Q4 2023 Krystal Biotech Inc Earnings Call

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Operator: Thanks for holding. We appreciate your time and patience. Please stay on the line, and we'll be back in just a moment. www.krishnandkritichannel.com. Thank you for standing by and welcome to the Krystal Biotech fourth quarter and full year 2023 earnings conference. At this time, all participants are in a listen-only mode after the speaker's presentation.

Yes.

Speaker Change: Thank you for standing by and welcome to the Crystal biotech fourth quarter and full year 2023 earnings conference call.

Speaker Change: At this time all participants are on a listen only mode. After the speaker's presentation, there will be a question and answer session.

Operator: 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, the Head of Investor Relations.

Speaker Change: As a reminder, today's conference is being recorded I would now like to hand, the conference over to your host Mike Dodge head of Investor Relations and corporate Communications. Please begin.

Head of Investor Relations: Good morning, and thank you all for joining today's call. Earlier today, we released our financial results for the fourth quarter and full year of 2023. The press release is available on our website at www.krystalbio.com. Our earnings 8K was filed earlier today.

Mike Dodge: Good morning, and thank you all for joining today's call.

Earlier today, we released our financial results for the fourth quarter and full year of 2023.

Mike Dodge: The press release is available on our website at Www Dot Crystal bio Dot Com our earnings 8-K was filed earlier today.

Head of Investor Relations: Additionally, we filed a 10-K with the SEC. Joining me will be Krish Krishnan, Chairman and Chief Executive Officer, Suma Krishnan, President of Research and Development, and Kate Romano, Chief Accounting Officer. I'd like to note that during this webcast, we will be making a number of forward-looking statements about our future business plans, strategies, financial performance and projections, product candidate development plans, including statements about Vijavec. These forward-looking statements involve risks and uncertainties, any of which are beyond Krystal's control. Actual results could materially differ from these forward-looking statements, as any and every such risk can materially and adversely affect the business, results of operations, and trading price of Krystal's common stock.

Speaker Change: Additionally, we filed our 10-K with the SEC.

Speaker Change: Joining me will be Krish, Krishnan, Chairman and Chief Executive Officer.

Speaker Change: My question President of research and development, and Kate Romano, Chief Accounting Officer.

Speaker Change: I'd like to note. During this webcast, we will be making a number of forward looking statements about our future business plan strategies financial performance isn't projections product candidate development plans, including statements about VAG back. These forward looking statements involve risks and uncertainties any of which are beyond Crystal control Act.

Speaker Change: Full results could materially differ from these forward looking statements.

Speaker Change: And such risk can materially and adversely affect the business results of operations and trading prices of crystals common stock for a detailed description of applicable risks and uncertainties. We encourage you to review our SEC filings.

Krish S. Krishnan: For a detailed description of applicable risks and uncertainties, we encourage you to review our SEC filing. The company does not undertake any obligation to publicly update its forward-looking statements, including any financial projections provided today, based on subsequent events or circumstances. With that, let me now turn the call over to Krish. Meg, thank you.

Speaker Change: The company does not undertake any obligation to publicly update its forward looking statements, including any financial projections provided today based on subsequent events or circumstances.

Speaker Change: With that let me now turn the call over to Chris.

Chris: Meg Thank you.

Krish S. Krishnan: Good morning, and thanks for joining us on the Krystal Earnings Call. 2023 was a spectacular year for Crystal and an inflection point for our company, with the approval and launch of iGVAC for the treatment of dystrophic epidermolosis bullosa, or DEB. We've now brought to market the first and only treatment that addresses the genetic cause of this debilitating disease. It has been immensely rewarding to hear from patients, families, and the entire DEP community about the positive impact YGVEC has had on their lives. It's also exciting to have secured this first approval for an entirely new treatment paradigm. We believe that a re-dosable topical off-the-shelf gene therapy that can be dosed at home by a HCP holds significant potential not only for deaf patients but for many others suffering from other rare and serious diseases.

Chris: Good morning, and thanks for joining the Crystal zoning school.

Chris: 2023 was a spectacular year for Cristal, and an inflection point for our company.

Chris: With the approval and launch of <unk> for the treatment of dystrophic, Epidermolysis <unk> or <unk>, we have now.

Chris: Brought to market the first and only treatment that addresses the genetic cause of this debilitating disease.

Chris: It has been immensely the boarding to hear from patients.

Chris: <unk> and the entire Deb community on the positive impact why does your work has had on their lives.

Chris: It's also exciting to have secured this first approval for an entirely new treatment paradigm.

Chris: We believe that a re dosing both topical off the shelf gene therapy that can be dosed at home by HCP holds.

Chris: Holds significant potential not only for patients, but for many of those suffering from other rare and serious diseases.

Krish S. Krishnan: We've only just begun tapping into the power of the HSV-1-based gene therapy platform. And as I will share in a moment, our U.S. launch of IZEVAC is in a great place. Tracking closely to some of the most successful rare disease launches in recent years, with over $50 million in net product revenue from Vizuvac in the last six months since approval, we've seen rapid uptake across the U.S. Patient compliance is high. Axis is almost behind this, and all these are starting to reflect in our net revenue.

Chris: We've only just begun tapping into the power of the head to three one based gene therapy platform.

Chris: As I will share in a moment.

Chris: Our U S launch of advisory work is in a great place tracking closely to some of the most successful rare disease launches from recent years with over $50 million of net product revenue from <unk>.

Chris: In the last six months since approval.

Chris: We've seen rapid uptake across the U S.

Chris: Patient compliance is high.

Chris: Access is almost behind us.

Chris: And all of these are starting to reflect in our net revenue.

Krish S. Krishnan: We're also making significant progress globally and look forward to growing the number of patients benefiting from VizorVac in the days, months, and years to come. Our success in 2023 allowed us to deliver another year of significant value creation for our shareholders and, perhaps more importantly, set us down a path for continued growth in the years ahead. Our vision for Krystal has always been to build a fully integrated, commercially established biotechnology company developing and commercializing a portfolio of high-value genetic medicines and generating long-term shareholder risk.

Chris: We're also making significant progress globally and look forward to growing the number of patients benefiting from buys you're back in the days months and years to come.

Chris: Our success in 2023 allowed us to deliver another year of significant value creation for our shareholders.

Chris: And perhaps more importantly.

Chris: Let us down a path.

Chris: <unk> growth to come.

Chris: Our vision for Crystal has always been to build a fully integrated commercially.

Chris: Established biotechnology company.

Chris: Developing and commercializing our portfolio of high value genetic medicines.

Chris: And generating long term shareholder returns.

Krish S. Krishnan: Thanks to a breakthrough year in 2023 and growing Visevec revenue, we are positioned better than ever to deliver on that vision. We expect to have at least five clinical trials this year. We have alignment with the FDA on a development path for BVAC formulated as eye drops to help treat eye lesions in deaf patients and could potentially start another clinical trial in the second half of 2024. With strong financial resources, an FDA-approved, re-dosable gene therapy platform, and two commercial-scale GMP manufacturing facilities, we're uniquely positioned to develop and bring to market highly differentiated gene therapies for many rare and serious diseases We look forward to making continued progress in 2020, as you have no doubt seen. Our commercial launch is proceeding exceptionally well. We reported net visoric revenue of $42.1 million for the fourth quarter and 50.1 million for 2023. Gross margins were 93% for the quarter, in line with our previous guidance of margins north of 90% at launch and expected to improve to over 95% after a few years. Gross net adjustments in the fourth quarter were 14 percent.

Chris: Thanks to a breakthrough year in 2023 and growing basically at revenue, we are positioned better than ever to deliver on that vision.

Chris: We expect to have at least five clinical trials.

Chris: This year.

Chris: We have alignment with the FDA on a development path for <unk>.

Chris: Formulated as eye drops to help treat lesions and that patients.

Chris: And could potentially start another clinical trial in the second half of 2024.

Chris: With strong financial resources, and FDA approved dose of <unk> gene therapy platform and to commercial scale GMP manufacturing facilities, we're uniquely positioned to develop and bring to market a highly highly differentiated gene therapies for many rare and serious diseases.

Chris: We look forward to making continued progress in 2024.

Chris: As you have no doubt seen by now.

Chris: Our commercial launch is proceeding exceptionally well.

Chris: We reported net revenue of $42 1 million for.

Chris: For the fourth quarter and $50 1 million for 2023.

Chris: Gross margins were 93% for the quarter.

In line with our previous guidance of margins north of 90% at launch and expect it to improve to over 95% after a few years.

Chris: Gross to net adjustments in the fourth quarter were 14%.

Krish S. Krishnan: Our long-term guidance on GTN is unchanged, and we expect it will settle into the mid to high teens range, reflecting a roughly even split of death patients on commercial and government plans with respect to future revenue. I'd like to highlight that earlier this year, a permanent J code was assigned to Vizier. The J-Code is an important milestone for finalizing coverage by Medicaid as it is required for many mandatory Medicaid states. Although this is a long-term tailwind and sets us up for sustained broad access in the U.S., I will note that revenue for the month of January was temporarily impacted as commercial and Medicaid coverage plans, including those that were previously covering Vizuvac under a temporary J-code were updated to the now issued permanent take. You can also expect to see an impact this year, as we accrue for patients on contracted commercial plans, potentially hitting the price cap of $900,000 gross per patient per calendar year in 2025. Before sharing details on the U.S. launch,

Chris: Our long term guidance on GTS is unchanged.

We expect it will settle into the mid to high teens.

Chris: Range, reflecting a roughly even split of their patients on commercial and government plans.

Chris: With respect to future revenue.

Chris: Like to highlight that earlier this year a permanent J code was assigned device UA.

Chris: The takeaway is an important milestone for finalizing coverage by Medicaid as it is required.

Chris: Many mandatory Medicaid states.

Chris: Although this is a long term tailwind and sets us up for sustained broad access in the U S.

Chris: I will note that the <unk>.

Chris: Revenue in the month of January was temporarily impacted.

Chris: As commercial and Medicaid coverage plans.

Chris: Including those that were previously covering baijiu back under.

Chris: There are temporary J code.

Chris: That updated.

Chris: So they're now issued permanent J code.

Chris: You can also expect to see an impact this year.

Chris: As we accrue for patients on contracted commercial plans.

Chris: Tensely hitting the price cap of 900000.

Chris: Dollars gross per patient per calendar year in 2024.

Chris: Before sharing details in the U S launch.

Krish S. Krishnan: I'd like to highlight a revision to our outlook on the total market opportunity that exists for Pfizer now that we have the benefit of six months of launch data in the U.S., and a clear line of sight on registrations and patient numbers in Europe and Japan, and alignment with the FDA on the development plan to get BVEC formulated as eye drops to treat eye lesions in deaf patients. We're confident in the total global market opportunity for Vizovac to be over a billion dollars, based on the trajectory of our launch and the feedback we're receiving from the field. Our conviction in the total U.S. market opportunity for Vizervac is only growing. We have spoken before about a total death population of 3,000 in the U.S., of which 1,200 are identified. That 1,200 figure, initially based on independent third-party claims, data sets from multiple sources, has been further strengthened by our latest data from the field, which includes interactions with over 1,500 unique HCPs, as well as real-time claims, and alerts that they use to optimize field development. We expect to close the gap between 1200 and 3000 in the years to come.

Chris: I'd like to highlight a revision to our outlook on the total market opportunity that exists for advisors.

Chris: Now that we have the benefit of six months launch data in the U S.

Chris: And a clear line of sight on registrations in patient numbers in Europe and Japan.

Chris: And alignment with the FDA on the development plan to get Vivek formulated eye drops to treat lesions and that patients were confident in the total global market opportunity for advisors to get over $1 billion.

Based on the trajectory of our launch.

Chris: And the feedback we're receiving from the field.

Our conviction in the total U S market opportunity for <unk> is only growing.

Chris: We have spoken before about a total that population of 3000 in the U S.

Chris: It's 1200 are identified.

