Earnings call transcript: Krystal Biotech Q3 2025 beats EPS forecasts, shares dip

Krystal Biotech Inc. reported a significant earnings beat for Q3 2025, with earnings per share (EPS) of $2.66, far exceeding the forecast of $1.09. This represents a surprise of 144.04%. Despite the strong financial performance, the stock price dropped 3.8% to $196 in pre-market trading, reflecting investor caution amid broader market trends.

Key Takeaways

• Krystal Biotech’s Q3 EPS of $2.66 surpassed expectations by 144%.
• Revenue reached $97.8 million, slightly above forecasts.
• Stock price fell 3.8% in pre-market trading despite earnings beat.
• Vyjuvek’s global launch contributes to strong revenue growth.
• Revised R&D and SG&A guidance to $145-$155 million.

Company Performance

Krystal Biotech’s performance in the third quarter of 2025 was marked by a robust financial showing, particularly in its flagship product, Vyjuvek. The company’s strategic global expansion, including launches in Germany, France, and Japan, has bolstered its revenue streams. The company continues to innovate with new clinical programs and a focus on expanding its pipeline across various therapeutic areas.

Financial Highlights

• Revenue: $97.8 million, up from the previous quarter.
• Earnings per share: $2.66, compared to a forecast of $1.09.
• Gross margin increased to 96% from 93% in the previous quarter.
• Net income: $79.4 million, or $2.74 per basic share.
• Cash and investments: Over $864 million.

Earnings vs. Forecast

Krystal Biotech’s EPS of $2.66 significantly outperformed the forecasted $1.09, marking a 144.04% surprise. This substantial beat highlights the company’s operational efficiency and successful market strategies. Revenue was slightly above expectations at $97.8 million, compared to the forecast of $93.19 million, a 4.95% surprise.

Market Reaction

Despite the impressive earnings report, Krystal Biotech’s stock fell 3.8% in pre-market trading to $196. This decline may reflect broader market trends or investor concerns about future growth prospects. The stock remains within its 52-week range, with a high of $207.84 and a low of $122.8.

Outlook & Guidance

Krystal Biotech has revised its non-GAAP R&D and SG&A guidance to $145-$155 million, reflecting its commitment to pipeline development. The company anticipates a readout of its CF program before year-end and aims to release NK and eye lesion data by mid-2026. However, no revenue guidance for 2026 was provided due to multiple new market launches.

Executive Commentary

CEO Krish Krishnan stated, "With launches in Germany, France, and Japan, Vyjuvek has now truly gone global," highlighting the company’s strategic expansion. President of R&D, Suma Krishnan, emphasized, "We have dramatically transformed the scope and ambition of our clinical stage pipeline," underscoring the company’s focus on innovation.

Risks and Challenges

• Supply chain disruptions could impact global distribution.
• Market saturation in key regions may limit growth.
• Regulatory hurdles for new product approvals.
• Competition in the rare genetic disease treatment space.
• Macroeconomic pressures affecting healthcare budgets.

Q&A

During the earnings call, analysts inquired about the NK program, with executives expressing confidence in dosing based on animal studies. The company expects one efficacy study to suffice for NK approval, with no major safety concerns reported in ongoing trials. The gradual ex-U.S. launch strategy aims for steady patient acquisition.

Full transcript - Krystal Biotech Inc (KRYS) Q3 2025:

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Stéphane Paquette, Vice President of Corporate Development, Krystal Biotech: Thank you for standing by, and welcome to the Krystal Biotech third quarter 2025 earnings call. At this time, all participants are on a listen-only mode. After the speakers’ presentations, there will be a question-and-answer session. As a reminder, today’s conference is being recorded. I would now like to hand the conference over to your host, Stéphane Paquette, Vice President of Corporate Development. Please begin.

