Krystal Biotech — Third Quarter 2026 Earnings Summary

Financial Performance:

• Global VYJUVEK net product revenue was $127.3 million for the quarter ended September 30, 2026, a 30% increase compared to $97.8 million in the prior year quarter.
• Total product revenue, net for the nine months ended September 30, 2026, was $362.9 million, up from $282.0 million in the same period of 2025.
• Gross margin for the third quarter of 2026 was 94%.
• Net income for the quarter ended September 30, 2026, was $63.1 million ($2.13 basic, $2.05 diluted per share), compared to $79.4 million ($2.74 basic, $2.66 diluted per share) in the prior year quarter.
• Net income for the nine months ended September 30, 2026, was $173.8 million ($5.90 basic, $5.66 diluted per share), compared to $153.4 million ($5.31 basic, $5.14 diluted per share) in the prior year period.
• Cash, cash equivalents, and investments totaled $1.2 billion as of September 30, 2026.
• Research and development expenses for the quarter were $14.9 million (including $2.6 million stock-based compensation), compared to $14.6 million in the prior year quarter.
• Selling, general, and administrative expenses for the quarter were $33.7 million (including $11.3 million stock-based compensation), compared to $37.6 million in the prior year quarter.
• Cost of goods sold for the quarter was $7.6 million, compared to $4.3 million in the prior year quarter.

Guidance and Future Outlook:

• Non-GAAP combined R&D and SG&A expense guidance for full year 2026 is set at $155.0 million to $165.0 million.
• The company expects to launch VYJUVEK in Italy in early 2027 following the completion of pricing negotiations.
• Registrational study for KB407 is on track to initiate in 2027.
• The company expects to complete enrollment of approximately 60 patients in the EMERALD-1 study (KB801) and report top-line results in 2027.
• The company expects to enroll approximately 70 patients in the KYANITE-1 dose expansion cohort for KB707 by mid-2027.
• Interim study results for KB111 are expected before the end of the year.
• Interim study results for KB407 are anticipated in the first half of 2027.
• Interim study results for KB408 are expected in 2027.
• Top-line results for the IOLITE study (KB803) are expected shortly after the last patient visit in February 2027.
• The company expects to meet with the FDA in the first quarter of 2027 regarding KB111 study designs.
• Jeune Aesthetics expects to initiate a Phase 2 study of KB304 in 2027.

Business Segments and Product Lines:

• VYJUVEK: Over 760 reimbursement approvals secured in the U.S. Pricing negotiations are complete in Germany and Italy; ongoing in the UK, Spain, and France. Marketing authorization applications submitted for Australia and expected for Switzerland before year-end.
• KB111 (Hailey-Hailey disease): Enrollment complete in the HALITE-1 study; dosing ongoing. A HHD-specific severity scale has been developed.
• KB113 (Gorlin syndrome): Clinical data showed regression in more than 80% of assessed basal cell carcinoma lesions in a three-patient pilot study. Discussions with the FDA regarding advanced clinical development are underway.
• KB803 (Corneal abrasions): Three additional patients enrolled in the IOLITE study, including one child aged one year.
• KB801 (Neurotrophic keratitis): Enrollment ongoing in the EMERALD-1 study; progress is slower than anticipated due to eligibility criteria and placebo-controlled trial challenges in an indication with approved therapies.
• KB407 (Cystic fibrosis): Three patients currently dosed; three additional patients expected to be dosed before year-end. Selected for the FDA's Complex Innovative Trial Design (CID) Meeting Program.
• KB408 (Alpha-1 antitrypsin deficiency): Enrolling in repeat-dose Cohort 2B of the SERPENTINE-1 study.
• KB707 (Non-small cell lung cancer): Interim results from the KYANITE-1 study showed an objective response rate (ORR) of 31% and a disease control rate (DCR) of 75% when combined with pembrolizumab.
• KB304 (Wrinkles of the décolleté): Lead program of Jeune Aesthetics, a wholly owned subsidiary.

Market and Competitive Landscape:

• VYJUVEK is the first redosable gene therapy and first genetic medicine approved in the U.S., Europe, and Japan for dystrophic epidermolysis bullosa.
• The company is expanding its prescriber base in the U.S. and converting physician interest into patient starts in Germany, France, and Japan.
• The company is actively engaging with the FDA regarding complex clinical trial designs for KB407.

Risks and Challenges:

• Patient enrollment in the EMERALD-1 study (KB801) has progressed slower than initially anticipated.
• Forward-looking statements regarding clinical trial timelines, regulatory approvals, and financial guidance are subject to uncertainties, including regulatory review outcomes and the ability to enroll patients on anticipated timelines.
• The company notes that stock-based compensation expense is inherently uncertain and cannot be confidently estimated for the full year 2026, which could materially affect GAAP combined R&D and SG&A expense calculations.

Management Commentary and Tone:

• Krish S. Krishnan, Chairman and CEO, stated that continued growth in VYJUVEK revenue is supporting profitability and funding pipeline advancement.
• Management expressed confidence in Krystal's long-term growth prospects and commitment to disciplined capital allocation, citing the company's financial strength.
• The tone reflects confidence in the company's ability to invest in programs and global commercial expansion while returning capital to shareholders.

Other Key Points:

• The Board of Directors authorized a share repurchase program of up to $400 million, with repurchases expected to occur opportunistically over the next two years.
• VYJUVEK has generated $1.1 billion in revenue since launch.
• The company is headquartered in Pittsburgh, Pennsylvania.
• KB113 demonstrated an abscopal effect, with regression observed in both injected and non-injected lesions.
• KB407 demonstrated successful delivery and expression of wild-type CFTR protein in the lungs of patients earlier in the year.