Greetings. Welcome to Achieve Life Sciences Third Quarter Earnings Conference Call and Webcast. [Operator Instructions] Please note this conference is being recorded. At this time, I'll turn the conference over to Nicole Jones with Investor Relations. Nicole, you may now begin.

Thank you, operator, and thank you to everyone for joining the call today. Today from Achieve, we have John Bencich, Chief Executive Officer; Dr. Cindy Jacobs, President and Chief Medical Officer; and Jerry Wan, Principal Accounting Officer. Achieve's management will be available for Q&A after the prepared remarks. 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 SEC concerning factors that could affect the company. I'll now turn the call over to John.

Thank you, Nicole and thanks, everyone, for joining us today to review our third quarter highlights and the overall status of the cytisinicline program. Over the last quarter as well as throughout the entire year, significant progress has been made in establishing the foundation for the first novel nicotine dependence treatment in almost two decades. So far this year, with a small and efficient team of only 22 full-time employees, Achieve accomplished many significant milestones including the announcement of positive results from our second Phase 3 cytisinicline trial for smoking cessation and published results from our first Phase 3 trial in JAMA. Reported a statistically significant efficacy benefit in the Phase 2 ORCA-V1 trial, the first ever randomized controlled trial for e-cigarettes cessation. We've completed three additional clinical studies of over 100 subjects required for NDA submission, made significant progress on the compilation of the NDA, held numerous interactions and conducted three formal meetings with the agency to prepare for filing and approval in the U.S., including most recently a pre-NDA discussion that occurred at the end of October and increased outreach and further discussions with potential commercial organizations on the cytisinicline U.S. and global marketing opportunity. We believe pending FDA approval cytisinicline holds promise for providing a fresh start to the millions grappling with quitting smoking and vaping. There remain over 1 billion cigarette smokers around the globe. In the United States alone, over 28 million adult smoke combustible cigarettes and 11 million adult-based nicotine. The market potential for cytisinicline is substantial and its potential impact on global public health is unparalleled. We have strong confidence in cytisinicline's effectiveness in assisting individuals who are motivated to quit smoking. Our Phase 3 clinical trial results demonstrate a significant advantage with smokers treated with cytisinicline being up to 8x more likely…

Thanks, John. I will be providing an update on our cash position as of September 30, 2023, and reviewing our operating expenses for the third quarter of 2023. As of September 30, 2023, the company's cash, cash equivalents, short-term investments and restricted cash were $20 million compared to $24.8 million as of December 31, 2022. We believe our current cash balance is sufficient to provide us runway into the second half of 2024. With respect to our statement of operations, net loss decreased to $7.1 million for the quarter ended September 30, 2023, compared to $13.1 million for the same quarter of 2022. Net loss for the nine months ended September 30, 2023, decreased to $24.3 million compared to $31.1 million for the same period of 2022. In line with expectations, operating expenses continued to decrease for the third quarter of 2023 with the completion and wind down of both the ORCA-3 Phase 3 trial and the ORCA-V1 Phase 2 trial. We expect our quarterly operating expenses to remain lower in the fourth quarter as compared to the first half of 2023. The decrease in costs will be partially offset an associated increase in NDA supporting activities including the finalization of three NDA supportive clinical trials and other NDA preparation activities. That concludes my financial remarks and I will now turn the call back over to John.

Thanks, Jerry. As I stated at the beginning of the call, 2023 has been a remarkable year for Achieve and the cytisinicline development program. In the near term, we have three key priorities where we will focus our efforts. First, finalized discussions with preferred strategic commercial organizations; second, complete preparations to finalize the NDA submission and third, define the regulatory pathway for cytisinicline label expansion in e-cigarette cessation. We maintain our confidence in cytisinicline's ability to change the face of public health and we appreciate your support as we work diligently to bring forward this important treatment. At this time, I'd now like to turn the call over to the operator for questions.

Thank you. [Operator Instructions] Our first question is from the line of Thomas Flaten with Lake Street. Please proceed with your question

Guys, I appreciate you taking the questions. John, with respect to timing of the NDA submission, given that the data from the three supportive studies will be out in the first quarter, is second quarter most likely? I know you're guiding the first half, but just some thoughts on that.