Chris: That 1200 figure initially based on independent third party claims data sets from multiple sources.

Chris: It has been further strengthened by our latest data from the field.

Chris: Which includes interactions with over 1500 unique hcp's as well as real time claims.

Chris: Alerts that they used to optimize field developments.

Chris: We expect to close the gap between 1200 and 3000 in the years to come.

Krish S. Krishnan: We're already finding new patients who are not part of the identified pool in the first few quarters of launch, and we expect this to continue, if not accelerate, as we increase our focus on patient finding in later quarters. Once we reach a meaningful threshold of 1,500 patients, we'll update our identified patient population number. Also, Christine Wilson has now joined Krystal as the Head of Sales and Marketing, reporting to me. Christine brings decades of commercial experience to Crystal, including a strong record of leading U.S. rare disease sales teams at Trevere, Riata, and Shine.

We're already finding new patients.

Chris: Patients not part of the identified pool.

Chris: In the first few quarters of launch and we expect this to continue if not accelerate as we increase our focus on patient finding in later quarters.

Chris: Once we reach a meaningful threshold of 1500 patients we'll update our identified patient population number.

Chris: Also.

Speaker Change: Christine Wilson has now John Chrystal, that's ahead of your sales and marketing reporting to me.

Christine brings decades of commercial experience of cristal, including a strong record.

Speaker Change: Of leading U S rare disease sales teams at severe reata and Shire.

Krish S. Krishnan: Most importantly, Christine has direct experience finding and activating rare disease patients in the community and will play a critical role for us as we continue to penetrate and grow our identified patient pool in the months and years to come. Outside of the United States, we benefit from patient registries, which give us a high degree of confidence in the global market opportunity. In France, Germany, Italy, Spain, and the U.S. alone, we believe there are over 2,200 dead patients that could benefit from BiJuVaccin, and there are hundreds more in Japan. We look forward to seeing continued growth in 2024, not only in the US, but also globally as we make progress toward EU and Japanese approval. As Sima will share, we're on track to launch in both regions in 2025. Now, I'd like to share a few highlights on the U.S. loan.

Speaker Change: Most importantly, Christine has direct experience finding and activating rare disease patients in the community.

Speaker Change: And will play a critical role for us.

Speaker Change: As we continue to penetrate in.

Speaker Change: And grow our identified patient pool in the months and years to come.

Speaker Change: Outside of the United States be benefit from patient registries, which give us a high degree of confidence in the global market opportunity.

Speaker Change: In France, Germany, Italy, Spain, and the U S alone. We believe there are over 2200 patients that could benefit from <unk>.

Speaker Change: And there are hundreds more in Japan.

Speaker Change: We look forward to seeing continued growth in 2024.

Speaker Change: Only in the U S.

Speaker Change: Also globally.

Speaker Change: As we make progress towards EU and Japanese approvals.

Speaker Change: As some of US sure we're on track to launch in both regions.

Speaker Change: In 2025.

Speaker Change: Now I'd like to share a few highlights in the U S launch.

Krish S. Krishnan: With respect to patient star forms, we're pleased to report that we have now received star forms representing 35% of the initial 1,200 identified patient polls. We're happy to see that we're both expanding and deepening the prescriber base as we progress with our launch. We now have over 195 unique prescribers of Vizuvac, up from the 136 unique prescribers we reported in the third quarter. We are encouraged to see the broadening of the Vizuvac prescriber base as awareness of our product grows through both our direct promotion efforts and organically through patient groups and the medical community. We're also seeing increasing depth of prescribing as the number of physicians that had written two or more prescriptions for death patients increased from 37 in the third quarter to 60 as of mid-February.

Speaker Change: With respect to patient start forms were pleased to report that one we have now received top farms, representing 35% of the initial 1200 identified patient pool.

Speaker Change: We're happy to see.

Speaker Change: That we're both expanding and deepening the prescriber base I see progress in our launch.

Speaker Change: We now have over 195 unique prescribers of <unk>.

Up from the $1 36 unique prescribers, we reported in the third quarter.

Speaker Change: We're encouraged to see the broadening adviser by prescriber base as awareness of our product grows through both our direct promotion efforts and organically through patient groups in the medical community.

We're also seeing increasing depth of prescribing.

Speaker Change: A number of physicians that have written two or more prescriptions for that patients increased from 37 in the third quarter 2016.

Speaker Change: As of mid February.

Krish S. Krishnan: We believe this increase is a reflection of the growing familiarity among prescribers with Vizuvac, and we expect this positive trend to continue as patient outcomes on Vizuvac become more widely known. With respect to the split of PSFs between centers of excellence in the community, trends are in line with what we saw earlier in the third quarter. Forty-seven percent of patient start forms received as of mid-February were from Centers of Excellence, and the balance of the scripts were written by community physicians. We continue to see a steady flow of start forms from centers of excellence at a cadence correlated to EV clinic days. The split between DDEB and RDEB start forms is also largely in line with what we saw in the third quarter, with a slight uptick in the proportion of prescriptions received from DDEP patients. Importantly... We are starting to see significant conversion of patients converted to paid drugs with 228 patient reimbursement approvals secured today. Most approvals are for six months or more, so a few have been up for reauthorization so far, but all have been either approved or still in process.

Speaker Change: We believe this increase is a reflection of the growing familiarity among prescribers and advisory work and we expect this positive trend to continue especially on outcomes and basically back become more widely known.

Speaker Change: With respect to the split of PSS between centers of excellence in the community trends are in line with what we saw earlier in the third quarter.

Speaker Change: 47% of patients start forms received as of mid February.

From centers of excellence and the balance of the scripts are written by community physicians.

Speaker Change: We continue to see a steady flow of start forms from centers of excellence at a cadence correlated to EBIT clinic days.

The split between D debt in order to start forms is also largely in line with what we saw in the third quarter with a slight uptick in the proportion of prescriptions.

Speaker Change: Received from <unk> patients.

Speaker Change: Importantly.

Speaker Change: We are starting to see significant conversion of patients converted to paid drug.

Speaker Change: With 228 patient.

Speaker Change: Reimbursement approvals secured to date.

Speaker Change: Most approvals for six months or more so a few have been up for reauthorization, so far but all have been either approved or still in process.

Krish S. Krishnan: In line with our high conversion rates, access is in a great place. We have received positive coverage policies or decisions for 97% of lives covered by commercial plans and 88% of lives covered by Medicaid. With the permanent J-Code now assigned, the trajectory for access and reimbursement approvals is only looking better. At-home administration demand continues to be high, now two full quarters into launch, with 98% of the drug starts occurring in a home setting. And accordingly, we also continue to see strong patient compliance to once-weekly treatment while on the drug, holding at 96% in the fourth quarter.

Speaker Change: In line with our high conversion rates access is in a great place.

Speaker Change: We have received positive coverage policies of decision for 97% of lives covered by commercial plans and 88% of lives covered by Medicaid.

With the permanent J code now assigned.

Speaker Change: Trajectory for access and reimbursement approvals is only looking better.

Speaker Change: At home administration demand continues to be high now two full quarters into launch with 98% of the drug starts occurring in a home setting.

Speaker Change: And accordingly, we also continue to see strong patient compliance to once weekly treatment, while on drug holding at 96% in the fourth quarter.

Krish S. Krishnan: We believe that compliance is both a reflection of the significant clinical benefits that can be realized with the Viz-a-Vec therapy, as well as our commitment to the patient experience and ensuring a smooth process for getting on drugs. At this point in our launch, I think it's also worthwhile to reiterate and update on some of the key dynamics that shape the trajectory of the Vijavec update. Although there is a temptation to think that for a severe rare disease such as DEBB, all patients would get prescriptions the day after approval, there are practical considerations that need to be understood.

Speaker Change: We believe the compliance is both a reflection of the significant clinical benefits that can be realized with device Vic therapy.

Speaker Change: As well as our commitment to the patient experience and ensuring a smooth process to getting on drug.

Speaker Change: At this point in our launch I think it's also worthwhile to reiterate and update on.

Speaker Change: On some of the key dynamics that shape the trajectory of devices like uptake.

Although there is a temptation to think they put a severe rare disease suggests that all patients would get prescriptions. The day. After approval there are practical considerations that need to be understood.

Krish S. Krishnan: First, it's important to recall that COE visits occur at a steady pace around EB clinics, with only a subset of their AV patients seen at each visit due to the time spent on each patient and the multi-specialty care they receive in the COE setting. In addition, we are also seeing some KOLs less familiar with VizuVec taking a stepwise approach starting with the more severe RDEF patients and stage gating, particularly in the early stages of access when reimbursement was still being set up. Second, it's important to understand that deaf patients are not all clustered around centers of expertise. Prior to 2023, only palliative treatment options were available, whether offered by an COE or a community. As a result, there was often little reason for a patient to visit, let alone return to, a COE unless it was conveniently located.

Speaker Change: Firstly, it's important to recall that CBOE visits occur at a steady pace that on E b clinics.

Speaker Change: It's only a subset of the D V patients seen at each visit due to the time spent on each patient and the multi specialty care they receive in the <unk> setting.

In addition, we are also seeing some kols less familiar with <unk>, taking a step wise approach starting with the mall to be it ought to patients and stage gating, particularly in the early stages of axis, where reimbursement was still being set up.

Speaker Change: Second it's important to understand that their patients are not all clustered around centers of excellence.

Speaker Change: Prior to 2023, only palliative treatment options that are available that are offered by our Coa or a community position.

Speaker Change: As a result, there was often a little reason for a patient to visit.

Speaker Change: Let alone returned to a theory.

Speaker Change: Yes, it is conveniently located.

Krish S. Krishnan: Certainly, there are some patients that are actively managed at COEs, but an equal number or more exists in the community, and many patients have relied on community physicians for many years prior to 2023. This also has implications for the launch.

Speaker Change: Certainly there are some patients that are actively manage that coes.

Speaker Change: But an equal number of war exist in the community and many patients have relied on community physicians for many years prior to 2023.

Speaker Change: This also has implications for the launch.

Krish S. Krishnan: It means that we have to make local doctors aware of ijuvec and educated on DEB, gene therapy, and sometimes both. Recall as well that prior to Viz-a-Vec approval, care of EB wounds did not require genetic confirmation. So even establishing this practice is an evolution in patient management. This is all addressable through physician education programs, but it does take a certain amount of time and contributes to a more gradual ramp in patient outcomes. Finally, there are logistical aspects of integrating at-home dosing of Pfizer Vax into existing wound care and bandaging. As the first and only FDA-approved re-dosable gene therapy, providing access to and coordinating weekly home treatment of Ayurveda is not as simple as dispensing pills at a local pharmacy for patient pickup or even one and done gene therapy administered at a large specialty center. Once the initial scheduling and setup is complete, which again takes a certain amount of time.

Speaker Change: It means that we have to make local doctors aware of buys you were educated on that gene therapy and sometimes both.

Speaker Change: Recall as well that prior to approval.

Speaker Change: E B wounds did not require genetic confirmation.

Speaker Change: So even establishing this practice is an evolution and patient management.

Speaker Change: This is all addressable through physician education programs.

Speaker Change: But it does take a certain amount of time and contributes to.

Speaker Change: A more gradual ramp in patient starts.

Speaker Change: Finally, there are logistical aspects of integrating at home dosing approach back into existing wound care and bandaging routines.

Speaker Change: As the first and only FDA approved dose of both gene therapy.

Speaker Change: Providing access to and coordinating weekly home treatment a bunch of them.

Speaker Change: It's not as simple as dispensing pills at a local pharmacy for patient pick up or.

Speaker Change: Or even one and done gene therapy administered at a large specialty center.

Speaker Change: Once the initial scheduling and set up is complete.

Speaker Change: But again it takes a certain amount of time.

