Abeona Therapeutics Inc. (ABEO) Earnings Call Transcript & Summary

We can't hear anything on our end here at Abeona. Line is Steve. Steve, can you hear us? Everyone listening, please bear with us a moment. We're having a moment of technical difficulty. This is Michael Amoroso, from Abeona. Thank you. [Technical Difficulty]

Hello. This is your host, John McGrane. We are experiencing technical difficulties right now. We are just going to pause the broadcast and resume fresh really quickly. Thank you very much.

Will the meeting come to order? Good morning, ladies and gentlemen, I welcome to the 2021 Abeona meeting of the stockholders of Abeona Therapeutics Inc. I'm Steve Rouhandeh, Chairman of the Board of Abeona, and I'll be serving as the Chairman of this meeting. I'm joined by Michael Amoroso, Chief Executive Officer at Abeona. Michael, would you like to take a moment to introduce yourself?

Sure. Thank you, Steve. Good morning, everyone. I'm delighted to be here today and participate in this important shareholder event. After the principal items of business for the meeting are concluded, I'm excited to present the company's progress achieved in 2020 and to start 2021. Afterwards, we will open the meeting to general questions from the stockholders. Steve, I will turn back to you to cover the business matters. Thank you.

Thank you, Michael. The principal items of business before the meeting are: one, the election of 3 directors, Steven Rouhandeh, Michael Amoroso, Leila Alland, MD, to hold office for a term of 3 years and until his or her sector -- successor is elected and qualified; two, to vote on the proposal to amend our restated certificate of incorporation to declassify our Board of Directors so that all directors are elected annually; three, to ratify the appointment of Whitley Penn LLP as our independent registered public accounting firm for the fiscal year December -- ending December 31, 2021. The close of business on March 29, 2021, was fixed as a record date for the determination of stockholders entitled to receive notice of and to vote at this meeting. Notice of the meeting and related proxy materials were sent on or about April 9, 2021, to all stockholders of record for the meeting. Any stockholder has not yet voted or wishes to change his vote, may do so by clicking on the voting button on the web portal and following instructions. Stockholders who are sending proxies or have previously voted via telephone or Internet do not want to change their vote, do not need to take any further action at this time. A quorum is present, represented by proxies received by the tabulator. As soon as the inspector of election has completed with the canvassing of the ballot, the total number of shares represented in the results of the voting will be reported at the meeting. Since there's a quorum present, it is in order to proceed with the business of the meeting. As you're aware from the proxy statement, there are 3 proposals before us today. I will briefly describe each of the proposals and then open the polls for voting. One, the first item on the notice of the meeting is the election of 3 directors to hold office until 2024 -- and the 2024 Annual Meeting of Stockholders until his or her successor has chosen or qualified. The Board of Directors recommends each of Steven Rouhandeh, Michael Amoroso and Leila Alland for election as directors. Two, the second item went to notice the meeting is a proposal to approve an amendment to our restated certificate of incorporation to declassify our Board of Directors so that all directors are elected annually. The Board of Directors recommend a vote for this proposal. The third item on the notice of meeting is a proposal to ratify the appointment by the Board of Directors of Whitley Penn LLP as our independent accountants for the company for the current fiscal year ending December 31, 2021. The Board of Directors recommends a vote for this proposal. Opening of the polls and voting on proposals. We will now proceed with the voting on the proposals. It is 9:09 a.m., and the polls are now open. If you previously sent in a signed proxy card or submitted your proxy vote by telephone or on Internet, it's not necessary for you to vote via the web portal today unless you wish to change your vote. If you are a stockholder of record on the close of business on March 29, 2021, if you have a valid proxy from your broker, bank or other agent with respect to the shares beneficially owned, you desire to vote via the web portal at today's meeting, please go to www.virtualshareholdermeeting.com/abeo2021. Any stockholder has not yet voted or wish to change your vote made us so by clicking on the voting button on the web portal and following instructions there. I'll give a moment for anybody who wants to do that to submit their vote. [Voting]

