Landmark Licensing Deal for ABVC in China’s Growing Healthcare Market
ABVC Biopharma, Inc. (NASDAQ: ABVC), a pioneer in the development of innovative therapeutic solutions in various medical fields, recently announced an exclusive licensing term sheet with Xinnovation Therapeutics Co., Ltd. The term sheet, upon completion of the definitive agreements, is geared towards the exclusive licensing of two key drugs, ABV-1504 for Major Depressive Disorder (MDD) and ABV-1505 for Attention-Deficit/Hyperactivity Disorder (ADHD), in mainland China.
Financial Implications of the Licensing Agreement
The ABVC-Xinnovation Therapeutics agreement is a significant financial milestone for ABVC. The agreement projects an aggregate income of $20 million for ABVC, and Xinnovation Therapeutics will bear all costs for clinical trials and product registration in China. The final agreement, anticipated to be formally signed within a year, will detail the terms for milestone payments and other financial arrangements. Based on the term sheet, ABVC is set to receive royalty payments between 5% to 12% depending on the annual net sales of the licensed drugs in China. This could potentially increase ABVC’s revenue to ~$50 million annually and ~$1 billion over the patent life of the products, given projected sales targets are met.
Extending the Reach of ABVC’s Innovative Therapies to China
Dr. Uttam, CEO of ABVC, expressed delight over this partnership with Xinnovation Therapeutics Co., Ltd., asserting ABVC’s commitment to expanding their innovative therapeutic reach to patients in China. ABVC aims to leverage Xinnovation Therapeutics Co., Ltd.’s strong presence and expertise in the Chinese market to offer new hope and improved treatment options for MDD and ADHD patients in China.
Collaborative Efforts to Foster Growth and Refinement of ABVC’s Products
ABVC’s neurology products, ABV-1504 and ABV-1505, are new botanical drugs derived from the extract of Polygala tenuifolia (Yuanzhi), a traditional Chinese medicine. In collaboration with other prominent pharmaceutical companies in China, Xinnovation plans to grow the raw materials following Good Agricultural Practices (GAP) and manufacture the drug substances in compliance with Good Manufacturing Practices (GMP). This approach will leverage China’s rich agricultural resources and expertise, aiding in the refinement and advancement of these new drugs, and paving the path for quicker and more efficient global distribution.
ABVC’s Market Potential in a Growing Global Market
According to the Future Market Insights report, the MDD market is expected to grow from $11.51 billion in 2022 to $14.96 billion by 2032 with a CAGR of 2.8% over the forecast period. On the other hand, the global ADHD treatment market is projected to surge from $16.13 billion in 2022 to $32.14 billion by 2030, boasting a CAGR of 7.1%, as reported by Polaris market research. Such promising forecasts demonstrate the immense market potential for ABVC’s pipeline products in the evolving global healthcare market.
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