Okay, so we'll get going with the next fireside chat without the fire. My name is Dae Gon Ha, one of the biotech analysts at Stifel, and joining me for the next half hour, we've got Abeona Therapeutics. Joining me on the stage here, we've got Vishwas Seshadri, Chief Executive Officer, and I'm going to try my best. Madhav Vasanthavada, Chief Commercial Officer and Head of BD. So, guys, thanks very much for taking the time. As I do with all my fireside chats, let's start with a brief overview of Abeona for those of us that are less familiar, and then we'll dive right into Q&A.
Fantastic. Thanks so much, Dae Gon, for having us over here today. It's always a pleasure. And thanks everyone for joining us today. I'm Vishwas Seshadri. I'm the CEO here at Abeona Therapeutics. We are a cell and gene therapy company with therapeutics for debilitating diseases, including rare diseases. We have two platforms, both the ex vivo autologous cell therapy that we have for our lead asset, which is pz-cel. I'll talk about that in a little bit. And also we have AAV-based in vivo gene therapies that we're developing more in early stages for preclinical ophthalmology indications. We have our manufacturing and research and everything based in Cleveland, Ohio. And we have a mighty team now of about 100-120 people across all different functions.
Just to give you a little bit about pz-cel, which is our most mature lead asset, this is an ex vivo autologous keratinocyte sheet that is used to treat a connective tissue disorder called recessive dystrophic epidermolysis bullosa. I know it's a mouthful. It's the most serious disease that you never heard of, right? Patients have a deficiency in producing collagen VII, a protein that's very important to keep the top and bottom layers of the skin tethered and intact.
And in the absence of this function, you're seeing a lot of blistering, wounding, and patients live all their lives with large gaping wounds in the largest organ of the body, which is the skin, and leading to complications that arise from both chronic infections, having to be on opioids to control their pain all through their lives, antibiotic to control infections, and also eventually these chronic wounds lead to squamous cell carcinomas and other complications that even take their lives. So that is the seriousness of the condition itself. It's not something that is episodic. This is there every day and all the time. So the patients are suffering all the time through their lives. So even if we can make a significant improvement in the quality of their lives, it's going to be meaningful for these patients.
We have pz-cel. We have two clinical studies that have demonstrated wound healing and pain reduction for the most advanced, tough to treat wounds. The phase 1/2a study has now up to 10 years of follow-up from a single-time treatment. So that's something that's unique about our therapy. And we also have a pivotal study, which was a randomized intrapatient controlled wound study where we showed meaningful improvements in wound healing and pain reduction treated versus controlled wounds. So that's where we are. And this asset is now under review by the FDA. We have a PDUFA date of April 29th coming up for action.
Yeah. So congrats on that progress, especially because it's a turnaround from your CRL. So for those of us a little bit distant to the story, I want to nail down this BLA resubmission that you guys completed recently. So let's revisit what was the original issue that the FDA raised in terms of the assays as well as the other CMC-related issues that precipitated into a CMC or related CRL, right? And at this point, how confident are you that you have fully aligned with the FDA and have adequately addressed what their concerns were?
Thanks for asking that question, Dae Gon. See, the thing is, when we had made our first BLA submission, we received the CRL April this year. All the items that they had discussed in the CRL, the 12 different asks were all CMC-related, right? There's nothing clinical. There were no concerns in our clinical data. They don't anticipate having the need for AdCom or anything. And if you look at what those different aspects are, there were three or four that were really kind of important for the FDA, but by definition, a CRL has to be a complete response. So anything that they see as a deficiency has to be noted. I would even hypothesize that not all of those were the deal breakers for getting the approval at that time. There could have been post-marketing commitments.
