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spk05: Thank you. Thank you. Thank you. Good afternoon, ladies and gentlemen, and welcome to the Achieve Life Scientist Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchstone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host. Executive Vice President of Commercial at Achieve Life Sciences, Ms. Jane Azenas. Ma'am, the floor is yours.
spk06: Thank you, Laura, and thanks, everyone, for joining us. On the call today from Achieve, we have John Bensich, Chief Executive Officer, Dr. Cindy Jacobs, President and Chief Medical Officer, Jerry Wan, Principal Accounting Officer, Rick Stewart, Executive Chairman of the Board of Directors, and Dr. Anthony Clark, Chief Scientific Officer. 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 filed with the SEC concerning factors that could affect the company, copies of which are available on our website. I'll now turn the call over to John.
spk09: Thank you, Jamie. We've certainly had a very busy and exciting third quarter. On today's call, we will discuss recently announced changes to our management team, details of our Phase III ORCA II trial that we initiated last month, a review of data presented at the Society for Research on Nicotine and Tobacco European meeting, including results from the RAURA head-to-head study of cytosine and clean versus Chantix, and finally, order financial results. To begin, at the end of September, we announced that I would be transitioning from Chief Financial and Operating Officer into the role of CEO. the role of CEO. Rick Stewart, Achieve's co-founder and former CEO, is continuing to serve as our executive chairman of the board of directors and remains actively involved in the company's strategic operations. Additionally, we announced that Dr. Cindy Jacobs, Achieve's chief medical officer, will assume the role of president, previously held by Dr. Anthony Clark. Dr. Clark, also a co-founder of Achieve, will continue to serve as our chief scientific officer. And finally, Jerry Wan, former Senior Director of Accounting Operations, has been promoted to the position of Principal Accounting Officer. While these changes were planned for some time, they were expedited in part by the pandemic, which has restricted international travel for Rick and Tony, who are both based in the UK. While our leadership structure has realigned, our management team remains dedicated in our mission and in our conviction that cytosinicline has great promise to change the lives of millions of smokers. To that end, I'd like to hand the call over to Cindy to discuss perhaps the most compelling highlight of the quarter, initiation of our Phase III ORCA II clinical trial. Cindy?
spk07: Thanks, John. We're excited to share that last month we began enrollment in our Phase III ORCA II study. As a reminder, ORCA II is a double-blind, randomized, placebo-controlled Phase III trial that will enroll 750 adult smokers at 15 sites in the U.S. Participants in ORCA2 will be randomly assigned to one of the three following arms. Arm A, who will receive 12 weeks of placebo. Arm B, who will receive 6 weeks of cytosinicline, followed by 6 weeks of placebo. Or Arm C, who will receive 12 weeks of cytosinicline. There will be 250 subjects in each arm receiving either placebo or cytosinicline. three times a day for 12 weeks, and then followed monthly out to week 24 for a six-month evaluation. All subjects will receive behavioral support during the study. The ORCA-2 study has two independent primary endpoints that will be evaluated. The primary endpoint outcomes will evaluate the rate of smoking abstinence of cytosinicline treatment compared to placebo treatment at the end of both six weeks and 12 weeks of treatment. For both primary endpoint comparisons, smoking abstinence will be defined as continuous abstinence during the last four weeks of treatment. That means for the six-week treatment period, successful quitters must have smoked zero cigarettes with weekly carbon monoxide biochemical verification at weeks three, four, five, and six assessments. For the 12-week treatment period, successful quitters must have smoked zero cigarettes with the weekly carbon monoxide biochemical verification at weeks nine, 10, 11, and 12 assessments. Importantly, the study will be considered successful if either or both of the cytosiniclin arms show an efficacy benefit over the placebo arms. The second endpoint outcomes will evaluate for continued smoking abstinence from the end of six-week cytosinicline treatment to week 24 and from the end of 12-week cytosinicline treatment to week 24 compared to placebo treatment at both of these same timeframes. The study sample size and specifications are over 95% powered to show statistical significance at an odds ratio of at least 1.83% in favor of cytosinicline at this 24-week assessment. An additional secondary endpoint outcome will also look for a reduction in risk of relapse at week 24 in subjects receiving 12-week cytosinicline compared to those subjects receiving six-week cytosinicline. FDA has reviewed our final protocol one last time in September prior to initiating the ORCA II Phase III trial and had only two minor recommendations. That was to add an additional nicotine withdrawal evaluation and to add a subgroup exploratory analysis related to relapse. With the study now actively enrolling subjects, we look forward to updating you when all subjects have been randomized and again when all study evaluations have been completed. I will now turn the call back over to John.
