ABEONA THERAPEUTICS INC. Q3 2025 earnings call

Thank you, Jenny. Good morning, and thank you for joining us on our third quarter 2025 results conference call. During this call, we will refer to the press release issued this morning announcing the financial results, which is available on our corporate website at www.abeonatherapeutics.com. We anticipate making projections and forward-looking statements during today's call, which 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. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including but not limited to those outlined in our Form 10-K and periodic reports filed with the Securities and Exchange Commission. These documents are available on our website at www.abeonatherapeutics.com. Now, joining me today with prepared remarks are Dr. Vish Seshadri, Chief Executive Officer; Dr.

Brian Kevany, Chief Technical and Scientific Officer; Dr. Madhav Vasanthavada, Chief Commercial Officer; and Joe Vazzano, Chief Financial Officer. After the prepared remarks, we will conduct a Q&A session. With that, I will now turn the call over to Vishwas Seshadri to lead us off. Vish.

Thank you, Greg. The third quarter of 2025 was marked by significant operational progress as we continue to scale the ZEVASKYN commercial launch to meet growing patient demand. While our first patient treated has shifted to the fourth quarter of 2025 due to optimization of a product release assay, our conviction in our ability to achieve our 2026 launch goals remains steadfast based on trends in patient demand, treatment center expansion, and market access. We're seeing growing patient demand for ZEVASKYN, the first and only autologous cell-based gene therapy for the treatment of adult and pediatric patients with recessive dystrophic EB, or RDEB. We also continue to strategically expand our qualified treatment center, or QTC, network. The activation of a highly recognized EB center, Children's Hospital Colorado, brings our total activated centers to three.

Furthermore, we've established a strong foundation with broad market access, which is essential for sustained commercial success. In summary, despite the temporary delay in the first patient treatment, we are well positioned for launch success in 2026. Before we dive deeper into our commercial launch progress and momentum, I now hand the call to our Chief Technical and Scientific Officer, Dr. Brian Kevany, to briefly highlight the release assay optimization. Brian.

Thanks, Vish. Hello, everyone. As we continue the ZEVASKYN launch, we remain dedicated to maintaining the highest standards of quality in the manufacturing of personalized drug products for each patient. During the third quarter, a full batch of drug product was manufactured following a patient biopsy but could not be released due to a performance issue in one of our release assays. Specifically, a rapid sterility assay delivered false positive results, which required us to reject the lot. The rapid sterility assay was not part of our clinical trials and was an FDA requirement that was added during the BLA review. Retesting using established gold standard USP sterility methods confirmed the sterility of the product, but unfortunately, those test results were not available until after the lot's expiration date, so they could not be used to release the lot.

As a proactive measure to ensure product quality, we temporarily paused collecting additional patient biopsies so that we could conduct a thorough investigation, run additional tests, and further optimize the new release assay. Following successful completion of optimization, validation, and the necessary regulatory submissions, we resumed biopsy collection in November 2025. We now anticipate patient treatment starting in the fourth quarter of 2025. I will now hand the call over to Chief Commercial Officer, Madhav Vasanthavada, to discuss our commercial launch progress. Madhav.

Thanks, Brian. Hello, everyone. Our launch momentum continues to accelerate on multiple fronts. Patient demand continues to build. Our relationships and trust with qualified treatment centers have grown stronger, and patient access to ZEVASKYN across all payer types has continued to broaden. On our second quarter call, we mentioned more than a dozen initial patients were identified at the first two qualified treatment centers. Of these patients, we have already received ZEVASKYN Product Order Forms, or ZPOFs, for 12 patients. A ZPOF is an informed consent generated by the QTC physician after the patient has been consulted, a treatment decision has been made, and the patient and their families have decided to move forward. Insurance prior authorizations have been obtained for several patients already, and we expect these patients to be biopsied over the coming months as and when full financial clearance is in place.

We are happy to also report that demand for ZEVASKYN continues to grow. The number of identified eligible patients at our QTCs who are motivated to initiate the treatment process has now more than doubled to approximately 30 patients, up from the 12+ mentioned on the second quarter call. At the same time, the broader pool of potential ZEVASKYN candidates at non-QTC referral sites continues to increase as our field force and promotional activities generate more ZEVASKYN awareness in the marketplace, and many of these referral sites have initiated patient referrals to the qualified treatment centers, which is exactly what we were hoping for. Regarding QTC activations, we are delighted that Children's Hospital Colorado is our newest ZEVASKYN qualified treatment center.

