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Stifel Initiates (Positive) Coverage on Awakn Life Sciences

The article Stifel Initiates (Positive) Coverage on Awakn Life Sciences was originally published on Microdose.

A few weeks ago we took a closer look at…

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The article Stifel Initiates (Positive) Coverage on Awakn Life Sciences was originally published on Microdose.

A few weeks ago we took a closer look at Awakn Life Sciences and their recent wave of good news. 

There were impressive results from their Phase 2 trial using ketamine for addiction, and a new partnership with MAPS to explore MDMA-assisted therapy for the treatment of Alcohol Use Disorder in Europe. 

And it seems the financial sector is taking notice. Investment firm Stifel GMP has initiated coverage on Awakn and their prognostication is pretty positive.

“Addiction treatment awakening to a new paradigm. Initiating coverage with a Speculative Buy rating, C$8.00 target price.”

 

This is the title of Stifel’s report, which gives the stock a very bullish price target of $8.00 (CAD) — a 400% increase from Awakn’s current price ($1.59 CAD on the NEO as of this writing). 

According to Stifel’s analyst, Awakn offers a differentiated investment option in the psychedelic medicine space. These are the key points for the positive outlook (taken from the full report, shared with Microdose by Stifel):

1. A world-renowned management team. The company boasts a management team that excels in each of the fields that encompass its strategic initiatives. Prof. Celia Morgan and Prof. Ben Sessa have both completed world firsts in their ketamine and MDMA clinical trials for AUD, respectively. Prof. Nutt is the global expert on substance addiction, leading AWKN’s second generation drug pipeline. Lastly, Prof. McNulty brings a wealth of blue-chip experience to steward these pharmacotherapies through commercialization.

2. A differentiated clinic strategy. Leveraging its proprietary KARE protocol, AWKN is delivering ketamine-assisted psychotherapy to treat AUD, among other offerings in the UK and EU, to address a $5b-6.5b market opportunity. The evidenced-based therapy differentiates itself from competing clinics and could increase adoption rates. Investors also gain free optionality for international KARE licensing opportunities and potential insurance reimbursement following a successful market authorization.

3. A de-risked drug development pathway with second generation optionality. The company has successfully completed the world’s first phase 2a trial with MDMA for AUD. The result could be a treatment with up to 10 years before generic competition, offering more attractive long term economics. In addition, investors could gain free exposure to its second generation NCE program led by one of the most respected addiction scientists globally, Prof. Nutt.

 

These are important points that do give Awakn a solid developmental pathway; and there are few firms with two Phase 2 trials actually underway. Also their focus on molecules like ketamine and MDMA could accelerate the approval process, as ketamine is already FDA approved for other uses and MDMA is currently the most advanced compound in clinical trials (MAPS’ MDMA for PTSD). Also Alcohol Use Disorder (AUD) is a potentially huge market. Still, 400% is very bullish and hitting these kinds of numbers will also depend on outside factors beyond the success of Awakn’s portfolio. 

Some other key takeaways on Awakn’s potential, as per the Stifel report:

The company has a growing network of clinics

Significant upcoming milestones that could give the stock some serious upward momentum:

Stay tuned to Microdose for further updates on Awakn and other industry news.

For more on this company, see Awakn Life Sciences Announces New Clinic: A Closer Look

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