false Q3 0000949858 --12-31 true P4Y P4Y
P5Y9M18D P5Y11M26D 0000949858 2022-01-01 2022-09-30 xbrli:shares
0000949858 2022-11-10 iso4217:USD 0000949858 2022-09-30 0000949858
2021-12-31 0000949858 achv:SeriesAConvertiblePreferredStockMember
2022-09-30 0000949858 achv:SeriesAConvertiblePreferredStockMember
2021-12-31 0000949858 achv:SeriesBConvertiblePreferredStockMember
2022-09-30 0000949858 achv:SeriesBConvertiblePreferredStockMember
2021-12-31 iso4217:USD xbrli:shares 0000949858 2022-07-01
2022-09-30 0000949858 2021-07-01 2021-09-30 0000949858 2021-01-01
2021-09-30 0000949858 achv:May2021PublicOfferingMember 2021-01-01
2021-09-30 0000949858 2020-12-31 0000949858 2021-09-30 0000949858
us-gaap:CommonStockMember 2021-12-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2021-12-31 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31
0000949858 us-gaap:RetainedEarningsMember 2021-12-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2022-01-01 2022-03-31 0000949858 2022-01-01 2022-03-31 0000949858
us-gaap:CommonStockMember 2022-01-01 2022-03-31 0000949858
us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0000949858
us-gaap:CommonStockMember 2022-03-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2022-03-31 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-03-31
0000949858 us-gaap:RetainedEarningsMember 2022-03-31 0000949858
2022-03-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2022-04-01 2022-06-30 0000949858 2022-04-01 2022-06-30 0000949858
us-gaap:CommonStockMember 2022-04-01 2022-06-30 0000949858
us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0000949858
us-gaap:CommonStockMember 2022-06-30 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2022-06-30 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30
0000949858 us-gaap:RetainedEarningsMember 2022-06-30 0000949858
2022-06-30 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2022-07-01 2022-09-30 0000949858 us-gaap:CommonStockMember
2022-07-01 2022-09-30 0000949858 us-gaap:RetainedEarningsMember
2022-07-01 2022-09-30 0000949858 us-gaap:CommonStockMember
2022-09-30 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2022-09-30 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30
0000949858 us-gaap:RetainedEarningsMember 2022-09-30 0000949858
us-gaap:CommonStockMember 2020-12-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2020-12-31 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-12-31
0000949858 us-gaap:RetainedEarningsMember 2020-12-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2021-01-01 2021-03-31 0000949858 2021-01-01 2021-03-31 0000949858
us-gaap:CommonStockMember 2021-01-01 2021-03-31 0000949858
us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0000949858
us-gaap:CommonStockMember 2021-03-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2021-03-31 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-31
0000949858 us-gaap:RetainedEarningsMember 2021-03-31 0000949858
2021-03-31 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2021-04-01 2021-06-30 0000949858 2021-04-01 2021-06-30 0000949858
us-gaap:CommonStockMember 2021-04-01 2021-06-30 0000949858
us-gaap:CommonStockMember achv:May2021PublicOfferingMember
2021-04-01 2021-06-30 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
achv:May2021PublicOfferingMember 2021-04-01 2021-06-30 0000949858
achv:May2021PublicOfferingMember 2021-04-01 2021-06-30 0000949858
us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0000949858
us-gaap:CommonStockMember 2021-06-30 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2021-06-30 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30
0000949858 us-gaap:RetainedEarningsMember 2021-06-30 0000949858
2021-06-30 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2021-07-01 2021-09-30 0000949858 us-gaap:CommonStockMember
2021-07-01 2021-09-30 0000949858 us-gaap:RetainedEarningsMember
2021-07-01 2021-09-30 0000949858 us-gaap:CommonStockMember
2021-09-30 0000949858
us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember
2021-09-30 0000949858
us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-09-30
0000949858 us-gaap:RetainedEarningsMember 2021-09-30 0000949858
achv:VancouverOfficeOperatingLeaseMember 2022-01-01 2022-09-30
0000949858 achv:NationalInstituteOnDrugAbuseMember 2021-08-01
2021-08-01 0000949858 achv:NationalInstituteOnDrugAbuseMember
2022-01-01 2022-09-30 0000949858
achv:ORCAV1ClinicalStudyCostsMember 2022-01-01 2022-09-30
0000949858
achv:NationalInstituteOnDrugAbuseAndNationalInstitutesOfHealthMember
2022-01-01 2022-09-30 0000949858
achv:NationalInstituteOnDrugAbuseAndNationalInstitutesOfHealthMember
2022-09-30 0000949858 2015-05-18 0000949858 2015-05-18 2015-05-18
0000949858 us-gaap:LicensingAgreementsMember 2022-09-30 0000949858
us-gaap:LicensingAgreementsMember 2021-12-31 0000949858
achv:UniversityOfBristolMember 2016-07-31 0000949858
achv:UniversityOfBristolMember
