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Avecho signs licensing deal for phase III cannabidiol drug

Avecho (ASX:AVE) has signed an exclusive 10-year development and licensing agreement with Sandoz Group AG for the commercial rights to its phase III cannabidiol (CBD) capsule for insomnia in Australia.

Avecho said it would continue to fund and oversee the ongoing Phase III clinical trial. Upon successful completion, Avecho and Sandoz will collaborate to secure Therapeutic Goods Administration (TGA) approval.

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

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

Avecho retains the rights to commercialise the product in all other territories, with Sandoz granted a right of first refusal to exceed any commercial offers Avecho receives.

“They’re running a major trial with around 250 people in Australia,” Power said.