Krystal Biotech Q1 2025 Earnings Report

Krystal Biotech EPS Results

• Actual EPS: $1.20
• Consensus EPS: $1.38
• Beat/Miss: Missed by -$0.18
• One Year Ago EPS: N/A

Krystal Biotech Revenue Results

• Actual Revenue: $88.18 million
• Expected Revenue: $98.66 million
• Beat/Miss: Missed by -$10.47 million
• YoY Revenue Growth: N/A

Krystal Biotech Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 8:30AM ET

Krystal Biotech (NASDAQ:KRYS), a commercial-stage biotechnology company, discovers, develops, and commercializes genetic medicines for patients with rare diseases in the United States. It commercializes VYJUVEK (beremagene geperpavec-svdt, or B-VEC) for the treatment of dystrophic epidermolysis bullosa (DEB). The company also develops KB105, which is in Phase 1/2 clinical trials for treating patients with deficient autosomal recessive congenital ichthyosis; KB104 for treating netherton syndrome; KB407 that is in Phase 1 clinical trials for treating cystic fibrosis; KB707 that is in Phase 1 clinical trials for the treatment of anti-PD-1 relapsed/refractory; KB408, which is in Phase 1 clinical trials for treating Alpha-1 antitrypsin deficiency; and KB301 that is in Phase 2 clinical trials for treating aesthetic skin conditions, as well as in open label study with ophthalmic B-VEC for treating for ocular complications of deb. Krystal Biotech, Inc. was founded in 2016 and is headquartered in Pittsburgh, Pennsylvania.

Krystal Biotech Q1 2025 Earnings Call Transcript

Key Takeaways

• Crystal secured full EC approval for Viévac in the EU with no post-approval efficacy studies required, targeting launches in Germany and France in Q3 ’25 and anticipating a larger European opportunity than current forecasts suggest; approval in Japan is expected in Q3 ’25 with patient dosing by Q4.
• First-quarter 2025 net product revenue for Vyjuvec was $88.2 million (up 95% year-over-year) at a 94% gross margin, with patient-induced pauses after induction therapy noted as part of a predictable long-term “tail” that supports durable wound maintenance and growth.
• US access remains robust with over 540 reimbursement approvals, full nationwide commercial and Medicaid coverage, and 97% of treatments administered at home; longer physician engagement cycles in Q1 prompted an expansion of the field sales force and new direct-to-patient programs like Vyjuvec Voices.
• Crystal’s clinical pipeline is on track for four key readouts in 2025—KB407 (cystic fibrosis) this summer, KB408 (AATD) later in the year, KB803 (ocular DEB) before year-end, and KB304 (aesthetics)—and will soon dose the first patient in a Phase 1/2 trial of KB801, a novel gene therapy for neurotrophic keratitis.
• The company ended Q1 with $765 million in cash and investments, seven consecutive profitable quarters, and US-based manufacturing and IP that insulate it from tariff or regulatory disruptions while supporting global expansion.

Presentation

[Operator]

Thank you for standing by, and welcome to the Crystal Biotech First Quarter twenty twenty five 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, Stephane Paquette, Vice President of Corporate Development. Please begin.

[Stéphane Paquette, VP - Business Development at Krystal Biotech]

Good morning, and thank you all for joining today's call. Earlier today, we released our financial results for the first quarter of twenty twenty five. The press release is available on our website at www.crystalbio.com. We also filed our earnings eight ks and 10 Q with the SEC earlier today. Joining me today will be Krish Krishnan, Chairman and Chief Executive Officer Suma Krishnan, President of Research and Development Jennifer McDonough, Senior Vice President of Patient Access Analytics and Operations Christine Wilson, Senior Vice President and Head of U.

[Stéphane Paquette, VP - Business Development at Krystal Biotech]

S. Sales and Marketing 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.

[Stéphane Paquette, VP - Business Development at Krystal Biotech]

With that, I will turn the call over to Krish.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Thank you, Stefan. Good morning, everyone. I'd like to start today by thanking the Crystal team. And we're fortunate to be in such a good position commercially, clinically, and financially to help patients amidst a turbulent macro and FDA backdrop. I'd like to briefly touch on four topics: Vizureka going global the upcoming clinical readouts in 2025, primarily CF alpha-one, a very exciting second ophthalmic program to treat neurotrophic keratitis that just entered the clinic, and briefly discuss in the end, how crystals insulated in the current macro and FDA situation.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

With the positive EC decision now behind us, and the broad label that we were fortunate to receive, we're excited about launching in Europe, where the burden of finding genetically confirmed patients is much lower than it has been in The U. S. We would like to highlight that this is a full approval, and not a conditional approval. That's pretty rare. And we do not have any post approval efficacy study requirements with respect to the EU.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

We're planning to launch in Germany and France in Q3, while simultaneously working on preparations to move the other EU countries towards launch. With a large number of already identified DEP patients across the continent, it's my belief that the opportunity in the EU could be bigger than what the market presently anticipates. With respect to Japan, the regulatory review is progressing well. And as noted in the slide, the manufacturing inspection is now complete. We expect to obtain approval in Q3 of twenty twenty five, and commence treating patients in Japan as early as Q4 twenty twenty five.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

And now on to our 1Q results. Christine and Jen will discuss The U. S. Launch details shortly. Net value of revenue for the quarter came in at $88,200,000 and gross margins in GTN were pretty consistent with prior quarters.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

