Q2 2024 Krystal Biotech Inc Earnings Call

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Operator: Thank you for standing by, and welcome to Krystal Biotech's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentations, there will be a question and answer session. During the question and answer session, there will be a limit of two questions per participant. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Stephan Paquette, Vice President of Corporate Development. Please begin.

Speaker Change: Thank you for standing by and welcome to Crystal Biotechs second quarter 2024 earnings Conference call.

At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: During the question and answer session, there will be a limit of two questions per participant.

Stefan Puckett: As a reminder, today's conference is being recorded I would now like to hand, the conference over to your host Stfan Puckett Vice President of corporate development. Please begin.

Stephan Paquette: Good morning, and thank you all for joining today's call. Earlier today, we released our financial results for the second quarter of 2020. The press release is available on our website at www.krystalbio.com. We also filed our earnings 8K and 10Q with the SEC earlier today.

Stefan Puckett: Good morning, and thank you all for joining today's call.

Speaker Change: Earlier today, we released our financial results for the second quarter of 2024.

Speaker Change: The press release is available on our website at Www Dot Crystal bio Dot com.

Speaker Change: We also filed our earnings 8-K, and 10-Q with the SEC earlier today.

Krish Krishnan: Krish Krishnan, Chairman and Chief Executive Officer. Suma Krishnan, President of Research and Development. Jennifer McDonough, Senior Vice President of Patient Access, Analytics, and Operations. Christine Wilson, Senior Vice President and Head of U.S. Sales and Marketing, and Kate Romano, Chief Accounting Officer.

Speaker Change: Joining me today will be.

Speaker Change: Krish Krishnan, Chairman and Chief Executive Officer.

Speaker Change: Sumo Krishnan President of research and development.

Jennifer McDonough: Jennifer Mcdonough senior Vice President of patient access analytics and operations.

Christine Wilson Senior Vice President and head of U S sales and marketing and <unk>.

Speaker Change: Mono Chief Accounting officer.

Stephan Paquette: This conference call will, and our responses to questions may, contain forward-looking statements. You are cautioned not to rely on these forward-looking statements, which are based on current expectations using the information available as of the date of this call and are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected. A description of these risks, uncertainties, and other factors can be found in our SEC filing. With that, I will turn the call over to Krish.

Jennifer McDonough: This conference call will end.

Speaker Change: Our responses to questions may contain forward looking statements.

Speaker Change: You are cautioned not to rely on these forward looking statements, which are based on current expectations excuse me the information available as of the date of this call and are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected.

Speaker Change: A description of these risks uncertainties and other factors can be found in our SEC filings.

Speaker Change: With that I will turn the call over to Krish.

Krish Krishnan: Thank you, Stephane. Thank you all for joining the call. Q2 2024 was a great quarter, during which we continued to make great progress, both with respect to the VizioVec launch and the clinical pipeline. But more importantly, it was quiet, free from external disruptions that we faced in one Q of this year.

Krish Krishnan: Thank you Stephanie.

Krish Krishnan: Thank you all for joining the call.

Krish Krishnan: Q2, 2024 was a great quarter for us.

Krish Krishnan: During which we continued to make great progress both with respect advisory like plant and clinical pipeline.

Krish Krishnan: More importantly, it was quiet.

Krish Krishnan: Wyatt from external disruptions that we faced in <unk> this year.

Krish Krishnan: Today's strong results reflect our commitment to improving the lives of patients suffering from DEB. The benefits that deaf patients are realizing with Visevac, the first and only corrective therapy for this debilitating disease, serve as a powerful reminder of what we can achieve as an organization. They also push us forward in our mission to treat death comprehensively and to develop new medicines for urgent unmet needs. As we will discuss in a moment, strong fundamentals continue to propel our U.S. launch. Patient demand remains high, and we are increasingly seeing positive impacts, both in patient starts and in new patient identification. Access, as you are aware, is in a great place, and compliance remains strong.

Krish Krishnan: Today's strong results reflect our commitment to improving the lives of patients suffering from DB.

Krish Krishnan: The benefits that that patients are realizing advisory work.

Krish Krishnan: First and only corrective therapy for this debilitating disease.

Krish Krishnan: It is a powerful reminder of what we can achieve as an organization.

Krish Krishnan: They also push us forward in our mission to treat Deb comprehensively and to develop new medicines for urgent unmet needs.

Krish Krishnan: As we will discuss in a moment strong fundamentals continue to propel our U S launch patient.

Krish Krishnan: Patient demand remains high and we are increasingly seeing positive impacts both in patient starts and new patient identification.

Krish Krishnan: Access as you are aware is in a great place and compliance remains strong.

Krish Krishnan: Net product revenue growth in the quarter was up over 55% compared to 1Q2024. We look forward to delivering further growth both in the U.S. and in overseas markets as we progress towards launches in Europe and Japan in 2025. We're also on the verge of a wave of clinical data readouts. Later this quarter, we expect to announce the first of these clinical updates for our Jun Aesthetics Program, KB301, which is being evaluated in two parallel Phase I cohorts for the treatment of wrinkles in unmet aesthetic areas. And before year-end, we expect to issue interim clinical updates, both for KB408 for the treatment of alpha-1-anti-Trypsin deficiency and intratumoral KB707 for the treatment of Injection-Accessible Solid Tumor.

Krish Krishnan: Net product revenue growth in the quarter was up over 55% compared to <unk> 2024.

Krish Krishnan: We look forward to delivering further growth both in the U S and in overseas markets as they progress towards launches in Europe, and Japan in 2025.

Krish Krishnan: We're also on the verge of a wave of clinical data readouts.

Krish Krishnan: Later this quarter, we expect to announce the first of these clinical updates.

Speaker Change: <unk> <unk> program <unk> hundred one which is being evaluated in two parallel phase <unk> cohorts for the treatment of wrinkles in unmet aesthetic areas.

Speaker Change: And before year end, we expect to issue interim clinical updates well. That's what gave me photo eight for the treatment of Alpha one antitrypsin deficiency and intra tumoral <unk> 707 for the treatment.

Speaker Change: Of injection accessible solid tumors.

Krish Krishnan: Additional clinical updates are expected in 2025 as enrollment continues across our expanding clinical pipeline. We continue to invest in our manufacturing infrastructure and are presently working with the FDA on a scale-up of our current approved manufacturing process to increase both biotech yields and margins with the potential for approval by the end of the year. The scaled-up process would increase the number of vials produced per manufacturing run by fourfold.

Speaker Change: Additional clinical updates are expected in 2025 as enrollment continues across our expanding clinical pipeline.

Speaker Change: We continue to invest in our manufacturing infrastructure and are presently working with the FDA on a scale up of our current approved manufacturing process to increase spot Wojciech yields and margins with the potential for approval by the end of the year.

Speaker Change: The scale of process would increase the number of vials produced per manufacturing run by fourfold.

Krish Krishnan: As you can see, this will further improve margins, require fewer packaging slots at our vendor, and ease any potential supply chain constraints to meet the growing demand from global markets. We're also on track to start the tech transfer of our commercial process to Astra later this year. Finally, I'm happy to report another profitable quarter for Krystal at $0.54 per share, up sequentially from $0.03 per share in the first quarter of 2024. In Q2, we accrued $12.5 million in litigation expenses, which once again mitigated our EPS as it did in Q1.

Speaker Change: As you can discern this will further improve margins to acquire fewer packaging slots at our vendor and ease any potential supply chain constraints to meet the growing demand from global markets.

Speaker Change: We're also on track to start tech transfer of our commercial process to Aster later this year.

Finally, I'm happy to report another profitable quarter for Crystal at 54 per share up sequentially from three cents per share in the first quarter of 2024.

Speaker Change: In Q2, the accrued $12 $5 million in litigation expenses and once again mitigated our EPS as it did in Q1.

Krish Krishnan: We presently anticipate one more final approval, of the litigation expense, this year. With strong and growing capital reserves, climbing revenues, and two commercial-scale CGMP facilities, we're well-positioned as ever to execute on our long-term growth plans, expand our global footprint, and bring to market a portfolio of highly differentiated genetic medicine. Moving now to our results.

Speaker Change: We presently anticipate one more final approval of.

Speaker Change: After litigation expense this year.

Speaker Change: With strong and growing capital reserves climbing revenues and do commercial scale cgmp facilities, we're well positioned as ever to execute on our long term growth plans and expand our global footprint and bring to market a portfolio of highly differentiated.

Speaker Change: Kinetic medicines.

Krish Krishnan: Net riser revenues for the quarter came in at $70.3 million, an increase of 55.3% compared to revenues from the first quarter of 2024. Note that this prior quarter had been affected by a one-time disruption.

Moving now to our results.

Speaker Change: Net revenues for the quarter came in at $73 million.

Speaker Change: An increase of 55, 3% compared to the revenues from the first quarter of 2024.

Speaker Change: Note that this prior quarter had been affected by onetime disruptions.

Krish Krishnan: So looking back over our first four full quarters, since our first sale in August of 2023, total net Vijavec revenues now exceed $166 million, and we continue to keep pace with the top tier of rare diseases. Gross margins were 91% for the quarter. We continue to expect margins to be above 90% in the coming quarters, gradually improving to over 95% within a few years. Gross net adjustments in the first quarter were 18%.

So looking back over our first four full quarters since the first sale in August of 2023.

Speaker Change: Total net revenues now exceed $166 million.

Speaker Change: Continue to keep pace with the top tier of rare disease launches.

Speaker Change: Gross margins were 91% for the quarter.

We continue to expect margins to be above 90% in the coming quarters gradually improving to over 95% within a few years.

Speaker Change: Gross to net adjustments in the first quarter were 18%.

Krish Krishnan: We expect growth to net will remain in the high teens, reflecting a roughly even split of debt patients on commercial and government plans. As we disclosed last quarter, please note that the net Vijavec revenues reported today also include an approval for patients on contracted commercial plans who are projected to potentially hit the cap of $900,000 gross per patient per calendar year in 2024. Our rapid revenue growth in the quarter was driven by strong launch fundamentals and the tireless contributions of our team at Krishnan. I'll now hand it off to Jen and Christine, who will provide more color on our successes helping patients get on Vigevac and stay on therapy. Jennifer

Speaker Change: We expect gross to net will remain in the high teens.

Speaker Change: Reflecting a roughly even split up that patients on <unk>.

Speaker Change: Marshall and government plans.

Speaker Change: As we disclosed last quarter. Please note that the net <unk> revenues reported today.

Speaker Change: <unk> included an accrual for patients on contracted commercial plans were projected to potentially hit the cap of $900000 gross per patient per calendar year in 2024.

Speaker Change: Our rapid revenue growth in the quarter was driven by strong launch fundamentals.

Speaker Change: And the tireless contributions of our team at Crystal.

