Krystal Biotech, Inc. (KRYS) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years. Since a c ...

Net product revenue of $70.3 million in 2Q and $166.2 million since launch in August 2023 On track to deliver three clinical readouts in 2H 2024 Jeune Aesthetics' KB301 Phase 1 PEARL-1 study (Cohorts 3 and 4) in 3Q 2024; KB408 Phase 1 SERPENTINE-1 study for the treatment of AATD in 4Q 2024; and KB707 Phase 1 OPAL-1 study for the treatment of injectable solid tumors in 4Q 2024 Strong balance sheet, ending the quarter with $628.9 million in cash and investments PITTSBURGH, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Kr ...

Company Overview - Krystal Biotech, Inc. is a commercial-stage biotechnology company focused on the discovery, development, and commercialization of genetic medicines for diseases with high unmet medical needs [3] - The company's first commercial product, VYJUVEK®, is the first-ever redosable gene therapy and the first medicine approved by the FDA for the treatment of dystrophic epidermolysis bullosa [3] - Krystal Biotech is advancing a robust pipeline of investigational genetic medicines across various fields including respiratory, oncology, dermatology, ophthalmology, and aesthetics [3] Upcoming Financial Results - The company will report its second quarter 2024 financial results on August 5, 2024, prior to the opening of U.S. markets [1] - A conference call and webcast will be hosted by the company's management at 8:30 am ET on the same day to discuss the financial results and provide a business update [1] Access to Information - Investors and the general public can access the live webcast through a provided link [2] - A replay of the webcast will be available for 30 days on the company's website for those unable to listen live [2]

A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. KRYS is quite a good fit in this regard, gaining 30.3% over this period. Moreover, KRYS is currently trading at 93.7% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout. The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Za ...

Krystal Biotech, Inc. (KRYS) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revi ...

Shares of the commercial-stage biotechnology company, Krystal Biotech, Inc. (KRYS) , surged 36.5% year to date against the industry's decline of 4.3%. This was due to the strong uptake of its newly approved drug Vyjuvek and encouraging pipeline progress. Another candidate, KB408, is being evaluated for the treatment of alpha-1 antitrypsin deficiency (AATD). Krystal dosed the first patient in phase I SERPENTINE-1 study in adult patients with AATD. Recruitment is ongoing and the company remains on track to re ...

Core Insights - Krystal Biotech, Inc. will present new preclinical data on respiratory genetic medicine candidates KB407 and KB408 at the ATS 2024 International Conference from May 17-22, 2024 [1] Group 1: Product Information - KB407 is designed for the treatment of cystic fibrosis and encodes two full-length copies of CFTR, while KB408 targets alpha-1 antitrypsin deficiency (AATD) and encodes two full-length copies of alpha-1 antitrypsin [2] - Both KB407 and KB408 are currently undergoing Phase 1 studies [3] Group 2: Presentation Details - The poster presentation for KB408 will cover a murine toxicology study and is scheduled for May 20, 2024, from 11:30 AM to 1:15 PM PT [3] - The poster presentation for KB407 will evaluate its efficacy in healthy and patient-derived airway cells and is set for May 21, 2024, from 11:30 AM to 1:15 PM PT [3] Group 3: Company Overview - Krystal Biotech is a commercial-stage biotechnology company focused on genetic medicines for diseases with high unmet medical needs, with its first product VYJUVEK® being the first FDA-approved redosable gene therapy for dystrophic epidermolysis bullosa [4] - The company is advancing a diverse pipeline of investigational genetic medicines across various therapeutic areas including respiratory, oncology, dermatology, ophthalmology, and aesthetics [4]

Krystal Biotech, Inc. (KRYS) came out with quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.20 per share. This compares to loss of $1.76 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -85%. A quarter ago, it was expected that this company would post a loss of $0.52 per share when it actually produced earnings of $0.30, delivering a surprise of 157.69%.Over the last four quarters, the company h ...

[General Information](index=1&type=section&id=General%20Information) Provides fundamental details about Krystal Biotech's filing, stock listing, and outstanding shares - Krystal Biotech, Inc. filed a Quarterly Report on Form 10-Q for the period ended March 31, 2024[1](index=1&type=chunk)[2](index=2&type=chunk) - The company's common stock (KRYS) is registered on the NASDAQ Global Select Market[3](index=3&type=chunk) - Krystal Biotech, Inc. is classified as a Large accelerated filer[4](index=4&type=chunk) - As of April 29, 2024, there were **28,558,440** shares of common stock issued and outstanding[4](index=4&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the company's unaudited condensed consolidated financial statements and management's discussion [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Krystal Biotech's unaudited condensed consolidated financial statements, prepared under GAAP [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Summarizes Krystal Biotech's financial position, detailing total assets, liabilities, and equity | (in thousands) | March 31, 2024 | December 31, 2023 | | :--------------- | :------------- | :---------------- | | Total assets | $853,296 | $818,355 | | Total liabilities | $54,054 | $39,714 | | Total stockholders' equity | $799,242 | $778,641 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details Krystal Biotech's product revenue, operating expenses, and net income or loss | (in thousands, except per share data) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Product revenue, net | $45,250 | $— | | Total operating expenses | $51,934 | $48,823 | | Loss from operations | $(6,684) | $(48,823) | | Interest and other income, net | $7,616 | $3,526 | | Net income (loss) | $932 | $(45,297) | | Basic net income (loss) per common share | $0.03 | $(1.76) | | Diluted net income (loss) per common share | $0.03 | $(1.76) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in Krystal Biotech's total stockholders' equity, including compensation and net income | (in thousands) | Balances as of January 1, 2024 | Balances as of March 31, 2024 | | :------------- | :----------------------------- | :---------------------------- | | Total Stockholders' Equity | $778,641 | $799,242 | | Stock-based compensation | $10,023 | $10,023 | | Net income | $932 | $932 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Reports Krystal Biotech's cash flows from operating, investing, and financing activities | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $15,888 | $(26,156) | | Net cash (used in) provided by investing activities | $(25,980) | $3,563 | | Net cash provided by financing activities | $10,583 | $1,474 | | Net increase (decrease) in cash and cash equivalents | $678 | $(21,155) | | Cash and cash equivalents at end of period | $359,006 | $140,745 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Organization](index=7&type=section&id=Note%201.