Fabrice Cabaud Abeona Therapeutics Inc. ( NASDAQ: ABEO ) is gearing up for a Biologics License Application [BLA] resubmission in the 2nd half of 2024. This would be regarding a resubmission of the BLA filing of Pz-cel for the treatment of patients with recessive dystrophic epidermolysis bullosa [RDEB].
There is a good chance that the next filing should have a better shot at FDA approval being achieved. The reason I believe this to be the case is because the only issue noted in the Complete Response Letter [CRL] was that the Chemistry, Manufacturing and Control [CMC] portion of the application was not sufficient. With no issues noted about safety/efficacy of Pz-cel, plus no mention of needing another study, there is a very good chance that it will receive U.
S. marketing approval of this therapy this next time around. Besides this, there was a collaboration agreement established with Beacon Therapeutics to obtain non-exclusive rights to the AAV204 Capsid platform that Abeona has.
The company can use this capsid for up to 5 gene therapy ophthalmic targets and then up to 4 additional gene targets. This deal doesn't have any money yet in place, but if a non-exclusive agreement option is taken, then it is possible to receive some cash based on this agreement. What puts Abeona in a good position already is that it has already licensed out other gene therapies in its pipeline.
For instance, it licensed its MPSIIIA gene therapy program to Ultragenyx Pharmaceutical ( RARE ) and then the Rett Syndrome and CLN-1 gene therapy programs to Taysha Gene Therapies ( TSHA ). While there is an emphasis to obtain U.S.
regulatory approval of Pz-cel for RDEB, it is in the process of developing several other preclinical candidates in its pipeline, all of which utilize the AIM Vector platform. This would be with the advancement of candidates ABO-503, ABO-504 and ABO-505 to treat patients with X-linked retinoschisis [XLRS], Stargardt Disease and Autosomal dominant optic atrophy [ADOA] respectively. Pz-Cel For The Treatment Of Patients With Recessive Dystrophic Epidermolysis Bullosa The main clinical program to go over would be the use of Pz-cel, which has already been explored in various clinical studies for the treatment of patients with recessive dystrophic epidermolysis bullosa [RDEB].
Before going over the entire history of this program, plus any catalysts to come out of it, it is first important to note what RDEB is and what the possible market opportunity for it could be. It is important to note that Epidermolysis Bullosa [EB] is a type of rare skin disorder that causes the skin to blister and come apart easily. With less severe disease, the blistering is a major problem for the patient, which affects their skin on the elbows, feet, hands, and knees.
However, in more severe cases it can lead a person with EB to become blind, cause severe scarring or other systemic medical conditions because of it. The term “dystrophic” means that the disorder is caused by a genetic mutation. In the case of this patient population, the mutated gene of COL7A1 causes the loss of Collagen VIII, which is a protein responsible for holding the skin together like Velcro.
With this protein lacking, the skin starts to blister and/or become loose for these EB patients. Regarding the term “Recessive,” this is just the inheritance reference being noted, where the disorder comes about because of inheriting certain genes from a parent. The global dystrophic epidermolysis bullosa treatment market size is predicted to reach $715 million by 2030 .
Specifically, the company itself predicts that it could obtain >$500 million U.S. peak revenue by year 5.
Abeona Therapeutics hit a major roadblock for Pz-cel for the treatment of patients with RDEB back in April 2024. That's because it received a complete response letter [CRL] from the FDA based on its submitted BLA of this therapy. The truth is that this CRL was given because of CMC deficiencies.
There was no mention that the company lacked safety or efficacy of Pz-cel, nor that it needed to complete an entirely new study at all. Having said that, this biotech believes that it can rectify this issue noted in the CRL and resubmit a BLA of Pz-cel for the treatment of patients with RDEB in the 2nd half of 2024. This is one catalyst that stems from this program, which investors can look forward to.
From there, it is possible that several other catalysts can come about. For instance, if the FDA accepts the BLA of Pz-cel for RDEB and sets a PDUFA date, this would be viewed positively by the stock market. Secondly, FDA approval itself could act as another milestone as well.
One final item to consider that would not only act as a catalyst, but could provide a means for Abeona to obtain additional funds, would be the ability to receive a PRV. How could this be possible? If Pz-cel is given the green light for U.S.
marketing approval of RDEB, then it would be entitled to receive a Priority Review Voucher [PRV]. The significance of this would be that it could either use it to speed up review for another program in its pipeline at a later period, or just choose to sell it to another pharmaceutical company for cash. PRVs are highly sought after by companies, and this would be because of the ability to speed up review of a pipeline drug by several months.
One example to point to, in 2024, would be a PRV that Valneva sold for $103 million . Thus, if a PRV is obtained and sold by Abeona, this would bring in an extensive amount of cash. This would help the company to not only fund the commercialization efforts for Pz-cel, but to also give it enough funds to advance other programs forward in the clinic.
Beacon Licensing Agreement Could Bring About Added Value One of the hallmarks of Abeona Therapeutics was its ability to license the AIM Capsid library technology so that it could develop several of its gene therapies. This technology was licensed from the University of North Carolina at Chapel Hill. The good thing about this AAV capsid technology for targeting the eye is that it has been shown to achieve high macular and optic nerve transduction after para-retinal administration.
