Solvonis Therapeutics PLC
Two Paths to Value: Comparing the Capital Demands of Poolbeg Pharma and Solvonis Therapeutics
By Alex Langton | 12 July 2025
It appears several of our members are eager for us to offer a view on Solvonis Therapeutics—not least because the company is active in the highly topical fields of Alcohol Use Disorder (AUD) and Post-Traumatic Stress Disorder (PTSD), both of which remain underserved by current pharmacological interventions.
Adding further intrigue is the identity of the covering analyst: none other than Karl Keegan (Second part of this article), known to some as either the wizard—or witch—behind the much-speculated initiation note on SkinBioTherapeutics. One can only hope that particular piece remains on hold until we have the benefit of Croda’s numbers being released and absorbed by the market—followed, we assume, by the note itself. But I digress.
Returning to the matter at hand, we felt it would be a worthwhile exercise to take a closer look at Singer Capital Markets’ recent note on Solvonis. The company’s positioning, pipeline, and valuation assumptions certainly warrant scrutiny, particularly given the ambitious upside targets being mooted. Let us then examine the thesis with an appropriately critical lens.
In a market teeming with biotech volatility, Solvonis Therapeutics remains one of AIM’s more intriguing speculative plays. On 11 July, the company announced a £1 million gross fundraise via direct subscription, with three of its largest shareholders participating at a 3.5% premium to market. Encouraging on multiple fronts. The proceeds are earmarked—not for ongoing clinical development—but for accelerating the firm’s AI-supported central nervous system (CNS) discovery platform.
While the support of cornerstone investors adds a veneer of confidence, this latest capital injection raises broader strategic and financial questions: is Solvonis doubling down on AI-led innovation to unlock near-term value, or merely pivoting to preserve optionality amid a dearth of clinical capital? One hope it is not playing the AI card, as it appears CapAI is.
Let’s compare two corporate strategies for creating value.
Solvonis Therapeutics is materially more capital-intensive and potentially dilutive to shareholders than Poolbeg Pharma. Here's a breakdown of the rationale:
Solvonis Therapeutics: High Capital Demands, Dilution Risk Elevated
Late-Stage Clinical Exposure: Solvonis’ initial assets—SVN-001 (Phase III) and SVN-002 (approaching Phase IIb)—place it squarely in a capital-intensive zone. Even with cost-sharing arrangements (e.g. UK Dept of Health support), pivotal trials in CNS disorders typically require £20–80 million, depending on geography, trial size, and endpoints.
Insufficient Funding: The recent £1 million raise is allocated to early-stage R&D, leaving late-stage assets unfunded. Unless the company secures strategic partners or non-dilutive grants, further equity raises are all but inevitable, increasing dilution risk.
Pre-Revenue Status: With no forecast revenue until at least 2027, the company remains reliant on external capital to fund both operations and clinical progression, compounding pressure on the cap table.
Poolbeg Pharma: Capital-Light by Design, Lower Dilution Profile
Out-Licensing Strategy: Poolbeg’s entire model is designed to avoid late-stage trial costs by partnering or out-licensing assets post-early validation. This enables it to generate income (e.g. upfronts, milestones) without absorbing the heavy financial burden of Phase II/III trials.
Strategic Collaborations: Recent deals, such as the oral delivery platform with a Nasdaq-listed biopharma, signal an ability to monetise without equity dilution.
Cash Conservation: Poolbeg has a disciplined approach to burn rate and does not require significant ongoing fundraising to maintain operations—thereby offering lower dilution risk to existing shareholders.
Reframing the Investment Narrative
Until recently, Solvonis’ value proposition was tightly anchored to its two lead clinical assets—SVN-001 and SVN-002—targeting Alcohol Use Disorder (AUD) and PTSD. With SVN-001 entering Phase III trials and SVN-002 nearing Phase IIb, one might expect capital raises to fuel these pivotal trials. Instead, the shift in allocation towards discovery-stage R&D may signal a recalibration of priorities—or, more pointedly, a recognition that current cash reserves cannot sustain late-stage trials.