Christine: I'll now hand, it off to 10, and Christine will provide more color on our successes, helping patients get on <unk> and stay on therapy.

Jennifer McDonough: Thank you, Krish. The number of dystrophic E.V.

Speaker Change: Jennifer.

Jennifer McDonough: Patients gaining access to Vijuvec and benefiting from fundamentally corrective therapy grew significantly in the second quarter of 2024. I am pleased to say that commercial and Medicaid access remains strong nationwide. We now receive positive policies or decisions from roughly 97% of all covered lives. This is up from 96% in our last report as we approach effectively full coverage across the country. With positive policies in place at all major plans, we are progressing patients steadily to treatment.

Christine: Thank you crash and I'm, just trying to think EV patients gaining access to <unk> and benefiting from fundamentally corrective therapy grew significantly in the second quarter of 2024, I am pleased to say that commercial and Medicaid access remains strong nationwide.

Speaker Change: We now have received positive policy decisions from roughly 97% of all covered lives. This is up from 96% in our last report as we approach effectively full coverage across the country.

Speaker Change: The positive policies in place at all major plans, we are progressing patients steadily to treatment and as of July we have secured over 400 patient reimbursement approval as.

Jennifer McDonough: And as of July, we have secured over 400 patient reimbursement approvals. As you can see on the slide, reimbursement approvals continue to be roughly evenly split across commercial and government plans. More importantly, we continue to see reimbursement approvals across the DEB patient population, including patients of both DEB subtypes and of all ages in similar proportions as reported last quarter. However, I would like to point out that while reimbursement approvals are a good leading indicator of revenue, they do not immediately translate to revenue. As you know, it often takes two to three weeks after insurance authorization to schedule a first home visit by a nurse and sometimes further exasperated over the summer where usual routines are disrupted.

Speaker Change: As you can see on the slide reimbursement approval will continue to be roughly evenly split across commercial and government plans.

Speaker Change: More importantly, we continue to see reimbursement approvals across the dead patient population, including patients with ALS subtype and of all ages and semi proportions as reported last quarter.

Speaker Change: I would like to point out that while reimbursement approvals are a great leading indicator of revenue. They do not immediately translate to revenue as you know it often takes two to three weeks after insurance authorization to schedule a firsthand.

Speaker Change: INR and sometimes further exasperated over the summer where usual routines are disrupted.

Jennifer McDonough: Conversion times held steady over the last quarter, and on average, it takes us four to six weeks to obtain insurance authorization and complete the first home treatment. Although the team continues to make process improvements, these were offset in the quarter by a high proportion of prescriptions coming from community prescribers less familiar with rare disease reimbursement, which required more active management by our team. Albeit taking a bit longer, thanks to the hands-on expertise and support of Crystal Connect, even in these cases, we are able to achieve successful access outcomes.

Speaker Change: Convergent has held steady over the last quarter and on average it takes us four to six weeks to obtain insurance authorization and complete the first time treatment.

Speaker Change: The team continues to make process improvements either offset in the quarter by a high proportion of prescriptions coming from community prescribers less familiar with rare disease reimbursement it required more active management by our team, albeit taking a bit longer I. Thanks to the hands on expertise and support a crustal connect even in these cases, we are able to.

Speaker Change: <unk> successful access outcomes.

Jennifer McDonough: And finally, as we enter into our second year since approval, the volume of reauthorizations required each month continues to grow. And, as in our previous quarters, all reauthorizations to date have been approved or are in process.

Speaker Change: And finally as we enter into our second year since approval the volume of reauthorization required each month continues to grow and payments in our previous quarters. All reauthorization to date had been approved or are in process.

Jennifer McDonough: Moving to patient experience compliance, patient preference for at-home administration remains effectively unchanged, with 96% of the weekly treatments again occurring in the patient's home. And we are pleased to report that compliance to weekly application through the end of the second quarter remains high at 90%, even as patient-based and average length of therapy continues to grow. We believe that HIVE-IGVAC compliance is driven not only by the profound impact corrective therapy has on the patient's lives but also by the convenience of home administration facilitated by our team at Crystal Connect.

Speaker Change: Moving to the patient experienced a compliant patient preference for at home administration remains effectively unchanged with 96% of the weekly treatments again occurring in the patient's home.

Speaker Change: And we are pleased to report that compliance to weekly application because at the end of the second quarter remains high at 90%, even as patient base and average length of therapy continues to grow.

Speaker Change: We believe that the highlight you that compliance is driven not only by the profound impact of corrective therapy has on patient lives, but also the convenience upon administration facilitated by our team at Crystal Can act.

Jennifer McDonough: As we progress in our launch, we remain unwavering in our focus on the patient experience and ensuring patients are able to access IGVIP promptly and conveniently to ensure maximal clinical benefit. I will now hand it off to Christine to discuss recent sales and marketing activities, driving awareness, and the new Dab Patient Starts On by Juvex.

Speaker Change: As you can for gas in our lives we remain unwavering in our focus on the patient experience and ensuring patients are able to access that promptly and conveniently to ensure maximal clinical benefit.

Speaker Change: I will now hand, it off to Christine to discuss recent sales and marketing activities driving awareness and new dad patient starts on <unk> Christine.

Christine Wilson: Thank you, John. I'm happy to share today that Krystal's integrated commercial strategy, organized around our three pillars of claim analytics, medical education, and patient activation, is driving significant growth for iJUVIC in the U.S. Our claims monitoring infrastructure continues to flag new alerts, enabling targeted deployments of our field force. We're also making great progress raising DEB and VYJUVIC awareness among the medical community through our educational efforts, including recent publications and virtual speaker events.

Christine: Thank you John.

Christine: I'm happy to share today that crystals integrated commercial strategy organized around our three pillars of clean analytics medical education and patient activation is driving significant growth in the U S.

Speaker Change: Our claims monitoring infrastructure continues to flag Mueller, enabling targeted deployment of our field force.

Speaker Change: We're also making great progress meeting andi genes like Atlanta.

Speaker Change: Among the medical community through our educational efforts, including recent publications and virtual speaker events.

Christine Wilson: And perhaps most importantly, we are connecting to patients and enabling patient-to-patient dialogue, amplifying early successes, and activating patients that may have otherwise resigned themselves to their duties. Although our primary commercial focus remains on penetration of the 1,200 dead patients identified at launch, and we continue to make rapid progress on this front, our commercial efforts are also organically expanding the dead patient pool. This will take on greater emphasis as we progress with our launch and as we work to ensure all dead patients, whether diagnosed today or not, ultimately have the chance to access iGVAC therapy.

Speaker Change: And perhaps most importantly, we are collecting the patients and enabling patient to patient dialogue amplifying early successes and activating patients that may have otherwise resigned themselves to their disease.

Speaker Change: Although our primary commercial focus remains on penetration up to 200 patients identified at lunch.

Speaker Change: And we continue to make lots of progress on this front. Our commercial efforts are also organically expanding the job patient pool. This will take on greater emphasis as we forgot to their launch and as we work to ensure all <unk> patients.

Speaker Change: They're diagnosed today or not ultimately have the chance to access to <unk> therapy.

Christine Wilson: I would also like to feature today a few recent highlights from our work to raise awareness and activate dead patients across the U.S. Earlier this quarter, a review article was published to serve as a practical guide for real-world use of iJUVEC. The article, authored in collaboration with DEB key opinion leaders, is now open access and provides readers with an overview of the DEB disease burden, iJUVEC clinical trial outcomes, as well as physician, patient, and caregiver recommendations.

Speaker Change: I would also like to feature today, a few recent highlights from our work to raise awareness and activating patients across the U S.

Speaker Change: Earlier this quarter a review article was published to serve as a practical guide for real world use of Iga back.

Speaker Change: The article authored in collaboration with key opinion leaders is now available open access and provides the readers and overview of the disease burden.

Speaker Change: The clinical trial outcomes as well as physician patient and caregiver recommendations.

Christine Wilson: Later this year, we expect to publish detailed results from the OLE study, providing additional information to prescribers and the DEP community on the extended use of IGV. These publications and related educational materials provide the medical community with easy access to critical data on the many benefits of adjuvic therapy and best practices for its use.

Speaker Change: Later this year, we expect to publish detailed results from the <unk> study, providing additional information to prescribers and the Doc community on the extended you get to piggyback.

Speaker Change: These publications and related educational materials provide the medical community with easy access to critical data on the money benefits about gene therapy.

Speaker Change: Best practices honesty.

Christine Wilson: They also help enrich our medical team's interactions with care providers, either during one-on-ones or in the increasing number of virtual and in-person events that we put on across the country. At the same time, we are making progress in facilitating patient-to-patient interactions, including holding our first patient webinar with EB Lifestyle this quarter. With testimony from multiple Vijuvik advocates, these virtual events allow us to disseminate their learnings and successes across the country at events such as the Deborah Care Conference recently held in July.

Speaker Change: They also help enrich our medical teams interactions with care providers, either doing one on ones or an increasing number of virtual and in person events that we put on across the country.

Speaker Change: At the same time, we are making progress in facilitating patient to patient interactions, including holding our first patient webinar with EDI lifestyle this quarter.

Speaker Change: With testimony from multiple <unk> advocacy these virtual events allow us to disseminate their learnings and successes across the country at events such as the Deborah Kerr Conference recently held in July.

Christine Wilson: We will be supplementing our virtual efforts with multiple in-person events in the second half of the year and a meeting series covering four major metropolitan areas across the U.S. Thanks to these initiatives and others, we have made excellent progress in both raising the profile of DEBB and communicating the value proposition of iJUVEC to patients and their caregivers. It is gratifying to see this work translate into new patient starts and dead diagnosis and look forward to the path ahead. Now I will hand it off to Suma to share a pipeline highlight.

Speaker Change: Will be supplementing our virtual efforts with multiple in person events in the second half of the year on a meeting series covering four major metropolitan areas across the U S. Thanks.

Speaker Change: Thanks to these initiatives and others, we made excellent progress on both raising the profile of Deb and communicating the value proposition of <unk> to patients and their caregivers.

Speaker Change: It is gratifying to see this work translates into new patient starts and that diagnosis and look forward to the Papa HUD.

Speaker Change: Now I'll hand, it off to Cmos pushout pipeline highlights.

Christine: Thank you Christine.

Suma Krishnan: As you have seen, our development team's strong momentum to start 2024 continued throughout this past quarter, as we made significant progress towards our goal of treating debt comprehensively and globally, while also advancing a broad pipeline of urgently needed re-dosable genetic medicines. With respect to the global development of BBAC, we remain on track for launches in both Europe and Japan by 2025.

Speaker Change: Our development team strong momentum to start 2024 continued throughout this past quarter.

Speaker Change: As we made significant progress towards our goals of creating Deb comprehensively and globally.

