Key Takeaways Krystal Biotech shares have climbed 57.2% in a year, far outperforming the biotech industry and sector.Vyjuvek uptake remains strong after FDA label expansion and approvals in the U.S., Japan and Europe.KRYS is advancing a broad pipeline across respiratory, ophthalmology, oncology, dermatology and aesthetics.Shares of Krystal Biotech (KRYS) have surged 57.2% in a year compared with the industry’s growth of 17.1%. The stock has also outperformed the industry and the sector in this time frame.Th ...

VYJUVEK Launch and Revenue - Since launch, VYJUVEK has generated over $623 million in net revenue[10] - Q3 2025 VYJUVEK product revenue reached $97.8 million, compared to $83.8 million in Q3 2024[35] - The company has secured over 615 reimbursement approvals for VYJUVEK in the U S[14] European and Japanese Expansion - VYJUVEK launched in Germany in late August, with over 10 prescribing centers and prescriptions for an estimated 20 DEB patients[15] - VYJUVEK launched in Japan in October, targeting over 500 estimated DEB patients[17, 18] - The company is building a specialty distributor partner network to reach thousands of potential DEB patients in rest-of-world markets[20] Pipeline Development - The FDA granted Platform Technology Designation for KB801, potentially accelerating its path to market[21] - The company expects to report molecular data from the KB407 Phase 1 trial for Cystic Fibrosis by year-end[28] - KB111 is entering clinical trials for the treatment of Hailey-Hailey disease, targeting an estimated 10,000-15,000 patients in the U S and Europe[34] Financial Performance - The company's cash and investments totaled $864.2 million as of September 30, 2025[35] - Net income for Q3 2025 was $79.4 million, compared to $27.2 million in Q3 2024[35] - Non-GAAP R&D and SG&A expense guidance for full year 2025 is updated to $145 million to $155 million[36]

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].

Core Insights - Krystal Biotech reported Q2 2025 EPS of $1.29, exceeding the Zacks Consensus Estimate of $1.08, and up from $0.93 in the same quarter last year [1][8] - Revenues reached $96 million, a 36.6% increase year over year, surpassing the Zacks Consensus Estimate of $91 million, driven solely by Vyjuvek sales [1][8] - Despite strong quarterly results, shares fell 14% due to soft guidance for Q3 revenues [2][17] Financial Performance - Gross margin for the reported quarter was 93% [5] - Research and development expenses were $14.4 million, down 7.5% year over year [5] - Selling, general and administrative expenses increased by 27.2% to $35.2 million, attributed to higher professional services fees [5] - As of June 30, 2025, cash, cash equivalents, and investments totaled $820.8 million, up from $765.3 million as of March 31, 2025 [6] Product Developments - Vyjuvek, the first revocable gene therapy for dystrophic epidermolysis bullosa (DEB), received FDA approval in 2023 and has over 575 reimbursement approvals in the U.S. as of July [4][9] - The European Commission approved Vyjuvek for DEB treatment, with launches planned in Germany and France in Q3 and Q4 respectively [9] - Vyjuvek was also approved in Japan for DEB treatment, with a target launch before the end of 2025 [9] Pipeline Progress - Krystal Biotech is advancing multiple gene therapy candidates, including KB407 for cystic fibrosis and KB408 for alpha-1 antitrypsin deficiency, with ongoing clinical trials [10][11] - Enrollment is ongoing for various studies, including EMERALD-1 for KB801 and KYANITE-1 for inhaled KB707 [13][14] - Jeune Aesthetics, a subsidiary, is developing KB304 for aesthetic treatments, with positive results from the PEARL-2 study leading to progression into phase II [15][16] Market Outlook - Despite a strong Q2 performance, revenues are expected to decline in Q3 due to seasonal trends, but growth is anticipated to resume in Q4 [17]