Good morning, and thank you all for joining today’s call. Earlier today, we released our financial results for the third quarter of 2025. The press release is available on our website at www.krystalbio.com. We also filed our earnings 8K and 10Q with the SEC earlier today. Joining me today will be Krish Krishnan, Chairman and Chief Executive Officer, Suma Krishnan, President of Research and Development, Laurent Goux, Senior Vice President and General Manager for Europe, and Kate Romano, Chief Accounting Officer. This conference call will, and our responses to questions may, contain forward-looking statements. You are cautioned not to rely on these forward-looking statements, which are based on current expectations using the information available as of the date of this call and are subject to certain risks and uncertainties that may cause the company’s actual results to differ materially from those projected.

A description of these risks, uncertainties, and other factors can be found in our SEC filings. With that, I will turn the call over to Krish.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Thank you, Stéphane. Good morning, and welcome to the call. It gives me immense pride to realize that we’re now in a position to help so many DEB patients within and outside the U.S. I would like to thank the entire team at Krystal for their contributions. In Q3, Vyjuvek launch continued to build momentum, and the updated U.S. label clearly strengthens long-term outlook in the U.S. We’re now launched in Germany, France, and Japan. We successfully negotiated pricing in Japan, and we believe the outcome bodes well for our payer conversations in Europe. We are looking forward to our readout in CF this quarter, and we’re accelerating enrollment across our pipeline, including KB801 for NK. We are initiating a new clinical program for Hailey-Hailey disease. It is a rare genetic disease of the skin that is a strong fit with our HSV-1 gene delivery platform and our commercial footprint.

Suma will share more about this program later on the call. Financially, we’re strong and well-positioned to execute on our strategic growth plans and deliver value to shareholders. Moving now to our 3Q results. We are pleased to report another quarter of revenue growth, with net Vyjuvek revenue coming in at $97.8 million. The patient-pausing impacts due to summer holidays that we observed earlier last quarter were mitigated by patient adds and early traction in Europe. Net Vyjuvek revenues reported here do include a contribution from Europe following our launch in Germany in late August. This brings total net Vyjuvek revenues since launch to over $623 million. Gross margins were 96% for the quarter. Gross to net dynamics were stable as with prior quarters. I’m happy to report continued acceleration in new reimbursement approvals in the U.S.

Our team added over 40 new approvals since our last earnings call update, bringing the total number of reimbursement approvals in the U.S. to over 615. This is now our second sequential quarter of reimbursement approval acceleration and a reflection of our field team’s efforts as well as the ongoing sales force expansion. Our expanded field force is now fully hired and being deployed as training is completed. Full impact is expected in early 2026. We’re also happy to report continued expansion of our prescriber network, reflecting increased penetration into the community setting, with the total number of prescribers in the U.S. now exceeding 450. I would like to highlight a recent milestone achieved in the U.S., which was the FDA approval of our updated Vyjuvek label.

This label update expanded the Vyjuvek eligible patient population to include DEB patients from birth and also provided patients with full flexibility in how they choose to dose Vyjuvek. This change reinforces Vyjuvek’s leadership position as the most flexible and convenient corrective therapy for DEB and should serve as a tailwind for adoption and compliance in the future. Compliance to weekly therapy continued the trend we reported in previous quarters, coming in in the low 80% as more patients achieve durable wound closure and more mild and moderate patients come onto therapy. While the revised label change should have a positive impact on compliance in the future. We, as always, continue to expect some quarter-to-quarter waviness in the U.S. revenues as we build on our long-term growth trajectory. With that, I’ll now hand it off to Laurent to share his excitement in Europe. Laurent?

Laurent Goux, Senior Vice President and General Manager for Europe, Krystal Biotech: Thank you, Krish. It is my pleasure to share an update on our progress in Europe. Our first European launch in Germany is off to a good start. Since launching in late August, we have seen widespread interest and demand across the country. Based on available aggregate label data, we estimate the number of patients prescribed Vyjuvek in Germany to be approximately 20. Just as importantly, we are seeing broad prescribing patterns across the country with prescriptions from over 10 centers to date. This breadth of prescribing is particularly helpful given the requirement for patients to start therapy in a healthcare setting. By growing the number of centers prescribing Vyjuvek, we can help patients to start therapy closer to home and avoid potential single center patient visit bottlenecks. Based on current trends, we expect continued steady growth in patients’ inclusion in the months ahead.

