Greetings. Welcome to the Abeona Therapeutics First Quarter '23 Portfolio Update Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Greg Gin, Vice President of Investor Relations and Corporate Communications. You may begin.

Thank you, Holly. Good morning, everyone. I would like to welcome and thank everyone for joining us on our portfolio update conference call. Our objective today is to share additional new positive data from our EB-101 and AAV ophthalmology programs recently presented at scientific congresses. The press release is announcing the data at the ISID and ASGCT meetings are available on our website at www.abeonatherapeutics.com. Before we start, I would like to note that remarks made during today's call may contain projections and forward-looking statements. Forward-looking statements are made pursuant to the Safe Harbor provisions of the federal securities laws. These forward-looking statements are based on current expectations and are subject to change, and actual results may differ materially from those expressed or implied in the forward-looking statements. Various factors that could cause actual results to differ include, but are not limited to, those identified under the Risk Factors section in our Form 10-K and periodic reports filed with the SEC. These documents are available on our website at www.abeonatherapeutics.com. On the call today are Dr. Vish Seshadri, Chief Executive Officer, who will give some opening remarks. Dr. Dmitriy Grachev, Chief Medical Officer, who will review the new VIITAL study data that we presented at ISID; and Dr. Brian Kevany, Chief Technical Officer, who will review the animal proof-of-concept data from our AAV ophthalmology program presented at ASGCT last week. After the prepared remarks, joining us for the Q&A session will be Joe Vazzano, Chief Financial Officer; and Dr. Madhav Vasanthavada, Vice President, Business Development. And with that, I will now turn the call over to Vish Seshadri to kick it off. Vish?

Thank you, Greg. Good morning, everybody, and thank you for joining us this morning. I want to start today by saying last week was a great advancement for the epidermolysis bullosa, or EB, community, I want to congratulate Krystal Biotech, the EB patient community, researchers and regulators for bringing the first genetic therapeutic option to tackle this debilitating disease as more therapies come to market, we anticipate increased awareness about therapeutic options in the EB space and also improved diagnosis and genotyping for this painful disease. Recessive dystrophic EB, or RDEB, is a connective tissue disorder in which both copies of the gene for collagen VII are mutated and dysfunctional resulting in the lack of connectivity between the outer and inner layers of the skin. Patients with RDEB face a lifelong struggle with fragile skin that easily tears and blisters with most patients developing large painful wounds that remain unhealed, often covering a significant proportion of their body. Recently published natural history data in RDEB analyzing 251 RDEB wounds describe the two distinct types of RDEB wounds. On the top are chronic open RDEB wounds, while on the bottom are the recurrent wounds. On the right, the spider plot [ph] show chronic wounds rarely show 50% or greater wound healing, while the recurrent wounds frequently healing completely and open again. Furthermore, at ISID this year, a prospective study was presented by the team at Stanford, that further corroborated this distinction between large chronic wounds and recurrent wounds. We are excited to advance EB-101 as a potential therapy that could deliver years of sustained wound healing and proven pain relief after a one-time treatment cycle for a large chronic RDEB wounds. These are pictures of the patients in our VIITAL study with large chronic wound on the upper left side. You…

Thank you, Vish. First, I would like to express my excitement about data presented at international Societies for Investigated Dermatology meetings or ISID. Dr. Jean Tang, Professor of Dermatology, Stanford and Principal Investigator of the VIITAL study, presented the data during oral session at ISID and data were also featured in separate poster presentation. The results presented at ISID show that EB-101 improved wound healing and pain reduction at 6, 12 and 24 weeks compared to control wounds following one-time application of EB-101. Furthermore, EB-101 demonstrated improvement in patient reported and caregiver reported outcomes for each and blistering severity. Before reviewing the results, I want to provide a brief summary of the trial design for VIITAL. VIITAL was designed to investigate the efficacy, safety and tolerability of EB-101 in approximately 36 large chronic wound pairs, in 10 to 15 patients with a minimum age of 6 years. Our study was randomized and controlled. Each patient had a minimum two large chronic wounds selected with each undermined treated wounds being paired with the controlled wound simulant size, years that would remain chronically open and anatomic location to the extent possible with the same patients. In VIITAL, we define large chronic wounds as wounds that have greater than 20 square centimeters of surface area and remain open for a minimum 6 months although many were open for years. We aligned with FDA on the study endpoints and statistical analysis plan. Given that EB-101 is targeting large chronic wounds, remember, the hardest to treat wounds that remain open for years because they cannot self-heal. Realign on the co-primary endpoint of greater than or equal to 50% wound healing and the second co-primary endpoint of pain reduction as additional measure of clinical benefit. Specifically, the co-primary end points were; first, the proportion of RDEB…

