ACHV: The Countdown Begins
The long-awaited new drug application to the FDA for Cytisinicline has been completed. The countdown has begun to decision/approval and a potential 2.5-5x return for shareholders from current levels.
It is essential you read the disclaimer at the end of this post!
Achieve Life Sciences (ACHV) submitted its new drug application (NDA) for Cytisinicline to the FDA in June. The long-awaited submission begins the countdown to the decision on approval. The timeline for decision, currently estimated late 2Q26, will be set-out in an acceptance letter from the FDA, which is expected imminently.
The count-down also sets the stage for defining how shareholder value will be created. We believe there is good probability there is an exit event of $8-16 per share prior to the approval decision.
Cytisinicline will be the first new smoking cessation product in 20-years, if approved. There are an estimated 29M smokers in the U.S. and a growing number of Alt-nicotine users – vape and pouches – which may represent potential future patients. Given Cyticinicline’s strong efficacy and safety profile, we believe it could be an exciting high-profile drug.
The company is pursuing a two-pronged strategy: a partnership with Big Pharma while simultaneously developing a drug launch strategy with an experienced partner.
If a bid at what management deems to be fair value does not emerge, we suspect the company will take the launch route.
We believe the company is worth $8-15 per share in a buy-out scenario. From current prices, the value implies a 2.5-5x return in slightly less than a year.
The Eventful Month of June
There was a flurry of announcements from ACHV on June 26th. It was good news on the product front and difficult news on the financial front.
The company announced that it submitted its NDA to the FDA. It was completed on time according to the revised schedule. The original anticipated date was delayed when the FDA requested long-term safety data.
The NDA submission is a significant milestone for the company and begins the countdown to the approval decision.
Prior to the submission announcement in June, the stock reflected the importance of the NDA. It trading up from ~$2 to a high of ~$4 in in anticipation of the event. However, the achievement of the NDA submission was overshadowed by another dilutive financing.
The company announced pricing of a $45M offering after the close on June 26th, the same day the NDA submission was announced . The 15M shares of stock with an accompanying warrant were priced at $3.00. On June 25th, the stock had closed at $3.80. It closed at $3.51 when the deal was announced and at $2.23 on June 27th, the first day following the pricing.
As disappointing as it was for shareholders to suffer a -40% decline in the stock price the day following achieving a key milestone, it creates a significant buying opportunity.
We now have a company that has been incrementally de-risked. The product approval decision will likely take place in less than a year, creating the opportunity for a short-term multi-bagger if the outcome is positive.
Two-pronged Approach: Build or Sell
Management has long spoken of a partnership with Big Pharma – the sale of the company. However, when the NDA submission and financing were announced, ACHV announced a partnership with Omnicom (OMC) to develop a drug-launch platform for Cytisinicline. Omnicom develops marketing and sales solutions primarily for healthcare companies.
We believe developing a launch strategy in parallel to partnership discussions provides the company with an option in the event that a buy-out offer is below what they view as fair value. In our view, the strategy makes sense and Omnicom is a good partner, a $14.5B market cap company known in the industry. The product should be launched by the end of 2026, if that route is taken.
Timeline of Events
The timeline of expected events provides a framework for the investment opportunity. The bullets below show the expected events.
Expected Timeline of Regulatory and Commercial Events
September 2025 – FDA acceptance letter. Formal acceptance of NDA package along with prospective time for review. The letter is expected any day.
Late 2025 – Release of long-term safety data. The FDA requested long-term safety data. While the study delayed submission of the NDA, it may provide incremental information on long-term use and efficacy.
Late 2Q26 – Current default time period expectation for the binary FDA acceptance/rejection decision. Given the trial information on efficacy and safety, particularly relative to the only competing product, generic Chantix, we would expect approval. It is possible that the drug review process is expedited, but we do not expect it.
Late 2026 – Commercial launch of Cytisinicline if the company is not sold.
The FDA acceptance letter is the fist event on the calendar and is expected imminently. Release of data from the completed long-term safety trial is likely not a major event. However, to the extent the study contains incremental information and nuance, it could be a net positive event for the company and the stock.
We view 4Q25 through 1H26 as the critical period. We think there is a reasonable probability that the company sells itself prior to the decision in late 2Q26.
We would interpret the lack of a buy-out announcement prior to the June/July 2026 as likely as indicative of a low offer. In that case, we would view the product launch scenario as a growing probability.
A product launch would both extend the timeline and increase capital needs. The company had $55.4M in cash as of June 30th. On the 2Q25 conference call, management stated that the cash can fund operations into 2H26. That implies, 12-15 months of cash or until 3Q26.
Management commentary on calls indicates that cash balances should take the company through a buy-out (if late 2Q26), but if the launch scenario materializes, the company will likely need to raise capital. Assuming Cytisinicline is approved, we would expect the stock price to be materially higher and a capital raise significantly less dilutive than previous offerings. The capital raising would support a late 2026 product launch.
What is it Worth?
The only other smoking cessation drug on the market is generic Chantix. Chantix was a $1B drug prior to being withdrawn from the market. Although it was taken off the market for manufacturing reasons, tolerance was a known issue with approximately 30% of patients experiencing nausea. Roughly 12% discontinued treatment due to tolerance issues.
We assume a market size of $750M-1B. Assuming a 35% share on the low side and 50% on the high implies total revenue of ~$260-$500M. This does not seem unreasonable given Endo Pharmaceutical reported sales of ~$160M for its generic Varenicline in 2023.
A buy-out multiple of 3x sales implies an EV of $750M to $1.3B. Using current shares outstanding of 85M, which includes warrant conversion implies a price per share of $8.69 to $16.23.
Why We Own Achieve
It has not always been easy to be an ACHV shareholder. It has been a long road to the NDA submission with good science punctuated by unfortunate capital raises and a significant delay. While the stock has been difficult, progress with the science and product development has been excellent. We believe ACHV has a compelling product for which there is growing demand.
Approximately 50% of the 29M smokers in the US attempt to quit each year. The number of smokers slowly dwindles, but Alt-nicotine users are growing. A 2021 CDC survey estimated there were 11.1M users of vape products. That is likely higher now. We would expect a portion of the Alt-nicotine users to become potential patients at some point. With the unfortunate growth of Alt nicotine products, treatment for nicotine dependence has gone from a shrinking to a growing market.
For those that would like to review the information on efficacy and safety, here is a link to the company’s summary of the Phase 3 trial results. Here is an article in JAMA on the same study.
The company is currently investigating the use of Cytisinicline for vaping. Here is a link to the trial data. JAMA has also covered the vape data, here.
DISCLAIMER
This report represents the opinions of Keith Dalrymple and Dalrymple Finance on Achieve Life Sciences. It is an opinion piece and should not be taken as investment advice of any kind. This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction. The report is based on publicly available information and due diligence Dalrymple Finance believes to be accurate and reliable. However, it is presented “as is” without warranty of any kind, whether express or implied. Dalrymple Finance makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use. This report contains a large measure of analysis and opinion. It is subject to change without notice. Following the publication of this report we intend on continuing to transact in the securities mentioned. We may be long, short or have no position at any time. That position may change at any time. We are investors with the goal of profiting from our research. You should assume that as of the publication date, that Dalrymple Finance, Keith Dalrymple and/or affiliates have a position in the securities mentioned in this report. In no event shall Dalrymple Finance or Keith Dalrymple be liable for any claims, losses costs or damages of any kind, including direct, indirect and otherwise, arising out of or in any way connected with information in this report.
Looks intriguing. Thanks for sharing this.
Curious if you have any comments after the recent selloff