ACHIEVE LIFE SCIENCES, INC.

Previous wording

We are 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. There are approximately 25 million adults in the United States who smoke combustible cigarettes. Tobacco use is currently the leading cause of preventable death that is responsible for more than eight million deaths worldwide and nearly half a million deaths in the United States annually.

Current wording

We are 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. There are approximately 25 million adults in the United States who smoke combustible cigarettes, and tobacco use is currently the leading cause of preventable death.

Previous wording

While nicotine e-cigarettes are thought to be less harmful than combustible cigarettes, they remain highly addictive and can deliver harmful chemicals which are associated with lung injury, cardiovascular disease and cancer. 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. In 2024, the FDA granted Breakthrough Therapy designation for cytisinicline for nicotine e-cigarette, or vaping, cessation. Breakthrough Therapy designation is a process that expedites the development and review of new drugs and biologics that are intended to treat serious or life-threatening conditions and have preliminary clinical evidence indicating substantial improvement over existing therapies.

Current wording

While nicotine e-cigarettes are thought to be less harmful than combustible cigarettes, they remain highly addictive and can deliver harmful chemicals which are associated with lung injury, cardiovascular disease and cancer. In 2025, 1.4 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. In 2024, the U.S. Food and Drug Administration, or FDA, granted Breakthrough Therapy designation for cytisinicline for nicotine e-cigarette, or vaping, cessation. Breakthrough Therapy designation is a process that expedites the development and review of new drugs and biologics that are intended to treat serious or life-threatening conditions and have preliminary clinical evidence indicating substantial improvement over existing therapies.

Previous wording

One third-party manufacturer named in our NDA underwent a non-Achieve related FDA current Good Manufacturing Practices, or cGMP, inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. The observations resulting in the OAI classification and warning letter at the third-party manufacturer's facility relate to general cGMP matters at the facility and are not specific to cytisinicline. We expect to receive a Complete Response Letter, or CRL, from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delay our NDA approval. We have partnered with a U.S.-based manufacturer, Adare Pharma Solutions, or Adare, to manufacture cytisinicline drug product for potential commercial launch and beyond (see Note 8 "Related Party Transactions" in the accompanying consolidated financial statements). We have completed the analytical method transfer to Adare's manufacturing facility in Vandalia, Ohio. In addition, we have completed our first cytisinicline engineering batch manufactured at Adare's facility. We anticipate the partnership with Adare will help to decrease risks related to our supply chain, international importation of pharmaceuticals and reduce costs, including potential tariffs. We intend to resubmit the NDA naming Adare as our manufacturer for commercial supply in the fourth quarter of 2026 and anticipate the commercial launch of cytisinicline in the first half of 2027.

Current wording

In June 2026, we received a Complete Response Letter, or CRL, from the FDA regarding our NDA for cytisinicline relating to outstanding manufacturing-related observations from a current Good Manufacturing Practice, or cGMP, inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. The FDA identified no deficiencies regarding the clinical efficacy or safety of cytisinicline. The deficiencies cited in the CRL concern our prior third-party manufacturer named in our NDA, who underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. The observations resulting in the OAI classification and warning letter at the third-party manufacturer's facility relate to general cGMP matters at the facility and are not specific to cytisinicline. We have partnered with a U.S.-based manufacturer, Adare Pharma Solutions, or Adare, to manufacture our finished drug product for potential commercial launch and beyond (see Note 8 "Related Party Transactions" in the accompanying consolidated financial statements). We have completed the analytical method transfer to Adare's manufacturing facility in Vandalia, Ohio. In addition, we have completed our first cytisinicline engineering batch manufactured at Adare's facility and fully qualified all testing procedures at the site. We anticipate the partnership with Adare will help to decrease risks related to our supply chain and international importation of pharmaceuticals, and reduce costs, including with respect to potential tariffs. We intend to resubmit the NDA naming Adare as our finished drug product manufacturer for commercial supply in the fourth quarter of 2026 and anticipate the potential approval of cytisinicline for smoking cessation in the first half of 2027, followed by U.S. commercial launch.

Previous wording

We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarettes users. We believe 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.

Current wording

We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarette users. We believe 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.

Previous wording

We have no products approved for commercial sale and have not generated any revenue from product sales to date. We have never been profitable and have incurred operating losses in each year since inception. Our net loss was $10.2 million for the three months ended March 31, 2026. As of March 31, 2026, we had an accumulated deficit of $270.4 million, cash, cash equivalents and marketable securities balance of $29.3 million and a positive working capital balance of $19.2 million. For the three months ended March 31, 2026, net cash used in operating activities was $6.9 million. In April 2026, we entered into a securities purchase agreement with certain institutional and accredited investors for a private placement of our securities. We received gross proceeds of approximately $180.0 million from the private placement, before deducting placement agent fees and other expenses. We estimate net proceeds to be approximately $168.6 million after deducting estimated placement agent fees and other expenses of approximately $11.4 million. In connection with the private placement, our board of directors appointed Andrew D. Goldberg, MD to the position of Chief Executive Officer and President, and as a member of the board of directors, effective following the closing of the private placement. We also appointed two additional members of our board of directors, Lucian Iancovici, MD and Aaron Royston, MD.

