ACHIEVE LIFE SCIENCES, INC. Q4 2025 earnings call

Thank you, operator. Good morning, everyone, and thank you for joining us today. From Achieve Life Sciences, we are joined by Rick Stewart, President and Chief Executive Officer, Dr. Mark Rubinstein, Chief Medical Officer, Jaime Xinos, Chief Commercial Officer, and Mark Oki, Chief Financial Officer. The management team will be available for Q&A following the prepared remarks. 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 as 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 Rick.

Thank you, Nicole, and good morning, everyone. The NDA submission in June 2025 started the transformation of Achieve from a pure play clinical development company into a commercially focused enterprise. Our primary objective now is to make cytisinicline available to the 25 million patients who smoke and nearly 18 million who vape. The need for a new nicotine dependence treatment like cytisinicline has never been greater. Achieve is committed to providing the new therapeutic tool to patients seeking to break free from the cycle of nicotine dependence. I'm incredibly impressed by the commitment and resilience of the entire Achieve team and their dedication to addressing the nicotine dependence public health crisis in the U.S.

The highlights in 2025 include, firstly, the submission of a new drug application or NDA for the smoking cessation indication and its acceptance by the FDA, moving us one important step closer to becoming the first new FDA-approved treatment in 20 years. Secondly, Achieve's vaping cessation indication was one of the first recipients of a Commissioner's National Priority Voucher. Recognition of cytisinicline as a national priority is an incredible achievement of the work conducted by Achieve and the importance of cytisinicline in tackling a previously intractable problem of nicotine dependence. The Commissioner's voucher gives us an accelerated pathway to be the first and only FDA-approved vaping cessation treatment. Thirdly, our clinical team delivered on all planned regulatory milestones and generated encouraging clinical data across our program during the year.

This includes concluding the ORCA-OL long-term exposure trial, which underlined cytisinicline safety profile, demonstrating strong tolerability and excellent patient satisfaction data. We should not underestimate the importance of the findings from the ORCA-OL safety study, which demonstrated the tolerability of cytisinicline over long-term 52-week exposure to treatment. Dr. Mark Rubinstein will elaborate in a minute. Lastly, post-hoc data published in Thorax, a leading peer-reviewed medical journal, demonstrated that cytisinicline significantly improved smoking quit rates compared to placebo in adults with chronic obstructive pulmonary disease. There are 6 million COPD smokers in the U.S. today with few options to help them quit. Their level of nicotine dependence must be high as continued smoking exacerbates COPD symptoms and impairs the efficacy of COPD drugs.

The positive data on COPD patients highlights the expansive scope of opportunities for cytisinicline in terms of the range of comorbidities that could potentially benefit from treatment and broad range of healthcare providers who would be interested in its benefits. Our commercial team has moved forward decisively towards building a scalable, data-driven commercial model that will position us to launch successfully. Our model is built to address the rapidly evolving healthcare environment, where approximately 75% of primary care physicians will no longer meet with medical reps. Achieve's omni-channel digital platform provides precision targeting of physicians and patients, which will allow us to identify high volume prescribers and the patients motivated to quit, deploying resources efficiently and maximizing impact per dollar spent. AI is a critical enabler in this evolution.

We'll be using advanced analytics and machine learning to enhance decision-making, automate customer engagement, and generate predictive insights about which messages will resonate most with target audiences, positioning us to continue building an efficient commercial organization that punches well above its weight. We also just announced that we have selected Adare Pharma Solutions, a U.S.-based manufacturing organization that will produce cytisinicline drug products as we prepare for potential commercial launch and future demand. We believe this partnership will secure our supply chain, reduce risks associated with international pharmaceutical importation, and may lower overall costs, including the risk and uncertainty for tariffs on international imports of drug products. I'm pleased to report that work has commenced and our technology transfer to Adare is already underway. The Adare partnership provides redundancy in our supply chain, allowing contingency capacity in the U.S.

The manufacturer named in the cytisinicline NDA recently had an FDA good manufacturing practices inspection with two observations related to solid oral dose manufacture, which are being addressed through an ongoing communication of its remedial action plan with the FDA. By establishing U.S. manufacturing with Adare, we increase confidence in our supply chain security as we advance towards a planned commercial launch of cytisinicline expected in the first half of 2027. We remain focused on bringing cytisinicline to patients as quickly as possible, and our decision to work with Adare positions us to launch with the manufacturing reliability and the operational readiness our patients and stakeholders expect. Now, let me take a moment to remind you why our team is so passionate about bringing cytisinicline to market. Recent data issued by CDC estimated that in 2024, approximately 25 million adults in the United States smoked cigarettes.