We are also making rapid progress outside of Germany. In September, the Haute Autorité de Santé, also known as HAS, the French HTA body, approved early Vyjuvek access under the post-marketing authorization Accès Précoce II. Last month, we formally launched Vyjuvek in France. Importantly, the relevant authorities in France are also allowing Vyjuvek to be dispensed outside the hospital setting. This is the first time a gene therapy has been approved in such a setting in France, a tremendous milestone to our local team and patients across the country. Last month, HAS also appraised Vyjuvek under the Amélioration du Service Médical Rendu, or ASMR, classification system, a key initial step for pricing and reimbursement discussions in France. Vyjuvek received an ASMR 3 designation.

This designation, which was only granted to 11% of the new drugs reviewed in 2024, acknowledged the added clinical benefit of Vyjuvek and may open up the possibility for EU priority list pricing in France. Finally, I am also proud to report that Vyjuvek was granted the Prix Galien in Italy under the Advanced Therapy Medicinal Product category, a prestigious award recognizing excellence in scientific innovation to improve the state of human health. This award is an important acknowledgment of the innovative and transformational nature of Vyjuvek and a helpful touchpoint as we start to engage with the relevant stakeholders in Italy. With these recent achievements, we are excited about the long-term growth trajectory in Europe and maximizing Vyjuvek access to the thousands of DEB patients in the region. I’ll now hand the call back over to Krish.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Thanks, Laurent. As I mentioned before, we have now also launched Vyjuvek in Japan. This summer, we were approved by the MHLW for the treatment of patients, and late last month, we successfully completed pricing negotiations with the Japanese authorities and launched Vyjuvek. We’re very pleased with our pricing in Japan, and that is a testament to the clinical benefits achieved by DEB patients treated with Vyjuvek. Our core Japanese team has been in place for over a year and is now fully staffed to support the Vyjuvek launch. Our Japanese medical team has also been active for over a year, mapping key centers and patients, which will be the early focus of our launch. Although we expect contribution from Japan in 2025 to be modest, it will be another important revenue growth driver in 2026. Finally, I wanted to highlight one more contributor to the long-term growth of Vyjuvek.

In addition to our direct Vyjuvek launches in the United States, major European markets, and Japan, we’ve started contracting with regional specialty distributors to support the commercialization of Vyjuvek in rest of the world markets. We have executed agreements in place with multiple leading distributors covering key markets in Central and Eastern Europe, Turkey, and the Middle East, and expect to add more in the year ahead. Healthcare infrastructure and access vary significantly across rest of the world markets, but even after accounting for this variability, we estimate that a global distributor partner network could help bring Vyjuvek to thousands more DEB patients around the world and supplement our exciting growth strategy in the United States, Europe, and Japan. With that, I’ll now hand it off to Suma to touch on recent pipeline progress. Suma.

Suma Krishnan, President of Research and Development, Krystal Biotech: Thank you, Krish. I would like to start today by acknowledging the hard work of our development team here at Krystal. In recent months, we have dramatically transformed the scope and ambition of our clinical stage pipeline, expanding our clinical programs in respiratory and oncology, and starting up new studies in ophthalmology and dermatology. These are all important achievements, none of which would be possible without the outsized contribution of each Krystal team member. Our team also achieved another important milestone in recent weeks. A platform therapy designation from the FDA. This designation, granted for our HSV-1 gene delivery platform and currently applicable to our KB801 program, could significantly accelerate the path to approval, providing us the opportunity for more frequent interactions with the FDA as well as the chance to leverage manufacturing and non-clinical safety data from Vyjuvek in our filings.

