Abeona Therapeutics 2026 Q3 Earnings Call

Thank you, Tom. Good morning, and thank you for joining us on our third quarter 2026 results conference call. During this call, we will refer to the press release issued this morning announcing the acquisition of APT-1011 and our third quarter financial results. They are available on our corporate website at www.abeonatherapeutics.com. Joining me on today's call are Dr. Vish Seshadri, chief executive officer, Dr. Madhav Vasanthavada, chief commercial officer, Joe Vazzano, chief financial officer, as well as Dr. Brian Kevany, chief technical officer. We will be 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 SEC. These documents are available on our website at www.abeonatherapeutics.com. With that, I will now turn the call over to Vish Seshadri to lead us off.

Vish? Thank you, Greg, and good morning, everyone.

This quarter represents an important point in Abeona's growth story as we continue to build the commercial foundation for ZEVASKYN while beginning to broaden and diversify opportunities that can unlock significant value for the company in the longer term. Toward that objective, today, we announced the acquisition of APT-1011, now ABO-801, from Ellodi Pharmaceuticals. ABO-801 is a phase III product candidate for eosinophilic esophagitis, or EoE, with both FDA Orphan Drug and Fast Track designations. Before elaborating further on the rationale and attractiveness of this opportunity, Madhav will first discuss the significant progress that we have made on the ZEVASKYN launch, which remains the foundation of our business and our immediate operating priority.

Madhav? Thank you, Vish, and good morning, everyone.

In the third quarter, we delivered ZEVASKYN growth with a net revenue of $13.5 million, an 18% increase compared with the prior quarter, while continuing to strengthen the foundation for ZEVASKYN launch. During the quarter, six patients were treated, bringing the total number of patients treated with ZEVASKYN since launch to 15. Revenue was recognized for five of the six treatments. As previously stated in August, revenue was not recognized for one treatment because the associated batch was out of specifications for the pan-CK identity assay. Also in the quarter, two of the activated QTCs, CHOP and UTMB, treated their first patients, bringing the total number of QTCs with ZEVASKYN treatment experience to four.

For a QTC, treating a patient for the first time, as you'll appreciate, is an important milestone because it validates their ability to execute the multi-step process end-to-end across different stakeholders and speeds up their learning curve for future treatments. During the quarter, we activated two additional qualified treatment centers, Cincinnati Children's and University of Florida Health, bringing the ZEVASKYN network to eight sites and further expanding geographic access for eligible patients. Both centers are already advancing their first patients through prior authorization and financial clearance, and they initiated those processes more quickly than our initial QTCs. We believe this reflects a maturing launch infrastructure and the benefit of sharing learnings and best practices across the QTC network. More broadly, patients across all eight centers are actively moving through the process.

Although QTCs are working to advance their patients toward ZEVASKYN, as mentioned in prior calls, treatment timing can vary based on QTC and patient-related factors. These steps often include ensuring patients are clinically ready, securing payer authorizations, negotiating single-case agreements, and coordinating patient travel and surgery schedules. Given the time required to schedule these steps for treatment, together with our planned annual manufacturing shutdown, we expect treatment timing to remain variable through year-end, with some patients currently progressing through the pathway in the advanced stages of the funnel, potentially moving into early 2027 for biopsy swabs. Speaking of 2027, we will have entered the year from a fundamentally different position than we did at the start of this year. In looking at this map, RDEB patients will have access to eight well-recognized qualified treatment centers, four of them having gained firsthand experience treating with ZEVASKYN.

Payer coverage available for more than 95% of commercial lives, baseline Medicaid coverage across all 50 states, a New Technology Add-on Payment, NTAP, status for Medicare beneficiaries, and with necessary billing, coding, and reimbursement infrastructure in place. As more centers gain firsthand experience with ZEVASKYN and patient wound healing outcomes continue to accrue, we expect real-world experience to support broader patient activity and uptake across the QTC network. We are confident in the important role ZEVASKYN can play for patients with RDEB, and we remain focused on the execution to realize that opportunity. With that, let me turn the call back over to Vish.

Vish? Thanks, Madhav. With ZEVASKYN providing our commercial foundation, we have also been considering how to build on our capabilities and broaden our opportunities for value inflection.

Through ZEVASKYN and our prior advancement of the program, which resulted in the approval of FAYUVI, we have built experience in late-stage clinical development, regulatory execution, and commercialization. Our goal is to create a diversified revenue-generating company with multiple opportunities for durable growth. ABO-801 is well aligned with that strategy. It is a phase III-ready Orphan Drug with robust clinical data and a uniquely differentiated profile that can translate into a substantial peak annual revenue potential of greater than $750 million in the disease of growing prevalence. Just as importantly, we believe that our prior experiences in late-stage development position us to move the phase III program forward without distracting our commercialization and manufacturing teams from the ZEVASKYN launch focus.

Eosinophilic esophagitis, or EoE, is a growing disease with increasing unmet need, with approximately 350,000 diagnosed patients in the U.S. today. It is a chronic, lifelong inflammatory disease of the esophagus that can significantly affect swallowing and food intake. Over time, persistent inflammation can also lead to structural damage to the esophagus and exacerbate the condition. Because of that, EoE requires lifelong disease management. The goal is not simply to manage symptoms, but also to control the underlying inflammation, restore and maintain normal structure of the esophagus, while limiting adverse events of therapy. ABO-801 is a once-daily oral disintegrating tablet, or ODT, formulation of fluticasone propionate taken at bedtime. It is designed to deliver topical corticosteroid therapy directly across the esophagus. The tablet dissolves in the mouth in less than 30 seconds without water and acts both in proximal and distal esophagus with little to no systemic absorption.

We think that this profile is important in a chronically managed disease like EoE. The treatment landscape of FDA-approved therapies comprises an oral corticosteroid, EOHILIA, and an injectable biologic, DUPIXENT. While there are several injectable biologics in development, there is dearth of effective, safe, and convenient oral therapies. We believe that a combination of targeted topical delivery, limited systemic exposure, and convenient once-daily bedtime orally disintegrating tablet, or ODT, could offer a uniquely differentiated treatment option for patients with EoE. Importantly, ABO-801 has already been evaluated in two phase III studies, giving us a substantial body of clinical experience to build on. Let me walk through those results, which are important not only in characterizing the activity and differentiated profile of the drug, but also in optimizing the design of the subsequent phase III study. The two completed phase III studies evaluated more than 350 patients combined.