I think it's those three or four important things that made it into a CRL. And then, of course, everything else was listed there. So I start with those four big ticket items, right? One is sterility is always a hot button for a product like ours, where you have a very limited expiry time and you have to treat the patient. You can't take the traditional way of looking at sterility that takes 14 days to read out. So we have to have some rapid method. So this was one requirement. The second is about replication competent retrovirus assays. This is something that every gamma retroviral vector-based therapy needs to show that I'm not creating replication competent retrovirus. We had an assay. It was just not validated the way they wanted validated, right? So that's the second one. Third is a cell-based identity assay.
So what we mean by that is, what is your product? Oh, it's keratinocytes. How are you showing it's keratinocytes, right? I think this was something that the FDA had not requested of us in terms of an identity assay the very first round, and it was discovered as they were reviewing the data. And so this was something new that came up in the first review. And last but not least, there was something about controls in how we make our sterile filtrations. There are validation procedures for those filters that we use. And that was something that they wanted as prior to approval kind of requirement. These were the four main, you know, topics I would say that came from the CRL. There are other things that are, you know, routine, like container closure integrity studies, how we qualify our raw materials.
These are all very routine programs, and our approach to addressing the asks of the FDA is not a half-baked approach where I say, okay, I'll address eight of your 10 items and let the two develop over time. No, we're giving you everything that you asked for, and not just giving you everything that you asked for, we're also showing you what's going to be in that data set in that Type A meeting that we had on August 8th. We had almost the data for almost every item, the exception of two, and had a kind of an informal, okay, this looks reasonable, and it'll be a review issue, that kind of an agreement, for those other two we agreed on what the protocol for validation would look like, and we have since generated the data that they asked for.
So we feel fairly confident that we've been comprehensive and thorough in making sure that we have, you know, we're writing up everything that they have requested in the CRL.
Okay. So on the, on the four that you've highlighted, I think in, in our calls with KOLs on our own, I think the cell identity assay was kind of singled out as the probably more challenging. If you kind of look at it from your vantage point, I mean, obviously it's accepted. It's a little bit frustrating when they say it's a data review issue because you never know what kind of stuff will come out of it. But what do you see as the highest risk? And what do you see as sort of the lowest risk out of the four plus two that you just disclosed?
I believe we have addressed all the risks from that came from the cell-based identity assay. It's not risky because it's overcomplicated. It's just risky because our product is so unique. This is something that is very idiosyncratic to our product. How do you look for keratinocytes, right? The antibody that you use to stain, what's your threshold and things like that. We had an informal meeting with the FDA after the Type A meeting, and we've squared off. We were aligned that this is good. So I'm not worried about it at all. Everything else in the CRL is something that some other company has done in the past. So we had to cut and paste it into our system, and the only piece that we haven't yet shown the data prior to the submission was the sterility assay because there's a rapid sterility test that we've developed.
We feel fairly confident because the sensitivity and the specificity of these assays and detecting various organisms is pretty robust, so that's why we feel fairly confident about, you know, our resubmission.
Just to clarify that, that sterility assay, did you have to develop something in-house de novo, or is this something commercially available that you just had to run your own?
It is commercially available. There are instruments that are sold by various vendors, and the FDA themselves recommended these options, right? So we didn't unilaterally develop it. We had multiple meetings with the FDA on what are the potential systems, what they like, what they've seen from other companies in the past. And then we brought those in, validated in-house. The manufacturers themselves do part of the validation as they bring it to your facility. And then we run multiple runs of that with our operators. So all of that has taken, and that was a rate-limiting step. So why we took all the time is really to complete those many runs and show the robustness of our data.
I see. But it should be seen as de-risk given that it's commercially available and that's not something de novo or something that you have to.
Correct, and the FDA themselves have published papers as early as 2011 and 2014 on using these types of methods. It's called ATP bioluminescence. It's out there.
Okay. Okay. That's good to know. Now that it's accepted, as it pertains to BLA AdCom, is there one? And the other thing I wanted to ask was it's a Class 2 review, which is why you have the April 29th PDUFA date. But if the CRL was originally for CMC-related issue, it seems like data review-wise, it's already done and in the bag, if you will. Why do they need all six months? Is it possible for them to kind of overdeliver on that promise and come back to you sooner?
