Abeona (ABEO) Q1 2026 Earnings Transcript

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DATE

Wednesday, May 13, 2026 at 8:30 a.m. ET

Call participants

• Chief Executive Officer — Vishwas Seshadri
• Chief Financial Officer — Joseph Vazzano
• Chief Medical Officer — Madhav Vasanthavada

Takeaways

• Net product revenue -- $8.7 million generated, reflecting treatment of three commercially insured ZEVASKYN patients and an increase of $6.3 million from $2.4 million in the prior quarter.
• Patient treatment momentum -- Five commercial ZEVASKYN patients treated since launch, with manufacturing underway for the sixth and up to six additional biopsies scheduled in the current quarter.
• QTC network expansion -- Six qualified treatment centers (QTCs) activated across diverse U.S. regions, with a goal to reach seven by year-end and active discussions ongoing with additional sites.
• Identified patient pool -- More than 100 patients identified as eligible for ZEVASKYN across QTCs and community-based physicians.
• Payer coverage progress -- Published policies now cover 95% of commercially insured lives; no final payer denials or patient attrition reported to date.
• Payer mix indication -- Expected split for the near term is approximately 60% commercial insurance and 30%-33% Medicaid among treated patients.
• R&D pipeline prioritization -- Ophthalmology preclinical programs have been deprioritized; focus shifted to cell and gene therapy assets aligning with internal capabilities.
• PSMA-SIR-T in-licensing -- $7 million upfront payment made for exclusive rights to a synthetic immune receptor T-cell therapy for advanced prostate cancer, with IND filing targeted for the second half of 2027.
• Cost structure -- First quarter cost of sales was $2.7 million, up from $1 million in the prior quarter; first quarter R&D expenses included the $7 million licensing payment and otherwise declined due to cost capitalization post-approval.
• SG&A growth -- Selling, general, and administrative expenses rose to $19.5 million, an increase of $9.7 million year over year, mainly reflecting expanded commercial infrastructure.
• Net loss -- Net loss was $17.1 million, or $0.30 per share, compared to a $12 million loss, or $0.24 per share, in the same quarter last year; higher commercial spending and in-licensing payment cited as drivers.
• Cash position -- Cash, cash equivalents, and short-term investments totaled $168.3 million at quarter end, down from $191.4 million at the end of 2025.
• PSMA program spend -- Anticipated R&D expenditure for PSMA-SIR-T is expected to remain in the low single-digit millions for the remainder of the year.
• Profitability signal -- CFO Joseph Vazzano said, "We believe we can achieve monthly profitability starting potentially in June."
• Manufacturing and turnaround -- Turnaround time from skin biopsy to ZEVASKYN delivery ranged from 23 to 26 days; all valid biopsies have resulted in successful product manufacture.

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Risks

• CEO Vishwas Seshadri stated, "That said, we are navigating a lengthy insurance approval process, which is typical of any high-cost gene therapy at launch, particularly for out-of-state Medicaid patients," indicating potential timing delays for revenue recognition.
• Chief Medical Officer Madhav Vasanthavada described QTC onboarding as a "months-long process," sometimes exceeding a year, which may constrain near-term treatment center expansion and patient access.
• Chief Executive Officer Vishwas Seshadri said, "It's very hard to predict because some may be in the border line and the manufacturing turnaround time is not a very precise number," highlighting uncertainty in patient treatment cadence and quarter-end product recognition.

Summary

The latest call records substantial commercial progress for Abeona Therapeutics (NASDAQ:ABEO), as ZEVASKYN net revenue climbed to $8.7 million, underpinned by continued expansion of the qualified treatment center network and an expanding pool of identified patients. The company reported early and broad payer acceptance, with 95% of commercially insured lives now covered, and cited ongoing dialogue with 45 referral physicians. Strategic pipeline re-alignment was announced, including the in-licensing of a novel T-cell therapy targeting prostate cancer, requiring only limited near-term cash outlay and resulting in a one-time $7 million R&D expense this quarter. Management highlighted stable liquidity, moderate front-loaded R&D, and the expectation of monthly operating profitability commencing as early as June. Enrollment and operational bottlenecks remain, reflecting lengthy QTC onboarding processes and the complex payer approval environment, with both cited as limiting factors for near-term acceleration.

• New clinical data on ZEVASKYN’s long-term wound healing durability and safety is scheduled for presentation at the Society for Investigative Dermatology, supporting clinical traction evidence.
• Management reported no attrition or final payer denials for ZEVASKYN, enhancing revenue security from identified and upcoming cases.
• The SIR-T cell therapy technology was in-licensed from Angelist Therapeutics and may provide a differentiated solution to limits seen with historic CAR-T constructs in solid tumors, according to preclinical evidence cited in the call.
• Chief Medical Officer Madhav Vasanthavada said patient demographic breadth includes both adults and children, and geographic proximity has "not been a barrier" to access, indicating national addressability as QTC onboarding progresses.