Speaker Change: While also advancing our broad pipeline of urgently needed re dose lebow genetic medicines.

Speaker Change: With respect to the global development of piggyback.

Speaker Change: We remain on track for launches in both Europe, and Japan by 2025.

Suma Krishnan: In Europe, EMA's review of our marketing authorization application is progressing well, and in May, GMP certification of our commercial manufacturing facility, ANKORUS, was granted by the European Authority. As we shared last quarter, based on recent discussions, we believe EMA, like the FDA, is also supportive of home dosing. We continue to expect a decision on our marketing authorization application before the end of the year and a first launch in Germany in 20

Speaker Change: In Europe.

Speaker Change: The review of a marketing authorization application is progressing well and then May GMP certification of our commercial manufacturing facility Anchoress was granted by the European authorities.

Speaker Change: As we shared last quarter based on recent discussions we believe EMA like the FDA is also supportive of home dosing.

Speaker Change: We continue.

Speaker Change: Expect a decision on our marketing authorization application.

Speaker Change: For the end of the year.

Speaker Change: And the first launch in Germany in 2025.

Suma Krishnan: In Japan, we remain on track to file the Japanese new drug application for BVAC in the second half of the year. Having previously 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. We remain on a trajectory for both a decision by the Japanese authorities as well as a launch in 2025. Our application to the Japanese authorities will include the results of our open-label extension study in Japanese patients that was completed earlier this year.

Speaker Change: In Japan, we remain on track to file the Japanese new drug application on buyback and second half of the year.

Speaker Change: Having previously received orphan drug designation by Japan's Pharmaceuticals, and medical device agency.

Speaker Change: That designation, which confers specific benefits for orphan drug development, including priority review of applications.

Speaker Change: We remain on a trajectory for both.

Speaker Change: And by the Japanese authorities as well as launch in 2025.

Speaker Change: Our application to the Japanese authorities will include the results of our open label extension study in the Japanese patients that was completed earlier this year.

Suma Krishnan: Key details including safety and efficacy observations from the Japanese Open-label Extension Studies are shown here. Overall, results closely mirrored those from our Registrational Phase 3 trial. The Japanese study was a multi-center, open-label, extension study in Japanese patients with Deb. The primary endpoint was the same as in our registrational study: complete closure of a pre-specified primary wound at the six-month time point.

Key details, including safety and efficacy observations from the Japanese open label extension studies are shown here.

Speaker Change: Overall results closely mirror those from a registrational phase III trial.

Speaker Change: The Japanese study was a multicenter open label extension study in Japanese patients with depth.

Speaker Change: The primary endpoint was the same as in a Registrational study.

Speaker Change: Fleet closure of our pre specified primary wound at the six month time point.

Suma Krishnan: Key inclusion criteria and dosing are shown on the slide. Importantly, we aligned with the Japanese regulatory authorities on the study design, number of patients for the Japanese study, and the use of U.S. clinical data to fulfill requirements for the Japanese new drug application submission. In total, we enrolled five patients, with one dropping out due to scheduling challenges.

Speaker Change: Key inclusion criteria and dosing as shown on the slide.

Speaker Change: Importantly, we are aligned with the Japanese regulatory authorities on the study design number.

Speaker Change: <unk> of patients for the Japanese study and the use of use clinical data to fulfill requirement for the Japanese new drug application submission.

Speaker Change: In total we enrolled five patients with one dropping out due to scheduling challenges.

Suma Krishnan: All enrolled patients add recessive, Deb, and covered a white E-train. As shown on the right, all four patients that completed the study achieved complete wound closure at the six-month time point. In addition, BVAC was well tolerated in the Japanese population, and both its efficacy and safety profile were consistent with previous U.S. studies.

Speaker Change: All enrolled patients at the surface.

Speaker Change: Yep and covered a wide range.

Speaker Change: As shown on the right all four patients that completed the study.

Complete wound closure at the six month time point.

Speaker Change: In addition feedback was well tolerated in the Japanese population.

Speaker Change: And both efficacy and safety profile was consistent with previous U S studies.

Suma Krishnan: We view these results as supportive of our application to the Japanese regulators and look forward to filing later this year. Moving now to a broader pipeline, here, as well, we have made rapid progress, putting us on track for three readouts before the end of the year. We expect to share the first of these readouts later this quarter with interim top-line results for both cohort 3 and 4 of our KB301 phase 1 study. Both cohorts are running concurrently to evaluate our aesthetic medicine candidate, KB301, in two potential target indications. Improvement of lateral campyloid at rest and improvement of Dynamic Wrinkles of the Decollete.

Speaker Change: We view these results as supportive of our application to the Japanese regulators and look forward to filing later this year.

Speaker Change: Moving now to our broader pipeline.

Speaker Change: Here as well as we have made rapid progress putting us on track for three read out before the end of the year.

Speaker Change: We expect to share the first of these Readouts later this quarter with interim top line results for both cohort three and four.

Speaker Change: <unk> 301 phase one study.

Speaker Change: Both cohorts are running concurrently evaluate our aesthetic medicine candidate <unk> 301, and two potential target indications.

Speaker Change: Improvement of lateral canthal lines at crest.

Speaker Change: An improvement of dynamic wrinkles of the deck with Te.

Suma Krishnan: Following readouts from Cohort 3 and 4, we expect to select a single indication for Phase 2 development. In the fourth quarter, we also expect to disclose interim data updates from both our KB408 and inter-tumoral KB707 programs. KB408 is our re-dosable inhale therapy for alpha-1 antitrypsin deficiency, which is currently being evaluated in a phase one Serpentine-1 study. Serpentine-1 is an open-label, single-dose escalation study in adult patients with AATD to allow assessment of safety, tolerability, alpha-1 antitrypsin levels, and key pharmacodynamic bio

Speaker Change: Following readouts from cohort three and four we expect to select a single indication for phase two development.

Speaker Change: In the fourth quarter, we also expect to disclose interim data updates from both <unk> eight and.

Speaker Change: Intra tumoral <unk> 707 programs.

Speaker Change: <unk> hundred eight is a re dose inhaled therapy for Alpha one antitrypsin deficiency, which is currently being evaluated in a phase one trial.

Speaker Change: <unk> one study separate than one is open label single dose escalation study in adult patients with TD to allow assessment of safety Tolerability.

Speaker Change: Well, one antitrypsin levels and Keith Amoco dynamic Biomarkers.

Suma Krishnan: We have completed Cohort 1 and are currently enrolling Cohort 2. With strong support from the Alpha 1 research community, we remain on track for an interim data readout before the end of 2024. Intratumoral KB707 is an injectable formulation of our modified HSV1 vector designed to deliver genes encoding both human IL-12 and IL-2 to the tumor microenvironment and promote systemic immune-mediated tumor clearance.

Speaker Change: We have completed cohort one and are currently enrolling cohort two.

Speaker Change: With strong support from the Alpha one research community, we remain on track for an interim data readout before the end of 2024.

Speaker Change: In Turkey alone <unk> 707 is an injectable formulation of a modified HSV one vector designed to deliver genes encoding both human <unk> 12 and <unk>.

Speaker Change: The tumor micro environment.

Speaker Change: And promote systemic immune mediated tumor clearance.

Suma Krishnan: It is being evaluated in a phase 1 dose, escalation, and expansion study of OPA1. We have now completed all three dose escalation cohorts, and dose expansion is underway. I'm happy to share that intratumor KD707 was recently granted a rare pediatric disease designation for the treatment of osteosarcoma. This is in addition to a Fast Track designation granted last year.

Speaker Change: It is being evaluated in a phase one dose escalation and expansion study of <unk> one.

Speaker Change: We have now completed all three dose escalation cohorts and dose expansion is underway.

Speaker Change: We will issue an interim data update.

Speaker Change: For year end.

Speaker Change: I'm happy to share that <unk> seven was recently granted a rare pediatric disease designation for the treatment of osteosarcoma.

Speaker Change: This is in addition to a fast track designation granted last year.

Suma Krishnan: We are also making progress in our Phase I studies evaluating inhaled KB407 for cystic fibrosis and inhaled KB707 for solid tumors of the lungs. We have now completed cohort 2 in our phase 1, coral 1 study evaluating KB407 and completed the first dose level. 1, Kainite 1, Study Evaluating Inhale KB707

Speaker Change: We are also making progress in our phase one studies evaluating inhaled <unk> four seven for cystic fibrosis at inhaled <unk> 707 for solid tumors after alone.

We have now completed cohort two in our phase one coral one study evaluating <unk> hundred seven and completed the first dose level.

Speaker Change: One highlight one study evaluating <unk> 707.

Speaker Change: We look forward to providing data updates on these programs as they advance.

Suma Krishnan: We look forward to providing data updates on these programs as they advance. Finally, we are moving ahead in our work towards developing an ophthalmic formulation of BVAC for the treatment of ocular complications in deaf patients. Earlier this year, we reached alignment 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. In support of this development strategy, earlier this month, we initiated a natural history study to prospectively collect data on the frequency and severity of coronal abrasions in patients with death.

Speaker Change: Finally, we are moving ahead in our work towards developing and ophthalmic formulation of <unk> for treatment of ocular complications in depth patients.

Speaker Change: Earlier this year.

Speaker Change: <unk> alignment with the FDA on single arm open label study to enable approval of feedback eye drops for the treatment of lesions in the eye of that patient.

Speaker Change: In support of this development strategy earlier this month, we initiated a natural history study.

Speaker Change: Aspect of Lee collect data on the frequency and severity of Cornell aberrations in patients with depth.

Suma Krishnan: This study will also serve as a run-in period for patients who may be eligible to participate in the registrational study. We remain on track to start the study before the end of this year with potential for top-line data read in 2025. The next 12 months have the potential to be transformational for Krystal as we read out on trials that showcase the breadth of our gene therapy platform. We look forward to sharing these updates as they come and Progressing Our Pipeline of Highly Differentiated Genetic Medicines. With that, I would like to turn the call over to Kay. Thank you, Suma.

This study will also serve as a run in period for patients who may be eligible to participate in the Registrational study.

Speaker Change: We remain on track to stop the study before the end of this year with potential for topline data read in 2025.

Speaker Change: The next 12 months have the potential to be transformational for crystal as we read out on trials that showcase the breadth of our gene therapy.

Speaker Change: Platform.

Speaker Change: We look forward to sharing these updates as they come.

Speaker Change: And progressing our pipeline.

Speaker Change: Of highly differentiated genetic medicines with that I would like to turn the call to Kate.

Kate: Thank you Sundar.

Kate Romano: With growing demand for Visevec in the U.S., our net product revenue for the quarter was $70.3 million, which represents a 55% increase over the first quarter of 2024. However, as Vizavec was approved by the FDA in May of 2023, and our first sales occurred in August of 2023, there was no comparative period revenue.

