Just over one year ago, the next great medical bull market was born: psy-che-delics. Ever since Compass Pathways became the first psy-che-delic stock to go public when it IPO’d on the NASDAQ, more and more companies in the space have gone public and gone scorched earth on the market.
Most notably, we saw MindMed rampage an incredible 240.91% in just a year, between $0.66 on Oct. 6, 2020, to its closing price of $2.25 a year later on Oct. 6, 2021.(1)
Want to know why investors are going so crazy over psych-e-delics stocks and why we could be overdue for yet another broad rally?
It’s simple. The Mental Health Crisis has become a pandemic and continues to deteriorate.
Addiction is currently a poorly treated, chronic medical disease involving complex interactions among brain circuits, the environment, and an individual’s life experiences. Individuals with addiction use substances or engage in behaviors that become compulsive and often continue despite harmful consequences.
The worst part? The medical community considers it one of the world’s most significant unmet needs. Substance addictions, like Alcohol Use Disorder (AUD), To-bacc-o Use Disorder (TUD), Opioid Use Disorder (OUD), and behavioral addictions like Gambling Disorder (GD), Compulsive Sexual Behaviour (CSB), and Binge Eating Disorder (BED), affect a significant proportion of the global adult population.
With considerable progress for psy-che-delic dr-ug companies in 2021 in both d-rug and IP development, massive capital is flowing into the sector from institutional investors. Not to mention, more and more positive media coverage of psy-che-delics is causing a seismic shift in attitudes. People are waking up to the potential.
After all, the first actively managed ETF dedicated to psy-che-delics just joined the NYSE- The AdvisorShares Psy-che-delics ETF.(3)
Here’s why. The holy grail for biotech stocks is to develop something so cutting-edge and revolutionary that it could change the course of medicine.
We’ve seen it with biotech plays like Moderna and BioNTech. They both developed groundbreaking mRNA vaccines to stomp out the worst health crisis we’ve seen in over a century. Moderna, on Mar 20, 2020, was a no-name company trading at $30.05. By the close on Oct 7, 2021, the stock was trading at $309.36. For those not counting, that’s a stunning 929.48% breakout.(4)
On Mar 12, 2020, BioNTech was a little-known experimental German biotech company trading at $28.00.(5) It had a deal with Pfizer from 2018 to develop mRNA vaccines for the flu, but nobody truly cared- that was until they had to.(6)
By the market close on Oct 7, 2021(5) BioNTech was at $246.57- a stunning 780.61% move.
Awakn Life Sciences (NEO: AWKN) (OTCQB: AWKNF) could accomplish the same type of thing for addiction. It’s a newly public disruptor developing a potentially groundbreaking approach to treat substance and behavioral addiction. And it’s already seen some jaw-dropping momentum.
The mass media could already be waking up to the revolution at hand as well.
So as buzz continues to grow for the sector, and notably this company, we believe we’ve found five reasons why it could pose unlimited potential moving forward.
Reason #1 – Current Addiction Treatments Are Not Effective…Creating a Lucrative Opening
We are at a crisis point in the field of mental health provision and addiction treatment.
As we mentioned earlier, addiction of all kinds is regarded within the medical community as one of the world’s most severe unmet medical needs. It probably affects way more of the world’s adult population than you realize too.
Let’s look at how bad it’s gotten with substance addiction specifically, an industry worth $17 billion in 2019 that’s projected to increase to $31 billion by 2027.(7)
- More than 20% of the global population suffers from substance addiction alone, that’s more than 1.3 billion people.(7)
- North America accounts for 40% of this market, Europe 30%, and the rest of the World 30%(7)
- Alcohol Use Disorder (AUD) alone affects 5% of the global population.(8)
- Behavioral addictions also affect a significant minority of the population, most of which are without any pharmacological treatments.
Nothing seems to be working. For example, when it comes to AUD, with only 16% of people seeking treatment and even with the best-in-class treatments available, relapse rates are very high. 75% of people have relapsed within 12 months.(8)
Unlike other medical disciplines, psychiatry focuses on maintenance rather than cure, and symptom suppression rather than addressing the root causes of these illnesses.
