ABEO

Good day, ladies and gentlemen, and welcome to the Abeona Therapeutics first quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode, and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Joseph Vazzano, Chief Financial Officer at Abeona Therapeutics. Sir, the floor is yours.

Thank you, operator. Good morning, and thank you for joining us on our first quarter 2026 results and business update 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 provisions 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 Securities and Exchange Commission. These documents are available on our website at www.abeonatherapeutics.com.

Joining me on today's call with prepared remarks are Dr. Vishwas Seshadri, Chief Executive Officer, and Dr. Madhav Vasanthavada, Chief Commercial Officer. With that, I will now turn the call over to Dr. Seshadri to kick us off. Vish.

Thank you, Joe, and good morning, everyone. First, we're excited to share updates on leading indicators of ZEVASKYN adoption that signaled strong momentum since treating our first commercial patient in December. We have now activated six qualified treatment centers or QTCs, treated our fifth commercial patient with manufacturing underway for the sixth, and scheduled additional patients throughout the current quarter. The recent acceleration of onboarding efforts of QTCs further underscores their conviction about the role that ZEVASKYN will play in addressing the unmet needs of patients suffering from recessive dystrophic epidermolysis bullosa or RDEB. Three of the ZEVASKYN treatments reported to date took place in Q1 2026 and translated into net revenue of $8.7 million for that quarter. Second, we're sharing meaningful updates to our R&D pipeline, featuring a potentially game-changing, radically novel engineered T-cell technology for advanced prostate cancer.

By leveraging our proven expertise in advancing complex cell and gene therapies from academia through commercialization, we are well-positioned to advance this exciting technology. Before going there, I'll first turn the call over to Dr. Madhav Vasanthavada to elaborate on the ZEVASKYN launch, which is our foundational and primary focus for Abeona. Madhav.

Thank you, Vish, and good morning, everyone. Launch momentum for ZEVASKYN and our commercial story continues to build, and we are beginning to see results on multiple fronts. I'd like to start off by providing you with visibility not only to patients treated so far, but also biopsies expected this quarter. As previously shared, one patient, our very first commercial patient, was treated in the fourth quarter of 2025, and three patients were treated in the first quarter of this year. Additionally, one patient has been treated so far this quarter for a total of five patients treated to date with ZEVASKYN since launch.

The forward-looking momentum of patients in queue is also picking up with 1 patient biopsied and manufacturing for that patient currently underway, and 6 additional patients expected to be biopsied this quarter, Actually, just as of this morning, 4 of whom have scheduled biopsies. I'd like to add that all patients treated to date and those scheduled for biopsies are from our first 2 activated QTCs. The other QTCs have identified patients and are not far behind in scheduling for biopsy, which will further add to ZEVASKYN treatments in the coming quarters. While we are pleased to see patients beginning to clear the upstream procurement process and receiving ZEVASKYN treatments, we are equally encouraged by the strong demand reflected in the near-term identified pool of more than 100 patients across our QTCs and the community-based physicians.

Our field teams are executing well, building deep relationships, expanding awareness, and driving broad reach across dermatology, pediatric dermatology, and subspecialties involved in the care of EB patients. We continue to engage with referral physician community and have active conversations ongoing with 45 physicians. These are not just one-off touch points, but action-oriented back-and-forth interactions which shows real clinical interest and their intent to refer patients for ZEVASKYN. Beyond the numbers, early qualitative launch insights are also encouraging and reinforce our conviction. Importantly, we are hearing positive feedback from QTCs that have treated patients, and their experience with the end-to-end process is getting better with every patient treated.

To elaborate further on the types of initial patients that have been treated and those in the queue, we are happy to note that the initial uptake of ZEVASKYN is not confined to a narrowly defined patient or payer type, but has spanned across both adults and children, with one patient as young as five years of age. Our payer mix consists of both commercial and Medicaid insurers, indicating the breadth of ZEVASKYN coverage. We are seeing that geographic proximity to QTC has not been a barrier because patients have traveled significant distances, including across state lines, to receive treatment, and our Abeona Assist patient and caregiver support programs have received positive feedback.

