Abeona Therapeutics reports strong patient demand and market access for ZEVA Skin, maintaining confidence in 2026 launch despite temporary treatment delays.

OPERATOR - (00:00:00)

Progress as we continue to scale the ZIVA Skin Commercial launch to meet Growing patient demand while our first patient treated has shifted to the fourth quarter of 2025 due to optimization of a product release assay, our conviction in our ability to achieve our 2026 launch goals remains steadfast. Based on trends in patient demand, treatment center expansion and market access, we're seeing growing patient demand for ZEVA skin, the first and only autologous cell based gene therapy for the treatment of adult and pediatric patients with recessive dystrophic EB or rdeb. We also continue to strategically expand our qualified treatment center or QTC network. The activation of a highly recognized EB center, Children's Hospital Colorado brings our total activated centers to three. Furthermore, we've established a strong foundation with broad market access which is essential for sustained commercial success. In summary, despite the temporary delay in the first patient treatment, we are well positioned for launch success in 2026. Before we dive deeper into our commercial launch progress and momentum, I now hand the call to our Chief Technical and Scientific Officer, Dr. Brian Keaveney to briefly highlight the release assay optimization. Brian.

Brian Keaveney - (00:01:17)

Thanks Vish and hello everyone. As we continue the Viva Skin launch, we remain dedicated to maintaining the highest standards of quality in the manufacturing of personalized drug product. For each pat during the third quarter, a full batch of drug product was manufactured following a patient biopsy but could not be released due to a performance issue in one of our release assays. Specifically, a rapid sterility assay delivered false positive results which required us to reject the lot. The rapid sterility assay was not part of our clinical trials and was an FDA requirement that was added during the BLA review. Retesting using established gold standard USP sterility methods confirmed the sterility of the product, but unfortunately those test results were not available until after the lot's expiration date so they could not be used to release the lot. As a proactive measure to ensure product quality, we temporarily paused collecting additional patient biopsies so that we could conduct a thorough investigation, run additional tests and further optimize the new release assay. Following successful completion of optimization validation and the necessary regulatory submissions, we resumed biopsy collection in November 2025. We now anticipate patient treatment starting in the fourth quarter of 2025. I will now hand the call over to Chief Commercial Officer Madhav Sadavantha Vadav to discuss our commercial launch progress.

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:02:42)

Madhav thanks Brian. Hello everyone. Our launch momentum continues to accelerate on multiple fronts. Patient demand continues to build Our relationships and trust with qualified treatment centers have grown stronger and patient access to Ziva Skin across all payer types has continued to broaden. On our second quarter call we mentioned more than a dozen initial patients were identified at the first two qualified treatment centers. Of these patients, we have already received ZEVA Skin product order forms or ZPOFs for 12 patients. A ZPOF is an informed consent generated by the QTC physician after the patient has been consulted, a treatment decision has been made and the patients and their families have decided to move forward. Insurance prior authorizations have been obtained for several patients already and we expect these patients to be biopsied over the coming months as and when full financial clearance is in place. We are happy to also report that demand for ZEVA skin continues to grow. The number of identified eligible patients at our QTCs who are motivated to initiate the treatment process has now more than doubled to approximately 30 patients, up from the 12 plus mentioned on the second quarter call. At the same time, the broader pool of potential ZEVA Skin candidates at non QTC referral sites continues to increase as our field force and promotional activities generate more zebra skin awareness in the marketplace and many of these referral sites have initiated patient referrals to the qualified treatment centers, which is exactly what we were hoping for. Regarding QTC activations, We are delighted that Children's Hospital Colorado is our newest ZEVA Skin qualified treatment center. Children's Hospital Colorado has an expert multidisciplinary team with years of EB experience and their commitment to onboarding Ziva Skin speaks to their belief in the benefits this therapy can bring to RDEV patients. Activation of Children's Colorado brings the number of Zebraskin qualified treatment centers to three. Alongside Lurie Children's Hospital of Chicago and Lucille Packard Children's Hospital Stanford.

UNKNOWN - (00:05:43)

We are.

