Avecho and Sandoz enter Exclusive License and Development Agreement to Commercialise CBD for Insomnia in Australia

Avecho Biotechnology Limited (ASX: AVE) (“Avecho” or the “Company”) today announced it has signed an exclusive ten-year development and licensing agreement with Sandoz Group AG (“Sandoz”) for the commercial rights to Avecho’s Phase III cannabidiol (“CBD”) capsule for insomnia in Australia. Avecho retains the rights to commercialise the product in all other territories, with Sandoz granted a first right of refusal for these markets. Avecho’s CBD capsule aims to be the first pharmaceutical CBD product registered with the Therapeutic Goods Administration (“TGA”) as an over-the-counter medicine, which market forecasts predict could generate sales surpassing US$125M per annum in Australia².

Highlights:

• Avecho and Sandoz sign an exclusive ten-year development and license agreement (“Agreement”) for Avecho’s pharmaceutical cannabidiol capsule for insomnia in Australia
• Avecho to receive upfront, milestone and royalty payments:
  • US$3M (~A$4.8M¹) in upfront payment
  • US$16M in development milestones prior to commercial sales
  • Tiered royalties ranging from 14% to 19% on net sales
  • Sandoz to purchase the product from Avecho for commercial sale
• Avecho retains the rights to commercialise the product in all other territories, with Sandoz granted a right of first refusal to exceed any commercial offers Avecho receives
• Market for over-the-counter cannabidiol registered in Australia forecast to grow to >US$125M per annum²
• CEO Dr Paul Gavin will discuss this announcement further during an investor webinar to be held at 11.00am (AEDT) on Tuesday 4 March 2025 – click here to register

Sandoz has agreed to an upfront licensing fee of US$3M (approx. A$4.8M¹) for the exclusive commercial rights to the CBD product for insomnia in Australia. Avecho will continue to fund and oversee the ongoing Phase III clinical trial. Upon successful completion, Avecho and Sandoz will collaborate to secure TGA regulatory approval. Sandoz will purchase finished product from Avecho and assume responsibility for the product's commercialisation, including marketing and distribution in Australia. Avecho is eligible for development milestone payments totalling US$16M prior to commercialisation and will receive tiered royalties ranging from 14% to 19% on net sales once on market.

Avecho CEO, Dr Paul Gavin, said: “We are excited to announce this partnership with Sandoz, which underscores the commercial potential of Avecho’s drug delivery platform and our shared commitment to deliver innovative insomnia treatments. Nearly 9.5 million Australians experience symptoms of insomnia with approximately 3.6 million of those considered chronic³. Sandoz’s extensive reach and expertise in the Australian market will ensures our products are widely accessible to insomnia patients across Australia. This partnership provides Avecho with a strong commercial foundation for success.”

The Agreement as an initial term of 10 years, with automatic extensions for two further renewal terms of two years each, unless terminated by agreement between both parties. The Company also confirms that the Agreement is otherwise subject to standard terms and conditions typical of a contract of this nature.

Investor webinar

Avecho will hold an investor webinar for shareholders and all other interested parties to provide more detail on this major milestone for the company.

CEO, Dr Paul Gavin, will present at 11.00am (AEDT) on Tuesday 4 March 2025.

Register to attend the presentation at the following link: https://us02web.zoom.us/webinar/register/WN_t4VmfT8RTX-0FexBBLJ_6Q

A recording will be available at the above link shortly after the conclusion of the live session, and the replay will also be available via the Company’s website and social media channels.

Questions can be submitted on the day or sent in advance to matt@nwrcommunications.com.au.

Click here for the full ASX Release

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