A biotechnology company operating in the promising niche of psychedelic medicine as a treatment for addiction, Awakn Life Sciences Corp. (OTCQB: AWKNF) (NEO:AWKN) has shown promising results across its research and development as well as clinical operations. Now that medicinal cannabis has become legalized in countries around the world, many believe that psychedelic stocks could be the next wave of investment. With this in mind, AWKNF could hold long-term promise as it works to develop treatments for the unsolved issue of addiction. In light of the global demand for such treatments, AWKNF could be one of the top penny stocks to watch.
AWKNF Stock Catalysts
While there are many programs seeking to treat the substance and behavioral addictions which affect over 1.3 billion people worldwide – these all have high failure rates. Thanks to its research, AWKNF aspires to become a market leader in effective addiction treatment. Its near-term focus is on Alcohol Use Disorder (AUD) treatment with its clinical trials having already shown that its radical approach has the potential to be more effective than any alcohol addiction treatment currently available.
This is done through Awakn’s drugs which target the brain circuits driving addiction instead of focusing on isolated receptors like most other treatments. The therapy being used in conjunction with these drugs is critical to its success and AWKNF’s approach has the potential to treat both substance and behavioral addictions. As AWKNF develops the psychedelic therapeutics – drugs and therapies used in combination – to drive this shift in treatment, the company has the potential to capitalize on the world’s largest unmet medical need making it one of the top penny stocks in this niche.
With AUD affecting 390 million people globally, the need for effective treatment has never been more important. AWKNF recently completed its Phase IIa/b study for Ketamine–Assisted Therapy and is planning to start its Phase III study in late 2022 or early 2023. Meanwhile its MDMA–Assisted Therapy for treating AUD is currently in planning for its Phase IIb study.
These trials could be pivotal for the company which has already published the promising results of its earlier Ketamine-assisted therapy for AUD trials in the American Journal of Psychiatry. The results of these trials showed 86% abstinence at 6 months post treatment versus 2% abstinence prior to the trial. Based on this success, the company is eager to move on to its Phase III trials.
However, an important part of the company’s operations is its ability to generate revenue while still in the research and development phase. Awakn has 3 clinics in operation – one located in Oslo, Norway, and two located in the UK cities of London and Bristol. Through these clinics the company provides treatment programs for addiction and mental health conditions like depression and PTSD. Given the specialized treatment it offers, the company expects to generate approximately CA$5 million per clinic per year and hopes to expand to 15 – 20 clinics. These impressive revenue streams could make AWKNF one of the top penny stocks in the addiction treatment market.
The company is already treating clients for AUD with its ketamine–assisted therapy protocol at these clinics. AWKNF also plans to use its therapy to treat Behavioral Addictions at its clinics based on the success of its earlier Ketamine treatment study. This could be very profitable for the company as there currently are no pharmacological treatments for behavioral addictions despite its rates increasing at an alarming rate.
Its earlier study covered a range of behavioral addictions such as Gambling Disorder, Internet Gaming Disorder, Binge Eating Disorder, and Compulsive Sexual Behavior. The world’s first study of this kind, it was led by Prof. Celia Morgan – an internationally respected expert in the therapeutic use of ketamine and Awakn’s Head of ketamine-assisted therapy.
AWKNF believes that these treatments for behavioral addictions can be introduced into its clinics in 2023 after it launches its licensing partnerships business. Through this business, AWKNF will license out its Ketamine-assisted therapy for AUD treatments to existing addiction clinics across North America in the second half of 2022 which is definitely a catalyst to watch for.
Looking towards the future, AWKNF plans to apply for regulatory approval/marketing authorization for its proprietary therapeutics to treat Alcohol Use Disorder in the UK after completing its Phase III trial. To expand and disrupt the North American addiction treatment market, AWKNF also intends to develop its FDA research strategy while offering access to its proprietary IP, training, and systems to licensing partners outside of the UK and Europe.
To fund the costs of its Phase III trial, the company has already applied for a UK State Grant which would cover 66% of the costs. The decision is forecast to be released very soon and if granted to AWKNF it could be a major catalyst for the company.
As one of the top penny stocks in this niche, the company is making steady progress in its research with a deep pipeline of projects and several behavioral disorder studies currently in their preclinical or clinical development phases. With 10 patent filings covering multiple chemical series and clinical targets, AWKNF could emerge ahead of its competitors as it targets the unmet needs of addiction treatment.
AWKNF Stock Financials
According to its Q1 report, AWKNF has CA$2.8 million in cash on hand which contributes to its total current assets worth CA$3.2 million. Its total current liabilities amount to CA$2.3 million. For the quarter, AWKNF reported CA$253,154 in revenue which was a 24% increase QoQ. Despite its expenses, the company reported no debt which is a promising sign.
Media Sentiment
@Big19Dream is bullish that the market will take notice of AWKNF given that it has made the same progress as CMPS despite having a lower market cap.
Technical Analysis
It appears that AWKNF has been backsliding since mid-January but has only recently listed on the OTC exchange since it was originally listed on the Canadian NEO exchange. The stock is currently trading at $.44 with a support at .396. Like most of the market, AWKNF has become bottomed out and is at a new low.
It shows resistances at .936 and 1.05. Since the stock has dropped 57% in June alone, it could be ready to rebound quickly considering its low float. The RSI is also oversold at 38 and the MACD is bullish. Accumulation shows a steep drop in June but with a slight uptick recently.
As is, AWKNF has a market cap of only $11.9 million with an OS of 26.9 million. Insider ownership is 31.23% of shares which leaves an unrestricted OS of only 10 million shares. Even fully diluted, the company would have only 31.9 million shares outstanding which is unique compared to most penny stocks.
AWKNF Stock Forecast
Given its position in this promising sector, AWKNF’s research and patents could pay off in the long-term as it seeks to capitalize on its work through partnerships globally. With three clinics already in operation, the company has a steady revenue stream from its operations which is an asset for a biotechnology company. Additionally, if it is granted the funding to conduct its Phase III research, then the company will be in a better financial position to pursue its long-term goals.
Considering the global market for Alcohol Use Disorder treatments, AWKNF is one of the top penny stocks in this market as it could capitalize on the unmet demand for effective treatments if its clinical trials prove successful. AWKNF could also see additional revenue streams from its behavioral disorder treatments in the near future as its research progresses. With this in mind, AWKNF could prove to be a valuable long-term hold.
But as with most biotech stocks, AWKNF will likely move on binary events such as successful clinical trials or regulatory approval. In light of its low float and share structure, AWKNF could be a stock to watch for more catalysts.
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