spk09: Thanks, Cindy. As you can see, The design of the ORCA2 trial provides multiple shots on goal as it relates to the primary endpoints being investigated and the ability to have a successful trial result with improved efficacy at six weeks of treatment, 12 weeks of treatment, or both, which is what we anticipate. We believe offering a beneficial smoking cessation treatment that is half the duration of existing therapies is a key differentiator. And for those patients that need slightly longer treatment duration to stop smoking or to reduce chances of relapse, they would have the option to continue on treatment for another six weeks. The confidence that we have in cytosinicline's ability to help smokers quit comes not only from our own studies, but from the numerous clinical trials that have evaluated thousands of smokers and have been conducted by external experts in the field of smoking cessation. Most recently, The results of the RAURA trial that compared cytosinicline to Chantix were presented at the annual SR&T European meeting in September. This was the first ever head-to-head study comparing these two treatments and enrolled a total of 679 smokers. The RAURA study was designed as a non-inferiority trial to demonstrate that cytosinicline quit rates would be no less than 10% lower than the quit rates for Chantix. Results showed that cytosinicline not only met the pre-specified non-inferiority endpoint, but was trending towards superiority. The absolute risk difference in the study was 4.29 in favor of cytosinicline, which equates to a 4.29% improvement in quit rates compared to Chantix. More importantly, the relative risk was 1.55, indicating that subjects in the cytosinicline arm were approximately one and a half times more likely to have quit smoking at six months compared to subjects who received Chantix. While we did not meet the threshold for superior efficacy versus Chantix, we were encouraged with the trend towards statistical significance with less than one-third of the target enrollment for the trial. Notably, these efficacy improvements were achieved using the historical 1.5 milligram dose of cytosinicline and the downward titration schedule. As discussed, ORCA2 is using the higher three milligram dose administered on a simplified three times daily schedule, which was the most efficacious treatment in our Phase 2b ORCA1 trial. We are optimistic that the simplified dosing will be more convenient for smokers and potentially result in even better smoking cessation rates than what was observed in Rauera. Also reported from Rauera, and what we continue to observe with cytosinicline, is the favorable side effect profile when compared to Chantix. Subjects treated with cytosinicline in Rauera experience statistically fewer side effects, including significantly less nausea, insomnia, and abnormal dreams. We know from patient research and claims data that a majority of Chantix patients do not complete their full course of therapy, and the number one reason is due to side effects. In addition to Rauera, Data were also presented at the SR&T meeting that may help explain cytosinicline's differentiated side effect profile. Research from the University of Cambridge elucidated the potential role of the 5-HT3 receptor activity in the development of Chantix side effects. By comparison to cytosinicline, the study showed that Chantix has a 2000 greater full binding affinity to the 5-HT3 receptor. which is believed to be the cause of increased rates of nausea and vomiting that smokers can experience while on Chantix. Overall, we are very pleased with the recent clinical data that has been generated, which continues to support the possibility of cytosinicline having both best-in-class safety and efficacy. I will now turn the call over to Jerry to discuss the third quarter financial results.
