Awakn Life Sciences Corp. (AWKN:NEO; AWKNF:OTCQB) has tightened its focus and advanced its AWKN-P001 program, Andrew Partheniou, Stifel vice president, reported in a Sept. 8 company update note.
"Awakn has made significant progress to endure the currently challenging capital markets, including the divestment of its clinic assets, significantly reducing its cash burn while retaining its asset-light, high-margin and recurring revenue licensing business," Partheniou wrote.
The biotech is developing and delivering psychedelic-assisted psychotherapies, using ketamine, MDMA and novel, second-generation MDMA candidates, to better treat addiction.
525% return potential
Accordingly, Stifel maintained its CA$1.75 target price on Awakn, noted Partheniou. In its current estimates, Stifel includes the clinic divestment but treats the licensing business as optionality.
In comparison to the target price, the life sciences company's current price is about CA$0.28 per share. The gap between this and the target prices implies a remarkable potential gain for investors, of 525%.
Awakn remains a Speculative Buy.
Improving the finances
Among its recent achievements, Awakn closed the sale of its clinic assets on Aug. 1, 2023, the aims of which were to improve cash burn and be able to concentrate solely on drug development, Partheniou explained.
The biotech still owns the revenue licensing business through the KARE protocol, an early stage opportunity estimated to generate US$200−450 million (US$200−450M) in revenue over the long term.
Awakn also commenced an equity unit offering, which has since been upsized to US$2M and which it is currently working to close.
Phase 3 trial imminent
The biotech company has moved forward its AWKN-P001 clinical program, its "greatest and most immediate value creation opportunity," highlighted Partheniou. AWKN-P001 is an investigative treatment, combining ketamine and the company's proprietary psychotherapy, for severe alcohol use disorder.
Most recently, Awakn filed a clinical trial application for a Phase 3 of AWKN-P001, "with ethical and regulatory approval, providing a pathway to start dosing patients likely in Q1/24," the analyst noted.
This Phase 3 would be a two-arm, placebo-controlled study involving 280 patients. It would be done in the United Kingdom (U.K.) in partnership with three entities: the University of Exeter, the Medicines and Healthcare products Regulatory Agency and the National Institute for Health and Care Excellence.
Given the partners on board, the trial is expected to cost Awakn only £800,000, one-third of the total.
Partheniou indicated Stifel is optimistic about the trial's results.
"We expect a favorable [trial] outcome that promotes commercial success and provides both Awakn shareholders and its government partners interesting return on investment," the analyst commented.
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