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Madhav Vasanthavada

Thanks, Vish, and hello, everyone. With less than six weeks until our PDUFA date and label discussions started with the FDA, we are looking ahead to potential pz-cel approval and the prospect of positively impacting the lives of people living with recessive dystrophic EB.
Before I share the status of our launch readiness, let me briefly recap how we see the commercial opportunity with pz-cel. In the US, based on medical claims data, we estimate there are approximately 1,300 dystrophic EB patients.
Our research indicates that about 750 of those EB patients are RDEB patients with moderate to severe wounds who are potential candidates for pz-cel. An average RDEB patient has greater than 30% of their body wounded, and we estimate two treatment cycles of pz-cel would be needed to cover the vast majority of their existing wounds.
In other words, with an average of two treatments per patient and about 750 patients, we foresee about 1,500 treatment opportunities for pz-cel in the US. At this time, we are not accounting for potential future RDEB wounds that patients may develop and other factors which could require additional rounds of pz-cel treatment for patients.
Even with the conservative floor of $1.5 million per treatment, we believe pz-cel can have a cumulative revenue potential of more than $2 billion in the US alone. Our confidence in realizing this opportunity stems from the continued enthusiasm we hear from patients, leading EB physicians and payers.
People with RDEB are desperate for therapeutic options that can reliably close multiple stubborn wounds in one treatment application and provide relief from the perpetual burden of chronic wound care. pz-cel has the potential to be a groundbreaking therapy designed to deliver years of wound healing and pain reduction after a single treatment application even in the tough large chronic rebounds.
Many of the EB physicians we spoke with at the recent American Association of Dermatologists Annual Conference indicated that they are looking forward to the approval of pz-cell. That said, pz-cel treatment, like other autologous cell and gene therapies is an involved process that requires extensive treatment planning, travel, and care coordination.
But despite this, patients are excited about the potential approval of pz-cel because of the robust clinical efficacy and durability seen in clinical trials. In a self-reported patient survey conducted two years after pz-cel treatment in a Phase I/IIa study, all seven participants reported that they would undergo pz-cel treatment again and would recommend the procedure to other patients with RDEB.
In fact, in our ongoing Phase IIIb trial, the majority of our patients are repeat patients, who have elected again to receive pz-cel for their previously nontreated wound areas. One patient even came back for a third round. We want to make pz-cel available and accessible to this patient community as soon as possible following approval.
As such, to talk about our launch readiness and expectations, we are in dialogue with five well-recognized epidermolysis bullosa EB centers to onboard them for pz-cel treatment. These centers are geographically dispersed each with the large catchment areas of patients and collectively can treat a sizable proportion of our estimated 750 pz-cel eligible patients. We expect the process of site activation to vary from site to site but based on our experience with the cell and gene therapy launches, site activation could take approximately three months post FDA approval.
During these initial months post approval, our teams will work with the centers to discuss eligible patients and secure the necessary payer authorizations. Our goal is to activate our target centers during this launch year that is 2025, so that centers can begin treating patients with pz-cel in third quarter of this year as Vish indicated.
We will announce the names of the pz-cel qualified treatment centers as they become activated. Once a site is activated, they can begin to schedule patients for biopsy based on available manufacturing slots and treat patients approximately 25 days from the time of biopsy collection. Revenue recognition will occur after the patient is treated with the product.
During the early launch phase, we expect to see a gradual ramp-up at the QTCs with centers treating one patient to two patients first as they get accustomed to the pz-cel treatment process, patient journey, and the reimbursement flow. Then as the sites become more experienced with pz-cel, we expect greater uptake of the product. This gradual ramp-up at the sites this year will be happening in parallel with Abeona ramping up our manufacturing capacity to increase launch supply as we have always indicated we would, a topic that Brian will cover later on this call.
So from an overall demand standpoint, we are confident of pz-cel's growth. And over time, with capacity ramped up in 2026, we intend to qualify additional treatment centers while also driving patient referrals into the QTCs from the community practices.
Let me now turn to market access where our two main goals are to ensure favorable access policies for the patients and reimbursement for the treatment centers. We remain confident in meeting both these objectives based on our payer interactions so far.
Abeona will give QTCs the flexibility to procure pz-cel either as a buy and bill product, all through a specialty pharmacy and sites like this flexibility to be able to choose. Because access and reimbursement are critical success factors for any high-cost gene therapy, we have been laser-focused on educating the payer community and have had over 40 pre-approval information exchanges communicating our clinical trial results.
To remind you, in terms of the payer mix, our data shows us that 60% to 65% of RDEB lives are covered by commercial plans about 30% to 35% by Medicaid and the remaining less than 10% by Medicare. Payers recognize the persistent unmet need in the RDEB treatment landscape and the tremendous clinical value of pz-cel as they review pz-cel's ability to cover large areas of the body and clinical data showing multiple years of wound healing and pain reduction after a single treatment application.
Just last week, we were an emerging biotech sponsor at the PCMA Annual Meeting, one of the industry's most important payer conferences, and we were pleased with the positive reactions. We have received on the clinical and economic value of pz-cel during multiple private in-person engagements with the largest national payers in the country covering the majority of RDEB commercial lives.
At approval, we plan to file for the Medicaid Drug Rebate application or MDRA and apply for a pz-cel-specific J code, so that state Medicaid programs will have an opportunity to carve out pz-cel from the bundled payment methodology with the goal of speeding up access and reimbursement. Finally, I want to mention Abeona assist our integrated support program designed to help eligible patients navigate their entire pz-cel treatment journey, including travel and logistics.
With that, I would like to hand the call over to Dr. Brian Kevany, our Chief Technical Officer, to discuss commercial manufacturing for pz-cel. Brian?

