Avecho Biotechnology (ASX:AVE) and Sandoz have signed an exclusive ten-year development and licensing agreement for the commercial rights to the Australian company's phase 3 cannabidiol capsule for insomnia in Australia.
Avecho said that under the agreement, which has an initial term of ten years, it retains the rights to commercialise the product in all other territories, with Sandoz granted a first right of refusal for these markets.
Avecho said it aims to develop its investigative capsule candidate into the first cannabidiol (CBD) pharmaceutical product registered with the TGA as an over-the-counter medicine.
Under the agreement, Sandoz has agreed to pay an upfront licensing fee of US$3 million ($4.8 million ) for the exclusive commercial rights to the CBD product for insomnia in Australia. Avecho will continue to fund and oversee the ongoing phase 3 clinical trial.
Avecho and Sandoz will collaborate to secure TGA regulatory approval after successful trial completion. Sandoz will purchase the 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$16 million prior to commercialisation and will receive tiered royalties ranging from 14 per cent to 19 per cent on net sales once on the 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 chronic. Sandoz’s extensive reach and expertise in the Australian market will ensure our products are widely accessible to insomnia patients across Australia. This partnership provides Avecho with a strong commercial foundation for success.”