Among the patients treated is our very first patient in the commercial setting who was biopsied in August of 2025, but as you may recall, could not receive ZEVASKYN due to a false positive result from a sterility assay. This patient came back to be rebiopsied early this year, and we are pleased to tell you that this patient was treated successfully. Such determination of patients, families, and physicians to pursue ZEVASKYN speaks volumes about what this therapy means to them. On the market access front, payer coverage continues to strengthen with the percentage of commercially covered lives with published ZEVASKYN policies now reaching 95%. This is a significant accomplishment in the first year post ZEVASKYN approval. That said, we are navigating a lengthy insurance approval process, which is typical of any high-cost gene therapy at launch, particularly for out-of-state Medicaid patients.

Even so, we have seen no patient attrition and no final payer denials to date, further underscoring the strength of ZEVASKYN's value proposition to RDEB patients and their families. As we continue to follow patients from our phase I, II-A, and phase III trials, we are excited to share that new data will be presented later this week at the Society for Investigative Dermatology, SID, featuring 5 years follow-up of our VIITAL phase III trial as well as a single patient 12 years of follow-up from phase I-II-A study. All of which reinforce durable wound healing and favorable safety profile after a one-time product application. On the patient side, our Strong Together network continues to be a powerful voice, with patients and caregivers sharing their experiences from clinical trials and helping to generate patient self-referrals.

As our initial ZEVASKYN commercial patients share their experiences over time, we expect these stories to become one of the most powerful demand drivers available to us in this rare disease setting. Lastly, we continue to onboard more ZEVASKYN treatment centers. As announced, we activated NewYork-Presbyterian/Columbia University last month, and Monday of this week, we announced the activation of Children's Hospital of Philadelphia, CHOP, as our sixth QTC. I want to sincerely thank all my team members involved in the onboarding of these centers and to recognize our QTC physician champions and their team's conviction in ZEVASKYN as they successfully navigated a several-month-long onboarding process. As you can gather from the map, we importantly have QTCs spanning the nation across geographically distinct regions, California, Colorado, Texas and the Gulf Coast, Chicago, and now the East Coast.

We continue to have active discussions with additional centers and remain well on track to achieving our goal of having a total of seven QTCs onboarded this year and ensuring even greater access for patients and families across the country. To close, we are progressing through the launch, accruing positive early feedback from treating physicians, a growing referral base, expanding QTC networks, and achieving broad payer acceptance. Every successful biopsy, every treatment, and every positive patient story is reinforcing our conviction in ZEVASKYN. With that, I'll turn the call back to Dr. Seshadri for an update on our R&D pipeline. Vis?

Thank you, Madhav. Now I'll share some important pipeline updates that highlight our focus on assets that align with our core competencies and what we believe would deliver the greatest long-term value. As part of this focused effort, we have deprioritized our in-house ophthalmology preclinical programs. Abeona has demonstrated capabilities with ZEVASKYN over the past years in end-to-end development and commercialization of personalized high-value cell therapies with durable clinical benefits for patients with debilitating diseases. Today, we announced the in-licensing of a radically novel cell therapy asset that targets PSMA or prostate-specific membrane antigen-A validated target for the treatment of advanced prostate cancer, a leading cause of cancer mortality with more than 30,000 deaths annually in the U.S. The CAR T technology was pioneered by Dr. Preet Chaudhary, founder of Angeles Therapeutics, and Professor of Medicine at the University of Southern California.

He has more than 200 granted or pending patents worldwide in the field of cell therapy. We have included a link to a recent talk by Dr. Chaudhary in today's slides, elaborating on the uniqueness and promise of this technology in oncology. PSMA CAR-T or ABO-701 is an autologous engineered T-cell therapy that carries a PSMA-directed synthetic immune receptor purposefully structured to overcome the limitations of CARs, or chimeric antigen receptors, and TCRs, which is T-cell receptors. The CAR-T technology is unique in that it can directly recognize and bind a target membrane antigen, like a CAR does, without the need for antigen presentation. It retains the physiologic signaling and regulatory features of a native T-cell receptor, which enables more controlled, durable, immune-mediated cell death.

In preclinical studies, PSMA CAR-T demonstrated the ability to achieve deep and durable PSMA-specific antitumor responses in mouse models and displayed exceptionally modest levels of cytokine release in vitro, a profile that has been elusive for other engineered cell therapies in solid tumors. The elimination of tumors in most mice treated with PSMA CAR-T and its superior performance versus corresponding PSMA CAR T comparator controls suggests a more controlled and durable immune activation in treated mice. We believe these data support a compelling hypothesis that CAR-T technology may overcome key limitations that have historically constrained engineered T-cell therapies in solid tumors. We anticipate IND filing and first-in-human studies to commence in the second half of 2027.