Biotech veterans will be acutely aware of the capital intensity of Phase III development. CNS trials, particularly in addiction psychiatry, are resource-heavy undertakings with costs often ranging from £20 million to £80 million. Even modest Phase II trials typically require £5–15 million. By contrast, Solvonis’ latest raise barely moves the needle, covering only a fraction of its estimated trial budgets.
The AI Discovery Play: Substance or Sentiment?
Management’s decision to funnel funds into AI drug discovery targeting major depressive disorder and stimulant use disorder is not without merit. These are underserved, high-burden markets, with the global antidepressant space projected to reach £31 billion by 2034. Moreover, the lack of FDA-approved treatments for stimulant use disorders represents a clear unmet need.
Solvonis aims to address these gaps using an in-house platform that integrates compound libraries, predictive modelling, and translational tools. This is a fast-emerging space—where the fusion of AI and neuroscience has already drawn the interest of big pharma and venture capital. However, the commercial viability of AI-led discovery remains largely unproven. For now, such initiatives are long-dated calls on future optionality—not near-term revenue levers.
Clinical Success Probabilities: A Dose of Realism
Investors enticed by Solvonis’ upside must confront the sobering statistics underpinning CNS drug development. For addiction-related compounds, only ~16% of drugs advance from Phase II to III, and just ~39% of Phase III trials culminate in a regulatory filing. Thus, the implied probability of either SVN-001 or SVN-002 achieving approval stands at a slender 5–10%—even before accounting for commercial hurdles and FDA US biases.
This statistical reality heightens the importance of robust funding, trial design, and regulatory strategy—all areas where the current raise falls short in providing answers.
Vision Without Execution?
Solvonis’ latest raise brings into the spotlight a business caught between ambition and affordability. The pivot to AI-driven discovery provides narrative oxygen and maintains investor engagement, but leaves unanswered questions about the fate of its headline clinical programmes. Without substantial new capital or strategic partners, the company risks straddling two worlds: underfunded late-stage trials and unproven early-stage innovation.
This is not necessarily a failing—many biotech companies pivot to preserve value and de-risk pipelines. But investors would be prudent to regard this not as a show of strength, but as a necessary act of survival. The strategic merit of AI discovery is plausible. The financial runway to deliver it, and sustain late-stage trials, remains a separate—and pressing—concern. Expect another round of fundraising.
Verdict: Solvonis presents an attractive speculative opportunity, but its high-risk profile requires careful due diligence.
I started off with expressing an interest in the POV of Kar Keegan of Singer Capital Markets (SCM) analysis.
The report is an initiation coverage by Singer Capital Markets on Solvonis Therapeutics (SVNS LN), a UK-based, pre-revenue biotechnology company focused on developing treatments for addiction and mental health disorders, specifically Alcohol Use Disorder (AUD) and Post-Traumatic Stress Disorder (PTSD). The report recommends a "Buy" with a 12-month target price of 1.6p, implying a significant upside of 788.9% from the current price of $0.0018p. It highlights Solvonis’ innovative pipeline, de-risked business model through drug repurposing, and strategic acquisition of Awakn Life Sciences. The valuation is based on a risk-adjusted net present value (rNPV) model and comparable peer analysis, with key assets SVN-001 and SVN-002 driving the investment case.
Analytical Strengths
Comprehensive Pipeline Overview: The report provides a detailed description of Solvonis’ pipeline, particularly SVN-001 (Phase 3 for severe AUD) and SVN-002 (Phase 2b planning for AUD). It explains the therapeutic approach—combining IV ketamine with cognitive behavioural therapy (CBT)—and supports it with scientific rationale, including neurobiological mechanisms and clinical evidence.
Market Context: The report effectively situates Solvonis within the growing mental health and addiction treatment market, citing Precedence Research’s projection of a $5.56% CAGR from $9.97 billion in 2025 to $16.22 billion by 2034. It also provides global prevalence data for AUD (283 million people, 5.1% of adults) and PTSD (8 million in the US), underscoring the unmet medical need.
