Small Cap Psychedelic Play Vying for Future Leadership in Addiction Treatment (AXSM, AWKNF, BICX, OPNT, ALKS, PFE, AMPH, OMER)

The addiction treatment space has been pummeled along with everything else in the growth side of the stock market so far in 2022. For long-term investors, this could represent a huge gift, especially as some of the stocks in this space are also working in new domains and technologies, including psychedelic treatment strategies that may offer enormous long-term potential (1).

The market is currently offering these stocks at deep discount prices, which equates to a low-risk entry opportunity with the potential for lotto ticket type returns at the best-case end of the outcome distribution.

Substance abuse got worse during the pandemic (2). People were isolated and stressed. Supportive social safety nets broke down. But supply chains for opioids, alcohol, and other dangerous and addictive substances didn’t miss a beat. As a result, we saw an unfortunate boom in addiction over the past two years.

Now, on the other side of that terrible period, we face a challenge. And there are a host of companies working to see us through that challenge and reverse the damage.

For investors willing to speculate, there are a number of promising names in the addiction treatment space that present interesting opportunities, including Axsome Therapeutics Inc. (Nasdaq:AXSM), BioCorRx Inc. (OTC US:BICX), Opiant Pharmaceuticals Inc. (Nasdaq:OPNT), Alkermes PLC (Nasdaq:ALKS), Pfizer Inc. (NYSE:PFE), Amphastar Pharmaceuticals Inc. (Nasdaq:AMPH), and Omeros Corp. (Nasdaq:OMER).

However, there is one lesser-known small-cap that could end up being perhaps the most interesting opportunity in the space: Awakn Life Sciences Corp. (OTC US:AWKNF).

AWKNF is a biotechnology company researching, developing, and commercializing therapeutics to treat addiction with a focus on Alcohol Use Disorder.

This is a pure-play psychedelic company focused on treating addiction. It also sports a world-renowned management team, including all-star Prof. David Nutt, a differentiated clinic strategy leveraging the only clinical trial-backed ketamine-assisted therapy protocol for Alcohol Use Disorder (KARE), and a de-risked drug development pathway – its lead candidate is MDMA for Alcohol Use Disorder (AUD), which is currently in phase 2.

A recent research report from Stifel gives the stock a very bullish price target of $8.00 (CAD) — a huge 500% jump from Awakn’s current price of USD $1.05. According to Stifel’s analyst, Awakn offers a differentiated investment option in the psychedelic medicine space by combining its ketamine therapy protocol and backed by its clinical trial data. (4)

Awakn Life Sciences Corp. (OTC US:AWKNF) most recently announced the filing of a Patent Cooperation Treaty (PCT) application for the treatment of behavioral addictions with ketamine and ketamine-assisted psychotherapy. The successful completion of Awakn’s behavioral addictions study was announced last week and the data provided from the study was used in the patent filing. The pilot study investigated ketamine as a potential new treatment approach for Gambling Disorder, Internet Gaming Disorder, Compulsive Sexual Behavior Disorder and Binge Eating Disorder.

According to the company’s release, the PCT covers all behavioral addictions or any recognized disorder or condition with similar compulsive symptoms to those in the study. If granted, the patent claims would give Awakn exclusive rights to use ketamine and ketamine-assisted therapy for the treatment of behavioral addictions. With no effective pharmacological treatments available globally at present for behavioral addictions, the study results and the patent filing position Awakn at the forefront of the industry at a time when rates of behavioral addictions are increasing at an alarming pace and sufferers have few treatment options which deliver poor outcomes.

As noted by the company, the promising results from the pilot study showed a reduction of symptoms for some participants, with some participants no longer meeting the criteria for a diagnosis. Some individuals also showed a reduction of the symptoms of a comorbid psychiatric condition, such as depression or anxiety. The treatment was also well tolerated with no safety concerns.

Awakn CEO Anthony Tennyson commented “Today’s news demonstrates our focus on researching, developing and commercializing therapeutics to treat addiction.  A core part of our efforts is to continually strengthen our IP portfolio as we work to bring effective therapies to chronic addiction sufferers in desperate need. To be forging a path to find an effective treatment for such a vast unmet medical need is critical and an effort we are very proud to be a part of.”

Awakn Life Sciences Corp. (OTC US:AWKNF) shares have been tumbling along with the rest of the biotech space and growth stocks, more broadly. Shares pierced the $1 support zone in April, but have seen some potential accumulation bidding start to step in – average volume increased in May and shares moved sideways after plummeting during the first four months of the year (6). RSI has been hovering under 50 – and as low as 25 – during that period, which signals a bullish scenario according to traditional technical analysis precepts.

References:

1. https://www.technologynetworks.com/neuroscience/articles/how-can-psychedelics-be-used-to-treat-addiction-352645

2. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/substance-abuse-got-worse-amid-pandemic-and-remote-work.aspx

3. https://awaknlifesciences.com/

4. https://microdose.buzz/news/stifel-initiates-positive-coverage-on-awakn-life-sciences/

5. https://www.otcmarkets.com/stock/AWKNF/news/Awakn-Life-Sciences-Files-Patent-Cooperation-Treaty-PCT-Application-for-the-Treatment-of-Behavioral-Addictions?id=358780

6. https://www.tradingview.com/

7. https://www.investopedia.com/terms/r/rsi.asp

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).