Krystal Biotech Announces Second Quarter 2025 Financial and Operating Results $96.0 million in 2Q VYJUVEK revenue and $525.4 million since launch in 3Q 2023 VYJUVEK approved in Japan for the treatment of DEB patients from birth Strong balance sheet, ending the quarter with $820.8 million in cash and investments PITTSBURGH, August 4, 2025 (GLOBE NEWSWIRE) – Krystal Biotech, Inc. (the "Company") (NASDAQ: KRYS) today reported financial results for the second quarter ending June 30, 2025 and provided a business ...

PART I. FINANCIAL INFORMATION This section provides a comprehensive overview of the company's financial performance and position, including detailed statements and accompanying notes [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income, statements of stockholders' equity, and statements of cash flows, along with their accompanying notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, presenting assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $1,138,394 | $1,055,838 | $82,556 | 7.82% | | Total Liabilities | $97,747 | $109,458 | $(11,711) | -10.70% | | Total Stockholders' Equity | $1,040,647 | $946,380 | $94,267 | 9.96% | | Cash and cash equivalents | $353,829 | $344,865 | $8,964 | 2.60% | | Short-term investments | $328,157 | $252,652 | $75,505 | 29.88% | | Accounts receivable, net | $111,439 | $104,746 | $6,693 | 6.39% | | Accrued expenses and other current liabilities | $26,517 | $58,989 | $(32,472) | -55.05% | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section outlines the company's financial performance, including revenue, expenses, and net income for the three and six months ended June 30, 2025, and 2024 Three Months Ended June 30 | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Product revenue, net | $96,042 | $70,284 | $25,758 | 36.65% | | Total operating expenses | $56,735 | $61,718 | $(4,983) | -8.07% | | Income from operations | $39,307 | $8,566 | $30,741 | 358.87% | | Net income | $38,333 | $15,568 | $22,765 | 146.23% | | Basic EPS | $1.33 | $0.54 | $0.79 | 146.30% | | Diluted EPS | $1.29 | $0.53 | $0.76 | 143.40% | Six Months Ended June 30 | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Product revenue, net | $184,225 | $115,535 | $68,690 | 59.45% | | Total operating expenses | $108,742 | $113,652 | $(4,910) | -4.32% | | Income from operations | $75,483 | $1,883 | $73,600 | 3908.66% | | Net income | $74,067 | $16,501 | $57,566 | 348.86% | | Basic EPS | $2.57 | $0.58 | $1.99 | 343.10% | | Diluted EPS | $2.48 | $0.56 | $1.92 | 342.86% | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section presents changes in stockholders' equity, including additional paid-in capital and accumulated deficit, for the six months ended June 30, 2025 | Metric | January 1, 2025 (in thousands) | June 30, 2025 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :----------------------------- | :--------------------------- | :-------------------- | :------- | | Total Stockholders' Equity | $946,380 | $1,040,647 | $94,267 | 9.96% | | Additional Paid-in Capital | $1,127,238 | $1,146,092 | $18,854 | 1.67% | | Accumulated Deficit | $(180,668) | $(106,602) | $74,066 | -41.00% | | Net income (6 months) | N/A | $74,067 | N/A | N/A | | Stock-based compensation (6 months) | N/A | $29,524 | N/A | N/A | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Net cash provided by operating activities | $83,698 | $11,720 | $71,978 | 614.15% | | Net cash (used in) investing activities | $(65,294) | $(45,333) | $(19,961) | 44.03% | | Net cash (used in) provided by financing activities | $(10,670) | $21,221 | $(31,891) | -150.28% | | Net increase (decrease) in cash and cash equivalents | $8,964 | $(12,542) | $21,506 | -171.47% | | Cash and cash equivalents at end of period | $353,829 | $345,786 | $8,043 | 2.33% | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, revenue, and other financial components [1. Organization](index=7&type=section&id=1.%20Organization) This note describes Krystal Biotech's business as a commercial-stage biotechnology company focused on genetic medicines and its financial outlook - Krystal Biotech is a fully integrated, commercial-stage global biotechnology company focused on the discovery, development, manufacturing, and commercialization of genetic medicines using an engineered herpes simplex virus-1 (HSV-1) gene therapy platform[18](index=18&type=chunk) - The company has established wholly-owned subsidiaries in Switzerland, Netherlands, France, Germany, Japan, Italy, and Spain for the commercialization of VYJUVEK and its product pipeline[18](index=18&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$106.6 million** but believes its **$682.0 million** in cash, cash equivalents, and short-term investments are sufficient to fund operations for at least the next 12 months[19](index=19&type=chunk)[20](index=20&type=chunk) [2. Summary of Significant Accounting Policies](index=7&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the