As you all know, 1Q tends to be a bit light for most companies in this industry, and something that's not unique to Crystal. And we saw this last year also. But more importantly, we saw patients pausing after an intensive induction period based on their individual needs. BIJUVEC is allowing patients to achieve durable wound closure, and in turn enabling patients to take control of their lives. This is a fantastic outcome for patients and for Crystal.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

These are the outcomes that will drive our long term success, building trust and supporting the utilization of VisioVec in The U. S. For patients' lifetimes. I sometimes refer to this as the tail on the drug, which we believe will be long. These success stories also activate new patients to seek out therapy, build anticipation and momentum in our ex U.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Launches, and enrich our access discussions overseas. This is why we pay so much attention to patient experience on Vigeovac, and Jen will elaborate more on this. However, in the near term, it will be important to understand that patient pausing patterns, particularly as patients come off intensive induction therapy for the first time, are inherently unpredictable quarter to quarter. And any number we could potentially provide to estimate pausing may not be repeatable in future quarters as patients come back on treatment. We're confident that patient adds in The U.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

S, Europe, and worldwide will continue to drive long term growth for years to come. But the upcoming quarters may have some waviness as we bring on new patients, and some of our existing U. S. Patients transition to a more maintenance style regimen. It's really key to recognize that DEV is a chronic disease, and Bijevac has a strong regulatory and a patent life.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

As we move into our second full year in the market, we're excited that Visovac is being established as a lifelong first line therapy for wound management. And we are continually seeking out ways to further support patients' experience with Vizurebat. With respect to the clinical pipeline in 2025, we have four upcoming clinical readouts for CF, AATD, aesthetic skin conditions, and ocular lesions in DEB. In CF and AATD, having already demonstrated that we can safely deliver to the lung with high rates of transduction and functional cargo expression, we're optimistic heading into molecular data updates for both programs later this year, starting with KB407 this summer. In aesthetics, with the expected KB304 readout, and initiation of our KB301 Phase II later this year, momentum is building as we work to establish the first truly rejuvenated platform in aesthetics.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

We're excited to have Mark Ford join the team in support of that effort. Mark's extensive commercial experience and during many years managing the Botox brand, will be invaluable, as we work to unlock the significant value that exists in our aesthetics pipeline. On KB803, designed to treat eye lesions of deaf patients, we plan to dose our first patient later this month. And when we do, we'll provide a detailed overview of study design, dosing regimen, endpoints, etcetera. So stay tuned.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

The Visovac franchise globally will be further strengthened when we get KB803 approved. Now on to our new exciting ophthalmic program that's entering the clinic. Neurotropic hepatitis is a rare degenerative corneal disease caused by nerve damage in the eye, leading to corneal epithelial defects, ulcers, and perforation. Estimates of disease prevalence vary, but typically range from ten to fifty per one hundred thousand. Based on results from the American Academy of Ophthalmology Intelligent Research Insight, or IRIS, registry, the prevalence is approximately twenty one per one hundred thousand patients.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Importantly, NK is associated with vision loss, and in severe cases can lead to blindness. There is presently only one specific therapy available: recombinant nerve growth factor, oxybate. Oxybate targets underlying nerve defect and has been shown to improve healing, but must be dosed six times daily for eight weeks, which is highly burdensome on patients. Eye pain is also a frequently reported complication for patients receiving oxybate, compounding the issue of frequent dosing. Timo will discuss the exciting preclinical data and our value proposition and next steps with respect to NK shortly.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Finally, in the current environment, we thought it was important that investors understand how insulated crystal is from external turbulence. All of our commercial and pipeline products are manufactured in The U. S. All crystal IP, composition of matter, method of use, formulation are also housed in The US, avoiding any tariff complications in our home market. I also want to point out, we do not utilize any kind of transfer pricing with respect to IZEAVEX sales in The U.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

S. On the financial side, as many of you know, we run a tight ship. We've had seven quarters of profitable EPS. And as I've mentioned before, the expected revenue from VaishoVec far exceeds our anticipated operating expense for the next few years. This financial stability gives us the optionality to maximize shareholder value at the right time.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

And finally, with our upcoming ex US launches, we're well on our way to build a global, geographically diversified business, limiting exposure to regulatory or trade dynamics in any single market, and allowing us to continue forward in our mission of being a lifelong first line therapy for our patients, and delivering long term profitable growth. I'll now hand it off to Jennifer to share more color on U. S. Launch dynamics.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

Thank you, Krish. I am happy to share continued growth in the number of U. S. Patients gaining access to VYJUVEC, with the number of patients with reimbursement approvals exceeding five forty as of April 2025. The access landscape across The United States remains very strong.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

We continue to maintain full nationwide commercial and Medicaid coverage. We are seeing no friction with reauthorizations. All have either been approved or on process. And changes in insurance that occurred in the first quarter were also processed smoothly with timelines in line with industry standards. Reimbursement approvals were again similar to recent quarters with roughly even splits between commercial and government plans.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

We also continue to see approvals across the entire DUB population, including patients of all ages with either dominant or recessive forms of the disease. Patient preference for at home administration is again effectively unchanged with ninety seven percent treatments occurring in the home setting. As Chris mentioned, as patients are experiencing real world treatment success and wound closure, we are seeing meaningful treatment pauses and maintenance treatment. Treatment success is a fantastic outcome, not only for DEV patients, but also for Crystal. Success on VYJUVEC brings about patients and caregivers' recognition that VYJUVEC is reliable and effective in treating and retreating wounds, which will change the course of the disease and enable patients to take control of their lives.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