Industry glossary

• QTC (Qualified Treatment Center): A specialized, multidisciplinary institution authorized to perform ZEVASKYN biopsy, manufacturing liaison, and treatment administration for approved indications.
• PSMA-SIR-T: Autologous engineered T-cell therapy using a synthetic immune receptor targeting prostate-specific membrane antigen, designed to improve solid tumor antitumor immune activity.
• CAR-T (Chimeric Antigen Receptor T-cell): Genetically engineered T-cell therapy platform primarily employed in oncology for hematologic and some solid tumors; distinct from SIR-T in signaling architecture.
• CDMO (Contract Development and Manufacturing Organization): Third-party partner contracted for scalable production of clinical- or commercial-phase advanced biologics.
• EB (Epidermolysis Bullosa): A rare, genetic connective tissue disorder targeted by ZEVASKYN.
• IND (Investigational New Drug): Regulatory submission required to initiate clinical studies of new drugs or biologics in the U.S.

Full Conference Call Transcript

Vishwas Seshadri: Thank you, Joe, and good morning, everyone. First, we are excited to share updates on leading indicators of ZEVASKYN adoption that signals strong momentum since treating our first commercial patients in December. We have now activated 6 qualified treatment centers or QTCs, treated our fifth commercial patient with manufacturing underway for the sixth and scheduled additional patients throughout the current quarter. The recent acceleration of onboarding efforts of QTCs further underscores their conviction about the role that ZEVASKYN will play in addressing the unmet needs of patients suffering from recessive dystrophic epidmolysis bullosa or RDEB. Three of the ZEVASKYN treatments reported to date took place in Q1 2026 and translated into net revenue of $8.7 million for that quarter.

Second, we're sharing meaningful updates to our R&D pipeline, featuring a potentially game-changing radically novel engineered T cell technology for advanced prostate cancer. By leveraging our proven expertise in advancing complex cell and gene therapies from academia through commercialization, we are well positioned to advance this exciting technology. But before going there, I'll first turn the call over to Dr. Madhav Vasanthavada? to elaborate on the ZEVASKYN launch, which is our foundational and primary focus for Abeona. Madhav?

Madhav Vasanthavada: Thank you, Vish, and good morning, everyone. Launch momentum for ZEVASKYN and our commercial story continues to build, and we are beginning to see results on multiple fronts. I'd like to start off by providing you with visibility not only to patients treated so far, but also biopsies expected this quarter. As previously shared, one patient, our very first commercial patient was treated in the fourth quarter of 2025 and 3 patients were treated in the first quarter of this year.? Additionally, 1 patient has been treated so far this quarter for a total of 5 patients treated to date with ZEVASKYN since launch.

The forward-looking momentum of patients in queue is also picking up with 1 patient biopsy and manufacturing for that patient currently underway and 6 additional patients expected to be biopsied this quarter, 3 of whom actually just as of this morning, 4 of whom have scheduled biopsies.? I'd like to add that all patients treated to date and those scheduled for biopsies are from our first 2 activated QTCs. The other QTCs have identified patients and are not far behind in scheduling for biopsy, which will further add to ZEVASKYN treatments in the coming quarters.

While we are pleased to see patients beginning to clear the upstream procurement process and receiving ZEVASKYN treatment, we are equally encouraged by the strong demand reflected in the near-term identified pool of more than 100 patients across our QTCs and the community-based physicians.? Our field teams are executing well, building deep relationships, expanding awareness and driving broad reach across dermatology, pediatric dermatology and subspecialties involved in the care of EB patients. We continue to engage with referral physician community and have active conversations ongoing with 45 physicians. These are not just one-off touch points, but action-oriented back-and-forth interactions, which shows real clinical interest and their intent to refer patients for ZEVASKYN.?

Beyond the numbers, early qualitative launch insights are also encouraging and reinforce our conviction. Importantly, we are hearing positive feedback from QTCs that have treated patients and their experience with the end-to-end process is getting better with every patient treated. To elaborate further on the types of initial patients that have been treated and those in the queue, we are happy to note that the initial uptake of ZEVASKYN is not confined to a narrowly defined patient or payer type, but has spanned across both adults and children with one patient as young as 5 years of age.? Our payer mix consists of both commercial and Medicaid insurers in getting the breadth of ZEVASKYN coverage.

We are seeing that geographic proximity to QTC has not been a barrier because patients have traveled significant distances, including across state lines to receive treatment and our Abeona Assist patient and caregiver support programs have received positive feedback.? Among the patients treated is our very first patient in the commercial setting who was biopsied in August of 2025, but as you may recall, could not receive ZEVASKYN due to a false positive result from a stability assay. This patient came back to be re-biopsied early this year, and we are pleased to tell you that this patient was treated successfully. Such determination of patients, families and physicians to pursue ZEVASKYN speaks volumes about what this therapy means to them.?