The FDA may also consider previous inspectional findings related to drug manufacture. The platform technology designation is applied for on a program-by-program basis and is currently only granted to KB801, although we intend to apply for this designation for additional programs to ultimately secure the designation and associated efficiencies for our entire pipeline. I’m also excited to report that we remain on track to deliver multiple exciting readouts in the months ahead. We expect our next readout to come from our cystic fibrosis program, KB407. With the backing of the CFFTDM, we have expanded our clinical trial network and are now very close to study completion. We look forward to announcing interim data before year-end, including molecular data from NALCF patients to assess the ability of the HSV-1 to deliver full-length wild-type CFTR to the lung.

On success, we would expect to immediately move to a repeat dosing study, which would enable assessment of functionality, including longitudinal FEV1. With our now expanded trial network and without the requirement for bronchoscopies, we expect a repeat dosing study would enroll quickly, enabling a potential FEV1 data readout next year. Our KB408 program for alpha-1 antitrypsin deficiency lung disease is also moving ahead well. Having already confirmed successful delivery of functional AAT in our single-dose study, this program is in repeat dosing, and we expect to be able to provide an interim data update in the first half of next year. Together with KB407, this will serve as a robust data set demonstrating our platform capabilities in the lung. In ophthalmology, strong enrollment is providing us with greater clarity on the timing of our first readout.

Based on current rates, we expect to complete enrollment of our phase three trial evaluating KB803 for corneal abrasions in DEB patients by end of the year. Enrollment in our randomized placebo-controlled study for KB801 in NK is also progressing well as we continue to onboard new sites globally, setting us for a potential data readout in 2026. I would also like to share a quick update on our work in oncology, which is increasingly focused on the development of intratumoral KB707 for the treatment of non-small cell lung cancer, or NSCLC. As we shared at ASCO over the summer, NSCLC is an indication where we have seen early evidence of monotherapy efficacy even in heavily pretreated and checkpoint inhibitor-failed patients. Building on that readout, we were recently granted an end-of-phase two meeting with the FDA to discuss a potential development pathway for intratumoral KB707.

Based on FDA’s feedback, we now expect that a single phase three study evaluating intratumoral KB707 in combination with chemotherapy versus chemotherapy alone in patients with advanced NSCLC could be sufficient to support a potential registration in combination for second-line NSCLC. In support of this potential registration pathway, we have opened a new cohort in our ongoing phase one two KYNITE-1 study to evaluate a fixed dose of intratumoral KB707 in combination with chemotherapy. Enrollment in KYNITE-1 is ongoing. Our current expectation is to report interim data from KYNITE-1 in the second half of 2026, at which point we would also be able to provide an update on registrational study plans and potential for phase three initiation. Finally, I’m also happy to introduce today a new addition to our clinical pipeline, KB111, for the treatment of Hailey-Hailey disease.

Hailey-Hailey disease is a genetic blistering disease of the skin linked to the mutation in the ATP2C1 gene and low expression of its encoded keratin-transporting ATPase. HHD is a rare disease with a prevalence that’s not well understood. The most common estimate of prevalence is one case per 50,000 patients, although underreporting is possible. HHD is characterized by painful rash and blistering in skin folds with a relapsing-remitting course that is exacerbated by heat and sweat. Patients often report debilitating symptoms of pain, itch, burning, body odor, as well as infections, resulting in severe negative impacts on quality of life, psychological distress, and intimacy issues. There are no specific therapies available for treatment of this disease. Building on our experience and clinically validated HSV-1 platform for skin delivery, we designed KB111 to deliver ATP2C1 directly to skin cells, increase ATPase levels, and hopefully change the course of this terrible disease.

As with Vyjuvek, KB111 is formulated for a topical administration directly to the lesions of HHD patients. We have already confirmed in preclinical studies that KB111 can efficiently transduce skin cells, resulting in functional ATPase expression, and last month cleared our IND. We expect to start an intrapatient randomized double-blind placebo-controlled multicenter study evaluating KB111 in HHD patients in the first half of next year. With strong execution across our pipeline and now the added benefits of the platform designation for KB801, we are well positioned to make rapid progress with multiple readouts in months ahead. With that, I’ll hand the call over to Kate.

