Abeona Therapeutics Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; filed March 31, 2022. Abeona is a clinical-stage biopharmaceutical company developing cell and gene therapies for rare genetic diseases. It had no significant product revenue; reported revenue was primarily from licensing milestones.
Business context and pipeline
EB-101, an autologous gene-corrected cell therapy for recessive dystrophic epidermolysis bullosa (RDEB), was the lead program in the pivotal Phase 3 VIITAL trial. Enrollment reached its target in the first quarter of 2022, with topline results anticipated in the third quarter of 2022. The company reported FDA alignment on key CMC requirements for a potential BLA, but approval and commercialization remain uncertain.
After a portfolio review in early 2022, Abeona said it would concentrate R&D resources on the EB-101 readout and seek a commercialization partner. It intensified efforts to find a partner for ABO-102 (MPS IIIA) and discontinued ABO-101 (MPS IIIB) development. These were post-year-end strategic developments. The company also plans to continue selected AAV research, including ophthalmic programs and its AIM capsid platform.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $3.0 million | $10.0 million |
| Research and development expense | $34.3 million | $30.1 million |
| General and administrative expense | $22.8 million | $23.8 million |
| Operating loss | $89.8 million | $81.4 million |
| Net loss | $84.9 million; $0.86 per share | $84.2 million; $0.91 per share |
| Cash used in operating activities | $65.7 million | $35.0 million |
Revenue declined 70%, reflecting lower licensing revenue: 2021 revenue was a $3.0 million CLN1 milestone from Taysha Gene Therapies, versus $10.0 million in 2020 from fixed consideration under CLN1 and Rett syndrome sublicenses. No product sales were reported. Conventional product margins are not meaningful for this clinical-stage business.
R&D expense increased 14%, mainly from higher clinical and development activity. Net loss was broadly similar year over year, but included a $32.5 million non-cash goodwill impairment in 2021. 2020 included a $32.9 million non-cash licensed-technology impairment. Other 2021 items included a $6.7 million accounting gain on the REGENXBIO settlement and $1.8 million of PPP loan forgiveness income.
At December 31, 2021, cash, cash equivalents, restricted cash and short-term investments totaled $50.9 million, down from $96.0 million a year earlier. Current assets were $55.4 million and current liabilities $16.6 million. Total liabilities were $28.2 million, including $9.4 million of lease liabilities and $8.4 million payable to a licensor; the PPP loan was forgiven in 2021. Operating cash use increased year over year. Investing activities provided $66.1 million, largely from short-term investment maturities, while financing activities provided $24.9 million, primarily from equity issuance and ATM sales.
The company reported $51.4 million of stockholders’ equity and an accumulated deficit of $655.6 million. It raised approximately $16.0 million net in a December 2021 public offering of 44.7 million shares and warrants to purchase another 44.7 million shares, and received $8.1 million net from ATM sales. Year-end shares outstanding were 147.2 million, compared with 96.1 million at year-end 2020.
Outlook, risks and unusual items
- Management believed existing resources and potential expense reductions would fund operations for at least 12 months from the filing date, based on then-current plans. It also stated that additional funding would be needed beyond that period to carry out planned R&D and that future financing was uncertain.
- The FDA recommended following ABO-102 participants to at least age 60 months, moving the anticipated neurocognitive outcomes readout to late 2024 or early 2025 from the prior second-quarter 2023 expectation.
- Under the November 2021 REGENXBIO settlement, Abeona paid $20 million and owes two further $5 million payments: one on the first anniversary and one by the earlier of the third anniversary or a defined strategic transaction. The former license was not reinstated.
- Key risks include clinical efficacy, safety and regulatory uncertainty; manufacturing and supply challenges; dependence on partners and vendors; need for additional capital and possible dilution; and uncertain reimbursement and commercialization prospects. COVID-19 had temporarily paused VIITAL in 2020 and could continue to disrupt trials, suppliers or operations.
- Nasdaq had notified Abeona in November 2021 of a bid-price deficiency, with an initial compliance deadline of May 16, 2022; the company cautioned that it might not regain or maintain listing compliance.
- Management concluded disclosure controls and internal control over financial reporting were effective as of year-end; the auditor issued an unqualified opinion on the financial statements and reported no critical audit matters. The auditor was not required to attest to internal control effectiveness.
Investor verification checklist
- Check VIITAL’s third-quarter 2022 topline results, endpoint outcomes, and any subsequent FDA feedback or BLA plans.
- Verify whether Abeona secured partners for EB-101 or ABO-102 and whether ABO-101 development remained discontinued.
- Track cash consumption, financing activity, dilution, and whether the stated 12-month runway was achieved.
- Confirm payment timing and settlement of the remaining $10 million REGENXBIO obligation.
- Check Nasdaq bid-price compliance and any effect on the stock’s listing.
- Assess manufacturing readiness, trial supply, and the eventual ABO-102 follow-up/readout timeline.