Q1 2026 Krystal Biotech Inc Earnings Call and Business Update

May 4, 2026

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Speaker #3: Thank you for standing by, and welcome to the Krystal Biotech first quarter 2026 conference call. At this time, all participants have been placed on a listen-only mode.

Operator: Thank you for standing by. Welcome to the Krystal Biotech Q1 2026 Conference Call. At this time, all participants have been placed on a listen-only mode. After the speakers' presentations, there will be a question and answer session. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Stéphane Paquette, Vice President of Corporate Development. Please begin.

Operator: Thank you for standing by and welcome to the Krystal Biotech Q1 2026 Conference Call. At this time, all participants have been placed on a listen-only mode. After the speakers' presentations, there will be a question and answer session. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Stéphane Paquette, Vice President of Corporate Development. Please begin.

Speaker #3: After the speakers' presentations, there will be a question-and-answer session. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Stephane Paquette, Vice President of Corporate Development.

Speaker #3: Please begin.

Speaker #4: Good morning and thank you all for joining today's call. Earlier today, we released our financial results for the first quarter of 2026. The press release is available on our website at www.krystalbio.com.

Stéphane Paquette: Good morning. Thank you all for joining today's call. Earlier today, we released our financial results for Q1 2026. The press release is available on our website at www.krystalbio.com. We also filed our earnings 8-K and 10-Q with the SEC earlier today. Joining me today will be Krish Krishnan, Chairman and Chief Executive Officer, Suma Krishnan, President of Research and Development, Laurent Goux, Executive Vice President and General Manager for Europe, Christine Wilson, Senior Vice President and Head of US Commercial, and Kathryn Romano, Chief Accounting Officer. This conference call will, and our responses to questions may, contain forward-looking statements.

Speaker #4: We also filed our earnings 8-K and 10-Q with the SEC earlier today. Joining me today will be Krish Krishnan, Chairman and Chief Executive Officer; Suma Krishnan, President of Research and Development; Laurent Goux, Executive Vice President and General Manager for Europe; Christine Wilson, Senior Vice President and Head of US Commercial; and Kate Romano, Chief Accounting Officer.

Stéphane Paquette: Joining me today will be Krish Krishnan, Chairman and Chief Executive Officer, Suma Krishnan, President of Research and Development, Laurent Goux, Executive Vice President and General Manager for Europe, Christine Wilson, Senior Vice President and Head of US Commercial, and Kate Romano, Chief Accounting Officer. This conference call will, and our responses to questions may, contain forward-looking statements.

Speaker #4: 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.

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

Speaker #4: A description of these risks, uncertainties, and other factors can be found in our SEC filings. With that, I will turn the call over to Krish.

Speaker #5: Good morning. It's now been 10 years since we founded Krystal. And in that time, we have worked to change the lives of deaf patients globally for the better.

Krish Krishnan: Good morning. It's now been 10 years since we founded Krystal, and in that time, we have worked to change the lives of deaf patients globally for the better while building a durable, fully integrated company with the financial strength to continue delivering value for both patients and shareholders. We have done this with discipline. We've not accessed the capital markets since 2022. 2022 is 6 years from when the company was founded. We maintain a strong balance sheet, and we continue to generate meaningful operating leverage. More importantly, somewhat ironically, we believe the next 12 to 24 months represent one of the most exciting periods in Krystal's history. We are positioned for 2 registrational readouts this year and 2 more next year. I sincerely want to thank our employees for the dedication and execution that have brought us to this point. Now turning to VYJUVEK.

Speaker #5: While building a durable, fully integrated company with the financial strength to continue delivering value for both patients and shareholders. We have done this with discipline, having not accessed a capital market since 2022.

Speaker #5: 2022 is six years from when the company was founded. We maintain a strong balance sheet and we continue to generate meaningful operating leverage. Yet, more importantly, somewhat ironically, we believe the next 12 to 24 months represent one of the most exciting periods in Krystal's history.

