Full Year 2025 Abeona Therapeutics Inc Earnings Call and Business Update

March 17, 2026

Operator: Good morning, everyone, and welcome to the Abeona Therapeutics Full Year 2025 Results Conference Call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during this conference, please press star zero on your phone keypad. Please note this conference is being recorded. During this call, we will refer to the press release issued this morning announcing the financial results, which is available on our corporate website at www.abeonatherapeutics.com. We anticipate making projections and forward-looking statements during today's call, which are made pursuant to the safe harbor provisions of the Federal Securities Law. These forward-looking statements are based on current expectations and are subject to change.

Speaker #2: If anyone should require operator assistance during this conference, please press star zero on your phone keypad. Please note this conference is being recorded. During this call, we will refer to the press release issued this morning announcing the financial results, which is available on our corporate website at www.abeonatherapeutics.com.

Speaker #2: We anticipate making projections and forward-looking statements during today's call, which are made pursuant to the Safe Harbor provisions of the Federal Securities Law. These forward-looking statements are based on current expectations and are subject to change.

Speaker #2: Actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those outlined in our Form 10-K and periodic reports filed with the Securities and Exchange Commission.

Operator: Actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including but not limited to those outlined in our Form 10-K and periodic reports filed with the Securities and Exchange Commission. These documents are available on our website at www.abeonatherapeutics.com. Joining us on today's call with prepared remarks are Dr. Vish Seshadri, Chief Executive Officer, and Dr. Madhav Vasanthavada, Chief Commercial Officer, Joe Vazzano, Chief Financial Officer, and Brian Kevany, Chief Technical Officer. After the prepared remarks, we will conduct a question and answer session. With that, I will now turn the call over to Vish Seshadri to lead us off. Vish, over to you.

Speaker #2: These documents are available on our website at www.abeonatherapeutics.com. Joining us on today's call with prepared remarks are Dr. Vishwas Seshadri, Chief Executive Officer, and Dr. Madhav Vasanthavada, Chief Commercial Officer.

Speaker #2: Joe Vazzano, Chief Financial Officer, and Brian Kevany, Chief Technical Officer. After the prepared remarks, we will conduct a question-and-answer session. So with that, I will now turn the call over to Vishwas Seshadri to lead us off.

Speaker #2: Vishwas, over to you. Thank you, Jenny, and good morning, everyone. We continue to see growing patient demand for ZivaSkin, the first and only autologous cell-based gene therapy for the treatment of adults and pediatric patients with recessive dystrophic epidermolysis bullosa, or RDEB.

Vish Seshadri: Thank you, Jenny, and good morning, everyone. We continue to see growing patient demand for ZEVASKYN, the first and only autologous cell-based gene therapy for the treatment of adults and pediatric patients with recessive dystrophic epidermolysis bullosa or RDEB. As a reminder, ZEVASKYN was approved in April 2025, but our launch was delayed to Q4 2025 as we optimized a sterility test that was required for product release. Treating our first commercial patient this past December was a significant milestone for Abeona, 2026 is where the launch execution ramps up. We aren't just looking at one-off successes anymore. We're focused on building a consistent cadence of biopsies, product delivery, and treatments.

Speaker #2: As a reminder, ZivaSkin was approved in April 2025, but our launch was delayed to Q4 2025, as we optimized a sterility test that was required for product release.

Speaker #2: Treating our first commercial patient this past December was a significant milestone for ABEONA, but 2026 is where the launch execution ramps up. We aren't just looking at one-off successes anymore.

Speaker #2: We're focused on building a consistent cadence of biopsies, product delivery, and treatments. Since resuming manufacturing in late January, after our annual shutdown, we've treated one patient this quarter, biopsied three additional patients with treatments scheduled over the coming weeks, and expect to perform additional biopsies this month.

Vish Seshadri: Since resuming manufacturing in late January after our annual shutdown, we've treated one patient this quarter, biopsied three additional patients with treatments scheduled over the coming weeks, and expect to perform additional biopsies this month. All patient treatments and biopsies performed to date have come from the first two of our four qualified treatment centers, Ann & Robert H. Lurie Children's Hospital of Chicago and Lucile Packard Children's Hospital at Stanford. As our third and fourth QTCs, which are Children's Hospital of Colorado and UTMB at Galveston, Texas, also begin to schedule their patients into upcoming biopsy slots, we anticipate a healthy cadence of patient biopsies in the coming months. This momentum provides Abeona the opportunity to demonstrate that the operational machine behind ZEVASKYN works at scale from initial biopsy through final delivery.

Speaker #2: All patient treatments and biopsies performed to date have come from the first two of our four qualified treatment centers: Lurie Children's Hospital in Chicago and Lucille Packard Children's Hospital at Stanford.

Speaker #2: As our third and fourth QTCs, which are Children's Hospital of Colorado and UTMB at Galveston, Texas, also begin to schedule their patients into upcoming biopsy slots, we anticipate a healthy cadence of patient biopsies in the coming months.

Speaker #2: This momentum provides ABEONA the opportunity to demonstrate that the operational machine behind ZivaSkin works at scale from initial biopsy through final delivery. At the same time, we are hyper-focused on ensuring a seamless experience for every patient in the ZivaSkin treatment journey, and we are building a foundation of operational excellence that resonates with this close-knit RDEB community.

Vish Seshadri: At the same time, we are hyper-focused on ensuring a seamless experience for every patient in the ZEVASKYN treatment journey, and we are building a foundation of operational excellence that resonates with this close-knit RDEB community. We recognize that in this patient-driven market, providing a smooth journey is the most effective way to catalyze the organic demand needed to scale ZEVASKYN in 2026 and beyond. To further elaborate on how our launch is gathering momentum, I'll now hand the call to our Chief Commercial Officer, Dr. Madhav Vasanthavada, to review the commercial update. Madhav?

Speaker #2: We recognize that in this patient-driven market, providing a smooth journey is a most effective way to catalyze the organic demand needed to scale ZivaSkin in 2026 and beyond.

Speaker #2: To further elaborate on how our launch is gathering momentum, I'll now hand the call to our Chief Commercial Officer, Dr. Madhav Vasanthavada, to review the commercial update.

Speaker #2: Madhav?

Speaker #3: Thank you, Vishwas, and hello, everyone. Demand for ZivaSkin continues to grow. We previously had reported that nearly 50 potentially eligible patients were identified across our initial qualified treatment centers and community-based physicians.

Madhav Vasanthavada: Thank you, Vish, and hello, everyone. Demand for ZEVASKYN continues to grow. We previously had reported that nearly 50 potentially eligible patients were identified across our initial qualified treatment centers and community-based physicians. Starting this year, we have deployed a field team that has been engaging with community physicians, and the number of identified eligible ZEVASKYN patients has now grown to more than 100. While demand continues to grow, the speed at which identified patients receive ZEVASKYN treatment has significantly varied during these initial months of launch, but the momentum is picking up. Since our launch in Q4 2025, 2 patients have been treated with ZEVASKYN. 3 additional patients have been biopsied for treatment over the coming weeks, and we expect to biopsy additional patients this month.

Speaker #3: Starting this year, we have deployed a field team that has been engaging with community physicians, and the number of identified eligible ZivaSkin patients has now grown to more than 100.

Speaker #3: While demand continues to grow, the speed at which identified patients receive ZivaSkin treatment has significantly varied during these initial months of launch, but the momentum is picking up.

Speaker #3: Since our launch in Q4 2025, two patients have been treated with ZivaSkin, three additional patients have been biopsied for treatment over the coming weeks, and we expect to biopsy additional patients this month.

Speaker #3: Currently, we also know of at least 10 more patients who are advancing through the administrative process and targeting a second quarter, 2026, biopsy. As Vishwas mentioned, the patient treatments and biopsies until now have all come from the first two QTCs that were activated in the middle of last year.

Madhav Vasanthavada: Currently, we also know of at least 10 more patients who are advancing through the administrative process and targeting a Q2 2026 biopsy. Vish mentioned, the patient treatments and biopsies until now have all come from the first two QTCs that were activated in the middle of last year. While it has taken a long time to move the very first patients through the funnel to treatment, we have not seen patient attrition during this process, and no payers so far have denied insurance coverage for ZEVASKYN, reflecting the strong value ZEVASKYN offers to this patient community. As QTCs and payers treat more patients and gain experience with the overall process, we expect the speed of patient treatment to go faster. Additionally, as the remaining two QTCs treat patients, we anticipate that the number of ZEVASKYN treatments will grow in the coming quarters.

Speaker #3: While it has taken a long time to move the very first patients through the funnel to treatment, we have not seen patient attrition during this process, and no payers so far have denied insurance coverage for ZivaSkin reflecting the strong value ZivaSkin offers to this patient community.

