Achieve Life Sciences, a pharmaceutical company developing the first vaping addiction treatment, has announced a new CEO. It explained that it needs a leader with substantial experience in M&A and drug commercialization. Freedom Finance Global Senior Analyst Ilya Zubkov believes that this move could indicate a potential sale of Achieve.
Details
Richard Stewart, Achieve’s cofounder, has been appointed as the new CEO; John Bencich, who had been the CEO for the past four years, will serve as an advisor until the end of 2024. “The change in leadership is driven by the need to have a CEO with substantial M&A and commercial experience pushing the company forward to future critical milestones,” Tom King, executive chairman of the board of directors, was quoted as saying in the press release.
Freedom Finance Global Senior Analyst Ilya Zubkov notes that Stewart had previously held leadership roles at pharmaceutical companies that became acquisition targets, including Huxley Pharmaceuticals before its acquisition by BioMarin and Brabant Pharma before its acquisition by Zogenix. Furthermore, the possibility of selling Achieve at the pre-commercial stage has already been mentioned as a strategic option during management calls, says Zubkov.
Context
Achieve is developing the first treatment in the U.S. for vaping addiction based on cytisinicline, a plant-derived alkaloid. At the end of July, it announced that its drug had been designated a “breakthrough therapy” by the FDA. This status means the company can get the product to market faster and skip the last phase of clinical trials.
However, the FDA has requested additional safety data on the chronic use of cytisinicline. Zubkov believes that this potentially pushes the approval timeline for the drug to 2026. Against this backdrop, he sees the sale of the company as a strong possibility, “considering the qualitative advantages of cytisinicline over peer drugs such as Pfizer’s Chantix, GSK’s Zyban, and various nicotine replacement therapy products like Nicorette.”
Stock performance
On Monday, August 26, Achieve stock climbed 1.55% to $4.58 per share. It is now up more than 11% since the beginning of the year but still off 1.2% over the last 12 months. The seven analysts who cover the company have an average target price of $17.25 per share, indicating upside of nearly 280% versus the last closing price.