In turn, successful outcomes will result in lifetime VYGUVEC usage, support better understanding of the benefits of lifetime VYJUVEC usage in the medical community, and encourage new DUB patients to seek out usage of VYJUVEC, all of which will drive Crystal's long term success. The benefits of patient success on VYJUVEC is why we pay so much attention to patient experience. Our commitment to patients via Crystal Connect goes far beyond simply treating patients. Because ZYJUVEC is a lifelong therapy, our goal is to support patients so that they integrate treatments into their normal wound care routines. And because wound closure and wound durability is personalized, we strive to build long term partnerships with each patient and their family.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

Our goal is to support their success at every stage of life and throughout their treatment journey, helping them heal and live more fully. Treatment persistence is a priority education topic for our patients, their caregivers, and their prescribers, and is continually reinforced by our patient support team at Crystal Connect. We have invested in educational campaigns drawing on real world outcomes to emphasize the importance of regular treatment and the potential links between wound closure and known complications of DEB. We also work closely with our patients setting expectations that VYJUVAC is a lifelong therapy as they manage their wounds so patients are well prepared to define and meet their treatment goals and ultimately get the most from their VYJUVAC treatments. This is all in addition to our comprehensive Crystal Connect services that include onboarding education, periodic check ins, and live and virtual patient programs, all of which are designed to maximize engagement to build strong trust based relationships for the long term.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

With our CrystalConnect team, we look forward to working lockstep with patients as they integrate VYJUVEC into their first line wound care routine throughout their lives, helping them reduce the disease burden and improve their quality of life. I will now hand it off to Christine.

[Christine Wilson, Head of U.S. Sales & Marketing at Krystal Biotech]

Thank you, Jen. With the steady stream of new patients over the past few months, we continue to make progress towards our goal of making BIJUVALIVEK available to as many DEV patients as possible across The US. We have the privilege of hearing directly from patients, giving us valuable insights into the diverse way this condition impacts daily life. Each patient's journey is unique. For example, one longtime patient believed that death had a minimal impact on his career or quality of life until he began treatment with BIJUVAK.

[Christine Wilson, Head of U.S. Sales & Marketing at Krystal Biotech]

After experiencing wound improvement, he realized how much pain he had simply learned to live with. Stories like this are exactly why our work matters. These personal experiences are a key element of our consumer communication strategy. Importantly, feedback from health care providers has been clear. ZYJUVIC is making a meaningful impact across every segment of the DEV patient population.

[Christine Wilson, Head of U.S. Sales & Marketing at Krystal Biotech]

This includes both RDEB and DDEB patients ranging from mild to severe regardless of age. While each patient's path is different, physicians consistently report durable wound healing and positive outcomes. It's evident that BIJUVAG is transforming care in a powerful and measurable way. In the last quarter, we observed a slowdown compared to the previous quarters in the number of reimbursement approvals, and this is directly tied to the pace of patient start forms we received in 1Q. We're entering a phase where the patients we aim to reach are further embedded in their communities, often under the care of HCPs who may have limited experience with Deb and in understanding the importance of treatment and who see their patients less frequently. Our reps are dealing with longer interaction times with each physician to meet and educate and pull through a patient start form. We started to address this in one q by enhancing the size of our field sales team and bolstering our field activities. In addition, we continue to elevate our direct to patient marketing tactics through social media and patient education events through our advocacy partners. We are soon launching our VYJUVIC Voices program that will allow potential patients to speak with VYJUVIC patient and caregiver ambassadors to learn about their experience and success with VYJUVIC, how they've incorporated VYJUVIC into their wound care routine, and the impact it's made on their lives.

[Christine Wilson, Head of U.S. Sales & Marketing at Krystal Biotech]

We believe these initiatives will help us to overcome this temporary slowdown in the next few months. While the pace of start forms slowed in 1Q, we remain confident in the total opportunity in The US starting with the 1,200 diagnosed DEV patients. Our near term claims data and field insights continue to show that there is still a large group of already diagnosed DEV patients we have yet to reach and start on BIJUVAC. With our growing toolkit of real world experiences and powerful success stories from early adopters, we are confident in the strong growth potential ahead. At the time of launch, we set for ourselves an ambitious goal to obtain 60% market share in two years.

[Christine Wilson, Head of U.S. Sales & Marketing at Krystal Biotech]

Based on the number of reimbursement approvals over the last two quarters, we now expect it to take a few extra months to achieve that target. With that being said, without question, the BIJUVA launch has gone extremely well to date, and we are confident that with the efforts we are putting in place, that momentum will continue. Our mission remains unchanged, to support the DEV community and help all DEV patients regardless of the severity of their disease and those who may believe a treatment is out of reach, understand that VYJUVA is safe, effective, and easy to use treatment to dramatically improve the quality of their life. We are confident in the opportunity ahead. Now I will hand it to Suma.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

Thank you, Christine. Before getting into our clinical pipeline, I want to take a moment to highlight two publications that came out just last month in support of VYGVAC, including our open label extension study results. Our OLE study, published in the American Journal of Clinical Dermatology, includes findings from an expanded study population across all ages and ethnicities with a medium VisuVac exposure of over five hundred days. These data clearly demonstrated that long term use of VisuVac is safe and delivers durable wound closure with clinical benefits compounding over time. Dramatic improvements were also reported for patients with large and chronic wounds, reinforcing that wounds of any size can benefit from VYGBEC therapy.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