spk08: Thanks, John. I would like to first provide an update on our recent financing and cash position and then review our third quarter financials. In the third quarter of 2020, we closed two public equity financings, totaling $13.5 million in gross proceeds. Both of these transactions were common stock only. In July, we closed a $6 million registered direct financing. The financing was completed at no discount to the previous closing share price. The financing provided a net cash of approximately $5.3 million after deducting placement agent commissions and offering expenses. In August, we closed an underwritten public offering with gross proceeds of approximately $7.5 million, which included the full exercise of the underwriter's over-allotment option. We received net proceeds of approximately $6.8 million after deducting commissions and offering expenses. In the third quarter, we saw outstanding warrant exercise that provided $2.5 million in cash proceeds. Year-to-date for 2020, we have received approximately $3.1 million in proceeds from warrant exercises. As of September 30th, 2020, the company's cash, cash equivalents, short-term investments, and restricted cash were $22.4 million. Our September 30th, 2020 cash balance reflects the two financings we completed during the quarter offset by our investments in the ORCA II trial that allowed it to be initiated in October. Turning to our statement of operations, the company incurred a net loss of $3.8 million for the quarter ended September 30th, 2020. as compared to a net loss of 3.7 million for the same period in 2019. Net loss for the nine months ended September 30th, 2020, decreased to 10 million compared to 13.2 million for the same period in 2019. We expect our quarterly operating expenses to increase with the initiation of our phase three trial, as subjects are randomized into the study. That concludes the summary of our third quarter financial results. I would now like to turn the call back over to John.
spk09: Thank you, Jerry. As you can see, we had an exciting and busy third quarter. Our continued focus will be on the execution of the Phase III program. While in parallel, we continue to explore opportunities for partnering and additional ways to expand the potential for cytosinicline. As discussed in previous calls, we continue to seek non-dilutive funding to initiate a trial in nicotine-addicted e-cigarette users and believe this could be a future indication of cytosinicline to help address the vaping epidemic. Finally, in closing, I'd like to remind everyone that we will be hosting a virtual KOL Roundtable next week on Tuesday, November 17th at 12 p.m. Eastern Time. The event will feature five esteemed thought leaders in the field of smoking cessation, including Dr. Nancy Rigotti, Professor of Medicine at Harvard Medical School and the ORCA II Primary Investigator. This event will provide an excellent opportunity to hear firsthand from experts on their perspective of cytosinicline, our development program, and how it fits within the smoking cessation market. Additional details and registration information can be found on the IR page of the Achieve website. That concludes our prepared remarks. We will now open the line for questions. Laura?
spk05: Thank you, sir. Ladies and gentlemen, if you have a question at this time, please press the star, then the number one key on your touch, don't tell us on. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your first question will come from the line of Michael Higgins from Lattenburg-Bellman. So your line is now live. Go ahead, please.
spk03: Thanks, Apparator. Hi, guys. How are you? Good. Thanks for taking some questions. A couple on... Orca, too. Congrats on the start. I know it's a heavy lift and a lot going on there. You mentioned in the press release in your comments with COVID underway as well. Just a couple questions on what's making it, I guess it's obvious that COVID essentially makes it tougher to enroll. On the other hand, there's likely to be greater motivation amongst the patients that are keenly aware that there's heightened risk with COVID how is this on balance so far? Are you seeing greater trepidation from patients and difficulty, or they seem to be more motivated, and how are the sites behaving so far? Thanks.
spk07: The sites actually have been wanting to start even sooner. Most of our sites have been designated essential businesses, and they've actually been open and running clinical trials and enrolling patients through the year. So they have been very motivated to get this started. Some of these sites have been on COVID vaccine trials. So from the site perspective, they're just excited to finally get this study on rolling. And the screening activity ramped up really quickly. So I don't think there's a problem as far as the interest in subjects. I should say, though, that we are metering enrollment right now. just to make sure that all the procedures and processes are there, that the sites are used to it, that everything goes smoothly. And then we plan on ramping up after the new years. So we're actually, for us as a company, metering that enthusiasm until after the first of the year.
