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Opportunity for Investors Found in Psychedelics Space

Source: Patrick R. Trucchio

 

September 28, 2022 (Investorideas.com Newswire) Treatment of alcohol use disorder with psychedelics plus therapy is effective, according to existing data, and the potential global market is large, noted an H.C. Wainwright & Co. report.


Awakn Life Sciences Corp. (AWKN:NEO; AWKNF:OTCQB) and Cybin Inc. (CYBN:NYSE American; CYBN:NEO) are best positioned to capitalize on the "robust potential of psychedelics in alcohol use disorder (AUD)," an estimated $20 billion-plus global market, purported H.C. Wainwright & Co. analyst Patrick Trucchio in a September 22, 2022 research note.

"With a potential addressable patient population in Western markets that exceeds 30 million people and with 10% or less of these patients in active treatment, the unmet medical need and opportunity for innovative approaches to treatment is very high," Trucchio wrote. "As such, we believe the potential for psychedelics with therapy to ameliorate AUD could represent a significant opportunity for drug sponsors, which is highly underappreciated by investors."

Two Leaders in the Space To Consider

Trucchio discussed Canada-based Awakn and Cybin, the two publicly traded biopharma companies that have announced AUD as a target indication. He noted both companies are worth an estimated $10 per share, "implying robust upside from current levels."

One of them, Awakn, is pursuing ketamine, an NMDA receptor antagonist, plus psychotherapy in a variety of addiction disorders as well as MDMA plus therapy for AUD.

The company's lead clinical program, Project Kestrel, is supported by the Phase 2 trial in which KARE, or ketamine in the reduction of alcoholic relapse, and psychotherapy were administered to 96 patients with severe AUD. In this trial, patients achieved, on average, 86% abstinence at six months post-treatment compared to 2% pre-trial and 25% with the current standard of care.

Next for the program is a Phase 3 trial in the United Kingdom (U.K.), 66% of the costs of which the U.K.'s National Institute for Health and Care agreed to cover. Up to 280 AUD patients will be enrolled, treated, and followed for six to 12 months.

"The study is expected to be the largest ketamine-assisted therapy clinical trial and the only psychedelic Phase 3 trial receiving government funding," Trucchio noted.

Awakn is also pursuing the use of MDMA plus therapy in AUD. The biopharma will explore a data licensing agreement with the U.S.-based Multidisciplinary Association for Psychedelic Studies, or MAPS, to support Awakn's Phase 2b and planned Phase 3 studies evaluating MDMA-assisted therapy for AUD in Europe.

The second company in the space Trucchio highlighted, Cybin, is currently evaluating deuterated psilocybin, CYB003, as a treatment for major depressive disorder. The biopharma is expected to expand this program into AUD if the Phase 1/2a study, now underway, shows the compound to be safe, well-tolerated, and efficacious. Phase 1 data are due out by year-end, Phase 2a data by mid-2023.

Data Support Use of Psychedelics in Treating AUD

Trucchio pointed out the results of three robustly conducted trials that individually evaluated ketamine (Awakn's Project Kestrel), MDMA (Imperial College London's Bristol Imperial MDMA in Alcoholism, or BIMA, study), and psilocybin (study by Bogenschutz, Ross, Bhatt, et al.) showed a benefit in AUD patients.

"What is consistent in the data is that when administered in the proper set and setting with psychotherapy, psychoactive substances appear to ameliorate the cravings associated with AUD and thus, provide the potential for a significant reduction in heavy drinking days and even abstinence, both of which are approvable regulatory endpoints in the U.S. and Europe," Trucchio wrote.

Results of the Bogenschutz et al. study were just published in JAMA's Aug. 24, 2022 issue. The trial showed that over 32 weeks of observation, AUD patients treated with psilocybin plus therapy experienced "robust decreases in [their] percentage of heavy drinking days over and above those produced by active placebo and psychotherapy."

The clinical data supporting the use of psychedelics-assisted therapy in treating AUD and the size of the global AUD market bode well for Awakn and Cybin, which are pursuing the opportunity, and for investors in these companies that currently offer upside.

Disclosures:

1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Awakn Life Sciences Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: Awakn Life Sciences Corp. Please click here for more information.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Awakn Life Sciences Corp., a company mentioned in this article.

6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

Disclosures For H.C.Wainwright & Co., Awakn Life Sciences Corp a.nd Cybin Inc., September 22, 2022

H.C. Wainwright & Co, LLC (the "Firm") is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.

I, Patrick R. Trucchio, CFA , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. Important disclosures and charts can be found on our disclaimer website: https://hcwco.bluematrix.com/sellside/ Disclosures.action

The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously.

No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request.


H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report.

H.C. Wainwright & Co., LLC's and its affiliates' salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report. H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.

The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data on the company, industry or security discussed in the report. All opinions and estimates included in this report constitute the analyst's judgment as of the date of this report and are subject to change without notice.

Securities and other financial instruments discussed in this research report: may lose value; are not insured by the Federal Deposit Insurance Corporation; and are subject to investment risks, including possible loss of the principal amount invested.


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