Abeona Therapeutics Inc. (ABEO) Q2 2025 Earnings Report, Transcript and Summary

Good Day everyone, and welcome to the Abeona Therapeutics Second Quarter 2025 Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Greg Gin, VP of Investor Relations and Corporate Communications. Sir, the floor is yours.

Thank you, Matt. Good morning, and thank you for joining us on our second quarter 2025 results conference call. 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 revisions of the federal securities laws. These forward-looking statements are based on current expectations and are subject to change. 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 SEC. These documents are available on our website at www.abeonatherapeutics.com. Joining me on today's call with prepared remarks are Dr. Vish Seshadri, Chief Executive Officer; Dr. Madhav Vasanthavada, Chief Commercial Officer; and Joe Vazzano, Chief Financial Officer. Also, Dr. Brian Kevany, Chief Technology Officer, will join us for the Q&A session. And with that, I will now turn the call over to Vish Seshadri to lead us off. Vish?

Thank you, Greg, and good morning, everyone. The second quarter of 2025 marked the biggest milestone achievement in Abeona history so far with the FDA approval of ZEVASKYN in April. ZEVASKYN is the first and only autologous cell-based gene therapy for the treatment of adult and pediatric patients with recessive dystrophic epidermolysis bullosa or RDEB, there is a persistent unmet need to meaningfully heal RDEB wounds. With ZEVASKYN approval, the enthusiasm and positive feedback from the RDEB community has further increased our confidence that ZEVASKYN will become an important treatment option for people with RDEB. We're already seeing positive momentum in the early stage of our launch. We're now accepting patients and referrals from health care providers to initiate ZEVASKYN treatment at both our activated qualified treatment centers or QTCs, which are Lurie Children's Hospital of Chicago and Lucile Packard Children's Hospital at Stanford. We are on track for the first ZEVASKYN patient treatment and thus anticipate first commercial revenue in the third quarter of 2025. With the commercial launch tracking to plan and with encouraging feedback from QTCs physicians and the patient community, we're very excited about ZEVASKYN's potential to improve the lives of people with RDEB. To dive deeper into our launch progress and the momentum in greater detail. I'll now hand the call to our Chief Commercial Officer, Dr. Madhav Vasanthavada. Madhav?