%20Organization) Krystal Biotech is a commercial-stage genetic medicine company, expanding internationally, with sufficient cash for 12 months of operations - Krystal Biotech, Inc. is a fully integrated, commercial-stage biotechnology company focused on the discovery, development, manufacturing and commercialization of genetic medicines using an engineered HSV-1 gene therapy platform[21](index=21&type=chunk) - The company incorporated wholly-owned subsidiaries in Switzerland, Netherlands, France, Germany, and Japan between January 2022 and March 2024 to establish initial operations for commercialization in Europe and Japan[20](index=20&type=chunk) - As of March 31, 2024, the company's cash, cash equivalents, and short-term investments of approximately **$538.3 million** are believed to be sufficient to fund planned operations for at least the next 12 months[23](index=23&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=7&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Interim financial statements conform to U.S. GAAP, with no material accounting policy changes - The accompanying interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP")[24](index=24&type=chunk) - There were no material changes to the Company's significant accounting policies during the three months ended March 31, 2024[29](index=29&type=chunk) - The Company is assessing the potential impact of ASU 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," effective for fiscal years starting after December 15, 2024[31](index=31&type=chunk) [Note 3. Revenue Recognition](index=8&type=section&id=Note%203.%20Revenue%20Recognition) VYJUVEK revenue recognition began in Q3 2023 post-FDA approval, incorporating variable consideration - The Company began commercial marketing and sales of VYJUVEK and recognizing revenue in the third quarter of 2023, following FDA approval on May 19, 2023[32](index=32&type=chunk) - The transaction price recognized as revenue for VYJUVEK sales includes an estimate of variable consideration, such as discounts, returns, copay assistance, and rebates[98](index=98&type=chunk) Rebates and Accruals (in thousands) | (in thousands) | Rebates | Prompt Pay | Other Accruals | Total | | :------------- | :------ | :--------- | :------------- | :---- | | Balance as of December 31, 2023 | $5,977 | $858 | $279 | $7,114 | | Provisions | $5,746 | $1,565 | $211 | $7,522 | | Payments/Credits | $(434) | $(953) | $(75) | $(1,462) | | Balance, as of March 31, 2024 | $11,289 | $1,470 | $415 | $13,174 | [Note 4. Net Income (Loss) Per Share Attributable to Common Stockholders](index=9&type=section&id=Note%204.%20Net%20Income%20(Loss)%20Per%20Share%20Attributable%20to%20Common%20Stockholders) Details basic and diluted net income (loss) per common share, showing significant improvement Net Income (Loss) Per Common Share (in thousands, except per share data) | (in thousands, except per share data) | 2024 | 2023 | | :------------------------------------ | :--- | :--- | | Net income (loss) | $932 | $(45,297) | | Weighted-average basic common shares | 28,295 | 25,712 | | Dilutive effect of stock options and unvested restricted stock | 996 | — | | Weighted-average diluted common shares | 29,291 | 25,712 | | Net income (loss) per common share—Basic | $0.03 | $(1.76) | | Net income (loss) per common share—Diluted | $0.03 | $(1.76) | - Common stock equivalents, including stock options and unvested restricted stock, were excluded from diluted EPS calculation in Q1 2023 due to their anti-dilutive effect[36](index=36&type=chunk) [Note 5. Fair Value Instruments](index=9&type=section&id=Note%205.%20Fair%20Value%20Instruments) Breaks down cash, cash equivalents, and available-for-sale securities by investment category Fair Value of Financial Instruments (in thousands) | (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Aggregate Fair Value | Cash and Cash Equivalents | Short-term Marketable Securities | Long-term Marketable Securities | | :------------- | :------------- | :--------------------- | :------------------------ | :------------------- | :------------------------ | :------------------------------- | :------------------------------ | | **March 31, 2024** | | | | | | | | | Cash and cash equivalents | $359,006 | $— | $— | $359,006 | $359,006 | $— | $— | | Commercial paper | $18,747 | $— | $(7) | $18,740 | $— | $18,740 | $— | | Corporate bonds | $115,918 | $132 | $(69) | $115,981 | $— | $70,182 | $45,799 | | U.S. government agency securities | $128,682 | $29 | $(183) | $128,528 | $— | $90,331 | $38,197 | | **Total** | **$622,353** | **$161** | **$(259)** | **$622,255** | **$359,006** | **$179,253** | **$83,996** | | **December 31, 2023** | | | | | | | | | Cash and cash equivalents | $358,328 | $— | $— | $358,328 | $358,328 | $— | $— | | Commercial paper | $17,124 | $5 | $(1) | $17,128 | $— | $17,128 | $— | | Corporate bonds | $111,824 | $407 | $(27) | $112,204 | $— | $70,996 | $41,208 | | U.S. government agency securities | $106,079 | $423 | $(30) | $106,472 | $— | $85,726 | $20,746 | | **Total** | **$593,355** | **$835** | **$(58)** | **$594,132** | **$358,328** | **$173,850** | **$61,954** | - The Company's short-term marketable securities mature in one year or less, while long-term marketable securities mature between one and two years[40](index=40&type=chunk) [Note 6. Balance Sheet Components](index=10&type=section&id=Note%206.%20Balance%20Sheet%20Components) Details inventory and property and equipment, net, including significant inventory increases Inventory (in thousands) | (in thousands) | March 31, 2024 | December 31, 2023 | | :--------------- | :------------- | :---------------- | | Raw materials | $4,489 | $3,154 | | Work-in-process | $6,387 | $3,204 | | Finished goods | $161 | $627 | | **Inventory** | **$11,037** | **$6,985** | Property and Equipment, Net (in thousands) | (in thousands) | March 31, 2024 | December 31, 2023 | | :--------------- | :------------- | :---------------- | | Total property and equipment | $175,132 | $174,029 | | Accumulated depreciation | $(15,121) | $(12,827) | | **Property and equipment, net** | **$160,011** | **$161,202** | - Depreciation expense was **$1.4 million** for the three months ended March 31, 2024, compared to **$1.1 million** for the same period in 2023[42](index=42&type=chunk) - Depreciation capitalized into inventory was **$867 thousand** in Q1 2024[42](index=42&type=chunk) - The majority of assets related to the ASTRA facility were reclassified from construction in progress to in-use assets (leasehold improvements, manufacturing equipment, buildings) as qualification occurred through Q1 2024[43](index=43&type=chunk) [Note 7. Commitments and Contingencies](index=11&type=section&id=Note%207.%20Commitments%20and%20Contingencies) Outlines commitments to CROs/CMOs and details the PeriphaGen legal settlement - Estimated remaining commitments under agreements with CROs and CMOs are approximately **$1.1 million** as of March 31, 2024[46](index=46&type=chunk) - The Company recorded litigation settlement expense of **$12.5 million** for both the three months ended March 31, 2024, and 2023, related to the settlement agreement with PeriphaGen, Inc[48](index=48&type=chunk) - As of March 31, 2024, the Company accrued **$12.5 million** for a contingent milestone payment to PeriphaGen, Inc., as reaching **$100.0 million** in total cumulative sales was deemed probable[48](index=48&type=chunk) - The total consideration for settling the dispute, acquiring assets, and granting a license from PeriphaGen will be **$75.0 million** if all milestones are achieved, of which **$37.5 million** has been paid[47](index=47&type=chunk) [Note 8. Leases](index=12&type=section&id=Note%208.