Yeah, a couple of things there, right? So first you said AdCom.
Yeah.
We don't anticipate an AdCom because in the late cycle meeting that happened in March, they said we don't see the need for an AdCom. And usually an AdCom is a topic, clinically related topic is what you would discuss. And they don't have any observations from a clinical perspective, the data package, they have no comments on it. So that's why we continue to feel that we're not anticipating an AdCom there. Your other question in terms of the Class 2 or the type 2 review, it is, there are only two options, right? You either take a two-month review or a six-month review. And we learned that ours is a six-month review. This is what we had anticipated even. And the reason is that in the previous round of our review, when we had the CRL, we hadn't progressed to the level of all specification settings.
So once you're through with all the CMC items, you're going to discuss are there the specifications for lot release and various control parameters. There is usually some discussion how you set those statistically. And we haven't gotten to that with all the items. We have with some of them. Second, we have not yet discussed label negotiations. So our, we've proposed a label language. The FDA will have iterations of it. They'll suggest, okay, this section has to be written in a certain way. We'll have usually for any review, BLA review, label negotiation is a good last one, one and a half months. So given that we have these two big milestones, one is agreeing on the specs and agreeing on the label language, I think they must have thought that two months was a very big crunch.
But what they told us after the CRL happened was that we're going to do this expeditiously. We'll likely take a type 2, Class 2 review, but we will do it as soon as we can. So that's how they left it. We feel good about it.
Yeah. So I mean, it's obviously a PDUFA goal date, right? It doesn't have to be that date, right? So it seems like they might've given themselves a little bit of a cushion given that the first iteration they've already reviewed, now you're supplementing that with the CMC-related question. Okay. So I guess we'll wait and see. Question on the material you guys are manufacturing. So, a company that you guys are very familiar with, Krystal Biotech, they, when they were going through their BLA review, they told me that there was a downstream apparatus that they switched out that did not fundamentally affect the drug product, but because it happened, FDA kind of latched on that and said PDUFA delay. So all that to basically ask you, has the manufacturing process in any way changed between your phase 3 VIITAL trial and your manufacturing going forward?
No, we have not changed our process. In fact, we've preserved our process to a great extent, even from Stanford. I mean, the phase 1/2a study was done by Stanford and manufacturing used to be done there, and then we brought tech transfer to Cleveland and we started manufacturing in VIITAL. And since then we've done yet another clinical study now, which is phase 3b that is ongoing. We have not changed our manufacturing process, and I do remember the time when Krystal had come out and announced that there was a centrifuge change and, you know, typically for complex biologics, the FDA wants any process change to be justified with data that adequately shows that product did not get affected by that. So we don't have any parallels to that particular story here. We have preserved our process the same.
Okay. Okay. So then thinking a little bit semi-commercial, semi-clinical, but based on your VIITAL experience or any ongoing experience, how are you thinking about the addressable patient population within RDEB, given you guys are going after chronic wounds and those were generally larger than what Vyjuvek ended up going for? I mean, do you see that as kind of a cutoff when you do ultimately get into sort of a labeling discussion?
I start with the clinical. I'll have Madhav add some color. In the clinical studies, we had a stringent cutoff, right? When we say size, you had to have a minimum of 20 square centimeters as the wound size. And, in terms of chronicity, that wound had to be open for at least six months, if not more. This was some of the first few patients who went through our therapy. This is like any therapeutic area where you do a first study or a phase one study, you're going to be looking at the most serious types of patients that have exhausted everything. Of course, in our DEB, there wasn't really nothing. Our investigational was in the toughest of the tough wounds. That does not mean that there's not going to be benefit.