Speaker #3: As QTCs and payers treat more patients and gain experience with the overall process, we expect the speed of patient treatment to go faster. Additionally, as the remaining two QTCs treat patients, we anticipate that the number of ZivaSkin treatments will grow in the coming quarters.

Speaker #3: Now, regarding activating additional QTCs for ZivaSkin, becoming a QTC is a multi-step process that starts with a dermatologist who is an EB specialist championing ZivaSkin at their institution, and requires a buy-in and sign-off from various functions and committees all the way to the level of CEO or CFO of that institution.

Madhav Vasanthavada: Now, regarding activating additional QTCs for ZEVASKYN, becoming a QTC is a multi-step process that starts with a dermatologist who is an EB specialist championing ZEVASKYN at their institution and requires a buy-in and sign-off from various functions and committees all the way to the level of CEO or CFO of that institution. Once the decision is made to become a QTC, several moving parts, including a master service agreement, trade policy, clinical training for biopsy and treatment, and registry protocols with IRB approvals must be put into place. That makes QTC onboarding a several-month process. Once a site is activated, it may then begin patient consultations for ZEVASKYN, work with insurers to secure clinical authorizations and financial commitment for that individual patient, and then schedule patients for biopsy. As mentioned earlier, we have 4 QTCs activated.

Speaker #3: Once the decision is made to become a QTC, several moving parts, including a master service agreement, trade policy, clinical training for biopsy and treatment, and registry protocols, with IRB approvals, must be put into place.

Speaker #3: That makes QTC onboarding a several-month process. Once a site is activated, it may then begin patient consultations for ZivaSkin, work with insurers to secure clinical authorizations and financial commitment for that individual patient and then schedule patients, for biopsy.

Speaker #3: As mentioned earlier, we have four QTCs activated. Two have started treating patients, and the other two have patients that are moving through the administrative process to schedule a biopsy.

Madhav Vasanthavada: Two have started treating patients, and the other two have patients that are moving through the administrative process to schedule a biopsy. In addition to the 4 current QTCs, we are actively working toward onboarding 5 additional centers and are in various stages of the site onboarding process. To ensure a geographically expansive footprint, our goal is to have at least 7 QTCs active by the end of 2026. Lastly, on the market access front, I would like to reiterate that all major commercial payers, including UnitedHealthcare, Cigna, Aetna, Anthem, and most Blue Cross Blue Shield plans, have published coverage policies for ZEVASKYN, representing roughly 80% of commercially covered lives. ZEVASKYN also has baseline coverage across all Medicaid programs for all 50 states. In addition, CMS has established a permanent HCPCS J-code for ZEVASKYN effective January 1, 2026.

Speaker #3: In addition to the four current QTCs, we are actively working toward onboarding five additional centers and are in various stages of the site onboarding process.

Speaker #3: To ensure a geographically expansive footprint, our goal is to have at least seven QTCs active by the end of 2026. Lastly, on the market axis front, I would like to reiterate that all major commercial payers, including UnitedHealthcare, Cigna, Aetna, Anthem, and most Blue Cross Blue Shield plans, have published coverage policies for ZivaSkin representing roughly 80% of commercially covered lives.

Speaker #3: ZivaSkin also has baseline coverage across all Medicaid programs for all 50 states. In addition, CMS has established a permanent HCPCS J-code for ZivaSkin, effective January 1, 2026.

Speaker #3: We expect a J code to be an important enabler for streamlined billing and reimbursement for QTCs. Ultimately, every step forward, every biopsy, every treatment, every positive patient story strengthens our confidence in the impact ZivaSkin can have.

Madhav Vasanthavada: We expect a J-code to be an important enabler for streamlined billing and reimbursement for QTCs. Ultimately, every step forward, every biopsy, every treatment, every positive patient story strengthens our confidence in the impact ZEVASKYN can have. We are energized by the early momentum and remain committed to delivering a seamless ZEVASKYN experience. With that, I'll now pass the call to our Chief Financial Officer, Joe Vazzano, to discuss our financial results. Joe?

Speaker #3: We are energized by the early momentum and remain committed to delivering a seamless ZivaSkin experience. With that, I'll now pass the call to our Chief Financial Officer, Joseph Vazzano, to discuss our financial results.

Speaker #3: Joe?

Speaker #2: Thanks, Madhav. I would like to remind everyone that you can find additional details on our financial results for the year ended December 31, 2025, in our most recent Form 10-K.

Joseph Vazzano: Thanks, Madhav. I would like to remind everyone that you can find additional details on our financial results for the year ended December 31, 2025 in our most recent Form 10-K. Starting with statements of operations. Total revenue for the year ending December 31, 2025 was $5.8 million. Total revenue includes $3.4 million in license and other revenues, and $2.4 million in net product revenue. License and other revenues were primarily driven by a clinical milestone of $3 million achieved in Q4 2025 under our sub-license agreement for Rett syndrome with Taysha Gene Therapies. Net product revenue reflects the patient treatment in December. The patient treated was a Medicaid patient. We expect our average net revenues to normalize over time as the payer mix expands to include commercially insured patients.

Joe Vazzano: Thanks, Madhav. I would like to remind everyone that you can find additional details on our financial results for the year ended December 31, 2025 in our most recent Form 10-K. Starting with statements of operations. Total revenue for the year ending December 31, 2025 was $5.8 million. Total revenue includes $3.4 million in license and other revenues, and $2.4 million in net product revenue. License and other revenues were primarily driven by a clinical milestone of $3 million achieved in Q4 2025 under our sub-license agreement for Rett syndrome with Taysha Gene Therapies. Net product revenue reflects the patient treatment in December. The patient treated was a Medicaid patient. We expect our average net revenues to normalize over time as the payer mix expands to include commercially insured patients.

Speaker #2: Starting with statements of operations, total revenue for the year ending December 31, 2025, was $5.8 million. Total revenue includes $3.4 million in license and other revenues, and $2.4 million in net product revenue.

Speaker #2: License and other revenues were primarily driven by a clinical milestone of $3 million achieved in the fourth quarter of 2025 under our sublicense agreement for Rett syndrome with Keisha Gene Therapies.

Speaker #2: Net product revenue reflects the patient treatment in December. The patient treated was a Medicaid patient. We expect our average net revenues to normalize over time as the payer mix expands to include commercially insured patients.

Speaker #2: We received payment for this treatment in the first quarter of 2026. Cost of sales for 2025 was $1.5 million, primarily driven by the first commercial ZivaSkin treatment in December.

Joseph Vazzano: We received payment for this treatment in Q1 2026. Cost of sales for 2025 was $1.5 million, primarily driven by the first commercial ZEVASKYN treatment in December. Cost of sales also includes the costs from the August production batch that was not released due to technical challenges related to an FDA-mandated rapid sterility lot release assay. As more patients are treated, we expect our gross margins to increase significantly with better economies of scale related to production costs. Total research and development, or R&D, spending for 2025 decreased $7.6 million to $26.8 million compared to $34.4 million in 2024.

Joe Vazzano: We received payment for this treatment in Q1 2026. Cost of sales for 2025 was $1.5 million, primarily driven by the first commercial ZEVASKYN treatment in December. Cost of sales also includes the costs from the August production batch that was not released due to technical challenges related to an FDA-mandated rapid sterility lot release assay. As more patients are treated, we expect our gross margins to increase significantly with better economies of scale related to production costs. Total research and development, or R&D, spending for 2025 decreased $7.6 million to $26.8 million compared to $34.4 million in 2024.

Speaker #2: Cost of sales also includes the cost from the August production batch that was not released due to technical challenges related to an FDA-mandated rapid sterility lot release assay.

Speaker #2: As more patients are treated, we expect our gross margins to increase significantly with better economies of scale related to production costs. Total research and development spending for 2025 decreased by $7.6 million.

Speaker #2: To $26.8 million, compared to $34.4 million in 2024. This reduction was primarily driven by the April 2025 FDA approval of ZivaSkin, which resulted in certain production costs being capitalized into inventory, and engineering runs that are no longer classified as R&D expense.

Joseph Vazzano: This reduction was primarily driven by the April 2025 FDA approval of ZEVASKYN, which resulted in certain production costs being capitalized into inventory and engineering runs that are no longer classified as R&D expenses. Selling, general, and administrative, or SG&A, expenses for 2025 were $65 million, an increase of $35.1 million over 2024. This increase primarily reflects Abeona's commercial transition following the April 2025 FDA approval of ZEVASKYN, including $18.6 million in personnel and stock-based compensation, and $2.3 million in direct commercialization costs. Additionally, certain engineering and training expenses previously classified as R&D were transitioned to SG&A post-approval. In May 2025, we sold our rare pediatric disease priority review voucher awarded following the FDA approval of ZEVASKYN.

