Stifel - "‘Favourable Commercialization Outcome" PT C$1.75 Analysts at Stifel GMP expect a “favourable commercialization outcome” from Awakn Life Sciences Corp (NEO:AWKN)’s planned Phase 3 trial of novel ketamine drug AWKN-P001 in combination with proprietary therapy for severe alcohol use disorder.
The company has submitted its Clinical Trial Application with ethical and regulatory approval providing a pathway to start dosing patients likely in the first quarter of 2024, the analysts noted.
“We reiterate AWKN's impressive network as this trial is expected to cost only £800,000 for the company, with partners contributing the balance,” they wrote in a note to clients.
In their view, this trial sets up interesting commercialization opportunities for Awakn as these same partners – the University of Exeter, the National Institute of Health and Care Research (NIHR), and the Medical Research Council (MRC) – could complement the company’s previously granted Innovation Passport, the UK’s version of the Food and Drug Administration’s (FDA’s) Breakthrough Therapy Designation in the United States.
“More specifically, AWKN intends to seek input from the Medicines and Healthcare products Regulatory Agency (MHRA) and the National Institute for Health and Care Excellence (NICE) on market access for AWKN-P001 in the UK concurrently with its Phase 3 program,” they wrote.
“As a result, we expect a favourable outcome that promotes commercial success and provides both AWKN shareholders and its government partners interesting return on investment.”
The analysts also pointed out that on August 1, 2023, Awakn completed the divestiture of its clinical assets which has significantly reduced its cash burn while retaining its asset-light, high margin and recurring revenue licensing business KARE.
“The company is working to close its upsized equity unit offering for an additional $2 million, offering further runway to hit potential milestones of initiating its Phase 3 trial in its AWKN-P001 program in the UK in 1Q calendar 2024,” they wrote.
“Overall, we view the greater focus as necessary to endure the challenging capital markets while preserving its most valuable assets.”
Based on these factors, the Stifel analysts maintained their C$1.75 target on Awakn with a ‘Speculative Buy’ rating.
“We reflect AWKN's clinic divestment in our estimates while treating its licensing business as optionality,” they wrote.
“Given our previous valuation was based solely on its drug development activities, we retain our C$1.75 target.”
Awakn’s Toronto-listed shares were down 13% at C$0.25 on Monday afternoon, while its U.S.-listed stock traded up 18.9% at US$0.22.