ABEO - NASDAQ

Good morning, everyone, and welcome to the Abeona Therapeutics Inc. full-year 2025 results conference call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during this conference, please press 0 on your phone keypad. Please note this conference is being recorded. During this call, we will refer to the press release issued this morning announcing the financial results, which is available on our corporate website at www.abeonatherapeutics.com. We anticipate making projections and forward-looking statements during today's call, which are made pursuant to the safe harbor provisions of the federal securities law. These forward-looking statements are based on current expectations and are subject to change. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors including, but not limited to, those outlined in our Form 10-K and periodic reports filed with the Securities and Exchange Commission. These documents are available on our website at www.abeonatherapeutics.com. Joining us on today's call with prepared remarks are Dr. Vishwas Seshadri, Chief Executive Officer; Dr. Madhav Vasanthavada, Chief Commercial Officer; Joseph Walter Vazzano, Chief Financial Officer; and Brian Kevany, Chief Technical Officer. After the prepared remarks, we will conduct a question-and-answer session. I will now turn the call over to Vishwas Seshadri to lead us off. Vishwas, over to you.

Thank you, Jenny, and good morning, everyone. We continue to see growing patient demand for

Thank you, Vishwas. Hello, everyone. Demand for

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-Ks. Starting with the statements of operations, total revenue for the year ending 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

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

Thank you very much, Vishwas. 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. Our first question is coming from Ram Selvaraju of H.C. Wainwright. Ram, your line is live.

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.

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 do you not take that one?

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 obviously wait for

And just to add to that, Ram, you said at steady state, what we anticipate is sites have communicated to us that one patient a month is kind of a cadence that we can definitely do. Some sites are saying perhaps two patients a month. So I think it is just a matter of we are 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, okay, sites are reaching their kind of cruise-control level of speed and, therefore, this is more predictable. So I hope that helps there. 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

Sure. Thanks, Vishwas. 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 that they, you know, track 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.

Right. And also, to add—sorry. Go ahead, Ram. Go ahead. Go ahead. No. No. Go ahead, please. I was just going to say, as you know, we do have some preclinical programs. We are not spending a lot of energy and resources on those. It is kind of running in the background. We do not see preclinical programs to stack 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

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

Yes, that is a great question. Go ahead, Madhav.

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

Thank you.

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

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. 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? 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?

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 demonstrated performance 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 looks like.

The current timelines are very variable. It depends on various factors. But if I were to 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, and 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 the 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 puts 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 put the START form. So it is a very variable input as to what point in the patient's journey we receive that. What Madhav is describing here as approximately five months is when there is a consult that happens and the patient intends to get

Got it. Okay. Thanks for taking my questions.

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

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 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. Okay. So when you say—oh, go ahead. Sorry. Just one clarification: 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. 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 pegging themselves to inclusion/exclusion criteria from the Phase 3. Is it pegged to the label? Just any color there would be helpful. 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?

Our target QTC number, Steven, has been five to seven, and we do think that seven this year is a realistic goal. That does help with certainly 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. We are going to be working towards bringing these centers on board. But in the meantime, 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. Our target centers right now are 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. 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. Correct.

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 are 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. For instance, if there is an age—age is one major that you are seeing in the sense that six years and above was our inclusion criteria—but for patients that are less than six, 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. For future and subsequent patients, for processes that are unique to

All right. Thanks for taking the questions.

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

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 be a sounding board and help as everybody familiarizes themselves with this process? Okay. And then, 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? 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 about dispersing throughout geography in the country, and how has that played an impact so far about getting patients on board and the ability to travel to these sites, etc.?

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

We expect one 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. 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. These patients, for other reasons with their other comorbidities, do travel significant distances to get therapies. We do not really think that even five or seven is going to impede their ability to travel for

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

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 in the commercial setting. What is the feedback you have been getting from physicians and patients on the overall experience?

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

Thanks, Vishwas. As a reminder, we had a very healthy dialogue with the agency around the sterility assay issue. That was a very productive conversation with the agency, and we do feel that the resolution that came out of that is the solution going forward. We will continue to always look to 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. 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 actually lining up very well with onboarding the additional QTCs to maintain a steady level of supply for those sites as they come on board.

And I just wanted to also add on the sterility topic, Jeff, which is we have done a lot of work trying to minimize the probability that 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. That is what gives us the strength. 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 cellular redevelopment alongside this so that we can get to an even better level. When you say R&D, we are always thinking about pipeline. There is a lot of lifecycle management R&D that goes into optimizing

Nothing more to add, Vishwas, to what you have said at this point.

Overall, when we talk to doctors and 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.

Alright. Appreciate it, guys. Thank you.

Thank you very much. Our next question is coming from David Bautz of

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?

Go ahead, Madhav.

We do not know the wound-by-wound related question. What we do know is that these patients were not simultaneously on VYJUVEK. That is the information we have. With regard to their prior history of VYJUVEK, we think that most of these patients have received VYJUVEK at some point in their journey. Your second question with regard to retreatment: based on the physician feedback, these patients have significantly large wound areas, and physicians have said that, yes, these patients would require a second round of the

Okay. Great. Appreciate you taking the questions.

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 Vishwas for his closing remarks.

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