The funding round involves investments from specialized healthcare backers like Propel Bio Partners LLC, Nantahala Capital, and a prominent life sciences investor. Strategic investor Sopharma, in conjunction with members of Achieve’s management team and board of directors, also took part. Lake Street Capital Markets, LLC, and JonesTrading Institutional Services LLC acted as co-placement agents for the offering.
Achieve intends to utilize the initial proceeds to finance the ORCA-OL trial and other research endeavors related to cytisinicline. The company anticipates that with the full exercise of milestone-driven warrants, the total net proceeds will be adequate to sustain the development of cytisinicline through potential FDA approval and into 2026.
The financing was executed partially through a registered direct offering of more than 13 million shares at 4.585 per share. Additionally, unregistered warrants enabling the purchase of up to an equivalent number of shares at 4.906 per share were issued through a private placement. These warrants are immediately exercisable and will expire either three and a half years after issuance or 30 days following the public announcement of FDA acceptance of cytisinicline’s NDA.
The transactions are projected to conclude around March 4, 2024, pending standard closing prerequisites. The common stock shares are being offered under a shelf registration statement that the SEC declared effective on January 5, 2022. The milestone-driven warrants and the underlying securities are being offered in a private placement under the Securities Act of 1933, as amended, and have not been registered under the Securities Act or relevant state securities laws.
Cytisinicline, a plant-derived alkaloid developed to aid in nicotine addiction treatment by engaging with nicotine receptors in the brain, is currently an investigational product candidate in the United States awaiting FDA approval.
Following Achieve Life Sciences’ recent financing deal, investors are closely monitoring the company’s financial well-being and market performance. According to data from InvestingPro, Achieve has a market capitalization of $94.4 million. The company’s Price / Book ratio for the last twelve months ending Q3 2023 is notably high at 23.38, which could raise concerns given the company’s current lack of profitability.
InvestingPro Tips emphasize Achieve Life Sciences’ substantial return in the past week, with a 16.75% price total return, indicating investor optimism likely linked to the recent financing announcement. However, analysts in the InvestingPro network are cautious, observing that the company is not expected to turn a profit this year and is rapidly depleting its cash reserves. This suggests that while the current capital infusion is crucial, Achieve’s journey to financial stability remains challenging.
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