Abeona (ABEO) Q4 2025 Earnings Call Transcript

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DATE

Tuesday, March 17, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Vishwas Seshadri
• Chief Commercial Officer — Madhav Vasanthavada
• Chief Financial Officer — Joseph Walter Vazzano
• Chief Technical Officer — Brian Keaveney

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TAKEAWAYS

• ZevaSkin Commercial Progress -- Two commercial patients treated since launch, with three additional patients biopsied and more biopsies scheduled imminently.
• Qualified Treatment Centers (QTCs) -- Four centers activated, with two treating patients and two advancing through the onboarding process; five more centers in various onboarding stages and a goal of seven active QTCs by year end.
• Patient Demand -- Identified eligible patient pool surpassed 100, up from nearly 50 at launch, driven by field engagement with community physicians.
• Market Access and Payer Coverage -- Coverage policies for ZevaSkin published by all major commercial payers, representing approximately 80% of commercially insured lives; baseline Medicaid coverage established in all 50 states.
• Reimbursement Infrastructure -- CMS granted a permanent HCPCS J-code for ZevaSkin effective January 1, 2026, supporting streamlined billing and reimbursement at QTCs.
• Revenue -- Total revenue for 2025 was $5.8 million, comprised of $3.4 million in license and other revenues (including a $3.0 million Rett syndrome milestone) and $2.4 million in net product revenue reflecting the first commercial ZevaSkin treatment.
• Cost of Sales -- Cost of sales for 2025 was $1.5 million, including the December commercial treatment and unreleased August production batch costs associated with technical issues in rapid sterility testing.
• Research and Development Spending -- R&D expense fell by $7.6 million to $26.8 million, primarily as costs shifted to inventory following FDA approval of ZevaSkin.
• Selling, General, and Administrative Expenses -- SG&A expense grew by $35.1 million to $65 million, with $18.6 million from personnel and stock-based compensation and $2.3 million allocated to direct commercialization, further increased by reclassified engineering and training costs.
• Priority Review Voucher Proceeds -- Sale of the rare pediatric disease priority review voucher following ZevaSkin approval resulted in a $1.524 billion gain, with payment received in June 2025.
• Profitability -- Net income for 2025 was $71.2 million ($1.34 per basic share, $1.10 per diluted share), compared to a net loss of $63.7 million in 2024.
• Liquidity -- Cash, cash equivalents, and short-term investments were $191.4 million at year-end 2025.
• Manufacturing Capacity -- Facility currently running at six patient treatments per month, targeting an increase to 10 per month during the year to support more QTCs.
• Operational Learnings -- Lessons from onboarding the first four QTCs are being used to expedite the activation of new centers, including cross-functional support and process optimization.
• Patient Treatment Timeline -- Average timeline from consult to treatment is four to five months, with about 25 days attributed to manufacturing; process efficiency expected to improve as experience grows.

SUMMARY

Management signaled a material operational shift from proof-of-concept to commercial execution, emphasizing measured acceleration in ZevaSkin delivery and QTC expansion. New payer coverage milestones and the CMS-granted permanent J-code directly improve billing clarity and may enable a faster patient ramp. Commercial execution is supported by a strengthened cash position, with net product revenue recognized as Medicaid-driven but expected to normalize toward a higher average as the payer mix diversifies. The manufacturing team has addressed prior sterility assay issues, incrementally increasing treatment cadence and building resilience for future challenges.

• CEO Seshadri stated, "Sites have communicated to us that one patient a month is kind of a cadence that they can definitely do. Some sites are saying perhaps two patients a month."
• CTO Keaveney said, "we are running at a cadence of six patients per month within the facility and continue to develop the space to be capable of reaching that 10-patient-per-month capacity."
• There has been no observed patient attrition or denial of coverage to date in the ZevaSkin launch phase.
• Registry study requirements and ongoing pipeline development will drive R&D expense for 2026, while preclinical program costs are expected to remain minimal through the year.
• Physician and patient feedback on commercial ZevaSkin use is still early; management expects more meaningful data after the six-month endpoints are reached.

