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Three Analysts Like Healthcare Co.'s Upside

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It is difficult to get three people to agree on anything, let alone three investment analysts. But that is precisely the case with one junior biotech company that has shown in a clinical trial that its ketamine-assisted therapy for alcohol use disorder (AUD) is three times more effective than the current standard of care.

In its 2018 Global Status Report on Alcohol the World Health Organization reported that 237 million men and 46 million women globally were “problem drinkers” or abused alcohol. Of those, some 3 million die annually in alcohol-related deaths.

Such comprehensive studies have been limited since the onset of the COVID 19 pandemic, but many alcohol-addiction experts suspect that the problem has only become more widespread since 2020 — and now affects more than 400 million people worldwide.

In America, a pre-pandemic estimate by the National Institute on Alcohol Abuse and Alcoholism (NIAAA) suggested that 14.5 million Americans suffered from Alcohol Use Disorder (AUD) in 2019, yet only 8% sought treatment. AUD remains the third leading cause of preventable deaths in the United States, behind only tobacco and a poor diet.

The number of AUD cases per 100,000 people is even higher in the United Kingdom where a small healthcare company is attempting to bring a higher standard of care to those suffering from AUD, while also providing investors the opportunity to profit from the firm’s success.

“Trucchio gives AWKN a Buy rating and a $10 target, while New York City-based Maxim Group Senior Managing Director Jason McCarthy gives AWKN a $4 target and a Buy rating.”

“Our lead development program is proprietary therapeutic of ketamine and psychotherapy together to treat AUD. The results of our Phase 2 B trial for this program were up to three times better than the current standard of care,” Awakn Life Sciences Corp. (AWKN:NEO; AWKNF:OTCQB) CEO, Director and Co-Founder Anthony Tennyson told Streetwise Reports.

Treatments for AUD, more commonly known as alcoholism, usually involve going to a clinic like the Betty Ford Center in California and checking in for weeks or even months.

In the U.S. there are some 14,000 clinics treating victims with AUD but Tennyson says there is on average only a 25% rate of alcohol abstinence in the 12 months post-treatment with the current standard of care, compared with the 86% abstinence rate observed in the six months following treatment using Awakn's combination of ketamine and psychotherapy, as demonstrated in Awakn’s Phase 2 b trial.

One of the most widely used medications to treat AUD is Alkermes' (ALKS:NASDAQ) Vivitrol, which works by essentially mediating or blocking the endorphin release during alcohol consumption — but it has reported side effects like high blood pressure, infections at the point of injection and even erectile dysfunction. Nonetheless, Vivitrol sales reached US$343.9 million in 2021, up from US$310.7 million the year before.

Awakn, which went public in 2021, has two divisions: one that researches and develops better therapeutics to better treat addiction and one that generates revenue by commercializing these therapeutics through a limited number of wholly owned clinics and licensing partnerships with third-party clinics.

Awakn’s clinics, with the flagship clinic operating in London, offer treatments for addiction and also depression and Post-traumatic stress disorder (PTSD). The cost of ketamine-assisted treatment is much less than a typical residency clinic, at about £6,750 (US$8,000) for an 11-session treatment program.

Tennyson says each clinic can generate as much as £3 million (US$3.7M) in revenue annually.

Revenue like this and the growth potential for other ketamine- and psychedelic-based treatments — and a likely NASDAQ listing in 2023 — prompted Toronto-based Stifel GMP Analyst Andrew Partheniou to give AWKN a Speculative Buy rating in a March 31, 2022 report. His target price for AWKN is CA$8.

Partheniou wrote that clinic revenue could reach $100M by 2024 but that the real growth will come from licensing agreements.

He wrote: “While clinics are an important piece in AWKN’s strategy, we note the company is not seeking to have a widespread footprint of owned clinics throughout the EU or North America. Instead, management expects to open 20 clinics by 2024 in the UK and EU, which we believe could act as flagships to raise awareness of its proprietary Ketamine-assisted therapy for AUD model. To rapidly expand its geographic exposure, AWKN is expected to leverage a licensing model, resulting in a capex-light strategy.”

A "capex-light" approach is well-suited to a beaten-up segment of the market like biotech.

If we use the SPDR S&P Biotech Exchange-traded Fund (XBI:NASDAQ) as a proxy for the space, the ETF reached an intraday peak of $136 in September 2021, only to slide steadily lower to a closing low of $63.32 on June 13. Since then, however, the ETF has trended higher to close at $80.70 on July 11. 

Throughout 2022 AWKN followed a similar pattern and drifted from a January high of CA$3.36 to close at CA$0.85 on July 11.

The weakened share price has tempered Tennyson’s near-term enthusiasm for 20 clinics by 2024. That’s still the goal, albeit over a longer timeframe.

Big Catalyst Ahead


The next big catalyst for the share price could be the approval of a grant from the U.K.’s National Institute for Healthcare Research, which would fund two-thirds of £2.5-million (roughly US$3M) Phase 3 study into psychedelic research.

“Awakn is advancing MDMA-assisted therapy for AUD in Europe, which we estimate could have blockbuster drug potential based on the significant unmet medical need and evidence generated to-date pointing to the potential of MDMA-assisted therapy in a variety of mood disorders.”
— H.C. Wainright & Co. Senior Healthcare Analyst Patrick Trucchio 

Tennyson says these types of studies would typically cost £10 million (US$11.9M) to £20 million ($US23.8M) but Awakn has limited costs by partnering with the University of Exeter and the National Health Service (NHS), the name given to the publicly funded healthcare system in the U.K. The NHS spends hundreds of millions annually treating alcohol-related illnesses and is the second largest drug purchaser in the world.