If there was a chronic wound that was 18 centimeters squared, would it not benefit from that? I don't think that's going to be the case, and I don't believe that the label is going to put those types of, you know, cutoffs, mainly because they are sometimes subjective. I mean, you cannot have every center replicate exactly how, you know, a doctor was measuring wound surface area. And these are dynamic changes that happen, so for that reason, but in terms of how we see the marketplace take both these products, our research has very clearly said that many patients are going to be on multiple products at the same time. It's going to be Filsuvez, Vyjuvek, pz-cel. That is, that is something we are hearing consistently, and with every episode of market research, that's only getting crystallized more and more, but Madhav, you can add.
I mean, just to build on the large and chronic wounds that Vish talked about, if you look at the total U.S. population for dystrophic EB, we just recently completed a claims analysis. 1,300 patients is what we have found out. Within that subsegment, the recessive form, which is the most severe type of EB, the moderate and severely wounded patients, which are often the large and chronic, 750 patients. So that to a 750 patient is a conservative number of pz-cel eligible patients that we think there are. And we think that given the large surface area that these bodies are wounded, roughly a third of the patient's body is often wounded. We think that patients will require more than one treatment cycle. We are estimating two treatment cycles per patient. So that equates to roughly 1,500 treatment opportunities with pz-cel.
That said, our label, we are not, you know, looking to have a specified, say, chronicity means the wound needs to be open for six months, right? Or large means it needs to be X centimeters and so many wounds. So if you add that on top of, you know, so this is in addition to 750 is where I'm going. And if you don't have that, then there is some potential, you know, upside because pz-cel, what it is doing is it's taking a biopsy of the patient and giving them functional skin, their own skin in return. So whether that wound to begin with was chronic or, you know, was open only for three months or six months or however you were years, does not really, you know, should affect the outcome of the patient.
Got it. Given that market research type feedback, where are you at with the manufacturing capacity today?
Yeah. So in the clinical trial setting, the max we have treated in a given month is maybe two or three patients. That is the kind of density we've achieved. We are building in our current GMP facility. We can go up to 10 patients a month in terms of how much room space there is and equipment and all that. There is going to be a ramp-up period to get from our current four or five patients a month all the way to up to 10 a month, which would take up pretty much most of 2025 to ramp up. Every month or a couple of months, we'll add two slots and bring it up to that. It's not a matter of facility space. It's more a matter of personnel training and recruitment and training, right? So we'll get up to that.
We recently announced that we've leased additional space, so we have design engineers actually looking at our facility now and saying, how can we go from 10 a month to beyond? Can it be doubled? You know, if so, what is the kind of design? So hopefully by the time we have our launch, we'll have some concrete designs and plans to increase that capacity, saying how many more slots we can add, what is the timeframe, lead time that it's going to take and what kind of investment that's going to need. Because we did kind of rough high-level analysis early on. If we had to do this as a greenfield project, completely construct a new building and bring it up, it would be about a $25-$30 million project. But because we're able to build it off the existing facility, there may be a lot of those synergies.
So it's more construction of those suites or modules rather than a whole new project. So we're trying to do this in a very creative, efficient way, at the same time not disrupt the ongoing ramp-up as well.
Okay.
That's how we are looking at capacity ramp-up.
Okay. Okay. Just forward-looking, right? Because we always have the disclosures and you guys have that in your slide deck as well. Commercially speaking, you just mentioned 1,300, about 750 of which have these large wounds, more than 30% of their body surface area covered. Any additional detail in terms of what proportion of them are currently on Vyjuvek, and/or Filsuvez? Because the way I'm kind of thinking about it, your lowest hanging fruit are going to be patients who are already in tune with therapy and coming into their dermatologist or whoever their physician is, right? So it'll be a lot easier for you to tap into that and basically say, no, you're going to be getting onto the pz-cel. So any thoughts around that?
Yeah, absolutely. So Vyjuvek, I mean, Vyjuvek is of course, I think some 75 or 80% of their patient mix are recessive DEB patients. We of course think that there will be a large overlap, because these patients who have high burden of disease, physicians are telling us that they need more than one treatment options. If you look at how we are approaching our launch, we are, it's a hub and spoke model. We are reaching out to centers that have high volume of patients. These are well-known centers and they've seen a lot of patients. And so by that virtue, we do think that, you know, these are patients who have, A, gotten a treatment with genetic disease, which also should help us with access because, you know, the medical records, letters of medical necessity, everything has already been pre-cleared with an insurance company.
