signed its first U.S. licensing agreement regarding its KARE, or ketamine in the reduction of alcoholic relapse, program, with Revitalist Lifestyle and Wellness Ltd., reported Stifel analyst Andrew Partheniou in an August 15, 2022 research note. Revitalist employs ketamine-assisted psychotherapy to treat patients with certain mental health conditions at its 10 U.S. clinics.
"The launch of the partnership is in line with Awakn's Q3/22 guidance and demonstrates good execution," added Partheniou.
The agreement between the two companies calls for Revitalist to pay an undisclosed annual fee plus revenue to Awakn in exchange for access to its KARE protocol and therapist training, Partheniou reported. This year, Revitalist aims to conduct 18,000 patient visits.
Partheniou highlighted that Awakn's licensing business has the potential to generate "attractive capex-light, high-margin software-as-a-service-like recurring revenues, which investors are currently getting for free at Awakn's current valuation." This revenue could be as much as $200–450 million per year at its peak, coming from the U.S. and the European Union, Stifel estimates.
Awakn's current share price is around CA$0.62, which is significantly lower than Stifel's target price of CA$8 per share. Thus, the potential return from this point for Awakn investors is noteworthy.
The Canadian life sciences firm beta launched its licensing offering about a month ago, after which it signed a number of related memoranda of understanding (MOUs) with various North American companies. The biotech's agreement with Revitalist is Awakn's first partnership following the mid-July launch.
Awakn intends to officially and fully roll out this line of business early next year, so with every licensing agreement signed in the interim, the company has a chance to further optimize all aspects of the model. Additional partnerships are expected, Partheniou indicated, just based on the number of MOUs in place.
Stifel has a Speculative Buy rating on Awakn.
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