ACHIEVE LIFE SCIENCES, INC.

Achieve Life Sciences, Inc. is 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. The company operates in the pharmaceutical industry, specifically focused on nicotine dependence treatments. 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. 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. The company's primary focus is to address this global epidemic.

The company faces substantial competition from major pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies, universities and other research institutions worldwide. Only two non-nicotine, prescription treatments for smoking cessation are currently available in the United States: varenicline (formerly marketed by Pfizer as Chantix) and bupropion (formerly marketed by GlaxoSmithKline as Zyban), both currently available as generic formulations. The most common OTC treatments are Nicotine Replacement Therapies such as nicotine gums, lozenges, and patches. The company believes 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. The company's competitive advantages include its exclusive license and supply agreement with Sopharma for cytisinicline outside of Sopharma's territories, and its intellectual property portfolio covering cytisinicline dosing methods, derivatives, salts, extraction methods, and formulations. As of December 31, 2025, the company owned, co-owned or in-licensed over 20 issued patents and over 50 pending patent applications with expiration dates ranging from 2037 to 2042.

The company generates revenue through the development and commercialization of its sole product candidate, cytisinicline, a naturally occurring alkaloid being developed for treatment of nicotine dependence for smoking cessation and nicotine e-cigarette cessation. The company has no products approved for commercialization and has never generated any revenue from product sales. The company's business model relies on obtaining regulatory approval from the FDA and other regulatory agencies, and then commercializing cytisinicline either independently or through strategic partners. The company plans to commercialize independently in the U.S. market by focusing marketing and sales efforts on highly targeted prescriber and patient audiences, utilizing a well-established marketing technology infrastructure and embedding Artificial Intelligence tools. The company intends to seek commercial partnerships in ex-U.S. territories.

The company's sole product candidate is cytisinicline, a naturally occurring alkaloid structurally similar to nicotine with a dual-acting mechanism of action as both a receptor agonist and antagonist. Cytisinicline is believed to work in treating nicotine dependence for smoking and e-cigarette cessation by interacting with nicotine receptors in the brain, reducing the severity of craving and withdrawal symptoms, and reducing the reward and satisfaction associated with nicotine products. The company has developed an improved dosage, formulation, and simpler treatment schedule compared to the 25-day downward titration regimen that has been approved and marketed in Central and Eastern Europe by Sopharma for over 20 years. It is estimated that over 20 million people have used Sopharma's cytisinicline product. The company is developing cytisinicline for two primary indications: smoking cessation and nicotine e-cigarette (vaping) cessation. For smoking cessation, the company submitted an NDA to the FDA in June 2025, which was accepted for review in September 2025 with a PDUFA targeted action date of June 20, 2026. For vaping cessation, the FDA granted Breakthrough Therapy designation in July 2024 and awarded a Commissioner's National Priority Voucher in October 2025. Currently, there are no FDA-approved therapies indicated specifically as an aid for nicotine e-cigarette cessation.

The company's clinical development program includes two completed Phase 3 trials for smoking cessation (ORCA-2 and ORCA-3) and one completed Phase 2 trial for vaping cessation (ORCA-V1). The Phase 3 ORCA-2 trial evaluated 810 adult smokers at 17 clinical sites and demonstrated that subjects who received 12 weeks of cytisinicline treatment had 6.3 times higher odds to have quit smoking during the last 4 weeks of treatment compared to placebo (p<0.0001), with an abstinence rate of 32.6% for cytisinicline compared to 7.0% for placebo. Subjects who received 6 weeks of cytisinicline treatment had 8.0 times higher odds to have quit smoking compared to placebo (p<0.0001), with an abstinence rate of 25.3% for cytisinicline compared to 4.4% for placebo. The Phase 3 ORCA-3 trial evaluated 792 adult smokers at 20 clinical sites and demonstrated that subjects who received 12 weeks of cytisinicline treatment had 4.4 times higher odds to have quit smoking compared to placebo (p<0.0001), with a smoking cessation rate of 30.3% for cytisinicline compared to 9.4% for placebo. Subjects who received 6 weeks of cytisinicline treatment had 2.85 times higher odds to have quit smoking compared to placebo (p=0.0008), with a smoking cessation rate of 14.8% for cytisinicline compared to 6% for placebo. The Phase 2 ORCA-V1 trial for vaping cessation evaluated 160 adults who used e-cigarettes and demonstrated that subjects who received 12 weeks of cytisinicline treatment had 2.64 times higher odds to have quit vaping during the last 4 weeks of treatment compared to placebo (p=0.04), with a vaping cessation rate of 31.8% for cytisinicline compared to 15.1% for placebo. The ORCA-OL open-label safety trial was initiated in May 2024 and completed in September 2025, enrolling 479 subjects at 29 clinical trial sites across the United States to evaluate long-term safety exposure of cytisinicline for up to one year.