Speaker Change: With our growing demand for advisory work in the U S. Our net product revenue for the quarter was $70 3 million, which represents a 55% increase over the first quarter of 2024.

Speaker Change: Advisory back was approved by FDA in May of 2023, and our first sales occurred in August of 2023, there was no comparative period revenue.

Kate Romano: Cost of goods sold was $6 million for the quarter, or about 9% of net product revenue, resulting in a gross margin of 91%. Before our approval in May of 2023, costs associated with the manufacturing of Vizorvac were expensed as research and development, and as previously mentioned, our first sales occurred in the third quarter of 2023. Therefore, there was no comparative period cost of goods sold in the second quarter of 2023.

Speaker Change: Cost of goods sold was $6 million for the quarter or about 9% of net product revenue.

Speaker Change: <unk> and a gross margin of 91%.

Speaker Change: Before our approval in May of 2023 costs associated with the manufacturing advisor back where expense as research and development.

Speaker Change: And as previously mentioned our first sales occurred in the third quarter of 2023.

Before there was no comparative period cost of goods sold in the second quarter of 2023.

Kate Romano: Research and development expenses for the quarter were $15.6 million, inclusive of stock-based compensation of $2.8 million, compared to $12.1 million for the prior year's second quarter, inclusive of $2.9 million of stock-based compensation. Higher research and development expenses in the second quarter of 2024 were due to increased R&D-related manufacturing and process optimization expenses for our product candidates, increased R&D depreciation expense, increased clinical development costs, as well as increased license and regulatory costs this quarter.

Speaker Change: Research and development expenses for the quarter were $15 6 million.

Speaker Change: Inclusive of stock based compensation of $2 8 million.

<unk> to $12 1 million for the prior year second quarter inclusive of $2 9 million of stock based compensation.

Speaker Change: Higher research and development expenses in the second quarter of 'twenty 'twenty four were due to increased R&D related manufacturing and process optimization expenses for our product candidates.

Speaker Change: Increased R&D depreciation expense increased clinical development costs as well as increased license and regulatory costs this quarter.

Kate Romano: These increases were partially offset by capitalization of direct and indirect overhead costs to manufacture Vizivac being charged to inventory following FDA approval. Selling general and administrative expenses for the quarter were $27.6 million, inclusive of stock-based compensation of $10.4 million, compared to $25.9 million for the prior year's second quarter, inclusive of stock-based compensation of $8.5 million. Higher selling, general, and administrative expenses in the second quarter of 2024 compared to the prior year's similar quarter were primarily the result of increased stock-based compensation.

Speaker Change: These increases were partially offset by capitalization of direct and indirect overhead costs to manufacture advisor back being charged to inventory following FDA approval.

Speaker Change: Selling general and administrative expenses for the quarter were $27 6 million.

Speaker Change: Ziv of stock based compensation of $10 4 million compared to $25 9 million for the prior year second quarter inclusive of stock based compensation of $8 5 million.

Speaker Change: Higher selling general and administrative expenses in the second quarter of 2024 compared to the prior year similar quarter were primarily the result of increased stock based compensation.

Kate Romano: Increased commercial related professional services fees; increased Vizovac selling expenses; and increased Vizovac patient access program costs. These increases were partially offset by a decrease in launch-related marketing costs incurred prior to our Vijavec launch in the second quarter of 2023. This quarter, we again recorded litigation settlement expense of $12.5 million due to our anticipation of reaching the second milestone payment in the Perificient Settlement, which is triggered at $200 million in cumulative sales payable following the filing of our Form 10-K in which the $200 million milestone is achieved.

Speaker Change: Increased commercial related professional services fees.

Speaker Change: Increased advisor back selling expenses and increased advisor that patient access program costs.

Speaker Change: These increases were partially offset by a decrease in launch related marketing costs incurred prior to our <unk> launch in the second quarter of 2023.

Speaker Change: This quarter, we again recorded litigation settlement expense of $12 $5 million due to our anticipation of reaching the second milestone payment in the periphery and settlement, which is triggered at $200 million in cumulative sales.

Speaker Change: Payable following the filing of our Form 10-K in which the $200 million milestone is achieved.

Kate Romano: The third and final milestone will be triggered by reaching $300 million in total cumulative revenue from sales of the company's. Net income for the quarter was $15.6 million, which represented $0.54 per basic and $0.53 per diluted share. Our non-GAAP operating expense guidance for 2024 remains unchanged. This guidance excludes the non-cash impact of stock-based compensation. Finally, we ended the second quarter with $345.8 million in cash on hand and $628.9 million in total cash plus short-term and long-term investments, marking quarterly growth in our overall cash and investments position, with an increase over our first quarter of 2024 cash and investments by about $7 million. And now, I will turn the call back over to Chris.

Speaker Change: The third and final milestone will be triggered by reaching $300 million in total cumulative revenue from sales of the company's products.

Speaker Change: Net income for the quarter was $15 6 million, which represented 54 per basic and <unk> 53 per diluted share.

Speaker Change: Our non-GAAP operating expense guidance for 2024 remains unchanged. This guidance excludes the noncash impact of stock based compensation.

Speaker Change: Finally, we ended the second quarter with $345 $8 million in cash on hand.

Speaker Change: And $628 $9 million in total cash plus short term and long term investments marketing quarterly growth in our overall cash and investments position with an increase over our first quarter of 2020 for cash in investments by about $7 million.

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

Krish Krishnan: S.K. with an annualized product revenue run rate already over $250 million and four quarters of positive EPS. We've been able to deliver significant value to our shareholders through the U.S. launch of Voyager, and yet, we see opportunities for significantly more value creation in the years ahead, both through the global expansion of the Visevec launch and the advancement of our clinical stage program, each of which addresses a clear unmet need and showcases the breadth of our platform. With the benefit of commercial scale in-house GMP manufacturing infrastructure, we are uniquely Thanks for listening. I'd like to now open the call for Q&A.

Chris: Thanks, Kate with an annualized product revenue run rate already over $250 million and four quarters of positive EPS.

Speaker Change: Being able to deliver significant value to our shareholders.

Speaker Change: Through the U S launch of <unk>.

Speaker Change: And yet we see opportunities for significantly more value creation in the years ahead, both through the global expansion of voice of our clients and the advancement of our clinical stage programs.

Speaker Change: Each of which addresses a clear unmet need and showcases the breadth of our platform.

Speaker Change: With the benefit of commercial scale in house GMP manufacturing infrastructure.

Speaker Change: We're uniquely positioned to rapidly execute against these goals.

Speaker Change: And bring to market a portfolio of highly differentiated re dosing will genetic medicines.

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

Operator: Certainly. 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 at this time. As a reminder, during the question and answer session, there will be a limit of two questions per participant. We ask that you pick up your handset if listening on speakerphone for optimum sound quality. Please hold while we ask you questions. Your first question for today is from Alec Stranahan with Bank of America.

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

Speaker Change: If you have any questions or comments. Please press star one on your phone at this time.

Speaker Change: As a reminder, during the question and answer session.

Speaker Change: There will be a limit of two questions per participant.

Speaker Change: We ask that you pick up your handset if listening on speakerphone for optimum sound quality. Please hold while we poll for questions.

Speaker Change: Your first question for today is from Alec Stranahan with Bank of America.

Alec Stranahan: Hey guys, thanks for taking our questions and congrats on a strong quarter. Two questions from us. First, just on patient compliance, how do you expect this to trend in the second half? Do you think it's reasonable to expect this to reach some steady state as new patients go on therapy, and older patients, you know, maybe see a benefit from therapy? And then, second question: any changes in the way you plan to approach the international market if IAG effects are approved, say in the EU or Japan? Thanks. Hey Alec, thank you. And the second question, which is:

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

Alec Stranahan: Two questions for my first just on patient compliance.

Alec Stranahan: How do you expect this to trend.

Speaker Change: In the second half do you think it's reasonable to expect this to reach some steady state as new patients go on therapy in older patients may be see a benefit from therapy and then.

Speaker Change: Second question any changes in the way you plan to approach the international market.

Speaker Change: If IAG effects approved in the EU or or Japan.

Krish Krishnan: Hey Alec, thank you. Here on the second question, which is quicker, no change in the approach we've had to date. We want a self-launching EU for the UK and Japan.

Speaker Change: Thank you.

Speaker Change: Second question, which is quicker.

Speaker Change: No change in the infants we've had to date, we wanted some funds in EU or U K and Japan.

Krish Krishnan: And we're looking to do distributor agreements in countries outside of that and the ROW, so really, no change to the way we're looking at international markets and the compliance trend. I will say, I'll make a couple of anecdotes. So we also track the oily patients who, on average, have been on drugs for about 35 months or so, and we are seeing a minority of patients drop below max compliance, and we define max compliance as north of 90 percent.

Speaker Change: And we're looking to do a distributor agreements.

Speaker Change: Entries on side of that.

Speaker Change: So really no change to the way, we're looking at international markets.

Speaker Change: The combined.

Speaker Change: I will say ill make a couple of anecdotes.

Speaker Change: We also tightened the oily basins, who on average have been to date on drug for about 35 months or so.

Speaker Change: And we are seeing a minority of patients.

Speaker Change: Hello.

Speaker Change: Combined would be defined by appliances north of 90%. This is always.

Speaker Change: A situation that someone misses a mild for personnel issues whatever.

Krish Krishnan: This is always a situation where someone misses a vial for personal issues, whatever. So we're starting to see at this point in time, especially with the oily patients, that said, the majority of them are still tracking to pretty high compliance at four vials, noting that Most of the patients in the OLE were severe. And so from a patient severity perspective, we're starting to see some good trends with respect to compliance in the mild to moderate look; most of the dominant patients have been on drugs since the launch.

Speaker Change: So we're starting to see.

Speaker Change: At this point in time.

Speaker Change: Especially with the OLED patients that said the majority of them are still on track into pretty high compliance.

Speaker Change: <unk>.

Speaker Change: Noting that.

Speaker Change: Most of the patients were severe.

Speaker Change: And so from a.

Speaker Change: Patients, who the entity perspective, we're starting to see some.

Speaker Change: Some good trends with respect to decline.

Speaker Change: The mild to moderate look most of the dominant patients have been on drug since the launch.

Speaker Change: And I'll turn it over to Jennifer who can talk a little bit more about <unk>.

Jennifer McDonough: <unk> and declines in the commercial side.

Jennifer McDonough: Sure, sure. Thanks, Krish. So, yeah, I think as we look at our one-year anniversary, as Kate said, our first assessment was in August, so we are able to start analyzing some of those cohorts that came on early, and we are really excited about, you know, their adherence to the weekly dosing. So, for my overall weekly application, the in-home nursing, that seems to be working really well. Patients are able to schedule within their normal schedules, whether it's the same day of the week, which really seems to be working well.