Thank you, Dmitriy. We've made significant progress towards BLA submission and are marching towards commercialization. We had previously mentioned, one of the key milestones was to complete three consecutive process performance qualification, or PPQ runs, to demonstrate our validated process and readiness for commercial production. We are excited to share that today we have completed this important step for both the retroviral vector manufacturing and EB-101 drug product manufacturing, which was the last critical piece of data we had to generate to complete the CMC module for the BLA submission. We announced in our first quarter 2023 results press release that we had submitted a pre-BLA meeting request with the FDA. The FDA has since accepted our request and the pre-BLA meeting is scheduled on July 10, 2023 to discuss the format, content and acceptability of the anticipated BLA application. Based on this meeting date, we are on track for the anticipated BLA submission in early third quarter of 2023. Based on the anticipated timing of BLA submission, we expect potential BLA approvals in late first quarter or early second quarter of 2024. If the BLA is approved, we anticipate being granted the priority review voucher, which can be used to receive expedited review by the FDA of a subsequent marketing application for a different product or sold to another company, prior PRVs have been sold to other biopharma companies for approximately $100 million. As part of our commercial planning for EB-101, we continue to engage with stakeholders across the health care system including public and private payers and health care providers to better understand market access and pricing for EB-101. We are encouraged by the initial feedback from these stakeholders and feedback that we have received from patient advocates and organizations, which collectively support positive coverage decisions and pricing in line with the value of a one-time treatment that delivers wound healing and pain reduction for years. Based on our initial discussion, payers view RDEB as a disease with very high unmet need and believe EB-101 has a well differentiated profile with durable clinical benefit for the treated wounds. Also, given the ultra-rare prevalence of our debt, payers view EB-101 will have a limited overall budget impact and have indicated high willingness to cover EB-101 with favorable access policies giving us confidence in its potential. Now let's turn to our preclinical ophthalmology programs. We presented animal proof-of-concept data at ASGCT for investigative AAV-based gene therapies for Stargardt disease, X-linked retinoschisis and autosomal dominant optic atrophy. The preclinical proof-of-concept data provides early evidence of the potential of our proprietary AAV capsid and gene construct to express the recombinant protein in target tissues and rescue mutant phenotype in mouse disease models. I'd now like to turn the call over to our Chief Technical Officer, Dr. Brian Caveney, who will review the results presented at ASGCT.

Thank you, Vish. We are excited by the broad potential for treating serious eye diseases with the new AAV-based therapies using novel AAV capsids from our in-licensed AM capsid library and internal research. At ASGCT, we presented three posters highlighting encouraging findings from animal proof-of-concept experiments from our AAV ophthalmology program. The first poster presented featured ABO-504, a novel approach to treating Stargardt disease, the most common form of juvenile inherited macular dystrophy. Autosomal recessive starter disease is caused by mutations in the ABCA4 gene, preventing the removal of toxic substances from photoreceptor cells that result in photoreceptor cell death and progressive vision loss. Our proprietary strategy is designed to efficiently reconstitute the full length ABCA4 gene which is too large to fit in a standard AAV genome by implementing a dual AAV vector strategy utilizing the Cre-LoxP recombinase system. The data at ASGCT provides compelling evidence that two independent AAV vectors utilizing Cre recombinase can efficiently reconstitute the ABCA4 gene, leading to full length ABCA4 protein expression. Key conclusions presented include in vivo Cre-Mediated Recombination yields full length ABCA4 using our dual AAV vector system, recombination -- recombinant human ABCA4 is detected and properly localized to photoreceptor outer segments within 1 month of treatment. Our results show that Cre-Mediated Recombination of dual AAV vectors is safe and effective in delivering an expression of full-length human ABCA4 in a knockout mouse model, paving the way for a novel therapeutic approach for treating Stargardt disease. Further studies will evaluate ABCA4 expression on accumulation of lipofuscin in a mouse model of Stargardt disease. Additionally, we believe our dual vector approach using Cre-LoxP can also be adapted for other therapies in which AAV-based delivery of large genes is desired. Our second poster presented at ASGCT featured ABO-503, a novel gene therapy approach for…

