ACHIEVE LIFE SCIENCES, INC. Q1 2026 earnings call

Thank you, operator. Good morning, everyone, and thank you for joining us today. From Achieve Life Sciences, we are joined by Dr. Andrew Goldberg, Chief Executive Officer, who will deliver the prepared remarks. Joining Dr. Goldberg for the Q&A will be Mark Oki, Chief Financial Officer. A replay will be available later today using the information in the earnings press release or by visiting the Achieve Life Sciences website. Today's conference call will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations, and future potential operating results of Achieve.

Although management believes these statements are reasonable based on estimates, assumptions, and projections of today, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties, and other factors, including, but not limited to, the factors set forth in the company's filings with the SEC. Achieve undertakes no obligation to update or revise any of these forward-looking statements. 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 Dr. Goldberg.

Thank you, Nicole, good morning, everyone. I'm honored to step into the role of Chief Executive Officer at such an important time. I joined Achieve to lead a mission-driven company. We are developing a new treatment for cessation of smoking, the leading cause of preventable death, as well as vaping that is putting a new generation at risk. We are going to make sure the public and the people most directly affected get the help they deserve.

Before turning to the quarter, a word about my background and why I'm here. For the last decade, I have been an investor and governance leader, serving as a director or observer on 19 healthcare boards, most recently at Veradermics and currently with Tarsus Pharmaceuticals through their national launch of XDEMVY.

My expertise is helping companies cross the chasm from late-stage development to commercial with disciplined execution, all in service of bringing next-generation therapies to market for patients. Improving patient care has been the focus of my career. I have spent nearly 20 years as a physician, dual board certified in critical care and emergency medicine. I trained and practiced at the Mayo Clinic, Los Angeles General Medical Center, and the VA health system.

I published my first research on tobacco when I was 19. Through treating critically-ill patients with respiratory failure, vascular events, and complications of cancer, I've since seen firsthand the toll nicotine dependence takes on patients and their families. Today, in the United States, nearly 50 million adults use nicotine. Approximately 25 million are smokers, 18 million vape, and though the majority want to quit, most fail because current treatment options fall short.

Despite the scale of this problem, there has not been a new FDA-approved smoking cessation therapy in more than two decades, and there has never been an approved therapy for vaping cessation. At Achieve, the strength of the clinical data and the favorable tolerability profile gave me conviction that we have an opportunity to fill that gap between patient need and available solutions and champion a category-defining public health intervention.

Before I jump into this quarter's updates, I want to acknowledge Rick Stewart, our Co-Founder and former CEO. Rick was instrumental in building this company from recognizing cytisinicline's potential through NDA acceptance. We are deeply grateful for his vision, leadership, and unwavering dedication to this mission. We would not be where we are today without him. We also recently appointed three new Board members. Chris Martin, most recently the Chief Commercial Officer of Verona Pharma, Dr. Lucian Iancovici, Managing Director at TPG, and Dr. Aaron Royston, Managing Partner at venBio.

Chris recently led the launch of OHTUVAYRE, widely regarded as one of the most successful pulmonary launches in industry history, and brings exemplary commercial execution experience to our Board. Dr. Iancovici and Dr. Royston each bring deep expertise in company scaling, investing, and board governance and have guided numerous companies through FDA approval. I'm pleased to welcome all three to the Board.

Earlier this morning, we also announced two of Chris's prior colleagues from Verona joining us as key leaders in our commercial team. Mark Zappia as Senior Vice President of Commercial, and Jim Willis as Vice President of Sales and Enablement, where he will lead the field force. Together with Chris, this team brings deep experience from OHTUVAYRE, widely regarded as one of the best launches in industry history, and we are thrilled to have their leadership for what comes next.

Today, I'd like to touch on three key highlights from the quarter. First, we closed a transformational financing, which positions us for success. This private placement included $180 million in upfront capital, plus up to $174 million from milestone-based warrants that may be exercised at any time prior to and up to 20 trading days following FDA approval. This financing came together because a syndicate of leading specialist healthcare investors chose to support this company's next chapter.

I want to personally thank Frazier Life Sciences, TPG, venBio, Paradigm BioCapital, Marshall Wace, and our other new and existing investors for the conviction they have placed in this team and this mission. Second, we continue to make operational progress. As mentioned last quarter, the company has partnered with U.S.-based Adare Pharma Solutions to manufacture cytisinicline drug product for potential commercial supply. We expect this partnership will help decrease risk related to international importation of pharmaceuticals, including potential tariffs.

In the first quarter, we produced our first cytisinicline engineering batch at their facility. In mid-April, the company announced it expects to receive a complete response letter from the FDA on or by our June 20th PDUFA date due to a separate third-party manufacturer having received an Official Action Indicated classification. It is important to note that these observations relate to general CGMP matters at the facility and are not specific to cytisinicline manufacturing.

The company's plan, as previously stated, is to resubmit the NDA in the fourth quarter of 2026, naming Adare Pharma Solutions as our new and primary manufacturing partner for commercial supply. The company's stated expectation is for a commercial launch in the first half of 2027. I am now ensuring our readiness against that timeline. Third, let's now turn to the continued advancement of our scientific data. In March, we published mechanistic data in Nicotine & Tobacco Research providing evidence that cytisinicline selectively interacts with the alpha-4 beta-2 nicotinic receptor while exhibiting minimal interaction with the 5-HT3 serotonin receptor, a key mechanism potentially underlying its tolerability.