Highlights

  • Avecho Biotechnology has confirmed receipt of $1.98 million for the year ended 31 December 2025 under the Australian Government’s R&D Tax Incentive Scheme.
  • $1.62 million of the funds will be used to repay Endpoint Capital for advances on the Company’s R&D tax Credit paid over the last year.
  • Remaining funds will support Company operations and advance Avecho’s commercialisation strategy.
  • Avecho’s lead asset is a proprietary cannabidiol (CBD) TPM soft-gel capsule, currently undergoing Phase III clinical development for the treatment of insomnia.
  • The Company describes a successful Phase III trial as Avecho’s final clinical step in support of a submission to the Australian TGA for pharmaceutical registration of the CBD TPM soft-gel capsule.
  • The trial has been designed with the stated intention of meeting requirements of the Australian TGA, the US Food and Drug Administration and the European Medicines Agency.

Avecho Biotechnology Limited (ASX:AVE) has confirmed receipt of $1.98 million for the year ended 31 December 2025 under the Australian Government’s Research and Development (R&D) Tax Incentive Scheme, providing a meaningful, non-dilutive cash injection for the Melbourne-based drug delivery and cannabinoid therapeutics developer.

According to the ASX announcement dated 22 May 2026, the receipt of these funds reinforces the Company’s significant and ongoing commitment to the development of differentiated cannabinoid formulations for pharmaceutical registration.

Of the $1.98 million received, $1.62 million will be used to repay Endpoint Capital for the advances on the Company’s R&D tax credit they have paid over the last year, with the balance supporting Company operations and advancing the commercialisation strategy as the Phase III clinical trial of Avecho’s CBD TPM soft-gel capsule for insomnia continues.

What the company announced

Avecho informed the market that it has received $1.98 million for the year ended 31 December 2025 under the Australian Government’s R&D Tax Incentive Scheme, a federal program designed to assist businesses recover some of the costs of undertaking research and development.

The Company stated that the receipt of these funds reinforces its significant and ongoing commitment to the development of differentiated cannabinoid formulations for pharmaceutical registration.

Avecho confirmed that $1.62 million of the receipt will be used to repay Endpoint Capital for advances on the Company’s R&D tax credit that Endpoint had paid over the last year. The balance of the receipt is intended to support Company operations and to advance Avecho’s commercialisation strategy aimed at bringing innovative medicines to patients globally.

The Company’s announcement contains background on its proprietary drug delivery system, Tocopheryl Phosphate Mixture (TPM®), which Avecho describes as derived from Vitamin E using unique, proprietary and patented processes. Avecho states TPM® is proven to enhance the solubility and oral, dermal and transdermal absorption of drugs and nutrients.

Avecho’s lead asset is a proprietary cannabidiol (CBD) TPM soft-gel capsule, which the Company describes as demonstrated to increase CBD absorption. The CBD soft-gel capsule is currently undergoing Phase III clinical development for the treatment of insomnia.

The announcement was authorised by the Board of Directors of Avecho Biotechnology Limited. Enquiries are directed to CEO Dr Paul Gavin on +61 3 9002 5000.

Key numbers from the announcement

The figures below are taken from the announcement, with clinical trial parameters drawn from the disclosed ClinicalTrials.gov identifier and the Company’s own description of the program.

  • R&D Tax Incentive amount received: $1.98 million.
  • Period covered: year ended 31 December 2025.
  • Repayment to Endpoint Capital: $1.62 million.
  • Implied retained portion of receipt: approximately $0.36 million ($1.98m less $1.62m), available to support operations and commercialisation strategy.
  • Lead clinical program: Phase III, multi-centre, randomised, double-blind, placebo-controlled trial.
  • Trial population: adults for use in the reduction of insomnia severity.
  • Trial dosing arms: 75mg CBD, 150mg CBD, and placebo (nightly).
  • Trial duration: eight weeks of dosing.
  • gov identifier: NCT05840822.
  • Trial location: multiple sites around Australia.
  • Regulatory intent: trial designed to meet requirements of the Australian TGA, US Food and Drug Administration and European Medicines Agency.

How the R&D Tax Incentive supports Avecho’s CBD TPM clinical program

The Australian R&D Tax Incentive Scheme is a federal government program intended to assist eligible businesses to recover a portion of the cost of undertaking research and development. For clinical-stage biotechnology companies such as Avecho, the scheme can be a meaningful source of non-dilutive funding for ongoing programs.

For Avecho, the receipt of $1.98 million for the year ended 31 December 2025 reflects R&D activity associated with the Company’s ongoing development programs, including the Phase III clinical trial of its proprietary CBD TPM soft-gel capsule for insomnia.

Endpoint Capital, named in the announcement, is a finance provider that had advanced funds against the expected R&D tax credit over the last year. Avecho confirms $1.62 million of the receipt will be applied to repay those advances. The remaining funds are intended to support Company operations and advance Avecho’s commercialisation strategy.

Avecho’s lead clinical program is described as a pivotal Phase III, multi-centre, randomised, double-blind, placebo-controlled clinical trial evaluating the efficacy and safety of CBD TPM soft-gel capsules in adults for use in the reduction of insomnia severity. The Company describes the trial as the largest of its kind testing cannabidiol.

