ABVC BioPharma and its Subsidiary Receive $460M From AiBtl BioPharma as the First Milestone Payment of Global Licensing Fees

Rhea-AI Summary

ABVC BioPharma, Inc. (NASDAQ: ABVC) and its subsidiary BioLite, Inc. announced that they received 46 million shares from AiBtl BioPharma Inc. as the first milestone payment under a global licensing agreement. The agreement values the payment at $460. The Company's pipeline of products has excellent market potential, with the MDD market expected to reach $14.96 billion by 2032 and the global ADHD treatment market expected to grow at a CAGR of 7.3% between 2023-2032.

Financial Analyst

The exchange of shares between ABVC BioPharma and AiBtl as a form of milestone payment under their licensing agreement is a strategic financial move. The valuation of these shares at $10 each, amounting to $460 million, is a significant liquidity event for ABVC, potentially bolstering its balance sheet. The expectation of additional licensing fees and royalties provides a forward-looking revenue stream, which is essential for the company's financial health and investor confidence. The impact on ABVC's stock could be positive, as the market often reacts favorably to increased cash flows and expansion of revenue sources. However, investors should be mindful of the inherent risks of such transactions, including the execution risk of AiBtl meeting further milestones and the market's acceptance of CNS drugs for MDD and ADHD.

Market Research Analyst

ABVC's strategic alignment with AiBtl to tap into the MDD and ADHD markets is underpinned by promising market growth projections, as highlighted by the Future Market Insights and Polaris market research reports. The projected CAGRs of 2.8% and 7.3%, respectively, for these markets indicate a steady demand for CNS therapies, which could translate into a robust revenue stream for ABVC if their pipeline products capture a significant market share. The botanical drug market, with a staggering expected CAGR of 39%, represents an additional growth avenue. ABVC's investors should consider the company's ability to capitalize on these growth trends through its product pipeline and international business development strategies.

Pharmaceutical Industry Analyst

The licensing agreement between ABVC and AiBtl marks a pivotal step in ABVC's commercial strategy, particularly for its CNS drugs addressing MDD and ADHD. The receipt of 46 million shares as a milestone payment not only reflects a non-dilutive financing strategy but also indicates confidence in the potential success of the licensed products. The subsequent milestone payments, including cash and royalties, suggest a long-term revenue generation model. Given the current market valuations for MDD and ADHD treatments, ABVC's pipeline products seem well-positioned to capture market share, assuming they demonstrate clinical efficacy and gain regulatory approvals. The consolidation of AiBtl as a subsidiary and related party could streamline operations and foster synergies in international market expansions.

FREMONT, CA , Jan. 03, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire  – ABVC BioPharma, Inc. (NASDAQ: ABVC) and its subsidiary BioLite, Inc. ("Company"), a clinical-stage biopharmaceutical company developing therapeutic solutions in ophthalmology, CNS (central nervous systems), and oncology/hematology, announced today that the Company and its subsidiary received an aggregate of 46 million shares from AiBtl BioPharma Inc. ("AiBtl"), as its first milestone payment under a global licensing agreement. The agreement between the Company and AiBtl placed a value of $460 ($10 per share) on such payment. AiBtl is a private company, and the share value is based on the terms of the agreement between the parties and the valuation report done by an independent third party.

The Company entered into a definitive global licensing agreement with AiBtl on November 12, 2023, for the Company's CNS drugs with the indications of MDD (Major Depressive Disorder) and ADHD (Attention Deficit Hyperactivity Disorder). According to the terms of the agreement, AiBtl delivered 46M shares to the Company as the first milestone payment. The Company expects AiBtl to achieve the further milestones under the agreement, upon which the Company may receive the remaining licensing fees of up to $7M cash and 5% royalties of net sales, up to $200M.
                                                                                                                 
"I am pleased with the progress of ABVC and AiBtl's collaborative work, which reflects ABVC's strength to grow and increase cash flow," said  Uttam Patil, Ph.D., Chief Executive Officer of ABVC. He continued, "After this licensing payment, AiBtl becomes a subsidiary of ABVC, which holds 57% of the consolidated shares of AiBtl; accordingly, AiBtl is now also considered a related party.
“We believe this milestone payment marks the beginning of ABVC's revenue generation through licensing deals and opens new avenues that could potentially increase ABVC's revenue. AiBtl will help ABVC conduct international business development for the MDD and ADHD markets and bridge the partnership with international pharmaceutical companies."