Thanks, Vish, and good morning, everyone. We are actively executing on our launch strategy, and I will provide specific updates on our initial progress, the near-term demand trends, the process for scheduling patients onto treatment and our momentum with payers. In the first 3 months since ZEVASKYN's approval, we have seen strong interest from the EB community. The 2 qualified treatment centers that have been onboarded have already identified more than a dozen patients as candidates for ZEVASKYN, and the process is underway to initiate their treatment. Moreover, we understand that referring physicians from other centers that are not QTCs have identified nearly 3 dozen additional immediate candidates. We expect patient referrals to further build as our promotional activities generate more ZEVASKYN awareness in the marketplace. With a total of approximately 50 identified patients and that number growing, we are actively working with Lurie and Stanford Children's to initiate treatment of those patients in the coming quarters, and we remain optimistic about our ability to treat 10 to 14 patients in 2025, as previously mentioned. In parallel, we are on track to increase our manufacturing capacity to treat 10 patients per month in mid-2026. While the volume of identified patients at our 2 existing QTCs is encouraging from a demand perspective, we will continue to activate additional QTCs to ease the travel burden on patients by expanding ZEVASKYN's geographic footprint, which we expect to further grow patient demand. We will announce new centers when they are ready to treat patients. Before I discuss the process for scheduling patients onto treatment, let me preface that the administrative process associated with ZEVASKYN during this early launch phase, requires a long lead time and involves significant logistical steps. Currently, we project that the journey from patient identification to ZEVASKYN treatment will take approximately 3 to 4 months, and we anticipate this time frame will shorten and scheduling will become more predictable as our launch progresses, as we activate additional QTCs and established QTCs gain experience. Let me provide an overview of the administrative steps involved in ZEVASKYN treatment. The patient journey begins with an initial consultation with the physician at the QTC, which is then followed by payer medical authorization that can take a week or more. The next step of securing financial -- the next step of securing payer financial agreement for that patient can take approximately 4 to 6 weeks. Once these steps are complete, the patient's biopsy is scheduled based on availability of both the patient and the care team. Our 25-day manufacturing process begin immediately after biopsy is received at our manufacturing facility and culminates in the patients return to the QDC for treatment, which is when we recognize revenue. Throughout this journey, our Abeona Assist patient navigators are ready and committed to supporting patients and the centers in dealing with the logistics of biopsy and return to the QTC for treatment. Now despite all these logistical steps, we are happy to report the successful completion of our first commercial patient biopsy at Lurie Children's Hospital. Manufacturing is underway, and we expect this patient to receive treatment soon. Now turning to payers. We have made significant progress in securing widespread insurance coverage for ZEVASKYN. It's important to remember that 60% of RDEB lives are covered by commercial plans, 3% by Medicaid and the rest by Medicare. To date, we have achieved positive coverage with multiple national and regional payers. Importantly, even in the absence of formal coverage policies, ZEVASKYN is being accessed through medical exception process. The prior authorization process has been highly successful with 100% of requests approved to date, including for Medicaid patients, with some approvals received as soon as within 48 hours. Now this demonstrates strong clinical acceptance of ZEVASKYN among payers. The most notable milestone with regards to commercial payers is the recent decision by UnitedHealthcare, the largest commercial payer in the U.S. to cover ZEVASKYN in line with its FDA-approved label and with no additional restrictions. We hope that this sets a critical precedent for other payers and that it will be a major step towards ensuring broad access and we are optimistic that this positive momentum with payers will continue. On the Medicaid front, we reached a key milestone by entering into a national drug rebate agreement, NDRA with the CMS and have taken the steps necessary to ensure coverage across all 51 state Medicaid programs and Puerto Rico. In parallel, we are driving productive discussions to expedite coverage and reimbursement with a majority of state Medicaid programs, and this is already yielding results as states implement favorable Medicaid coverage criteria for ZEVASKYN. Overall, we are encouraged by these early market access trends. Finally, turning to our engagement with the RDEB community, the patient and community response continues to be exceptionally positive. We recently partnered with debra of America for a nationally broadcast webinar where a clinical trial patient shared her individual experience of durable wound healing following a single application. This patient received ZEVASKYN twice during our clinical trials to cover different wound areas. We are encouraged that so far, she has been experiencing durable healing even 3.5 years after treatment. We also engaged directly with RDEB family at 3 regional meet-ups, at Columbia Presbyterian in New York City, Cincinnati Children's and the University of South Carolina in Los Angeles, where 3 unique patients from our strong together network shared their ZEVASKYN stories and showed their present day images of their still intact treated wounds. All 3 have so far experienced durable wound healing from their single treatment in clinical trials, 2 receive treatment nearly 4 years ago, and 1 patient who received treatment 7 years ago. In summary, we are encouraged by our initial last progress with nearly 50 ZEVASKYN patients having been identified between our 2 activated QTCs and a growing number of referrals. We remain optimistic about our ability to treat 10 to 14 patients this year. We are also actively onboarding new QTCs this year to further expand patient access. Reimbursement trends are strong, and the clinical interest from patients and physicians highlight ZEVASKYN's value proposition of providing significant wound healing from a single surgical application. As QTCs gain experience, we expect the centers to identify and treat more patients. With that, I will now pass the call over to our Chief Financial Officer, Joe Vazzano, to discuss our financial results. Joe?

