ABEONA THERAPEUTICS INC. Q1 FY2022 earnings call

• Strategic re-prioritization: Divested MPS programs (ABO-102 and ABO-101), focusing resources on EB-101's Phase III VIITAL study. Completed accrual for VIITAL, expecting top-line results in late 2022 for potential BLA filing.
• EB-101 Phase I/II results: Long-term follow-up data shows instantaneous wound healing and pain reduction in RDEB patients, with results to be presented at SID Annual Meeting.
• Pre-clinical eye programs: AAV204 data from ARVO 2022 shows robust transduction in primates via para-retinal administration, with animal proof of concept data expected mid-2022.
• Financials: Cash, cash equivalents, restricted cash, and short-term investments totaled $37.2 million as of March 31, 2022, with estimated cash runway extending to Q2 2023.

License and other revenues for Q1 2022 were $0.3 million (compared to $0 in Q1 2021), consisting mainly of deferred revenues from grants for AB-102 and AB-101 development programs. Research and development expenses were $10.5 million in Q1 2022 (vs. $8.3 million in Q1 2021). General and administrative expenses were $4.2 million in Q1 2022 (vs. $6.3 million in Q1 2021). Net loss was $20.8 million in Q1 2022, including $6.2 million in non-cash impairment charges from disposing of AB-102 and AB-101 programs.

• Projected cash runway extends into Q2 2023 due to portfolio re-prioritization.
• Anticipate top-line results of VIITAL study in late 2022, which could support BLA filing.
• Actively exploring partnerships for commercialization of EB-101.

• Factors from the company’s 10-K and periodic reports that could cause actual results to differ from forward-looking statements, including those related to clinical trial outcomes, partnership negotiations, and NASDAQ listing compliance requirements.

Q: Hi, good morning. Congrats on the updates today, and thanks for taking my questions, and also thank you for the details from the RDEB Phase III study. I guess for the 14 non-randomized wounds treated, is it fair to say that those were particularly large wounds, and can you talk more about how the treatment worked for those wounds and also talk about your total RDEB data and how that’s going to fit into the BLA filing and the argument around the BLA.

A: Thank you Maury. As always, a pleasure talking to you. Thanks for the questions. Your first question was about the 14 non-randomized wounds, and the 14 non-randomized wounds, just for avoidance of doubt, will not be part of the primary data set for our efficacy end points. The reason they are non-randomized is mostly inability to find an appropriate control wound, so we have the sheet created so the patient benefits by treating and that’s pretty much the goal of treatment. We will obviously report the results for those wounds in terms of wound healing and pain scoring and such end points., so that’s something about the trial. The 43 randomized wounds that I mentioned first, those are the primary analysis data set. Now, your second question was about how the treatment relates to the BLA filing. As we announced on March 31 that first quarter we completed treating the last patient who went into VIITAL, and as you know, it’s a six-month data point, so from March through September is our follow-up. Our team is diligently cleaning data real time so there is not a back end lag after database lock in order to report the results, so we feel fairly confident that’s why the end of quarter two, we should have those clinical results. Regarding the BLA filing, our first goal is to get to the clinical results of the study in a very cost efficient way, so we are certainly stage gating capital intensive BLA preparations work after the study reads out so we are careful with the finite resources that we have today. In the base case scenario if we do that, we’re going to look at quarter two - earlier we had, I think, communicated a quarter one, but it will be a quarter two filing of the BLA in 2023. Now that said, there is a scenario, an upside scenario where we may be able to accelerate that if we have a source of non-dilutive funding mainly from a partnership for commercialization, and if such partnership happens prior to the study readout itself, then we may be able to trigger some of these BLA preparation activities early on. I hope I answered your questions, Maury. If I missed something, please do reiterate.

Q: Good morning, this is Rick on for Kristen. Thank you for taking our question. We just have one for you here - it’s about the ARVO poster. Could you talk a little bit about the AIM platform vector in para-retinal delivery? Is there anything you can say about how the AIM capsid used is optimized for para-retinal delivery, and is your plan to go forward with para-retinal delivery for the other undisclosed ophthalmic indications? Thanks.

A: Thank you for the question. I’m going to request Brian Kevany, our Head of Research to take this one. Brian Kevany: Certainly. The AAV tool for capsid was originally identified as being a potential candidate for intravitreal administration for its ability to enter the retina after an intravitreal injection. There was a paper published last year or two years ago from Dr. Paul Sieving’s group at the NIH that demonstrated the ability of capsids to enter the retina after this so-called para-retinal injection. This is a modified intravitreal injection where the virus is layered on top of the retina beyond the vitreous but does not cause a retinal detachment, thus representing a potentially safer and less invasive method for administration. Yes, there are several indications from our undisclosed eye programs where we are intending to try and leverage AAV-204 via para-retinal administration to use for those indications.

Q: Thanks for taking the follow-up. Just wanted to ask a question about the Ultragenyx deal too. Wondering if there is any upfront, and then for manufacturing at commercial scale, is that going to be a tech transfer of AAV9 or how is that going to work?

A: Yes, thank you, Maury, for that question. The short answer to your first question, is there any upfront payment, is no, but I want to put context for that answer, which is our goal, our primary goal for Abeona is twofold. One is have a partner take over all responsibility for further development as you can appreciate clinical development as well as CMC are pretty capital intensive, and we wanted to reduce our operating expenses, so that was our first goal while still retaining our value from the program in the back end. That’s secured through the terms of the agreement that were disclosed. Secondly, our goal is towards the stakeholders, patients and the community in MPS. We wanted to make sure that a partner is able to most aggressively develop this product and bring it to patients as early as possible. I hope that gives you some context behind the timing of the deal and the terms.

Q: Maybe just last one on MPS IIIB, is it possible that you could end up out-licensing that program at some point as well?

A: It’s very premature to comment on that, Maury, only because the follow-up for the study is very early and we did not have the resources to have a lot of items in our portfolio, so we had to de-prioritize that. We have turned the license rights for that program over to NCH, so if the data looks promising at a later date, hopefully there is future development prospects for that asset for MPS IIIB.