ABVC BioPharma Reports Third Quarter 2022 Financial and Operational Results

FREMONT, CA, Nov. 14, 2022 (GLOBE NEWSWIRE) — via NewMediaWire – ABVC BioPharma, Inc. (Nasdaq: ABVC), a clinical stage biopharmaceutical company developing therapeutic solutions in oncology/hematology, CNS, and ophthalmology, today announced its financial and operating results for the third quarter of 2022.  These results, including the financial statements included herein, can be found in the Company’s Quarterly Report on Form 10-Q that was filed earlier today with the Securities and Exchange Commission. 

Third Quarter 2022 Financial Results

All comparisons are made on a year-over-year basis.

  • Revenues. The Company generated $42,269 and $98,999 in revenues for the three months ended September 30, 2022 and 2021, respectively. The decrease in revenues was mainly due to the completion of certain contract services during Q3 2021.
  • Operating Expenses increased by $1,678,209, or 81%, to $3,747,369 for the three months ended September 30, 2022 from $2,069,160 for the three months ended September 30, 2021. Such increase in operating expenses was mainly attributable to the increase in selling, general and administrative expenses by $1,636,150 which relates to costs in conjunction with our recent stock issuance and increase in research and development expenses of $42,059 to continue developing our pipeline.
  • Other Income (Expense) Our other (expense) income was $(56,461) for the three months ended September 30, 2022, compared to $8,643 for the three months ended September 30, 2021. The change was principally caused by the increase in interest expense, while being offset by the increase in interest income for the three months ended September 30, 2022, and loss on investment in equity securities and government grant income for the three months ended September 30, 2021.
  • Net Interest income (Expense) was $(78,372) for the three months ended September 30, 2022, compared to $(29,344) for the three months ended September 30, 2021. The increase of $49,028, or approximately 167%, was primarily due to the increase in interest expense due to recognition of interest expense for the converted notes for proper accounting purposes.
  • Net Loss. As a result of the above factors, our net loss was $3,776,524 for the three months ended September 30, 2022 compared to $1,886,244 for the three months ended September 30, 2021, representing a decrease of $1,890,280, or 100%.

Recent Operational Highlights

Vitargus® Phase II Study

  • Australia: Vitargus® Phase II Clinical Study protocol documents were accepted by the Australian Bellberry Human Research Ethics Committee (“HREC”) and a Clinical Trial Notification (“CTN”) was submitted to the Australian Therapeutic Goods Administration (TGA) to initiate the study in Australia.
  • Thailand: On August 2, 2022, the Ethics Committee (EC) of the Ramathibodi Hospital, Mahidol University provided approval allowing the hospital to conduct the Vitargus Phase II Study. This follows a similar approval received on July 18, 2022, by Srinagarind Hospital, Khon Kaen University of Thailand. On November 2, 2022, both hospitals received Thai FDA investigational product (IP) import licenses allowing them to initiate the clinical study in Thailand.

ADHD Phase II Part 2 Clinical Update

  • Taiwan: The Phase II Part 2 clinical study of the Company’s ADHD medicine, ABV-1505 has been initiated at five prestigious medical centers in Taiwan. The Part 2 study is a randomized, double-blind, placebo-controlled study, titled “A Phase II Tolerability and Efficacy Study of PDC-1421 Treatment in Adult Patients with Attention-Deficit Hyperactivity Disorder (ADHD), Part 2”. Thirty-five subjects have already been enrolled including 20 subjects who have completed the 56-day treatment. It is expected that eventually approximately 100 patients in Taiwan and the United States will participate in the study.
  • United States: The University of California, San Francisco (UCSF) Medical Center Institutional Review Board has approved participation in the Part 2 study, set to begin in the first quarter of 2023. Part 1 of the Phase II study of ABV-1505 was conducted at UCSF from January 2020 through July 2020 and was accepted by the US Food & Drug Administration in October of 2020.