INDUSTRY GLOSSARY

• QTC (Qualified Treatment Center): Medical centers designated and trained to deliver cell-based gene therapies under specialized protocols.
• HCPCS J-code: A permanent reimbursement code used by Medicare and insurance providers for billing drugs and biologics administered in outpatient settings.

Full Conference Call Transcript

Vish Seshadri: Thank you, Jenny, and good morning, everyone. We continue to see growing patient demand for ZevaSkin, the first and only autologous cell-based gene therapy for the treatment of adult and pediatric patients with recessive dystrophic epidermolysis bullosa, or RDEB. As a reminder, ZevaSkin was approved in April 2025, but our launch was delayed to Q4 2025 as we optimized a sterility test that was required for product release. Treating our first commercial patient this past December was a significant milestone for Abeona Therapeutics Inc., but 2026 is where the launch execution ramps up. We are not just looking at one-off successes anymore. We are focused on building a consistent cadence of biopsies, product delivery, and treatments.

Since resuming manufacturing in late January after our annual shutdown, we have treated one patient this quarter, biopsied three additional patients with treatment scheduled over the coming weeks, and expect to perform additional biopsies this month. All patient treatments and biopsies performed to date have come from the first two of our four qualified treatment centers, Lurie Children's Hospital in Chicago and Lucile Packard Children's Hospital at Stanford. As our third and fourth QTCs, which are Children's Hospital of Colorado and UTMB at Galveston, Texas, also begin to schedule their patients into upcoming biopsy slots, we anticipate a healthy cadence of patient biopsies in the coming months.

This momentum provides Abeona Therapeutics Inc. an opportunity to demonstrate that the operational machine behind ZevaSkin works at scale from initial biopsy through final delivery. At the same time, we are hyper-focused on ensuring a seamless experience for every patient in the ZevaSkin treatment journey, and we are building a foundation of operational excellence that resonates with this close-knit RDEB community. We recognize that in this patient-driven market, providing a smooth journey is the most effective way to catalyze the organic demand needed to scale ZevaSkin in 2026 and beyond. To further elaborate on how our launch is gathering momentum, I will now hand the call to our Chief Commercial Officer, Dr. Madhav Vasanthavada, to review the commercial update. Madhav?

Madhav Vasanthavada: Thank you, Vish. Hello, everyone. Demand for ZevaSkin continues to grow. We previously had reported that nearly 50 potentially eligible patients were identified across our initial qualified treatment centers and community-based physicians. Starting this year, we have deployed a field team that has been engaging with community physicians, and the number of identified eligible ZevaSkin patients has now grown to more than 100. While demand continues to grow, the speed at which identified patients receive ZevaSkin treatment has significantly varied during these initial months of launch, but the momentum is picking up.

Since our launch in Q4 2025, two patients have been treated with ZevaSkin, three additional patients have been biopsied for treatment over the coming weeks, and we expect to biopsy additional patients this month. Currently, we also know of at least 10 more patients who are advancing through the administrative process and targeting a Q2 2026 biopsy. As Vish mentioned, the patient treatments and biopsies until now have all come from the first two QTCs that were activated in the middle of last year.

While it has taken a long time to move the very first patients through the funnel to treatment, we have not seen patient attrition during this process, and no payers so far have denied insurance coverage for ZevaSkin, reflecting the strong value ZevaSkin offers to this patient community. As QTCs and payers treat more patients and gain experience with the overall process, we expect the speed of patient treatment to go faster. Additionally, as the remaining two QTCs treat patients, we anticipate that the number of ZevaSkin treatments will grow in the coming quarters. Now, regarding activating additional QTCs for ZevaSkin, becoming a QTC is a multistep process.

It starts with a dermatologist who is an EB specialist championing ZevaSkin at their institution and requires a buy-in and signoff from various functions and committees, all the way to the level of CEO or CFO of that institution. Once the decision is made to become a QTC, several moving parts, including a master service agreement, trade policy, clinical training for biopsy and treatment, and registry protocols with IRB approvals, must be put into place. That makes QTC onboarding a several-month process. Once the site is activated, it may then begin patient consultations for ZevaSkin, work with insurers to secure clinical authorizations and financial commitment for that individual patient, and then schedule patients for biopsy.