Brian Kevany

Thanks, Madhav. We continue to prepare our curtain good manufacturing practices facility in Cleveland, Ohio for manufacturing commercial-grade pz-cel drug products. As a reminder, our Cleveland site is a completely non-CDMO dependent facility for the production of pz-cel as well as our retroviral vector.
As Vish mentioned, we anticipate launching pz-cel in the third quarter of this year, pending FDA approval and we are on track from a manufacturing perspective to be prepared to begin receiving biopsy samples from qualified treatment centers and initiating the manufacturing process to support the planned launch.
Our facility is led by a team of highly skilled production, process and [assay] development and quality control scientists with expertise in cell and gene therapy, particularly in cell culture, analytical testing and wet lab techniques. The maximum capacity at our CGMP facility supports pz-cel manufacturing for up to 10 patients or manufacturing runs per month.
We have previously communicated that pz-cel will be a supply measured launch and there will be a ramp-up period to get to maximum capacity. We currently estimate our initial manufacturing capacity during the early launch phase to be about four treatments per month. And we plan to gradually ramp that monthly capacity to six treatments starting roughly at the end of 2025 to early 2026 towards achieving a maximum capacity of 10 monthly treatments in the first half of 2026. We believe the planned manufacturing capacity ramp-up will sync up well with the ramp for QTCs treating our first patients during the early launch phase this year.
It is important to note that we have a planned annual manufacturing shutdown for maintenance on equipment in the facility, which is standard for cell therapy facilities. This planned shutdown is crucial to maintain operational integrity, regulatory compliance, and product safety, and we schedule it during the December-January holiday time frame to minimize any temporary impact on our production capacity.
We have already taken steps to enable capacity expansion beyond our current manufacturing footprint. During the fourth quarter of 2024, we leased additional building space in Cleveland adjacent to our existing facility which will allow us to create additional manufacturing space to increase production capacity for pz-cel. In the coming months, we will be assessing design plans, and we'll share more on our increased manufacturing capacity on a future call.
Our long-term plan is to build manufacturing capacity to support 200-plus annual pz-cel treatment by the second half of 2027. I'd like to hand the call over to our Chief Financial Officer, Joe Vazzano, to discuss our financial results.

