ACHIEVE LIFE SCIENCES, INC.
For the period ended Dec 31, 2025. Filed Mar 24, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 24, 2026
ACHV$6.72+5.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-11.
0000950170-25-036831
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-24.
0001193125-26-120690
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 104 current paragraphs.
58 unchanged; 30 reworded; 14 added; 18 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
In October 2025, the FDA awarded cytisinicline for nicotine e-cigarette, or vaping, cessation the Commissioner’s National Priority Voucher, or CNPV, as part of the pilot program. A CNPV is granted to product candidates with significant potential to address a major national priority, such as meeting a large unmet medical need, reducing downstream health care utilization or addressing a public health crisis. CNPV recipients will receive a decision from the FDA within one to two months following filing of a complete application for a drug, as well as enhanced communication with review staff throughout the development process prior to their final submission and during the review period. Currently, there are no FDA-approved therapies indicated specifically as an aid for nicotine e-cigarette cessation.
Current report
We believe we will be able to commercialize independently in the U.S. market by focusing our marketing and sales efforts on highly targeted prescriber and patient audiences. We are planning to launch by utilizing a well-established marketing technology infrastructure and embedding Artificial Intelligence, or AI, tools to enhance targeting, decision making, and performance metrics. Launch planning and readiness activities are underway, leveraging our integrated agency partnership with Omnicom, with teams established for key functional areas including market access, medical education, prescriber and patient marketing, and digital infrastructure. Additionally, field-based and virtual sales representatives will supplement digital promotional efforts.
Current report
We communicated to Sopharma that we had concerns regarding their ability to pass an FDA pre-approval inspection and that if those concerns were not resolved, we planned to engage third-party manufacturers, and include such manufacturers in our NDA, until such time that Sopharma is able to pass an FDA inspection. In June 2025, we submitted our NDA, which included third-party manufacturers. Sopharma has alleged that our engagement of third-party manufacturers is a breach of our agreement, which we have disputed and have proposed steps to resolve.
Current report
Our R&D expenses are devoted to our ongoing clinical development program, cytisinicline. R&D expenses for the years ended December 31, 2025 and 2024 were $23.0 million and $22.8 million, respectively. The increase in 2025 as compared to 2024 was primarily due to higher employee costs from increased headcount and higher manufacturing and supply chain costs associated with commercial launch preparation, including purchase of raw cytisinicline inventory expensed to R&D prior to regulatory approval. This was partially offset by lower clinical trial costs associated with the wind down of the ORCA-OL trial which was completed at the end of September 2025.
Current report
Loss on extinguishment of 2023 Silicon Valley Bank convertible term loan
Current report
In October 2025, pursuant to the New Debt Agreement and following the occurrence of the Additional Term Loan Event I as described therein, we drew down on the second tranche of the New Convertible Term Loan for an additional $5.0 million. We did not draw down on the third tranche of the New Convertible Term Loan and it expired and became unavailable on December 31, 2025.
Current report
June 2025 Public Offering
Current report
On June 26, 2025, we entered into an underwriting agreement, or Underwriting Agreement, with Citizens JMP Securities, LLC and Raymond James & Associates, Inc., or the Underwriters, as representatives of the underwriters, pursuant to which we agreed to issue and sell to the Underwriters 15,000,000 shares of our common stock, or the Shares, and accompanying common warrants, or Accompanying Warrants, to purchase up to 15,000,000 shares of common stock, or Warrant Shares, or pre-funded warrants to purchase shares of our common stock in lieu thereof, or Pre-Funded Warrants.
Current report
The Shares and Accompanying Warrants were sold collectively at the public offering price of $3.00 per Share and Accompanying Warrant, less underwriting discounts and commissions. Pursuant to the Underwriting Agreement, we also granted the Underwriters a 30-day option to purchase up to an additional 2,250,000 Shares and/or up to an additional 2,250,000 Accompanying Warrants at the same public offering price per Share and Accompanying Warrant, less underwriting discounts and commissions. On June 28, 2025, the Underwriters exercised their option in part to purchase an additional 1,766,666 Accompanying Warrants. On July 25, 2025, the Underwriters exercised their option in part to purchase an additional 1,419,896 Shares.
Current report
Each Accompanying Warrant is exercisable, at the purchaser’s election, for either Warrant Shares at an exercise price of $3.00 per share or for Pre-Funded Warrants at an exercise price of $2.999 per Pre-Funded Warrant. The Accompanying Warrants are exercisable any time after the date of issuance, subject to certain ownership limitations, and will expire on the fifth anniversary of the date of issuance. A holder of Accompanying Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of our common stock outstanding immediately after giving effect to such exercise. The Pre-Funded Warrants have an exercise price of $0.001 per share, will be immediately exercisable subject to certain ownership limitations, and have no expiration. A holder of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of our common stock outstanding immediately after giving effect to such exercise. A holder of Accompanying Warrants and Pre-Funded Warrants may increase or decrease the ownership limitation by providing at least 61 days' prior notice to us.