That’s where psy-che-delics and psy-che-delic-assisted psychotherapy can play a potentially revolutionary role. Simply put, it could radically change addiction treatment with significantly better patient outcomes in unprecedented ways.
This is precisely why a biotech innovator like Awakn Life Sciences (NEO: AWKN) (OTCQB: AWKNF) could become the leading face of transforming in this underserved market. All via clinical operations, R&D, and delivering psy-che-delic medicine.
This is bar-none, a significant current, and future market opportunity.
Reason #2 – A Potentially Revolutionary Approach and Business Model
Awakn is developing revolutionary new treatments for both substance and behavioral addictions. By addressing these addictions with new proprietary therapeutics (dr-ugs and therapies) used in combined, it approaches the treatment of addiction in a radically different way.
How? Based on new research, the company’s dr-ugs will target the brain circuits that drive addiction through multiple receptors rather than a single dr-ug receptordri. These circuits control the behavioral drivers of addiction. By focusing on circuit mechanisms rather than isolated receptors, Awakn’s approach could be effective in treating both substance and behavioral addictions.
This disruption allows the individual to escape from repetitive, addictive behaviors and thoughts and aids individuals to engage with Awakn’s psychotherapy to enable lasting positive changes.
Awakn’s proprietary therapies work in conjunction with its dr-ugs. Together, they enable patients to regain control over their lives. All while helping them learn new, more adaptive ways to respond to addictive urges, cravings, and the underlying psychological processes that drive them.
This could revolutionize the way we treat addiction very shortly. Much of that can be credited with Awakn’s cutting-edge business model that focuses on two precise business functions- Development and Delivery.
- Research & Development of therapeutics (dr-ugs and therapies to be used in combination) to treat substance & behavioral addictions.
- Research and development of enabling technologies to improve consistency and efficiency of psy-che-delic-assisted psychotherapy for treating substance & behavioral addictions.
- Awakn is the only company in the world providing evidence-backed keta-mine-assisted psychotherapy for AUD. They have acquired the rights to a Phase IIab trial using Keta-mine to reduce Alcoholic relapse (led by Prof. Celia Morgan, a world-leading ket-a-mine expert).
- The company has set short, medium, and longer-term therapeutic plans for treating patients.
- This refers to the company’s multiple revenue streams.
- Clinic Revenue- Starting in 2021. The target is 20 clinics by the end of 2024. Each clinic is forecast to generate a $5.45 million (£4m) top line, with total forecast revenue of $109 million (£80m).(8)
- This refers to the company’s multiple revenue streams.
- Licensing Partnership Revenue– Anticipated to start in 2022 (Outside of U.K. and Europe)(8)
- Therapeutic Commercialization– Anticipated by 2025+.(8)
- Dr-ug Discovery Revenue- Anticipated in 2028+.(7)
Yet, as exciting as these prospects for the company look, what if I told you that its real x-factor could be…
Reason #3 – Groundbreaking Intellectual Property Supported By World-Class Leadership
What could genuinely set Awakn apart from the other upstarts in this skyrocketing industry is its robust intellectual property (IP) and world-renowned leadership.
Let’s start with the IP. Awakn truly has a clear IP development pathway based on psy-che-delic dr-ug discovery and therapy development, both targeting addiction. (7)
It could hold the cards towards transforming the way we treat addiction with a one-of-a-kind competitive edge. Awakn’s IP boasts the following:(8)
- A two-stage preclinical dr-ug discovery program developing next-generation psy-che-delic medicines to treat addiction. The first stage is due to be completed and reported in early Q4 2021.
- 6 years of proprietary research data procured from Prof. David Nutt’s research company Equasy Enterprises, including details of potentially faster-acting MD-MA and Keta-mine-like molecules and components of newly discovered modes of action for MD-MA.
- 10 patent filings covering multiple chemical series and clinical targets.
- A completed phase IIab trial for Keta-mine-Assisted Psychotherapy to treat Alcohol Use Disorder (AUD).
