Avecho Biotechnology Limited (ASX:AVE) Receives US$3M Licensing Fee from Sandoz
Licensing Agreement
Avecho Biotechnology Limited has received a US$3M (~A$4.79M) upfront licensing fee from Sandoz AG for the commercial rights to its Phase III cannabidiol (CBD) capsule for insomnia in Australia.
Financial Terms
Under the agreement, Avecho is eligible for development milestone payments totaling US$16M prior to commercialization and tiered royalties ranging from 14% to 19% on net sales once the product is on the market. Sandoz will purchase the finished product from Avecho and oversee its commercialization, including marketing and distribution in Australia.
Market Outlook
The Australian over-the-counter cannabidiol market is forecasted to exceed US$125M annually. Avecho aims to be the first pharmaceutical CBD product registered with the Therapeutic Goods Administration (TGA) for over-the-counter sale.
Executive Comments
CEO Dr Paul Gavin said, “The upfront licensing fee from Sandoz strengthens our financial position, providing the necessary support to accelerate ongoing research and commercial activities. 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.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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