Abeona Therapeutics Inc. (ABEO) on Q2 2023 Results - Earnings Call Transcript
Operator: Good day, and welcome to the Abeona Therapeutics Second Quarter 2023 Update Conference Call [Operator Instructions]. As a reminder, today's conference is being recorded. I'll now introduce your host for today's conference, Greg Gin, Vice President of Investor Relations and Corporate Communications at Abeona. Sir, please go ahead.
Greg Gin: Thank you, operator, and good morning, everyone. I would like to welcome and thank everyone for joining us on our second quarter 2023 update conference call. The press release announcing the results is available on our Web site at www.abeonatherapeutics.com. Before we start, I would like to note that remarks made during today's call may contain projections and forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of the federal securities laws. These forward-looking statements are based on current expectations and are subject to change, and actual results may differ materially from those expressed or implied in the forward-looking statements. Various factors that could cause actual results to differ include, but are not limited to, those identified under the Risk Factors section in our Form 10-K and periodic reports filed with the SEC. These documents are available on our Web site at www.abeonatherapeutics.com. On the call today with prepared remarks are Dr. Vish Seshadri, Chief Executive Officer; and Joe Vazzano, Chief Financial Officer. Joining us for the Q&A session will be Dr. Madhav Vasanthavada, Vice President, Business Development; and Dr. Brian Kevany, Chief Technical Officer. With that, I will now turn the call over to Vish Seshadri to lead us off. Vish?
Vish Seshadri: Thank you, Greg. Hello, everybody, and thank you for joining us this morning. We are happy to update you on our continued progress, in particular with our lead program, EB-101, our investigational autologous engineered cell therapy had to deliver years of sustained clinical benefit in patients with recessive dystrophic epidermolysis bullosa, or RDEB, in short. Remember that all our clinical data pertain to treatment of large chronic booms, which are the hardest to treat and have remained open for years because they cannot sell to you and inflict the great [Indiscernible] burden to these patients. The durability of both investigator-assessed [hemin] and patient-reported pain following a single administration of serving toughest RDEB wounds paints a very compelling and unique value proposition for EB-101 for patients. We have made significant progress during the last quarter towards planned EB-101 BLA submission. We have completed process performance qualification, or PPQ manufacturing runs for both retroviral vector and EB-101 drug product to demonstrate our validated process and readiness for commercial production. In June, we announced that we had gained alignment with the FDA on the data required to establish retroviral vector or RVV comparability, which is a critical CMC component for the BLA. The FDA has requested additional assay data to establish comparability between RVV sourced from Indiana University and RVV manufactured in-house at Abeona, both of which have been used in the EB-101 clinical study, we have since generated the additional stat that we believe establishes comparability between the two vector sources and have included in the briefing package that we submitted to the FDA in July for a pre-BLA meeting later this month. In that meeting, we will align with the agency on the format content and overall acceptability of the anticipated BLA for EB-101 based on discussion of critical components of the BLA package. Following the conclusion of the meeting and subject to supportive FDA feedback, we anticipate submitting the EB-101 on BLA in the third quarter of 2023. As we expect a priority review based on the anticipated timing of the BLA submission, we expect potential BLA approval in the second quarter of 2024. If the BLA is approved, we anticipate being granted a priority in review voucher, which is worth approximately $100 million based on recent PRV transactions. In parallel, with our BLA-related activities, we're looking ahead to EB-101's potential FDA approval and launch next year. In anticipation of approval, we raised $25 million in a registered direct offering priced at the market with select existing investors in July with the proceeds from the offering, we're ready to invest in pre-commercialization activities and the planned launch of EB-101 in the U.S. by being thoughtful about what we need to spend now versus later after day approval. We have already initiated dialogue with top EB treatment centers in the U.S. about onboarding EB-101 as a treatment option, and we're encouraged by the level of interest. Physicians indicate there is a high unmet need in debt and particularly for a treatment like EB-101 that