Avecho’s Revenue Jumps 79% but Loss Widens to $2.68M in H1 2025
Avecho Biotechnology reported a 79% revenue increase driven by a $4.8 million upfront licensing fee from Sandoz, yet its half-year loss grew 23% as R&D and administrative costs rose. The company advances its Phase III CBD insomnia trial while pursuing further international licensing.
- Revenue up 79.4% to $560,069, driven by licensing and product sales
- Loss after tax increased 23% to $2.68 million due to higher R&D and admin expenses
- Received $4.8 million upfront licensing fee from Sandoz for Australian CBD insomnia product
- Phase III clinical trial recruitment accelerated, targeting interim results in early 2026
- Cash reserves nearly $6 million, supported by licensing fee and R&D grants
Financial Performance and Licensing Milestone
Avecho Biotechnology Limited has reported a mixed half-year result for the period ending 30 June 2025, with revenue surging 79.4% to $560,069, largely reflecting the upfront licensing fee received from pharmaceutical giant Sandoz AG. Despite this revenue growth, the company’s loss after tax widened by 23% to $2.68 million, driven by increased research and development (R&D) and administrative expenses.
The $4.8 million upfront payment from Sandoz, secured under a ten-year exclusive licensing agreement for Avecho’s proprietary TPM®-enhanced cannabidiol (CBD) capsule targeting insomnia, represents a significant commercial validation of Avecho’s technology. This agreement grants Sandoz exclusive commercialization rights in Australia, with Avecho retaining rights elsewhere and a first right of refusal for additional territories.
Clinical Trial Progress and Commercial Strategy
Avecho’s lead asset, the TPM®-enhanced CBD soft-gel capsule, is currently in a pivotal Phase III clinical trial designed to evaluate its efficacy in treating insomnia. The trial is a multi-centre, randomized, double-blind, placebo-controlled study assessing nightly doses over eight weeks. Recruitment has accelerated with new trial sites in Sydney and the Gold Coast, reaching 131 patients dosed by late July 2025, with a target of 210 participants for an interim analysis expected in early 2026.
This interim readout will be a critical milestone, potentially unlocking further development milestones and royalty payments from Sandoz. Avecho is actively collaborating with Sandoz to ensure regulatory readiness and timely trial completion, underpinning its commercialisation ambitions.
Financial Position and Funding Outlook
The company’s cash position improved markedly to nearly $6 million at 30 June 2025, bolstered by the licensing fee and government R&D grants totaling $1.7 million. However, expenses rose 24.3% to $3.86 million, with R&D costs up 7.8% to $2.1 million and administrative expenses increasing due to share-based payments and foreign exchange losses.
Avecho repaid its R&D advance loan during the period, reflecting a disciplined approach to managing its capital structure. The directors acknowledge a material uncertainty regarding the company’s ability to continue as a going concern but remain confident in ongoing funding prospects, supported by its licensing strategy, government incentives, and shareholder backing.
International Licensing and Future Prospects
Beyond Australia, Avecho is actively pursuing additional licensing agreements internationally. CEO Dr Paul Gavin’s recent engagements at the BIO International Convention and follow-up meetings in Europe signal the company’s intent to broaden its commercial footprint. Success in securing further partnerships could materially enhance Avecho’s revenue streams and market presence.
Overall, Avecho’s half-year results reflect a biotech company transitioning from development to commercialisation, balancing investment in clinical validation with strategic licensing deals. The upcoming Phase III interim results and progress on international licensing will be key indicators of the company’s trajectory.
Bottom Line?
Avecho’s next critical test lies in its Phase III interim data and expanding global licensing, which will shape its path from clinical-stage biotech to commercial success.
Questions in the middle?
- Will the Phase III interim results validate the efficacy of Avecho’s CBD insomnia treatment?
- How quickly can Avecho secure additional international licensing deals beyond Australia?
- What impact will deferred revenue recognition of the Sandoz licensing fee have on future earnings?