Thank you, Brian. We are looking forward to pre-IND meetings with the FDA for two of our programs taking place this quarter. With that, I'll turn the call back over to Holly for the Q&A section.

[Operator Instructions] Your first question for today is coming from Maury Raycroft at Jefferies.

Hi. Good morning and congrats on the updates and thanks for the presentation today. We saw Krystal's Vyjuvek was approved with a relatively broad label. Do you expect the same based on your conversations with the agency, including patient profile type of wounds, et cetera? Maybe if you can talk a little bit about what you're expecting in the label.

Thank you, Maury, for the question and good morning. Regarding the indication and the patient types, I want to reiterate that VIITAL our pivotal study has treated RDEB patients, recessive dystrophic EB. And we have inclusion criteria that focus on large and chronic wounds. It's very early in the BLA process to comment on how broad or restrictive the label would be given, of course, the high unmet need, and this is an ongoing dialogue that's going to be there with the agency. So unfortunately, I cannot give you a definitive answer, but what I can assure is the types of wound that we have generated evidence for.

Got it. That makes sense. And you mentioned that initial feedback from stakeholders across the health care system has been positive. Maybe if you can talk a little bit about how you're anticipating pricing could work out with Vyjuvek having a list price of about 630,000. I guess how does that inform how you're thinking about pricing?

Certainly we can talk about that. I will turn the call over to Madhav Vasanthavada, who is leading a lot of our discussions with important stakeholders like both payers as well as hospital administrators, where there's a clear appreciation for the value proposition of a one-time treatment that can give you years of benefit without having to treat the same move again. So Madhav, if you can throw light on the differentiation and how we have discussed about pricing, please?

Sure, Vish. Hey, Maury, thanks for the question. Yes, we find Vyjuvek's launch price now to be very insightful in how we will go about with pricing. Earlier in the year, we had conducted payer research, mostly blinded research with nearly a dozen payer groups across commercial, Medicare, Medicaid. And it was very encouraging to hear when we discuss the clinical profiles of both all the investigation therapies, including [indiscernible] as well as for EB-101 that the payers really find the clinical profile for EB-101 to be very transformational given the wound healing profile, pain reduction and durable. And at that time, we had placed a few different scenarios as to what if the entry price for Vyjuvek would be, and how would that compare with potential price and price elasticity for EB-101, which is all very encouraging. And now that we have learned what the pricing for Vyjuvek is, we will be in a much better position to be able to place pricing for EB-101 to making sure that there is no access hurdles to patients. But at the same time, we are also capturing the value for the innovation and the durable effects that EB-101 will be able to bring. So all in all, I think the price elasticity maintains. And given the profile that we now have, we will be in a better position to be able to place a price for a launch price for EB-101.

Got it.

Does that help [indiscernible]?

Yes, that's helpful. It makes sense with understanding the value proposition. And maybe last question, and then I'll hop back in the queue. The gene therapy data from ASGCT looks good. Just wondering if you could talk a little bit more about how you're prioritizing those three different opportunities. And should we think of Stargardt with the 504 program as being the lead? Or how should we think about that?