On the market access front, payer coverage continues to strengthen with the percentage of commercially covered lives with published ZEVASKYN policies now reaching 95%. This is a significant accomplishment in the first year post ZEVASKYN approval. That said, we are navigating a lengthy insurance approval process, which is typical of any high-cost gene therapy at launch, particularly for out-of-state Medicaid patients.? Even so, we have seen no patient attrition and no final payer denials to date, further underscoring the strength of ZEVASKYN's value proposition to RDEB patients and their families.?

As we continue to follow patients from our Phase I/IIa and Phase III trials, we are excited to share that new data will be presented later this week at the Society for Investigative Dermatology, SID, featuring 5-year follow-up of our VIITAL Phase III trial as well as a single patient 12 years of follow-up from Phase I/IIa study, all of which reinforce durable wound healing and favorable safety profile after a onetime product application. On the patient side, our Strong Together Network continues to be a powerful voice with patients and caregivers sharing their experiences from clinical trials and helping to generate patient self-referrals.

As our initial ZEVASKYN commercial patients share their experiences over time, we expect these stories to become one of the most powerful demand drivers available to us in this rare disease setting. Lastly, we continue to onboard more ZEVASKYN treatment centers. As announced, we activated NewYork-Presbyterian/Columbia University last month. And Monday of this week, we announced the activation of Children's Hospital of Philadelphia, CHOP, as our sixth QTC. I want to sincerely thank all my team members involved in the onboarding of these centers and to recognize our QTC physician champions and their team's conviction in ZEVASKYN as they successfully navigated a several month long onboarding process.

As you can gather from the map, we importantly have QTCs spanning the nation across geographically distinct regions: California, Colorado, Texas and the Gulf Coast, Chicago and now the East Coast. We continue to have active discussions with additional centers and remain well on track to achieving our goal of having a total of seven QTCs onboarded this year and ensuring even greater access for patients and families across the country. To close, we are progressing through the launch, accruing positive early feedback from treating physicians, a growing referral base, expanding QTC network and achieving broad payer acceptance. Every successful biopsy, every treatment and every positive patient story is reinforcing our conviction in ZEVASKYN.

With that, I'll turn the call back to Dr. Seshadri for an update on our R&D pipeline. Vish?

Vishwas Seshadri: Thank you, Madhav. Now, I'll share some important pipeline updates that highlight our focus on assets that align with our core competencies and what we believe would deliver the greatest long-term value. As part of this focused effort, we have deprioritized our in-house ophthalmology preclinical programs. Abeona has demonstrated capabilities with ZEVASKYN over the past years in end-to-end development and commercialization of personalized high-value cell therapies with durable clinical benefits for patients with debilitating diseases. Today, we announced the in-licensing of a radically novel cell therapy asset that targets PSMA or prostate-specific membrane antigen, a validated target for the treatment of advanced prostate cancer, a leading cause of cancer mortality with more than 30,000 deaths annually in the U.S.

The CAR T-technology was pioneered by Dr. Preet Chaudhary, Founder of Angelist Therapeutics and Professor of Medicine at the University of Southern California. He has more than 200 granted or pending patents worldwide in the field of cell therapy. We have included a link to a recent talk by Dr. Chaudhary in today's slides, elaborating on the uniqueness and promise of this technology in oncology. PSMA-SIR-T or ABO-701 is an autologous engineered T-cell therapy that carries a PSMA-directed synthetic immune receptor purposefully structured to overcome the limitations of CARs or chimeric antigen receptors and TCRs, which is T-cell receptors.

The SIR-T technology is unique in that it can directly recognize and bind a target membrane antigen like a CAR does without the need for antigen presentation. However, it retains the physiologic signaling and regulatory features of a native T-cell receptor, which enables more controlled, durable immune-mediated cell death. In preclinical studies, PSMA-SIR-T demonstrated the ability to achieve deep and durable PSMA-specific antitumor responses in mouse models and display exceptionally modest levels of cytokine release in vitro, a profile that has been elusive for other engineered cell therapies in solid tumors.

The elimination of tumors in most mice treated with PSMA-SIR-T and its superior performance versus corresponding PSMA CAR-T comparator controls suggests a more controlled and durable immune activation in treated mice. We believe these data support a compelling hypothesis that SIR-T technology may overcome key limitations that have historically constrained engineered T-cell therapies in solid tumors. We anticipate IND filing and first-in-human studies to commence in the second half of 2027. In the near-term, we will gain regulatory alignment beginning with a pre-IND meeting with the FDA on June 3, 2026, and engage a CDMO for supply readiness, while our internal teams maintain operational focus on ZEVASKYN commercialization.

With that, I'll now pass the call to our Chief Financial Officer, Joe Vazzano, to discuss our first quarter financial results. Joe?

