An analyst recommended shares of a company developing a smoking cessation drug. Growth potential: 80%

Morgan Stanley recommended buying shares of the small-cap biotech company Achieve Life Sciences. The company is developing a treatment for smoking and vaping addiction, and the bank’s analysts believe its sales could exceed $1 billion. After receiving a “buy” rating, Achieve’s stock jumped by more than 8%.

Morgan Stanley began covering Achieve's securities and immediately recommended buying them (Overweight rating), according to the Seeking Alpha portal.

Analysts have set a target price of $13 per share, which implies upside potential of more than 79% relative to the stock’s closing price on August 13. On that day, the company’s stock rose 8.4%.

Morgan Stanley is optimistic about the prospects for Achieve, an experimental smoking cessation drug based on cytisine, despite the U.S. Food and Drug Administration’s (FDA) decision to reject the drug’s marketing application, according to Seeking Alpha.

The FDA issued its decision in June; its concerns centered on labeling issues and noncompliance with standards at the third-party facility where the company planned to manufacture the drug, the biotech company explained. However, the regulator did not identify any deficiencies regarding the efficacy or safety of citizinincline, he emphasized. Achieve plans to submit a new application for registration in the fourth quarter of 2026 and to receive approval in the first half of 2027.

Morgan Stanley notes that cytisine has already proven itself as a treatment for nicotine dependence in Central and Eastern Europe. It has been marketed there for more than two decades by the Bulgarian company Sopharma. The American biotech company has entered into several agreements with Sopharma, under which, among other things, it purchases raw materials from the company.

Investbank stated that it views cytizinin as a well-established and low-risk drug. It estimates its potential sales by 2039 at approximately $760 million in the smoking cessation segment. According to analysts’ estimates, sales of cytizine for the treatment of vaping addiction could generate an additional $330 million.

Clinical trials for this indication are not yet complete, but the FDA has granted the drug Breakthrough Therapy designation, which could expedite the approval process.

Achieve has 11 ratings from Wall Street analysts, all of which are “buy.” The average price target is $13.83, which is 91% higher than the stock’s closing price on August 13.

After the company received a full response from the FDA denying its application to register cytizinclin, investment banks H.C. Wainwright and Canaccord Genuity reaffirmed their “buy” recommendations for Achieve shares. They emphasized that the denial was not related to the safety of the drug itself.

Earlier, analysts at Raymond James resumed coverage of the biotech stock and set a price target of $20—one of the highest on Wall Street. This implies upside potential of nearly 180% from the stock’s most recent closing price.