With this technology being able to transduce multiple layers of the retina [inner and outer layers of it], it could allow it to go after eye disorders with a huge unmet medical need. The AIM vectors produced for gene therapy delivery are highly ideal, because of two functions: Non-replicating nature of the vectors Ability to evade immune responses generated by naturally occurring AAV vectors for gene therapy. With the last function being critical because the ability to not generate an immune response upon treatment, could allow for a competitive advantage of re-dosing.
The beauty of this technology is being able to target genetic disorders that not only target the tissues of the retina, but other tissues of the body like the lungs, liver, and others. Having said all of this, there was a prominent novel AAV capsid to come from the AIM Capsid library, which is known as AAV204. This is the product candidate that was just licensed to Beacon for the development and commercialization of gene therapies for select ophthalmology indications.
Based on such an agreement, the goal is to evaluate gene therapies towards the targeting of eye disorders over a 12-month period. If all goes well in this regard, then Beacon can use its option to obtain a worldwide, non-exclusive license to use the AAV204 capsid towards up to 5 gene or disease targets. From there, it could also obtain the ability to nominate up to 4 other candidates on certain terms.
The bottom-line is that if Beacon exercises its option for one of these candidates, then Abeona would be entitled to receive an upfront cash payment. There would also be the eventual development, regulatory and sales-based milestone payments made as part of deals like this. Along with the ability to receive the typical tiered royalties based on net sales of products marketed.
The best part of the deal, is that the ophthalmic targets here with this Beacon deal, have nothing to do with what Abeona is using this Capsid for. This means the targeting of X-linked retinoschisis [XLRS], Stargardt Disease and Autosomal dominant optic atrophy [ADOA] are to be wholly owned by it, irrespective of this deal. Financials According to the 10-Q SEC Filing , Abeona Therapeutics had cash, cash equivalents, restricted cash and short-term investments of $62.
7 million as of March 31, 2024. Even though this is a low amount of cash on hand, it completed two financing transactions to bring about a considerable amount of cash. The first of which was a $50 million credit facility with Avenue Venture Opportunities Fund, L.
P., with a term of 3 and a half years. The first tranche of $20 million was received at closing, with other tranches to follow, such as: Second tranche - $10 million of committed capital Third tranche - option to upsize credit facility by an additional $20 million upon meeting certain terms and conditions The second financial transaction done was the pricing of $75 million underwritten offering of common stock and pre-funded warrants.
With both of these transactions in place, the company believes that it has enough cash on hand for a cash runway to fund its operations into 2026. One thing to note is that this cash projection doesn't include any possible sales to be made with Pz-cel if approved, nor any cash obtained thereafter as part of a sale of the PRV. The cash burn per quarter for this company is $14.
3 million. Risks To Business There are several risks that investors should be aware of before investing in Abeona Therapeutics. The first risk to consider would be regarding the BLA resubmission of Pz-cel for the treatment of patients with RDEB.
The risk here is that even if the resubmission occurs, there is no guarantee that the FDA will accept the newly submitted CMC portion of the application. Plus, even if the BLA is accepted for review, there is no assurance that Pz-cel will ultimately be approved for U.S.
marketing. A second risk to consider would be in terms of the development of the preclinical gene therapy products that are in the company's pipeline. This would be the advancement of ABO-503 for X-linked retinoschisis [XLRS], ABO-504 for Stargardt Disease and ABO-505 for the treatment of patients with Autosomal dominant optic atrophy [ADOA].
Even though it has been able to achieve clinical success in advancing the use of Pz-cel for the treatment of patients with RDEB all the way through phase 3 testing, there is no assurance that a similar outcome will be achieved with any of these other rare eye disorder gene therapy treatments. The third and final risk to consider would be regarding the recent announcement of the licensing agreement made with Beacon. It was announced that Beacon would be responsible for using the AAV204 Capsid to go after select ophthalmology targets.
There is no guarantee of Beacon exercising its option to continue further development of such targets. If no target indications are taken as an option by Beacon, then this means Abeona could lose its ability to obtain cash based on this collaboration agreement. Conclusion Abeona Therapeutics has done well to advance the use of Pz-cel for the treatment of patients with RDEB.
Even though it hit a major roadblock with a CRL from the FDA after the first review, I believe that it could easily rectify this situation. Again, the CRL was only given based on CMC issues alone. Thus, I believe a resubmission of the CMC portion of the application in the 2nd half of 2024, should take care of the FDA's original concerns.
If all goes well with such a move, then it is highly likely that several other catalysts could come about for shareholders. Obtaining U.S.
marketing approval of Pz-cel for RDEB will be important because it would allow the company to go after a well-sized market opportunity. The company believes that it could reach peak U.S.
sales of >$500 million by year 5 of the gene therapy being sold. The truth is that should this Pz-cel program go well in terms of receiving FDA approval, then Abeona Therapeutics Inc. could move on to develop the other preclinical gene therapy candidates in its pipeline.
With the potential for resubmission of the BLA of Pz-cel for RDEB in the 2nd half of 2024, plus the ability to look forward to several other catalysts thereafter, I believe that investors could benefit with any potential gains made. This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of.
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Terry Chrisomalis is a private investor in the Biotech sector with years of experience utilizing his Applied Science background to generate long term value from Healthcare. He is the author of the investing group Biotech Analysis Central which contains a library of 600+ Biotech investing articles, a model portfolio of 10+ small and mid-cap stocks with deep analysis for each, live chat, and a range of analysis and news reports to help Healthcare investors make informed decisions. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours.
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