Good morning, everyone, and welcome back to the Leerink Partners Global Healthcare Conference. My name is Lili N songo, and today I'm joined with the Abeona Therapeutics team, Vish Seshadri, CEO, and Madhav Vasanthavada, the CCO. Welcome back.
Thank you.
It's a pleasure to have you again. A lot has happened since we last spoke last year, same time, same place, actually. Maybe without the disco ball, but that's an addition for this year. Thank you for being with us. Thank you for your time. Just diving into what everyone is waiting to hear for, how is the launch going?
Thank you, Lili, for having us here. It's been always a pleasure. The launch is going very well. I think, you all saw, our press release, yesterday. Just to rewind a little bit, our approval happened April, end of April last year, and then we had, certain needs of assay optimization and things like that because, we had a situation where we could not release product for the very first patient in August, and, we had to go through some, you know, amendments for that. Our launch really took off in December. We treated the first patient. In some ways, we're just three, four months into that launch and the momentum, that's picked up, is really very encouraging.
Great. Diving into details, as you mentioned, the approval was in the second quarter last year, and then really the drug manufacturing started in the third quarter, and then there was some delay due to some adjustment that needed to be made. Can you maybe tell us a little more about the false positive issue that you had, how you remediated it, and how do you see this potentially being or not being an issue moving forward?
Yes, certainly. The issue was with an assay that looks at sterility. Sterility is a safety-related aspect of the product, which is a binary outcome. It's either sterile or not sterile. We have a product that has a shelf life of 84 hours, so we have to use a rapid sterility method that can give you results very quickly. When you do that, it's gonna be very sensitive, and a very sensitive assay is sometimes going to pick up noise and give it to you as a positive signal, and that's what exactly happened with the very first run. Even to show the evidence that this was a false positive, there is no evidence, there is no sterility issues with our manufacturing run, it takes us the gold standard testing, which takes two weeks.
Mm.
-to do. For that reason, you cannot release that particular batch of product to a patient. You can imagine if you put yourself in a patient's shoes that, I don't know if I give my precious skin as a biopsy, I'm not sure I'm gonna get product or not. That's not a good place to be. We recognize that very well. We said we're gonna first fix this, and we're not gonna give any biopsy slots until that happens. That is the reason we pushed out and worked with the FDA to optimize the assay in such a way that you minimize that kind of a noise.
Technically, what it is is that the cells that are in our own culture, the patient's cells that we're growing, can sometimes give the same signal that a microbial contaminant would give, and we had to somehow separate the wheat from chaff. It's a lot of fine-tuning of the assay, which is what we really did. Our feasibility studies and the validation, revalidation studies show that we have vastly reduced the probability of a false positive. Of course, the empirical evidence is gonna come from the number of runs that we now complete successfully. That's gonna tell you that, okay, this is really behind us.
The good news is that despite, you know, you can imagine that patients want to be on the fence and say, "Hey, I want to see someone else go through this process two, three runs, and then I'll put my name for that." Once we actually got the modified, improved assay in place, the patients started to put their names, and you see the slots have been filling up and, you know, we're up and running, the train is running. That, in fact, tells us how much the unmet need and the motivation of the patient is for receiving ZEVASKYN. We're very encouraged to see that because we've earned ourselves the opportunity to demonstrate that we've actually put this behind us. Now these runs that we are conducting now will be the empirical evidence that we've minimized such risk.
By minimized, can we try and maybe quantify that? Is it minimized to a threshold that it's very unlikely that it happens again, or is this still a risk that you have to discuss with patients as they go through the process?
We believe that it's very unlikely, and it's hard to predict, can I get to 100 runs without one example like this, or is it more like 50? I think that that's the empirical evidence we will generate. We feel confident that we've significantly reduced that risk. Of course, the reduction of that risk is done in a proxy model because we don't have patient materials to be demonstrating that in.
Yeah.
Right? We feel pretty good about our ability to demonstrate that in real-world practice.
Great. As the launch is ongoing, could you remind us of the size of the commercial opportunity? You know, the epidemiology of the study, but also the patient population that will be eligible for treatment.