"Completing out-licensing for the licensed products is our priority to strengthen our collaboration with ABVC," said AiBtl's Chief Executive Officer Russman Jaimes. He further commented, "AiBtl is a US company registered in Delaware. We are working on progressive joint ventures in Asia to expand the healthcare business and are poised to strengthen it. With ABVC's strong pipeline of products, we believe AiBtl has a strong future."

Management believes the Company's pipeline of products has excellent market potential. 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 with a CAGR of 2.8% over the forecast period[1]. According to the Polaris market research report, the global ADHD treatment market was valued at $15.23 billion in 2022 and is expected to grow at a CAGR of 7.3% over the forecast period between 2023-2032.[2] Straits Research reports that the global botanical drug market size was valued at $163 million in 2021 and is expected to be valued at $3.2 billion; the market is expected to grow at a CAGR of 39% during the forecast period (2022–2030).[3]

About ABVC BioPharma & Its Industry
ABVC BioPharma is a clinical-stage biopharmaceutical company with an active pipeline of six drugs and one medical device (ABV-1701/Vitargus®) under development. For its drug products, the Company utilizes in-licensed technology from its network of world-renowned research institutions to conduct proof-of-concept trials through Phase II of clinical development. The Company's network of research institutions includes Stanford University, University of California at San Francisco, and Cedars-Sinai Medical Center. For Vitargus®, the Company intends to conduct global clinical trials for PMA (pre-Market Approval).

Forward-Looking Statements
This press release contains "forward-looking statements." Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential," or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified, and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. None of the outcomes expressed herein are guaranteed. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our product candidates on a commercial scale on our own, or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; and (v) difficulties in securing regulatory approval to proceed to the next level of the clinical trials or to market our product candidates. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors are urged to read these documents free of charge on the SEC's website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy any of the Company's securities, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from registration, nor shall there be any offer, solicitation or sale of any of the Company's securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

Contact:
Leeds Chow
Email: leedschow@ambrivis.com
  

[1] https://www.futuremarketinsights.com/reports/major-depressive-disorder-treatment-market#:~:text=The%20major%20depressive%20disorder%20(MDD,US%24%2011.51%20billion%20in%202022
[2]  https://www.polarismarketresearch.com/industry-analysis/attention-deficit-hyperactivity-disorder-market
[3] https://straitsresearch.com/report/botanical-drugs-market

What is the company name and ticker symbol of the clinical-stage biopharmaceutical company mentioned in the press release?

The company mentioned in the press release is ABVC BioPharma, Inc. Its ticker symbol is ABVC.

What was the value of the first milestone payment received by ABVC BioPharma, Inc. from AiBtl BioPharma Inc.?

The first milestone payment received by ABVC BioPharma, Inc. from AiBtl BioPharma Inc. was valued at $460.

What are the indications of the CNS drugs developed by ABVC BioPharma, Inc.?

The CNS drugs developed by ABVC BioPharma, Inc. have indications of MDD (Major Depressive Disorder) and ADHD (Attention Deficit Hyperactivity Disorder).

What is the expected market value of the MDD market by 2032 according to the Future Market Insights report mentioned in the press release?

The MDD market is expected to reach $14.96 billion by 2032 with a CAGR of 2.8% over the forecast period.

What is the expected growth rate of the global ADHD treatment market according to the Polaris market research report mentioned in the press release?

The global ADHD treatment market is expected to grow at a CAGR of 7.3% over the forecast period between 2023-2032.