Q2 2024 Achieve Life Sciences Inc Earnings Call

Speaker Change: Thank you for joining us.

Bill Graham: I'm Bill Graham.

Operator: At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. And as a reminder, this conference is being recorded. I would now like to turn the call over to Nicole Jones with Investor Relations. Thank you, Nicole.

Speaker Change: Greetings, and welcome to the Achieve Life Sciences second quarter 2024 earnings conference call and webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Unknown Executive: At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. And, as a reminder, this conference is being recorded.

Nicole Jones: I would now turn the call over to Nicole Jones, investor relations. Thank afternoon everyone, and thank you for joining us today. 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.

Speaker Change: And as a reminder, this conference is being recorded. I would now like to turn the call over to Nicole Jones with Investor Relations. Thank you, Nicole. You may begin.

Nicole Jones: You may begin. Thank you, operator. Good afternoon, everyone, and thank you for joining us today.

Nicole Jones: Thank you, Operator. Good afternoon, everyone, and thank you for joining us today.

Nicole 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 Q&A following today's prepared remarks. Before we begin, 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

Speaker Change: 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.

Nicole Jones: Management will be available for a Q&A session following today's prepared remarks. Before we begin, 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. Please refer to Achieve documents available on our website and filed with the FDC concerning factors that could affect the company.

Speaker Change: Management will be available for Q&A session following today's prepared remarks. Before we begin, 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 Jones: 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.

Speaker Change: Please refer to achieved documents available on our website and filed at the FCC concerning factors that could affect the company. I'll now turn the call over to John.

John Bencich: I'll now turn the call over to John. Thank you, Nicole. And thanks, everyone, for joining us. We are excited to provide an update today on the tremendous progress we have made on the cytosynically development program from both the clinical and regulatory fronts. In recent weeks, several key accomplishments have provided excellent momentum for furthering our mission of bringing cytosynically into the millions of people who are battling nicotine dependence. Furthermore, we are pleased with the recent refinancing, which will propel us towards our first NDA submission for smoking cessation, which remains on track for filing in the first half of 2025.

John Bencich: And thanks, everyone, for joining us. We are excited to provide an update today on the tremendous progress we have made on the Cytosinic Lean Development Program from both the clinical and regulatory fronts. In recent weeks, several key accomplishments have provided excellent momentum for furthering our mission of bringing cytosineclean to the millions of people who are battling nicotine dependence. Furthermore, we are pleased with the recent refinancing, which will propel us toward our first NDA submission for smoking cessation, which remains on track for filing in the first half of 2025.

Speaker Change: Thank you, Nicole, and thanks, everyone, for joining us.

Speaker Change: We are excited to provide an update today on the tremendous progress we have made on the cytosine and clean development program from both the clinical and regulatory fronts.

John C.: In recent weeks, several key accomplishments have provided excellent momentum for furthering our mission of bringing cytosine to the millions of people who are battling nicotine dependence.

John C.: Furthermore, we are pleased with the recent refinancing, which will propel us towards our first NDA submission for smoking cessation, which remains on track for filing in the first half of 2025.

John Bencich: We will go through each of our achievements in more detail, but briefly, in the last few months, we have received FDA Breakthrough Therapy designation for Cytosynically for treating e-cigarette or vaping nicotine dependence. We initiated and gained significant traction on the ORCA-OL trial evaluating the long-term safety effects of Cytosynically. We were added to the US Russell 3000 and Russell Microcap indexes, and we refinanced our outstanding debt agreement with SVB. We are very pleased with this progress and the support we are receiving from the scientific, regulatory, and financial communities that are setting up cytosynically for great success.

John Bencich: We will go through each of our achievements in more detail, but briefly, in the last few months, we have received FDA breakthrough therapy designation for cytosine acclaim for treating e-cigarette or vaping nicotine dependence. We initiated and gained significant traction on the ORCA-OL trial evaluating the long-term safety effects of cytosine acclaim. We were added to the U.S. Russell 3000 and Russell microcap indexes

Speaker Change: We'll go through each of our achievements in more detail, but briefly, in the last few months, we have received FDA breakthrough therapy designation for cytosineclean for treating e-cigarette or vaping nicotine dependence.

Speaker Change: We initiated and gained significant traction on the ORCA-OL trial, evaluating the long-term safety effects of cytosine acclaim. We were added to the U.S. RUSLE-3000 and RUSLE-MICROCAP indexes.

John Bencich: And we refinanced our outstanding debt agreement with SVB. We are very pleased with this progress and the support we are receiving from the scientific, regulatory, and financial communities that are setting up Cytosinically for great success. I'll now turn it over to Cindy, who will give an update on recent regulatory and clinical advances.

Speaker Change: and we refinanced our outstanding debt agreement with SVB.

Speaker Change: We are very pleased with this progress and the support we are receiving from the scientific, regulatory, and financial communities that are setting up Cytosinic Lean for great success.

Cindy Jacobs: I'll now turn it over to Cindy, who will give an update on recent regulatory and clinical advances. Cindy? Thank you, John. Recently, in July, we were very pleased to have FDA grant Cytosynical and breakthrough therapy designation for the vaping cessation indication. Citation. Breakthrough therapy designation is important because it offers access to an FDA cross-disciplinary project management team for interactive communications with senior managers and reviewers at FDA. This will be beneficial in completing the regulatory requirements necessary for expanding cytosinical entreatment as the first approved pharmacotherapy in treating nicotine dependence for e-cigarette cessation, not only in adults but also possibly for an adolescent vaping population.

Speaker Change: I'll now turn it over to Cindy, who will give an update on recent regulatory and clinical advances. Cindy?

Cindy Jacobs: Thank you, John. Recently, in July, we were very pleased to have FDA grant Cytosiniclin breakthrough therapy designation for the vaping cessation indication. The Breakthrough Therapy Designation is important because it offers access to an FDA cross-disciplinary project management team for interactive communications with senior managers and reviewers at FDA. This will be beneficial in completing the regulatory requirements necessary for expanding cytosine eclin treatment as the first approved pharmacotherapy for treating nicotine dependence for e-cigarette cessation, not only in adults but also possibly for an adolescent vaping population.

Cindy: Thank you, John. Recently in July, we were very pleased to have FDA grant Cytosinoglen breakthrough therapy designation for the vaping cessation indication.

Cindy: Breakthrough Therapy Designation is important because it offers access to an FDA cross-disciplinary project management team for interactive communications with senior managers and reviewers at FDA.

Cindy: This will be beneficial in completing the regulatory requirements necessary for expanding cytosinic lin treatment.

Cindy: as the first approved pharmacotherapy

Speaker Change: and treating nicotine dependence for e-cigarette cessation not only in adults but also possibly for an adolescent vaping population.

Cindy Jacobs: The public heightened issues surrounding the increasing e-cigarette use in young adults and adolescents justify the need for urgent action towards the solution. Breakthrough therapy designation will help to accelerate our proposed clinical program with more active FDA input. Although there is a general understanding that using e-cigarettes as safer, alternative to smoking, combustible cigarettes, this has led to the perception that e-cigarettes or vaping nicotine is safe, resulting in a new, younger generation becoming addicted to nicotine. The developing body of scientific and medical evidence is now showing that long-term e-cigarette use can be harmful and may lead to more severe addiction due to the high nicotine levels invades.

Cindy Jacobs: The public's heightened issues surrounding the increasing e-cigarette use in young adults and adolescents justifies the need for urgent action towards a solution. Breakthrough Therapy designation will help to accelerate our proposed clinical program with more active FDA input. Although there is a general understanding that using e-cigarette is a safer alternative to smoking combustible cigarettes, this has led to the perception that e-cigarette use or vaping nicotine is safe, resulting in a new, younger generation becoming addicted to nicotine.

Speaker Change: The public heightened issues surrounding the increasing e-cigarette use in young adults and adolescents justifies the need for urgent action towards a solution.

Speaker Change: Breakthrough Therapy designation will help to accelerate our proposed clinical program with more active FDA input.

Speaker Change: Although there is a general understanding that using e-cigarettes is safer, alternative to smoking, combustible cigarettes, this has led to the perception that e-cigarettes or vaping nicotine is safe.

Speaker Change: resulting in a new younger generation becoming addicted to nicotine.

Cindy Jacobs: A developing body of scientific and medical evidence is now showing that long-term e-cigarette use can be harmful and may lead to more severe addiction due to the high nicotine levels in vapes. Long-term e-cigarette use may also contribute to potential lung injury, asthma, COPD, and negative cardiovascular effects. At the annual March meeting of the Society for Research on Nicotine and Tobacco, guidance from experts in the field was presented based on Project VECTOR, which stands for Vaping and Electronic Cigarette Toxicity Overview and Recommendation.

Speaker Change: The developing body of scientific and medical evidence is now showing that long-term e-cigarette use can be harmful and may lead to more severe addiction due to the high nicotine levels in vapes.

Cindy Jacobs: Long-term e-cigarette use may also contribute to potential lung injury, asthma, COPD, and negative cardiovascular effects. At the annual March meeting of the Society for Research on Nicotine and Tobacco, guidance from experts in the field was presented based on Project Vector, which stands for Vaping and Electronic Cigarette Toxicity Overview and Recommendations. Several recommendations were presented, which included people who do not smoke should not use nicotine e-cigarettes, and people who use e-cigarettes should avoid long-term use of e-cigarettes. These recommendations were based on reducing long-term respiratory injury, adverse effects on the cardiovascular system, and exposure to cancer-causing chemicals in vaping aerosols, as well as preventing sustained nicotine dependence.

Speaker Change: Long-term e-cigarette use may also contribute to potential lung injury, asthma, COPD, and negative cardiovascular effects.

Speaker Change: At the annual March meeting of the Society for Research on Nicotine and Tobacco, guidance from experts in the field was presented based on Project VECTOR, which stands for Vaping and Electronic Cigarette Toxicity Overview and Recommendations.

Cindy Jacobs: Several recommendations were presented, which included people who do not smoke should not use nicotine e-cigarette, and people who use e-cigarette should avoid long-term use of e-cigarette. These recommendations were based on reducing long-term respiratory injury, adverse effects on the cardiovascular system, and exposure to cancer-causing chemicals in vaping aerosols, as well as preventing sustained nicotine dependence.

Speaker Change: Several recommendations were presented, which included, people who do not smoke should not use nicotine e-cigarettes.

Speaker Change: and people who use e-cigarettes should avoid long-term use of e-cigarettes.

