Krystal Biotech, Inc. Q3 FY2024 earnings call

• VYJUVEK launch: Net revenue for Q3 was $83.8M, with total net VYJUVEK revenues since launch exceeding $250M. Reimbursement approvals for VYJUVEK are over 460 patients. The Krystal Connect team focuses on patient experience, with 97% of weekly treatments in home settings and 87% compliance among DEB patients.
• Global opportunities: Ophthalmic formulation of VYJUVEK is progressing to a registrational study. In Europe, on track for a CHMP opinion by year-end and has early reimbursed access in France. Japan New Drug Application submitted, expected launch in 2025.
• Pipeline: Jeune Aesthetics KB301 had positive efficacy signals, moving to Phase 2. Upcoming data readouts for HSV-1 based gene delivery to lung, KB408, and KB707 programs. KB301 shows potential in regenerative aesthetics.
• Profitability: Profitable this quarter at $0.95 per share, final litigation accrual done. Strong balance sheet with $374M cash-on-hand and total cash plus investments at $694.2M.

The main product segment is VYJUVEK. Net VYJUVEK revenue for the third quarter was $83.8 million. Since launching in August 2023, total net VYJUVEK revenues have surpassed $250 million. Cost of goods sold for the quarter was $6.7 million, which is about 8% of net product revenue, resulting in a gross margin of 92%.

• VYJUVEK launch has exceeded $250M in net revenue, with ex-US expansion and eye drop formulation of KB803 expected to drive future growth.
• Multiple pipeline readouts upcoming, including for HSV-1-based gene therapy platform. Anticipate demonstrating potential of the platform through these readouts.
• Acknowledged potential holiday season disruption but remains confident in VYJUVEK launch trajectory. Guidance for 2025 will be clearer as ex-US launches and pipeline progress become more defined.

• Potential disruption in revenue due to holiday season as families may have life interruptions.
• Uncertainty in European pricing negotiations and ex-US launch timelines and market reception.
• Volatility in patient compliance rates and impact of reimbursement caps on revenue modeling.

Q: Could you give us a sense of how many patients are at or near their annual cap currently? Is this something we should be looking for when we model sales into year-end or should the new patient adds throughout the year sort of offset this?

A: Krish mentioned they're not disclosing the exact number but net revenue growth is expected to be smooth and on track.

Q: How do you expect the decline in compliance to impact revenue?

A: Krish said they're ahead of initial compliance expectations and will have more clarity on 2025 guidance later.

Q: I was just curious about your broader marketing campaign. Can you comment to what extent that's actually helping identify patients or if any of that effort has translated to a new starts?

A: Christine Wilson said social media campaigns are helping reach patients not yet engaged, but volumes are low in the ultra-rare space but they're getting there.

Q: Have you guys received the 180-day questions? And if so, can you comment on the topics and whether you've responded and whether at this point, you're expecting oral arguments?

A: Suma Krishnan said they received 180-day questions, responses were submitted, and no oral meeting is expected at the moment.

Q: How do you expect the decline in compliance to impact revenue?

A: Krish said they're ahead of initial compliance expectations and will have more clarity on 2025 guidance later.

Q: How should we think about 4Q given patients approaching reimbursement caps and holiday season? And why not guide to the U.S. market for 2025 guidance?

A: Krish said holidays may cause some disruption but still on track for 720 reimbursement approvals. Guidance for 2025 is uncertain due to ex-US launch complexities.