If you have plans to disrupt the multi-billion-dollar U.S. and European Alcohol Addiction treatment market by developing and commercializing more effective therapeutics, then you had better ensure you have a significant body of data and the appropriate intellectual property moats in place.
Alcohol Use Disorder (AUD) affects 400 million people globally, and the current standard of care is poor, with a typical 75% relapse rate.
Despite the high relapse rate, the alcohol addiction treatment industry is immense. In the U.S. alone, there are 14,000 clinics generating an estimated $30 billion in revenue annually.
As part of its ongoing efforts to disrupt the alcohol addiction treatment industry, Awakn Life Sciences Corp. (AWKN:NEO; AWKNF:OTCQB), a biotechnology company that researches and develops therapeutics to treat addiction, has signed a 12-month option agreement with a leading drug development, manufacturing, and delivery systems company to in-license a proprietary formulation of ketamine with a route of administration that is optimized for in-clinic use.
It's a move that Awakn says will could provide protection for the company and its proprietary therapeutic.
“The upside here for Awakn is to deepen our existing ‘intellectual property moat’ for our lead program — ketamine-assisted therapy for AUD (known as Project Kestrel) and probably also for our program for Gambling Disorder. We will, if successful, have a proprietary formulation of ketamine with a route of administration that we believe is optimized to support ketamine-assisted therapy in the clinic and proprietary therapy — double intellectual property protection,” Tennyson told Streetwise Reports.
Stifel GMP Analyst Andrew Partheniou has a Speculative Buy rating on Awakn with a 12-month target of CA$8 per share.
Essentially, both sides have 12 months to reach a longer-term deal or go their separate ways.
If Awakn successfully develops a unique formula, it could perhaps file another patent and eventually have a drug that delivers brand equity to shareholders.
Tennyson compares Awakn’s end goal to Alkermes Plc (ALKS:NASDAQ) Vivitrol, a drug used to treat alcohol addiction in clinics around the world. However, Vivitrol is just Naltrexone with a specific formulation and route of administration. Sales for Vivitrol reached $343 million in 2021.
The biotechnology company completed a Phase 2b trial for ketamine-assisted therapy, the results of which were published in January. That study achieved an 86% abstinence rate or only 14% relapse rate — five times better than current standard of care.
Awakn will look to include and evaluate this new formulation in its Phase 3 trial for AUD in the U.K.
Awakn is now advancing the program to Phase 3 in the U.K. where the public healthcare system spends more than CA$5.5 billion a year on AUD-related illness.
The biotech company would not disclose the name of its partner or where it’s based, only that it’s a “leading drug development, manufacturing, and delivery systems company.”
Done Deals
Earlier this month, Awakn signed an out-licensing partnership deal with Knoxville, Tennessee-based Revitalist Lifestyle and Wellness Ltd. (CALM:CSE; RVLWF:OTCQB; 4DO:FSE) to bring its ketamine-assisted therapy to Revitalist’s 10 U.S.-based ketamine wellness clinics. About CA$45 billion is spent annually treating AUD in the U.S.
The company followed that deal with another agreement with Burlington, Ontario-based Wellbeings Pain Management and Dependency Clinic, which will be the first company in Canada to deliver Awakn’s off-label treatment. Both deals will see Awakn receive annual fees, revenue-sharing on a per-treatment basis, and patient and treatment data.
On August 16, 2022, Stifel GMP Analyst Andrew Partheniou published a note highlighting Awakn's new licensing business.
He said these deals and others to come have 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."
Partheniou has a Speculative Buy rating on Awakn with a 12-month target of CA$8 per share.
Share Structure
Awakn has about CA$2 million cash in the treasury and will soon need to raise more.
Awakn’s biggest shareholder is OrbiMed Advisors LLC. 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 roughly 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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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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