Abeona Therapeutics (NASDAQ:ABEO) reported second-quarter revenue growth from its ZEVASKYN cell therapy launch while outlining operational challenges involving patient scheduling and manufacturing that affected revenue recognition.
The company recorded net ZEVASKYN revenue of $11.4 million for the quarter ended June 30, up 31% from $8.7 million in the first quarter. Abeona treated five patients during the second quarter but recognized revenue for four treatments because one batch had cell yield below the threshold for billing. The company said it has treated 12 patients since ZEVASKYN’s launch, including three additional patients treated in the third quarter to date.
Commercial rollout expands to seven treatment centers
NewYork-Presbyterian/Columbia University Irving Medical Center and Children’s Hospital of Philadelphia, or CHOP, were activated during the second quarter. CHOP completed its first ZEVASKYN treatment in July after being activated in May, while the University of Texas Medical Branch recently completed its first patient biopsy.
According to Chief Commercial Officer Madhav Vasanthavada, about 40% of Abeona’s addressable market has in-state access to a QTC based on claims analysis. He said QTCs also serve patients traveling from other states, and the company is receiving requests from additional epidermolysis bullosa treatment centers to offer ZEVASKYN.
Abeona said the treatment’s logistics require coordination among dermatologists, surgeons, anesthesiologists, hospital staff, payers and patients. ZEVASKYN has an 84-hour shelf life, making scheduling particularly important for biopsies, manufacturing and treatment procedures.
Patient cancellations and manufacturing issues affected results
Management said the launch has produced operational lessons, including delays from patient health changes and limitations in manufacturing yields. During the second quarter, two scheduled biopsies were canceled at the last minute because of patient health deterioration. Vasanthavada said those cancellations reflected the need to reschedule rather than patients deciding against treatment.
The company also reported one low-yield manufacturing batch in the second quarter and one out-of-specification batch in the third quarter. No revenue was recognized for either treatment, although both patients received the available product and were treated.
Seshadri said the low-yield issue was the first such event observed across the company’s clinical and commercial experience. A batch producing fewer than four sheets is considered low yield for revenue-recognition purposes, he said. The company’s commercial manufacturing runs have averaged about nine sheets per lot, compared with about five sheets per patient in its Phase 3 VIITAL trial, where six sheets was the maximum allowed.
The out-of-specification batch involved an identity test related to Pan-CK marker expression on keratinocytes, according to Seshadri. He said the issue did not concern product safety or potency. Abeona has discussed the matter with the FDA and is gathering manufacturing data that it believes could support a revision to the specification. The company expects to provide an update in a subsequent quarterly report.
Abeona said it will no longer emphasize leading indicators such as scheduled biopsies or biopsies in manufacturing in its quarterly disclosures, citing external variables that can disrupt the path to revenue-generating treatment. Instead, future reports will focus on patients treated during the quarter and net revenue recognized.
CMS grants NTAP status for fiscal 2027
Abeona also highlighted that the Centers for Medicare & Medicaid Services granted New Technology Add-on Payment, or NTAP, status for ZEVASKYN, effective Oct. 1, 2026, for fiscal 2027.
Vasanthavada said NTAP provides supplemental reimbursement to hospitals for eligible high-cost therapies administered during inpatient stays. Of 15 applications submitted through the traditional pathway for fiscal 2027, ZEVASKYN was one of three that received NTAP status, he said.
Management said Medicare represents roughly 10% of the payer mix for recessive dystrophic epidermolysis bullosa, or RDEB. The company said the designation could improve access for Medicare and dual-eligible patients by helping treatment centers cover costs beyond standard hospital payments. Executives also said they expect the designation to support discussions with other payers, though they did not quantify its expected revenue impact.
Quarterly loss widened as revenue increased
Abeona reported research and development expense of $5 million for the second quarter, down from $9.6 million in the first quarter. The prior quarter included a $7 million one-time upfront cost related to the in-licensing of ABO-701.
Selling, general and administrative expense declined to $15.8 million from $19.5 million in the first quarter, primarily due to fewer engineering runs and lower manufacturing training costs.
Net loss was $20.2 million, or $0.35 per basic and diluted share, compared with a net loss of $17.1 million, or $0.30 per share, in the first quarter. As of June 30, Abeona had $146.8 million in cash equivalents and short-term investments.
Chief Financial Officer Joseph Vazzano said gross margins depend heavily on the number of patients treated in a quarter because many manufacturing costs are fixed. He said Abeona believes gross margins could reach roughly 85% to 90% at full operating capacity.
Management said its near-term focus is increasing the number of patients entering the treatment process, expanding QTC access and improving treatment-center readiness as it works toward a more consistent cadence of patient treatments.
About Abeona Therapeutics (NASDAQ:ABEO)
Abeona Therapeutics is a clinical‐stage biopharmaceutical company focused on the development and commercialization of gene and cell therapies for severe, life‐threatening rare diseases and oncology indications. Founded in 2014 and headquartered in Cleveland, Ohio, Abeona leverages proprietary viral and non‐viral delivery platforms to correct or compensate for underlying genetic deficiencies. The company’s research efforts target pediatric neurodegenerative disorders as well as debilitating dermatologic conditions with high unmet medical need.
The company’s lead clinical programs include separate AAV‐based gene therapies for CLN1 and CLN3 forms of neuronal ceroid lipofuscinosis, alongside an ex vivo autologous cell therapy for recessive dystrophic epidermolysis bullosa.