As mentioned earlier, we have four QTCs activated. Two have started treating patients, and the other two have patients that are moving through the administrative process to schedule a biopsy. In addition to the four current QTCs, we are actively working toward onboarding five additional centers and are in various stages of the site onboarding process. To ensure a geographically expansive footprint, our goal is to have at least seven QTCs active by 2026. Lastly, on the market access front, I would like to reiterate that all major commercial payers, including UnitedHealthcare, Cigna, Aetna, Anthem, and most Blue Cross Blue Shield plans, have published coverage policies for ZevaSkin, representing roughly 80% of commercially covered lives.

ZevaSkin also has baseline coverage across all Medicaid programs for all 50 states. In addition, CMS has established a permanent HCPCS J-code for ZevaSkin effective 01/01/2026. We expect a J-code to be an important enabler for streamlined billing and reimbursement for QTCs. Ultimately, every step forward—every biopsy, every treatment, every positive patient story—strengthens our confidence in the impact ZevaSkin can have. We are energized by the early momentum and remain committed to delivering a seamless ZevaSkin experience. With that, I will now pass the call to our Chief Financial Officer, Joe Vazzano, to discuss our financial results. Joe?

Joseph Walter Vazzano: Thanks, Madhav. I would like to remind everyone that you can find additional details on our financial results for the year ended 12/31/2025 in our most recent Form 10-K. Starting with the statements of operations, total revenue for the year ended 12/31/2025 was $5,800,000. Total revenue includes $3,400,000 in license and other revenues and $2,400,000 in net product revenue. License and other revenues were primarily driven by a clinical milestone of $3,000,000 achieved in 2025 under our sublicense agreement for Rett syndrome with Taysha Gene Therapy. Net product revenue reflects the patient treatment in December. The patient treated was a Medicaid patient.

We expect our average net revenues to normalize over time as the payer mix expands to include commercially insured patients. We received payment for this treatment in 2026. Cost of sales for 2025 was $1,500,000, primarily driven by the first commercial ZevaSkin treatment in December. Cost of sales also includes the costs from the August production batch that was not released due to technical challenges related to an FDA-mandated rapid sterility lot release assay. As more patients are treated, we expect our gross margins to increase significantly with better economies of scale related to production costs. Total research and development (R&D) spending for 2025 decreased $7,600,000 to $26,800,000 compared to $34,400,000 in 2024.

This reduction was primarily driven by the April 2025 FDA approval of ZevaSkin, which resulted in certain production costs being capitalized into inventory and engineering runs that are no longer classified as R&D expense. Selling, general, and administrative (SG&A) expenses for 2025 were $65,000,000, an increase of $35,100,000 over 2024. This increase primarily reflects Abeona Therapeutics Inc.’s commercial transition following the April 2025 FDA approval of ZevaSkin, including $18,600,000 in personnel and stock-based compensation and $2,300,000 in direct commercialization costs. Additionally, certain engineering and training expenses previously classified as R&D were transitioned to SG&A post approval. In May 2025, we sold our rare pediatric disease priority review voucher awarded following the FDA approval of ZevaSkin.

The company recorded a $1.524 billion gain on sale from this transaction after receiving payment in June 2025. Net income was $71,200,000 for the year ended 12/31/2025, or $1.34 per basic and $1.10 per diluted common share. Net loss in 2024 was $63,700,000, or $1.55 loss per basic and diluted common share. As of 12/31/2025, cash, cash equivalents, and short-term investments totaled $191,400,000. With that, I will pass the call back to Vish for additional remarks before opening the call for Q&A.

Vish Seshadri: Thank you, Joe. In closing, I want to reiterate that while 2025 gave us our first commercial proof of concept, 2026 is about solidifying our commercial blueprint. I am incredibly proud of the entire Abeona Therapeutics Inc. team, from our manufacturing and quality groups ensuring every lot meets our highest standards, to our commercial and clinical teams supporting our treatment centers. Every person in this company is focused on ensuring that the RDEB community's experience with ZevaSkin is nothing short of excellent.