Current wording

We have no products approved for commercial sale and have not generated any revenue from product sales to date. We have never been profitable and have incurred operating losses in each year since inception. Our net loss was $84.9 million for the six months ended June 30, 2026. As of June 30, 2026, we had an accumulated deficit of $345.2 million, cash, cash equivalents and marketable securities balance of $187.3 million and a negative working capital balance of $9.4 million. For the six months ended June 30, 2026, net cash used in operating activities was $17.7 million.

Previous wording

We communicated to Sopharma that we had concerns regarding their ability to pass an FDA pre-approval inspection and that if those concerns were not resolved, we planned to engage third-party manufacturers, and include such manufacturers in our NDA, until such time that Sopharma is able to pass an FDA inspection. In June 2025, we submitted our NDA, which included third-party manufacturers. Sopharma has alleged that our engagement of third-party manufacturers is a breach of our agreement, which we have disputed and have proposed steps to resolve.

Current wording

We communicated to Sopharma that we had concerns regarding their ability to pass an FDA pre-approval inspection and that if those concerns were not resolved, we planned to utilize third-party manufacturers, and include such manufacturers in our NDA, until such time that Sopharma is able to pass an FDA inspection. In June 2025, we submitted our NDA, which included third-party manufacturers. Sopharma has alleged that our planned utilization of third-party manufacturers is a breach of our agreement, which we have disputed. In July 2026, Sopharma filed an arbitration demand alleging breach of the Sopharma Supply Agreement. We dispute these claims and intend to defend the matter vigorously. For more information on this arbitration demand, see “Item 1. Legal Proceedings."

Previous wording

As of March 31, 2026, the fair value of the contingent consideration was estimated to be $1.3 million (see Note 5 “Fair Value Measurements, Fair Value of Sopharma Share Purchase Agreement Contingent Consideration” in the accompanying unaudited consolidated financial statements). We recognized a gain of $0.3 million for the three months ended March 31, 2026 and a loss of $0.1 million for the three months ended March 31, 2025.

Current wording

As of June 30, 2026, the fair value of the contingent consideration was estimated to be $1.4 million (see Note 5 “Fair Value Measurements, Fair Value of Sopharma Share Purchase Agreement Contingent Consideration” in the accompanying unaudited consolidated financial statements). We recognized a loss of $0.1 million and a gain of $0.2 million for the three and six months ended June 30, 2026, respectively, and a loss of $0.1 million and $0.2 million for the three and six months ended June 30, 2025, respectively.

Previous wording

General and administrative expenses consist primarily of personnel costs related to executive, finance and accounting, and other administrative functions, as well as consulting costs, including commercial, corporate communications, market research, business consulting, human resources and intellectual property. Other costs include professional fees for legal and auditing services, insurance and facility costs.

Current wording

General and administrative expenses consist primarily of personnel costs related to executive, finance and accounting, commercial and other administrative functions, as well as consulting costs, including commercial, corporate communications, market research, business consulting, human resources and intellectual property. Other costs include professional fees for legal and auditing services, insurance and facility costs.

Previous wording

Our R&D expenses are devoted to our one ongoing clinical development program, cytisinicline. R&D expenses for the three months ended March 31, 2026 decreased to $3.3 million as compared to $7.1 million for the three months ended March 31, 2025. The decrease in expense for the three months ended March 31, 2026, was due to a decrease in clinical trial costs of $3.3 million in 2026 as compared to 2025, associated with the ORCA-OL trial, which was completed in September 2025 and wound down through the first quarter of 2026, as compared to the same period in 2025, in which higher costs incurred were associated with the continued full enrollment of the ORCA-OL trial. In addition, R&D expenses were lower due to a decrease in stock-based compensation expense of $1.0 million for the three months ended March 31, 2026 as compared to the same period in 2025, due to the revaluation of the probability on the achievement of certain performance conditions of our outstanding performance based restricted stock unit awards, or PRSUs. This was partially offset by higher manufacturing and supply chain costs of $0.6 million during the three months ended March 31, 2026 as compared to the same period in 2025, which was associated with commercial launch preparation, including purchase of raw cytisinicline inventory expensed to R&D prior to regulatory approval and completion of analytical method transfer to Adare and completion of an engineering batch manufactured at Adare's facility.

