Abeona Therapeutics Inc.

Good day ladies and gentlemen and welcome to the Abiona 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 zero on your telephone keypad. And please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Joe Vizzano, Chief Financial Officer at Abiona 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 calls. 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.abionatherapeutics.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 Law. 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.aviantherapeutics.com. Joining me on today's call with prepared remarks are Dr. Vishesh Chaudhry, Chief Executive Officer, and Dr. Madhav Basantabhata, Chief Commercial Officer. With that, I will now turn the call over to Dr. Shashadri to kick us off.

Thank you, Joe, and good morning, everyone. First, we are excited to share updates on leading indicators of ZivaScan adoption that signal 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 schedule additional patients throughout the current quarter. The recent acceleration of onboarding efforts of QTCs further underscores their conviction about the role that ZivaSkin will play in addressing the unmet needs of patients suffering from recessive dystrophic epidermolysis bullosa, or RDEV. Three of the ZivaSkin 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. But before going there, I'll first turn the call over to Dr. Madhav Basantavada, to elaborate on the ZivaSkin launch, which is our foundational and primary focus for Aviona. Madhav?

Thank you, Vish, and good morning, everyone. Launch momentum for ZivaSkin 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 ZivaSkin since launch. The forward-looking momentum of patients in queue is also picking up with one patient biopsied and manufacturing for that patient currently underway, and six additional patients expected to be biopsied this quarter, three of whom, actually just as of this morning, four 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 two activated QTCs. The other QTCs have identified patients and are not far behind in scheduling for biopsy, which will further add to ZivaSkin treatments in the coming quarters. While we are pleased to see patients beginning to clear the upstream procurement process and receiving ZivaSkin 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 ZivaSkin. 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 ZivaSkin 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 ZivaSkin coverage. And 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 Aviona 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 ZivaSkin due to a false positive result from a sterility assay. This patient came back to be re-biopsied early this year and we are pleased to tell you that this patient was treated successfully. Best determination of patients, families, and physicians to pursue ZivaSkin 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 ZivaSkin policies now reaching 95%. This is a significant accomplishment in the first year post-Zivaskin 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 Zivaskin's value proposition to RdEV patients and their families. As we continue to follow patients from our Phase 1, 2A, and Phase 3 trials, we are excited to share that new data will be presented later this week at the Society for Investigative Dermatology, SID, featuring five-year follow-up of our vital Phase 3 trial, as well as a single patient, 12 years of follow-up from Phase 1 to 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 ZivaSkin 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 ZivaSkin treatment centers. As announced, we activated New York Presbyterian Columbia University last month. And Monday of this week, we announced the activation of Children's Hospital of Philadelphia, SHARP, 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 DivaSkin 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 ZivaSkin. With that, I'll turn the call back to Dr. Seshadri for an update on our R&D pipeline. Vish?

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. Abiona has demonstrated capabilities with ZivaSkin 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 SIRT-T technology was pioneered by Dr. Preet Chaudhary, founder of Angelus 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. Chowdhury in today's slides, elaborating on the uniqueness and promise of this technology in oncology. PSMA-13, or AB0701, 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 third 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. However, 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-13 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 SIRT 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 SIRT 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 3rd, 2026, and engage a CDMO for supply readiness while our internal teams maintain operational focus on ZivaSkin commercialization. With that, I now pass the call to our Chief Financial Officer, Joe Vizzano, to discuss our first quarter financial results.

Joe? Thank you, Vish. I would like to remind everyone that you can find additional details on our financial results for the first quarter ending March 31, 2026, in our most recent 10Q. We reported total net product revenue of $8.7 million for the first quarter of 2026. All three 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 Ziviskin. 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 DivaSkin with three patient treatments in Q1 versus one 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 SIRT assets. Excluding this transaction, R&D expenses declined meaningfully, reflecting the transition of certain manufacturing costs capitalized to inventory and engineering run that are no longer considered R&D following the FDA approval of ZivaSkin. 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 30 cents per basic and diluted common share. compared to a net loss of $12 million, or 24 cents 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 SIRT licensing transaction. We ended the quarter with $168.3 million in cash, 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 Ziviskin 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 Ziviskin launch performance. That is the foundation on which we have taken a bold step in advancing PSMA-CERT development. Every milestone we've 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 will 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 Ziva Skin. So now that you have five 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, so 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 ZivaSkin. So 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 ZivaSkin. And so we'll keep you updated if we have that kind of information. And from the patients who have received ZivaSkin already, yeah, I think I already addressed that part, which is we don't know exactly when they'll come in, but there is certainly a need for that.

Okay, thank you for that. And 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. But 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 it in two view 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 eight patients today in the call, one treated, one in manufacturing process, and six that are in the biopsy scheduling process, right? So we could anticipate that maybe one or two 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 one, is it two, is it three? It's very hard to predict because the sum 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, but a good chunk of the patients that we have described today should fall under quarter two treatment.

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 and Stanford. Can you clarify what other QTCs are fully activated? And 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?

