Is Achieve Life Sciences Stock a Buy?

By Kirsteen Mackay

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Achieve Life Sciences (NASDAQ: ACHV) is developing a treatment to help smokers quit cigarettes and e-cigarettes.

Late-stage clinical pharmaceutical company Achieve Life Sciences (NASDAQ: ACHV) is developing a new solution to quit smoking. There are 31 million smokers in the US and 11 million e-cig users.

Nicotine addiction remains a problem, but few options exist to help wean users off these addictive products. Quitting smoking, also known as 'smoking cessation,' is a difficult path to follow and a minority of those that attempt it ever succeed.

That's why Achieve Life Sciences wants to bring a new treatment to market specifically to help smokers quit.

What Is Achieve Life Sciences?

Achieve Life Sciences, Inc. operates as a pharmaceutical company. The company develops and commercializes cytisine treatment to help people battling nicotine addiction. Achieve Life Sciences serves customers in North America.

ACHV's lead product, cytisinicline, is being developed to help smokers quit. This treatment is made from cytisine, a plant-based alkaloid with a binding affinity to the nicotinic acetylcholine receptor. The company was founded in October 1991 and is headquartered in Vancouver, Canada.

What is Cytisinicline?

Cytisinicline is a plant-based alkaloid with a high binding affinity to the nicotinic acetylcholine receptor.

Derived from natural sources, including the seeds of the laburnum tree, cytisinicline is a potential new treatment for smoking cessation and nicotine addiction.

Cytisinicline is believed to aid in treating nicotine addiction by helping smokers of cigarettes and e-cigarettes to quit. Cytisinicline interacts with nicotine receptors in the brain, reducing the severity of withdrawal symptoms and reducing the reward and satisfaction associated with nicotine products.

ACHV Q2 Financial Results 

ACHV stock's most recent earnings report for the Q2 period ended June 30, 2022, was distributed on August 11. EPS for the quarter came in at -$1.08, and there were no sales. 

  • As of June 30, 2022, the company's cash, cash equivalents, and restricted cash were $29.4m.

  • Total operating expenses for Q2: $10.1m

  • Total operating expenses for Q1 & Q2 (six-month period): $17.3m

  • Total net loss for Q2: $10.5m

  • Total net loss for Q1 & Q2 (six-month period): $18m

As of August 11, 2022, Achieve Life Sciences had 9,681,855 shares outstanding.

Recent ACHV highlights include:

  • Reported statistically significant results from the Phase 3 ORCA-2 clinical trial of cytisinicline in 810 adult smokers

  • Awarded $2.5m grant from the National Institutes of Health (NIH) to conduct ORCA-V1 Phase 2 trial of cytisinicline in nicotine e-cigarette users

  • Initiated the Phase 2 ORCA-V1 clinical trial to evaluate cytisinicline in adult e-cigarette users

John Bencich, CEO of Achieve Life Sciences, commented:

We continue to build upon the progress of cytisinicline with the announcement of the initiation of the ORCA-V1 trial and the continued enrolment in ORCA-3, our final NDA-enabling smoking cessation clinical trial,

We remain focused on executing on our milestones and potentially expanding cytisinicline to e-cigarette and vaping users who currently have no FDA-approved cessation treatments.

Achieve Life Sciences' next earnings report date is expected around November 9, 2022.

FactSet analyst estimates have an EPS consensus of -$1.13.

How Does Achieve Life Sciences Make Money? 

Achieve Life Sciences does not make money. The company has no products approved for commercial sale and has not generated any revenue from product sales. 

ACHV has never been profitable and has incurred operating losses each year since its inception.

Cytisinicline is an investigational product candidate being developed by ACHV for the treatment of nicotine addiction and has not yet been approved by the Food and Drug Administration (FDA) for any indication in the United States.

ACHV Stock Financials

Over the past year, Achieve Life Sciences Inc (ACHV) has traded between $4.67 and $10.09. Today it trades at around $4.78.

Year-to-date, the Achieve Life Sciences Inc (ACHV) stock is down by -42.13%, while the S&P 500 is down -13.73% over the same period.

Achieve Life Sciences Growth Potential

Achieve's focus is to address the global smoking health and nicotine addiction epidemic through the development and commercialization of cytisinicline. 

Tobacco use is currently the leading cause of preventable death, responsible for more than eight million deaths worldwide and nearly half a million deaths in the United States annually.

More than 87% of lung cancer deaths, 61% of all pulmonary disease deaths, and 32% of all deaths from coronary heart disease are attributable to smoking and exposure to second-hand smoke. 

In addition, nearly 11 million adults in the United States use e-cigarettes, also known as vaping.

While nicotine e-cigarettes are thought to be less harmful than combustible cigarettes, they remain addictive and can deliver toxic chemicals which can cause lung injury or cardiovascular disease.

In 2021, e-cigarettes were the most used tobacco product reported by 1.72 million high school students. Indeed, teen vaping poses a serious challenge.

Research shows adolescents who have used e-cigarettes are seven times more likely to become smokers one year later than those who have never vaped. 

Currently, no FDA-approved treatments are explicitly indicated as an aid to nicotine e-cigarette cessation.

Achieve Life Sciences believes that cytisinicline if approved, could be the first prescription drug indicated for vape and e-cigarette users who are ready to quit their nicotine addiction.

This would give the product prominence and a large target market to sell to. While commercialization is a long way off, the addressable market is vast. Therefore the potential to make a lot of money is evident.

As a rough comparison, previously, the most successful prescription smoking cessation product was Chantix, which had peak global sales of $1.1bn before it was withdrawn in 2021 for safety concerns. Despite being tainted with its historical black box warning and disruptive side effects, generic Chantix is anticipated to reach approximately $300m in US sales over the coming year. 

The management team at Achieve Life Sciences believes the cytisinicline product profile, including robust efficacy, high tolerability and shorter duration of treatment, has the potential to resonate in this underserved market. 

ACHV Stock Risks

  • The company requires ongoing financing to function. R&D is expensive, and getting through clinical trials is an arduous process.

  • Achieve Life Sciences will need to raise substantial additional capital to continue operating. This may be through the sale of ACHV shares, partnering arrangements or other financing transactions. 

  • The COVID-19 pandemic, rising interest rates, and inflation may also make raising additional capital on favorable terms challenging.

Should You Invest in Achieve Life Sciences?

There are many risks associated with investing in clinical-stage start-ups, but the appeal lies in the growth potential.

The management team at Achieve Life Sciences has significant experience in growing emerging companies focused on developing under-utilized pharmaceutical compounds to meet unmet medical needs. This gives it investor appeal and confidence in its ability to create and ultimately commercialize cytisinicline.

With such an enormous total addressable market, the potential to make vast sums of money is clear if the drug can be approved and brought to market. However, that scenario is a long way off, and there are many funding rounds and clinical trials to get through in the meantime.

Whether you buy shares in ACHV stock depends on your risk appetite and investing time horizon.

A group of seven FactSet analysts has a consensus Buy rating on ACHV stock with a target share price of $31.75. These were most recently updated between August 12 and 15. 

Analyst James Molloy of Alliance Global Partners issued a Buy rating on ACHV stock with a target share price of $25. At the same time, Francois Brisebois of Oppenheimer has a Buy rating on the stock with a target share price of $27. The most optimistic target share price of recent times comes from Michael J Higgins of Ladenburg Thalmann & Co, who has a $35 target on ACHV stock. 

If you enjoyed our Achieve Life Sciences stock overview, you might be interested in the schizophrenia biotech company Karuna Therapeutics. Read our KRTX stock coverage.

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Achieve Life Sciences

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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