Achieve Life Sciences, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Achieve is a clinical-stage pharmaceutical company developing cytisinicline for smoking cessation and nicotine addiction. It has no approved products and has generated no product revenue.
Financial performance and position
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $5.642 million | $1.541 million |
| General and administrative expense | $2.342 million | $1.816 million |
| Total operating expenses | $7.984 million | $3.357 million |
| Net loss | $7.999 million | $3.320 million |
| Basic and diluted loss per share | $1.30 | $2.15 |
| Net cash used in operating activities | $6.452 million | $4.461 million |
R&D expense rose mainly because of enrollment activity in the Phase 3 ORCA-2 trial. G&A increased primarily due to employee-related stock compensation and clinical-trial media and awareness costs. The lower reported loss per share versus the prior-year quarter reflects a substantially higher weighted-average share count; the net loss itself increased.
At March 31, 2021, cash and cash equivalents were $29.637 million, current assets $30.439 million, current liabilities $3.515 million, and working capital $26.9 million. Total assets were $33.662 million and stockholders’ equity was $30.088 million. Total liabilities were $3.574 million, including $126,000 of remaining lease commitments; the filing reports no material borrowing debt. Cash, cash equivalents and restricted cash declined $6.216 million during the quarter. No investing cash outflow was reported for Q1 2021.
The company reported an accumulated deficit of $68.4 million and no current operating revenue. It stated that it expects to settle obligations in the ordinary course over the next 12 months, but ongoing operations and clinical development depend on raising additional capital or obtaining other funding. No explicit cash-runway estimate or profitability guidance is provided.
Clinical progress, outlook and risks
- ORCA-2, a Phase 3 U.S. trial evaluating 3 mg cytisinicline three times daily for 6 or 12 weeks versus placebo in 750 smokers, began in October 2020. COVID-19 delayed enrollment; the company expected enrollment to be complete in mid-2021.
- Management expects R&D expenses to increase as clinical trials and registration-enabling work advance. It also described a planned Phase 2 ORCA-V1 study in e-cigarette users, while pursuing non-dilutive funding to support it.
- The filing cites earlier supportive findings: ORCA-1 results informed the Phase 3 dose selection; the investigator-sponsored RAUORA trial met its non-inferiority endpoint versus varenicline, with six-month continuous abstinence of 12.1% for cytisinicline and 7.9% for varenicline. These results do not establish U.S. regulatory approval or predict the outcome of ORCA-2.
- Key risks include the need for additional financing and potential dilution; dependence on cytisinicline as its sole product candidate; clinical, regulatory and commercialization uncertainty; COVID-related trial disruption; and reliance on Sopharma as the exclusive source and intended commercial manufacturer of cytisinicline, which is derived from a plant with geographically limited supply.
- The company has license-related milestone and royalty obligations, including potential payments to the University of Bristol and Sopharma. It reported no material changes to contractual obligations from its 2020 Form 10-K and no off-balance-sheet financing arrangements.
Important facts for investors to verify
- Whether ORCA-2 enrollment and subsequent trial milestones proceeded on schedule, and the eventual efficacy and safety results.
- Cash burn, actual funding needs and available financing; the filing gives no formal runway estimate and identifies additional capital as necessary for continued development.
- Whether cytisinicline supply, manufacturing capacity and quality remain secure through Sopharma, including risks tied to plant sourcing.
- Regulatory requirements and timing for any U.S. application, and the extent of any additional clinical or toxicology work required.
- The potential dilution and warrant overhang from equity financing arrangements; $6.6 million remained available under the Lincoln Park Capital purchase agreement at March 31, 2021.