Good morning, and welcome to the Abeona Therapeutics, Inc. First Quarter 2018 Earnings and Business Update Conference Call. Today’s call is being recorded. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. For opening remarks and introductions, I would like to now turn the call over to Christine Silverstein, Senior Vice President, Finance and Investor Relations.

Thank you. Good morning, and welcome, everyone. Today's call will be led by our Carsten Thiel, our Chief Executive Officer. Carsten will be joined by Tim Miller, our President and Chief Scientific Officer; Juan Ruiz, our Chief Medical Officer; and Jeff Davis, our Chief Operating Officer. Before I turn the call over to them I need to remind our listeners that remarks made during this call may contain forward-looking statements that involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws. Information contained in the forward-looking statements is based on current expectations and is subject to change, and actual results may differ materially from forward-looking statements. Some of the factors that could cause actual results to differ are discussed in the reports filed with the SEC. These documents are available on our website at www.abeonatherapeutics.com. With that said, it is now my great pleasure to introduce to you Dr. Carsten Thiel. Carsten, you have the floor.

Thank you, Christine, and good morning, everyone. I'm delighted to be on Board and very excited about the opportunities that lie ahead. I would start this morning by sharing a few thoughts about Abeona and some initial impressions from my first month. Then I would like to highlight our clinical programs and business development as these programs are critical to our continued success and mission to patients, and they align well with our strategic intent to deliver long-term growth and increase value for shareholders. I will then turn the call over to my colleagues for more details on our programs, quarter financials and investor-related events before we open the floor for questions. Before I begin, as announced this morning, it is with great pleasure to welcome our newly appointed Directors of our Board, Stefano Buono and Richard Van Duyne. We believe their insights and expertise will play an important role in guiding and helping us advance our business strategy in the years ahead. I’ve been here for about a month now, having joined on April 2, and I’ve spent much of my time with our teams getting a direct view of the strengths of our existing science and capabilities and assessing potential new value drivers. I've been deeply impressed with the talent, experience and accomplishments of our employees contribute to our company and want to commend them for a remarkable quarter and thank them for their warm welcome, unwavering focus and performance through this transition. Frankly, I could not have imagined a better start in the company and would like to thank Tim Miller, specifically, for our good collaborations and his vision and leadership without which we would not be the company we are today. We are fortunate to have him transition to Chief Scientific Officer. I believe we have…

Thank you, Carsten. It's been an exciting quarter for a lot of our preclinical studies. In our preclinical work in the first quarter, we achieved two regulatory designations from the FDA for our program in CLN1 disease, also known as infantile-onset Batten disease, an inherited genetic disease in newborns that progresses very rapidly. The Orphan Drug Disease Designation was received in February and the Rare Pediatric Disease Designation was received in March. After quarter-end, this program also received its third regulatory designation, EMA – the Orphan Drug Designation by the EMA, European – or Europe's regulatory body. In preclinical studies, ABO-202, which is the CLN1 program has demonstrated increased survival in CLN1 mice treated with the combination of intrathecal or intravenous delivery compared to intrathecal or intravenous delivery alone. Similar to other lysosomal storage diseases like MPS IIIA and IIIB, the early presentation and rapid decline of patients with infantile Batten disease may see similar results from earlier intervention with gene therapy and at higher doses. Our IND-enabling studies continue to support the CLN3 gene therapy program, and our CLN1 IND-enabling studies will start very soon. Both programs have been recognized with Orphan Drug Designation by the FDA and EMA, highlighting the stage of development and how the amount of preclinical data to date have supported the translation of the programs into the clinic. In addition, we continue to work on optimizing and expanding our worldwide exclusive AIM vector platform, which has AAV capsids that have demonstrated enhanced selectivity of specific tissues compared to naturally occurring AAV capsids. Studies are ongoing and utilize different levels of administration relative to first-generation vectors with direct CNS, intravenous or intramuscular approaches which may be used to enhance gene delivery. This platform provides alternatives for next-generation treatment opportunities in patients that may have neutralizing antibodies to natural AAV serotypes as well as a potential option for additional AAV treatment strategies in patients that were first treated with a natural-occurring AAV. We continue to develop and expand the AIM chimeric AAV vectors, both internally and through the strategic partnering efforts. I'll now turn the call back over to Christine, who will review our first quarter financials. Christine?