Speaker Change: These recommendations were based on reducing long-term respiratory injury, adverse effects on the cardiovascular system, and exposure to cancer-causing chemicals in vaping aerosols, as well as preventing sustained nicotine dependence.

Cindy Jacobs: Breakthrough therapy was developed to expedite the clinical development of products that treat serious conditions, which there is an unmet need, and when there is preliminary evidence demonstrating potential benefit. Our justification was that long-term vaping may lead to serious conditions that there are no approved treatments to assist people in quitting, and that the positive results we observed in our Orca V1 trial showed the potential benefit of cytosinoclin in this setting. These criteria were all instrumental in granting us breakthrough status. We've already submitted a request for a tight-d meeting with FDA that will start interactions with their cross-disciplinary project management team.

Cindy Jacobs: Breakthrough therapy was developed to expedite the clinical development of products that treat serious conditions where there is an unmet need and when there is preliminary evidence demonstrating potential benefits. Our justification was that long-term vaping may lead to serious conditions, that there are no approved treatments to assist people in quitting, and that the positive results we observed in our ORCA V1 trial showed the potential benefit of cytosineclin in this setting. These criteria were all instrumental in granting us breakthrough status.

Speaker Change: Breakthrough therapy was developed to expedite the clinical development of products that treat serious conditions, which there is an unmet need, and when there is preliminary evidence demonstrating potential benefit.

Speaker Change: Our justification was that long-term vaping may lead to serious conditions.

Speaker Change: that there are no approved treatments to assist people in quitting, and that the positive results we observed in our ORCA V1 trial showed the potential benefit of cytosineclin in this setting.

Speaker Change: These criteria were all instrumental in granting us breakthrough status.

Cindy Jacobs: We've already submitted a request for a Type D meeting with FDA that will start interactions with their cross-disciplinary project management team, and it will also serve as an end of phase two meeting for gaining agreement on the development plans for a vaping cessation indication, moving on to our lead indication smoking cessation and the status of the long-term cytosineclin exposure trial.

Speaker Change: We've already submitted a request for a Type B meeting with FDA that will start interactions with their cross-disciplinary project management team.

Cindy Jacobs: and will also serve as an end of phase two meeting for gaining agreement on the development plans for vaping cessation indication.

Speaker Change: And we'll also serve as an end of phase two meeting for gaining agreement on the development plans for a vaping cessation indication.

Cindy Jacobs: Moving on to our lead indication, smoking cessation, and the status of the long-term cytosinoclin exposure trial. In May, we initiated the Open Label Orca OL trial, which is collecting long-term exposure data on cytosinoclin. Orca OL is recruiting subjects who participated in our previous Phase Two and Phase Three trials. We are pleased to report that all 29 clinical sites are actively enrolling subjects. Enrollment has been going very well, and more than half of the proposed 650 participants have already been enrolled onto the study. Over the next few months, we will be monitoring the treatment and discontinuation rate, which is currently very low.

Speaker Change: Moving on to our lead indication smoking cessation and the status of the long-term cytosineclin exposure trial. In May we initiated the open label ORCA OL trial which is collecting long-term exposure data on cytosineclin.

Cindy Jacobs: In May, we initiated the Open Label ORCA-OL trial, which is collecting long-term exposure data on cytosineclin. Orca OL is recruiting subjects who participated in our previous phase 2 and phase 3 trials. We are pleased to report that all 29 clinical sites are actively enrolling subjects. Enrollment has been going very well, and more than half of the proposed 650 participants have already been enrolled in the study. Over the next few months, we will be monitoring the treatment discontinuation rate, which is currently very low.

Speaker Change: Orca OL is recruiting subjects who participated in our previous Phase II and Phase III trials.

Speaker Change: We are pleased to report that all 29 clinical sites are actively enrolling subjects. Enrollment has been going very well and more than half of the proposed 650 participants have already been enrolled onto the study.

Speaker Change: Over the next few months we will be monitoring the treatment discontinuation rate, which is currently very low.

Cindy Jacobs: The enrollment objective is to ensure that we achieve the required 300 subjects exposed for six months at NDA submission. Providing that subject retention rates continue to remain high, we anticipate possibly closing out enrollment in advance of the 650 enrollment cap, possibly within the next two months. As a reminder, the primary analysis for this study will be to evaluate the rate of serious adverse events thought to be related to cytosinoclin treatment. And we have engaged the same independent Data Safety Monitoring Committee who had oversight of Orca II, Orca III, and Orca V1 studies to oversee and review safety events during this open label study.

Cindy Jacobs: The enrollment objective is to ensure that we achieve the required 300 subjects exposed for six months at NDA Submission. Providing that subject retention rates continue to remain high, we anticipate possibly closing out enrollment in advance of the 650 enrollment cap, possibly within the next two months. As a reminder, the primary analysis for this study will be to evaluate the rate of serious adverse events thought to be related to cytosineclin treatment.

Speaker Change: The enrollment objective is to ensure that we achieve the required 300 subjects exposed for six months at NDA submission.

Speaker Change: Providing that subject retention rates continue to remain high, we anticipate possibly closing out enrollment in advance of the 650 enrollment cap, possibly within the next two months.

Speaker Change: As a reminder, the primary analysis for this study will be to evaluate the rate of serious adverse events thought to be related to cytosineclin treatment.

Cindy Jacobs: And we have engaged the same independent data safety monitoring committee who had oversight of ORCA 2, ORCA 3, and ORCA V1 studies to oversee and review safety events during this open-label study. We plan to provide general summary updates following the completion of these committee safety reviews, with the first meeting expected to occur in the fourth quarter and subsequent meetings to be determined by the committee members thereafter.

Speaker Change: And we have engaged the same Independent Data Safety Monitoring Committee, who had oversight of ORCA 2, ORCA 3, and ORCA V1 studies, to oversee and review safety events during this Open Label Study.

Cindy Jacobs: We plan to provide general summary updates following the completion of these committee safety reviews, with the first meeting expected to occur in the fourth quarter and subsequent meetings to be determined by the committee members thereafter. Based on our agreement with the FDA, the necessary clinical data from Orca OL remains on track to support an NDA submission during the first half of 2025. As we continue our monitoring of subjects being treated in the Open Label study and their exposure timing, we can further refine our guidance in the future on the NDA submission timing.

Speaker Change: We plan to provide general summary updates following the completion of these Committee Safety Reviews.

Speaker Change: with the first meeting expected to occur in the fourth quarter and subsequent meetings to be determined by the committee members thereafter.

Cindy Jacobs: Based on our agreement with FDA, the necessary clinical data from ORCA OL remains on track to support an NDA submission during the first half of 2025. As we continue our monitoring of subjects being treated in the Open Label Study and their exposure timing, we can further refine our guidance in the future on the NDA submission timing. Overall, I am very pleased with the rapid progress we have made both in the clinic and with regulators since our last update. I'll now turn it back over to John. Thanks, Cindy.

Speaker Change: Based on our agreement with FDA, the necessary clinical data from ORCA OL remains on track to support an NDA submission during the first half of 2025.

Speaker Change: As we continue our monitoring of subjects being treated in the Open Label Study and their exposure timing, we can further refine our guidance in the future on the NDA submission timing.

Cindy Jacobs: Overall, I am very pleased with the rapid progress we have made both in the clinic and with regular regulators since our last update.

Speaker Change: Overall, I'm very pleased with the rapid progress we have made both in the clinic and with regulators since our last update. I'll now turn it back over to John.

John Bencich: I'll now turn it back over to John. Thanks, Cindy. Turning now to the financial updates, we recently completed a 20 million debt refinancing with Silicon Valley Bank that refinance our existing debt facility and extended the maturity date from August 1st, 2024, to December 1st, 2027. This refinancing continues our partnership with SVB and further solidifies their confidence and achieve and the cytosynically improved program. The refinancing also lowers our cost of capital, extends our cash runway, and provides access to additional capital as Cytosynically moves through the regulatory approval process with F.

John Bencich: Turning now to the financial updates, we recently completed a $20 million debt refinancing with Silicon Valley Bank that refinanced our existing debt facility and extended the maturity date from August 1, 2024 to December 1, 2027. This refinancing continues our partnership with SVB and further solidifies their confidence in Achieve and the Cytosine Clean program. The refinancing also lowers our cost of capital, extends our cash runway, and provides access to additional capital as Cytosinically moves through the regulatory approval process with FDIC. I'll now hand the call over to Jerry for additional financial updates. Jerry?

John C.: Thanks, Cindy.

John C.: Turning now to the financial updates, we recently completed a 20 million debt refinancing with Silicon Valley Bank that refinanced our existing debt facility and extended the maturity date from August 1st, 2024 to December 1st, 2027.

Speaker Change: This refinancing continues our partnership with SVB and further solidifies their confidence in Achieve and the Cytosine to Clean program.

Speaker Change: The refinancing also lowers our cost of capital, extends our cash runway, and provides access to additional capital as Cytosinacline moves through the regulatory approval process with FDA.

Jerry Wan: Well, they now hand the call over to Jerry for additional financial updates. Jerry? Thank you, John.

Speaker Change: I'll now hand the call over to Jerry for additional financial updates. Jerry?

Jerry Wan: Thank you, John. Good afternoon, everyone. As John mentioned, we successfully entered into a debt refinancing agreement with SVB that provides for up to $20 million in availability. Under the terms of this new agreement, the $20 million term loan is divided into three tranches. The first tranche of $10 million was received at closing; the second tranche of $5 million will be available upon FDA acceptance of the new drug application for cytosine aclinic, and the final $5 million tranche will be available subject to SVB's discretion and credit committee approval. The outstanding principal will accrue interest at a floating rate per annum equal to the greater of 7% and the prime rate minus 1%.

Jerry Wan: Good afternoon, everyone. As John mentioned, we successfully entered into a debt refinancing agreement with SVB that provides for up to $20 million in availability. Under the terms of this new agreement, the $20 million term loan is divided into three tranches. The first tranche of $10 million was received at closing. The second tranche of $5 million will be available upon FDA acceptance of the new drug application for cytosinoclin. And the final $5 million tranche will be available subject to SVB's discretion and credit committee approval. The outstanding principle will accrue interest at a floating rate per annum equal to the greater of 7% and the prime rate minus 1%.

Jerry: Thank you, John. Good afternoon, everyone. As John mentioned, we successfully entered into a debt refinancing agreement with SVB that provides for up to $20 million in availability.

Jerry: Under the terms of this new agreement, the $20 million term loan is divided into three tranches.

Jerry: The first tranche of $10 million was received at closing.