Thanks, Madhav. I would like to remind everyone that you can find additional details on our financial results for the 3- and 6 months ended June 30, 2025, in our most recent Form 10-Q, which is available on our website. Starting with the financial resources on our balance sheet. We had unaudited cash, cash equivalents, short-term investments and restricted cash of $225.9 million as of June 30, 2025, which includes the net proceeds of the sale of the Priority Review Voucher that we received with ZEVASKYN approval. This compares to $98.1 million as of December 31, 2024. Our existing cash resources provide Abeona with robust financial flexibility, providing over 2 years of operating capital on our forecast without the need for further capital infusion and prior to accounting for ZEVASKYN sales. We anticipate that the first ZEVASKYN patient treatment will occur in the third quarter of 2025, which will initiate revenue generation, leading to our projected company-wide profitability in early 2026. As a reminder, revenue recognition occurs when the patient receives ZEVASKYN, that is upon surgical application. At this early stage in our launch, it has premature to provide revenue guidance. A quick note on our financial reporting going forward. As we transition into a revenue-generating commercial company, we will move away from providing cash runway guidance given the complexities of estimating future revenues in the early launch fees. In lieu of runway guidance, we plan to provide high-level forward cost guidance alongside regular updates on the commercialization in progress. Now turning to the statement of operations. Research and development expenses were $5.9 million for the quarter ended June 30, 2025 compared to $9.2 million for the quarter ended June 30, 2024. The reduction in R&D expense was primarily due to costs capitalized into inventory and select costs such as engineering runs and other production costs reclassified as selling, general and administrative or SG&A expense following the approval of ZEVASKYN. Our spend on SG&A activities was $17.1 million for the quarter ended June 30, 2025, compared to $8.6 million for the quarter ended June 30, 2024. In addition to the reclassification of select R&D expense to SG&A, the increase in SG&A reflects increased head down and professional costs associated with the commercial launch of ZEVASKYN. Net income was $108.8 million for the second quarter of 2025 or $2.07 per basic and $1.71 per diluted common share, including the gain from the sale of the PRV. Net income in the second quarter of 2024 was $7.4 million or $0.19 per basic and a net loss of $0.26 per diluted common share. In terms of upcoming Investor Relations activity, we plan to participate in 2 investor conferences in September, the Cantor Global Healthcare Conference and H.C. Wainwright Annual Global Investment Conference. And with that, I'll pass the call back to Vish for additional remarks before opening the call for Q&A.

Thank you, Joe. Turning to our pipeline. Beacon Therapeutics has exercised its option for a nonexclusive license to the patented AAV204 capsid for use in retinal diseases and genetic targets that are nonredundant with our AAV ophthalmology pipeline. As a reminder, AAV204 has been shown to achieve high macular and optic nerve transduction levels after para-retinal administration and has also been shown to facilitate transaction of both the inner and outer retina after intravitreal administration in mice and nonhuman primates. Now I want to turn to another partner pipeline program, AAV gene therapy UX111, which is being developed by Ultragenyx for Sanfilippo syndrome type A or MPS IIIA. In July, Ultragenyx reported that the FDA issued a CRL in its review of the UX111 BLA, requesting additional information and improvements on CMC procedures and validation. The FDA also provided observations from the manufacturing facility inspections. Ultragenyx believes the observations are readily addressable and many have already been addressed on its 2Q '25 call last week, Ultragenyx noted that it aims to reach agreement on its plan to resolve the CRL observations through a Type A meeting with the FDA. And upon BLA resubmission, expect a priority review period of up to 6 months. Next, I turn to another partner pipeline program, AAV gene therapy TSHA-102, which is being developed by Taysha Gene Therapies for the treatment of Rett Syndrome. In May, Taysha reported that it secured FDA alignment of both key elements of its pivotal trial design for TSHA-102 and the next steps to enable the initiation of the pivotal trials that could support a potential BLA submitted. Taysha has subsequently commenced pivotal trial site activation and expect to begin patient enrollment in the fourth quarter of 2025. In June, clinical data highlighting the therapeutic potential of TSHA-102 were presented at the 2025 International Rett Syndrome Foundation, Rett Syndrome Scientific Meeting. With that, I will open the call for Q&A. Operator, please open the Q&A session.

[Operator Instructions] Your first question is coming from Kristen Kluska from Cantor.

Nice to see there's so much momentum out of the gate. First, I wanted to just ask about how you're specifically defining identified patients? Are these patients that wound profiles that might make them good candidates for ZEVASKYN? Or are these patients that have indicated that they're potentially interested in receiving the treatment?

Sure. Kristen, Madhav, can you please take that one?

