Andre’a Lucca – Vice President of Communications & Operations Tim Miller – President and Chief Executive Officer Jeff Davis – Chief Operating Officer.

Jason McCarthy – The Maxim Group Elemer Piros – Roth Capital George Zavoico – JonesTrading.

Good afternoon and welcome to the Abeona Therapeutics Inc. Quarterly Earnings and Business Update Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Andre’a Lucca, Vice President of Communications & Operations at Abeona Therapeutics.

Andre’a?.

Thank you, Tim. Good afternoon and welcome everyone. On the call today are Dr. Tim Miller, President and CEO; and Jeff Davis, COO of Abeona Therapeutics. Dr. Miller will begin the call with an overview of the fourth quarter and more recent developments at Abeona and then Jeff Davis will provide additional comments on the quarter.

A brief overview of summary financials and provide a snapshot of our financial position and review the upcoming investor conference calendar. Following that we will open the floor to few questions.

But before I turn the call over to them I need to remind our listeners that remarks made during this call may contain forward-looking statements that involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the Federal Securities laws.

Information contained in the forward-looking statements is based on current expectations and is subject to change and actual results may differ materially from forward-looking statements. Some of the factors that could cause actual results to differ are discussed in the reports filed with the SEC.

These documents are available on our website at www.abeonatherapeutics.com. With that said, it is now my pleasure to introduce Dr. Tim Miller. Tim, you have the floor..

Hi, thanks, Andre’a, and thank you for everyone for joining our earnings call. It’s nice to see so many familiar faces and names that are joining us today. With that, I’d like to discuss on some of our recent history in the fourth quarter and some of our recent developments.

I used to begin with a brief overview of our pipeline, primarily of our IIIB programs, which are adeno-associated virus gene therapy programs.

We have an MPS Sanfilippo type IIIA and type IIIB that would come out of Nationwide Children’s Hospital, which we are advancing into clinical trials this year, as well as Juvenile Batten Disease specifically for the CLN3 variant.

The most common form of Juvenile Batten Disease out of the University of Nebraska Medical Center, which we’ll also be having in clinical trials this year with our clinical side of the University of Rochester in Rochester, New York. This is really – the way that we have been positioned in these three programs.

All AAV programs they are all delivered by intravenous delivery, to be able to cross the blood brain barrier, but also importantly to treat all the somatic symptoms throughout the whole body of the disease for our patients. We’ve made a lot of progress in the past year, but really in the past quarter, quarter and a half.

As we’ve advanced these programs towards a global development strategy as we pursue our commercialization of these gene therapies. When we look at how we’re positioning them, we look around the rest of the space and see what other companies and what the regulatory agencies are how they are pursuing and reviewing these.

And yes, we look and see that – this golden number has been some more around 24 to 35 patients is really a target goal to try and get a rare disease for approval. And when we’ve seen this with some gene therapy companies that have gone for an approval with 24, 27 patients.

And others more recent companies looking at other lysosomal storage diseases where they have looked at about 24 patients to go ahead and file for a registration. As we look in the United States and try to pursue in advance these in clinical trials by the IND [indiscernible] and also to our OUS strategies in Europe and in Australia.

I’ll discuss first our – first program, our lead program, which is MPS IIIA. This originally came out of Nationwide Children’s Hospital uses AAV9 delivered by intravenous gene therapy to treat, again the whole body of the disease.

We’ve achieved the orphan product designation and also the rare disease designation, which we announced last year, which is the first pre-requisite step [indiscernible]. With great pleasure that we were able to announced on rare disease date, February 29.

The FDA had allowed the IND to treat again our first patients at Nationwide Children’s Hospital and anticipate that our first patient will be enrolled at some point in the second quarter. And when we anticipate that we will have some bio potency measurements to report sometime in the third quarter.

In the MPS III program, again we look at our OUS strategy, we have received the Genetically Modified Organism approval and ethical committee approvals for the MPS IIIA program in Spain by the AEMPS.