Joseph Vazzano: Thank you, Vish. I would like to remind everyone that you could find additional details on our financial results for the first quarter ending March 31, 2026, in our most recent 10-Q. We reported total net product revenue of $8.7 million for the first quarter of 2026. All three patients treated in the quarter were commercially insured patients. This reflects a strong quarter-over-quarter increase of $6.3 million compared to $2.4 million in the fourth quarter of 2025. The growth was driven by early commercial traction following the launch of ZEVASKYN. Cost of sales for the quarter was $2.7 million compared to $1 million in the prior quarter.

The increase was primarily driven by the scaling of commercial ZEVASKYN with three patient treatments in Q1 versus one treatment in Q4. Turning to operating expenses. R&D expenses were $9.6 million compared to $9.9 million in the first quarter of 2025. Notably, Q1 2026 includes a $7 million upfront payment related to the in-licensing of our PSMA-SIR-T asset. Excluding this transaction, R&D expenses declined meaningfully, reflecting the transition of certain manufacturing costs capitalized to inventory and engineering runs that are no longer considered R&D following the FDA approval of ZEVASKYN. Selling, general and administrative expenses were $19.5 million, representing an increase of $9.7 million year-over-year first quarter.

This increase was expected and reflects our continued investment in commercial infrastructure post approval. Key drivers include $5.4 million in personnel and stock-based compensation, $1.9 million of costs related to engineering runs with the remainder due to other commercialization costs. Net loss for the quarter was $17.1 million or $0.30 per basic and diluted common share compared to a net loss of $12 million or $0.24 per basic and diluted common share in the first quarter of 2025. The year-over-year change primarily reflects increased commercial investment and the PSMA-SIR-T licensing transaction. We ended the quarter with $168.3 million in cash, cash equivalents and short-term investments compared to $191.4 million at the end of 2025.

Our balance sheet remains strong and positions us well to support continued commercial execution and pipeline advancement. We anticipate minimal R&D expenditures for the PSMA program, limited to low single-digit million dollars for the remainder of this year. Overall, we are encouraged by the early commercial progress of ZEVASKYN and remain disciplined in our capital allocation as we scale the business. With that, I'll pass the call back to Vish for closing remarks before opening the call for Q&A. Vish?

Vishwas Seshadri: To summarize, we are encouraged by favorable trends in leading indicators of ZEVASKYN launch performance. That is the foundation on which we have taken a bold step in advancing PSMA SIR-T development. Every milestone we discussed ultimately connects back to patients with serious diseases who are waiting for better, more innovative medicines. Our mission is not just a statement, but a commitment that guides how we allocate capital, how we prioritize our pipeline and how we measure success. With that, I request the operator to open the floor for questions.

Operator: [Operator Instructions] Our first question today is coming from Kristen Kluska with Cantor Fitzgerald.

Kristen Kluska: Congrats on all the progress here around ZEVASKYN. So now that you have 5 patients treated and quite a few in the biopsy pipeline, can you give us a sense of what the typical patient profile has looked like across treatment? Are these more severe patients? Are any of that who have come back from the clinical trial to get another cycle? And for those that have undergone the procedure already, have they commented on whether they would be interested in potentially coming back in the future for another cycle?

Vishwas Seshadri: Hi, Kristen, thanks for that question. Yes. So, with regard to your first question about the patient profile, what we hear from physicians are these are severe patients as we had expected. And many of those patients treated would require more than 12 sheets of ZEVASKYN. So, there is still an unmet need even in these treated patients. Of course, it's early to say how many of these patients will come back and at what point in time will they come back for a second treatment, but there is definitely a clinical need from that standpoint. The second part, clinical trial patients, they are interested, and we know that patient consults are happening.

It's just a matter of for those patients, when would be the right time for them to come in for a retreatment with ZEVASKYN. And so, we'll keep you updated if we have that kind of information. From the patients who have received ZEVASKYN already, yes, I think I already addressed that part, which is we don't know exactly when they'll come in, but there is certainly a need for.

Kristen Kluska: And then, just as we think about how to model this out for 2Q, we know one patient has officially been treated. And all this color is really helpful around the biopsy schedule. But just what can you tell us about your sense of how many patients you ultimately believe will have the procedure, meaning you get paid for it in 2Q versus how we should be thinking about maybe some of these trickling into next quarter?

Vishwas Seshadri: Thanks for that question, Kristen. It's hard to precisely place how many of the -- I think we gave visibility to at least eight patients today in the call, one treated, one in manufacturing process and six that are in the biopsy scheduling process. So, we could anticipate that maybe one or two of those patients who may receive who may be biopsied in June, anything after the first week of June would fall into July treatment. Is it one? Is it two? Is it three? It's very hard to predict because some may be in the border line and the manufacturing turnaround time is not a very precise number, even though we have it approximately 23 or 24 days.

That is something that we have to see. But a good chunk of the patients that we have described today should fall under quarter 2 treatment.

