ABVC BioPharma Inc (ABVC)

[Biorat]

ABVC BioPharma: A Promising Investment With a $35 Per Share Valuation target



11/01/2023 1:00 A.M.

Highlights

• ABVC BioPharma, Inc. (NASDAQ: ABVC), is clinical-stage biopharmaceutical company developing therapeutic solutions in oncology/hematology, central nervous system (CNS) disorders, and ophthalmology.

• ABVC Biopharma has gained interest in the investment community due to strategic partnerships in neurological and mental health treatments.

• The company's CNS drugs targeting MDD and ADHD have definitive agreements and a licensing deal, with potential income of $20 million and a valuation of $667 million.

• ABVC's flagship product, Vitargus®, is expected to be the first biodegradable hydrogel product used in retinal detachment surgery, with positive results potentially leading to distribution agreements in Asia and Australia.


About the company

ABVC BioPharma, Inc. (NASDAQ: ABVC), is clinical-stage biopharmaceutical company developing therapeutic solutions in oncology/hematology, central nervous system (CNS) disorders, and ophthalmology.

Promising future in neurological and mental health treatments

ABVC Biopharma Inc. has recently gained interest in the investment community. The stock surged by 300% and then retreated on Thursday October 26, 2023 following the company's announcement of a term sheet to license global rights for CNS drugs targeting MDD and ADHD to AiBtl BioPharma for a valuation of $667 million. ABVC is excited about its major depressive disorder (MDD) and adult attention-deficit/hyperactivity disorder (ADHD) trials, which, if successful, will take the company closer to Phase III trials for those products and drive the multi-product biopharma company forward. ABVC has definitive agreements for the same CNS drugs with Xinnovation for ABV-1504, ABV-1505, and ABV-1601. The licensing deal carries a possible aggregate income of $20 million for ABVC. As per the Future Market Insights report, the MDD market was valued at $11.51 billion in 2022 and is expected to reach $14.96 billion by 2032. Xinnovation will fund the Phase III trials under the agreement and ABVC gets the global market less the Chinese market.

ABVC's CNS drugs have been developed into a controlled-release tablet formulation or PDC-1421, the primary active ingredient in its neurological programs. This formulation enables the active ingredient to be absorbed slower over time compared to conventional tablet formulations, thereby reducing the dosage frequency and increasing the bioavailability.

The product is ready for an End-of-Phase II meeting with the FDA to finalize the protocol for Phase III trials. At the same time, ABVC commenced the ADHD Phase IIb trials at the University of California, San Francisco (UCSF) and another five sites in Taiwan. The trials are heading for the interim report, which ABVC expects to complete by the end of 2023.

Vitargus®: A groundbreaking hydrogel product for retinal detachment surgery

In ophthalmology, ABVC’s Vitargus® (ABV-1701) is a groundbreaking, advanced-staged flagship product that is expected to be the first biodegradable hydrogel product used in retinal detachment surgery. Vitargus® has completed the feasibility study in Australia and was approved by the Australian Therapeutic Goods Administration (TGA) to initiate the next phase of the trial in two participating sites.

The Science Park Administration in Taiwan approved ABVC’s plan to set up a pilot Good Manufacturing Practice (GMP) facility to produce Vitargus® and to pursue the process development work for manufacturing optimization. This project is proposed by ABVC’s Taiwan affiliate and co-development partner, BioFirst Corporation.

The Phase II trial of Vitargus® is expected to release its results in Q4 2023. If the results are positive, it could lead to distribution agreements in Asia and Australia in early 2024.

According to iHealthcare Analyst, Inc., the global market for retinal surgery devices is expected to reach $4.3 billion by 2029, driven, in part, by the rising geriatric population worldwide.

Early clinical studies done by the Company indicate Vitargus® has unique properties that could eliminate the need for patients to remain in a face-down position post-surgery, while significantly improving patient comfort and visual acuity during surgical recovery compared to current products available on the market. Vitargus® is believed to be the first biodegradable vitreous substitute to eliminate the need for an additional surgery to remove surgical fluids.Several large pharmaceutical companies are interested in becoming distribution and/or manufacturing partners for Vitargus®. ABVC continues to have active discussions.


FDA approves clinical trial of BLEX 404 for advanced non-small cell lung cancer

The US FDA has approved the Investigational New Drug (IND) application for the proposed clinical investigation of BLEX 404, the primary active ingredient in ABV-1519. This treatment is being co-developed by BioKey, Inc. and by the Rgene Corporation, Taiwan. The study is under review at the Taiwan FDA for approval. With three previous INDs approved by the US FDA for combination therapies of triple-negative breast cancer, myelodysplastic syndromes (MDS), and pancreatic cancer, BLEX 404 is a promising new option in the fight against cancer.

