Those already bullish on Awakn Life Sciences Corp (OTCQB: AWKNF, $AWKNF) (NEO: AWKN) were provided an "I told ya so" moment. Since the start of February, Awakn stock is trading higher by over 77%, stretching to as much as 100% higher intraday on Wednesday. But while many expected the ascent, the better news may be that it may be the precursor to even higher prices.
That bullish presumption comes after Awakn announced the U.K. Medicines and Healthcare products Regulatory Agency (MHRA) has granted them an Innovation Passport as part of the Innovative Licensing and Access Pathway (ILAP) for its proprietary ketamine-assisted therapy for the treatment of Severe Alcohol Use Disorder.
For Awakn, investors, and potential patients, that's excellent news. Alcohol Use Disorder(s) affects 285 million people globally; of these, more than 70 million suffer from Severe Alcohol Use Disorder. But here's the great news: Awakn believes they are on track to treat the debilitating condition, and with its ILAP enabling accelerating getting its candidate to market and providing near-term patient access, that could happen sooner than later. Why? Because similar to the FDA's fast-track program in the United States, the U.K.'s MHRA Innovation Passport will provide Awakn access to specialist advice from the MHRA and its partners, including the National Institute of Health and Care Excellence (NICE).
That means that throughout the therapeutic development process, Awakn has an intimate connection to those able to facilitate a more efficient and faster route to marketing authorization.
A Big Step Forward For Awakn's Psychedelic-Based Treatments
In fact, the ILAP pathway can be the key to earning expedited marketing approvals, noting that it provides a single integrated platform for sustained collaborative working among the MHRA, key bodies, and the therapeutics developer, which, when connected, facilitates earlier engagement, enhanced coordination, and on-going monitoring of product development activities, designed in theory to get promising treatments to markets and patients quickly.
Under the ILAP, Awakn also has access to many development assets supporting all stages of the design, development, and approvals process. As important, it helps to streamline discussions with regulatory agencies to identify key areas to address during the development process.
Awakn Life Sciences CEO, Anthony Tennyson, commented on earning the ILAP, saying, "Ensuring our therapeutics reach people who need them most is our key priority as a company. Having an innovation passport gives us the opportunity working with the regulators to find the most efficient pathway to marketing authorization and, ultimately and most importantly, to those people who desperately need it. We are very grateful to the MHRA and its partners for identifying the vast potential in our treatment."
Still, the better news about the ILAP is it validates the continued development of AWKN's innovative therapeutic approach of using ketamine-assisted psychotherapy to treat severe alcohol use disorder. Furthermore, it enables the company to build on the excellent Phase II proof of concept study as they collaborate with the NIHR, MRC, NHS, and Exeter University toward marketing authorization. And not lost in the discussion, AWKN is a giant step closer to starting its Phase 3 trial.
Determined To Change AUD Treatment Landscape
That's where potentially exponential value could be unleashed. For those not following headlines, psychedelic therapeutics has become one of the most talked about ways to treat specific mental health issues, overcoming a long history of misconceptions thanks to increasing clinical evidence of their effectiveness in treating ailments such as addiction and PTSD. In fact, studies conducted in jurisdictions where legalized use of medically controlled psychedelic compounds such as psilocybin, ketamine, and MDMA have shown effectiveness in treating disorders that even conservative doctors and politicians are calling for expedited studies to evaluate their use in patients who have not responded well to conventional therapies.
Successful development will hit potentially enormous demand. Consider that while the sector is in its infancy, analysts already expect AWKN's target market to be a $100 billion revenue-generating opportunity by 2030. Of course, there will often be winners and losers, so for investors, the best approach would be to find companies ushering in the movement. Awakn Life Sciences makes that list.
In fact, they are already blazing a trail to deliver best-in-class psychedelic-based treatments to patients struggling with mental health complications. What's more, while competitors are making promises about its future, Awakn is already seizing opportunities and secured its place as one of the most compelling psychedelic therapeutics companies in the space, a result of developing novel medicines and therapies that treat one of the world's most significant health problems: addiction.
