Abeona Therapeutics Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 13, 2023

There are 7 speakers on the call.

Operator

Greetings, and welcome to the Abeona Therapeutics Third Quarter 2023 Conference Call. At this time, all participants are on a listen only mode and a question and answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Greg Jin.

Operator

Sir, you may begin.

Speaker 1

Thank you, Ali. Good morning, everyone. I would like to welcome and thank everyone for joining us on our Q3 2023 Update conference call. The press release announcing the Q3 'twenty three results is available on our website at www.abionatherapeutics.com. Before we start, I would like to note that remarks made during today's call may contain projections and forward looking statements.

Speaker 1

Forward looking statements are made pursuant to the Safe Harbor provisions of the federal These forward looking statements are based on current expectations and are subject to change and actual results may differ materially from those expressed or implied in the forward looking statements. Various factors that could cause actual results to differ include, but are not limited to, those identified under the Risk Factors section in our Form 10 ks periodic reports filed with the Securities and Exchange Commission. These documents are available on our website at www.abionatherapeutics.com. On today's call with prepared remarks are Doctor. Vish Sasadri, Chief Executive Officer Doctor.

Speaker 1

Madhav Visanthavada, Chief Commercial Officer and Head of Business Development and Joe Bozzano, Chief Financial Officer. Also joining us for the Q and A session will be Doctor. Brian Kemeny, Chief Technical Officer. With that, I will now turn the call over to Vish Seshadri. Go ahead, Vish.

Speaker 2

Thank you, Greg. Hello, everybody, and thank you for joining us this morning. I'm pleased to update you on our continued progress evolving from a clinical stage company to one with a significant commercial opportunity. Let me start with the highlight that everyone at Abeona is thrilled about. We achieved and have the most meaningful milestone yet In Abeona's history, at the end of September, with submission to the FDA of our Biologics Licensing Application or BLA for Pradimogene sammicarasa or PZ set, which was formerly known as EB-one hundred and one.

Speaker 2

TC Cell is our investigational autologous COL-seven eighty one gene corrected epidermal sheet for recessive dystrophic epidermolysis For LOSA, for ArDET. As a reminder, in clinical trials, a one time application of PV Cell had demonstrated wound healing and pain reduction for the toughest to treat large chronic wounds. Some wounds that were treated in our Phase IIIa Clinical trial remains healed after 8 years. The sustained treatment effect we have seen is due to the integration of COL7A1 transgene into the host genome during retroviral transduction of patient keratinocytes ex vivo. Our BLA submission represents a critical step Towards the potential approval of PZcell as the first therapy to provide instantaneous wound coverage and multi year healing in Ardent wound With a one time application, I want to take a moment to thank the many stakeholders who contributed To this milestone achievement, not just for Abeona, but for the whole RTIP community, from the patients, caregivers and physicians We participated in the vital clinical trial, the patient advocacy community and to the FDA for their level of engagement and constructive guidance In the months leading up to the pre BIA meeting that occurred in late August, I also would like to acknowledge our entire submission team for their tremendous determination over many months to prepare the BLA.

Speaker 2

We recently completed Our application orientation meeting with the FDA, where we overviewed our BLA and walk them through our clinical data. Our understanding is that this meeting is one of the last steps before the FDA decides on acceptance of the application for formal review. Regarding what we can expect next, the FDA's decision on whether BLA review process can start is typically made during the 60 day window following submission, which in our case goes out to late November. With the BNA submission, we requested the FDA grant a 6 month priority review. I'd remind you that pzcell has been granted rare pediatric disease designation by the FDA.

Speaker 2

So upon its potential approval, We continue to believe that we're eligible to receive a priority review voucher or PRB. It's permissible to sell PRBs Other PRBs have been worth approximately $100,000,000 based on recent PRB transactions. Planning for the potential success of our BLA, our manufacturing team is focusing on supporting the BLA review process, Preparing for pre approval site inspection and scaling up our internal capabilities and staffing for commercial launch. In the 1st full year of launch, we currently plan to supply PCcell for up to 120 patient treatments We are excited about the prospects of transitioning to a commercial stage organization with Abeona's first product launch. However, it is important to note that PV Cell will not be the 1st autologous therapy launch for this leadership team As Madhav and I will draw upon our previous launch experiences with Briansy and Abekma.