Operator: Our next question is coming from Maury Raycroft with Jefferies.

Maurice Raycroft: Congrats on the progress. Maybe as a follow-up to Kristen's last question. For the patients treated so far, from my understanding, they've been treated at Laury and Stanford. Can you clarify what other QTCs are fully activated? And it may be too early for this, but can you provide some bookending for what patient volume could look like per QTC or across the QTCs for 2026 and maybe what steady state could look like eventually as well?

Vishwas Seshadri: Yes, Maurice. So, in addition to Lurie Children's and Stanford Children's, we have Colorado Children's Hospital that's active and UTMB University of Texas and Galveston, which is also active. And of course, the most recent ones were Columbia and CHOP. We do know that Colorado and UTMB have patients actively identified and they are working through the administrative process to put them on, and we expect that we should receive biopsy schedule requests for their patients imminently. And in terms of the volume, these are centers. Colorado is actually a very well-known institution for EB care.

And in terms of the cadence, what we have been hearing from QTC is treating one patient a month at a steady state is quite doable. So, it's just a matter of getting these patients initiated with biopsy and the treatment cadence.

Maurice Raycroft: Based on the comments in the prepared remarks around the length of the insurance approval process, it seems like ultimately, this is not limiting usage, but is this something that you have line of sight on that you can improve? And how can improving this factor into your ability to fine-tune projections? And then do you anticipate there could be greater pushback or friction when it comes to retreating patients?

Vishwas Seshadri: Yes. Definitely, the process will improve. Oftentimes, with gene therapy, especially high-cost gene therapy, the initial process of payer clearance, especially if a patient is traveling from out of state, there is additional layers of paperwork that need to be secured, starting with physicians also need to be enrolled. It's a onetime enrollment. For example, if a patient is coming from traveling from a different state to receive treatment in one of these QTC states, then the physician from the qualified center, whether it's a surgeon, anesthesiologist or the EB physician need to be enrolled in sort of the out-of-state patient state. So that is a one-time process as well as just providing a fee schedule.

Sometimes when you have an established product, there is a fee schedule that's already in place. So, you don't need additional letters of agreement or a single case agreement for those patients. So, because we are navigating these initial payer processes, it takes a little additional time. But once that is secured, then it gets better over time. So that's been our experience, and that's how it's panning out.

Operator: Our next question is coming from Stephen Willey with Stifel.

Stephen Willey: Maybe just a little bit of a follow-up. What is the average scheduling lead time for biopsies right now? Just curious how far out these procedures are being scheduled.

Vishwas Seshadri: Yes. Thank you, Steve. If you look at the time that a patient is identified as a ZEVASKYN patient and then the time that it takes for them to actually get biopsied, that is the timeline that you're talking about. It's very variable. I think the factors that determine that are the type of payer, how recent the QTC is to the process. For example, now Lurie's, as you all know, has treated some patients and maybe they've gotten into rhythm and there's a lot of precedent that's been set, whereas the other sites that are just about starting, this is the first time.

So it's very hard to generalize an average time because we have examples of patients where, when we activated Lurie's, I think the first patient was biopsied in August. This is pretty early. It was 2 months or something since activation, whereas we have seen certain sites that have been active for 6 or 7 months and they're just coming up for their first patient biopsy, preparing for that. So it's a very variable thing. And with only 5 to 6 sites, it's very hard to say this is a trend.

But I think a good estimate is 4 to 5 months is what it's taking for any site that gets active to get their first patient on a biopsy schedule there. I hope that answered your question.

Stephen Willey: No, it did. And then I guess the PSMA SIR-T looks conceptually pretty interesting. I think you spoke to the $7 million licensing fee. Can you speak to any additional economics that might be owed on the progression of that product? Then I know you're in the process of tech transfer now, but what are the implications for manufacturing in terms of the need to build out additional suites to potentially accommodate the clinical development of this product?

Madhav Vasanthavada: Sure. In terms of deal economics, it's the upfront payment that we shared of $7 million. And Abeona is going to develop this asset until end of Phase I. So there's going to be dose escalation and dose expansion. And those first-in-human studies do not start until second half of 2027, as I mentioned. There is just about $1 million of milestone payments up to that time point through the end of Phase I. That happens with the first patient dosed and the last patient maybe. So if you look at that, the upfront payment is really the main substantial payment that's done right now.

In terms of deal structure, at the end of Phase I data, we have 2 potential paths. And one could be a 50-50 development with Angelas, so we share the cost and we share the proceeds later, or it could be an outright licensing deal where we'll have some buyouts and royalties and Abeona will fully own the program but provide royalties to Angelas. So which of these paths is going to actually prevail, it's going to be a long journey to even discovering that because the data will determine those. So it's early to comment on that. But in terms of cost implications, I wanted to make sure this is very well understood.