Other Developments

  • On October 20, 2022, ABVC received a Notice of Allowance for ABV-1504 from the US Patent and Trademark Office that substantially extends the existing patent life of ABV-1504 to the year 2041.  The patent, entitled “Polygala Extract for the Treatment of Major Depressive Disorder,” outlines a method for treating major depressive disorder by oral administration of a composition, ABV-1504, containing Radix Polygalae (Polygala tenuifolia Willd). The polygala extract, designated PDC-1421, is the key active ingredient in ABV-1504 which was orally administered to healthy volunteers and proved to be safe and well-tolerated for a daily dose from 380 mg to 3800 mg. The completed Phase II clinical study indicated that the drug can be administered chronically over at least 42 days with the daily dose administered three times per day, wherein each dose contains from 380 mg to 760 mg of the botanical extraction.
  • The Cedars-Sinai Medical Center (CSMC, West Hollywood CA) Institutional Review Board (IRB) has approved their institution joining the Phase I study of ABV-1601 for treating depression in cancer patients. The Principal Investigator of the CSMC study will be Dr. Scott A. Irwin, MD, PhD., an eminent Professor of Psychiatry & Behavioral Neurosciences. The Phase I study is open label and will be conducted with 12 cancer patients with moderate to severe depressive symptoms. The main objective of the study is to evaluate the safety of PDC-1421, the primary active ingredient in ABV-1601. The second objective is to determine the most effective dosages for a randomized, double-blind, non-inferiority Phase II trial of PDC-1421 that ABVC expects to initiate in 2023. The Company then intends to compare results of the Phase II study of ABV-1601 to Wellbutrin XL, a commonly used medicine to treat cancer patients suffering with depression.

About ABVC BioPharma, Inc.

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, it is focused on utilizing its licensed technology to conduct proof-of-concept trials through Phase II of the clinical development process at world-famous research institutions (such as Stanford University, University of California at San Francisco, and Cedars-Sinai Medical Center). For Vitargus®, the company intends to conduct the clinical trials through Phase III at various locations throughout the globe.

Forward-Looking Statements

Clinical trials are in early stages, and there is no guarantee that any specific outcome will be achieved. 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. 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;  (v) difficulties in securing regulatory approval to proceed to the next level of the clinical trials or to market our product candidates; and (vi) impact of COVID-19 pandemic on our business, results of operations, financial condition and cash flows. 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 these securities, nor shall there be any sale of these 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 that state or jurisdiction.