Jerry: The second tranche of $5 million will be available upon FDA acceptance of the new drug application for cytosineclin.

Jerry: And the final $5 million tranche will be available subject to SVB's discretion and credit committee approval.

Jerry: The Outstanding Principle will accrue interest at a floating rate per annum equal to the greater of 7% and the prime rate minus 1%.

Jerry Wan: The loan facility includes an interest-only period through December 31, 2025, followed by 24 monthly payments of principal plus interest to the maturity date of December 1, 2027. Upon achieving certain regulatory and financial milestones, there's an option for a six-month extension to the interest-only period and maturity date. Furthermore, the initial outstanding debt, including principal and accrued interest, subject to certain terms and limitations, can be converted into achieved common stock at SVB's discretion before repayment at a conversion price of $7 per share. Subsequent tranches may be converted based on a 150% premium to achieve stock closing price at that time, with a minimum price of $4.85 per share.

Jerry Wan: The loan facility includes an interest-only period through December 31st, 2025, followed by 24 monthly payments of principal plus interest to the maturity date of December 1st, 2027, upon achieving certain regulatory and financial milestones. There is an option for a six month extension to the interest-only period and maturity date. Furthermore, the initial outstanding debt, including principal and accrued interest, subject to certain terms and limitations, can be converted into Achieve's common stock at SVB's discretion before repayment at a conversion price of $7 per share.

Jerry: The loan facility includes an interest-only period through December 31, 2025, followed by 24 monthly payments of principal plus interest to the maturity date of December 1, 2027.

Jerry: upon achieving certain regulatory and financial milestones.

Jerry: There is an option for a six-month extension to the interest-only period and maturity date.

Jerry: Furthermore, the initial outstanding debt, including principal and accrued interest subject to certain terms and limitations, can be converted into achieved common stock at SVB's discretion before repayment at a conversion price of $7 per share.

Jerry Wan: Subsequent tranches may be converted based on a 150% premium to the achieve stock closing price at that time, with a minimum price of $4.85 per share. Importantly, while the loan is outstanding, SEB cannot short sell or hedge Achieve stocks.

Jerry: Subsequent tranches may be converted based on a 150% premium to achieve stock closing price at that time with a minimum price of $4.85 per share.

Jerry Wan: Importantly, while the loan is outstanding, SVB cannot short sell or hedge achieved stock. We can repay and retire all outstanding convertible debt at any time before conversion by paying a premium based on the repayment date.

Jerry: Importantly, while the loan is outstanding, SEB cannot short sell or hedge achieved stock.

Jerry Wan: We can repay and retire all outstanding convertible debt at any time before conversion by paying a premium based on the repayment date. Let's now turn to the second quarter financials. As of June 30, 2024, the company's cash, cash equivalents, restricted cash, and short-term investments were $61.3 million.

Speaker Change: We can repay and retire all outstanding convertible debt at any time before conversion by paying a premium based on the repayment date.

Jerry Wan: Let's now turn to the second quarter financials. As of June 30, 2024, the company's cash, cash equivalents, restricted cash, and short-term investments were $61.3 million, as compared to $66.4 million for the prior quarter. We believe our current cash balance is sufficient to provide us runway into the second half of 2025. The company incurred a net loss of $8.5 million for the quarter ended June 30, 2024, as compared to a net loss of $8.2 million for the same quarter in the prior year. Net loss for the six months ended June 30, 2024, decreased to $15 million, as compared to $17.2 million for the same period in 2023.

Jerry Wan: As compared to $66.4 million for the prior quarter. We believe our current cash balance is sufficient to provide us runway into the second half of 2025. The company incurred a net loss of $8.5 million for the quarter ended June 30, 2024, as compared to a net loss of $8.2 million for the same quarter in the prior year. The net loss for the sixth month ended June 30, 2024, decreased to $15 million, as compared to $17.2 million for the same period in 2023.

Speaker Change: Let's now turn to the second quarter financials.

Speaker Change: As of June 30, 2024, the company's cash, cash equivalents, restricted cash, and short-term investments were $61.3 million, as compared to $66.4 million for the prior quarter.

Speaker Change: We believe our current cash balance is sufficient to provide us runway into the second half of 2025.

Speaker Change: The company incurred a net loss of $8.5 million for the quarter ended June 30, 2024, as compared to a net loss of $8.2 million for the same quarter in the prior year.

Speaker Change: Net loss for the sixth month ended June 30, 2024, decreased to $15 million, as compared to $17.2 million for the same period in 2023.

Jerry Wan: We expect our quarterly operating expenses will increase as we progress forward with the ORCA OL trial.

Jerry Wan: We expect our quarterly operating expenses will increase as we progress forward with the ORCA OL trial. I'll now turn the call back over to John. Thank you, Jerry.

Speaker Change: We expect our quarterly operating expenses will increase as we progress forward with the ORCA OL trial.

John Bencich: I now turn the call back over to John.

John Bencich: Thank you, Jerry. Smoking remains the leading cause of preventable death, killing over 8 million people globally each year, including nearly half a million in the US. Smoking is recognized as a major cause of various cancers, of respiratory disease and lung injury, cardiovascular disease, type 2 diabetes, and dementia.

Speaker Change: I'll now turn the call back over to John.

John Bencich: Smoking remains the leading cause of preventable death, killing over 8 million people globally each year, including nearly half a million in the U.S. It is recognized as a major cause of various cancers, respiratory disease, and lung injury, cardiovascular disease, type 2 diabetes, and dementia. We believe that cytosinecline can help address the root cause of these disorders and have an impact through disease reduction. Focusing on COPD as an example, according to the CDC, approximately 80% of COPD is caused by smoking, and 38% of the 16 million U.S. adults with COPD currently smoke.

John C.: Thank you, Jerry.

John C.: Smoking remains the leading cause of preventable death, killing over 8 million people globally each year, including nearly half a million in the U.S.

Speaker Change: Smoking is recognized as a major cause of various cancers of respiratory disease and lung injury, cardiovascular disease, type 2 diabetes, and dementia.

John Bencich: Sonsha. We believe that Cytosynoclin can help address the root cause of these disorders and have an impact through disease reduction. Focusing on COPD is an example. According to the CDC, approximately 80% of COPD is caused by smoking, and 38% of the 16 million US adults with COPD currently smoke. If we are able to help patients with COPD quit smoking, there is potential to significantly reduce the number and severity of exacerbations, and in the long term potentially reduce the number of COPD patients. In addition, vaping continues to be an emerging health crisis, with an estimated 11 million adults and 2 million middle and high school students using e-cigarettes in the US.

Speaker Change: We believe that cytosinecline can help address the root cause of these disorders and have an impact through disease reduction.

Speaker Change: Focusing on COPD is an example. According to the CDC approximately 80% of COPD is caused by smoking and 38% of the 16 million US adults with COPD currently smoke.

John Bencich: If we are able to help patients with COPD quit smoking, there is the potential to significantly reduce the number and severity of exacerbations and, in the long term, potentially reduce the number of COPD patients. In addition, vaping continues to be an emerging health crisis, with an estimated 11 million adults and 2 million middle and high school students using e-cigarette in the U.S. The long-term health effects from inhalation of vape products that are heavily unregulated are of utmost concern.

Speaker Change: If we are able to help patients with COPD quit smoking, there is potential to significantly reduce the number and severity of exacerbations and, in the long term, potentially reduce the number of COPD patients.

Speaker Change: In addition, vaping continues to be an emerging health crisis, with an estimated 11 million adults and 2 million middle and high school students using e-cigarettes in the U.S.

John Bencich: The long term help effects from inhalation of vape products that are heavily unregulated is of utmost concern. These statistics highlight the urgent need for effective cessation treatments, especially since no new products have been FDA approved in nearly 20 years. There are no FDA-approved treatments for e-cigarette cessation, and concern is growing as evidence emerges on their long-term use. cytosynoclin has the potential to be a first-in-class treatment to address the unique challenges of quitting vaping. Currently, there are more nicotine products available than any time in history, which has been fueled by continued innovation in ways to deliver nicotine to consumers.

Speaker Change: The long-term health effects from inhalation of vape products that are heavily unregulated is of utmost concern.

John Bencich: These statistics highlight the urgent need for effective cessation treatments, especially since no new products have been FDA-approved in nearly 20 years. There are no FDA-approved treatments for e-cigarette cessation, and concern is growing as evidence emerges on their long-term effects.

Speaker Change: These statistics highlight the urgent need for effective cessation treatments, especially since no new products have been FDA approved in nearly 20 years.

Speaker Change: There are no FDA-approved treatments for e-cigarette cessation, and concern is growing as evidence emerges on their long-term use.

John Bencich: Cytosineclean has the potential to be a first-in-class treatment to address the unique challenges of quitting vaping. Currently, there are more nicotine products available than at any time in history, which has been fueled by continued innovation in ways to deliver nicotine to consumers. This includes the increasingly popular flavored nicotine products like Zyn, which have seen triple-digit growth in recent years. Regardless of the nicotine delivery mechanism, we believe cytosine inoculine can play a critical role in addressing this health crisis and achieving better long-term outcomes for patients.

Speaker Change: Cytosineclean has the potential to be a first-in-class treatment to address the unique challenges of quitting vaping.

Speaker Change: Currently, there are more nicotine products available than any time in history, which has been fueled by continued innovation in ways to deliver nicotine to consumers.

John Bencich: This includes the increasingly popular flavored nicotine products like XIN, which has seen triple-digit growth in recent years. Regardless of the nicotine delivery mechanism, we believe Cytosynoclin can play a critical role in addressing this health crisis and achieving better long-term outcomes for patients.

Speaker Change: This includes the increasingly popular flavored nicotine products like Zyn, which has seen triple-digit growth in recent years.

Speaker Change: Regardless of the nicotine delivery mechanism, we believe cytosinuclein can play a critical role in addressing this health crisis and achieving better long-term outcomes for patients.

John Bencich: We've had a great first half of 2024 and expect the momentum to carry forward as we look to our objectives for the remainder of the year. We are now focused on closing out enrollment and continuing our focus on monitoring of subjects in the Orca O.L. trial. Continuing preparations for the NDA submission, which remains on track for the first half of 2025, and conducting the end-of-phase two meeting with the FDA for the vaping cessation indication. The support that we expect to receive from FDA, having a breakthrough status, should further de-risk the program and expedite our ability to move through the regulatory approval process.

