Bod Australia will produce a low-dose CBD product exclusively for pharmaceutical company Arrotex in a move the cannabis firm said will generate a “consistent revenue stream” over several years.

Under a five-year licence and supply agreement, Bod will develop an over-the-counter (OTC) medicine for Arrotex for an initial upfront fee of A$500,000.

Arrotex is said to service 5,700 pharmacies across Australia with preferred agreements with 3,000

Arrotex was described by Bod as Australia’s largest generic pharmaceutical and private label OTC medicines company, with preferred agreements with 3,000 Australian pharmacies.

The deal is conditional on Bod overseeing a positive phase IIB clinical trial by June 30 next year and successfully registering an OTC product with the Therapeutic Goods Administration (TGA) by August 2024.

Bod’s trial will target symptoms associated with insomnia.

Chief executive Jo Patterson described the agreement as “an exciting step for Bod”.

“It highlights our position as an agile and trusted drug developer for large corporate partners and has the potential to unlock considerable value through Arrotex’s established channels into the Australian market,” she said.

“We are excited to progress work towards commercialising a unique product for Arrotex and the Australian market, allowing us to become one of the first providers of Schedule 3 CBD medicines in Australia.”

Its clinical trial is “well advanced”, she added.

Bod said the deal demonstrates its ability to “commercialise its drug development pipeline and provides another consistent revenue stream over the coming years”.

Arrotex chief commercial officer Sandy Mellis said: “We look forward to adding a specially designed, scientifically proven CBD medicine to our OTC product range.

“Bod has previously undertaken a considerable amount of R&D and clinical trial research on its unique cannabis extract and has the ability to bring a new CBD product to the Australian market quickly.

“This speed to market and expertise in commercialisation for large corporates makes it an exciting and obvious partner.”

Speed to market, however, is largely out of the hands of companies striving to register over-the-counter products.

Once trials have been completed and dossiers lodged – the first are expected in the first quarter of 2023 – the TGA will spend several months examining applications.

Opinion is split over the chances of a product going on sale by the end of 2023.

Steve has reported for a number of consumer and B2B titles over a journalism career spanning more than three decades. He is a regulator contributor to health journal, The Medical Republic, writing on...

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