- A planned phase IIb trial for MD-MA as a treatment for AUD with ethics approval forecast for Q4 2021.
- Exclusive rights to the world’s first published study assessing MD-MA-Assisted Psychotherapy as a treatment for AUD from Imperial College London.
What makes this genuinely seem like a company that would actually DO something with this intellectual property, rather than just hold onto it and talk about it, is its leadership team.
It has THE leading scientific and medical team in the industry, with deep expertise in psy-che-delics, biotech, and capital markets, such as Prof. David Nutt, Dr. Ben Sessa, Prof. Celia Morgan,, Dr. Michael Mithoefer, Ann Mithoefer, and Prof. Matt Johnson.(8)
Most importantly, Awakn’s leadership consists of global research leaders in the field of psy-che-delic treatments for addiction. Most notably, Prof. David Nutt, Awakns’s Chief Research Officer is the world’s leading expert in addiction Dr. Ben Sessa, the company’s Chief Medical Officer, led the world’s only MD-MA-Assisted Psychotherapy and AUD study (BIMA). Prof. Celia Morgan, the company’s Head of Keta-mine-Assisted Psychotherapy, also led the world’s only Keta-mine-Assisted Psychotherapy AUD study (KARE).(7)
Sound like a top psy-che-delics play to you yet?
Reason #4 – This Ground-Floor Stock Has Had Scorching Momentum Since July…Is More On The Way?
All of what Awakn is doing looks all the more impressive when you realize that the AWKN stock is in its infancy. It’s only traded on the NEO since June 23, 2021(9) and on the OTC since August 3, 2021.(10) So we’re talking a true blue ground-floor play here. In an industry that’s forecasted to potentially explode into a $100 billion market(11) with targeted treatment markets, beyond just addiction, that could be worth a combined $330 billion.(12)
So the fact that this company has rallied roughly 36.67% from a low of CAD $1.50 on Jul 20, 2021, to its Oct 7, 2021 close of CAD $2.05 is immensely encouraging.(9)
Moreover, with a market cap of 49.71M and a float of 18.73M as of Oct 7, 2021, this company has all the makings of a small-cap disruptor with plenty of blue sky potential. Its tightly held share structure, with 11.59% held by Insiders and 8.54% held by Institutions, certainly enhances the case as well.(13)
Reason #5 – Even Though It’s Newly Public, Its Recent Strategic Moves and Partnerships Are Staggering
On Sep 15, 2021, Awakn announced that it closed the July 31 ‘21 Q well capitalized with approximately $8.8M of cash on hand.(14)
In addition, it also proudly reported several impressive business highlights, including(14)
- Filed provisional patent applications in the U.S. for two next-generation novel MD-MA-derived new chemical entities, AWKN001 and AWKN002, further strengthening the company’s intellectual property portfolio and pipeline for the treatment of a broad range of addictions, including, but not limited to alcohol, opioid and behavioral, such as gambling.
- Initiated a new chemical entity (NCE) dr-ug discovery program to strengthen Awakn’s pipeline to treat a broad range of substance and behavioral addictions. The program is led by Prof David Nutt. The first project in the program is a two-stage ten-month Hit to Lead (HtL) dr-ug discovery program, with results from the first stage due in early Q4 2021.
- Initiated a Keta-mine research program designed to demonstrate the effectiveness of keta-mine-assisted psychotherapy against multiple addictions, initially focusing on treating AUD and gambling addiction.
- Signed a 10-year lease to open Awakn Clinics London, a psy-che-delic-focused therapy center to treat addiction and other mental health conditions. Awakn Clinics London will be approximately 4,419 square feet and will host eight treatment rooms.
- Established preclinical and clinical expert advisory boards by separating its current advisory board while adding Prof. Stephen Husbands (University of Bath), Prof. Harriet de Wit (University of Chicago), and Prof Kevin Fone (University of Nottingham). Each of the two boards is to be chaired by Professor David Nutt, Chief Research Officer.