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:05:43)

Also in active discussions with several EV centers across the US to strategically expand geographic footprint of ZEVA Skin even further. These centers are advancing through the various stages of site onboarding and will continue to announce new centers as they are activated. Finally, regarding market access, we have seen a steady cadence of positive coverage decisions from both national and regional commercial health plans in the six months since approval. Importantly, policies covering Ziva Skin have been published by all major commercial payers including UnitedHealthcare, Cigna, Aetna, Anthem and the majority of Blue Cross Blue Shield plans, all collectively covering more than 80% of all commercially insured lives. Now on the government payer front for Medicaid, we are happy to report that Ziva Skin now has received baseline coverage across all 51 state Medicaid programs in Puerto Rico effective October 1, 2025. Moreover, multiple state Medicaid programs have already published policies covering Ziva Skin, signaling that payers recognize the value Ziva Skin brings to their patients and the healthcare system. As another major highlight, CMS has established a permanent product, Jcore for Ziva Skin that will go into effect on January 1, 2026. We believe that this product code will simplify claims and reimbursement processing between our QTCs and all payer types and will further support hospital adoption for ZEVA Skin. In summary, we are very encouraged by the growing patient demand, patients actively progressing to toward treatment, continued growth of the QTC site network and a favorable market access landscape for Ziva Skin and we are looking forward to a strong start in 2026. With that, I'll now pass the call over to our Chief Financial Officer Joe Vazano to discuss our financial results. Joe.

Joe Vazano - Chief Financial Officer - (00:08:07)

Thanks Mahrav. I would like to remind everyone that you could find additional details on our financial results for the three and nine months ended September 30, 2025 in our most recent form. 10Q starting with our financial resources, we had cash, cash equivalents, restricted cash and short term investments totaling $207.5 million as of September 30, 2025. This robust cash position provides us with significant financial flexibility as we execute on the Zivaskin commercial launch. The current cash position, without accounting for anticipated revenue from Zivaskin, is expected to be sufficient to fund current and planned operations for over two years. Turning to the statements of operations, Research and Development, or R and D spending for the three months ended September 30, 2025 was $4.2 million compared to $8.9 million for the same period of 2024. This reduction was primarily due to costs capitalized into inventory and the reclassification of selected costs such as engineering runs and other production costs for to selling, general and administrative expense or SGA. Following Ziva Skin's FDA approval, SGA expense were $19.3 million for the three months ended September 30, 2025, compared to $6.4 million for the same period of 2024. This increase reflects the reclassification of RD expenses as noted, along with increased headcount and professional costs associated with the commercial launch of Zivaskin. Our net loss was $5.2 million for the third quarter of 2025, or negative $0.10 per basic and diluted common share compared to a Net loss of $30.3 million in the third quarter of 2024 or negative 0.63 cents per basic and diluted common share. In terms of upcoming investor relations activities, we plan to participate in the Stifel 2025 healthcare conference tomorrow. With that, I'll pass the call back to Vish for additional remarks before opening the call for Q and A. Thank you Joe.

Vish - Moderator - (00:10:42)

Turning briefly to our pipeline, we have two key updates. First, our gene therapy program for x linked retinoschesis ABO503 has been selected to participate in the FDA Rare Disease Endpoint Advancement RDEA Pilot program. This selection will provide opportunities for enhanced communication with the FDA to accelerate the development and validation of product specific novel efficacy endpoints for the program. Second, we have strengthened our management team with the appointment of Dr. James A. Gao as the Senior Vice President Head of Clinical Development and medical affairs. Dr. Gao brings over 20 years of industry experience and is a recognized expert in gene therapy, especially in ophthalmology, which will be valuable as we advance our pipeline. In closing, while the first patient treatment has shifted to the fourth quarter of 2025, we are encouraged by the doubling of identified patients. 10 product order forms, 12 product order forms, the expansion to a third QTC and the broad and rapid payer coverage across commercial and government plans. This progress underscores the high value proposition of Ziva Skin for the RDP community. With that I will now open the call for Q and A. Jenny, please open the Q and A session.

Jenny - (00:12:03)

Thank you very much. At this time we will be conducting our question and answer session. If you would like to ask a question please press star one on your phone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Mauri Rakarft of Jefferies Mori. Your line is live.

Amin - (00:12:40)

Hi, thank you for taking our questions. This is Amin on for Mori. A couple of questions from us. You mentioned receiving Zevskin product order from product order forms for 12 patients. What's the expected timeline for these patients to receive treatment at this point? And I have a follow up.

Vish - Moderator - (00:13:05)

Yeah, thank you for that question Amin. I'll request Madhav to take that one.