Current report
The June 2025 public offering of 15,000,000 Shares and 15,000,000 Accompanying Warrants raised total gross proceeds of approximately $45.0 million, and after deducting approximately $3.8 million in underwriting discounts and offering expenses, we received net proceeds of approximately $41.2 million. The exercises in part of the Underwriters’ option to purchase 1,766,666 Accompanying Warrants and 1,419,896 Shares raised gross proceeds of $4.3 million, and after deducting approximately $0.3 million in underwriting discounts, we received net proceeds of approximately $4.0 million.
Current report
Inventory Costs
Current report
Inventoriable costs, such as manufacturing costs for our product candidate, cytisinicline, are expensed as incurred as research and development expenses prior to regulatory approval. If regulatory approval of a product is obtained and the approved product is commercially launched, we will begin capitalizing manufacturing costs related to the approved product into inventory.
Current report
In November 2024, the Financial Accounting Standard Board, or FASB, issued ASU2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The standard will require additional disclosure of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. We are evaluating this standard to determine if adoption will have a material impact on our consolidated financial statements.
Removed paragraphs (18)
Previous report
Our research and development expenses for our cytisinicline clinical development program are as follows (in thousands):
Previous report
Research and development expenses for the years ended December 31, 2024 and 2023 were $22.8 million and $15.8 million, respectively. The increase in 2024 as compared to 2023 was primarily due to the initiation, in May 2024, of our ORCA-OL open label safety trial. This increase was partially offset by a reduction in costs associated with our Phase 3 ORCA-3 trial and Phase 2 ORCA-V1 trial as both were completed in the second quarter of 2023.
Previous report
Our general and administrative expenses were as follows (in thousands):
Previous report
Loss on extinguishment of 2023 SVB convertible term loan
Previous report
Virtu At-the-Market Sales Agreement
Previous report
On December 21, 2021, we entered into an At-the-Market Offering Sales Agreement, or ATM, with Virtu Americas, LLC, as sales agent. The ATM was terminated on February 29, 2024, and no further sales of our common stock will be made pursuant to the ATM.
Previous report
Through the date of termination of the ATM, we offered and sold an aggregate of 200,000 shares of our common stock. These aggregate sales resulted in gross proceeds to us of approximately $1.5 million. During the year ended December 31, 2024, we did not sell any shares of our common stock pursuant to the ATM.
Previous report
November 2022 Private Placement
Previous report
In November 2022, we entered into subscription agreements with certain accredited investors pursuant to which we sold to the purchasers in a private placement transaction approximately 4,093,141 units at a purchase price of $4.625 per unit, with each unit consisting of two shares of common stock and a common stock purchase warrant to purchase one share of common stock, or the Warrants.
Previous report
The Warrants are exercisable at a price per share of common stock of $4.50, subject to adjustment. The Warrants are exercisable beginning on the six-month anniversary of the initial closing date of the private placement offering, or May 18, 2023, or the Initial Exercise Date, and will expire on the seven year anniversary of the initial closing date of the private placement offering, or November 18, 2029. The Warrants cannot be exercised by a Warrant holder if, after giving effect thereto, such Warrant holder would beneficially own more than 19.99% of our outstanding common stock. Additionally, subject to certain exceptions, if, after the Initial Exercise Date, (i) the volume weighted average price of our common stock for each of 30 consecutive trading days, or the Measurement Period, which Measurement Period commenced on November 18, 2022, exceeds 300% of the exercise price (subject to adjustments for stock splits, recapitalizations, stock dividends and similar transactions), (ii) the average daily trading volume for such Measurement Period exceeds $500,000 per trading day and (iii) certain other equity conditions are met, and subject to a beneficial ownership limitation, then we may call for cancellation of all or any portion of the Warrants then outstanding.
Previous report
We received approximately $17.9 million in net proceeds from the private placement after deducting placement agent expenses and commissions and offering expenses.
Previous report
May 2023 Registered Direct Offering
Previous report
We received approximately $15.3 million in net proceeds from the registered direct offering after deducting placement agent fees and offering expenses.
Previous report
Jefferies Open Market Sale Agreement
Previous report
On September 27, 2024, we entered into an Open Market Sale Agreement, or Sale Agreement, with Jefferies LLC, or Jefferies, as sales agent, to establish an at-the-market offering program through which we may sell shares of our common stock with an aggregate offering price of up to $50.0 million. During the year ended December 31, 2024, we did not sell any shares under the Sale Agreement. As of December 31, 2024, we had $50.0 million available under the Sale Agreement.
Previous report
Government Grants
Previous report
We account for government grants by recognizing the benefit of the grant as qualifying expenditures are incurred provided that there is reasonable assurance that we have complied with all conditions under the terms of the grant and that the amount requested for reimbursement will be received. The government grant reduces the research and development expenses to which it relates on our statement of profit and loss.
Previous report
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to provide enhanced segment disclosures. The standard will require disclosures about significant segment expenses and other segment items and identifying the Chief Operating Decision Maker and how they use the reported segment profitability measures to assess segment performance and allocate resources. These enhanced disclosures are required for all entities on an interim and annual basis, even if they have only a single reportable segment. The standard is effective for years beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024 and early adoption is permitted. The adoption of this standard did not have a significant impact on our financial position or results of operations.