So until first-in-human studies begin, there's not a big cost load on Abeona because once the upfront payment has been done, it's low single-digit millions of a CDMO developing the process. As you know, engineered T-cells, it's not as complex as ZEVASKYN, fortunately, but it's going to be mostly a cut-and-paste kind of process. We already have GMP-grade vector that has been produced. And it's a matter of locking down process. And these processes are fairly standard. So it's going to be done by an external CDMO, and we're not going to disturb our internal teams in Cleveland. We're laser-focused on the ZEVASKYN commercialization.

So there's a very small team that's just going to drive the project out of a CDMO. And when the time comes and the regulatory team is also involved in getting clarity and alignment with the regulatory agencies on what our trial design looks like and how we go about that. So other than that, from a personnel standpoint, Abeona is laser-focused on ZEVASKYN commercialization and any significant costs will not hit us until we get into human clinical studies, which happens in the second half of 2027. I hope that gives a little bit of some color on what we are undertaking for the near term with PSMA SIR-T.

Stephen Willey: Yes. No, that's helpful. The external CDMO kind of addresses the question on the manufacturing front. Can you just say whether or not the 50-50 co-promote, I'm presuming that decision is made by Angelas based upon a review of Phase I data?

Madhav Vasanthavada: Correct. Yes. Actually, the option for us to pursue the program is after the Phase I. Angelas has the option to either do the 50-50 co-development or a license agreement with what Vish had mentioned with predefined financial terms for an agreement that will be agreed upon later.

Operator: Our next question is coming from Raghuram Selvaraju with H.C. Wainwright.

Unknown Analyst: Congrats on the quarter and on activating the new QTCs. This is Ahmed on for Ram. I just had a few questions. One was what have been the key challenges associated with setting up additional qualified treatment centers? And how do you think those will play out in the future? My second question was on the patients receiving ZEVASKYN. How often does cell harvesting from RDEB patients fail due to insufficiency? Thank you.

Vishwas Seshadri: So the first question you asked was the key challenges with activating QTC centers. I think more than challenges, I'll just say, what are all the various milestones in the journey that have to check a box. I mean this is a huge undertaking by a QTC. An EB physician has to gather a multidisciplinary team first, and they need to have anesthesiologists and plastic surgeons who are familiar with the RDEB patients and what types of care they need. Once such a team forms and they feel that feasibility from a center's perspective and the ability to deliver this exists, they have to make a business case for their management.

That itself is a few months' journey because every buy-and-build that they have to put some financial risk on their P&L is going to be scrutinized carefully. So all that is in itself a months-long process, and then we have the onboarding once that has been checked off and everybody in that QTC has agreed that they're going to go with this journey. Then you're going to have onboarding, medical onboarding as well as clinical training and quality training and all those types of events. Then there's numerous legal policies, trade policies, the master service agreements. Those are all, again, legal steps that take several months.

So that's the reason why the journey of actually the first handshake with the QTC to when they're ready to treat a patient has been several months, sometimes even more than a year long. And we started that process with our first set of QTCs very early. And it's what you alluded to, is there an unlimited number of QTCs that we can activate? And the answer is no because the multidisciplinary team is the key for which QTCs can actually activate, and that's something that we always carefully weigh in because that's important from a patient experience and patient care and outcome perspective.

And of the 23 centers where there are EB patients cared for today, a good 5 to 10 centers already have these multidisciplinary teams in place, and those are our focus areas. And as we had stated earlier, our goal was to have about 7 centers active because when 7 centers are active and produce at least 1 biopsy a month. So we want to ramp up as we ramp up our capacity as well. So those are all factors that speak to the overall QTC numbers. Anything else, Madhav?

Madhav Vasanthavada: Yes. I'll just add that you summed it up well, Vish. I mean just in terms of challenges, every QTC has a different risk tolerance. We observed that some institutions started right after ZEVASKYN approval. There were other institutions that wanted to wait for the actual FDA approval to happen last year before they began to invest their time and energy. Yet there were some other institutions that wanted to see reimbursement pathways established. So now we are beginning to see greater engagement with the tail of these other centers, EB centers, and the traction is picking up. I mean, with the recent announcement and additional centers, as we said, we are well on track.

We believe we'll be able to get another QTC also activated. The second question that you asked about patients getting the harvest. Can you please elaborate on your question? Is this the biopsy-to-delivering-the-sheet manufacturing success rate? Or was it something else that you were referring to here?

Unknown Analyst: Yes, exactly. Basically after the biopsy, is there kind of a failure rate between the biopsy and the patient receiving the treatment?

Madhav Vasanthavada: Yes. Our experience so far in the commercial setting is that every time that we have received a valid biopsy, we have been able to produce sheets, the numbers could be variable, but in majority of cases, we are actually producing a double-digit number of sheets. So we're happy with what we're seeing in terms of success rate. But beyond that, I think the timing of how long it takes from skin to skin, as you know, is a variable time. It can be anywhere as early as 23 days in some cases, and it can be as lengthy as 26 days.