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:13:12)

Thanks Amin for the question. So these patients. As I mentioned, the product order form is the first step and after that there are insurance discussions that have been ongoing between the qualified centers and the Payers for many of these patients already we have a prior authorization. Some of them have already been scheduled for biopsy in November this year as well as in early part of 2026. So we expect that if all paperwork goes through administrative process in the coming months to treat these patients.

Amin - (00:13:51)

Okay, helpful. Thank you. So.

Vish - Moderator - (00:13:52)

Thanks Madhav. The only point I wanted to add there, I mean, is that as Madhav mentioned, these 12 patients are at various points in their journey to generalize how much time it will take for these 12 patients to come all the way through the funnel into a treatment. It's a hard thing to do at this point in time. But what we believe is as we start to treat patients, this is going to normalize. So metrics in terms of time taken from a ZPOF to various time points in the journey. We'll have better idea having been through that process for a bunch of patients which we should have in the first quarter of 2026. Okay, thanks.

Amin - (00:14:30)

And of the 12 ZEVA Skin product order forms, how many are from patients who refer to QTCs versus patients already being treated in these sites? And what's your timeline estimate for achieving profitability at this point? Is that bumped by a quarter based on the current delay? Yeah.

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:14:53)

On the topic of the first question. Yeah. For the first question, the vast majority are at the QTCs. I mean, and there are patient referrals that already have been initiated and those patients will go through the consult process as well. But for the 12 patients that we've talked about, the vast majority are homegrown. You know, the patients at the QTCs.

Amin - (00:15:17)

Yeah.

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:15:17)

And also, I mean to your second part question, which is how does it impact the time to profitability? We don't see a significant impact. I think in the past we've guided that in the first half of 2026 we should be a profitable business. And that continues to be our projection. So we do not see the first patient treatment shifting to quarter four, significantly impacting that time frame.

Amin - (00:15:44)

Thanks.

Jenny - (00:15:46)

Okay, thank you very much. Our next question is coming from Kristin Klutzke of Cantor Fitzgerald. Kristen, your line is live.

Rick - (00:15:55)

Hi, this is Rick on for Kristen. Thanks for taking our questions to start out. Are you still planning on shutting the plant down in December for the routine maintenance and if so, what's the timeline around reopening there?

Vish - Moderator - (00:16:11)

Yeah, thanks for that question and it's a great question. Yes, we do have a shutdown which starts approximately second week or mid December and takes about a month. Brian, you can add some color if I missed the timing or anything else to add there?

Brian Keaveney - (00:16:36)

No, that's accurate. Yeah. And this is really a mandated FDA requirement to have this type of shutdown at the end of the year for general maintenance and recalibrations of equipment. But yeah, mid December to early January is the current schedule for the shutdown.

Rick - (00:16:54)

Okay. And on the temporary pause while you were working on the optimization, were there any biopsies that were collected but not yet sent to manufacturing before the temporary pause reoptimization? And if so, will you be able to just sort of move into manufacturing with these or will you need to re biopsy any patients?

Brian Keaveney - (00:17:16)

Yeah, the answer is no. We paused on collecting any further biopsies when this happened. Not from any regulatory action or anything, but our own abundance of caution to avoid patients, you know, giving their biopsies. And especially until we solved this problem, we were not, we didn't know what exactly the problem was, how long it will take for us to resolve it. So we didn't take any chances there.

Rick - (00:17:51)

Okay, thank you.

Jenny - (00:17:53)

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

Josh - (00:18:06)

Hey, good morning. Thanks for taking a question. This is Josh on prestige. Is there maybe any color you can share related to the current lead time between receiving these Ziva skin product order forms following initial patient identification efforts? And do you anticipate this to maybe come down over time as patient demand continues to increase?

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:18:32)

Yeah, I can take that, Josh. So yes, we do expect this will reduce, decrease over a period of time. Like I mentioned earlier, some of these patients, even though the zpoffs we received a couple of months ago, they're already scheduled for biopsy collection starting next year and we have resumed biopsies already. So as more and more patients come through and the processes at the qualified centers and the payer policies, with payer policies coming through nicely, we expect this overall time to reduce. At this point, when we mentioned on our second quarter call, it's about three month process is what it takes from the time that you have a patient identified, consulted, prior from a clinical standpoint and any agreements that take place. And as more and more patients go through the queue, we should expect that process to come down and we'll guide more in terms of what we are seeing over a period of next quarter or so.