Krish Krishnan: We maintain a strong balance sheet, and we continue to generate meaningful operating leverage. More importantly, somewhat ironically, we believe the next 12 to 24 months represent one of the most exciting periods in Krystal's history. We are positioned for two registrational readouts this year and two more next year. I sincerely want to thank our employees for the dedication and execution that have brought us to this point. Now turning to VYJUVEK.

Speaker #5: We are positioned for two registrational readouts this year and two more next year. I sincerely want to thank our employees for the dedication and execution that have brought us to this point.

Speaker #5: Now, turning to Visulac. We delivered another quarter of global revenue growth, with net revenue of $116.4 million in the quarter. This brings cumulative net Visulac revenue since launch to more than $846 million.

Krish Krishnan: We delivered another quarter of global revenue growth with net revenue of $116.4 million in the Q. This brings cumulative net VYJUVEK revenue since launch to more than $846 million. We are particularly pleased with this performance, which represents a 9% sequential growth versus Q4 2025, despite a higher than usual level of insurance changes, which happens, by the way, not just to us, but many biotech commercial companies in Q1. Gross margin was 95%. We delivered our 11th consecutive quarter of positive EPS. Outside the US, we're still early in the VYJUVEK launch in Europe and Japan. I'm pleased with the progress overseas. We're also working to add two additional major European markets, Italy and Spain, later this year.

Speaker #5: We are particularly pleased with this performance, which represents 9% sequential growth versus Q4 2025. Despite a higher-than-usual level of insurance changes—which happens, by the way, not just to us but to many biotech commercial companies in one quarter.

Speaker #5: Gross margin was 95%, and we delivered our 11th consecutive quarter of positive EPS. Outside the US, we're still early in the VISULAC launch in Europe and Japan, and I'm pleased with the progress overseas.

Krish Krishnan: Gross margin was 95%. We delivered our 11th consecutive quarter of positive EPS. Outside the US, we're still early in the VYJUVEK launch in Europe and Japan. I'm pleased with the progress overseas. We're also working to add two additional major European markets, Italy and Spain, later this year.

Speaker #5: We're also working to add two additional major European markets—Italy and Spain—later this year. Laurent and Christine will provide more detail on Visulac commercial dynamics and the opportunity ahead in a moment.

Krish Krishnan: Laurent and Christine will now provide more detail on VYJUVEK commercial dynamics and the opportunity ahead in a moment. FDA has now granted platform technology designation to both KB407 for CF and KB111 for Hailey-Hailey disease. This is in addition to receiving the same designation for our NK program, KB801 last year. These designations have a profound implication for Krystal. At the program level, these designations allow us to streamline our interactions with the agency and our development plans. We've already seen the benefits with KB801 as the designation allowed us to rapidly advance KB801 into a registrational study. The platform implications are also powerful. These designations bring a compounding advantage. Each developmental milestone on our pipeline strengthens our collective regulatory data set and reduces development risk, cost, and time for the next program we bring to the clinic.

Speaker #5: FDA has now granted platform technology designations to both KB407 for CF and KB111 for Haley-Haley. This is in addition to receiving the same designation for our NK program, KB801, last year.

Speaker #5: These designations have a profound implication for Krystal. At the program level, these designations allow us to streamline our interactions with the agency and our development plans.

Speaker #5: We've already seen the benefits with KB801, as the designation allowed us to rapidly advance KB801 into a registrational study. The platform implications are also powerful.

Krish Krishnan: We've already seen the benefits with KB801 as the designation allowed us to rapidly advance KB801 into a registrational study. The platform implications are also powerful. These designations bring a compounding advantage. Each developmental milestone on our pipeline strengthens our collective regulatory data set and reduces development risk, cost, and time for the next program we bring to the clinic.

