Avecho Biotechnology Limited announced it has entered into a product license and supply agreement with Medterra granting Medterra exclusive rights to develop and commercialize Avecho's soft-gel CBD capsule for the oral treatment of arthritis (other than in Australia and New Zealand). The Agreement signals a strategic step forward in Avecho's ambitions to secure Food and Drug Administration ("FDA") approval for its soft-gel CBD product - and will occur in parallel to its existing work to register the product for sleep indications with the Therapeutic Goods Administration ("TGA") in Australia. Medterra is one of the most successful CBD companies in the United States, known for developing and selling science-backed products in the consumer space. Its business development activities are now shifting to emerging opportunities in the pharmaceutical space, with the launch of Medterra Pharma. Medterra will develop Avecho's CBD soft-gel capsule product as an oral treatment for arthritis indications including osteoarthritis and rheumatoid arthritis. Medterra scientists have already demonstrated the therapeutic potential of CBD for the treatment for arthritis in preclinical models. In vitro and in mouse models, CBD significantly attenuated the production of pro-inflammatory cytokines IL-6 and TNF-a while elevating levels of anti-inflammatory IL-10. In canine models of osteoarthritis, CBD significantly decreased pain and increased mobility in a dose-dependent manner. Pursuant to the terms of the Agreement, Avecho will receive USD 50,000 upon execution of the Agreement and up to an additional USD 800,000 in milestone payments triggered by the submission of INDs for subsequent clinical trials. Avecho will receive 2% royalties on net sales upon the successful commercialization of the CBD soft-gel product, and can receive a further profit-share of up to 20% dependent upon Medterra Pharmaceuticals development plans for arthritis treatments and Avecho's ongoing patent protection. Avecho will retain the manufacturing rights for the soft-gel product, which will be supplied to Medterra (based on its published pricing) using a third party contract manufacturer. Avecho will manufacture and supply the TPM for use in the product. Avecho will retain all rights for the soft-gel product for the treatment of arthritis in Australia and New Zealand, while Medterra is granted the development and commercialisation rights to the indication for the rest of the world. Avecho also retains all rights to the soft-gel product anywhere in the world for other indications, including over-the-counterapplications and treatment of "acute pain" indications not specific to treatment of arthritis indications. The Agreement is effective immediately and will continue in perpetuity unless terminated by either party due to a material breach of the Agreement or terminated by Medterra due to discontinuation of development of commercialisation of the soft-gel product for technical, scientific, medical or regulatory reasons.