Avata Biosciences Holdings Ltd has announced a significant co-development and licensing agreement with Oceanus Bio, Inc., securing $95 million in co-development contributions, regulatory and sales milestone payments, plus double-digit royalty payments. The deal grants Oceanus exclusive rights to develop and commercialize AVAT-021 and AVAT-022 in Japan and Asia, excluding China and India.
Breakthrough Solid Dose CBD Technology
The partnership centers on AVAT-021, a solid dose cannabidiol formulation designed for adult patients with treatment-resistant epilepsy and schizophrenia. According to Rupert Haynes, Chief Executive Officer of Avata Biosciences, the epilepsy community has long sought a solid dose CBD medicine, but achieving the high therapeutic levels needed has proven challenging for developers.
"The ability to pack more than 200mg of CBD into size 0 capsules represents a significant technological innovation," Haynes stated. This breakthrough addresses a critical unmet need in the cannabidiol therapeutic space, where previous attempts at solid dose formulations have struggled to deliver adequate therapeutic concentrations.
Positive Phase 1 Results Drive Partnership
Avata has achieved positive Phase 1 data demonstrating the tolerability and bioavailability of AVAT-021 in comparison to Epidiolex®, the currently approved CBD medication. The trial met all pharmacokinetic objectives, marking a significant milestone in the development of the company's cannabidiol portfolio.
The company is also advancing AVAT-022, a water-soluble CBD powder formulation developed as an alternative route of administration for pediatric patients and others who find capsules difficult to swallow. This dual approach addresses both adult and pediatric patient populations with neurological conditions.
Strategic Partnership with Asian Market Focus
Oceanus Bio brings substantial expertise to the collaboration, founded by Kazunari Tsunaba and built upon proven leadership experience from Novartis Japan and Aculys Japan. The company specializes in CNS drug development with a track record of successful drug development and commercialization in Japan.
"We are excited to partner with Avata to advance the development of AVAT-021 and AVAT-022 in Japan and Asian countries," said Tsunaba, CEO of Oceanus Bio. "This collaboration represents a key step in fulfilling our mission to improve outcomes for patients with neurological and psychiatric disorders in Asia."
Regulatory Strategy and Timeline
In the United States, Avata plans to file an Investigational New Drug application in the second half of 2025, utilizing the Food and Drug Administration's 505(b)(2) expedited regulatory pathway. This approach is designed to make a solid dose CBD prescription medicine commercially available for U.S. patients in the shortest possible timeframe.
Oceanus will lead regulatory engagement and clinical development in Japan and Asian regions in close collaboration with Avata. The agreement funding will accelerate clinical development and enable build-out of scalable manufacturing capabilities in the United States.
Addressing Neurological Disease Burden
The partnership targets significant therapeutic areas including treatment-resistant epilepsy and schizophrenia, conditions that represent substantial unmet medical needs. The development of both adult and pediatric formulations demonstrates a comprehensive approach to addressing diverse patient populations with neurological and psychiatric disorders across Asian markets.