Krish S. Krishnan: What we're seeing is strong adherence, given that Bijevic is designed to be integrated into existing wound care routines and demonstrated to be effective. Together, these real world dynamics influence the shape of our launch curve, which we expect to be characterized by a steady stream of prescriptions and patient conversions to drugs. Recall that our own estimates for the United States are informed by multiple third-party estimates and our own real-time and boots-on-the-ground insights, and further supported by the prevalence in Europe, where robust patient registries and genetic testing indicate that prevalence rates well in excess of our US identified patient pool. So trying to correlate the shape of the launch curve to prevalence is simply erroneous.

Speaker Change: What we're seeing is strong adherence given the advisory work is designed to be integrated into existing wound care routines and demonstrated efficacy.

Speaker Change: Together these real world dynamics influence the shape of our launch curve, which we expect to be characterized by a steady stream of prescriptions and patient conversion to drug.

Recall that our own estimates for the United States are informed by multiple third party estimates and our own real time and boots on the ground insights and.

Speaker Change: And further supported by the prevalence in Europe, but robust patient registries and genetic testing indicate that prevalence rates well in excess of our U S identified patient pool.

Speaker Change: So trying to correlate the shape of the launch curve to prevalence is simply erroneous.

Krish S. Krishnan: Our conviction in the total opportunity and our ability to capture it have only been strengthened after these first few quarters of launch before closing on the U.S. launch. I'd like to emphasize the thanks to the efforts of our team and our focus on the patient experience in changing the treatment paradigm for deaf patients. Years ago, we set out to build the necessary infrastructure to support a strong commercial launch, including our patient support program, Crystal Connect, our NOPAS genetic testing program, DECODE-DEB, and a network of local pharmacies to prepare and deliver Vizure to a patient's home, along with a trained nurse to apply the treatment each week, as I just shared. This at-home administration infrastructure has been in high demand since launch, supporting strong As I also reported, we're broadening and deepening the prescriber base. All KOLs within Centers of Excellence across the U.S. are now prescribing Vizuvax.

Speaker Change: Our conviction and the total opportunity.

Speaker Change: And our ability to capture it has only been strengthened after these first few quarters of launch.

Speaker Change: Before closing on the U S launch.

Speaker Change: I'd like to underscore the thanks to the efforts of our team and our focus on the patient experience with changing the treatment paradigm for their patients.

Speaker Change: Years ago, we set out to build the necessary infrastructure to support a strong commercial launch.

Speaker Change: Clothing of a patient support program Crystal connect.

Speaker Change: No cost genetic testing program decode Deb and a network of local pharmacies to prepare and deliver advisory away to a patient's home along with a trained nurse to apply the treatment each week.

Speaker Change: As I just said.

Speaker Change: At home administration infrastructure has been in high demand since launch supporting strong compliance to the therapy.

Speaker Change: As I also reported we're broadening and deepening the prescriber base.

Speaker Change: All kols within centers of excellence across the U S have now prescribed by user of it.

Krish S. Krishnan: And outside of the Centers of Excellence, our field team has had tremendous success educating regional, adult, and pediatric dermatologists and community physicians, as evidenced by the continued influx of community prescriptions. Sales cycles tend to be a bit longer in the community, but for 2024, with more evidence of a dispersed patient community, we expect to continue to generate demand from large EB centers, regional derm specialists, and community physicians. And finally, our marketing team has invested and will begin deploying several social media campaigns on different channels, to generate awareness to patients and families directly who we know, similar to other rare diseases, having varying levels of engagement with the health care system as they've learned to self-manage their death wounds but deserve to learn about VizioVac and the benefit it can provide to them, combined with our partnership with advocacy groups, we're committed to reaching all patients and families to share the powerful wound healing that Viagra can provide.

Speaker Change: And outside of the centers of excellence our field team has had tremendous success educating regional adult and pediatric dermatologists and community physicians as evidenced by the continued influx of community prescriptions.

Speaker Change: Sales cycles tend to be a bit longer in the community, but for 'twenty 'twenty four with more evidence of a disposal of the patient community. We expect to continue to generate demand from largely be centers regional dump specialists and community physicians.

Speaker Change: And finally, our marketing team has invested and will begin deploying several social media campaigns on different channels to generate awareness to patients and families directly who he know.

Speaker Change: Similar to other rare diseases, having varying levels of engagement with the health care system as they've learned to self manage the dep wounds, but deserve to learn about <unk> and the benefit it can provide to them.

Speaker Change: Combined with our partnership with advocacy groups.

Speaker Change: <unk> to reaching all patients and families to share the powerful wound healing advisory if I can provide them.

Krish S. Krishnan: Altogether, these successes point to a strong long-term growth strategy for Weizsiewic in the U.S. And in the interim, it's important to highlight that by any measure, the launch of Vizivac has been among the top tier of rare disease launches in recent years. Despite all the nuances that I outlined, in only two full quarters since approval, we recorded $50.7 million in revenue.

Speaker Change: Altogether. These successes point to a strong long term growth strategy provides direct in the U S.

Speaker Change: And in the interim it's important to highlight that by any metric.

Speaker Change: Launch of ice Iraq has been among the top tier of rare disease launches in recent years.

Speaker Change: Despite all the nuances that I outlined.

Speaker Change: The only two full quarters since approval, we recorded $50 7 million in revenue.

Speaker Change: And as and now as of mid February we've secured reimbursement approvals for 228 patients and have positive coverage policies in place, but over 93% of commercial and Medicaid patients.

Krish S. Krishnan: And now, as of mid-February, we've secured reimbursement approvals for 228 patients and have positive coverage policies in place for over 93% of commercial and Medicaid patients. We are excited about our success today and more excited still in the years to come as we work to change the treatment paradigm for every patient with DEB. Finally, before I turn the call over to Suma, I'd like to touch on the power of our platform and our milestone-rich clinical pipeline. The crystal story is more than just a vision. HSV-1 is unlike any other vector system currently in development, with a capacity for large genetic cargo, broad tissue tropism, redose ability, and no integration risk.

Speaker Change: We are excited about our success to date and more excited so by the years to come as we work to change the treatment paradigm for every patient with D E.

Speaker Change: Finally, before I turn the call over to Soma.

Soma: Like to touch on the power of our platform and our milestone rich clinical pipeline.

Soma: The Christmas story is more than just wireless device.

Soma: Hey, just read one is unlike any other vector system currently in development.

Soma: The capacity for large genetic cargo brought tissue tropism re dose ability and no integration risk.

Krish S. Krishnan: HSV-1 is also amenable to formulation to target multiple tissues such as the skin, the lung, and the eye, providing us with a large number of opportunities to develop first and best-in-class genetic medicines for rare and serious diseases. Our team is hard at work leveraging these unique platform attributes and advancing our programs to and through the clinic. These include a new eyedrop formulation of Vivec to treat ocular complications of DEB, which has already been evaluated in a single patient under compassionate use, two clinical stage lung programs targeting cystic fibrosis and alpha-1 antitrypsin deficiency, an emerging oncology program that leverages our experience in skin and lung drug delivery, as well as clinical stage candidates, for Red Skin Disease and Aesthetic Skin Condition. With I shall now turn the call over to Suma to provide a clinical and regulatory update and provide more color on the clinical program. Thank you, Krish.

Soma: One is also amenable to formulation to target multiple tissues, such as skin lung and thereby providing us with a large number of opportunities to develop first and best in class genetic medicines for rare and serious diseases.

Soma: Our team is hard at work leveraging these unique platform attributes and advancing our programs to and through the clinic.

Soma: These include a new eye drop formulation of <unk> to treat ocular complications of Deb, which has already been evaluated and single patient under compassionate use.

Soma: <unk> clinical stage lung programs targeting cystic fibrosis and alpha one antitrypsin deficiency.

Soma: And emerging oncology program that Leverages, our experience in skin and lung drug delivery as well as clinical stage candidates.

Soma: For rare skin diseases and aesthetics skin conditions.

Soma: With four active clinical programs and more to come later this year.

Soma: Forward to the data Readouts, which will validate the breath of our hits the sweet <unk> based gene delivery platform.

Soma: I shall now turn the call over to Soma.

Soma: To provide a clinical and a regulatory update.

Soma: And provide more color on our clinical programs.

Soma: Thank you Chris.

Krish S. Krishnan: 2023 was a milestone year for Crystal and our development team, securing the first ever FDA approval for a re-dosable gene therapy. It has been immensely gratifying to see a growing number of U.S. patients benefit from Vizurac as our commercial launch progresses. However, our work is not yet done.

Soma: 2023 was a milestone year for crystal and our development team securing the first ever FDA approval for our <unk> gene therapy.

Soma: It has been immensely gratifying to see a growing number of U S patients benefit from bodies Iraq.

Soma: The commercial launch progresses.

Soma: However.

Soma: Work is not yet done.

Krish S. Krishnan: Our goal has always been to enable global access for patients suffering from death, and I'm happy today to share we are on track for commercial launches in both Europe and Japan by 2025. For Europe, we announced in October that we filed for a marketing authorization with the European Medical Agency. Subsequently, in November, our application was validated by the agency, putting us on track for a decision by European authorities in the second half of 2024.

Our goal has always been enabled global access for patients suffering from that.

Soma: And then I'm happy today to share we are on track for commercial launches in both Europe and Japan.

Soma: 25.

Soma: For Europe, we are.

Soma: In October that we filed for marketing authorization.

Soma: European Medical agency Pepsi.

Soma: Subsequently in November.

Soma: <unk> was validated by the agency, putting us on track for a decision by the European Authority in the second half of 2024.

Krish S. Krishnan: In Japan, we recently announced in December that we had received orphan drug designation by Japan's Pharmaceutical and Medical Device Agency, a designation which confers specific benefits for orphan drug development, including priority review of applications, Extended Registration Validity, and reduced development costs. With our open-label bridging study in Japanese patients fully enrolled, we are on track for a Japanese new drug application filing in 2024 and a decision by Japanese authorities in 2025. We are also making important progress on our broader clinical pipeline, where we have four programs in the clinic and more coming in the first half of this year. As said previously, we are committed to treating them comprehensively. Ocular complications are thought to affect over half of patients with recessive dents, and to date, only supportive care and surgical interventions are available.

Soma: In Japan, we recently announced in December that we had received orphan drug designation might Japan's pharmaceutical and medical device agency.

Soma: That designation, which country specific benefit for orphan drug development.

Soma: <unk> priority review of applications.

Soma: Extended registration validity and reduce development cost.

Soma: With our open label <unk> study in Japanese patients fully enrolled we are on track for a Japanese new drug application filing in 2024, and a decision by Japanese authority in 2025.

Soma: Okay.

Soma: We are also making important progress on our broader clinical pipeline, where we have four programs in the clinic and more coming in the first half of this year.

Soma: As said previously we are committed to treating that comprehensively.

Soma: Ocular complications I thought in fact over half of patients with.

Soma: Recessive dead.

Soma: And to date, only supportive care and surgical interventions are available.

Krish S. Krishnan: Earlier this month, the New England Journal of Medicine published the clinical results of the first patient treated with topical BVAC to the eye. The improvement seen in this patient was dramatic, including full healing of the corneal epithelium and improvement of visual equity from hand motion to 20-25 in eight months. Given these outcomes, we started discussions with the FDA earlier this year regarding a potential development program to bring an ophthalmic BVAC formulation to market. And earlier this month, we reached agreement with the FDA on a single-arm, open-label study to enable approval of BVAC eye drops for the treatment of lesions in the eye of deaf patients. We are now planning to initiate the study in the second half of 2024 with KD407, our redosable inhaled gene therapy for the treatment of cystic fibrosis. We completed Cohort 1 of the Coral 1 study with no severe or serious adverse events and initiated dosing in COHA2. Coral 1 is a Phase 1 opal-labeled dose-escalation study in patients with cystic fibrosis.

Soma: Earlier this month.

Soma: New England Journal of Medicine, published our clinical results, but the first patients treated with topical veeva to the eye.

Soma: The improvement seen in this patient was a dramatic including full healing of the corneal epithelium and improvement of visual liquidity from and motion to 2025 by eight months.