In the near term, we will gain regulatory alignment, beginning with a pre-IND meeting with the FDA on June 3, 2026, and engage a CDMO for supply readiness while our internal teams maintain operational focus on ZEVASKYN commercialization. With that, I now pass the call to our Chief Financial Officer, Joseph Vazzano, to discuss our first quarter financial results. Joe.

Thank you, Vish. I would like to remind everyone that you could find additional details on our financial results for the first quarter ending March thirty-first, 2026, in our most recent Form 10-Q. We reported total net product revenue of $8.7 million for the first quarter of 2026. All 3 patients treated in the quarter were commercially insured patients. This reflects a strong quarter-over-quarter increase of $6.3 million compared to $2.4 million in the fourth quarter of 2025. The growth was driven by early commercial traction following the launch of ZEVASKYN. Cost of sales for the quarter was $2.7 million compared to $1 million in the prior quarter. The increase was primarily driven by the scaling of commercial ZEVASKYN, with 3 patient treatments in Q1 versus 1 treatment in Q4. Turning to operating expenses.

R&D expenses were $9.6 million compared to $9.9 million in the first quarter of 2025. Notably, Q1 2026 includes a $7 million upfront payment related to the in-licensing of our PSMA CAR-T asset. Excluding this transaction, R&D expenses declined meaningfully, reflecting the transition of certain manufacturing costs capitalized to inventory and engineering runs that are no longer considered R&D following the FDA approval of ZEVASKYN. Selling general and administrative expenses were $19.5 million, representing an increase of $9.7 million year-over-year first quarter. This increase was expected and reflects our continued investment in commercial infrastructure post-approval. Key drivers include $5.4 million in personnel and stock-based compensation, $1.9 million of costs related to engineering runs, with the remainder due to other commercialization costs.

Net loss for the quarter was $17.1 million, or $0.30 per basic and diluted common share, compared to a net loss of $12 million or $0.24 per basic and diluted common share in the first quarter of 2025. The year-over-year change primarily reflects increased commercial investment and the PSMA CAR-T licensing transaction. We ended the quarter with $168.3 million in cash equivalents, and short-term investments, compared to $191.4 million at the end of 2025. Our balance sheet remains strong and positions us well to support continued commercial execution and pipeline advancement. We anticipate minimal R&D expenditures for the PSMA program, limited to low single-digit million dollars for the remainder of this year.

Overall, we are encouraged by the early commercial progress of ZEVASKYN and remain disciplined in our capital allocation as we scale the business. With that, I'll pass the call back to Vish for closing remarks before opening the call for Q&A. Vish?

To summarize, we are encouraged by favorable trends in leading indicators of ZEVASKYN launch performance. That is the foundation on which we have taken a bold step in advancing PSMA-13 development. Every milestone we discussed ultimately connects back to patients with serious diseases who are waiting for better, more innovative medicines. Our mission is not just a statement, but a commitment that guides how we allocate capital, how we prioritize our pipeline, and how we measure success. With that, I request the operator to open the floor for questions.

Thank you. Ladies and gentlemen, at this time, we'll be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue, and you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Our first question today is coming from Kristen Kluska with Cantor Fitzgerald. Your line is live.

Hi. Good morning, everybody, and congrats on all the progress here around ZEVASKYN. Now that you have 5 patients treated and quite a few in the biopsy pipeline, can you give us a sense of what the typical patient profile has looked like across treatment? Are these more severe patients? Are any of these any that have come back from the clinical trial to get another cycle? And for those that have undergone the procedure already, have they commented on whether they would be interested in potentially coming back in the future for another cycle?

Hi, Kristen. Good morning, and thanks for that question. Yes. With regard to your first question about the patient profile, what we hear from physicians are these are severe patients as we had expected, and many of those patients treated would require more than 12 sheets of ZEVASKYN. There is still an unmet need even in these treated patients. Of course, it's early to say how many of these patients will come back and at what point in time will they come back for a second treatment, but there is definitely a clinical need from that standpoint. The second part, clinical trial patients, they are interested, and we know that patient consults are happening.

