Benzinga | Nov 15, 2021 10:44AM EST

ACHV: Early 2022 Start to ORCA-3 and ORCA-V1

By John Vandermosten, CFA

NASDAQ:ACHV

READ THE FULL ACHV RESEARCH REPORT

Third Quarter 2021 Results

Achieve Life Sciences, Inc. (NASDAQ:ACHV) reported third quarter results in a press release and held a conference call after market close on November 9, 2021. The company concurrently filed its Form 10-Q with the SEC.

Highlights for the third quarter ended September 30th and to-date include:

NIH grant for cytisinicline in e-cigarette cessation - July 2021

Two patents granted for novel cytisinicline dosing - August 2021

Expansion of cytisinicline clinical operations team - August 2021

Presentation at 21st Annual SRNT-E1 Virtual Conference - September 2021

FDA acceptance of IND for e-cigarette cessation - November 2021

No revenues were reported in the third quarter. Operating expense in 3Q:21 was ($6.7) million yielding a net loss of ($6.7) million or ($0.71) per share.

For the third quarter ending September 30, 2021 and versus the same ending September 30, 2020:

Research & development expense totaled $4.6 million, rising 143% from $1.9 million, driven by enrollment and ramp up of Phase 3 ORCA-2 trial that was initiated in 4Q:20 and was fully enrolled by mid-2021;

General & administrative expense was $2.1 million, up 13% from $1.9 million, primarily due to higher employee expenses associated with stock-based compensation, increase in premiums for insurance and clinical trial media and awareness expenses;

Net loss was ($6.7) million vs. ($3.8) million or ($0.71) and ($1.14) per share, respectively.

As of September 30, 2021, cash and equivalents totaled $33.3 million. This amount compares to a $35.9 million balance in cash and equivalents held at the end of 2020. Achieve carries no debt on its balance sheet. Cash used in operations for the first nine months of 2021 was ($24.2) million versus ($11.0) million for the prior year comparable period, respectively. Cash flows from financing activities totaled $21.7 million year-to-date comprised primarily of proceeds generated from the May 2021 public offering.

ORCA-3

Achieve plans to initiate the Phase III ORCA-3 trial in early 2022. ORCA-3 will be similar in trial design, safety and efficacy evaluations, and statistical criteria as ORCA-2. As per FDA requirements, it will be conducted at new sites to ensure the statistical robustness of the data. As with the first Phase III trial, the primary outcome measure for ORCA-3 will be biochemically verified continuous abstinence during the last 4 weeks of treatment in the 6 and 12-week cytisinicline treatment arms compared to placebo. We anticipate that the diminishing impacts of COVID, the alignment of the start of the trial with New Year's resolutions to stop smoking and Achieve's extensive experience conducting this type of trial, the enrollment of the planned 750 patients will be at a materially faster pace than in previous studies.

Expansion of Clinical Operations team

On August 13, 2021, Achieve announced that it had expanded its Clinical Operations Team with the hiring of a Director of Clinical Operations, a Senior Manager of Clinical Trials, and a Senior Director of Biometrics. The additions will support cytisinicline development efforts, namely Achieve's fully-enrolled Phase III ORCA-2. Along with the new hires, Achieve's Board of Directors approved employee inducement grants of stock options for an aggregate of 45,000 shares of common stock with grant dates of August 10; 2021, August 23; 2021, and September 13; 2021.

Cytisinicline in Vaping

NIH Vaping Grant

Last year, Achieve announced a collaboration with the FreeMind Group to identify non-dilutive funding to support the launch of a clinical trial that will evaluate the effectiveness of cytisinicline in subjects that are vaping and using e-cigarettes. On July 22, 2021, Achieve announced that it had been awarded a grant from the National Institute on Drug Abuse (NIDA) of the National Institutes of Health (NIH) for the evaluation of cytisinicline in cessation of nicotine e-cigarette use. The grant award commenced on August 1, 2021, in an amount of $320,000. This initial infusion will support the completion of regulatory and clinical activities, namely protocol finalization, clinical site identification, and submission of an IND. Upon completion of the milestones, Achieve will then be subject to NIH assessment for the next stage of grant award of $2.5 million. The second tranche of the award will enable initiation of the Phase II trial designated ORCA-V1, which will target ~150 adult nicotine e-cigarette users in the US. Grant funding is expected to cover approximately 50% of the trial cost. Primary investigators for the grant are Achieve's CMO, Dr. Cindy Jacobs, and Dr. Nancy Rigotti, Professor of Medicine at Harvard Medical School.