John Bencich: We've had a great first half of 2024 and expect the momentum to carry forward as we look to our objectives for the remainder of the year. We are now focused on closing out enrollment and continuing our focus on monitoring of subjects in the ORCA OL trial. Continuing preparations for the NDA submission, which remains on track for the first half of 2025, and conducting the end of phase two meeting with FDA for the vaping cessation indication.

Speaker Change: We've had a great first half of 2024 and expect the momentum to carry forward as we look to our objectives for the remainder of the year. We are now focused on closing out enrollment and continuing our focus on monitoring of subjects in the ORCA OL trial.

Speaker Change: Continuing preparations for the NDA submission, which remains on track for the first half of 2025, and conducting the end of phase 2 meeting with FDA for the vaping cessation indication.

John Bencich: The support that we expect to receive from FDA having breakthrough status should further de-risk the program and expedite our ability to move through the regulatory approval process. We look forward to providing further updates on the vaping program after our end of phase two meeting with the agency. In closing, we are excited about what lies ahead for the company in the coming months. We greatly appreciate the dedication of our trial participants and healthcare providers and the continued support of our shareholders.

Speaker Change: The support that we expect to receive from FDA having a breakthrough status should further de-risk the program and expedite our ability to move through the regulatory approval process.

John Bencich: We look forward to providing further updates on the vaping program after our end-of-phase two meeting with the Agency has been conducted.

Speaker Change: We look forward to providing further updates on the vaping program after our end-of-phase two meeting with the agency has been conducted.

John Bencich: In closing, we are excited about what lies ahead for the company in the coming months. We greatly appreciate the dedication of our trial participants and health care providers, and the continued support of our shareholders. We remain committed to advancing our mission and in our belief of Cytosynoclin's potential to help millions of people overcome nicotine dependence.

Speaker Change: In closing, we are excited about what lies ahead for the company in the coming months. We greatly appreciate the dedication of our trial participants and healthcare providers and the continued support of our shareholders.

John Bencich: We remain committed to advancing our mission and in our belief that cytosine has the potential to help millions of people overcome nicotine dependence. In parallel, we believe strongly that we can create shareholder value by bringing to market the first new FDA-approved nicotine-dependence product in nearly two decades, with the potential to become the market leader and generate substantial revenue. Thank you for joining us today.

Speaker Change: We remain committed to advancing our mission and in our belief of cytosine eclease potential to help millions of people overcome nicotine dependence.

John Bencich: In parallel, we believe strongly that we can create shareholder value by bringing to markets the first new FDA-approved nicotine dependence product in nearly two decades, with the potential to become the market leader and generate substantial revenues.

Speaker Change: In parallel, we believe strongly that we can create shareholder value by bringing to market the first new FDA-approved nicotine-dependence product in nearly two decades with the potential to become the market leader and generate substantial revenues.

John Bencich: Thank you for joining us today.

Unknown Executive: We look forward to continuing our progress, and we will now open the line for questions. Thank you.

Operator: We look forward to continuing our progress, and we will now open the line for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press the star key followed by one on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two to remove a question from the queue.

Speaker Change: Thank you for joining us today. We look forward to continuing our progress and we will now open the line for questions.

Unknown Executive: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press the star key, followed by one on your telephone keypad. A confirmation tunnel will indicate that your line is in the queue. You may press star 2 to remove a question from the queue. For any participant using speaker equipment, it may be necessary to pick up your hands up before pressing the star. Excuse. One moment, please. We'll be pulled for questions.

Speaker Change: John Bencich, John Bencich,

Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press the star key followed by one on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two to remove a question from the queue. For any participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: For any participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. And the first question comes from the line of Thomas Flaten with Lake Street Capital. Please proceed with your question. Good afternoon, everybody.

Speaker Change: One moment, please, while we poll for questions.

Thomas Flaten: And the first question comes from the line of Thomas Flaten with Lake Street Capital. Please proceed with your question. Good afternoon, everybody. Congrats on all the progress. Cindy, a couple questions for you. You mentioned the retention rate in your prepared comments. I was wondering if you could share with us what that is. And then also can I infer from your comments around potentially ending enrollment sooner that enrollment pace is accelerated?

Speaker Change: And the first question comes from the line of Thomas Flatton with Lake Street Capital. Please proceed with your question.

Thomas Flaten: Congratulations on all the progress. Cindy, I have a couple questions for you. You mentioned the retention rate in your prepared comments, and I was wondering if you could share with us what that is. And then also, can I infer from your comments around potentially ending enrollment sooner that enrollment is accelerated? Well, the enrollment actually started off in an accelerated manner, and we don't give exact numbers, but given that we have over half of the intended 650, kind of tells you how well that enrollment has gone over the last couple of months.

Thomas Flatton: Good afternoon, everybody. Congrats on all the progress. Cindy, a couple of questions for you. You mentioned the retention rate in your prepared comments. I was wondering if you could share with us what that is. And also, can I infer from your comments around potentially ending enrollment sooner that enrollment pace is accelerating?

Cindy Jacobs: Well, the enrollment actually started off in an accelerated manner, and we don't give exact numbers, but given that we have over half of the intended 650, kind of tells you how well that enrollment has gone over the last couple of months. Our most important thing now is looking at the discontinuation rate. And if the discontinuation rate remains low and it's like single digits, then we're looking at how many subjects we really need to enroll to get then 300 at six months and 100 at one year. We certainly don't need five to six hundred subjects at six months and one year.

Cindy: Well, the enrollment actually started off in an accelerated manner, and we don't give exact numbers, but given that we have over half.

Speaker Change: of the intended 650 kind of tells you how well that enrollment has gone over the last couple of months. Our most important thing now is looking at the discontinuation rate.

Cindy Jacobs: Our most important thing now is looking at the discontinuation rate, and if the discontinuation rate remains low, and it's like single digits, then we're looking at how many subjects we really need to enroll to get 300 at six months and 100 at one year. We certainly don't need 500 to 600 subjects at six months and one year, so that's where we're looking at when do we then look at closing enrollment early to basically save costs on the trial. I got it.

Speaker Change: And if the discontinuation rate remains low, and it's like single digits,

Speaker Change: then we're looking at how many subjects we really need to enroll to get then 300 at 6 months and 100 at 1 year.

Speaker Change: We certainly don't need five to six hundred subjects at six months and one year. So that's where we're looking at when do we then look at closing enrollment early to basically save costs on the trial.

Cindy Jacobs: So that's where we're looking at when do we then look at closing enrollment early to basically save costs on the trial. Got it.

Cindy Jacobs: And then once you have the 300 patients with six months of data, are there any other gating items that we should be thinking about as it relates to completing the NDA package, or is that pretty much set, and you're waiting to staple this down to the back of it? That is the last piece of the ClinReg puzzle for the NDA. I mean, obviously, once you get to six months, you have to monitor all the data, collect it, lock the database, and write it up.

Cindy Jacobs: And then once you have the 300 patients with six months of data, are there any other gating items that we should be thinking about as it relates to completing the NDA package, or is that pretty much set in your waiting to staple this in the back a bit? That is the last piece for the Clean Reg of four, the NDA. I mean, obviously, once you get to six months, you have to monitor all the data, collect it, lock the database, and write it up. So there is that period of time, but then you feed then or kind of thread the results of that long exposure into the ISS documents that will be ready and waiting for that last piece of information for the NDA.

Speaker Change: Got it. And then once you have the 300 patients with six months of data, are there any other gating items that we should be thinking about as it relates to completing the NDA package or is that pretty much set and you're waiting to staple this down to the back of it?

Speaker Change: That is the last piece for the ClinReg for the NDA. I mean, obviously, once you get to six months, you have to monitor all the data, collect it, lock the database, write it up. So there is that period of time.

Unknown Executive: At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Cindy Jacobs: So there is that period of time. But then you feed in or kind of thread the results of that long exposure into the ISS documents that will be ready and waiting for that last piece of information for the NDA. Got it. Appreciate it. Thanks so much.

Unknown Executive: And as a reminder, this conference is being recorded.

Nicole Jones: I would now turn the call over to Nicole Jones, Investor Relations.

Speaker Change: But then you feed then or kind of thread the results of that long exposure into the ISS documents that will be ready and waiting for that last piece of information for the NDA.

Cindy Jacobs: Got it. Appreciate it. Thanks so much.

Nicole Jones: Thank afternoon everyone and thank you for joining us today.

Speaker Change: Got it. Appreciate it. Thanks so much.

John Bencich: 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. Before we begin, 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. Please refer to Achieve Documents available on our website and filed with the FDC concerning factors that could affect the company.

Justin Walsh: And the next question will come from the line of Justin Walsh with Jones Trading. Please excuse me with your question. Hi, thanks for taking the question.

Justin Walsh: And the next question will come from the line of Justin Walsh with Jones Trading. Please proceed with your question. Hi, thanks, Dave; expand on the potential advantages of having specifically on your label versus broader Yeah, thanks for the question, Justin. So, you know, with respect to the labeling, I think the core indication will be smoking cessation for nicotine dependence. And there can certainly be some off-label usage in other forms of nicotine addiction.

Speaker Change: And the next question will come from the line of Justin Walsh with Jones Trading. Please proceed with your question.

John Bencich: Can you expand on the potential advantages of having baking cessations specifically on your label versus broader labels focused more generally on nicotine? Yeah, thanks for the question, Justin. So, with respect to the labeling, I think the core indication will be smoking cessation for nicotine dependence, and there can certainly be some off-label usage in other forms of nicotine addiction. But I think, with respect to vaping in particular, we think it'd be very powerful to be able to promote directly to e-cigarette users given the size of that market. You know, we look at smoking overall here in the US, there's approximately 28 million adult smokers, and the vaping indication is now 11 million and growing.

Speaker Change: Hi, thanks for taking the question. Can you expand on the potential advantages of having vaping cessation specifically on your label versus broader labels focused more generally on nicotine?

Speaker Change: Yeah, thanks for the question, Justin. So, you know, with respect to the the labeling, you know, I think the the core indication will be

John Bencich: But with respect to vaping in particular, we think it would be very powerful to be able to promote directly to e-cigarette users, given the size of that market. You know, when we look at smoking overall, here in the US, there are, you know, approximately 28 million adult smokers, and the vaping indication is now 11 million and growing. So it is a very, very large segment.

Speaker Change: Smoking cessation for nicotine dependence, and there can certainly be some off label usage in other forms of nicotine addiction, but I think with respect to vaping in particular.