An Expedited Path To Market
And innovation is their differentiation and advantage. Moreover, while most players in the space have no approved products and little is happening in the clinic, AWKNF has at least three functional studies in the clinical stage, working together to deploy Awakn's novel therapeutics while also generating additional data that could lead to generating substantial near-term revenues. And with as many as 20 clinics planned to open by the end of 2024, those with longer-term investment horizons could benefit from Awakn capitalizing on its leadership position to target and likely earn a share of hundreds of millions in potential revenues.
Currently, studies primarily focus on maximizing the value of its Ketamine-Assisted Therapy program known as Project Kestrel. So far, its treatment candidates have shown promise in treating five targeted indications: addiction, anxiety disorders, depression, eating disorders, and PTSD. And in a world where mental health treatments have seen significantly less innovation than those aimed at treating physical ailments, safely harnessing the therapeutic power and potential of psychedelic compounds could save millions of lives and transform the way mental health issues are treated. Those companies leading that medical revolution could earn a sizable share of a booming market and opportunity.
Remember, mental health-related diagnoses are on the rise. In fact, CDC data shows a 400% increase in antidepressant prescriptions between 1988 and 2008. Notably, the most commonly prescribed antidepressant of today remains Pfizer's (NYSE: PFE) Zoloft (sertraline), which was first introduced in 1991. Still, while effective for some, it's important to remember that there is no "one size fits all" solution when treating mental health – what may work perfectly for some can have no or even detrimental effects on others. Thus, without discounting the positive experiences millions have reported from Zoloft and similar antidepressants in its class, companies like Awakn are highlighting the need to look beyond conventional treatments to reach the substantial number of patients who have exhausted their available treatment options without any significant benefit.
Reaching Patients Needing An Alternative
The importance of addressing those whose symptoms haven't improved by using prescribed antidepressants or who responded well to psychological therapies cannot be understated. At least 1.3 billion people, or roughly 1 in 3 adults, struggle with addiction or mental illness. That population includes 24,500,000 people in the E.U. & U.K. and 14,500,000 Americans suffering from Alcohol Use Disorder (AUD). For AWKNF and companies like them, they are timely in helping patients and, from a revenue perspective, focus on earning a large percentage of an estimated $12.5b opportunity in the E.U. & U.K. and a $7.5 billion addressable market in the U.S. Those extraordinary numbers illuminate the need for an effective and alternative therapeutic option for the 430,000 people who die from addiction-related causes yearly. Remember, many resisted treatment, dropped out, or didn't respond to it.
Whatever the case, missing the opportunity to save those lives exposes a need for a broader range of therapeutic options and solutions. Studies have shown that while 16% of alcohol abusers will seek some form of medical treatment, 75% of that population will relapse within 12 months. To make matters worse, mental health disorders such as depression, PTSD, and ADHD are known comorbidities for addiction. Still, while the percentages are against those addicted, help could be on the way, with the emerging psychedelic-based therapeutics showing significant potential to treat the addiction and the adjacent mental health indications that can lead to it.
What's more, Awakn is one of the few companies actually getting these innovative and alternative solutions to patients in a way that could prove better and more effective than competing products. As noted, part of Awakn's advantage is from being different. Awakn's therapeutics target the brain circuits that drive addiction through multiple receptors rather than single receptors. Four brain-circuit mechanisms have been identified as pivotal in forming and perpetuating an addiction disorder.
A Broader Working Therapeutic
Notably, while the four circuit mechanisms work harmoniously in a healthy individual, those suffering from addiction and related ailments see these circuits thrown off balance, resulting in diminished cognitive control that can make it nearly impossible to break a pattern of negative behaviors. But, by disrupting the circuits that control the behavioral drivers of addiction, tailored treatments and therapies are showing an ability to more effectively treat the patient, enabling them to reestablish control of their cognitive control center.
The most excellent news for Awakn, patients, and investors is that results from clinical trials thus far have been, in a word- impressive. Results from Project Kestrel's successful Phase II a/b trial were published in the American Journal of Psychiatry in January 2022. The results showed an extraordinary 6-month post-trial abstinence rate of 86% compared to a 2% pre-trial abstinence rate. Looking to capitalize upon these promising results, Awakn signed a 12-month option agreement with a leading drug development company to in-license a proprietary formulation and route of administration for ketamine.