accounting principles used in preparing the financial statements and discusses the impact of new accounting pronouncements - The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (GAAP)[21](index=21&type=chunk) - There were no material changes to the Company's significant accounting policies during the six months ended June 30, 2025[26](index=26&type=chunk) - The company is assessing the potential impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) on its consolidated financial statement disclosures, with effective dates in fiscal years starting after December 15, 2024, and December 15, 2026, respectively[28](index=28&type=chunk)[29](index=29&type=chunk) [3. Product Revenue, Accounts Receivable and Reserves for Product Sales](index=8&type=section&id=3.%20Product%20Revenue%2C%20Accounts%20Receivable%20and%20Reserves%20for%20Product%20Sales) This note details product revenue recognition, changes in accounts receivable, and allowances for product sales, including rebates and discounts | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Product revenue, net | $96,042 | $70,284 | $184,225 | $115,535 | - Accounts receivable, net, increased to **$111.4 million** as of June 30, 2025, from **$104.7 million** as of December 31, 2024[31](index=31&type=chunk) - Approximately **78%** of accounts receivable, net, as of June 30, 2025, was outstanding from a single customer, down from **97%** as of December 31, 2024[31](index=31&type=chunk) Changes in Allowances and Discounts for Six Months Ended June 30, 2025 | (in thousands) | Balance as of Dec 31, 2024 | Provisions | Payments/Credits | Balance as of Jun 30, 2025 | | :------------- | :------------------------- | :--------- | :--------------- | :------------------------- | | Rebates | $38,223 | $30,918 | $(14,716) | $54,425 | | Prompt Pay | $2,570 | $6,245 | $(4,362) | $4,453 | | Other Accruals | $326 | $257 | $(261) | $322 | | Total | $41,119 | $37,420 | $(19,339) | $59,200 | [4. Net Income Per Share Attributable to Common Stockholders](index=9&type=section&id=4.%20Net%20Income%20Per%20Share%20Attributable%20to%20Common%20Stockholders) This note presents basic and diluted net income per common share and identifies common stock equivalents excluded from diluted EPS calculations Net Income Per Common Share (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Net income per common share—basic | $1.33 | $0.54 | | Net income per common share—diluted | $1.29 | $0.53 | Net Income Per Common Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Net income per common share—basic | $2.57 | $0.58 | | Net income per common share—diluted | $2.48 | $0.56 | - Common stock equivalents excluded from diluted EPS calculation due to anti-dilutive effect: **604 thousand stock options** and **275 thousand unvested restricted stock** for Q2 2025; **520 thousand stock options** and **89 thousand unvested restricted stock** for H1 2025[34](index=34&type=chunk)[35](index=35&type=chunk) [5. Fair Value Instruments](index=9&type=section&id=5.%20Fair%20Value%20Instruments) This note provides a breakdown of cash, cash equivalents, and marketable securities, detailing their fair values and investment types | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Total Cash, Cash Equivalents & Marketable Securities (Fair Value) | $820,793 | $749,631 | | Cash and cash equivalents | $353,829 | $344,865 | | Short-term marketable securities | $328,157 | $252,652 | | Long-term marketable securities | $138,807 | $152,114 | - The portfolio includes commercial paper, corporate bonds, and U.S. government agency securities, with short-term securities maturing in one year or less and long-term securities maturing between one and two years[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [6. Balance Sheet Components](index=10&type=section&id=6.%20Balance%20Sheet%20Components) This note provides detailed breakdowns of inventory, property and equipment, and accrued expenses, including the resolution of a litigation settlement Inventory | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Raw materials | $14,053 | $13,639 | | Work-in-process | $15,285 | $10,743 | | Finished goods | $1,703 | $2,126 | | Total Inventory | $31,041 | $26,508 | Property and Equipment, Net | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :---------------- | | Total property and equipment | $177,044 | $177,087 | | Accumulated depreciation | $(26,656) | $(21,919) | | Property and equipment, net | $150,388 | $155,168 | Accrued Expenses and Other Current Liabilities | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Accrued expenses and other current liabilities | $26,517 | $58,989 | | Accrued litigation settlement | $0 | $31,250 | - The **$75.0 million** PeriphaGen litigation settlement was fully paid as of March 31, 2025, resulting in **zero** accrued litigation settlement as of June 30, 2025[43](index=43&type=chunk)[44](index=44&type=chunk) [7. Commitments and Contingencies](index=11&type=section&id=7.