Yes. Thomas, thanks for the question there. So given that the discussions are ongoing with the agency, as we conclude the pre-NDA meeting, and we look to get final agreements and minutes out the other end. We're not able to refine anything further on that. So we'll have a future update as we kind of get through that final process and dialogue with the agency.

And coming out of that October meeting, was there anything surprising any incremental studies that they requested or was it pretty straightforward?

I think in terms of the output, I think as we mentioned, the discussion was constructive. We did get agreement on many of the items that we were looking for. And there's a few other pieces that we're looking to get finalized and written documentation on. And so we'll be able to provide a further update on that as we get through those final discussions.

And then just one final question for me. Could you give us maybe a little assistance in mapping out spending between today and the submission?

Yes. So I think if you look at the third quarter in terms of kind of the decrease in burn that we saw from the first half of this year, I think you can expect that will continue through the fourth quarter of this year as well. So we will see that decline carry forward if you're looking at kind of projecting that ahead. So I think that would be a good way to think about it at the moment.

Excellent. Appreciate you taking the question. Thank you.

Thanks Thomas.

Our next question is from the line of Michael Higgins with Ladenburg Thalmann. Please proceed with your questions.

Thanks. Hi John, hey guys. Congrats on the continued to progress including your ION expenses that's notable here in Q3 results and thanks for taking some questions here. If I could ask a bit more on the feedback and your progress with potential commercialization partners. Wondering how that's coming along. And if you believe our discussions with the FDA will be wrapping up in first part of 2024, do you expect to have feedback from NDA NIH regarding vaping before you complete those potential commercialization conversations?

Michael, yes, thanks for the question. So on the vaping indication, what we've been guiding to is holding an end of Phase 2 meeting next year. In terms of further refining our timing on that, we can't really provide that at the moment. Our focus will continue to be on the smoking cessation NDA as kind of that initial priority to make sure the path moving forward expeditiously.

Is it fair to say the partnering discussions would be separate for cigarette versus vaping?

The partnering discussions, I think we have seen a fair amount of interest coming from the vaping side of the opportunity. Smoking cessation will continue to be the core of that. And so I think in terms of the initial opportunity, that's going to be the first piece to launch. And so both are important, but I think the smoking given kind of the near-term nature of it is going to be the majority of focus there.

That’s fair. Thanks. And then just to clarify for everyone on board here, the gating factors ahead of the NDA filing. Obviously, you have discussions with the agency. You've got some three studies reading out early next year. Are those the two primary drivers of this discussion with the agency, but anything else besides those three that you're waiting on?

Yes. So those three are obviously critical in terms of having those key components that we knew were going to be needed for the NDA. I think as we finalize the pre-NDA discussions, we get those file written minutes, we'll be able to clarify further timing on the NDA piece. And I think the key piece of this is getting clarity going forward and that feeds back into the partnering discussions and making sure that the path towards approval is fully clarified, and that's exactly what we're getting out of the pre-NDA meeting. Makes sense. Appreciate it. Thanks, guys.

Thank you.

Our next question is from the line of Francois Bridge with Oppenheimer. Please proceed with your questions.

Hi. This is Dan on for Frank. Thanks for taking my questions. Firstly, congrats on JAMA publication, also the ORCA-V2 presentation at the V1 presentation at the SRNT. Can you give us a sense of the KOL feedback that you're hearing from these conferences? Anything in particular in terms of cytisinicline features, tolerability, efficacy that is standing out, that is coming up? Any color there?

Yes. Thanks for the question. I'm going to hand this over to Cindy.

Yes. Well, Nancy Rigatti actually presenting and our other KOLs are pretty excited as far as the efficacy that cytisinicline shows but actually, there are even more impressed and excited about the safety profile, which allows them individuals to stay on treatment and get the benefit. So it's really a combination of the efficacy and safety profile that they are the most excited for smokers and in the future of vapors to actually have a new therapy to help their nicotine dependence.

Great. And just any updates on the FDA inspection readiness on the - Sopharma front? And also any updates regarding preparations with regard to supply chain, getting the registration batch are all those processes on track?