Joe Vazzano: This reduction was primarily driven by the April 2025 FDA approval of ZEVASKYN, which resulted in certain production costs being capitalized into inventory and engineering runs that are no longer classified as R&D expenses. Selling, general, and administrative, or SG&A, expenses for 2025 were $65 million, an increase of $35.1 million over 2024. This increase primarily reflects Abeona's commercial transition following the April 2025 FDA approval of ZEVASKYN, including $18.6 million in personnel and stock-based compensation, and $2.3 million in direct commercialization costs. Additionally, certain engineering and training expenses previously classified as R&D were transitioned to SG&A post-approval. In May 2025, we sold our rare pediatric disease priority review voucher awarded following the FDA approval of ZEVASKYN.

Speaker #2: Selling general and administrative or SG&A expenses for 2025 were $65 million. An increase of 35.1 million over 2024. This increase primarily reflects ABEONA's commercial transition following the April 2025 FDA approval of ZivaSkin.

Speaker #2: Including $18.6 million in personnel and stock-based compensation, and $2.3 million in direct commercialization costs. Additionally, certain engineering and training expenses previously classified as R&D were transitioned to SG&A post-approval.

Speaker #2: In May of 2025, we sold our Rare Pediatric Disease Priority Review Voucher awarded following the FDA approval of ZivaSkin. The company recorded a $152.4 million gain on sale from this transaction after receiving payment in June of 2025.

Joseph Vazzano: The company recorded a $152.4 million gain on sale from this transaction after receiving payment in June 2025. Net income was $71.2 million for the year ended 31 December 2025, or $0.34 per basic and $1.01 per diluted common share. Net loss in 2024 was $63.7 million, or $1.55 loss per basic and diluted common share. As of 31 December 2025, cash equivalents, and short-term investments totaled $191.4 million. With that, I will pass the call back to Vish for additional remarks before opening the call for Q&A.

Joe Vazzano: The company recorded a $152.4 million gain on sale from this transaction after receiving payment in June 2025. Net income was $71.2 million for the year ended 31 December 2025, or $0.34 per basic and $1.01 per diluted common share. Net loss in 2024 was $63.7 million, or $1.55 loss per basic and diluted common share. As of 31 December 2025, cash equivalents, and short-term investments totaled $191.4 million. With that, I will pass the call back to Vish for additional remarks before opening the call for Q&A.

Speaker #2: Net income was $71.2 million for the year ended December 31, 2025, or $1.34 per basic and $1.01 per diluted common share. Net loss in 2024 was $63.7 million, or $1.55 loss per basic and diluted common share.

Speaker #2: As of December 31, 2025, cash equivalents and short-term investments totaled $191.4 million. With that, I will pass the call back opening the call for Q&A.

Speaker #1: Thank you, Joe. In closing, I want to reiterate that while 2025 gave us our first commercial proof of concept, 2026 is about solidifying our commercial blueprint.

Madhav Vasanthavada: Thank you, Joe. In closing, I want to reiterate that while 2025 gave us our first commercial proof of concept, 2026 is about solidifying our commercial blueprint. I'm incredibly proud of the entire Abeona team from our manufacturing and quality groups, ensuring every lot meets our highest standards to our commercial and clinical teams supporting our treatment centers. Every person in this company is focused on ensuring that our RDEB community's experience with ZEVASKYN is nothing short of excellent. We are doing the heavy lifting now to get these foundations right.

Vish Seshadri: Thank you, Joe. In closing, I want to reiterate that while 2025 gave us our first commercial proof of concept, 2026 is about solidifying our commercial blueprint. I'm incredibly proud of the entire Abeona team from our manufacturing and quality groups, ensuring every lot meets our highest standards to our commercial and clinical teams supporting our treatment centers. Every person in this company is focused on ensuring that our RDEB community's experience with ZEVASKYN is nothing short of excellent. We are doing the heavy lifting now to get these foundations right.

Speaker #1: I'm incredibly proud of the entire ABEONA team, from our manufacturing and quality groups ensuring every lot meets our highest standards, to our commercial and clinical teams supporting our treatment centers.

Speaker #1: Every person in this company is focused on ensuring that our dev community’s experience with ZivaSkin is nothing short of excellent. We are doing the heavy lifting now to get these foundations right, and I'm confident that this collective focus on execution today is what will allow us to scale aggressively and deliver meaningful value in the quarters and years to come.

Vish Seshadri: I'm confident that this collective focus on execution today is what will allow us to scale aggressively and deliver meaningful value in the quarters and years to come. We look forward to providing updates on our continued progress on our Q1 2026 conference call. With that, I'll turn the call over to Jenny to open it up for Q&A. Thanks, Jenny.

Speaker #1: We look forward to providing updates on our continued progress on our first quarter 2026 conference call. With that, I'll turn the call over to Jenny to open it up for Q&A.

Speaker #1: Thanks, Jenny.

Speaker #3: Thank you very much, Vish. 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 now.

Operator: Thank you very much, Vish. 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 now. 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 while we poll for questions. Thank you. Our first question is coming from Ram Selvaraju of H.C. Wainwright. Ram, your line is live.

Speaker #3: 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.

Speaker #3: And for anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment while we poll for questions.

Speaker #3: Thank you. Our first question is coming from Ram Selvaraju, of HC Wainwright. Ram, your line is live.

Speaker #4: Thanks so much for taking our questions, and congratulations on all the recent progress. I was wondering if you could comment on the cadence with which qualified treatment centers are likely to be stood up in the coming months, and any specific factors that might influence the speed with which that occurs.

Ram Selvaraju: Thanks so much for taking our questions and congratulations on all the recent progress. I was wondering if you could comment on the cadence with which qualified treatment centers are likely to be stood up in the coming months and any specific factors that might influence the speed with which that occurs, if you expect that pace to increase, and if so, you know, what might be the specific contributing factors to that. Secondly, I was wondering if you could comment on the specific drivers of R&D spending over the course of 2026 and beyond, and if we should expect R&D spend to modulate somewhat over the course of the coming quarters, or if in fact you expect any noteworthy increases over the remainder of 2026. Thank you.

Speaker #4: If you expect that pace to increase, and if so, what might be the specific contributing factors to that? Secondly, I was wondering if you could comment on the specific drivers of R&D spending over the course of 2026 and beyond, and if we should expect R&D spend to modulate somewhat over the course of the coming quarters.

Speaker #4: Or if, in fact, you expect any noteworthy increases over the remainder of 2026. Thank you.

Speaker #1: Good morning, Ram, and thank you for the questions. Regarding the cadence with the QTCs and the speed of ramp-up, right? I think there are a lot of factors that go in.

Vish Seshadri: Good morning, Ram, and thank you for the questions. Regarding the cadence with the QTCs and the speed of ramp up, right? I think there are a lot of factors that go in. We have some preliminary viewpoint just beginning this quarter. I'll turn it over to Madhav to articulate. Knowing that our projections are based on the first two sites just about ramping up, right? Madhav, why don't you take that one?

Speaker #1: We have some preliminary viewpoint just beginning this quarter. I'll turn it over to Madhav to articulate. And knowing that our projections are based on the first two sites just about ramping up, right?

Speaker #1: So, Madhav, why don't you take that one?

Speaker #5: Yeah. Thanks, Ram, for the question. So with regard to QTCs, as I mentioned, we are working with five centers, one of whom is imminent, and we expect to hopefully announce it in this coming quarter.

Madhav Vasanthavada: Yeah. Thanks, Ram, for the question. With regard to QTCs, as I mentioned, we are working with 5 centers, one of whom is imminent, and we expect that to hopefully announce it in this coming quarter. Centers are in varying stages of their onboarding process. Our goal is to have 7 in total active by the end of the year. In terms of the aspects that drive the speed with which the centers come on board, there are various ones. Some centers wanted to obviously wait for ZEVASKYN approval to take place before they invested additional resources.

Speaker #5: And then centers are in varying stages of their onboarding process. Our goal is to have seven in total active by the end of the year.

Speaker #5: In terms of the aspects that drive the speed with which the centers come on board, there are various ones. Some centers wanted to, obviously, wait for ZivaSkin approval to take place before they invested additional resources.

Speaker #5: Some started looking at their payer mix, like of the individuals or of patients that are in their treatment sort of pool, to see what kind of payer mix exists, how many are commercially insured patients, and if Medicaid, what sort of is the out-of-state Medicaid nuances there.