%20Commitments%20and%20Contingencies) This note outlines the company's contractual commitments and potential liabilities, including legal proceedings and government inquiries - Estimated remaining commitments under agreements with Contract Manufacturing Organizations (CMOs) and Contract Research Organizations (CROs) were approximately **$507 thousand** as of June 30, 2025[45](index=45&type=chunk) - The company received subpoenas from the U.S. Department of Justice regarding its sponsored genetic testing program for VYJUVEK and is cooperating, but cannot estimate the potential loss[47](index=47&type=chunk) [8. Leases](index=12&type=section&id=8.%20Leases) This note details the company's operating lease commitments, including future payments, interest, and present value of lease liabilities Future Minimum Operating Lease Commitments as of June 30, 2025 | (in thousands) | Operating Leases | | :-------------------------- | :--------------- | | Future minimum operating lease payments | $17,739 | | Less: Interest | $(8,058) | | Present value of lease liability | $9,681 | - The weighted-average remaining lease term for operating leases was **10.4 years** as of June 30, 2025[48](index=48&type=chunk) - The weighted-average discount rate for operating leases was **9.7%** as of June 30, 2025[48](index=48&type=chunk) [9. Stock-Based Compensation](index=12&type=section&id=9.%20Stock-Based%20Compensation) This note provides information on stock-based compensation plans, expenses, and unrecognized compensation for options, RSUs, and PSUs - Shares remaining available for grant under the 2017 IPO Stock Incentive Plan were **2.0 million** as of June 30, 2025[51](index=51&type=chunk) Stock-Based Compensation Expense, Net | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,627 | $2,772 | $5,096 | $4,640 | | Selling, general and administrative | $11,492 | $10,384 | $22,501 | $17,815 | | Total stock-based compensation | $14,119 | $13,156 | $27,597 | $22,455 | - Unrecognized stock-based compensation expense as of June 30, 2025: **$71.4 million** for options (weighted-average period of **2.8 years**), **$46.4 million** for RSU awards (weighted-average period of **3.0 years**), and **$6.0 million** for PSU awards (weighted-average period of **eight months**)[55](index=55&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk) [10. Income Taxes](index=15&type=section&id=10.%20Income%20Taxes) This note presents the company's income tax expense and discusses the valuation allowance against net deferred tax assets Income Tax Expense | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $8,442 | $477 | $16,305 | $477 | - The company maintains a full valuation allowance against its net deferred tax assets as of June 30, 2025[61](index=61&type=chunk) [11. Segment Information](index=15&type=section&id=11.%20Segment%20Information) This note clarifies that the company operates as a single segment and details the metrics used by management to assess performance - The company operates as one operating segment, focused on the discovery, development, manufacturing, and commercialization of genetic medicines[62](index=62&type=chunk) - The chief operating decision maker (CODM) uses consolidated gross margin, operating margin, net income, and total research and development expenses by product candidate or program to assess performance and allocate resources[62](index=62&type=chunk) Gross Margin | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross margin | 93% | 91% | 93% | 93% | [12. Subsequent Events](index=16&type=section&id=12.%20Subsequent%20Events) This note describes significant events occurring after the reporting period, including new tax legislation and its potential impact - The "One Big Beautiful Bill Act" was signed into U.S. law on July 4, 2025, introducing changes to federal tax law[64](index=64&type=chunk) - The company is currently assessing the potential impact of this new legislation on its consolidated financial statements[64](index=64&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key financial performance drivers, product commercialization updates, pipeline developments, and liquidity [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=17&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This note cautions readers about forward-looking statements in the report, highlighting inherent risks and uncertainties that may cause actual results to differ - The report contains forward-looking statements identifiable by terms such as "anticipate," "believe," "expect," and "will," relating to future events and financial performance[68](index=68&type=chunk) - These statements are subject to known and unknown risks, uncertainties, and assumptions, including those described in Item 1A, which may cause actual results to differ materially[68](index=68&type=chunk)[69](index=69&type=chunk) - The company assumes no obligation to publicly update these forward-looking statements as a