Reworded paragraphs (30)
Previous wording
We are a late-stage clinical specialty pharmaceutical company with a sole mission to address the global nicotine dependence epidemic in combustible cigarette and e-cigarette usage through the development and commercialization of cytisinicline. There are an estimated 29 million adults in the United States alone who smoke combustible cigarettes and an estimated 11 million adults in the United States who utilize e-cigarettes. Tobacco use is currently the leading cause of preventable death and is responsible for more than eight million deaths worldwide and nearly half a million deaths in the United States annually. 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.
Current wording
We are a late-stage clinical specialty pharmaceutical company with the sole mission to address the global nicotine dependence epidemic through the development and commercialization of cytisinicline. There are an estimated 29 million adults in the United States alone who smoke combustible cigarettes and an estimated 17 million adults in the United States who utilize e-cigarettes. Tobacco use is currently the leading cause of preventable death and is responsible for more than eight million deaths worldwide and nearly half a million deaths in the United States annually. 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. Our primary focus is to address this global epidemic.
Previous wording
While nicotine e-cigarettes are thought to be less harmful than combustible cigarettes, they remain highly addictive and can deliver harmful chemicals which can cause lung injury or cardiovascular disease. In 2024, 1.6 million high school and middle school students reported using e-cigarettes. Research shows adolescents who have used e-cigarettes are seven times more likely to become smokers one year later compared to those who have never used e-cigarettes. Recently, the U.S. Food and Drug Administration, or FDA, granted Breakthrough Therapy Designation for cytisinicline for nicotine e-cigarette, or vaping, cessation. Breakthrough Therapy Designation is a process that expedites the development and review of new drugs and biologics that are intended to treat serious or life-threatening conditions and have preliminary clinical evidence indicating substantial improvement over existing therapies. Currently, there are no FDA approved drug therapies indicated specifically as an aid to nicotine e-cigarette cessation. We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarettes users.
Current wording
While nicotine e-cigarettes are thought to be less harmful than combustible cigarettes, they remain highly addictive and can deliver harmful chemicals which can cause lung injury or cardiovascular disease. In 2024, 1.6 million high school and middle school students reported using e-cigarettes. Research shows adolescents who have used e-cigarettes are seven times more likely to become smokers one year later compared to those who have never used e-cigarettes. In 2024, the FDA granted Breakthrough Therapy designation for cytisinicline for nicotine e-cigarette, or vaping, cessation. Breakthrough Therapy designation is a process that expedites the development and review of new drugs and biologics that are intended to treat serious or life-threatening conditions and have preliminary clinical evidence indicating substantial improvement over existing therapies.
Previous wording
Cytisinicline is a plant-based alkaloid with a high binding affinity to the nicotinic acetylcholine receptor. It is believed to work in treating nicotine dependence for smoking and e-cigarette cessation by interacting with nicotine receptors in the brain by 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 treatment of nicotine dependence and has not been approved by the FDA for any indication in the United States.
Current wording
Cytisinicline is a natuarlly occuring alkaloid with a high binding affinity to the nicotinic acetylcholine receptor. It is believed to work in treating nicotine dependence for smoking and e-cigarette cessation by interacting with nicotine receptors in the brain by reducing the severity of craving and withdrawal symptoms, and reducing the reward and satisfaction associated with nicotine products. Cytisinicline is an investigational product candidate being developed for treatment of nicotine dependence. In September 2025, we announced that the FDA accepted for review our New Drug Application, or NDA, for cytisinicline as a treatment for smoking cessation as the first indication in the United States and assigned a Prescription Drug User Fee Act, or PDUFA, targeted action date of June 20, 2026. One third-party manufacturer named in our cytisinicline NDA recently underwent an, non-Achieve related, FDA current Good Manufacturing Practices inspection and FDA made two observations related to solid oral dose manufacturing, which are being addressed through an ongoing communication with FDA of the company’s remedial action plan. While unclear, there is potential for a delay in FDA approval beyond the PDUFA targeted action date of June 20, 2026. We have partnered with a U.S.-based manufacturer, Adare Pharma Solutions, or Adare, to manufacture cytisinicline drug product for potential commercial launch and beyond and have commenced a technology transfer (see Note 11 "Related Party Transactions" in the accompanying consolidated financial statements). We expect the partnership with Adare to provide supply chain redundancy and U.S.-based contingency capacity, help decrease risks related to international importation of pharmaceuticals and reduce costs, including potential tariffs. By establishing U.S. manufacturing with Adare, we expect to decrease our supply chain risk as we progress toward commercial launch of cytisinicline, anticipated to take place in the first-half 2027.
Previous wording
We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarettes users. If approved by the FDA, it may become one of the first new prescription medicines in nearly two decades aimed at aiding individuals in overcoming nicotine dependence. We believe cytisinicline is differentiated from existing smoking cessation treatments given its combination of efficacy, well-tolerated safety profile, and a shorter therapy duration, as demonstrated in clinical trials.
Current wording
We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarettes users. We believe cytisinicline is differentiated from existing smoking cessation treatments given its combination of efficacy, well-tolerated safety profile and dosing flexibility with a 6 or 12-week regimen, as demonstrated in clinical trials.