We now appear to have all of the ballots. And since all of those designed to vote have had an opportunity to do so, I'll now declare the polls closed at 9:10 a.m. I have here the preliminary report of the inspectors based on the proxies already received. The final voting results will be presented in the current report on Form 8-K to be filed following the date of this meeting. The final results will include ballots voted by stockholders present and voting at the meeting. On the basis that proxies already collected, I report the following: stockholders of record owning 60,870,359 shares of common stock, constituting a majority of all the outstanding shares of common stock of the company are represented at the meeting by proxy or in person. The results of the balloting with respect to the first item on the annual meeting on the agenda for the meeting, the election of directors of the company to serve until 2024 annual meeting indicate that at least 84% of the shares of common stock of the company were voted for the election of Steven Rouhandeh, at least 97% of the common stock of the company voted for the election of Michael Amoroso, and at least 97% of the common stock of the company were voted for the election of Leila Alland, MD. Since the majority of the votes -- since the majority of the shares present in person by proxy entitled to vote on the matter has been voted for each of the nominees, each of Steven Rouhandeh, Michael Amaroso and Leila Alland have been newly elected as directors of the company to serve until the 2024 Annual Meeting of Stockholders and until his or her respective successor is chosen and qualified. The results of the balloting we expect the second item of the agenda for the meeting to prove an amendment to our restated certificate of incorporation to declassify our Board of Directors so that all directors are elected annually indicate that 35% of the outstanding shares of common stock voted to approve the amendment to our restated certificate of incorporation to declassify our Board of Directors that all directors elected annually. Since less than the required 66.6667% of the shares outstanding is voted for the amendment to our restated certificate of incorporation to declassify our Board of Directors. The restated certificate of incorporation has not been amended to declassify our Board of Directors. The results of the balloting in respect to the third item on the agenda for the meeting to ratify the appointment of Whitley Penn LLP as our independent registered public accounting firm for the fiscal year indicate that 98% of the shares of the common stock present, in person or by proxy entitled to vote on this matter voted to ratify the appointment of Whitley Penn LLP. Since the majority of the shares present, in person or by proxy entitled to vote on this matter has been voted for the ratification of the appointment of Whitley Penn LLP. They have been ratified as independent accountants of the company for the current fiscal year. At this point, I'd like to turn the call over to Michael to review some milestones achieved in 2020 and into 2021. Michael?