result of subsequent events, developments, or otherwise[70](index=70&type=chunk) [Overview](index=18&type=section&id=Overview) This section provides a high-level description of Krystal Biotech's business model, gene therapy platform, and manufacturing capabilities - Krystal Biotech is a fully integrated, commercial-stage global biotechnology company focused on the discovery, development, manufacturing, and commercialization of genetic medicines[73](index=73&type=chunk) - The company utilizes a patented gene therapy technology platform based on engineered herpes simplex virus-1 (HSV-1) to efficiently deliver therapeutic transgenes[73](index=73&type=chunk) - The innovative technology platform is supported by two in-house, commercial-scale Current Good Manufacturing Practice (CGMP) manufacturing facilities[73](index=73&type=chunk) [Our Commercial Product](index=18&type=section&id=Our%20Commercial%20Product) This section details VYJUVEK, the company's approved gene therapy for DEB, including its recent international marketing authorizations and commercialization plans - VYJUVEK (B-VEC) is a non-invasive, topical, redosable gene therapy approved for the treatment of dystrophic epidermolysis bullosa (DEB)[74](index=74&type=chunk) - VYJUVEK received marketing authorization from Japan's MHLW on July 24, 2025, and from the European Commission on April 23, 2025, following its U.S. FDA approval in May 2023[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) VYJUVEK Product Revenue and Gross Margin | Metric | Three Months Ended June 30, 2025 (in millions) | Cumulative Net Product Revenue Since Launch (in millions) | Gross Margin (Q2 2025) | | :----------------------- | :--------------------------------------- | :------------------------------------------------------ | :--------------------- | | Net VYJUVEK product revenue | $96.0 | $525.4 | 93% | - Preparations and infrastructure buildout are underway to support planned direct commercial launch in key European markets and Japan in 2025, starting with Germany expected in the third quarter of 2025[80](index=80&type=chunk) [Pipeline Highlights and Recent Developments](index=19&type=section&id=Pipeline%20Highlights%20and%20Recent%20Developments) This section provides updates on the company's product pipeline across various therapeutic areas, including respiratory, ophthalmology, oncology, dermatology, and aesthetics [Respiratory](index=19&type=section&id=Respiratory) This section highlights the progress of KB407 for Cystic Fibrosis and KB408 for Alpha-1 Antitrypsin Deficiency Lung Disease in clinical trials - KB407 for Cystic Fibrosis (CF) is in Phase 1 (CORAL-1); interim safety data showed single and repeat inhaled administration to be safe and well tolerated, with enrollment in the third and final cohort ongoing and data expected before year-end[82](index=82&type=chunk) - KB408 for Alpha-1 Antitrypsin Deficiency (AATD) Lung Disease is in Phase 1 (SERPENTINE-1); inhaled KB408 was safe and well-tolerated, with clear evidence of SERPINA1 delivery and AAT expression observed, and repeat dosing in Cohort 2B is ongoing[83](index=83&type=chunk) [Ophthalmology](index=19&type=section&id=Ophthalmology) This section provides updates on KB803 for Ocular Complications in DEB and KB801 for Neurotrophic Keratitis, both in clinical development - KB803 for Ocular Complications in DEB is in a Phase 3 IOLITE study, initiated in June 2025, evaluating KB803 eye drops for corneal abrasions following positive compassionate use observations[86](index=86&type=chunk) - KB801 for Neurotrophic Keratitis (NK) entered a randomized, double-masked, placebo-controlled Phase 1/2 EMERALD-1 study in July 2025, aiming for sustained NGF production to reduce treatment burden[89](index=89&type=chunk) [Oncology](index=20&type=section&id=Oncology) This section details the development of KB707 for Solid Tumors, an immunotherapy with FDA designations and early clinical activity - KB707 for Solid Tumors, an immunotherapy delivering IL-2 and IL-12, has received Rare Pediatric Disease Designation and Fast Track Designation from the FDA for both inhaled and intratumoral formulations[91](index=91&type=chunk) - Inhaled KB707 (KYANITE-1 Phase 1/2) showed early monotherapy activity in advanced non-small cell lung cancer, achieving an objective response rate of **36%** and a disease control rate of **54%** in evaluable patients[92](index=92&type=chunk) - Intratumoral KB707 (OPAL-1 Phase 1/2) enrollment is ongoing for patients with locally advanced or metastatic solid tumors[93](index=93&type=chunk) [Dermatology](index=20&type=section&id=Dermatology) This section outlines the development of KB105 for Lamellar Ichthyosis and preclinical candidates for Hailey-Hailey and Darier diseases - KB105 for Lamellar Ichthyosis (LI) expects to resume enrollment in the Phase 2 portion of the JADE-1 study in 2026[95](index=95&type=chunk) - Preclinical data on early-stage dermatology genetic medicine