Krish Krishnan: And I'll ask, I'll turn it over to Jennifer to talk a little bit more about what she's seeing in compliance in the commercial sector. Sure, sure. Thanks, Krish. Um, so yeah.

Jennifer McDonough: Sure sure. Thanks Krish.

Jennifer McDonough: Yeah, I think as we look at our one year anniversary in case, there are first expenses in August.

Jennifer McDonough: We are able to start utilizing some of those cohorts that came on early.

Jennifer McDonough: Really excited around here.

Jennifer McDonough: Don.

Ian: So overall, we allocation Ian home nursing I think you are.

Ian: Really wow patients very lifting schedule within there.

Ian: Within our normal schedule and other things.

Speaker Change: Thanks, guys.

Jennifer McDonough: For those folks that Krish mentioned, as the open label extension has been in place for a relatively long period of time, several years, they may, you know, pause treatment, you know, for the most part, because they may have no open wounds, and then they cycle back as life continues to happen for them. So, overall, as we analyze those first cohorts, we see very, very high compliance in that one-year period, which is kind of that threshold that we're looking at.

Speaker Change: We seem to do well for.

Chris: For those folks that Chris mentioned that open label extension, but on a relatively long period of time several years now.

Speaker Change: They may pause treatment.

Speaker Change: For the most part because they may have.

Speaker Change: No.

Speaker Change: Then they'd write things cycled back as online continues to happen for them. So so overall as we analyze those first I want to be very very high compliance.

Jennifer McDonough: And again, we believe that the weekly convenience of home application and the impact iGVACs have on their daily lives is driving that high compliance percentage. So we're really happy with what we're seeing in the real world.

Speaker Change: And that one year period, which is kind of that threshold that we're looking at.

Speaker Change: We believe that.

Speaker Change: Oh application and the impact of energy, that's making on their daily lives is driving that high five percentage and we're really happy with what we're seeing in rural World.

Speaker Change: Thank you.

Ritu Baral: The next question is from Ritu Baral of TD Cowan.

Ritu barrel: The next question is from Ritu barrel from TD Cowen.

Ritu Baral: Hi guys, good morning.

Ritu barrel: Hi, guys. Good morning, Thanks for taking the question I wanted to ask about the status of manufacturing.

Ritu barrel: The manufacturing approvals for expanded capacity and then my follow up is on the European application.

Ritu Baral: Thanks for taking the question. I want to ask about the status of manufacturing, and the manufacturing approvals for expanded capacity. And then my follow-up is on the European application. It sounds like you are seeking some sort of FDA sign-off on the expansion of the NCORIS plant. Will there be any sort of new inspection required, new assays? Are you taking another floor in NCORIS, or will it be the same sort of square footage?

Speaker Change: It sounds like you are seeking.

D. A sign off on expansion in India, and chorus plant will there be any sort of new inspection required new assays are you are you taking like another floor in enquiries or will it be the same sort of square footage.

Suma Krishnan: I'm going to go over to Suma to do a...

Speaker Change: Some of them do.

Suma Krishnan: So where we stand with Encoris is that Encoris has the capacity to fully meet the commercial demand for the U.S. and potentially in Europe. So as far as the current scale is concerned, obviously we are going into large-scale production.

So where we stand in courses in chorus.

Speaker Change: Yes.

To fully meet the commercial demand for Veeva.

Speaker Change: Yeah.

Speaker Change: So as far as well.

Speaker Change: The Grand scale, obviously beyond.

Speaker Change: All right.

Speaker Change: Going into the.

Speaker Change: The large scale production, we have filed the <unk> for.

Suma Krishnan: We have filed the PAS for that filing, and we anticipate that should, I mean, we hope to get that approved by the end of the year. So we're pretty excited about our scale-up. With regard to inspection of the Encoris facility, again, as you know, we have been inspected by the FDA with very minimal 483s or any findings. Again, they were very pleased with the inspection. The inspection results went pretty well.

Speaker Change: For that filing and we anticipate that we hope to get that.

Speaker Change: So we are pretty excited about on chemo with regarding vaccine facility.

Speaker Change: Facilities again as you know we have been inspected by the FDA is very minimal fully diesel or any finding seem to the EMA again. They were very pleased with instructions inspection results went pretty well I mean, obviously you know every two years and have routine inspection I think we are prepared.

Suma Krishnan: I mean, obviously, you know, every two years we have routine inspections. I think we are prepared. We know the agency. We know all of the, you know, what they look for.

Suma Krishnan: I think we're well prepared. With regard to scale-up, we may not receive inspections. Again, we don't know.

Speaker Change: No. The agency, we know all of the year.

Speaker Change: What we look for I think you are willing to pay all with regarding to scale.

Speaker Change: You May now proceed.

Speaker Change: Infections, because you don't know, but if we do absolutely prepared.

Suma Krishnan: But if we do, we are absolutely prepared. With regard to ASTRA, we have already transferred some of our key starting materials into ASTRA, and that's filed.

Speaker Change: Regarding the Astral.

Speaker Change: Already transferred some of our team are starting the diesel into Astra and that's filed.

Suma Krishnan: That's, I mean, we are already talking with the agency about getting ASTRA approved for those key starting raw materials. So we anticipate transfer of our ASTRA process, which is a scale-up process, to ASTRA sometime this year. So I think we're in good shape with manufacturing. We feel very, manufacturing is going pretty smoothly.

Speaker Change: We are already with agency are giving us.

Speaker Change: With this key study enrollment season, so the anticipated transfer of our Astro conference.

Speaker Change: Gross new.

Speaker Change: You asked.

Speaker Change: Sometime this year I think we are in good shape manufacturing do you feel that manufacturing is pretty going pretty smoothly.

Ritu Baral: Great. And then on the European applications, can you give us the status on the 120-day questions, or have you moved on to the 180-day questions? And basically, are the topics covered in those questions related to home dosing? Are they materially different from what the FDA asked during its review period? And any points of note there?

Speaker Change: Great and then on the European applications can you give us the status on like 120 day questions or have you moved on to the 180 day questions.

Speaker Change: And basically for the topics covered in those questions related to home dosing are they.

Speaker Change: Materially different than what the FDA asked during its review period.

Speaker Change: And and any any points of note there.

Suma Krishnan: Yes, I mean, we have completed responding to all of the questions, and we should be submitting it shortly, but pretty much the questions were very aligned and predictable. So there were no surprises, Ritu. It was because, again, because we have the prime designation, we had many scientific meetings with the EMA, so I think there were no surprises. Obviously, you know, EMA is thorough because we have the Rappaport and co-Rapp

Speaker Change: Yes, I mean.

Speaker Change: We have completed.

Speaker Change: In responding to all of the questions, we should be submitting itself.

Speaker Change: Pretty much the questions will vary in lines and predictable.

Speaker Change: Surprising.

Speaker Change: Because again.

Speaker Change: Because we have the prime designation, we had many scientific meetings will be consistent so I think there were no surprises.

Suma Krishnan: So again, the questions, all of them were addressable. Yes, home dosing was on that list of questions. And we have obviously responded to some of their questions regarding home dosing. So home dosing is very much a discussion point. And if you look at our SMPC right now, home dosing is part of our SMPC. So again, I think with regard to all of the questions and our responses, we feel very comfortable because there are no surprises. Very similar trend from the FDA, and we are very prepared. We feel confident about responding to those questions in a timely manner.

Speaker Change: You may borrow because behalf and.

Speaker Change: Outperformance called apical countries, where again the questions. We will all of them are addressable.

Speaker Change: Home dosing was in a list of questions.

Speaker Change: And we have obviously no risk.

Understood some of your questions regarding home dosing the homebuilding is very much in the discussion point.

Speaker Change: If you look at our S&P right now on dosing.

Speaker Change: Again, I think with regards to all of the questions on our responses, we feel very comfortable because theres no surprises.

Speaker Change: Very similar trends from the FDA and we have already prepared.

Speaker Change: We're confident.

Speaker Change: One of those questions in a timely manner.

Ritu Baral: Okay. Just to clarify, were these the 180 day questions that you spoke of, or the 120?

Speaker Change: Understood just to clarify these with 180 day questions that you spoke of are the 120.

Suma Krishnan: I mean, the 120, that's the, I mean, review is done, and we should get the 180 shot. Okay, got it. Thank you.

Speaker Change: I mean the unemployment.

Speaker Change: The review is done and we should get the 180.

Speaker Change: Okay got it thank you.

Andrea Tan: Your next question for today is from Andrea Tan with Goldman Sachs.

Speaker Change: Your next question for today is from Andrea <unk> with Goldman Sachs.

Christine Wilson: Good morning, thanks for taking our questions. I was just wondering if you could provide some color on the proportion of VIJVAC patients who are coming from Centers of Excellence and to what extent are you seeing uptake amongst other patients who might have stepped away from these centers previously and thus require a little bit more work to bring back into the system. And then I have a follow-up.

Speaker Change: Good morning, Thanks for taking our questions.

Andrea <unk>: Just wondering if you could provide color on the proportion of <unk> patients who are coming from centers of excellence and to what extent are you seeing uptake amongst other patients who might have stepped away from these.

Speaker Change: Centers previously industrial require a little bit more work to bring back into the system and then I have a follow up.

Christine Wilson: Sure. Thanks, Andrea. Yeah, sure. So as we look at

Andrea <unk>: Sure. Thanks Andrea.

Christine Wilson: Unknown Speaker Yeah, sure. So as we look at the analytics around measuring who's coming from a COE versus community, we do know, you know, the majority of our patients are really seen in those areas, those sites of care. You know, we see a trend towards the community for sure. However, you know, the centers are strong. They continue to, as they prescribe, as they see new patients or new patients are being diagnosed, we see them coming in earlier and earlier, which is a great trend. Unknown Speaker Yeah.

Speaker Change: Yes, sure. So as we look at the analytics around measuring yeah, he's coming from us versus community. We do know is the majority of our patients are only seen in those areas those sites of care.

Speaker Change: We see a trend towards the communities for some more color.

Speaker Change: Ever.

Speaker Change: The centers are strong they continue to as a prescribing <unk> patients or new patients are being diagnosed.

Speaker Change: See them coming in earlier and earlier, which is a great trend.

Speaker Change: Sure.

Speaker Change: The second part of that.

Speaker Change: Sorry.

Speaker Change: It was basically CRB.

Christine Wilson: C.O.E. and ending all of that with C.O.E. Yeah.

Speaker Change: Any overlap.

Christine Wilson: Yeah, so again, the community continues to be strong. I think in this past quarter, the majority of customers are coming from the community, which is exactly where our strategy is pointing our sales team. So overall, it's just as expected with strong utilization in both the centers and in the community setting.