And we certainly look forward to updating everyone once we have a CTA, clinical trial approval in hand to treat patients at our clinical center in Bilbao, Spain. We also have an MPS IIIB program, also they came out of Nationwide Children’s Hospital that is again an AAV9, it is delivered by intravenous delivery.

And we have achieved the orphan product designation and similarly a rare pediatric disease designation for these programs. We have also gone through our regulatory – have started some of our regulatory discussions and have completed the RAC submission for the MPS IIIB.

We also again when we look towards Spain again, we have achieved the genetically modified organism and Ethical committee approvals. And I look forward to updating everyone when we have more regulatory news on that program.

And as our last AAV program, the users in AAV9 by intravenous delivery, we’re also looking to treat patients with Juvenile Batten Disease. This program comes out of the University of Nebraska Medical Center to treat this CLN3 variant. We have and are looking forward to announcing the orphan product designation.

We have scheduled some regulatory meetings or guidance with the FDA and look forward to updating when we have started our IND enabling studies. We do anticipate based on our other programs when that – what will be required there and do anticipate being able to enroll patients probably towards the end of the fourth quarter, in 2016.

Abeona has seen a lot of progress internally, as we’d added a number of team members to help build out our operations in senior management teams. Of note, we brought on Board Dr. Kate Spratt, who has been involved with gene therapies with other biotech companies over the last 15 years. As well as Dr.

Adam Davis, to run our manufacturing both out sourced and potentially in-house in future. We look forward to updating all of our investors, our shareholders and our patients again on regulatory filings and how we start to look towards 2016 for reporting our early clinical data.

And with that I’ll turn this over to Jeff, to discuss some of our additional comments on the summary of financials..

Thank you Tim. Okay to discuss on the plasma side of the business we to compliment the gene therapy programs we have programs in plasma protein replacement therapies. And our lead program on that side of the business is in alpha-1 antitrypsin or alpha1-proteinase inhibitor deficiency.

If you have AAT deficiency, you will develop a variety of conditions, the most prevalent is an inherited form of COPD, or chronic obstructive pulmonary disease. So we in license a technology called Salt Diafiltration from a private company called Plasma Technologies LLC in late 2014.

And we put the lead program alpha-1 antitrypsin deficiency in a process development program for most of 2015, where we did some scale up. We completed optimization of the downstream chromatography steps. We built additional fences around our technology with additional provisional patent applications.

And near the end of the year coming into 2016, we also expanded our contract manufacturing organization relationships to include a second CMO that will be instrumental in helping us through the continued scale up production of clinical material for the ultimate registration directed trial.

So this alpha-1 antitrypsin product addresses a sector, a segment of the human blood plasma proteins market that represents about 1.2 billion that’s the alpha-1 market. The entire market is about $15 billion global market that’s growing up to 10% annually.

What differentiates our Salt Diafiltration process from the process that is standard in the industry today, which is called the Cohn Process, is our process does not use any alcohol in the initial precipitation stages. So we have a 2-stage salt precipitation process followed by more traditional chromatography steps to purify the proteins.

The upshot of our process is, we have vastly increased yields, achievable yields, manufacturing yields in the high value proteins. We have in our alpha-1 program through repeated runs and repeated lots been able to achieve 10-fold to 12-fold increase in alpha-1 over the Cohn Process.

And we’ve been able to do this while preserving a purity of the product that is equal to the most pure commercially available alpha-1s today.

So we’re very excited about the process as it’s borne itself out and we’re also second steps we’ve run our process on IVIG, where we believe we can get yield improvements of between 20% and 25%, that is very financially meaningful in this sector because IVIG represents about half of the $15 billion global market.

The upshot of our vast yield improvements obviously would be the potential to have very much increased margins, gross margins relative to the Cohn method. And as I said, we did in the last quarter and half, if you will, expand our intellectual property position.

We have three issued patents, but we have also been able to file additional provisional patents to secure our fence around those assets.