Sure. I can talk a little bit about it and then turn it over to Brian for any additional thoughts. Right now we have compelling preclinical data from these disease models in mice that showed the expression of the gene as you may be aware, there's high unmet need in all three of those indications. We have chosen those indications specifically based on how many other investigational therapies are able to make inroads and have hit some challenges along the way. And we are encouraged to see that Stargardt of course, the most talked about among the three were able to uniquely address the size of the ABCA4 gene and produce that and correct tissue. In terms of prioritization and how we resource the programs, Maury, it's going to be -- we have a lot of dialogue going on. We are looking at various different sources of funding non-diluted as well and even some potential government funds. And these are programs that are all equally high and unmet needs. And so it's not really going to be an [indiscernible]. It's just going to be a matter of when. And such events will be further discussed in our upcoming calls as we make more progress and also get a little bit more clarity on other nuances from our dialogue with the agency, because that tells us, I mean, are we going to be held to having NHP data or can we have other types of animal studies which will make it much quicker to develop these drugs. So there is lot of other pieces to the equation which will further inform our prioritization.

Got it. That makes sense. Thanks for taking my questions. I will hop back in the queue.

Thank you, Maury.

Your next question is coming from Kristen Kluska at Cantor Fitzgerald.

Hi. Good morning, everybody and congrats on both of these recent data sets. The first question I had was related to the ophthalmology portfolio. So we haven't seen as many dual AAV vector strategies yet in gene therapy. I know it's something that others have talked about for some time. So maybe the first part of the question is just understanding what you think is differentiated about your construct that led to the successful findings at this preclinical stage. And then the latter half of that question is just, frankly, looking at the dual AAV vector landscape, what are the expectations on how you would expect to this to translate into human studies. And I guess the key things to look out for, given the difference between the models.

Hi, Kristen, thanks for the question. I'm going to turn it over to the expert on AAV and ophthalmology, which will be Dr. Brian Kevany, but I think before that, I'd just say that we do have -- thank you for this question, specifically because there are certain mechanistic elements of why we think we can be successful where some other approaches of getting full length ABCA4 other methods fail in the past. So Brian, can you please throw some light on our unique gene constructs and the dual AAV system, please?

Of course, yes. Thanks, Kristen. Yes. So I think there have been a number of strategies that have been tried, both in dual AAV vectors as well as mini genes for ABCA4. And while those programs have been going on for a number of years, we haven't seen a lot of movement. So I think we were encouraged by our ability to do this and push into a field that is still struggling to get construct that provides full length ABCA4. As far as how we differentiate from others, the Cre recombinase system is one of the most efficient recombination systems known in nature. And we're trying to take advantage of that as part of developing this therapy. So I think that is the one place where we differentiate from others where they're using things like homologous recombination and in pains where the efficiency of recombination may not be as high as what we are seeing with the Cre recombinase system. So I think the major differentiating point for us is less about the [indiscernible] and more about the actual mechanistic aspects of the therapy that we are trying to develop here. And Kristen, could you repeat your second part of your question?

The second part of the question was just essentially on how you think it's going to translate into human studies. And I guess, what are the key things to consider the risk of course, going from the different models outside of what you normally expect.

Sure. Yes. I mean I don't anticipate any significant differences. I mean the advantage here is we are approaching this with a sub-retinal delivery for the Stargardt program. For those that aren't aware, this is a relatively very specific injection that occurs between the photoreceptors and the retinal pigment epithelium. This directed injection keeps the vector very close to the site of action and does not get diluted out as if you were providing it as an intravenous or other types of injections. So I think the aspects of that keep it somewhat similar to between -- as we are moving between, say, mouse to a larger animal model during IND-enabling studies and then beyond into the human studies. So I think the translation from, say, the large animal to the human studies is going to be relatively smooth because the injection volume will be exactly the same between the large animal model and the human. We'll be using a lot of the -- exactly the same type of dosing. So I think that sort of translation from large to humans is going to be relatively seamless. Yes.