Soma: Given these outcomes be started discussion with the FDA earlier this year regarding the potential development program.

Soma: Bring an ophthalmic vivek formulation to market.

Soma: And earlier this month, we reached alignment with the ft on a single arm open label study.

Soma: Table approval of Vivek eye drops.

Soma: The treatment of lesions in the eye of the patients.

Soma: We are now planning to initiate this study in the second half of 2024.

Soma: On <unk> 407, retail Sybil inhaled gene therapy for the treatment of cystic fibrosis.

Soma: We completed cohort one of the portal, one study, but no severe or serious adverse events.

Soma: <unk> initiated dosing in cohort two.

Soma: Quarter, one is the phase one open label dose escalation study in patients with cystic fibrosis.

Krish S. Krishnan: The primary objective of the study is to evaluate safety and tolerability of KB407, but bronchoscopies are planned for COVID-3 to allow evaluation of airway epithelial cell transduction and expression of CFTR transcript and protein. Cohort 3 also includes a Minimum Enrollment Threshold for Patients That Are Not Eligible for Modulators An Important Patient Population For Which No Effective Disease Modifying Therapies Exist. The pace of enrollment in Coral One is improving as clinicians grow more familiar with inhaled KB407. The potential for patients to roll over into multiple cohorts is also expected to help us progress more rapidly through cohorts two and three. In addition, we continue to work closely with the Therapeutic Development Network of the Cystic Fibrosis Foundation to provide us access to a broader site network, which would enable us to accelerate enrollment.

Soma: The primary objective of this study is to evaluate safety and Tolerability of <unk> four seven.

Soma: But bronchoscopy are planned for cohort three.

Soma: Evaluation of every epithelial cell transduction and expression of CFT, our transcript and protein.

Soma: Cohort three also includes.

Soma: Minimum enrollment threshold for patients that are not eligible for modulators.

Soma: And then important patient population for which.

Soma: No effective because he is not buying therapies exist.

Soma: Enrollment in total one is improving.

Soma: Clinicians grow most familiar with emails gave before of seven.

Soma: The potential for patients to roll over into multiple cohorts is also expected to help us progress more rapidly to cohort two and three.

Soma: In addition, we continue to work closely with the therapeutic development network of cystic fibrosis Foundation to.

Soma: To provide us access to the broadest site network, which would enable us to accelerate enrollment.

Krish S. Krishnan: On KB408, our Redosable Inhale Therapy for Alpha-1 Antitrypsin Deficiency, we just recently dosed our first patient in our Serpentine-1 study. Serpentine-1 is a Phase 1 open-label, single-dose escalation study in adult patients with AATD to allow assessment of safety, tolerability, and alpha-1 antitrypsin levels and key pharmacodynamic biomark We also made several advancements in our oncology program, KB707 last quarter and earlier this year. Recall that KB707 is a modified HSV-1 vector designed to deliver genes encoding both human IL-12 and IL-2 to the tumor microenvironment and promote systemic immune-mediated tumor clearance.

Soma: On kidney for eight a reader civil inhaled therapy for Alpha one antitrypsin deficiency.

Soma: Just recently dosed, our first patient in our serpentine one study.

Soma: Serpentine one is the phase one open label single dose escalation study in adult patients with AA T D.

Soma: Our assessment of safety Tolerability.

Soma: And alpha one antitrypsin levels and key Pharmacodynamic biomarkers.

Soma: With strong support from the Alpha one research community. We are optimistic that this study will.

Soma: And real quickly in 2024.

Soma: We also made several advancements in our oncology program <unk>.

Soma: <unk> 707.

Soma: Last quarter and earlier this year.

Soma: So that gave me seven or seven is a modified HSV one vector designed to deliver genes encoding both human IL 12, and IL two.

To the tumor micro environment and promote systemic immune mediated tumor clearance.

Krish S. Krishnan: We have two formulations of KB707 in development, a liquid formulation for intratemoral injection and an inhaled formulation for lung delivery. In October, the first patient was dosed in a Phase 1, OPAL 1 study to evaluate intratumoral KB707 monotherapy in patients with locally advanced or metastatic solid tumor malignancy. Additionally, an amendment to the existing KB707 IND was cleared earlier this January, allowing us to evaluate inhaled KB707 in a clinical trial to treat tumors in patients' lungs. We will initiate the study, which we'll be calling CHI-9-1, in the first half of 2024. It will be an open-label, multi-center, dose-escalation and expansion study to evaluate inhaled KB707 monotherapy in patients with advanced solid-tumor malignancies affecting the lungs.

We have two formulations of <unk> 77 in development.

Soma: Our liquid formulation for <unk> injection and the inhaled formulation for lung delivery.

Soma: In October.

Soma: The first patient was dosed in phase one.

Soma: One study evaluate intra Tumoral gave me seven or seven monotherapy in patients with locally advanced or metastatic solid tumor malignancies. Additionally.

Soma: Additionally, an amendment to the existing can be seven or seven IND was cleared earlier this January.

Soma: Having us to evaluate inhaled <unk> seven or seven in a clinical trial.

Soma: Two months in patients' lungs.

We will initiate the study.

Soma: We'll be calling kainite one in the first half of 2024.

Soma: It will be an open label multi center dose escalation and expansion study.

Soma: In health can be 707 monotherapy in patients with advanced solid tumor malignancies affecting the lungs.

Krish S. Krishnan: And finally, we are looking forward to sharing a data update on our lead aesthetic program, KB301, which is being evaluated in the PERL-1 multi-cohort phase 1 study, later this year. We previously announced data from cohorts 1 and 2, which demonstrated that KB301 encoded with payload COL3A1 was expressed locally after intradermal injection, and that injections to the upper and lower cheeks and above the knees were generally well-tolerated and associated with clinically meaningful and durable improvement in subject satisfaction. We are now running cohorts 3 and 4 of PERL-1 in parallel to evaluate KB301 PAW 2 potential target indications. Improvement of lateral canthal lines at rest and improvement of dynamic wrinkles of the decollete.

Soma: And finally, we're looking forward to sharing a data update on our lead aesthetic program PBT of one later this year.

Soma: <unk> is being evaluated in the pole, one multi cohort phase one study.

Soma: We previously announced data from cohorts, one and two which demonstrated that <unk> T O. One encoded the payload called three a one watts expressed locally after intradermal injection.

Soma: And then in Texas to the upper and lower cheek and above the knees, but generally well tolerated and associated with clinically meaningful and durable improvement in subject satisfaction.

Soma: We are now running cohort three and four of BOE one in parallel to evaluate.

Soma: 301.

Soma: Oh, two potential target indications.

Soma: Improvement of lateral canthal lines at West and.

Soma: And improvement of dynamic wrinkles off the deck, let's say.

Krish S. Krishnan: Both were identified as potential indications based on initial data from Cohort 1 and Cohort 2, and the high demand for effective aesthetic options in these regions. We expect to announce results in the first half of 2024. We are also progressing on our broader pipeline in dermatology. We expect to commence the Phase 2 cohort of this KB105-02 JADE1 trial for the treatment of TGM1-ARCI later this year, subject to alignment with FDA on study endpoints. Additional preclinical candidates are also in development, and we expect to share updates in the quarters to come. Our HSE platform has the potential to yield a large number of highly differentiated, re-dosable gene therapies. We look forward to making continued progress in 2024 and sharing data updates on our clinical pipeline later this year. With that, I would like to turn the call over to Kate.

Soma: Both were identified as potential indications based on initial data from cohort one and cohort two.

Soma: And the high demand for effective aesthetic options in these regions.

Soma: We expect to announce data in first half of 2024.

Soma: We are also progressing on our broader pipeline in dermatology.

Soma: We expect to commence the phase two cohort of this gave me 105, that's O to Jade one trial for the treatment of T. G. M. One dash E. C. I later this year.

Soma: The alignment with FDA on study endpoints.

Soma: Additional preclinical candidates are also in development and we expect to share updates and nickel.

Soma: What is to come.

Soma: Our HSV platform as potential to yield a large number of highly differentiated lido Sybil gene therapies.

Soma: We look forward to making continued progress in 2024.

Sharing data updates on our clinical pipeline later this year.

Keep: I'd like to turn the call to keep.

Kate Romano: Thank you, Suma. We concluded 2023 with $358.3 million of cash on hand and $594.1 million of cash in investments, which positions us well for our future growth, the expansion of Vijavec outside of the U.S., and our pipeline development. In our second quarter since the launch, we recorded $42.1 million in net product revenues from Vija back in the fourth quarter and $50.7 million for the year ended 2023. However, as Vizivac was approved by the FDA in May of 2023, there were no comparative period revenues. Cost of goods sold was $2.9 million for the quarter, or about 7% of net product revenues, and $3.1 million for the year, or about 6% of net product revenues.

Keep: Thank you Simona.

Keep: We concluded 2023 with $358 3 million of cash on hand, and $594 1 million of cash and investments, which positions us well for our future growth expansion advisory back outside of the U S and our pipeline development plans.

Keep: In our second quarter since the launch we recorded $42 1 million in net product revenues from buying them back in the fourth quarter and $50 7 million for the year ended 2023.

Keep: Advisory back was approved by the FDA in May of 2023, there were no comparative period revenues cost of goods sold with $2 9 million for the quarter or about 7% of net product revenues and $3 1 million for the year or about 6% of net product revenues cost of goods sold increased on a sequential.

Kate Romano: Cost of goods sold increased on a sequential quarter basis as a portion of the initial costs associated with the manufacturing of Visevac were expensed as research and development costs earlier in the year prior to approval. Research and development expenses for the quarter were $11.4 million, inclusive of stock-based compensation of $2.4 million, compared to $10.7 million for the prior year's quarter, inclusive of $2.4 million of stock-based compensation. Research and development expenses for the year were $46.4 million, inclusive of stock-based compensation of $10.1 million, compared to $42.5 million in the prior year, inclusive of $7.9 million of stock-based compensation. Higher research and development expenses in 2023 were due to increases in payroll and facility-related costs, primarily driven by an increase in personnel to support our overall growth, especially as we ramp up our KB 707 program.

Keep: Order basis as a portion of the initial costs associated with the manufacturing advisor backward Expensed as research and development costs earlier in the year prior to approval.

Keep: Research and development expenses for the quarter were $11 4 million inclusive of stock based compensation of $2 4 million.

Keep: Compared to $10 7 million for the prior year's quarter.

Keep: Inclusive of $2 $4 million of stock based compensation.

Keep: Research and development expenses for the year were $46 $4 million inclusive of stock based compensation of $10 1 million.

Keep: Compared to $42 $5 million in the prior year inclusive of $7 9 million of stock based compensation.

Keep: Higher research and development expenses in 2023 were due to increases in payroll and facility related costs, primarily driven by an increase in personnel to support our overall growth, especially as we ramp up our Kb 77 program.

Kate Romano: Partially offset by decreases in R&D manufacturing costs as, following our FDA approval, our costs related to the manufacturing of ViagraVac are now recorded as part of our cost of inventory. Selling general and administrative expenses for the quarter were $24.8 million, inclusive of stock-based compensation of $7.5 million, compared to $24 million for the prior year's quarter, inclusive of stock-based compensation of $7.2 million. Selling general and administrative expenses for the year were $98.4 million, inclusive of stock-based compensation of $29.9 million, compared to $77.7 million in the prior year, inclusive of stock-based compensation of $25.3 million.

Keep: Partially offset by decreases in R&D and manufacturing costs.

Keep: Following our FDA approval are costs related to the manufacturing of advisor back are now recorded as part of our cost of inventory.

Keep: Selling general and administrative expenses for the quarter were $24 $8 million.

Keep: Inclusive of stock based compensation of $7 5 million compared to $24 million for the prior year's quarter.

Keep: Our stock based compensation of $7 2 million.

Keep: Selling general and administrative expenses for the year were $98 $4 million inclusive of stock based compensation of $29 9 million.