Vish - Moderator - (00:19:39)

Yeah, and the only other thing I would add there, Josh, is that the very first few patients at the time when their prior auth and letters of agreements were going through the policies were not published by some of these payers, they have come in more recently. So that's the basis why we believe that for the future patients coming through the funnel that time should reduce because the policy is already in place and we don't need exceptions for the patients.

Josh - (00:20:08)

Right.

Vish - Moderator - (00:20:09)

I'll just say that this is nothing new about Ziva Skin. Any cell and gene therapy that has launched goes through these kinds of process. And the centers that we are working with are super experienced about working with cell and gene therapies. So we've got a good team in place, we've got a good market access team on our side in place. And the receptivity that we're getting from insurance companies and the willingness for the payers to work with centers to expedite this process is there. So as more and more patients go through for a given payer, that time for agreements will also we expect that to come down.

Josh - (00:20:48)

Okay, appreciate the caller, thank you.

Ram Selvaraju - (00:20:52)

Thank you very much. Our next question is coming from Ram Selvaraju of HC Wainwright. Ram, your line is live. Thanks so much for taking my questions. Firstly, I was wondering if you could give us some additional granularity on what you expect the attrition rate, if any, to be among those patients for whom zpoffs have been received. Before you go through the entire biopsy cell graft engineering and subsequently administration of the graft, just give us a sense of those initial 12 patients. Just taking that number as an example, how many do you anticipate are going to go successfully through the entire treatment process?

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:21:42)

I would say it's a pretty high level of conversion ram for these patients because these are the patients that the physicians, obviously these are motivated patients, they want to move forward. Which is why we have the ZPOP already come through and insurance clearances and those processes, we are working through those. So we expect now with this release assay optimization also behind us, we expect as biopsies come through to be able to treat these patients. Of course these are engineered cell therapies that we are talking about. But our success rate has been from clinical trials perspective has been pretty high. So for those reasons we expect that these patients pretty high level of conversion rate now that we have these EPOPs already in place for these patients. And the fact that when we mentioned a little over a dozen patients identified at these QTCs, for us to get 12 ZPOFFs already shows that none of the patients that were identified, almost none of the patients that were identified early on actually said that. No, I'm not interested in getting cpop, I think that to me is a pretty, pretty strong metric. And as more patients get into this funnel and as patients get treated, you can already see the word of mouth and the data percolating, which only motivates additional patients to come through the process.

Vish - Moderator - (00:23:11)

And I just wanted to add one more color to that ram. If you look at the number of patients that have been identified just organically within the QTCs that Madhav mentioned has more than doubled to about 30 patients or so. We're not even adding the referred patients. So if you add that, the last call we had mentioned close to 50, and that number has gone way north. And we are not even talking about that right now. And in some ways, from that big pool of identified patients, the QTCs are acting as kind of gatekeepers and giving us the zpoffs because they also want to regulate how much they can treat. And these first 12 patients are earmarked as the highest priority. And so we do not anticipate attrition because for them it's not easy to get the slot either. So this is going to be just a matter of conversion.

Ram Selvaraju - (00:24:06)

Okay, that's very helpful. And then with respect to the prior authorization process or prior authorization protocol that you are seeing with respect to payers, can you maybe describe for us what that looks like? And I'm in particular interested in situations involving RDev patients with large chronic open wounds that have persisted for an extended period of time. What is the prior authorization requirement, if any, specifically in those types of patients? That's being mandated by payers at this time. Thank you.

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:24:40)

Yeah, so the prior auth process ram, essentially it's. I can break them into two steps. One is a clinical prior authorization and then the other is a financial discussion that takes place after a patient is clinically given a green signal from the insurance company. The prior auth most payers, especially for these type of therapies, tend to follow the inclusion exclusion criteria of the clinical trials. And then there are some payers who also cover it to the label. Right. So in terms of the requirements, it's often pretty straightforward. Make sure that the patient has recessive dystrophic eb, which means the genetic testing or confirmation of the mutation of the collagen 7A1 gene that they have recessive wounds. In our clinical trial, there were certain wound size requirements, but we are seeing most of the insurance companies now, for example, UnitedHealthcare covering to label, meaning no real requirement on the size of the wound for these patients. Some payers have age 6 years and above. But our FDA label is broader right from birth, so certain payers have those policies in place. But when you do have a payer that, let's say it's a five year old patient that requires a treatment, we are seeing that with the letter of medical necessity. You're able to overturn that because you're able to explain as to what the impact Ziva Skin is bringing. And we are successfully overturned those initial PA denials that typically happen. So that's the process that take place. And once you have that clearance, then the next step is the financial agreement between the payer and the qualified center.

