Avecho Biotechnology advances CBD insomnia trial with Sandoz licensing deal and funding

Avecho Biotechnology (ASX: AVE) has received a maiden payment of approximately $4.7 million (US$3m) from international generic and biosimilar medicines specialist Sandoz.

The payment forms part of a recently signed licensing agreement for the commercial rights to develop Avecho’s proprietary cannabidiol (CBD) product for insomnia treatment in Australia.

Avecho has granted Sandoz exclusive commercial rights over its Phase III CBD capsule for a period of 10 years, with Avecho retaining the rights to commercialise the product in all other territories and Sandoz holding first right of refusal for these markets.

CBD product first

Avecho chief executive officer Dr Paul Gavin said the company is aiming to make its capsule the first pharmaceutical CBD product registered with the Therapeutic Goods Administration as an over-the-counter medicine in Australia.

“The upfront licensing fee from Sandoz strengthens our financial position, providing the necessary support to accelerate ongoing research and commercial activities,” Dr Gavin said.

“With ample capital to complete our pivotal Phase III trial through to the interim analysis, our primary focus is to advance the study to this key inflection point as swiftly as possible.”

Finished product

Sandoz will purchase the finished product from Avecho and assume responsibility for the product’s commercialisation in Australia, including marketing and distribution .

Avecho is eligible for development milestone payments totalling approximately $25.4m (US$16m) prior to commercialisation and will receive tiered royalties ranging from 14% to 19% on net sales once on market.

The company is currently conducting a pivotal Phase III multi-centre, randomised, double-blind, placebo-controlled clinical trial evaluating the efficacy and safety of CBD soft-gel capsules in adults for use in the reduction of insomnia severity.

Random participation

Avecho will randomly assign participants in the Phase III trial to one of three groups to receive nightly doses of either 75 milligrams or 150mg of CBD, or a placebo, for eight weeks.

Participants will use validated questionnaires and daily sleep diaries over the course of the study to record the duration and quality of their sleep.

Insomnia affects up to 237 million people globally, with as much as 60% of the Australian population suffering at least some symptoms.