If the grant is approved, Awakn’s total cost for the study would be about £750,000 (about US$1M). Tennyson expects an answer on the grant by the end of July.

H.C. Wainright & Co. Senior Healthcare Analyst Patrick Trucchio wrote that the Phase 3 trials could add even more options to Awakn’s growing list of therapeutic choices, including methyl​enedioxy​methamphetamine-assisted (MDMA) therapy. That’s Ecstasy to you and me — and it remains illegal in the U.S.

In a report dated Feb. 1, 2022, Trucchio wrote: “Awakn is advancing MDMA-assisted therapy for AUD in Europe, which we estimate could have blockbuster drug potential based on the significant unmet medical need and evidence generated to-date pointing to the potential of MDMA-assisted therapy in a variety of mood disorders.”

He added: “Moreover, Awakn’s MDMA-assisted therapy has generated promising Phase 2A data in AUD, which follows the validation of the approach in PTSD in a late-stage program being conducted by MAPS, a non-profit organization based in the U.S.”

Trucchio gives AWKN a Buy rating and a $10 target, while New York City-based Maxim Group Senior Managing Director Jason McCarthy gives AWKN a $4 target and a Buy rating.

Why Ketamine?


Ketamine is a dissociative anaesthetic that was created in the early 1960s as a weaker derivative of phencyclidine (PCP). American soldiers in Vietnam were able to give it to each other after suffering injuries or trauma in combat. Ketamine’s “friendly” effects led to it being known as the “buddy drug.” It’s now the most commonly prescribed painkiller in the world.

Tennyson says that based on new research led by Awakn’s Chief Research Officer and world renowned academic researcher, Professor David Nutt, Awakn’s therapeutics target the brain circuits that drive addiction.

Tennyson explains that there are four brain-circuit mechanisms that play a pivotal role in addiction —memory, reward, driver, and cognition.

In a non-addicted brain, they work in harmony and remain in a balanced state, thereby allowing cognition to have sufficient control over the other circuits to prevent addictive thought patterns from forming.

However, in an addicted brain, these circuit mechanisms lose balance, diminishing cognitive control,dramatically increasing reward urges. This ultimately results in the addiction being fed and those addictive patterns becoming deeply rooted.

Awakn’s approach — using proprietary therapeutics — disrupts the circuits and the deep-rooted addictive behaviours with drugs and allows the therapy to penetrate deeper and restore order in the cognitive control centre.

The Dream Team


Tennyson is by no means doing this alone.

Awakn has assembled a team of leading global experts across its board and management teams, including: Paul Carter, former global chief commercial officer with Gilead Life Sciences and Steve Page, former CEO of the Priory Group (the U.K. version of the Betty Ford Center) as non-executives on the board.

Nutt, Awakn’s Chief Research Officer, is a psychiatrist and the Edmund J. Safra Professor of Neuropsychopharmacology in the Division of Brain Science, Department of Medicine, at Imperial College London.

Dr. Ben Sessa co-founded the company with Chief Business Officer Jonathan Held, Chairman George Scorsis, and Tennyson. Sessa now serves as head of psychedelic medicine. Over the last 15 years he has been part of scientific and clinical studies administering lysergic acid diethylamide (LSD), ketamine, MDMA and other psychedelics to patients and volunteers.

The Ketamine-assisted therapy program is being run by Professor Celia Morgan, who is renowned as one of the world’s leading experts in the therapeutic use of Ketamine, she has a Ph.D from University College London. She also runs the Exeter Translational Addiction Partnership.

Dr. Shaun McNulty is the company’s chief scientific officer and has worked in the neuroscience drug discovery units of major pharmaceutical companies, including Parke-Davis, Pfizer Inc., and GlaxoSmithKline.

Chief Medical Officer Dr. Arun Dhandayudham was once clinical director of the NHS Addictions services across the Bedfordshire and Northamptonshire districts.

And Awakn recently retained Dennis Purcell, founder of life sciences venture capital firm Aisling Capital LLC, as a special advisor. Purcell is also on the board of several larger players in the pharmaceutical space. He's expected to guide and grow Awakn's presence in the American market.

Share Structure


Awakn has about CA$2.8 million cash left and will likely need to do a raise before year-end.

Chairman George Scorsis owns around 4.19% or 1.28 million shares of Awakn, while Sessa almost doubles that with 2.23 million shares or 8.28%; Tennyson owns roughly 1.55 million shares or 5.75%; and Held holds just less than 600,000 shares or 2.23%. In total, management owns roughly 23%.

Awakn’s biggest shareholder is OrbiMed Advisors LLC, which manages a series of public equity funds. OrbiMed owns 8.93% or about 2.4 million shares.

Other institutional holders include: London-based Psych Capital; New York-based JLS Fund; investment fund Palo Santo; Florida-based Iter Investments; Grand Cayman, Cayman Islands-based Negev Capital; San Juan, Puerto Rico-based Ambria Capital; and London-based Neo Kuma Ventures.

AWKN has issued almost 27 million shares and all but approximately 6 million shares remain tightly held. The company trades in a 52-week range of CA$0.45 and CA$3.36.

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1) Brian Sylvester wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Awakn Life Sciences Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 
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4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. 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., a company mentioned in this article.

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