We are doing the heavy lifting now to get these foundations right, and I am confident that this collective focus on execution today is what will allow us to scale aggressively and deliver meaningful value in the quarters and years to come. We look forward to providing updates on our continued progress on our first quarter 2026 conference call. With that, I will turn the call over to Jenny to open it up for Q&A. Thanks, Jenny.

Operator: Thank you very much, Vish. At this time, we will be conducting our question-and-answer session. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. It might be necessary to pick up your handset before you press the keys. Please wait a moment while we poll for questions.

Operator: Our first question is coming from Ram Selvaraju of H.C. Wainwright. Ram, your line is live.

Ram Selvaraju: Thanks so much for taking our questions, and congratulations on all the recent progress. I was wondering if you could comment on the cadence with which qualified treatment centers are likely to be stood up in the coming months and any specific factors that might influence the speed with which that occurs, if you expect that pace to increase. And if so, what might be the specific contributing factors to that?

Secondly, I was wondering if you could comment on the specific drivers of R&D spending over the course of 2026 and beyond, and if we should expect R&D spend to modulate somewhat over the course of the coming quarters, or if in fact you expect any noteworthy increases over the remainder of 2026. Thank you.

Vish Seshadri: Good morning, Ram, and thank you for the questions. Regarding the cadence with the QTCs and the speed of ramp up, I think there are a lot of factors that go in. We have some preliminary viewpoint just beginning this quarter. I will turn it over to Madhav to articulate, knowing that our projections are based on the first two sites just about ramping up. Madhav, why don’t you take that one?

Madhav Vasanthavada: Yeah. Thanks, Ram, for the question. So with regard to QTCs, as I mentioned, we are working with five centers, one of whom is imminent, and we expect to hopefully announce it in this coming quarter. And then centers are in varying stages of their onboarding process. Our goal is to have seven in total active by the end of the year. In terms of the aspects that drive the speed with which the centers come on board, there are various ones. Some centers wanted to wait for ZevaSkin approval to take place before they invested additional resources.

Some started looking at their payer mix—of the individual patients that are in their treatment pool—to see what kind of payer mix exists, how many are commercially insured patients, and if Medicaid, what are the out-of-state Medicaid nuances there. And they essentially were also waiting to see coverage established. But now we have covered significant ground with regard to market access, having established coverage and these payer policies also in place. So that has given great confidence for these sites to initiate their process and speed that up.

And then there are other factors with regard to institutional bureaucracies that exist with every institution, people getting to understand the cell and gene therapy units, because in the dermatology space, this is the first engineered cell therapy moving into the treatment space, and so that requires greater cross-functional interaction. But we have learned a lot in onboarding the previous four centers, and our teams are doing a tremendous job in helping the upcoming centers to navigate that pathway and bring them up to speed. So we are confident about having seven total. And if additional centers move faster, then yes, of course, we will be able to help them stand up sooner. I hope that gives some flavor.

Vish Seshadri: Yeah, and just to add to that, Ram, you asked at steady state what we anticipate. Sites have communicated to us that one patient a month is kind of a cadence that they can definitely do. Some sites are saying perhaps two patients a month. So I think it is just a matter of us projecting based on what we are hearing from the sites in terms of their plans and their patient visibility. We need to see that come through. I think we will be able to give more evidence-based cadence and the speed of getting there once we start seeing that steady state. We need to see three consecutive months of delivering that consistently.

I think that is really what we are looking to get to by midyear. But as we also articulated, two of our four sites are yet to reach the point where they start layering their patients because the upfront setup time is what they are taking right now. Hopefully, that comes through in the second quarter, and we are able to show with data that sites are reaching their kind of cruise-control level of speed, and therefore this is more predictable. So hope that helps there.