Leeds Chow
Email: leedschow@ambrivis.com

      September 30,   December 31,
      2022     2021  
Current Assets          
Cash and cash equivalents $ 1,323,543     $ 5,828,548  
Restricted cash and cash equivalents   646,604       736,667  
Accounts receivable, net   47,680       280,692  
Accounts receivable – related parties, net         145,399  
Due from related party – Current   500,000        
Inventory, net   20,489       25,975  
Short-term Investment   77,583       108,147  
Prepaid expense and other current assets   287,181       528,354  
Total Current Assets   2,903,080       7,653,782  
Property and equipment, net   566,751       525,881  
Operating lease right-of-use assets   1,243,930       1,471,899  
Goodwill, net          
Long-term investments   816,160       932,755  
Deferred tax assets   1,013,159       981,912  
Prepaid expenses – noncurrent   103,218       119,309  
Security deposits   57,656       41,157  
Prepayment for long-term investments   2,586,358       1,153,155  
Due from related parties – noncurrent   1,190,255       818,183  
Total Assets $ 10,480,567     $ 13,698,033  
Current Liabilities          
Short-term bank loans $ 1,866,250     $ 1,640,000  
Accrued expenses and other current liabilities   1,201,497       1,300,803  
Advance from customers   10,985       10,985  
Operating lease liability – current portion   363,752       347,100  
Due to related parties   451,826       393,424  
Total Current Liabilities   3,894,310       3,692,312  
Tenant security deposit   12,880       10,580  
Operating lease liability – noncurrent portion   880,178       1,124,799  
Total Liabilities   4,787,368       4,827,691  
Preferred stock, $0.001 par value, 20,000,000 authorized, nil shares issued and outstanding          
Common stock, $0.001 par value, 100,000,000 authorized, 32,632,329 and 28,926,322 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively   32,632       28,926  
Additional paid-in capital   66,493,649       58,113,667  
Stock subscription receivable   (1,580,180 )     (2,257,400 )
Accumulated deficit   (50,040,501 )     (38,481,200 )
Accumulated other comprehensive income   113,081       539,660  
Treasury stock   (9,100,000 )     (9,100,000 )
Total Stockholders’ equity   5,918,681       8,843,653  
Noncontrolling Interest   (225,482 )     26,689  
Total Equity   5,693,199       8,870,342  
Total Liabilities and Equity $ 10,480,567     $ 13,698,033  
      Three Months Ended September 30,   Nine Months Ended September 30,
      2022     2021     2022     2021  
Revenue $ 42,269     $ 98,999     $ 380,789     $ 393,590  
Cost of revenue   10,741       393       21,004       2,284  
Gross profit   31,528       98,606       359,785       391,306  
Operating expenses                      
Selling, general and administrative expenses   3,216,146       1,579,996       6,000,055       3,979,283  
Research and development expenses   305,483       263,424       1,197,669       743,617  
Stock based compensation   225,740       225,740       5,143,483       927,220  
Total operating expenses   3,747,369       2,069,160       12,341,207       5,650,120  
Loss from operations   (3,715,841 )     (1,970,554 )     (11,981,422 )     (5,258,814 )
Other income (expense)                      
Interest income   48,165       9,333       127,354       72,584  
Interest expense   (126,537 )     (38,677 )     (159,507 )     (251,577 )
Operating sublease income   21,597       2,624       78,523       60,822  
Operating sublease income – related parties         1,200             3,600  
Gain/Loss on foreign exchange changes   (177 )     (5,999 )     17,865       (10,806 )
Gain/Loss on investment in equity securities         (91,765 )           (193,147 )
Other (expense) income   491       (404 )     (59,381 )     (171 )
Government grant income         132,331             256,731  
Total other income (expense)   (56,461 )     8,643       4,854       (61,964 )
Loss before provision for income tax   (3,772,302 )     (1,961,911 )     (11,976,568 )     (5,320,778 )
Provision for income tax   4,222       (75,667 )     (165,096 )     (186,255 )
Net loss   (3,776,524 )     (1,886,244 )     (11,811,472 )     (5,134,523 )
Net loss attributable to noncontrolling interests   (71,660 )     (79,756 )     (252,171 )     (227,964 )
Net loss attributed to ABVC and subsidiaries   (3,704,864 )     (1,806,488 )     (11,559,301 )     (4,906,559 )
Foreign currency translation adjustment   (190,019 )     16,138       (426,579 )     416,859  
Comprehensive loss $ (3,894,883 )   $ (1,790,351 )   $ (11,985,880 )   $ (4,489,700 )
Net loss per share:                      
Basic and diluted $ (0.11 )   $ (0.07 )   $ (0.37 )   $ (0.20 )
Weighted average number of common shares outstanding:                  
Basic and diluted   32,574,551       26,882,181       31,193,397       25,053,522  
          Nine Months Ended September 30,
          2022     2021  
Cash flows from operating activities          
Net loss   $ (11,811,472 )   $ (5,134,523 )
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation   17,364       8,725  
Stock based compensation for non employees   5,143,483       927,220  
Gain/Loss on investment in equity securities         193,147  
Government grant income         (256,731 )
Provision for doubtful accounts   521,955        
Other non-cash income and expenses   30,564        
Deferred tax   (31,247 )     (187,055 )
Changes in operating assets and liabilities:          
Decrease (increase) in accounts receivable   (31,909 )     (171,655 )
Decrease (increase) in prepaid expenses and deposits   243,065       (647,219 )
Decrease (increase) in due from related parties   (983,707 )     422,651  
Decrease (increase) in inventory   5,486       (59,673 )
Increase (decrease) in accounts payable         (6,547 )
Increase (decrease) in accrued expenses and other current liabilities (99,306 )     (338,928 )
Increase (decrease) in advanced from others         (1,085 )
Increase (decrease) in due to related parties   58,402       178,570  
Net cash used in operating activities   (6,937,322 )     (5,073,103 )
Cash flows from investing activities          
Purchase of equipment   (119,603 )      
Purchase of investment         (110,700 )
Purchase of property, plant and equipment         (18,503 )
Prepayment for equity investment   (1,518,793 )     (1,104,609 )
Net cash used in investing activities   (1,638,396 )     (1,233,812 )
Cash flows from financing activities          
Issuance of common stock   3,917,425       6,875,000  
Payment for offering costs         (850,429 )
Proceeds from short-term loan   350,000        
Repayment of convertible notes         (306,836 )
Repayment of short-term loan         (100,000 )
Repayment of notes payable         (107,100 )
Proceeds from long-term loan         236,498  
Repayment of long-term bank loans         (4,396 )
Net cash provided by (used in) financing activities   4,267,425       5,742,737  
Effect of exchange rate changes on cash and cash equivalents and restricted cash   (286,775 )     11,579  
Net decrease in cash and cash equivalents and restricted cash   (4,595,068 )     (552,599 )
Cash and cash equivalents and restricted cash          
Beginning     6,565,215       5,001,371  
Ending     $ 1,970,147     $ 4,448,772  
Supplemental disclosure of cash flows          
Cash paid during the year for:          
Interest expense paid $ 161,741     $ 327,642  
Income taxes paid $ 1,600     $  

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