It's just a matter of for those patients, when would be the right time for them to come in for a retreatment with ZEVASKYN. We'll, you know, keep you updated if we have that in kind of information. From the patients who have received, you know, ZEVASKYN already. Yeah, I think I already addressed that part, which is, you know, we don't know exactly when they'll come in, but there is certainly a need for that.

Okay. Thank you for that. Then just as we think about how to model this out for 2Q, we know one patient has officially been treated and, you know, all this color is really helpful around the biopsy schedule, just kind of you know, what can you tell us about your sense of how many patients you ultimately believe will have the procedure, meaning you get paid for in 2Q versus how we should be thinking about maybe some of these trickling into next quarter?

Thanks for that question, Kristen. It's hard to precisely place how many of the I think we gave visibility to at least 8 patients today in the call, 1 treated, 1 in manufacturing process, and 6 that are in the biopsy scheduling process, right? We could anticipate that maybe 1 or 2 of those patients who may receive who may be biopsied in June, anything after the first week of June, would fall into July treatment. Is it 1? Is it 2? Is it 3? It's very hard to predict because some may be in the borderline and the manufacturing turnaround time is not a very precise number even though we have it approximately 23 or 24 days. That is something that we'll have to see.

A good chunk of the patients that we have described today should fall under quarter 2 treatments.

Thank you.

Thank you, Kristen.

Thank you. Our next question is coming from Maury Raycroft with Jefferies. Your line is live.

Hi. Good morning. Congrats on the progress, and thanks for taking my questions. Maybe as a follow-up to Kristen's last question, for the patients treated so far, from my understanding, they've been treated at Lurie's in Stanford. Can you clarify what other QTCs are fully activated? It may be too early for this, but can you provide some bookending for what patient volume could look like per QTC or across the QTCs for 2026 and maybe what steady state could look like eventually as well?

Maury. In addition to Lurie Children's and Stanford Children's, we have Children's Hospital Colorado that's active and UTMB, University of Texas in Galveston, which is also active. Of course, the most recent ones were Columbia and CHOP. We do know that Colorado and UTMB have patients actively identified, and they are working through the administrative process to put them on, and we expect that we should receive biopsy schedule requests for their patients imminently. In terms of the volume, these are centers. Colorado is actually a very well-known institution for EB care. You know, in terms of the cadence, what we have been hearing from QTC is treating 1 patient a month at a steady state is quite doable.

It's just a matter of getting these patients, initiated with biopsy and the treatment cadence.

Got it. That's helpful. Based on the comments in the prepared remarks around the length of the insurance approval process, it seems like ultimately this is not limiting usage, but is this something that you have line of sight on that you can improve? How can improving this factor into your ability to fine-tune projections? Then do you anticipate there could be greater pushback or friction when it comes to retreating patients?

Yeah, definitely the process will improve. Oftentimes with gene therapy, especially high-cost gene therapy, the initial process of payer clearance, especially if a patient is traveling from out of state, there is additional layers of paperwork that need to be secured. Starting with, you know, physicians also need to be enrolled. It's, it's a one-time enrollment. Like, so for example, if a patient is traveling from a different state to get receive treatment in one of these QTC states, then the physician from the qualified center, whether it's a surgeon, anesthesiologist, or the EB physician, need to be enrolled in sort of the out-of-state, you know, patient state. That is a one-time process, as well as, you know, just providing a fee schedule.

Sometimes when you have an established product, there is a fee schedule that's already in place. You don't need additional letters of agreement or a single case agreement for those patients. Because we are navigating these initial, you know, payer processes, it takes a little additional time. Once that is secured, it gets better over time. That's been our experience, and that's how it's panning out.

Got it. Okay, that's helpful. Thanks for taking my questions.

Thank you, Maury Raycroft.

Thank you. Our next question is coming from Stephen Willey with Stifel. Your line is live.

Yeah, good morning. Thanks for taking the questions. Maybe just a little bit of a follow-up. What is the average scheduling lead time for biopsies right now? Just curious how far out these procedures are being scheduled.