candidates for Hailey-Hailey and Darier diseases were presented in May 2025[96](index=96&type=chunk) [Aesthetics](index=21&type=section&id=Aesthetics) This section describes Jeune Aesthetics' efforts in developing gene therapies for aesthetic applications, including KB304 and KB301 - Jeune Aesthetics, a wholly-owned subsidiary, is leveraging the company's platform to deliver proteins to skin cells for aesthetic medicine[98](index=98&type=chunk) - KB304 for décolleté wrinkles showed positive safety and efficacy results in PEARL-2 (Phase 1), with significant improvements in wrinkles, elasticity, crepiness, hydration, and radiance, and is slated for Phase 2 initiation in H1 2026[99](index=99&type=chunk)[100](index=100&type=chunk) - KB301 for aging/damaged skin showed meaningful and sustained improvements in multiple skin aesthetic attributes in PEARL-1 (Phase 1) for lateral canthal lines and dynamic wrinkles, with further aesthetic indications under evaluation[101](index=101&type=chunk) [Financial Overview](index=21&type=section&id=Financial%20Overview) This section explains the company's accounting policies for revenue, research and development, and selling, general and administrative expenses - Product revenue is recognized net of variable consideration, including discounts, returns, copay assistance, and rebates[103](index=103&type=chunk) - Research and development costs are expensed as incurred, with a significant portion unallocated to individual products or programs (e.g., stock-based compensation, certain manufacturing, and facility costs)[105](index=105&type=chunk)[106](index=106&type=chunk) - Selling, general and administrative expenses are anticipated to increase in the future due to commercialization efforts and product candidate development, including increased personnel, professional fees, and marketing costs[109](index=109&type=chunk) - There have been no significant changes to the company's critical accounting policies, significant judgments, and estimates during the six months ended June 30, 2025[111](index=111&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, detailing changes in revenue and expenses for the three and six months ended June 30, 2025, and 2024 [Three Months Ended June 30, 2025 and 2024](index=23&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section provides a detailed comparison of financial results for the three months ended June 30, 2025, and 2024, highlighting key revenue and expense changes | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Product revenue, net | $96,042 | $70,284 | $25,758 | 37% | | Cost of goods sold | $7,165 | $6,009 | $1,156 | 19% | | Research and development | $14,410 | $15,583 | $(1,173) | (8)% | | Selling, general and administrative | $35,160 | $27,626 | $7,534 | 27% | | Litigation settlement | $0 | $12,500 | $(12,500) | (100)% | | Income from operations | $39,307 | $8,566 | $30,741 | 359% | | Net income | $38,333 | $15,568 | $22,765 | 146% | - The decrease in research and development expenses was primarily attributable to a **$1.6 million** net decrease in manufacturing costs, partially offset by a **$0.6 million** net increase in preclinical and clinical development costs, mainly for KB707[120](index=120&type=chunk) - Selling, general and administrative expenses increased by **$7.5 million**, driven by higher professional services (**$3.3M**), payroll-related costs (**$1.6M**), marketing costs (**$1.5M**), and other G&A costs (**$1.3M**)[121](index=121&type=chunk)[122](index=122&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=25&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section provides a detailed comparison of financial results for the six months ended June 30, 2025, and 2024, highlighting key revenue and expense changes | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Product revenue, net | $184,225 | $115,535 | $68,690 | 59% | | Cost of goods sold | $12,193 | $8,428 | $3,765 | 45% | | Research and development | $28,666 | $26,539 | $2,127 | 8% | | Selling, general and administrative | $67,883 | $53,685 | $14,198 | 26% | | Litigation settlement | $0 | $25,000 | $(25,000) | (100)% | | Income from operations | $75,483 | $1,883 | $73,600 | 3909% | | Net income | $74,067 | $16,501 | $57,566 | 349% | - The increase in research and development expenses was primarily attributable to a **$1.4 million** net increase in clinical development costs (KB707) and a **$0.6 million** increase in facilities and equipment costs, partially offset by a **$0.4 million** net decrease in manufacturing costs[129](index=129&type=chunk)[131](index=131&type=chunk) - Selling, general and administrative expenses increased by **$14.2 million**, driven by higher payroll-related expenses (**$5.9M**), professional services (**$4.5M**), other G&A costs (**$3.2M**), and marketing costs (**$1.7M**)[130](index=130&type=chunk)[132](index=132&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding strategy, and future capital