Yes, absolutely. Thanks, Kristen, for that question. So these patients that have been identified are really coming from the physicians and physicians criteria at this moment are for severe RDEB patients, and severe defined as patients with large wounds that have never healed in their lifetime so far. So we are really talking about really the most clinically burdened patients and physicians are very confident that these patients will get -- will want to get ZEVASKYN treatment. So that's really how they are looking at it. And again, this is really a tip of the pool of patients that they have, and that's really the type of patient they want to prioritize first.

And then given that there's about 36 plus of these that are not specifically within the 2 QTCs, how should we be thinking about when they'll get treated? Is it that it's -- I know you still have a few more that you're planning to open. So is it possible that they might wait for 1 of those? Or is there just going to be more travel involved for these Patients?

Yes. So these patients have -- we have already started the process of referrals of those [indiscernible] 36 some that we've discussed, and those patients are coming to QTCs going through the initial consult already. And for us, the way we are looking at it is with nearly 50 patients identified, pretty much initial demand, the work is cut out in that regard to get these patients onto treatment as soon as possible while in the process of activating additional treatment centers, and as I mentioned, those additional treatment centers will certainly make it easier in terms of travel for these patients, but also there are more patients in these QTCs that will be identified.

Okay. And then a last question from me. We had heard from the advocacy group that essentially all of the patients that participated in the trial said that if they had the option, they would do it again, because of the benefits. So I know you have this Abeona Assist program that's been instrumental to help the whole patient journey, but how critical has been the face time or the conversations between patients that have already had ZEVASKYN through the trial that are now talking to potential patients that may want it in the commercial setting?

It's been really helpful for the patients from our strong together network who, again, as a reminder, are clinical trial patients who have seen the type of benefits durable, long-lasting wound healing, for them to talk with -- directly with RDEB family, especially in these regional meet-ups that I mentioned, we've had these patients talking one-on-one and answering and addressing the questions. And when the rest of the community are seeing the type of healing and their patient experience, it's definitely motivating for the other patients.

Yes. And also, Kristen, to your question, yes, we believe this -- these disease trial patients were pretty much treated in Stanford. Some of them have expressed interest in getting other areas treated as well. So there will be in that pool, not necessarily the Abeona Assist because these are already patients that have the relationship with the QTC. So they will -- they are directly in touch with Stanford.

Your next question is coming from Maury Raycroft from Jefferies.

This is [ Amit ] on for Maury. Congrats On the progress. 2 from us. First, Basically, in your view, how many cases does a center of excellence typically need to treat before adopting Pz-cel as a like a routine therapy? And is there a max capacity for number of surgeries per month that these centers can handle? And I have a follow-up. .

It sounds like your question is more about the site's own capacity and whether we have criteria for site selection based on what volume of patients makes it a QTC qualifiable site. Is that correct?

Yes. Partly that and partly, I wanted to know if there is a number that you think each of these centers need to do the surgery, to become comfortable with the entire process and start to adopt the sort of treatments routinely.

Sure. Sure. I can take -- I can give you a short answer and Madhav will elaborate if needed. In terms of the number of pretreatments, right, I mean there are sites that will have their very first ZEVASKYN treatment as their commercial treatment experience. There is no practice treatment per se, Amit, they've been part of the clinical trials. So the only 2 sites that may have a repeat patient coming is -- or prior experience actually surgically applying is going to be Stanford or UMass. But that being said, the other sites, for example, you can even take Chicago Lurie's was not a clinical trial sites. The very first patient that they will be treating is a commercial patients. So there is no dry run for patient treatment that way, but they have experience treating a lot -- large number of RDEB patients because they've chosen our sites. If you really look at it, the treatment experience for patients is to do with how many specialties have seen such patients, right, the anesthesiologists, surgeons being comfortable and the EB champion physician who is the pediatric dermatologists in this case. So that infrastructure is the most important thing, and they do have that. Madhav you can add with numbers or prior experience treating RDEB patients generally at the centers that are QTCs.