Joseph Vazzano

Thank you, Brian. I would like to remind everyone that you can find additional details on our financial results for the full year ended December 31, 2024, in our most recent Form 10-K, which is available on our website. Starting with the financial resources on our balance sheet, we had cash, cash equivalents, short-term investments, and restricted cash of $98.1 million as of December 31, 2024. This compares to $52.6 million as of December 31, 2023.
Based on our current operating plan and assumptions with our existing cash resources, we estimate we have sufficient financial resources to fund operations into 2026. Our cash runway assumptions do not account for any potential revenue from commercial sales of pz-cel or proceeds from the sale of a Priority Review Voucher, or PRV, if awarded by the FDA. I'll remind you that pz-cel has been granted rare pediatric disease designation by the FDA. So upon its potential approval, we believe that we are eligible to receive a PRV.
Research and development expenses were $34.4 million for the full year ended December 31, 2024, and compared to $31.1 million for the full year ended December 31, 2023. Our spend on general and administrative activities was $29.9 million for the full year ended December 31, 2024, compared to $19 million for the full year ended December 31, 2023.
The increase in general and administrative expenses is primarily due to commercial launch preparation costs, which included the hiring of a well-experienced commercial team to support the potential launch. Net loss was $63.7 million for the full year ended December 31, 2024, or $1.55 loss per common share as compared to $54.2 million or $2.53 loss per common share for the full year of 2023.
Lastly, we have received a question from investors about when we will start recognizing revenue after pz-cel's commercially launched. As we stated earlier on this call, we are planning for a commercial launch in the third quarter of this year if pz-cel is approved. Revenue recognition occurs upon pz-cel administration. That is the surgical procedure. So that would give you a sense of the time it would take from a patient being biopsied through the 25-day pz-cel manufacturing process to when we recognize revenues.
And with that, I will open the call for Q&A. Operator, can you please open the Q&A session of this call.

Question and Answer Session

Operator

(Operator Instructions)
Kristen Kluska, Cantor.

Kristen Kluska

Hi, good morning, everyone. Thanks for taking my question and just want to say, very much appreciate how transparent you've been with us during this review process, including the last year. So considering where are in discussions right now with the agency, do you feel that the FDA is satisfied with the work you've done on the CMC side that resulted in the CRL last year. Have you fielded more questions specific on that? Do you have a sense of any work that you'll need to do on that side?

Vishwas Seshadri

Good morning, Kristen. Thank you for the question. I would say this, we have addressed all the asks of the FDA from our side that came out from the CRL. We did not negotiate any of those points. I mean those 12 items that we had articulated last year and so we took the approach of comprehensively addressing each and every one of those, and we believe we've done that.
And the reason we believe we've done that is because how many touch points we've had like five or six informal meetings with them in the time between the CRL and the resubmission and also a formal Type A meeting where we got a lot of our questions answered. So we feel like we have addressed all of those.
And then, of course, through the current review process after the resubmission, the types of questions we -- IR that we have received and how we addressed them even the amount of time that has gone past our resubmission, we just put two and two together. And if you look at the holistic picture, we feel like we're in a good place, of course. Technically, we cannot say the FDA said you've satisfied all these items because the review is still ongoing. But from our end, we have really checked those boxes. I hope that addresses your question.

Kristen Kluska

Yes, it does. Thank you. And then of the five centers that you referenced, have you had conversations with them specifically just to get an early sense of maybe the percent of their patients that may be eligible for this therapy over time.

Vishwas Seshadri

Great. And for that question, I'll actually turn over to Madhav to address it as the person that is directly in dialogue here.

Madhav Vasanthavada

Yes, Kristen, thanks for that question. These centers that we are talking to, they are large, as we have discussed in the past, large economic institutions with patients. We will get more closer soon after approval in terms of how many actual number of patients, but we continue to hear from them that there are patients who they see pz-cel as a really good option for the moderate severe RDEB patients primarily complementary to the existing treatment options. So from that standpoint, they have patients that they are thinking about. But as soon as we have approval, we'll begin to start clearing all of the access related topics that we discussed.
In terms of the numbers of patients, about 30% of the 750 patients are primarily based on the claims analysis are in seven centers of excellence, five of these centers, we are already in discussions with. So we are looking at least a triple-digit number of patients that are currently housed within these institutions. And a pretty sizable number of those triple-digit number of patients would be at least at the early phase of launch candidates and then they will come on the product over time.