requirements for operations and product development [Overview](index=27&type=section&id=Overview) This section provides an overview of the company's current liquidity, including cash, cash equivalents, and short-term investments, and its funding strategy - As of June 30, 2025, cash, cash equivalents, and short-term investments totaled approximately **$682.0 million**, which the company believes is sufficient to fund operations for at least the next 12 months[136](index=136&type=chunk) - Management intends to fund future operations through on-hand cash, revenue generated from VYJUVEK sales, and potentially additional capital from strategic partners, equity sales, or debt financings[137](index=137&type=chunk) - The company expects to incur significant manufacturing and commercialization expenses and may require substantial additional funding to obtain regulatory approval and commercialize product candidates[138](index=138&type=chunk) [Operating Capital Requirements](index=27&type=section&id=Operating%20Capital%20Requirements) This section outlines the primary uses of capital and factors influencing future funding needs for the company's operations and product development - Primary uses of capital include compensation, manufacturing costs for preclinical and clinical materials, regulatory expenses, third-party clinical trial R&D services, laboratory supplies, selling expenses, legal expenses, and general overhead costs[139](index=139&type=chunk) - Future funding requirements are highly dependent on factors such as global commercialization costs for VYJUVEK, progress and costs of clinical trials, manufacturing capabilities, regulatory approvals, and intellectual property protection[140](index=140&type=chunk)[142](index=142&type=chunk) - Failure to raise capital when needed or on attractive terms could force significant delays, scaling back, or discontinuation of development or commercialization efforts[141](index=141&type=chunk) [Sources and Uses of Cash](index=29&type=section&id=Sources%20and%20Uses%20of%20Cash) This section details the cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net cash provided by operating activities | $83,698 | $11,720 | | Net cash (used in) investing activities | $(65,294) | $(45,333) | | Net cash (used in) provided by financing activities | $(10,670) | $21,221 | | Net increase (decrease) in cash | $8,964 | $(12,542) | - Net cash provided by operating activities significantly increased to **$83.7 million** in H1 2025, primarily due to higher net income and non-cash adjustments[144](index=144&type=chunk) - Net cash used in investing activities increased to **$65.3 million** in H1 2025, driven by purchases of investments and property and equipment, partially offset by maturities of investments[146](index=146&type=chunk) - Net cash used in financing activities was **$10.7 million** in H1 2025, mainly due to employee tax withholding payments related to restricted stock, partially offset by proceeds from stock option exercises[148](index=148&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk on its investment portfolio and foreign currency exchange rate risk from international operations - The company holds **$682.0 million** in cash, cash equivalents, and short-term investments, primarily in money market funds, commercial paper, corporate bonds, and U.S. government agency securities[150](index=150&type=chunk) - A **10% change** in interest rates is not expected to materially affect the company's results of operations or financial position[151](index=151&type=chunk) - Foreign exchange rate risk exists due to operations in Europe and Japan (Swiss Francs, Euros, Japanese Yen), but is not currently material, with a **10% change** not expected to materially affect results[152](index=152&type=chunk) - The company does not hold or issue derivatives, derivative commodity instruments, or other financial instruments for speculative trading purposes[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and notes the implementation of a new procure-to-pay (P2P) system - The Chief Executive Officer and Chief Accounting Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[154](index=154&type=chunk) - A new procure-to-pay (P2P) system was implemented in June 2025, leading to modifications in the design and documentation of internal control processes and procedures[155](index=155&type=chunk) - No other material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[156](index=156&type=chunk) PART II. OTHER INFORMATION This section covers additional disclosures beyond financial statements, including legal proceedings, risk factors, and other regulatory information [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is not currently a party to any material legal proceedings and confirms the full payment of the PeriphaGen litigation settlement - The **$75.0 million** PeriphaGen litigation settlement was fully paid as of March 31, 2025[159](index=159&type=chunk) - The