Krystal Biotech (KRYS) Up 8.5% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Krystal Biotech, Inc. has shown a positive performance with an 8.5% increase in shares since the last earnings report, outperforming the S&P 500, but faces concerns regarding future revenue guidance [1][2]. Financial Performance - The company reported Q2 2025 earnings per share (EPS) of $1.29, exceeding the Zacks Consensus Estimate of $1.08, and up from $0.93 in the same quarter last year [3]. - Revenues reached $96 million, a 36.6% year-over-year increase, surpassing the Zacks Consensus Estimate of $91 million, with all revenues derived from Vyjuvek sales [3]. - Despite strong quarterly results, shares fell by 14% due to soft guidance for third-quarter revenues [4]. Product Developments - Vyjuvek, the first-ever revocable gene therapy for dystrophic epidermolysis bullosa (DEB), received FDA approval in 2023 and has secured over 575 reimbursement approvals in the U.S. as of July [5]. - The European Commission approved Vyjuvek for treating DEB-related wounds, with launches planned in Germany and France in Q3 and Q4 respectively [7]. - Vyjuvek was also approved in Japan for DEB treatment, with a target launch before the end of 2025 [7]. Research and Development - Research and development expenses were $14.4 million, down 7.5% year-over-year, while selling, general, and administrative expenses rose to $35.2 million, a 27.2% increase from the previous year [6]. - The company is evaluating KB407 for cystic fibrosis, with four patients enrolled in a study, and expects interim data before year-end [8]. - KB408 is being assessed for alpha-1 antitrypsin deficiency, with positive results reported in a patient from a dose escalation study [9]. Pipeline Progress - Krystal Biotech is advancing multiple candidates, including KB801 for neurotrophic keratitis and KB707 for solid tumors, with ongoing enrollment in various studies [11][12]. - Jeune Aesthetics, a subsidiary, reported positive results for KB304 in treating décolleté wrinkles, leading to its progression into phase II studies [13][14]. Market Outlook - Since the earnings release, there has been a downward trend in estimates, with a consensus estimate shift of -16.13% [15]. - The stock has an average Growth Score of C, a Momentum Score of F, and a Value Score of D, resulting in an aggregate VGM Score of F [16]. - Krystal Biotech holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [17][18].