Keep: Compared to $77 $7 million in the prior year.

Keep: Stock based compensation of $25 3 million.

Kate Romano: Higher selling general and administrative expenses in 2023 were largely driven by an increase in personnel. Higher selling expenses related to the launch of Vizobac, increased IT infrastructure and software costs, as well as increases in travel, sponsorship, and professional fees. These increases were partially offset by a decrease in commercial preparation expenses, a decrease in medical affairs costs, and a decrease in business development. Our net income for the quarter was $8.7 million, which represented $0.31 per basic share and $0.30 per diluted share.

Keep: Higher selling general and administrative expenses in 2023 were largely driven by an increase in personnel.

Increased selling expenses related to the launch of buyback increased IP infrastructure and software costs as well as increases in travel sponsorship and professional fees.

Keep: These increases were partially offset by a decrease in commercial preparation expenses.

Keep: A decrease in medical affairs costs, and a decrease in business development costs.

Keep: Our net income for the quarter was $8 $7 million, which represented 31 cents per basic share and <unk> 30 per diluted share.

Kate Romano: Net income for the year ended 2023 was $10.9 million, which represented $0.40 per basic share and $0.39 per diluted share, compared to a $140 million net loss in 2022, which equated to a loss of $5.49 per share, both basic and diluted. We would also like to provide some perspective on our forecast for operating costs in 2024, given the objectives we have for the year. We expect between $150 and $175 million in combined non-GAP, R&D, and SG&A costs this year. This projection excludes stock-based compensation.

Keep: Net income for the year ended 2023 was $10 9 million, which represented 40 cents per basic share and 39 cents per diluted share compared to a $140 million net loss in 2022, which equated to a loss of $5 49 per share both basic and diluted.

Keep: Ed.

Keep: We would also like to provide some perspective on our forecast for operating costs in 2024, given the objectives, we have for the year.

Keep: We expect between 150 and $175 million in combined non-GAAP R&D and SG&A costs. This year.

Keep: This projection excludes stock based compensation.

Kate Romano: This expected increase over 2023 is driven primarily by increased SG&A costs associated with our continued U.S. launch and planned Expansion for visors outside of the U.S. From a research and development perspective, we expect a pickup in our clinical and regulatory costs associated with our oncology and respiratory programs, as well as costs associated with initiating a clinical trial for the BVAC formulation to treat lesions in the eye of DEB patients With that being said, and given our projected revenue trajectory in 2024 and our current strong balance sheet, we are well capitalized and positioned for these growth drivers, and we look forward to reporting our progress over the next several quarters. And now, I will turn the call back over to Krish.

Keep: This expected increase over 2023 is driven primarily by increased SG&A cost associated with our continued U S launch.

Keep: And planned expansion for advisory back outside of the U S.

Keep: From our research and development perspective, we expect to pick up in our clinical and regulatory costs associated with our oncology and respiratory programs.

Keep: Well as for costs associated with initiating a clinical trial for the <unk> formulation to treat lesions in the eye of D E B patients.

Keep: With that being said and given our projected revenue trajectory in 2024, and our current strong balance sheet, we are well capitalized and positioned for these growth drivers and we look forward to reporting our progress over the next several quarters.

Keep: And now I will turn the call back over to Chris.

Krish S. Krishnan: Before we open the call up to Q&A, I'd like to underscore our excitement for 2024 as we have successfully transitioned Krystal to a fully integrated commercial biotech with a deep clinical pipeline, a great launch underway, and growing revenue to contribute to our already strong balance sheet. We believe we are well positioned to create value for our shareholders and deliver our mission for patients now and in the future. Thanks for listening, and I'd like to now open the call for Q&A.

Chris: Before we open the call up to Q&A.

Chris: I'd like to underscore our excitement for 2024 as we have successfully transitioned crystal to a fully integrated commercial biotech with a deep clinical pipeline.

Chris: With a great launch underway and growing revenue to contribute to our already strong balance sheet. We believe we are well positioned to create value for our shareholders and deliver our mission for patients now and in the future.

Speaker Change: Thanks for listening and I'd like to now open the call for Q&A.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone. We ask that while posing your question, you please pick up your handset. If listening on speakerphone to provide optimum, Alec. 949-680-WILLIAMSVILLE, New Orleans, CA 949-680-WILLIAMSVILLE, New Orleans, CA Hey guys

Speaker Change: Thank you at this time, we will be conducting a question and answer session.

Speaker Change: 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 speaker phone to provide optimum sound quality. Once again Thats star one if you wish to ask a question at this time I am please hold while we poll for questions.

Speaker Change: First question today is coming from Alec Stranahan from Bank of America.

Alec Stranahan: Alex Your line is nice.

Alec Stranahan: Hey, guys. Thanks for taking our questions and congrats on the strong close to 23.

Operator: Thanks for taking our questions and congrats on the strong close to 23. Two questions from us. I guess, what was the roughly average conversion time between NuSTAR forms and initiating therapy in 4Q? And where do you see this tracking over the next few quarters? Or is this really not the metric we should be looking at anymore?

Alec Stranahan: Two questions from us that's what it's been in the roughly the average conversion time between new start forms and initiating therapy.

Alec Stranahan: And for Q, and where do you see this tracking them over the next few quarters or is that's really not the metric we should be looking at anymore.

Krish S. Krishnan: And second, could you maybe walk us through the anticipated J code impact on uptake looking at the next couple of quarters, especially in the Medicare segment? Thanks. Thanks, Alec.

And second could you maybe walk us through the anticipated J code impact uptake.

Alec Stranahan: Looking at the next couple of quarters, especially in the Medicare segment. Thanks.

Speaker Change: Thanks Alec.

Krish S. Krishnan: Hey, on your first question, at the end of Q3, we were tracking at a two-month pace between start forms to patient-on-drug. We were making progress, and presently, we're about 30 days from a start form to patient-on-drug. Our goal, at least by the second half of this year, is to shrink it down by a few weeks, maybe two to three weeks.

Speaker Change: Hey on your first question at the end of Q3, we were tracking like a two month pace between start forms to patient on drug.

Speaker Change: We were making progress and presently we're about 30 days.

Speaker Change: Start from the patient on drug.

Speaker Change: Our goal at least by the second half of this year is pushing it down by a buyer by a few weeks maybe two to three weeks.

Krish S. Krishnan: A lot of it has to do with single-case agreements, and with access getting behind us, we expect the trend to only decrease and get to a steady state of two to three weeks in the second half of this year. With respect to the J-Code, the reason I mentioned that comment, look, J-Code is a great tailwind for the company in the long term. I just was simply pointing out that in January, as our specialty pharmacy was transitioning people into the official J-Code from a prior J-Code, you should expect a few weeks of a revenue hit to the story in the interim. But outside of that, we don't particularly see the J-Code having any impact going forward, especially impact in the positive direction, not having any kind of impact in the other direction. Thank you. Yigal, Nakamovic from, Hi, Krish and team.

Speaker Change: A lot of it has to do with <unk>.

Speaker Change: Single case agreements and with access getting behind US, we expect the trend to only decrease.

Speaker Change: And get to a steady state of two to three recent second half of this year.

Speaker Change: With respect to the J code.

Speaker Change: The reason I mentioned that comment look J code is a great tailwind for the company long term.

Speaker Change: We're simply pointing out that in January as our specialty pharmacy was transitioning people from.

Speaker Change: Into the official J code from prior.

Speaker Change: J code.

Speaker Change: You should expect a few weeks of a revenue hit.

Speaker Change: The story in the interim but outside of that.

Speaker Change: We don't particularly see the take or having any impact going forward, especially impact in a positive direction not having any kind of impact in the other direction.

Speaker Change: Thank you.

Speaker Change: Thank you. The next question is coming from Yigal <unk> from Citi. Your line of lives.

Yigal: Oh, Hi, Christian team. Thank you so much for taking my question could you just help us clarify on the numbers the 228 reimbursement approvals and the 35% of the 1200. The 420 is the $2 28, a subset of the $4 20 are they distinct populations just to just to clarify please.

Krish S. Krishnan: Thank you so much for taking the question. Could you just help us clarify the numbers, the 228 reimbursement approvals and the 35% of the 1200, the 420, is the 228 a subset of the 420, or are they distinct populations just to clarify? No, no, I mean... Let me answer it this way.

Christian: No no I mean.

Christian: Let me answer it this way the 1% to 35%.

Krish S. Krishnan: The one, the 35 percent, the 420, that's clearly the start firms that we've been mentioning in the past. The 228 talks about, out of the start firms we've gotten, the exact number of reimbursements we have gotten from. We like that metric because it's a much closer indicator of net revenue, in the long term. And so, yes, obviously, it is a subset of all the startup firms we've gotten to sort of answer that very directly. But it's a different metric in the sense that it's a more important metric, as revenue becomes a much more important part of the story going forward.

Christian: For 'twenty, that's clearly the start forms that we've been mentioning in the past.

Christian: The $2 28 talks about out of the suffering we've gotten the exact number of reimbursement.

Christian: We have gotten.

Christian: From.

Christian: We liked that metric because it's a much closer indicator of net revenue.

Christian:

Christian: In the long term.

Christian: So yes, obviously it is a subset of all the start forms we've gotten sort of answer that very directly.

Christian: But it's a different metric in the sense that it's a more important metric.

Christian: As revenue becomes a much more important part of the story going forward.

Krish S. Krishnan: Okay, thanks. And then you referenced that, I think you said 60 of the 195 were prescribed two or more. I was just trying to do a little math on that.

Christian: Okay. Thanks, and then you referenced I think you said 60 of the 195 were prescribed in two or more.

Christian: Just trying to do a little math on that suggests that for those higher prescribers at somewhere around five patients per prescriber has that is that the correct thinking or or is it or is it a different thanks.

Krish S. Krishnan: It suggests that for those higher prescribers, it's somewhere around five patients per prescriber. Is that, is that the correct thinking, or is it different? Thanks. I think, I mean, it's a difficult question to answer immediately, but I think you're right. I think you're right.

Speaker Change: I think I mean.

Speaker Change: A difficult question to answer immediate but I think you're right I think youre right.

Krish S. Krishnan: All we were trying to show is that people who prescribe Viagra to begin with are now getting more familiar with the drug and are repeat prescribing, and that's a good metric for us because it shows confidence in the drug. It shows they are expanding to a broader base of patients. There were a couple COEs, I've mentioned this before, who were positioning that let me get my harder patients on the drug before I got my dominant patients on the drug and see how they're doing. All in all, the reason for that metric is to show the increasing confidence of a prescriber towards continuing to prescribe Viagra.

Speaker Change: All we were trying to show is that people who have prescribed <unk> to begin with are now getting more familiar with the drug and a repeat prescribing and thats a good metric for us because it shows the confidence in the drug.

Speaker Change: It shows they are expanding to a broader base of patients.

Speaker Change: There were a couple of Coes I've mentioned this before who we're positioning that let me get my heart patients on drug before I get my dominant patients on drug and see how they're doing all in all the reason for that metric is to show increasing confidence.

Speaker Change: Prescriber towards continuing to prescribed regimen.

Krish S. Krishnan: Okay, and then just one quick one on the eyedrop, certainly very interesting early data. Can you just discuss the strategy there, longer term? Is that going to be provided as an adjunct to the topical for those that have the eye complications, or would it be an additionally priced drug separate from the cream? I think it's a bit too early to be very definitive on the matter, but our objective is to have a separately priced product like we do right now for that single patient. We ship that patient the next vial. And so our thinking is to have a separate NDC number, a separate price, and send it along with the topical gel. Okay, thank you very much. The next question is...

Speaker Change: Okay, and then just one quick one on the eye drop or certainly very interesting early data.

Speaker Change: Can you just discuss the strategy there longer term is that going to be provided as an adjunct to the topical for those that have the eye complications or would it be and additionally, priced drug separate from the cream.