Previous wording
We have no products approved for commercial sale and have not generated any revenue from product sales to date. We have never been profitable and have incurred operating losses in each year since inception. Our net loss was $39.8 million for the year ended December 31, 2024. As of December 31, 2024, we had an accumulated deficit of $205.6 million, cash, cash equivalents and marketable securities balance of $34.4 million and a positive working capital balance of $29.8 million. During the year ended December 31, 2024, net cash used in operations was $29.8 million.
Current wording
We have no products approved for commercial sale and have not generated any revenue from product sales to date. We have never been profitable and have incurred operating losses in each year since inception. Our net loss was $54.6 million for the year ended December 31, 2025. As of December 31, 2025, we had an accumulated deficit of $260.2 million, cash, cash equivalents and marketable securities balance of $36.4 million and a positive working capital balance of $30.8 million. During the year ended December 31, 2025, net cash used in operations was $49.5 million.
Previous wording
We are party to a license agreement, or the Sopharma License Agreement, and a supply agreement, or the Sopharma Supply Agreement, with 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.
Current wording
We are party to a license agreement, or the Sopharma License Agreement, and a supply agreement, or the Sopharma Supply Agreement, with Sopharma. Pursuant to the Sopharma License Agreement, we were granted access to all available manufacturing, efficacy and safety data related to cytisinicline. Additional rights granted under the Sopharma License Agreement include the exclusive use of, and the right to sublicense, certain Sopharma patent rights and the trademark Tabex 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 Tabex branded 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. We have agreed to coordinate with Sopharma in the defense against any actual or threatened infringement claims with respect to Tabex branded products. The Sopharma License Agreement will also terminate under customary termination provisions including bankruptcy or insolvency and material breach. To date, any amounts paid to Sopharma pursuant to the Sopharma License Agreement have been immaterial.
Previous wording
In May 2015, we entered into a Share Purchase Agreement with Sopharma to acquire 75% of the outstanding shares of Extab Corporation for $2.0 million in cash and $2.0 million in a deferred payment, contingent on regulatory approval of cytisinicline by the FDA or the European Medicines Agency, or EMA. The fair value of the contingent consideration on the acquisition date was nil. The contingent consideration liability is measured at fair value in our financial statements,
Current wording
On May 14, 2015, we entered into a Share Purchase Agreement with Sopharma to acquire 75% of the outstanding shares of Extab Corporation for $2.0 million in cash and $2.0 million in a deferred payment, contingent on regulatory approval of cytisinicline by the FDA or the European Medicines Agency, or EMA. The fair value of the contingent consideration on the acquisition date was nil. The contingent consideration liability is measured at fair value in our financial statements.
Previous wording
As of December 31, 2024, the fair value of the contingent consideration was estimated to be $1.1 million as compared to $0.5 million as of December 31, 2023. (see Note 2 "Significant Accounting Policies, Sopharma Share Purchase Agreement Contingent Consideration" in the accompanying consolidated Financial Statements). We recognized a loss of $0.6 million for the year ended December 31, 2024.
Current wording
As of December 31, 2025, the fair value of the contingent consideration was estimated to be $1.6 million as compared to $1.1 million as of December 31, 2024 (see Note 2 "Significant Accounting Policies, Sopharma Share Purchase Agreement Contingent Consideration" in the accompanying consolidated financial statements). We recognized losses of $0.4 million and $0.6 million for the years ended December 31, 2025 and 2024 respectively.
Previous wording
The process of conducting clinical trials and non-clinical studies necessary to obtain regulatory approval is costly and time consuming and we may never succeed in achieving marketing approval for cytisinicline. (See “Item 1A. Risk Factors—Risks Related to the Development of Our Product Candidate Cytisinicline.”)
Current wording
Our R&D expenses will vary materially between quarters based on the timing of our clinical trials. The process of conducting clinical trials and non-clinical studies necessary to obtain regulatory approval is costly and time consuming and we may never succeed in achieving marketing approval for cytisinicline. (See “Item 1A. Risk Factors—Risks Related to the Development of Our Product Candidate Cytisinicline.”)
Previous wording
General and administrative expenses consist primarily of salaries and related costs for our personnel in executive, finance and accounting, and other administrative functions, as well as consulting costs, including commercial, corporate communications, market research, business consulting, human resources and intellectual property. Other costs include professional fees for legal and auditing services, insurance and facility costs.
Current wording
General and administrative expenses consist primarily of personnel costs related to executive, finance and accounting, and other administrative functions, as well as consulting costs, including commercial, corporate communications, market research, business consulting, human resources and intellectual property. Other costs include professional fees for legal and auditing services, insurance and facility costs.
Previous wording
G&A expenses for the years ended December 31, 2024 and 2023 were $16.3 million and $11.4 million, respectively. The increase in 2024 as compared to 2023 was primarily due to higher employee expenses associated with stock based compensation expense and severance costs, commercial launch preparation costs, consulting costs, and legal expenses associated with patent activities and general corporate activities.
Current wording
General and administrative expenses for the years ended December 31, 2025 and 2024 were $31.9 million and $16.3 million, respectively. The increase in 2025 as compared to 2024 was primarily due to higher commercial launch preparation costs, which were $12.3 million in 2025 as compared to $1.2 million in 2024, and a $2.7 million increase in stock-based compensation expense in 2025 as compared to 2024.
