AVECHO BIOTECHNOLOGY LIMITED — Capital/Financing Update 2020

Aug 19, 2020

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ASX Announcement

20 August 2020

ASX Market Announcements ASX Limited Level 4, North Tower, Rialto 525 Collins Street Melbourne VIC 3000

Progress Update for TPM® Cannabinoid Development Program

Melbourne , Australia, 20 August 2020 - Avecho Biotechnology Limited (ASX: AVE) (“Avecho” or the “Company”), today announces that it is proceeding to the next phase of the recently announced cannabinoid development program. The decision to move forward was made possible after in vitro studies confirmed increased cannabidiol (CBD) dispersibility and solubilisation from TPM® cannabidiol formulations in simulated gastro-intestinal digestions.

As presented to the market in June, Avecho has begun the development of pharmaceutical cannabinoid products combined with its TPM® technology. These products aim to increase the oral absorption of cannabinoids, to overcome limitations associated with poor bioavailability and high variability in absorption, and improve the cost to patients.

This development program consists of three main components; (i) in vitro testing in simulated gastrointestinal digestions, (ii) animal studies to assess in vivo bioavailability of candidate formulations, and (iii) subsequent human trials testing the best formulations.

Researchers at Bioneer:FARMA, located within the University of Copenhagen, have completed the first round of formulation testing in vitro. Various formulations containing TPM® were assessed for their ability to solubilize CBD during simulated gastro-intestinal digestion. Solubility of drug molecules in the intestinal space is required for absorption, and this in vitro model pioneered by researchers at the University of Copenhagen, can predict formulations that produce improved oral bioavailability in-vivo.

CBD administered in a commercial formulation vehicle was found to have very poor gastric and intestinal solubility: a finding that correlates well with the poor oral bioavailability reported for CBD in the literature. As predicted, test formulations containing TPM® were found to significantly increase the solubilisation of CBD during gastric and intestinal in vitro digestion, suggesting the potential for improved oral bioavailability in animals and patients.

Formulations identified in these experiments are now scheduled for testing in animal studies. These experiments will characterize the CBD absorption profile after oral administration in vivo, and identify a formulation to take forward into human testing. The animal studies are scheduled to begin in the coming weeks.

Dr Paul Gavin, Chief Executive Officer of Avecho, said: “We are happy to have successfully passed this first step with a demonstrated increase in drug solubilisation during in vitro digestion. The coming months will determine whether this increase in gastro-intestinal solubilissolation produces a commensurate increase in oral bioavailability”.

Data from both the in vitro and in vivo animal studies will not only be used to support the clinical development of Avecho’s own pharmaceutical products, but also supplementary licensing opportunities for TPM® allowing medicinal cannabis suppliers to differentiate their own products.

Avecho Biotechnology Limited | ASX: AVE | ACN: 056 482 403 | ABN: 32 056 482 403 Unit 8A, 2A Westall Road, Hallmarc Business Park, Clayton VIC Australia 3168

avecho.com.au

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For enquiries, please contact

Ms Melanie Leydin Company Secretary Avecho Biotechnology Limited +61 3 9002 5000

This announcement has been authorised by the Board of Directors of Avecho Biotechnology Limited.

About Avecho

Avecho Biotechnology Limited develops and commercialises innovative Human and Animal Health products using its proprietary drug delivery system called Tocopheryl Phosphate Mixture ( TPM® ). TPM® is derived from Vitamin E using unique, proprietary and patented processes and is proven to enhance the solubility and oral, dermal and transdermal absorption of drugs and nutrients.

Avecho's major projects include delivering TPM® enhanced injectable, oral and topical products for the human health market and is also developing TPM® to enhance the feed efficiency and health of livestock.

See more here - avecho.com.au

Forward-Looking Statements

Certain statements in this announcement are forward looking statements. Forward looking statements can generally be identified by the use of words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “target”, “may”, “assume” and words of similar import. These forward-looking statements speak only as at the date of this announcement. These statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause the actual results, performances and achievements to differ materially from any expected future results, performance or achievements expressed or implied by such forward looking statements.

No representation, warranty or assurance (express or implied) is given or made by AVE that the forwardlooking statements contained in this announcement are accurate, complete, reliable or adequate or that they will be achieved or prove to be correct. Except for any statutory liability which cannot be excluded, AVE and its respective officers, employees and advisers expressly disclaim any responsibility for the accuracy or completeness of the forward looking statements and exclude all liability whatsoever (including negligence) for any direct or indirect loss or damage which may be suffered by any person as a consequence of any information in this announcement or any error or omission therefrom.

Subject to any continuing obligation under applicable law or relevant listing rules of the ASX, AVE disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements in these materials to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of AVE since the date of the announcement.

Avecho Biotechnology Limited | ASX: AVE | ACN: 056 482 403 | ABN: 32 056 482 403 Unit 8A, 2A Westall Road, Hallmarc Business Park, Clayton VIC Australia 3168

avecho.com.au