Definitely. I think if you look at recessive dystrophic EB as a patient pool, which is very well genetically defined.
Mm-hmm.
A vast majority of those patients are in the moderate to severe RDEB category. These are the patients that often come to centers of excellence that have multidisciplinary medical teams that have operating room access and anesthesiologists that know how to, you know, administer for these patients. That pool of patients is our target patients for ZEVASKYN, the moderate to severe RDEB patients. If you look at how many of those patients are there in the country, in the U.S., based on our claims analysis in these centers of excellence, as well as other triangulations talking to the physicians in those centers, we are roughly, give or take, around the 750 patients mark.
Given the body size of wounds area for these patients, we anticipate on average two ZEVASKYN treatments to be able to achieve substantial coverage of the wounds. If you look at the total addressable market, TAM, it's 750 times two, it's about 1,500 treatment opportunities for moderate to severe RDEB. These are the patients that are also at higher risk for other complications like squamous cell carcinomas and the urgency to treat with, you know, quick, rapid treatments that can give substantial coverage is gonna be important.
Can you provide us an overview of the patient journey? From the time that they express interest to the time that they are treated, and are there any rate-limiting steps?
Yeah. I'll let Madhav elaborate on this because he's living and breathing this every day.
Yeah.
It's not a very simple answer, but we will give you know, some puzzle pieces that'll fit together over time.
Yeah. No, thanks, Vish. The overview of the treatment journey, as you asked, it's right now we are seeing it as variable because we are still in the process of getting our initial patients that were identified through the treatment process. In terms of the high level picture, the steps, it's taking about four-five months, and we expect that this particular overall end-to-end time, which is from the time a patient is identified to the time they get the treatment, and which is when we recognize the revenue, that period is going to shrink. The steps that are involved is a patient is identified, there is an in-person consultation that takes place at the qualified center, and then once that step is completed, then an order form is placed. Once you have the order form, then insurance clearance happens.
Once the insurance clearance and sort of the clinical medical necessity as well as payer clearances, financial clearances is completed, that's when the site is de-risked with regard to the financial commitment, and then they go ahead and schedule a slot for the patient for a biopsy collection. Once a patient biopsy is taken, it is really predictable, 25-day manufacturing time to come back with the product, which is when the product is applied. It's the upstream process or from the time of patient identification to the time biopsy is collected, that is the variable phase that we are seeing, and that depends on various factors.
If the patient is already at a qualified center, then it's relatively easy for the physician to bring the patient in, and consult with the patient and, you know, go forward with the product order form. If the patient has to be referred in from a different physician, then there is another step that takes place. That's sort of the variability that we are seeing, and also the other variability is with regard to payer clearance. Because like with any launch, especially with an expensive, you know, high-priced gene therapy, payers want to make sure that a medical necessity is established before going ahead with issuing clearance for the product. The letters of medical necessity, et c., you know, is a process that take place.
You know, in like images of wound, you know, prior, you know, copy of mutation that exists, things of that nature. Those things we expect to get better over time and shrink that overall time.
The only nuance I'll add to that is, sometimes sites are different in at what stage they put an order form. Some, as Madhav explained, you put an order form in for a patient, and then you go through the prior authorization process. Sometimes they want to do more of that prior authorization and insurance verification before the order form. The sequence of events can also vary depending on a site's-
Right.
preference and comfort with that.
Do you expect a harmonization of that process over time?
We expect, I mean.
Is it more site dependent and just the way they run, and we should expect variability?
We should expect some variability, but you know, overall, right now, we have two treatment centers that are producing these patients of the four. We have qualified four, right? Lurie Children's in Chicago, Lucile Packard Children's Hospital Stanford, Children's Hospital Colorado, and UTMB. The volume of biopsies that we are seeing and the cadence is really coming from the two first initiated centers. So as we get the other two, I mean, there should be some variability, but big picture, it should streamline, especially the upstream process.