Financial Data and Key Metrics Changes - Q2 net revenue was $96 million, marking a return to growth due to patients resuming treatment and ongoing sales team expansion [7][8] - Total net revenue for Visovac since launch exceeded $525 million [7] - Net income for the quarter was $38.3 million, representing $1.33 per basic and $1.29 per diluted share, compared to $15.6 million in the prior year's second quarter [30] Business Line Data and Key Metrics Changes - Gross margin remained consistent at 93% in Q2 [29] - Research and development expenses decreased to $14.4 million from $15.6 million in the prior year, while general and administrative expenses increased to $35.2 million from $27.6 million [29] Market Data and Key Metrics Changes - Compliance while on drug was reported at 82%, with expectations of a downward trend as the patient mix shifts [9] - The company secured over 575 reimbursement approvals for patients in the U.S. [8] Company Strategy and Development Direction - The company is focused on the successful launch of Visovac in Europe and Japan, with significant potential for growth in these markets [12][18] - The strategy includes expanding the sales force and enhancing patient support programs to drive adoption [10][15] Management's Comments on Operating Environment and Future Outlook - Management expects Q3 revenues to be below Q2 due to seasonal trends but anticipates a return to growth in Q4 [10] - The company is optimistic about the long-term growth trajectory driven by transformative patient outcomes and global expansion [11][18] Other Important Information - The approval of VYZUVAC in Japan is seen as a significant milestone, with plans for launch before year-end [12] - The company has established dedicated commercial teams in Germany and France for the European launch [14] Q&A Session Summary Question: Was the revenue growth for this quarter impacted by the Salesforce expansion? - Management clarified that part of the increase in Q2 was due to patients resuming treatment, and the full impact of the Salesforce expansion will be felt in the coming quarters [36] Question: Can you provide quantitative commentary on the magnitude of slower growth in the first few weeks of the quarter? - Management refrained from providing specific details, noting that summer vacations typically lead to increased treatment pauses [40] Question: What is the mix of RDEB versus DDEB patients in reimbursement approvals? - The mix was reported to be approximately 64% RDEB and 36% DDEB, with no significant changes noted [42] Question: How do drug holidays factor into the guidance for U.S. patients initiating VYJUVEC? - Management indicated that they are on track but may be a quarter or two behind the original timeline [46] Question: Will patients need to see a healthcare practitioner before initiating VYJUVEC in Japan? - Yes, the process is similar to Europe, requiring an initial visit to a physician [70] Question: What is the compliance rate among patients using different vial counts? - Compliance is defined based on the duration of drug use, with a range of 76% to 84% expected [101] Question: What are the timelines to capture the remaining patient base in the U.S. market? - Management emphasized that the goal is to target the entire 1,200 patient base, with ongoing efforts to reach the remaining patients [92]

Financial Performance & VYJUVEK Launch - VYJUVEK revenue since launch exceeds $525 million[8] - Second quarter 2025 product revenue reached $96 million, compared to $70.3 million in the second quarter of 2024[43] - Gross margin in the second quarter was 93%[10, 43] - Gross to net in the second quarter was 17%[10] VYJUVEK Expansion & Approvals - VYJUVEK received approval in Japan for DEB patients from birth, with launch expected in the fourth quarter of 2025[11, 14] - Over 575 reimbursement approvals in the U S[10] - U S compliance to weekly therapy while on drug at 82% as of end of 2Q 2025[10] - European launch is on track for later this quarter, with over 575 identified DEB patients in Germany and France[15, 16] Pipeline Development - 36% objective response rate was observed with KB707 monotherapy in advanced NSCLC patients[22] - 40% AAT positive cells after KB408[26] - Functional AAT delivery to the lungs was confirmed in the third patient dosed with KB408, showing a 79.3% reduction in free neutrophil elastase in ELF after a single dose[25, 26] Financial Guidance - Non-GAAP R&D and SG&A expense guidance for the full year 2025 is $150 million to $175 million[44]

Financial Performance - The company reported $96.0 million in net product revenue for the second quarter of 2025, a significant increase from $70.3 million in the same quarter of 2024, representing a growth of approximately 36% [20][38] - For the six months ended June 30, 2025, net product revenue totaled $184.2 million, compared to $115.5 million for the same period in 2024, indicating a year-over-year increase of about 61% [18][39] - The gross margin for the second quarter was 93%, reflecting strong profitability [6] - The company ended the quarter with a robust balance sheet, holding $820.8 million in cash and investments [20][37] Product Developments - VYJUVEK, the company's gene therapy product, has been approved in Japan for the treatment of dystrophic epidermolysis bullosa (DEB) patients from birth, with plans to launch before the end of 2025 [6][23] - The company has secured over 575 reimbursement approvals for VYJUVEK in the U.S., maintaining strong access nationwide [6] - VYJUVEK is also set for its first European launch in Germany in the third quarter of 2025 and in France in the fourth quarter of 2025 [6][34] Clinical Trials and Pipeline - The company is actively enrolling patients in various clinical trials, including KB407 for cystic fibrosis and KB408 for alpha-1 antitrypsin deficiency lung disease, with interim data expected before year-end [5][7] - The company has initiated a Phase 3 study for KB803, aimed at treating and preventing corneal abrasions in DEB patients, with ongoing enrollment [13] - In oncology, the company continues to evaluate inhaled KB707 in patients with solid tumors, with promising safety and efficacy data reported [11][19] Management Commentary - The CEO highlighted the company's global expansion plans following VYJUVEK's approvals in Europe and Japan, which are expected to enhance access for DEB patients worldwide [2] - The company is approaching key readouts in both lung and eye treatments, which could have transformative implications for its platform and patient care [2]

Company Overview - Krystal Biotech (KRYS) announced the dosing of the first patient in a phase I/II study for its eye drop KB801, aimed at treating neurotrophic keratitis (NK), a rare corneal disease [1][7] - KB801 is a redosable gene therapy designed to enhance nerve growth factor (NGF) production in the eye, promoting corneal healing and preventing complications associated with NK [2][8] Market Context - NK affects an estimated 10 to 50 individuals per 100,000, with increasing awareness and diagnosis in the U.S.; claims for NK reached approximately 68,000 in 2024, up from 31,000 in 2020 [3] - Year-to-date, KRYS shares have declined by 5%, while the industry has seen a 2% decline [6] Clinical Development - The EMERALD-1 study is a double-masked, placebo-controlled trial evaluating the safety and tolerability of KB801 in up to 27 adults with NK [7][8] - This study represents a significant step towards providing a simple eye drop treatment option for patients with NK [8] Other Developments - In addition to KB801, Krystal Biotech is also advancing its phase III IOLITE study for KB803, another investigational eye drop treatment for corneal abrasions in dystrophic epidermolysis bullosa (DEB) [9] - The company's only marketed product, Vyjuvek, is FDA-approved for treating DEB in patients aged six months and older [10]

