Abeona Therapeutics Reports First Quarter 2024 Financial Results and Recent Corporate Progress

Rhea-AI Summary

Abeona Therapeutics (Nasdaq: ABEO) reported financial results for Q1 2024 and recent corporate progress. A significant highlight is the recent $75 million underwritten securities offering, extending the cash runway into 2026.

In April 2024, the FDA issued a Complete Response Letter (CRL) for their BLA for prademagene zamikeracel (pz-cel) for RDEB, citing the need for additional CMC information. However, no deficiencies were noted in clinical efficacy or safety data. The resubmission of the BLA is expected in the second half of 2024.

Financially, Abeona reported a net loss of $31.6 million for Q1 2024, an increase from $9.1 million in Q1 2023. R&D expenses decreased slightly while G&A expenses increased compared to the same period last year. Cash and equivalents totaled $62.7 million as of March 31, 2024.

Positive

• $75 million underwritten securities offering closed in May 2024.
• Cash runway extended into 2026.
• No clinical efficacy or safety data deficiencies noted by the FDA for pz-cel.
• New long-term safety data for pz-cel accepted for presentation at SID Annual Meeting.

Negative

• Received a Complete Response Letter (CRL) from the FDA requiring additional CMC information for pz-cel.
• Net loss of $31.6 million for Q1 2024, compared to $9.1 million in Q1 2023.
• Increased G&A expenses of $7.1 million in Q1 2024, up from $4.0 million in Q1 2023.
• Cash used in operating activities was $14.5 million for Q1 2024.

Financial Analyst

The recent financial results of Abeona Therapeutics indicate both strengths and areas of concern for investors. The closing of a $75 million underwritten offering is a significant positive, as it extends the company’s cash runway into 2026. This offers a substantial cushion, ensuring operational stability and reducing liquidity risks for the next few years.

However, the financial statements for Q1 2024 reveal a net loss of $31.6 million, a stark increase from the $9.1 million net loss in the same period last year. This substantial loss is partly attributed to changes in the fair value of warrant liabilities, which is a non-cash item but still reflects on profitability challenges.

Moreover, research and development expenses have slightly decreased, which could signal cost management efforts or delays in pipeline progression. General and administrative expenses have increased significantly, suggesting potential scaling efforts in preparation for a commercial launch, but also pointing towards increased overheads.

Overall, Abeona shows promise with extended cash resources and focused regulatory efforts. However, investors should monitor ongoing losses and the company’s ability to manage operational expenses efficiently.

Medical Research Analyst

The FDA’s Complete Response Letter (CRL) for Abeona’s Biologics License Application (BLA) for prademagene zamikeracel (pz-cel) highlights key hurdles in the approval process. While the CRL did not indicate deficiencies in clinical efficacy or safety, the requirement for additional Chemistry, Manufacturing and Controls (CMC) information is a critical step that needs to be addressed.

The company’s plan to resubmit the BLA in the second half of 2024 is promising, but the timelines could be delayed if the additional CMC information is not satisfactorily resolved. It is worth noting that no new clinical trials or data were requested, which means that the company can focus resources on addressing manufacturing and validation issues.

Long-term safety data with up to 11 years of follow-up is a strong positive, potentially supporting the product's market acceptance post-approval. The company's proactive engagement with the FDA and commercial preparations show a strategic approach towards eventual market entry.

Market Research Analyst

Abeona's commercial preparations for pz-cel indicate readiness to enter the market upon approval. The company's efforts to engage with epidermolysis bullosa treatment sites and build a robust supply chain reflect a comprehensive strategy. These steps are important to ensure a smooth transition into a commercial-stage company and capture market share swiftly upon approval.

However, the competitive landscape in the gene therapy space for rare diseases is evolving. Investors should watch for potential competitors and the market's reception to long-term safety data, which could influence pz-cel's adoption rate.