In terms of the patient identification to the order form, what would you say is the percentage of patients that we lose in that process? Is it that, you know, from the identification, oftentimes they just jump at the opportunity to get the treatment?
We are expecting a high conversion rate. We are in fact seeing a high conversion rate because these initially identified patients are severe, moderate severe patients with large chronic wounds. It's not a question of if will they convert, but it's really a question of maybe when.
Mm-hmm.
The factor of when really depends on, you know, their calendars and the family situation and maybe at a time where, you know, they you know schooling, you know, and the calendar and things of that nature. But really, these initial patients, we are seeing a very high conversion rate.
In an ideal world where you can optimize every part of the process, prioritization just goes so well and so fast, what would be your target time? Well, I guess from order, the form being filled to the patient being treated. How short, how compressed could this be?
Yeah
the ideal target timeframe?
See, look, manufacturing itself is about 25 days to a month, so about a month, right? We expect this to be around 90 days. Three months is a good expectation there.
Okay. When should we expect or when do you anticipate reaching that, like, three months timeframe? How much more optimization needs to happen before we can assume that any patient that starts today will be treated in three months?
Let's see. I mean, we are not there yet to be able to give a, you know, a better handle because it's going to depend from center to center. We're already seeing at Lurie Children's and Stanford, like I mentioned, they are getting better. You know, they are identifying who are the internal stakeholders that need to clear the paperwork. If you have a, you know, patient coming in from a particular insurance plan, let's say Aetna, then the future patient that comes from that particular, you know, insurance carrier is already reduced because there is a template for a contract, a letter of agreement that already exists. They don't have to reinvent the wheel for ZEVASKYN. There are so many factors that are going to weigh in in terms of how rapidly we'll be able to get a, you know, steady state.
The good news is that as we are seeing more patients entering the treatment funnel, we are going to be in a whoever is ready to take the slot, you know, move forward with that.
Yeah.
That's going to be our approach. So far, the first few patients' experiences with these biopsies that we talked about, as Madhav mentioned, are just from the first two sites that were activated, which is Lurie and Stanford. They will probably by mid-year get into a little bit of an equilibrium or steady state of knowing this process, and now this has become cut and paste for us kind of a thing. Whereas in the second quarter, now you're gonna have layering on top of these first two sites from the second two sites that we activated. Imminently, we were working with a lot of other sites also to take them active. I think you're gonna see that the most experienced sites will probably be the ones that are most comfortable in turning around efficiently.
Before we dive into capacity, maybe can we spend some time talking about evolution of demand? What are you seeing in terms of the number of patients that are identified, the number of forms that are filled, and how is that increasing as the launch progresses?
On our previous call, we had mentioned about 30 patients identified, right? And which was a combination of, patients at the qualified centers as well as about, you know, patients that are coming in, 30 plus 20. 20 were out in the referring, you know, sort of community. And we are seeing that number, you know, increase. Where the physicians are spending most of the time right now is in the administrative process of clearing the patients that are already identified and putting them on a treatment pathway. That's most of the time. As they are clearing this treatment, you know, patients for the treatment, then they are in the position to bring in more patients, you know, into the funnel. And it's steadily building.
As we are actively working, you know, right now we have four, we wanna be, you know, soon we will announce another treatment center, once that is active. Plus there are additional treatment centers that have expressed interest to have ZEVASKYN in their institution, especially after the approval of ZEVASKYN, and especially after these additional centers have seen, you know, Lurie and Stanford begin to, you know, bring patients on. So that is also going to be a source of, you know, demand for us. And we have our field team that's already now trained and is deployed, and they are actively engaging with community physicians. That is the third channel of referrals. We are really seeing good engagement and interest from the referring physician.
100% of the physicians that our field teams have engaged have expressed interest in ZEVASKYN, and there's a really positive sentiment to put patients on it. We are encouraged to see the way that the trend is shaping up.
The RDEB community is a very tight-knit community. All these patients have social media channels that they're all talking to each other. As the first few patients get their commercial treatment and they're sharing their experiences, this is just giving more and more conviction for those people that, "Hey, I just wanted to listen to this and then see if I want to go for ZEVASKYN." That phenomena is also feeding into the physician side of things that Madhav was describing, right? I think it's a gathering momentum kind of a phenomena here.
