Abeona Therapeutics Tanks On CRL From The FDA, But All Hope Is Not Lost

Core Viewpoint - Abeona Therapeutics Inc. (ABEO) experienced a significant stock drop of over 50% after receiving a Complete Response Letter (CRL) from the FDA regarding its Biologics License Application for pz-cel, which is a gene therapy for recessive dystrophic epidermolysis bullosa (RDEB) [2][3] Group 1: Company Overview - Pz-cel is designed to treat RDEB, a severe inherited connective tissue disorder, and can cover approximately 500 square centimeters with a single application of gene-corrected epidermal sheets [3] - The company estimates peak revenue in the U.S. to exceed $500 million by the fifth year post-approval [3] Group 2: Regulatory Challenges - The CRL highlighted manufacturing issues but did not raise concerns regarding clinical efficacy or safety data, which may enhance the likelihood of future approval once the identified issues are resolved [3] - ABEO plans to resubmit its BLA addressing the deficiencies identified in the CRL, with expectations for submission in Q2 or Q3 of 2024, potentially leading to a new PDUFA date in Q1 2025 [3] Group 3: Financial Position - As of the end of 2023, ABEO had $52 million in cash and $42 million in working capital, with a net loss of $54 million for the year [4] - The company raised $5.3 million from stock issuance and $20 million from a credit facility, which allows for an additional $30 million in lending contingent on FDA approval of pz-cel [4] - The quarterly cash burn rate is approximately $12 million, suggesting that current cash resources could last for about six quarters, extending into mid-2025 [4] Group 4: Market Sentiment and Investment Outlook - At the time of the report, ABEO was trading around $3.40, leading to a market cap of approximately $95 million and an enterprise value of around $50 million [5] - Given the potential for significant revenue and a previous price target of $38, there is speculative upside despite the risk of dilution [5] - The stock is expected to bottom out around $3.00, presenting a potential entry point for investors [5]