Speaker Change: I think it's a bit too early to be very definitive on the matter, but our objective is to have a separately priced product like we do right now on that single patient we shipped that patient into next.

Speaker Change: Oh.

Speaker Change: And so our thinking is to have a separate MDC number a separate pricing.

Speaker Change: And send it along with the topical gel.

Speaker Change: Okay. Thank you very much.

Speaker Change: Thank you. The next question is coming from.

Krish S. Krishnan: I just want to clarify, sorry about the I, as I said, we have pre-IND guidance from the agency, so this is going to be a new IND, and it's going to be a BLA, so a brand new label with a new NDC code, as Krish mentioned. Thank you. The next question is coming from Devjit Chattopadhyay from..., www. KrishKrishnan.com, Hey, good morning, team. This is Robert Unford-Debjit.

Speaker Change: I just wanted to clarify sorry on the eye.

Speaker Change: As I said as we have.

Speaker Change: Any guidance from the agency. So this is going to be a new IMD and and it's going to be a BLA. So brand new label with the new NBC code as Chris mentioned.

Speaker Change: Just want to clarify.

Speaker Change: Thank you.

Speaker Change: Thank you. The next question is coming from Doug G to charter Apache from Guggenheim.

Doug G: Your line is live.

Doug G: Hey, good morning team. This is Robert on for Doug.

Operator: Can you provide any color on the number of dominant patients on therapy as of December 31st and Feb 24? And also the number of recessive patients on therapy as of December 31st? Then I have a follow-up on the ocular complications. No, I think for now, and I don't want to dig through to figure this split out, I think for now, as we mentioned in the call, 25% of the total stock firms were worth the dominant type.

Robert: Can you provide any color on the number of diabetic patients on therapy as of December 31st and sub 24.

And also the number of resuscitation on therapy as of December 31.

Speaker Change: And then I have a follow up on the auction complications.

Speaker Change: No I think for now and I don't want to dig through to figure displayed out I think for now as we mentioned in the call.

Speaker Change: 25% of the total star phones was were the dominant type we did not just to be clear see any big change in the trend of the dominant with the success of at the moment.

Krish S. Krishnan: We did not, just to be clear, see any big change in the trend of the dominant versus the success of at the moment. Okay, thank you. And then on Ocular.

Speaker Change: Okay. Thank you and then on ocular.

Krish S. Krishnan: Do you currently have 10 or more patients with complications identified who could quickly be enrolled? And how long is follow-up planned for the study? I can answer this question: Yes.

Speaker Change: Do you currently have 10 or more patients with complications identified due to quickly be enrolled.

Speaker Change: And how long this follow up planned for the study.

Ocular: And I can answer this question, yes. In fact, we have a lot of patients in the I mean, the reason we're accelerating is because there is a request for even off label. So we'd want to avoid that yes, we do have enough.

Krish S. Krishnan: In fact, we have a lot of patients, and the reason we are accelerating is because there is a request for even off-label, so we want to avoid that. Yes, we do have enough patients who have a good natural history of their disease, and as you can see, it's a single-arm open-label study, so it should be pretty straightforward. Great, thank you. Daygona

Ocular: Enough patients who have been who have a good natural history of the disease.

Ocular: And as you can see it's a single arm open label study so should be pretty straightforward.

Speaker Change: Great. Thank you.

Speaker Change: Thank you. The next question is coming from Dae Gon ha from Stifel.

Speaker Change: <unk> lives.

Krish S. Krishnan: Thanks for taking our questions. And let me add my congratulations on the quarter as well. Krish, just going back to the roughly 136 start forms that you've reported as of February, I was just kind of curious if you could talk about the cadence of patients. I know it's kind of a combination of Q4 and a little bit of 24.

Speaker Change: Great. Thanks for taking our questions and let me add my congrats on the quarter as well, Chris just going back to the roughly 136 start forms are that you've reported as of February I was just kind of curious if you could talk about the cadence of patients I know, it's kind of a combination of Q4 and a little bit of 24.

Krish S. Krishnan: And you've added a lot of conviction around sort of the year end, I mean, the opportunity this year. So if you could kind of comment on that cadence, and then go back to the more than 1 billion opportunity you were talking about, I guess, a little early, but if you can maybe frame for us, what exactly are you thinking? Because in prior, I guess, VIJVAC approvals, you gave some conservative estimates that you had to revise. So what should we be thinking in terms of VIVAC ophthalmic solution there? Thanks so much.

Speaker Change: And you've added a lot of conviction around sort of the year and I mean, the opportunity. This year. So if you could kind of comment on that cadence and then going back to the more than 1 billion.

Speaker Change: Opportunity we're talking about.

Speaker Change: I guess, a little early but if you could maybe frame for us what exactly are you thinking because in prior I guess <unk> approval you have given some conservative estimates that you had to revise so what should we be thinking in terms of feedback ophthalmic solution. There. Thanks, so much.

Krish S. Krishnan: Great, and the cadence of patients, just to correct you, I think 35% of 1,200, I want to be clear, that's the number of star forms. I heard a number of 136 that I wasn't sure about, but that said, definitely, the holiday period was a bit slow, slow as in appointments getting pushed out by a week or two, EB clinics being rescheduled, and that was a singular cadence that we observed, which is why we kind of pushed out the star form reporting as of February. So that's the cadence on that.

Speaker Change: Great.

Speaker Change: On the cadence of patients just to correct you I think 35% of 1200 I want to be clear thats. The number of start forms I heard a number 136 that I wasn't sure about but that said look definitely the holiday period were a bit slow.

Speaker Change: Slower than.

Speaker Change: Climate is getting pushed out.

Speaker Change: A week or two E b clinics being rescheduled and that was a singular cadence that we observed which is why we kind of pushed out the start form reporting two as of February.

Speaker Change: So that's the cadence of that on the opportunity look there was some confusion when we first reported when we first reported the market opportunity. All we had was an approval in the U S.

Krish S. Krishnan: On the opportunity, look, there was some confusion when we first reported. When we first reported the market opportunity, all we had was an approval in the US, and it felt a bit conservative. The feedback I got was super conservative.

Speaker Change: It felt a bit conservative.

Speaker Change: Feedback I got was assortment is evident.

Krish S. Krishnan: Now we're starting to see feedback from the MA. Our conviction in the drug getting approved in Europe and Japan is definitely a lot higher than it was six months ago. Then we're also starting to align with the agency on the economic indication in the eye, and now that it's a single-label study, and as Summa mentioned, there are people with natural history, we feel at the moment pretty good about 50% of the ARDEP patients or 25% of the total DEP patients, however you want to I guess just to clarify on that point, are you able to give some percentage breakdown of how much would that be from BVAC as it currently is as Vigevec or BVAC formulation? Uh, do you mean the eye formulation? Look, without, without the eye formulation... We believe it's north of a billion dollars.

Speaker Change: Now, we're starting to see feedback from the EMA.

Speaker Change: We're starting to see feedback from the Japanese authorities.

Speaker Change: Our conviction in the drug getting approved in Europe, and Japan is definitely a lot higher than it was six months ago.

Speaker Change: And then we're also starting to align with the agency or the ophthalmic indication in the eye and now that it's a single level study and as Soma mentioned that our people with natural history.

Speaker Change: We feel at the moment pretty good about.

Speaker Change: 50% of the RF patients or 25% of the total depth patients. However, you want to look at it.

Speaker Change: Also adding to the market opportunity and so we thought we'd take the moment to.

Alleviate any confusion from prior and be very definitive on the market opportunity of buyback going forward.

Speaker Change: I guess just to clarify on that point are you able to give some percentage breakdown of how much would that be from <unk> as it currently is that a <unk> formulation.

Speaker Change: You mean, the ifr emulation.

Speaker Change: Now without the Ifr emulation, we believe it's north of $1 billion.

Krish S. Krishnan: The I formulation, and this is a very premature estimate from my end, probably adds another 250 to 300 million to the opportunity itself. Excellent. Thank you very much. The next question is coming from Joe Pangenis, from..., all your life. Hi everybody. Good morning.

Speaker Change: The <unk> formulation and this is a very premature estimate from my end, probably adds another $250 million to $300 million to the opportunity itself.

Speaker Change: Excellent. Thank you very much.

Speaker Change: Thank you. The next question is coming from Joe <unk> from H C. Wainwright, Joe Your line is nice.

Operator: Thanks for taking the question. Of course, congratulations as well, but also, thank you, Krish, because of the real clarity and visibility that you're providing around the launch. So we all appreciate that.

Joe: Everybody. Good morning, Thanks for taking the question of course, congrats as well, but also thank you krish because of.

Joe: The real clarity and visibility that you are providing around the launch so we all appreciate that.

Krish S. Krishnan: So I guess two questions. First, I guess when you come to the actual patient, do you have any data that you can share with us about the ranges of the treatment area sizes, number one. And then, number two, You know, I know there's great compliance so far, as you've alluded to. Anything you could share with us as to the reasons for that? It's a great question, Joe.

Joe: So I guess two questions first I guess when you come to the actual patients do you have any data that you can share with us about the the ranges of the treatment area sizes. The number one and then number two.

Joe: Hum.

Joe: I know theres, a great compliance so far as you've alluded to.

Joe: You could share with us as to the reasons for patient stops thanks a lot.

Speaker Change: It's a great question Joe.

Krish S. Krishnan: In terms of ranges and area sizes, let me say, as the patient population grows and as the visits are weekly, we're not tracking every single patient and every single wound. But that said, through feedback, through Crystal Connect, we do know that there are a good number of patients treating large wound sizes, a good number of patients choosing to start with the small ones and moving into the large ones. We see no difference in the way the drug works between recurrent and chronic.

Speaker Change: In terms of ranges in area sizes, Let me say look as the patient population grows and as the visit weekly we're not particularly.

Joe: Tracking every single patient in every single thing, but that said to feedback to peso connect we do know that there are a good number of patients treating large wound sizes.

Joe: Good number of patients choosing to start with the small ones moving into the large ones. We see no difference in the way the drug works between the current and chronic.

Krish S. Krishnan: And all in all, we believe that Vizurek has been great to treat wounds of all sizes and cadences, recurring versus chronic, et cetera. The only point that we are working on, not immediately, but in the medium term or so, is to see if we can increase the dosage per vial per week. That would be beneficial, but that's not an immediate solution. People seem very happy with the drug. People seem very happy with home dosing.

Joe: All in all we believe.

Joe: That provides you I guess it'd be great to treat wounds of all sizes and windows.

Joe: Cadence is in recurring versus chronic et cetera.

Joe: The only point.

Joe: That is that we are working on not immediately but in the medium term. So this is <unk>.

Joe: If we can increase the dosage per vial per week.

Joe: It would be beneficial, but that's not an immediate solution people seem very happy with the drug people seem very happy with the home dosing I will say one of the best things we got on the label was home dosing.

Krish S. Krishnan: I will say one of the best things we got on the label was home dosing. Compliance is high because of this. We see patients unwilling to even go to a local physician to get it done on a weekly basis, and so home dosing has really helped a lot with that. In terms of compliance, look, when we look back at our clinical studies, I mean, like just before the launch or the first few months of launch, compliance was very high. We expect compliance to continue to be high in 2024, but as wounds start to heal, one has to think about maybe a handful of patients slowing down, either taking a pause and restarting or going from four to maybe three to two vials a month. But it's not immediate.

Joe: Compliance is high because of this we see patients unwilling to even go to a local physician to get it done on a weekly basis.

Joe: So home dosing has really helped a lot with a lot.

Joe: In terms of compliance law.

Joe: When we look back at our clinical studies I mean like just before the launch or the first few months of launch compliance was very hot.

Joe: Spec compliance to continue to be high in 2024, but as wounds start to heal.

Joe: One has to think about maybe a handful of patients.

Joe: Slowing down either taking a pause and restarting or.

Joe: Going from four to maybe three to two <unk> a month.

Joe: It's not immediate I think our original assumption of.

