Achieve Life Sciences Announces $20M Loan Refinancing with Silicon Valley Bank
29 Juli 2024 - 2:00PM
Achieve Life Sciences, Inc. (Nasdaq: ACHV), a late-stage
pharmaceutical company committed to the global development and
commercialization of cytisinicline for smoking cessation and
nicotine dependence, today announced that it has entered into a $20
million debt refinancing agreement with Silicon Valley Bank (SVB),
a division of First-Citizens Bank. The new loan agreement
refinances the existing debt facility with SVB and SVB Capital and
extends the maturity date from August 1, 2024 to December 1, 2027.
“We are pleased to continue our partnership with SVB and believe
this refinancing further solidifies the firm’s confidence in
Achieve Life Sciences and the potential of cytisinicline to impact
the nicotine addiction market,” said John Bencich, CEO of Achieve
Life Sciences. “This refinancing lowers our cost of capital,
extends our cash runway and provides access to additional capital
as we move cytisinicline through the regulatory approval process
with FDA.”
Under the terms of the new agreement, the $20 million term loan
facility is structured into three tranches, with the first tranche
of $10 million received at loan closing. The second tranche of $5
million will be available upon the U.S. Food and Drug
Administration’s acceptance of filing the New Drug Application
(NDA) for cytisinicline, and the final $5 million tranche will be
available at SVB’s discretion and subject to SVB's credit committee
approval.
Under the terms of the agreement, the outstanding principal will
accrue interest at a floating rate per annum equal to the greater
of 7.0% and the prime rate minus 1.0%. The loan facility includes
an interest-only period through December 31, 2025, followed by 24
monthly payments of principal plus interest through the maturity
date of December 1, 2027. Additional provisions include the option
for a six-month extension to the interest-only period and maturity
date upon achieving certain regulatory and financial
milestones.
Subject to certain terms and conditions, the initial outstanding
debt (principal and accrued and unpaid interest) may be converted
into shares of Achieve’s common stock at SVB’s election at any time
prior to repayment of such debt, at a conversion price equal to
$7.00 per share, subject to customary adjustment provisions.
Subsequent tranches may be converted at a conversion price
calculated based on a premium to the closing price of Achieve’s
stock at the applicable time, with a minimum conversion price of
$4.854 per share. While the loan remains outstanding, SVB is not
permitted to short sell or engage in any other hedging transaction
with respect to Achieve’s common stock.
Achieve has the right at any time to repay and retire all (but
not less than all) of the outstanding convertible debt prior to its
conversion by payment of a premium determined based on the date of
such repayment.
Additional terms of the agreement can be found within the
company’s Form 8-K filing issued on July 29, 2024.
About Achieve and Cytisinicline Achieve’s focus
is to address the global smoking health and nicotine addiction
epidemic through the development and commercialization of
cytisinicline. There are an estimated 28 million adults in the
United States alone who smoke combustible cigarettes.1 Tobacco use
is currently the leading cause of preventable death that is
responsible for more than eight million deaths worldwide and nearly
half a million deaths in the United States annually.2,3 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 secondhand smoke.3
In addition, there are over 11 million adults in the United
States who use e-cigarettes, also known as vaping.1 In 2023,
approximately 2.1 million middle and high school students in the
United States reported using e-cigarettes.4 Currently, there are no
FDA-approved treatments indicated specifically as an aid to
nicotine e-cigarette cessation.
Cytisinicline is a plant-based alkaloid with a high binding
affinity to the nicotinic acetylcholine receptor. It is believed to
aid in treating nicotine addiction for smoking and e-cigarette
cessation by interacting with nicotine receptors in the brain,
reducing the severity of withdrawal symptoms, and reducing the
reward and satisfaction associated with nicotine products.
Cytisinicline is an investigational product candidate being
developed for the treatment of nicotine addiction and has not been
approved by the Food and Drug Administration for any indication in
the United States. For more information on cytisinicline and
Achieve visit www.achievelifesciences.com.
Forward Looking StatementsThis press release
contains forward-looking statements within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995, including, but not limited to, statements regarding the
timing and nature of cytisinicline clinical development and
regulatory review and approval, data results and commercialization
activities, the potential market size for cytisinicline, the
potential benefits, efficacy, safety and tolerability of
cytisinicline, the ability to discover and develop new uses for
cytisinicline, including but not limited to as an e-cigarette
cessation product, the development and effectiveness of new
treatments and Achieve’s access to capital under the terms of the
term loan facility. All statements other than statements of
historical fact are statements that could be deemed forward-looking
statements. Achieve may not actually achieve its plans or product
development goals in a timely manner, if at all, or otherwise carry
out its intentions or meet its expectations or projections
disclosed in these forward-looking statements. These statements are
based on management’s current expectations and beliefs and are
subject to a number of risks, uncertainties and assumptions that
could cause actual results to differ materially from those
described in the forward-looking statements, including, among
others, the risk that cytisinicline may not demonstrate the
hypothesized or expected benefits; the risk that Achieve may not be
able to obtain additional financing to fund the development of
cytisinicline; the risk that cytisinicline will not receive
regulatory approval or be successfully commercialized; the risk
that new developments in the smoking cessation landscape require
changes in business strategy or clinical development plans; the
risk that Achieve’s intellectual property may not be adequately
protected; general business and economic conditions; risks related
to the impact on our business of macroeconomic and geopolitical
conditions, including inflation, rising interest rates, increased
volatility in the debt and equity markets, actual or perceived
instability in the global banking system, global health crises and
pandemics and geopolitical conflict and the other factors described
in the risk factors set forth in Achieve’s filings with the
Securities and Exchange Commission from time to time, including
Achieve’s Annual Reports on Form 10-K and Quarterly Reports on Form
10-Q. Achieve undertakes no obligation to update the
forward-looking statements contained herein or to reflect events or
circumstances occurring after the date hereof, other than as may be
required by applicable.
Investor Relations ContactNicole
Jonesachv@cg.capital(404) 736-3838
Media ContactGlenn
SilverGlenn.Silver@Finnpartners.com(646) 871-8485
References1Cornelius ME, Loretan CG, Jamal A,
et al. Tobacco Product Use Among Adults – United States, 2021. MMWR
Morb Mortal Wkly Rep 2023;72:475–483.2World Health Organization.
WHO Report on the Global Tobacco Epidemic, 2019. Geneva: World
Health Organization, 2017.3U.S. Department of Health and Human
Services. The Health Consequences of Smoking – 50 Years of
Progress. A Report of the Surgeon General, 2014.4Birdsey J,
Cornelius M, Jamal A, et al. Tobacco Product Use Among U.S. Middle
and High School Students — National Youth Tobacco Survey, 2023.
MMWR Morb Mortal Wkly Rep 2023;72:1173–1182.
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