Vish Seshadri: Regarding your second question about R&D spending, let me open it up to Joe first to just give a little bit because we are so focused on ZevaSkin launch right now that our R&D spend is almost insignificant. But, Joe, why don’t you go ahead?

Joseph Walter Vazzano: Sure. Thanks, Vish. Yes, Ram, I believe the question was just drivers of R&D spend for 2026 and going forward. As you may recall, we have to do the registry study that was part of the FDA approval, so the registry study costs go into R&D, and then also the pipeline development costs will go into R&D. And, again, as I mentioned in the prepared remarks, there is a shift from R&D to SG&A just with the evolution of transition to a commercial company. But those two items that I mentioned are going to be the main drivers of R&D spend for 2026 and outer years.

Vish Seshadri: And also, to add—as you know, we do have some preclinical programs. We are not spending a lot of energy and resources on those. They are kind of running in the background. We do not see preclinical programs stacking up R&D expenses in a significant way, at least in 2026. 2027 is a different story, and I think a lot of it is going to depend on the ramp-up speed of ZevaSkin and what we can bite into. So I think that is going to be a story that will evolve through the rest of the year.

Ram Selvaraju: Just with respect to the qualified centers, I was wondering if you could comment on the relative coalescing or concentration of patients around those centers, and if you expect on a go-forward basis the bulk of new patients coming in to go through the first two treatment centers to be stood up, or if you expect some of the other treatment centers to be just as significant contributors to the overall number of patients coming on to ZevaSkin.

Vish Seshadri: Yeah. That is a great question. Go ahead, Madhav.

Madhav Vasanthavada: Yeah. We expect them to have a good, decent pool of patients similar to the currently stood-up centers, Ram. And our strategy right now, just to expand on your question, is very clear. It is a three-pronged approach that we are taking. One is to have patients that are in these qualified treatment centers—we want to place them on ZevaSkin therapy as soon as possible. The second is to focus on the community physicians who already have indicated they have patients that are motivated and would be eligible for ZevaSkin treatment. We want those referrals to be the second tranche.

And in parallel, as we look to stand up these additional centers, that is going to pancake on top of the first two-pronged approach to have their own pool of patients. Our approach is to make sure that the centers are as geographically spread as possible because that also will help with the travel for the patients and their families, let alone payer barriers that will be easier to overcome once you have more centers that are geographically spread. So we anticipate some of these centers who have the infrastructure, who have the EB centers of excellence, etcetera, to bring their own set of patients as they get activated.

Ram Selvaraju: Thank you.

Operator: Thank you very much. Our next question is coming from Maury Raycroft of Jefferies. Maury, your line is live.

Maury Raycroft: Hi, thank you. Congrats on the progress and thanks for taking my questions. I had a question on the QTCs as well. So it sounds like currently, the QTCs are able to manage about one or two patients per month. Just wanted to clarify that. And what do you expect the cruise-control state to look like? I guess, how many patients per QTC do you think you are going to be able to get at sort of a maximum capacity at these initial sites? I will start with that one.

Vish Seshadri: Go ahead, Madhav.

Madhav Vasanthavada: That is correct, Maury. One or two patients a month. We think that their ability to ramp up is really dependent on the sites. Certain institutions have the performance and resources to be able to have a greater number, even go up to three patients a month, which will really depend on what their experience has been like with regard to their resource allocation and the nursing staff that have to care for the patient post operating procedures. But for the most part, we expect one or two patients a month in the foreseeable future. We will have to see how that ramps up as their overall process experience builds.

But even with five centers at one or two patients a month, we are looking at a really good rate.

Maury Raycroft: Okay. And can you also just comment on the current timeline from receipt of start form to treatment initiation? What does that timeline look like? And then could that become more efficient over time as well?

Vish Seshadri: Right. The current timelines are very variable. It depends on various factors. But if I were to just kind of average ballpark, it is more like a four- to five-month process, of which 25 days is manufacturing time. That is very much a hard fix there. So four to five months, that includes roughly one month of manufacturing. And we expect that to improve over time. I am glad you asked this question, Maury, because another factor here is you mentioned start form.

