#Australia #Melbourne #CBD #Avecho #Sandoz

Exclusive Ten-Year Agreement Between Avecho and Sandoz for CBD

In a significant development for the medical cannabis sector, Avecho Biotechnology Limited (ASX: AVE) has entered into a landmark exclusive development and licensing agreement with Sandoz Group AG. This partnership focuses on the commercialization of Avecho's cannabidiol (CBD) capsules aimed at treating insomnia in the Australian market. With a duration of ten years, this agreement marks a critical step for both companies in addressing sleep disorders that affect millions of Australians.

Key Details of the Agreement

The partnership stipulates various financial arrangements, starting with an initial licensing fee of $3 million USD (approximately $4.8 million AUD). Furthermore, Avecho stands to receive $16 million USD in milestone payments associated with the development stages leading to commercial sales. Once the product hits the market, Avecho will earn royalties ranging from 14% to 19% of the net sales.

Sandoz, a subsidiary of Novartis and a leader in generic pharmaceuticals, plans to purchase the finished product from Avecho, taking charge of its marketing, distribution, and sales efforts across Australia. Interestingly, Avecho retains the rights to market the product in all other territories, while Sandoz has the first right of refusal on any commercial offers made to Avecho for these markets.

Market Potential

According to industry forecasts, the Australian over-the-counter CBD market could yield sales surpassing $125 million USD annually. With insomnia affecting nearly 9.5 million Australians and approximately 3.6 million suffering from chronic insomnia, the potential impact of this agreement is substantial.

The CBD capsules aim to be the first pharmaceutical CBD product registered with the Therapeutic Goods Administration (TGA) as an over-the-counter medicine, providing a safe and effective alternative for those struggling with sleep issues.

Leadership Insights

Dr. Paul Gavin, CEO of Avecho, expressed his enthusiasm for the collaboration, emphasizing the commercial potential of Avecho's drug delivery platform. He remarked, “We are thrilled to announce this partnership with Sandoz, which highlights the commercial capabilities of our drug delivery platform and our shared commitment to providing innovative insomnia treatments. With approximately 9.5 million Australians experiencing insomnia symptoms, our goal is to ensure that our products are accessible to all patients struggling with this condition across Australia.”

Future Collaborations and Webinars

The ten-year agreement contains provisions for two additional two-year renewal periods, contingent on mutual consent. Avecho also affirms that the agreement aligns with typical contractual terms found in such partnerships.

To discuss this pivotal step for Avecho, a webinar is scheduled for March 4, 2025, at 11 AM Australian Eastern Standard Time, where Dr. Gavin will give further insights into the partnership and its implications. Interested parties can register for the presentation online.

A recording of the session will be available shortly after its conclusion, alongside additional content on various social media platforms operated by Avecho. Questions can be submitted in advance via email or asked during the live session, promoting an interactive engagement between the company and its stakeholders.

Conclusion

As Avecho and Sandoz embark on this promising journey to develop effective insomnia treatments, the implications for the Australian healthcare landscape, particularly in the realm of cannabis-based therapeutics, are noteworthy. This endeavor not only showcases innovation in drug development but also signifies a growing recognition of the therapeutic potential of CBD in the treatment of sleep disorders.