Neurotrophic Keratitis (NK) Market & KB801 Opportunity - The number of patients in the U S with at least one NK claim has increased by over 115% from 31,000 in 2020 to an estimated 68,000 in 2024[9, 10] - In 2023, U S Medicaid and Medicare spent over $540 million on Oxervate, the only FDA-approved therapy for NK[12] - An estimated over 410,000 days of Oxervate therapy were reimbursed in the U S in 2024[12] - KB801 is designed to address the shortcomings of Oxervate, aiming for superior NGF exposure with significantly reduced dosing frequency[11, 21] KB801 Preclinical Data - KB801 transduces primary human corneal epithelial cells in vitro, leading to dose-dependent expression and secretion of mature NGF[25, 26, 29] - In vitro studies confirmed functionality of secreted NGF using a growth factor starved cell proliferation assay[25, 30] - Topical administration of KB801 to wounded murine corneas was well-tolerated and resulted in localized NGF expression[25] - Head-to-head mouse PK studies demonstrated a clear durability advantage with KB801 compared to recombinant NGF, even against intensive recombinant dosing[43, 47] KB801 Clinical Development - The EMERALD-1 study is a Phase 1/2 double-masked, 2:1 randomized, placebo-controlled study in patients with moderate-to-severe NK, with the first patient dosed in July 2025[51, 53, 1] - Krystal is pursuing Platform Technology Designation with the FDA, potentially leading to expedited development of KB801[56, 57]

Summary of Crystal Biotech's Conference Call on KB801 Company and Industry Overview - **Company**: Crystal Biotech - **Industry**: Biotechnology, specifically focusing on gene therapy for ophthalmic conditions, particularly neurotrophic keratitis (NK) Key Points and Arguments 1. **First Patient Dosed**: The first patient has been dosed in the EMERALD-one Phase 1/2 study evaluating KB801 for the treatment of neurotrophic keratitis [2][5][22] 2. **Current Treatment Landscape**: NK is a rare, degenerative disease with only one FDA-approved therapy, Oxervate, which requires intensive dosing (six times daily) and has limitations such as rapid protein clearance and associated eye pain [7][9][10] 3. **Market Opportunity**: The estimated number of U.S. patients with an NK claim in 2024 is projected to be 68,000, representing a 115% increase from 2020 [7] 4. **KB801 Advantages**: KB801 aims to provide a more consistent nerve growth factor (NGF) exposure with a reduced treatment burden, potentially dosed once or twice weekly compared to Oxervate's six times daily regimen [10][24] 5. **Clinical Program Design**: EMERALD-one is a double-masked, randomized, placebo-controlled study involving up to 27 adult subjects with moderate to severe NK [22][23] 6. **Safety and Efficacy Focus**: The primary focus of the study is on the safety and tolerability of KB801, with secondary endpoints assessing efficacy through corneal defect closure and corneal sensitivity [23][24] 7. **Regulatory Confidence**: The company expresses confidence in obtaining an accelerated pathway for approval due to the existing knowledge from Oxervate and the favorable dosing regimen of KB801 [24][40][41] 8. **Platform Technology**: The HSV-1 based gene delivery platform is highlighted as versatile, with applications in multiple tissues (skin, lung, eye) and the potential for various genetic therapies [5][12][28] 9. **Future Pipeline**: The company has a diversified pipeline with ongoing programs in oncology, aesthetics, and skin, alongside KB801 and KB803, which are both in clinical stages [27][28] Additional Important Content 1. **Preclinical Data**: Preclinical studies indicate that KB801 can effectively transduce corneal epithelial cells, leading to sustained NGF production without cytotoxicity [15][18][19] 2. **Market Dynamics**: The company is actively engaging with key opinion leaders (KOLs) and clinical sites to facilitate patient enrollment, indicating a strong demand for new treatments in this space [79] 3. **Patient Compliance Issues**: The challenges of patient adherence to the current treatment regimen (Oxervate) are emphasized, with many patients unable to maintain the required dosing frequency [94] 4. **Potential for Faster Wound Closure**: There is optimism that KB801 could lead to faster wound closure compared to existing therapies, although the exact duration of treatment will be evaluated based on clinical data [76][81] 5. **Regulatory Interactions**: The company has had positive interactions with the FDA, which has provided feedback on the study design and expressed understanding of the product's profile [100][101] This summary encapsulates the critical insights from the conference call, highlighting the strategic direction of Crystal Biotech and the potential impact of KB801 on the treatment of neurotrophic keratitis.