Join our daily newsletter At The Bell to receive exclusive market insights
- Aussie biotech company Avecho will be handing off the manufacturing of two of its skincare products to American company Ashland
- Through a one time deal, Ashland has secured the exclusive global manufacturing, development and sales rights of products Vital ET and TPM for roughly AU$3.5 million
- Vital ET is a vitamin E supplement that boosts skin defence against UV rays and TPM is a product that improves drug delivery and efficiency of diffusing the chemicals into the human body
Aussie biotechnology company Avecho has just landed a manufacturing deal with American Ashland.
Ashland’s subsidiary ISP Investments purchased the global manufacturing rights to Avecho products Vital ET and TPM. The one-time licence fee is valued at roughly AU$3.5 million.
The agreement marks Ashland as the exclusive developer, manufacturer and seller of Vital ET and TPM in the global personal care products market.
Vital ET is a vitamin E supplement that boosts the skin’s defence against UV stressors and improves after-sun damage recovery. The product is also soothing and anti-ageing.
TPM on the other hand is a product developed when Avecho was under its previous name, Phosphagenics. TPM is a technology for drug delivery, built upon vitamin E compounds that diffuse more efficiently when servicing the human body.
Avecho Executive Chairman Greg Collier says the deal is positive for investors and provides a healthy amount of non-dilutive capital.
“Based on historical revenues received from our partnership with Ashland, this payment locks in and brings forward revenue that we may have expected to accrue over a four-plus year period,” Greg said.
The A$3.5 million deal is significantly higher than the company’s current cash burn of roughly A$1.7 million per year, providing breathing room.
Avecho also granted Ashland a right of first refusal to the manufacturing patents if the Aussies receive an offer from a third party to purchase the patents.
Avecho will still retain the intellectual property and rights to manufacture TPM outside of the personal care space. This condition does not apply for Vital ET.
Shares in AVE are unchanged today, sitting at 0.3 cents in a $4.732 million market cap.