Ram Selvaraju - (00:26:31)

And no meaningful step edits, correct?

Madhav Sadavantha Vadav - Chief Commercial Officer - (00:26:34)

No, we have not seen any step edits.

Ram Selvaraju - (00:26:40)

Thank you.

Jenny - (00:26:42)

Thank you very much. Just a reminder there, if you have any remaining questions, you can still join the queue by pressing star1 on your keypad. Now.

Jeff Jones - (00:26:51)

Our next question is coming from Jeff Jones of Oppenheimer. Jeff, your line is live. Good morning, guys, and thanks for taking the questions. Can you comment on of the 12 patients in process, how many have had. Their biopsies done today? And have any of those doses passed the revised sterility release criteria or with the new assay, rather.

Brian Keaveney - (00:27:18)

Vish, you want me to take that? Sure, yeah. I think as of this point we announced that we have resumed biopsy. Right. We have biopsied a patient where we're not guiding how many are going to be biopsied within the time window for this year versus how many will spill over. Because that's an ongoing process, hasn't settled down. So it's too early. We're going to be talking about that in our next quarterly call.

Jeff Jones - (00:27:45)

Okay. Can you remind us then in terms of revenue recognition from the time that you dose these patients, how long until revenue recognition?

Vish - Moderator - (00:28:00)

The revenue is recognized when the product is applied on the patient from an accounting standpoint. And obviously the cash flow has days to accounts payable. That's involved. That's different for different. You know, it's governed more by trade policies with each site. But for reporting purposes, the revenue is recognized by the day of administration.

Jeff Jones - (00:28:24)

Great. Appreciate it, guys. Thank you.

James Malloy - (00:28:28)

Thank you very much. Our next question is coming from James Malloy of Alliance Global Partners. James, your line is live. Hi, guys. Thank you for taking our questions.

Matt - (00:28:39)

Matt on for Jim today, just one from us. Of the 30 patients that are slated to receive Zeviscan, how many are on. Background by Juvec currently or have failed by Juvec?

Vish - Moderator - (00:28:53)

We don't have visibility into that, Matt. We would never have visibility into that. But we Expect vast majority would be on by Jovec and or on Vilsuvet because that's what we hear from the patient community that these patients require there's a met need for multiple treatment options. We hear that from patients as well as from physicians across the board. So we would expect those patients and from an access standpoint that only helps us. Right, because these patients have their copies of genetic records and other letters and background already in place so that physicians can provide that information to the payer because they have received prior other gene therapies but we don't know the actual exact count.

Matt - (00:29:45)

Got it. Thank you guys for taking our question.

David Bouts - (00:29:49)

Thank you very much. And our next question is coming from David Bouts of Zachs small cap research. David, your line is live. Hey, good morning everyone. Just one for me this morning. So UMass was a center in the phase three study and of course noticed that they are not signed up as a QTC yet. I'm curious if there's any holdup there or why they are not listed as a QTC or drive inside on yet.

Vish - Moderator - (00:30:19)

Yeah, I can take that question. Good morning David. Different sites have different reasons. I don't want to call out specific reasons. Specific sites. Sometimes sites would intend to onboard and activate with us, but there could be financial constraints on how the site is. Sometimes the types of trade policies that we're willing to accept may not be footing within their framework. Right. So there's multiple different reasons why a given site may not be onboarded yet with us as a Ziva skin site. But we're not going to be discussing specific sites hurdle on why they haven't been activated despite the fact that they've got experience with handling Xevoskin. I hope that gives some color to the types of reasons. Yeah, actually that's great.

David Bouts - (00:31:16)

I appreciate it.

Jenny - (00:31:18)

Thank you very much. Well, we appear to have reached the end of our question and answer session so I will now like to turn the call back over to Vish for closing comments.

Vish - Moderator - (00:31:31)

Thank you very much Jenny and I really appreciate everyone joining us today for the call and we look forward to talking to you soon. Bye bye.

OPERATOR - (00:31:41)

Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation. Goodbye.