spk03: Right. Yeah, makes sense. Okay, thanks. Cindy, while I have you here, you mentioned in September the check with the FDA that there were two adjustments, I think it's some secondaries. I didn't quite hear all that. It sounded like some nicotine withdrawal evaluations and some relapse measurements. Could you clarify what those are again?
spk07: Yeah, we've actually, so just to remind you, in November we had the FDA in a Type B meeting review the protocol, all of the statistic analyses, everything was fine. We did send the final protocol to them for one last review in July, letting them know that we planned on starting in that October timeframe, and they really came back with only two minor changes. They asked us to do a nicotine withdrawal assessment at week seven, and they asked us to add another exploratory objective for an analysis, and that was it. So we felt pretty confident that all issues, especially the primary endpoints and the assessments and the safety and the efficacy, had been well vetted with just only those two minor changes. And we made them, and off and running we went.
spk03: Thank you for that. And then one final, if I could, here. It doesn't sound like there's a need to have any adjustments along the way for COVID. It sounds like in the design, there could be a virtual if necessary. But kind of walk us through how the CO confirmation, the biochem confirmation happens. I assume they have to have face-to-face meetings for that. Thanks.
spk07: Yes, they can actually do that. If worst-case scenario, they could drive up in a car and actually have these assessments. And we're also looking at, you know, if the subject really came out to be COVID positive, that we have the ability to have home evaluations in that. We can send the CO monitors to their home for them to do it virtually on their own, as well as send... medication, study drug to them. So the sites we've looked at having virtual as well as home delivery for those subjects. So we've really looked at all aspects of trying to make sure we don't have missing data. Now, even though you plan for that, if we do have missing data, We also have a plan to discuss any issues that we might have with missing data with FDA prior to final study analysis and study database lock.
spk03: Makes sense. Appreciate the insights.
spk09: Thank you.
spk05: Thank you. Your next question will come from the line of Thomas Flatton from Lake Street Capital Markets. Your line is now live. Go ahead, please.
spk11: Hey, guys. Thanks for taking the questions. Rawara, during Dr. Walker's presentation at SRNT, she mentioned there was an opportunity to perhaps go back and use some different statistical models and tools to evaluate whether or not there was another cut of the data that could be done that might show superiority. Is that ongoing, do you know?
spk09: Thanks, Thomas. Yeah, I think we're not aware of kind of the status of that based on her comments during the presentation there. I think what we're currently looking for at the moment is the ultimate publication of the data. We know that's in process. And so, you know, we're looking forward to seeing, you know, more data coming out when that is ultimately published in a manuscript.
spk11: Great. And then just to follow up on the question about enrollment, is it fair to assume you should be fully enrolled, you know, kind of partway through the second quarter of next year? Is that a fair assumption, just trying to do the follow-up timing and when we might have data?
spk07: Yes. Actually, without any COVID interference, we were hoping that we could get this enrolled by the end of the first quarter. So, you know, if there is some delay – in enrollment, then it would be the beginning of quarter two.
spk11: Oh, great. And then just one quick final one. On ORCA V1, have you guys made any progress in finding a non-dilutive financing opportunity to advance that program?
spk09: So we are currently evaluating that. We've identified an opportunity that we think we match up well with. of getting grant funding for that trial. And so that's what we're currently pursuing at the moment. The deadline for that is right at the beginning of next year. And so we'll go ahead and we're pulling together the documentation and the thesis for why it makes sense currently and get that submitted. So I think as soon as we have further updates on that, we'll happily provide.
spk11: That's great. Thanks for taking the questions.
spk05: Thank you. Your next question will come from the line of Jason McCarthy from Maxim Group. Your line is now live. Go ahead, please.