I would say from the point of identifying a patient to when they receive treatment, because the start form is something that we are seeing has a lot of variation in when a site submits that form to us. Some sites do it soon after an identified patient is either referred or they have had a consult, and some sites wait until the entire payer process takes place and then submit the start form. So it is a very variable input as to what point in the patient's journey we receive that.

So what we are describing here as this approximate five months is when there is a consult that happens and the patient intends to get ZevaSkin and that conversation has happened. The first few patients took about five months all the way to get to treatment, whereas we are seeing that process is going to shorten over time because the administrative part of this is getting more efficient as a given site has been through two or three patients. Hope that makes sense.

Maury Raycroft: Yep. That makes sense, and that is helpful. Maybe last quick question, and I will hop back in the queue. Just if you can comment on, based on the demand ramp that you are seeing, how confident are you in achieving profitability for the company this year?

Vish Seshadri: We believe that we have a pretty good chance of achieving profitability. I think profitability, if you define it as an entire company-level profitability, there are numerous factors that you already know. We have mentioned that anything north of three patients a month takes us to the profitable zone, which is, you know, a $100,000,000, give or take, about the company burn in a given year. So if you use your gross-to-net calculations, 3.5 or more per month is taking us to the profitable zone. I think this is a very achievable target.

There are some uncertain factors as to how the third and the fourth sites are going to achieve their speed and reach that cruise control, and also how quickly we are bringing additional sites on board and then up and running. So I think these are a couple of variables, but we feel this is a pretty reasonable goal.

Maury Raycroft: Got it. Okay. Thanks for taking my questions.

Operator: Thank you very much. Our next question is coming from Steven Willey of Stifel. Steven, your line is live.

Steven Willey: Yeah. Good morning. Thanks for taking the questions, and congrats on the progress. Has the target number of QTCs that you want to bring online over the longer term—has that increased at all? I know you have some early experience on the referral front. I am just curious if you are finding that it might be logistically easier to activate more of these centers as opposed to trying to increase the band of referrals.

Madhav Vasanthavada: Our target QTC number, Steve, has been five to seven, and we do think that seven this year is a realistic goal. That does help with the bandwidth within the qualified treatment centers as well as just increasing the footprint overall. We think we will have more outlets for patients to get treated. So we are going to be working towards bringing these centers on board. But in the meantime, also, of course, as the various community physicians have patients, we want that healthy awareness and healthy enthusiasm from all of the other physicians also, so that in the longer term, that is really where we will rely on these community physicians to funnel their patients into the qualified centers.

So that is really our approach. So our target centers right now is seven. And as I said, we have more centers that are working with us and would like to be activated. So if we have more treatment centers, then certainly that only adds more to the process and even the logistics.

Vish Seshadri: Just one clarification is also, as Madhav explained, the QTC onboarding process itself can take several months. So while we talked about five additional centers beyond the four that we are working with which are already activated giving you a bigger number, we anticipate that some of those may spill over to even next year because it is a lengthy process. But we are definitely looking to have seven activated sites this year.

Steven Willey: Okay. So when you say you are actively onboarding five additional centers, that does not include the two that have recently signed up, Colorado Children's and UTMB.

Vish Seshadri: Correct.

Steven Willey: Okay. Understood. Then is there just anything you can talk about on the reimbursement side, specifically as it pertains to preauthorization? And just curious if payers are kind of pegging themselves to inclusion/exclusion criteria from the Phase 3? Is it pegged to the label? Just any color there would be helpful.

Madhav Vasanthavada: Yeah. We are seeing a mix—definitely to inclusion/exclusion criteria. Given the high-cost nature of the product, they want to make sure that their initial set of patients are guided to the inclusion/exclusion. But then we also have major plans like UnitedHealthcare and many of the Medicaid states also looking to have coverage that is favorable to the label criteria. So it really depends on the plans. But regardless of the criteria, what we are seeing is with letters of medical necessity, physicians have been able to overturn the requirements.

