Okay, good morning, everybody. This is Kristen Kluska at Cantor. Very happy to be hosting Abeona Therapeutics. I have Dr. Vish Seshadri, the President and CEO, and Dr. Madhav Vasanthavada, the CCO. Thank you both so much for being here today.
Thank you for having us.
Really appreciate it. Very exciting times at Abeona. But to kick it off, may I please ask just to give a brief overview, and then we'll certainly dive into some of the details?
Yeah, thanks for having us here, Kristen. You know, this is the first Cantor Fireside after we're a commercial- stage-
Yeah
... biotech. So as a cell and gene therapy company based out of Cleveland, for those of you that are new to the story, we are commercial- stage since the approval of our lead product ZEVASKYN, for patients suffering with recessive dystrophic EB, or DEB. This is a quarter two event, so a lot of exciting updates that we just shared in our quarter two call. That includes the momentum that is building up in launching this product and bringing this... So essentially, this is autologous cell-based gene therapy for patients with a deficiency in COL7, which is a connective tissue disorder.
Patients have large wounds, chronic wounds, and suffer both from the immediate quality-of-life impact and wound burden, but also long-term effects like squamous cell carcinomas that happen and often take the lives of these patients, so you don't see these patients live beyond their 30s and 40s usually. And this is where our therapy is unique in its ability to treat large wounds with quick, immediate closure and long-term durable wound healing and pain reduction after a single one-time application. So that's there. We also have another platform, which is the in vivo gene therapies. We don't talk a lot about it. They're in earlier stages of development, but we're nevertheless excited about those, and we'll over time bring more to light on those.
Also, we reported the strongest balance sheet we've seen in quarter two, end of quarter two, $226 million. It takes us more than two years of runway and enables a strong launch, and these are some exciting times. Some of the highlights we also shared on how the launch of ZEVASKYN is building up includes the identification of about 50 patients already without even having a sales force implemented yet, and two qualified treatment sites where patients can receive ZEVASKYN, and a lot of payer willingness. We are seeing a lot of payers institute policies that are very favorable for coverage. So in a short span of time, we're already seeing a lot of steps in place for patients to be receiving this therapy.
Thank you for that overview. So yeah, great to see a significant level of interest out of the gate. Can you comment, of these, 50 or so patients, what's the typical profile that you're seeing across them?
Yeah.
Absolutely.
Indeed, indeed, a significant level of interest that we are seeing. The 50 patients that, you know, Vish mentioned, more than a dozen patients are already coming just from the two qualified centers that we have activated, and that number is growing, and then in addition to that, we've got about three dozen patients from non-qualified centers that are initiated in the process of referral without even doing active promotion yet.
So that is really a strong start from a demand standpoint, and for us, we are seeing the work is pretty much cut out for the upcoming quarters to have these patients, 50 patients or so, growing, put them on treatment. If you look at the type of patients who these are, these are really some of the many patients that these physicians have that have large wounds and wounds that have never closed in their lifetime.
They are basically the severe patients, and many of these are on prior treatments with either by Vyjuvek or Filsuvez, but interestingly, some of them still have not been receiving any other treatment, so they are treatment-naïve.
Thank you for that. So when we think about the rDEB community as a whole, do you have a sense of what percent of patients are going to either be open or eligible for this therapy? And on that note, what actually does make somebody a good candidate?
Yeah, so rDEB patients, they're patients with severe and moderate wound size. We have about 750 patients that we estimate, 750 patients across about 23 centers of excellence. And all of them are eligible for ZEVASKYN because of the amount of wound surface area that they have. ZEVASKYN, the label, is for adults and pediatric patients that have recessive DEB wounds, so technically all recessive DEB patients are on label. 750 patients are with severe and moderate wounds, and initially, we expect that patients who have these contiguous large areas and chronic wounds will be first prioritized, and slowly over time, as more experience gains, then, you know, wounds that are in frictional areas, recurring wounds, these will all be the candidates for the product.
Okay, so what are the top reasons why physicians are recommending ZEVASKYN for their patients, or are we seeing that patients are approaching their physicians at this time? Essentially, I'm trying to figure out what the biggest selling points are.
Yeah, I think it's both dynamics, right? Patients have been waiting, and they are approaching the physicians, but I think the primary driver for the physicians starts with the clinical evidence. If you look at our evidence data set, both from the phase I / II-A study and the phase III study, it's unique in the types of wounds that have been treated.