Yes. I'll just say that early on physicians at the QTC, so at Chicago, for example, wanted to first treat 1 or 2 patients before even identifying additional patients. But now we are seeing that even though our first patient has not been treated yet, the -- as they are talking to more patients and the conviction, they've already started identifying more patients even without treating the very first patient. And these additional patients are currently going through the payer approval process. So that just speaks to the volume of conviction that these centers have just given the ZEVASKYN's profile and all the clinical data generated and that is very encouraging. But with regards to the efficiencies of the process flow, et cetera, I think once 1 or 2 patients are treated at the, let's say, at Lurie Children's, that's enough for them to scale this to go to the additional patients that they have in their routine care and offer ZEVASKYN to more patients. That's what we are hearing from the centers.

Yes. Yes, absolutely. And for the other 3 centers you're planning to open, do you have a sense of what the -- our deputation numbers might look like there? Would those be similar to what we are seeing from the first 2?

It's about a couple of dozen patients based on our initial discussions we had with these centers bottom up. We also were able to triangulate that with a claims analysis. So these patients are disproportionately located in these centers. And so even the dozen patients that we have said so far, that at these 2 [indiscernible] basis. So there's just a snapshot in time. And with the new QTCs that we identify, certainly, there are more patients and these centers, they have EB clinics that typically tend to meet on like on a monthly basis, patients come in for their consulting. so as these EB clinic meetings and monthly consults happen, that gives an opportunity for these physicians to actually talk to their patients that are coming in and offering ZEVASKYN to more patients. So we see this is all going to be a compounding effect of patients being identified and -- in the funnel.

Your next question is coming from Stephen Willey from Stifel.

Congrats on the progress, and this is [ Tuli ] on for Steve. So I have 2 questions, and I have a follow-up for Joe. My first question is related to activation of other QTCs. So when it comes to activating other QTCs in the future, how do you think about it? Should we think that Lurie Children Hospital as a reliable proxy for these upcoming QTCs? And also another 1 related to more future commercial guidance. So with these 2 activate -- already activated QTCs, do you think you will be able to achieve the lower end of your patient guidance range? And then I'll have a follow-up for Joe.

Yes. I'll let Madhav answer that question, but I just wanted to have a clarifying question back, which is when you say Louis proxy, do you mean in terms of patient numbers or experience. Can you just clarify that point?

Yes. More like a patient number, yes.

Got it. Got it. The short answer is that with just the 2 QTCs we have, as Madhav gave numbers, we have enough patients to treat in the near term, which is 2025 treatments that we've communicated. We're really -- when we're talking about the funnel and the 50 patients that are being identified, it's really building the momentum for 2026, right, because of our manufacturing capacity is also ramping up as we speak. But go ahead, Madhav, you have more granular everyday look into this.

No, nothing more to add. Vish, you captured it well. We have the demand. It's really a matter of how quickly we can put these patients on treatment in this particular year. But as Vish reiterated, again, we have -- in terms of patient volume, sufficient work cut out for us, and that's really going to be in the coming quarters. So that's going to be our focus, while at the same time, of course, trying to ramp additional sites as well.

Your next question is coming from Ram Selvaraju from H.C Wainwright.

I was wondering if you could just comment on 2 aspects regarding the mechanics of payment and reimbursement for ZEVASKYN. Firstly, are there differences in the ways in which you receive payment for ZEVASKYN? Or that you are in the ways you are envisaging receiving payment for ZEVASKYN related to the process of administration. Like for example, in every case, is the payment for the product all received and booked upfront. Or is part of it staged as patients move through the treatment process. And secondly, I was wondering if you could comment on the prior authorization situation, if you're seeing any emergent trends indicating intent by any reimbursement agency to ask for patient status with respect to other RDEB treatments, the extent to which other RDEB treatments have already been tried before approving ZEVASKYN or if you don't expect that to ever be something that emerges in the future?

Great questions, Ram. Madhav, here is the right person for those. If I just have to recap, just to be clear, whilst the first 1 was more about the reimbursement mechanics of what triggers payment and if there's certain ways in which dollars are paid. And the second 1 is more about the prior authorization process, looking at what other treatments these are the patients and using that as a gating factor. Go ahead, Madhav.

