Achieve Life Sciences (ACHV) risk factors, FY2024 10-K

Risks Related to Our Financial Condition and Capital Requirements

1. 01the terms of any new collaborative, licensing, commercialization and other arrangements that we may establish
2. 02As of December 31, 2024, the principal amounts due under our debt instruments (including the New Debt Agreement, as defined and further described under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) totaled $10.0 million
3. 03Our existing and any future indebtedness may limit our cash resources available to invest in the ongoing needs of our business
4. 04placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options
5. 05We are a late-stage clinical specialty pharmaceutical company with a limited operating history, are not profitable, have incurred losses in each year since our inception and expect to continue incurring losses for the foreseeable future
6. 06require additional studies to support regulatory approval and commercialization
7. 07We have never generated any revenue from product sales and may never be profitable
8. 08attracting, hiring, and retaining qualified personnel
9. 09Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail

Risks Related to the Development of Our Product Candidate Cytisinicline

1. 10Cytisinicline is currently our sole product candidate and there is no guarantee that we will be able to successfully develop and commercialize cytisinicline
2. 11We are dependent upon a single company for the manufacture and supply of cytisinicline
3. 12The development and commercialization of our product candidate is dependent upon securing sufficient quantities of cytisinicline from trees and other plants, which grow outside of the United States in a limited number of locations
4. 13Results of earlier clinical trials of cytisinicline are not necessarily predictive of future results, and any advances of cytisinicline into clinical trials may not have favorable results or receive regulatory approval
5. 14delays in the manufacture or packaging of sufficient quantities of cytisinicline for use the ORCA-OL trial
6. 15Cytisinicline may cause undesirable side effects or have other properties that could delay or prevent regulatory approval, limit the commercial viability of an approved label, or result in significant negative consequences following marketing approval, if any
7. 16Any of these events could prevent us from achieving or maintaining market acceptance of cytisinicline, even if approved, and could significantly harm our business, results of operations, and prospects
8. 17product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties. Claims could also be asserted under state consumer protection acts
9. 18Our business may be negatively affected by weather conditions, natural disasters, and the availability of natural resources, as well as by climate change
10. 19We conduct clinical trials internationally, which may trigger additional risks
11. 20We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success

Risks Related to Regulatory Approval of Cytisinicline and Other Legal Compliance Matters

1. 21If we do not obtain the necessary regulatory approvals in the United States and/or other countries, we will not be able to sell cytisinicline
2. 22have a material adverse effect on our business. Further, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations
3. 23Healthcare legislative and executive reform measures may have a material adverse effect on our business, financial condition or results of operations
4. 24Our ability to obtain services, reimbursement or funding may be impacted by possible reductions in federal spending in the United States as well as globally
5. 25Even if we obtain regulatory approval for cytisinicline, we will remain subject to ongoing regulatory requirements in connection with the sale and distribution of cytisinicline
6. 26Ongoing post-approval monitoring and clinical trial obligations may be costly to us and the failure to meet such obligations may result in the withdrawal of such approvals
7. 27require a product recall
8. 28We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties
9. 29Our employees, independent contractors, consultants, commercial partners, principal investigators, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business
10. 30A Breakthrough Therapy designation by the FDA may not lead to a faster development or regulatory review or approval process for the vaping/ e-cigarette cessation indication and it does not increase the likelihood that our product candidates will receive marketing approval

Risks Related to our Business Operations

1. 31It is difficult to evaluate our current business, predict our prospects and forecast our financial performance and growth
2. 32Our future success depends in part on our ability to attract, retain, and motivate other qualified personnel
3. 33agreements permit those executives to terminate their employment with us at any time, subject to providing us with advance written notice
4. 34We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations
5. 35In the future, we may invest in the development of additional indications for cytisinicline. If we invest in and are unsuccessful in developing additional indications for cytisinicline, our business, financial condition and results of operations may be adversely affected
6. 36Our internal computer systems, or those of our third-party collaborators or other service providers, may fail or suffer security breaches and cyber-attacks, which could result in a material disruption of our development programs

