Krystal Biotech begins phase 1/2 trial of eye drop gene therapy for NK

PITTSBURGH - Krystal Biotech, Inc. (NASDAQ:KRYS), a $4.1 billion biotech company with impressive 93% gross profit margins according to InvestingPro data, has dosed the first patient in its Phase 1/2 clinical trial evaluating KB801, an investigational eye drop gene therapy for neurotrophic keratitis (NK), the company announced Wednesday.

The EMERALD-1 trial is a randomized, double-masked, multicenter, placebo-controlled study that will enroll up to 27 adults with Stage 2 or Stage 3 NK. Participants will be randomized in a 2:1 ratio to receive either KB801 or placebo twice weekly for 8 weeks.

KB801 is designed to enable sustained expression of nerve growth factor (NGF) in the front of the eye. The therapy aims to address a key limitation of current NGF treatments that require six daily applications due to rapid clearance from the eye.

"Until now, rapid protein clearance rates and high cell turnover in the front of the eye have severely limited the therapeutic potential of biologics and gene therapies for the treatment of corneal epithelial defects," said Suma Krishnan, President of Research & Development at Krystal Biotech.

NK is a degenerative corneal disease characterized by damage to the nerves that innervate the eye, which can lead to corneal epithelial defects, ulcers, and potential vision loss. According to claims data cited in the company’s press release, approximately 68,000 patients in the United States had an NK claim in 2024, representing a 115% increase from 2020. This market opportunity aligns with Krystal’s strong financial performance, with revenue growth of 247% over the last twelve months.

The primary objective of EMERALD-1 is to evaluate safety and tolerability, with secondary objectives focused on efficacy measures including complete healing of the corneal epithelium.

Krystal Biotech is also advancing other ophthalmology programs, including its Phase 3 IOLITE study in dystrophic epidermolysis bullosa.

The company’s first commercial product, VYJUVEK, is a redosable gene therapy approved by both the FDA and EMA for the treatment of dystrophic epidermolysis bullosa. With a "GREAT" financial health score from InvestingPro and strong cash position exceeding debt, Krystal Biotech appears well-positioned to advance its pipeline. Discover more insights about KRYS and access comprehensive analysis of 1,400+ stocks with an InvestingPro subscription.

In other recent news, Krystal Biotech reported its first-quarter 2025 earnings, which showed a shortfall in both earnings per share (EPS) and revenue compared to analysts’ expectations. The company posted an EPS of $1.20, below the forecasted $1.46, and revenue came in at $88.18 million, falling short of the anticipated $99.12 million. Despite this, the net product revenue for their flagship treatment, VYJUVEK, increased by 95% year-over-year. Clear Street initiated coverage on Krystal Biotech with a Buy rating and a $190 price target, citing opportunities in the company’s pipeline, including treatments for cystic fibrosis and ocular programs. H.C. Wainwright maintained its Buy rating with a $240 price target, expressing confidence in the launch trajectory of VYJUVEK and upcoming clinical data. The firm also highlighted the company’s strong cash reserves, which stand at $765.3 million. Krystal Biotech is preparing for European and Japanese market launches of VYJUVEK, with Germany and France expected in the third quarter of 2025. Additionally, the company is advancing its clinical pipeline, with several readouts expected by the end of 2025.

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