Vaping addiction drug developer Achieve to sell up to $50 million of stock

Achieve Life Sciences, a company with a market capitalization of about $164 million developing the world’s first treatment for vaping addiction, has announced it may sell up to $50 million in stock. The market price fell almost 4% in after-hours trading on Friday, September 27, reversing strong gains during the day.

Details

Achieve Life Sciences has disclosed plans to raise up to $50 million through a stock offering, with Jefferies as the sales agent, according to filings submitted to the U.S. SEC.

Investors received the news after the main trading session on Friday ended. In after-hours trading, Achieve shares dropped 3.6% to $4.60 per share, following a 7.4% gain earlier in the day, when they had closed at $4.80 per share.

According to MarketWatch, six analysts currently cover the company, all recommending a buy. The average target price is $16.29 per share, implying upside of about 240% from the last closing price.

Context

The proceeds from the share offer will be used to fund the continued clinical development of cytisinicline and support related research, as well as working capital and general corporate needs.

Cytisinicline, a plant-based alkaloid, is the active ingredient in the world’s first drug for vaping addiction, which Achieve is developing. In late July, the company announced that the U.S. FDA had granted the drug “breakthrough therapy” designation, which allows it to skip the final phase of clinical trials and thus could accelerate its path to market.

However, the FDA has requested additional safety data on the chronic use of cytisinicline, which may delay approval until 2026, said Ilya Zubkov, a senior analyst at Freedom Finance Global.

In late August, Achieve announced a leadership change. Cofounder Richard Stewart replaced John Bencich as CEO. The company explained that it needs a leader with substantial experience in M&A and drug commercialization. Freedom’s Zubkov believes this move could indicate a potential sale of Achieve.

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