%20Leases) Outlines operating lease commitments, with future minimum payments totaling **$15.8 million** Future Minimum Operating Lease Payments (in thousands) | (in thousands) | Operating Leases | | :--------------- | :--------------- | | 2024 (remaining nine months) | $1,157 | | 2025 | $1,277 | | 2026 | $1,277 | | 2027 | $1,300 | | 2028 | $1,325 | | Thereafter | $9,438 | | Future minimum operating lease payments | $15,774 | | Less: Interest | $(7,879) | | Present value of lease liability | $7,895 | - The weighted-average remaining lease term for operating leases was **12.2 years** as of March 31, 2024, with a weighted-average discount rate of **9.5%**[50](index=50&type=chunk) Total Lease Expense (in thousands) | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------- | :-------------------------------- | :-------------------------------- | | Operating lease expense | $299 | $463 | | Variable lease expense | $40 | $59 | | **Total lease expense** | **$339** | **$522** | [Note 9. Capitalization](index=12&type=section&id=Note%209.%20Capitalization) Describes ATM equity offering programs, with **$150.0 million** available under the New ATM Program - The Company established a New ATM Program on May 8, 2023, to issue and sell shares of common stock with an aggregate offering price of up to **$150.0 million**[53](index=53&type=chunk) - No shares of Common Stock were issued pursuant to the New ATM Program during the three months ended March 31, 2024, resulting in **$150.0 million** available for issuance[53](index=53&type=chunk) [Note 10. Stock-Based Compensation](index=13&type=section&id=Note%2010.%20Stock-Based%20Compensation) Details equity award plans, with **2.4 million** shares available and **$9.3 million** expense - Shares remaining available for grant under the 2017 IPO Stock Plan were **2.4 million** as of March 31, 2024[55](index=55&type=chunk) - The total intrinsic value of stock options exercised was **$24.5 million** during the three months ended March 31, 2024, compared to **$1.1 million** in the prior year period[57](index=57&type=chunk) Total Stock-Based Compensation (in thousands) | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------- | :-------------------------------- | :-------------------------------- | | Research and development | $1,868 | $2,496 | | Selling, general, and administrative | $7,431 | $7,941 | | **Total stock-based compensation** | **$9,299** | **$10,437** | - The Company capitalized **$724 thousand** of stock-based compensation into inventory for the three months ended March 31, 2024, compared to zero in the prior year period, following FDA approval of VYJUVEK[63](index=63&type=chunk) [Note 11. Income Taxes](index=15&type=section&id=Note%2011.%20Income%20Taxes) No income tax provision recorded in Q1 2024 or 2023 due to tax losses - The Company did not record an income tax provision for the three months ended March 31, 2024, or 2023, as it generated sufficient tax losses[65](index=65&type=chunk) - The Company expects to maintain a full valuation allowance against its net deferred tax assets for the year[65](index=65&type=chunk) [Note 12. Subsequent Events](index=15&type=section&id=Note%2012.%20Subsequent%20Events) No subsequent events requiring recognition or disclosure were identified after the balance sheet date - The Company concluded that no subsequent events have occurred that would require recognition or disclosure in the condensed consolidated financial statements[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Krystal Biotech's financial condition, VYJUVEK's launch, pipeline, and liquidity [Special Note Regarding Forward-Looking Statements](index=16&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) Warns readers that the report contains forward-looking statements subject to risks and uncertainties - This Quarterly Report contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied[68](index=68&type=chunk) - Key factors influencing future results include the commercial success of VYJUVEK, R&D activities, regulatory approvals, market opportunity, costs, competition, intellectual property, and global economic conditions[69](index=69&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements due to inherent uncertainties and the rapidly changing environment[70](index=70&type=chunk) [Overview](index=17&type=section&id=Overview) Provides a high-level summary of Krystal Biotech's FDA-approved product, pipeline highlights, and developments [Our FDA Approved Commercial Product](index=17&type=section&id=Our%20FDA%20Approved%20Commercial%20Product) VYJUVEK, the first redosable gene therapy for DEB, generated **$45.3 million** in Q1 2024 revenue - VYJUVEK (B-VEC) was FDA approved on May 19, 2023, as the first redosable gene therapy for treating dystrophic epidermolysis bullosa (DEB) in patients six months of age or older[74](index=74&type=chunk) - Net VYJUVEK product revenue was **$45.3 million** for the three months ended March 31, 2024, with cumulative net product revenue of **$95.9 million** since August 2023[75](index=75&type=chunk) - A permanent J-code (J3401) for VYJUVEK became effective on January 1, 2024, and as of April 2024, positive access has been achieved for **96%** of lives covered under commercial and Medicaid plans[76](index=76&type=chunk) - Q1 2024 product revenue was negatively impacted by the J-code switchover and a cybersecurity incident, leading to approximately **400 free vials** dispensed to ensure treatment continuity[78](index=78&type=chunk) - Preparations for direct commercial launch in Europe and Japan are underway, with an EMA decision on the Marketing Authorization Application (MAA) expected in 2H 2024 and a Japan New Drug Application filing anticipated in 2H 2024[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [Pipeline Highlights and Recent Developments](index=18&type=section&id=Pipeline%20Highlights%20and%20Recent%20Developments) Highlights progress in Krystal Biotech's diverse genetic medicine pipeline across multiple areas [Respiratory](index=18&type=section&id=Respiratory) Details clinical trial progress for respiratory gene therapy candidates KB407 and KB408 - KB407 (cystic fibrosis): Completed dosing of the second cohort in the Phase 1 CORAL-1 study in March 2024, with the third and final cohort expected to initiate in Q2 2024[84](index=84&type=chunk) - KB408 (alpha-1 antitrypsin deficiency): Dosed the first patient in the Phase 1 SERPENTINE-1 study in February 2024, with interim data expected in 2H 2024[85](index=85&type=chunk) [Ophthalmology](index=18&type=section&id=Ophthalmology) Outlines developments for ophthalmic B-VEC for ocular DEB, including a planned clinical study - Compassionate use of B-VEC as an eyedrop for ocular DEB showed full corneal healing at 3 months and visual acuity improvement[86](index=86&type=chunk) - The Company aligned with the FDA on a proposed single-arm, open-label study in approximately **10 patients** for ophthalmic B-VEC, planned to initiate in 2H 2024[87](index=87&type=chunk) - U.S. Patent No. 11,865,148 was issued, covering methods of delivering human transgenes to the eye using replication-incompetent HSV-1[88](index=88&type=chunk) [Oncology](index=19&type=section&id=Oncology) Reports progress for oncology candidate KB707, including Fast Track Designations and Phase 1 studies - KB707 (immunotherapy for solid tumors): Intratumoral KB707 received Fast Track Designation for melanoma, and the Phase 1 OPAL-1 study has cleared the first two dose escalation cohorts with interim data expected by year-end[91](index=91&type=chunk) - Inhaled KB707 received Fast Track Designation for solid tumors with pulmonary metastases, and the Phase 1 KYANITE-1 study initiated in April 2024[92](index=92&type=chunk) - Preclinical data for KB707 demonstrated enhanced local and systemic T-cell effector responses in syngeneic