that, it would be any related serious adverse events, just general treatment emergent adverse events, related treatment emergent adverse events, any clinically significant laboratory abnormalities, and after that, looking at any problematic vital signs. I mean, most of these we haven't seen in phase three, but we have all of those.

None: Yeah. So the focus on the the vaping indication really is going to be the end of phase II meeting with the agency. So now that we've got the Orca one trial complete we're able to share that with the agency.

Again under the guise of an end of phase two meeting to get clarity on the path forward as we've indicated before our belief is that a single phase III trial is what will be required to open up.

None: The label and expand into nicotine E cigarette cessation, but we need clarity on that so that is a high priority for us this year and something.

Cindy Jacobs: objectives or endpoints in the Open Label study as similarly as we did in the Phase 3 study. Got it. Thank you. Thank you. And our next question comes again from Michael Higgins with Landenburg-Dowman.

None: We'd hope to get clarity on in the second half of this year.

None: Okay sounds good we'll sit tight for that thanks for that and then second one here being manufacturing it sounds like the sites are open and so forth do you have enough supply at this point is that still coming on board in the summer months and into the fall I'm just trying to understand that the manufacturing is.

Michael John Higgins: Please proceed. Thanks again, guys, for taking a few more follow-ups here. Can you help us with your conversations with the FDA and NIH on vaping and what that may look like throughout this year? I know you want to get that going.

None: Is it ready to go for.

None: Yeah. Thanks, Michael on the manufacturing side of things you know this is probably is the gating item to our initiating centers and getting folks back into the clinic for the Orca Oh, well trial, the cowboy involved and made and we're in the process.

John A. Bencich: You've had your hands full with, uh, with, OLLI and all that's been happening there, but just trying to get a better sense for the timing of the vaping program and your discussion. Yeah, so the focus on the vaping indication really is going to be the end of Phase 2 meeting with the agency. So now that we've got the ORCA V1 trial complete, we're able to share that with the agency, again, under the guise of an end of phase 2 meeting to get clarity on the path forward. As we've indicated before, our belief is that a single phase 3 trial is what will be required to open up the label and expand into nicotine e-cigarette cessation, but we need clarity on that. So that is a high priority for us this year and something we'd hope to get clarity on in the second half. Okay, sounds good. We'll sit tight for that. Thanks for that. And then the second one here being manufacturing; it sounds like the sites are open, and so forth. Do you have enough supply at this point?

None: Here in the coming weeks to get that western packed and ready for the clinic. So everything's on track to move that a horse.

None: Forward here in the in the coming weeks. So we can initiate New York a O L trial.

Michael John Higgins: Awesome, Okay sounds good and then finally I noticed the Opex in Q4 was later than that.

And then we had expected Ah congrats on that.

Michael John Higgins: And then we look ahead to <unk>.

Michael John Higgins: Oh, Oh, L and trying to get an assessment or some sort of.

Michael John Higgins: Gauge as to how the cost may be compared to orca, two and three its longer but less frequent visits just trying to get a sense in comparison to the trials. How this cost me when they come out.

None: Yeah. Thanks, Michael.

None: With respect to the cost for a corker O L. We've currently estimated this is at roughly 20 million dollar trial that will come in basically over the course of 2024 and 2025.

John A. Bencich: Is that still coming on board in the summer months and into the fall? Just trying to understand if the manufacturing is ready to go for OLEC. Yeah, thanks, Michael. On the manufacturing side of things, you know, this probably is the gating item to initiating centers and getting people back into the clinic for the ORCA-OL trial. The tablets have all been made, and we're in the process here in the coming weeks of getting that blister packed and ready for the clinic. So everything's on track to move that forward in the coming weeks. So we can initiate the ORCA-OL trial.

So while the visits are less frequent.

None: The overall number of visits is similar to what we've seen in our previous studies just over a longer period of time and as Sandy articulated the what we're doing at those businesses very consistent and the bulk of the cost of these studies as the patient recruitment costs.

None: So the bulk of the expense will come in as the patients are enrolled and complete their therapy. So.

John A. Bencich: Awesome. Okay. Sounds good.

Michael John Higgins: And then finally, I noticed the OPEX in Q4 was later than we had expected. Congratulations on that. And then we looked ahead to ORCA OLL and tried to get an assessment or some sort of a gauge as to how the cost may be compared to ORCA 2 and 3. It's longer, but less frequent visits, just trying to get a sense, in comparison to the trials, how this cost may come out. Yeah, thanks, Michael. With respect to the costs for ORCA OL, we've currently estimated this as a roughly $20 million trial that will come in basically over the course of 2024 and 2025.

None: So we'll see some of that cost kick off here in Q1.

And then drive the bulk of it you know through the first part of next year. So hopefully.

None: Hopefully that's helpful and kind of modeling out.

None: Oh Wow.

None: That's certainly appreciate all of the Oh the feedback thanks, guys. Congrats again.

None: Yeah.

None: Thank you and we have reached the end of the question and answer session. I'll now turn the call them that long into the job vantage for closing remarks.

None: Thanks, operator, and thanks, everyone for joining us today I appreciate all the continued support we've made a huge amount of progress here.

None: Recently to get clarity from FDA and really move forward quickly with the Orca O L trial, now and we look forward to providing additional updates updates as.

John A. Bencich: So, while the visits are less frequent, the overall number of visits is similar to what we've seen in our previous studies, just over a longer period of time. As Cindy articulated, what we're doing at those visits is very consistent, and the bulk of the cost of these studies is patient recruitment. So, the bulk of the expense will come in as the patients are enrolled and complete their therapy. So, we'll see some of that cost kick off here in Q1 and then drive the bulk of it through the first part of next year. So hopefully that's helpful in kind of modeling out the URL.

None: As we proceed and look forward to.

None: To continue to stay in contact thanks again, everyone.

None: Okay.

None: And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

None: Okay.

None: [music].

John A. Bencich: That certainly is appreciated, all the feedback. Thanks, guys, for the grants again. Thank you. And we have reached the end of the question and answer session. I'll now turn the call back over to John Bencich for a closing remark. Thanks, operator, and thanks, everyone, for joining us today. I appreciate all the continued support. We've made a huge amount of progress here recently to get clarity from FDA and really move forward quickly with the ORCA OL trial, and we look forward to providing additional updates as we proceed. Please continue to stay in contact. Thanks again. And this concludes today's conference, and you may disconnect your lines. Thank you for your participation. Thomas Vandermosten, Michael Higgins, Franois Brisebois, John Bencich, Nicole Jones, Unknown Executive, Thomas Flaten, Cindy Jacobs, Jerry Wan, Achieve, [inaudible]

None: Yes.

None: [music].

None: Yeah.

None: [music].

Okay.

None: Uh huh.