Small-cap ASX biotech Avecho strikes Sandoz deal for CBD insomnia treatment
An Australian biotech minnow wants to become the first company globally to register an over-the-counter cannabidiol product for sleep disorders.
In the pharmaceutical industry regulatory hurdles often derail ambitions. But a Melbourne-based Avecho Biotechnology has turned regulation to its advantage, signing a deal with ₣17 billion ($30 billion) Swiss pharma company Sandoz that could potentially be worth more than the ASX-listed minnow's entire market value.
Avecho secured an exclusive 10-year licensing agreement with Sandoz for its pharmaceutical-grade cannabidiol (CBD) soft-gel capsule targeting insomnia.
The treatment aims to become the world's first over-the-counter CBD product registered specifically for sleep disorders, allowing patients to purchase it directly from pharmacists without a prescription.
Under the terms announced Monday, Avecho will receive USD3 million (A$4.8 million) upfront, with up to USD16 million in additional development milestone payments before commercial sales begin. Once the product reaches market, Avecho will earn tiered royalties ranging from 14% to 19% on net sales, while also manufacturing the product for Sandoz to distribute.
