Avecho Biotechnology (AVE) Study update summary

Interim analysis results and trial design

• Interim analysis of a pivotal phase III trial for a proprietary cannabidiol capsule in insomnia showed positive results, with the Data Monitoring Board recommending continuation to the full 519 patients after meeting pre-specified criteria.

• The trial is the largest randomized, double-blind, placebo-controlled CBD insomnia study globally, with three arms (75mg CBD, 150mg CBD, placebo) and two primary endpoints: Insomnia Severity Index and Subjective Sleep Efficiency; success on either is sufficient.

• The adaptive design allowed for recalibration of patient numbers, but the DMB confirmed the original target is sufficient, indicating the effect size is at least as expected.

• No serious adverse events were reported among the 244 patients analyzed, supporting a strong safety and tolerability profile.

• Validated sleep questionnaires and diaries were used for assessment, and the analysis is fully blinded.

Implications and commercial outlook

• The positive interim analysis de-risks the program, shifting focus from proof of efficacy to commercialization, regulatory submission, and ongoing licensing discussions outside Australia.

• The product's safety profile is favorable compared to existing insomnia drugs, lacking risks like overdose and next-day impairment.

• Sandoz has licensed Australian rights, validating commercial interest and providing $3M upfront, up to $16M in milestones, and 14-19% tiered royalties; further licensing deals are expected for other territories.

• The company holds strong patent protection for its unique formulation, with patents granted or allowed in the US, Europe, and Japan, and pending in China.

• The Australian OTC pathway and potential for rapid FDA engagement present significant regulatory and commercial opportunities.

Market opportunity

• Chronic insomnia affects up to 850 million adults globally, with the global insomnia treatment market forecast at $9.5bn by 2033 and the sleep aids market projected to reach $950 billion by 2032.

• In Australia, up to 60% of the population experience insomnia symptoms, with significant economic impact.

• No other Phase III CBD insomnia trials have succeeded in Australia, where the OTC pathway for low-dose CBD remains unfilled.