#Australia #Melbourne #CBD #Avecho #Sandoz

Avecho and Sandoz Join Forces in CBD Licensing Agreement

In an exciting development for the pharmaceutical landscape, Avecho Biotechnology Limited (ASX: AVE) has officially announced a monumental ten-year exclusive licensing and development agreement with Sandoz Group AG. This collaboration focuses on the commercialization of Avecho's Stage III cannabidiol (CBD) capsule specifically designed for insomnia treatments in Australia.

The Agreement Breakdown

Under this agreement, Sandoz will pay Avecho an initial licensing fee of $3 million USD (approximately $4.8 million AUD) for the exclusive rights to market the CBD insomnia capsules. Additionally, Avecho has the opportunity to receive milestone payments totaling $16 million USD contingent upon the successful progress of pivotal clinical trials. Importantly, after obtaining market approval, Sandoz will be responsible for purchasing the finished product from Avecho and managing the commercialization efforts, including marketing and distribution.

But that's not all; the licensing deal also includes tiered royalties ranging from 14% to 19% of net sales, ensuring a continuous revenue stream for Avecho.

Commercial Potential

Estimates suggest that the market for OTC cannabidiol registered in Australia could surpass $125 million USD annually. This projected growth underscores the immense commercial potential of their collaboration, with a significant demographic needing effective solutions for insomnia-related symptoms. According to recent studies, approximately 9.5 million Australians experience insomnia symptoms, with about 3.6 million identified as chronic cases.

Dr. Paul Gavin, CEO of Avecho, expressed enthusiasm about the partnership, stating, "This collaboration underscores the commercial potential of Avecho's drug delivery platform and our commitment to innovating treatments for insomnia. With Sandoz's expertise and reach in the Australian market, we are poised to deliver widely accessible products to those suffering from sleep disturbances."

Clinical Trials and Future Prospects

Avecho will continue to lead and fund the active Stage III clinical trials aimed at ensuring the effectiveness and safety of the CBD capsules. Upon successful results, both companies will work together to attain regulatory approvals from the Australian Therapeutic Goods Administration (TGA).

The first ten-year term of this agreement is automatically renewable for two additional two-year periods unless terminated by mutual consent. The deal reflects standard terms typically found in agreements of this nature, hinting at a robust strategic direction for both companies.

Investor Engagement

To further engage stakeholders and provide insights into this significant milestone, Avecho has scheduled an investor webinar where Dr. Paul Gavin will elaborate on the partnership. This event is set to take place on March 4, 2025, at 11:00 AM AEDT. Interested parties can register through the provided link to gain deeper insights into Avecho's plans and financial prospects related to this collaboration.

As the landscape of insomnia treatment continues to evolve, this partnership not only highlights advancements in pharmaceutical innovation but also signals a promising path for CBD-based therapies in Australia and beyond. Stay tuned as Avecho and Sandoz work together to set new standards in insomnia management.