Previous wording
Total interest income for the years ended December 31, 2024 and 2023 was $2.4 million and $0.8 million, respectively. The increase in interest income for the year ended December 31, 2024 as compared to the same period in 2023was primarily due to higher average cash balances throughout 2024 and higher interest rates.
Current wording
Total interest income for the years ended December 31, 2025 and 2024 was $1.5 million and $2.4 million, respectively. The decrease in interest income for the year ended December 31, 2025 as compared to 2024 was primarily due to lower average cash balances throughout 2025 and lower interest rates.
Previous wording
Total interest expense for the years ended December 31, 2024 and 2023 was $2.2 million and $2.9 million, respectively. The decrease in interest expense for the year ended December 31, 2024 as compared to the same period in 2023 was due to a lower principal balance on our New Convertible Term Loan, relative to the Convertible Term Loan, that bears only a monthly interest as a result of the debt refinancing under the New Debt Agreement (see “Liquidity and Capital Resources” below).
Current wording
Total interest expense for the years ended December 31, 2025 and 2024 was $0.8 million and $2.2 million, respectively. The decrease in interest expense for the year ended December 31, 2025 as compared to the same period in 2024 was due to a lower principal balance on our New Convertible Term Loan, relative to the prior contingent convertible debt agreement with the Lenders, that bears only a monthly interest as a result of the debt refinancing under the New Debt Agreement (such terms as defined in "Liquidity and Capital Resources" below).
Previous wording
For the years ended December 31, 2024 and 2023 we recognized losses of $0.6 million and $0.5 million, respectively.
Current wording
For the years ended December 31, 2025 and 2024 we recognized losses of $0.4 million and $0.6 million, respectively.
Previous wording
We have incurred an accumulated deficit of $205.6 million through December 31, 2024 and we expect to incur substantial additional losses in the future as we operate our business and continue or expand our regulatory, manufacturing, commercialization and other R&D activities and other operations. We have not generated any revenue from product sales to date, and we may not generate product sales revenue in the near future, if ever. As of December 31, 2024, we had a cash, cash equivalents and marketable securities balance of $34.4 million and a positive working capital balance of $29.8 million. For the year ended December 31, 2024, net cash used in operations was $29.8 million.
Current wording
We have incurred an accumulated deficit of $260.2 million through December 31, 2025, and we expect to incur substantial additional losses in the future as we operate our business and continue or expand our regulatory, manufacturing, commercialization and other R&D activities and other operations. We have not generated any revenue from product sales to date, and we may not generate product sales revenue in the near future, if ever. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $36.4 million and a positive working capital balance of $30.8 million. For the year ended December 31, 2025, net cash used in operations was $49.5 million.
Previous wording
We have historically financed our operations through equity and debt financings. While we believe that we will be able to settle our commitments and liabilities in the normal course of business as they fall due during the next 12 months, as a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to support the ongoing advancement of our clinical trials and corporate activities. We believe that our existing cash, cash equivalents and marketable securities will be sufficient for us to fund our current operating expenses and capital expenditures into the third quarter of 2025.
Current wording
We have historically financed our operations through equity and debt financings and government grants. As a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to support the ongoing clinical development and commercialization activities.
Previous wording
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. We have historically financed our operations through equity offerings and/or debt financings. There can be no assurance that financing from these or other sources will be available to us in the future. Without additional funds, we may be forced to delay, scale back or eliminate some of our research and development 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 occur, our ability to achieve our development and commercialization goals would be adversely affected.
Current wording
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. While we have historically financed our operations through equity offerings, debt financings, and government grants, the timing and amount of future financings may be impacted by macroeconomic conditions including uncertainty in the capital markets. There can be no assurance that financing from these or other sources will be available to us in the future. Without additional funds, we would be forced to delay, scale back or eliminate some of our commercialization and 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 commercialization and development goals would be adversely affected.
Previous wording
Our current resources are insufficient to fund our planned operations for the next 12 months. We will continue to require substantial additional capital to continue our clinical development and commercialization activities. Accordingly, we will need to raise substantial additional capital from the sale of our securities, debt, partnering arrangements, non-dilutive fundraising or other financing transactions in order to continue to fund our operations and finance the remaining development and 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, regulatory review and commercialization efforts. The uncertainty with respect to our operations and the market generally may also make it challenging to raise additional capital on favorable terms, if at all. In addition, current macroeconomic conditions have caused uncertainty in various sectors, including capital markets. 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.
Current wording
Our current resources are insufficient to fund our planned operations for the next 12 months. We will continue to require substantial additional capital to continue our clinical development and commercialization activities. Accordingly, we will need to raise substantial additional capital from the sale of our securities, debt, partnering arrangements, non-dilutive fundraising or other financing transactions in order to continue to fund our operations and finance the remaining development and commercialization of our product candidate. The amount and timing of our future funding requirements will depend on many factors, including the pace of our commercialization activities and the pace and results of our clinical development efforts. The uncertainty with respect to our operations and the market generally may also make it challenging to raise additional capital on favorable terms, if at all. In addition, current macroeconomic conditions have caused uncertainty in various sectors, including the capital markets. 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 prepare for commercialization and develop our product candidate. We expect our expenses to substantially increase over time in connection with our development, particularly as we prepare our commercialization activities and advance our product candidate in clinical development.