Thanks, Ram, for those questions, and Vish. So the payment is not gated through the process, the payment is -- or the revenue is recognized after a patient has been treated with ZEVASKYN. So that's in terms of Abeona booking the revenue for that patient. And I will just add on that in terms of the procurement process, there are 2 pathways by which a hospital can procure the product, either directly from Abeona or the other channel is through a specialty pharmacy. And in both cases, revenues recognized after the product is treated. In terms of the prior auth process and the financial agreement, the good part here is that the hospital is able to come to an agreement with payer even before placing an order for the product with Abeona. So that just minimizes any kind of risk that the hospital also has got in this. So that is -- that's just how the mechanics is working with regards to the payment. Does that -- let me pause there, and Ram, does that answer your question before I talk about the therapies?

Yes. No, that's very clear.

Okay. Great. And then with regards to your second question, so far, we have not received any pushback from payers or any kind of resistance about that the patient should not have or should have received other approved treatments before getting ZEVASKYN. And all of our conversations we've been having, and this is really a kudos to the payers, so realizing the value and the value proposition of ZEVASKYN because you've got a therapy here that has the ability to treat vast areas of the body, and we recognize the high clinical burden on these patients with durable wound healing and that is resonating well. So we hope that, that trend will continue as payers also institute policies.

Your next question is coming from Jeff Jones from Oppenheimer.

Really appreciate the degree of granularity you're providing here. You mentioned 100% success rate on submitted prior authorizations. As we think about the time line leading into the biopsies and eventual treatment, can you comment on how many prior authorizations have been submitted at this point. And as we think about time lines for the 1 biopsy done so far, if you're anticipating additional biopsies this quarter that would lead to treatments this quarter? And then I have a follow-up.

Yes. Thank you, Jeff, for that question. we can definitely share the numbers, but the thing is the prior auths that are in process are more than the ones that are approved, right? So the first 4 or 5 or something like that, we have seen that we've been able to get to the prior auths approvals. But it's a dynamic number. As we speak, these numbers keep changing so I don't want to throw out any numbers prematurely. But in regards to the time aspect that you asked, right, I mean, how long would it take for these prior auths. I think that process is getting shorter and shorter. We are right now at a phase where not all calls have been put in place and prior auths are happening as medical exceptions. So even with that scenario to see the patients going through the prior auths process coming out the other end eventually with an approval is very encouraging. It's more qualitatively the nature of no blockage per se is what we want to communicate at this point in time. It's premature to give reimbursement success metrics otherwise because we have to look at trends over 1 or 2 quarters. But what we do have confidence is that the number of patients that are going through the funnel, I don't want to give specific biopsy numbers for Q3 versus Q4 and things like that. But just from the number of patients, and the demand and have been in the funnel so far, we feel optimistic that the 10 to 14 estimate that we've provided still remains very achievable, and we're looking forward to attaining that goal.

Great. Really appreciate it. And 1 follow-up question. As we talk about that ramp for patient dosing and the issue of production capacity. And I know you're looking at production capacity of 10 per month by mid '26. Can you speak to any hurdles or risk there to that capacity coming online? Any concerns regarding FDA inspections, for example, given all of the events we've seen at the agency of late.

Yes. I think our -- the current CGMP facility that we already have has the space capacity to get up to 10. And as previously communicated, we -- it goes in steps of building 2 patients every increment, and we have done all the hiring and base adjustments that we needed to do in order to have that 10 by mid next year for more details around what are the processes, I wouldn't say risks in terms of catastrophic, but is there an FDA action involved? Yes, to go beyond 6 to 10, we do need to have some disease approved by the FDA. But I'll have our Chief Clinical Officer, Dr. Brian Kevany, comment on our plans so far and why we feel good about this is on track. Brian, can you add some color?

Yes. Thanks, Vish. So I would say our previous communications around this topic, we are exactly in line with where we anticipated being at this point. The ramp to -- from clinical to commercial manufacturing has gone extremely well, hiring, training, having the facility ready for that production has gone just how we hoped it would go, and we are still on track to meet that goal in the middle of next year. As Vish mentioned, we do have some discussions with the agency. We do not anticipate -- there's no anticipation of any kind of inspection. It's just additional conversations around the other parts of our facility being used for ZEVASKYN manufacturing that we also use for our retrovirus manufacturing. So that's really more of just a meeting with the agency. We don't anticipate inspections necessary for that change. And yes, we are very bullish about our anticipated goal for the middle of next year, meeting that 10 patient per month cadence.