ORCA Vaping Trial

ORCA-V1 trial will enroll 150 subjects that are vaping but not smoking. Randomization will be divided into a 2:1 split with 100 receiving twelve weeks of cytisinicline and 50 on placebo. Dosing is expected to follow the regimen evaluated in ORCA-2: 3 mg three times daily. The Phase II study will examine vaping cessation as the endpoint at the six week and twelve week point by measuring cotinine levels. 2 If the trial is successful and generates statistically significant results, it could provide support, along with a successful ORCA-2 trial, to require only one Phase III to obtain approval. On November 2, 2021, Achieve announced that cytisinicline's investigational new drug (IND) application for e-cigarette cessation had been reviewed and accepted by the FDA. ORCA-V1 is expected to begin in 2Q:22.

Intellectual Property

On August 11th, Achieve publicized the grant of two US patents for dosing and administering cytisinicline. The two patents 11,083,715 and 11,083,716 cover the novel 3 mg TID 4 dosing regimen. The patents could provide marketing exclusivity for cytisinicline until 2040. The claims cover 3 mg TID dosing for the treatment of nicotine addiction and for promoting reduction/cessation in smoking and vaping in treatment nave and refractory patients who have failed previous cessation treatment attempts.

ORCA-1 Data Presented at SNRT-E

The SRNT-E 21st Annual Virtual Conference was held September 15-17, 2021. Achieve presented at two sessions during the conference. The first presentation was entitled "Cytisinicline may benefit smokers who previously failed to quit smoking with varenicline: A subgroup analysis of the ORCA-1 trial." It detailed a subgroup analysis based on participants who had previously failed varenicline. They demonstrated Week 4 abstinence of 51.3% on TID 3 mg cytisinicline versus 15.8% in placebo (p = 0.009). Odds ratios for cessation through Weeks 5-8 were 1.8 and 4.3 for titration and TID regimens, respectively.

The second presentation, "Time to Sustained Abstinence with Cytisinicline in the ORCA-1 trial," revealed new analysis of ORCA-1 showing that smokers treated in the study with cytisinicline showed earlier onset of sustained abstinence compared to placebo. 3 mg TID cytisinicline arm showed the shortest time to sustained abstinence with median of seven days compared to 18 days for placebo.

ORCA-2 Phase III Trial

Achieve announced the start of its Phase III ORCA-2 trial on October 7, 2020, targeting enrollment of 750 smokers at 15 clinical sites throughout the United States. The trial is a multi-center, double-blind, randomized, placebo-controlled Phase III study that will enroll adult cigarette smokers who intend to quit smoking. Subjects will be randomized into one of three arms which include 12 weeks of placebo, six weeks of cytisinicline then six weeks of placebo or 12 weeks of cytisinicline. Dosing will be 3.0 mg, three times daily in each of the treatment cohorts. This dosing regimen is expected to be effective against even high nicotine use prior to cessation as cytisinicline efficiently binds nicotinic acetylcholine receptors.

The trial began with a slower than expected enrollment rate due to disruptions related to the coronavirus and severe winter weather in the South; however, the enrollment rate accelerated at the end of the first quarter and ORCA-2 has now enrolled 810 subjects. There will be a six-month follow up period after the measurement at week 12, and last patient, last visit is anticipated by the end of 2022. Then the data analysis portion will begin and topline results are anticipated to be available by spring 2022.

Key Events

Launch of ORCA-2 October 2020

$23.0 million gross capital raise May 2021

Completion of enrollment in ORCA-2 - June 2021

NIDA (NIH) grant for ORCA-V1 - July 2021

ORCA-V1 IND development 2H:21

Topline readout of ORCA-2 - 1H:22

ORCA-V1 launch 1H:22

Initiation of ORCA-3 - 2022

Summary

Achieve's third quarter was marked by further progress on the NIH grant supporting the company's pursuit of an indication in e-cigarette cessation, FDA acceptance of Achieve's IND, and presentation of additional data at the SRNT-E annual meeting. ORCA-3 is slated to start in early 2022 and ORCA-V1 is expected to begin in 2Q:22, pending the go-ahead by the NIH. Achieve bolstered its clinical team during the quarter, and continues to wrap up the ORCA-2 study.

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1. Society for Research on Nicotine & Tobacco

2. Cotinine is a metabolite of nicotine & cotinine urine or blood testing is considered highly accurate for assessing nicotine use, including vaping.

3. Source: Achieve Life Sciences October 2020 Corporate Presentation

4. Three times daily

5. Source: Achieve Life Sciences S-1 Filed November 6, 2019.

6. Source: Achieve Life Sciences Website Accessed November 2021.