ABVC BioPharma Reports Third Quarter 2022 Financial and Operational Results

Rhea-AI Summary

ABVC BioPharma reported its Q3 2022 financial results, revealing a revenue drop to $42,269, down from $98,999 in Q3 2021. Operating expenses surged by 81% to $3,747,369, largely due to increased selling and administrative costs connected to recent stock issuance. The net loss escalated to $3,776,524, reflecting a 100% increase year-over-year. On a positive note, ABVC has made progress in clinical studies, including approvals for Vitargus® Phase II in Australia and Thailand, and initiated a Phase II ADHD study in Taiwan, with 35 subjects enrolled.

Positive

• Progress in clinical trials with Vitargus® approvals in Australia and Thailand.
• Initiation of Phase II ADHD clinical study in Taiwan with 35 subjects enrolled.
• Notice of Allowance for ABV-1504 patent extension to 2041.

Negative

• Revenue decreased by 57% year-over-year from $98,999 to $42,269.
• Operating expenses increased by 81%, reaching $3,747,369.
• Net loss doubled to $3,776,524 compared to the previous year.

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.

Contact:
Leeds Chow
CFO
Email: leedschow@ambrivis.com

ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
			September 30,				December 31,
			2022				2021
				(Unaudited)
ASSETS
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
LIABILITIES AND EQUITY
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
COMMITMENTS AND CONTINGENCIES
Equity
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

ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
			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

ABVC BIOPHARMA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
					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			$	-

FAQ

What were ABVC's Q3 2022 revenue figures?

ABVC reported revenues of $42,269 for Q3 2022, down from $98,999 in Q3 2021.

How much did ABVC's operating expenses increase in Q3 2022?

Operating expenses increased by 81% to $3,747,369 in Q3 2022.

What was ABVC's net loss for Q3 2022?

ABVC reported a net loss of $3,776,524 for Q3 2022, which is a 100% increase from the previous year.

What clinical trials are currently in progress for ABVC's products?

ABVC is conducting a Phase II study for Vitargus® in Australia and Thailand and a Phase II ADHD trial in Taiwan.

What is the significance of the Notice of Allowance for ABV-1504?

The Notice of Allowance for ABV-1504 extends its patent life to 2041, enhancing its market exclusivity.