Yeah. Thank you, Steve. If you look at the time that a patient is identified as a ZEVASKYN patient and then the time that it takes for them to actually get biopsied, right? That is the kind of time that we are talking about. It's very variable. I think the factors that determine that are the type of payer, how recent a QTC is to the process. For example, now Lurie, as you all know, have treated some patients, and maybe they've gotten into a rhythm, and there's a lot of precedents that's been set, whereas the other sites that are just about starting, this is the first time, right? It's very hard to generalize an average time because we have examples of patients where when we activated Lurie's, I think the first patient was biopsied in August.

This is pretty early. It was 2 months or something out of since activation. Whereas we have seen certain sites that have been active for 6 or 7 months, and they're just coming up for their first patient biopsy, preparing that for that. It's a very variable thing, and with n of 5, 6 sites, it's very hard to say this is a trend. I think a good estimate is 4 to 5 months is what it's taking for any site that gets active to get their first patient on a biopsy schedule there. Is I hope that answered your question.

No, it did. Thank you. I guess the PSMA CAR-T looks conceptually pretty interesting. I think you spoke to the $7 million licensing fee. Can you speak to any additional economics that might be owed on the progression of that product? I know you're in the process of tech transfer now, but what are the implications for manufacturing in terms of the need to build out additional suites to potentially accommodate the clinical development of this product? Thanks.

Sure. In terms of deal economics, right? It's the upfront payment that we shared of $7 million. Abeona is gonna develop this asset until end of phase I. There's gonna be dose escalation and dose expansion, and those first in human studies do not start until second half of 2027, as I mentioned. There is just about $1 million of milestone payments up to that time point through the end of phase I. That happens with the first patient dosed and the last patient maybe. If you look at that, it's not, you know, the upfront payment is really the main substantial payment that's done right now.

In terms of deal structure, at the end of phase I data, we have two potential paths. One could be a 50/50 development with Angeles, so we share the cost and we share the proceeds later. It could be an outright licensing deal where we'll have some biobucks and royalties that Abeona will fully own the program, but provide to Angeles. Which of these paths is going to actually prevail? It's going to be a long journey to even discovering that because the data will determine those. We, it's early to comment on that. In terms of cost implications, I wanted to make sure this is very well understood, right?

Until first-in-human studies begin, there's not a big cost load on Abeona because once the upfront payment has been done, it's low single-digit millions of a CDMO developing the process. As you know, engineered T cells, it's not as complex as ZEVASKYN fortunately, but you know, it's going to be mostly a cut and paste kind of process. We already have GMP-grade vector that has been produced, and it's a matter of locking down process, and these processes are fairly standard, so it's going to be done by an external CDMO, and we're not going to disturb our internal teams in Cleveland. We're laser focused on the ZEVASKYN commercialization. There's a very small team that's just going to drive the project out of a CDMO.

When the time comes for the regulatory team is also involved in getting clarity and alignment with regulatory agencies on what our trial design looks like and how we go about that. Other than that, from a personnel standpoint, Abeona Therapeutics is laser focused on ZEVASKYN commercialization, and any significant costs will not hit us until we get into human clinical studies, which happens in the second half of 2027. I hope that gives a little bit of some color on what we are undertaking for the near term with ABO-701.

Yeah. No, that's helpful. The external CDMO kind of addresses the question on the manufacturing front. Can you just say whether or not the 50/50 co-promote, I'm presuming that decision is made by Angeles based upon a review of phase I data?

Correct.

Actually, the option for us to pursue the program is after the phase I. Angeles has the option to either do the 50/50 co-development or a license agreement with, what Vish had mentioned with predefined, financial terms for an agreement that'll be agreed upon later.

Understood. Very helpful. Thank you.

Thank you. Our next question is coming from Raghuram Selvaraju with H.C. Wainwright. Your line is live.

Hello. Congrats on the quarter and on activating the new QTCs. This is Ahmed Anvarram. I just had a few questions. One was, what have been the key challenges associated with setting up additional Qualified Treatment Centers, and how do you think those will play out in the future? My second question was on the patients receiving ZEVASKYN. How often does cell harvesting from RDEB patients fail due to insufficiency?

Thank you. The first question you asked was the key challenges with activating QTC centers. I think more than challenges, I'll just say what are all the various milestones in the journey that have to check a box, right? I mean, this is a huge undertaking by a QTC. An EB physician has to gather, you know, a multidisciplinary team first, and they need to have anesthesiologists and plastic surgeons who are familiar with the RDEB patients and what types of care they need. Once such a team forms and they feel that feasibility from a center's perspective and the ability to deliver this exists, they have to make a business case for their management.

