Good day, ladies and gentlemen, welcome to the Achieve Life Sciences first quarter 2023 earnings conference call. All lines have been placed on a listen-only mode. The floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Nicole Jones, Investor Relations at CG Capital. Ma'am, the floor is yours.
Thank you, Operator. Thank you to everyone for joining the call. 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 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 thank you to all for joining us. Just a few weeks ago, we reported positive top-line results from our groundbreaking phase II ORCA-V1 clinical trial, the first-ever randomized placebo-controlled trial for vaping cessation. Cytisinicline treatment resulted in a statistically significant benefit for nicotine e-cigarette cessation compared to placebo. Results for the primary endpoint showed that study participants who received cytisinicline were approximately three times more likely to quit vaping compared to those who received placebo. Cytisinicline also continued to demonstrate exceptional safety and tolerability. We are very pleased with another win for cytisinicline and for people who are seeking options to overcome their nicotine dependence. Nicotine e-cigarette use continues to be a growing concern, with recent reports from CDC indicating vaping rates in the U.S. are increasing.
Data recently published indicates that roughly 11 million adults and 2.5 million high school and middle school students use e-cigarettes to vape nicotine. The CDC indicated in recent weeks the percentage of use has increased by 2.5%. As this segment of nicotine use continues to grow, an increasing number of people who use e-cigarettes may start to look for solutions to quit. Currently, there are no medications specifically indicated for vaping cessation. We completed a survey in people using e-cigarettes and found that 73% of participants desired to quit vaping in the next 3-12 months, and the overwhelming majority would be interested in using a naturally derived prescription treatment to help them do so.
Based on this unmet need for treatments, the swift enrollment we observed in the ORCA-V1 trial and the statistically significant results from the recent top-line data announcement, we believe that cytisinicline has a unique opportunity to become a solution to help address this growing vaping epidemic. To touch more on the recent clinical data, I will now hand the call over to Cindy to go through the ORCA-V1 results in more detail.
Thanks, John. As mentioned, the ORCA-V1 top-line results that we shared last month showed a statistically significant benefit for cytisinicline as a treatment for nicotine vaping cessation even though this phase II proof of concept study was not powered to do that. Similar to our phase III designs, ORCA-V1 evaluated three milligrams cytisinicline dose three times daily for 12 weeks. ORCA-V1 randomized subjects at five clinical sites in the U.S. in a 2-to-1 ratio, such that a total of 160 subjects were randomized with 107 receiving cytisinicline for 12 weeks and 53 receiving placebo. ORCA-V1 enrollment was completed in approximately four months. The average age of ORCA-V1 subjects was 34, and all of them wanted to quit vaping on the study.
Approximately half of the subjects had previously tried to quit vaping by self-attempt methods. Subjects were stratified based on past smoking history, with 72% identifying as former or past smokers. Dr. Nancy Rigotti of Harvard Medical School served as the primary investigator of the study. ORCA-V1 was supported via grant funding from NIDA and the NIH. The primary endpoint results for vaping cessation showed subjects who received cytisinicline had 2.6 times higher odds or likelihood to quit vaping during the last 4 weeks of treatment compared to subjects who received placebo. This endpoint was statistically significant with a P value of 0.035. The 4 weeks continuous vaping cessation rate during weeks 9 through 12 was 31.8% for cytisinicline-treated subjects, compared to 15.1% for those who received placebo.
Importantly, cytisinicline benefit was also observed across all clinical trial sites and demographics such as participant age, gender, race, and whether they had been past smokers or not. Regarding safety, cytisinicline was very well tolerated, with 50.9% of subjects who received cytisinicline reporting adverse events, compared to 54.7% of subjects in the placebo arm. Adverse events were as expected, mainly mild to moderate, and there were no serious adverse events reported during the study. As these are top line results, we are continuing to analyze the data and look forward to providing additional details on our findings as we learn more. I will now turn the call back over to John.
Thank you, Cindy. Our next key milestone is rapidly approaching as we eagerly await results from our second NDA-enabling phase III study, which we expect to report later this quarter. The ORCA-3 trial mirrors the design of the previously reported and highly successful ORCA-2 trial. ORCA-3 is evaluating the efficacy and tolerability of 3 milligrams cytisinicline dosed three times daily for either six or 12 weeks, compared with placebo. Biochemically verified continuous abstinence is the primary endpoint. Similar to ORCA-2, will be evaluated during the last four weeks of treatment. Each arm will be compared independently to the placebo arm. Success will be determined if either or both of the cytisinicline treatment arms show a statistical benefit as compared to placebo.
Our efforts are now focused on preparing for the data readout later this quarter and continuing our preparations to support a new drug application, or NDA, for cytisinicline in the US. At this time, I'll now turn the call over to Jerry to review our financial results for the quarter.