The second publication in the British Journal of Dermatology describes a case of VIGEWAC therapy successfully promoting wound healing following surgical excision of a large squamous cell carcinoma lesion in a recessive DEB patient. Not only did the authors report that this patient achieved closure of large wound over 100 centimeters square in size within a few months. It remained closed at four ten month follow-up. These data underscore the consistent clinical benefits provided by Vigevac and supports its use in the routine management of SCC. Both these studies reinforce the versatility of Vigevac in treating wounds of all types and sizes.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

The benefits of VYGUAC therapy for the treatment of large and chronic wounds, in particular, are showcased here, with multiple examples of large wound healing among our OLE participants. On the left, we have a case where at the start of the OLE, the patient's entire upper back was an open wound. With regular treatment, we saw steady and continual improvements approaching complete closure at the one year mark. On the right, we have images from the patient that started in our Phase III study and continued on the OLE. Here we can see not only compelling initial wound healing outcomes with the context of the Phase III, but also further improvements over the course of the OLE.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

Again, reinforcing Vigeevix versatility and the potential benefits of sustained long term therapy. We are excited for more patients to access and benefit from Vigeevq therapy as we progress in our launch in The US and worldwide. Shifting focus to our pipeline, we are now rapidly approaching a critical juncture for our lung program. Thanks to the support of the CFF Foundation, we are on track to report molecular data in CF patients this summer, followed by additional molecular data in AATD patients before year end. With initial KB408 data already demonstrating that we can deliver safely functional genetic cargo to the airways of the lung, we look forward to validating the breadth of our platform for lung delivery in a broader population of CF and AATD patients, and then moving quickly to repeat dosing.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

At the same time, we are pushing ahead our development efforts in the eye. Our lead ophthalmology program, an eye drop formulation of BVAC, we refer to as KB803, is on track for registrational study start later this month. Having already seen a dramatic improvement in the patient treated with BVAC eye drops and the compassionate use, we are excited about the prospect of delivering more comprehensive benefits to DEV patients with KB803. With our IND cleared, approximately 50 patients in a natural history study, and potential to roll over into a Phase III, we continue to expect a top line data readout before year end. Additional details on the study design and endpoints will be disclosed at the time we dose our first patient this month.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

We are excited to announce today our second clinical stage ophthalmology program, KB801, for the treatment of neurotopic keratitis. Until now, rapid clearance rate and high turnover in the front of the eye have severely limited the therapeutic potential of biologics and gene therapies for the treatment of corneal dystrophies and other front of the eye diseases. With our reducible vector platform already shown to be safe in the clinic, we have an opportunity to drive sustained expression of therapeutic biological payloads with a simple eye drop application. KB801 leverages these exact features. Developed using our proprietary HSV-one vector platform, KB-eight zero one is an eye drop designed to deliver two transgene copies to the corneal epithelium and enable sustained local production of nerve growth factor with the therapeutic goal of maintaining more consistent nerve growth factor levels and potential healing advantages in the NK patients.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

All while also significantly reducing the treatment burden for patients when compared to the currently approved recombinant protein dosing regimen of six times per day. We recently presented preclinical data on KB801 at ARVO. The presentation has been filed as an eight ks. These data clearly demonstrated that KB801 is able to efficiently transduce corneal epithelial cells in vitro and in vivo, leading to sustained NG obstruction in front of the eye. On the back of this data and with recently cleared IND, we are on track to dose the first patient with KB801 in a Phase onetwo study later this month.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

Head to head data comparing the pharmacokinetics of KB801 to the recombinant human NGF are shown here. Mouse corneas were wounded to approximate the corneal lesions that are observed in the neurotropic keratitis and then treated with a single dose of either KB801 or dilution factor matched recombinant human NGF. Eyes were then collected at the specified time point for assessment of NGF levels by ELISA. Whereas detectable NGF levels dropped rapidly after administration of a recombinant protein, a single dose of KV-eight zero one resulted in sustained expression peaking at twenty four hours at levels higher than those achieved with recombinant protein and remaining elevated for many days thereafter. In a follow-up study comparing a single dose head to head with six doses of recombinant protein and approximation of the current label treatment regimen of OxoWait, we found that within fifteen minutes of the sixth recombinant protein dose, NGF levels were higher in KB801 treated eyes and remained elevated through twenty four hours after last dose.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

Both of these results in a relatively stringent mouse model gives us strong conviction in the potential of KB801 to achieve and maintain therapeutic NGF levels with infrequent dosing. Based on the preclinical data generated to date, as well as previously generated preclinical and clinical data with ophthalmic BVAC, last month the FDA cleared our IND to evaluate Kb801 in NK patients. Study preparations are underway, and we expect to dose the first patient in a two:one randomized, placebo controlled, blinded, multicenter, phase one study in moderate to severe NK patients later this month. Additional details on the study design and endpoints will be disclosed at the time we dose the first patient. With upcoming readouts in the lung, eyes, and aesthetics, we remain on track to meet our ambitious 2025 plans, all while adding on new clinical stage program, KB801.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

We look forward to delivering our first molecular readout in CF this summer, followed by readouts for KB408 in AATD, KB803 in ocular, DEB, and KB304 in aesthetics before year end. Finally, you all probably saw the announcement regarding our ASCO presentation. Doctor. Ma Weiss, Chairman of the Cancer Institute of Cleveland Clinic, will present efficacy and safety data from inhaled KB707, a novel HSV based immunotherapy as a monotherapy in patients with solid tumor malignancies affecting the lung. We are excited about this upcoming announcement and cannot wait to share this data with you.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

This update will build on the interim data readout we provided at the end of last year in which we saw early evidence of monotherapy activity in patients in non small cell lung cancer, including an ORR of twenty seven percent. We also continue to enroll in both our intertumor and inhaled KV-seven zero seven clinical studies. We believe that we have only begun to tap in the opportunity that exists with HSV-one based gene delivery and are excited about the work ahead. With that, I would like to turn the call to Kate.