Speaker Change: Yes.

Speaker Change: Yeah, So again.

Speaker Change: The community continues to be strong I think in this past quarter. The majority are coming from community, which is exactly where our strategy is pointing our sales team.

Speaker Change: For all he has done just as expected with strong utilization investment centers and in the community setting.

Andrea Tan: And then my second question is actually for Suma. I just hope you might be able to frame expectations ahead of the AAT data layer this year, specifically around how many patients we might be able to expect. Will it be from both cohorts one and two? And then what will you be looking for specifically to make a go or no go decision on the program?

<unk>: Great and then my second question is actually for <unk> I was just hoping you might be able to frame expectations ahead of the <unk> data later this year.

Speaker Change: Specifically around how many patients we might be able to expect we will it be from both cohorts one and two and then what will you be looking for specifically to make a go no go decision on the program. Thanks again.

Andrea Tan: Thanks again.

Suma Krishnan: Yeah, so again, Cohort 2 is pretty much fully enrolled. I mean, again, we expect to go into Cohort 3 pretty shortly. I think Cohort 3 is going to be our important cohort because you're going to go with the highest dose, and this is where we are going to have bronchoscopy and evaluate that. So obviously, you'll have some data regarding the expression of A118, both in the lung and in the lavage, and also we look at systemic levels if it's in the plasma. So again, we expect to enroll patients and get some molecular correction using, you know, bronchoscopy data from the patient.

Speaker Change: Yeah. So again, our cohort two is pretty much fully enrolled again so.

Speaker Change: So we expect to go into cohort two pretty sharply I think <unk> is going to be our important cohort because even with.

Speaker Change: The highest dose and this is where we are going to have bronchoscopy.

We obviously do have some data with regard to <unk>.

Speaker Change: Expression of <unk>, both in the lung.

Speaker Change: And also look at systemic level.

Speaker Change: Again, we expect to enroll patients with <unk>.

Speaker Change: You know bronchoscopy data.

Suma Krishnan: And to confirm, Cohort 3 data will be the key data set that we're expecting by year-end.

Speaker Change: Got it and to confirm the cohort three data will be that the key dataset that we're expecting by by year end.

Suma Krishnan: Go back. That's what we're targeting. Yes.

Speaker Change: Correct, that's what we're targeting.

Krish Krishnan: I will point out, Andrea, we view the releases... Phase One data like it's stuff to predict if all the data would be in on all the patients by the end of the year. But we definitely think that most of them would be in, so we're still calling it an Interim Phase 1-2 update.

Speaker Change: Andrea.

Speaker Change: View the.

Speaker Change: Leases.

Speaker Change: Phase one data.

Speaker Change: All of the data would be in on all of the patients from the end of the year definitely.

Speaker Change: Most of them would be and so we're still coming in.

Speaker Change: Phase two update.

Speaker Change: Okay. Thanks, so much.

Tim Lugo: Your next question is from Tim Lugo with William Blair.

Krish Krishnan: Okay, thanks so much. Your next question is from Tim Lugo with William Blair. Hi, this is Jon on behalf of Tim. Thanks so much for taking our question.

Speaker Change: Your next question is from Tim Lugo with William Blair.

John: Hi, This is John on for Tim. Thanks, So much for taking my question I was wondering if you could talk a little bit more about the number of new patients you have identified outside of the original 200 that were identified.

And then talk a little bit more about your current comfort level with the estimated total of around 3000 patients in the U S.

John:

Krish Krishnan: Okay, let me start. No. We definitely are starting to see new patients being identified outside of the 1,200. It's basically analytics driven, and it's not as simple and direct as you can imagine because of the way some patients are treated both in the COV and in the community. It's tough to put an exact fine point on it, but our internal view on the matter is that it expanded on the identified base by close to 10%.

Speaker Change: Okay, Let me start.

Speaker Change: We definitely are starting to see.

Speaker Change: New patients being identified outside of Pittsburgh.

Speaker Change: Basically analytics driven.

Speaker Change: And it's not simply a direct as you can imagine because of the.

Speaker Change: Because of that.

Speaker Change: The way that how some patients on treatment burden.

Speaker Change: On the community.

Speaker Change: It's tough to put an exact fine point on it.

Speaker Change: Our internal view on the Madden.

Speaker Change: Is that.

We have.

Speaker Change: Expanded on the identified base by close to 10%.

Speaker Change: At the moment.

Speaker Change: Okay, and then your current comfort level around the estimated total around 3000 patients.

Speaker Change: It's still the same.

Speaker Change: Okay. Thank you so much.

Okay.

Yigal Nochomovitz: Your next question for today is from Yigal Nochomovitz with Citi.

Speaker Change: Your next.

Yigal <unk>: For today is from Yigal <unk> with Citi.

Yigal Nochomovitz: Hi Krish and team, I had a question about the ocular formulation regarding the natural history run-in. I'm just curious, what sort of eligibility criteria would you be using in that run-in to determine who would qualify for the treatment phase of that study?

Yigal <unk>: Hi, Christian team had a question on the ocular formulation regarding the natural history running I'm, just curious what sort of eligibility criteria would you be using in that run in to determine who would qualify for the treatment phase of that study.

Suma Krishnan: I mean, the qualification is, I mean, the inversion criteria is that the patient must have at least two episodes of, you know, blisters or incidents of blisters in the past six months. And I can tell you that the natural history study is going pretty well because there are a lot of patients with blister manifestation. I mean, more than I thought, because these patients do have, you know, constant blistering in their eyes. So, two blisters; that's what the agency we discussed with said.

Speaker Change: I mean.

Speaker Change: Please begin.

Speaker Change: They blend in pricing pricing is the patient must have a clean two episodes.

Speaker Change: Mr.

Speaker Change: In the past six months.

Speaker Change: And I can tell you I mean, it's the natural history study is going to be wrong. Because there is lot of patients with liver manifestations I mean more than I thought because.

Speaker Change: Do you have constant.

Speaker Change: No.

Speaker Change: So that's what the agency that this customer.

Speaker Change: Without from Macquarie.

Yigal Nochomovitz: Okay, thanks. And I recall there was one instance of a compassionate use case in a 13-year-old boy with Vigevec intraocular. Have there been other instances of compassionate use or use off-label Vigevec for ocular complications with the commercial drug?

Speaker Change #100: Okay. Thanks, and I recall, there was one instance of a compassionate use case.

Speaker Change #101: For 10 year old boy with very generic intra ocular have there been other instances of compassionate use.

Speaker Change #101: Or use off label <unk> for ocular complications with the commercial drug.

Suma Krishnan: So right now, the boy that had the ocular, so it was in his left eye, now they have also treated his right eye. So both his left and right eye have been treated with Vigilance for an extended period of time. So that's the Only Compassionate Youth.

Suma Krishnan: So right now, the

Speaker Change #101: So right now the boys that have Oh cooler.

Speaker Change #102: And his lifestyle now also gets because his lifetime.

Matt: <unk> has left and right eye has been treated this is Matt.

Krish Krishnan: Obviously, we do get a lot of requests. But now that we are, you know, in the process of getting clinical studies going on in the national history study, we have a lot of patients enrolling in the national history study, so we are hoping we'll be able to enroll the study pretty fast.

Speaker Change #104: For extended periods of time.

Speaker Change #105: That's the only investment obviously, we do get more of a request but.

Speaker Change #106: But I think now since we are in the process of getting clinical study going and the natural history that has been rolled out when you have a lot of pieces that are moving international.

Speaker Change #106: So we are hoping we will be able to enroll the study pretty fast.

Krish Krishnan: Yigal, on your question on off-label use, look at how the drug is mixed in the pharmacy. It's almost inconceivable the way it's mixed and delivered to contemplate any, even remotely, off-label use of the drug present.

Speaker Change #106: Hey, Don on your question on off label use look at drug it makes into pharmacies.

Speaker Change #107: It's almost inconceivable.

Don: The way to some extend delivery.

Don: Contemplate any even remotely off label use.

Don: Okay. Thank you.

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

Speaker Change #109: Your next question for today is from Gavin Clark Gartner with Evercore ISI.

Gavin Clark Gartner: Hey guys, thanks for taking the questions. I had one more granular one and one higher level question.

Speaker Change #110: Hey, guys. Thanks for taking the questions I had one more granular one and one higher level question.

Gavin Clark Gartner: First, just on the reimbursement approvals, so I believe you had around 420 start forms as of mid-February, and now you have around 400 reimbursement approvals. I'm just wondering, for some of those start forms that didn't come through as reimbursement approvals, what's the current status of them? And just overall, how many of the reimbursement approvals do you expect will ultimately make it to patients on the drug at some point?

Speaker Change #111: First just on the reimbursement approvals. So I believe you had around 420 start forms as of mid February and now on around 400 reimbursement approval I'm just wondering for some of those start forms that didn't come through as reimbursement approvals whats the current status of them and just overall, how many of the reimbursement.

Speaker Change #112: <unk> do you expect will ultimately make it to patients on drug at some point.

Krish Krishnan: Hey, so can we not go into the term stock firms because we're never going to talk about stock firms. I'd be excited that you've gotten beaten up on that term for like six months, for absolutely no reason.

Speaker Change #112: So.

Speaker Change #113: We're certainly not going to the term start forms because we're never going to talk about some forms.

David: Hi, David.

Speaker Change #115: <unk> beaten up on that term unlike six months.

Krish Krishnan: In terms of reimbursement approvals to net revenue, the most important thing to realize is that it's not immediate. It still takes two to three weeks to schedule a nurse, in some cases with the summer schedules, and comorbidity in some cases. So there's always a time lag, and Jen can elaborate on exactly what it is we track. Now, look, reimbursement approvals, as I see it, are a great predictor of net revenue, but not an immediate predictor of net revenue.

Speaker Change #115: But absolutely no reason.

Speaker Change #115: In terms of <unk>.

Speaker Change #115: Reimbursement approvals to net.

Speaker Change #115: The most important thing to them.

Speaker Change #115: It's not immediate but still it takes two to three weeks to schedule and those.

Speaker Change #115: In some cases with the summer schedules.

Speaker Change #115: Comorbidity in some cases, so there's always a time lag and Jim can elaborate on exactly what it is we track.

Speaker Change #116: No reimbursement approval.

Jim: Approvals are valued.

Krish Krishnan: So if you look at it that way, I think it's the closest indicator you can have to kind of estimating what net revenues could be in the future. You know, we've always said, look, the start form. We don't call something a start form until it's adjudicated. You know, you can call it a script.

Jim: Is a great predictor of net revenue, but not an immediate predictable.

Jim: So if you look at it that way I think it's the closest indicators you can have the kind of estimating what net revenues could be.

In the future.

Yeah.

Speaker Change #118: We've always said look the start form we don't cause something I'll start form 10. This adjudication.