Financials

ABVC BioPharma has been making significant strides in its clinical trials and pipeline development thus creating a more financially sound company going forward under an experienced CEO. The company generated $969,783 and $355,797 in revenues for the years ended December 31, 2022 and 2021, respectively, representing an increase of $613,986 or approximately 173%.Despite a net loss of $16,312,374 for the year ended December 31, 2022 compared to $12,035,851 for the year ended December 31, 2021, ABVC BioPharma has received a $3.175 million investment from The Lind Partners to continue clinical trials. This investment will help the company to further develop its pipeline of six drugs and one medical device known as Vitargus®, a biodegradable vitreous substitute that facilitates retina reattachment surgery.

ABVC has also signed both an agreement with Xinnovation and a term sheet with AiBtl BioPharma to earn licensing fees of up to $20 million from Xinnovation and royalties of 5-12% of net sales from AiBtl BioPharma. The licensed products in the term sheet with AiBtl BioPharma for Major Depressive Disorder (MDD) and Attention-Deficit/Hyperactivity Disorder (ADHD) were valued at $667 million by a third-party evaluation. The new CEO of ABVC has chosen to forgo a salary and instead opted for stock options as a pivotal component of his compensation package. This move demonstrates the CEO’s confidence in the company’s future and its potential for growth.The future financial outlook looks to be improving dramatically for ABVC BioPharma with the flagship product Vitargus® expected to find cash infusion collaboration deals in the near future.

Strategic partnerships

1)BioKey, Inc., a leading producer of dietary supplements in its GMP facility, is set to receive USD $1.0 million from Define Biotech Co. Ltd. amid increasing interest in mushroom-based nutritional supplements. Define Biotech has been granted the right to distribute the nutritional supplement containing Maitake mushrooms in China and Taiwan

.2)ABVC BioPharma has a collaboration agreement with MerDury BioPharma for New Product Development and Commercialization through BioKey, Inc.

3) Ramathibidi Hospital in Thailand. Press release

4) Srinagarind Hospital in Thailand Vitargus® meeting to discuss Phase II study protocol with the principal investigator and begin training clinical personnel. Agreement

5) Sydney Eye Hospital in Australia 

6) Cedars-Sinai Medical Center conducts some of the studies

7) Rgene Corporation, Taiwan Rgene. Co-development partnership[color=red][/color]

8) AiBtl BioPharma $667 million deal

9)  Xinnovation Licensing agreement

10) Science Park Administration in Taiwan creating production facility

11) Cooperation Agreement to exchange a 20% ownership stake in real estate property of Zhonghui United Technology (Chengdu) Group Co., Ltd. Health and wellness in China. Do not underestimate the culture for "healthy medicines" in China and all of Asia.

The above is not a full list of strategic partnerships as the list is extensive.

Conclusion

ABVC Biopharma Inc. is a promising investment with multiple near-term catalysts. The company’s strategic partnerships in neurological and mental health treatments create a promising future. ABVC’s CNS drugs targeting MDD and ADHD have definitive agreements with Xinnovation for ABV-1504, ABV-1505 and ABV-1601, Thedefinitive agreement carries a possible aggregate income of $20 million for ABVC. There is also a licensing deal with AiBtl BioPharma for a valuation of $667 million. As per the Future Market Insights report, the MDD market was valued at $11.51 billion in 2022 and is expected to reach $14.96 billion by 2032. ABVC’s CNS has been developed into a controlled-release tablet formulation or PDC-1421, the primary active ingredient in its neurological programs. This formulation enables the active ingredient to be absorbed slower over time compared to conventional tablet formulations, thereby reducing the dosage frequency and increasing the bioavailability.

Investors should keep an eye on ABVC’s major depressive disorder (MDD) and adult attention-deficit/hyperactivity disorder (ADHD) trials, which, if successful, will take the company closer to Phase III trials for those products and drive its multi-product biopharma company forward. The product is ready for an End-of-Phase II meeting with the FDA to finalize the protocol for Phase III trials. At the same time, ABVC has commenced ADHD Phase IIb trials at the University of California, San Francisco (UCSF) and another five sites in Taiwan. With all these developments in place, ABVC Biopharma Inc. is poised to make a significant impact in the biopharmaceutical industry. ABVC share could revalue upwards of $35 in 12 months given the transformation the CEO and his team are making at ABVC Biopharma.