[Kathryn Romano, Executive VP & Chief Accounting Officer at Krystal Biotech]

Thank you, Suma, and good morning, everyone. I'd like to provide a few highlights from our Q1 financial results that were reported in our press release earlier today. As Chris noted, our net product revenue for VYJEVEC was $88,200,000 for the first quarter of twenty twenty five. This marked meaningful growth from the first quarter of twenty twenty four, up 95% from the prior year. Cost of goods sold was $5,000,000 compared to $2,400,000 in the prior year's first quarter, and gross margin remained relatively consistent at 94 in 1Q twenty twenty five.

[Kathryn Romano, Executive VP & Chief Accounting Officer at Krystal Biotech]

Research and development expenses were $14,300,000 compared to $11,000,000 in the prior year, primarily due to an increase in personnel related expenses, including stock compensation expense, clinical development costs, and increased manufacturing costs related to our product candidates. General and administrative expenses were $32,700,000 compared to $26,100,000 in the prior year, primarily due to an increase in personnel related expenses, including stock compensation expense, as well as charitable contributions and increased professional service expenses. Operating expenses included non cash stock based compensation of $13,500,000 as compared to $9,300,000 in the prior year's first quarter. Net income for the quarter was $35,700,000 which represented $1.24 per basic and $1.2 per diluted share. In closing, we ended Q1 well capitalized with $765,300,000 in total cash plus investments, noting quarterly growth in our overall cash and investments position and putting us in excellent shape to execute on our European launch and to invest in our significant clinical programs this year.

[Kathryn Romano, Executive VP & Chief Accounting Officer at Krystal Biotech]

And now, I will turn the call back over to Krish.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Thanks, Kate. You heard from Jen that the successes that patients are achieving today, characterized by pauses, drive our success tomorrow, and are the tailwinds that will support long term utilization, further market adoption and penetration in The U. S. And abroad, and productive access discussions with ex U. S.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Payers. You heard from Christine that our reps are dealing with longer interaction times with each physician, and we've already started to address this in 1Q by enhancing the size of our field sales team. That said, with strong patient outcomes demonstrating the value of regular VisuVec therapy, our conviction on the total market opportunity and the long term profitability of the VisuVec franchise have only been strengthened. You heard from Suma on the upcoming readouts and productive clinical pipeline, and Kate confirmed the strength of our financial situation. All of the above give us plenty of ammunition to deliver on shareholder value in 2025.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Thanks for listening, and I'd like to now open the call for Q and A.

[Operator]

Certainly. At this time, we will be conducting a question and answer 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 Alex Stranahan with Bank of America.

[Alec Stranahan, Vice President - Equity Research at Bank of America]

Hey, guys. Thanks for taking our questions. Just a couple from us. First, on the VYGUVIC sales in 1Q, curious how insurance changes or any other effects sort of impacted the trends you're seeing in 1Q? And is it fair to maybe model a bit of a rebound at 2Q, just given what the trends we saw last year? And then I've got a follow-up.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Look, there was an impact from insurance changes. It wasn't as prominent as it was last year because we already have a JCORD in place. But this is something we expect every year, and especially those with insurance changes, there's a time lag, and that part of it makes it up in 2Q, makes up that component of it catches up.

[Alec Stranahan, Vice President - Equity Research at Bank of America]

Okay. Okay, that makes sense. And then it looks like the new reimbursement approvals is slowing down as well. Since the percent access determinations appears stable at 97%, is this sort of a natural shrinking in the addressable population, or should we maybe expect some swings on this number as well? Thanks a lot.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

No, look, I was clear in my opening conversation that look, we have no hesitation, no questions about the total market opportunity, which we defined as about twelve hundred identified patients, and a total prevalence of close to three thousand in The US. But as Christine mentioned, it is taking longer for our reps to pull through a patient start form, especially as they get deeper into the community. And so to address that, we have been, we already started increasing the size of the commercial effort to address that slowness.

[Alec Stranahan, Vice President - Equity Research at Bank of America]

Okay. Makes sense. Yeah. Thanks for the color, and congrats on the continued progress.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Thanks, Alan.

