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Highlights
- Avecho Biotechnology (AVE) secures a significant payment from Sandoz.
- The partnership focuses on developing a CBD product for insomnia.
- Avecho retains rights in other markets, with potential for extensive royalty earnings.
Avecho Biotechnology (ASX:AVE) recently announced a substantial development in their journey to address insomnia through cannabidiol (CBD) treatments. The company has secured an upfront payment of approximately $4.7 million (US$3m) from Sandoz, a global leader in generic and biosimilar medicines. This financial boost stems from a licensing agreement granting Sandoz the rights to commercialize Avecho's Phase III CBD capsule specifically designed for insomnia treatment in Australia.
This strategic partnership marks a pivotal step for Avecho, as it not only solidifies its financial foundation but also enhances its capacity to push forward with crucial research and commercial initiatives. The collaboration outlines the terms of the agreement where Sandoz will manage the commercial aspects of the product in Australia, including its marketing and distribution.
Avecho’s CBD capsule is on track to become the first pharmaceutical CBD product registered with the Therapeutic Goods Administration as an over-the-counter medicine in Australia. Dr. Paul Gavin, CEO of Avecho, highlighted the importance of the upfront licensing fee from Sandoz in strengthening their financial position. This support is vital as it accelerates the company's ongoing research and helps reach the interim analysis of their pivotal Phase III trial swiftly.
Furthermore, Avecho stands to gain from development milestone payments that could total approximately $25.4m (US$16m) before the product hits the market. Once commercialized, the company will also receive tiered royalties ranging from 14% to 19% on net sales.
The ongoing Phase III trial is a multi-centre, randomized, double-blind, placebo-controlled study. It aims to evaluate the efficacy and safety of CBD soft-gel capsules in adults to reduce insomnia severity. During this eight-week trial, participants are randomly assigned to receive nightly doses of either 75 milligrams, 150mg of CBD, or a placebo. The trial's structure allows participants to use validated questionnaires and daily sleep diaries to track the duration and quality of their sleep.
With insomnia affecting up to 237 million people globally and nearly 60% of Australians experiencing some symptoms, the potential impact of Avecho’s CBD treatment could be significant. This partnership not only underscores the growing interest and investment in CBD-based health solutions but also positions Avecho (AVE) and Sandoz at the forefront of this evolving market.