It's estimated that more than 15 million attempt to quit every year. Smoking remains the leading cause of preventable death in the U.S., claiming approximately 500,000 lives annually and costing over $600 billion each year in healthcare costs and lost productivity. The comorbidities are devastating. To name a few, respiratory disease, cardiovascular disease, metabolic disease, and cancer. We also know that 60% of the nearly 18 million adult e-cigarette users in the U.S. want to quit, and adult nicotine e-cigarette use is on the rise. However, there is no FDA-approved treatment for e-cigarette cessation. Patients are frustrated. Physicians are frustrated. The narrative around nicotine dependence needs to change. We've seen this transformation happen with obesity. When GLP-1s emerged, they helped society recognize obesity for what it truly is, a medical condition, not a personal failure. Nicotine dependence deserves the same recognition.

It's a neurobiological condition rooted in how nicotine alters brain chemistry and creates physical dependence. It's a medical condition, and it demands medical treatment. That's why we launched our Willpower awareness campaign in January. This is the beginning of us reframing the conversation to help people understand that quitting takes more than willpower alone and that effective treatment exists. The bottom line is that Achieve is not quitting on people who smoke. The parallels between obesity and nicotine dependence are not lost on many investors. Unmet medical needs, same physician call points, same cost to society. In summary, our science is strong. We're advancing through the regulatory review process with the FDA working constructively towards approval. Our commercial infrastructure is taking shape with real progress in 2025, and we're actively building for launch.

With that, let me turn it over to Dr. Mark Rubinstein, who will detail our regulatory progress and the data that continue to reinforce cytisinicline across patient populations.

Thank you, Rick, and good morning, everyone. We have made tremendous progress in 2025 for cytisinicline from a clinical and regulatory standpoint. Since our last earnings call, we've continued to validate cytisinicline's clinical profile through peer-reviewed publications and scientific conference presentations. We were pleased to present findings from a pooled analysis of over 1,600 participants from our phase III trials at the Society for Research on Nicotine and Tobacco, or SRNT, conference a few weeks ago. This analysis examined cytisinicline's efficacy across participants with different prior treatment histories and quit attempt patterns. Regardless of whether the participants had previously tried varenicline, bupropion, or nicotine replacement therapy, or whether they had made four or fewer quit attempts versus many more, we saw consistent efficacy. These data show that if approved, cytisinicline will offer a new quit option for patients, including those for whom medications have failed.

This consistent efficacy across patient subgroups shows that past setbacks should not discourage people from trying again. For millions of people who have tried and failed, cytisinicline offers real hope. We also presented late-breaking survey data from our year-long ORCA-OL study that demonstrated voluntary self-reported patient experiences with extended cytisinicline use up to 52 weeks. This survey of data from people who chose to continue treatment beyond the six or 12-week standard courses offers insight into long-term tolerability and impact. Patient experience is hugely important for those trying to quit smoking and is encouraging to see trial participants describing meaningful benefits, including successful quitting and improvements in physical health. We have also been accepted to present research at the 2026 American Thoracic Society Conference in May and look forward to updating you in the coming months.

On the e-cigarette front, we received the FDA Commissioner's National Priority Voucher for cytisinicline in e-cigarette or vaping cessation, a significant recognition of the public health urgency. The CMPV is designed to provide enhanced FDA communications and an expedited NDA review timeline to 1-2 months compared to a typical 10-12 months. We are now laying the groundwork for our ORCA-V2 phase III trial for vaping cessation, including selecting trial sites and identifying principal investigators. In summary, 2025 has strengthened our clinical and regulatory position significantly. We're advancing through the FDA's review process with an active dialogue with the agency. We remain confident that cytisinicline has the potential to deliver the first FDA-approved treatment for nicotine dependence in two decades. With that, let me turn it over to Jaime.

Thank you, Mark. When I look back at where we started at the beginning of 2025 and where we stand today, I'm struck by the incredible progress our commercial team has made in just over a year. We've built the foundation for a launch-ready infrastructure from the ground up while remaining lean and right-sized for our current stage requirements. We've established partnerships, deployed advanced analytics, created an AI-powered asset factory, and are positioning ourselves to execute at scale. I'm deeply grateful to the entire team who have been instrumental in bringing this vision to life. As a reminder, our commercial execution rests on three critical priorities, availability or ensuring supply chain readiness so that cytisinicline can reach the patients who need it, access to secure coverage and affordability, and awareness, which is educating the right patients and healthcare professionals at the right time about this transformative new option.