So we are continuing to make process with the SDF, continue to the do the scale up, we’re happy with the way it is going and we still look forward to the opportunity to get this in a registration directed trial in the second half of this year. So that is the plasma update. On the financial to briefly review that before we sort of get into some Q&A.

The revenues for the fourth quarter and the full year 2015 were $215,000 and $1 million respectively that compared to $234,000 and $925,000 for the comparable periods in 2014.

Our revenues as most people know are a combination of royalties from our marketed MuGard product, as well as recognition of deferred royalties related to the upfront payments from our early licensing agreements.

Our loss per share as we reflected in our press release was $0.07 for the fourth quarter of 2015 and $0.53 for the full year 2015, and that compared to $2.05 and $15.26 loss in the comparable periods in 2014.

I think most importantly, for investors and analysts, everyone is always curious of our cash position we finished 2015, December 31, 2015 with $40.1 million in cash, compared to $11.6 million as of the end of the December 2014.

The increase in cash was obviously due to a number of financings that the company was able to achieve in the first half of 2015 offset by the cash used in operations. Our cash used in operations in 2015 was $10.4 million.

So in terms of looking at the burn that was less than $1 million a month, that has continued into 2016 we do anticipate that the burn will ramp as we move the gene therapy and the plasma closer into clinical trials and start enrolling patients since start following those trials. But that is the summary of financials as they are and we see them today.

I think just quickly before we turn it over to Q&A, I’ll mention a couple of the upcoming conferences and events that we’re going to be participating in. I know Tim Miller is heading out to the Roth Conference.

Coming up I believe it’s this weekend 13 through 16 our presentation day it is on March 14 at 2 PM Pacific Time and I believe that is also going to be webcast.

We’re going to be participating in the 2016 international Plasma Protein Congress in Barcelona, Spain a little bit latter this month, as well as we are going to participate in the Alliance for Regenerative Medicine, is going to have a Cell & Gene Therapy Investor Day in New York City, that’s on Tuesday March 22, where we will have a short presentation and fireside chat I believe.

And then we will in May, have a strong presence down at the American Society of Gene & Cell Therapy, which is a very significant scientific meeting for the gene therapy side of the business, that’s on May 7. And then, I think in June, will participate in the Bio Conference at San Francisco.

So, that’s a summary of upcoming events, as well, I think I’ll turn it back over to the operator for any Q&A..

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jason McCarthy of The Maxim Group. Please proceed with your question, Mr. McCarthy..

Hi, guys, sounds like everything is progressing nicely, gene therapy programs, it is moving right into the clinic it seems, I wanted to see if you had any thoughts on the data that Alexion recently presented for, I know it’s Type B Sanfilippo and the NAGLU enzyme replacement therapy, but they did have good data, does that give you confidence that for Type A or Type B that gene therapy will this be even better, because you can get into the forebrain, you can get into areas that Alexion is probably going to miss?.

Hi, Jason, sure, this is Tim Miller. So great, great question and we applaud our colleagues in the rare disease space with Alexion and really congratulate them on their data. We certainly pay very close attention to any of the ERT and gene therapy trials.

In some aspects, it’s very – we are very cautious about comparing any of the ERT data to gene therapy aspects. Also because the gene therapy aspects can be little more nuanced depending on the vector that used and the method of deliveries.

However, I do think that the data are supportive that giving these types of therapies can have a direct, potential benefit. I mean we do know that there was a very large variation.

And that again, it kind of reflects where dosing maybe truly effective or whether needs to be an increasing dosing from an ERT standpoint, but it was certainly supportive of seeing that, they did see some changes in that CSF, but they were just dependant, but not very much in the plasma.

So, again, I do think that with the gene therapy that’s able to target, not only of the CNS, but the entire somatic and peripheral systems that you have the potential to benefit and the whole body of the disease..

Okay, thank you. And given the both Type A and Type B are in relatively small populations, I would imagine that these kids are concentrated in just a handful of centers.

