Q & A Highlights

Q: Can you provide details on the manufacturing yield issues that led to no revenue recognition for two patients, and what is the long-term success rate for manufacturing? A: Dr. Vish Seshadri (CEO) clarified that the two non-revenue cases were different: one was a low-yield batch (below the 4-sheet threshold) and the other was an out-of-specification batch related to a new identity test (Pan-CK marker) that was not part of clinical development. Both patients were treated, but no revenue will be recognized. He noted that the average commercial yield is around 9 sheets per lot, which is favorable compared to the ~5 sheets in clinical trials, and views these as rare events. The company is working with the FDA to revisit the specifications for the identity test, which were set based on limited data during BLA review.

Q: What is the expected cadence for existing QTCs like Lurie and Stanford to reach one patient per month, and how should we think about the impact of patient cancellations? A: Madhav Vasanthavada (CCO) stated that the one-patient-per-month cadence is still the expectation once centers reach steady state. He noted that while Lurie and Stanford are treating, other centers like UTMB and CHOP are progressing. Regarding cancellations, he explained that two biopsy cancellations in Q2 were due to patient health deterioration, not a lack of willingness. The company is focused on expanding the QTC network and filling the top of the funnel to offset such unpredictable events.

Q: Can you elaborate on the significance of the CMS NTAP status for ZEVASKYN and its impact on revenue and margins? A: Madhav Vasanthavada (CCO) explained that NTAP, effective October 1, 2026, provides supplemental reimbursement for Medicare patients (about 10% of the payer mix), which previously had limited access. Dr. Vish Seshadri (CEO) added that NTAP has a "halo effect" on other payers, validating the technology and easing payer negotiations. On margins, Joe Vazzano (CFO) noted that gross margins are heavily dependent on volume due to fixed manufacturing costs, with a normalized steady-state margin expected around 85% to 90%.

Q: What is the average number of sheets manufactured per patient in the commercial setting, and how does this compare to clinical trial experience? A: Dr. Vish Seshadri (CEO) reported that the average commercial yield is approximately 9 sheets per lot, which is significantly higher than the ~5 sheets per patient in the Phase 3 VIITAL trial. He emphasized that the low-yield batch was an anomaly, and the company is learning from each batch to improve processes. The threshold for revenue recognition is a minimum of 4 sheets per batch.

Q: How large does the QTC network need to be to provide in-state access to the majority of patients, and how important is in-state access? A: Madhav Vasanthavada (CCO) stated that in-state access is important for faster Medicaid reimbursement, but not necessary for all patients, as ~40% of patients at QTCs travel from out of state. He noted that the current network covers ~40% of the addressable market with in-state access, and further expansion will prioritize leading EB centers. He did not provide a specific target number for QTCs but emphasized that the network will continue to grow based on demand.

Q: Can you provide more details on the patient funnel and the number of patients identified or in the treatment process? A: Madhav Vasanthavada (CCO) reiterated that over 100 patients have been identified as clinically eligible by community physicians and QTCs. However, he declined to provide specific numbers on the downstream funnel, stating that the rate-limiting step is advancing patients through the treatment process at QTCs. He emphasized that recent patient and physician interactions at conferences have been very positive and are building clinical conviction.

Q: How long does it take for a new QTC to begin treating patients, and what are the key variables? A: Dr. Vish Seshadri (CEO) noted that the average time is 4-6 months, but the variance is high. For example, CHOP was activated in May and treated a patient in July, while other sites have taken over 12 months without treating a patient. The variability is driven by payer mixes, state-specific paperwork, and patient scheduling. The company is working with new sites to pre-line up processes before activation to accelerate timelines.

Q: What is the financial impact of the two non-revenue treatments, and where do you see normalized gross margins? A: Joe Vazzano (CFO) confirmed that the company absorbs the cost of goods sold for non-revenue treatments, as per agreements. He stated that gross margins are heavily dependent on patient volume due to fixed manufacturing costs, and the company expects normalized gross margins of approximately 85% to 90% at full operating capacity. For Q2 2026, gross margins were around 63%.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .