- Avecho Biotechnology (AVE) entered a product licence and supply agreement with vitamin and supplement company Medterra
- Medterra is one of the most successful CBD companies in the United States and is known for developing and selling science-backed products
- Under the agreement, Medterra will have the exclusive rights to develop and commercialise Avecho’s soft-gel CBD capsule for the oral treatment of arthritis
- Further, the company will retain the rights for the treatment of arthritis in Australia and New Zealand, while Medterra has been granted the rights for the rest of the world
- Avecho ends the day with shares trading at 1.5 cents
Avecho Biotechnology (AVE) has entered a product licence and supply agreement with vitamin and supplement company Medterra.
Under the agreement, Medterra will have the exclusive rights to develop and commercialise Avecho’s soft-gel CBD capsule for the oral treatment of arthritis in markets other than Australia and New Zealand.
Medterra is one of the most successful CBD companies in the United States and is known for developing and selling science-backed products.
Following the launch of Medterra Pharma, the company has expanded into the pharmaceutical market.
Medterra scientists have already demonstrated the therapeutic potential of CBD in the treatment of arthritis in preclinical models.
Medterra Pharma CEO Matt Halpert said this agreement plays an important role in the company’s growth.
“This licensing and supply agreement with Avecho Biotechnology is an important and strategic part of our Company’s commitment to expanding our profile of evidence-based CBD pharmaceutical products.” Mr Halpert said.
Avecho will keep the manufacturing rights of the soft-gel product and will supply and manufacture the tocopheryl phosphate mixture (TPM) for use in the product.
Further, the company will retain the rights for the treatment of arthritis in Australia and New Zealand while Medterra has been granted the development and commercialisation rights for the rest of the world.
The agreement begins immediately and will continue permanently unless terminated by either company due to a breach.
Upon execution of the agreement, Avecho will receive US$50,000 (A$70,405) and up to a further $800,000 (A$1.12 million) in milestone payments triggered by the submission of Investigation New Drug for trials.
Avecho will also receive a two per cent royalty of the net sales upon the successful commercialisation of the CBD soft-gel product.
This partnership marks a strategic step forward in Avecho’s plans to secure Food and Drug Administration (FDA) approval for its soft-gel CBD product and CEO Paul Gavin has welcomed the announcement.
“While Avecho focuses on a sleep related indication, this agreement allows Medterra to fund the development of the CBD soft-gel product for an additional indication, providing Avecho with potential upside for an indication we do not have the bandwidth to pursue ourselves,” Dr Gavin said.
“Using this strategy, we plan to collaborate with reputable, well-resourced partners to progress our products towards regulatory approval on a number of parallel indications – and we are very excited to commence this work.”
Avecho has ended the day in the grey with shares trading at 1.5 cents in a $27.54 million market cap.