There's that itself is a few months journey because every buy and build that they have to, you know, put some financial risk on their P&L is going to be scrutinized carefully. All that is in itself a month's process, and then we have the onboarding. Once that has been checked off and everybody has agreed in that QTC that they're gonna go with this journey, then you're gonna have onboarding, medical onboarding as well as, you know, clinical training and quality training and all those types of events. There's numerous legal policies, the trade policies, the master service agreements. Those are all, again, legal steps that take several months.

That's the reason why the journey of actually the first handshake with a QTC to when they're ready to treat a patient has been several months, sometimes even more than one year long. We started that process with our first set of QTCs very early. You know, it's kind of what you alluded to is there a unlimited number of QTCs that we can activate? The answer is no, because the multidisciplinary team is the key for which QTCs can actually activate, and that's something that we always carefully weigh in because, you know, that's important from a patient experience and patient care and outcome perspective.

You know, of the 23 centers where there are EB patients cared for today, a good, you know, 5-10 centers already have these multidisciplinary teams in place, and those are our focus areas. As we had stated earlier, our goal was to have about 7 centers active because when 7 centers are active and produce at least 1 biopsy a month, we're gonna be up to our manufacturing capacity of 7-10 or whatever that number happens to be because some centers will do more than a biopsy a month. We want to ramp up as we ramp up our capacity as well. Those are all factors that kind of speak to the overall QTC numbers. Anything else, Madhav?

Yeah. I'll just add that you summed it up well, Vish. I mean, just in terms of challenges, right, every QTC has a different risk tolerance. We observed that some institutions started even before, you know, right after ZEVASKYN approval. There were other institutions that wanted to wait for the actual FDA approval to happen last year before they began to invest their time and energy.

Yet there were some other institutions that wanted to see reimbursement pathway established. Now we are beginning to see greater engagement with the tail of these other centers, EB centers, and the traction is picking up. I mean with the recent announcements and additional centers, as Vish said, we are well on track. We believe we'll be able to get another QTC also activated. The second question that you asked about patients, getting the harvest, can you please elaborate on your question? Is this the biopsy to delivering the sheets, manufacturing process success rate, or was it something else that you were referring to here?

Yes, exactly. Just the, basically after the biopsy, how long is there kind of a failure rate between the biopsy and the patient receiving the treatment?

Our experience so far in the commercial setting is that every time that we have received a valid biopsy, we have been able to produce a sheet. The numbers could be variable, in majority of cases, we're actually producing the double-digit number of sheets. We're happy with what we're seeing in terms of success rate. Beyond that, I think the timing of how long it takes from skin to skin is a variable time. It can be anywhere as early as 23 days in some cases, and it can be as lengthy as 26 days. I think that's still a very tight window, that's kind of our range of turnaround time we've seen so far.

Got it. Thanks so much. If I may just have one quick follow-up is, I guess, what is the Abeona's plan to optimize ZEVASKYN value outside of the U.S.?

Yeah, that's something that's been on top of our mind. We're already looking at what are the markets that we can first supply from our Cleveland site, because that is the, you know, lowest hanging fruit in terms of timing. It is probably if you're looking at markets like Europe and Japan, the logistical challenges in delivering from Cleveland, more than product delivery could be related to bringing the biopsies of the patients and cold chain and things like that. That's something that we're working out, we should have such updates in the following quarterly calls. Right now, it's, you know, our teams are so spread already thin in making sure that every aspect of the U.S. launch is maximized.

We're definitely, you know, there's a sub-team that is looking at these external opportunities. Hopefully, in later quarterly calls, we give some better color to what that path looks like.

Got it. Thank you so much.

Thank you. Our next question is coming from Jeff Jones with Oppenheimer. Your line is live.

Good morning, guys, thanks for taking the question. Again, congrats on a great quarter. Maybe following up on QTC activation, with 6 on board and a target of 7 by end of year seems a pretty low bar for you to get 1 more in by year end. Just how are you thinking about building out additional QTCs, as we look ahead into additional quarters and into next year? How, as you mentioned, how that aligns with capacity. Maybe on pipeline, you've deprioritized the ophthalmology programs, and you've brought on board an oncology program. How are you thinking about pipeline moving forward? Are you thinking about oncology specifically? Maybe outline for us, sort of how you're thinking about that strategically.