Krish Krishnan: And as we go into the community, especially in the elderly, genetic testing rates are lower, even if they have been done many years ago, or they used to be treated in the COE. The paperwork gets misplaced. So, more in the community, you should assume that the majority of scripts we get don't convert to start forms till we get the genetic testing done. So that's important to note. But outside of that, besides the lag in time, given the high compliance, there isn't anything magical about the way the launch is going. It's going really well.

Jim: This trend.

Jim: And as we go into the community, especially.

Jim: Genetic testing.

Jim: Rates are lower.

Jim: Even if they have been done many years ago, they used to be cleared in the Coa.

Pedro: Pedro what gets misplaced so more in the community use it assume that the majority of fits we get don't convert to start forms until we get the genetic testing done.

Pedro: So that's an important note.

Pedro: But outside of that besides the lag in time given.

Speaker Change #120: Given the high combined there isn't anything magical about the way the market is going it's going really well patients who get on drug supply.

Krish Krishnan: Patients who get on drugs get compliant. We would like to see patients get on drugs sooner than they do, but life does get in the way. And we are super focused on patient experience, making sure we're not rushing them.

Speaker Change #121: I'd like to see the patients get on drug sooner than the two but like does get in the way.

Speaker Change #121: And we are super focused on patient experience, making sure we're not rushing them into something that they're not super comfortable give.

Speaker Change #121: Given personal license schedules et cetera.

Gavin Clark Gartner: Yeah, that makes sense. And just one higher-level question then, as you kind of transition to a more mature period of the launch, I'm just wondering what we should expect for go forward metrics. So you guys are going to keep reporting the reimbursement approvals and the compliance every quarter? Will you ever report patients on the drug or maybe plan to give any guidance? Just wondering what we should expect for the go forward metrics. Thanks guys.

Speaker Change #122: Yeah that makes sense and just one higher level question, then as you kind of transition to a more mature period of the launch I'm. Just wondering what we should expect for go forward metrics. So you guys are going to keep reporting the reimbursement approval then the compliance every quarter will you ever report patients on drug or maybe plan to give any guidance just wondering what we should.

Speaker Change #122: <unk> for the go forward metrics. Thanks, Scott It's Chris.

Krish Krishnan: Hey, first, I don't believe we're entering the mature phase of launch. The way we look at it, we still believe we're in a high growth, you know, I don't want to call it high growth, but we're in a growth phase. Look, when we get to the mature phase of launch, hopefully sometime next year. Our present intentions, which can change, are simply to guide on revenue because there are more and more people like, you know, how this generates this start and stop, or I'll come back to it after summer. I'm not that severe.

Chris: I don't believe rhythm and I don't mean, the mature phase of launch the way we look at.

Speaker Change #123: We still believe we're in a high growth.

Speaker Change #124: I don't want to kind of high growth better in a growth phase.

Speaker Change #124: Look when we get to the mature phase of launch hopefully sometime next year.

Speaker Change #125: Our present intentions, which can change is simply to guide on revenue.

Jen: Because as more and more people like you don't have Jen alluded to start and stop or.

Speaker Change #127: Come back to it after some are I'm not that severe.

Krish Krishnan: Clients will start to get, as you go into the community going to dominant compliance will become less clear over time. We're still at very high numbers. Our expectation, if you remember at the time of launch, was four vials a month for the first 18 months and going to two vials. So we were expecting compliance to drop to 50% in about 18 months post-launch. The trend doesn't look like it's going that way at the moment, but we reserve our judgment on where it's going to end up.

Speaker Change #128: Clients will start to get to go into the community going to dominant combines we'll get.

Speaker Change #128: Less clear overtime.

Speaker Change #129: That very high numbers unexpected if you remember at the time of launch was four vials of months for the first 18 months and go into two vials and we would expect the combined dropped to 50% in like 18 months post launch.

Speaker Change #130: The trend doesn't look that is going that way at the moment.

Speaker Change #130: But the reserve judgment on what it's going to end up.

Speaker Change #130: Good.

Krish Krishnan: We're still, in many ways, in the early stages of launch. So A, we're in a growth period in the early stages of launch. And if we ever get to the mature phase, we'll probably simply guide on net revenues at that point.

Speaker Change #130: We're still in many ways the early stages of thought so.

Speaker Change #130: We're in a growth period early stage of launch.

Speaker Change #130: If we ever get to the mature phase will probably some of the guide on net revenues.

Speaker Change #130: Okay.

Daegon Ha: Your next question is from Daegon Ha with Stiefel.

Speaker Change #131: Your next question is from Dae Gon ha with Stifel.

Daegon Ha: Great, good morning. Thanks for taking our questions. Maybe a question for Krish or Christine, just in terms of looking at the commercial portion, you put the headwinds behind us since the first quarter. So I'm just kind of wondering, you know, is this kind of community typesetting phase going to continue where we can anticipate a little bit more of a conversion period delay? Or, you know, if you could maybe comment on sort of the physician and patient behavior transitions or evolution, if you will, since the August 1st commercial launch last year, that would be great.

Speaker Change #132: Great. Good morning, Thanks for taking our questions maybe a question for Chris or Christine just in terms of looking at the commercial portion you put the headwinds behind us since the first quarter. So I'm just kind of wondering is this kind of community type setting phase going to continue where we can.

Speaker Change #132: Anticipate a little bit more of a conversion period delay.

Speaker Change #133: Or if you could maybe comment on sort of the physician and patient behavior transitions or evolution. If you will since the August 1st commercial launch last year that would be great. And then second question is specifically for Soma.

Daegon Ha: And then, specifically for Suma, just reverting back to the KB408 expectation, is the anticipation that you're going to focus more on the lung bronchoscopy measurement of the AAT concentration? And if so, what's the bogeyman or what's the level that you're kind of seeing as a potentially promising level? Thanks so much.

Speaker Change #134: Just reverting back to the <unk> expectation I mean is the anticipation that youre going to focus more on the long bronchoscopy measurement of a concentration and if so what's the bogey or what's the level that youre kind of seeing as a potentially promising level. Thanks. So much.

Speaker Change #135: See you soon or yes, so I've mentioned, our Queen Margaret infrastructure continued to apply new alerts, which is what has supported our ability to not just focus on the coes, but also in the community bank funding and as we look about that community based setting we are finding patients all across the United.

Speaker Change #136: <unk>, which is really exciting because it gives us an opportunity to introduce ICU back to both HCP and patient.

Speaker Change #136: Our intention is to continue on both tracks right and continue to cultivate our coes and Kols advocacy.

Speaker Change #136: <unk> Sciences as time goes on but in addition, we are seeing that growth in the community setting and as mentioned the dynamics are a bit different as you would imagine insight where patients may have been less engaged with the health care system as a whole and therefore it takes a bit more time, he got a genetic testing done.

Speaker Change #136: The condos that are required for reimbursement approval et cetera. So we do anticipate that either.

Speaker Change #136: <unk> platforms, we will see a combination of.

Speaker Change #137: Timelines that are associated amongst others.

Speaker Change #137: And the community setting peripheral growth.

Speaker Change #138: Great Thanks to cede some share.

Speaker Change #139: 2000 and poorly obviously.

Speaker Change #140: And then you one expression in the lung right I mean, thats whats speaking to our team.

Speaker Change #141: That's what we hear I mean again, nobody knows what kind of level, we need to see a correction of improvement.

Speaker Change #141: Obviously the improvement in function.

Speaker Change #141: As we start measuring them.

Speaker Change #142: With regards to <unk> the beauty of AEP is and so it does include the protein.

Speaker Change #142: We already know that from a west to east and high expression of <unk>.

Speaker Change #143: The decrease the proteins that we anticipate when are you going to is amongst the unit realize it it's going to add any.

Speaker Change #143: Intel systems be anybody seen along the protein that's being generated a needs based on our animal data and in vitro data, we expect high expression. So.

Speaker Change #143: When you look at the Bronchoscopy again will be compared as a baseline we would calculate.

Speaker Change #144: When it comes down what is the difference in the level and obviously going forward given the stock measuring improvements in lung function as part of the efficacy, but again I think that's really the beauty of oral agents I mean, there is no.

Speaker Change #144: No approved product for this therapy.

Speaker Change #145: We from a regulatory strategy for us and we believe we can go to the agency and go with the biomarker approach. If you are seeing expression levels in the lung and begin quantify them the plan or the incentives obviously sit down with the agency and see if there is a pathway for extra work.

Speaker Change #145: <unk> approval with the particular entities that could be an opportunity.

Speaker Change #145: Yes.

Speaker Change #146: The advantage is having with wood.

Speaker Change #146: <unk> clearly based on the mechanism here the loan levels that are important for measuring systemically.

Speaker Change #147: What's going to drive decision, making.

Speaker Change #146: For us the <unk>.

Speaker Change #146: PD Biomarkers will give us a sense of if we're in a.

Speaker Change #146: Previously the range. There is also an <unk>.

Speaker Change #146: Literature understanding levels in Angola for example, systemic maybe 5% to 10% in that range and so there are tools to benchmark, where we would expect to be clinically useful ADT, which will then be bracketed by the information we get from baseline both patients on an organization.

Speaker Change #146: PD Biomarkers and having the effect that we won in the <unk>.

Speaker Change #146: Context of along so collectively we think that will give us information we need to.

Speaker Change #146: Make a decision on progressing the phase II.

Speaker Change #146: I do have a final comment.

Speaker Change #146: These realized we're re dose that we will see therapy right and we make the arguments on our chip away at the problem and that unlike other therapies, which are primarily for the most part one and done even look at the first readout. This always bear in mind as we report data that we have the ability to re dose.

Speaker Change #146: A more amenable situations and we stuck with it.

Speaker Change #146: On that point, Chris I guess this cohort three data wont necessarily give us what the re dosing frequency may be right.

Chris: Yes, correct, because it's in single dose, but very quickly we are going to go and maybe some of the same patients. We can enroll them into the extension study, where we can start dosing them because I think one week, we will have a good understanding what level of <unk> and <unk>.

Chris: Based on that we are going to rollover those patients continue to come.

Chris: Collect that data.

Speaker Change #148: That makes sense. Thank you very much this is forecast to be shrinking, but we'll try we'll see what we can gather.

Speaker Change #149: As many of you know I'm, a pneumonia or <unk>.

Speaker Change #150: Open to doing allowing bronchoscopy, because you know it.

Speaker Change #150: Seems to be okay with it so we will buy enough patients to collect that data.

What.

And he loved attached to those numbers.

Okay, great. Thanks, so much.

Christine Wilson: [inaudible]

Speaker Change #151: Once again, if you would like to ask a question. Please press star one on your phone at this time.

Christine Wilson: Yeah, so I mentioned our claims monitoring infrastructure continues to flag new alerts, which is what has supported our ability to not just focus on the COEs but also in the community base.