Previous wording
In addition, we expect to incur significant expenses and increasing operating losses for at least the next several years as we continue our clinical development of, seek regulatory approval for, and commercialize, cytisinicline and add personnel necessary to operate as a commercial-stage public company. We expect that our operating losses will fluctuate significantly from quarter to quarter and year to year due to timing of clinical development programs and efforts to achieve regulatory approval and commercialization.
Current wording
In addition, we expect to incur significant expenses and increasing operating losses for at least the next several years as we continue our clinical development of, seek regulatory approval for, and commercialize, cytisinicline and add personnel necessary to operate as a commercial-stage public company. We expect that our operating losses will fluctuate significantly from quarter to quarter and year to year due to timing efforts to achieve regulatory approval, commercialization activities, and of clinical development programs.
Previous wording
On July 25, 2024, we entered into a contingent convertible debt agreement, or New Debt Agreement, with Silicon Valley Bank, or SVB, a division of First-Citizens Bank & Trust Company, or FCB, in its capacity as administrative agent and collateral agent, and FCB, as a lender, or Lender, pursuant to which the Lender provided term loans having an aggregate original principal amount of $10.0 million, with additional term loans of up to $10.0 million available upon the occurrence of certain events as provided for in the New Debt Agreement and further described below, or New Convertible Term Loan. Our obligations under the New Debt Agreement are secured by substantially all of our assets, other than intellectual property.
Current wording
On July 25, 2024, we entered into a contingent convertible debt agreement, or New Debt Agreement, with Silicon Valley Bank, or SVB, a division of First-Citizens Bank & Trust Company, or FCB, in its capacity as administrative agent and collateral agent, and FCB, as a lender, or Lender, pursuant to which the Lender provided term loans having an aggregate original principal amount of $10.0 million, with additional term loans of up to $10.0 million available upon the occurrence of certain events as provided for in the New
Previous wording
The New Convertible Term Loan matures on December 1, 2027, which maturity date may be extended to June 1, 2028 upon the occurrence of certain events as provided for in the New Debt Agreement. The first tranche of the New Convertible Term Loan, which was advanced on July 25, 2024, has an aggregate original principal amount of $10.0 million. The Lender will further make available to us, upon our request: (a) on or prior to October 31, 2025, a second tranche of the New Convertible Term Loan having an aggregate principal amount of $5.0 million in the event that we receive written notice that the FDA has accepted for filing our NDA with respect to cytisinicline for a smoking cessation indication, or the Additional Term Loan Event I, and (b) on or prior to December 31, 2025, a third tranche of the New Convertible Term Loan having an aggregate principal amount of $5.0 million, subject to the Lender’s sole discretion. Interest is calculated on the outstanding principal amount of the New Convertible Term Loan at a floating rate per annum equal to the greater of (i) 7.0% and (ii) the prime rate minus 1.0%, which interest shall be payable in cash monthly in arrears and shall be payable on the earlier to occur of (x) the first day of the first month following any extension of credit by the Lender for our credit, (y) the date of any prepayment pursuant to the New Debt Agreement, or (z) the maturity date. The New Convertible Term Loan will be “interest-only” until December 31, 2025, subject to extension as provided for in the New Debt Agreement. The “interest-only” period may be extended to June 30, 2026, if (i) prior to December 31, 2025, we have received at least $40,000,000 in net cash proceeds from the issuance equity interests and (ii) the conditions of Additional Term Loan Event I have been satisfied.
Current wording
The New Convertible Term Loan matures on June 1, 2028. The first tranche of the New Convertible Term Loan, which was advanced on July 25, 2024, has an aggregate original principal amount of $10.0 million. The Lender made available to us, upon our request: (a) prior to October 31, 2025, a second tranche of the New Convertible Term Loan having an aggregate principal amount of $5.0 million in the event that we received written notice that the FDA had accepted for filing our NDA with respect to cytisinicline for a smoking cessation indication, or the Additional Term Loan Event I, and (b) on or prior to December 31, 2025, a third tranche of the New Convertible Term Loan having an aggregate principal amount of $5.0 million, subject to the Lender’s sole discretion.
Previous wording
Subject to certain terms and conditions, the conversion feature grants the Lender or, pursuant to an assignment, any designee thereof, or Conversion Right Holders (as defined in the New Debt Agreement), the right to convert part or all of the outstanding aggregate original principal amount of the New Convertible Term Loan, plus accrued and unpaid interest, into shares of our common stock at a conversion price equal to $7.00, subject to customary adjustment provisions. The Conversion Right Holders have the further right to convert part or all of the outstanding principal amount of the second and third tranches of the New Convertible Term Loan, plus accrued and unpaid interest, into shares of our common stock at a conversion price equal to the greater of (i) $4.854, subject to customary adjustment provisions, and (ii) the lower of (a) 150% of the average of the closing sale price of our common stock during the 10 trading days preceding the effective date of such tranche and (b) 150% of the closing sale price of our common stock on the trading day immediately preceding the effective date of such tranche.