Madhav Vasanthavada: Some started looking at their payer mix, like of the individual sort of patients that are in their treatment, you know, sort of pool to see what kind of payer mix exists, how many are commercially insured patients, and if Medicaid, you know, what sort of is the out-of-state Medicaid nuances there. They essentially were also waiting to see coverage established. Now we have covered significant ground with regard to market access, having established coverage and these payer policies also in place. That has given great confidence for these sites to initiate that process and speed that up.

Speaker #5: And they essentially were also waiting to see coverage. Established. But now we have covered significant ground with regard to market access, having established coverage and these payer policies also in place.

Speaker #5: So that has given great confidence for these sites to initiate their process and speed that up. And then there are other factors with regard to institutional bureaucracies that exist with every institution.

Madhav Vasanthavada: There are other factors with regard to institutional, you know, bureaucracies that exist with every institutions, people getting to understand the cell and gene therapy units, because in the dermatology space, this is the first engineered cell therapy that we are moving to a treatment space. That requires greater cross-functional interaction. We have learned a lot in onboarding the previous four centers, and our teams are doing a tremendous job in helping the upcoming centers to navigate that pathway and bring them to speed. We think, you know, we are confident about having seven in total, and if additional centers move faster, then yes, of course, we will be able to help them stand up sooner. I hope that gives some flavor.

Speaker #5: People getting to understand the cell and gene therapy units because in the dermatology space, this is the first engineered cell therapy that we are moving to treatment space.

Speaker #5: And so that requires greater cross-functional interaction. But we have learned a lot in onboarding the previous four centers, and our teams are doing a tremendous job in helping the upcoming centers to navigate that pathway and bring them up to speed.

Speaker #5: So, we think we are confident about having seven in total. And if additional centers move faster, then yes, of course, we will be able to help them stand up sooner.

Speaker #5: I hope that gives some flavor.

Speaker #1: Yeah. And just to add to that—right, Ram—you said at steady state, what we anticipate is, sites have communicated to us that one patient a month is kind of a cadence that we can definitely do.

Vish Seshadri: Yeah. Just to add to that, right, Ram, you said at steady state, what we anticipate is sites have communicated to us that one patient a month is a kind of a cadence that we can definitely do. Some sites are saying perhaps two patients a month. I think it's just a matter of we're projecting based on what we are hearing from the sites in terms of their plans and their patient visibility. We need to see that come through, right? I think we'll be able to give more evidence-based cadence and the speed of getting there once we start seeing that steady state. We need to see three consecutive months of, you know, delivering that consistently. I think that's really what we're looking to get to by mid-year.

Speaker #1: Some sites are saying perhaps two patients a month. So, I think it's just a matter of—we're projecting based on what we are hearing from the sites in terms of their plans and their patient visibility.

Speaker #1: We need to see that come through, right? I think we'll be able to give more evidence-based cadence and the speed of getting there. Once we start seeing that steady state, we need to see three consecutive months of delivering that consistently.

Speaker #1: I think that's really what we're looking to get to by mid-year. But as we also articulated, two of our four sites are yet to reach the point where they start layering their patients because the upfront setup time is what they're taking right now.

Vish Seshadri: As we also articulated, two of our four sites are yet to reach the point where they start layering their patients because the upfront setup time is what they're taking right now. Hopefully, that comes through in Q2 and we're able to show with data that, okay, sites are reaching their kind of cruise control level of speed, and therefore this is more predictable. Hope that helps there. Regarding your second question about R&D spending, right? Let me open it up to Joe first to just give a little bit because we're so focused on ZEVASKYN launch right now that our R&D spend is almost insignificant. Joe, why don't you go ahead?

Speaker #1: Hopefully, that comes through in the second quarter, and we're able to show with data that, okay, sites are reaching their kind of cruise control level of speed and therefore this is more predictable.

Speaker #1: So I hope that helps there. Regarding your second question about R&D spending, right? Let me open it up to Joe first to just give a little bit, because we're so focused on ZivaSkin launch right now that our R&D spend is almost insignificant.

Speaker #1: But Joe, why don't you go ahead?

Speaker #6: Sure. Thanks, Vish. Yes, Ram, I believe the question was just drivers of R&D spend for 2026 and going forward. As you may recall, we have to do the registry study that was part of the FDA approval.

Joseph Vazzano: Sure. Thanks, Vish. Yes, Ram, I believe the question was just drivers of R&D spend for 2026 and going forward. You know, as you may recall, we have to do the registry study that was part of the FDA approval so that they, you know, the registry study costs go into R&D, and then also the pipeline development costs will go into R&D. And again, there's, you know, as I mentioned on the prepared remarks, there's a shift from R&D to SG&A just with the evolution of transitioning to a commercial company. Those two items that I mentioned are going to be the main drivers of spend, of R&D spend for 2026 and outer years.

Joe Vazzano: Sure. Thanks, Vish. Yes, Ram, I believe the question was just drivers of R&D spend for 2026 and going forward. You know, as you may recall, we have to do the registry study that was part of the FDA approval so that they, you know, the registry study costs go into R&D, and then also the pipeline development costs will go into R&D. And again, there's, you know, as I mentioned on the prepared remarks, there's a shift from R&D to SG&A just with the evolution of transitioning to a commercial company. Those two items that I mentioned are going to be the main drivers of spend, of R&D spend for 2026 and outer years.

Speaker #6: So, that’s—the registry study costs go into R&D, and then also the pipeline development costs will go into R&D. And again, as I mentioned in the prepared remarks, there’s a shift from R&D to SG&A just with the evolution of transitioning to a commercial company.

Speaker #6: But those two items that I mentioned are going to be the main drivers of spend R&D spend for 2026 and outer years.

Speaker #1: Right. And also to add sorry, go ahead, Ram.

Vish Seshadri: Right. Also to add-

Joseph Vazzano: Just very quickly.

Joe Vazzano: Just very quickly.

Vish Seshadri: Sorry, go ahead, Ram.

Speaker #6: Go ahead. Go ahead. No, no, go ahead, please.

Joseph Vazzano: Go ahead. No, go ahead, please.

Ram Selvaraju: Go ahead. No, go ahead, please.

Speaker #1: I was just going to say, as you know, we do have some preclinical programs, but we're not spending a lot of energy and resources on those.

Vish Seshadri: I was just going to say, as you know, we do have some preclinical programs that we're not spending a lot of energy and resources on those. It's kind of running in the background. We do not see preclinical programs to stack up R&D expenses in a significant way, at least in 2026. 2027 is a different story, and I think a lot of it is gonna depend on, you know, the ramp-up speed of ZEVASKYN and what we can bite into, right? I think that's gonna be a story that'll evolve through the rest of the year.

Speaker #1: It's kind of running in the background. We do not see preclinical programs to stack up R&D expenses in a significant way, at least in 2026.

Speaker #1: 2027 is a different story, and I think a lot of it is going to depend on the ramp-up speed of ZivaSkin and what we can bite and chew, right?

Speaker #1: So, I think that's going to be a story that will evolve through the rest of the year.

Speaker #6: Just with respect to the qualified treatment centers, I was wondering if you could comment on the relative coalescing or concentration of patients around those centers and if you expect on a go-forward basis the bulk of new patients coming in to go through the first two treatment centers to be stood up or if you expect some of the other treatment centers to be just as significant contributors to the overall number of patients coming on to ZivaSkin.

Ram Selvaraju: Just with respect to the qualified treatment centers, I was wondering if you could comment on the relative coalescing or concentration of patients around those centers, and if you expect, on a go-forward basis, the bulk of new patients coming in to go through the first two treatment centers to be stood up, or if you expect some of the other treatment centers to be just as significant contributors to the overall number of patients coming on to ZEVASKYN.

Speaker #1: Yeah, that's a great question. Go ahead, Madhav.

Vish Seshadri: Yeah, that's a great question.

Madhav Vasanthavada: Yeah, I can.

Vish Seshadri: Go ahead, Madhav.

Speaker #6: Yeah. We expect them to have a decent pool of patients similar to the currently stood-up centers, Ram. And our strategy right now, just to expand on that, on your question, is very clear.

Madhav Vasanthavada: Yeah. We expect them to have a decent pool of patients similar to the currently stood up centers, Ram. Our strategy right now, just to expand on that, on your question is very clear. It's a three-pronged approach that we are taking. One is to have patients that are in these qualified treatment centers. We want to place them on ZEVASKYN therapy as soon as possible. The second is to focus on the community physicians who already have indicated they have patients that are motivated and would be eligible for ZEVASKYN treatment. We want those referrals to be the second tranche. In parallel, as we look to stand up these additional centers, that is going to pancake on top of the first two-pronged approach to have their own pool of patients.