Time-to-access standpoint, you know, should help us, and so that's really how we are, you know, looking at it. There are also de novo patients, whom at least the last quant market research we did was four months ago, summer of this year, where community physicians (we polled 63 community physicians) where they said of their patient pool that they are treating, which on average each physician was treating about 10 patients. Roughly 40% at that time were on Vyjuvek, 60% were not. Of the 40%, physicians felt two-thirds would be pz-cel candidates, and of the 60%, which were de novo, half of them is pz-cel candidates, which is another data point. Now, of course, you know, the landscape is evolving as more patients get on Filsuvez and Vyjuvek, it's only going to help raise awareness.
We know that there are certain patients who are on both treatments, both the approved treatments, which again shows the testament for the unmet need, which is out there for these patients. These patients are looking for whatever therapeutic that they can, you know, try and apply and see how the outcomes look like for them.
Yeah. Sorry.
No, I was just going to add one more point, which is as we talk to these five centers that we want to have ready to go after approval, we also get a sense that these numbers are adding up both from what we get from a claims data analysis and what the centers are telling us from their own EMR. They're triangulating pretty well. I just wanted to add that one more point. And that centers are quite confident that about two patients a month kind of run rate is something that they would achieve without even referrals. Just the patients that they are seeing now gives that kind of volume. And if you can do the math, that already takes up more than the manufacturing capacity we'll be launching with, right? So we'll have to ramp up the capacity pretty quickly.
Yeah. One of the things that I guess, us being fortunate enough not to have this disease, that we are somewhat puzzled by when we kind of keep track of what Krystal has been doing. Phenomenal drug, no doubt about it. But this idea that certain adult or older patients are not really coming back into therapy because they've somehow gotten used to the disease, they're okay. And so not really desperate enough to present themselves. So recognizing that pz-cel is from a logistical standpoint more complex. Krystal talks about how a lot of their patients prefer to do at-home dosing because it's just really cumbersome to come in or move anywhere. And then third, it's probably going to be a new approach, you know, grafting, versus just topical stuff.
Just Madhav, help us understand how you're strategizing around the commercial launch, bearing in mind these are some key learning steps that you get to benefit from Krystal.
Yeah. I mean, I think it all starts with at the end of the day, this is a very tight-knit patient community. So they talk to each other all the time. Yes, there are certain groups of patients who have gotten, you know, who have been living with this condition and bandage supplies are shipped delivered and then they go through the wound dressing and changes. We do think that there is a lot that still needs to be done to raise awareness of therapeutic options, and, and more testimonials. If you kind of look at the types of wound healing images that we have shown here and the durability of the wound healing images, we're going up to five years, the visuals we have shown to eight years.
I think at some point in time, this is going to move those patients as well, that you do have a therapeutic option that can take care of my chronic wounds. I think more awareness with the community physicians even, because these patients, they do go three months, six months to check their wounds. Are they infected? You know, is there any greater risk? So I think we are talking about, it's, it's almost like a bullseye, like a target, right? Where you have the concentrated innermost circle of ready to sort of treat patients, they are motivated patients or they are motivated children, parents are motivated. They want to make sure that their kids get the best cure and care as possible.
Then you have the next circle of the 23 centers of excellence where there are patients and our teams are going to be educating them so that they can be referred into the qualified treatment centers. And then you have the outermost, which are the types of examples you are pointing out, which are like with DEBRA of America, EBRP, and you have the social media patient testimonials, physicians talking to them. So we will be able to get them in as we ramp our capacity. Because one of the things we want to also avoid is having launched Breyanzi and Abecma ourselves, we know as to what it is like where you want to be able to get the right level of, you know, energy and excitement at the same time, you know, we take care of these patients.
