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Healthcare Co. Wants Share of $17.5B Addiction Treatment Industry

Source: Jason McCarthy

 

July 15, 2022 (Investorideas.com Newswire) One healthcare co. is currently rated a Buy and is making a push for a share of the $17.5-billion addiction treatment industry after a recent study showed its psychedelic-assisted psychotherapy treatment showed a significant decrease in alcohol use, noted a Maxim Group equity research report.


Awakn Life Sciences Corp. (AWKN:NEO; AWKNF:OTCQB) is a biotechnology company that uses psychedelics in combination with psychotherapy to treat things like Alcohol Use Disorder (AUD) and depression. The company is already generating revenue from a small number of psychedelic treatment clinics and is considering licensing its treatments to third-party clinics.

Maxim Equity Research Analyst Jason McCarthy wrote that addiction is a significant public health challenge with substance addiction impacting around 15-20% of the population in the U.S. and Europe, and "driving a $17.5-billion ($17.5B) treatment industry, which is rapidly growing and is expected to reach $31B by 2027. AUD makes up 30% of this market and impacts 5% of the global population."

McCarthy explained that "current therapies for alcohol use disorder have limited effectiveness with only a small portion of patients with AUD ever seeking treatment (~15%)."

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

In nine months, only 21% of those in the P2a study were still drinking over the doctor’s recommended amount (14 units per week), compared with 75% of the people in the observational study. Overall, patients lowered their alcohol intake to around 18.7 units per week after nine months post-detox, down from 130.6 units per week before treatment.

With ketamine-assisted therapy, Awakn has licensed the only P2-validated protocol for AUD, which gives the company an advantage versus other companies providing similar therapeutics.

"Considering that private addiction treatment comes with a 70%-80% fail rate and treatment can cost north of $30K, the opportunity for Awakn to improve this model is significant," McCarthy wrote.

Awakn is currently on a path to developing and fortifying its infrastructure. The company's goal is to open 20 clinics over the next few years, with each clinic generating £1.75 million (US$2.1M) to £3M (US$3.6M) in revenue, depending on clinic size. Awakn also sees the possibility of licensing its protocols to third-party clinics, most of which would be in the U.S.

McCarthy pointed out that "Awakn is unique in psychedelics, integrating clinics with development of both traditional psychedelics and NCEs, and creating synergies for both drug development and commercial launch. The importance of having both, in our view, is not fully valued at the current market cap."

Awakn's market cap was CA$23.15M as of the close on July 12.

McCarthy reports that in F1Q22, Awakn had a net loss of CA$1.2M.

In June 2021, Awakn listed on the NEO exchange after a reverse-takeover (RTO) of a Canadian company. It later listed on America's OTCQB in August. In association with the RTO, Awakn raised CA$8.3M in a private placement.

New York City-based Maxim Group gave Awakn a Buy rating with a $4 per share target price. Awakn shares closed at CA$0.86 on July 12.

Disclosures:

1) Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. They or members of their household own securities of the following companies mentioned in the article: None. They or members of their 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.

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. 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. 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.

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

I, Jason McCarthy, Ph.D., attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, 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.

I, Michael Okunewitch, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, 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.

The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.

Maxim Group expects to receive or intends to seek compensation for investment banking services from Awakn Life Sciences Corp. in the next 3 months.

Some companies that Maxim Group LLC follows are emerging growth companies whose securities typically involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Maxim Group LLC research reports may not be suitable for some investors. Investors must make their own determination as to the appropriateness of an investment in any securities referred to herein, based on their specific investment objectives, financial status and risk tolerance.

This communication is neither an offer to sell nor a solicitation of an offer to buy any securities mentioned herein. This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or disclosed to another party, without the prior written consent of Maxim Group, LLC ("Maxim"). Information and opinions presented in this report have been obtained or derived from sources believed by Maxim to be reliable, but Maxim makes no representation as to their accuracy or completeness. The aforementioned sentence does not apply to the disclosures required by FINRA Rule 2241.

Maxim accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Maxim. This report is not to be relied upon in substitution for the exercise of independent judgment. Maxim may have issued, and may in the future issue, other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views and analytical methods of the analysts who prepared them and Maxim is under no obligation to ensure that such other reports are brought to the attention of any recipient of this report.

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