Thanks, Tim. I remind listeners that we have recently filed a Form 10-Q where you can get all the specific details on our financial results. But in summary, our cash, cash equivalents as of March 31, 2018, were $132 million compared to $137.8 million as of the end of the fourth quarter of last year, December 31, 2017. Net cash used in operations for capital expenditures for three months ending March 31, 2018, was $7.6 million compared to $5.9 million in the same period of 2017, an increase of $1.7 million. Cash outflows were offset by inflows of approximately $1.8 million from proceeds of the exercising of outstanding options and warrants. Total net cash outflow was $5.8 million for the quarter. From a revenue perspective, our revenues were $2.6 million for the first quarter of 2018 compared to $186,000 for the similar quarter the year prior. A large portion of the increased quarterly revenues consisted of the recognition of foundation grants that were announced during the fourth quarter of 2017. A portion of those grants were received in the fourth quarter of 2017 and in the first quarter of 2018. And the amount recognized is matched against corresponding expenditures for drug manufacturing and clinical readiness. Additional revenues consisted of royalties from the marketed products, specifically MuGard. In the quarter, Abeona adopted the ASC 606 pertaining to revenue recognition, and therefore there will no longer be any recognition of deferred revenues related to upfront payments from earlier license agreements Loss per share was $0.18 per share for the first quarter of compared to $0.13 per share in the comparable period in 2017. Total number of common shares outstanding as of the day that we filed the 10-Q on May 10 is roughly 47.3 million shares. That's the summary of financials. In…

Thank you, Christine. In summary, I am excited about the progress we have made across our pipeline over the recent quarter. And you've heard from Christine that we have a promising future ahead of us that includes important milestones for our company. I want to thank our hardworking staff, our investors, our clinical investigators and, most of all, our patients for working with us to develop potentially curative therapies for their devastating diseases. I will now turn over the – to the operator to open up for questions. Thank you.

Thank you. We will now conduct a question-and-answer session. [Operator Instructions] Our first question comes from the line of Maury Raycroft with Jefferies. Please proceed with your question.

Hi, good morning, and congrats on the progress. To start, for EB-101, I'm wondering what we should expect at ASGCT and the SID meeting? If you can contextualize the data we'll see at both meetings? And if you can also remind us where you are at with the final details with the FDA for the Phase 3 trial design?

Yes, thank you Maury. Good morning, I am glad you’re on the call. So the two questions, what to expect this week at the conferences, obviously, we ask everyone for a few days more – more patients for the data readouts. I'll let Tim give you a bit more detail on the presentations this week, what's happening. To your second question, we are in the finalization stage of the protocol for the Phase 3 study. This is an important milestone for us. In parallel, good progress is happening so that the Phase 3 study can be at a good place. So, Tim, with respect to the presentations this week?

Hi, Maury, nice to speak with you again. As Carsten mentioned, these will be mostly incremental updates for the EB-101 program. As you know, we've enrolled seven patients, the first patient of which is actually through almost four years of follow-up. So the investigators will be providing an update on really just wound healing through additional time points.

Okay, great. And then, next question is based on the fireside chat discussion planned at ASGCT. If you can provide any previews to what topics will be included and whether there'll be any focus on the evolving thinking around neurocog subdomain measures in MPS IIIA and IIIB, specifically? And I don't know if – I wonder I realize your CMO is available, but if he can provide any perspective on this, that would be great?

Yes. So with respect to MPS IIIA, I guess, that's what you're asking. We feel very confident and good about the work that has been done in the Natural History Study and the scales on the neurocognitive med performance and function assessed and the consistency with our clinical trials. So again, this week will just be update, and I'll let Juan give a bit more detail on the neurocognitive scales that we're using. Juan?

Yes. Thank you, Carsten. Thank you, Maury. Let me emphasize, as Carsten has pointed out, that the selection of the cognitive scales is one of the most relevant decisions or the measuring of the outcomes of our clinical trial. And we are fortunate that we are – we have counted with collaboration of Nationwide Children's Hospital on the Natural History Study they conducted that has helped us to inform of the most adequate parameters on the scales to use in the assessment of the patients treated in our trial. We have selected those that were identified in this Natural History Study, and we are confident that this scale will provide us the data in order to evaluate the efficacy of our treatment.

Thanks, Juan.

Our next comes from the line of Liav Abraham with Citi. Please proceed with your question.

Good morning. My first question relates to ABO-102 and data that are expected at ASGCT later this week. Can we expect biomarker data from the most recent two patients that were enrolled in the trial and the highest-dose cohorts later this week?

Good morning Liav, and thanks for joining. I can understand the curiosity in what's happening over the next couple of days, we haven't disclosed any more detail per patient, and so I think the ASGCT conference is important to see any updates.

