Awakn Life Sciences Corp (NEO:AWKN), a biotechnology company developing psychedelic therapies to treat addiction with a near-term focus on alcohol use disorder (AUD), is at an ideal entry point for investors given the company’s de-risked ketamine Phase 3 trial for AUD in the UK as well as good momentum in its clinics, according to analysts at Stifel GMP.
In a note to clients, the analysts wrote that Awakn has progressed on multiple fronts, such as securing a differentiated partnership with the UK government to conduct its Phase 3 pivotal trial, Project Kestrel, for ketamine for severe AUD across seven NHS sites.
The government will fund 66% of the $3.75 million trial cost, significantly reducing Awakn’s out-of-pocket expense to just over $1 million, they noted.
READ: Stifel analysts still bullish on psychedelic stocks, citing attractive risk-reward profile
They also highlighted that the company continues to expand its ketamine clinic business, soon opening its second location in Norway, expanding the footprint of its first, and signing its third licensing agreement in North America, which provides an avenue for high-margin revenue contribution.
“Our positive stance on AWKN is based on:1) a world-renowned management team specialized in each of the company's strategic initiatives; 2) a differentiated clinic strategy leveraging its proprietary KARE protocol to offer evidence-backed ketamine-assisted psychotherapy for AUD with on-label optionality; and 3) a de-risked pathway to drug development with the world's most advanced clinical trial of MDMA for AUD and second generation NCE optionality,” the analysts wrote.
They maintained their ‘Speculative Buy’ rating on the stock with a price target of C$1.75. Awakn’s NEO-listed shares are currently trading at about $0.38.
Stifel’s analysts wrote that they were maintaining their rating and target in recognition of the company’s progress despite a materially challenging market backdrop.
“At a ~$10m enterprise value, we believe the market is currently undervaluing AWKN’s position, offering investors an attractive entry point,” the analysts wrote.
Contact the author at emily.jarvie@proactiveinvestors.com
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