Avecho signs $23 million deal with Sandoz for CBD insomnia treatment

Avecho Biotechnology signed an exclusive ten-year development and licensing agreement with Sandoz for the commercial rights to its cannabidiol (CBD) insomnia treatment in Australia, according to an ASX announcement released on Monday.

The deal includes an upfront payment of US$3 million (approximately A$4.8 million) and potential development milestone payments totalling US$16 million prior to commercialisation. Avecho will also receive tiered royalties ranging from 14 per cent to 19 per cent on net sales once the product reaches the market.

Under the agreement, Avecho will continue to fund and oversee the ongoing Phase III clinical trial while retaining rights to commercialise the product in territories outside Australia, with Sandoz granted a right of first refusal on these markets.

Avecho CEO Dr Paul Gavin said the partnership underscores the commercial potential of the company’s drug delivery platform.

“Nearly 9.5 million Australians experience symptoms of insomnia with approximately 3.6 million of those considered chronic,” Gavin said. “Sandoz’s extensive reach and expertise in the Australian market will ensure our products are widely accessible to insomnia patients across Australia.”

The CBD capsule aims to be the first pharmaceutical CBD product registered with the Therapeutic Goods Administration as an over-the-counter medicine. Market forecasts predict this could generate sales surpassing US$125 million per annum in Australia.

Avecho’s technology uses a proprietary Tocopheryl Phosphate Mixture derived from Vitamin E that enhances the absorption of drugs, including CBD.

An investor webinar will be held at 11.00am on Tuesday, 4 March 2025, where the CEO will provide more details on the agreement.

Picture: LinkedIn