Speaker 2

As Chief Commercial Officer, Madhav will oversee all aspects of commercial strategy, planning and operations. His extensive and diverse leadership experience across sales, marketing and market access coupled with a strong track record Launching autologous cell therapies with a heavy focus on customer experience makes MARTA the ideal candidate to lead the stage build out of our highly focused nimble commercial organization to maximize the potential commercial opportunity for pZcell. I'll now ask Madhav to talk about our near term commercialization focus and launch preparations. Madhav? Thanks, Rish.

Speaker 2

We are, of course, excited for the potential commercial launch of PGC7 pending FDA approval. In terms of our commercialization approach, our near term focus is simply on 2 main areas. One is to onboard and prepare 5 to 7 high volume EB treatment centers so that they can treat with PD cell upon approval. These centers already have the expertise in caring for EB patients and are geographically dispersed across the U. S, which would help make PD cell treatment accessible for these patients and 2, Working with commercial and government health insurance systems to ensure broad access for all eligible patients at a price point that captures the value We are happy with our progress so far on both these fronts.

Speaker 2

To elaborate further, in terms of site onboarding, shortly after our BLA submission, we conducted an advisory board meeting that was attended by 8 well respected physicians, PD physicians from across the U. S. We discussed not only the clinical data and the care coordination needed for surgical application of PD Cell, but also for the first time we shared some of the before and after images from several large booms across multiple anatomical areas treated with PZcell as well as patients and caregiver testimonials about their experience with PCcell in clinical trials. They are very encouraged by the physicians' feedback, which included their suggestions on ways to operationalize PD cells at treatment centers. We have received interest from these physicians to initiate EZcell site onboarding discussions at their end stations and we are very excited by it.

Speaker 2

With respect to the 2nd focus area of payer engagement, we will continue to engage payers over the coming months to educate them about PT Cell and further assess the price potential. Early feedback from payers and hospital administrators Support positive coverage for PT Cell and pricing in line with the value of a cell and gene therapy that provides instantaneous coverage for large wound areas and that demonstrates years of wound healing and pain reduction Even in the toughest to treat RDEB wounds following a one time application. Furthermore, we hope that the sustained effect We see in our clinical trials on wound areas with a one time application of BG Cell could minimize the treatment burden incurred by patients and caregivers and continuously caring for their wounds day after day and week after week with current standards of care. Additionally, in speaking with our clinical trial patients and the advocacy community, we continue to hear enthusiasm for PZcell. In fact, in our ongoing Phase IIIb trial, all three patients are repeat patients We fully appreciate the involved nature of the procedure and have elected to receive PZcell again for their previously untreated wound areas.

Speaker 2

We will continue to work with patient groups and make sure that the voices of the patients, the families and the caregivers are well represented as we engage with the FDA and payers. Lastly, since our BLA submission, we have leveraged our network and have moved quickly to fill crucial commercial roles, including key account management, market access and marketing, with proven biopharma veterans Hoop brings additional launch and commercialization experience with autologous cell therapies. Their contributions will be an important piece of our launch planning. We intend to further build out our commercial organization and infrastructure in a stage gated manner aligned to BLA acceptance. Now I'll hand the call over to Joe to discuss our Q3 financial results.

Speaker 1

Joe? Thanks Manav. I would

Speaker 3

like to remind everyone that the Form 10 Q is available on our website, which is where you can get additional details on our financial results for the 3 9 months ended September 30, 2023. Starting with the financial resources on our balance sheet, we had cash, cash equivalents, restricted cash and short term investments of $54,100,000 as of September 30, 2023, including $25,000,000 in gross Proceeds from the registered direct offering in July of 2023 as compared to $37,100,000 as of June 30, 2023. Based on our current operating plan and assumptions, our financial resources remain sufficient to fund our commercial launch preparations for pzcell and our business operations into the Q4 of 2024. In other words, our cash runway extends beyond the potential commercial launch of pzcell and receipt of a priority review voucher. Research and development expenses were $7,100,000 for the 3 months ended September 30, 2023 compared to $5,500,000 in the 3 months ended September 30, 2022.

Speaker 3

Our spend on general and administrative activities was $4,200,000 for the 3 months ended September 30, 2023 compared to $3,900,000 in the same period of 2022. Net loss attributable to common shareholders was $11,800,000 for the Q3 of 2023 or $0.48 loss per common share as compared to a net loss attributable to common shareholders of $6,400,000 or $1 loss per common share in the Q3 of 2022. With that, I'll turn the call back to Vish for brief closing remarks before kicking off the Q and A session. Vish?

