Abeona Therapeutics Announces $50 Million Credit Facility

Rhea-AI Summary

Abeona Therapeutics Inc. (Nasdaq: ABEO) has secured a $50 million credit facility with Avenue Venture Opportunities Fund, L.P. to support the launch and commercialization of pz-cel, an investigational treatment for patients with recessive dystrophic epidermolysis bullosa. The FDA has granted Priority Review with a PDUFA target action date of May 25, 2024 for the Biologics License Application for pz-cel.

Financial Analyst

The provision of a $50 million credit facility to Abeona Therapeutics by the Avenue Venture Opportunities Fund represents a strategic financial maneuver aimed at bolstering the company's liquidity as it approaches a critical juncture in its product pipeline. The credit agreement's structure, with its staggered tranches and accordion feature, provides Abeona with both immediate and contingent capital that aligns with the company's anticipated capital needs, presuming successful commercialization of its lead product, pz-cel.

From a financial perspective, this facility may serve to reassure investors about the company's ability to fund its operations in the near term without resorting to dilutive equity financing. The option to upsize the credit facility by an additional $20 million offers flexibility and can be interpreted as a vote of confidence by the lender in Abeona's prospects, contingent on the achievement of certain milestones.

However, it's important to scrutinize the terms of the debt, such as interest rates and covenants, which are not disclosed in the brief. These terms could have significant implications for the company's financial health, especially if commercialization efforts encounter delays or if the product does not achieve expected market penetration.

Medical Research Analyst

The anticipation of FDA approval for Abeona's pz-cel, an investigational therapy for recessive dystrophic epidermolysis bullosa (RDEB), underpins the company's current strategic financial decisions. RDEB is a rare, debilitating genetic disorder characterized by the fragility of skin, leading to blisters and erosions from minor friction or trauma. The Priority Review designation by the FDA indicates that pz-cel could offer significant improvements over existing therapies for this condition, if approved.

Given the orphan drug status often granted to treatments for rare diseases like RDEB, Abeona could benefit from incentives such as market exclusivity, which would enhance the commercial viability of pz-cel. Nevertheless, the actual impact on the market will depend on the drug's efficacy, safety profile and the competitive landscape, which includes emerging gene therapies and symptomatic treatments.

The success of pz-cel will be pivotal for Abeona, as it could transform the company from a research-focused entity into a commercial player in the biotech industry. This transition will require significant investment in manufacturing, marketing and distribution capabilities, which the credit facility is intended to support.

Market Research Analyst

The credit facility secured by Abeona Therapeutics is indicative of a proactive approach to ensuring sufficient capital for the launch and commercialization of its lead product. The timing of this financial move is particularly noteworthy, as it precedes the PDUFA target action date for pz-cel, which is a critical event that could significantly affect the company's stock performance.

Investors often closely monitor such financial arrangements as they can provide insights into a company's risk management and preparedness for future business challenges. In the biotechnology sector, where product launches are capital-intensive and fraught with risk, the ability to secure non-dilutive financing is often viewed favorably.

However, the broader market impact will largely hinge on the FDA's decision and the subsequent commercial performance of pz-cel. The potential approval and successful launch could serve as a catalyst for positive sentiment among investors, while failure to gain approval or achieve market traction could expose the company to financial strain, given its increased debt obligations.

CLEVELAND, Jan. 08, 2024 (GLOBE NEWSWIRE) -- Abeona Therapeutics Inc. (Nasdaq: ABEO) today announced that it has entered into a $50 million credit facility with the Avenue Venture Opportunities Fund, L.P. The credit agreement, which has a term of three and a half years, includes a first tranche of $20 million at closing, a second tranche of $10 million of committed capital, and an additional accordion option to upsize the credit facility by an additional $20 million upon satisfaction of certain terms and conditions.

