SEATTLE, Wash. - Achieve Life Sciences, Inc. (NASDAQ:ACHV), a late-stage pharmaceutical company, has announced a financing agreement to raise up to approximately $124.2 million. The company secured an initial $60 million with the potential for an additional $64.2 million, contingent on the achievement of certain milestones. This funding is expected to advance the clinical development of cytisinicline, a smoking cessation aid, through to a New Drug Application (NDA) submission anticipated in the first half of 2025.
The financing includes contributions from healthcare-focused investors such as Propel Bio Partners LLC, Nantahala Capital, and a notable life sciences investor. Strategic investor Sopharma, along with members of Achieve's management team and board of directors, also participated. Lake Street Capital Markets, LLC and JonesTrading Institutional Services LLC served as joint placement agents for the offering.
Achieve will use the upfront proceeds to fund the ORCA-OL trial and other research activities related to cytisinicline. The company expects that if all milestone-driven warrants are exercised, the aggregate net proceeds will be sufficient to support the development of cytisinicline through potential FDA approval and into 2026.
The financing was conducted in part through a registered direct offering of over 13 million shares at $4.585 each. Additionally, unregistered warrants to purchase up to an equivalent number of shares at $4.906 per share were issued in a private placement. These warrants are immediately exercisable and will expire upon the earlier of three and a half years after issuance or 30 days following the public disclosure of FDA acceptance of cytisinicline's NDA.
The offerings are expected to close around March 4, 2024, subject to standard closing conditions. The shares of common stock are being offered under a shelf registration statement declared effective by the SEC on January 5, 2022. The milestone-driven warrants and underlying securities are offered in a private placement under the Securities Act of 1933, as amended, and have not been registered under the Securities Act or applicable state securities laws.
Cytisinicline is a plant-based alkaloid designed to help treat nicotine addiction by interacting with nicotine receptors in the brain. It is currently an investigational product candidate in the United States and has not yet received FDA approval.
The information in this article is based on a press release.
InvestingPro Insights
In light of Achieve Life Sciences' recent financing agreement, investors are keenly observing the company's financial health and market performance. According to InvestingPro data, Achieve has a market capitalization of $94.4 million. The company's Price / Book ratio as of the last twelve months ending Q3 2023 stands at a high 23.38, which might raise eyebrows considering the company's current lack of profitability.
InvestingPro Tips highlight that Achieve Life Sciences is experiencing a significant return over the last week, with a 16.75% price total return, reflecting investor optimism possibly tied to the recent financing news. However, analysts within the InvestingPro network are cautious, noting that the company is not expected to be profitable this year and has been quickly burning through cash. This suggests that while the current capital raise is crucial, Achieve's path to financial stability is still fraught with challenges.
For investors seeking a deeper dive into Achieve Life Sciences' financials and market performance, there are additional InvestingPro Tips available. These insights could be particularly valuable for understanding the company's cash burn rate, gross profit margins, and debt levels. To access these tips and more, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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