Speaker #6: It's a three-pronged approach that we are taking. One is to have patients that are in these qualified treatment centers. We want to place them on ZivaSkin therapy as soon as possible.

Speaker #6: The second is to focus on the community physicians who already have indicated they have patients that are motivated and would be eligible for ZivaSkin treatment.

Speaker #6: We want those referrals to be the second tranche. And in parallel, as we look to stand up these additional centers, that is going to pancake on top of the first two-pronged approach to have their own pool of patients.

Speaker #6: Our approach is to make sure that these centers are as geographically spread as possible, because that also, obviously, will help with the travel, etc.

Madhav Vasanthavada: Our approach is to make sure that these centers are as geographically, you know, spread as possible because that also obviously will help with the travel, etc., for the patients and their families, let alone payer, you know, barriers that we will be easier to overcome once you have more centers that are geographically spread. We anticipate some of these centers who have the infrastructure, who have the, you know, the EB centers of excellence, etc., to bring their own set of patients as they get activated.

Speaker #6: for the patients and their families. Let alone payer barriers that will be easier to overcome once you have more centers that are geographically spread.

Speaker #6: So, we do anticipate some of these centers who have the infrastructure, who have the EB centers of excellence, etc., to bring their own set of patients as they get activated.

Speaker #1: Thank you.

Ram Selvaraju: Thank you.

Speaker #5: Thank you very much. Our next question is coming from Maury Raycroft of Jeffrey's. s. Maury, your line is live.

Operator: Thank you very much. Our next question is coming from Maury Raycroft of Jefferies. Maury, your line is live.

Speaker #7: Hi. Thank you. Congrats on the progress and thanks for taking my questions. I had a question on the QTCs as well. So it sounds like currently the QTCs are able to manage about one or two patients per month.

Maury Raycroft: Hi. Thank you. Congrats on the progress, and thanks for taking my questions. I had a question on the QTCs as well. It sounds like, currently, the QTCs are able to manage about one or two patients per month. Just wanted to clarify that and what do you expect the cruise control state to look like? I guess how many patients per QTC do you think you're gonna be able to get at a sort of a maximum capacity, at these initial sites? I'll start with that one.

Speaker #7: Just wanted to clarify that. And what do you expect the cruise control state to look like? I guess how many patients per QTC do you think you're going to be able to get at a sort of a maximum capacity at these initial sites?

Speaker #7: And I'll start with that one.

Speaker #1: Go ahead, Madhav.

Vish Seshadri: Go ahead, Madhav.

Madhav Vasanthavada: That's correct, Maury. One or two patients a month. We think that their ability to ramp up, it's really dependent on the sites. Certain institutions have, you know, done their pro formas, to be able to have a greater number, even go up to three patients a month, which, you know, will really depends on, what their experience has been like with regard to their resource allocation and the nursing staff that have to care for the patient post operating procedures. But for the most part, we expect one or two patients a month in the foreseeable future. We'll have to see, you know, how that ramps up as the experience, what their overall process experience look like.

Speaker #6: That's correct, Maury. One or two patients a month. We think that their ability to ramp up is really dependent on the sites. Certain institutions have done their pro formas.

Speaker #6: To be able to have a greater number, even go up to three patients a month, which will really depend on what their experience has been like with regard to their resource allocation and the nursing staff that have to care for the patient post-operating procedures.

Speaker #6: But for the most part, we expect one or two patients a month in the foreseeable future. We'll have to see how that ramps up as they experience what their overall process experience looks like.

Maury Raycroft: Got it. Okay.

Madhav Vasanthavada: Even with pilot centers at 1 or 2 patients a month, we are looking at a really good rate.

Speaker #6: But even with five centers, one or two patients a month, we are looking at a really good rate.

Madhav Vasanthavada: Even with pilot centers at 1 or 2 patients a month, we are looking at a really good rate.

Speaker #1: Okay. And can you also just comment on the current timeline from receipt of the START form to treatment initiation? Just, what does that timeline look like?

Maury Raycroft: Okay. Can you also just comment on the current timeline from receipt of start form to treatment initiation? Just what does that timeline look like? Could that become more efficient over time as well?

Speaker #1: And then, could that become more efficient over time as well?

Speaker #6: Right. The current timelines are very variable. It depends on various factors. But if I were to just kind of average ballpark, it's more like a four- to five-month process.

Madhav Vasanthavada: Right. The current timelines are very variable. Depends on various factors, but if I were to, you know, just kind of average ballpark, it's more like 4- to 5-month process, of which 25 days is manufacturing time. That's very much a hard fix there. 4 to 5 months, that includes 1 month, roughly 1 month of manufacturing.

Speaker #6: Of which 25 days is a manufacturing time. That's very much a hard fix there. So four to five months. That includes one month, roughly one month of manufacturing.

Speaker #6: And we expect that to improve over time.

Maury Raycroft: Yeah.

Madhav Vasanthavada: We expect that to improve over time.

Speaker #1: Yeah, I'm glad you asked this question, Maury, because another factor here is—you mentioned the START form. I would say, from the point of identifying a patient to when they receive treatment, the START form is something that we're seeing has a lot of variation in when a site submits that form to us.

Vish Seshadri: Yeah, I'm glad you asked this question, Maury, because another factor here is you mentioned start form. I would say from the point of identifying a patient to when they receive treatment, because the start form is something that we're seeing has a lot of variation in when a site puts that form to us. Some sites do it soon after an identified patient is either referred or they have had a consult, and some sites wait until the entire payer process takes place and then puts a start form. It's a very variable input as to what point in the patient's journey we receive that. I think it adds one more layer of confounding variables to calculate that time.

Speaker #1: Some sites do it soon after an identified patient is either referred or they have had a consult, and some sites wait until the entire payer process takes place and then put a START form.

Speaker #1: So it's a very variable input as to what point in the patient's journey we receive that. So I think it adds one more layer of confounding variables to calculate that time.

Speaker #1: But what Madhav is describing here as this approximate five months is when there is a consult that happens and the patient intends to get ZivaSkin, and that conversation has happened. Then, the first few patients took about five months all the way to get to the treatment.

Vish Seshadri: What Madhav is describing here as this approximate 5 months is when there is a consult that happens and patient intends to get ZEVASKYN and that conversation happens, then the first few patients took about 5 months all the way to get to the treatment. Whereas we are seeing that process is gonna shorten over time because the administrative part of this is getting more efficient as, you know, a given site has been through 2 or 3 patients. I hope that makes sense.

Speaker #1: Whereas we are seeing that process is going to shorten over time because the administrative part of this is getting more efficient as a given site has been through two or three patients.

Speaker #1: I hope that makes sense.

Speaker #7: Yeah, yeah, that makes sense. And that's helpful. Maybe last quick question, then I'll hop back in the queue. Just if you can comment on, based on the demand ramp that you're seeing, how confident are you in achieving profitability for staff this year?

Maury Raycroft: Yeah. Yeah, that makes sense, and that's helpful. Maybe last quick question, then I'll hop back in the queue. Just, if you can comment on, based on the demand ramp that you're seeing, how confident are you in achieving profitability first half this year?

Speaker #1: We believe that we have a pretty good chance of achieving profitability. I think profitability, if you define it as entire company-level profitability, I think there are numerous factors, as you already know.

Vish Seshadri: We believe that we have a pretty good chance of achieving profitability. I think profitability, if you define it as an entire company level, you know, profitability, I think there's numerous factors, as you already know. We've mentioned that anything north of 3 patients a month takes us to the profitable zone, which is, you know, $100 million, give or take, is about the company burn in a given year, right? If you use your gross and net calculations, 3.5 or more per month is taking us to the profitable zone. I think this is a very achievable target.

Speaker #1: We've mentioned that anything north of three patients a month takes us to the profitable zone, which is 100 million give or take is about the company burn in a given year, right?

Speaker #1: So if you use your gross-to-net calculations, $3.5 million or more per month is taking us to the profitable zone. I think this is a very achievable target.

Speaker #1: It's more that there are some uncertain factors as to how the third and the fourth sites are going to achieve their speed and reset cruise control.

Vish Seshadri: It's more there are some uncertain factors as to how the third and the fourth sites are gonna achieve their speed, and reach that cruise control, and also, you know, how quickly we're bringing additional sites even on board and then up and running. I think these are a couple of variables, but we feel this is a pretty reasonable goal.

Speaker #1: And also how quickly we're bringing additional sites even onboard and up and running. So I think these are a couple of variables, but we feel this is a pretty reasonable goal.

Speaker #7: Got it. Okay. Thanks for taking my questions.

Maury Raycroft: Got it. Okay. Thanks for taking my questions.

Speaker #1: Thank you.

Vish Seshadri: Thank you.