Kristen Kluska

Okay. Thanks. And last question for me. I've seen a lot of new investor faces on the story over the last few weeks and months in particular. So can you just remind us what's really going to be the top reason for patients wanting to seek this therapy?
Is it just the wound profile itself and having to deal with the advantages is it in particular because these wounds make patients more susceptible to things like squamous cell carcinoma and infections, which are leading causes of mortality here? Just what is like really drilling down the key reason? Thank you so much, again.

Vishwas Seshadri

I think the key reason from what we are hearing is the need to have a durable or a longer-term closure of the wounds. Really, these patients have multiple wounds on their bodies and if there is a treatment option that can minimize chances of infections, minimize reduction in the bandage and the wound dressing changes.
These are really the quality of life impact that they would have squamous cell carcinoma is certainly a significant factor that is riding not just for patients and caregivers, also from physicians' standpoint. So -- and we know that there is a high relation between squamous cell carcinoma [crane] as the wounds get more and more chronic. So they're always watching out for that.
And therefore, especially for chronic wounds, if you're able to treat and heal these wounds then that's a significant impact for them. So that's really the primary driver. And over time, I think that we will learn many more quality-of-life impact as patients get treated.

Kristen Kluska

Thanks again, and wishing you all the best in the next six weeks.

Vishwas Seshadri

Thank you, Krist.

Operator

Maury Raycroft, Jefferies.

Hi. This is Ami on for Maury. Two from us. First, on the label draft that you mentioned, is the draft that you received from the FDA in line with your vision for pz-cel? Or do you anticipate further modifications and discussions with the FDA?
And the second question is probably for Madhav, on upon the approval, do you expect a patient backlog until you reach maximum manufacturing capacity or do you think patient interest and manufacturing capacity will increase gradually without creating that backlog.

Vishwas Seshadri

Thank you for the question. I'll take the first one and then pass it on to Madhav. So your question was whether the drag label is aligned or consistent with our expectations. The short answer is yes. As you can imagine, there are a lot of different details where it will get refined over back and forth between the FDA and the sponsor. So that's very routine process. But in terms of the big ticket items of how we look at the label, there are no big surprises here. Madhav?

Madhav Vasanthavada

Yes. And I would add with regards to the patient backlog, we do anticipate that happening and I know we had mentioned that early on, and we continue to feel that this particular launch early on, for sure, is supply gated for the several months coming up at the very least as we are ramping up to 10 patients a month. To Kristen's earlier question as well, we have received interest, right, from these physicians who are who are identifying patients that we will work with them to clear the -- to begin to have the patients get on manufacturing slots.
So early on at the time of launch for the several months as we release the manufacturing slots, we want to make sure that these slots are occupied for the foreseeable months. And we will continue to keep you updated in terms of how that is shaping up. But yes, we are very much expecting there will be a queue of patients.

Thank you very much.

Operator

Francois Brisebois, Oppenheimer.

Francois Brisebois

Hi. Thanks for taking the question. And thanks for the updates on the developments here. I was just wondering, you mentioned your conferences recently, can you help us understand maybe the physician education that's necessary?
The trials have been going on for a while. So I'm just wondering if this is a situation where the doctors are just waiting for it? Or is there still based on the fact that it's not approved yet, is there still a lot of physician education and training that's necessary at launch? Then I'll have a follow-up. Thank you.

Madhav Vasanthavada

So physician is -- yes, physician education is certainly needed. I mean in terms of the focus areas for us, we are really discussing in greater detail with the qualified or the centers that we are looking to onboard and qualify. But for the rest of the physicians out in the community, as we understand, there are about 23 centers of excellence that have a coordinated practice for EB clinics. And we are really targeting at the time of launch, a subset of those.
So for the rest of the centers as well as for the community positions, we never -- we have not gone out and discussed really pz-cel with them because we are still waiting for the approval to happen. So as we begin to raise our promotional measures and efforts as well as engage with other patients who have gone through clinical trials in the past and share their experiences that is definitely going to get more of the word and attention out there. So did that answer your question, Frank or in terms of the training aspect and awareness?