De-Risked Business Model: SCM highlights Solvonis’ strategy of repurposing approved drugs (e.g, ketamine), which increases the probability of success (21% vs. 10% for novel drugs) and leverages accelerated regulatory pathways like the FDA’s 505(b)(2). This is supported by a table comparing success probabilities (Figure 1).
Valuation Methodology: The valuation combines an rNPV model (15% discount rate, 25x PE multiple) with a patient-based forecast and peer group analysis. The report provides deal value estimates from PharmaVentures (£60 million for SVN-001, £150 million for SVN-002), adding credibility to the commercial potential.
Strategic Insights: The acquisition of Awakn Life Sciences is presented as a value-accretive move, expanding the pipeline and commercial potential. The report also discusses Solvonis’ hub-and-spoke business model, drawing parallels with successful biotechs like Roivant and BridgeBio.
Analytical Flaws and Limitations
Over-Optimistic Valuation:
The target price of 1.6p implies an 788.9% upside, which appears speculative given Solvonis’ pre-revenue status and reliance on future milestones. The rNPV model assumes successful Phase 3 outcomes and out-licensing deals, but the report lacks a sensitivity analysis to show how changes in assumptions (e.g., trial failure, lower deal values) impact the valuation.
The 25x PE multiple and 15% discount rate are industry-standard but not justified in the context of Solvonis’ high-risk profile. A higher discount rate (e.g, 20–25%) might better reflect clinical and financial uncertainties.
Limited Financial Analysis:
The financial projections (Pages 1, 29–30) show no revenue through 2026 and increasing losses (Adjusted EBITDA: -£0.7m in 2025, -£2.8m in 2026). However, the report does not discuss the sustainability of the cash runway (£3m in 2025, -£1m in 2026) or the likelihood of further equity dilution, which is a significant risk given the recent £2m raise.
The cash flow statement (Page 30) is sparse, with minimal explanation of working capital changes or capital expenditure needs for clinical trials.
Risk Assessment Gaps:
While the report identifies clinical, financial, regulatory, and commercialisation risks (Pages 27–28), it downplays their severity. For example, the complexity of combining ketamine with psychotherapy introduces variability in trial outcomes, but the report does not quantify this risk or discuss mitigation strategies.
Regulatory risks, particularly for psychedelic-assisted therapies, are acknowledged but dismissed with reference to Spravato’s approval. This overlooks potential differences in regulatory scrutiny between the US and UK/EU markets.
Lack of Peer Comparison Detail:
The report mentions comparable companies in the mental health space but provides no specific examples or metrics (e.g., market cap, EV/revenue multiples). This weakens the valuation’s credibility, as investors cannot assess how Solvonis stacks up against peers.
The peer group analysis is referenced as part of the valuation (Page 4) but not elaborated, leaving readers without context on industry benchmarks.
Over-Reliance on Third-Party Data:
The report heavily relies on PharmaVentures’ deal value estimates (£60m for SVN-001, £150m for SVN-002) without critiquing their assumptions or methodology. This introduces a risk of bias, especially since PharmaVentures is engaged by Solvonis for commercialisation support.
Prevalence data from WHO (2016) and other sources is slightly outdated, and the report does not address potential changes in AUD/PTSD epidemiology post-COVID.
Incomplete Discussion of Competitive Landscape:
The report mentions the competitive landscape as a threat (Page 3) but does not identify specific competitors or alternative therapies (e.g., MDMA-assisted psychotherapy, other ketamine formulations). This limits the understanding of Solvonis’ first-mover advantage or differentiation.
The claim of a “first-of-its-kind” combination therapy is not substantiated with evidence that no other companies are pursuing similar approaches. While Solvonis has a niche in ketamine-CBT for AUD/PTSD, the field is crowded with psychedelic innovators. Direct ketamine competitors for AUD are fewer (e.g, Revitalist), but PTSD sees more activity with MDMA and psilocybin. For the latest updates, it is recommended to monitor clinical trial registries, such as ClinicalTrials.gov. So, a whopper of an overstatement here. *See further details at the foot of this report.