[Operator]

Your next question is from Roger Song with Jefferies.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Great. Thanks for the update and taking all questions. A couple of questions from us as well. The first one is related to the compliance. Totally understand the patients are doing gray and then parting treatments as they won't close and understanding the fluctuation of the situation.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Just curious about what's your updated thoughts around the long term compliance rate going to look like? And also given that you already treated the patient for a year, do you have any patients with restarting the VetriVac? How's the experience look like in terms of the timing of the restart? And then what's the duration of the use of the VetriVac as they restart? Thank you.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Look, with respect to compliance, Roger, when we launched about, I don't know, eighteen months ago, we had expected that we'd be at 50% compliance eighteen months post launch. We're not there, we're way ahead, like as you noted. But as the mix of RDEB and DDEB patients get closer and closer to each other, we expect the compliance to hit 50% in the long term, and it's tough to predict when that would happen, but it's definitely heading in that direction, but a lot slower than we had anticipated it to be. And on your second question Which was

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

specific, I think, to pauses and restarts. As I mentioned in the script, it is very individualized for every patient. Wound closure and wound durability is just very specific to patients and where their wounds are located and the type of friction and some other outside influences that do impact the behavior of the wounds and the reopening. But yes, we definitely are seeing patients pause and then come back as their wounds are repaired or reopened or other wounds are created. Yeah, so we are seeing all that behavior.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

I mean, which is a good thing. I mean, is what we want to see in these patients. What we can see is our treatment is effective, it's durable. And as you know, these patients, even if they're durable, as Jen mentioned, sometimes they get more confident and they do more activities because of wound healing. And sometimes that can result in created wounds because of those additional activities.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

And then obviously they're so used to getting these wounds treated, signal that they need the drug again. So the flexibility really does help these patients, the drug.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Got it. Yeah, thank you for the comment. And then just one more question from me is the German, this label, this label seems pretty favorable. And then you see where you all launched veg bag in German in mid year. So how should we think about the trajectory of that compared to US?

[Roger Song, Senior Equity Research Analyst at Jefferies]

I believe in the past that you also benchmarked US launch, so do you still hold the same view here? Thank you.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Yeah, so look Roger, Germany, we plan to launch in Q3. As I mentioned in the call, patient identification is less of an issue in Europe. They're all genetically sequenced, and it really helps because now, in terms of our growth targets, we have the same objective in every country, trying to get to like a 60% market share in two years. It is a really big stretch, it's a really big goal, But even getting close to it means that the launch has gone really, really well. But in terms of trajectory, I think we need a quarter or so after launch to kind of determine, but there is quite a bit of existing demand to get on drug, both in Germany and in France.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Excellent. Thanks. Congrats for the quarter.

[Operator]

Your next question for today is from Ritu Baral with TD Cowen.

[Ritu Baral, MD & Senior Biotechnology Analyst at TD Cowen]

Good morning, guys. Thanks for taking the question. On the increase in Salesforce, Krish, how much by how much are you increasing headcount? And are these sort of boots on the ground reps or are they sort of back office helping with reimbursement and patient support and and how much of this new initiative essentially for increasing the sales force is related to rising d dab? How much is potential increasing competition coming up in the next twelve months?

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Jen, you want to take the first step?

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

Yeah, I'll take a stab at this. So we started our efforts here in Q1 based on, as mentioned, as we get deeper in the community, it takes more educational efforts of both the HCP as well as to work to engage the patients into the HCP offices. So as a result of that, we did enhance our field force efforts starting in Q1. We're still monitoring the impact of that and then evaluating how we want to proceed from there. But it's really about our goal is to achieve and strive to reach every DEM patient.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

And in doing that, it's taking more time, so we're adding emphasis support that.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

It's not a function of competitive situation at all. It's more in terms of trying to get a certain level of demand in particular quarter as the time to get a PSF is taking longer as we go further into the community.

[Ritu Baral, MD & Senior Biotechnology Analyst at TD Cowen]

And how much of this, Krish, is related to DDEB? In our last tracking survey, we were seeing, you know, rapid uptake in DDEB patients and intent to treat by clinicians in more DDEP. So we're just wondering how that impacts numbers return to treatment, whether these patients, you know, resolve their lesions faster, etc.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Yeah, I mean, percentage of these patients is definitely on the rise. DDEB patients, because they're not severe, need a little bit more education in terms of getting on Visumag. We make a strong case. We have seen a lot of dominant patients, not a lot, but a percentage of dominant patients, so just as severe as recessive, sometimes they learn to live with the disease. And so to pull them through requires education on the part of the physician, education with respect to how the disease can potentially get, there's always a chance of getting squamous cell.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

And so yeah, so you're right, Ritu, I think as we go into the community, as we start to get more dominant patients, the cycle time of getting a PSF is taking longer, and by having additional revs, and having revs cover a territory that was not as big as prior will definitely help bring it forward.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

Great,

[Ritu Baral, MD & Senior Biotechnology Analyst at TD Cowen]

thank you.

[Operator]

Your next question is from Gavin Clark Gartner with Evercore ISI.

[Gavin Clark-Gartner, Director - Biotechnology Equity Research at Evercore ISI]

Hey, guys. Thanks for taking the questions. On the compliance side, so the figure you report is still reported as since launch. I was curious how it's tracking on more of a quarterly or a run rate type of basis.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Look, Gavin, I'll answer. Look, we've been consistent in mentioning compliance since launch. It has served well over the last twelve, fifteen months or so, but definitely will paint a slightly different picture than what happens on a quarterly basis, and I'll turn it over to Jen to describe the quarterly behavior. The only point I'll make, the reason we're not putting up another stat in terms of your answer, as I mentioned in the call, it's tough to predict pausing, right? Let's say it was a particular number, and they all come back over the next quarter, and all of a sudden you're in this wavy pattern again.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

So we're being cautious about trying to put a number out that we don't have enough history on, but with that, I'll send it over.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

I I can add, I think one thing that we can be solid on is that patients are compliant to weekly therapy. That is not an issue. The convenience around at home dosing allows that weekly application with no issue at all. So as prescribed weekly to open wounds, we're 100% confident on and patients are not concerned about that at all. And I mentioned in my speech around persistence, that's the combination that we're trying to evaluate as Chris mentioned.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

So far on a quarterly basis, your patients are extremely compliant in that high range because they're taking it week to week. It's the persistence when we look at like a one year mark or an eighteen month mark that we're being cautious on as we try to understand the wounding behaviors and how we segment patients potentially based on their disease severity.