Speaker Change #152: Your next question is from.

Christine Wilson: Unknown Executive, Dae Ha, Gavin Clark, Anvita Gupta, Kathryn Romano, Meg Dodge, Albert Wang, Krystal Biotech Inc. The healthcare system as a whole, and therefore it takes a bit more time to get the genetic testing done, the clinical notes that are required for reimbursement approval, et cetera. So, we do anticipate that as our growth continues in both platforms, we will see a combination of timelines that are associated with both the COE and the community setting for full throw.

Speaker Change #153: Deb jet Chatto, Patti I with Guggenheim Securities.

Suma Krishnan: Thank you, Suma. Sure. With regard to 408, obviously, I mean, you want expression in the lungs, right? I mean, speaking to our TKOLs, that's what we hear. I mean, again, nobody knows what kind of level we need to see a correction or improvement. But again, obviously, the lung improvement and functions, we're going to tell you as we start measuring them. With regard to AAT, the beauty of AAT is that it's a secreted protein.

Speaker Change #154: Hey, good morning.

Chris: Chris could you clarify.

Speaker Change #155: What do you expect steady state given the earlier comments on some of the OLED patients out to <unk> 35.

Speaker Change #156: These patients now are two vials per month and.

Speaker Change #157: What are you assuming steady state revenue per patient.

Speaker Change #157: Hi.

So let me just clarify the moment.

Speaker Change #158: I don't know I don't recall phase two soon to be three or 201, something thats been forward.

Speaker Change #158: Let Jim comment on them.

Speaker Change #160: What exactly.

Suma Krishnan: And you know, we already know that from a vector, we see high expression of the secreted protein. So we anticipate when you go into the lungs and you nebulize it, it's going to infect any cells that it sees, and you're going to see a lot of the protein that's been generated. At least based on our animal data and in vitro data, we expect high expression. So, when we look at the bronchoscopy, again, when we compare it to baseline, we would, that's where we're going to compare it.

Jim: Yeah. So as we look at the cohort of patients that they do vary and we plan to separate into kind of two different cohorts. One that consistently is remaining on therapy of four months for that entire year, then those both debt and pension advising and coming back and that's the cohort that as Chris said, it's a little.

Speaker Change #161: I would be premature to kind of understand where they're at I think do very they find that there are lines of therapy and the other comorbidities that they are dealing with whether they're in the hospital et cetera. So we are continuing to try and I think it is little early to say, where the final results will be based on severity based on where the wound.

Speaker Change #161: Or at a baseball everything else is going on in the patient lives, but overall again.

Speaker Change #161: Patients that are continuing.

Speaker Change #161: Stay on weekly and then essentially a pause here or there might have been pulled out and so we'll continue to track it and I think steady state.

And as we evolve our.

Speaker Change #161: As patients continue on therapy.

Speaker Change #162: Yeah, and I think net revenue.

Speaker Change #162: I mean, it's sometime next year, we'll have a much better idea what the number it looks like we're still less than I mean, we're almost at 12 months into launch.

Speaker Change #162: We're still not at 18 months here.

Speaker Change #163: So anything we said we'd be a bit treatment children right now combines his good work.

Speaker Change #163: Tracking ahead of our expectations with respect to launch.

Speaker Change #163:

Speaker Change #163: So hopefully next year.

Suma Krishnan: What is the difference in the levels? And obviously, going forward, we're going to start measuring improvements in lung function as part of the efficacy. But again, I think it's 408, the beauty of 408 is, I mean, there is no approved product for this therapy. So, from a regulatory strategy point of view for us, as we believe, we can go to the agency and go with the biomarker approach. If you're seeing expression levels in the lung, and we can quantify them, the plan, or the intent is for us to obviously sit down with the agency and see if there's a pathway for accelerated approval.

Speaker Change #163: Awesome.

Suma Krishnan: So that would be an opportunity for us.

Speaker Change #164: Couple of follow ups here.

Suma Krishnan: Yeah, Dagon, this is Spitben here, just adding on top of what Suma said. You know, clearly based on the mechanism here, it's the lung levels that are important. We're measuring systemically, but that's not what's going to drive decision making for us. The PD biomarkers will give us a sense of if we're in a clinically useful AAT range. There's also, you know, in the literature and understanding, levels in ELF, for example, relative to systemic, maybe 5 to 10 percent in that range.

Suma Krishnan: And so there are tools to benchmark what we would expect to be clinically useful AAT, which will then be bracketed by the information we get from baseline, both patients on and off augmentation, and those PD biomarkers having the effect that we want in the context of the lung. So collectively, we think that will give us the information we need to make a decision about progressing.

Speaker Change #165: Do you think you could get to over 700 patients on approved therapy by mid 25, which would roughly be about 60% of the identified 1200 patients.

Suma Krishnan: I do have a final comment, please realize that we're re-dosable gene therapy, right? And we make the argument for CF, how we chip away at the problem, and that unlike other gene therapies, which are, you know, primarily, for the most part, one and done, people look at the first readout, just always bear in mind as we report data that we have the ability to re-dose into a more amenable situation than we started with.

Krish Krishnan: On that point, Krish, I guess this cohort 3 data won't necessarily give us what the redosable frequency may be, right?

Speaker Change #166: Well I'll call. The launch always has been to get to 60% market share in two years.

Speaker Change #167: So I will caveat it a little bit at the time in the sense that we were talking in terms of start forms and not in terms of patients on drug bump.

Suma Krishnan: I mean, yes, correct, because it's a single dose. But very quickly, we are going to go, and maybe some of the same patients, we can roll them into the extension study where we can start redoing them. Because I think one week we will have a good understanding of what levels we see and, based on that, we are going to, you know, roll over those patients and continue to, you know,

Suma Krishnan: Thank you very much.

That said our internal goal is just to be very clear on the topic.

Speaker Change #167: Is the word.

Speaker Change #168: Pretty hard to guide to get to that number.

Speaker Change #168: Two years from launch yes, that's the goal.

Daegon Ha: It seems to be okay with it, so we will find enough patients to collect that data, but we don't know what, I mean, at a capital level. Okay, great, thanks so much.

Speaker Change #169: Got it and the ophthalmic indication is that a separate BLA.

Daegon Ha: Okay, great. Thanks so much.

Speaker Change #169: Or a label expansion and what could be the pricing assumption for the segment.

Deb Jett Chattopadhyay: Once again, if you would like to ask a question, please press star 1 on your phone at this time. Your next question is from Deb Jett Chattopadhyay with Guggenheim Securities.

Krish Krishnan: Hey, good morning. Um, Krish, could you clarify what you expect from the study states, given the earlier comments on some of the OLE patients out to month 35? Are these patients now at two vials per month, and what is your assuming steady state revenue per patient? So, let me just clarify the comment. I don't know, I don't recall saying two, so it could be three or two or one, something less than four, but I'll let Jen comment on what exactly this is.

Speaker Change #169: It's going to be a different BLA because again the volume is going to be.

Jennifer McDonough: Yeah, so if you look at the cohort of patients, they do vary, and we kind of separated into, you know, kind of two different cohorts. One that consistently remains on therapy at four months for that entire year. And then those folks that potentially are pausing and coming back, and that's the cohort that, as Krish said, it's a little, I would say, premature to kind of understand where they're at. They do vary based on their level of therapy and the other comorbidities that they are dealing with, whether they're in the hospital, etc.

Jennifer McDonough: So we are continuing to trend. I think it is a little early to say where the final results will be based on severity, based on where the wounds are, and based on everything else that's going on in the patient's lives. But overall, again, the patients that are continuing weekly stay on weekly, and then potentially, a pause here and there as life happens for them. So we'll continue to track it, and I think steady state will eventually evolve as patients continue on therapy.

Speaker Change #170: <unk> safety outcomes that can be different because of the EI. So it is a separate BLA, but again as you mentioned, we have agreement with the agency will be important embarking on is the Registrational trial, which we expect to complete next year, it's going to be in <unk>, yes.

Jennifer McDonough: Yeah, and I think net revenue, I mean, sometime next year we'll have a much better idea of what the number looks like. We're still less than, I mean, we're almost 12 months into launch, and he was still not at the 18 months he had. So anything we said would be a bit premature. But right now, compliance is good. We're tracking ahead of our expectations with respect to launch. I don't know

Krish Krishnan: So hopefully next time. It's awesome. So a couple of follow-ups here. Do you think you could get to over 700 patients on approved therapy by mid-25, which would roughly be about 60% of the identified 1,200 patients? Look, our goal for the launch always has been to get to 60% market share in two years. But I will caveat a little bit. At the time when we said that, we were talking in terms of initial forms and not in terms of patients on trial.

Speaker Change #170: Got it.

Krish Krishnan: That said, our internal goal, just to be very clear on the topic, is to work pretty hard to try and get to that number two years from launch. Yes, that's the goal. Got it. And the ophthalmic indication, is that a separate BLA or a label expansion? And what should be the pricing assumption for this segment?

Deb Jett Chattopadhyay: It's going to be a different BLA because, again, the volume is going to be different, and the safety outcomes are going to be different because it's an AI. So it is a separate BLA, but again, as we mentioned, we have an agreement with the agency. So what we're embarking on is the registrational trial, which we expect to complete next year. So it's going to be a new reality, here on the

Suma Krishnan: Yeah, the pricing is... Sorry, can you get me a... Oh, sorry. Thank you. So I was just going to say, if it's a separate BLA, should we also expect a pediatric review voucher along the way?

Speaker Change #170: Sure.

Speaker Change #170: Awesome.

Speaker Change #172: So I was just going to say if it's a separate BLA should we also expect our.

Speaker Change #172: Pediatric review voucher along with us.

Deb Jett Chattopadhyay: Yeah, I mean, as per the regulatory guidance for the same molecule entity, I mean, this is what happened to Bluebird, if you guys remember, I think they do not issue a second pediatric arthritis indication, Depends on the Molecular Entity, So that's it, I think. Thank you so much.

Speaker Change #173: If approved.

Speaker Change #173: Yeah, I mean asked but the regulatory guidance.

Speaker Change #173: Same molecular entity I mean, this is what happened to Bluebird, if you guys remember.

Speaker Change #174: I think they did not issue a second pediatric participants at the moment, let me currency.

Suma Krishnan: So that's the guidance. Thank you so much.

Speaker Change #175: So that's the nice thing thank you so much.

Operator: This now concludes the call. At this time, thank you to all participants for joining the Krystal Biotech second quarter 2024 earnings conference call. You may now disconnect.

Speaker Change #176: This now concludes the call at this time, thank you to all participants for joining the Crystal biotech second quarter 2024 earnings Conference call.

Speaker Change #176: You may now disconnect.

Okay.