Speaker 2

Thank you, Joe. I would like to close by reiterating what an exciting time this is for Abeona for PCcell And for the ARTIF community, based on our strong clinical data and enthusiasm from the medical community, we believe that TZ Cel could be an important Potential treatment option for patients. With our BLA submission, we've demonstrated our ability to take a cell therapy product from research through clinical development. We are well positioned for potential market entry with extensive and diverse commercial and launch experience with autologous cell therapies. We're looking forward to the anticipated momentum in the coming months as we both advance BDCels through the regulatory process toward potential approval We continue executing on our commercial readiness plan and ultimately to a potential U.

Speaker 2

S. Launch of PCcell. With that, operator, please open the Q and A session.

Operator

Thank you, sir. At this time, we will be conducting our question and answer One moment please while we poll for questions. Thank you. Our first question is coming from Kristin Kluska with Cantor Fitzgerald. Your line is now open.

Speaker 4

Hi, everyone. Good morning. Thanks for taking the questions. I was hoping you could elaborate or speak to some of the work you're doing now for patient identification early on. And given that some of these patients may need 2 of the procedures, any chance of the prior trial participants, including Phase onetwo

Speaker 2

Being involved. Thank you for that question, Kristen. Before I turn it over to Mazhar, I'll just provide my thoughts and Mazhar will elaborate. Just to reiterate, your question is around prior identification of patients before potential launch and how I think the Phase III as well as I would say even the vital patients would benefit from a potential launch. We can even provide some anecdote from our current experience.

Speaker 2

And it's not just the Phase III study and VITAL, but we are also having a Phase 3b study that is going on for the 302 study where patients from both the previous two studies are coming for repeat treatments. So All of this augurs well as we prepare for launch. But for the specific question of patient identification, Mahathir will take that. Yes. Thanks, Kristin, for the question.

Speaker 2

I think the ad board that we conducted recently was very assuring in that physicians continue to believe that These patients will require more than one therapy. So as we have patients being identified and the awareness Increasing with the topical gel right now with BioEq, that is certainly one bolus of patients that we can look to bring on. We do know that there are patients in the Centers of Excellence who visit these centers for ongoing wound care management, Whether it is infections or whether it is squamous cell carcinoma and the longer the wounds are chronic in nature, the greater the risk for these infections to happen. So in speaking with physicians, we already know that certain physicians are thinking about their patients Who would benefit from PZcell and are thinking of identifying in their own minds. But as we get closer to launch, We will continue to formalize this analysis and gather more tangible based on claims analysis and where the patients are to Concretely find out, okay, what is the volume here we are talking about so that we can queue them up in anticipation of the approval.

Speaker 4

Okay. Thanks. And then sorry, go ahead.

Speaker 2

I wanted to check if that helps I'll answer your question.

Speaker 4

Yes, yes. Very helpful. Thanks. And assuming your timelines that you've laid out Our go. How quickly do you think you'll be able to have this in the commercial field?

Speaker 2

So post approval, similar to autologous therapy, right after approval, we will look to do P and C approvals at the EBE treatment centers and then very quickly have medical policies in place from the payers' standpoint. So our estimation is we're talking about maybe a month to 2 months ballpark to have these processes in place. So that would be our sort of a launch, if you will. And from then on, we have the physician's ability to place an order for PC sales. But our goal will be to have it as soon as we can, post FDA approval.

Speaker 4

Thank you so much.

Operator

Thank you. Our next question is coming from Maury Raycroft with Jefferies. Your line is live.

Speaker 5

Hi, this is Yao on for Maury. Good morning. Thank you for taking our questions. Our First question is on the commercial opportunity. We think you recently said at the conference that you estimate the peak sales to be about RMB 500,000,000, what kind of assumptions went into that estimate?

Speaker 5

And what do you need to build in terms of infrastructure reach that target?

Speaker 2

Yes. Thanks for that question. In terms of the assumptions that, Waijan, as we have indicated, for us, our ability to supply At the time of launch, it's around 120 patients in a given year. And we look to ramp that Scale over time, as soon as we have few initial treatment centers, have the experience Provide PG Cell and then we estimate what the demand looks like so that we can increase the CapEx. For the peak sale, we have a projection of 500 patients in a year over, I think, around 5 year time frame.