mouse models[93](index=93&type=chunk) [Dermatology](index=19&type=section&id=Dermatology) Provides updates on dermatology candidates KB105 and KB104 clinical development plans - KB105 (TGM1-ARCI): Expects to resume enrollment in the Phase 2 portion of the JADE-1 study later in 2024[94](index=94&type=chunk) - KB104 (Netherton Syndrome): Plans to file an IND application and initiate a clinical trial following the KB105 Phase 2 study[94](index=94&type=chunk) [Aesthetics](index=19&type=section&id=Aesthetics) Details progress for aesthetic candidate KB301, with Phase 1 clinical study results expected mid-2024 - KB301 (aging/damaged skin): Initiated Phase 1 PEARL-1 Cohort 3 and Cohort 4 clinical studies, with results for both expected in mid-2024[95](index=95&type=chunk)[96](index=96&type=chunk) [Financial Overview](index=20&type=section&id=Financial%20Overview) Outlines key financial statement components, including revenue, COGS, expenses, and capital expenditures - Revenue recognition began in Q3 2023 following FDA approval of VYJUVEK, with future revenue expected to fluctuate[97](index=97&type=chunk) - Cost of goods sold includes direct and indirect manufacturing costs for VYJUVEK; prior to FDA approval in May 2023, these costs were expensed as research and development[99](index=99&type=chunk)[100](index=100&type=chunk) - Research and development expenses are expected to increase due to ongoing clinical trials for KB407, KB408, intratumoral KB707, inhaled KB707, resumption of KB105 dosing, initiation of ophthalmic B-VEC study, and KB301 Phase 2[102](index=102&type=chunk) - Selling, general, and administrative expenses are anticipated to increase due to commercialization efforts for VYJUVEK globally and support for product candidates[105](index=105&type=chunk) - Significant capital expenditures were incurred for the second commercial scale CGMP facility, ASTRA, with continued expenditures expected throughout its operational life[106](index=106&type=chunk) - Interest and other income, net, primarily consists of income earned from cash, cash equivalents, and investments[107](index=107&type=chunk) - There have been no significant changes to critical accounting policies, significant judgments, and estimates during the three months ended March 31, 2024[108](index=108&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Compares Q1 2024 and Q1 2023 financial performance, highlighting **$45.3 million** net product revenue Comparative Results of Operations (in thousands) | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change | | :--------------- | :-------------------------------- | :-------------------------------- | :----- | | Product revenue, net | $45,250 | $— | $45,250 | | Cost of goods sold | $2,419 | $— | $2,419 | | Research and development | $10,957 | $12,288 | $(1,331) | | Selling, general, and administrative | $26,058 | $24,035 | $2,023 | | Litigation settlement | $12,500 | $12,500 | $— | | Total operating expenses | $51,934 | $48,823 | $3,111 | | Loss from operations | $(6,684) | $(48,823) | $42,139 | | Interest and other income, net | $7,616 | $3,526 | $4,090 | | Net income (loss) | $932 | $(45,297) | $46,229 | - Product revenue, net, was **$45.3 million** for Q1 2024, compared to zero for Q1 2023, due to sales of VYJUVEK after FDA approval in May 2023[111](index=111&type=chunk) - Research and development expenses decreased by **$1.3 million** in Q1 2024, primarily due to manufacturing expenses related to VYJUVEK being recorded as inventory post-FDA approval and capitalization of commercial batches[113](index=113&type=chunk)[114](index=114&type=chunk) - Selling, general, and administrative expenses increased by **$2.0 million** in Q1 2024, driven by **$2.1 million** in selling expenses related to VYJUVEK's launch, **$706 thousand** in professional services, and **$367 thousand** in net payroll, partially offset by a **$1.3 million** decrease in marketing costs[117](index=117&type=chunk)[118](index=118&type=chunk) - Interest and other income, net, increased to **$7.6 million** in Q1 2024 from **$3.5 million** in Q1 2023, reflecting increased investment activity and more favorable interest rates[120](index=120&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) Details Krystal Biotech's liquidity, with **$538.3 million** in cash and investments - As of March 31, 2024, cash, cash equivalents, and short-term investments totaled approximately **$538.3 million**, with an accumulated deficit of **$268.9 million**[121](index=121&type=chunk) - Management believes current funds are sufficient to fund operations for at least 12 months from the filing date of this Quarterly Report[121](index=121&type=chunk) - Future operations are intended to be funded through on-hand cash, revenue from VYJUVEK sales, equity sales, debt financings, and arrangements with strategic partners[122](index=122&type=chunk) - The company faces unpredictable clinical trial costs and potential future contingent milestone payments of **$12.5 million** each upon reaching **$100.0 million**, **$200.0 million**, and **$300.0 million** in total cumulative sales[123](index=123&type=chunk) Cash Flow Summary (in thousands) | (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $15,888 | $(26,156) | | Net cash (used in) provided by investing activities | $(25,980) | $3,563 | | Net cash provided by financing activities | $10,583 | $1,474 | | Net increase (decrease) in cash | $678 | $(21,155) | - Net cash provided by operating activities was **$15.9 million** in Q1 2024, primarily driven by net income and non-cash adjustments[130](index=130&type=chunk) - Net cash used in investing activities was **$26.0 million** in Q1 2024, mainly due to purchases of short-term and long-term investments and property and equipment, partially offset by maturities of investments[131](index=131&type=chunk) - Net cash provided by financing activities was **$10.6 million** in Q1 2024, primarily from stock option exercises, partially offset by tax withholding payments related to restricted stock units and awards[132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses market risk exposures, primarily interest rate fluctuations and foreign currency risk - As of March 31, 2024, the company held **$538.3 million** in cash, cash equivalents, and short-term investments, primarily in money market funds, commercial paper, corporate bonds, and U.S. government agency securities[133](index=133&type=chunk) - The company's primary investment objective is to preserve principal while maximizing income without significantly increasing risk[133](index=133&type=chunk) - The company does not believe that a **10%** immediate change in interest rates or foreign currency exchange rates would materially affect its results of operations or financial position[133](index=133&type=chunk)[134](index=134&type=chunk) - The company is subject to foreign exchange rate risk from operations in Europe, Australia, and Japan, but these foreign operations are not currently material[134](index=134&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CAO concluded disclosure controls were effective, with no material changes in internal control - The Chief Executive Officer and Chief Accounting Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[136](index=136&type=chunk) - There was no change in internal control over financial reporting during the three months ended March 31, 2024, that materially affected, or is reasonably likely to materially affect, internal control over financial reporting[137](index=137&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents additional information, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Incorporates legal proceedings information from Note 7, detailing the PeriphaGen settlement - Information on legal proceedings is incorporated by reference from Note 7 of the notes to condensed consolidated financial statements[139](index=139&type=chunk) - The company has an ongoing settlement agreement with PeriphaGen, Inc., which includes three additional **$12.5 million** contingent milestone payments upon reaching **$100.0 million**, **$200.0 million**, and **$300.0 million** in total cumulative sales[47](index=47&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) Details significant risks impacting Krystal Biotech's business, including commercial, regulatory, and financial factors [Risks Related to Our Business and Industry](index=28&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Outlines risks related to VYJUVEK's commercial success, competition, and healthcare reforms - The company's near-term prospects are substantially dependent on the commercial success of VYJUVEK, including obtaining regulatory approval in other jurisdictions[141](index=141&type=chunk)[142](index=142&type=chunk) - Krystal Biotech faces significant competition from other companies developing alternative gene therapy approaches, many with greater financial and technical resources[150](index=150&type=chunk) - The company is exposed to the risk of product liability lawsuits, which could result in substantial liabilities, reputational damage, and potential limitations on commercialization[153](index=153&type=chunk)[154](index=154&type=chunk) - Negative public opinion and increased regulatory scrutiny of gene therapy, as a novel technology, could damage public perception and adversely affect the ability to conduct business or obtain approvals[156](index=156&type=chunk) - Healthcare legislative reforms, such as the Inflation Reduction Act of 2022, and increasing governmental scrutiny over drug pricing, may adversely affect the company's business and results of operations[166](index=166&type=chunk)[167](index=167&type=chunk) - The company is subject to federal and state healthcare fraud and abuse laws, false claims laws, and health information privacy and security laws (e.g., HIPAA, CCPA, GDPR), with potential for substantial penalties for non-compliance[170](index=170&type=chunk)[171](index=171&type=chunk)[178](index=178&type=chunk) - Cybersecurity incidents, such as the one affecting a specialty pharmacy provider in Q1 2024, could harm the business by damaging reputation, exposing to liability, adversely impacting revenue, or materially disrupting operations[187](index=187&type=chunk) [Risks Related to the Development, Regulatory Review and Approval of Our Product Candidates](index=40&type=section&id=Risks%20Related%20to%20the%20Development%2C%20Regulatory%20Review%20and%20Approval%20of%20Our%20Product%20Candidates) Details risks in product development, regulatory approval, clinical trials, and post-market oversight - Failure to advance product candidates through clinical trials, obtain regulatory approval, or significant delays would materially harm the business, as the development and commercialization process is subject to many uncertainties[203](index=203&type=chunk)[204](index=204&type=chunk) - The gene therapy platform is a novel technology, making the time and cost of obtaining regulatory approvals difficult to predict, and regulatory requirements may change frequently[205](index=205&type=chunk)[206](index=206&type=chunk) - Product or product candidates may cause undesirable side effects or have other properties that could delay or prevent regulatory approval, limit commercial potential, or result in significant negative consequences post-approval[209](index=209&type=chunk)[211](index=211&type=chunk) - The company relies on third parties to conduct certain aspects of preclinical studies and clinical trials, and their failure to meet contractual duties or comply with regulations could delay or terminate development[221](index=221&type=chunk)[222](index=222&type=chunk) - Interim, 'top-line,' and preliminary data from clinical trials may change as more patient data becomes available or additional analyses are conducted, potentially differing materially from final data[224](index=224&type=chunk) - Even with FDA approval, obtaining approval outside the United States is not guaranteed and would limit market opportunities, as foreign regulatory requirements can be lengthy and expensive[225](index=225&type=chunk) - VYJUVEK and other approved product candidates remain subject to ongoing regulatory oversight, including manufacturing, labeling, and post-market surveillance, with risks of non-compliance or changes to regulations[227](index=227&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - Orphan drug exclusivity for VYJUVEK and designations for KB105, KB407, and KB408 may not effectively protect against competition, and future designations are uncertain[231](index=231&type=chunk)[236](index=236&type=chunk) - Accelerated approval pathways (Breakthrough Therapy, Fast Track, RMAT, Priority Review, PRIME) do not guarantee faster development, review, or approval, nor do they increase the likelihood of marketing approval[237](index=237&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) [Risks Related to Manufacturing](index=49&type=section&id=Risks%20Related%20to%20Manufacturing) Covers risks in manufacturing, including regulatory approvals, third-party reliance, and capacity challenges - Delays in obtaining regulatory approvals for manufacturing processes or facilities, or disruptions in the manufacturing process, could disrupt production of VYJUVEK or delay development and commercialization efforts[248](index=248&type=chunk)[249](index=249&type=chunk) - Reliance on third-party manufacturing capabilities or components subjects the company to risks of unsatisfactory performance, supply issues, or non-compliance with CGMP regulations[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - Contamination, shortages of raw materials (especially biologic sources), or failure of key suppliers could result in delays in producing VYJUVEK or product candidates[253](index=253&type=chunk)[254](index=254&type=chunk) - Failure to increase manufacturing capacity and yields in a timely or cost-effective manner, or to continuously improve the quality management program, could delay commercial availability and lead to regulatory actions[255](index=255&type=chunk)[256](index=256&type=chunk)[258](index=258&type=chunk) - Scaling up the VYJUVEK commercial manufacturing process to meet increased demand or improve efficiencies requires regulatory approval (Prior Approval Supplement to the FDA) and is subject to significant risks and uncertainties[259](index=259&type=chunk) - Technical transfer of VYJUVEK manufacturing between facilities (e.g., ANCORIS to ASTRA) is a time-consuming process requiring FDA inspection and approval, with no guarantee of success[260](index=260&type=chunk) [Risks Related to Commercialization of VYJUVEK and Our Product Candidates](index=51&type=section&id=Risks%20Related%20to%20Commercialization%20of%20VYJUVEK%20and%20Our%20Product%20Candidates) Addresses risks in commercialization, including sales, market acceptance, pricing, and reimbursement - As a company with limited commercial experience, the sales, marketing, and distribution of VYJUVEK or any future approved products may be unsuccessful or less successful than anticipated, requiring significant resources and potentially impacting profitability[261](index=261&type=chunk)[262](index=262&type=chunk) - The company relies on a small number of