ABVC - 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.
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 |
| $ |
| - |