achv:AmendmentToLicenseAgreementMember 2018-01-22 2018-01-22
0000949858 achv:UniversityOfBristolMember
achv:AmendmentToLicenseAgreementMember 2018-01-22 0000949858
achv:UniversityOfBristolMember 2022-01-01 2022-09-30 0000949858
srt:MaximumMember 2022-01-01 2022-09-30 0000949858
us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0000949858
us-gaap:MoneyMarketFundsMember
us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0000949858
achv:RestrictedCashMember us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0000949858
achv:RestrictedCashMember
us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0000949858
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0000949858
us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0000949858
us-gaap:MoneyMarketFundsMember 2022-09-30 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
achv:ContingentConvertibleDebtAgreementMember 2021-12-22 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
achv:ContingentConvertibleDebtAgreementMember
us-gaap:ConvertibleDebtMember 2021-12-22 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
achv:ContingentConvertibleDebtAgreementMember
achv:NonConvertibleTermLoansMember 2022-04-26 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
achv:ContingentConvertibleDebtAgreementMember 2021-12-22 2021-12-22
xbrli:pure 0000949858 2021-12-22 2021-12-22 0000949858
achv:PrimeRateMinusOnePercentageMember 2021-12-22 2021-12-22
0000949858 2021-12-22 achv:Day 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
achv:ContingentConvertibleDebtAgreementMember
achv:BeforeEighteenMonthAnniversaryMember 2021-12-22 2021-12-22
0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
achv:ContingentConvertibleDebtAgreementMember
achv:AfterEighteenMonthAnniversaryMember 2021-12-22 2021-12-22
0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
2022-04-25 2022-04-26 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
srt:MinimumMember 2022-04-25 2022-04-26 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
2022-04-26 0000949858
achv:SiliconValleyBankAndSVBInnovationCreditFundVIIILPMember
2022-09-30 0000949858 us-gaap:CommonStockMember
achv:MayTwoThousandTwentyOnePublicOfferingMember 2021-05-27
2021-05-27 0000949858 us-gaap:CommonStockMember
us-gaap:OverAllotmentOptionMember 2021-05-27 2021-05-27 0000949858
us-gaap:CommonStockMember
achv:MayTwoThousandTwentyOnePublicOfferingMember 2021-05-27
0000949858 achv:MayTwoThousandTwentyOnePublicOfferingMember
2021-05-27 2021-05-27 0000949858 achv:AtMarketSalesAgreementMember
2022-09-30 0000949858 achv:AtMarketSalesAgreementMember 2022-01-01
2022-09-30 0000949858 achv:AtMarketSalesAgreementMember 2021-12-21
2022-09-30 0000949858
achv:TwoThousandAndEighteenEquityIncentivePlanMember
us-gaap:EmployeeStockOptionMember 2022-09-30 0000949858
achv:TwoThousandAndEighteenEquityIncentivePlanMember 2022-09-30
0000949858 us-gaap:RestrictedStockUnitsRSUMember 2022-09-30
0000949858 achv:TwoThousandAndEighteenEquityIncentivePlanMember
srt:MinimumMember achv:EmployeesAndConsultantsMember 2022-01-01
2022-09-30 0000949858
achv:TwoThousandAndEighteenEquityIncentivePlanMember
achv:EmployeesAndConsultantsMember srt:MaximumMember 2022-01-01
2022-09-30 0000949858
achv:TwoThousandAndEighteenEquityIncentivePlanMember
srt:MinimumMember achv:BoardOfDirectorsMember 2022-01-01 2022-09-30
0000949858 achv:TwoThousandAndEighteenEquityIncentivePlanMember
achv:BoardOfDirectorsMember srt:MaximumMember 2022-01-01 2022-09-30
0000949858 achv:TwoThousandAndEighteenEquityIncentivePlanMember
2022-01-01 2022-09-30 0000949858
achv:NewEmployeeInducementGrantsMember
us-gaap:EmployeeStockOptionMember 2022-01-01 2022-09-30 0000949858
achv:NewEmployeeInducementGrantsMember
us-gaap:EmployeeStockOptionMember 2022-09-30 0000949858
achv:TwoThousandsAndSeventeenEquityIncentivePlanMember
us-gaap:EmployeeStockOptionMember 2022-09-30 0000949858
achv:TwoThousandsAndSeventeenEquityIncentivePlanMember
achv:EmployeesAndConsultantsMember srt:MinimumMember 2022-01-01
2022-09-30 0000949858
achv:TwoThousandsAndSeventeenEquityIncentivePlanMember
achv:EmployeesAndConsultantsMember srt:MaximumMember 2022-01-01
2022-09-30 0000949858
achv:TwoThousandsAndSeventeenEquityIncentivePlanMember
achv:BoardOfDirectorsMember srt:MinimumMember 2022-01-01 2022-09-30
0000949858 achv:TwoThousandsAndSeventeenEquityIncentivePlanMember
achv:BoardOfDirectorsMember srt:MaximumMember 2022-01-01 2022-09-30
0000949858 achv:TwoThousandsAndSeventeenEquityIncentivePlanMember
2022-01-01 2022-09-30 0000949858
achv:TwoThousandsAndTenPerformanceIncentivePlanMember
us-gaap:EmployeeStockOptionMember 2022-09-30 0000949858
achv:TwoThousandsAndTenPerformanceIncentivePlanMember
us-gaap:RestrictedStockUnitsRSUMember 2022-09-30 0000949858
achv:EmployeesAndConsultantsMember
achv:TwoThousandsAndTenPerformanceIncentivePlanMember
srt:MinimumMember 2022-01-01 2022-09-30 0000949858