Can you remind us where we are in terms of some key launch metrics, meaning the number of patients identified, the number of order forms filled, and the number of patients treated?
Number of patients identified, 50, and it's climbing.
Okay.
When I say identified, these are physicians who have identified in their minds. There is still the process of consultation, and there is still a process of order form, and there is a process of payer clearance, and so on. There is likely attrition, but we expect vast majority to convert since these are the initial set of patients that are identified. With regard to order forms, we had communicated 12 order forms, and we are in the process of clearing those patients through. We will at our earnings call just give some more for the fourth quarter as to how the year has ended. We are seeing a pretty good conversion of all these patients going through multiple steps of the process.
Sorry, I forgot your.
Patient treated.
Patient treated, yes. We, as we announced, we have treated already two patients, one in December and one in January after we started our manufacturing in late January. We, you know, we are expecting more patients to get treated with the multiple biopsies we have already taken and more that already have been scheduled for this month. We are very much active.
With the continued increase of the number of qualified treatment centers, how should we think about the cadence of the potential number of expected patients treated on a quarterly basis?
These centers, they have communicated treating about one, maybe two patients a month. If we have to keep it at, like, you know, four and then five, you know, patient treatment kind of an output, then we will be in a really good spot given where our capacity, which, you know, we are also in the process of ramping up our manufacturing capacity. We'll be in a really good spot with that.
I just wanted to clarify when Madhav said there's 50 patients identified or whatever, that's what we had disclosed in our last earnings call, and that has grown since, right? This is still not taking into account some of the other sites that we're onboarding at this point in time and their catchment areas that have some referrals as well. I think as we add sites, because you asked the question, how does site activation influence this? It's only gonna bring in a different pool of patients in. That is all yet to come for us.
Yeah.
And-
Sorry, go ahead.
No, I was just saying, so for us, you know, from overall demand, just to close that topic, you know, we are seeing the demand. I think it's really a question of the steps, the administrative process and clearing these patients through the multiple, you know, aspects that we have and the learning curve of new centers that come on board, and their processes, right? Things that we won't be able to control, admittedly so, and then things that we are able to control, which is our manufacturing and predictability in delivering. Those are the aspects that are going to give a better handle. The underlying sentiment is really, you know, continuous as we engage with more patients and more physicians.
Can you maybe give us a little bit more color on your strategy for the expansion of the QTCs? Do you have a target number in mind in terms of, like, what you know about where the patients are and where they go for treatment? Or is the strategy to convert, you know, referral sites into active treatment sites? Can you give us a little more color?
Yeah. I'll start off and then Madhav add color to this. The five to seven QTCs that we have always described as our target for this year, we're pursuing that, and it should be imminent, right? That five to seven activated. If you look at the 750 patients we talked about, well north of 100 patients are already in these five to seven centers, maybe some number between 100 and 150. We're not stopping there. In fact, other than the four QTCs we've already announced as activated, we're working with a pretty big list of QTCs because even beyond the five to seven, there are more QTCs that have expressed interest. We are engaging with them.
It's just a matter of we wanna be mindful of how quickly we onboard sites because our capacity also has to be able to catch up to that. We're gonna try and stagger that as we build our capacity, and I think it's fitting pretty well. The five to seven in 2026 is still a pretty good target, and we think it's very much on track.
Yeah, total five to seven total number of sites. Then on the referral part, we don't expect, anticipate converting these referring sites into, you know, treatment centers just for various reasons. A, not all referring institutions have that kind of infrastructure. They probably see a small number of patients, maybe, you know, less than five patients. More importantly, these patients travel hundreds of miles sometimes in order to get, you know, other comorbidities taken care of, whether it is syndactyly, whether it is squamous cell carcinomas, whether it is GI dilatation. The notion of traveling to centers of excellence is not a foreign concept for these patients.