[Gavin Clark-Gartner, Director - Biotechnology Equity Research at Evercore ISI]

Got it. That makes sense. And just a follow-up on the same topic. I believe the way you do the calculation, if a patient has been completely off drug for a certain amount of time, I think they excluded from the denominator of the calculation. Is that right? And what's that period of time again?

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

No. Actually, it's while they're on therapy. So if they do come back, then we look at that start date from the entire time that they had experience with Viduvec, so they would always be in the denominator. We don't take them out. So if they come back on, like I said, their compliance percentage would go down.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

It's when they stay off that it just maintains where they were at while they were on therapy.

[Gavin Clark-Gartner, Director - Biotechnology Equity Research at Evercore ISI]

Okay. So in other words, if someone comes off drug, they don't get counted until they come back on?

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

Well, they stay in the calculation of where they were at while they were on therapy.

[Alec Stranahan, Vice President - Equity Research at Bank of America]

Okay. Got it. Thank you.

[Operator]

Your next question for today is from Sami Crowan with William Blair.

[Sami Corwin, Biotech Equity Research Analyst at William Blair]

Hey, guys. Congrats on the progress, and thanks for taking my question. I was wondering if you could talk a bit more about the EU launch and how we should think about the cadence of patient starts given the first dose needs to be administered in an office by a physician. And then kind of going back to the patient startstops. I mean, any stats you could really provide us on patients that have stopped therapy and not restarted? Thank you.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

With respect to the Yulon family, I think if there were to be a gating factor, which we are proactively addressing, it's the time it takes for the first appointment with the physician. And how many can a center or a doctor accommodate in the early stages of launch. But if we can figure that part out, once they have actually met with a physician, there's an opportunity for the patient to quickly transfer it into a home dosing situation where they can actually have caregiver administration, or in some cases, self administration. And the rate of it, I mean, how quickly can you get an appointment? It varies by country, but we have anticipated this issue over the last six months or so.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Laurent, who's the general manager of Europe, is working pretty aggressively to facilitate this. We'll know more after the first one or two months of launch how quickly this is happening and provide color. But we feel good in the sense that, I mean, this is probably the best question with respect to launch. And we talked through it and are taking steps towards mitigating that.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

I can add, our MSOs have already reached out to the centers, They've educated the physicians. Everybody's pretty excited because keep in mind, there was no corrective therapy for any of these patients. So I think most of the physicians have been educated about the drug. Now that it's approved, they see the label. So obviously now, hopefully they will prioritize getting these patients in.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

And on your second question, Sami, on starts and stops, look, there are a very small percentage of patients who do not come back on drug, and most of the time the rationale is they are undergoing a complication that's more severe than the nature of DEP itself, which is a skin manifestation. Know, squamous cell carcinoma, mortality, and in terms of coming back, outside of that factors, I don't want call them beyond, that has nothing to do with the safety of the drug, or the efficacy of the drug, or the convenience, patients come back on drug. Some come back in thirty, some come back in '60, some come in '90, some 120 plus, it all depends on, it's highly individual, depends on where the wound is, if they're recessive, if they're dominant, but we honestly have had no concern at all with respect to them coming back on drug. And we actually like that pattern because that's the tail on the turf that we believe will continue for a very long time. But Jen and her team, they do a great job of managing the patient experience while on drug, and it's really served us well.

[Sami Corwin, Biotech Equity Research Analyst at William Blair]

Got it. Appreciate the color.

[Operator]

Your next question is from Andrea Newkirk with Goldman Sachs.

[Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs]

Good morning. Thank you for taking the question. Krish, in the context of the approval of a competitor product last week, curious based off of your market research, how you're thinking about VIGIVAC utilization on the forward and how those two products can coexist? And then Suma, just quickly, if you could speak a little bit about a little bit more about what we should be looking for at ASCO, how many more patients or extended follow-up will be included? Thank you.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Look, I'll start on the recent approval question. When Crystal was founded in 2016, it was founded on the principle that some of felt the an autologous way of treating DEB is not That was the premise of crystal founding. And I'll turn it over. There are issues on this, I mean, there's so many differences on safety side, efficacy side, convenience side. Suma, if you can quickly

[Suma Krishnan, President, Research & Development at Krystal Biotech]

mean, as you said, we don't consider the product competition at the moment because of the differences. Obviously it's indicated for just RDAT. And clearly there are safety differences, as you can see, on oncogenesis, anaphylaxis, and also the graft is not sterile. So that itself can cause infection in these patients. So there are a lot of safety issues from an efficacy perspective.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

There is a controlled study, not blinded. And it's done, of the patients came out of Stanford. So it's an unblinded study unlike us. We are randomized, blinded, multi site study. And if you look at efficacy, the efficacy is pretty robust for us, one hundred percent closure at six months, there's fifty percent at six months.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

I mean, though they say there's improvement in pain, adverse event is pain induced during surgery, The patient has to be biopsied. The biopsy can fail, they have to repeat administer. And if you look at their dose, it's just forty centimeters square of graft. Often these wounds are not exactly the shape of a graft, so they have to in their label. They have to degrade these wounds, open the wounds to administer the drug.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

So there is additional burden to these patients. So it's apples and oranges, whereas us, it's home administered, easy to compare label to label. We don't consider this as a competition. So now, I mean, second question was in ASCO. We are absolutely excited about our ASCO poster.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

It's going to be a poster talk. Many of the physicians are, I mean, it's novel because we can administer cytokines directly to the lungs in a safe, effective manner. We've already demonstrated that. I mean, safety is one of the biggest concerns. Have overcome that burden.