Speaker 2

So the peak sale we have projected there is with the 500 capacity over a period of 5 years. And the pricing estimate we have also baked in is a 7 digit price point. So these are the initial key assumptions and We expect these patients to come in both de novo patients the first time as well as an average assumption that Each recessive death patient, given the large amounts of wounded area that they have, will require 2 such rounds of ED-one hundred and one treatment cycle. Yes. And if I can just add, one of the reasons we will be triggering any capacity expansion After launch and the initial experience with the 1st centers of excellence that we onboard is that we get a good sense of To what level we will need to expand that capacity?

Speaker 2

We're starting at 120 a year. And let's say, in a 2 year post launch scenario, Should we ramp it up to 500 or 350 or 700? I think some of those assumptions will be validated Once we start seeing that initial demand and trends, and for that reason, so what you're seeing as A peak opportunity of greater than $500,000,000 is dependent on a capacity expansion in our assumption. I hope that helps give you some perspective there.

Speaker 5

Got it. That makes sense. Thanks for the answer. Another one on commercial, we heard recently that Crystal reported about half of their scripts are actually from community doctors versus centers of excellence. Are you thinking about reaching maybe to some community doctors and get the initial steps done before Patients are treated at centers of excellence or how does that report or sort of surprising update Change, how you're thinking about your launch?

Speaker 2

Yes. So there are centers of excellence As well as community centers where these patients are present. For us at the time of launch, We believe that patients who are at the Centers of Excellence will be ideal candidates to get this therapy. And over a period of time, we will look to expand outwards from centers of excellence, which are, PT cell Trained centers to the centers of excellence that don't necessarily have the ability to So it's fully applied with PD Cell and then finally to the community centers. There are some 23 centers of excellence that we know of that see a lot of EB or dead patients.

Speaker 2

And so clearly, we will look to educate these centers so that they are aware of the therapy and we could have the referral in place. So that's our approach. And We continue to work with patient advocacy group. We have a strong partnership with multiple advocacy groups, Deborah in particular. And given the nature of this patient community, we also anticipate a vast majority of these patients with self referral.

Speaker 2

If you understand where these centers are that apply PC cell procedures. So that's going to be our approach. And so even though the patients are In the community setting, for a treatment like this, which is a one time procedure For those wounds that they are suffering from, there is a strong appetite and there is a strong pull versus if this were to be a chronically applied treatment, then yes, I think we would have to think hard, but here is where we feel the value proposition is very strong.

Speaker 5

Okay, got it. Just one last quick question. The Phase III trial enrolled patients 6 year old or older, do you think the label is going to have a minimum age of 6? Or how do you think about unmet needs in patients under 6 year old?

Speaker 2

Yes, that's a fantastic question, Yao. Thanks for that. It's going to be a dialogue that we will have to have with the FDA. So if you look at body surface area, so this is a Topically applied, epidermal sheet. So dose is something that is differently viewed here As a percentage of body surface area that we are applying these sheets.

Speaker 2

So if you look at a small statured patient, Let's say close to the 6 year old mark and we've applied 6 to 8 sheets. In fact, we have applied 14 sheets across the two studies On the same patient, that's a 7 year old. And so as a proportion of their body surface area, that's a huge percentage of coverage. So how the agency is going to view dosage is going to impact how they view a minimal age, because the reason why the 6 year age was Selected as a minimum in our study was primarily the ability to report pain endpoints, Understanding the Wong Baker scale, which is validated for age of 6 and above. So because we had an endpoint, we had that restriction.

Speaker 2

Now does that mean you couldn't apply this Therapy on a patient that is 4 years or 3 years old, that is up to the negotiation. And we believe that With the currently ongoing Phase 3b study, dropping that age limit below that 6 years is also going to help build that So by the time we get approval, this is something that's going to be locked in the late stages of review with the FDA. Our anticipation is that it's going to It will be beneficial for patients even younger than 6 years of age, but this is where the dialogue that's currently happening among various types of physicians, Plastic surgeons as well as the EB specialists said, what is the age of a patient where we can safely have them Follow best practices after application in order to immobilize these sheets because if patients move too much, The graph needs to take optimally and how do we manage those patients that are younger than, let's say, 12 months old. I think these are all the types of questions we're currently answering to say what is that age, but we believe that it's definitely applicable to much lower than 6 years of age.

Speaker 2

So more to come in the coming months on that topic.

Speaker 5

Got it. Thank you so much for taking our questions. Again, I'll hop back in the queue.