Thanks, John. Looking at our statement of operations, the company incurred a net loss of $9 million for the quarter ended March 31st, 2023, as compared to a net loss of $7.6 million for the same quarter of 2022. Total operating expenses in the first quarter of 2023 increased to $8.6 million, as compared to $7.2 million for the same quarter of 2022. Operating expenses were higher for the quarter ended March 31st, 2023, as both the ORCA-3 phase III trial and the ORCA-V1 phase II trial were fully enrolled during the quarter and had their last subject last visit completed in March 2023, as compared to the same period in 2022, where only our phase III ORCA-2 was fully enrolled. We anticipate our operating expenses to decline in the second quarter in line with the completion of the two clinical studies.
As of March 31st, 2023, the company's cash equivalents and restricted cash were $16.6 million, as compared to $24.8 million as of December 31st, 2023. We believe our current cash balance is sufficient to provide us with runway into late 2023. I'd now like to turn the call back over to John.
Thanks, Jerry. A final highlight from the 1st quarter before we conclude today's call. In March, we announced a refresh to our Board of Directors to support the future direction of the company. We are pleased to welcome Mr. Stuart Duty, Mr. Thomas King, and Mr. Tom Sellig to the Board. They each bring extensive leadership in the pharmaceutical and life science industries across capital markets, strategic transactions, sales and marketing, as well as manufacturing. We would also like to thank Mr. Donald Joseph, Dr. Martin Mattingly, and Mr. Jay Moyes for their years of service and strategic guidance to Achieve as they will not be standing for re-election at our upcoming annual shareholder meeting on June 7th. We have achieved many milestones within the 1st quarter of 2023, and we expect to continue this exciting year with the upcoming ORCA-3 readout.
We appreciate your continued support, and I will now turn the call over to the operator for questions.
Thank you. The floor is now open for questions. If you do have a question, you may press star one on your telephone keypad at this time. If your question has been answered, you can remove yourself from the queue by pressing one. Again, ladies and gentlemen, it's star one to ask a question. Our first question comes from Thomas Flaten from Lake Street Capital. Go ahead, Thomas.
Great. I appreciate you guys taking the questions. John or Cindy, with respect to completing ORCA-3 and then moving forward, could you give us some sense of what you think realistic timing for an NDA submission would be and if there are any critical path items there that we should be aware of at, you know, pre-NDA meeting with FDA or, and anything like that, any pre-clinical data that you still need to generate?
Thanks for the question, Thomas. I'm gonna hand this one over to Cindy.
Sure. We've been waiting for ORCA-3 results. With ORCA-3 results now we can coordinate a pre-NDA meeting with FDA. I mean, obviously we're gonna target that for this year. Timing though, we would need to request the meeting, so we kind of figure it's going to be you know, at the end of quarter three or quarter three at some time, but we'll find that out when we get that scheduled. We actually have three phase I studies. We're finishing up things that we need for the NDA, like a PK study on renal impairment. We actually have another PK study looking at steady state concentrations with the 3 milligrams 3 times a day, and also finishing up a TQT study.
These are all things that are required in the NDA. All of them will be completed by the end of this year. We're looking at the, you know, first half of next year at some time, for the NDA coming together.
Excellent. John, any update on the potential for a debt refinancing? 'Cause I know that repayment is looming at the end of the year as well.
Yeah. Thanks, Thomas. On the debt side, we've been in dialogue with the folks at SVB, formerly SVB, now First Citizens Bank. We do think there is a path towards getting some movement on an extension or refi of that facility. Nothing to announce today, but we do think at least the discussions we've had so far are positive on that front.
Just one quick final one maybe for Jerry. There was a bit of a sequential uptick in G&A. I was curious if there are any one-timers in their stock-based comp for bonuses or anything like that.
Jerry, you wanna take that one?
Yeah. Sorry, I was just on mute there. Yeah, it was just the one-time stock-based comp grants that we have annually at the beginning of January.
Excellent. Appreciate it, guys. Thanks so much.
Thanks, Thomas.
Thank you. Our next question comes from François Brisebois from Oppenheimer. Go ahead.
Thank you for for taking the question. The first one here in terms of the ORCA-3 that's we're expecting to read out this quarter. I was just wondering, any thoughts on what you would expect, maybe odds ratio-wise? Is this something where we should compare it to the data that you had shown in the previous phase III ORCA trial?
Yeah, thanks for the question, Frank. I think in terms of odds ratios, you know, I don't think we have a firm expectation in terms of what those might look like. I think when we look at the market today and where odds ratios sit for the existing products, they're in the range of 2-3, when you go kind of at the low end of NRT to varenicline at the higher end. I think anything in that range or above we see as being a win. The ORCA program so far, at least for smoking cessation, we've seen odds ratios between five and eight. So we've exceeded kind of those benchmark requirements. But f rom the discussions we've had with the key opinion leaders in this space, you know, anything over an odds ratio of two is gonna be a meaningful clinical benefit in this setting.
Okay, that's helpful. In terms of manufacturing, as we're getting to that stage here, any, you know, can you give any color on what's going on on the manufacturing side? Any obstacles to overcome or just the process where you stand right now? Thank you.