Got it. And can you confirm whether any additional patients have been enrolled in the trial since your recent announcement that a total of 11 patients have been enrolled in the ABO-102 trial?

Yes, actually up to date 11 is the number that we have disclosed so far.

Okay. And now that you have RMAT designation for ABO-102, do you guys have a better sense of what data you feel that you need to have to hand in order to engage with FDA and agree on a pivotal trial design? And any update on your timeline for engaging with FDA on this program?

Yes, this is actually a very important question. The RMAT designation allows us to engage with FDA and that's something that's now a priority for us. We don't want to get ahead of ourselves. And I see this dialogue with FDA as an important milestone that is ahead of us. And then, we will know what that means for our regulatory process and what needs to be included in the package. Thank you.

And one final question for you, Carsten. Just given your background, can you talk a little bit about the preparations that you're making on the commercial front for some of your lead compounds, the time to market is not that far away, hopefully, and maybe you can just talk about whether you started laying the groundwork for – on the commercial front and for commercial activities? And where you are in this process?

Yes. Actually, this is very close to my heart, and I thank you for asking the question. Access, reimbursement and commercial has been somewhat, I would say, behind the outstanding work that the company has done on science and on the clinical side. So one of our priorities now is to recruit the leadership in the commercial organization. I think we have great potential both in the U.S. as well as in Europe. I see these opportunities across these two major regions. And the focus is clearly on commercialization. These are rare diseases and require a very particular and specific approach. And as with all gene therapy companies, access and reimbursement is going to be a key question to address, and we will have the capabilities for that.

Our next question comes from the line of Kennen MacKay with RBC. Please proceed with your question.

Hi, thank you for taking my questions. And looking forward to the update coming at ASGCT. So I won't ask on what's coming at ASGCT since it's couple days away here. But again, maybe just wondering if there was any additional color you could help us with on the potential registrational trial designs for EB-101 and ABO-102? I guess for, specifically, EB-101 after the RMAT designation, wondering if we could still be thinking about a potential registrational trial here that involves enrollment of a dozen or so patients with seven to eight wounds per patient and a control wound in those. Is that still sort of the right way to be thinking about this after your interactions with the FDA so far? Or should we be maybe thinking about a larger trial more in line with some of the historical trials that have been run in RDEB?

Yes. Thank you, Kennen, for the question. As you know, we are in the finalization process. The conversation so far has been very positive. And the endpoints that we had in our Phase 1/2 study with more than 50% wound healing are indicative of success. And we anticipate the Phase 3 trial to recruit roughly 10 to 12 patients with more than 50% wound healing. So as you rightfully said, the controls will be intra-patient with at least one chronic wound at the same patient for control, untreated.

Okay. Thank you very much.

Our next question comes from the line of Elemer Piros with Cantor Fitzgerald. Please proceed with your question.

Yes, good morning. A question. I was wondering if you could tell us a little bit about the enrollment patent in the IIIA trial. When you look at the historical pattern, obviously there were some higher enrollment rates last year. Could you discuss, maybe, the screened failure rate in the study and what is your plan to increase or enhance enrollment in the study?

Sure. Thanks very much for the question. And I will refer to Juan, who can give a bit more detail on the specifics of the screening process and how many screening success and failures we have in the IIIA trial. All I just want to say upfront is we're delighted with the progress of that trial. As you know, we're working very closely with the investigators, and we see a strong collaboration with the families of those affected patients. So with that, Juan, do want to talk about the screening so far?

Yes. Thank you, Carsten. Well, the screening failures that we have observed in our trial are mostly related to the presence of antibodies for the AAV9 that we are using. And they have been in the same rate that you can find antibodies in the normal population. So we haven't seen anything different from that. And as Carsten has emphasized, we are very pleased with the enrollment progress of our trial, currently having enrolled 11 patients and targeting 15. We are confident that we will provide information later this year about the completion of enrollment.

Okay. Thank you very much. And maybe, just one more from me, Carsten. If in a Phase 3 trial for the RDEB population, would you be utilizing material made in Cleveland or at the original source at Stanford University?

So regarding the RDEB program, this trial is going to start with Stanford material and University of Stanford is preparing for this now with GMP-conform material in parallel. And I think we have disclosed this also before, we're voting off Cleveland, the site, it's going to be finished by the end of this month in May, and this site is going to be able to provide both commercial supply for EB-101 as well as Phase 3 clinical trial supply.

Thank you. We have reached the end of the question-and-answer session, and we set the conclusion of today's call. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.