So, for instance, age is one major factor you are seeing—in the sense 6 years and above was our inclusion criteria—but for patients that are less than 6, physicians have been able to overturn that. Also, with regard to squamous cell carcinoma and their presence in the body location, that is also one of the factors that physicians have been able to overturn and get the patients onto the product. So as more patients go through the process, in terms of the overall timing, that is also improving because letters of medical necessity and the templates that are required—those templates are getting populated.

So for future and subsequent patients, for processes that are unique to ZevaSkin, we are seeing that time also improve at the QTCs that are already treating patients. So even if the plan has that kind of restriction, we are able to work through that and get patients reimbursed.

Steven Willey: Okay. And then just lastly, I think you mentioned that there is, I believe, another 10 patients or so that are targeting biopsies for next quarter. Can you just speak to how those patients are distributed against the two QTCs that are already treating patients versus Colorado and UTMB that you will be activating here shortly?

Vish Seshadri: It is across all of the four QTCs.

Steven Willey: All right. Thanks for taking the questions.

Operator: Thank you very much. Our next question is coming from Kristen Kluska of Cantor Fitzgerald. Kristen, your line is live.

Kristen Brianne Kluska: Hi. Good morning, everybody, and thanks for all of this specific color this morning. I wanted to ask about the dialogue or the relationship between the QTCs themselves. It sounds like Stanford and Chicago being the first two are kind of paving the way here, having a little bit of additional time to get things on board. Are they working with the additional two QTCs just to kind of be a sounding board and help as everybody familiarizes themselves with this process?

Vish Seshadri: They are not that we are directly aware of. It is a tight-knit physician community, so they do talk to each other in terms of the sharing of best practices as well as administrative steps. Plus, our teams are also actively working with them and helping them cross-pollinate the best practices.

Kristen Brianne Kluska: Okay. Thank you for that. And then just as we think about the fact that some additional biopsies are already scheduled, and we have two weeks left in Q1, should we be conservatively modeling that these are more likely to come in Q2 versus the current quarter?

Vish Seshadri: We expect one—no, it is for this month, Kristen. But, of course, until the biopsy is done, we do not know. We do not see a reason why there should be any attrition or a drop off. But it is for this month that we expect additional biopsies.

Kristen Brianne Kluska: Okay. And then it sounds like we will get one more QTC pretty quickly and another two maybe before the end of the year. How are you thinking just about dispersing throughout geography in the country, and how has that played an impact so far about getting patients on board, ability to travel to these sites, etcetera?

Vish Seshadri: Our goal is to have a geographically dispersed footprint—clearly, you can see that the Eastern Seaboard is an important area for us. So if we have a center in that region, I think that will certainly help with patient access. And these patients, for other reasons with their other comorbidities, do travel significant distances to get therapies. So I do not think that even five or seven is going to impede their ability to travel for ZevaSkin. But, of course, as more centers come on board, that is definitely going to be a positive thing. And also the flexibility that it offers. Right now, for some patients—crossing state borders—there is extra paperwork to go through for Medicaid.

There are more bureaucratic steps. Those things will also be streamlined a little bit by offering more choice and flexibility on where they can get treated. So that is really what we are also excited about.

Kristen Brianne Kluska: Okay. Thank you very much.

Operator: Thank you very much. Our next question is coming from Jeff Jones of Oppenheimer. Jeff, your line is live.

Jeffrey Michael Jones: Good morning, guys, and thanks for taking the question. Maybe the first one on manufacturing. How comfortable are you at this point that the sterility testing is well behind you now? And just a reminder, if you would, on current production capacity and then the expansion plan of that capacity through the year. And then the second one, maybe on patient and physician feedback now that you have treated patients out in the commercial setting, what is the feedback you have been getting from physicians and patients on the overall experience?

Vish Seshadri: Thank you, Jeff. So your first question is about manufacturing, the sterility test—is that behind us and how we are ramping up capacity? We do have our CTO, Dr. Brian Keaveney, on the call. Brian, can you take that one, please?