Especially if you have a therapy such as ZEVASKYN where it's a surgical application under anesthesia, and you have the ability to cover large areas of body for durable healing, these patients will travel those kinds of distances. We want centers to get better and better as they treat more and more patients in their institution for various reasons, administrative as well as clinical reasons. We wanna keep our footprint, you know, relatively finite, and continue to really build that positive experience for everyone.
As you mentioned, in parallel with the site activations, there is also the issue of capacity. Can you tell us how you're thinking about ramping up capacity and, say, you know, you get to the five to seven QTCs this year, what is the maximum number of patients you can manufacture for?
Yeah. Right now we are already operating at a capacity of six slots per month.
Per month.
Our goal is to ramp that up to about 10 a month in the second half of this year. You're gonna see that ramp up. We're already hiring people and training them to get to that kind of a capacity, and that's going well. One of the factors that was gating this was the conversion of a GMP suite that we use for vector manufacturing. We have now manufactured sufficient vector that can keep us going for maybe two, three years even, and that suite is available to convert. This is something that we will continue to march towards. When you say five to seven sites that say I'm starting at a cadence of one to two patients a month, we're right at that kind of capacity.
Having the 10 slots a month capacity gives flexibility because you have to match patients' availability and their schedule with the slot dates. Not every patient can fit a slot like, you know, Tetris that can occupy spaces efficiently. For that reason, we always wanna offer a higher capacity than what we'll actually operate. I think this is gonna be a very good thing to be operating at 10 by the end of this year. Of course, to your longer term question, beyond 10, we have already identified the suite, because on the fourth floor of our current building, we have enough space to double that 10 to 20 slots. We've done all the designs, everything is ready.
It's just a matter of, you know, when can we pull the trigger on that kind of a project, because it's going to have an 18-month lead time to activate those suites. You know, that's all upside for us.
Great. Thinking about longer term strategy, do you expect, or do you anticipate expansion to less severe patients?
That's a great question. I think before looking at less severe patients, a lot of the need that's coming to us as we want this therapy for a different type of purpose is for the pseudosyndactyly, where the digits fuse and then the patients undergo hand surgery to separate the digits, and then over a year or 18 months, this fuses again, right? So there is a lot of interest. Can we apply ZEVASKYN for after the surgery to keep our digits free? This is going to be one of the major lifecycle management type of focus areas for us.
I think for the lesser severe patients, as you asked, I think, the risks of even the recurrent wounds becoming chronic over time is gonna be the driving force to, let's not let it go chronic, let's treat it early, right? I think those are the types of needs that are going to show up in terms of expanding beyond the moderate to severe patient type.
Great. Well, thank you so much for all of the color on the commercial launch. I also wanted to maybe take a minute to talk about the pipeline, what is cooking and what we should be expecting.
Yeah. We have not spoken much about the pipeline. As you all know, we have, we do have preclinical assets as well as partnered assets.
Mm-hmm
With other companies. That's a very deliberate reason because we are so laser focused on getting the ZEVASKYN launch in a good footing, and then we can talk about. The fiscal discipline of not diluting our efforts is what has kept us not talking about the pipeline very much. Rest assured, those two, three programs. A small team in the company has been working with part of their time in moving those projects. I think the next quarter and towards the middle of the year, we'll get more updates on what is the timing looking like, when will these get into clinic, or what our strategy looks like. I think there's a lot of discussion on that. We just didn't want to, you know, dilute our attention.
All hands on deck for ZEVASKYN right now.
That makes a lot of sense. Thinking about the all hands on deck, you had guided to profitability in 2026. Does this timeline assume a specific run rate in terms of the number of patients treated per month, and how are we progressing toward that?
Yeah. Anything north of three patients a month is going to generate profits for the company, and we're not far from that, even if you look at what we've announced so far and how the momentum is building. We're still on track to see maybe quarter two to get to that place. The path is very visible and clear now.
Great. We're at the top of our time, but I'm gonna scan the audience for any question. I think we are set. Thank you so much for your time.
Thank you so much, Lili.
Good luck with the launch.
Thank you for having us.
Thank you.