Proceeds from the facility are intended to support the Company’s ongoing preparations for launch and commercialization in anticipation of a potential approval for marketing in the U.S. by the Food and Drug Administration (FDA) of pz-cel (prademagene zamikeracel), Abeona’s investigational autologous, COL7A1 gene-corrected epidermal sheets for the treatment of patients with recessive dystrophic epidermolysis bullosa (RDEB), and for general corporate purposes. The FDA has accepted and granted Priority Review with a PDUFA target action date of May 25, 2024 for the Biologics License Application for pz-cel.

“We are excited to enter into this relationship with Avenue Venture Fund and secure additional financial resources to further support our launch and commercialization efforts for pz-cel,” said Joe Vazzano, Chief Financial Officer of Abeona. “We expect the proceeds from this term loan facility will meaningfully extend Abeona’s cash runway even further beyond value creating milestones, including the potential approval of pz-cel.”

A.G.P./Alliance Global Partners served as financial advisor and sole lead arranger to the Company on this transaction.

About Avenue Venture Opportunities
The Avenue Venture Debt Fund seeks to provide creative financing solutions to high-growth, venture capital-backed technology and life science companies. The Avenue Venture Debt Opportunities Fund focuses generally on companies within the underserved segment of the market created by the widening financing gap between commercial banks and larger debt funds. The Avenue Venture Debt fund is part of the larger group of funds of Avenue Capital Group. For additional information on Avenue Capital Group, which is a global investment firm with assets estimated to be approximately $12.6 billion as of November 30, 2023, visit www.avenuecapital.com.

About Abeona Therapeutics
Abeona Therapeutics Inc. is a clinical-stage biopharmaceutical company developing cell and gene therapies for serious diseases. The U.S. FDA has accepted and granted Priority Review with a PDUFA target action date of May 25, 2024 for the Biologics License Application for pz-cel (prademagene zamikeracel), Abeona’s investigational autologous, COL7A1 gene-corrected epidermal sheets currently in development for recessive dystrophic epidermolysis bullosa. The Company’s fully integrated cell and gene therapy cGMP manufacturing facility served as the manufacturing site for pz-cel used in its Phase 3 VIITAL™ trial, and is capable of supporting commercial production of pz-cel upon FDA approval. The Company’s development portfolio also features AAV-based gene therapies for ophthalmic diseases with high unmet medical need. Abeona’s novel, next-generation AAV capsids are being evaluated to improve tropism profiles for a variety of devastating diseases. For more information, visit www.abeonatherapeutics.com.

Forward-Looking Statements
This press release contains certain statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and that involve risks and uncertainties. We have attempted to identify forward-looking statements by such terminology as “may,” “will,” “believe,” “anticipate,” “expect,” “intend,” “potential,” and similar words and expressions (as well as other words or expressions referencing future events, conditions or circumstances), which constitute and are intended to identify forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, numerous risks and uncertainties, including but not limited to, the timing and outcome of our Biologics License Application submission to the FDA for pz-cel; the FDA’s grant of a Priority Review Voucher; continued interest in our rare disease portfolio; our ability to enroll patients in clinical trials; the outcome of future meetings with the FDA or other regulatory agencies, including those relating to preclinical programs; the ability to achieve or obtain necessary regulatory approvals; the impact of any changes in the financial markets and global economic conditions; risks associated with data analysis and reporting; and other risks disclosed in the Company’s most recent Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to revise the forward-looking statements or to update them to reflect events or circumstances occurring after the date of this press release, whether as a result of new information, future developments or otherwise, except as required by the federal securities laws.

What is the recent announcement from Abeona Therapeutics Inc. (Nasdaq: ABEO)?

Abeona Therapeutics Inc. (Nasdaq: ABEO) has entered into a $50 million credit facility with Avenue Venture Opportunities Fund, L.P. to support the launch and commercialization of pz-cel, an investigational treatment for patients with recessive dystrophic epidermolysis bullosa.

What is the FDA's involvement in the announcement?

The FDA has granted Priority Review with a PDUFA target action date of May 25, 2024 for the Biologics License Application for pz-cel.

Who served as the financial advisor and sole lead arranger to Abeona Therapeutics Inc. in this transaction?

A.G.P./Alliance Global Partners served as financial advisor and sole lead arranger to the Company on this transaction.