Francois Brisebois

Yes. No, no, absolutely. And I think the competitor having a product out there is probably helped as well for awareness. But I guess so on the physician side and then on the patient angle, is this an RDEB community, this is so severe that I'm just wondering how tightly knit -- is the patient community? And I'm not talking a full-blown DTC, but is there an angle on the digital side? Is there an online community that makes these patients very aware quickly of the opportunity? Or how do you market to that? Thank you.

Madhav Vasanthavada

Absolutely. We do have -- it's a very tight as you said, very tightened patient community. We have advocacy groups that have been great partners with us even through the approval process. So we will have a digital presence. We are in discussions with these patients who will be able to share sort of their stories as well as -- of course, our website presence and social media, we will be there to raise this awareness.
And as you mentioned, there is a lot of coming in second to market in this particular space as a gene therapy has its own advantages, not only in terms of some of the early patients and patient identification, but also from other aspects of payers and access clearances.
So in terms of our digital presence, we will be there to do all of the right things there, but also in terms of physical presence and field personnel we'll have members of our team who will be out in the community to raise their awareness and begin to start to help with the referral of these patients into the qualified treatment centers.
So that's really going to be our two-pronged approach. But given our supply capacity, we are also trying to titrate as to how much of rigor we want to put on these different measures because we do know that the unmet need exists. And from what we are hearing from physicians, it's really a complementary aspect to existing treatment, so it's really going to be over a period of time, how we get our marketing resources.

Francois Brisebois

Thank you.

Operator

Ram Selvaraju, H.C. Wainwright.

Ram Selvaraju

Hi. Thanks for taking my question. Firstly, on the PRV, I was just wondering if you could enumerate any potential factors that might preclude the PRV from being granted or if at this juncture, you fully expect it to be awarded? And also if you could comment on the recent environment for PRV resales.

Vishwas Seshadri

Good morning, Ram. Thank you for the question. We do not anticipate any potential factors that may preclude a PRV for us. In general, the big requirement items for PRV eligibility or you should have a rare pediatric designation, which we do.
The second is we should have a priority review in the current review process, which we do. And finally, this has to be a new drug. It's prademagene zamikeracel, the first-time launch, right? So if you look at past examples, it's the same drug is rebranded, but it's the same vector or whatever process you had, then there was an example where PRV was not granted. We don't believe that applies to us because it's a first time launch for us.
So those were the three big topics on checking off. Are we really gearing up for PRV here. But to flip back that question, if there are anything else that we have not discussed as eligibility factors that you've heard, we'd definitely like to hear, but we have not -- we don't have any such things right now.
And your second part of the question was the recent trend in PRV sale, right? We have seen that after the program is -- has been put on hold or we don't know the future of the PRV program where it's headed, and that uncertainty may have created a different pricing trend for the last four PRVs, I think, which are sold for north of $150 million.
Our goal is to optimize the pricing. We're not really in a rush that the PRV has to sell. The day we get granted if we get granted, we have the time now since we have our cash runway to optimize for pricing over speed. So that's where I would leave it. But if you have any follow-up questions on this topic, happy to address it.

Joseph Vazzano

And also just to add into that, one of those four PRVs was sold within a week of actually getting approval at the full $150 million price tag.

Ram Selvaraju

Okay. Very helpful. And then the only other follow-up was with respect to potential positioning and deployment of pz-cel in markets outside of the US. In particular, I wanted to see if you had any other comments regarding logistical potential deployment of this for treatment of European RDEB patients and what other high-priority markets you potentially see as being viable for pz-cel ex US. Thanks.

Vishwas Seshadri

Sure. I will start with Madhav. Feel free to add your thoughts. We do have a lot of interest from Europe and also some Asian markets for pz-cel, just from a bandwidth perspective, we haven't been able to entertain those discussions in much depth. We have those inquiries in a warm relationship right now because we wanted to get through the pz-cel approval in the US first, and then we will be able to have more meaningful dialogues.
But the interest, the markets, they exist as we understand, we need to do a little bit more homework on the timing of when we will be able to supply there. And also whether there are creative -- I mean, our default assumption is that we will need to set up manufacturing shop in a European location, but we're also now more recently hearing there are ways depending on the shelf life of a product, even for a transplant like product that has very limited shelf life. There are ways in which you could supply from a US location to European countries, but we will explore that optionality after launch.
Madhav, sorry, please do add any other --