John Bencich: I'll now turn the call over to John. Thank you, Nicole. And thanks everyone for joining us. We are excited to provide an update today on the tremendous progress we have made on the cytosynically development program from both the clinical and regulatory fronts. In recent weeks, several key accomplishments have provided excellent momentum for furthering our mission of bringing cytosynically into the millions of people who are battling nicotine dependence. Furthermore, we are pleased with the recent refinancing which will propel us towards our first NDA submission for smoking cessation, which remains on track for filing in the first half of 2025.

Speaker Change: We think it'd be very powerful to be able to promote directly to e-cigarette users given the size of that market. You know we look at smoking overall here in the U.S. there's you know approximately 28 million.

John Bencich: And I think to be able to promote it as the first and likely only treatment there, we think it would be very powerful. Thanks and a quick follow up. I don't know how much you can actually say, but I was wondering if there's any color you can provide on potential discussion points.

Speaker Change: adult smokers, and the vaping indication is now 11 million and growing. So it is a very, very large segment, and I think to be able to promote as the first and likely only treatment there, we think would be very powerful.

John Bencich: So it is a very, very large segment, and I think to be able to promote as the first and likely only treatment there, we think would be very powerful.

Nicole Jones: Nicole. Great, thanks. And a quick follow up.

Cindy Jacobs: I don't know how much you can actually say, but I was wondering if there's any color you can provide on potential discussion points leading into your end of phase two meeting with the FDA. You want me to take that, John? Yes, maybe. Yeah. So, for the end of phase two meeting, we'll have a list of questions that will all be based that we have smoking cessation as our first indication. The biggest one will be that we only need one phase three because of the phase two is a supporting trial. And there'll be other discussions as far as what do we need in any additional safety data because we'll have all the long-term exposure from this open-label study that should be appropriate for the vaping cessation as well as the smoking cessation indication.

Speaker Change: Great, thanks. And a quick follow-up. I don't know how much you can actually say, but I was wondering if there's any color you can provide on potential discussion points leading into your end of Phase 2 meeting with the FDA.

John Bencich: We will go through each of our achievements in more detail, but briefly, in the last few months, we have received FDA breakthrough therapy designation for cytosynically for treating e-cigarette or vaping nicotine dependence. We initiated and gained significant traction on the ORCA-OL trial evaluating the long-term safety effects of cytosynically. We were added to the US Russell 3000 and Russell microcap indexes, and we refinanced our outstanding debt agreement with SVB. We are very pleased with this progress and the support we are receiving from the scientific, regulatory, and financial communities that are setting up cytosynically for great success.

Cindy Jacobs: So for the end of the Phase 2 meeting, we'll have a list of questions that will all be based on the fact that we have smoking cessation as our first indication. The biggest one will be that we only need one Phase 3 because Phase 2 is a supporting trial. And there'll be other discussions as far as what we need and any additional safety data because we'll have all the long-term exposure from this open-label study that should be appropriate for the vaping cessation indication as well as the smoking cessation indication.

Speaker Change: Do you want me to take that, John?

John C.: So for the end of Phase 2 meeting, we'll have a list of questions that will all be based that we have smoking cessation as our first indication. The biggest one will be that we only need one Phase 3 because of the Phase 2 is a supporting trial.

John C.: and there will be other discussions as far as...

Speaker Change: What do we need and any additional safety data because we'll have all the long term exposure from this open label study that should be appropriate for the vaping cessation as well as the smoking cessation indication. So we'll get some...

Cindy Jacobs: I'll now turn it over to Cindy, who will give an update on recent regulatory and clinical advances. Cindy? Thank you, John.

Justin Walsh: So we'll get some good clarity and agreement on what is required. So there's no surprises, and we can actually then advance to that supplemental NDA faster. Great. Thanks for taking the questions.

Cindy Jacobs: So we'll get some good clarity and agreement on what is required so there are no surprises, and we can actually then advance to that supplemental NDA faster. And the next question comes from the line of Frank Brisebois with Oppenheimer. Please proceed with your question. Hi, this is Dan Alperfrank.

Cindy Jacobs: Recently in July, we were very pleased to have FDA grant cytosynical and breakthrough therapy designation for the vaping cessation indication. Citation. Breakthrough therapy designation is important because it offers access to an FDA cross-disciplinary project management team for interactive communications with senior managers and reviewers at FDA. This will be beneficial in completing the regulatory requirements necessary for expanding cytosinical entreatment as the first approved pharmacotherapy in treating nicotine dependence for e-cigarette cessation, not only in adults but also possibly for an adolescent vaping population.

Speaker Change: Good clarity and agreement on what is required so there's no surprises and we can actually then advance to that supplemental NDA faster.

Speaker Change: Great, thanks for taking the questions.

Frank Breeze: And the next question comes in the line of Frank Breeze bought with Oppenheimer. Please proceed with your question. I was a dad on for Frank. Thanks for taking the questions. Just quickly, one regarding the open label, or we know this is a safety trial, but we'll be looking at any efficacy in this file. Is there anything from an efficacy perspective that you could get from this trial potentially for a lady on purposes any doctor. Yes, we will be looking at efficacy, especially for retreatment of individuals that have already been treated with a cytosinoclin, as well as individuals that were originally on the placebo, seeing it for the first time. FDA definitely views this as a primary safety study.

Speaker Change: And the next question comes from the line of Frank Brisebois with Oppenheimer. Please proceed with your question.

Unknown Speaker: Thanks for taking our questions. Just quickly one regarding the Open Label ORCA. We know this is a safety trial, but will you be looking at any efficacy in this trial? Is there anything from an efficacy perspective that you could get from this trial potentially for labeling purposes? Any thoughts there?

Dan Alperfrank: Hi, this is Dan Alperfrank, thanks for taking our questions. Just quickly one regarding the Open Label ORCA, we know this is a safety trial but will you be looking at any efficacy in this trial, is there anything from an efficacy perspective that you could get from this trial potentially for labeling purposes, any thoughts there?

Cindy Jacobs: Yes, we will be looking at efficacy, especially for re-treatment of individuals that have already been treated with cytosineclin, as well as individuals that were originally on the placebo and are seeing it for the first time. FDA definitely views this as a primary safety study, so I'm not sure, because it's not a randomized study, that we're going to get any of that on the label, but certainly we will be publishing it, and we are collecting efficacy. Thank you. And the next question comes from the line of John Vandermosten.

Cindy Jacobs: The public heightened issues surrounding the increasing e-cigarette use in young adults and adolescents justify the need for urgent action towards the solution. Breakthrough therapy designation will help to accelerate our proposed clinical program with more active FDA input. Although there is a general understanding that using e-cigarettes as safer, alternative to smoking, combustible cigarettes, this has led to the perception that e-cigarettes or vaping nicotine is safe, resulting in a new younger generation becoming addicted to nicotine.

Speaker Change: Yes, we will be looking at efficacy, especially for re-treatment of individuals that have already been treated with cytosineclin, as well as...

Speaker Change: individuals that were originally on the placebo seeing it for the first time.

Speaker Change: FDA definitely views this as a primary safety study, so I'm not sure because it's not a randomized study that we're going to get any of that in the label, but certainly we will be publishing it and we are collecting efficacy.

Cindy Jacobs: So I'm not sure because it's not a randomized study that we're going to get any of that in the label, but certainly we will be publishing it, and we are collecting efficacy. Thank you.

Unknown Executive: Thanks for taking my question.

Speaker Change: Thank you. Thanks for taking my question.

John Vandermosten: And the next question comes in the line of John Vandermostin with that. Please proceed with your question. All right. Thank you. Hello. Good afternoon.

John Vandermosten: With that said, please proceed with your question. All right, thank you. Hello and good afternoon.

Speaker Change: And the next question comes from the line of John Van Der Mosten. With that, please proceed with your question.

Cindy Jacobs: The developing body of scientific and medical evidence is now showing that long-term e-cigarette use can be harmful and may lead to more severe addiction due to the high nicotine levels invades. Long-term e-cigarette use may also contribute to potential lung injury, asthma, COPD, and negative cardiovascular effects.

Operator: I wanted to ask what your screening success rate is for the O.L. trial and then also on... Unknown Speaker Let's see.

John Vandermosten: I wanted to ask what your screening success rate is for the OL trial. And then also on that thing that same theme. Have you been able to enroll a lot of the 12 week cytosinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclinoclin In fact, most of these individuals had already screened through and were on the previous Orca studies, so we'd hope the screen fell rate would be low, which it is. This month and one year sooner.

Speaker Change: Alright, thank you. Hello and good afternoon. I wanted to ask what your screening success rate is for the OL trial and then also on that same

Unknown Speaker: Have you been able to enroll a lot of the 12-week cytosine to clinic exposure patients? And then roll a bunch of those, or is it pretty even between the, I guess, the patients. Unknown to you though. Sure. I mean, the one nice thing is the screen fail rate.

Speaker Change: that same theme. Have you been able to enroll a lot of the 12-week cytosine decline exposure patients and enroll a bunch of those or has it been pretty even between I guess the patients that were in the placebo, the 6-week and the 12-week?

Cindy Jacobs: At the annual March meeting of the Society for Research on nicotine and tobacco, guidance from experts in the field was presented based on project vector, which stands for vaping and electronic cigarette toxicity overview and recommendations. Several recommendations were presented, which included people who do not smoke should not use nicotine e-cigarettes, and people who use e-cigarettes should avoid long-term use of e-cigarettes. These recommendations were based on reducing long-term respiratory injury, adverse effects on the cardiovascular system, and exposure to cancer causing chemicals invaping aerosols, as well as preventing sustained nicotine dependence.

Cindy Jacobs: We look at screen fails. The screen fail rate has been half or even lower than what we normally see, which, you know, we kind of hopefully expected because most of these individuals had already... screened through and were in the previous ORCA studies, so we'd hope the screen fail rate would be low, which it is. Interesting, you know, all of the Phase III and even the Phase II vaping study, two-thirds of the individuals had already been treated with cytosineclin, so it's the same sort of two-thirds of the individuals on the open label have already been treated with cytosineclin coming in.

Speaker Change: Sure, I mean the one nice thing is the screen fail rate, we look at screen fails, the screen fail rate has been half or even lower than what we normally see which you know we kind of hopefully expected because most of these individuals had already

Speaker Change: screened through and were on the previous ORCA studies, so we'd hoped the screen fail rate would be low, which it is.

Speaker Change: Interesting, you know, all of the Phase 3 and even the Phase 2 vaping study, two-thirds of the individuals had already been treated with cytosineclin, so it's the same sort of two-thirds of the individuals on the open label have already been treated with cytosineclin coming in.