Children's Hospital Colorado has an expert multidisciplinary team with years of EB experience, and their commitment to onboarding ZEVASKYN speaks to their belief in the benefits this therapy can bring to RDEB patients. Activation of Children's Colorado brings the number of ZEVASKYN qualified treatment centers to three, alongside Lurie Children's Hospital of Chicago and Lucile Packard Children's Hospital Stanford. We are also in active discussions with several EB centers across the U.S. to strategically expand the geographic footprint of ZEVASKYN even further. These centers are advancing through the various stages of site onboarding and we will continue to announce new centers as they are activated. Finally, regarding market access, we have seen a steady cadence of positive coverage decisions from both national and regional commercial health plans in the six months since approval.

Importantly, policies covering ZEVASKYN have been published by all major commercial payers, including UnitedHealthcare, Cigna, Aetna, Anthem, and the majority of Blue Cross Blue Shield plans, all collectively covering more than 80% of all commercially insured lives. Now, on the government payer front for Medicaid, we are happy to report that ZEVASKYN now has received baseline coverage across all 51 state Medicaid programs and Puerto Rico effective October 1, 2025. Moreover, multiple state Medicaid programs have already published policies covering ZEVASKYN, signaling that payers recognize the value ZEVASKYN brings to their patients and the healthcare system. As another major highlight, CMS has established a permanent product J-code for ZEVASKYN that will go into effect on January 1, 2026. We believe that this product code will simplify claims and reimbursement processing between our QTCs and all payer types and will further support hospital adoption for ZEVASKYN.

In summary, we are very encouraged by the growing patient demand, patients actively progressing toward treatment, continued growth of the QTC site network, and a favorable market access landscape for ZEVASKYN. We are looking forward to a strong start in 2026. With that, I'll now pass the call over to our Chief Financial Officer, Joe Vazzano, to discuss our financial results. Joe?

Thanks, Madhav. I would like to remind everyone that you could find additional details on our financial results for the three and nine months ended September 30, 2025, in our most recent Form 10-Q. Starting with our financial resources, we had cash, cash equivalents, restricted cash, and short-term investments totaling $207.5 million as of September 30, 2025. This robust cash position provides us with significant financial flexibility as we execute on the ZEVASKYN commercial launch. The current cash position, without accounting for anticipated revenue from ZEVASKYN, is expected to be sufficient to fund current and planned operations for over two years. Turning to the statements of operations, research and development, or R&D spending for the three months ended September 30, 2025, was $4.2 million, compared to $8.9 million for the same period of 2024.

This reduction was primarily due to costs capitalized into inventory and the reclassification of selected costs, such as engineering runs and other production costs, to selling general and administrative expense, or SG&A, following ZEVASKYN's FDA approval. SG&A expenses were $19.3 million for the three months ended September 30, 2025, compared to $6.4 million for the same period of 2024. This increase reflects the reclassification of R&D expenses as noted, along with increased headcount and professional costs associated with the commercial launch of ZEVASKYN. Our net loss was $5.2 million for the third quarter of 2025, or -$0.10 per basic and diluted common share, compared to a net loss of $30.3 million in the third quarter of 2024, or -$0.63 per basic and diluted common share. In terms of upcoming investor relations activities, we plan to participate in the Stifel 2025 Healthcare Conference tomorrow.

With that, I'll pass the call back to Vish for additional remarks before opening the call for Q&A.

Thank you, Joe. Turning briefly to our pipeline, we have two key updates. First, our gene therapy program for X-linked retinoschisis, ABO-503, has been selected to participate in the FDA Rare Disease Endpoint Advancement, or RDEA Pilot Program. This selection will provide opportunities for enhanced communication with the FDA to accelerate the development and validation of product-specific novel efficacy endpoints for the program. Second, we have strengthened our management team with the appointment of Dr. James A. Gao as the Senior Vice President, Head of Clinical Development and Medical Affairs. Dr. Gao brings over 20 years of industry experience and is a recognized expert in gene therapy, especially in ophthalmology, which will be valuable as we advance our pipeline.

In closing, while the first patient treatment has shifted to the fourth quarter of 2025, we are encouraged by the doubling of identified patients, 10 product order forms, 12 product order forms, the expansion to a third QTC, and the broad and rapid payer coverage across commercial and government plans. This progress underscores the high-value proposition of ZEVASKYN for the RDEB community. With that, I will now open the call for Q&A. Jenny, please open the Q&A session.