FREMONT, CA - ABVC BioPharma, Inc. (NASDAQ: ABVC), a clinical-stage biopharmaceutical company, announced today its entry into a term sheet with OncoX BioPharma, Inc. for the development and commercialization of its Oncology/Hematology pipeline. The agreement, pending the execution of a definitive contract, grants OncoX rights to clinical trials, registration, and distribution of the licensed products.
ABVC is poised to receive $50 million in licensing fees as cash/shares within 30 days post the definitive agreement execution, plus an additional $5 million milestone payment after the first fundraising and royalties of 5% of net sales, capped at $50 million, upon the products' launch.
The U.S. FDA has approved four Investigational New Drug (IND) applications from ABVC for various cancer therapies, including Triple Negative Breast Cancer, Non-Small Cell Lung Cancer, Myelodysplastic Syndrome, and Pancreatic Cancer. These therapies are based on BLEX 404, which contains β-glucan derived from Grifola frondosa, known for its bioactive constituents.
Dr. Uttam Patil, CEO of ABVC, expressed enthusiasm about the potential of this partnership to transform the Oncology/Hematology sector, with a third-party valuation of the products at $105 million. Wen-Pin Yen, CEO of OncoX, also shared optimism for the collaboration's impact on the industry. OncoX's experience with marketing dietary supplements is expected to contribute to the development of the licensed products.
Under the proposed terms, OncoX will have exclusive global rights to develop and commercialize the products within the designated field of use, with the ability to sublicense. ABVC will be responsible for product supply, while OncoX will handle regulatory filings and commercialization efforts. Furthermore, OncoX will grant ABVC perpetual royalty-free access to any associated development, regulatory, and market data.
The global cancer therapeutics market is projected to grow significantly, reaching an estimated $393.61 billion by 2032. This deal represents a strategic move for both ABVC and OncoX in a rapidly expanding market.
This news is based on a press release statement.
InvestingPro Insights
As ABVC BioPharma, Inc. (NASDAQ: ABVC) advances in its strategic partnership with OncoX BioPharma, Inc., its financial metrics provide a deeper understanding of the company's current market position. ABVC's adjusted market capitalization stands at $12.43 million, reflecting its valuation within the biopharmaceutical industry. Despite facing challenges as evidenced by a negative price-to-earnings (P/E) ratio of -0.441 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at -1.2, the company is positioning itself for future growth through this new collaboration.
The revenue figures from the last twelve months as of Q4 2023 show a decline, with ABVC's revenue at $0.15 million and a significant revenue growth decrease of -84.28%. The company's gross profit margin during the same period was -98.15%, indicating financial strains. However, the InvestingPro Fair Value estimate for ABVC stands at $1.54, suggesting potential undervaluation at the current price of $1.25 per share.
InvestingPro Tips indicate that investors should be cautious of the company's negative growth metrics but also consider the potential upside from the recent licensing agreement with OncoX. The partnership could serve as a catalyst for ABVC, potentially leading to improved financial performance in the future. For those interested in a more comprehensive analysis, InvestingPro offers additional insights, with numerous tips available to guide investment decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and unlock the full suite of investment tools and metrics.
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