Yet, the company has not rested on its laurels. Since that announcement, it has accomplished the following:
- Sep 16, 2021: Acquired a leading keta-mine-assisted psychotherapy clinic in Norway. It acquired a 100% interest in Axonklinikken AS (“Axon”), which will be renamed ‘Awakn Oslo AS. This acquisition intends to help Awakn accelerate its clinic rollout program. Awakn will now parallel path its regional expansion plans in the Nordics (Norway, Sweden, Denmark, Finland, and Iceland) and the U.K. & Ireland, territories with a combined 100m population and US$5trn GDP.
This clinic plans to serve as Awakn’s regional hub for expansion across the Nordics. This should significantly support the two other clinics Awakn plans to have operational this fiscal year (Bristol and London). All of these facilities are expected to begin generating revenue in the near term.
On Oct 5, 2021, the Axonklinikken AS acquisition officially closed.(17)
- Sep 23, 2021: Acquired exclusive rights to MD-MA Research from Imperial College London, one of the world’s leading psy-che-delics research centers. From the phase IIa Bristol Imperial MDMA in Alcoholism Study (BIMA), this research was the world’s first published study assessing MD-MA-assisted psychotherapy as an addiction treatment.
The results from this study, published in February 2021, indicated that MD-MA can be more effective at treating AUD. MD-MA treatments showed a 20% relapse rate within the first nine months, compared to a 75% relapse rate with traditional therapies treatments.
This data is valuable because it can assist Awakn’s progress by enabling a better design and more efficient execution of its clinical program. The company can now accelerate its clinical research into a phase IIb randomized controlled trial (RCT) in the U.K. This is part of its strategy to secure marketing authorization for MDMA to treat AUD in both the U.K. and the European Union, a 400 million person territory. (16)
These moves may only be the start of Awakn’s worldwide conquest. By Q4 2021 and H1 2022, it anticipates even more expansion with the following moves:(8)
- In vitro data due from Awakn’s HtL dr-ug discovery program – early Q4 2021.
- In vivo data due from Awakn’s HtL dr-ug discovery program – Q1 2022.
- Publication of the results of our acquired Phase II ab for ketamine-assisted psychotherapy for AUD in Q4 2021.
- Completion of Gambling addiction study – H1 2022.
- Ethics and regulatory approval for world’s only phase IIb trial for MDMA to treat AUD.
- Awakn’s clinical rollout plan helping the company become the leading authority in the development and delivery of psy-che-delic-assisted psychotherapy clinics in the U.K. and across Europe
- Clinics to open in 2021: Oslo, Bristol & London.
- Clinics to open in 2022: Manchester, London 2, Birmingham, Dublin, Nordics 2, UK x 1 more.
- Clinics to open in 2023+: Nordics x3, DACH, Benelux, France, Iberia, Eastern Europe.
So Here’s The Key Takeaway…
Look. With a market cap of only 49.71M(13), this company could transform a potential $31 billion substance addiction market.(7)
Does that not sound like some serious mispricing to you?
How about this, then. It’s in the thick of a psy-che-delics industry that could explode into a $100 billion market(11) with targeted treatment markets, beyond just addiction, potentially worth a cool $330 billion.(12)
This could literally mean unlimited commercial potential in numerous multi-billion-dollar markets. Existing traditional treatments have failed repeatedly, and the world is literally on its knees, begging for companies like Awakn Life Sciences (NEO: AWKN) (OTCQB: AWKNF).
The fact that the AWKN stock rallied roughly 36.67% from Jul 20, 202 to its Oct 7, 2021 close is impressive and all.(9)
But it might only be the start.
Media coverage continues to gush about the potential for psy-che-delics, and Awakn absolutely has a compelling narrative. Especially when you realize what a ground floor play it is, with potentially revolutionary treatments and operations for some of the most underserved and suffering patients in the world.
As its discovery and delivery pipeline continue progressing, this is a company to unequivocally pay attention to NOW- BEFORE this medical revolution truly takes hold.
After all, remember how Moderna and BioNTech’s stocks started BEFORE mRNA vaccines were even available…and where they are now.
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