Aided by advice from international sleep and regulatory experts, the trial has been designed to meet the requirements of the Australian Therapeutic Goods Administration (TGA), US Food and Drug Agency and the European Medicines Agency. Participants are randomly assigned to one of three groups to receive nightly doses of either 75mg or 150mg of CBD, or a placebo, for eight weeks. Participants use validated questionnaires and daily sleep diaries over the course of the study to record the duration and quality of their sleep. Further information about the study can be found at ClinicalTrials.gov under Study Identifier NCT05840822.

The Company states that a successful Phase III trial is Avecho’s final clinical step in support of a submission to the TGA for pharmaceutical registration of the CBD TPM soft-gel capsule for the management of insomnia. Avecho also notes that Australian regulatory changes in 2020 allow for over-the-counter sales of CBD products direct from pharmacy without a prescription, provided they gain appropriate approvals.

Management commentary

The 22 May 2026 announcement does not contain a separate management Quotation. The announcement has been authorised by the Board of Directors of Avecho Biotechnology Limited, with enquiries directed to CEO Dr Paul Gavin on +61 3 9002 5000.

Why this ASX announcement matters

For ASX investors following Avecho, the receipt of $1.98 million in R&D Tax Incentive funding is a recurring source of non-dilutive support for the Company’s clinical and operational activities, particularly the ongoing Phase III CBD TPM soft-gel capsule program in insomnia.

The repayment of $1.62 million to Endpoint Capital reflects the Company’s use of receivables financing to bridge the timing gap between incurring eligible R&D expenditure and receiving the corresponding tax refund — a common strategy among Australian biotechs.

Avecho describes a successful Phase III trial as the final clinical step in support of a submission to the TGA for pharmaceutical registration of the CBD TPM soft-gel capsule. While there is no certainty as to trial outcomes or regulatory decisions, the funding receipt supports continuity of execution toward that step.

The Phase III program is designed with the stated intention of meeting requirements of the Australian TGA, the US FDA and the European Medicines Agency. If achieved, this would position Avecho to seek pharmaceutical registration in multiple jurisdictions for a CBD product targeting insomnia, an indication the Company describes as affecting up to 237 million people globally based on cited prevalence estimates.

The funding receipt and operational continuity should be viewed in the broader context of Avecho’s drug-delivery platform (TPM®), which the Company states has applications beyond CBD, including in injectable, oral and topical products for the human health market and in livestock health.

Investor implications

Investors may wish to monitor Avecho’s ongoing communications regarding the Phase III CBD TPM soft-gel capsule trial, including any updates on recruitment, completion of dosing, data readouts and regulatory engagement.

The non-dilutive nature of the R&D Tax Incentive receipt is a positive feature relative to Equity raisings, though investors should consider Avecho’s overall funding position, including future R&D expenditure plans and any additional financing arrangements that may be entered into.

Successful Phase III trial completion, while described as Avecho’s final clinical step in support of a TGA submission, does not in itself guarantee regulatory approval or commercial success. Investors should consider the standard risks of biotech clinical development, including the possibility that trials do not meet primary endpoints.

The Company’s description of the regulatory framework — including its statement that Australian regulatory changes in 2020 allow for over-the-counter sales of CBD products direct from pharmacy without a prescription, provided they gain appropriate approvals — should be read as background rather than as commercial guidance.

Risks and uncertainties

Clinical trial risk: the Phase III CBD TPM soft-gel capsule insomnia trial is ongoing. There is no assurance that the trial will achieve its primary endpoints or that results will support regulatory submissions.

Regulatory Risk: any future submissions to the Australian TGA, US FDA and European Medicines Agency are subject to those regulators’ requirements and decision-making processes. The Company’s intentions are not guarantees of approval.

Funding risk: the R&D Tax Incentive is dependent on continued eligibility of R&D expenditure and on the prevailing scheme rules. Future receipts may differ from those reported.

Financing risk: Avecho has used Endpoint Capital advances against expected R&D tax credit receipts. Any change in the availability or terms of such financing could affect Cash Flow timing.

Commercialisation risk: even if regulatory approval is obtained, commercial success depends on factors including pricing, reimbursement, Marketing, competition and patient and prescriber adoption.

Forward-looking statement risk: the announcement includes forward-looking statements that are subject to a number of known and unknown risks and uncertainties. Readers should refer to the Company’s formal forward-looking statements disclaimer in the announcement.

What investors should watch next

  • Updates on recruitment progress, dosing completion and any milestones in the Phase III CBD TPM soft-gel capsule trial for insomnia.
  • Any guidance from Avecho regarding expected timing of Phase III data readouts.
  • Future announcements regarding the Company’s use of the funds retained after repayment of Endpoint Capital advances.
  • Subsequent R&D Tax Incentive claims for future income years, and any further advance arrangements with finance providers such as Endpoint Capital.
  • Engagement with the Australian TGA, US FDA and European Medicines Agency, including any pre-submission interactions.
  • Progress of Avecho’s broader TPM® projects across human and animal health, including cannabinoid and other formulations.