Thank you. And then for the autosomal dominant optic atrophy study that you presented on, you have the bullet here that that visual acuity assessments demonstrate function recovery. I think with a lot of the AAV ophthalmology gene therapy trials, the goal essentially is to show slowing down of disease progression rather than reversal. So I guess I'm just kind of interested in the context of that comment. And maybe how you think about this clinically and understand a lot of it is going to have to do with age of intervention. And as these different diseases progress at different rates, but what the underlying goal you're essentially looking at will be.

Yes. So visual acuity in mice is something that we've studied with this animal study and looking at preservation or improvement of visual acuity over time. So these animals, as they age, the mutant animals age, they start to lose their ability to have high acuity vision. This treatment was provided very early on in the disease progression prior to any degradation of that visual acuity. So it really was a prevention of that development. And visual acuity is a difficult thing to study in humans because it's something that takes a long time to develop. We've seen a number of failures in the industry where visual acuity was the primary endpoint for their trial. And because of the slow progression of these diseases and specifically visual acuity, it tends to be a bit of a blunt instrument for looking at therapeutic benefit. So I think as part of our discussions with the agency, we're going to be looking at understanding how primary endpoint decisions are made to better capture a therapeutic benefit. This is a very hot topic at ASGCT last week, specifically in ocular but in general, over the rare disease space about understanding meaningful endpoints that capture therapeutic benefit that may not be the ones that are available right now. So I think as we start to talk to regulators, we will have a better sense of how we want to approach end points and make sure that we are capturing that benefit that is probably there, but may not be captured by something like visual acuity.

Yes. And if I may just add to that, Kristen, also what we're going to be looking at is for any monogenic disease where we have a gene therapy our goal is to treat early enough that the disease symptoms don't appear or you preserve your eye function, right? But in terms of clinical development, it's going to be, the first priority would be prevention or cessation of deterioration of visual acuity. But of course, the bigger goal is also to see can you reverse disease that's already happened because it's a prevalent pool of patients with forgone disease. So we're going to be looking to test all types of populations maybe [indiscernible] start, I don’t know, 20 to 60 level of vision and maybe those for subjects where visual function may have deteriorated even more can reverse that, right. So we are going to be investigating clinically for all those signals and of course the long-term goal is to prevent such deterioration from happening in the first place.

Great. Thanks. And then last question for me related to RDEB ISID, two key new findings were just understanding the effects and then earlier point of evaluation and then also around some these other secondary endpoints. So since you presented these data, I wanted to hear as you have all these discussions with thought leaders, how important these two components are? And I know in the past we talked about looking at understanding pain reductions correlated with wound healing, but now you have a number of other data points to support these notions? Thank you again.

Thanks for that. I will take that, Kristen. So just to kind of highlight what the delta of data that we presented at ISID which wasn't in the top line. The top line focused onto the 6 months endpoint because that the regulatory endpoint timing whereas what we presented at ISID is, number one, how quickly do we see these effects, right? So you saw that 6 weeks, 12 weeks, 24 weeks, in fact, even 3 weeks where there wasn't a patient visits to do a physician's assessment, where they're reporting, they're maintaining the diaries and writing down the pain levels and [indiscernible] levels and things like that, and caregivers are scoring as well. We're seeing that the clinical benefit sets in early and we've seen an example of even 3 weeks, which is pretty much soon, a couple of weeks after they discharged went home, right. And at every time point, you can see the same kind of benefit for treated wounds and untreated wounds that effect has sustained. So that's key. And that's important to note. The second is also previously presented, the correlation between the wound healing level and pain reduction is that's also very encouraging to see that it's not a one-time point that's showing that it's very consistent over the time course post-treatment. And that's -- those have been some of the new data points that were discussed, and we've had a lot of discussions with KOLs. And this is going to be very important in further building on the value proposition. And as Dr. Dmitriy Grachev presented, we had Itch data that's also showing a dramatic improvement for treated versus untreated. And as you heard, Itch can also be a risk factor for further blistering and trauma. And that's something that we're encouraged to see. So this is going to be a holistic view of what is the benefit to patients. And beyond all what the KOLs opine and what we see as data point, what's encouraging to us is those patients who went through VIITAL are coming back in our current ongoing study, which is a source for our manufacturing runs that we conducted PPQ. And they've all lined up and they're asking for their control wounds to be treated and things like that. That's for us the ultimate source of confidence and conviction that this is something that patients really value. I hope that answered your question, Kristen?

