The chairman of Avecho Biotechnology has told shareholders they should take “immense confidence” from the commitment of pharmaceutical firm Sandoz to invest in the company’s bid to register a CBD over-the-counter product.
Speaking at Avecho’s annual general meeting, Gregory Collier said it was “remarkable” for a small Australian firm to have struck a deal with such a large multinational prior to the completion of a phase III trial.
It demonstrated the “compelling” business case put forward by Avecho, and could open the door for future success, he said.
Avecho and Sandoz struck a deal in March under which Sandoz paid an upfront US$3m (A$4.8 million) to Avecho and, if the trial is successful, US$16m (A$25.7m) in development milestones ahead of commercial sales.
The trial, which is targeting insomnia, is underway with interim analysis expected early next year.
Collier told shareholders: “Partnerships with pharmaceutical companies of this calibre are not firmed lightly, particularly when the product involves molecules derived from cannabis, which carries significant investor relations and public perception considerations for any global player.
“However, the commercial potential of our CBD capsule is substantial and the strength of the business case behind it was compelling. So much so that Sandoz, after thorough deliberation, could not afford to ignore the opportunity.
“With this agreement, Sandoz has become the largest pharmaceutical company globally to publicly commit to the development and future commercialisation of a pharmaceutical-grade cannabinoid product.”
He said Sandoz’s willingness to commit resources prior to the availability of phase III data “should provide shareholders with immense confidence”.
Collier told the meeting that the backing of Sandoz was secured after months of “rigorous” due diligence in which Avecho’s science, trial design, preliminary data and employees were put through their paces.
“We hope you appreciate the significance of this deal and the endorsement it represents for our product, our trial, its commercial potential and our team,” he told the AGM. “With the backing of a major pharmaceutical company we now have the regulatory expertise and distribution capabilities to maximise this opportunity.”
Collier added that Australia is “just the start” of its commercial efforts, with the opportunity in markets not covered by the Sandoz deal “already piquing the interest of additional pharmaceutical companies”.
Avecho last week added three sites to its insomnia trial that, by the end of the year, will have dosed around 210 patients.