Significant operational developments during the period include the submission of an NDA to the FDA for cytisinicline as a treatment for smoking cessation in June 2025, which was accepted for review in September 2025 with a PDUFA targeted action date of June 20, 2026. The company completed a public offering in June 2025, selling 15,000,000 shares of common stock and accompanying warrants to purchase up to 15,000,000 shares of common stock at a public offering price of $3.00 per share and accompanying warrant, raising total gross proceeds of approximately $45.0 million ¹, and after deducting approximately $3.8 million ² in underwriting discounts and offering expenses, received net proceeds of approximately $41.2 million ³. The underwriters exercised their option to purchase an additional 1,766,666 ⁴ Accompanying Warrants and 1,419,896 ⁵ Shares, raising gross proceeds of $4.3 million ⁶, and after deducting approximately $0.3 million ⁷ in underwriting discounts, received net proceeds of approximately $4.0 million ⁸. In October 2025, the company drew down on the second tranche of the New Convertible Term Loan for an additional $5.0 million ⁹ following the FDA's acceptance of the NDA filing. The company entered into a partnership with a U.S.-based manufacturer, Adare Pharma Solutions, to manufacture cytisinicline drug product for potential commercial launch and beyond and has commenced a technology transfer. The company also entered into a partnership with Omnicom to support the commercial launch of cytisinicline in the United States. The FDA awarded cytisinicline for nicotine e-cigarette cessation a Commissioner's National Priority Voucher in October 2025.

For the fiscal year ended December 31, 2025, the company reported a net loss of $54.6 million ¹⁰ compared to a net loss of $39.8 million ¹¹ in 2024 and a net loss of $29.8 million ¹² in 2023. Total operating expenses were $54.9 million ¹³ in 2025, compared to $39.1 million ¹⁴ in 2024 and $27.3 million ¹⁵ in 2023. Research and development expenses were $23.0 million ¹⁶ in 2025, compared to $22.8 million ¹⁷ in 2024 and $15.8 million ¹⁸ in 2023. General and administrative expenses were $31.9 million ¹⁹ in 2025, compared to $16.3 million ²⁰ in 2024 and $11.4 million ²¹ in 2023. The increase in general and administrative expenses was primarily due to higher commercial launch preparation costs of $12.3 million ²² in 2025 as compared to $1.2 million ²³ in 2024. Interest income was $1.5 million ²⁴ in 2025, compared to $2.4 million ²⁵ in 2024. Interest expense was $0.8 million ²⁶ in 2025, compared to $2.2 million ²⁷ in 2024. As of December 31, 2025, the company had cash, cash equivalents and marketable securities of $36.4 million ²⁸ and an accumulated deficit of $260.2 million ²⁹.

The primary growth vector for the company is the potential commercialization of cytisinicline for smoking cessation in the United States, with commercial launch anticipated to take place in the first-half 2027. The company believes a substantial market exists in the United States, European Union, and the rest of the world for a new, safe and effective smoking cessation treatment. According to DelveInsight's 2020 report, global revenues for prescription smoking cessation therapies are estimated to reach $5.6 billion ³⁰ by 2030. In 2025, approximately 10.5 million ³¹ prescriptions were written for smoking cessation treatments in the United States alone. The company is planning to launch by utilizing a well-established marketing technology infrastructure and embedding Artificial Intelligence tools to enhance targeting, decision making, and performance metrics. Launch planning and readiness activities are underway, leveraging the 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.

A second major growth vector is the development of cytisinicline for nicotine e-cigarette (vaping) cessation. The FDA granted Breakthrough Therapy designation for cytisinicline for nicotine e-cigarette cessation in July 2024, and in October 2025, the FDA awarded cytisinicline for nicotine e-cigarette cessation the Commissioner's National Priority Voucher as part of the pilot program. 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. The company obtained FDA agreement on a proposed single Phase 3 study design for a vaping cessation indication, and the FDA agreed that one well-controlled Phase 3 trial, in addition to the completed Phase 2 ORCA-V1 trial and the safety exposure data from the ORCA-OL trial, would be sufficient for a vaping cessation indication as an sNDA. The company would target to enroll and complete study evaluations approximately 12 months after study initiation.

The company expects expenses to substantially increase over time in connection with development, particularly as it prepares commercialization activities and advances its product candidate in clinical development. The company expects to incur significant expenses and increasing operating losses for at least the next several years as it continues clinical development, seeks regulatory approval for, and commercializes cytisinicline, and adds personnel necessary to operate as a commercial-stage public company. The company expects that operating losses will fluctuate significantly from quarter to quarter and year to year due to timing efforts to achieve regulatory approval, commercialization activities, and clinical development programs. The company has partnered with a U.S.-based manufacturer, Adare Pharma Solutions, to manufacture cytisinicline drug product for potential commercial launch and beyond, which is expected 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.