achv:EmployeesAndConsultantsMember
achv:TwoThousandsAndTenPerformanceIncentivePlanMember
srt:MaximumMember 2022-01-01 2022-09-30 0000949858
achv:BoardOfDirectorsMember
achv:TwoThousandsAndTenPerformanceIncentivePlanMember
srt:MinimumMember 2022-01-01 2022-09-30 0000949858
achv:BoardOfDirectorsMember
achv:TwoThousandsAndTenPerformanceIncentivePlanMember
srt:MaximumMember 2022-01-01 2022-09-30 0000949858
achv:TwoThousandsAndTenPerformanceIncentivePlanMember 2022-01-01
2022-09-30 0000949858 us-gaap:EmployeeStockOptionMember
achv:EmployeesAndConsultantsMember 2022-01-01 2022-09-30 0000949858
us-gaap:EmployeeStockOptionMember achv:BoardOfDirectorsMember
srt:MinimumMember 2022-01-01 2022-09-30 0000949858
us-gaap:EmployeeStockOptionMember achv:BoardOfDirectorsMember
srt:MaximumMember 2022-01-01 2022-09-30 0000949858
us-gaap:EmployeeStockOptionMember srt:MinimumMember 2022-01-01
2022-09-30 0000949858 us-gaap:EmployeeStockOptionMember
srt:MaximumMember 2022-01-01 2022-09-30 0000949858
us-gaap:ResearchAndDevelopmentExpenseMember 2022-07-01 2022-09-30
0000949858 us-gaap:ResearchAndDevelopmentExpenseMember 2021-07-01
2021-09-30 0000949858 us-gaap:ResearchAndDevelopmentExpenseMember
2022-01-01 2022-09-30 0000949858
us-gaap:ResearchAndDevelopmentExpenseMember 2021-01-01 2021-09-30
0000949858 us-gaap:GeneralAndAdministrativeExpenseMember 2022-07-01
2022-09-30 0000949858 us-gaap:GeneralAndAdministrativeExpenseMember
2021-07-01 2021-09-30 0000949858
us-gaap:GeneralAndAdministrativeExpenseMember 2022-01-01 2022-09-30
0000949858 us-gaap:GeneralAndAdministrativeExpenseMember 2021-01-01
2021-09-30 0000949858 us-gaap:EmployeeStockOptionMember 2022-01-01
2022-09-30 0000949858 us-gaap:WarrantMember 2022-01-01 2022-09-30
0000949858 us-gaap:EmployeeStockOptionMember 2022-01-01 2022-09-30
0000949858 us-gaap:RestrictedStockUnitsRSUMember 2022-01-01
2022-09-30 0000949858 us-gaap:RestrictedStockUnitsRSUMember
2022-01-01 2022-09-30 0000949858
us-gaap:RestrictedStockUnitsRSUMember 2022-07-01 2022-09-30
0000949858 us-gaap:RestrictedStockUnitsRSUMember 2021-07-01
2021-09-30 0000949858 us-gaap:RestrictedStockUnitsRSUMember
2021-01-01 2021-09-30 0000949858
us-gaap:RestrictedStockUnitsRSUMember 2021-12-31 0000949858
us-gaap:EmployeeStockMember 2022-01-01 2022-09-30 0000949858
achv:WarrantsIssuedInSeptemberTwoThousandSeventeenMember 2022-09-30
0000949858 achv:WarrantsIssuedInJuneTwoThousandEighteenMember
2022-09-30 0000949858
achv:WarrantsIssuedInOctoberTwoThousandEighteenMember 2022-09-30
0000949858 achv:WarrantsIssuedInMayTwoThousandNinteenMember
2022-09-30 0000949858
achv:WarrantsIssuedInDecemberTwoThousandNineteenMember 2022-09-30
0000949858 achv:WarrantsIssuedInAprilTwoThousandTwentyMember
2022-09-30 0000949858
achv:WarrantsIssuedInAprilTwoThousandTwenty1Member 2022-09-30
0000949858 achv:WarrantsIssuedInAprilTwoThousandTwenty2Member
2022-09-30 0000949858
achv:WarrantsIssuedInAugustTwoThousandTwentyMember 2022-09-30
0000949858 achv:WarrantsIssuedInDecemberTwoThousandTwentyMember
2022-09-30 0000949858
achv:WarrantsIssuedInSeptemberTwoThousandSeventeenMember 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInJuneTwoThousandEighteenMember 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInOctoberTwoThousandEighteenMember 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInMayTwoThousandNinteenMember 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInDecemberTwoThousandNineteenMember 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInAprilTwoThousandTwentyMember 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInAprilTwoThousandTwenty1Member 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInAprilTwoThousandTwenty2Member 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInDecemberTwoThousandTwentyMember 2022-01-01
2022-09-30 0000949858
achv:WarrantsIssuedInAprilTwoThousandTwentyFinancingMember
2022-09-30 0000949858
achv:WarrantsIssuedInAprilTwoThousandTwentyFinancingMember
2022-01-01 2022-09-30 0000949858
achv:WarrantsIssuedInDecemberTwoThousandNineteenMember 2021-09-30
0000949858 achv:WarrantsIssuedInDecemberTwoThousandNineteenMember
2021-01-01 2021-09-30 0000949858
achv:VancouverOfficeOperatingLeaseMember 2022-09-30 0000949858
stpr:CA-BC achv:VancouverOfficeOperatingLeaseMember 2018-11-18
2018-11-19 utr:sqft 0000949858 stpr:CA-BC
achv:VancouverOfficeOperatingLeaseMember 2018-11-19 0000949858
stpr:CA-BC achv:VancouverOfficeOperatingLeaseMember 2022-01-01
2022-09-30 0000949858 achv:SeattleOfficeOperatingLeaseMember
achv:PikeMember 2017-12-10 2017-12-11 0000949858
achv:SeattleOfficeOperatingLeaseMember achv:PikeMember 2022-01-01
2022-09-30 0000949858 achv:SeattleOfficeOperatingLeaseMember
achv:PikeMember 2018-03-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED September 30, 2022
or
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
FOR THE TRANSITION PERIOD FROM ______________ TO ____________.