When we say large and chronic wounds, these are wounds that were open for a minimum of six months, but often five years, six years, even up to 21 years, that wounds never closed. So those types of wounds, to be put to test in a clinical study, there is no other data set. ZEVASKYN 's two trials are unique in that way, and I think that's definitely getting their attention, and that's the impetus that's driving physician interest.
Of course, from a patient perspective, as Madhav mentioned, the ones with the large wounds, chronic wounds, these are the ones that become squamous cell carcinomas. They want urgency in getting these treated because of the downstream complications of having these wounds open over a long period of time. That's why you see both the stakeholders are interacting on that.
So the process does take some time. It involves travel. There are some cumbersome aspects to it. So putting it together, why is it worth it for these patients to go through that?
Yeah, I mean, why is it worth it? Like, if you realize the lives that these patients are living, right? As Vish mentioned, significant infection burden and lots of other comorbidities. These patients tend to visit these centers of excellence for various reasons: hand surgery, excision of the squamous cell carcinoma, GI dilatation for multiple reasons. They visit either annually or more frequently to these centers of excellence. So if you have a treatment option that can close large areas of the body in a durable fashion for multiple years with a single application, we are hearing from patients that they want to sign up. In fact, in our clinical trials, patients did go through this procedure twice to treat different parts of their body. And one patient actually went through ZEVASKYN, you know, in clinical trials three times.
And some of these patients are already saying they want to consider ZEVASKYN in the commercial setting, even though they have gone through. So there is definitely, you know, the worth it aspect of it. There are more patients beginning to understand because we have put together a strong together network. These are the patients who have gone through our clinical trials, and that patient-to-patient, you know, I mean, I think that interaction is also happening, so that motivates more patients.
So firsthand, coming from the patients themselves that have had it, it's been worth it to the point where they want to come back?
Yes.
Okay. That, I think that speaks volumes. So what are some of the logistical factors that are worked out? I know you have a very good team that really handholds throughout the entire process, but yeah, what does a patient have to kind of figure out before they can go through this cycle?
Like any autologous process, even for ZEVASKYN , it's an autologous therapy. So there are multiple administrative steps that need to take place, and we are very early in the launch, and we expect that this process, end to end, taking about three to four months. I mean, we don't have a crystal ball per se, but that's really what we anticipate the time taking. You know, we expect that this total time to reduce as treatment centers get more experience, as insurance companies and the policies come out and you know, being in place, and as more patients get into the pipeline, then you have the ability to get them placed on treatment aspect itself.
But just in a nutshell, the main steps that are involved, as we mentioned on our earnings call also, is the first and foremost is an initial consult that happens at the qualified treatment center, and once that patient is considered eligible, then you start the process of insurance clearance, a clinical prior authorization from the insurance company, and once that is secured, then there is a financial arrangement that happens between the QTC treatment site and the payer, and once that is secured, then a manufacturing slot is booked for collection of the biopsy based on the availability. And then it's a 25-day manufacturing process once a biopsy is collected to the time that the patient gets the surgery again to get ZEVASKYN .
So we think that overall this time should get better and better as we get more into the launch state and get into a steady state.
Can we talk a little bit about expectations around durability? And might this also depend on where in the body the ZEVASKYN is applied?
Sure. I think, we've seen from our phase I / II-A study, right, some of the earliest treated patients have their healed wound status, up to 10 years now and counting. So those are the earliest patients that have had this kind of follow-up, but we're seeing that the same type of trend as what you would expect. But in terms of trying to see if there are certain locations of the body you treat and you get this certain type of durability, I think we have very small-
Okay
... data sets that we don't have-
Yeah
... stratifications that way. But anecdotally, we have durable outcome in various places, right? I mean, we have, we've shown pictures in our, even our corporate website, back wounds, where you have patients followed for two years, five years, and still the wound healed, has remained healed over that period of time. So, we'll... That body of evidence will grow because we're gonna be following the patients even from VIITAL for a longer period of time, so we'll have a more robust data set, but we don't have any reason to believe so far that, whether it's extremities or trunk or back, that, you know, your durability should be any different than your expectations from what we are seeing in the evidence.
This one's more out of curiosity, but are you seeing more patients are scattering the sheets throughout the body, or are they using more of, like, that quilt-like fashion design?