spk04: Hi, guys. This is Joanne Lee. I'm a call for Jason McCarthy. Thanks for taking the questions, and congratulations on the continued progress. I know you guys just started enrolling patients into the Phase III ORCA study last month, but I was wondering if there are any updates you guys could provide at this time and if we could look forward to any sort of preliminary data at the upcoming KOL later this month. Thanks.
spk09: So in terms of update on enrollment so far, we don't have anything else to report outside of Cindy's update earlier, other than we continue to be on target. We are metering enrollment between now and the end of the year. And again, our target has been to complete enrollment by the end of the first quarter. But I think if there are some COVID-related delays, that might push that out into the second quarter of next year. But so far, everything's on target.
spk04: Great, thank you. And you just mentioned that enrollment could be completed by first quarter 21. Could you discuss a little on how you guys were able to mitigate timing delays in relation to COVID rising, and in general, how smoking cessation was impacted by COVID? Because this seems to be the time when people don't really want to stop smoking.
spk09: Cindy, you want to grab that one?
spk07: Sure. Well, actually, it's a double-edged sword because smoking Individuals who are smokers can actually have worse symptoms, especially if they're hospitalized. In fact, we're going to be going into this in far more detail at the KOL event next Tuesday. So this is the perfect timing to plug that. If you're interested in more of that and hearing it from the experts, tune in to that KOL event next week. Okay, got it. All right, thank you so much.
spk09: Thanks, Joanne.
spk05: Thank you. Your next question will come from the line of John van der Mosten from Zach's FCR. Your line is now live. Go ahead, Tim.
spk10: Good afternoon, everyone, and congratulations, John and Sydney, on your promotion, and welcome to the call, Jerry. I wanted to build off some of the initial questions on the enrollment for ORCA 2. Are all 15 sites ready to enroll, or do we only have a few of them open now with the rest opening as of the beginning of the year?
spk07: No, all of them are open and screening at this time.
spk10: Okay, great. And then I also want to recognize the great results from the RORA trial that were quite close to showing superiority. I think that didn't get enough attention, and that was really a big positive from Zach's point of view. I also wanted to look at the vaping trial results. I saw that it looks like the protocol for that was out in the previous presentation that had been put out. Can you talk a bit about how that will be structured when it goes live, assuming you're able to obtain that financing?
spk07: Are you talking about the general study design?
spk10: Yeah, exactly, for the vaping trial.
spk07: Yeah, the study is 150 subjects who are vaping only, so they're not vaping and smoking cigarettes. So most of these subjects will have been, frankly, prior smokers who are vaping. Of the 150, it'll be a one to two randomization with 50 receiving placebo and 100 receiving cytosiniclin for 12 weeks. So everyone will... I'll go for 12-week treatment. You'll have 50 with getting 12 weeks of placebo and 100 getting 12 weeks of cytosinicline, but we'll be looking and comparing at measuring 6 weeks and 12 weeks vaping cessation as the end point. Very similar to actually what the ORCA-2 is doing, but not with three arms because we're really not going to be comparing reduction and risk of relapse in the vaping study. This is much more of a pilot study.
spk10: Okay. Oh, okay. Yeah, and maybe that kind of gets to my next question, which is going to be if, you know, I think it's a Phase II, you know, if that could possibly be used in conjunction with the ORCA II trial to perhaps get an additional approval or a way to get that, you know, approved so that it could be used for that as well.
spk07: Well, obviously, it's only 150 subjects, but you can bet that if there is statistical significance, we'd be discussing with the FDA having that as a supportive trial for then a one Phase III for vaping as an additional indication, follow-on indication.
spk10: Okay. Great. Well, that's all for me. Thank you, guys. Thanks, John.
spk05: Thank you. And again, at this time, ladies and gentlemen, if you have a question, please press the number one key on your touchstone telephone. Your next question will come from the line of Jim Molloy from Alliance Global. Your line is now live. Go ahead, please.