third parties for VYJUVEK distribution in the U.S., and their failure to fulfill contractual obligations or adequately distribute could adversely affect sales and revenue[263](index=263&type=chunk)[264](index=264&type=chunk) - Plans to use local distributors outside the U.S., U.K., and certain EU countries involve risks of non-compliance, ineffective sales, or failure to devote necessary resources[265](index=265&type=chunk) - If the commercial launch of VYJUVEK is unsuccessful, the substantial investment in sales, marketing, and distribution capabilities could be lost[266](index=266&type=chunk)[267](index=267&type=chunk) - The commercial success of VYJUVEK and product candidates depends on market acceptance by physicians, patients, third-party payors, and the medical community, which is uncertain[275](index=275&type=chunk) - Government price controls, changes in pricing regulation, and uncertainty regarding insurance coverage and reimbursement status for newly approved products could restrict revenue and limit marketability[277](index=277&type=chunk)[279](index=279&type=chunk) - Ethical, legal, and social issues related to genetic testing may reduce demand for product candidates, if approved[283](index=283&type=chunk) - Increasing demand for compassionate use or expanded access of unapproved therapies could negatively affect the company's reputation and business, potentially diverting resources or impacting safety profiles[284](index=284&type=chunk)[286](index=286&type=chunk) [Risks Related to Our Intellectual Property](index=57&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Discusses risks concerning intellectual property, including patent protection, infringement claims, and trade secret disputes - Inability to obtain and maintain adequate U.S. and foreign patent protection for VYJUVEK, product candidates, and the vector platform, or insufficient scope of protection, could allow competitors to commercialize similar products[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) - Protecting intellectual property rights globally is expensive and challenging, as foreign laws may not offer the same extent of protection as in the U.S., making enforcement difficult[292](index=292&type=chunk)[293](index=293&type=chunk) - Third parties may initiate legal proceedings alleging infringement of their intellectual property rights, leading to uncertain outcomes, potential licensing requirements, monetary damages, or cessation of development/commercialization[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - Intellectual property litigation is expensive, time-consuming, and can distract personnel, potentially compromising confidential information and adversely impacting financial results[298](index=298&type=chunk)[299](index=299&type=chunk) - The company has been, and may be in the future, subject to claims of wrongful use or disclosure of alleged trade secrets of other parties, or claims asserting ownership of its own intellectual property, leading to potential litigation and loss of valuable rights[300](index=300&type=chunk)[301](index=301&type=chunk) - Changes in U.S. patent law, such as the Leahy-Smith America Invents Act and evolving court decisions, could diminish the value of patents and negatively impact the ability to protect and enforce intellectual property rights[302](index=302&type=chunk)[303](index=303&type=chunk) - Inadequate protection of trademarks and trade names could hinder name recognition and competitive effectiveness, adversely affecting the business[305](index=305&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=60&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) Covers financial risks, including recurring losses, unpredictable costs, and need for additional funding - Despite generating net income in 2023, the company has incurred recurring losses and negative cash flows since inception and may not sustain profitability, which depends on the successful commercialization of VYJUVEK and pipeline development[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk) - Product development costs are unpredictable and will increase with delays in testing or obtaining marketing approvals, potentially delaying revenue from product candidates[310](index=310&type=chunk) - The company will need to raise additional funding to maintain and expand commercialization capabilities for VYJUVEK and to complete product development, but such funding may not be available on acceptable terms, leading to potential delays or termination of efforts[311](index=311&type=chunk)[312](index=312&type=chunk) - Changes in U.S. and foreign tax laws, including new income, sales, or other tax laws, could adversely affect the company's business operations and financial performance[313](index=313&type=chunk)[314](index=314&type=chunk) - The ability to use net operating loss carryforwards and certain tax credit carryforwards may be subject to limitation under Sections 382 and 383 of the Internal Revenue Code due to changes in ownership[315](index=315&type=chunk)[316](index=316&type=chunk) - The company's limited operating history since 2016 makes it difficult to evaluate its future success, performance, or viability, and operating results are expected to fluctuate[317](index=317&type=chunk)[318](index=318&type=chunk) [Risks Related to Ownership of Our Common Stock](index=63&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Addresses risks for common stock owners, including management influence, stock price volatility, and dilution - The CEO and Chairman, and Founder, President, Research & Development and Director, collectively owning approximately **14%** of outstanding common stock, have substantial influence over matters submitted to stockholders for approval[319](index=319&type=chunk) - Negative evaluations of the company's stock by securities analysts could cause the stock price to decline[320](index=320&type=chunk) - Raising additional capital through equity or debt financings could cause the price of common stock to decline, dilute existing stockholders, or impose restrictive covenants on operations[321](index=321&type=chunk)[322](index=322&type=chunk) - The price of the company's common stock has been and is likely to continue to be volatile, influenced by various factors including clinical trial results, regulatory approvals, competition, and general market conditions[324](index=324&type=chunk)[325](index=325&type=chunk) - Failure to maintain effective internal control over financial reporting could adversely affect investor confidence and the value of common stock[326](index=326&type=chunk) - Provisions in corporate charter documents and Delaware law could make an acquisition of the company more difficult and potentially prevent attempts by stockholders to replace current management[327](index=327&type=chunk)[328](index=328&type=chunk) - Management has broad discretion in the use of cash, cash equivalents, and marketable securities, and ineffective use could result in financial losses[329](index=329&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future, making capital appreciation the sole source of gain for stockholders[330](index=330&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Summarizes equity securities purchases, noting shares bought for employee tax withholding Equity Securities Purchases | Period | Total number of shares (or units) purchased | Average price paid per share (or unit) | Total number of shares (or units) purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs | | :----------------------------- | :---------------------------------------- | :------------------------------------- | :--------------------------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------------------------------- | | January 1, 2024 - January 31, 2024 | — | — | — | — | | February 1, 2024 - February 28, 2024 | 7,677 | $78.89 | — | — | | March 1, 2024 - March 31, 2024 | — | — | — | — | | **Total** | **7,677** | **$78.89** | **—** | **—** | - The reported purchases represent shares withheld from employees for taxes resulting from the vesting of restricted stock awards[333](index=333&type=chunk) [Item 3. Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults occurred upon senior securities during the reporting period - There were no defaults upon senior securities[334](index=334&type=chunk) [Item 4. Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosure requirements are not applicable to Krystal Biotech, Inc - Mine Safety Disclosures are not applicable to the registrant[335](index=335&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) Reports no directors or officers adopted or terminated Rule 10b5-1 trading arrangements - None of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024[336](index=336&type=chunk) [Item 6. Exhibits](index=67&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including CEO/CAO certifications and Inline XBRL data - Exhibits include certifications of periodic reports under Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, and Inline XBRL (Extensible Business Reporting Language) formatted materials[337](index=337&type=chunk) [SIGNATURES](index=68&type=section&id=SIGNATURES) Confirms the report's official signing by the President and CEO, and Chief Accounting Officer on May 6, 2024 - The report was signed on May 6, 2024, by Krish S. Krishnan, President and Chief Executive Officer, and Kathryn A. Romano, Chief Accounting Officer[340](index=340&type=chunk)

[First Quarter 2024 Highlights](index=1&type=section&id=First%20Quarter%202024%20Highlights) Krystal Biotech reported strong Q1 2024 net product revenue, initiated a key clinical study, received Fast Track Designations, and maintained a robust financial position - Krystal Biotech announced net product revenue of **$45.3 million** in Q1 2024, contributing to **$95.9 million** since August 2023[1](index=1&type=chunk) - The company initiated dosing for the first patient in the inhaled KB707 study for locally advanced or metastatic lung tumors[1](index=1&type=chunk) - Both inhaled and intratumoral KB707 programs received Fast Track Designations[1](index=1&type=chunk) - Krystal Biotech maintains a strong balance sheet with **$622.3 million** in cash and investments[1](index=1&type=chunk) [Business and Pipeline Updates](index=1&type=section&id=Business%20and%20Pipeline%20Updates) Krystal Biotech reported strong VYJUVEK revenue growth and accelerating clinical pipeline enrollment, focusing on global access and upcoming data readouts [VYJUVEK for Dystrophic Epidermolysis Bullosa (DEB)](index=1&type=section&id=VYJUVEK%20for%20Dystrophic%20Epidermolysis%20Bullosa%20%28DEB%29) VYJUVEK showed strong Q1 2024 commercial performance with high patient compliance and significant progress in international regulatory reviews [Commercial Performance and Reimbursement](index=1&type=section&id=Commercial%20Performance%20and%20Reimbursement) Commercial Performance and Reimbursement Metrics | Metric | Value | | :---------------- | :------------ | | Net Product Revenue | $45.3 million | | Gross Margin | 95% | - As of April, over **330 reimbursement approvals** for VYJUVEK have been secured in the U.S., achieving positive access for **96% of lives** covered under commercial and Medicaid plans[3](index=3&type=chunk) - A permanent J-code for VYJUVEK was received in January, streamlining billing and reimbursement, including for U.S. Medicaid plans[3](index=3&type=chunk) - Patient compliance with once-weekly treatment remained high at **91%** by the end of the quarter[3](index=3&type=chunk) [International Regulatory Progress](index=1&type=section&id=International%20Regulatory%20Progress) - The European Medicines Agency (EMA) completed manufacturing facility inspections in February for B-VEC's MAA review, with GMP certification and a decision anticipated in **2H 2024**[3](index=3&type=chunk) - The company is on track to file a Japan New Drug Application (NDA) in **2H 2024**, following efficacy study completion in April, with potential authorization in **2025**[3](index=3&type=chunk) - B-VEC received Orphan Drug Designation (ODD) status for DEB from Japan's MHLW in December 2023, providing benefits like priority review and reduced development costs[3](index=3&type=chunk)[4](index=4&type=chunk) [Clinical Pipeline Progress](index=2&type=section&id=Clinical%20Pipeline%20Progress) Krystal Biotech is advancing multiple clinical programs across various therapeutic areas, with several interim data readouts expected in 2H 2024 [Respiratory Programs (KB407, KB408)](index=2&type=section&id=Respiratory%20Programs%20%28KB407%2C%20KB408%29) - For KB407 (cystic fibrosis), Cohort 2 dosing in the Phase 1 CORAL-1 study was completed in March, with Cohort 3 initiation planned for **2Q 2024**[6](index=6&type=chunk) - For KB408 (alpha-1 antitrypsin deficiency), the first patient was dosed in the Phase 1 SERPENTINE-1 study in February, with interim data expected in **2H 2024**[6](index=6&type=chunk) [Ophthalmology Programs (B-VEC eyedrops)](index=2&type=section&id=Ophthalmology%20Programs%20%28B-VEC%20eyedrops%29) - Clinical data on the compassionate use of B-VEC eyedrops for ocular complications of DEB was published in the New England Journal of Medicine in February[8](index=8&type=chunk) - The company aligned with the FDA on a proposed single-arm, open-label study for B-VEC eyedrops to treat ocular complications of DEB, with study initiation planned for **2H 2024**[8](index=8&type=chunk) - U.S. Patent No. 11,865,148 was issued in January, covering methods of delivering human transgenes to the eye using replication-incompetent HSV-1[8](index=8&type=chunk) [Oncology Programs (KB707)](index=3&type=section&id=Oncology%20Programs%20%28KB707%29) - The first patient was dosed in April in the Phase 1 KYANITE-1 clinical study for inhaled KB707 in patients with locally advanced or metastatic solid tumors of the lung[12](index=12&type=chunk) - The FDA granted Fast Track Designation for inhaled KB707 in February, marking the second Fast Track Designation for the KB707 program[12](index=12&type=chunk) - Enrollment in Cohort 3 of the Phase 1 OPAL-1 clinical study for intratumoral KB707 was completed in April, with interim data expected in **2H 2024**[12](index=12&type=chunk) [Aesthetics Programs (KB301)](index=3&type=section&id=Aesthetics%20Programs%20%28KB301%29) - Jeune Aesthetics initiated Cohort 4 of the Phase 1 PEARL-1 study in January to evaluate KB301 for the improvement of dynamic wrinkles of the décolleté[10](index=10&type=chunk) - Results from both Cohort 3 (lateral canthal lines) and Cohort 4 are expected in **mid-2024**[10](index=10&type=chunk) [Financial Performance and Outlook](index=3&type=section&id=Financial%20Performance%20and%20Outlook) Krystal Biotech achieved Q1 2024 net income driven by VYJUVEK revenue, maintains a strong balance sheet, and provided non-GAAP expense guidance for FY2024 [First Quarter 2024 Financial Results](index=4&type=section&id=First%20Quarter%202024%20Financial%20Results) First Quarter 2024 Financial Results (in thousands of USD) | Metric | 2024 | 2023 | Change | | :----------------------------------------- | :-------- | :-------- | :-------- | | Product revenue, net | $45,250 | $0 | $45,250 | | Cost of goods sold | $2,419 | $0 | $2,419 | | Research and development | $10,957 | $12,288 | $(1,331) | | Selling, general, and administrative | $26,058 | $24,035 | $2,023 | | Litigation settlement | $12,500 | $12,500 | $0 | | Total operating expenses | $51,934 | $48,823 | $3,111 | | Loss from operations | $(6,684) | $(48,823) | $42,139 | | Interest and other income, net | $7,616 | $3,526 | $4,090 | | Net income (loss) | $932 | $(45,297) | $46,229 | | Net income (loss) per common share (Basic) | $0.03 | $(1.76) | | | Net income (loss) per common share (Diluted) | $0.03 | $(1.76) | | | Weighted-average common shares outstanding (Basic) | 28,295 | 25,712 | | | Weighted-average common shares outstanding (Diluted) | 29,291 | 25,712 | | - Net income for Q1 2024 was **$0.9 million** (**$0.03 per common share**), a significant improvement from a net loss of **$45.3 million** (**$1.76 per common share**) in Q1 2023[15](index=15&type=chunk)[33](index=33&type=chunk) [Balance Sheet Overview](index=3&type=section&id=Balance%20Sheet%20Overview) Balance Sheet Overview (in thousands of USD) | Metric | March 31, 2024 | December 31, 2023 | | :------------------------ | :------------- | :---------------- | | Cash and cash equivalents | $359,006 | $358,328 | | Short-term investments | $179,253 | $173,850 | | Long-term investments | $83,996 | $61,954 | | Total assets | $853,296 | $818,355 | | Total liabilities | $54,054 | $39,714 | | Total stockholders' equity| $799,242 | $778,641 | - Cash, cash equivalents, and investments totaled **$622.3 million** on March 31, 2024[11](index=11&type=chunk) [Financial Guidance](index=4&type=section&id=Financial%20Guidance) - For the year ending December 31, 2024, the company anticipates approximately **$150 million to $175 million** in Non-GAAP Research and Development ("R&D") and Selling, General and Administrative ("SG&A") expense[13](index=13&type=chunk) - The Non-GAAP guidance excludes stock-based compensation due to the inability to confidently estimate the full-year expense, and no reconciliation to GAAP is provided[13](index=13&type=chunk) [Product and Company Information](index=4&type=section&id=Product%20and%20Company%20Information) This section details VYJUVEK's mechanism, indication, and safety, explains regulatory designations, and provides an overview of Krystal Biotech and Jeune Aesthetics [About VYJUVEK](index=4&type=section&id=About%20VYJUVEK) VYJUVEK is a non-invasive, topical, redosable gene therapy for Dystrophic Epidermolysis Bullosa (DEB) in patients six months and older [Product Description and Indication](index=4&type=section&id=Product%20Description%20and%20Indication) - VYJUVEK is a non-invasive, topical, redosable gene therapy designed to deliver two copies of the COL7A1 gene directly to DEB wounds, addressing the fundamental disease-causing mechanism[15](index=15&type=chunk)[16](index=16&type=chunk) - It is a herpes-simplex virus type 1 (HSV-1) vector-based gene therapy indicated for the treatment of wounds in patients six months of age and older with dystrophic epidermolysis bullosa with mutation(s) in the collagen type VII alpha 1 chain (COL7A1) gene[17](index=17&type=chunk) [Important Safety Information](index=5&type=section&id=Important%20Safety%20Information) - The most common adverse drug reactions (incidence >5%) include itching, chills, redness, rash, cough, and runny nose[18](index=18&type=chunk) - There are no known contraindications for VYJUVEK[19](index=19&type=chunk) - VYJUVEK gel must be applied by a healthcare provider; patients and caregivers should avoid touching treated wounds and dressings for 24 hours after treatment[20](index=20&type=chunk) - Caregivers should wash hands, wear protective gloves when changing dressings, disinfect bandages from the first change with a virucidal agent, and dispose of disinfected bandages in a separate sealed plastic bag in household waste[21](index=21&type=chunk) [Regulatory Designations Explained](index=5&type=section&id=Regulatory%20Designations%20Explained) This section defines Orphan Drug Designation (ODD) in the U.S. and Japan, and FDA Fast Track Designation, highlighting their benefits for rare disease therapies [Orphan Drug Designation](index=5&type=section&id=Orphan%20Drug%20Designation) - U.S. FDA Orphan Drug Designation is granted for therapies addressing rare conditions affecting fewer than **200,000 people**, offering development assistance, tax credits, fee exemptions, and seven years of post-approval marketing exclusivity[23](index=23&type=chunk) - Japan's orphan drug designation system supports drugs for diseases affecting fewer than **50,000 patients** with unmet medical needs, providing subsidies, prioritized consultation, tax incentives, priority review, and extended registration validity[24](index=24&type=chunk) [Fast Track Designation](index=6&type=section&id=Fast%20Track%20Designation) - Fast Track Designation facilitates development and expedites review of drugs for serious conditions and unmet medical needs, enabling earlier patient access[25](index=25&type=chunk) - Clinical programs with Fast Track Designation may benefit from early and frequent communication with the FDA and eligibility for Accelerated Approval and Priority Review[25](index=25&type=chunk) [About Krystal Biotech and Jeune Aesthetics](index=6&type=section&id=About%20Krystal%20Biotech%20and%20Jeune%20Aesthetics) - Krystal Biotech, Inc. (NASDAQ: KRYS) is a commercial-stage biotechnology company focused on genetic medicines for high unmet medical needs, headquartered in Pittsburgh, Pennsylvania[26](index=26&type=chunk) - VYJUVEK is the company's first commercial product, the first redosable gene therapy, and the first FDA-approved medicine for dystrophic epidermolysis bullosa[26](index=26&type=chunk) - Jeune Aesthetics, Inc., a wholly-owned subsidiary, leverages a clinically validated gene delivery platform to develop products addressing the biology of aging and/or damaged skin[27](index=27&type=chunk) [Additional Information](index=4&type=section&id=Additional%20Information) This section covers conference call logistics, forward-looking statement disclaimers, and definitions of non-GAAP financial measures [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) - The company hosted an investor webcast on May 6, 2024, at 8:30 am ET[14](index=14&type=chunk) - A replay of the conference call will be available for 30 days on the Investors section of the company's website[14](index=14&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) - Statements regarding future expectations, plans, and prospects are considered forward-looking statements under The Private Securities Litigation Reform Act of 1995[28](index=28&type=chunk) - Actual results may differ materially due to various important factors, including uncertainties associated with regulatory review, product availability, and sufficiency of cash resources[29](index=29&type=chunk) - The company disclaims any obligation to update these forward-looking statements, which represent its views as of the press release date[29](index=29&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) - The press release includes forward-looking combined R&D and SG&A expense guidance not required by, or presented in accordance with, U.S. GAAP[30](index=30&type=chunk) - Non-GAAP combined R&D and SG&A expense is defined as GAAP combined R&D and SG&A expense excluding stock-based compensation[30](index=30&type=chunk) - A quantitative reconciliation of forecasted non-GAAP to GAAP combined R&D and SG&A expense is not provided due to inherent uncertainty in estimating stock-based compensation expenses[30](index=30&type=chunk)[31](index=31&type=chunk)