Your next question is coming from James Molloy from Alliance Partners.

I was wondering, it's certainly been a great launch. I know it's a different manufacturing process than the other competitor in this space. But how should we think about the sort of the remarkable launch and the expectations of how this should guide? What should we expect for you guys over the next year or so, next 2 years for your initial stage of launch?

Yes, I think -- thanks for the question, Jim. We have been quite bold in how we articulated our launch in the sense that the patient demand is really what drive our strength here. And just within 3 months of approval to have the number of patients that Madhav communicated that are already identified as ZEVASKYN, that's what gives us the confidence that this is going to be growing as the first few patients go through this treatment experience. And we do feel that the unmet need still exists in the RDEB community. So we have so far communicated that our goal is to treat 10 to 14 patients in 2025. And the funnel is already building for more patients in 2026. So in terms of a remarkable launch. I think for the early stages, I would say that we've removed all the hurdles for these patients to go through therapy. Sites being ready, site activation is in progress right now. We already have 2 sites activated and we communicated that sufficient to hit the numbers, for the shorter term, which is 2025, and then we will be announcing more sites activated. So by the end of the year, you're going to actually see a lot more momentum having built at that point, and I could answer your question with more metrics for what a remarkable launch looks like. The reason why we haven't put any particular metric in place is because the compounding effect of so many variables, Madhav explained what the treatment journey looks like. There's a lot of time between various milestones in a patient's journey to actually get to the treatment, and that's getting shorter and short and shorter. So we will be able to give you more quantifiable ways of looking at what a remarkable launch will look like by the end of 2025. We don't want to prematurely put numbers just because this is an unprecedented type of therapy and patient population who has not experienced this at the scale that we are trying to achieve. So -- but the early trends are showing us good signs. That's all I would say about that because we're not ready to give any KPIs per se at this point in time. That is understandable.

Absolutely. I know you got your hands full of the launch. But looking over the horizon or even over the pond, any thoughts on the EU filing, EU partners, potential EU launch?

We are -- we have started some process of looking at EU as well as the Japan market. The thing is do we -- the big question is, do we supply from the Cleveland facility? Or do we have to build manufacturing footprint. The manufacturing footprint in a different geography is going to be a very long lead time, as you can imagine, because between the tech transfer and engineering runs and providing the data necessary for regulators to take action, you are looking at a 3-, 4-year time project. So we are actually looking at are there ways in which the Cleveland light can supply to other markets as well. And as you know, we are building capacity beyond the [ 10 months ] and that project is already ongoing. We are hoping that this is something that can be -- at least not for all markets, but some select markets could be potentially supplied. And we'll give you a little bit more of an update more towards the end of the year because we're all so focused on the U.S. launch first.

[Operator Instructions] Your next question is coming from Stephen Willey from Stifel.

Just 1 for Joe. How should we think about 2Q SG&A spend? Is that number a good surrogate for the next couple of quarters? Or should we expect that number to scale with an onboarding of additional QTCs?

Yes, that's a good question. I mean what I was alluding to on the call earlier is that as we're doing the engineering run, those costs are SG&A. So the mix between R&D, COGS and SG&A will really vary depending on production output. So it's kind of tough to forecast that. But as we've stated previously, 3 patients a month is our breakeven point. So if you do the math on that, you can kind of see what our operating burn will be in a given year. It's just that the mix between those 3 different expense items might fluctuate quarter-by- quarter.

Yes. It's more of an accounting mix that shifts a little because of how the engineering runs were considered in the SG&A, but overall operating costs is a good trend, what we've seen in the Q2 this year.

Thank you. That concludes our Q&A session. I will now hand the conference back to Vish Seshadri for closing remarks. Please go ahead.

Thank you, everyone, for joining us in today's business update. We'll talk to you again soon.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.