company is not currently a party to any material legal proceedings[160](index=160&type=chunk) - The company may, in the ordinary course of business, face various claims that could subject it to costly litigation, reputational damage, or adverse financial effects if insurance coverage is insufficient[160](index=160&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section updates the company's risk factors, primarily reflecting the recent MHLW approval of VYJUVEK in Japan, and details risks related to business operations, product development, regulatory approvals, commercialization, and financial position [Risks Related to Our Business and Industry](index=31&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section outlines various risks impacting the company's operations, including dependence on VYJUVEK, social media, employee misconduct, healthcare reforms, data privacy, ESG, and government agency funding - The company is substantially dependent on the commercial success of VYJUVEK, with no assurances of regulatory approval in jurisdictions beyond the U.S., EU, and Japan[162](index=162&type=chunk)[163](index=163&type=chunk) - Increasing use of social media platforms presents new risks and challenges, including potential noncompliance with evolving regulations, adverse event reporting failures, and reputational damage[164](index=164&type=chunk)[165](index=165&type=chunk) - Risks of employee misconduct include intentional failures to comply with regulatory standards (FDA, EMA, MHLW), healthcare fraud and abuse laws, and accurate financial reporting, potentially leading to significant fines or sanctions[166](index=166&type=chunk) - Healthcare legislative reforms, including the Inflation Reduction Act (IRA) and the recently signed "One Big Beautiful Bill Act," could lead to price controls, reduced reimbursement, and increased compliance costs, adversely affecting profitability[168](index=168&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk) - Stringent and evolving U.S. and foreign privacy and data security laws (e.g., HIPAA, CCPA, GDPR) increase compliance costs, legal risk, and potential for significant fines or operational disruptions, especially concerning cross-border data transfers[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - Increased attention to ESG initiatives could raise costs, harm reputation, or lead to regulatory scrutiny, while international operations expose the company to various business, regulatory, political, and financial risks[192](index=192&type=chunk)[197](index=197&type=chunk) - Inadequate funding for the FDA and other government agencies, or other disruptions to their operations, could hinder their ability to review and approve new products in a timely manner, negatively impacting the business[199](index=199&type=chunk)[201](index=201&type=chunk) [Risks Related to the Development, Regulatory Review and Approval of Our Product Candidates](index=38&type=section&id=Risks%20Related%20to%20the%20Development%2C%20Regulatory%20Review%20and%20Approval%20of%20Our%20Product%20Candidates) This section addresses risks associated with the complex and evolving regulatory landscape for gene therapies, impacting development, approval, and ongoing compliance - The novel nature of the company's gene therapy platform makes predicting the time and cost of obtaining regulatory approvals difficult, as requirements are more extensive and variable for new product candidates[203](index=203&type=chunk) - Evolving regulatory requirements and new guidelines from agencies like the FDA (Office of Therapeutic Products), EMA, and MHLW could lengthen the review process, increase development costs, and delay or prevent approval[204](index=204&type=chunk)[205](index=205&type=chunk) - Approved products, including VYJUVEK, remain subject to ongoing regulatory oversight (manufacturing, labeling, safety monitoring), and non-compliance or changes in policies could lead to restrictions, recalls, or withdrawal of approval[206](index=206&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) [Risks Related to Commercialization of VYJUVEK and Our Product Candidates](index=39&type=section&id=Risks%20Related%20to%20Commercialization%20of%20VYJUVEK%20and%20Our%20Product%20Candidates) This section details the challenges and uncertainties in commercializing VYJUVEK and other product candidates, including market acceptance and sales execution - The company has limited experience as a commercial company, and the success of VYJUVEK's commercial launch in the U.S., Europe, or Japan is difficult to predict and requires effective execution of business plans and significant investment[212](index=212&type=chunk)[214](index=214&type=chunk) - Commercial success depends on factors such as the ability to train and retain adequate sales and marketing personnel, educate physicians, and overcome competitive disadvantages[215](index=215&type=chunk)[216](index=216&type=chunk)[218](index=218&type=chunk) - Market