Kate Romano, Chief Accounting Officer, Krystal Biotech: Thank you, Suma, and good morning, everyone. I’d like to provide some highlights from our third-quarter financial results reported in our press release and 10Q filing earlier this morning. Vyjuvek net product revenue for the third quarter was $97.8 million. This marks sustained growth as compared to the prior quarter, including the early sales from our German launch. Gross to net revenues remain consistent with prior quarters. Cost of goods sold was $4.3 million. Gross margin was 96% for the quarter as compared to 93% last quarter. Note that the increase in gross margin this quarter was the result of U.S. product manufacturing process optimizations and the benefit of lower-cost batches after FDA approval of this optimized process. While we expect these manufacturing efficiencies to continue benefiting our U.S. operations, the optimized process has not yet been approved for products sold outside the United States. As ex-U.S.

sales grow over the coming quarters, we anticipate gross margins will normalize towards historical levels until the optimized process is approved for products sold outside the United States. Research and development expenses were $14.6 million. General and administrative expenses were $37.6 million. Operating expenses for the quarter included non-cash stock-based compensation of $13.2 million. You’ll note on slide 13 that we are revising our full-year non-GAAP R&D and SG&A guidance to $145-$155 million compared to our prior guidance of $150-$175 million. This represents both a reduction and narrowing of the range to better reflect our performance so far this year, as well as our continued confidence in our ability to execute with discipline for the remainder of the year. During the quarter, we released a majority of the valuation allowance that was previously recorded against our deferred tax assets, reflecting our confidence in Krystal’s future profitability.

This release resulted in a one-time non-cash tax benefit that increased our reported EPS. We also benefited from the reversal of the Section 174 R&D capitalization requirement under the One Big Beautiful Bill legislation. This reversal was also non-recurring. Net income for the quarter was $79.4 million, which represented $2.74 per basic and $2.66 per diluted share, reflective of these one-time benefits. Finally, our balance sheet continues to be a key point of strength for Krystal. We ended the third quarter with over $864 million in combined cash and investments, and we remain well positioned to support our commercial launches globally, as well as our significant pipeline programs in the upcoming quarters. I will turn the call back over to Krish.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Thanks, Kate. As we close today’s call, I’d like to emphasize our excitement for the path ahead at Krystal in 2026. With launches in Germany, France, and Japan, Vyjuvek has now truly gone global, providing us the opportunity to dramatically expand the number of patients benefiting from Vyjuvek therapy in the months ahead. The hard part of a global Vyjuvek launch is now behind us, and Krystal’s focus in 2026 is on our clinical pipeline. We have our first readout in CF before year-end. We’re working towards readouts in KB801 for NK and KB803 for eye lesions in DEB patients by mid-year, and we shall update once enrollment is complete in these programs. These programs, along with KB111 for Hailey-Hailey, fit neatly within our core global commercial capabilities.

At the same time, we recognize the significant optionality that HSV-1 provides as a re-dosable, non-integrating, large-capacity gene delivery platform and the potential upside opportunities that exist in large market indications. We will continue to invest in these programs with the same operational discipline as we have in the past to ensure that we maximize the value that we believe exists in our pipeline and platform before entering into partnerships for these programs. Thanks for listening, and I’d like to now open the call for Q&A.

Conference Moderator: Certainly. At this time, we will be conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is from Alec Stranahan with Bank of America.

Hey, guys. This is Matthew on for Alec. Congrats on the quarter. Appreciate you taking our questions, maybe just two from us. On the ex-U.S. launch, I guess whether your focus is on expanding the breadth of prescribers or depth of prescribers that have already made some prescriptions, and then maybe on the optimized process that led to better gross margins. Just curious what was sort of optimized in this process and whether you can speak to timelines for this optimized process to be expanded to ex-U.S. markets. Thanks.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Thank you, Matthew. Hey, in terms of your first question on ex-U.S. launch, breadth of prescribers versus depth. I mean, our focus, I mean, you know, our objective in Europe is primarily to accelerate getting a patient to meet the physician as soon as possible. Because the first clinical visit has to be in a physician office. Now, purely logistically, that’s a lot easier if you start focusing on centers of excellence, as you heard from Laurent, to begin with. At the same time, slowly spreading out into the community. On the question about optimized process, this is essentially moving to a larger bioreactor. It got approved in the U.S., and we’re working towards an application in Europe. I’ll ask Suma to comment on the timing.