Formatting and Clarity Issues:
The financial tables (Pages 1, 29–30) contain inconsistencies, such as the reported PAT (-£1.6m in 2023) differing from Adjusted PBT (-£2.5m). The report does not explain these discrepancies.
Some sections (e.g., “What has happened to forecasts?” on Page 4) are incomplete, stating “No forecasts are available,” which undermines the report’s thoroughness.
SWOT Analysis.
Based on the report, a SWOT analysis of Solvonis Therapeutics is as follows:
Strengths:
Innovative Pipeline: SVN-001 (Phase 3) and SVN-002 (Phase 2b) target high-unmet-need indications (AUD, PTSD) with a novel combination of ketamine and CBT, supported by clinical evidence.
De-Risked Model: Repurposing ketamine increases the probability of success (21% vs. 10% for novel drugs) and reduces development costs/timelines via accelerated regulatory pathways.
Strategic Acquisition: The Awakn Life Sciences acquisition expands the pipeline and commercial potential, with value inflection points expected within 18–24 months.
Experienced Leadership: The management team is commercially aware, with a track record of raising capital and engaging partners like PharmaVentures.
Market Opportunity: Positioned in a growing market (addiction treatment projected to reach $16.22bn by 2034), with significant societal and economic demand for AUD/PTSD solutions.
Weaknesses:
Pre-Revenue Status: No revenue through 2026, with increasing losses and reliance on capital markets for funding.
Limited Cash Runway: Cash reserves (£3m in 2025) may not sustain operations beyond 2026 without further fundraising, risking dilution.
Complex Therapy Delivery: Combining ketamine with psychotherapy introduces variability in trial execution and scalability challenges for commercialisation.
Lack of Commercial Infrastructure: Dependence on licensing partners or contract sales forces increases execution risk.
Opportunities:
Market Growth: Rising prevalence of AUD and PTSD, coupled with increasing awareness, supports demand for innovative treatments.
Partnership Potential: Out-licensing deals (e.g., £60m for SVN-001, £150m for SVN-002) could provide non-dilutive funding and external validation.
Regulatory Pathways: Accelerated pathways (e.g., FDA 505(b)(2), EU data exclusivity) could expedite market entry.
Hub-and-Spoke Model: Adopting a diversified portfolio approach could attract investors seeking lower-risk biotech investments.
AI Integration: Leveraging AI for drug development could enhance efficiency and attract tech-focused investors.
Threats:
Clinical Risks: Phase 3 failure for SVN-001 or delays in SVN-002 trials could erode investor confidence and funding options.
Regulatory Uncertainty: Psychedelic-assisted therapies face evolving standards and potential political/reimbursement barriers.
Competitive Landscape: Emerging therapies (e.g., MDMA, other ketamine formulations) could challenge Solvonis’ market position.
Financial Constraints: A biotech market downturn or failure to secure partnerships could lead to insolvency.
Execution Risk: Dependence on third parties for commercialisation and therapy delivery introduces operational uncertainties.
Overview
The Singer Capital Markets report on Solvonis Therapeutics provides a compelling case for investment, highlighting the company’s innovative pipeline, de-risked business model, and strategic positioning in the growing mental health and addiction treatment market. The detailed therapeutic rationale, supported by prevalence data and clinical evidence, strengthens the investment narrative. The valuation, based on rNPV and peer analysis, is ambitious but grounded in reasonable assumptions about out-licensing potential. However, the report has notable flaws that undermine its credibility. The overly optimistic target price lacks sensitivity analysis, and the financial projections are sparse, with insufficient discussion of cash runway sustainability or dilution risks. The risk assessment is superficial, particularly regarding regulatory and competitive challenges, and the reliance on third-party data (e.g., PharmaVentures) introduces potential bias. The lack of detailed peer comparisons and outdated epidemiology data further weakens the analysis. Overall, the report is a useful starting point for understanding Solvonis’ potential but it falls short of providing a robust, critical evaluation. Investors should approach the “Buy” recommendation with caution, seeking additional data on trial progress, competitive dynamics, and funding plans before committing.