We are cognizant of making sure that we create the right experience for the patients, and that we treat the right set of patients.
I also wanted to add one more clinical point about this. What's unique about pz-cel is we started our clinical studies with older patients and slowly worked our way to the younger patients. It's very different from how you have. So if you look at the clinical efficacy, the first, our first study had an 18 as the cutoff, right? The age cutoff. Now in VIITAL, we lowered that to six, age of six. So the youngest patient is about seven years old that was treated. Now, earlier patients that were treated were all, there's thirties and even I think 40. So that kind of, data set exists for us where those patients actually have benefit as well. So that's going to also come forth.
We do feel that adult patients as well as pediatric patients will come out from the community seeking pz-cel.
Yeah, and one last point is almost every patient we have talked to are scared of squamous cell carcinoma.
Right. Right.
For us, we are not, you know, proactively talking about this, but if you look at our safety data, we haven't seen squamous cell carcinoma in any of the 128 treated sites or the 11-year of follow-up.
Yeah.
I think that is, that's also motivating for these people.
Yeah. So given your prior lives and experience, as well as some of the more recent launches, and here I'm thinking Casgevy and Lyfgenia, which are clearly different fields, right? Hematologists versus dermatologists for you guys, but approach is similar in the sense that they got to come in, go back, come back in, get treated. It's all kind of a surgical process. So how should we think about from a launch trajectory standpoint, what is a relevant comp here? Bearing in mind that you guys are the first in class almost in DEB, but presumably there would be some, some kind of a relevant bogey.
Yeah, it's very challenging, right? This is the first time autologous cell therapy is coming to rare disease. When I say relatively rarer than sickle cell disease, because you took those examples, the patients are already concentrated in these few centers in terms of our deb patients. So the dependence on referral patterns even at out of the gates is lesser compared to some of the other examples that you cited. So I don't think there is a perfect comp. Our trajectory is going to be guided by our supply capacity. That's really going to guide your trajectory rather than the market demand. That's we feel the market demand is a log order higher than the capacity that we'll have at the time of launch, which is.
Four to five per month.
Correct.
At the initial stages before you get to 10.
Before we get to the 10. Yep.
Okay. And that's going to take most of 2025.
25.
Okay. Okay.
Yeah. Yeah. I mean, I think we will certainly also be putting a pool of patients, right? And making sure that these patients are in the hopper so that we are able to, yeah, you know, that that's, there's no shortage, at least from interest or willingness to treat, onboarding more centers at the right time. These will be the other aspects of which, you know, that'll also shape the launch.
Right. Five QTCs upon launch. I think you mentioned on the call two to three months after the approval would be when you start treating patients.
Correct. They start treated.
Okay. Okay.
Or biopsied rather.
Right. Right. And I know we're running out of time. So let's quickly touch on your cash projection wise when it comes to the runway.
Yeah. We reported end of quarter three, we have $110 million cash and that takes us into 2026. And when I say takes us into 2026, we're not accounting for any PRV sale proceeds. We're not accounting for any revenues from potential pz-cel sales after approval. And it accounts for the commercialization infrastructure costs, the resources hiring and all of that, right? So I think that's a great place to be. And it also gives us the luxury of optimizing, you know, what is the right time to look at a PRV sale maybe or monetize that. So this is a great position to be for us. And yeah, I think some of the projects that could be potentially accelerated, we'll have more data for capacity expansion as we get closer and closer to launch. So we'll keep giving you those periodic updates.
Okay. All right.
I'll just say that in terms of revenue pricing, we didn't talk about that.
Yeah.
As we talked the last time, it's north of $1.5 million per treatment, is how we are looking at it.
Probably conservative.
Conservative because we're still looking at what the upside could be, but it's going to be like gene therapies, right? So.
Right. Okay. Well, Vish and Madhav, thank you very much.
Thank you so much for having us.
Thank you.