• Gross Proceeds from Equity Offering: $75 million raised in early May.

• Cash Runway Extension: Extended into 2026.

• Cash and Equivalents: $62.7 million as of March 31, 2024.

• Net Cash Used in Operating Activities: $14.5 million for Q1 2024.

• Research and Development Expenses: $7.2 million for Q1 2024.

• General and Administrative Expenses: $7.1 million for Q1 2024.

• Net Loss: $31.6 million for Q1 2024, including a noncash loss of $17.3 million from warrant liabilities.

• Earnings Per Share (EPS): Loss of $1.16 per common share for Q1 2024.

• Warning! GuruFocus has detected 6 Warning Signs with ABEO.

Release Date: May 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Abeona Therapeutics Inc (NASDAQ:ABEO) successfully raised $75 million in gross proceeds from an underwritten offering, enhancing their capital to support upcoming regulatory milestones and commercial launch.

• The FDA did not identify any deficiencies related to the clinical efficacy or safety of Pz-cel, nor did it request new clinical trials, indicating strong foundational support for the therapy's approval.

• Significant progress has been made in addressing the CMC deficiencies noted in the CRL, with key studies completed and ongoing positive interactions with the FDA to align on requirements.

• Strong commercial readiness and confidence in Pz-cel's potential as a game-changing therapy, with ongoing positive feedback from physicians and patient groups, and strategic payer engagements to ensure access upon approval.

• Abeona Therapeutics Inc (NASDAQ:ABEO) has a robust financial position with sufficient resources to fund operations into 2026, bolstered by recent fundraising and careful financial management.

Negative Points

• The FDA issued a CRL requesting additional CMC information before Pz-cel can be approved, indicating there are still regulatory hurdles to overcome.

• The timeline for the BLA resubmission is somewhat uncertain, with potential external factors that could affect the exact timing of submission and approval.

• Increased general and administrative expenses, rising from $4 million in Q1 2023 to $7.1 million in Q1 2024, reflecting higher costs as the company prepares for commercial launch.

• A net loss of $31.6 million for Q1 2024, significantly higher than the previous year, driven in part by a noncash loss related to the change in fair value of warrant liabilities.

• While there is strong data supporting Pz-cel, achieving a label claim for prevention of squamous cell carcinomas may require additional long-term data, indicating further research and time may be needed to fully realize this aspect of the therapy.

Q & A Highlights

Q: Could you clarify the timeline change for the BLA submission from Q2 to Q3? Is there a specific reason behind this adjustment? A: Vishwas Seshadri, President and CEO of Abeona Therapeutics, explained that the adjustment from Q2 to Q3 is primarily to accommodate external uncertainties, such as the timing of FDA meetings. The company aims to ensure all questions from the FDA are thoroughly addressed before resubmission, hence the softening of the timeline to the second half of 2024. However, there is no material change in the company's operational plans.

Q: Can you discuss the alignment with the FDA on the novel cell-based identity assay for Pz-cel? A: Vishwas Seshadri mentioned that the company is in ongoing discussions with the FDA to align on the cell-based identity assay, which is crucial for ensuring the product's cell composition. The FDA has indicated that Abeona's approach seems straightforward, and the company is confident in providing the necessary data for approval.

Q: Is there potential for Pz-cel to include a label claim for preventing squamous cell carcinomas (SCCs) based on current data? A: Vishwas Seshadri addressed that while early data are encouraging regarding Pz-cel's potential to prevent SCCs, claiming this officially would require more extensive data. The focus remains on treating high-risk wounds known to lead to SCCs, but a label claim for prevention would likely necessitate further studies.

Q: Could you elaborate on the endpoints and wound sizes treated in the Phase 3 trial of Pz-cel? A: Vishwas Seshadri clarified that the trial focused on treating large and chronic wounds, some as large as hundreds of square centimeters. The primary endpoints included not just wound healing but also significant pain reduction, which is a critical factor in improving patient quality of life.

Q: How does the increase in genetic testing and diagnosis accuracy impact the market size for Pz-cel? A: Madhav Vasanthavada, Chief Commercial Officer, noted an increase in genetic testing and efforts to correct misclassification of EB patients. This improvement in diagnosis accuracy is expected to better define the patient pool and potentially expand the market for Pz-cel as more patients are correctly identified.

Q: What financial resources does Abeona Therapeutics currently have, and how do they support the company's operations? A: Joseph Vazzano, CFO, stated that as of March 31, 2024, the company had substantial financial resources, including recent gross proceeds from a $75 million equity offering. These resources are expected to fund operations into 2026, not accounting for potential revenue from Pz-cel commercial sales or other financial opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.