Cindy Jacobs: So we are getting some placebos, which is great because then that means we have more subjects overall treated with cytosineclin, and then we also have those coming in that helps us get to the six-month and one-year sooner. And when we look at the breakthrough therapy designation that was granted, you kind of look at the ways that could help you.

Cindy Jacobs: Breakthrough therapy was developed to expedite the clinical development of products that treat serious conditions, which there is an unmet need, and when there is preliminary evidence demonstrating potential benefit. Our justification was that long-term vaping may lead to serious conditions that there are no approved treatments to assist people in quitting, and that the positive results we observed in our Orca V1 trial showed the potential benefit of cytosinoclin in this setting. These criteria were all instrumental in granting us breakthrough status.

Speaker Change: So we are getting some placebos, which is great because then that means we have more subjects overall treated with cytosilicone, and then we also have those coming in that helps us get to the six month and one year sooner.

John Bencich: Okay, great. And when we look at the, the breakthrough therapy designation that was granted and you kind of looked the way that could help you. I mean, I guess I get three, three ways where it might help accelerate the trial case, reduce the cost, or increase the likelihood of ultimate approval there. What do you, those three areas, what do you see as the biggest help from, from this FDA program? I think both right now, quick your agreement to what the phase three clinical trial will look like. And then once that we're getting through that trial, then negotiating a rolling submission and then obviously upon having it being submitted to priority review.

Speaker Change: Thank you. Okay, great.

Speaker Change: And when we look at the Breakthrough Therapy Designation that was granted,

John Bencich: I mean, I guess I could see three ways where it might help accelerate the trial pace, reduce the cost, or increase the likelihood of ultimate approval there. Where do you see as the biggest help from this FDA in those three areas? I think both right now, quicker agreement on what the phase three clinical trial will look like, and then once that we're getting through that trial, then negotiating a rolling submission, and then obviously upon having it being submitted to priority review. So it's kind of taking time off through all aspects of the development. And last question. It was still on the vaping theme.

Speaker Change: and you kind of look at the ways that could help you. I mean, I guess I could see three ways where it might help accelerate the trial pace, reduce the cost, or increase the likelihood of ultimate approval there. Where do you, those three areas, what do you see as the biggest help from this FDA?

Speaker Change: I think...

Speaker Change: Both right now, quicker agreement to what the Phase III clinical trial will look like.

Cindy Jacobs: We've already submitted a request for a tight-d meeting with FDA that will start interactions with their cross-disciplinary project management team, and will also serve as an end of phase two meeting for gaining agreement on the development plans for vaping cessation indication.

Speaker Change: And then once that we're getting through that trial, then negotiating a rolling submission, and then obviously upon having it being submitted to priority review. So it's kind of taking time off through all aspects of the development.

John Bencich: So it's kind of taking time off through all aspects of the development.

Cindy Jacobs: Moving on to our lead indication smoking cessation and the status of the long-term cytosinoclin exposure trial. In May, we initiated the Open Label Orca OL trial, which is collecting long-term exposure data on cytosinoclin. Orca OL is recruiting subjects who participated in our previous phase two and phase three trials. We are pleased to report that all 29 clinical sites are actively enrolling subjects. Enrollment has been going very well and more than half of the proposed 650 participants have already been enrolled onto the study.

John Bencich: In last question, it was still on the baking theme. You had some, some, some money's coming in from the grants. Have we, have we received that all yet, or are there still funds that are going to be off spending some years in the future? How does it look on that side of things? Yeah, on the, the grant side of things, you know, the vaping phase two trial, which is where the grant was directed previously. We have received all the funding related to that. So that's now complete. But we'll continue to look for future opportunities, in particular given the strong support we've received from NIH and NIDA historically.

Speaker Change: And last question, it was still on the vaping theme, you had some monies coming in from the grants, have we received that all yet or are there still funds that are going to be offsetting some of your expenses in the future? How does it look on that side of things?

John Bencich: You had some, and money is coming in from grants. Have we received that all yet? Or are there still funds that are going to be offsetting some of your expenses in the future? How does it look at that?

John Bencich: Yeah, on the grant side of things, you know, the vaping phase two trial, which is where the grant was directed previously, we have received all the funding related to that. So that's now complete, but we'll continue to look for future opportunities, in particular given the strong support we've received from NIH and NIDA historically. All right. Thank you, Jonathan.

Speaker Change: Yeah, on the grant side of things, you know, the vaping phase two trial, which is where the grant was directed previously, we have received all the funding related to that. So that's now complete.

Speaker Change: But we'll continue to look for future opportunities, in particular, given the strong support we've received from NIH and NIDA historically.

Cindy Jacobs: Over the next few months we will be monitoring the treatment and discontinuation rate, which is currently very low. The enrollment objective is to ensure that we achieve the required 300 subjects exposed for six months at NDA submission. Providing that subject retention rates continue to remain high, we anticipate possibly closing out enrollment in advance of the 650 enrollment cap, possibly within the next two months. As a reminder, the primary analysis for this study will be to evaluate the rate of serious adverse events thought to be related to cytosinoclin treatment.

Unknown Executive: Right. All right. Thank you, Jonathan.

Michael Higgins: And the next question comes in the line of Michael Higgins. Please proceed with your question.

Speaker Change: Great, all right. Thank you, Jonathan. Appreciate it.

Michael Higgins: And the next question comes from the line of Michael Higgins with Lattinburg-Ballman. Please proceed with your question. Hey, guys, this is Farhana on behalf of Michael.

Speaker Change: And the next question comes from the line of Michael Higgins of Lattinburg-Ballman. Please proceed with your question.

Farhana: Hey guys, this is Sarhana on behalf of Michael. Congratulations from us on your progress this quarter. So, so one question from us last week. JAMA published a series of papers on vaping, so I'm following the recent Break to Therapy designation. Are you hearing any activities from the FDA, the NIH, or any other government agencies that may support your development and the vaping education? Yeah, thanks for the question, Farhana. You know, we're continuing to track all the activities going on across the spectrum, in particular with the respective vaping in particular. So we do expect more support on that front.

John Bencich: Congratulations from us on your progress this quarter. So one question from us: last week, JAMA published a series of papers on vaping, and following the recent breakthrough therapy designation, are you hearing any activities from the FDA, the NIH, or any other government agencies that may support your development in vaping education? Yeah, thanks for the question Farhana. You know, we're continuing to track all the activities going on across the spectrum, in particular with respect to responsible vaping in particular. So we do expect more support on that front.

Speaker Change: Hey guys, this is Farhana on behalf of Michael. Congratulations from us on your progress this quarter.

Farhana: So one question from us, last week JAMA published a series of papers on vaping and following the recent breakthrough therapy designation, are you hearing any activities from the FDA, the NIH or any other government agencies that may support your development in the vaping education?

Cindy Jacobs: And we have engaged the same independent data safety monitoring committee who had oversight of Orca II, Orca III and Orca V1 studies to oversee and review safety events during this Open Label study. We plan to provide general summary updates following the completion of these committee safety reviews with the first meeting expected to occur in the fourth quarter and subsequent meetings to be determined by the committee members thereafter. Based on our agreement with FDA, the necessary clinical data from Orca OL remains on track to support an NDA submission during the first half of 2025.

Speaker Change: Yeah, thanks for the question Farhana.

Speaker Change: You know, we're continuing to track all the activities going on across the spectrum, in particular with respective vaping in particular.

John Bencich: You know, I think the biggest piece that we're looking to here in the near term would be through the breakthrough designation. Now that we have that in place with FDA. I mean, as I just mentioned previously, you know, continuing to look to see if there's additional support we might be able to garner from NIH and NIDA. I think those are the two most critical areas. And I think when you look across the overall landscape of what's being done in terms of other existing smoking cessation products being studied across the vaping indication, there really isn't too much happening in that space.

John Bencich: You know, I think the biggest piece that we're looking to here in the near term would be through breakthrough designation now that we have that in place with FDA. And then, as I just mentioned previously, continuing to look to see if there's additional support we might be able to garner from NIH and NIDA. I think those are the two most critical areas. And I think when you look across the overall landscape of what's being done, in terms of other existing smoking cessation products being studied across the vaping indication, there really isn't too much happening in that space.

Speaker Change: So, we do expect more support on that front. I think the biggest piece that we're looking to here in the near term would be through the breakthrough designation, now that we have that in place with FDA, and then, as I just mentioned previously, continuing to look to see if there's additional support we might be able to garner from NIH and NIDA. I think those are the two most critical areas, and I think when you look across the overall landscape of what's being done, in terms of other...

Cindy Jacobs: As we continue our monitoring of subjects being treated in the Open Label study and their exposure timing, we can further refine our guidance in the future on the NDA submission timing. Overall, I am very pleased with the rapid progress we have made both in the clinic and with regular regulators since our last update. I'll now turn it back over to John. Thanks, Cindy.

Speaker Change: existing smoking cessation products being studied across the vaping indication.

John Bencich: So we think, you know, driving this program forward quickly, you can really move the needle in a category that has no approved products currently.

Speaker Change: There really isn't too much happening in that space. So we think, you know, driving this program forward quickly, you know, can really move the needle in a category that has no approved products currently.

Unknown Executive: Thank you.

John Bencich: So we think you know, driving this program forward quickly, you can really move the needle on a category that has no approved products. Thank you. And the next question comes from the line of Ilya Zubkov with Freedom Broker. Please proceed with your question. Good afternoon, and thank you for taking my question. My first question is about the OrcaWell trial.

John Bencich: Turning now to the financial updates, we recently completed a 20 million debt refinancing with Silicon Valley Bank that refinance our existing debt facility and extended the maturity date from August 1st, 2024 to December 1st, 2027. This refinancing continues our partnership with SVB and further solidifies their confidence and achieve and the cytosynically improved program.

Elias Zubkov: And the next question comes in the line of Elias Zubkov with Freedom Broker. Please proceed with your question. Anderson, and thank you for taking my question. My first question is on the Oracle L trial. So, given the swift recruitment of trial participants, do plan to publish any interim results from the trial this year? Publish, no. When we go and have complete our data safety monitoring committee, we will at least give an update as far as where we are with the safety monitoring in general, but right now not publishing it.

Speaker Change: And the next question comes from the line of Ilya Zubkov with Freedom Broker. Please proceed with your question.

Ilya Zubkov: Good afternoon and thank you for taking my question. My first question is on the ORCO-L trial. So, given the swift recruitment of trial participants, do you plan to publish any interim results from the trial this year?