Brian Keaveney: Yeah. Thanks, Vish. As a reminder, we had a very healthy dialogue with the agency around the sterility assay issue. That was a very productive conversation, and we do feel that the resolution that came out of that is the solution going forward. We will continue to always look for ways to improve our manufacturing and testing process, but we do feel very confident that the resolution that came out of those discussions is going to support us going forward.

And as it relates to production capacity, currently we are running at a cadence of six patients per month within the facility and continue to develop the space to be capable of reaching that 10-patient-per-month capacity that we have previously discussed throughout the rest of this year. All of those activities are on track to meet that goal, and it is lining up very well with the onboarding of additional QTCs to maintain a steady level of supply for those sites as they come on board.

Vish Seshadri: And I just wanted to also add on the sterility thing, Jeff, that we have done a lot of work trying to minimize the probability that problem occurs again. Whether we can go, say, 40 runs or 50 runs and never see this problem happen again, that is only going to be empirically proven. But all our feasibility studies point out that the probability is significantly reduced by at least a log order or more. So that is what gives us confidence. But we are not stopping at that. Whatever we have implemented as an improvement to reduce those false positives, we are not stopping at that.

We are also doing the next-generation rapid sterility development alongside this so that we can get to an even better level. So when you say R&D, we are always thinking about pipeline, but there is a lot of life-cycle management R&D that goes into optimizing ZevaSkin. That is really where some of our teams in the quality function are focused. And as Brian said, we are already operating at six manufacturing runs a month cadence. This is, right now with the current demand, keeping up, and that is going to be ramped up to about 10 a month by the second half of the year.

The second question that you asked was about the patient and HCP feedback on the current treatment. I will just preface this by saying that there are only two patients that have been treated, and there is not enough time that has passed along because you remember even our endpoints and assessments happen at six months. This is a therapy with a durability play. So I do not know if we have enough feedback, but I will just open it up to Madhav to see what he has on that.

Madhav Vasanthavada: Nothing more to add, Vish, to what you have said at this point.

Vish Seshadri: Yeah. When we talk to doctors, they say, “Oh, that patient is doing well.” What does that really mean? Are you talking about wound healing, or are you talking about general health of the patient? These are things that we do not really know. So it is too premature to comment on that.

Jeffrey Michael Jones: Alright. Appreciate it, guys. Thank you.

Operator: Thank you very much. And our next question is coming from David Bautz of Zacks Small Cap Research. David, your line is live.

David Bautz: Hey. Good morning, everyone. Thanks for the update this morning. So I have a couple of questions about the patients that you have already treated. First off, are you aware if they were also simultaneously being treated with VYJUVEK, say, maybe for their smaller wounds, if they had any? Do you anticipate the need to retreat either of those patients later in 2026? And then are you aware if there are any exclusions for retreatment, say, if any of the payers have restrictions on the ability to get retreated.

Madhav Vasanthavada: Thanks, David. On your first question, we are not aware of simultaneous treatment with VYJUVEK for these patients; the information we have is that they were not simultaneously on VYJUVEK. With regard to their prior history of VYJUVEK, we think that most of these patients have received VYJUVEK at some point in their journey. On retreatment, based on physician feedback, these patients have significantly large wound areas and the physicians have said that yes, these patients would likely require a second round of ZevaSkin treatment. We do not know if that is going to be this year or next year, because these initial patients—and the foreseeable future patients—have large areas of their body that require several areas to be treated.

On exclusions, we are not seeing exclusion criteria from payers with regard to a retreatment of a patient. We are pleased to see that payers are not blocking ZevaSkin as a once-in-a-lifetime therapy. If we do have a patient that requires a retreatment of a previously treated ZevaSkin area, then it really depends on what the payer policies there look like, but we are not seeing any kind of blockade based on the policies that have been published.

David Bautz: Okay. Great. Appreciate you taking the questions.

Operator: Thank you very much. We have now reached the end of our question-and-answer session. I will now turn the call back over to Vish for his closing remarks.

Vish Seshadri: Thank you, Jenny, and thank you, everyone, for joining us today for the earnings call. We will talk to you again soon.

Operator: Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.

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