Madhav Vasanthavada

Yes, you've addressed most. And I would just say, even within Europe, right, Ram, we'll look to see what's really the market where the reimbursement landscape also in the market access looks positive. We know that, for instance, Austria and Germany, maybe are a couple of markets where there may be a greater appetite and we understand that, especially for these kinds of surgeries Austria is a big center where patients already travel to the EB center.
So from a logistics standpoint, it's not like we have to go into multiple markets, but rather already take advantage of the infrastructure and the patient pathway that exists in these kinds of markets. And if we are able to just deploy in one or maybe two centers, over time, that can really be a huge benefit from a cost and speed to market kind of standpoint.
And then other markets, of course, we will continue -- we need to do more of the homework on this, as we said, but we also understand Japan could be a potential or Asia Pacific, but these are more over time as we have the US FDA approval once we have it, then that's our next chapter we want to get there.

Ram Selvaraju

Thank you.

Operator

(Operator Instructions)
David Bautz, Zacks Small Cap Research.

David Bautz

Hey, good morning, everyone. Thanks for the overview this morning. You had mentioned that you want to get five treatment centers online with launch when you launch but what is the ultimate goal for the total number of treatment centers you'd like to see one day? Is it to get it up to 10, 15? What do you see in terms of that?

Madhav Vasanthavada

I think total number, not -- at this point in time, we don't anticipate going more than 10. And Yes. So 5 this year and building it up slowly. Part of the reason is because we see that patients already in the status quo are used to traveling to centers that have specialty to be able to do multiple procedures, right, either for infections or surgical procedures, syndactaly and for various reasons, they are comfortable traveling not for pediotic application, but for these kinds of onetime important procedures.
Now which is a therapeutic options, we see and we have heard from patients that there is a very high willingness to travel to these centers as far as 200, 250 miles radius. So we want to keep the number of centers tight and build the experience curve for these centers. So that as they do more patients and more applications, they just get better and better at it. So that's really our goal.
And that also matches up with our supply, right? Because one of the things having launched CAR T cell therapies in our past is we got ran into issues with supply and keeping up the expectations. So we are -- we're careful in terms of keeping that experience going given where we are with regards to our supply situation as well. And as we ramp our supply, then yes, certainly, we will explore ways to have more centers onboarded.

David Bautz

Okay. Great. Thanks for that. And in terms of treatment, you mentioned that most patients are probably going to require two treatments. And I'm just curious, what is the maximum service area that a patient can be treated with at one time? And then what kind of dictates that number?

Madhav Vasanthavada

So the maximum surface area that can be treated is we can supply up to 12 sheets in collagen producing [genocide] sheets and 40-centimeter square is the size for each of the sheet. So 12 times 40 up to 480-centimeter square.
From the natural history studies, we've seen that patients have, on average, 30%, actually some patients have even up to 80% of their bodies wounded for recessive DEB. So if we go with 30% and we come back of the envelope body surface area analysis, we estimate around 1,000, 1,000 centimeter square of body is covered in large chronic wounds and non-flyxian parts of the body.
So that -- with that calculation, we are estimating around two rounds because 2 times, 480 but then there is -- we cannot guarantee that there's going to be 12 sheets for each and every patient, right, because it's a cellular engineered cell therapy and so for that reason, there is a chance that we may not be probably it's 8 or 10.
So that just -- those are the factors that we'll have to see over time how many treatment cycles will be required and also patients coming back to get their additional parts of their body treated. So that's sort of the math behind how we estimate about two treatments per patient.

David Bautz

Okay. Great. I appreciate the information there. Thanks for taking my question.

Operator

Thank you. There were no other questions in queue at this time. I would now like to hand the call back to Vish Seshadri for closing remarks.

Vishwas Seshadri

Thank you, Paul. Our top priorities continue to be to secure FDA approval for and launching pz-cel in the US as a new treatment for RDEB patients. We believe we are well positioned for the significant opportunity ahead of Abeona, and we look forward to a potentially transformative 2025 for the company. Thank you, everyone, for joining us for today's business update. We'll talk to you again soon.

Operator

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.