Ilya Zubkov: So given the swift recruitment of trial participants, do you plan to publish any interim results from the trial this year? Not yet. When we go and complete our data safety monitoring committee, we will at least give an update as far as where we are with the safety monitoring in general. But right now, we are not publishing it.

John Bencich: The refinancing also lowers our cost of capital, extends our cash runway, and provides access to additional capital as cytosynically moves through the regulatory approval process with F.

Speaker Change: Publish, no. When we go and complete our Data Safety Monitoring Committee, we will at least give an update as far as where we are with the safety monitoring in general. But right now, not publishing it.

Jerry Wan: Well, they now hand the call over to Jerry for additional financial updates. Jerry? Thank you, John.

Jerry Wan: Good afternoon, everyone. As John mentioned, we successfully entered into a debt refinancing agreement with SVB that provides for up to $20 million in availability. Under the terms of this new agreement, the $20 million term loan is divided into three tranches. The first tranche of $10 million was received at closing. The second tranche of $5 million will be available upon FDA acceptance of the new drug application for cytosinoclin. And the final $5 million tranche will be available subject to SVB's discretion and credit committee approval.

Elias Zubkov: Okay, thank you.

Cindy Jacobs: Okay, thank you. And I have another one on the anticipated e-cigarette trial. I know that it is difficult to discuss the details before meeting with FDA, but as the high risk of vaping for adolescents was mentioned, are you considering targeting this population in the e-cigarette study as well? Yes, but more in a post-marketing kind of arena. So the most important thing for us is to complete phase three for vaping cessation in young adults. But like our other studies, young adults we define as 18 years and older.

Cindy Jacobs: And I have another one on the anticipated to figure trial. I know that it is difficult to discuss the details before meeting with FDA, but as the high risk of vaping for adolescents was mentioned, I consider in targeting this population in e-seagull study as well. Yes, but more in a post-marketing kind of arena. So, the most important thing for us is to complete a phase three for vaping cessation in young adults. But, like our other studies, young adults we define as 18 years and older. So, we will have younger adults and looking at that as well for a future potential adolescent program.

Speaker Change: Okay, thank you. And I have another one on the anticipated T-cigarette trial. I know that it is difficult to discuss the details before meeting with the FDA, but...

Speaker Change: As the high risk of vaping for adolescents was mentioned, are you considering targeting this population in e-cigar study as well?

Speaker Change: Yes, but more in a post-marketing kind of arena, so the most important thing for us is to complete a phase three for vaping cessation in young adults.

Jerry Wan: The outstanding principle will accrue interest at a floating rate per annum equal to the greater of 7% and the prime rate minus 1%. The loan facility includes an interest-only period through December 31, 2025, followed by 24 monthly payments of principal plus interest to the maturity date of December 1, 2027. Upon achieving certain regulatory and financial milestones, there's an option for a six-month extension to the interest-only period and maturity date. Furthermore, the initial outstanding debt, including principal and accrue interest subject to certain terms and limitations, can be converted into achieved common stock at SVB's discretion before repayment at a conversion price of $7 per share.

Speaker Change: But like our other studies, young adults we define as 18 years and older, so we will have younger adults and looking at that as well for a future potential adolescent program.

Cindy Jacobs: Great.

Cindy Jacobs: So we will have younger adults and will be looking at that as well for a future potential adolescent program. Great, thank you. And the next question is a follow-up from Thomas Flaten with Lake Street Capital. Please proceed with your question. John or Cindy, I just wanted to confirm. So assuming you have a good end of phase two meeting with FDA, you know, around the end of the year, what would your intentions be with respect to actually starting a study?

Unknown Executive: Thank you.

Unknown Executive: Happy as well.

Speaker Change: Great, thank you, happy as a lion.

Thomas Flaten: And the next question is a follow-up from Thomas Flaten with Lake Street Capital. Please proceed with your question. John or city, I just wanted to confirm, so assuming you have a good end of phase two meeting with FDA, you know, around the end of the year. What would be your intentions be with respect to actually starting a study with that be, you know, done under your own under your own account, or would you anticipate working with a partner on that and what would timing be? I'm just thinking from a modeling perspective on anything right now.

Speaker Change: Thank you for watching. Please subscribe to our channel. And if you like our content, please give us a thumbs up.

Speaker Change: John Bencich, John Bencich,

Speaker Change: And the next question is a follow-up from Thomas Flatton with Lake Street Capital. Please proceed with your question.

Cindy Jacobs: Would that be, you know, done under your own account? Or would you anticipate working with a partner on that? And what would the timing be? I'm just thinking from a modeling perspective more than anything right now.

Thomas Flatton: John or Cindy, I just wanted to confirm, so assuming you have a good end of Phase 2 meeting with FDA, you know, around the end of the year, what would be your intentions be with respect to actually starting a study? Would that be, you know, done under your own

Jerry Wan: Subsequent tranches may be converted based on a 150% premium to achieve stock closing price at that time with a minimum price of $4.85 per share. Importantly, while the loan is outstanding, SVB cannot short sell or hedge achieved stock. We can repay and retire all outstanding convertible debt at any time before conversion by paying a premium based on the repayment date.

Thomas Flatton: Under your own account or would you anticipate working with a partner on that and what would timing be? I'm just thinking from a modeling perspective more than anything right now

John Bencich: Yeah, thanks for the question, Thomas. I think on next steps on the vaping program, I think the most important piece is getting through the end of phase two meeting. Really understanding what's required going forward and seeing what sort of support we might be able to corner from FDA to accelerate that. I think, with respect to starting a new trial, it's really probably more middle of next year with the earliest. The focus is going to continue to be getting that MBA on file first half of 2025 and driving the core indication forward to approval.

Thomas Flaten: Yeah, thanks for the question, Thomas. I think the next steps for the vaping program are getting through the end of phase two meeting, really understanding what's required going forward, and seeing what sort of support we might be able to garner from FDA to accelerate that. I think with respect to starting a new trial, it's really probably more the middle of next year at the earliest.

Speaker Change: Thank you.

Speaker Change: Yeah, thanks for the question, Thomas. I think on next steps on the vaping program, I think that the most important piece is getting through the end of phase two meeting, really understanding what's required going forward and seeing what sort of support we might be able to garner from FDA to accelerate that.

John Bencich: The focus is going to continue to be getting that NDA on file in the first half of 2025 and driving the core indication forward. I appreciate it. Thanks, John. Thank you. At this time, we have reached the end of the question and answer session. Now I'd like to turn the call back over to the management team for any closing comments. Thanks again, everyone, for joining us today. We look forward to providing additional updates as we progress through the balance of this year and drive the program forward towards NDA submission in the first half of 2025. So again, I appreciate the continued support and have a great afternoon. And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time.

Jerry Wan: Let's now turn to the second quarter financials. As of June 30, 2024, the company's cash, cash equivalents, restricted cash and short-term investments were $61.3 million, as compared to $66.4 million for the prior quarter. We believe our current cash balance is sufficient to provide us runway into the second half of 2025. The company incurred a net loss of $8.5 million for the quarter ended June 30, 2024, as compared to a net loss of $8.2 million for the same quarter in the prior year.

Speaker Change: I think with respect to starting a new trial, it's really probably more middle of next year at the earliest. The focus is going to continue to be getting that NDA on file first half of 2025 and driving the core indication forward to approval.

Thomas Flaten: Excellent. Appreciate it. Thanks, John. Thank you.

Speaker Change: Excellent. Appreciate it. Thanks, John.

John Bencich: At this time, we have reached the end of the question-and-answer session. Now let's turn the call back over to the management team for any closing comments. Thanks again, everyone, for joining us today. We look forward to providing additional updates as we progress through the balance of this year and drive the program forward towards NDA submission in the first half of 2025. So again, I appreciate the continued support and have a great afternoon.

Speaker Change: Thank you. At this time, we have reached the end of the question and answer session, and I would like to turn the call back over to the management team for any closing comments.

Speaker Change: Thanks again, everyone, for joining us today. We look forward to providing additional updates as we progress through the balance of this year and drive the program forward towards NDA submission in the first half of 2025. So, again, appreciate the continued support and have a great afternoon.

Jerry Wan: Net loss for the six months ended June 30, 2024, decreased to $15 million, as compared to $17.2 million for the same period in 2023. We expect our quarterly operating expenses will increase as we progress forward with the ORCA OL trial. I now turn the call back over to John. Thank you, Jerry.

Unknown Executive: And ladies and gentlemen, the dose concludes today's teleconference. You may hit this connection lines at this time. Thank you for your participation.

Speaker Change: And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: Thank you for your participation. Unknown Executive, Thomas Flaten, Cindy Jacobs, John Bencich, Franois Brisebois, Nicole Jones, Unknown Special guests, [inaudible] and John Vandermosten. E. E. E. E. [inaudible] Landsat is a collaborative effort between Landsat and NASA John Bencich, John Bencich, that thing up. E. E. E. E.

Speaker Change: [music]

John Bencich: Smoking remains the leading cause of preventable death, killing over 8 million people globally each year, including nearly half a million in the US. Smoking is recognized as a major cause of various cancers of respiratory disease and lung injury, cardiovascular disease, type 2 diabetes and dementia. Sonsha. We believe that cytosynoclin can help address the root cause of these disorders and have an impact through disease reduction. Focusing on COPD is an example. According to the CDC, approximately 80% of COPD is caused by smoking and 38% of the 16 million US adults with COPD currently smoke.

John Bencich: If we are able to help patients with COPD quit smoking, there is potential to significantly reduce the number and severity of exacerbations, and in the long term potentially reduce the number of COPD patients. In addition, vaping continues to be an emerging health crisis with an estimated 11 million adults and 2 million middle and high school students using e-cigarettes in the US. The long term help effects from inhalation of vape products that are heavily unregulated is of utmost concern.

John Bencich: These statistics highlight the urgent need for effective cessation treatments, especially since no new products have been FDA approved in nearly 20 years. There are no FDA approved treatments for e-cigarette cessation and concern is growing as evidence emerges on their long-term use, cytosynoclin has the potential to be a first-in-class treatment to address the unique challenges of quitting vaping. Currently, there are more nicotine products available than any time in history, which has been fueled by continued innovation in ways to deliver nicotine to consumers.

John Bencich: This includes the increasingly popular flavored nicotine products like XIN, which has seen triple-digit growth in recent years. Regardless of the nicotine delivery mechanism, we believe cytosynoclin can play a critical role in addressing this health crisis and achieving better long-term outcomes for patients.