*Competitors Targeting PTSD (Often with Psychedelics or Ketamine-Assisted Therapy)
Multidisciplinary Association for Psychedelic Studies (MAPS)
MAPS remains at the forefront of MDMA-assisted therapy for PTSD, having delivered impressive Phase III trial results with response rates reportedly around 80%. While its primary focus is PTSD, the organisation has also explored MDMA applications in alcohol use disorder (AUD) through various partnerships. MAPS is currently on the cusp of FDA approval for its PTSD treatment, though recent regulatory turbulence has tempered timelines.
Compass Pathways
Best known for its synthetic psilocybin compound, COMP360, Compass is running a Phase II open-label trial evaluating the therapy’s safety and tolerability for PTSD. The broader pipeline is geared towards trauma-related mental health conditions, especially treatment-resistant depression, though it stops short of directly targeting AUD.
Gilgamesh Pharmaceuticals
Gilgamesh is developing a portfolio of novel chemical entities (NCEs), dubbed “neuroplastogens,” drawing inspiration from psychedelics. These candidates are positioned to treat psychiatric disorders like depression, anxiety, and likely PTSD. The company’s $2 billion collaboration with AbbVie underscores its credibility in next-generation mental health therapeutics.
Field Trip Health and Wellness
This company offers ketamine-assisted psychotherapy for PTSD, treatment-resistant depression, and a range of central nervous system conditions. It operates through a network of clinics and represents a more clinical, service-based approach to psychedelic therapy.
Emyria
An Australian biotech pursuing MDMA analogues for PTSD and other indications. Emyria stands out for its focus on regulatory engagement and early-stage compound development in a relatively undercrowded regional market.
Psylo
Psylo is innovating non-hallucinogenic, psychedelic-inspired compounds for conditions like depression and PTSD. Their work in medicinal chemistry aims to bypass the hallucinatory effects traditionally associated with psychedelics, potentially easing regulatory pathways.
Numinus Wellness
Operating under special access frameworks, Numinus provides ketamine-assisted therapy and also supports use of psilocybin and MDMA for mental health disorders. PTSD and addiction sit within their wider target set, aligning closely with dual-diagnosis strategies.
Delic Corp.
Focused on the commercial side of ketamine-assisted therapy, Delic offers psychedelic wellness services that could indirectly serve those with PTSD. While not exclusively targeting PTSD, its model appeals to self-directed mental health consumers.
Overlaps and Broader Observations
A number of competitors—such as atai Life Sciences, MindMed, and Gilgamesh—operate across the broader psychedelic therapeutics space. While not always directly targeting PTSD or AUD, their efforts in adjacent areas like depression or substance use disorder (SUD) create indirect competitive pressure on companies like Solvonis with a narrower dual-focus.
Academic and non-profit initiatives also colour the landscape. Institutions such as Johns Hopkins and Ohio State University are running early-phase trials (e.g., psilocybin for PTSD in veterans), while the U.S. Department of Veterans Affairs is backing research into psychedelic treatments for PTSD and AUD. Though these are not commercial players, their findings may shape future standards of care.
Meanwhile, grassroots non-profits such as Heroic Hearts Project and Veterans of War are promoting alternative therapies like ayahuasca retreats for veterans suffering from PTSD. These programmes offer informal, community-based competition by attracting patients who might otherwise pursue clinical interventions.
Despite growing scientific enthusiasm, the sector still faces major regulatory headwinds. For example, the FDA’s recent rejection of MDMA for PTSD has tempered some of the earlier optimism. Nonetheless, momentum continues to build, with several compounds receiving breakthrough designations and securing strategic partnerships across the pharmaceutical industry.
Opinions
We offer no advice or solicit the purchase of shares in any companies we discuss. However, shares fluctuate in value, making your financial situation unpredictable.
The views and opinions contained within these editorials are for research purposes and are the opinions of the author(s). We aim to be as accurate as possible, but we stress you should also perform your research and never act solely on the contents of these editorials.