Operator

Thank Our next question is coming from James Molloy with Alliance Global Partners. Your line is live. Hello.

Speaker 6

This is Laura on for Jim. Thank you for taking my questions. So with you working on building a commercial organization for pvcell, Have you also started the sales team hiring process yet? And have there been any challenges on getting members to join?

Speaker 2

Thanks, Laura. To address your second question, actually, we have had no issues at all in bringing on talent So far, we've got the leadership team in place from a commercial side. We have been Head of marketing, the medical operations person, market access and key account management. So we look to continue to scale the organization, not we don't need a whole lot of team, right, because what we have been saying early on Is that this is a therapy where a limited commercial infrastructure is what we require given the pull. So that leads me to your first part of the question with Regards to sales per se, we don't anticipate having a sales team or a major sales team at launch because of the Initial level of interest that exists in these centers, but over time, perhaps after the approval is when we may look to bring on sales Teams to continue to educate the outdoor community that is out there.

Speaker 2

We will have a medical team in place, whether it's medical science liaison And continue to educate and also have a key account managers who are going to be the point of contact at these treatment centers where PT Cell will be placed. So that's our model that we will have, which is to focus on K Account Managers and Medical Teams.

Speaker 6

Got it. And then also going back to Crystal Biotech and now the launch of BIJUVIC for DEB, Comparing this to pzcell, what are your overall thoughts and what takeaways do you see for pzcell from this particular launch?

Speaker 2

I mean, the takeaway is that this is great to see the uptake of these products, right? I mean, for far too long, These patients have had no really therapeutic options, have been subjected to standard of care. The burden that they've had on treating their Wounds has been just devastating for everyone. So we are happy to see the awareness picking up. We are happy to see that patients are Getting motivated, the insurance companies are beginning to cover these patients and that was our major takeaway from our from Following what's happening in this space is that payers are beginning to clean up the access.

Speaker 2

And I think what that means EasyCell is a fantastic positioning because we are coming fast followers, which only helps, a, number 1, helps raise the awareness for these patients and these physicians that there are therapeutic options coming in the space And number 2, for the paperwork and the access clearance and genetic copy of genetic testing, so on and so forth, which is taking several weeks. By the time that PD Cell comes to market, we will be in a better position. So these are really the positive takeaways for us and we continue to learn as we approach our approval timelines. And also just not to forget differentiation, right? We've heard very clearly from physicians that All these therapies are going to be needed by almost all the patients, because the approach is very different, The value proposition is very different and patients do have different types of wounds in their body.

Speaker 2

And for the large wounds where There's a lot of pain and even spontaneous closure, willingness to go for the big guns, if you may, PCcell is going to be there. So that's what we're learning and which is why a pent up bolus of patients in centers of excellence It's already kind of sufficient to take our loss infrastructure over and which is why we're not investing on a big sales force Because we know these patients already exist.

Speaker 6

Understood. So just one last question from us. You've mentioned in the past the potential for PD cells to be formulated either as a spray or to have different skin graft sizes used for the patients. So when might you look into trying to get these additional indications or administration methods onto the label?

Speaker 2

Yes. I think from a perspective of lifecycle management, this is really We'll have to think hard whether it's even PC cells that come with a spray. It's probably going to be a whole new biological product. Clearly, there is some learning. I mean, we have been very disciplined in how to Focus our finite resources.

Speaker 2

Our job with the PVTEN launch is not yet done as much as we're getting closer every day. So we are we have these ideas. I think some of the common unmet needs that we hear Can you make glove shaped grafts for mid term deformities because hand surgeries are a big part of These patients led and then can you do that? I think there's a lot of that unmet need and ask from the patient community for these products. We're being careful that let's get the D cell launched, let's get the uptake and we will be on our way for what Improvements we can build, but clearly that's going to be not EB-one hundred and one, but EB-one hundred and two.

Speaker 2

It's going to be a different product, But we are keeping our eyes and ears out to further understand the unmet need and design these products appropriately.

Speaker 6

Got it. Thank you for taking the questions.

Speaker 2

Thank you,

Operator

Thank you. As we have no further questions in queue at this time, I would like to hand it back over to Mr. Seshadri for

Speaker 2

Thank you. In closing, I want to thank our shareholders and other stakeholders We have listened to this call and we'll talk to you again soon. Have a nice day.

Operator

Thank you. Ladies and gentlemen, this concludes today's conference and you may disconnect your lines at this time. And we thank you for your participation.

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