Shares of Achieve Life Sciences, a developer of the first vaping addiction treatment, rose 1.7% on Monday, July 1, after the company announced that it had been added to the U.S. Russell 3000 and Russell Microcap indexes.
Details
Shares of Achieve Life Sciences climbed 1.7% to $4.78 per share on the Nasdaq exchange. After the close, they gained another 3.62% in after-hours trading. The pharmaceutical company’s stock is up 16% since the beginning of the year but still down nearly 8% over the past 12 months.
On Monday, the company announced that starting July 1, its shares are included in the U.S. Russell 3000 and Russell Microcap indexes, the latter comprising the thousand smallest companies by market capitalization. According to FTSE Russell, microcap stocks make up less than 2% of the U.S. equity market. For Achieve Life Sciences, inclusion in the indexes is an opportunity to enhance visibility among investors, stated CEO John Bencich.
About the company
Achieve is developing the first U.S. medication for treating vaping addiction based on cytisinicline, a plant-derived alkaloid used for smoking cessation and nicotine dependence.
In the first quarter, the company completed phase II of clinical trials, having evaluated the efficacy and safety of cytisinicline compared to placebo across 160 users of nicotine e-cigarettes or vapes. Achieve also conducted phase III of another study involving 810 smokers (the final phase before a registration application), with the drug showing impressive safety and efficacy results, according to Zacks Small Cap Research.
Zacks analysts believe that Achieve’s shares are undervalued and should be priced at at least $30 per share, indicating upside of over 527% from the last closing price.
Context
Every May, FTSE Russell conducts its annual index rebalancing, adding or removing companies. Issuers initially enter the Russell 3000 and are then distributed across subindexes, with this process taking place every Friday up until July 1.
Nasdaq research indicates that inclusion in the Russell indexes almost always brings new long-term investors into a company’s shareholder base, resulting in increased liquidity and trading volumes.
Investment managers and institutional investors use the Russell indexes in their strategies, as noted by pre-prepared food producer Mama’s Creations, also added to the Russell indexes as of July 1. According to nonlethal weapons manufacturer and another new addition Byrna Technologies, the indexes serve as the benchmark for approximately $10.5 trillion in assets (as of end-December 2023). On Monday, Byrna’s shares fell almost 5%, while Mama’s Creations dropped nearly 4%.