Risks Related to Our Reliance on Third Parties

1. 37of our potential third-party manufacturers to comply with applicable regulations may result in long delays and interruptions to our product candidate supply while we seek to secure another supplier that meets all regulatory requirements
2. 38Each of these risks could delay our clinical trials, the approval, if any, of cytisinicline by the FDA or the commercialization of cytisinicline or result in higher costs or deprive us of potential product revenue
3. 39such as nitrosamines, are discovered in quantities above regulators’ thresholds within our supply of cytisinicline, we may potentially delay product development and approval or have a material adverse impact on our business
4. 40We may not be able to establish or maintain the third-party relationships that are necessary to develop or potentially commercialize cytisinicline
5. 41We may be unable to realize the potential benefits of any collaborations which we may enter into with other companies for the development and commercialization of cytisinicline
6. 42We enter into various contracts in the normal course of our business in which we indemnify the other party to the contract. In the event we have to perform under these indemnification provisions, it could have a material adverse effect on our business, financial condition and results of operations

Risks Related to Commercialization of Cytisinicline

1. 43We face substantial competition and our competitors may discover, develop or commercialize products faster or more successfully than us
2. 44availability of cytisinicline from other suppliers and/or distributors
3. 45Increasing efforts by governmental and private payors in the United States and abroad to limit or reduce healthcare costs may result in restrictions on coverage and the level of reimbursement for new products
4. 462020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area
5. 47Sopharma may breach its supply agreement with us and sell cytisinicline into our territories or permit third parties to export cytisinicline into our territories and negatively affect our commercialization efforts of our products in our territories
6. 48The illegal distribution and sale by third parties of counterfeit versions of cytisinicline, stolen products, or alternative third-party distribution and sale of cytisinicline could have a negative impact on our financial performance or reputation
7. 49We may attempt to form collaborations in the future with respect to cytisinicline, but we may not be able to do so, which may cause us to alter our development and commercialization plans
8. 50We may not be successful in any efforts to identify, license, discover, develop, or commercialize additional product candidates
9. 51a potential product candidate may not be accepted as safe and effective by patients, the medical community, or third-party payors

Risks Related to our Intellectual Property

1. 52If we are unable to maintain effective proprietary rights for our product candidate or any future product candidates, we may not be able to compete effectively in our proposed markets
2. 53Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts
3. 54Although we rely or will rely in part on trade secret protection as part of our intellectual property rights strategies, we also intend to rely on patent rights to protect certain aspects of our technologies and upon the patent rights of third parties from which we license certain of our technologies
4. 55Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
5. 56We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
6. 57It is difficult and costly to protect our proprietary rights and as a result we may not be able to ensure their protection. In addition, patents have a limited lifespan and will eventually expire
7. 58there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of available patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns
8. 59Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements
9. 60We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming, and unsuccessful
10. 61We or our licensors may not be able to protect our intellectual property rights throughout the world

Risks Related to Our Common Stock

1. 62The price for our common stock is volatile
2. 63tweets or other social media posts related to our market and industry
3. 64A significant portion of our total outstanding shares of common stock may be sold into the public market at any point, which could cause the market price of our common stock to drop significantly, even if our business is doing well, and result in significant dilution to our stockholders
4. 65If we raise additional capital, the terms of the financing transactions may cause dilution to existing stockholders or contain terms that are not favorable to us
5. 66We are a smaller reporting company and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors
6. 67If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business, or our market, our stock price and trading volume could decline
7. 68We are at risk of securities class action litigation
8. 69We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies
9. 70Shareholder activists could cause a disruption to our business
10. 71Anti-takeover provisions under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our management
11. 72Our bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees
12. 73Failure to maintain effective internal control over financial reporting could have a material adverse effect on our reputation, results of operations and financial condition
13. 74Because our merger resulted in an ownership change under Section 382 of the U.S. Internal Revenue Code for OncoGenex, pre-merger net operating loss carryforwards and certain other tax attributes are now subject to limitations
14. 75U.S. federal tax reform and changes in other tax laws could increase our tax burden and adversely affect our business and financial condition
15. 76In addition, beginning in 2022, tax legislation requires research and experimental expenditures to be capitalized and amortized ratably over a five-year period. Any such expenditures attributable to research conducted outside the United States must be capitalized and amortized over a 15-year period