spk02: Hey, guys. Thanks for taking my question. I had a quick question on the two endpoints on the trial. The p-value is still 0.05 for the both, and understand quickly, it's either or both for a successful trial, and then maybe a follow-up on that would be If you had to pick one, I know all the kids are beautiful, which one, given the mechanism of action of cytosinicline, do you think is more likely to hit?
spk07: Well, yes, we do think both of them are beautiful. So when you look at the p-value of 0.05, it's a two-sided, so you have to understand I talk one-sided p-values. So obviously for cytosinicline being better than placebo, the p-value has to be 0.025 or less. Right. And so if both of those endpoints meet 0.025 or less, the study is statistically successful at both endpoints. Now, if you have one endpoint that does not make that significance level, then the other endpoint does have to have a lower p-value of 0.0125 to be significant. I guess if you looked at that, you would think the chance of six weeks might be less than 12 weeks. More treatment is better. So the 12-week might be the one that would be significant. But for our bet, if we're betting, we're betting both of them are going to be significant and that it will give us then the flexibility that some individuals who only want to take six weeks of treatment can take six weeks Those that might take longer to stop smoking or the reduction of risk of relapse actually is significant. Those more refractory smokers might choose to go 12 weeks in their treatment.
spk02: Thanks for that answer. Then I'll need to follow up on that. Assuming a positive trial, which do you think plays to the strength of cytosinicline, the shorter duration of therapy or the lower side effects?
spk07: Well, certainly the lower side effects are going to be very helpful because no one really likes to have side effects if you're trying to quit smoking on top of the nicotine withdrawal. So I think that six weeks, if you stop smoking, that is a success.
spk02: Well, best of luck on the trial. Thank you for taking the questions.
spk01: Thanks, Jim.
spk05: Thank you. And presenters, we do have a follow-up question coming from Mr. Michael Higgins. Your line is now live. Go ahead, please.
spk03: Thanks. Just a follow-up to get some insights from you guys as to what we'll see next week. I understand the event is happening, of course, and I'm very happy to be moderating, but is there a certain – Certain information we should look for that's new next week. Obviously, a year ago, having the KOLs there at the event was really spectacular, and you've got a great list coming. Most of those are coming back again this year. Anything new from ARARA? Anything different from the EVAPing? A bit more information there? Obviously, we'll ask and get some depth of the verniculine studies versus the designs here with cytosinicline, but anything in particular we should look for for next week. Thanks.
spk09: Great, thanks, Michael. Yeah, I think in terms of new information, I think we are planning on doing a deeper dive into the phase three trial and some of the mechanics around that, including further analysis of the endpoints as well as some of the pieces in place related to mitigating the effects of the pandemic. I think in terms of new data coming out of RAURA or prior information, we're not planning on anything there. But I think as you noted before, I think we've got a great group of key opinion leaders in this space. And I know we got a lot of positive reviews when we got some of these folks together last September in terms of elucidating what is going on in the smoking cessation landscape and why a new treatment option really is needed in this space. And I think letting The experts in the field, you know, get their time to talk about the space, I think is always helpful to get just more information out in terms of why this is important. So I think all in all, it should be a real great event and hope that everyone gets a chance to tune in for that.
spk03: That's great. And likely some further discussion on the evaping opportunity, I assume.
spk09: Yes, indeed.
spk03: Great. Look forward to it. Thanks, guys.
spk05: Thank you. And I am showing no further questions at this time. I would like to turn the conference back to Mr. John Bancich for any closing remarks.
spk09: Great. Thank you. Thanks, everyone, again, for joining us on the call today. I hope many of you will get a chance to tune in next Tuesday for our KOL Roundtable. We look forward to providing additional updates as we progress in the near future. Thank you again.
spk05: Thank you, sir. Thank you so much, presenters. And again, thank you, everyone, for participating. This concludes today's conference. You may now disconnect. Stay safe and have a lovely day. Thank you. Thank you. Hello. Thank you. Bye.
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