Current wording

Our R&D expenses are devoted to our one ongoing clinical development program, cytisinicline. R&D expenses for the three and six months ended June 30, 2026 decreased to $3.8 million and $7.1 million, respectively, as compared to $6.7 million and $13.8 million, respectively, for the three and six months ended June 30, 2025. The decrease in R&D expense was primarily due to a decrease in clinical trial costs of $3.2 million and $6.4 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, which were associated with the ORCA-OL trial, which was completed in September 2025. In addition, R&D expenses were lower due to a decrease in stock-based compensation expense of $0.3 million and $1.3 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, due to the revaluation of the probability of achieving certain performance conditions of our outstanding performance-based restricted stock unit awards. This was partially offset by higher manufacturing and supply chain costs of $0.4 million and $1.0 million during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, which were associated with commercial launch preparation, including purchase of raw cytisinicline inventory expensed to R&D prior to regulatory approval, completion of analytical method transfer to Adare and completion of an engineering batch manufactured at Adare's facility.

Previous wording

Total interest expense for the three months ended March 31, 2026, was $0.3 million compared to $0.2 million for the three months ended March 31, 2025. The increase in interest expense for the three months ended March 31, 2026 as compared to the same period in 2025 was due to a higher average debt balance of $15.0 million in 2026 as compared to $10.0 million in 2025.

Current wording

Total interest expense for the three and six months ended June 30, 2026, was $0.3 million and $0.6 million, respectively, compared to $0.2 million and $0.4 million for the three and six months ended June 30, 2025, respectively. The increase in interest expense for the three and six months ended June 30, 2026 as compared to the same periods in 2025 was due to a higher average debt balance of $15.0 million in 2026 as compared to $10.0 million in 2025.

Previous wording

For the three months ended March 31, 2026, we recognized a gain on the fair value of the contingent consideration of $0.3 million. For the three months ended March 31, 2025, we recognized a loss on the fair value of the contingent consideration of $0.1 million.

Current wording

For the three and six months ended June 30, 2026, we recognized a loss of $0.1 million and a gain of $0.2 million, respectively, on the fair value of the contingent consideration. For the three and six months ended June 30, 2025, we recognized a loss on the fair value of the contingent consideration of $0.1 million and $0.2 million, respectively.

Previous wording

We have incurred an accumulated deficit of $270.4 million through March 31, 2026, and we expect to incur substantial additional losses in the future as we operate our business and continue or expand our regulatory, manufacturing, commercialization and other R&D activities and other operations. We have not generated any revenue from product sales to date, and we may not generate product sales revenue in the near future, if ever. As of March 31, 2026, we had a cash, cash equivalents and marketable securities balance of $29.3 million and a positive working capital balance of $19.2 million. For the three months ended March 31, 2026, net cash used in operations was $6.9 million. In April 2026, we entered into a securities purchase agreement with certain institutional and accredited investors for a private placement of our securities. We received gross proceeds of approximately $180.0 million from the private placement, before deducting placement agent fees and other expenses. We estimate net proceeds to be approximately $168.6 million after deducting estimated placement agent fees and other expenses.

Current wording

We have incurred an accumulated deficit of $345.2 million through June 30, 2026, and we expect to incur substantial additional losses in the future as we operate our business and continue or expand our regulatory, manufacturing, commercialization and other R&D activities and other operations. We have not generated any revenue from product sales to date, and we may not generate product sales revenue in the near future, if ever. As of June 30, 2026, we had a cash, cash equivalents and marketable securities balance of $187.3 million and a negative working capital balance of $9.4 million. For the six months ended June 30, 2026, net cash used in operations was $17.7 million.

Previous wording

We have historically financed our operations through equity offerings, debt financings, and government grants. As a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to support the ongoing clinical development and commercialization activities. While we believe that we will be able to settle our commitments and liabilities in the normal course of business as they fall due during the next 12 months, as a development-stage company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or from other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to fund our operations and finance the remaining development and commercialization of our product candidate.

Current wording

We have historically financed our operations through equity offerings, debt financings, and government grants. As a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to support the ongoing clinical development and commercialization activities. While we believe that we will be able to settle our commitments and liabilities in the normal course of business as they fall due during the next 12 months, as a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or from other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to fund our operations and finance the remaining development and commercialization of our product candidate.

Previous wording

Interest is calculated on the outstanding principal amount of the New Convertible Term Loan at a floating rate per annum equal to the greater of (i) 7.0% and (ii) the prime rate minus 1.0%, which interest shall be payable in cash monthly in arrears and shall be payable on the earlier to occur of (x) the first day of the first month following any extension of credit by the Lender for our credit, (y) the date of any prepayment pursuant to the New Debt Agreement, or (z) the maturity date. The New Convertible Term Loan will be “interest-only” until June 30, 2026 (see Note 6 "Convertible Debt" in the accompanying consolidated financial statements).

