Avecho and Sandoz have entered into an exclusive ten-year licensing and development agreement (the “Agreement”) for pharmaceutical grade cannabidiol (CBD) capsules for insomnia in Australia.
Avecho will receive payments in the form of an advance payment, milestone payments and license fees:
USD 3 million (~AUD 4.8 million [1]) as advance payment
USD 16 million for the implementation of stages related to the development of the preparation before the start of commercial sales
License fees depending on net sales level, ranging from 14% to 19%
Sandoz to purchase product from Avecho for commercial sale
Avecho retains the rights to commercialize the product in other markets, and Sandoz receives first right in the event of a commercial offer superior to Avecho's
The market for registered over-the-counter cannabidiol in Australia is expected to grow to over $125 million per year [2]
CEO Dr Paul Gavin will discuss this announcement in more detail during an investor webinar on Tuesday 4 March 2025 at 11:00 (AEDT) – click here to register
MELBOURNE, Australia , March 5, 2025 /PRNewswire/ -- Avecho Biotechnology Limited (ASX: AVE) (""Avecho"" or the ""Company"") today announced that it has entered into a ten-year license and development agreement with Sandoz Group AG (""Sandoz"") for the commercial rights to its cannabidiol (""CBD"") capsule for insomnia currently undergoing Phase III clinical trials in Australia. Avecho retains the rights to market the product in other markets, with Sandoz receiving first right of way in those regions. Avecho CBD capsule will be the first pharmaceutical CBD product registered with the Therapeutic Goods Administration (TGA) as an over-the-counter medicine, and sales of the product in Australia are expected to exceed $125 million [2].
Sandoz has agreed to an upfront royalty of $3 million (approximately AUD$4.8 million [1]) for exclusive commercial rights to the CBD insomnia product in Australia. Avecho will continue to fund and oversee the ongoing Phase III clinical trials. Upon successful completion of the trials, Avecho and Sandoz will work together to obtain TGA regulatory approval. Sandoz will purchase the finished product from Avecho and assume responsibility for its commercialization, including marketing and distribution in Australia. Avecho will be entitled to receive milestone payments totaling $16 million prior to commercialization and royalties of 14% to 19% of net sales post-launch.
Avecho CEO, Dr Paul Gavin , said: “We are delighted to announce this partnership with Sandoz, which underlines the commercial potential of Avecho’s drug delivery platform and our shared commitment to delivering innovative treatments for insomnia. Almost 9.5 million Australians struggle with the symptoms of insomnia, of which approximately 3.6 million are chronic insomnia sufferers [3] . Sandoz’s extensive reach and experience in the Australian market will ensure our products are widely available to insomnia patients across Australia. This partnership provides Avecho with a strong commercial foundation for success.”
The Agreement has an initial term of 10 years, with automatic extensions for two additional terms of two years, unless the parties agree to terminate it. The Company also confirms that the Agreement is subject to the standard terms and conditions for this type of agreement.
Webinar for investors
Avecho will organize a webinar for investors, shareholders and all other interested parties to provide more details about this important stage of the company’s development.