Speaker #5: Thank you very much. Our next question is coming from Stephen Willie of Stifel. Stephen, your line is live.

Operator: Thank you very much. Our next question is coming from Steven Willey of Stifel. Steven, your line is live.

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

Speaker #7: Yeah. Good morning. Thanks for taking the questions. And congrats on the progress. Has the target number of QTCs that you want to bring online over the longer term has that increased at all?

Steven Willey: Yeah, good morning. Thanks for taking the questions and, congrats on the progress. Has the target number of QTCs that you wanna bring online over the longer term, has that increased at all? I know you have some early experience on the referral front. I'm just curious if you're finding that it might be logistically easier to activate more of these centers as opposed to trying to increase the band of referrals.

Stephen Willey: Yeah, good morning. Thanks for taking the questions and, congrats on the progress. Has the target number of QTCs that you wanna bring online over the longer term, has that increased at all? I know you have some early experience on the referral front. I'm just curious if you're finding that it might be logistically easier to activate more of these centers as opposed to trying to increase the band of referrals.

Speaker #7: I know you have some early experience on the referral front. I'm just curious if you're finding that it might be logistically easier to activate more of these centers as opposed to trying to increase the band of referrals.

Speaker #1: Go ahead, Madhav.

Vish Seshadri: Go ahead, Madhav.

Madhav Vasanthavada: Five. Right. Our target QTC number, Steve, has been 5 to 7, and we do think that 7 this year is a realistic goal that does help with certainly the bandwidth within the qualified treatment centers, as well as just increasing the footprint overall. We think we'll have more outlets for patients to get treated. You know, we are gonna be working towards bringing these centers on board. In the meantime, also, of course, as the various community physicians have patients, we want that healthy, you know, awareness and healthy enthusiasm from all of the other physicians also, so that in the longer term, that's really where we will rely on these community physicians to funnel their patients into the qualified centers. That's really our approach.

Speaker #6: Fine. Right. Our target QTC number, Steve, has been five to seven, and we do think that seven this year is a realistic goal. That does help with, certainly, the bandwidth within a qualified treatment center.

Speaker #6: As well as just increasing the footprint overall, we think we'll have more treated. So we are going to be working towards bringing these centers on board, but in the meantime, also, of course, as the various community physicians have patients, we want that healthy awareness and healthy enthusiasm from all of the other physicians also, so that in the longer term, that's really where we will rely on these community physicians to funnel their patients into the qualified centers.

Speaker #6: So that's really our approach. So our target centers right now is seven, and as I said, we have more centers that are working with us and would like to be activated.

Madhav Vasanthavada: That's really our approach. Our target centers right now, you know, is 7, and as I said, we have more centers that are working with us and would like to, you know, be activated. If we have more treatment centers, then certainly that only adds more to the process and easens the logistics.

Madhav Vasanthavada: Our target centers right now, you know, is 7, and as I said, we have more centers that are working with us and would like to, you know, be activated. If we have more treatment centers, then certainly that only adds more to the process and easens the logistics.

Speaker #6: So, if we have more treatment centers, then certainly that only adds more to the process and eases the logistics.

Speaker #1: Yeah.

Speaker #7: Okay, so when you say, "Oh, go ahead. Sorry."

Vish Seshadri: Yeah, also.

Steven Willey: Okay. Oh, go ahead, sorry.

Stephen Willey: Okay. Oh, go ahead, sorry.

Vish Seshadri: Steve, just one clarification is also, as Madhav explained, the QTC onboarding process itself can take several months. While we talked about 5 additional centers beyond the 4 that we're working with, which are already activated, gives you a bigger number. We anticipate that some of those may spill over to even next year, right? Because it's a lengthy process. We are definitely looking to have 7 activated sites this year.

Speaker #1: Just one clarification is also as Madhav explained, the QTC onboarding process itself can take several months. So while we talked about five additional centers beyond the four that we're working which are already activated, it gives you a bigger number.

Speaker #1: We anticipate that some of those may spill over to even next year, right? Because it's a lengthy process. But we are definitely looking to have seven activated sites this year.

Speaker #7: Okay. So when you say you're actively onboarding five additional centers, that does not include the two that have recently signed up, Colorado Children's and UTMB.

Steven Willey: Okay. When you say you're actively onboarding 5 additional centers, that does not include the 2 that have recently signed up, Colorado Children's and UTMB?

Stephen Willey: Okay. When you say you're actively onboarding 5 additional centers, that does not include the 2 that have recently signed up, Colorado Children's and UTMB?

Speaker #1: Right. Correct. Correct.

Vish Seshadri: Right.

Madhav Vasanthavada: Correct.

Vish Seshadri: Correct.

Speaker #7: Correct. Okay. Understood. And then, is there anything you can talk about on the reimbursement side, specifically as it pertains to pre-authorization? I'm just curious if payers are kind of pegging themselves to inclusion/exclusion criteria from the phase three.

Madhav Vasanthavada: Correct.

Steven Willey: Okay. Understood. Is there just anything you can talk about on the reimbursement side, specifically as it pertains to pre-authorization? I'm just curious if payers are kind of pegging themselves to inclusion, exclusion criteria from the phase 3. Is it pegged to the label? Just any color there would be helpful.

Stephen Willey: Okay. Understood. Is there just anything you can talk about on the reimbursement side, specifically as it pertains to pre-authorization? I'm just curious if payers are kind of pegging themselves to inclusion, exclusion criteria from the phase 3. Is it pegged to the label? Just any color there would be helpful.

Speaker #7: Is it pegged to the label? Just any color there would be helpful.

Speaker #1: Yeah. We are seeing a mixed definitely to inclusion/exclusion criteria given the high-cost nature of the product. They want to make sure that their initial set of patients are guided to the inclusion/exclusion.

Madhav Vasanthavada: Yeah. We are seeing a mix definitely to inclusion, exclusion criteria, given the, you know, high-cost nature of the product. They want to make sure that their initial set of patients are guided to the inclusion, exclusion. We also have major plans like UnitedHealthcare and many of the Medicaid states also looking to have coverage that are favorable to, you know, the label criteria. It really depends on the plans, but regardless of the criteria, what we are seeing is with Letter of Medical Necessity, physicians have been able to overturn, you know, sort of the requirements.

Speaker #1: But then we also have major plans like UnitedHealthcare’s, and many of the Medicaid states are also looking to have coverage that is favorable to the label criteria.

Speaker #1: So it really depends on the plans, but regardless of the criteria, what we are seeing is with letters of medical necessities, physicians have been able to overturn sort of the requirements.

Speaker #1: So for instance, if there is an age, age is one major aspect that we're seeing in the sense six years and above was our inclusion criteria.

Madhav Vasanthavada: For instance, if there is an age is one major aspect that we're seeing in the sense 6 years and above was our inclusion criteria, but for patients that are less than 6, physicians have been able to overturn that. Also, you know, with regard to squamous cell carcinoma and their presence in the body, location, that is also one other factor that physicians have been able to overturn and, you know, get the patients onto the product. As more, you know, patients go through the process in terms of the overall timing, that's also improving because Letter of Medical Necessity and the templates that are required, those templates are getting populated, right? For future and subsequent patients, for processes that are unique to ZEVASKYN, we are seeing that time also to improve.

Speaker #1: But for patients that are less than six, physicians have been able to overturn that. Also, with regard to squamous cell carcinoma and their presence in the body location, that is also one of the factors that physicians have been able to overturn and get the patients onto the product.

Speaker #1: So, as more patients go through the process, in terms of the overall timing, that's also improving because letters of medical necessity and the templates that are required—those templates are getting populated, right?

Speaker #1: So for future and subsequent patients, for processes that are unique to ZivaSkin, we are seeing that time also improve. Improving at the QTCs that are already treating patients.

Madhav Vasanthavada: You know, improving at the QTCs that are already treating patients. That's really the reimbursement process.

Speaker #1: So that's really the reimbursement process.

Speaker #7: The bottom line, though, is that these inclusion/exclusion criteria do not prevent a patient from getting reimbursed eventually, with all these additional steps that we're taking.

Vish Seshadri: The bottom line, though, is that these inclusion/exclusion criteria do not prevent a patient from getting reimbursed eventually with all these additional steps that we're taking. Even if the plan has that kind of, you know, a restriction, we're able to work through that and get patients reimbursed.

Speaker #7: So even if the plan has that kind of a restriction, we're able to work through that and get patients reimbursed. Okay. And then just lastly, I think you mentioned that there's, I believe, another 10 patients or so that are targeting biopsies for next quarter.