Conference Moderator: For the approval in Europe with respect to the optimized batch.

Suma Krishnan, President of Research and Development, Krystal Biotech: I mean, we have already started the process. We have filed the scale-up. I mean, it’s pretty straightforward because we have a lot of data from the U.S. So we expect, hopefully, sometime next year to have the optimized and scaled-up process approved.

Great. Thanks.

Conference Moderator: Your next question is from Roger Song with Jefferies.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Great. Congrats for the quarter, and thank you for taking our question. Also related to the question on ex-U.S. launch. So. I understand the contribution in 3Q probably not too much from Germany. But just curious about your expectation moving to next year, I mean, before Q and the next year, how should we think about ex-U.S. versus U.S. revenue contribution and when on the FEU will give us some breakdown later on? And then also related to. This ex-U.S. launch is, how should we think about the pricing? I understand you need to negotiate on top of the list price, and then how this will change over time, particularly with the U.S. MFN. Policy. Thank you. Great, Roger. Thanks for both those questions. Look. The only requirement, as I mentioned in the prior response, is to start in a healthcare setting.

In spite of that, we think Germany is off to a really good start with like 10-plus centers. Starting to prescribe. The only point I’ll make with respect to the EU launch, I would expect it to be a steady. Launch upwards as opposed to expecting any kind of bolus early on in either country, whether it be Germany or France. The demand and the. Physicians and the patients are pretty excited, I would say, both. In Germany, France, and. Italy is starting to go that way too. With respect to pricing, look, we know Germany affords free pricing for the first six months. Internally, we’ll make a determination to start accruing for the next 12 months, depending on how pricing’s proceeding. Negotiations are proceeding in France. Obviously, we start accruing from day one. It’s very country-specific.

I will say, based on the ASMR rating, based on the pricing we got in Japan. I think it bodes well. It remains to be seen, but I think the efficacy and the debilitating nature of the disease, I think that message we’re doing a really good job of conveying that, and it’s being received well. By these authorities in different countries. Got it. Thank you.

Conference Moderator: Your next question for today is from Ritu Baral with TD Cowen. Ritu, your line is live.

Kate Romano, Chief Accounting Officer, Krystal Biotech: Hi, guys. Apologies. I was muted. Good morning. Thank you for taking the questions. I have been getting a lot of questions on NK timing. Specifically, Krish, could you take us through sort of what the gating aspects of getting that trial up and going is? How many sites and how difficult it is to open those sites? Has formal enrollment actually started? I think there’s a lot of focus on the rapidity of getting to data. What that says about the overall NK population prevalence. I have a quick follow-up on CF.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Gotcha. On NK. I would just say, look, I think we have started to enroll patients in the study. Maybe Suma, you could add some color on how we’re proceeding.

Suma Krishnan, President of Research and Development, Krystal Biotech: Absolutely. I mean, we have quite a few sites up and running. We are actively adding additional sites. Really intent, not just in the U.S., but globally, because there are a lot of NK patients in Europe and the rest of the world, and we want to make this a global filing. As you know, it takes a little while to get them up and running for the global studies, but we are right in the process. I think we will have most of our sites all completely signed up and ready to go, hopefully by end of the year. As you know, we are enrolling patients. This is one of our top priority projects. We are excited to see the progress on this particular trial.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: I will add to our internal timing target is to announce some kind of interim data by the middle of next year.

Conference Moderator: Got it. Can you say what percentage of planned sites that you have up and running at this point?

Suma Krishnan, President of Research and Development, Krystal Biotech: I mean, we have quite a few sites. I mean, within the U.S., we got most of the academic sites up and running. We have a few more to go, but I think we should have most of the U.S. sites up and running by end of the year.