has a compelling value proposition. The positive feedback we hear from KOLs is consistent with what you've heard from payers, hospital administrators and patient advocacy groups. We plan to continue to engage with payers, both commercial and Medicaid to ensure broad market actions after launch. In addition to preparing the market for EB-101, we're also preparing our organization for commercialization. We have mapped out key commercial and medical roles that we plan to fill in the second half of this year and the capabilities we will build to support a successful launch. During the second quarter, additional efficacy and safety data from the EB-101 pivotal Phase III VIITAL study was reported at the International Society for Investigative Dermatology, or ISID and Society for Pediatric Dermatology SPD meetings. The results presented at ISID and SPD showed that EB-101 improved wound healing and pain reduction at six, 12 and 24 weeks compared to control wounds following a onetime application of EB-101. Furthermore, EB-101 demonstrated improvement in patient-reported and caregiver reported outcomes for itch and blistering severity. Let's turn briefly to our preclinical ophthalmology programs. We're excited by the broad potential for treating serious eye diseases with new AAV-based therapies using novel AAV capsids from our in-licensed AIM capsid library and internal research. At ASGCT, we presented three posters highlighting encouraging findings from animal proof-of-concept experiments for investigative AAV-based gene therapies for Stargardt disease, X-linked retinitis and autosomal dominant optic atrophy -- the preclinical proof-of-concept data provides early evidence of the potential of our proprietary AAV capsid and gene constructs to express the recombinant protein and target tissues and rescue mutant phenotypes in mouse disease models. We completed pre-IND meetings with the FDA regarding preclinical development plans and regulatory requirements to support first-in-human trials for two preclinical gene therapy product candidates from our AAV ophthalmology program. We're gathering additional proof-of-concept data before committing to IND-enabling tox studies, which we anticipate initiating in the second half of 2023. I'd now like to turn the call over to our Chief Financial Officer, Joe Vazzano, who will review the second quarter financial results and recent capital rates. Joe?
Joe Vazzano: Thanks, Vish. I would like to remind everyone that the Form 10-Q is available on our website, which is where you can get additional details on our financial results for the three and six months ended June 30, 2023. Starting with the financial resources on our balance sheet. We had cash, cash equivalents, restricted cash and short-term investments of $37.1 million as of June 30, 2023, prior to the $25 million registered direct offering in July of 2023 as compared to $40.7 million as of March 31, 2023. Based on our current operating plan and assumptions, our estimated current financial resources, including the proceeds from the $25 million registered direct offering in July of 2023, are sufficient to fund our commercial launch preparations for EB-101 and our business operations into the fourth quarter of 2024. In other words, our cash runway extends beyond the potential commercial launch of EB-101 and receipt of a priority review voucher. License and other revenues for the second quarter of 2023 were $3.5 million compared to $1 million in the second quarter of 2022. The revenue in the second quarter of 2023 resulted from a clinical milestone achieved under a sub [Indiscernible] agreement with taysha Gene Therapies related to an investigational AAV-based gene therapy for RETT syndrome. Turning to research and development activities. We spent $8.5 million for the three months ended June 30, 2023, compared to $6.7 million in the three months ended June 30, 2022. Our spend on general and administrative activities was $5.0 million for the three months ended June 30, 2023, compared to $3.5 million in the same period of 2022. Net loss attributable to common shareholders was $16.7 million for the second quarter of 2023 or $0.92 loss per common share as compared to a net loss attributable to common shareholders of $7.9 million or $1.36 loss per common share in the second quarter of 2022. With that, I'll turn the call back over to the operator for the Q&A session. Operator?
Operator: [Operator Instructions] Thank you. Our first question is coming from Maury Raycroft with Jefferies.
Maury Raycroft: Congrats on the progress. Just wondering, based on the briefing package and additional RVV data that you submitted to FDA. Have you gotten any recent feedback yet based on those -- that submission? And also as a follow-up, are you providing any more granularity on the pre-BLA meeting agenda topics where you need to align and also just on timing of the meeting.
