has tightened its focus and advanced its AWKN-P001 program, Andrew Partheniou, Stifel vice president, reported in a September 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 an 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 August 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 with 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 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.
|Want to be the first to know about interesting Psychedelics investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.||Subscribe|
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Awakn Life Sciences Corp.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee.
- This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
For additional disclosures, please click here.
Disclosures for Stifel, Awakn Life Sciences Corp., September 8, 2023
I, Andrew Partheniou, research analyst, 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.
Please visit the Research Page at www.stifel.com for the current research disclosures and respective target price methodology applicable to the companies mentioned in this publication that are within the Stifel coverage universe. For a discussion of risks and changes to target price including basis of valuation or methodology please see our stand-alone company reports and notes for all stocks. The information contained herein has been prepared from sources believed to be reliable but is not guaranteed by us and is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell any securities referred to herein. Opinions expressed are as of the date of this publication and are subject to change without notice. These opinions do not constitute a personal recommendation and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of Stifel, or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed within. Stifel or any of its affiliates may have positions in the securities mentioned and may make purchases or sales of such securities from time to time in the open market or otherwise and may sell to or buy from customers such securities on a principal basis; such transactions may be contrary to recommendations in this report. Past performance should not and cannot be viewed as an indicator of future performance. Unless otherwise noted, the financial instruments mentioned in this report are priced as of market close on the previous trading day and presumed performance is calculated always over the next 12 months. As a multi-disciplined financial services firm, Stifel regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as a placement agent in private transactions.
Affiliate Disclosures References to “Stifel” (collectively ”Stifel”) refer to SFC and other associated affiliated subsidiaries including (i) Stifel, Nicolaus & Company, Incorporated (“SNC”); (ii) Keefe, Bruyette & Woods, Incorporated (“KBWI’’), which are both U.S. broker-dealers registered with the United States Securities and Exchange Commission (“SEC”) and members of the Financial Industry National Regulatory Authority (“FINRA”), respectively; (iii) Stifel Nicolaus Canada Inc. (“Stifel Canada”), which is authorised and regulated by the Canadian Investment Regulatory Organization (“CIRO”); (iv) Stifel Nicolaus Europe Limited (“SNEL”), which is authorised and regulated by the Financial Conduct Authority (“FCA”) (FRN 190412) and is a member of the London Stock Exchange and also trades under the name Keefe, Bruyette & Woods Europe (“KBW Europe”); (v) Stifel Europe Bank AG (“SEBA”), which is regulated by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht; “BaFin”) and is a member of Deutsche Boerse and SIX Swiss Exchange and (vi) Stifel Schweiz AG (“STSA”), which is representative of SEBA in Switzerland and regulated by the Eidgenössische Finanzmarktaufsicht (“FINMA”). SNEL, SEBA and STSA are collectively referred to as Stifel Europe. Registration of non-US Analysts: Any non-US research analyst employed by Stifel contributing to this report is not registered/qualified as a research analyst with FINRA and is not an associated person of the US broker-dealer and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances, and trading securities held by a research analyst account. Global Research Notes: Research analysts contributing content to these reports are subject to different regulatory requirements based on the jurisdiction in which they operate. Clients seeking additional information should contact the Stifel entity through which they conduct business.
SEBA & STSA Sponsored research: At SEBA & STSA, analysts may produce issuer paid research ('sponsored research'). This research is produced by analysts in accordance with local regulatory requirements relating to such research. In certain jurisdictions, this issuer paid research may be deemed to be independent research albeit not produced to the same conflicts of interest standards required by all jurisdictions for independent research. Where research has been paid for by an issuer, this will be clearly labelled. Please see our European Policy for Managing Research Conflicts of Interest for additional information. Country Specific and Jurisdictional
Disclosures United States: Research produced and distributed by Stifel Europe is distributed by Stifel Europe to “Major US Institutional Investors” as defined in Rule 15a-6 under the US Securities Exchange Act of 1934, as amended. SNC may also distribute research prepared by Stifel Europe directly to US clients, including US clients that are not Major US Institutional Investors. In these instances, SNC accepts responsibility for the content. Stifel Europe is a non-US broker-dealer and accordingly, any transaction by a US client in the securities discussed in the document must be effected by SNC. US clients wishing to place an order should contact their SNC representative.