Conference Moderator: Got it. For CF, can you tell us how many null patients that you plan to provide data on by the year-end update? What constitutes success on molecular response? What aspects of molecular response will you be reporting, and what’s success in a null patient?

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Yeah. Ritu, thanks for that question. We are looking at a minimum of three null patients, primarily focused on molecular correction. Because it is a single-dose study. Suma, anything else?

Suma Krishnan, President of Research and Development, Krystal Biotech: Yeah. I mean, obviously, we are bronching these patients, these three null patients, after the drug is administered. The biopsies, we will take across all the different areas of the lung, and we will look for expression of CFTR by immunofluorescence. We will see what kind of expression. We are expecting to see robust expressions. I mean, based on our NHP primate study, I mean, hopefully, if we can recreate that, we see expression all the way up to 28 days. We see full-length molecular CFTR expression across all of our biopsies. We think we feel pretty confident. Nobody is able to today show full-length expression of CFTR. Hopefully, we can break that cycle. That is our goal.

Conference Moderator: What will you report as % of normal and sort of what threshold could result in FEV1 changes at a later time point?

Suma Krishnan, President of Research and Development, Krystal Biotech: I mean, we know that you don’t need much, right? Even these patients don’t produce any CFTR. Even if we can produce anywhere between 5-10% of CFTR expression, I think that’s pretty robust. Again, our intent is in these multiple biopsies across the lung, we will hopefully want to show expression in most of these biopsies, and that will give us some confidence that, yes, we can express and we have enough molecular correction. Especially in these null patients, they don’t produce any CFTR.

Conference Moderator: Got it. Thanks for taking all the questions. Your next question is from Gavin Clark-Gartner with Evercore.

Hey, guys. Thanks for taking the questions. On NK, what makes you confident that you do not need to test any different doses and why the one that you picked is the right dose? And somewhat on this topic, do you think you need two efficacy studies for approval, or may one be sufficient?

Suma Krishnan, President of Research and Development, Krystal Biotech: The confidence for the dose comes from our animal studies. I mean, we clearly see expression gave a clear pharmacokinetic profile. We know how long the expression lasts. That has guided us into the dosing regimen in the clinic. Yes, we feel pretty sure that we just need one efficacy trial because this is, again, a rare disease. It meets the regulatory guidance for what the requirement is. Based on our study and the way we have powered the study based on our animal studies and what oxalate studies have achieved, we have powered it to hopefully see clinical significant improvement from placebo. That’s the goal of this. If the study is successful, we expect this to be the registrational trial. Obviously, we have the platform technology, and we have guidance on what we need from a CMC perspective. I think we’re aligned. That’s something that’s positive for this program.

Is there any commentary you can provide on the safety you’re seeing in the ocular depth study or even the NK study on a blinded basis?

I mean, so far, we have not seen any adverse events of concern.

All right. Great. Thanks.

Conference Moderator: Your next question is from Sami Corwin with William Blair.

Good morning. Congrats on the progress, and thanks for taking my questions. I also have one on NK. Could you remind us if you’re excluding patients that have had a prior ocular HSV infection and if you think a prior HSV infection could impact the efficacy or safety of treatment? In terms of the initial data set, what exactly will we see in that? Thank you.

Suma Krishnan, President of Research and Development, Krystal Biotech: Regarding your first question, no, we do not. We do not exclude patients that have tried infection. The only requirement is they should not have an active infection. That is the only exclusion criteria. I mean, that. Let’s see. This is what are we going to announce?

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: What?

Suma Krishnan, President of Research and Development, Krystal Biotech: What are we going to announce? Yeah. Data said this is a randomized one-to-one placebo-controlled study, eight-week. We look at complete healing using, I mean, complete healing with an independent reader. If you see complete healing against placebo, then that’s what we’re just exactly like oxalate.