On the CMC side, we've been working hand in hand with our colleagues over at Sopharma , who will be the manufacturers of record on that front. The focus has been, I would say, in two parallel tracks. One is just FDA inspection readiness. That's something we'll continue to focus on as we march forward to an NDA filing. The other track would be preparations on supply chain, getting registration batches up and on stability, and then making sure kind of all the way through the supply chain through final packaging is sorted. Those activities are all in process as well.
Okay, great. Lastly, maybe if I can ask about vaping. Sorry if you mentioned it. Steps going forward, is this kind of a label expansion? How many trials would we need to potentially get to approval here on the vaping side? Thank you.
Thanks, Frank. On the vaping side, as we indicated a couple weeks back when we released the ORCA-V1 results, our belief currently is that a single phase III trial is likely what the FDA would expect for approval in this indication. That would be under the guise of already being on the market or having an approval for smoking cessation. We're effectively just expanding the indication. I think by having a statistical significant result from ORCA-V1, that reinforces our belief.
Thank you.
Our next question comes from Michael Higgins from Ladenburg Thalmann. Go ahead, Michael.
Thanks, Operator. Good evening, guys. Congrats on the progress with cytisinicline, including ORCA-V1. We're certainly eager here to see the second phase III, ORCA-3 here in Q2. Question on ORCA-3. Can you give us any sense for the timing here in Q2, as investors start to look out and look at the calendars? When might we see that data come through? Thanks.
The timing for ORCA-3, you know, we've guided to the second quarter, and I think, you know, the closest we can get to firming that up would be second half of this quarter. Anytime after kind of the middle of May, that trial result would be in play.
Okay. That's helpful. Also on the phase III, Cindy, question for you on the 24-week data that was presented at SRNT. You noted 82% compliance at 24 weeks. Curious how that compares to varenicline or your expectations for cytisinicline in both ORCA pivotals? Thanks.
I think compliance was actually quite good. I think it may be a little higher than what varenicline reported. It obviously is probably a component of being in a clinical trial, as well as you have the behavioral support component that continues actually throughout the follow-up period.
That's helpful. One on vaping. Obviously this is an area of increased interest across society. Curious in your conversations with investors, how they're seeing vaping relative to their interest in cigarette smoking.
Yeah, interesting question. I think, you know, the bread and butter of what we've been doing is been on the smoking cessation side. And I think people are beginning to appreciate, You know what we just validated here with ORCA-V1, which is the potential to expand into a segment that currently has no available treatment options and is growing. You know, we just saw the latest update of e-cigarette users here in the US increase from about 9 million up to 11 million. So this is a growing segment with no available options. And we think, you know, this is the right course to trot as we move ahead. And I think that's resonated quite strongly as we've been able to socialize the results.
Look forward to seeing ORCA-3. Appreciate the question. Thanks, guys.
Thanks, Michael.
Again, to ask a question on the phone, it is star one. Our next question comes from John Vandermosten from Zacks. Go ahead.
Thank you. Good afternoon, John, Cindy, and Jerry. You know, as you guys are going to the final stages, are there any preparations that you're making for commercialization? Our belief is that you're gonna work with a partner to do that. I know sometimes that it makes sense to reach out and work on some, you know, perhaps labeling, packaging, pricing, or outreach to key stakeholders, in order to kind of prep to work with a partner and also help your negotiating position. Is that something that you're planning to do or makes sense to do?
Yeah. Thanks for the question, John. On the commercialization prep, one of the key areas is supply chain, making sure that we've got all the blocking and tackling together, you know, all the way through final packaging, and into potential distribution. So again, we're in the early phases of a lot of that planning to make sure that's on track. I would say the other piece that we're looking at to make sure is moving ahead would be on the market access side. Now, we know that this is a very favorable category given the Affordable Care Act mandates that all FDA-approved smoking cessation products be covered.
There's still a fair amount of work that's required to make sure that we can get all the pieces in place so we're ready to move ahead with those contracting discussions. I'd say those are the two primary areas of focus.
Okay. Regarding labeling, what's the timeline left for that? You know, discussions with the FDA and preparation there.
On the labeling front, we've already began working with some outside advisors on what the label would look like. That's early days. ORCA-3 will feed into that, we'll need that in hand. That's an important piece that we will submit with the NDA. The bulk of that work will be done over the course of 2023.
Got it. Finally from me, any work done on a brand name yet or, directions in terms of, you know, how you're gonna eventually, market that?
Sorry, was the question around a brand name?
Yeah, exactly. Is that anything you've worked on yet? I mean, I know it's probably a challenging thing to do with, you know, all the other names out there, but any work done there yet? Any indications of where that might go?
Yes. We have been through an exercise to hone in on a brand name. We did get preliminary clearance from FDA on that. We wouldn't get final approval until it's submitted with NDA. We have gone through that process. That is another piece, at least on the commercialization front, that we're ready for.
Great. Thank you, John.
Thanks, John.
That appears to be the last question at this time. I would now like to turn it back to management for any closing remarks.
Thanks, Operator. Thanks, everyone, for joining us today. It's been an exciting, first portion of 2023. We look forward to rejoining you soon, with results from the ORCA-3 trial, later this quarter. Appreciate the continued support, and we'll talk to you soon. Thanks.
Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.