Vish Seshadri: I'll start with your first question, which is have we had any further discussion about the briefing package for the pre-BLA meeting itself? And our focus so far, just as a reminder, we've been having a lot of collaborative interactions with the FDA since December of last year after we had our pivotal data out there. And over those six, seven months, we've had a lot of communication, made a lot of progress on various aspects of the BLA submission. And to remind you, the big -- two big items on the CMC side were the PPQ run completion as well as establishing the RVV comparability. What we had agreed an informal meeting before even making our pre-BLA briefing book submission was the outstanding work that had to be done with assays to establish the RVV comparability. And we believe we've done that to the satisfaction of the agency because we had agreed on what exactly needed to be done and what the data outcome needed to be. like. So based on the results that we have seen, we're fairly confident that the comparability of RVV from the two vector sources is adequately supportive. So the big focus areas of discussion between the FDA and Abeona has been covered with that data that we submitted in the pre-BLA -- as we speak, they are still reviewing. We haven't had any interactions since the submission itself. Now the second part of the question, Maury, in terms of the specifics of the pre-BLA meeting itself, our goals are twofold. One is the format content and overall acceptability of the BLA package is that appropriate? And two, we want a confirmatory answer that the CMC data that we've put together as well as the clinical data that we have put together are sufficient to submit a BLA. Those are the two answers that we need to hear from the FDA formally. And we're fairly confident we're making -- we're on the right track. Based on all the last seven months of discussion we've had on various topics that relate to both CMC and clinical. The only piece on the clinical side that I would add is the FDA has seen the top line data already and gave us some feedback -- preliminary feedback on how we would pool the data from the two different studies. We have done that, and this is the first time that they are reviewing the combined consolidated data as part of the briefing book. So we haven't had interactions since we submitted the briefing book. I hope that answered your question.
Maury Raycroft: Yes, that's definitely a helpful perspective. And maybe one other question, if I may. You said that you will be commercializing 101 by yourself in the United States. Can you just talk a little bit more about where you're at with the commercial -- or if you could talk more about what the commercial launch rollout will look like and where you're at with CMC scale up for the launch? And if that's something that you can do before getting approved? Or would you wait for that approval to scale up.
Vish Seshadri: So your two part question. One was about our general commercial launch preparation itself. I'm going to let Dr. Madhav Vasanthavada comment on that because he's been spearheading a lot of that planning. But I'll first address your second question, which is the CMC manufacturing buildup. As we have previously communicated, we are currently set up to manufacture up to about 120 manufacturing cycles in a year, which translates to 120 patients, we only consider onetime treatment for each patient. Now we are not -- we're going to be very careful and choiceful in how and when we trigger undertaking capacity expansion because as a reminder, we have the PRV proceeds that we anticipate upon approval that could further fund our capacity expansion. And so we believe that the current capacity is sufficient, and we will definitely hire appropriately to have that operating scale and full operation there. But in terms of how we are preparing for the commercial launch itself, I'll let Madhav add some comments there, Madhav.
Madhav Vasanthavada: So as Vish mentioned, we've initiated pre-commercial activities, essentially with the goal to prioritize the sequence of events that we will trigger as we approach towards BLA approval. But just to give a flavor, we are looking to understand and sort of prepare the market on the one hand for EB-101 launch in the U.S. as well as prepare the organization. And the fact that VYJUVEK has already now gotten approved and patients are beginning to get identified is actually an excellent news for us because this is, like we mentioned earlier, is helping raise the awareness, identify these patients, and that's going to be a good cursor for us. Meanwhile, while we're waiting for the approval, we are already going ahead and engaging with certain top EB centers, treatment centers to discuss EB-101 as a potential treatment option in their centers because this is a hospital and patient procedure. And we are seeing a lot of interest from them to engage because these centers, they both -- they are treating both pediatric patients as well as adult patients, and they are expressing a high unmet need in depth. And as we all know, the EB-101 clinical profile is extremely compelling, given the onetime procedural nature and the long-term durability. So these providers, the feedback that we are getting from them is helpful. But besides providers, Maury, we're also engaging with the payer groups, as you may recall, the initial engagement we've had with Insurance companies was very helpful for us, and we want to continue this engagement as we go towards the launch so that we are fully equipped to ensure a broad market access and a rapid market access immediately post approval in the U.S. So we talked about the payers. We talked about providers. And then final piece, I would also say is from a CMS standpoint, we have already initiated activities to ensure there is a new technology add-on payments because this is a hospital procedure. Securing this NTAP is going to be extremely helpful because it provides additional payments to hospitals for Medicare-covered patients. So these are all the activities and many more that we have ongoing and planned to help prepare the market. And from an organizational standpoint, we have already mapped out, as Vish mentioned earlier, some of the key commercial roles, medical roles that we plan to fill in this year as well as next year and some additional capabilities that we're going to be putting in place for a successful launch. And the fact that we are coming with an autologous cell therapy launch experience. Having done that recently, we know really a strong network of people and the talent that are there and just eager to get them on board. Hope that addresses Maury.
Operator: Our next question is coming from Kristen Kluska with Cantor Fitzgerald.