Can you discuss or fill us in on work you’ve done with the community, the Sanfilippo community, do you have patients that are anticipating gene therapy would like to enter the trial and kind of the work that Abeona is doing in that regard?.

Sure. So one of the benefits of this program that it comes out of Nationwide Children’s Hospital originally and we are unique in this space and then we have had a 25 patient natural history study that enrolled at Nationwide Children’s Hospital, we have 25 patients that went through over one year with the follow-up data at this point.

And again strength of this program is that the clinical center has seen probably more patient visits, for Sanfilippo than any other hospital in the world. And it’s particularly with regard to clinical trials. And have validated the outcome measures for the MPS IIIA and IIIB trial.

So, we’re able to leverage a lot of that that learning, as we now enter the clinic. And we have our roots in the foundations and patient advocacy groups. We have a shareholders and a company over a dozen, the different international Sanfilippo organizations due to their early support in the programs both at Abeona and at Nationwide.

So we have built up very strong report with them both here and overseas. We have a number of patients that are very anxious of course to get ready to receive these potential treatments. And I look forward to continuing to spread the message remedial therapies and hopefully, the potential in the gene therapy field overall..

Great. Thanks, Tim. Thanks, guys..

You’re welcome..

Our next question comes from the line of Elemer Piros of Roth Capital. Please proceed with your question..

Thank you very much. Good afternoon, gentlemen. Tim, if I may refer back to the Natural History Study, what were some of the surprising or it on surprising findings that caught your eye as apposed to looking back at historical case studies.

What is the take home message here with regards to surrogate endpoints the primary or a efficacy end point? What did you learn just the highlights please..

Sure Elemer with the clinical trials coming up, one of the first things that we’ll be able to look at are measures of bio potency, both having assays that have been validated for looking at enzyme activity in multiple fluids as well as glycosaminoglycans and heparan sulfates.

And look forward to sharing that data with the community hopefully as it progresses – we have –really as we have some kind of report.

Through the Natural History Study, if the learnings points that we have there were when that – when we first started the Natural History Study, there were certain assays that we thought were going to be informative, six-minute walk test, few of the behavior [indiscernible].

As we went through the trial, we really got a better understanding of the patient community and really what the patients were capable of as we looked across different ages.

And found that some of these accounts were just not going to be very effective for clinical trial use, whether due to fore effect in the efficacy assessment or just appropriateness or too much signal or sorry too much noise in any potential signal. So we then added a few different behavioral or parental assessments [indiscernible] in.

And those turned out to be very effective instruments throughout the Natural History Study to look at over a one-year follow-up period to see significant changes from baseline to 12 months.

So when we look at how we are going to be assessing our patients throughout these global trials, we know that and have strong confidence going into that, the FDA has accepted these as potential instruments and to look at clinical efficacy..

It was surprising to me to see that there is actually a floor effect in GAG level measurements with H so order individuals have reached a relatively low level.

Would you be able to use that as a biomarker across the Board?.

GAGs are much like the six-minute walk test in lot of muscular dystrophy trials. They’ve been a staple I think that the field has used. But more recently the field has evolved as the technology has evolved and you see more of the tandem aspect assessment that are able to give a much more quantitative, but also a much higher signal to noise ratio.

So looking at heparan sulfates, which are a GAG of course but are V-GAG to look in these particular diseases. I think it’s going to be a much more robust measurement of determining if there is increase in some activity that has a direct effect on GAG specifically heparan sulfate,.

Got it. Just a couple of quick ones, please. You mentioned that the MPS IIIB program was submitted to RAC, could you describe what events would have to take place between the submission potential approval filing an IND and dosing to first patient and if you would venture to guess a timeframe please.

Did I miss something in these lines?.

Sure. We had a great RAC experience without that protocol that actually been selected for public review. And we went to the RAC and quite along with us to an earlier comment, many of the patient foundation and families, they have – make sure that they had a voice at the regulatory level.

