Awakn Life Sciences Corp. (AWKN:NEO; AWKNF:OTCQB) is currently undervalued and, thus, providing investors an attractive time to get into the stock, reported Stifel analyst Andrew Partheniou in a Dec. 16 research note.
With the Canadian biotech firm, the "market sees about a CA$10 million ($10M) valuation," he wrote. "We see a Phase 3 company with a derisked molecule."
Further, Awakn offers significant potential return for investors given the difference between its current share price (CA$0.40) and Stifel's target price on it (CA$1.75). As such, Stifel rates the biotech Speculative Buy.
The reasons Stifel considers Awakn undervalued are its three recent key accomplishments, Partheniou wrote, "despite a materially challenging market backdrop."
Recent Progress Made
1) Awakn completed the second tranche of its capital raise, generating US$1.9M. The two tranches together and debt settlement yielded US$3M, enough to get it through the next three quarters, Partheniou wrote.
"This could provide the company with time to realize some potential catalyst to create shareholder value through derisking its outlook and pursue another equity financing," he added.
2) Awakn partnered with the British government on the life sciences firm's Phase 3 pivotal trial of ketamine for alcohol use disorder, and it will be conducted at seven National Health Service sites. Also, the company secured governmental funding in the form of a grant that will cover 66% of the trial cost, or CA$3.75M, dropping Awakn's contribution at CA$1.25M, "a significantly advantageous position," noted Partheniou.
3) Awakn further grew its ketamine clinic business, adding locations in Norway and the U.S. reported Partheniou. In Norway, the biotech signed a lease for a second location, expected to be up and running by late Q1/23. The company also entered a licensing agreement with Nushama in New York, making it the third such arrangement in North America. Nushama will pay Awakn an annual fee and a royalty of an unknown amount.
"Hence, we see good momentum overall," wrote Partheniou.
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Disclosures For Stifel GMP, Awakn Life Sciences Corp a.nd Cybin Inc., December 16, 2022
I, Andrew Partheniou, certify that the views expressed in this research report accurately reflect my personal views about the subject securities or issuers; and I, Andrew Partheniou, certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report.
Stifel or an affiliate expects to receive or intends to seek compensation for investment banking services from Awakn Life Sciences Corp. in the next 3 months. The equity research analyst(s) responsible for the preparation of this report receive(s) compensation based on various factors, including Stifel's overall revenue, which includes investment banking revenue.
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