Kristen Kluska: First question, just given that the RDEB community is pretty tightened it and aware of the clinical landscape. What's your expectation on how much awareness there will be moving closer to an approval decision? I guess I understand that you're going to be building a sales force and getting the word out there. But do you also anticipate this to be one of the situations where you can get people coming inbound to you?
Vish Seshadri: Again, I think Madhav is the appropriate person to address this matter.
Madhav Vasanthavada: I think at the time of launch, we do expect there will be self referrals and the awareness that we will have created. As you rightly mentioned, patient advocacy groups are really powerful in this setting, and they've been doing a lot of reports. Debra and PeDRA in particular, have been fantastic partners. We are engaging with them. And as we go closer to launch, we expect greater awareness, especially in these centers of excellence. We know that these patients travel, they travel distances to come to get their treatments done and our approach in the outer years or in outer months post launch will be to take advantage of the sales team in the non-sort of centers of excellence and raising awareness with the community-based physicians and making sure that patients understand where these treatments are available. So for sure, more to come, but it's a great starting point, tighten patient community and some amount of awareness that will already have been generated.
Kristen Kluska: And then I wanted to ask you on epidemiology. I know that this is a rare disease, but not that rare to the point where you have a good sense of how many patients are available. So first, I wanted to ask how you think, given the landscape with two potential commercial therapies could help impact or perhaps drive awareness on epidemiology. And then given this impressive data set that you recently had in Japan, I'm wondering if you've had people approach you to perhaps look at markets besides the usual U.S. and Europe that we would think about.
Madhav Vasanthavada: I think the way we are looking at this opportunity is by wounds, right? And that's what we are hearing from physicians that it's not just about the number of patients, but it's the different types of wounds that each patient has got. And we are hearing from physicians that both these therapies are for different types of wounds. And so if you look at the current base of bolus patients and/or prevalent patients, we have estimates of up to 350, which is what are the reported numbers. But as we know that about 1,100 is what has been identified by Crystal, who have already gone to the centers of excellence. So from our standpoint at the time of launch and given our manufacturing capacity, we think these hundreds of thousands of patients which are out there. For us, we are going to be well satiated with the patient numbers out there in terms of the way we will expand our capacity ramp up. And so that's what is very encouraging at least from our perspective of supplying these patients. And as we have more therapies and awareness, the diagnosis also we expect to increase. And many a times, these patients under ICD code 81.2 is what is used for RDEB, but several patients are also misdiagnosed or put in other classifications. So I think having the right diagnosis and awareness is going to help identify RDEB patients in particular more so. With regards to other than U.S. markets, absolutely, we do have interest that is coming in from pharma companies in Europe, as well as actually in Japanese markets where there is interest and those discussions are ongoing to see as to when is the right time to look into expansion.
Vish Seshadri: And just to add to that, Kristen, we will be looking for partnerships to go ex U.S. because right now, we're so laser-focused on getting the U.S. launch to BLA and preparing for the U.S. launch and for a company with finite resources like us, we have to depend on creative partnerships to get this to many patients. But in terms of interest and demand, we are already seeing that happening, right? So we're excited by that. We believe that the important catalysts that will take those dialogues to the next level is when we reach a milestone in the U.S., like a BLA acceptance or a BLA approval that's going to trigger a lot more conversation along those lines and the ex U.S. conversation will become prime time at that point in time. So right now, we're just putting our heads down to see how to best maximize the U.S. opportunity and address that unmet need first.
Operator: Our next question is coming from David Bautz with Zacks Small Capital Research.
David Bautz: Crystal Biotech recently announced that they had received 121 patient start forms since launching BYJUVEC about six weeks ago. So I'm curious if you could just comment on what your thoughts are on that number, maybe in regards to potential market size and patient access? And then how we should think about that in terms of the launch of EB-101.
Vish Seshadri: It's very early for us to speculate translating 120 patient forms into what the full market opportunity is. It's still early in their launch, and we're also learning. But I'll turn it over to Madhav to speak about his experience because he's really leading our launch preparations here.