I think you're going to see both-
Okay
... examples. I would say, as Madhav mentioned, the very first patients that come for treatment may be more of contiguous regions-
Sure
... where you need to apply, like, tiles.
Yeah.
Even in those patients, there may be a few wounds that are islands, so you may use single sheets to cover those, and I think it's gonna be a mix of examples that you see.
Okay. That was more curiosity than anything else. So you have two QTCs up and running today. Again, there's a lot of interest coming out of the gate. So how should we be thinking about, first, the capacity that's possible through manufacturing, and then, two, the cadence that's expected at each of these centers? And I understand more will ultimately come on board.
Yeah. So from a QTC perspective, right, they have communicated that at the beginning, they're gonna be able to treat two patients per QTC per month. And it goes hand in hand with what our manufacturing capacity is, because in the clinical trial setting, we were at two patients a month, and then we're ramping up now four to ... We are saying that by mid-2026, we should be at 10-a-month kind of manufacturing capacity. So by that time, if we have five QTCs operating at two a month, we're kind of building our manufacturing capacity to match what the site capacity is gonna look like. So that's kind of how we're planning for their capacity.
But if you take just 2025, we have these two QTCs. I think they have expressed quite a level of comfort in getting to that two-a-month kind of cadence at this point in time.
Okay. So how are patients determined which center they're gonna be treated at? Does this have to do based on whatever's closest geographically, when in the cycle they need to get their treatment, or other factors?
Yeah, patient preference is certainly going to be a big factor in here, and I think proximity to the qualified center or the distance that they travel will definitely weigh in, as well as the relationship that their referring doctor has got with the treater. So at this moment, because we have two centers, you know, it's for the patients. They are picking and choosing as to what centers that they want to go, and we know that these patients have the willingness to travel far distances. In the research that we have done, 150, 200, 300 miles is not really problematic at all for these patients. Three, four hours of drive or flight times is pretty reasonable.
And as we have more qualified centers, then this obviously offers more choice for these patients. And we are, again, working with qualified centers, you know, with institutions that are very well-respected in this space. They've got patients of their own, but also these are centers that patients already trust and have an affinity to go to them. So we think that, you know, patient preference will only become easier as you get more qualified centers on board.
Okay. And how should we be conservatively thinking about market potential through the end of this year, and then early thoughts into next year?
Yeah, no, this is a very important question, right? Because, definitely we'll decouple 2025 and 2026.
Yes.
In 2025, whatever we have, you know, said so far, the 10 to 14 patients, we have a lot of confidence on the patient demand. We've communicated that just the de novo patients in the two sites is over a dozen patients, and then there are 36 or so additional patients that already have been referred. This is, I'm talking about the Q2 earnings call that we-
Sure. Yeah
... shared. So if you look at the patient demand, I think we're at a very good estimate in terms of what we think. Where the uncertainties come in, for 2025 specifically, is the very first patients that come through that funnel and the pipe maybe of getting from identified patient to prior authorization is done, and then you have a financial agreement between the payer and the institution. And then you look at slots, and you're matching up patient availability with slot availability at our manufacturing site, and everything just has checked the box. And then you have a biopsy, and then the manufacturing, and then the patient gets treated. This entire process, what Madhav explained, is gonna probably be more towards four months in the beginning.
Yeah.
And then over time, that reduces. We do not have, in our assumptions in how the patients trickle to numbers in 2025, we don't have validated tools that tell us this is how it's gonna... It's unprecedented.
That is the challenge in answering a question of: How confident are you in putting numbers out? So this is the level of uncertainty vis-a-vis when you have an example where I have X number of patients already in this quarter, they're just gonna continuously dose into the next quarter, so there's a base business, right? We're not in that level at this point in time. So we should always put that context when we say, "Okay, our estimate is this," which means we're relying patients to trickle from that funnel at a certain flow rate at the other end to be treated. Why it's important to know that is, over time, as these processes smoothen and all the stakeholders have gone through this two, three times, then it becomes more cruise control mode.
That time from identifying the patient to actually treating them is gonna shorten, right? So then we'll have a lot more confidence in what are those leading indicators that tell us what's the next quarter numbers and things like that, and we are going to evolve to that level of sophistication. We're not there yet.
Okay.
