Aussie biotech finds its market niche down in the weeds

Aussie biotech finds its market niche down in the weeds

Date of Report: Market close on Tuesday, 1st March
ASX: AVEPrice: A$0.014

52 Week Range: $0.012 - $0.026

Market Cap: $22.05 million

Sector: Pharmaceuticals, biotechnology & life sciences

Every second week we invite a leading fund manager to present at The Insider: Meet the Fund Manager. In September, Matt McNamara, from Horizon3 BioTech, selected Avecho as one of his two favourite stocks, noting the company could be a major beneficiary of the growing demand for cannabinoid medications.

17 September, 2021

8 December, 2021

The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.

The Insider: Meet the CEO sessions feature a selection of company leaders who provide a succinct overview of big things their companies are doing. 

As demand for medicinal cannabis in Australia continues to grow, listed biotechnology company Avecho is looking to capture the recently opened market for over-the-counter cannabidiol (CBD) products. 

The Melbourne-based company produces a novel drug delivery system called TPM (tocopheryl phosphate mixture), which improves the solubility, stability and bioavailability of certain medications, including cannabinoids.

“TPM is a proprietary mixture of two different forms of phosphor-related vitamin E, which we manufacture at our facility in Melbourne,” Avecho CEO Dr Paul Gavin said.

“When it’s added to systems containing water, TPM can self-assemble into tiny vesicles – tiny little nano-particles – that can encapsulate drug molecules.”

This encapsulation process makes it easier for the human body to absorb certain drug molecules, which can make certain medicines work faster and last longer – particularly those that are not readily soluble in water.

Although this has a range of applications, Dr Gavin noted that recent changes to cannabinoid ‘scheduling’ – referring to the classifications used to dictate how drugs are made available to consumers – has opened a new market for the business.

“In December 2020, the TGA (Therapeutic Goods Administration) down-scheduled cannabidiol to an over-the-counter medicine,” he said.

“That means future cannabidiol products can be approved as over-the-counter medicines, so patients can walk straight into the pharmacy and buy CBD directly from the pharmacist without having to go to the GP.”

Dr Gavin said these changes are almost “tailor-made” for Avecho, and the company has developed a 75mg cannabidiol product that uses TPM to drastically improve absorption of the active chemicals. 

In the right formulation, TPM can lift the absorption of CBD by 40 times in animals, Dr Gavin noted.

Matt McNamara, chief investment officer of Horizon3 BioTech and non-executive director of Avecho, said the business is now exploring how this pans out in humans, too.  

“[The results in animals] mean you can improve the effectiveness of the dosing that you do give and you can actually reduce the amount of doses that you might give,” he said.“We’re very hopeful and confident that this will be proven in humans, and make the administering of CBD that much cleaner and more effective.”

Click here to view more videos from Matt McNamara’s  Meet the Fund Manager’ session, or click here to view the full ‘The Insider: Meet the CEOs’ session.

The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.

Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.

The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.

Meet the Fund Manager

Upcoming Session

Ben HarrisonChief Investment OfficerAltor Capital

Meet the Manager

Get access to some of Australia’s leading fund managers who share their 3 favourite stocks, investment approach and insights on the market.

Each session includes:

  • 3 favourite stock opportunities
  • Market views for the year ahead
  • Investment strategy and approaches

This is a live and interactive session, where you get the rare opportunity for Q&A with a fund manager. Spots are limited, so secure yours today.

Book into the next session

What is a 708 investor?

By clicking submit, I agree to the terms of the Reach Markets Financial Services Guide that includes the Privacy Statement.

The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.