Avecho Secures US$3M Upfront Payment from Sandoz in CBD Licensing Deal

Avecho Biotechnology (ASX: AVE) has secured a US$3 million upfront payment from Sandoz AG for exclusive rights to market its Phase III cannabidiol (CBD) capsule for insomnia in Australia. Avecho retains global commercialization rights.

The deal includes up to US$16 million in milestone payments before launch, plus tiered royalties of 14% to 19% on net sales. Sandoz will also purchase the product for distribution, reinforcing its commitment to the Australian sleep-aid market.

Expanding into Australia’s CBD Market

The Australian over-the-counter CBD market is projected to exceed US$125 million annually, driven by regulatory changes allowing pharmacy sales without prescriptions. If approved by the Therapeutic Goods Administration (TGA), Avecho’s CBD capsule could be the first registered pharmaceutical CBD product for insomnia in Australia.

“This upfront payment strengthens our financial position as we advance our Phase III trial,” said Avecho CEO Dr. Paul Gavin. “With Sandoz’s expertise, we are well-positioned to capitalize on this growing market.”

Path to TGA Approval

Avecho is conducting a Phase III clinical trial, the largest of its kind for CBD in Australia. The randomized, placebo-controlled study tests 75mg and 150mg doses over eight weeks, assessing sleep improvements.

Regulatory approval would unlock a major market. While Avecho retains rights outside Australia, Sandoz has first refusal on other markets, signaling confidence in the product’s global potential.

CBD’s Role in Insomnia Treatment

Insomnia affects up to 30% of the global population, with chronic cases linked to depression, anxiety, and heart disease. The sleep economy, including treatments, is projected to reach US$950 billion by 2032. In Australia, 60% of adults experience sleep disorders, prompting government recognition of sleep health as a national priority.

Avecho’s proprietary Tocopheryl Phosphate Mixture (TPM®) enhances CBD absorption, potentially offering a superior alternative to existing sleep treatments. If successful, its CBD soft-gel could disrupt the market with a clinically validated, pharmaceutical-grade option.

What’s Next for Avecho?

With Sandoz backing, Avecho is focused on completing its trial and securing regulatory approval. Success would position the company as a leader in Australia’s pharmaceutical CBD market and pave the way for international expansion.

With a clear path to commercialization, Avecho is one step closer to reshaping the sleep-aid landscape in Australia and beyond.