And for 2026, the reason we are very, you know, confident of, you know, getting the numbers is because obviously, even at this point in time, we've mentioned the 50 patients and counting without even putting a sales force, and we'll have more sites activated by the end of this year. So even if you take site capacity as a, one of the limiting factors of two patients per site per month, with five sites, we should be way above our break even. So as a business, we break even if we treat more than three patients in a month right? So we're very confident that we're gonna move past that threshold in the first half of 2026.
... Okay, thanks. So you talked about the fact that in some of your trials, patients were noting that they might wanna come back for commercial setting just to get another part of their body covered with the ZEVASKYN . Are you seeing this or some of these patients in that initial 50 that you laid out? I know you talked about one patient in particular is getting a third cycle, but are there any others that maybe are going for a repeat?
Yes, you can-
There is interest. I mean, we do expect patients will come back for a repeat, in fact, as we have seen in our clinical trial. What's, of course, hard to tell is how soon they will come back for a second or a repeat trial, a repeat application. And that is standing up because as we talk to some of these patients who the physicians are saying have got large areas of the body, and one doctor even said that 12 sheets is not going to be enough to cover the wound surface of this patient. You know, some of the patients that were already currently being evaluated.
So they are already the doctors asking us, "Okay, when should we be thinking about the second one?" And that second application will really depend on the recovery time for the patient after the first, which we think will be, you know, I guess six months is what, you know, our guess is right now, that they will want to wait for six months. It will also depend on the insurance companies as to how quickly payers will allow for the second one, which, by the way, a quick note on that, as insurance policies are coming up, payers are not really locking it only to one treatment. There is no cap, per se, in terms of repeat treatments, which is also extremely encouraging with regards to that repeat applications. So...
As more testimonials come out, where patients showing, this patient at the Cincinnati meeting, she's showing her back wound seven years after a single treatment application that covers the back and intact. Seven years. I mean, this is a big deal, and you've got other patients in the room listening to this patient and having one-on-one discussions. Those are the things that are going to move and, of course, if the real world plays out like the way, you know, it did in a clinical trial setting, this should set us up well.
Also to put some numbers, right? If you look at our clinical trial experience, there were 11 patients that went to the VIITAL pivotal study. Of those 11, six or so have already gotten the repeat treatment in our phase III-B study.
Oh, okay.
That's a pretty big number. I mean, in a short span of time, relatively, to have gone through a second treatment. So that shows also some kind of interest in coming back for therapy.
Okay, thank you. So you, you mentioned some of the patients that have had initial interest, some are treatment-naïve, some of them have been on one of the other therapies out there. I know we often use the word complementary versus competitive when talking about this space, but I'm curious, in both instances for the treatment-naïve, were these wounds just of a size that maybe didn't make them appropriate candidates for other medications? Or, why do you think that's the case?
In which one? In treatment-naïve group?
I guess in both.
In both? Yeah. I mean, I think, definitely complementary approach is what we are seeing or hearing from physicians as well as patient advocacy groups. They all are telling that these patients require multiple treatment options, and there is a clear position for ZEVASKYN , just given the wound burden and the need for a durable treatment options.
So we expect, you know, patients to get ZEVASKYN as well as other treatment options and, and/or vice versa, and early on, we think that our ZEVASKYN patients, the vast majority of them, will have received other treatment, Vyjuvek or Filsuvez, and that sets us up nicely as a second mover, second gene- therapy mover advantage. Because from an insurance standpoint, there's a lot of paperwork, copies of, you know, genetically tested results, medical letters, et cetera, already in place.
So, you know, we think that this is only going to help with our access and with other treatments, we are seeing both kind of category, vast majority of the patients, because they are non-responders. Non-responders in the sense some of the patients have just completely not responded to other treatments, Vyjuvek or Filsuvez, and even within a patient, there are certain wounds that are so large that have taken much longer, so the patients want a more, you know, durable kind of treatment for them, so it's going to be a mix heavily weighted towards treatment patients with prior treatments.
Are you surprised that reimbursement and payer discussions are going so well so far?
Surprised? I mean, we are surprised. Given the price point, right? I mean, there was always this sort of a question as to what the reimbursement landscape is going to look like, but we are seeing really strong positive trend with regards to coverage. All of the patients that we have submitted, that the doctors have submitted prior auth have been approved so far, and some of them have approved within 48 hours, so that's probably the surprising part. The speed with which access for some of these patients that we have seen has come through, including Medicaid, managed Medicaid, covering some of these patients. Even though Medicaid states take longer than usual, that speed is definitely a surprising part.