Commission file number 033-80623
Achieve Life Sciences, Inc.
(Exact Name of Registrant as Specified in Its Charter)
|
Delaware
|
|
95-4343413
|
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer
|
|
Incorporation or Organization)
|
|
Identification Number)
|
1040 West Georgia Street, Suite 1030, Vancouver, British Columbia,
Canada V6E 4H1
(Address of Principal Executive Offices)
(604) 210-2217
(Registrant’s telephone number,
including area code)
|
Securities registered pursuant to
Section 12(b) of the Act:
|
|
|
Title of each
class
|
Trading Symbol
|
Name of exchange on which
registered
|
|
|
Common Stock, par value $0.001 per share
|
ACHV
|
The NASDAQ Capital Market
|
|
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☐
|
|
|
|
|
|
|
|
Non-accelerated filer
|
☒
|
|
Smaller reporting company
|
☒
|
|
|
|
|
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable
date.
As of November 10, 2022, there were 9,710,747 shares of the registrant’s Common Stock, $0.001
par value per share, outstanding.
Achieve Life Sciences, Inc.
Index to Form 10-Q
2
PART I.
FINANCIAL INFORMATION
|
Item
1.
|
Consolidated
Financial Statements
|
Achieve Life Sciences, Inc.
Consolidated Balance
Sheets
(Unaudited)
(In thousands, except per share and share amounts)
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents [note
6]
|
|
|
18,197
|
|
|
$
|
43,022
|
|
|
Grant receivable [note
3]
|
|
|
145
|
|
|
|
153
|
|
|
Prepaid expenses and other assets
|
|
|
2,615
|
|
|
|
1,419
|
|
|
Total current assets
|
|
|
20,957
|
|
|
|
44,594
|
|
|
Right-of-use assets [note
9]
|
|
|
18
|
|
|
|
64
|
|
|
Other assets and restricted cash [note 6]
|
|
|
239
|
|
|
|
183
|
|
|
License agreement [note 4 and
5]
|
|
|
1,475
|
|
|
|
1,641
|
|
|
Goodwill [note 5]
|
|
|
1,034
|
|
|
|
1,034
|
|
|
Total assets
|
|
$
|
23,723
|
|
|
$
|
47,516
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
412
|
|
|
$
|
841
|
|
|
Accrued liabilities other
|
|
|
539
|
|
|
|
348
|
|
|
Accrued clinical liabilities
|
|
|
4,552
|
|
|
|
1,352
|
|
|
Accrued compensation
|
|
|
1,390
|
|
|
|
1,940
|
|
|
Current portion of long-term obligations [note 9]
|
|
|
23
|
|
|
|
69
|
|
|
Total current liabilities
|
|
|
6,916
|
|
|
|
4,550
|
|
|
Convertible debt [note
7]
|
|
|
15,763
|
|
|
|
14,920
|
|
|
Long-term obligations [note
9]
|
|
|
—
|
|
|
|
4
|
|
|
Total liabilities
|
|
|
22,679
|
|
|
|
19,474
|
|
|
Commitments and contingencies [note 9]
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Series A convertible preferred stock, $0.001 par value, 9,158
shares designated, zero
issued and outstanding at September 30, 2022 and zero issued and
outstanding at December 31, 2021
|
|
|
—
|
|
|
|
—
|
|
|
Series B convertible preferred stock, $0.001 par value, 6,256
shares designated, zero
issued and outstanding at September 30, 2022 and zero issued and
outstanding at December 31, 2021
|
|
|
—
|
|
|
|
—
|
|
|
Common stock, $0.001 par value, 150,000,000 shares authorized,
9,710,747 issued and outstanding at September 30, 2022 and
9,453,542 issued and outstanding at December 31, 2021
|
|
|
79
|
|
|
|
79
|
|
|
Additional paid-in capital
|
|
|
125,665
|
|
|
|
121,545
|
|
|
Accumulated deficit
|
|
|
(124,704
|
)
|
|
|
(93,586
|
)
|
|
Accumulated other comprehensive income
|
|
|
4
|
|
|
|
4
|
|
|
Total stockholders' equity
|
|
|
1,044
|
|
|
|
28,042
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
23,723
|
|
|
$
|
47,516
|
|
|
Going concern [note 1]
|
|
|
|
|
|
|
|
|
See accompanying notes.
