Abeona Therapeutics Inc. Common Stock 2026 Q2 Earnings Call

Thank you, Jenny. Good morning, and thank you everyone for joining us on our second quarter 2026 results conference call. During this call, we will refer to the press release issued this morning announcing the financial results. It is 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, Joseph Vazzano, Chief Financial Officer, and Dr. Brian Kevany, Chief Technical Officer. 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. With that, I will now turn the call over to Vish Seshadri to lead us off.

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

I will begin today with an overview of our commercial progress before turning the call over to Madhav for operational details. Our commercial experience to date reinforces our confidence in ZEVASKYN's substantial commercial opportunity. During the second quarter, we advanced our rollout by expanding our qualified treatment center network and progressing more patients through the treatment pathway. With the recent addition of Cincinnati Children's, which is one of the largest epidermolysis bullosa treatment centers in the country, we now have seven activated QTCs nationwide. Importantly, CHOP and UTMB are biopsying patients, and CHOP has completed its first treatment. We have treated 12 patients since launch, including five in the second quarter of 2026 and three additional patients in the third quarter to date. As Madhav will discuss further, a couple of these treatments did not generate revenue.

As our commercial footprint expands, we are refining how we report progress to the investment community. Over the past quarter, we have seen that leading indicators, such as scheduled biopsies or biopsies in manufacturing, are subject to external variables outside our control and have limited utility in predicting revenue-generating treatments. Later on the call, Joe will outline the specific reporting updates we are making to eliminate this uncertainty and to align with standard practices of commercial-stage companies. With that, I will turn the call over to Madhav Vasanthavada, our Chief Commercial Officer, to detail our commercial execution and network expansion.

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

We are making progress in executing the launch with clear priorities. Advancing identified patients through the treatment journey, strategically expanding the QTC footprint by onboarding leading EB centers, and raising ZEVASKYN awareness across the EB community. Let me start with EB community engagement, since we just attended back-to-back meetings. The debra Care Conference, which is a flagship meeting for EB patients hosted by debra of America, a patient advocacy group, and the Society for Pediatric Dermatology, SPD, annual meeting, where we interacted with dozens of highly engaged patients, caregivers, and physicians. Patient ambassadors from our Strong Together Network, which is a group of patients who received ZEVASKYN in clinical trials, engaged with families and physicians throughout these events, fostering meaningful dialogue, sharing the impact ZEVASKYN has had on their lives, and helping connect patients and caregivers with ZEVASKYN resources and support.

Following these interactions, and the many that we have been having in the recent months, we are energized by the opportunity and the fundamental role ZEVASKYN can play in healing RDEB wounds today and for the years to come. Based on our interactions with patients and caregivers, we continue to believe that the distinct value of ZEVASKYN is deeply resonating with the RDEB community. We see clinical conviction building across our QTC network and the community practices of other RDEB physicians. While we are thrilled with the patient community's interest in ZEVASKYN, our recent experience has revealed bottlenecks that we are working through in the journey from patient identification to ZEVASKYN treatment. Because ZEVASKYN is the first surgically applied autologous cell therapy in dermatology and is operationally very different from traditional topical therapies, QTCs have a steep learning curve to climb.

As a result, the time from patient identification to patient treatment can vary considerably site to site and be influenced by a broad range of factors that are beyond the control of individual stakeholders. Executing the launch has provided us with several real-world learnings, of which I would like to highlight three important ones. First, administering ZEVASKYN, which has an 84-hour shelf life, requires a QTC to execute seamless real-time coordination across multiple stakeholders. Well before requesting a biopsy slot, dermatologists, surgical specialists, anesthesiologists, and hospital staff must lock in precise dates for biopsy appointments, for operating room reservations, and for surgeon and medical teams. These unique operational dynamics require even greater planning, particularly when patient and physician availability can be limited with holidays and back-to-school planning, and we have seen this lead to scheduling disruptions for biopsy and treatment dates.

Second learning, on the clinical side, we have observed that the health of RDEB patients can sometimes change unexpectedly, which can lead to unavoidable biopsy delays or cancellations. In the second quarter, patient health deterioration resulted in 2 last-minute cancellations of scheduled biopsies. Because of the amount of coordination required at the QTC with payer and patient schedules well before booking a treatment slot, a last-minute cancellation means that the slot cannot be filled by another patient. Lastly, on the supply side, as our patient sample size has continued to grow, we have learned that manufacturing yields can be influenced by variability in the incoming biopsy material. These factors resulted in 1 low-yield batch in Q2 and 1 out-of-specification batch in Q3, for which no revenue was recognized. Despite these challenges, we are gratified that both patients received treatment.

While the launch has highlighted these complexities, they have provided valuable operational and commercial learnings that continue to strengthen execution by both Abeona and its QTC partners. Importantly, despite these complexities, we have maintained a steady quarterly growth, and 12 patients have now been treated with ZEVASKYN since launch. As we apply these launch learnings, our focus remains on ensuring more patients enter the top of the funnel to help offset patient attrition that can occur for reasons beyond our control. A key component of that strategy is continued expansion of our qualified treatment center network, continued engagement with the EB community, and improving patient access. Towards that end, during the second quarter, we activated 2 leading institutions, NewYork-Presbyterian/Columbia University Irving Medical Center and Children's Hospital of Philadelphia, CHOP. More recently, Cincinnati Children's Hospital, one of the largest EB centers in the U.S., has come on board.

Activating treatment sites has taken significant time and commitment from QTCs and Abeona teams, and I want to thank everyone involved who helped achieve our stated goal of activating 7 QTCs by the end of this year. With our expanded QTC network, about 40% of our addressable market now has in-state access to a QTC based on claims analysis. In addition, our QTCs also provide specialized care for a sizable portion of patients traveling from out of state, which enables even broader patient access. That said, we are getting requests from additional EB centers to onboard ZEVASKYN, and we plan to work with those centers to further our expansion of the QTC network. While site activation is a critical milestone, it is only a first step that allows a QTC to initiate the ZEVASKYN treatment process, including consultation, patient workup, and payer engagement.

Our commercial and medical teams continue to communicate regularly with each activated center as they build treatment readiness and administrative planning, including pharmacy and therapeutics committee review, prior authorization and payer agreement processes, and planning for surgery and logistics. As an example of exceptional operational efficiency, CHOP completed its first ZEVASKYN treatment in July, shortly after its activation in May. UTMB recently completed its first patient biopsy, representing another important step towards future treatments and overall reflecting growth in the number of QTCs that are treating patients. Next, as we think about the long-term adoption curve for ZEVASKYN, we know that physician confidence and learning builds over time. Our QTC physicians rely heavily on multi-center, real-world experience shared through peer-to-peer dialogue before transitioning a new therapy like ZEVASKYN into standard practice.