I think you hear a lot of stories about how the parent support groups and Patient Advocacy groups like to try and get involved with FDA and NIH and they came with us and spoke at the RAC meeting a very moving discussion.

And then at the end of the RAC meeting, the RAC members universally, unanimously agreed that that program can move – shouldn’t involve in the clinical trial development with the completion of the pre-clinical studies had been undergoing.

So we look forward to engaging the FDA throughout IND process and look forward to enrolling our first patients here in OUS in 2016..

Okay. And the very last one is you are looking at the CLN3 variant of Batten disease. Some of your competitors or at least one in the gene therapy field and one in the enzyme replacement field, is looking at CLN2.

What drove their decisions you think? It’s just – I know you might not be able to comment on them, but what drove your decision to choose the CLN3 program?.

Sure. I think just a little clarification. I believe that we’re the only ones in the world working on CLN3 gene therapy program. And what’s exciting about that really that it is CLN3 is the most common form of Batten disease. I would speculate that the other groups have looked at CLN1 and CLN2, mainly because it’s more infantile and presents earlier.

So the mortality is something that could be measured a little bit more easily than some of the more unsubtle and qualitative assessment of efficacy particularly around diseases that have not a CNS component.

So you are looking forward and working with our investigators at University of Rochester and University of Nebraska Medical Center on a very exciting program. I would add that one of the great things about gene therapy in 2016 is you’re starting to see a lot of congruency among the different delivery methods particularly, AV9 and IV delivery.

I think it’s probably accepted now that delivering AV9 by IV has crossed the blood brain barrier for a very significant component and we’re able to see beneficial facts in both animal models and now as we go forward in the clinical trials at multiple institutions across multiple CNS disorders.

So there’s a lot of strength in that field now as we continue to move in the 2016 and many companies looking to report clinical data..

Thank you very much, Tim..

Thanks Elemer..

Our next question comes from the line of George Zavoico of JonesTrading. Please proceed with your question..

Hi, Tim and Jeff, thanks for the opportunity for the update. Just following on a little bit with the biomarker and endpoint issues in or concerns with MPS.

And then you brought up the Patient Advocacy groups and clearly one of the reasons why they are there is because of that – well besides the severity of the disease, by the caregiver burden that they’re saddled with as these kids progress, is that going to be part of the endpoint, any endpoint, the secondary endpoint, perhaps in any of these MPS IIIA trails?.

I’m sorry, can you just say that one more time.

What exactly you’re asking if we’re going to measure?.

Caregiver burden..

Yes, so one of the qualitative assessments is that instruments of our patient caregiver assessment. So the quality of life many of the families is obviously directly impacted by these devastating diseases. And the simple ability to be able to sleep through the night or to have less wake episodes would be significant.

The ability to have focus on a particular task is again something that the parents have now looked at and relate to us as an important quality of life measurement. When you’re working with a lot of these patient groups, we have validated outcome measures.

But we do have a lot of subjective things that we’ll be paying attention to the families, again they presented us with checklists of things that they’re going to look at that will help us quantify and qualify some of the efficacy of new potential therapies.

So again it’s strength of the program that we have such close ties, a dozen different foundations, but really they are in the same boat with us they want the best for their kids, they want the best for, as we get future diagnosis and to do that they are willing to help us try and find ways to improve the quality of life of the parents as well as the children..

Okay.

Is the natural history study done or are you following – are you going to follow some of the kids more than just to 12 months?.

Yes and yes. Really that is the answer, all of the patients, all 25 patients have gone through one year with the follow-up and we do expect many crossovers into the clinical trials both here and abroad. And we’re currently investigating the potential to have another follow-up let’s say 18 months or two years throughout that trial.

Really it depends in some aspects on clinical trial logistics you know the MRIs, because the MRIs always gone on certain days, the clinical trials at the hospital are making sure that there is enough bandwidth to be able to do both two clinical trials and additional follow-ups from the natural history study.