Steven Willey: Okay. Just lastly, I think you mentioned that there's, I believe, another 10 patients or so that are targeting biopsies for next quarter. Can you just speak to how those patients are distributed against the two QTCs that are already treating patients versus Colorado and UTMB that you'll be activating here shortly? Thank you.

Stephen Willey: Okay. Just lastly, I think you mentioned that there's, I believe, another 10 patients or so that are targeting biopsies for next quarter. Can you just speak to how those patients are distributed against the two QTCs that are already treating patients versus Colorado and UTMB that you'll be activating here shortly? Thank you.

Speaker #7: Can you just speak to how those patients are distributed against the two QTCs that are already treating patients versus Colorado and UTMB that you'll be activating here shortly?

Speaker #7: Thank you.

Speaker #1: It's from across all of the four QTCs.

Madhav Vasanthavada: It's from across all of the four QTCs.

Speaker #7: All right. Thanks for taking the questions.

Steven Willey: All right. Thanks for taking the questions.

Stephen Willey: All right. Thanks for taking the questions.

Speaker #2: Thank you very much. Our next question is coming from Kristen Kluska of Cantor Fitzgerald. Kristen, your line is live.

Operator: Thank you very much. Our next question is coming from Kristen Kluska of Cantor Fitzgerald. Kristen, your line is live.

Speaker #8: Hi. Good morning, everybody, and thanks for all of this specific color this morning. I wanted to ask about the dialogue or the relationship between the QTCs themselves.

Kristen Kluska: Hi. Good morning, everybody, and thanks for all of this specific color this morning. I wanted to ask about the dialogue or the relationship between the QTCs themselves. It sounds like Stanford and Chicago being the first two are kind of paving the way here, having a little bit of additional time to get things on board. Are they working with the additional two QTCs just to kind of be a sounding board help as everybody familiarizes themselves with this process?

Speaker #8: It sounds like Stanford and Chicago being the first two are kind of paving the way here, having a little bit of additional time to get things on board.

Speaker #8: Are they working with the additional two QTCs just to kind of be a sounding board, help as everybody familiarizes themselves with this process?

Madhav Vasanthavada: Not that we are directly aware of. We certainly, you know, it's a tight-knit physician community, so they do talk to each other in terms of the sharing of the best practices as well as administrative steps. Plus, our teams are also actively working with them in helping them cross-pollinate the best practices.

Speaker #1: Not that we are directly aware of. Certainly, it's a tight-knit physician community, so they do talk to each other in terms of the sharing of best practices, as well as administrative steps.

Speaker #1: Plus, our teams are also actively working with them in helping them cross-pollinate the best practices.

Speaker #8: Okay. Thank you for that. And then just as we think about the fact that some additional biopsies are already scheduled and we have two weeks left in one queue, should we be conservatively modeling that these are more likely to come in two queue versus the current quarter?

Kristen Kluska: Okay. Thank you for that. Just as we think about the fact that some additional biopsies are already scheduled and we have two weeks left in Q1, should we be conservatively modeling that these are more likely to come in in Q2 versus the current quarter?

Madhav Vasanthavada: We expect one. Yeah. No, this for this month, Kristen. Of course, you know, until the biopsy is done, it's not. You know, we don't know. We don't see a reason why there should be any, you know, attrition or a drop off, but it is for this month that we expect additional biopsy. Yeah.

Speaker #1: We expect one, yeah. No, for this month, Christine. But, of course, until the biopsy is done, we don't know. We don't see a reason why there should be any attrition or a drop-off.

Speaker #1: But it is for this month that we expect additional biopsy. Yeah.

Speaker #8: Okay. And then it sounds like we'll get one more QTC pretty quickly and another two maybe before the end of the year. How are you thinking just about dispersing throughout the geography and the country, and how is that played in impact so far about getting patients on board, ability to travel to these sites, etc.?

Kristen Kluska: Okay. Sounds like we'll get one more QTC pretty quickly and another two maybe before the end of the year. How are you thinking just about dispersing throughout the geography in the country? How has that played an impact so far about getting patients on board, ability to travel to these sites, et cetera?

Speaker #1: We our goal is to have a geographically dispersed I mean, clearly, you can see that eastern seaboard is an important area for us. So if we have a center in that region, I think that will certainly help with patient access.

Madhav Vasanthavada: Our goal is to have a geographically dispersed. I mean, clearly you can see that, Eastern Seaboard is an important area for us. If we have a center in that region, I think that will certainly help with patient access. You know, these patients, for other reasons, with their other comorbidities, they do travel significant distances to get therapies. You know, we don't really think that even 5 or 7 is going to impede their ability to travel really for ZEVASKYN. You know, of course, as more centers come on board, that's definitely going to be a positive thing.

Speaker #1: And these patients, for other reasons, with their other comorbidities, they do have traveled. They do travel significant distances to get—so we don't really think that even five or seven is going to be—is going to impede their ability to travel, really, for ZivaSkin.

Speaker #1: But of course, as more centers come on board, that's definitely going to be a positive thing.

Speaker #9: And also the flexibility that it offers right now, certain patients, I'm not saying this is true for every patient, some patients crossing state borders have extra paperwork to go through Medicaid, right?

Vish Seshadri: Also the flexibility that it offers. You know, right now, certain patients, I'm not saying this is true for every patient. Some patients, crossing state borders, have extra paperwork to go through Medicaid, right? There's more bureaucratic steps. Those things will also be streamlined a little bit by offering more choice and flexibility on where they can get treated. That's really what we are also excited about.

Speaker #9: There's more bureaucratic steps. Those things will also be streamlined a little bit by offering more choice and flexibility on where they can get treated.

Speaker #9: So that's really what we are also excited about.

Speaker #8: Okay. Thank you very much.

Kristen Kluska: Okay, thank you very much.

Speaker #2: Thank you very much. Our next question is coming from Jeff Jones of Oppenheimer. Jeff, your line is live.

Madhav Vasanthavada: Thank you.

Operator: Thank you very much. Our next question is coming from Jeff Jones of Oppenheimer. Jeff, your line is live.

Speaker #10: Good morning, guys, and thanks for taking the question. Maybe the first one on manufacturing. How comfortable are you at this point testing is well behind you now?

Jeff Jones: Good morning, guys, and thanks for taking the question. Maybe the first one on manufacturing. How comfortable are you at this point that the sterility testing is well behind you now? Just a reminder, if you would, on current production capacity and the expansion plan of that capacity through the year. The second one, maybe on, you know, patient and physician feedback now that you've treated patients in the commercial setting, what is the feedback you've been getting from physicians and patients on the overall experience?

Speaker #10: And just a reminder, if you would, on current production capacity and the expansion plan of that capacity through the year, and then the second one maybe on patient and physician feedback now that you've treated patients in the commercial setting, what is the feedback you've been getting from physicians and patients on the overall experience?

Speaker #9: Thank you, Jeff. So your first question is about manufacturing the sterility test. Is that behind us and how we're ramping up capacity? We do have our CTO, Dr. Brian Kevany on the call.

Vish Seshadri: Thank you, Jeff. Your first question is about manufacturing the sterility test, is that behind us and how we're ramping up capacity? We do have our CTO, Dr. Brian Kevany, on the call. Brian, can you take that one, please?

Speaker #9: Brian, can you take that one, please?

Speaker #11: Yeah. Thanks, Fish. Yeah. As a reminder, we had a very healthy dialogue with the agency around the sterility assay issue. And that was a very productive conversation with the agency.

Brian Kevany: Yeah. Thanks, Vish. As a reminder, we had a very healthy dialogue with the agency around the sterility assay issue, and that was a very productive conversation with the agency. We do feel very confident that the resolution that came out of that is a solution going forward. We'll continue to, you know, always look to ways to improve our manufacturing and testing process. We do feel very confident that the resolution that came out of those discussions is gonna support us going forward.

Speaker #11: And we do feel very confident that the resolution that came out of that is a solution going forward. We'll continue to always look to ways to improve our manufacturing and testing process, but we do feel very confident that the resolution that came out of those discussions is going to support us going forward.

Speaker #11: And as it relates to production capacity, currently, we're running at a cadence of six patients per month within the facility. And continue to develop the space to be capable of reaching that 10 capacity 10 patient per month capacity that we have previously discussed.

Brian Kevany: As it relates to production capacity, currently, we're running at a cadence of 6 patients per month within the facility, and continue to develop the space to be capable of reaching that 10 capacity - 10 patient per month capacity that we have previously discussed throughout the rest of this year. All of those activities are on track to meet that goal, and it's actually lining up very well with the onboarding the additional QTCs to maintain a steady level of supply for those sites as they come on board.

Speaker #11: Throughout the rest of this year, all of those activities are on track to meet that goal. And it's actually lining up very well with the onboarding of the additional QTCs to maintain a steady level of supply for those sites as they come on board.