Yeah, Maurice. So in addition to Lurie Children's and Stanford Children's, we have Colorado Children's Hospital that's active and UTMB, University of Texas in Galveston, which is also active. And, 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. And in terms of the volume, these are centers. Colorado is actually a very well-known institution for EB care. And, you know, in terms of the cadence, what we have been hearing from QTCs is treating one patient a month at a steady state is quite doable. So it's just a matter of getting these patients initiated with biopsy and the treatment cadence.

Got it. That's helpful. And based on the comments and 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? And how can improving this factor into your ability to fine tune projections? And 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 a one-time enrollment. Like, so for example, if a patient is coming from traveling from a different state to get received treatment in one of these QTC states, then the physician from the qualified center, whether it's a surgeon and a sociologist or the EB physician, need to be enrolled in sort of the out-of-state, you know, patient state. So 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. So you don't need additional letters of agreement or a single case agreement for those patients. So because we are navigating these initial payer processes, it takes a little additional time. But once that is secured, then it gets better over time. So 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.

Thank you. Our next question is coming from Stephen Willie with Stiefel. 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 ZivaSkin patient and then the time that it takes for them to actually get biopsied, right, that is the kind of time that you're talking about. It's very variable. I think the factors that determine that are the type of payer, how recent QTC is to the process. For example, now Lurie's, as you all know, have treated some patients and maybe they've gotten into rhythm and there's a lot of precedence that's been set, whereas the other sites that are just about starting, this is the first time, right? So 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 two months or something since activation, whereas we have seen certain sites that have been active for six or seven months, and they're just coming up for their first patient biopsy, preparing for that. So It's a very variable thing, and with N of five to six sites, it's very hard to say this is a trend. But I think, you know, a good estimate is four to five months is what it's taking for any site that gets active to get their first patient on a biopsy schedule there. I hope that answered your question.

No, it did. Thank you. And then I guess the PSMA SIRT looks different. 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? And then 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 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. And Abiona is going to develop this asset on the end of phase one. So there's going to 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 a dollar million of milestone payments up to that time point through the end of phase one. That happens with the first patient dose and the last patient maybe. So 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 one data, we have two potential paths. And one could be a 50-50 development with Angelus. So we share the cost and we share the proceeds later. Or it could be an outright licensing deal where we'll have some biobucks and royalties that Aviona will fully own the program but provide to Angelus. So 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. So it's early to comment on that. But in terms of cost implications, I wanted to make sure this is very well understood, right? So until first-in-human studies begin, there's not a big cost load on Abiona because once the upfront payment has been done, it's low single-digit millions of CDMO developing the process. And as you know, engineered T-cells, it's not as complex as VivaSkin, 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 ZivaSkin commercialization. So there's a very small team that's just going to drive the project out of a CDMO and when the time comes for, and the regulatory team is also involved in, you know, getting clarity and alignment with regulatory agencies on what our trial design looks like and how we go about that. So other than that, from a personnel standpoint, AB owner's laser focused on ZivaSkin 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 PSMA-30.

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 Angelus based upon a review of Phase I data?

Correct. Actually, the The option for us to pursue the program is after the phase one. AngelList has the option to either do the 50-50 co-development or a license agreement with what Fish had mentioned with predefined financial terms for an agreement that will be agreed upon later. Understood. Very helpful. Thank you.

Thank you. Our next question is coming from Raghuram Salvaraju with HC Wainwright. Your line is live.

Hello. Congrats on the quarter and on activating the new QTCs. This is Ahmed on for ROM. 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? And my second question was on the patients receiving ZivaSkin. How often does cell harvesting from ARDA patients fail due to insufficiency?

Thank you. So 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 AB physician has to gather information you know, a multidisciplinary team first. And they need to have anesthesiologists and plastic surgeons who are familiar with the R-DEP patients and what types of care they need. And 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. And that itself is a few months journey because every buy-in bill that they have to you know, put some financial risk on their P&L is going to be scrutinized carefully. So 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 going to go with this journey, then you're going to have onboarding, medical onboarding as well as, you know, clinical training and quality training and all those types of events And then there's numerous legal policies, the trade policies, the master service agreements. Those are all, again, legal steps that take several months. So 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 a year long. And we started that process with our first set of QTCs very early. And, you know, it's kind of what you alluded to is is there an unlimited number of QTCs that we can activate? And 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. And, you know, of the – 23 centers where there are EB patients cared for today, a good five to 10 centers already have these multidisciplinary teams in place. And those are our focus areas. And as we had stated earlier, our goal was to have about seven centers active. Because when seven centers are active and produce at least one biopsy a month, we're going to be up to our manufacturing capacity of seven to 10 or whatever that number happens to be. Because Some centers will do more than a biopsy a month. So we want to ramp up as we ramp up our capacity as well. So those are all factors that kind of speak to the overall QTC numbers. Anything else, Mada?

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 ZivaSkin 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. So 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.

And 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 basically after the biopsy, is there kind of a failure rate between the biopsy and the patient receiving the treatment?

