Achieve Life Sciences Plans Stock Offering to Advance Vaping Addiction Drug

Key Insights

• Achieve Life Sciences intends to raise up to $50 million through a stock offering, with Jefferies acting as the sales agent, to fund the clinical development of cytisinicline.
• The FDA granted Achieve's cytisinicline 'breakthrough therapy' designation, potentially accelerating its path to market, but requested additional safety data, possibly delaying approval until 2026.
• Achieve's stock price experienced volatility, initially gaining 7.4% before falling 3.6% in after-hours trading following the announcement of the stock offering.

Achieve Life Sciences, focused on developing a treatment for vaping addiction, has announced plans to sell up to $50 million in stock. The company intends to use the proceeds to further the clinical development of cytisinicline, its primary drug candidate, and for general corporate purposes. The announcement led to a nearly 4% drop in the company's stock price in after-hours trading on Friday, September 27, reversing gains made earlier in the day.

Funding Cytisinicline Development

According to SEC filings, Jefferies will act as the sales agent for the stock offering. This move aims to secure additional capital for Achieve as it advances cytisinicline through the regulatory process. Cytisinicline, a plant-based alkaloid, is the active ingredient in Achieve's investigational drug for vaping addiction.

Regulatory Pathway and Potential Delays

In July, the FDA granted cytisinicline breakthrough therapy designation, potentially allowing Achieve to bypass the final phase of clinical trials. However, the FDA has requested additional safety data regarding the chronic use of cytisinicline, which, according to Ilya Zubkov, a senior analyst at Freedom Finance Global, could delay approval until 2026.

Market Response and Analyst Outlook

The market responded to the stock offering announcement with some uncertainty. While the stock initially closed up 7.4% at $4.80 per share, it subsequently fell 3.6% to $4.60 per share in after-hours trading. Despite this volatility, analysts covering Achieve Life Sciences maintain a positive outlook. Six analysts currently recommend a buy rating, with an average target price of $16.29 per share, implying a potential upside of approximately 240% from the last closing price, according to MarketWatch.

Leadership Changes and Strategic Direction

Achieve Life Sciences recently underwent a leadership change, with cofounder Richard Stewart replacing John Bencich as CEO. The company stated that this change reflects a need for a leader with experience in M&A and drug commercialization. This move has led to speculation, including from Freedom Finance Global’s Ilya Zubkov, that Achieve may be considering a potential sale.