Madhav Vasanthavada: I think it's for sure, encouraging. I know that they had both the dominant and recessive form, and I think this split was roughly 30 some patients having the dominant version. And it's in line with where our expectations are also and as the -- I don't want to talk much about their launch preparations. But from what I'm seeing on the public domain as insurance companies open up greater access and more centers having understanding this product, there's going to be a greater adoption curve. So I think this is all very encouraging for us. And given that we have another several more months to go before EB-101 gets launched, I think it's a good setup and we are encouraged to hearing what this feedback are going to be from patients as they continue to get these therapies and better understand ensuring that they understand the value proposition of EB-101, which is a onetime therapy that can offer several years of durable benefit for their larger set wounds. Does that help, David?
David Bautz: Now you had also mentioned that you completed the process performance qualification manufacturing run as part of the CMC package. So I'm curious, were there a certain number of runs that you needed to complete there as per the FDA what they would require? And then are there any additional CMC activities that need to occur prior to filing the BLA?
Vish Seshadri: There is an agreement on the number of process performance qualification runs that have to be completed, which is 10 manufacturing runs, but three of those runs had to be done prior to BLA approval in a consecutive three run fashion. So we have completed, in fact, four PPQ runs. So we have what we need for a BLA submission per se. And then the remaining runs to make up to the 10 can continue even post approval or between now and approval even. So we have multiple different time points to complete that obligation. In terms of your other question, which is, are there other CMC activities that need to be completed. We have completed the last set of CMC activities that we had agreed with the agency, especially because the retroviral vector comparability package that we had discussed. That and the PPQ runs where the biggest items on the list. We've had multiple discussions on many -- very many other topics. One example I can give you is transportation and stability associated. So when we manufacture for a patient, we run a batch fly it to Florida or distant parts of the country and bring it back and after various standpoints, we look for stability of the drug product, and we're happy with what we're seeing that's all being written up as part of the BLA package in Module 3. So we have completed the work that needs to be done. We're almost complete with writing it up with all the data that's necessary. So we feel fairly confident that things are coming together for a Q3 submission here. I hope that gives you an idea.
Operator: Our next question is coming from James Molloy with Alliance Global Partners.
Unidentified Analyst: So this is [Indiscernible] filling in for James Molloy. So for EB-101, are you looking into publishing the additional RVV compatibility data that was requested by the FDA? Or will it fully remain in the briefing package and the upcoming BLA submission?
Vish Seshadri: We are not planning per se to Publish this as a peace meal, but definitely, it's going to be part of our Module 3, which goes into the BLA. Without getting too technical about it, I would just like to mention that we have preset goals on what comparability means with the FDA. And we believe we're in a good position to establish that comparability based on the results that we've generated. So that being said, in terms of scientific advancement, this is one piece that is important. There are so many other pieces that speak to retroviral vectors. We're talking about potency, identity, stability, drug product level potency as well. So there are numerous different parameters. Holistically, the data can potentially make it to the public domain eventually, but we haven't yet made a decision on that.
Unidentified Analyst: And then also with the study starts to be initiated by the end of the year for your other -- for your AAV gene therapy program. What might be the study protocols here? And then what indications might you be looking at what ophthalmology indications are you looking on to targeting for [Indiscernible].
Vish Seshadri: The preclinical data that we have, as I mentioned, are for Stargardt disease, we have X-linked retinitis and autosomal dominant optic atrophy -- for all the three disease areas, there is what we've shown so far is proof of expression of the transgene in the right compartment of [Indiscernible]. So we need to first -- the first step that we need to sales is in a larger sample set of animals confirm the results that we've seen. And we're being very up-gated and in how we're going to commit our resources because our focus is laser-focused on EB-101. Having said that, our target is still to have first-in-human patients in the second half of next year, so approximately a year from now. The feedback we just received from the FDA on what it takes to have an IND approved definitely has given us an operating plan of what we need to do in steps. And as I had -- just along the lines of the previous comments we made, we first have additional proof-of-concept experiments in animals before we trigger GLP, IND-enabling tox, which still should start at least for one or two indications in the second half of this year. And we're going to be opportunistic on when we trigger it for all our programs because we have numerous different funding sources that we could tap into to further these programs, and that's something that we should be ready to talk about in the last quarter of this year.
Operator: [Operator Instructions] As we have no further questions, I will hand it back to Mr. Seshadri for any closing comments you may have.
Vish Seshadri: Thank you, Ali. In closing, I want to thank our shareholders and all our other stakeholders who listened to this call, and we'll talk to you again soon.
Operator: This does conclude today's conference, and you may disconnect your lines at this time, and we thank you for your participation.
