Biotech Incubator Trades At 6-Month High, Lead Medical Device A Game Changer

Taiwan has long been recognized as a global leader in drug research and development and, with biotech sector veteran Tsai Ing-wen seated as President, the industry should continue to thrive. Lawmakers in Taipei have taken a proactive approach to deregulation encouraging small companies to go public, while amendments to the New Drug Development Act further support drug makers.

Through its initiatives, the small island country has developed a flourishing biotech market that comprises about 19% of companies listed on the Taiwan Stock Exchange.

For Americans, getting exposure to world-renowned Taiwanese pharmas is not easy. Very few successful biotech/pharma companies from Taiwan list in the U.S., with Taiwan Liposome (NASDAQ:TLC) being one of only a handful. American BriVision (Holding) Corporation (OTCQB:ABVC) is another insomuch as management has deep connections in the Taiwan drug R&D industry, conducts clinical trials in Taiwan (in combination with leading U.S. institutions), and has plant-based experimental drugs coming through the pipeline that were sourced from research conducted in Taiwan.

In addition to advancing two drug candidates through Phase 2 clinical trials, American BriVision is focused on completing development of its next-generation vitreous substitute, dubbed Vitargus (medical device). Before year-end, ABVC expects to initiate a 375-patient, international (including U.S. and Taiwan) pivotal clinical trial of Vitargus for the purpose of expanding upon the safety and efficacy data collected in previous clinical research.

Constituting about 80% of the volume of an eye, the vitreous is a clear gel that fills the space between the lens and the retina, playing many key roles including keeping the eye’s shape. Innovations in surgical techniques with vitrectomies in recent years have outpaced improvements in vitreous substitutes, leaving a big area of unmet need that American BriVision is aiming to fill.

There is plenty of market for ABVC to capture considering nearly 2 million patients in 2019 underwent surgery for retinal detachment and vitreous hemorrhage. Because the vitreous cannot regenerate, each of these patients required one of today’s vitreous substitutes, such as octafluoropropane, sulfur hexafluoride or silicone oil. All of today’s replacements come with limitations, including degradation, toxicity, excessive intraocular pressure, poor viscosity and long-term complications.

With today’s substitutes having limitations, the market is ripe for innovations like Vitargus, a biodegradable, next-generation vitreous substitute that has significant advantages over the current medical treatments available to surgeons worldwide.

In October, ABVC presented these advantages at the American Academy of Ophthalmology conference. Benefits over legacy technologies include a one-day recovery, clearer vision following surgery, no need for a second surgery, a density higher than water (meaning patients don’t have to lie face down after surgery), and, probably most importantly, low thermal expansion coefficients that results in reduced intraocular pressure, and in turn reduces adverse side-effects to retinal tissue and vision recovery.

As is becoming a theme at ABVC, in-human trials have demonstrated benefits without signs of toxicity or treatment-related serious adverse events. The first in-human trial, which began in 2016, demonstrated this with zero serious adverse events in patients receiving Vitargus while delivering a statistically significant improvement from baseline in corrected visual acuity (BVCA).

With the frequency of vitrectomies increasing (expected to reach 4 million annually by 2030), the world is waiting for a new vitreous substitute. Headquartered in the U.S. with a network in Taiwan, ABVC is in an envious position given that the U.S. is the largest segment in a global retinal surgery device market expected to reach $3.0 billion by 2025. The U.S. is the biggest, but Asia-Pacific is the fastest growing (8% CAGR).

The pivotal Vitargus study will include continuous monitoring of patients for six months after surgery and is expected to lead to Premarket Approval (PMA) and global out-licensing agreements in Australia, Thailand, Taiwan, USA, Japan, Mainland China and India. Kicking off the trial this year means – provided all goes well with the research as expected – that approvals for commercialization should be completed late in 2022.

That is, provided a bigger peer doesn’t want to buy it for their own first.

In many ways, American BriVision is a biotech incubator/accelerator in its strategy. There is a growing body of evidence that the lead products have the potential to one day capture share in large markets, with Vitargus the closest to the finish line at this point along with other promising drugs in the pipeline. Add to it the exciting pharma activity and development in Taiwan, and ABVC is one of a short-list of U.S. listed companies that give investors the opportunity to participate in this flourishing market.