Speaker #9: Yeah. And I just wanted to also add on the sterility thing right, Jeff, which is we've done a lot of work trying to minimize the probability that that problem occurs again.

Vish Seshadri: Yeah. I just wanted to also add on the sterility thing, right, Jeff, which is we've done a lot of work trying to minimize the probability that that problem occurs again. You know, whether we can go, say, 40 runs or 50 runs and never saw this problem happen again, that's only gonna be empirically proven. All our feasibility studies point out that the probability is significantly reduced by at least a log order, or more. That's what gives us the strength, but, you know, we're not stopping at that. Whatever we've implemented as an improvement to reduce those false positives, we're not stopping at that. We're also doing the next generation, rapid sterility development alongside this so that we can, you know, get to an even better level.

Speaker #9: Whether we can go, say, 40 months or 50 months and never saw this problem happen again, that's only going to be empirically proven. But all our feasibility studies point out that the probability is significantly reduced by at least a log-order or more.

Speaker #9: So that's what gives us the strength. But we're not stopping at that. Whatever we've implemented as an improvement to reduce those false positives, we're not stopping at that.

Speaker #9: We're also doing the next generation rapid sterility development alongside this so that we can get to an even better level. So this is part of when you say R&D, we're always thinking about pipeline.

Vish Seshadri: This is part of when you say R&D, we're always thinking about pipeline. There's a lot of lifecycle management R&D that goes into optimizing ZEVASKYN. That's really where some of our teams in the quality function are focused on. As Brian said, we're already operating at 6 manufacturing runs a month cadence. This is right now with the current demand, it's keeping up, and that's gonna be ramped up to about 10 a month by second half of the year. That's also coming. The second question that you asked was about the patient and HCP feedback on the current treatment.

Speaker #9: There's a lot of life cycle management R&D that goes into optimizing ZivaSkin. That's really where some of our teams and the quality function are focused.

Speaker #9: And as Brian said, we're already operating at a six manufacturing runs per month cadence. So, right now with the current demand, it's keeping up.

Speaker #9: And that's going to be ramped up to about 10 a month by second half of the year. So that's also coming. The second question that you asked was about the patient and HCP feedback on the current treatment.

Speaker #9: I'll just preface this by saying that there's only two patients that have been treated and there's not enough time that has passed along because if you remember even our endpoint and assessments and things like that happened six months this is a therapy with a durability play, right?

Vish Seshadri: I'll just preface this by saying that there's only two patients that have been treated, and there's not enough time that has passed along because if you remember, even our endpoint and assessments and things like that happen six months. This is a therapy with a durability play, right? I don't know if we have enough feedback, but I'll just open it up to Madhav to see what he has on that.

Speaker #9: So, I don't know if we have enough feedback, but I'll just open it up to Mazov to see what he has on that.

Speaker #1: Nothing more to add. I wish to what you have said. At this point.

Madhav Vasanthavada: Nothing more to add, Vish, to what you have said at this point.

Speaker #9: Yeah, overall, yeah. Because when we talk to doctors, they say, "Oh, that patient is doing well." What does that really mean? I mean, are you talking about wound healing, or are you talking about the general health of the patient?

Vish Seshadri: Yeah. Overall.

Madhav Vasanthavada: Yeah.

Vish Seshadri: Oh, yeah, because when we talk to doctors, they say, "Oh, that patient is doing well." What does that really mean? I mean, are you talking about wound healing or are you talking about?

Madhav Vasanthavada: Right.

Vish Seshadri: General health of the patient? These are things that we don't really know, it's too premature to comment on that.

Speaker #9: These are things that we don't really know. So it's too premature to comment on that.

Speaker #10: All right. Appreciate it, guys. Thank you.

Jeff Jones: All right. Appreciate it, guys. Thank you.

Madhav Vasanthavada: Mm-hmm.

Speaker #2: Thank you very much. And our next question is coming from David Bouts of Zach Smallcap Research. David, your line is live.

Operator: Thank you very much. Our next question is coming from David Bautz of Zacks Small Cap Research. David, your line is live.

Speaker #12: Hey, good morning, everyone. Thanks for the update this morning. So I got a couple of questions about the patients that you've already treated. First off, are you aware if they were also simultaneously being treated with Vijuvix, say, maybe for their smaller wounds if they had any?

David Bautz: Hey, good morning, everyone. Thanks for the update this morning. I got a couple questions about the patients that you've already treated. First off, are you aware if they were also simultaneously being treated with VYJUVEK, say, maybe for their smaller wounds, if they had any? Do you anticipate the need to retreat either of those patients later in 2026? Are you aware if there are any exclusions for retreatment, say if any of the payers have restrictions on the ability to get retreated?

Speaker #12: Do you anticipate the need to retreat either of those patients later in 2026? And then are you aware if there are any exclusions for retreatment, say, if any of the payers have restrictions on the ability to get retreated?

Speaker #10: Go ahead, Mazov.

Vish Seshadri: Go ahead, Madhav.

Speaker #1: Yeah. So we don't know the Vijuvix-related question, what we do know is that these patients were not simultaneously on Vijuvix. That's the information we have.

Madhav Vasanthavada: Yeah. We don't know the VYJUVEK-related question. What we do know is that these patients were not simultaneously on VYJUVEK. That's the information we have. With regard to their prior history of VYJUVEK, we think that most of these patients have received VYJUVEK at some point in their journey. Your second question with regard to retreatment, based on the physician feedback, these patients have significantly large wound areas, and they have said that, yes, these patients would require a second round of ZEVASKYN treatment. We don't know if that is going to be this year or if this is going to be next year or to some other point, 'cause these initial set of patients and to the foreseeable future, these patients have large, you know, areas of their body that require, you know, several areas to be treated.

Speaker #1: But with regard to their prior history of Vijuvix, we think that most of these patients have received Vijuvix at some point in their journey.

Speaker #1: Your second question with regard to retreatment. Based on the physician feedback, these patients have significantly large wound areas. And that they have said that, yes, these patients would require a second round of ZivaSkin treatment.

Speaker #1: We don't know if that is going to be this year, or if this is going to be next year, or some other point. Because these initial set of patients, and to the foreseeable future, these patients have large areas of their body that require several areas to be treated.

Madhav Vasanthavada: We don't know if that is going to be this year or if this is going to be next year or to some other point, 'cause these initial set of patients and to the foreseeable future, these patients have large, you know, areas of their body that require, you know, several areas to be treated. The third one with regard to exclusion, no, we don't see exclusion criteria with regard to a retreatment of a patient, which is really, you know, something we are very pleased to see that payers are not blocking, like ZEVASKYN for once in their lifetime. So that is encouraging. If we do have a patient that requires a retreatment of a previously treated ZEVASKYN area, then it really depends on what the payer policy there will look like.

Speaker #1: The third one with regard to exclusion, no, we don't see exclusion criteria with regard to a retreatment of a patient. Which is really something we are very pleased to see that payers are not blocking ZivaSkin for once in their lifetime.

Madhav Vasanthavada: The third one with regard to exclusion, no, we don't see exclusion criteria with regard to a retreatment of a patient, which is really, you know, something we are very pleased to see that payers are not blocking, like ZEVASKYN for once in their lifetime. So that is encouraging. If we do have a patient that requires a retreatment of a previously treated ZEVASKYN area, then it really depends on what the payer policy there will look like. We are not seeing any kind of a blockade or anything of that sort based on the policies that have been published.

Speaker #1: So, that is encouraging. If we do have a patient that requires a retreatment of a previously treated ZivaSkin area, then it really depends on what the payer policies there would look like.

Speaker #1: But we are not seeing any kind of blockade or anything of that sort, based on the policies that have been published.

Madhav Vasanthavada: We are not seeing any kind of a blockade or anything of that sort based on the policies that have been published.

Speaker #9: Okay. Great. Appreciate taking the questions.

David Bautz: Okay, great. Appreciate you taking the questions.

Speaker #1: Yeah.

Madhav Vasanthavada: Yeah.

Speaker #2: Thank you very much. Well, we have now reached the end of our question and answer session. I will now turn the call back over to Vish for his closing remarks.

Operator: Thank you very much. Well, we have now reached the end of our question and answer session. I will now turn the call back over to Vish for his closing remarks.

Speaker #9: Thank you, Jenny. And thank you, everyone, for joining us today for the Earnings Call. We'll talk to you again soon.

Vish Seshadri: Thank you, Jenny. Thank you everyone for joining us today for the earnings call. We'll talk to you again soon.

Speaker #2: 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.

Operator: 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.

Full Year 2025 Abeona Therapeutics Inc Earnings Call and Business Update

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