3
Achieve Life Sciences, Inc.
Consolidated
Statements of Loss and Comprehensive Loss
(Unaudited)
(In thousands, except per share and share amounts)
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
9,869
|
|
|
|
4,591
|
|
|
|
21,464
|
|
|
|
19,460
|
|
|
General and administrative
|
|
|
2,770
|
|
|
|
2,102
|
|
|
|
8,474
|
|
|
|
6,519
|
|
|
Total operating expenses
|
|
|
12,639
|
|
|
|
6,693
|
|
|
|
29,938
|
|
|
|
25,979
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
73
|
|
|
|
3
|
|
|
|
81
|
|
|
|
14
|
|
|
Interest expense [note
7]
|
|
|
(481
|
)
|
|
|
—
|
|
|
|
(1,242
|
)
|
|
|
—
|
|
|
Other income (expense)
|
|
|
(30
|
)
|
|
|
(1
|
)
|
|
|
(19
|
)
|
|
|
(36
|
)
|
|
Total other (expense)
|
|
|
(438
|
)
|
|
|
2
|
|
|
|
(1,180
|
)
|
|
|
(22
|
)
|
|
Net loss and comprehensive loss
|
|
$
|
(13,077
|
)
|
|
$
|
(6,691
|
)
|
|
|
(31,118
|
)
|
|
|
(26,001
|
)
|
|
Basic and diluted net loss per common share [note 8[d]]
|
|
$
|
(1.35
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(3.24
|
)
|
|
$
|
(3.39
|
)
|
|
Weighted average shares used in computation of basic and diluted
net loss per common share [note
8[d]]
|
|
|
9,693,788
|
|
|
|
9,452,238
|
|
|
|
9,600,947
|
|
|
|
7,670,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
4
Achieve Life Sciences, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
(In thousands)
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(31,118
|
)
|
|
$
|
(26,001
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization [note 4]
|
|
|
171
|
|
|
|
188
|
|
|
Stock-based compensation [note
8[c], note 8[e], note 8[f] and note 8[g]]
|
|
|
2,492
|
|
|
|
1,693
|
|
|
Shares issued as settlement with trade vendor
|
|
|
26
|
|
|
|
41
|
|
|
Accrued interest on SVB convertible debt [note 7]
|
|
|
863
|
|
|
|
—
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Grant receivable [note
3]
|
|
|
8
|
|
|
|
(151
|
)
|
|
Prepaid expenses and other assets
|
|
|
(1,256
|
)
|
|
|
(146
|
)
|
|
Accounts payable
|
|
|
(429
|
)
|
|
|
483
|
|
|
Accrued liabilities other
|
|
|
191
|
|
|
|
(390
|
)
|
|
Accrued clinical liabilities
|
|
|
3,200
|
|
|
|
304
|
|
|
Accrued compensation
|
|
|
(550
|
)
|
|
|
(233
|
)
|
|
Lease obligation [note
9]
|
|
|
(4
|
)
|
|
|
(10
|
)
|
|
Net cash used in operating activities
|
|
|
(26,406
|
)
|
|
|
(24,222
|
)
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of warrants
|
|
|
24
|
|
|
|
339
|
|
|
Proceeds from ATM, net of issuance costs [note 8[b]]
|
|
|
1,499
|
|
|
|
—
|
|
|
Financing costs relating to convertible debt with SVB [note 7]
|
|
|
(20
|
)
|
|
|
—
|
|
|
Proceeds from the May 2021 public offering, net of issuance
costs
|
|
|
—
|
|
|
|
21,343
|
|
|
Proceeds from employee stock purchase plan [note 8[g]]
|
|
|
126
|
|
|
|
—
|
|
|
Taxes paid related to net share settlement of equity awards
|
|
|
(47
|
)
|
|
|
—
|
|
|
Net cash provided by financing activities
|
|
|
1,582
|
|
|
|
21,682
|
|
|
Effect of exchange rate changes on cash
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
Net decrease in cash, cash equivalents and restricted cash
|
|
|
(24,825
|
)
|
|
|
(2,541
|
)
|
|
Cash, cash equivalents and restricted cash at beginning of the
period
|
|
|
43,072
|
|
|
|
35,903
|
|
|
Cash, cash equivalents and restricted cash at end of the period
|
|
$
|
18,247
|
|
|
$
|
33,362
|
|
See accompanying notes.
