Abeona Therapeutics Inc. (NASDAQ:ABEO): Navigating the Challenges and Opportunities in Cell and Gene Therapy

Published on September 24, 2024 | Ticker: ABEO

Business Overview

Abeona Therapeutics Inc. (NASDAQ:ABEO) is a clinical-stage biopharmaceutical company developing innovative cell and gene therapies for serious and life-threatening diseases. The company's lead clinical program is pz-cel, an investigational autologous, COL7A1 gene-corrected epidermal sheets therapy currently in development for recessive dystrophic epidermolysis bullosa (RDEB). Abeona's diverse pipeline also features adeno-associated virus (AAV)-based gene therapies targeting ophthalmic diseases with high unmet medical needs.

Abeona's primary focus is on advancing pz-cel, its investigational autologous cell therapy for RDEB, a rare and devastating genetic skin disorder. The company recently submitted a Biologics License Application (BLA) for pz-cel to the U.S. Food and Drug Administration (FDA) and is awaiting regulatory review. Abeona's fully integrated cGMP manufacturing facility in Cleveland, Ohio served as the production site for the pz-cel used in the Phase 3 VIITAL™ clinical trial, and is capable of supporting the potential commercial launch of the therapy upon FDA approval.

In addition to pz-cel, Abeona's development portfolio includes a pipeline of AAV-based gene therapies targeting ophthalmic diseases. The company's novel AIM™ capsid technology, licensed from the University of North Carolina at Chapel Hill, is being evaluated to improve tropism profiles and enhance the delivery of genetic payloads for a variety of devastating diseases. Abeona's preclinical ophthalmic programs include ABO-504 for Stargardt disease, ABO-503 for X-linked retinoschisis, and ABO-505 for autosomal dominant optic atrophy.

Financials

For the fiscal year ended December 31, 2023, Abeona reported annual revenue of $3.5 million and a net loss of $54.2 million. The company's annual operating cash flow was -$37.0 million, and its annual free cash flow was -$37.3 million. These financial results reflect Abeona's continued investment in the development of its cell and gene therapy pipeline, as well as the ongoing costs associated with its manufacturing operations and regulatory activities.

In the first quarter of 2024, Abeona reported a net loss of $31.6 million, with research and development expenses of $7.2 million and general and administrative expenses of $7.1 million. The company's cash, cash equivalents, restricted cash, and short-term investments totaled $62.7 million as of March 31, 2024. Subsequent to the quarter, Abeona raised $75.0 million in gross proceeds from an underwritten public offering, further strengthening its balance sheet and liquidity position.

Regulatory Updates and Outlook

Abeona's lead program, pz-cel, is currently under review by the FDA following the submission of a BLA in September 2023. In April 2024, the company received a Complete Response Letter (CRL) from the FDA, which identified certain Chemistry, Manufacturing, and Controls (CMC) requirements that need to be addressed before the BLA can be approved. Abeona has submitted plans to the FDA to provide the requested CMC data prior to BLA approval, and the company is working diligently to satisfy the agency's requirements.

Despite the CRL, the FDA did not identify any deficiencies related to the clinical efficacy or safety data included in the BLA for pz-cel. Abeona remains committed to addressing the CMC-related issues and resubmitting the BLA as soon as possible. The company is also continuing to prepare its commercial manufacturing facility in Cleveland, Ohio to support the potential launch of pz-cel, if approved.

In the company's preclinical pipeline, Abeona has completed pre-Investigational New Drug (pre-IND) meetings with the FDA regarding the development plans and regulatory requirements for its AAV-based gene therapy programs targeting ophthalmic diseases. The company is actively advancing these programs, which leverage its proprietary AIM™ capsid technology, towards first-in-human clinical trials.

Liquidity

As of March 31, 2024, Abeona had $62.7 million in cash, cash equivalents, restricted cash, and short-term investments. This liquidity position was further strengthened by the company's recent $75.0 million underwritten public offering, which closed on May 7, 2024. Abeona believes that its current cash resources, combined with the net proceeds from the recent financing, will be sufficient to fund its operations through at least the next 12 months.

The company has historically funded its operations primarily through the sale of common stock. Abeona also has an open market sale agreement in place with Jefferies LLC, under which it may sell shares of its common stock for up to $150.0 million. During the first quarter of 2024, the company raised $6.4 million in net proceeds from sales of its common stock under this agreement.

Risks and Challenges

Abeona faces several key risks and challenges as it continues to advance its cell and gene therapy pipeline. The most significant near-term risk is the successful resolution of the CMC-related issues identified in the FDA's CRL for the pz-cel BLA. Delays in addressing these requirements could push back the potential approval and commercialization timeline for the therapy.

Additionally, Abeona's preclinical AAV-based gene therapy programs face the typical risks associated with early-stage drug development, including the ability to achieve positive results in clinical trials, obtain necessary regulatory approvals, and successfully manufacture and commercialize the therapies. The company also faces competition from other cell and gene therapy developers, as well as potential pricing and reimbursement challenges for its products.

Abeona's ability to continue funding its operations is another key risk factor. While the company's recent financing has bolstered its liquidity position, it may need to secure additional capital in the future to support its ongoing research and development activities, as well as potential commercialization efforts.

Conclusion

Abeona Therapeutics is navigating the complex and rapidly evolving cell and gene therapy landscape, with a focus on advancing its lead program, pz-cel, for the treatment of RDEB, and a promising pipeline of AAV-based gene therapies targeting ophthalmic diseases. Despite the recent setback with the FDA's CRL for the pz-cel BLA, the company remains committed to addressing the agency's requirements and resubmitting the application as soon as possible.

Abeona's strong liquidity position, supported by its recent financing, provides the company with the resources to continue investing in its pipeline and manufacturing capabilities. However, the company faces significant risks and challenges, including the successful resolution of the CMC-related issues, the ability to achieve positive clinical results and regulatory approvals for its programs, and the need to secure additional funding to support its long-term growth.

As Abeona navigates these challenges, investors will closely monitor the company's progress in addressing the FDA's CRL, the advancement of its preclinical pipeline, and its ability to execute on its strategic priorities. The company's success in these areas will be crucial in determining its long-term prospects in the rapidly evolving cell and gene therapy landscape.

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