Great. First, I'll ask Madhav to respond to the QTC-

Yeah question.

Jeff, yes. I mean, we continue to work with a few more centers, based on the knowledge we have. A total of 10 EB centers have this kind of infrastructure that Vish alluded to earlier, cross-functional discipline of, you know, multidisciplinary team, as well as EB patients that frequent those centers. We are working with these institutions and at our various stages of onboarding. I think if we get to that kind of a number, 9 or 10 centers, we are in a pretty good shape because we continue to hear from centers about 1 patient a month is a good cadence to that we can expect for these centers to treat. If we maintain that would be really our steady state.

Let's see, this year, next year would be we should be able to get all these other centers also active.

Yeah. Also, you asked this question, how are we building our internal capacity, right? We're very diligent in building up, and we had announced 6 at launch and 6 this year, and we're already in ramp-up mode to bring it up to 10 by end of the year. The numbers that Madhav shared in terms of QTC numbers goes hand in hand with how we are building our internal capacity, so we'll be able to, you know, match the demand. From a longer-term perspective, definitely, we have work that has progressed on getting additional suites designed. We haven't started construction yet, but a lot of the design work has already happened, and we're ready to, raring to go, right?

It's the right trigger, and that's not very far away. We can, you know, again, speak about that in the upcoming quarterly updates. Rest assured with, we are not going to artificially restrict ourselves to 7 sites. As Madhav mentioned, if there's more sites that show that, multidisciplinary teams are pulled together and, they have, you know, EB experience, that's an added advantage as well. We are, well on our way to get a healthy number of QTCs activated even just in 2026. Your second question was about, our, move from ophthalmology to oncology. I just wanted to reiterate one thing, right?

I think, where our strengths are and where we have done well learning from the ZEVASKYN experience is really how do we develop complex biologics that have the types of profiles of long-term, durable, meaningful clinical benefit for patients with serious diseases. We're not defining ourselves as a rare disease or an ophthalmology or an oncology company, but where our strengths can actually if you look at, you know, the CMC aspect of it, you will see a perfect fit. I mean, in fact, some of these engineered T-cell therapies are a little bit even more advanced and defined than the types of autologous cells we are working with. It feels a little easier, even a little bit of a breath of fresh air in that sense.

If you look at our commercial teams, we're all from the CAR T world. We've done launching of BREYANZI, Abecma, and in fact, Dr. Preet Chaudhary, with whom we have done this deal, was one of our customers when we were in the hematology CAR T launching expedition at that time. We've continued to discuss what are these unmet needs and how do we really get breakthrough there. As an innovator, we've held that dialogue from those days, right? You see that the strength in the oncology field really is not something that we have to start from ground zero here. Every little angle that you're looking from, we have that. Of course, clinical development, we will build it over the clinical trial experience.

The move from ophthalmology to oncology was really, you know, I would call it semi-opportunistic, but a lot of synergies with the CMC path that we've learned and how to work with the FDA and what they expect in this kind of a technology and also knowing what are the unmet needs in the solid tumor space, generally. Prostate specifically, of course, some of us have launched products in this prostate space in our past lives, so that's also bringing us the relationships.

Also the KOLs that we have interacted with in ad boards even before we licensed this asset, have taken a look at a lot of the data. These are the top international, six or eight KOLs who opine, and they're very eager and interested in participating in these trials, even putting their patients on this type of technology. You know, when you have everything from a capability standpoint lining up to take us to a disease where, of course, the market potential is a log order bigger from where we are in the rare disease space, you know, why not? I mean we were waiting for the right moment, which was ZEVASKYN is in a good place with its launch.

We're already seeing early indicators that this is taking off, and that's what we had kept this. I mean, this has been a diligence that we've been doing for quite a while. This was the right kind of time. That's really where we've shifted. This doesn't mean to say we're not putting a stake in the ground and saying we're gonna be an oncology company. If our technologies, for example, CD19, as a CAR T field, found great application beyond the hematology where we started, and now everybody that has a CD19 asset is in the autoimmune space. That is, you know, I mean, still leveraging their strengths in a completely different disease area, right?