Current wording

Interest is calculated on the outstanding principal amount of the New Convertible Term Loan at a floating rate per annum equal to the greater of (i) 7.0% and (ii) the prime rate minus 1.0%, which interest shall be payable in cash monthly in arrears and shall be payable on the earlier to occur of (x) the first day of the first month following any extension of credit by the Lender for our credit, (y) the date of any prepayment pursuant to the New Debt Agreement, or (z) the maturity date. The New Convertible Term Loan was “interest-only” through June 30, 2026 (see Note 6 "Convertible Debt" in the accompanying consolidated financial statements).

Previous wording

A holder of common warrants or pre-funded warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99%, 9.99% or 19.99%, at the election of the holder (provided that no holder may beneficially own more than 19.99%) (the “Ownership Limitation”), of the number of shares of our common stock outstanding immediately after giving effect to such exercise. A holder of common warrants or pre-funded warrants may generally increase or decrease the Ownership Limitation by providing at least 61 days’ prior notice to us. A holder of common warrants or pre-funded warrants also may not exercise the common warrants or pre-funded warrants, as applicable, for shares of our common stock if we do not have sufficient authorized and unissued shares of our common stock to issue such shares of our common stock upon exercise.

Current wording

A holder of common warrants or pre-funded warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99%, 9.99% or 19.99%, at the election of the holder (provided that no holder may beneficially own more than 19.99%) (the “Ownership Limitation”), of the number of shares of our common stock outstanding immediately after giving effect to such exercise. A holder of common warrants or pre-funded warrants may generally increase or decrease the Ownership Limitation by providing at least 61 days’ prior notice to us.

Previous wording

We received gross proceeds of approximately $180.0 million from the private placement, before deducting placement agent fees and other expenses. We estimate net proceeds to be approximately $168.6 million after deducting estimated placement agent fees and other expenses of approximately $11.4 million.

Current wording

We received net proceeds of approximately $168.2 million after deducting estimated placement agent fees and other expenses of approximately $11.8 million.

Previous wording

For the three months ended March 31, 2026, net cash used in operating activities was $6.9 million compared to $11.1 million for the three months ended March 31, 2025. The decrease in cash used in operations in the 2026 period as compared to the 2025 period was due to the wind down of the ORCA-OL trial, which was completed in September 2025, as compared to the same period in 2025, in which costs incurred were associated with the continued full enrollment of the ORCA-OL trial.

Current wording

For the six months ended June 30, 2026, net cash used in operating activities was $17.7 million compared to $20.2 million for the six months ended June 30, 2025. The decrease in cash used in operations in the 2026 period as compared to the 2025 period was due mainly to higher compensation costs paid out in 2025 for the 2024 bonuses associated with achievement of corporate goals and cash upfront payments in 2025 for commercial launch preparation activities. This was partially offset by payment of severance in 2026.

Previous wording

For the three months ended March 31, 2026, net cash provided by financing activities was $21,000, related to proceeds received from warrant exercises.

Current wording

For the six months ended June 30, 2026, net cash provided by financing activities was $168.5 million, compared to $41.2 million for the six months ended June 30, 2025. Net cash provided by financing activities in the six months ended June 30, 2026 related to proceeds received from the April 2026 private placement, proceeds from the sale of shares under the ESPP plan, proceeds from the exercise of stock options and proceeds from the exercise of warrants. Net cash provided by financing activities in the six months ended June 30, 2025, related to proceeds received from the June 2025 public offering.

Previous wording

For the three months ended March 31, 2026, net cash provided by investing activities was $14.3 million compared to $11.4 million for the three months ended March 31, 2025. Net cash provided by investing activities in the three months ended March 31, 2026 and 2025, respectively, was due to transactions involving marketable securities in the normal course of business.

Current wording

For the six months ended June 30, 2026, net cash used in investing activities was $123.5 million, compared to net cash provided by investing activities of $18.1 million for the six months ended June 30, 2025. Net cash used in investing activities for the six months ended June 30, 2026 and net cash provided by investing activities for the six months ended June 30, 2025, were due to transactions involving marketable securities in the normal course of business.

Previous wording

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our audited financial statements for the year ended December 31, 2025 in our Annual Report on Form 10-K filed with the SEC, on March 24 2026. Since December 31, 2025, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.

Current wording

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our audited financial statements for the year ended December 31, 2025 in our Annual Report on Form 10-K filed with the SEC, on March 24, 2026. See Note 2, “Accounting Policies,” for new significant accounting polices since December 31, 2025.