Bod Australia has entered into an agreement to produce a low-dose CBD product exclusively for pharmaceutical company Arrotex, a move the cannabis company says will generate a "consistent revenue stream" over multiple years.
The five-year licence and supply arrangement will see Bod develop an over-the-counter (OTC) medicine for Arrotex, with an initial upfront payment of A$500,000.
Bod describes Arrotex as Australia's largest generic pharmaceutical and private label OTC medicines company, holding preferred agreements with 3,000 pharmacies across the country.
The agreement is contingent on Bod completing a successful phase IIB clinical trial by June 30 next year and securing registration of an OTC product with the Therapeutic Goods Administration (TGA) by August 2024.
Bod's clinical trial is focused on symptoms related to insomnia.
Chief executive Jo Patterson called the agreement "an exciting step for Bod."
"It highlights our position as an agile and trusted drug developer for large corporate partners and has the potential to unlock considerable value through Arrotex's established channels into the Australian market," she said.
"We are excited to progress work towards commercialising a unique product for Arrotex and the Australian market, allowing us to become one of the first providers of Schedule 3 CBD medicines in Australia."
Patterson added that the clinical trial is "well advanced."
Bod said the deal shows its capacity to "commercialise its drug development pipeline and provides another consistent revenue stream over the coming years."
Arrotex chief commercial officer Sandy Mellis said: "We look forward to adding a specially designed, scientifically proven CBD medicine to our OTC product range.
"Bod has previously undertaken a considerable amount of R&D and clinical trial research on its unique cannabis extract and has the ability to bring a new CBD product to the Australian market quickly.
"This speed to market and expertise in commercialisation for large corporates makes it an exciting and obvious partner."
How quickly a product reaches shelves, however, depends heavily on regulatory processes that sit outside the control of the companies involved.
After trials conclude and dossiers are submitted — with the first expected in the opening quarter of 2023 — the TGA will require several months to assess each application.
Views differ on whether any product could realistically reach consumers before the end of 2023.