So it's a very strong trend, and we have been engaging with these payers for the last year and a half, right, and just educating the marketplace. Just as a recap on the payer front, right? I mean, if you look at the total payer mix, you've got about roughly 60% of rDEB lives are commercially insured lives. About 30% are Medicaid, and 10% are Medicare. Oftentimes, the question we get is, "Oh, is this a reimbursement, a DRG-type reimbursement? Does this mean that the hospitals are not going to be, you know, sufficiently reimbursed," et cetera, so on and so forth. So DRG is really for the Medicare portion, which is a 10%, tiny, and on top of that, we'll be applying for an NTAP and an outlier payment, which will cover, which will help bridge.
But for the vast majority, the 60%, which are commercially insured lives, we are already seeing coverage. In fact, as we announced, UnitedHealthcare has issued a policy covering to label. Covering to label, no additional restrictions to the sort of the inclusion, exclusion criteria that usually payers tend to follow, clinical trial inclusion, exclusion criteria, especially for expensive gene therapies.
So I think that's a really strong start, and we are watching as to how the policies shape up for the rest of the commercial lives. And on the Medicaid side, which is a 30% coverage, we already entered into a national drug rebate agreement with the CMS at the mothership level, and that's a prerequisite step, which then enables an expedited coverage and access with the individual 50 Medicaid states, and we are seeing some really good, you know, momentum already with the states. So-
The one point I just wanted to add is we could not take this for granted. Madhav has an amazing market access team, so the work that started to have all of this sail through so easily started, maybe a year, a year and a half ahead in time. It's almost like another FDA approval process, where you have information requests day in and day out, and we have to answer the questions that these payers have been asking us over these months, that we are actually in a position where, you know, the willingness to pay has been kind of secured. So I just wanted to not miss that it didn't-
Sure, yeah
... just happen like that.
Right. And one last,
please
to build on in terms of any surprises question, we are not seeing any pushback with regards to covering multiple treatment options for these patients. Patients on Vyjuvek. Payers are not saying that, you know, if your patient is already on Vyjuvek, you cannot get Zevaskyn, or if you're on Filsuvez, you cannot get Zevaskyn and vice versa. I think that's really positive. Also, the other positive, as I mentioned earlier, is that there is no cap in terms of number of treatments that a patient can get for new lesions, which is very encouraging. Also, there is no limitation on the total amount of body surface area that you can treat or the number of sheets that I'm authorizing.
This could have gone in many, many other ways, but because our NDC unit is one, up to 12 sheets, that's really your pack, and that's really how we are seeing the reimbursement laid out.
Okay, thanks. On manufacturing, how do you plan to support additional capacity down the line, and what are gonna be some of these trigger points that determine, "Okay, it's, it's time to think about additional scalability?
Yeah, so as I mentioned, we are scaling up to 10 a month kind of cadence by mid-2026, right? Now we're talking about should we go from 10 to maybe 20 or a bigger number, and that requires additional GMP space, right?
Okay.
So that work, some of the long lead activities have already started, so we're not wasting that time. But the big investments for that, at some point in quarter one, right? And this will also take into consideration by that time, is this something that could supply to some ex-U.S. markets if we are able to work with the durability of the drug product and the expiry time and things like that?
Sure.
So I think those are some of the considerations that will inform our design of that additional GMP space.
Okay. Would like to open the floor to you, see if there's anything else our audience should take away today.
No, I think we've covered all the main points here. I think the exciting part is that we're, you know, we have a strong balance sheet that allows us to execute on this launch. The bar to be a profitable company is relatively low. I mentioned the three patients a month, and we're already seeing demand build in a very strong way. It's really an execution problem right now, and we have no doubts that's gonna come through.
We don't talk about this very much. We have some very exciting assets that are in the earlier stages of development, proprietary capsids that have shown amazing data in retinal inherited diseases. We will be bringing that to patients in a clinical trial setting, starting 2026, latter half, and I think as we see the luster and the ZEVASKYN launch come up, we'll speak more and more about the pipeline as well at that point in time.
Okay, great. Well, thank you both so much. Great to have you here. We're rooting for you.
Thank you, Kristen.
Thanks so much, Kristen.