The success of the Phase II a/b trial has also enabled Awakn to deploy those therapeutics in its clinics, contributing to additional data collection and accelerating the potential for accretive revenue growth.
An Expedited Pathway To A Phase III Trial
Of course, commencing its Phase 3 trial is a milestone worthy of a valuation increase. And that's now a near-term expectation. According to Awakn, its Phase III trial is expected to occur across 7 National Health Service (NHS) sites in the U.K. and be conducted in conjunction with the University of Exeter. Anticipated to be the largest ketamine-assisted therapy clinical trial ever commenced, 280 people with severe AUD will be recruited and randomly allocated into two groups.
The first group will be given ketamine in conjunction with Awakn's proprietary psychological therapy developed for its Phase II trial. The other group will be assigned only a very low dose of ketamine and a seven-session education package about the harmful effects of alcohol. A positive trial outcome will be a transformational moment for the company as it would provide evidence of the therapeutics' ability to treat AUD, which would likely position it as a front-line option for that indication in the U.K.
That wouldn't only be great news for addiction patients; the U.K.'s NHS would also benefit significantly from an alternative addiction treatment added to its arsenal. Costs related to alcohol misuse are estimated to drain the NHS of roughly £3.5 billion yearly, and that takes into account utilizing approved and used treatment options with high relapse rates. Notably, while AWKNF's ketamine-assisted therapy is available off-label via its clinics, an official regulatory approval to treat AUD would vastly broaden AWKNF's revenue-generating reach by making the prescription more mainstream, accepted and written by providers.
Don't think U.K. officials aren't taking this approach to treatment seriously. The National Institute for Health and Care Research (NIHR), a U.K. government agency, has agreed to fund 66% of the trial's estimated CA$3.75 million cost, making it the only known Phase III psychedelic clinical trial ever to receive government funding.
This shows that regulatory and legislative bodies understand that conventional treatment methods aren't enough to combat the growing mental health crisis. Rather than stay on the sidelines, they are eager and willing participants to help discover newer and more effective ways to treat a significant part of their population. More importantly, it instills confidence that Awakn Life Sciences is one of the best candidates to further examine and exploit the potential of psychedelic-based treatments.
A Milestone-Fueled Rally In Progress
Remember, the U.K. government's support of Awakn Life Sciences' Phase III trial fuels speculation that they may be the best candidate to open the global floodgates to a transformative new field of medicine. By the way, analysts agree, and they highlight multiple reasons that support their bullish sentiment and much higher than current price targets.
First, a positive outcome to its lead program's upcoming Phase III trial could position the company in its best position ever for expansion across Europe. With addiction patients demonstrating an 84% increase in substance-abstinence rates following its Phase II a/b trial, further validation of the treatment's efficacy could significantly expand the company's available and willing audience.
In fact, the near-term Phase III trial could expedite Awakn's intentions to break into the North American market. The company has announced its plans to hold a pre-IND meeting with the FDA in 2023 regarding its proprietary therapeutics for treating AUD. Should all go as planned, Awakn said it will move to submit IND and Breakthrough Therapy designation applications to the FDA, critical steps in securing regulatory and ethical approval for the U.S. arm of its lead program.
There's still more to appreciate. In addition to near-term catalysts in the crosshairs, AWKNF has only about 17 million shares trading in its public float, a low-float cap structure that could play well into the next leg of a rally once expected milestones get announced – such as the commencement of its Phase III trial. Also, remember that analysts are modeling for a bullish breakout, setting price targets for AWKNF stock as high as $8 and $10, which from current levels, represents an upside potential of over 2100%. Before the February spike, that return could have been as high as 3900%, showing that Awakn stock could already be in play.
And with innovative 21st-century therapeutics in development, ILAP designation, government funding support, collaborative partnerships, and a low trading float, investors taking advantage of current share prices appear to be one thing in particular- timely to the opportunity.
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