5
Achieve Life Sciences, Inc.
Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Other
|
|
|
|
|
|
|
Total,
|
|
|
|
|
Common Stock
|
|
|
Preferred Stock
|
|
|
Paid-in
|
|
|
Comprehensive
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income (Loss)
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance, December 31, 2021
|
|
|
9,453,542
|
|
|
$
|
79
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
121,545
|
|
|
$
|
4
|
|
|
$
|
(93,586
|
)
|
|
$
|
28,042
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
823
|
|
|
|
—
|
|
|
|
—
|
|
|
|
823
|
|
|
Shares issued on exercise of warrants
|
|
|
3,709
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24
|
|
|
Shares issued from purchase agreement with Virtu
|
|
|
12,742
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
91
|
|
|
|
—
|
|
|
|
—
|
|
|
|
91
|
|
|
Shares issued as settlement with trade vendor
|
|
|
3,584
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,573
|
)
|
|
|
(7,573
|
)
|
|
Balance, March 31, 2022
|
|
|
9,473,577
|
|
|
$
|
79
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
122,509
|
|
|
$
|
4
|
|
|
$
|
(101,159
|
)
|
|
$
|
21,433
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
840
|
|
|
|
—
|
|
|
|
—
|
|
|
|
840
|
|
|
Shares issued from purchase agreement with Virtu
|
|
|
187,258
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,408
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,408
|
|
|
Restricted stock unit settlements
|
|
|
26,625
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Restricted stock unit settlements withheld and retired to
treasury
|
|
|
(5,605
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(47
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(47
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,468
|
)
|
|
|
(10,468
|
)
|
|
Balance, June 30, 2022
|
|
|
9,681,855
|
|
|
$
|
79
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
124,710
|
|
|
$
|
4
|
|
|
$
|
(111,627
|
)
|
|
$
|
13,166
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
829
|
|
|
|
—
|
|
|
|
—
|
|
|
|
829
|
|
|
Shares issued under employee share purchase plan
|
|
|
28,892
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
126
|
|
|
|
—
|
|
|
|
—
|
|
|
|
126
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13,077
|
)
|
|
|
(13,077
|
)
|
|
Balance, September 30, 2022
|
|
|
9,710,747
|
|
|
$
|
79
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
125,665
|
|
|
$
|
4
|
|
|
$
|
(124,704
|
)
|
|
$
|
1,044
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Other
|
|
|
|
|
|
|
Total,
|
|
|
|
|
Common Stock
|
|
|
Preferred Stock
|
|
|
Paid-in
|
|
|
Comprehensive
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income (Loss)
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance, December 31, 2020
|
|
|
6,111,735
|
|
|
$
|
76
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
97,640
|
|
|
$
|
4
|
|
|
$
|
(60,434
|
)
|
|
$
|
37,286
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
542
|
|
|
|
—
|
|
|
|
—
|
|
|
|
542
|
|
|
Shares issued on exercise of warrants
|
|
|
35,217
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
236
|
|
|
|
—
|
|
|
|
—
|
|
|
|
236
|
|
|
Shares issued as settlement with trade vendor
|
|
|
2,965
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,999
|
)
|
|
|
(7,999
|
)
|
|
Balance, March 31, 2021
|
|
|
6,149,917
|
|
|
$
|
76
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
98,441
|
|
|
$
|
4
|
|
|
$
|
(68,433
|
)
|
|
$
|
30,088
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
621
|
|
|
|
—
|
|
|
|
—
|
|
|
|
621
|
|
|
Shares issued on exercise of warrants
|
|
|
14,443
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
95
|
|
|
|
—
|
|
|
|
—
|
|
|
|
95
|
|
|
Shares issued - May 2021 public offering
|
|
|
3,285,714
|
|
|
|
3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,340
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,343
|
|
|
Shares issued as settlement with trade vendor
|
|
|
2,149
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(11,311
|
)
|
|
|
(11,311
|
)
|
|
Balance, June 30, 2021
|
|
|
9,452,223
|
|
|
$
|
79
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
120,515
|
|
|
$
|
4
|
|
|
$
|
(79,744
|
)
|
|
$
|
40,854
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
530
|
|
|
|
—
|
|
|
|
—
|
|
|
|
530
|
|
|
Shares issued on exercise of warrants
|
|
|
1,174
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
Restricted stock unit settlements
|
|
|
145
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(6,691
|
)
|
|
|
(6,691
|
)
|
|
Balance, September 30, 2021
|
|
|
9,453,542
|
|
|
$
|
79
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
121,052
|
|
|
$
|
4
|
|
|
$
|
(86,435
|
)
|
|
$
|
34,700
|
|
See accompanying notes.
7
Achieve Life Sciences, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
1. NATURE OF BUSINESS, BASIS OF PRESENTATION AND GOING CONCERN
UNCERTAINTY
Achieve Life Sciences, Inc. (referred to as “Achieve,” “we,” “us,”
or “our”) is a clinical-stage pharmaceutical company committed to
the global development and commercialization of cytisinicline for
smoking cessation and nicotine addiction. We were incorporated in
the state of Delaware, and operate out of Vancouver, British
Columbia and Seattle, Washington.
The unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles in the
United States, or U.S. GAAP, for interim financial information and
with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required to be
presented for complete financial statements. The accompanying
unaudited consolidated financial statements reflect all adjustments
(consisting only of normal recurring items) which are, in the
opinion of management, necessary for a fair presentation of the
results for the interim periods presented. The accompanying
consolidated Balance Sheet at December 31, 2021 has been derived
from the audited consolidated financial statements included in our
Annual Report on Form 10-K for the year then ended. The unaudited
consolidated financial statements and related disclosures have been
prepared with the assumption that users of the interim financial
information have read or have access to the audited consolidated
financial statements for the preceding fiscal year. Accordingly,
these financial statements should be read in conjunction with the
audited consolidated financial statements and the related notes
thereto included in the Annual Report on Form 10-K for the year
ended December 31, 2021 and filed with the U.S. Securities and
Exchange Commission, or the SEC, on March 10, 2022.
The consolidated financial statements include the accounts of
Achieve and our wholly owned subsidiaries, Achieve Life Sciences
Technologies Inc., Achieve Life Science, Inc., Extab Corporation,
and Achieve Pharma UK Limited. All intercompany balances and
transactions have been eliminated.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming
we will continue to operate as a going concern, which contemplates
the realization of assets and liabilities and commitments in the
normal course of business.
We have historically experienced recurring losses from operations
and have incurred an accumulated deficit of $124.7 million through
September 30, 2022. As of September 30, 2022, we had cash and cash
equivalents of $18.2 million and a positive working capital balance
of $14.0 million. For the nine months ended September 30, 2022, we
incurred a net loss of $31.1 million and net cash used in operating
activities was $26.4 million.
Substantial doubt exists as to our ability to continue as a going
concern. Our ability to continue as a going concern is subject to
material uncertainty and dependent on our ability to obtain
additional financing. There is no assurance that we will obtain
financing from other sources. We have historically financed our
operations through equity and debt financings. Without additional
funds, we may be forced to delay, scale back or eliminate some of
our research and development, or R&D, activities or other
operations and potentially delay product development in an effort
to provide sufficient funds to continue our operations. If any of
these events occurs, our ability to achieve our development and
commercialization goals would be adversely affected.
Our current resources are insufficient to fund our planned
operations for the next twelve months. We will continue to require
substantial additional capital to continue our clinical development
activities. Accordingly, we will need to raise substantial
additional capital to continue to fund our operations from the sale
of our securities, partnering arrangements or other financing
transactions in order to finance the commercialization of our
product candidate. The amount and timing of our future funding
requirements will depend on many factors, including the pace and
results of our clinical development efforts. The uncertainty with
respect to our operations and the market generally due to the
COVID-19 pandemic and increasing interest rates and inflation may
also make it challenging to raise additional capital on favorable
terms, if at all. Failure to raise capital as and when needed, on
favorable terms or at all, will have a negative impact on our
financial condition and our ability to develop our product
candidate. We expect our R&D expenses to substantially increase
in connection with our ongoing activities, particularly as we
advance our product candidate in clinical development.
The consolidated financial statements do not include any
adjustments to the amounts and classification of assets and
liabilities that might be necessary should we be unable to continue
as a going concern. Such adjustments could be material.
2. ACCOUNTING POLICIES
The preparation of financial statements in accordance with U.S.
GAAP requires management to make estimates and assumptions that
affect reported amounts and related disclosures. We have discussed
those estimates that we believe are critical and require the use
of
8
complex judgment in their application in our audited financial
statements for the year ended December 31, 2021
in our Annual Report on Form 10-K filed with the SEC, on March
10,
2022.
Since December 31, 2021, there have been no material changes to our
critical accounting policies or the methodologies or assumptions we
apply under them.
3. GOVERNMENT GRANT
In July 2021, we announced that we
were awarded a grant from the National Institute on Drug Abuse, or
NIDA, of the National Institutes of Health, or NIH, to evaluate the
use of cytisinicline as a treatment for cessation of nicotine
e-cigarette use. This initial grant award, in the amount of $0.3
million, commenced on August 1, 2021, and was utilized to complete
critical regulatory and clinical operational activities, such as
protocol finalization, clinical trial site identification, drug
packaging, and submission of a new Investigational New Drug
Application, or IND, to the U.S. Food and Drug Administration, or
FDA, for investigating cytisinicline in nicotine e-cigarette
users. In November 2021, we announced that the FDA had
completed their review and accepted the IND application to
investigate cytisinicline as a cessation treatment in this
population. In June 2022, following NIH review of completed
milestones, we announced that we were awarded the next grant
funding from the NIDA in the amount of approximately $2.5 million,
which we have used to conduct the ORCA-V1 Phase 2 clinical
trial.
In June 2022, we announced the initiation of the ORCA-V1 Phase 2
clinical trial. ORCA-V1 will evaluate the efficacy and safety of 3
mg cytisinicline dosed three times daily compared to placebo in
approximately 150 adult e-cigarette users at five clinical trial
locations in the United States. Participants will be
randomized to receive cytisinicline or placebo for 12 weeks in
combination with standard cessation behavioral support.