So I think that's still a very tight window, but that's kind of our range of turnaround time we've seen so far.

Unknown Analyst: If I may just have one quick follow-up is, I guess, what is Abeona's plan to optimize ZEVASKYN value outside of the U.S.?

Madhav Vasanthavada: Yes, that's something that's been on top of our mind. We're already looking at what are the markets that we can first supply from our Cleveland site because that is the lowest-hanging fruit in terms of timing. If you're looking at markets like Europe and Japan. The logistical challenges in delivering from Cleveland, more than product delivery, could be related to bringing the biopsies of the patients and cold chain and things like that. And that's something that we're working out, but we should have such updates in the following quarterly calls. Right now, our teams are already spread thin in making sure that every aspect of the U.S. launch is maximized.

There's a sub-team that is looking at these external opportunities. So hopefully, in later quarterly calls, we'll give some better color to what that path looks like.

Operator: Our next question is coming from Jeff Jones with Oppenheimer.

Jeffrey Jones: Congrats on a great quarter. Maybe following up on QTC activation, with 6 onboard and a target of 7 by end of year, it seems a pretty low bar for you to get one more in by year-end. Just how are you thinking about building out additional QTCs as we look ahead into additional quarters and into next year? As you mentioned, how that aligns with capacity? Then maybe on pipeline, you've deprioritized the ophthalmology programs and you brought onboard an oncology program. How are you thinking about pipeline moving forward? Are you thinking about oncology specifically? Or maybe outline for us, how you're thinking about that strategically?

Vishwas Seshadri: Great. So first, I'll ask Madhav to respond to the QTC question.

Madhav Vasanthavada: So Jeff, yes, I mean, we continue to work with a few more centers. Based on the knowledge we have, a total of 10 EB centers have this infrastructure that Vish alluded to earlier, cross-functional discipline of multidisciplinary teams as well as EB patients that frequent those centers. So we are working with these institutions and are at various stages of onboarding. I think if we get to that kind of a number, 9 or 10 centers, we are in pretty good shape because we continue to hear from centers about 1 patient a month being a good cadence that we can expect for these centers to treat. And if we maintain that, that would be really our steady state.

So let's see, this year, next year, we should be able to get all these other centers also active.

Vishwas Seshadri: Yes. And also, you asked this question, how are we building our internal capacity, We're very diligent in building up, and we had announced 6 at launch and 6 this year, and we're already in ramp-up mode to bring it up to 10 by end of the year. So the numbers that Madhav shared in terms of QTC numbers goes hand-in-hand with how we are building our internal capacity. So we'll be able to match the demand. And from a longer-term perspective, definitely, we have work that has progressed on getting additional suites designed and we haven't started construction yet, but a lot of the design work has already happened, and we're ready to go.

So it's the right trigger, and that's not very far away. We can again speak about that in the upcoming quarterly updates. But rest assured, we are not going to artificially restrict ourselves to 7 sites. As Madhav mentioned, if there are more sites that show that multidisciplinary teams are pulled together and they have EB experience, that's an added advantage as well. So we are well on our way to get a healthy number of QTCs activated even just in 2026. And your second question was about our move from ophthalmology to oncology. I just wanted to reiterate one thing.

I think where our strengths are and where we have done well learning from the ZEVASKYN experience is really how do we develop complex biologics that have the types of profiles of long-term durable clinically meaningful benefit for patients with serious diseases. We're not defining ourselves as a rare disease or an ophthalmology or an oncology company, but where our strength can actually, if you look at the CMC aspect of it, you will see a perfect fit. I mean, in fact, some of these engineered T-cell therapies are a little bit even more advanced and defined than the types of autologous cells we are working with.

And it feels a little easier, even a little bit of a breath of air in that sense. But if you look at our commercial teams, we're all from the CAR-T world. We've done launches of Breyanzi and Abecma. And in fact, Dr. Preet Choudhary, with whom we have done this deal, was one of our customers when we were in the hematology CAR-T launching expedition at that time. And we've continued to discuss what are the unmet needs and how do we really get breakthroughs there. And as an innovator, we've held that dialogue from those days.

So you see that the strength in the oncology field really is not something that we have to start from ground zero here. And so every little angle that you're looking from, we have that. Of course, clinical development, we will build it over the clinical trial experience. But the move from ophthalmology to oncology was really, I would call it semi-opportunistic, but with a lot of synergies with the CMC path that we've learned and how to work with the FDA and what they expect in this kind of technology, and also knowing what the unmet needs are in the solid tumor space generally.?

And prostate specifically, of course, some of us have launched products in this prostate space in our past lives. So that's also bringing us the relationship. Also the KOLs that have interacted with in ad boards even before we licensed this asset have taken a look at a lot of the data, and these are the top international 6 or 8 KOLs who are opine and they're very eager and interested in participating in these trials, even putting their patients on this type of technology.?