The company's operational outlook includes establishing U.S. manufacturing with Adare to decrease supply chain risk as it progresses toward commercial launch of cytisinicline, anticipated to take place in the first-half 2027. The company expects 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. The company has commenced a technology transfer to Adare. The company currently partners with Sopharma as supplier and contract manufacturer for required raw materials, active pharmaceutical ingredients and finished drug product for clinical trials, and utilizes third-party contract manufacturing organizations for manufacturing and clinical packaging supplies. The company expects to continue stockpiling cytisinicline to meet the projected demand upon commercial launch. As of December 31, 2025, the company had a total of 28 ³² employees, of whom 11 ³³ were engaged in research and development functions and 17 ³⁴ were engaged in general and administrative functions.

The company's capital allocation strategy includes raising substantial additional capital from the sale of securities, debt, partnering arrangements, non-dilutive fundraising or other financing transactions to continue to fund operations and finance the remaining development and commercialization of its product candidate. The company's current resources are insufficient to fund its planned operations for the next 12 months. The company's outstanding debt as of December 31, 2025 totaled $15.0 million ³⁵ in principal amounts under its debt instruments. The New Convertible Term Loan matures on June 1, 2028 ³⁶. Interest is calculated on the outstanding principal amount at a floating rate per annum equal to the greater of (i) 7.0% ³⁷ and (ii) the prime rate minus 1.0% ³⁸. The New Convertible Term Loan will be interest-only until June 30, 2026 ³⁹. The company did not draw down on the third tranche of the New Convertible Term Loan of $5.0 million ⁴⁰ and it expired and became unavailable on December 31, 2025. The company has not declared or paid cash dividends on its capital stock and does not anticipate paying any cash dividends in the foreseeable future.

A significant headwind flagged by management is the potential for a delay in FDA approval beyond the PDUFA targeted action date of June 20, 2026 ⁴¹. One third-party manufacturer named in the cytisinicline NDA recently underwent a non-Achieve related FDA cGMP 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. Additionally, the company has an ongoing dispute with Sopharma, who has alleged that the company's engagement of third-party manufacturers is a breach of their agreement, which the company has disputed and has proposed steps to resolve. In the event the company is unable to resolve the ongoing dispute with Sopharma, such dispute may result in litigation, additional costs or delays in activities relating to the NDA or ultimate commercialization.

Substantial doubt exists as to the company's ability to continue as a going concern. The company's ability to continue as a going concern is subject to material uncertainty and dependent on its success at raising additional capital sufficient to meet its obligations on a timely basis. The company's current resources are insufficient to fund its planned operations for the next 12 months. The company will continue to require substantial additional capital to continue its clinical development activities and expand its regulatory, manufacturing and commercialization activities. The current financing environment in the United States, particularly for biotechnology companies, is challenging and the company can provide no assurances as to when this will improve. The company's business may be impacted by macroeconomic conditions, including fluctuating inflation, interest and tariff rates and market conditions as well as political events, war, terrorism, business interruptions and other geopolitical events and uncertainties beyond its control. Supply chain disruptions and delays as a result of any new tariff policies or trade restrictions could also negatively impact the company's cost of materials and production processes.

Substantial doubt exists as to the company's ability to continue as a going concern, as its current resources are insufficient to fund planned operations for the next 12 months and it will need to raise substantial additional capital. The company has incurred substantial debt of $15.0 million ⁴² in principal amounts as of December 31, 2025, which is secured by substantially all of its assets other than intellectual property, and servicing this debt requires significant cash. Cytisinicline is the company's sole product candidate, and there is no guarantee of successful FDA approval; the NDA has a PDUFA targeted action date of June 20, 2026 ⁴³, but a third-party manufacturer's cGMP inspection issues may cause delay. The development and commercialization of cytisinicline is dependent upon securing sufficient quantities from plant sources that grow outside the United States in a limited number of locations, and the company relies on third-party manufacturers including Sopharma, with whom there is an ongoing dispute regarding the engagement of third-party manufacturers. The company faces substantial competition from major pharmaceutical companies with greater resources, and the commercial success of cytisinicline depends on market acceptance, pricing, and reimbursement from third-party payors, which is uncertain.

Management's message to shareholders emphasizes the company's position as 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. The key strategic priorities emphasized for the period ahead include obtaining FDA approval for cytisinicline for smoking cessation, with the NDA accepted for review and a PDUFA targeted action date of June 20, 2026 ⁴⁴, and preparing for commercial launch anticipated to take place in the first-half 2027. Management also highlights the advancement of the vaping cessation program, noting the FDA's Breakthrough Therapy designation and the award of a Commissioner's National Priority Voucher. Management's forward-looking statements include expectations regarding the potential benefits and differentiated profile of cytisinicline, the timing of regulatory filings and FDA responses, the ability to raise additional capital, and the establishment of commercial infrastructure. Management specifically states that the company expects 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, and that by establishing U.S. manufacturing with Adare, the company expects to decrease its supply chain risk as it progresses toward commercial launch of cytisinicline, anticipated to take place in the first-half 2027.