Krish S. Krishnan: I think our original assumption of having a patient on BIOS for 12 months or longer, as of today, continues to cause problems. Thank you. Good morning, thanks for taking my question. Krish, could you speak a little bit more about the evolution of the competitive landscape as you see it and how you envision the treatment paradigm shifting if Avionis graft is approved? Oh, great.

Joe: Having a patient on <unk> for 12 months or longer.

Joe: As of today continues to track properly.

Speaker Change: Great. Thank you really appreciate it.

Speaker Change: Thank you. The next question is coming from Andrea <unk> from Goldman Sachs.

Andrea: China's lives.

Good morning, Thanks for taking my question Christian could you speak a little bit more about the evolution of the competitive landscape as you see it and how you envision that treatment paradigm shifting if Abby honest graph is approved.

Speaker Change: Oh, great Hey.

Krish S. Krishnan: Hey, on the competitive landscape... Krystal was started in 2016 when we realized that the competitive landscape was not a very commercially viable approach to treating DEB. I mean, we obviously appreciate anyone and everyone working on this debilitating disease. But our view right now, and this could be different, since Pfizer has the ability to treat larger wounds, is that patients would go through the inconvenience of having to graft over and over and again in the same location and take a certain bit of time. If you look at the convenience aspect, it gets much, You know, Viagra obviously is much more convenient and affordable.

Speaker Change: On the competitive landscape.

Speaker Change: Crystal was started in 2016, when we realized that the competitive landscape was.

Speaker Change: A very commercially viable approach to treating <unk>.

Speaker Change: I mean, we obviously appreciate 81 and all working in this debilitating disease.

Speaker Change: But our view right now and this could be different since <unk> has the ability to treat larger wounds.

Speaker Change: We doubt if patients would go through the inconvenience of having to graft over and over again in the same location.

Speaker Change: And it takes a certain period of time, if you look at the convenience aspect.

Speaker Change: It gets much.

Speaker Change: Advisory work, obviously, it's much more convenient and amenable so we're not presently.

Krish S. Krishnan: So we're not presently, watching, and anxious about an autologous approach to treating the disease at the moment. We feel we feel that the convenience aspect of iZOAC is much more that it's much more convenient. Now on the other competitive environment, which does not fundamentally address the cause of the disease, we're less concerned about that because, at the end of the day, we believe that most patients and most physicians want an approach that fundamentally treats the nature of the disease. And I'm just going to add another point to Abiona's therapy. It's, keep in mind, it's 50% wound closure. I mean, we had a high bar of 100% wound closure. So we are seeing, even with large wounds, pretty good closure. So I think, again, as Krish mentioned, easy to apply, topical. We don't have to biopsy these patients. These patients cannot stand any sort of pain or inflict pain during hospitalization.

Speaker Change: Watching too anxious about an autologous approach to treating the disease at the moment we feel.

Speaker Change: We feel that the convenience aspect advisory work is much more.

Speaker Change: That is much more convenient now on the other current competitive environment, which is does not fundamentally address the cause of the disease, we're less concerned about that because at the end of the day.

Speaker Change: We believe that most patients in most physicians want an approach that fundamentally treats the nature of the disease.

Speaker Change: And I'm, just going to add another point to Abbvie unnecessarily keep.

Speaker Change: Keep in mind, 50% wound closure I mean, we had a high bar of 100% wound closure. So we are seeing even the large wounds.

Speaker Change: Good closure, so I think again as Chris mentioned easy to apply topical we don't have to biopsy. These patients. These patients cannot stand any sort of pain or inflect and hospitalization. They can't afford that so I think from that perspective, because of the ease of application and good efficacy.

Krish S. Krishnan: They can't afford it. So, from that perspective, because of ease of application and good efficacy, again, we're not concerned. And then, Sima, maybe one question here on the pipeline, as you think about the upcoming data reads that you have across the different programs, just wondering if you could help frame expectations for each one of those and what would trigger either a go or no-go decision to bring those forward. Thanks so much.

Speaker Change: Kevin you are not concerned.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Maybe one question here on the pipeline as you think about that upcoming data read that you have across the different programs. Just I was just wondering if you could help frame expectations into each one of those and what would trigger either a go or no go decision to bring those forward. Thanks so much.

Krish S. Krishnan: I mean, again, 407; we are excited. We finished Cohort 1. Cohort 2 is, I mean, the acceleration of enrolling those patients is ongoing right now. So, we are excited to move that and quickly into Cohort 3. We think, we really believe we already have sites that are established who can do bronchoscopy, and we have now patients identified.

Speaker Change: I mean again <unk> seven we are excited to finish cohort one cohort two is I mean the.

Speaker Change: Operational.

Speaker Change: And rolling those patients is ongoing right now so we are excited to move that quickly into cohort. Three we think we really believe we have already sites that are established who can do bronchoscopy and we have now patients identified so we believe in 470 shares by end of the year.

Krish S. Krishnan: So, we believe in 407, and we should, by the end of the year, be able to dose those patients and have some positive bronchoscopy data. But also, we are working on some preclinical models which we feel we have some promise in, you know, building confidence to get to establish a functionality for TDN to, you know, collaborate with us. So, we feel pretty positive about 407. 408, Again, as we mentioned, we dosed our first patient. This patient was not on augmentation therapy.

Speaker Change: Be able to dose those patients and have some positive bronchoscopy data, but also we are working on some preclinical models, which we feel we have some promising.

Speaker Change: Getting confidence to get.

Speaker Change: To establish a functionality for TVN too.

Speaker Change: Collaborate with us so we feel pretty positive on photo seven photo eight again as we mentioned we dosed our first patient this.

Speaker Change: Patient was not an augmentation therapy, so again with the Biomarkers that we can we are measuring because you're going to see blood levels of Avon AP and again, it's easy to measure both neutrophil elastase binding of neutrophil elastase in sputum and see the plaza in plasma levels, we feel that these biomarkers will help us.

Krish S. Krishnan: So, again, with the biomarkers that we can, we are measuring because we're going to see blood levels of A1AT and, again, it's easy to measure both neutrophil elastase, binding of neutrophil elastase, and sputum and see the plasma levels. We feel that these biomarkers will help us identify or get a faster read on 408. And we are very excited, actually, about 408. I think with the division, the OTP division, open to biomarker approaches for, you know, approval, we think with 408, we hold a good chance of getting in front of them once we have positive data to discuss a biomarker approach for approval. So, again, 408 is an exciting program for us. 707 is also exciting.

Speaker Change: Densify it will get a faster lead on <unk> eight and we are very excited actually about <unk> I think with the division the Otp Division.

Speaker Change: Open to biomarker approach.

Speaker Change: For approval, we think with $4 eight we hold a good chance of getting in front of 10 months, we have positive data to discuss biomarker approach for approval.

Speaker Change: <unk> is an exciting program for us.

Speaker Change: 707, and also exciting I mean, we have as Chris mentioned, we haven't provided too many specifics, but the program with the intra tumoral injection is moving forward. So hopefully we'll have some outcome and data read end of the year and of course, our lung program also again very excited so hopefully end of the year.

Krish S. Krishnan: I mean, we have, as Krish mentioned, we haven't provided too many specifics, but the program with the intratumoral injection is moving forward. So, hopefully, we'll have some outcomes and data read at the end of the year. And, of course, our lung program, also, again, we are excited. So, hopefully, at the end of the year, there could be exciting data reads on all our programs, to ask a question if you have not already done so. Star 1: Congratulations on the quarter and also for all the clarity.

Speaker Change: It could be.

Speaker Change: Exciting data reads on all our programs.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: And if you wish to ask a question on you have not already done. So please press star one on your phone at any time. The next question is from Tim Lugo from William Blair.

Timothy Francis Lugo: Congratulations on the quarter end.

Timothy Francis Lugo: Also all the clarity can you give us a fair.

Operator: Can you give us a sense of product revenue ramping through 2024? It sounded like there was some seasonality on scheduling in Q4, and we're also two-thirds of the way through Q1. Do you have a sense of what's going to be kind of incremental increases, at least in the near term, or if there might be some lumpiness quarter to quarter? Tim, we're not providing any guidance to a reflector.

Timothy Francis Lugo: Product revenue ramping through 2024, it sounded like there was some seasonality around scheduling and Q4.

Timothy Francis Lugo: So two thirds of the way through Q1 do you have any.

Timothy Francis Lugo: That was going to be incremental increases.

Timothy Francis Lugo: From a near term or if there might be some lumpiness quarter to quarter.

Timothy Francis Lugo: It's Tim we are not providing any guidance.

Timothy Francis Lugo: Reflective of it.

Timothy Francis Lugo: Understood.

Krish S. Krishnan: I was only, yeah, and I said there's not much of a seasonality. I was just pointing out that the JCO transition is a one-time event. It's not a seasonal event, and with that, there's a powerful tailwind behind us.

Timothy Francis Lugo: Yes.

Timothy Francis Lugo: Yes.

Timothy Francis Lugo: There is not much of a seasonality of a disappointing out that Jacob transitioned as a onetime event, it's not a seasonal event and with that it is a powerful tailwind behind us.

Krish S. Krishnan: The second, as I mentioned, I mentioned a handful of patients hitting the cap at the end of the year, and what we're trying to do is provide some kind of a clue for it as we move through the year to avoid any kind of lumpiness in Q4 one day or the other. So that said, I think as more and more patients come on this drug, you can start figuring out what that new potential of ayurvedic is going to be this year, but no comment from us. I understand. For maybe a question on your platform, you know, you obviously have some unique capabilities with the platform and re-dosing. Are there any pipeline opportunities?

Timothy Francis Lugo: As I mentioned.

Timothy Francis Lugo: Mentioned about a handful of patients hitting the cap at the end of the year and what we're trying to do is the kind of accrued for it as we move through the year to avoid any kind of lumpiness in Q4, one way or the other.

Timothy Francis Lugo: So.

Timothy Francis Lugo: That said I think as more and more patients come on drug that you can start figuring out what the revenue potential advisory work is going to be this year, but no no comment from us.

Timothy Francis Lugo: Yes.

Speaker Change: Of course.

Speaker Change: A question on your platform you, obviously have some unique capabilities.

Speaker Change: Our platform of re dosing.

Speaker Change: It really pipeline opportunities.

Krish S. Krishnan: You know, you've built out a number of pipeline assets, but are there any that you looked at that might have just been, you know, too expensive to run the clinicals on that you think a partner would be appropriate for? I'm getting a sense of just how much capacity there is within the manufacturing and kind of development side. Yeah, look, our position on this is the same for large indications. I'll talk about Alpha 190 trypsin, large indications, some areas in oncology, large indications.

Speaker Change: Without a number of pipeline assets, but are there any that you looked at that might have just been too expensive to run a clinical along that you think a partner would be appropriate for them getting a sense of just how much capacity. There is we can be.

Speaker Change: Manufacturing and.

Speaker Change: And kind of development cloud.

Speaker Change: Yeah look our position on this is state to say for large indications.

Speaker Change: Talk about Alpha one antitrypsin large indication some.

Speaker Change: Some areas in oncology large indication anytime in CF, primarily going after the <unk> limitation. So we view it much more as a rare disease that is a really large indication.

Krish S. Krishnan: Anytime in CF, we're primarily going up to the null limitation, so we view it much more as a rare disease than as a really large indication. I think we are always open to partnering on large indications. The company wants to stay focused on its ability to develop, manufacture, and commercialize rare diseases and definitely would like to seek partners on larger indications, but we have enough manufacturing capacity to support any partnership small or large with the product either in the development stage or in commercialization. Thank you, and congratulations.

Speaker Change: I think we are always open to partnering on large indications.

Speaker Change: The company wants to stay focused on its ability to develop manufacture and commercialize rare diseases.

Speaker Change: And definitely would like to seek partner on larger indications, but we have enough capacity manufacturing wise to support any partnership small or large.

The product either in the development stage of the commercial stage.