Thank you, Steve. Earlier today, we issued a letter to shareholders outlining the tremendous progress Abeona achieved in 2020 and to start 2021. I'd like to highlight some key points from that letter. We remain laser-focused on bringing urgently-needed treatments to patients with recessive dystrophic epidermolysis bullosa, otherwise known or referred to as -- respectively. [Technical Difficulty] Sorry, I think we had a technical challenge there. I'll begin, again. We remain laser-focused on bringing urgently-needed treatments to patients with recessive dystrophic on epidermolysis bullosa, RDEB, and Sanfilippo syndrome Type A and B. I want to thank the patients, caregivers, investigators and patient advocacy partners who continue to show a steadfast dedication to our clinical trials. Our most critical -- our most significant clinical milestone of '20 was the initiation of Phase III VITAL study of EB-101, our gene-corrected cell therapy for patients afflicted with RDEB. We expect to complete patient enrollment in the VITAL study in 2021, and we anticipate top line data in mid-2022, followed by a BLA application filing, if the data is positive, of course. We had a successful Type B meeting with the FDA in late 2020 for EB-101, and now have crystal clear alignment with the FDA on proposed co-primary endpoints. A, the proportion of EB-101 treated wounds with greater than 50% wound healing from the baseline at week 24 or 6 months. And b, co-primary endpoint, improvement in pain at 24 weeks assessed by the Long Baker pain scale at time of dressing change versus an untreated control wound, also at week 24 or 6 months. We believe these are clinically meaningful endpoints that are -- and we are thankful to the FDA for their collaboration. With regard to our investigational adeno-associated virus or AAV-based gene therapy clinical candidates, we're developing ABO-102 for the treatment of MPS IIIA, otherwise known as Sanfilippo Syndrome A and ABO-101 for the treatment of MPS IIIB, otherwise known as Sanfilippo syndrome B. We're very excited to share new interim data from the Transpher A study at the 17th Annual World Symposium in February 2021, which continues to show the potential for ABO-102 to help preserve neurocognitive development in patients with MPS IIIA when they're treated at a young age. In the Transpher A study, we demonstrated that in the 3 youngest patients treated with ABO-102, respectively, age is 27 months, 19 and 12, neurocognitive development was preserved within the normal range of a non-afflicted child, up to 2.5 to 3 years post-treatment with ABO-102. We were very excited with this promising data. We believe ABO-102 has the potential to be a life-altering treatment option for children with MPS IIIA. Also at the World Symposium in February 2021, we presented new results from the Transpher B study that provided additional insights into ABO-101's biologic effect in patients with MPS IIIB, seen through biologic markers such as urine and heparin sulfates, cerebrospinal fluids, liver volume reductions. Since the beginning of 2020, we've continued to advance our in-house manufacturing capabilities for EB-101. A key component to the EB-101 drug manufacturing process is the retroviral vector that delivers the functional copy of the Collagen VII alpha-1 cDNA gene into skin graft in cells. In 2020, we internally developed the cGMP manufacturing process for the retroviral vector and have produced 3 cGMP lots for analytical and clinical comparability. This helps Abeona have control of their supply chain and full end-to-end manufacturing capability. In 2020, we also initiated the AAV process development activities to enable in-house manufacturing of commercial supply of ABO-102 and ABO-101. As part of our strategy to focus resources on key clinical programs, we entered into 2 strategic partnerships in 2020 with tissue gene therapies for ABO-202 for CLN1 disease, also known as infantile Batten disease. And for an AAV-based gene therapy for Rett syndrome. The partnerships are intended to facilitate development by Taysha of earlier-stage noncore internally-developed assets for patients with high unmet need, while providing the opportunity for Abeona to share in the future success of these. Looking ahead to the balance of 2021, we're focused on completing enrollment in the EB-101 Phase III pivotal VITAL study, gaining clarity on a regulatory path for ABO-102 with the FDA for MPS IIIA, and producing the first lot of Abeona-produced clinical-grade product for ABO-102. We're reporting additional neurocognitive data for Transpher A study and additional clinical updates for the Transpher B study. As part of our strategy to expand our clinical pipeline, we are conducting preclinical research assessing AAV capsids in 6 undisclosed eye disorders, and we are advancing towards IND-enabling studies in '22. Before wrapping up, I wanted to highlight the additions to our Board of Directors. In addition to my appointment as Chief Executive Officer and Board member, we appointed 4 new independent members to our Board of Directors. And yesterday, we announced a key hire of a Senior Vice President, Head of Research and Clinical Development. Our strength in Board and management team represents a group of highly qualified and diverse executives who bring fresh perspectives, relevant operational expertise with life science companies and leadership experience to Abeona. The accomplishments over the past year and into our fast start of 2021, fill us with great optimism for Abeona's future and give us positive momentum as we focus on execution, achieving key mile [Audio Gap] I'd like to open up the meeting for general questions in an orderly fashion. Questions will be introduced by Greg Gin, our Head of Investor Relations.

Thank you, Michael. The first question that has come in is, can you comment on the potential competitors for EB-101 in RDEB?

