FDA Approves Abeona Cell Therapy for Rare Skin Condition

The U.S. Food and Drug Administration recently approved a groundbreaking treatment for a rare skin disorder, setting the stage for a competitive landscape between two pioneering cell and gene therapy firms. The newly approved drug, Zevaskyn, developed by Abeona Therapeutics, offers a transformative treatment for epidermolysis bullosa (EB), a rare genetic condition that causes severe and widespread skin blistering. On a recent call, Abeona's CEO, Vishwas Seshadri, revealed that Zevaskyn is priced at $3.1 million, marking it as one of the most expensive medical treatments available globally. He also mentioned that Abeona plans to reimburse insurers a certain percentage of the cost if additional therapy is needed for a treated wound within three years.

Epidermolysis bullosa affects an estimated 50,000 individuals in the U.S., with the most severe type being the recessive form of the dystrophic disease. This version leads to chronic blistering from birth, covering large portions of the skin and resulting in persistent scarring and other health challenges. Traditionally, EB has been managed with supportive care, but recent advancements have introduced more innovative treatments. In 2023, Krystal Biotech launched a topical gene therapy named Vyjuvek for the dystrophic form of EB. Administered weekly via a topical gel, Vyjuvek has a yearly cost estimated at $631,000. Its successful market introduction has significantly boosted Krystal's financial status, with its shares doubling post-approval and the firm's market valuation nearing $5 billion.

Abeona's Zevaskyn is being positioned as a unique alternative, distinguished as the sole FDA-approved treatment addressing disease-related wounds with a single application. Abeona anticipates that Zevaskyn will play a crucial role in helping the company achieve financial stability in the next year. Additionally, the FDA's approval granted Abeona a special voucher, which the company plans to sell. Despite the potential of Zevaskyn, some investors remain wary due to the competition posed by Krystal's gene therapy. This skepticism was reflected in Abeona's stock value, which saw a 5% decline following the approval announcement.

However, some analysts from Wall Street have expressed optimism about Abeona's future prospects. Analysts from Stifel suggested that Krystal and Abeona's treatments might complement each other rather than compete head-on, as Vyjuvek may not be a universal solution. Earlier this month, Jefferies analysts projected that Zevaskyn could potentially achieve annual sales of $460 million, emphasizing the significant unmet needs that Vyjuvek doesn't entirely address. They suggested that while Krystal's therapy is suitable for recurring minor wounds, Abeona's treatment is more applicable for extensive, chronic wounds.

Seshadri highlighted the high financial burden of specialized wound care, noting that monthly retail costs can reach up to $80,000, and the lifetime expense per patient for Vyjuvek can escalate to tens of millions of dollars. He defended Zevaskyn's pricing by emphasizing its comprehensive value to patients, caregivers, and the broader healthcare system, given its capability to treat both small and large wounds with a single application.

Abeona plans to introduce Zevaskyn in the third quarter, anticipating a gradual increase in its adoption. The company expects to treat 10 to 15 patients initially, with growth projected to accelerate thereafter. Abeona is also eager to sell the priority review voucher, which facilitates expedited FDA reviews, prioritizing a quick sale over price due to uncertainties surrounding the FDA's regulatory fast-pass program. Previously, the FDA had rejected Abeona’s application due to manufacturing concerns, but the recent approval marks a significant milestone for the company.