Speaker Change: Understood. Thank you and congratulations.

Speaker Change: Yes.

Speaker Change: Thank you. The next question is coming from Kevin Clark, Kevin Clark Gardner from Evercore ISI, Kevin Your line of lives.

Operator: Thank you. Thank you. The next question is coming from Gavin Clark Gardner from Evercore ISI. Hey, thanks for taking the questions. Just had a couple of clarifications and then questions on the 228 reimbursement approvals. Wanted to be clear. Was this also through mid February, or was that at the end of December? It said on the deck as of February, if I'm not mistaken, and we hold to that, like let's not, we're not trying not to get too cute between mid versus early versus late, but it was as of February.

Kevin Clark: Hey, Thanks for taking the questions just had a couple of clarifications and then questions.

Kevin Clark: On the 228 reimbursement approvals wanted to be clear was this also through mid February or was that at the end of December.

Speaker Change: It said on the deck as of February if I'm, not mistaken and we hold to that.

Speaker Change: I'm wondering I'm trying not to get too cute between mid versus early versus late but.

Speaker Change: It was as of February.

Krish S. Krishnan: Okay. And just trying to quantify the holiday impact a little bit, were the initial forms coming in in January, February, were those actually at a higher rate than later November or December? Um, yes, because it's a shift.

Speaker Change: Okay. That's helpful and just trying to quantify the holiday impact a little bit where the start forms coming in in January February where that was actually at a higher rate than later in November or December.

Speaker Change: Yes.

Speaker Change: It was a shift right.

Krish S. Krishnan: And, So that kind of affected the rate, shifting from, say, the middle of December to January, et cetera. Okay, and have there been any differences in the conversion rate or the conversion time between Medicaid and commercial patients? That's a good question because it doesn't have a time dimension.

Speaker Change: <unk>.

Speaker Change: So that kind of affected the rate.

Speaker Change: Shifting from say middle of December into January et cetera.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Have there been any differences in the conversion rate or the conversion time between Medicaid and commercial patients.

Speaker Change: In the in depth.

Speaker Change: Good question, because it doesn't have a time dimension in the past and like your 2023, Medicaid definitely took a bit longer because there was no J code different states where different points.

Krish S. Krishnan: Now in the past, in 2023, Medicaid definitely took a bit longer because there was no JCO, different states were at different points, and commercial was doing pretty well. And I think right now, I wouldn't say, starting now, going forward, I don't see a measurable difference between the two. We do depend on it, and in fact, on the commercial side, if you end up with a single case agreement on a patient, it could take just as long as Medicaid. So, I mean, to answer your question simply, and I was thinking as I was responding, we don't see any meaningful difference in time, especially going forward. And we might have seen some in the past.

Speaker Change: And commercial was doing pretty well.

Speaker Change: Yeah.

Speaker Change: And.

Speaker Change: I think right now I wouldn't say starting now going forward.

Speaker Change: Don't see a measurable difference between the two.

Speaker Change: We do and in fact on the commercial side. If you end up with a single case agreement on a patient.

Speaker Change: You could take just as long as Medicaid. So I mean to answer your question simply and I was thinking as I was responding we don't see any meaningful difference in time, especially going forward.

Krish S. Krishnan: Okay, great. And last one, I just wanted to ask what your latest expectations for Vizivac pricing in Europe were, and thanks for taking all the questions. We don't know. We... look... We are. It's a differentiated drug. The efficacy profile is very strong.

Speaker Change: Might have seen some in the past.

Speaker Change: Okay, Great and then last one I just wanted to ask what your latest expectations for advisory like pricing in Europe was thanks for taking all the questions.

Speaker Change: We don't know we look.

Speaker Change: We are it's a differentiated drug the efficacy profile is very strong we're seeing really good demand on named patient sales from a handful of countries are conversations with ema's outgoing well our job is to make a case for.

Krish S. Krishnan: We're seeing really good demand for name patient sales from a handful of countries. Our conversations with the MAs are going well. Our job is to make a case for, we know it's going to be lower, but our job is to get to, less than a 50% discount if we're fortunate, less than, you know, I hope I'm not confusing people there, something north of say $15,000 per vial would be great. That makes sense. Thank you. This question is coming from Josh. Josh, your line is live. Thanks for taking the questions. I have a three-click one.

Speaker Change: We know it's going to be lower but our job is to get to.

Speaker Change: Less than a 50% discount if we're fortunate.

Speaker Change: Less than like.

Speaker Change: I hope I am.

Speaker Change: I'm not confusing people there.

Speaker Change: Something north of.

Speaker Change: Of say $15000 per vial would be great for us.

Speaker Change: That makes sense. Thank you.

Speaker Change: Thank you. The next question is coming from Josh Shimmer from Cantor.

Josh Shimmer: Josh Your line is great.

Josh Shimmer: Great. Thanks for taking the questions I have three quick ones.

Operator: So 228 reimbursement approvals out of around 428 start forms; that's 55% conversion. What about the remaining 45%? How many of those, or what proportion of those, do you expect to be able to capture with the new J code and over what period of time? The second question is if you can quantify any contribution from either inventory building or name patient access in Europe. And then last question, the annual cap of 900,000 gross, is that on a per patient basis or a per plan basis averaged across their population? Look, on the first one, our internal goal is to try and get all the patients, you talked about the gap between the stock farms and the thing, we're trying to get all the patients in 2023 on to reimbursement by the end of Q1.

Josh Shimmer: 228 reimbursement approvals set of around 428 start for them. So that's 55%.

Josh Shimmer: Conversely for the remaining 45% how.

How many of those or what proportion of those do you expect to be able to capture with the new J code and over what period of time. Our second question is if you can.

Josh Shimmer: Quantify any contribution from either inventory build.

Josh Shimmer: Building or named patient access in Europe, and then last question. The annual cap of 900000 gross is that on a per patient basis or a per plan basis averaged across their population. Thank you.

Josh Shimmer: Look on the first one our internal goal is to try and get too.

Josh Shimmer: Paul you talked about the gap between the start forms in the thing we're trying to get to get all the patients.

Josh Shimmer: In 2023.

Josh Shimmer: On to reimbursement by the end of Q1, that's the goal.

Operator: That's the goal. And then, so I don't, you know, instead of answering a question that's 228 versus 428, our internal goal is all the patients who we know of at the end of 2023; we want them to be reimbursed by the end of Q1. In terms of, Was there any inventory or NPP, hardly any yet; we're just starting to get NPP, it'll probably get reflected more going forward and on the annual cap. Look, it is... Um...

Josh Shimmer: And then so I don't instead of entering a question of <unk> 28 versus <unk> 28, our internal is all of the patients who we know of at the end of 2023, we want them on reimbursement by the end of Q1.

Josh Shimmer: In terms of.

Josh Shimmer: Was that any inventory or NPP hardly any yet.

Josh Shimmer: We're just starting to get NPP, it'll probably get reflected more.

Josh Shimmer: Going forward.

Josh Shimmer: And on the annual cap.

Josh Shimmer: Look it is.

Josh Shimmer: Uh huh.

Krish S. Krishnan: The overall discount, I think I've mentioned this, is measured at the payer level. So it's kind of like a blended average, depending on the number of patients in the plant. Hi, good morning, guys. This is Anirudhan speaking for Ritu today. Congratulations on the quarter. I have two questions.

Josh Shimmer: The overall discount I think I've mentioned this is measured at the payer level.

Josh Shimmer: So it's kind of like.

Josh Shimmer: Blended average depending on the number of patients in the plant.

Speaker Change: Thank you.

Redo Barrow: Thank you and the next question is coming from a redo borrow from TD Cowen.

Redo Borrow: Richard Your line is life.

Redo Borrow: Hi, Good morning, guys. This is on your commentary today congrats on the quarter I have two questions. So as you see more reauthorization taking place.

Krish S. Krishnan: So as you see more reauthorizations taking place, could you just expand on how, what's the process of that, and then what does the prescriber need to show for a successful reauthorization? And then I have a follow-up after that. Yeah, the reauthorization happens every six months; usually, you need some, it's called clinical notes from a physician saying that the Viz-a-Vec is working. Some of them certify without a patient visit, and some certify wanting a patient visit. And we're talking about a local patient visit, for the most part, for the most part. And that's what it entails. So, depending on the patient, it could take a certain amount of time, but usually it's pretty quick.

Richard: Can you just expand on how what the process of that and then what is the fifth Craig Let me just show for a successful reauthorization and I have a follow up after that.

Speaker Change: Yes on the reauthorization happens every six months.

Speaker Change: Usually.

Speaker Change: <unk>.

Speaker Change: <unk>.

Speaker Change: It's called clinical notes from a physician, saying that <unk> is working.

Speaker Change: Some of them certified without a patient visit and some certified wanting a patient visits and we're talking of local patient visit for the most part for the most part.

Speaker Change: And that's what it entails.

Speaker Change: So depending on the basin and that could take a certain amount of time, but usually it's pretty quick.

Krish S. Krishnan: Got it. And then could you talk about the market research efforts in the EU ahead of the potential launch there and, like, in terms of how patients are currently managed there and now, and just to confirm now that you're expecting a launch there next year versus later this year? Thank you. Look, later. Later, I want to be clear. It depends on when we get approved, and if you saw what happened to us in the U.S., we're always adding three months to the PDUFA date from this point on. It appears to be the norm rather than anything management says.

Speaker Change: Got it and then could you talk about the market research efforts in the EU ahead of a potential launch then like in terms of how patients are currently manage there now and just to confirm now you're expecting and launched it in next year, which is later this year.

Speaker Change: Thank you.

Speaker Change: Look later.

Speaker Change: I want to be clear it depends on when we get approved and if you saw what happened to us in the U S where from we're always adding treatments.

Speaker Change: From this point on it appears to be the norm.

Speaker Change: Anything management says having said that.

Krish S. Krishnan: Having said that, if the launch is scheduled for late in the year, like say in December, we'd probably push it out to January. In terms of launch plans, I think we're going to have a general manager in Germany at the beginning of March to build out the team. That will be the first country of launch. In terms of market research, our current EU general manager, Laurent, has already been talking to physicians and centers of excellence who have really strong registries, so we feel really good about the identified patient population. A lot of home dosing in Europe is handled by the hospital, so a lot of the logistical complications you see in the U.S., like getting home dosing in place, finding patients, are not as big issues in Europe. What is important in the EU is that we get to a good place on access. If we get to a good place with respect to access, the EU launch becomes a bit simpler logistically than the U.S. launch and kind of very similar to the Japanese story.

Speaker Change: If the launch is scheduled for late in the year like I say in December we would probably push it out to January.

Speaker Change: In terms of launch plans I think we're going to have a gentleman.

Speaker Change: General manager in Germany at the beginning of March.

Speaker Change: To build out the team that will be the first country of launch.

Speaker Change: In terms of market research, our current EU General manager Lora has already been talking to.

Physicians and centers of excellence, who have really strong registry. So we feel really good about the identified patient population.

Speaker Change: A lot of home dosing in Europe is handled by the hospital. So a lot of the <unk>.

Speaker Change: Logistical complications you see in the U S like getting home dosing in place.

Speaker Change: Finding patients.

Speaker Change: No. It is big issues in Europe, what is important in EU is that we get to a good place on access if we get to a good place with respect to access to the EU launch becomes.

Speaker Change: A bit simpler logistically than the U S slot and.

Speaker Change: And kind of very similar in Japan story.

Operator: Great, very helpful. Thank you. Thank you. There were no other questions in queue at this time. This now concludes the call. Thank you all, participants, for joining the Krystal Biotech fourth quarter and full year.

Speaker Change: Great very helpful. Thank you.

Speaker Change: Okay.

Speaker Change: Thank you there are no other questions in queue at this time. This now concludes the call.

Speaker Change: At this time. Thank you all participants for joining the Crystal biotech fourth quarter and full year 2023 earnings call you may now disconnect.