John Bencich: We've had a great first half of 2024 and expect the momentum to carry forward as we look to our objectives for the remainder of the year. We are now focused on closing out enrollment and continuing our focus on monitoring of subjects in the Orca O.L, trial. Continuing preparations for the NDA submission, which remains on track for the first half of 2025, and conducting the end-of-phase two meeting with FDA for the vaping cessation indication.

John Bencich: The support that we expect to receive from FDA, having a breakthrough status, should further de-risk the program and expedite our ability to move through the regulatory approval process. We look forward to providing further updates on the vaping program after our end-of-phase two meeting with the agency has been conducted.

John Bencich: In closing, we are excited about what lies ahead for the company in the coming months. We greatly appreciate the dedication of our trial participants and health care providers and the continued support of our shareholders. We remain committed to advancing our mission and in our belief of cytosynoclin's potential to help millions of people overcome nicotine dependence. In parallel, we believe strongly that we can create shareholder value by bringing to markets the first new FDA-approved nicotine dependence product in nearly two decades with the potential to become the market leader and generate substantial revenues.

John Bencich: Thank you for joining us today. We look forward to continuing our progress and we will now open the line for questions. Thank you.

Unknown Executive: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press the star key, followed by one on your telephone keypad. A confirmation tunnel will indicate that your line is in the queue. You may press star 2 to remove a question from the queue. For any participant using speaker equipment, it may be necessary to pick up your hands up before pressing the star. Excuse. One moment please, we'll be pulled for questions.

Thomas Flaten: And the first question comes from the line of Thomas Flaten with Lake Street Capital. Please proceed with your question. Good afternoon everybody, congrats on all the progress. Cindy, a couple questions for you. You mentioned the retention rate in your prepared comments. I was wondering if you could share with us what that is. And then also can I infer from your comments around potentially ending enrollment sooner, that enrollment pace is accelerated? Well, the enrollment actually started off in an accelerated manner and we don't give exact numbers, but given that we have over half of the intended 650 kind of tells you how well that enrollment has gone over the last couple of months.

Thomas Flaten: Our most important thing now is looking at the discontinuation rate. And if the discontinuation rate remains low and it's like single digits, then we're looking at how many subjects we really need to enroll to get then 300 at six months and 100 at one year. We certainly don't need five to six hundred subjects at six months and one year. So that's where we're looking at when do we then look at closing enrollment early to basically save costs on the trial.

Thomas Flaten: Got it. And then once you have the 300 patients with six months of data, are there any other gating items that we should be thinking about as it relates to completing the NDA package, or is that pretty much set in your waiting to staple this in the back a bit? That is the last piece for the Clean Reg of four, the NDA. I mean, obviously, once you get to six months, you have to monitor all the data, collect it, lock the database, write it up.

Thomas Flaten: So there is that period of time, but then you feed then or kind of thread the results of that long exposure into the ISS documents that will be ready and waiting for that last piece of information for the NDA. Got it. Appreciate it. Thanks so much.

Justin Walsh: And the next question will come from the line of Justin Walsh with Jones Trading.

John Bencich: Please excuse me with your question. Hi, thanks for taking the question. Can you expand on the potential advantages of having baking cessations specifically on your label versus broader labels focused more generally on nicotine? Yeah, thanks for the question, Justin. So with respect to the labeling, I think the core indication will be smoking cessation for nicotine dependence, and there can certainly be some off-label usage in other forms of nicotine addiction, but I think with respect to vaping in particular, we think it'd be very powerful to be able to promote directly to e-cigarette users given the size of that market.

John Bencich: You know, we look at smoking overall here in the US, there's approximately 28 million adult smokers, and the vaping indication is now 11 million and growing. So it is a very, very large segment and I think to be able to promote as the first and likely only treatment there, we think would be very powerful.

Cindy Jacobs: Nicole. Great, thanks. And a quick follow up. I don't know how much you can actually say, but I was wondering if there's any color you can provide on potential discussion points leading into your end of phase two meeting with the FDA. You want me to take that, John? Yes, maybe. Yeah. So for the end of phase two meeting, we'll have a list of questions that will all be based that we have smoking cessation as our first indication.

Cindy Jacobs: The biggest one will be that we only need one phase three because of the phase two is a supporting trial. And there'll be other discussions as far as what do we need in any additional safety data because we'll have all the long term exposure from this open label study that should be appropriate for the vaping cessation as well as the smoking cessation indication. So we'll get some good clarity and agreement on what is required. So there's no surprises and we can actually then advance to that supplemental NDA faster.

Unknown Executive: Great. Thanks for taking the questions.

Cindy Jacobs: And the next question comes in the line of Frank Breeze bought with Oppenheimer. Please proceed with your question. I was a dad on for Frank thanks for taking the questions just quickly one regarding the open label or we know this is a safety trial, but we'll be looking at any efficacy in this file. Is there anything from an efficacy perspective that you could get from this trial potentially for a lady on purposes any doctor.

Cindy Jacobs: Yes, we will be looking at efficacy especially for retreatment of individuals that have already been treated with a cytosinoclin as well as individuals that were originally on the placebo seeing it for the first time FDA definitely views this as a primary safety study. So I'm not sure because it's not a randomized study that we're going to get any of that in the label, but certainly we will be publishing it and we are collecting efficacy.

Unknown Executive: Thank you. Thanks for taking my question.

John Vandermosten: And the next question comes in the line of John Vandermostin with that. Please proceed with your question. All right. Thank you. Hello. Good afternoon.

Cindy Jacobs: I wanted to ask what your screening success rate is for the OL trial. And then also on that thing that same theme. [inaudible] This month and one year sooner. Okay, great. And when we look at the, the breakthrough therapy designation that was granted and you kind of looked the way that could help you. I mean, I guess I get three, three ways where it might help accelerate the trial case, reduce the cost or increase the likelihood of ultimate approval there.

Cindy Jacobs: What do you, those three areas, what do you see as the biggest help from, from this FDA program? I think both right now, quick your agreement to what the phase three clinical trial will look like. And then once that we're getting through that trial, then negotiating a rolling submission and then obviously upon having it being submitted to priority review. So it's kind of taking time off through all aspects of the development.

John Bencich: In last question, it was still on the baking theme. You had some, some, some money's coming in from the grants. Have we, have we received that all yet or are there still funds that are going to be off spending some years in the future? How does it look on that side of things? Yeah, on the, the grant side of things, you know, the, the vaping phase to trial, which is where the grant was directed previously. We have received all the funding related to that. So that's now complete. But we'll continue to look for future opportunities in particular given the strong support we've received from NIH and NIDA historically. Right. All right.

Michael Higgins: Thank you, Jonathan. And the next question comes in the line of Michael Higgins. Please proceed with your question.

Operator: John Bencich, John Bencich, John Bencich, E. E. E. E. E. John Bencich, John Bencich, E.C. John Bencich, John Bencich, John Bencich, John Bencich, John Bencich, John Bencich, John Bencich, E. E. E. E. E. E. E. E. E. John Bencich, John Bencich, John Bencich, John Bencich, John Bencich, John Bencich, [inaudible] John Bencich, John Bencich, John Bencich, E. E. E. E. E. Dr. John Vandermosten, John Vandermosten, John Bencich, John Bencich, John Bencich, Greetings, and welcome to the Achieve Life Sciences second quarter 2024 earnings conference call and webcast.

Farhana: Hey guys, this is Sarhana on behalf of Michael. Congratulations from us on your progress this quarter. So, so one question from us last week. Jama published a series of papers on vaping so I'm following the recent break to therapy designation. Are you hearing any activities from the FDA, the NIH or any other government agencies that may support your development and the vaping education? Yeah, thanks for the question, Farhana. You know, we're continuing to track all the activities going on across the spectrum in particular with the respective vaping in particular.

Farhana: So we do expect more support on that front. You know, I think the, the biggest piece that we're looking to here in the near term would be through the breakthrough designation now that we have that in place with FDA. I mean, as I just mentioned previously, you know, continuing to look to see if there's additional support we might be able to garner from NIH and NIDA. I think those are the two most critical areas.

Farhana: And I think when you look across the overall landscape of what's being done in terms of other existing smoking cessation products being studied across the vaping indication, there really isn't too much happening in that space. So we think, you know, driving this program forward quickly, you can really move the needle in a category that has no approved products currently. Thank you.

Elias Zubkov: And the next question comes in the line of Elias Zubkov with Freedom Broker. Please proceed with your question. Anderson, and thank you for taking my question.

Elias Zubkov: My first question is on the Oracle L trial. So, given the swift recruitment of trial participants, do plan to publish any interim results from the trial this year? Publish, no. When we go and have complete our data safety monitoring committee, we will at least give an update as far as where we are with the safety monitoring in general, but right now not publishing it. Okay, thank you.

Elias Zubkov: And I have another one on the anticipated to figure trial. I know that it is difficult to discuss the details before meeting with FDA, but as the high risk of vaping for adolescents was mentioned, I consider in targeting this population in e-seagull study as well. Yes, but more in a post-marketing kind of arena. So, the most important thing for us is to complete a phase three for vaping cessation in young adults.

Elias Zubkov: But like our other studies, young adults we define as 18 years and older. So, we will have younger adults and looking at that as well for a future potential adolescent program. Great. Thank you. Happy as well.

Thomas Flaten: And the next question is a follow-up from Thomas Flaten with Lake Street Capital. Please proceed with your question. John or city, I just wanted to confirm so assuming you have a good end of phase two meeting with FDA, you know, around the end of the year. What would be your intentions be with respect to actually starting a study with that be, you know, done under your own under your own account, or would you anticipate working with a partner on that and what would timing be?

Thomas Flaten: I'm just thinking from a modeling perspective on anything right now. Yeah, thanks for the question, Thomas. I think on next steps on the vaping program, I think the most important piece is getting through the end of phase two meeting. Really understanding what's required going forward and seeing what sort of support we might be able to corner from FDA to accelerate that. I think with respect to starting a new trial, it's really probably more middle of next year with the earliest. The focus is going to continue to be getting that MBA on file first half of 2025 and driving the core indication forward to approval.

John Bencich: Excellent. Appreciate it. Thanks, John. Thank you.

John Bencich: At this time, we have reached the end of the question and answer session. Now let's turn the call back over to the management team for any closing comments. Thanks again, everyone for joining us today. We look forward to providing additional updates as we progress through the balance of this year and drive the program forward towards NDA submission in the first half of 2025.

Unknown Executive: So again, appreciate the continued support and have a great afternoon, and ladies and gentlemen, the dose concludes today's teleconference. You may hit this connection lines at this time.

Unknown Executive: Thank you for your participation.