Current wording
Subject to certain terms and conditions, the conversion feature grants the Lender or, pursuant to an assignment, any designee thereof, or Conversion Right Holders, the right to convert part or all of the outstanding aggregate original principal amount of the New Convertible Term Loan, plus accrued and unpaid interest, into shares of our common stock at a conversion price equal to $7.00, subject to customary adjustment provisions. The Conversion Right Holders have the further right to convert part or all of the outstanding principal amount of the second tranche of the New Convertible Term Loan, plus accrued and unpaid interest, into shares of our common stock at a conversion price equal to the greater of (i) $4.854, subject to customary adjustment provisions, and (ii) the lower of (a) 150% of the average of the closing sale price of our common stock during the 10 trading days preceding the effective date of such tranche and (b) 150% of the closing sale price of our common stock on the trading day immediately preceding the effective date of such tranche.
Previous wording
Additionally, the outstanding principal of the New Convertible Term Loan, plus accrued and unpaid interest, will automatically be converted into shares of our common stock at the applicable conversion price on such date if any, when the closing price per share of our common stock has been equal to or greater than (a) in the case of the outstanding aggregate original principal amount of the New Convertible Term Loan, plus accrued and unpaid interest, $24.00 or, (b) in the case of the outstanding principal amount of the second and third tranches of the New Convertible Term Loan, plus accrued and unpaid interest, three times the applicable conversion price, in each case for the thirty consecutive trading days prior to such date, and the Liquidity Conditions (as defined in the New Debt Agreement) have been satisfied.
Current wording
Additionally, the outstanding principal of the New Convertible Term Loan, plus accrued and unpaid interest, will automatically be converted into shares of our common stock at the applicable conversion price on such date if any, when the closing price per share of our common stock has been equal to or greater than (a) in the case of the outstanding aggregate original principal amount of the New Convertible Term Loan, plus accrued and unpaid interest, $24.00 or, (b) in the case of the outstanding principal amount of the second tranche of the New Convertible Term Loan, plus accrued and unpaid interest, three times the applicable conversion price, in each case for the thirty consecutive trading days prior to such date, and the Liquidity Conditions (as defined in the New Debt Agreement) have been satisfied.
Previous wording
The New Debt Agreement contains customary affirmative and restrictive covenants, including covenants regarding the incurrence of additional indebtedness or liens, investments, transactions with affiliates, delivery of financial statements, payment of taxes, maintenance of insurance, dispositions of property, mergers or acquisitions, among other customary covenants. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. The New Debt Agreement also includes customary representations and warranties, events of default and termination provisions. The Lender may not engage in any short sales of, or other hedging transactions in, our common stock while any amounts are outstanding under the New Debt Agreement.
Current wording
The New Debt Agreement contains customary affirmative and restrictive covenants, including covenants regarding the incurrence of additional indebtedness or liens, investments, transactions with affiliates, delivery of financial statements, payment of taxes, maintenance of insurance, dispositions of property, mergers or acquisitions, among other customary covenants. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. The New Debt Agreement also includes customary representations and warranties, events of default and termination provisions. The Lender may not engage in any short sales of, or other hedging transactions in, our common stock while any amounts are outstanding under the New Debt Agreement. As of December 31, 2025, we are in compliance with all covenants under the New Debt Agreement.
Previous wording
In a concurrent private placement, we issued unregistered warrants to purchase up to 13,086,151 shares of common stock at an exercise price of $4.906 per share (provided, however, that the purchaser may elect to exercise the warrants for pre-funded warrants in lieu of shares of common stock at an exercise price of $4.906, minus $0.001, the exercise price of each pre-funded warrant). These warrants will be immediately exercisable for shares of common stock or pre-funded warrants in lieu thereof, and will expire on the earlier of (i) three and one-half years following the date of issuance and (ii) 30 days following our public disclosure of the acceptance of an NDA for cytisinicline by the FDA in a Day 74 Letter or equivalent correspondence. The shares of common stock issuable upon exercise of the warrants (or pre-funded warrants, as applicable) were subsequently registered pursuant to our registration statement on Form S-3, which was declared effective on May 6, 2024.
Current wording
In a concurrent private placement, we issued unregistered warrants to purchase up to 13,086,151 shares of common stock at an exercise price of $4.906 per share (provided, however, that the purchaser may elect to exercise the warrants for pre-funded warrants in lieu of shares of common stock at an exercise price of $4.906, minus $0.001, the exercise price of each pre-funded warrant). These warrants were immediately exercisable for shares of common stock or pre-funded warrants in lieu thereof and expired in October 2025 on the date 30 days after our public disclosure of the acceptance of an NDA filing for cytisinicline by the FDA in a Day 74 Letter or equivalent correspondence. The shares of common stock issuable upon exercise of the warrants (or pre-funded warrants, as applicable) were subsequently registered pursuant to our registration statement on Form S-3, which was declared effective on May 6, 2024.