Additionally, the extension of the cash runway into 2026, considering no revenue from pz-cel until approval, puts Abeona in a strong position to execute its commercial strategy without immediate financial pressure.

BLA resubmission anticipated in second half of 2024

Closed $75 million underwritten offering in May, extending expected cash runway into 2026

CLEVELAND, May 15, 2024 (GLOBE NEWSWIRE) -- Abeona Therapeutics Inc. (Nasdaq: ABEO) today reported financial results for the first quarter of 2024 and recent corporate progress.

“We are grateful to our existing as well as new investors who have demonstrated their support through the recent financing, which has extended our cash runway into 2026, well beyond anticipated regulatory milestones,” said Vish Seshadri, Chief Executive Officer of Abeona. “We now remain focused on working with the FDA to address the CMC deficiencies noted in the CRL and making the BLA resubmission to bring pz-cel to RDEB patients as soon as possible.”

First Quarter and Recent Progress

Corporate highlights

• On May 7, 2024, Abeona closed a $75 million underwritten securities offering with participation from both new and existing investors.
• In January 2024, Abeona entered into a $50 million credit facility and received the first tranche of $20 million.

Pz-cel for RDEB

• In April 2024, Abeona received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding the Company's Biologics License Application (BLA) for prademagene zamikeracel (pz-cel) for recessive dystrophic epidermolysis bullosa (RDEB), based on the need for additional Chemistry Manufacturing and Controls (CMC) information. In the CRL, the FDA noted that certain additional information needed to satisfy CMC requirements must be resolved before the application can be approved. The information needed to satisfy the CMC requests in the CRL pertains to validation requirements for certain manufacturing and release testing methods. The CRL did not identify any deficiencies related to the clinical efficacy or clinical safety data in the BLA, and the FDA did not request any new clinical trials or clinical data to support the approval of pz-cel. The Company anticipates completing the BLA resubmission in the second half of 2024.
• New pz-cel long-term safety data with up to 11 years of follow-up has been accepted as a late-breaking presentation at the Society for Investigative Dermatology (SID) Annual Meeting, being held on May 15-18, 2024.

U.S. commercial launch preparations for pz-cel

• Abeona continues to advance key commercial activities in preparation for a potential U.S. launch for pz-cel, including onboarding discussions with epidermolysis bullosa treatment sites, conducting medical and payer engagement, as well as building supply chain and enterprise capabilities to support the Company’s transition to a commercial stage company.

First Quarter Financial Results and Cash Runway Guidance

Cash, cash equivalents, restricted cash and short-term investments totaled $62.7 million as of March 31, 2024, compared to $52.6 million as of December 31, 2023. Net cash used in operating activities was $14.5 million for the three months ended March 31, 2024.

Abeona estimates that its current cash and cash equivalents, restricted cash and short-term investments, as well as the credit facility, combined with the net proceeds from the underwritten securities offering, are sufficient resources to fund operations into 2026, before accounting for any potential revenue from commercial sales of pz-cel, if approved, or proceeds from the sale of a Priority Review Voucher or PRV, if awarded by the FDA.

Research and development expenses for the three months ended March 31, 2024 were $7.2 million, compared to $8.0 million for the same period of 2023. General and administrative expenses were $7.1 million for the three months ended March 31, 2024, compared to $4.0 million for the same period of 2023. Net loss was $31.6 million for the first quarter of 2024, or $1.16 loss per common share, including a change in the fair value of warrant liabilities due to remeasurement of the Company’s issued stock purchase warrants. Net loss in the first quarter of 2023 was $9.1 million, or $0.54 loss per common share.

Conference Call Details

The Company will host a conference call and webcast on Wednesday, May 15, 2024, at 8:30 a.m. ET, to discuss the first quarter results. To access the call, dial 888-506-0062 (U.S. toll-free) or 973-528-0011 (international) and Entry Code: 496484 five minutes prior to the start of the call. A live, listen-only webcast and archived replay of the call can be accessed on the Investors & Media section of Abeona’s website at https://investors.abeonatherapeutics.com/events. The archived webcast replay will be available for 30 days following the call.

