ABVC Biopharma Signs Landmark Licensing Agreement with Xinnovation Therapeutics

ABVC Biopharma experienced a major boost in its shares, which rose by an impressive 58% to reach $3.93. This surge in stock value came as a result of the company’s recently signed legally binding term sheet with Xinnovation Therapeutics. The agreement grants Xinnovation Therapeutics exclusive licensing rights for ABV-1504, designed for major depressive disorder, and ABV-1505, created for attention-deficit/hyperactivity disorder (ADHD) in mainland China.

ABVC anticipates a potential income of $20 million stemming from this licensing agreement. The term sheet outlines all the essential terms and conditions of this groundbreaking partnership.

The final agreement is expected to be officially signed within the next year. Once signed, it will provide comprehensive details regarding the licensing terms, including the schedule for milestone payments and other financial arrangements.

ABVC envisions receiving royalty payments ranging from 5% to 12%, based on the projected annual net sales of the licensed drugs in China. These royalty payments are projected to generate approximately $50 million in annual revenue for ABVC. Furthermore, if the anticipated level of sales is achieved, the company expects to accumulate a total of $1 billion in revenue throughout the patent life of these products.