So we’re working with the hospitals potentially you’d see a better option..

But I mean some of the biomarkers obviously are very important and one of the issues they are trying to resolve here is being able to manage – and being able to look at the biomarkers and actually correlate them pretty strongly significantly with some of the functional measures.

And some of the questions only pointed out I mean as you pointed out some of the measures really didn’t change very much and there was a lot of noise. I’d suppose I’m wondering that if you do find in the trial was just began, because you also doing recommended, you are also doing two different doses, right.

So you’ll move on once we got the two doses, you’ll enlarge the trial with the recommended dose, which everyone is perhaps provides the better result.

Would you be able to think of having one of the severe end points as being an end point for a functional end point is that one of the goals of the trial?.

Well, I think the goals of the trial identify biologic or biopotency end point or potential biomarker as well as one of the instruments is going to be used to measure efficacy such as win-win scale or the lighter scale.

So we’re looking through our clinical centers around the world using their metabolic for us to look at for other potential biomarkers through direct patient and samples and depending on what we find those may also be added as a secondary potential biomarker end point..

Okay. You mentioned the biomarker – did that look to me from the poster that seem to have the greatest change in the shortest amount of time, that for both MPS IIIA and IIIB.

So and in this trial, you are measuring all of them all over again as well for obvious reasons because I mean you don’t know if the noise of the natural history trial might be overcome if you have an approved effect on your – with a gene therapy.

So in that sense it’s still exploratory as well, correct?.

I think that we would – our clinicians would point to the win-win as – win-win composite score as one of the best potential outcome measures for this trial. Looking at many of the patients that were in the natural history study you do see a decline then they had not yet the actual more effect at that point.

So looking to see a stable – either a decrease in the slow stabilization of the disease or even an improvement would really be the goal using the particular win-win scale. And certainly we’ll have individual patient demographics from baseline, hoping to wrap those into again a composite for each cohort as well across the clinical sites..

Okay, great. And then in January also did some work on at Fanconi anemia. You looked at two different promoters in your gene vectors.

What’s the next step for that business?.

So we do – I didn’t speak for much about it, but we do have a CRISPR program that’s looking at hematologic disorders through our license we have access over 250 different disorders that we look at Fanconi anemia as the one with our lead proof-of-concept with investigators at the University of Minnesota have generated data in Fanconi anemia.

Right now we’re moving down a path for a first generation and a second generation product called ex vivo and in vivo similar to other gene editing programs that are out there with the hopes that again we’ll have some regulatory feedback on what the agencies are looking for particularly for things like off target effect different approaches from a safety level about what necessary.

So we’re seeking regulatory advice and guidance at this point as we move those programs into IND enabling studies..

But you still have to decide on the specific with the construct, correct I mean that’s not settled yet, is it?.

Well, as you know again it’s – we’re trying to approach this prospectively from the aspect, if we do an ex vivo approach how we would go about treatment versus what I think maybe we call the real goal which is to try and do an in vivo gene editing approach.

So as we require different constructs but again we’re trying to find ways to use the gene editing get into clinical trials as well as in our next generation product..

Okay, all right. That’s all for me. Thanks, Tim..

You’re welcome..

And good luck with your progress. Hope to see data – more data this year..

Thanks..

There are no further questions in audio portion of the conference. I would like to turn the conference back over to our COO, Mr. Jeff Davis. Mr. Jeff Davis, would you like to make closing remarks..

Thank you very much. I guess on behalf of Tim Miller and Andrea and myself, I want to thank everyone for their participation. And we look forward to keeping investors and analysts and other stakeholders abreast of our developments. And we hope to see at upcoming investors and corporate partnering conferences.

Just to remind everyone, our website is www.abeonatherapeutics.com. We do have a current investor presentation on there and at the end of that, we’ll have contact information for some of us here at the firm if you have any additional follow-up questions. Thank you..

This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time..