Every initiative is data-driven, and every decision is tied to measurable impact, with the goal of making cytisinicline accessible to the millions of Americans struggling with nicotine dependence. Now I'll provide updates on each of our three priorities. First, let's look at availability. Implementation with our third-party logistics provider is well underway. We are on track with our state licensing and have secured more than half of the required licenses to date. Additionally, we have now completed the administrative and logistical setup with our specialty pharmacy hub partner. We believe these foundational steps will be critical to ensure patients can obtain cytisinicline and that prescriptions written are prescriptions filled. On the access front, our focus remains on securing rapid, broad, and affordable coverage for cytisinicline. In Q1, we continued discussions with prioritized payers to share our clinical data.

Feedback from these ongoing discussions will be critical in finalizing our pricing, access, and contracting strategy as we move closer to launch. On awareness, our focus is establishing Achieve's reputation as a trusted, science-driven partner and shifting how patients and providers think about nicotine dependence. As Rick mentioned, we launched our Willpower campaign, which directly challenges the outdated narrative that quitting smoking is simply a matter of personal determination. The campaign features visuals that reimagine vintage cigarette advertising, but instead of selling cigarettes, they're selling willpower as a miracle product. It is deliberately provocative because the message is clear: willpower alone is not enough. We will continue to strategically deploy this campaign throughout 2026 to drive ongoing conversation and awareness around nicotine dependence as a medical condition requiring a medical solution.

Beyond this, we are leveraging technology and AI tools to generate rapid, evidence-based and regulatory compliant content that will fuel our launch. To use a bit less marketing jargon, this means we are able to build things faster using fewer resources. Through our partnership with Omnicom, we developed a marketing engine designed to shave weeks off the development, review, and approval of brand messaging, promotional, and educational materials. This is just one example of how modern tech and data are improving our ways of working at Achieve. We've also established our unified data ecosystem and our custom-built marketing technology foundation to support hyper-targeted, personalized customer engagement and measurement.

Finally, we've completed detailed customer segmentation to better understand how to reach and meet the needs of our future patients and prescribers. As we look ahead, we are building plans for optimizing sales deployment and non-personal promotion to key audiences at launch and beyond. We will look to deploy the Willpower campaign in select audiences, complete our data and performance measurement capabilities, and finalize media channels and plans. We are confident in our ability to execute and scale effectively and deliver long-term value for patients, providers and shareholders. I'll now turn it over to Mark Oki for financial updates.

Thank you, Jaime. Let me walk through our financial position and results. As of December 31, 2025, cash equivalents and marketable securities totaled $36.4 million. Total operating expenses for the three and 12 months ended December 31, 2025 were $14.7 million and $54.9 million, respectively, reflecting our ongoing investment in regulatory, clinical, pre-commercial and commercial infrastructure activities. Our total net loss for the three and 12 months ended December 31, 2025 was $14.7 million and $54.7 million, respectively. As always, we continue to evaluate financing options and cash management strategies, and we will provide updates if and when appropriate. I'll turn it back to Rick for closing remarks.

Thank you, Mark. In closing, I'm pleased with our regulatory, clinical and go-to-market efforts, which underscores the momentum behind Achieve Life Sciences and our unwavering commitment to addressing the critical unmet needs of nicotine dependence. As we look ahead, I want to highlight three critical value drivers for our company. First, receiving NDA approval and successfully launching cytisinicline for smoking cessation. This is our near-term priority, and the team is executing with discipline and purpose. Discipline is important to ensure there is a controlled and successful launch. Second, the growing recognition of the significant opportunity represented by our vaping indication. With the Commissioner's National Priority Voucher and the urgent public health need around e-cigarette cessation, we have the opportunity to be first to market with a treatment for an indication where no approved options currently exist.

Finally, both of these are underpinned by our digital commercial platform, the AI-powered, data-driven infrastructure we built that positions us to launch efficiently and scale rapidly with precision targeting and measurable impact. To the millions of Americans who are ready to break free from nicotine dependence, Achieve Life Sciences is not quitting on you. We are dedicated to this urgent need. The standard of care in smoking cessation has not evolved in two decades, and we're about to change that. I'm grateful to our patients, clinical investigators, regulatory partners, investors, and our incredible Achieve team for their unwavering dedication to this mission. Together, we're building something meaningful. We're not quitting on you. We will not quit until we deliver a treatment that changes the standard of care for nicotine dependence and helps people live free of nicotine.

Lastly, we're limited in what we can say about our interactions with the FDA while the NDA is under review. As I said earlier, the communications are normal for this stage of the review process. I look forward to updating you on our progress. Thank you for your time, attention, and continued confidence in Achieve Life Sciences.