Yes. Thanks for the question there. So I think the Sopharma and CMC attributes are going to continue to be focus as we move forward through NDA submission. As we've indicated historically, we've been working very closely with Sopharma and their readiness efforts including numerous mock FDA inspection audit. So that work will continue. As we progress and Sopharma continues to be confident that they can be ready for a future inspection. But it will continue to be a high area of focus for us as we proceed.

Thank you. Thanks for taking my questions.

[Operator Instructions] The next question is from the line of John Vandermosten with Saks. Please proceed with your questions.

All right. Thank you. Is there any reason to think that the potential vaping Phase 3 trial would be much different from ORCA-3. Are there any considerations there? Might it be smaller or I know it's kind of early, but just thinking ahead on that.

Yes. So in terms of overall sizing, I think looking back at ORCA-2 and ORCA-3 is probably a good proxy in terms of overall sample size. As we've indicated before, our belief is a single Phase 3 trial is what would be required for approval in this indication. But ultimately, we'll need to get guidance from FDA on that. But the ultimate design, we'll still be working on in terms of what that looks like. But yes, that sort of size is what you should anticipate.

Okay. Great. And I was doing some reading on varenicline and there's thoughts that it could be used for other types of addiction, perhaps cocaine and things like that. Is that something that you might consider as well to pursue beyond nicotine addiction.

It's Cindy. So we've had a lot of interest from our KOLs and other investigators of considering that once obviously approved for smoking cessation through brands and so we're supportive in those types of investigators on trials to kind of look at the other areas of addiction that cytisinicline could be helpful. And with that, then watch and see what we should pursue as a company.

And is that something that you talked to with potential buyers at this point. I might those get split off you pursue that on your own and they lift out the nicotine addiction part? Or is that - would that kind of all go together, do you think? I mean, again, I know it's early, but just I'm wondering kind of how the thought would be on that and maybe conversations that you've had.

Yes. So I think in terms of discussions with commercial innovation partners, I think this is really looking at the totality of this. We're not looking at splitting this apart in terms of multiple pieces like as we indicated on a larger scale before we've had term sheet ex U.S. from parties, in particular, a lot of interest coming out of Asia. Our continued belief is that this asset belongs in the hands of a single global partner, one that does have strong U.S. capabilities to maximize the opportunity here in the U.S. And so that's what we're looking for. We think that really kind of resolves around the entirety of the asset, not covering it up into specific indications.

Okay. And then looking at the potential sales force that might work the best for this after approval, are there any characteristics that you kind of look forward? And I'm sure you have a number of suitors that you're talking to and obviously, on your side, you want to see something that's attractive there to know what you can target and negotiate hardest with. What are some of those features that you look for in the sales force that would allow cytisinicline to kind of layer on easily and have them be very effective.

Yes, I think when we look at this overall indication. I think historically, where we see it moving forward and will continue to be a primary care call point. So from our perspective, having reps on the ground that can hit that call point. This could be an asset that's basically plugged and played into an existing sales force out there. We think that's kind of the easiest path forward. But there could be other opportunities when you look at more specialty companies that have either a CNS focus or addiction focus. So I think there's a number of angles, but I think a strong overlap with the call point is one of the key considerations for us.

Okay. And then any hints on a brand name that you guys might be working on or looking for?

We do. A good question. This is something that we precleared with the agency already. Obviously, it's not fully blessed until the NDA review gets through the end. But that's one of the components we did pretty clear early just to make sure that we have that ready to roll.

Great. All right. Thank you, John. Thank you, Cindy.

Thank you.

At this time, I will turn the floor back to management for closing remarks.

Yes. Thanks, operator, and thanks, everyone, for joining us today. We appreciate all the continued interest. It's been a tremendous year with data coming out of not only our second confirmatory Phase 3 trial, but also the first ever randomized placebo-controlled trial in vaping and publication of our first Phase 3 trial in JAMA. So really excited about where the program sits today and the interest that we continue to see from commercialization organization. We look forward to driving this forward expeditiously and providing updates as we proceed. So thanks, everyone, again for joining us today.

Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.