Previous wording
For the years ended December 31, 2024 and 2023, net cash used in operating activities was $29.8 million and $24.5 million, respectively. The increase in net cash used in operations in 2024 as compared to 2023 was due to higher R&D expenses associated with initiation, in May 2024, and ramp up of enrollment of our ORCA-OL trial and the timing of required upfront prepayments by our clinical vendors. This was partially offset by reduced costs associated with our Phase 3 ORCA-3 trial and Phase 2 ORCA-V1 trial as both were completed in the second quarter of 2023.
Current wording
For the years ended December 31, 2025 and 2024, net cash used in operating activities was $49.5 million and $29.8 million, respectively. The increase in net cash used in operations in 2025 as compared to 2024 was due to higher R&D expenses associated with our ORCA-OL open-label safety trial, which was initiated in May 2024, continued at full enrollment throughout the majority of 2025, and was completed in September 2025.
Previous wording
For the years ended December 31, 2024 and 2023 net cash provided by financing activities was $48.5 million and $15.3 million, respectively. Net cash provided by financing activities for the year ended December 31, 2024 relates to proceeds received from our February 2024 registered direct offering, the New Convertible Term Loan associated with the refinancing transaction in July 2024, warrant exercises, and stock sales under our employee stock purchase plan. This was partially offset by repayment of our Convertible Term Loan associated with the refinancing transaction. Net cash provided by financing activities for the year ended December 31, 2023 relates to proceeds received from our May 2023 private placement, and warrant exercises.
Current wording
For the years ended December 31, 2025 and 2024 net cash provided by financing activities was $51.5 million and $48.5 million, respectively. Net cash provided by financing activities for the year ended December 31, 2025 relates to proceeds received from our June 2025 public offering, warrant exercises, and the drawdown of the second tranche of the New Convertible Term Loan. Net cash provided by financing activities for the year ended December 31, 2024 relates to proceeds received from our February 2024 registered direct offering, the New Convertible Term Loan associated with the refinancing transaction in July 2024, warrant exercises, and stock sales under our employee stock purchase plan. This was partially offset by repayment of our Convertible Term Loan associated with the refinancing transaction in July 2024.
Previous wording
Net cash used in investing activities in 2024 was due to transactions involving marketable securities in the normal course of business. Investing activities in 2023 consisted of property and equipment purchases.
Current wording
For the year ended December 31, 2025, net cash provided by investing activities was $6.1 million compared to net cash used in investing activities of $21.6 million in the year ended December 31, 2024. Net cash provided by, and used in, investing activities in 2025 and 2024 was due to transactions involving marketable securities in the normal course of business.
Previous wording
We account for warrants pursuant to the authoritative guidance on accounting for derivative financial instruments indexed to, and We account for warrants pursuant to the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities laws, the warrants require the issuance of registered securities upon exercise and therefore do not sufficiently preclude an implied right to net cash settlement. We have warrants classified as equity and these are not reassessed for their fair value at the end of each reporting period. Warrants classified as equity are initially measured at their fair value and recognized as part of stockholders’ equity. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment, including estimating stock price volatility and expected warrant life. The computation of expected volatility was based on the historical volatility of comparable companies from a representative peer group selected based on industry and market capitalization. A small change in the estimates used may have a relatively large change in the estimated valuation. We use the Black-Scholes pricing model to value the warrants.
Current wording
We account for warrants pursuant to the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities laws, the warrants require the issuance of registered securities upon exercise and therefore do not sufficiently preclude an implied right to net cash settlement. We have warrants classified as equity and these are not reassessed for their fair value at the end of each reporting period. Warrants classified as equity are initially measured at their fair value and recognized as part of stockholders’ equity. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment, including estimating stock price volatility and expected warrant life. The computation of expected volatility was based on the historical volatility of comparable companies from a representative peer group selected based on industry and market capitalization. A small change in the estimates used may have a relatively large change in the estimated valuation. We use the Black-Scholes pricing model to value the warrants.
Previous wording
In December 2023, the Financial Accounting Standards Board, or FASB, issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the United States. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. We are evaluating this standard to determine if adoption will have a material impact on our consolidated financial statements.
Current wording
In December 2023, FASB, issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the United States. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. We adopted this standard and applied it retrospectively. The adoption of this standard did not have a significant impact on our financial position or results of operations.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Debt Agreement and further described below, or New Convertible Term Loan. Our obligations under the New Debt Agreement are secured by substantially all of our assets, other than intellectual property.
Current report — wording carried from elsewhere
Interest is calculated on the outstanding principal amount of the New Convertible Term Loan at a floating rate per annum equal to the greater of (i) 7.0% and (ii) the prime rate minus 1.0%, which interest shall be payable in cash monthly in arrears and shall be payable on the earlier to occur of (x) the first day of the first month following any extension of credit by the Lender for our credit, (y) the date of any prepayment pursuant to the New Debt Agreement, or (z) the maturity date. The New Convertible Term Loan will be “interest-only” until June 30, 2026.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In May 2023, we entered into a securities purchase agreement with certain purchasers, pursuant to which we sold 3,000,000 shares of common stock at a price of $5.50 per share in a registered direct offering. The offering of the shares was made pursuant to our shelf registration statement on Form S-3, including the prospectus dated January 5, 2022 contained therein, and the prospectus supplement dated May 25, 2023.