About Abeona Therapeutics
Abeona Therapeutics Inc. is a clinical-stage biopharmaceutical company developing cell and gene therapies for serious diseases. Prademagene zamikeracel (pz-cel) is 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 results of ongoing testing and other corrective actions being performed in response to the FDA’s identified deficiencies, which could delay the Company’s BLA resubmission; the timing and outcome of the FDA’s review of our resubmission; the FDA’s grant of a Priority Review Voucher upon approval; 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.

ABEONA THERAPEUTICS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share amounts) (Unaudited)
	For the three months ended March 31,
	2024				2023
Revenues:
License and other revenues	$	—			$	—
Expenses:
Research and development		7,207				8,041
General and administrative		7,123				3,997
Total expenses		14,330				12,038
Loss from operations		(14,330	)			(12,038	)
Interest income		843				364
Interest expense		(952	)			(101	)
Change in fair value of warrant and derivative liabilities		(17,301	)			2,265
Other income (expense)		162				403
Net loss	$	(31,578	)		$	(9,107	)
Basic and diluted loss per common share	$	(1.16	)		$	(0.54	)
Weighted average number of common shares outstanding – basic and diluted		27,315,537				16,904,024
Other comprehensive income (loss):
Change in unrealized gains (losses) related to available-for-sale debt securities		(118	)			64
Comprehensive loss	$	(31,696	)		$	(9,043	)

ABEONA THERAPEUTICS INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited)
	March 31, 2024				December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	17,558			$	14,473
Short-term investments		44,786				37,753
Restricted cash		338				338
Other receivables		2,232				2,444
Prepaid expenses and other current assets		1,811				729
Total current assets		66,725				55,737
Property and equipment, net		3,767				3,533
Operating lease right-of-use assets		4,222				4,455
Other assets		114				277
Total assets	$	74,828			$	64,002
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	3,362			$	1,858
Accrued expenses		2,791				5,985
Current portion of operating lease liability		1,044				998
Current portion payable to licensor		4,691				4,580
Other current liabilities		1				1
Total current liabilities		11,889				13,422
Long-term operating lease liabilities		4,046				4,402
Long-term debt		18,079				—
Derivative liabilities		1,005				—
Warrant liabilities		48,690				31,352
Total liabilities		83,709				49,176
Commitments and contingencies
Stockholders' (deficit) equity:
Preferred stock - $0.01 par value; authorized 2,000,000 shares; No shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		—				—
Common stock - $0.01 par value; authorized 200,000,000 shares; 27,550,693 and 26,523,878 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		276				265
Additional paid-in capital		772,129				764,151
Accumulated deficit		(781,102	)			(749,524	)
Accumulated other comprehensive loss		(184	)			(66	)
Total stockholders' (deficit) equity		(8,881	)			14,826
Total liabilities and stockholders' (deficit) equity	$	74,828			$	64,002

FAQ

What were Abeona Therapeutics' financial results for Q1 2024?

Abeona Therapeutics reported a net loss of $31.6 million for Q1 2024. Cash and equivalents totaled $62.7 million as of March 31, 2024.

What is the current cash runway for Abeona Therapeutics?

Following a $75 million securities offering, Abeona Therapeutics' cash runway is extended into 2026.

What was the FDA's feedback on Abeona's BLA for pz-cel?

The FDA issued a Complete Response Letter (CRL) requiring additional CMC information but found no deficiencies in clinical efficacy or safety data.

When does Abeona plan to resubmit the BLA for pz-cel?

Abeona plans to resubmit the BLA for pz-cel in the second half of 2024.

How did Abeona's R&D and G&A expenses change in Q1 2024 compared to Q1 2023?

R&D expenses slightly decreased to $7.2 million from $8.0 million, while G&A expenses increased to $7.1 million from $4.0 million.