Got it. Great. And then just one question on Vyjuvek. Do we expect some guidance or full-year revenue guidance for Vyjuvek early next year? Thanks.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: No. Because we have so many launches and the distribution you see, it will take us some time to kind of get comfortable with how the different launches are going in different countries. Fortunately, Sammy, we will not be guiding on revenue for 2026.

Got it. Thank you.

Conference Moderator: Your next question is from Josh Schimmer with Cantor Fitzgerald. Hi. This is Alexa Diemer on for Josh Schimmer, and congrats on a great quarter. Can you please provide some more color on the contribution of US and ex-US sales in the third quarter for Vyjuvek? More specifically, what was the percentage breakdown from the US versus Germany? Thank you.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Yeah. Look, the decision not to break down in this particular quarter was somewhat accounting-auditor-driven, and the goal is to establish a consistent long-term practice on segment reporting. If you follow that thought, we will be starting to break down geographies at some point in 2026. It’s just that now it is so modest the contribution relative to the overall net revenues of the company.

Okay. Got it. Can you provide any more specifics on how U.S. sales were in the second quarter versus the third quarter?

Yeah. Definitely. I would say that the U.S. was a bit lower than what we saw in Q2, but not to the extent based on my comments from the last quarter. Definitely, reimbursement approvals were on an uptick. Overall, we ended up getting to a number that was higher than Q2.

Got it. Thanks so much.

Conference Moderator: Your next question for today is from Andrea Newkirk with Goldman Sachs.

Kate Romano, Chief Accounting Officer, Krystal Biotech: Hi. This is Morgan on for Andrea. Thank you for taking our question. With 615 reimbursement approvals, what do you attribute this growth to? Are you seeing more patient ads from the community setting? How are you thinking about the path to 60% penetration from here? Thank you.

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: No. Great question, Andrea. Look. Like I mentioned, maybe last quarter or the one before, it was taking us a bit longer to pull through a start form as we are getting patients more out in the community and physicians who are far away from a center of excellence. By just increasing the size of the sales force, I believe we have turned that issue around. We saw some acceleration last quarter. We see a continued acceleration this quarter. We expect that to go forward as more reps are being trained and out into the field. In terms of 60% market share, look, that’s a number around 720. We reported 615. So we’re maybe a quarter or two from hitting that number.

If you just do a simple math on that metric, we feel really good about the way the launch is going and how we’ve been able to reverse this. One or two one-quarter of deceleration in RAs.

Kate Romano, Chief Accounting Officer, Krystal Biotech: Great. Thank you so much.

Conference Moderator: Your next question is from Yigal Nochomovitz with Citigroup.

Hi. This is Johan Kim on for Yigal. Thanks for taking our question. Maybe just two quick ones from us. On KB408, can you just talk a little bit about your expectations there, whether you’re expecting a significant uptick in AAT with repeat dosing versus a single dose, and what sort of boost you’d be expected to see or would you want to see?

Krish Krishnan, Chairman and Chief Executive Officer, Krystal Biotech: Yeah. Obviously, we’re expecting an uptick, but we’re not particularly talking right now about how much of an uptick.

Suma Krishnan, President of Research and Development, Krystal Biotech: I mean, we are doing repeat dosing of A180, I mean, of 408, and we’ll be collecting bronch and Levod samples. So that’s something that’s ongoing. So we will show repeat dosing and an expression of A180.

Got it. Can you speak on whether opening up more sites is also a priority for that program to continue enrolling patients, given that there are quite a number of AATD programs ongoing right now?

I mean, right now, we have a couple of sites that’s open because, remember, again, these sites have to be able to do bronchoscopy. In case of 408, it’s a little more complex because it’s not just biopsies. They also need to take lung lavage fluids out to measure the AATD and the protein levels. So there’s only a few sites that are capable of doing this. So we have those sites. We have the patients. Hopefully, once we finish that cohort with the repeat dose administration and AATD levels, then we hope to have a meeting with the agency to potentially talk about a path forward.

Got it. Thank you.

Conference Moderator: There are no further questions in queue. Thank you. We have reached the end of the question and answer session and today’s conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

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