[Suma Krishnan, President, Research & Development at Krystal Biotech]

In December we presented the data, 11 patients in NMCCL. And at that time, we had data cut of November. Now we have additional, I mean, three or four months data on the same patients that we presented. So you will see revised numbers on efficacy, safety, as well as you will see images of the scans where you saw shrinking of the tumor. So we're very, very excited about the poster.

[Operator]

Your next question for today is from Debjit Chattopadhyay with Guggenheim Securities.

[Debjit Chattopadhyay, Senior Managing Director at Guggenheim Partners]

Hey, good morning, and thank you for taking the questions. I have a couple. So number one, could you elaborate on the subpoena with respect to the genetic testing? And does that impact prior revenue recognition or future implications?

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Hey, on that, we're fully cooperating with the DOJ, and we have no further comment on that at the moment.

[Debjit Chattopadhyay, Senior Managing Director at Guggenheim Partners]

And the second question, just to clarify, the 83 compliance rate that is being reported, that includes the patients who are, let's say one week on, one week off, right? I mean, your 83% assumes that there is gonna be partial compliance, at least in the patients who are on therapy for the longest.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Correct.

[Jennifer McDonough, SVP of Patient Access, Analytics & Operations at Krystal Biotech]

That's right. It includes any missed dose while they're on therapy. So that's how it gets adjusted lower. If somebody misses and then comes back, it would calculate those missed doses.

[Debjit Chattopadhyay, Senior Managing Director at Guggenheim Partners]

And one last follow-up. In the patients who are still being treated or managed at the community centers who you still don't have on therapy, did we assume off the bat, these are milder patients and compliance to start off is going to be on the lower end of what you currently have versus the more severe RDEB patients? Thank you.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Look, early on, irrespective of whether you're RDEB or DDEB in the community, or a COE, your compliance is pretty good. Where the lines deviate is the wound, of the reasons for patients stopping on drug, and the biggest reason, is all wounds are healed. And all wounds are healed happens faster in a dominant patient, much faster than in a recessive patient. And then in terms of comeback times, dominant patients take a bit longer on the repeat than the RDF patients who are much more sensitive, much more focused on their wounds. Outside of that, besides one being, and then there's a spectrum, right?

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

There's a severe, there's a moderate, there's a mild, but the nature of getting on, being so early on, the compliance is no different between recessive and dominant for an extended period.

[Operator]

Your next question for today is from Yigal Nachomovitz with Citigroup.

[Yigal Nochomovitz, Director at Citigroup]

Hi, Krish and team. I had a question on the Japan market with the upcoming approval there. Can you just discuss how the Japan market will contribute to the global revenue picture for VYGUVECK? And do you have any numbers in terms of the identified patients there in Japan based on genetic testing, as well as the overall prevalence compared to Europe and The United States? Thanks.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Yeah, you should look, the overall prevalence, and I'm giving a number that could be off ten percent, is about five hundred, north of two hundred, two twenty five, something in that range are fully identified. We just had the inspection, which went pretty well. So it's a pretty attractive pricing tends to be, I wouldn't say comparable to The US, but somewhere between US and Europe price is where Japan price ends, if we do a good job of making a strong value proposition. And if you look at some of the other companies in the rare disease market, Japan has been very attractive compared to some European countries. And so we look forward to launching in Japan hopefully by the end of this year, if not early next year.

[Yigal Nochomovitz, Director at Citigroup]

And you mentioned you just had the inspection. What was the outcome of that?

[Suma Krishnan, President, Research & Development at Krystal Biotech]

I mean, we had both the clinical and the CMC inspection because we did have Japanese particular study. And obviously our manufacturing facility at Encoris was inspected for the drug.

[Krish Krishnan, Chairman & CEO at Krystal Biotech]

Yeah, because we don't have the official answer here, I can broadly say the inspection went well. There were no Yeah.

[Alec Stranahan, Vice President - Equity Research at Bank of America]

Okay. Thank you.

Participants

Executives

• Stéphane Paquette, VP - Business Development
• Krish Krishnan, Chairman & CEO
• Jennifer McDonough, SVP of Patient Access, Analytics & Operations
• Christine Wilson, Head of U.S. Sales & Marketing
• Suma Krishnan, President, Research & Development
• Kathryn Romano, Executive VP & Chief Accounting Officer

Analysts

• Alec Stranahan, Vice President - Equity Research at Bank of America
• Roger Song, Senior Equity Research Analyst at Jefferies
• Ritu Baral, MD & Senior Biotechnology Analyst at TD Cowen
• Gavin Clark-Gartner, Director - Biotechnology Equity Research at Evercore ISI
• Sami Corwin, Biotech Equity Research Analyst at William Blair
• Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs
• Debjit Chattopadhyay, Senior Managing Director at Guggenheim Partners
• Yigal Nochomovitz, Director at Citigroup