The full grant award of $2.8 million is expected to cover
approximately half of the total ORCA-V1 clinical study costs. The
Primary Investigators for the grant are our Chief Medical Officer,
Dr. Cindy Jacobs, and Dr. Nancy Rigotti, Professor of Medicine at
Harvard Medical School and Director, Tobacco Research and Treatment
Center, Massachusetts General Hospital.
For the nine months ended September 30, 2022, we incurred $0.7
million in qualifying R&D expenditures under the NIDA/NIH
grant, which has been recorded as a reduction in R&D expense.
As of September 30, 2022, we had $0.1 million in grant receivable
related to the NIDA/NIH grant.
4. INTANGIBLES
All of our intangible assets are subject to amortization and are
amortized using the straight-line method over their estimated
useful life.
We acquired license and supply agreements in relation to
cytisinicline upon the acquisition of Extab Corporation, or Extab,
on May 18, 2015. The agreements were determined to have a fair
value of $3.1 million with an estimated useful life of 14
years.
The components of intangible assets were as follows:
|
|
|
September 30, 2022
|
|
|
December 31, 2021
|
|
|
|
|
Gross Carrying
|
|
|
Accumulated
|
|
|
Net Carrying
|
|
|
Gross Carrying
|
|
|
Accumulated
|
|
|
Net Carrying
|
|
|
|
|
Value
|
|
|
Amortization
|
|
|
Value
|
|
|
Value
|
|
|
Amortization
|
|
|
Value
|
|
|
License Agreements
|
|
$
|
3,117
|
|
|
$
|
(1,642
|
)
|
|
$
|
1,475
|
|
|
$
|
3,117
|
|
|
$
|
(1,476
|
)
|
|
$
|
1,641
|
|
For the three and nine months ended September 30, 2022, we recorded license agreement
amortization expense of $0.1 million and $0.2 million,
respectively. For the three and nine months ended September
30, 2021, we recorded license
agreement amortization expense of $0.1 million and $0.2 million,
respectively. The following table outlines the estimated future
amortization expense related to intangible assets held as of
September 30, 2022:
|
Year Ending December 31,
|
|
|
|
|
|
2022
|
|
|
56
|
|
|
2023
|
|
|
223
|
|
|
2024
|
|
|
223
|
|
|
Thereafter
|
|
|
973
|
|
|
Total
|
|
$
|
1,475
|
|
9
We evaluate the carrying amount of intangible assets periodically
by taking into account events or circumstances that may warrant
revised estimates of useful life or that indicate the asset may be
impaired. We conducted an analysis of potential impairment
indicators for long lived assets, including the license and supply
agreements for the active pharmaceutical ingredient cytisinicline,
and concluded that there were no indicators of impairment
identified as of September 30,
2022.
5. LICENSE AGREEMENTS
Sopharma License and Supply Agreements
We are party to a license agreement, or the Sopharma License
Agreement, and a supply agreement, or the Sopharma Supply
Agreement, with Sopharma, AD, or Sopharma. Pursuant to the Sopharma
License Agreement, we were granted access to all available
manufacturing, efficacy and safety data related to cytisinicline,
as well as a granted patent in several European countries related
to new oral dosage forms of cytisinicline providing enhanced
stability. Additional rights granted under the Sopharma License
Agreement include the exclusive use of, and the right to
sublicense, certain cytisinicline trademarks in all territories
described in the Sopharma License Agreement. Under the Sopharma
License Agreement, we agreed to pay a nonrefundable license fee. In
addition, we agreed to make certain royalty payments equal to a
mid-single digit percentage of all net sales of cytisinicline
products in our territory during the term of the Sopharma License
Agreement, including those sold by a third party pursuant to any
sublicense which may be granted by us. To date, any amounts paid to
Sopharma pursuant to the Sopharma License Agreement have been
immaterial.
University of Bristol License Agreement
In July 2016, we entered into a license agreement with the
University of Bristol, or the University of Bristol License
Agreement. Under the University of Bristol License Agreement, we
received exclusive and nonexclusive licenses from the University of
Bristol to certain patent and technology rights resulting from
research activities into cytisinicline and its derivatives,
including a number of patent applications related to novel
approaches to cytisinicline binding at the nicotinic receptor
level.
In consideration of rights granted by the University of Bristol, we
paid a nominal license fee and agreed to pay amounts of up to
$3.2 million, in the aggregate, tied to a financing milestone
and to specific clinical development and commercialization
milestones resulting from activities covered by the University of
Bristol License Agreement. Additionally, if we successfully
commercialize any product candidates subject to the University of
Bristol License Agreement, we are responsible for royalty payments
in the low-single digits and payments up to a percentage in the
mid-teens of any sublicense income, subject to specified
exceptions, based upon net sales of such licensed products.
On January 22, 2018, we and the University of Bristol entered into
an amendment to the University of Bristol License Agreement.
Pursuant to the amended University of Bristol License Agreement, we
re