We're gonna follow such paths where we have good science that takes us to solving big problems, and there is huge long-term value in that. That's how this asset really fit, checked all the boxes that we're describing here.

Great. Thank you guys very much.

Thank you.

Thank you. Our next question is coming from James Molloy with Alliance Global Partners. Your line is live.

Hi. Good morning. Thank you very much for taking my questions. Just a couple quick questions on pricing and sort of gross to net. Mechanistically looking at the revenue number you guys printed in the quarter at $3.1 million per, looks like a much more favorable gross to net discount for you guys on the quarter. Can you talk a little bit to how you're seeing the payer mix come through on that and the pricing holding there? Then I guess a follow-up would be on the OpEx. You know, ex the $7 million one-timer, these are the R&D and G&A numbers we should expect sort of going forward through the rest of 2026. Thank you.

Thanks, Jim. Regarding the gross to net for Q1, all 3 patients treated in the quarter were commercial, compared to Q4, where it was the Medicaid patient. On the commercial patient, there's far less, you know, rebates and discounts than the government 23.1% rebate that was for the Medicaid patient. Going forward, again, you know, when things normalize with more patients, we think the gross to net will be in the, you know, mid to upper teens when we have more patients treated. For your 2nd question, you know, if you exclude the $7 million upfront payment for R&D and, you know, SG&A, the total spend will be.

Pretty much the same for the rest of the year. Again, as we treat more patients and get more volume in there, some of the costs will come out of SG&A, the engineering runs, and they will go to cost of goods sold. The overall run rate, again, throw out the, you know, $7 million expense is reflective of the rest of the year.

Okay, great. A quick follow-up if I could, please. Any guidance on the 6 or 7 people potentially in the shoot for second quarter? What that mix looks like on commercial versus Medicare Medicaid?

Similar, kind of, you know, mix that we have.

Yeah.

Overall, we can expect based on our claims data and what we've understood of the market, about 60% commercial, about 30%-33% or something like that, is Medicaid. That is the split we're looking at.

Yeah.

Got it. Thank you. Have you guys put any guidance on when you anticipate being profitable? I know last year you put some guidance out. Obviously things have changed since then.

You know, we maintain the assumption that we had in the last call that we believe, you know, depending on how these biopsies come out that Vish and Madhav had spoken about earlier, we believe we can, you know, achieve monthly profitability starting potentially in June, so next month.

Excellent. Thank you very much for taking the questions.

Thank you. Our final question today is coming from David Boutz with Zacks Small-Cap Research. Your line is live.

Hey, good morning, everyone. Appreciate the update today. Given the fact that most solid tumor CAR T programs have struggled in the past, I'm just curious, what was it specifically about 701 that gives you confidence that it could be successful?

Thanks, David, for that question. First of all, we have to, you know, underscore that this is not a CAR T. The synthetic immune receptors are fundamentally differently structured. You know, a lot of the innovation in the CAR T field has been about, you know, better signaling domains or, you know, the zeta domains, and they're built on an existing CAR structure, right? I mean, it's physiologically very different from the natural TCRs that you have. Of course, the TCR technologies themselves have failed due to other reasons which are, you know, to do with MHC restriction and, you know, the various, you know, population-based constraints. What the CAR T technology does is actually take the best of both worlds.

It would probably take me 2 days to describe all the components of the technology that make us believe that it's different. If you look at the money slide, the preclinical data that we shared, we've used a CAR control with the same kind of binding domain, which is the receptor, which recognizes and binds to PSMA, but the rest of the structure is all like a CAR versus the SIR. You can see that in a preclinical model in mice, you already see that difference. How can you generate persistent serial killer T cells that go after a tumor-specific membrane antigen, right? That's what we're encouraged with, and these experiments have been repeated many, many times with variations in manufacturing process and everything. We're excited.

Our KOL community is excited that this is a new hope. We're not doing exactly the same thing that has been done in the past. There is true novelty structurally as well as functionally in this approach. That's what really gives us. We have included a link that takes you to a talk by the inventor himself, and that has a lot of technical details. If you're interested, I would encourage anyone to go and listen to that. Hope I answered your question.

Yeah. Sounds great. Appreciate it.

Thank you.

Thank you. Ladies and gentlemen, this does conclude today's Q&A session and also today's call. You may disconnect your lines at this time, and we thank you for your participation.