Healthcare company wants $17.5 billion stake in addiction treatment industry :: InvestMacro

source: Jason McCarthy 07/14/2022

One healthcare company. It is currently classified as a buy-and-hold share of the $17.5 billion addiction treatment industry after a recent study showed that drug-assisted psychotherapy showed a significant reduction in alcohol use, according to a Maxim Group research report.

Awakn Life Sciences Corp. (AWKN: NEO; AWKNF: OTCQB) is a biotech company that uses psychedelics in combination with psychotherapy to treat things like alcohol use disorder (AUD) and depression. The company already generates revenue from a small number of drug treatment clinics and is considering licensing its treatments to third-party clinics.

Jason McCarthy, Equity Research Analyst Maxim, writes that addiction is a major public health challenge as substance addiction affects about 15-20% of the population in the United States and Europe, and drives a $17.5 billion ($17.5 billion) treatment industry, a fast-track treatment industry. It is growing and expected to reach $31 billion by 2027. The Australian dollar makes up 30% of this market and affects 5% of the world’s population.”

McCarthy explained that “current treatments for alcohol use disorder have limited efficacy, with only a small portion of patients with AUD seeking treatment (about 15%).”

McCarthy noted that Awakn’s P2a Bristol Imperial MDMA in Alcoholism (BIMA) study showed a significant reduction in the alcohol intake of its participants.

At nine months, only 21% of participants in the P2a study were still drinking the amount recommended by their doctor (14 units per week), compared to 75% of people in the observational study. Overall, patients reduced alcohol intake to about 18.7 units per week after nine months after detox, down from 130.6 units per week before treatment.

With ketamine-assisted therapy, Awakn has licensed the only P2-approved protocol for AUD, which gives the company an advantage over other companies offering similar treatments.

“Given that special addiction treatment comes with a failure rate of 70%-80% and treatment can cost north of $30,000, Awakn’s opportunity to improve this model is significant,” McCarthy wrote.

Awakn is currently on the path of developing and strengthening its infrastructure. The company’s goal is to open 20 clinics over the next few years, with each clinic achieving from £1.75 million (US$2.1 million) to £3 million (US$3.6 million), depending on the size of the clinic. Awakn also sees the possibility of licensing its protocols to third party clinics, most of which will be in the US

McCarthy noted, “Awakn is unique in psychedelics, integrating clinics with both conventional psychedelic development and NCEs, creating synergies for both drug development and commercial release. In our view, the importance of acquiring both is not fully assessed at current market value.”

Awakn’s market capitalization was C$23.15 million as of July 12.

McCarthy reports that in F1Q22, Awakn had a net loss of C$1.2 million.

In June 2021, Awakn was listed on the NEO Stock Exchange following a reverse takeover (RTO) of a Canadian company. It was later listed on US OTCQB in August. In collaboration with RTO, Awakn raised C$8.3 million in a private placement.

New York City-based Maxim Group has given Awakn a Buy rating with a target price of $4 a share. Awakn shares closed at C$0.86 on July 12.

1) Catherine DiGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. They or their family members own the securities of the following companies mentioned in the article: None. Their salaries or their family members are paid by the following companies mentioned in this article: None.

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Disclosures to Maxim Group, AWAKN Life Sciences Corp. September 1, 2022

I, Jason McCarthy, Ph.D., certify that the opinions expressed in this research report accurately reflect my personal views on the topic of security and source. Furthermore, no part of my salary was or would be directly or indirectly related to the specific recommendation or opinions expressed in this research report.

I, Michael Okonowitz, certify that the opinions expressed in this research report accurately reflect my personal views on the security of the subject and source. Furthermore, no part of my salary was or would be directly or indirectly related to the specific recommendation or opinions expressed in this research report.

The research analyst(s) primarily responsible for preparing this research report received compensation based on various factors, including the company’s total revenue, a portion of which is generated through investment banking activities.

Maxim Group expects to receive or intend to claim compensation for investment banking services from Awakn Life Sciences Corp. In the next three months.

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