Sure. Thank you for the question. First, I want to just correct the language that's near and dear to us here at Abeona. We truly in this ultra-rare space that have had no approved therapies in 3 to 4 decades and have tremendous high unmet need, don't look at the other life sciences folks who are studying EB and types of EB as competitors. We really believe the therapies out there will be complementary, and I'll give you a little background. There are other partners out there who are looking at other types of EB. There are other partners out there who are looking at RDEB specifically, as is Abeona. I'll remind everybody EB-101 for the VITAL trial focuses on the worst type of epidermolysis bullosa known as recessive dystrophic epidermolysis bullosa. Within that study, within that disease, there are really 2 different segregated wound types. The early evolution of wounds are recurrent and recurring cluster of blisters, which are small recurrent wounds, as they referred to. And as the disease evolves, the patient now has a wound type that is more morbid and ultimately leads to mortality eventually in the life cycle, which are now referred to as large and chronic wounds. These are wounds 20-centimeter square to greater or wounds that are open for 6 months or longer. And unlike the recurrent wounds I just referred to, they can no longer close themselves. That is the patient, that is the wound type that will be applicable for EB-101 as the start for our positioning of our product and where we're generating data today, the most troublesome wounds. So the other studies that are ongoing in this space really are not focused on just RDEB and just large and chronic wound. They're more small recurrent or other type of EB. So we really think and hope for approval of several companies in this space, and we think these therapies will be complementary through the 2 and 3 decades where these patients usually see their demise in their mid-30s. I hope that gives some clarity of the positioning and focus of target, patient type and wound type for EB-101 as well as where some other research and development from other companies is going on right now, which is not exactly in the same space. Some overlap in RDEB, but large and chronic wounds being very specific to Abeona and EB-101. Greg?

Thank you, Michael. Next question is with respect to M&A. Can you comment on Abeona's expectations for M&A?

Yes. Sure. I would love to. And if you were with us on our earnings call yesterday, you'll hear a reiteration. M&A is a very important part of what we do. Right now, we do believe we have -- there was a question that came in. We don't give exact burn rates right now on financial guidance, but I know, Ed, we'd share our cash position at the end of Q1 yesterday. We'll share that again in a moment. But we're always looking at M&A from a 2 standpoint view, which is are there partners out there with or in our respective therapeutic area disease states that we're researching that could propel our capabilities? Our knowledge base within this area, whether that could be in areas of clinical development, manufacturing, commercial capability. We're always looking at those partners. We have those conversations ongoing on a regular basis. Well, we always look at partners also that could help us out -- help us with our cash positions. So these are ongoing activities that are part of what I call normal small-cap daily activities, and we, at Abeona, are continuing to do the same. Ed, would you state -- restate for us, please, our cash position at the end of Q1 that was reported yesterday?

Yes, sure. The year-end cash was, I think, about $86.7 million. I'm sure we don't mention -- we don't comment on our financing strategy. But as we said yesterday, we believe we have sufficient cash resources fit to propel us to keep regulatory milestones. So we feel good where we're at.

Thank you, Ed.

Okay. The next question, actually, I'll take. The next question is the Taysha and [ corenea ], the obligation that from a potential REGENX arbitration outcome. So whether Taysha needs a license to AAV9 from REGENX for any of its products would be a legal conclusion that we can't comment on at this time. And at this time, that concludes the questions.

Well, thank you. I think we appreciate shareholders for dialing in. And with no further ado, we'll turn it back over to Steve.

Thank you, Michael. I'll repeat that just in case people didn't hear me. Lou Larson of L2 Elections, LLC has been appointed to serve as inspector of election for this meeting. With no further questions, I will now take a motion to accept the report of the inspector and adjourn the meeting.

Go ahead, Steve. You repeat then Ed will respond.

Sure. With no further questions, I will now take a motion to accept the report to the inspector and adjourn the meeting.

Okay. Q4, please make sure both lines are open, please. I move that the report of the inspector be accepted, and then all ballots be filed with the secretary upon the adjournment of the meeting.

I second the motion.

Will those in favor, say aye, those opposed, no.

Aye.

The motion is carried. There are no other formal items of business to be brought before the meeting. Unless there's any further business to come before the meeting, may I have a motion to adjourn?

I move that we adjourn.

I second the motion.

Well, those in favor say aye. Those opposed, no.

Aye.

The motion is carried. The motion is carried, the meeting is adjourned.