Awakn Life Sciences Corp. (AWKN:NEO; AWKNF:OTCQB), a biotechnology company researching, developing, and commercializing therapeutics to treat addiction, is the first ever public company to have a Phase 3 clinical trial in psychedelics approved to receive a U.K. government grant.
The grant will fund two-thirds of a Phase 3 clinical trial exploring the use of ketamine-assisted therapy for the treatment of alcohol use disorder (AUD), better known as alcoholism.
The approximate CA$2.5 million grant was approved by the U.K.’s National Institute for Health and Care Research (NIHR).
The study is expected to cost CA$3.75 million, with Awakn contributing roughly CA$1.25 million of the total.
“It's a fantastic milestone for them to get that capital to help them through their Phase 3 clinical trials. I believe they will be the furthest along company in getting an approval for ketamine beyond what it's been approved (for), which was as an anaesthetic.”
— Dustin Robinson, cofounder of Florida-based Iter Investments
A clinical trial of this size and scope would typically cost £10 million (US$12M) to £20 million (US$24M) but Awakn has limited costs by partnering with the University of Exeter and the NHS — the publicly funded healthcare system in the U.K.
Dustin Robinson, cofounder of Florida-based Iter Investments, which supports companies offering psychedelic treatments in what Robinson calls a global “mental and behavioral health crisis” that pre-existed COVID-19, says the funding for the study is a milestone for Awakn.
“It's a fantastic milestone for them to get that capital to help them through their Phase 3 clinical trials. I believe they will be the furthest along company in getting an approval for ketamine beyond what it's been approved (for), which was as an anesthetic,” Robinson told Streetwise Reports. “It's non-dilutive capital."
Awakn is one of two public companies in the 16-company Iter Investments fund. Robinson believes that the sector offers tremendous value at this stage of the broader bear market.
“So many of these companies are undervalued right now. They're coming out with milestone after milestone. And right now, the markets just aren't recognizing that,” Robinson explained.
Awakn is covered by three analysts.
New York City-based Maxim Group Senior Managing Director Jason McCarthy gives AWKN a $4 share price target and a Buy rating, while H.C. Wainright & Co. Senior Healthcare Analyst Patrick Trucchio also gives the company a Buy rating, with a CA$10 target.
Stifel GMP Analyst Andrew Partheniou gives AWKN a Speculative Buy rating in a March 31, 2022 research report. His target price for AWKN is CA$8.
NHS Must Mitigate Costs
The grant is part of a larger effort by the NHS to seek ways to mitigate the escalating costs of AUD in the public healthcare system.
A 2019 study published in the medical journal Addiction estimated that alcohol-related conditions cost the NHS about £3.5 billion pounds (US$4.2 billion) annually, a number that U.K. healthcare experts believe has grown considerably with the onset of the COVID-19 pandemic.
The Phase 3 trial will include 280 patients who will be monitored intermittently over six to 12 months. The trial will also pilot test patient-specific peer support groups once the treatment trials are finished.
Awakn has dubbed its clinical development program Project Kestrel, which aims to deliver clear intellectual property, marketing authorization, and regulatory approval for ketamine-assisted therapy to treat AUD in the U.K., and just as importantly, in the U.S.
'Ground-Breaking Results'
The Phase 3 trial comes on the heels of what Awakn calls “ground-breaking results” from the company’s Phase 2 a/b trial announced in January. In that trial, AUD participants experienced on average 86% abstinence after six months post-treatment, versus 2% pre-trial.
Awakn’s Head of Ketamine-Assisted Therapy, Celia Morgan, who is also a Professor of Psychopharmacology at the University of Exeter, will lead the Phase 3 trial. The goal is to establish definitive evidence of the desired outcome or efficacy of ketamine-assisted therapy in the treatment of AUD — which could lead to the new treatment being licensed.
“I know this will be a great source of hope for the patients we work with, their families, and friends. The financial commitment by the U.K. government emphasizes the promise of this treatment and the scientific rigor behind the trial,” Morgan said in a release.
Other representatives from the University of Exeter, the NHS, and the U.K. Department of Health and Social Care will be working with Awakn’s scientists throughout the clinical trial.
Awakn CEO and Cofounder Anthony Tennyson, who helped take the company public in 2021, told Streetwise Reports that AUD affects 400 million people globally, yet only about 8% seek treatment.
The company has two divisions: one that researches and develops therapeutics to better treat addiction and one that generates revenue by commercializing these therapeutics through a small number of wholly owned clinics and third-party licensing partnerships.
Awakn’s flagship clinic is in London and offers treatments for addiction, depression, and post-traumatic stress disorder (PTSD). The cost of ketamine-assisted treatments at Awakn’s clinics range from £6,000 (US$7,200) to £7,500 (US$9,000) for an 11-session program.
Tightly Held Structure
AWKN has almost 27 million shares issued 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. It closed at CA$0.70 on July 19.
Awakn has about CA$2.8 million cash in the treasury and will likely need to do a raise before the end of 2022.
Management owns roughly about 23%, while Awakn’s biggest shareholder, OrbiMed Advisors LLC, owns just less than 9% or about 2.4 million shares.
Other institutional holders include London-based Psych Capital; New York-based JLS Fund; investment fund Palo Santo; Grand Cayman, Cayman Islands-based Negev Capital; San Juan, Puerto Rico-based Ambria Capital; and Iter Investments.
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Disclosures
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.
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