When you have everything from a capability standpoint lining up to take us to a disease where, of course, the market potential is a log order bigger from where we are in the rare disease space, why not? And we were waiting for the right moment, which was ZAVASKYN is in a good place with its launch. We're already seeing early indicators that this is taking off. And that's what we had kept this. I mean, this has been a diligence that we've been doing for quite a while. And so this was the right time.? So that's really where we've shifted.

This doesn't mean to say we're not putting a stake in the ground, saying we're going to be an oncology company. If our technologies, for example, CD19 as a CAR-T field, found great application beyond hematology, where we started. And now everybody who has a CD19 asset is in the autoimmune space. That is, I mean, still leveraging their strength in a completely different disease area. We're going to follow such a path where we have good science that takes us to solving big problems, and there is huge long-term value in that. So that's how this asset really checked all the boxes that we're describing here.

Operator: Our next question is coming from Jim Molloy with Alliance Global Partners.

James Molloy: Just a couple of quick questions on pricing and so gross to net. Mechanistically, looking at the revenue number you guys printed in the quarter at $3.1 million per, it looks like a much more favorable gross to net discount for you guys on the quarter. Can you talk a little bit about how you're seeing the payer mix come through on that? And is the pricing holding there? And then I guess a follow-up would be on the OpEx, ex the $7 million one-timer, these are the R&D and G&A numbers we should expect, sort of going forward through the rest of '26?

Joseph Vazzano: Thanks, Jim. Yes. So, regarding the gross to net for Q1, all 3 patients treated in the quarter were commercial compared to Q4, where it was a Medicaid patient. So, on the commercial patients, there are far less rebates and discounts than the government 23.1% rebate that was for the Medicaid patient. So going forward, again, when things normalize with more patients, we think the gross to net will be in the mid- to upper teens when we have more patients treated.? And then for your second question, yes, so if you exclude the $7 million upfront payment for R&D and SG&A, the total spend will be pretty much the same for the rest of the year.

Again, as we treat more patients and get more volume in there, some of the costs will come out of SG&A, the engineering runs, and they will go to cost of goods sold. But the overall run rate, again, throwing out the $7 million expense, is reflective of the rest of the year.

James Molloy: A quick follow-up, if I could, please. Any guidance on the 6 to 7 people potentially to shoot for the second quarter, what that mix looks like on commercial versus Medicare, Medicaid?

Vishwas Seshadri: A similar kind of mix that we have.? And overall, we can expect, based on our claims data and what we've understood of the market, about 60% commercial, about 30% to 33%, or something like that, is Medicaid. So that is the split we're looking at.

James Molloy: And have you guys put any guidance on when you anticipate being profitable? I know last year, you put some guidance. Obviously, things have changed since then.

Joseph Vazzano: We maintain the assumption that we had in the last call, that we believe, depending on how these biopsies come out, that Vish and Madhav had spoken about earlier, we believe we can achieve monthly profitability starting potentially in June, so next month.

Operator: Our final question today is coming from David Bautz with Zacks Small-Cap Research.

David Bautz: Given the fact that most solid tumor CAR-T programs have struggled in the past, I'm just curious what was it specifically about 701 that gives you confidence that it could be successful?

Vishwas Seshadri: Thanks, David, for that question. First of all, we have to underscore that CRS is not a CAR-T. The synthetic immune receptors are fundamentally differently structured. So A lot of the innovation in the CAR-T field has been about better signaling domains or the domains, and they're built on an existing CAR structure. I mean, it's physiologically very different from the natural TCRs that you have. And then, of course, the TCR technologies themselves have failed due to other reasons, which are to do with MSC restriction and various population-based constraints.? What the SIR-T technology does is actually take the best of both worlds.

It will probably take me 2 days to describe all the components of the technology that make us believe that it's different. But if you look at the money slide, the preclinical data that we shared, we've used a CAR control with the same kind of binding domain, which is the receptor, which recognizes and binds to PSMA, but the rest of the structure is all like a CAR versus the SIR. And you can see that in a preclinical model in mice, you already see that difference.? How can you generate persistent serial killer T cells that go after a tumor-specific membrane antigen? That's what we are encouraged with.

And these experiments have been repeated many, many times with variations in the manufacturing process and everything.? So we're excited. Our KOL community is excited that this is a new hope. So we're not doing exactly the same thing that has been done in the past. There is true novelty structurally as well as functionally in this approach. So that's what really gives us, and we have included a link that takes you to a talk by the inventor himself, and that has a lot of technical details. If you're interested, I would encourage anyone to go and listen to that. So I hope I answered your question.

Operator: Thank you.?Ladies and gentlemen, this does conclude today's Q&A session and also today's call. You may disconnect your lines at this time, and we thank you for your participation.

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