Ladenburg cuts Achieve Life Sciences PT to $50 from $80

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Ladenburg Thalmann lowered its price target for Achieve Life Sciences (NASDAQ:ACHV) to $50 from $80, but retained a “buy” rating, citing dilution as well as a reduction in the projected price level of future financings, which is “lowered to current stock levels.” The stock closed at $8.32 on Oct. 9.

Achieve is focused on developing cytisinicline, a plant-based alkaloid with a high binding affinity to the nicotinic acetylcholine receptor, which is the same receptor as Chantix. Cytisinicline has been used as a smoking cessation therapy in Eastern Europe since 1964 though Achieve is the first company developing it as a prescription treatment for nicotine addiction in the U.S. 

Analyst Michael Higgins writes that cytisinicline is being tested in a Phase 3 study among some 800 nicotine-addicted smokers across 17 U.S. sites,  with results expected in the first quarter of 2022. Four investigator-initiated studies have confirmed its efficacy and safety profile, but Achieve is testing it at an optimized dosing regimen. 

Mr. Higgins said the highlight of the third quarter report and conference call was the company’s decision to move the start of the second cytisinicline pivotal to the first half of 2022 from the second half. This is being driven by the company’s recent hiring of additional clinical personnel. 

“While the timing of both ORCA-2 and ORCA-3 events are first half 2022, management has commented about not needing to see the results of ORCA-2 to start ORCA-3 (identical designs), given its confidence in ORCA-2’s results,” he added. 

In July, Achieve received a grant from the NIH to run a Phase 2 study with cytisinicline in 150 nicotine-addicted e-cigarette users, including $2.5-million cover half the cost of the trial, which Achieve expects to start in the first half of 2022. 

“We believe the trial will complete in mid-2023,” Mr. Higgins said . The ORCA-V1 clinical study will be a two-arm study with 3mg of cytisinicline three times a day, running for 12-weeks at eight U.S. sites.