acceptance of VYJUVEK and product candidates by physicians, patients, and third-party payors is crucial and depends on efficacy, safety, perceived advantages, cost, and favorable reimbursement[217](index=217&type=chunk)[219](index=219&type=chunk)[222](index=222&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=41&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) This section highlights financial risks, including past losses, increasing expenses, and the ongoing need for substantial additional funding to support operations - Despite recent net income, the company has incurred net losses in the past and may not sustain profitability, which depends on successful commercialization of VYJUVEK and regulatory approvals for product candidates[221](index=221&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) - Expenses are expected to increase substantially due to ongoing research and development, manufacturing, global commercialization of VYJUVEK, and development and protection of intellectual property[221](index=221&type=chunk)[223](index=223&type=chunk) - The company may require substantial additional funding, and failure to raise capital on acceptable terms could force significant delays, scaling back, or discontinuation of development or commercialization efforts[226](index=226&type=chunk)[141](index=141&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[227](index=227&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities to report - No defaults upon senior securities were reported[228](index=228&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[229](index=229&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[230](index=230&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various certifications and Inline XBRL documents for the financial statements and cover page - The exhibits include certifications (31.1, 31.2, 32.1) and Inline XBRL documents (101, 104) for the financial statements and cover page[231](index=231&type=chunk) SIGNATURES This section provides the official signatures of the company's President and Chief Executive Officer and Chief Accounting Officer, certifying the report - The report was signed by Krish S. Krishnan (President and Chief Executive Officer) and Kathryn A. Romano (Chief Accounting Officer) on August 4, 2025[234](index=234&type=chunk)

$96.0 million in 2Q VYJUVEK revenue and $525.4 million since launch in 3Q 2023 VYJUVEK approved in Japan for the treatment of DEB patients from birth Strong balance sheet, ending the quarter with $820.8 million in cash and investments PITTSBURGH, Aug. 04, 2025 (GLOBE NEWSWIRE) -- Krystal Biotech, Inc. (the "Company") (NASDAQ: KRYS) today reported financial results for the second quarter ending June 30, 2025 and provided a business update. "With the approval of VYJUVEK in Europe and Japan, we are on the cusp ...

"I was not afraid to hire young scientists with no experience, but mentoring them."Suma Krishnan, chairman and CEO of Krystal Biotech, joined Forbes Women Editor Maggie McGrath to discuss the growth of her company from $50 million to $4.4 billion.https://t.co/PZkPBCKxGb https://t.co/7fCObQMtPw ...

Longtime drug developer Suma Krishnan was 51 when she cofounded Krystal Biotech. Now the company has one gene therapy on the market and more in the works. #ForbesOver50 (Photo: Jamel Toppin for Forbes) https://t.co/eU154GZ8Kg https://t.co/fmDPWfCYnm ...

"I was not afraid to hire young scientists with no experience, but mentoring them."Suma Krishnan, chairman and CEO of Krystal Biotech, joined Forbes Women Editor Maggie McGrath to discuss the growth of her company from $50 million to $4.4 billion.https://t.co/PZkPBCKxGb https://t.co/rJiTnZ2Lnh ...

Longtime drug developer Suma Krishnan was 51 when she cofounded Krystal Biotech. Now the company has one gene therapy on the market and more in the works. #ForbesOver50 (Photo: Jamel Toppin for Forbes) https://t.co/hb8RGouKMY https://t.co/5138pb6yHR ...

"I was not afraid to hire young scientists with no experience, but mentoring them."Suma Krishnan, chairman and CEO of Krystal Biotech, joined Forbes Women Editor Maggie McGrath to discuss the growth of her company from $50 million to $4.4 billion.https://t.co/PZkPBCKxGb https://t.co/zJsC98CBkw ...

PITTSBURGH, July 29, 2025 (GLOBE NEWSWIRE) -- Krystal Biotech, Inc. (the "Company") (NASDAQ: KRYS), a commercial-stage biotechnology company, today announced that it will report its second quarter 2025 financial results on Monday, August 4, 2025, prior to the open of U.S. markets. CONTACT Investors and Media: Stéphane Paquette, PhD Krystal Biotech spaquette@krystalbio.com The Company's management will also host a conference call and webcast at 8:30 am ET on Monday, August 4, 2025, to discuss the financial r ...

Wall Street expects a year-over-year increase in earnings on higher revenues when Krystal Biotech, Inc. (KRYS) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the sto ...