Yeah, 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 sheets. The numbers could be variable, but in the majority of cases, we're actually producing the double-digit number of sheets. So we're happy with what we're seeing in terms of success rate. But beyond that, I think the timing of how long it takes from skin to skin. As you know, it's a variable time. It can be anywhere as early as 23 days in some cases, and it can be as lengthy as 26 days. So I think that's still a very tight window, but 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 Ibeona's plan to optimize ZivaSkin 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 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, it could be related to bringing the biopsies of the patients and cold chain and things like that. And that's something that we're working out, but we should have such updates in the following quarterly calls. Right now, our teams are so busy 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. So hopefully in later quarterly calls, we'll give some better color to what that path looks like.

Thank you so much.

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

Good morning, guys, and thanks for taking the question. And again, congrats on a great quarter. Maybe following up on QTC activation with six on board and a target of seven by end of year, it seems a pretty low bar for you to get one 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, and how, as you mentioned, how that aligns with capacity? And then 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 or maybe outline for us sort of how you're thinking about that strategically?

Great.

So first I'll ask Madhav to respond to the QTC question. So, 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. So we are working with these institutions and at our various stages of onboarding I think if we get to that kind of a number, nine or 10 centers, we are in a pretty good shape because we continue to hear from centers about one patient a month is a good cadence that we can expect for these centers to treat. And if we maintain that, that would be really our steady state. So let's see, this year, next year, we should be able to get all these other centers also active.

Yeah, and also you asked this question, how are we building our internal capacity, right? We are very diligent in building up and we had announced six at launch and six this year, and we're already in ramp up mode to bring it up to 10 by end of the year. So 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. And from a longer-term perspective, definitely we have work that has progressed on getting additional suites designed and starting to – we haven't started construction yet, but a lot of the design work has already happened, and we're raring to go, right? So 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. But rest assured with – We are not going to artificially restrict ourselves to seven sites. As Madhava mentioned, if there's more sites that show that multidisciplinary teams are pulled together and they have EV experience, that's an added advantage as well. So we are well on our way to get a healthy number of QTCs activated even just in 2026. And 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 ZivaSkin 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. And it feels a little easier, even a little bit of a breath of fresh air in that sense. But if you look at our commercial teams, we're all from the CAR T world. We've done launching of Briancy, Abekma, and in fact, Dr. Preet Chowdhury, 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. And we've continued to discuss what are these unmet needs and how do we really get breakthrough there? And as an innovator, we've held that dialogue from those days, right? So you see that the strength in the oncology field really is not something that we have to start from ground zero here. And so every little angle that you're looking from, we have that. Of course, clinical development, we will build it over the clinical trial experience. But 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. And prostate specifically, of course, some of us have launched products in the prostate space in our past lives. So that's also bringing us the relationship. And 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. And 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. And, 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, and we were waiting for the right moment, which was ZivaSkin 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, and so this was the right kind of time. So that's really where we've shifted. This doesn't mean to say we're not putting a stake in the ground and say we're going to be an oncology company. If our technologies, for example, CD19 as a CAR-T field, found great application beyond 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 going to follow such paths where we have good science that takes us to solving big problems, and there is huge long-term value in that. So 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 Jim Malloy with Alliance Global Partners. Your line is live.

Hi, good morning. Thank you very much for taking my questions. Just a couple of 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. And then I guess a follow-up would be on the OpEx, you know, X 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 26. Thank you.

Thanks, Jim. Yeah, so regarding the gross to net for Q1, all three patients treated in the quarter were commercial patients. compared to Q4, where it was the Medicaid patient. So on the commercial patients, there's far less rebates and discounts than the government 23.1% rebate that was for the Medicaid patient. So going forward, again, when things normalize with more patients, we think the gross net will be in the mid to upper teens when we have more patients treated. And then... For your second question, if you exclude the $7 million upfront payment for R&D and 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. So, but the overall run rate, again, throw out the $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 six or seven people potentially on the shoot for second quarter, what that mix looks like on commercial versus Medicare, Medicaid?

It's a similar kind of mix that we have.

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

Got it. Thank you. And have you guys put in any guidance on when you anticipate being profitable? I know last year you put some guidance out, and obviously things have changed since then.

We haven't. We maintain the assumption that we had in the last call that we believe, depending on how these biopsies come out that Vish and Madhav had spoken about earlier, we believe we can 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 Bouts with Zach's Small Capital Research. Your line is live.

Hey, good morning, everyone. I 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. So, 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 a It's physiologically very different from the natural TCRs that you have. And then, of course, the TCR technologies themselves have failed due to other reasons, which are, you know, to do with MHC restriction and, you know, various, you know, population-based constraints. What the third T technology does is actually take the best of both worlds and It will probably take me two days to describe all the components of the technology that make us believe that it's different, but if you look at the money slide, the pipeline, 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, and 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 are encouraged with, and these experiments have been repeated many, many times with variations and manufacturing process and everything. So we're excited. Our KOL community is excited that this is a new hope. So 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. So that's what really gives us, and 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. So I 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.