[Operator Instructions] Your next question for today is coming from Jim Molloy at Alliance Global Partners.

Hey, guys. Good morning. Thanks for taking my questions. I just want to follow-up on a question earlier, obviously, a [indiscernible] approval. And I think on their call, they're talking about the 630,000 a year, about 485,000 a year after U.S. government discounts and I think they're saying about 1,100 target patients, not to hold due to a competitor's numbers, but how do those change up or down, your guys' estimates for where you think pricing can come in and size of the market given sort of their -- what they've put out there publicly as their estimates?

Thank you for the question, Jim. We did take note of what their pricing is, Jim. But at this point in time, as Madhav mentioned, we are encouraged by the value that the various stakeholders are placing in these types of gene therapies. I would reiterate that what we thought a year ago maybe in terms of what pricing we were considering. And then post VIITAL results, clearly, having seen the results in the best case scenario of clinical profile play out, we are definitely relooking at pricing in a different way. Now what we don't know is many details about the label for Vyjuvek's #1, very broad. It includes all of dystrophic EB, whereas we are currently looking at -- our clinical evidence is focused on recessive dystrophic EB, which is, let's say, half of the debt. And so it's really an apples-to-oranges comparison because RDEB is a smaller -- it's a relatively rarer narrower disease space and the value proposition is different as well. I mean, it's -- on the one hand, you have a redoseable gene therapy. On the other hand, we have -- for a given wound, a one-time treatment that gives you years of benefit and not having to retreat soon enough, right? So that's something we will definitely take into account. I don't want to comment anything about exact price points and things like that because we have to do our homework on how the estimated pricing per year works out and what happens in the real world because sometimes we make these estimates and then the real world turns out. So there is some time and homework for us to do before we come up. But I want to reassure that we will be responsible corporate citizens and make sure that patients will get access to our therapies because that's our guiding principle here.

Outstanding. Thank you. And then on the pre-BLA, anything that we should tip potentially coming out of the pre-BLA? I imagine it's a fairly -- it should be a fairly straightforward meeting the right into BLA. And then a follow-up would be again, given the competitor's approval, has this changed your thinking on self-launch for potentially partnering?

Thanks, Jim. So the first question that you asked on the pre-BLA, it's every BLA submission, given the complexity of our therapies, the therapeutic space, limited experience that we have in these disease areas, it behooves us to have the pre-BLA meeting to make sure that we have everything that warrants a submission, there's no decision. So that's kind of a -- but the pre-BLA meeting itself is that former step that you have. However, I just want to assure that it's not like we have complete silence with the agency and suddenly appearing for one; meeting on July 10, we have -- we've been having a lot of interaction with the agency, even as we speak. There's also a series of informal meetings and exchange. So this will be like the final culmination step saying we scored everything that we needed to. We're going to make put the dossier in front of you, right? So that is what the pre-BLA meeting is, and we are confident we should be in time because, as I mentioned, that the biggest piece of work that we had to finish was the PPQ runs, and we completed those three consecutive manufacturing runs successfully. And what's significant about that is it's not just that we had to meet the release criteria for EB-101 drug products, but also all the various process parameters have to fall within the pre-specified range to show the robustness of our process and we're happy to report that all those parameters met the goal and where we have everything we need to pull together the package. So that's for the pre-BLA and the submission work stream itself. Your second question was about partnering and commercialization. And this is a rare disease. We have -- the focus for us is more…

Great. Thanks for taking the questions.

Of course, thank you.

We have reached the end of the question-and-answer session, and I will now turn the call over to Vishwas for closing remarks.

Thank you. In closing, I want to thank our shareholders and other stakeholders who have listened to this call, and we will talk to you again soon. Thank you.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.