Speaker #5: These designations bring a compounding advantage: each developmental milestone on our pipeline strengthens our collective regulatory dataset and reduces development risk, cost, and time for the next program we bring to the clinic.

Speaker #5: This advantage is presently unique to Krystal, and one we intend to leverage to its full potential. You'll hear more about our development plans from Suma.

Krish Krishnan: This advantage is presently unique to Krystal and one we intend to leverage to its full potential. You'll hear more about our development plans from Suma. I'll now turn it over to the team to provide details on the commercial launch and the clinical pipeline. Laurent.

Speaker #5: I'll now turn it over to the team to provide details on the commercial launch and the clinical pipeline. Laurent, thank you. Krish, we are very encouraged by the progress we are seeing outside the United States, where Visulac is beginning to establish itself as an important new treatment option for DEB patients in key international markets.

Laurent Goux: Thank you, Krish. We are very encouraged by the progress we are seeing outside the United States, where VYJUVEK is beginning to establish itself as an important new treatment option for DEB patients in key international markets. When we think about the international launch, the story is not just one of geographic expansion. It is a story of building trust across cultures with physicians, with treatment centers, with payers, and ultimately with the entire EB community who have been waiting for new options. There are nuances in every country we launch, and sometimes within a country by region. That said, across Europe and Japan, we are seeing strong word of mouth and increasing engagement from key centers. That is raising awareness of VYJUVEK and helping translate physician interest into real patient demand. Importantly, our prescriber base continues to broaden.

Speaker #5: When we think about the international launch, the story is not just one of geographic expansion. It is a story of building trust across cultures—with physicians, with treatment centers, with payers, and ultimately with the entire EB community who have been waiting for new options.

Laurent Goux: It is a story of building trust across cultures with physicians, with treatment centers, with payers, and ultimately with the entire EB community who have been waiting for new options. There are nuances in every country we launch, and sometimes within a country by region. That said, across Europe and Japan, we are seeing strong word of mouth and increasing engagement from key centers. That is raising awareness of VYJUVEK and helping translate physician interest into real patient demand. Importantly, our prescriber base continues to broaden.

Speaker #5: There are nuances in every country we launch, and sometimes within a country, by region. That said, across Europe and Japan, we are seeing strong word-of-mouth and increasing engagement from key centers.

Speaker #5: That is raising awareness of Visulac and helping translate physician interest into real patient demand. Importantly, our prescriber base continues to broaden. This gives more patients the opportunity to start treatment closer to home, while also creating a more durable and resilient foundation for the launch.

Laurent Goux: This gives more patients the opportunity to start treatment closer to home while also creating a more durable and resilient foundation for the launch. We estimate that more than 140 DEB patients have been prescribed VYJUVEK across Germany, Japan and France. We believe this reflects both strong execution by our international team and growing physician confidence in VYJUVEK in the early launch market. This early momentum is also beginning to show financials. European market plus Japan contributed to EUR 28.9 million in net revenue, demonstrating the meaningful role these regions can play in the growth of VYJUVEK over time. Looking ahead, our focus is clear. We are working to deepen penetration in our current launch markets, secure positive access and reimbursement outcomes, and expand it to additional major European markets. In Germany and France, pricing negotiations remain ongoing.

Speaker #5: We estimate that more than 140 DEB patients have been prescribed Visulac across Germany, Japan, and France. We believe this reflects both strong execution by our international team and growing physician confidence in Visulac in the early launch market.

Speaker #5: This early momentum is also beginning to show financially. European market plus Japan contributed to $28.9 million in net revenue, demonstrating the meaningful role these regions can play in the growth of Visulac over time.

Laurent Goux: This early momentum is also beginning to show financials. European market plus Japan contributed to EUR 28.9 million in net revenue, demonstrating the meaningful role these regions can play in the growth of VYJUVEK over time. Looking ahead, our focus is clear. We are working to deepen penetration in our current launch markets, secure positive access and reimbursement outcomes, and expand it to additional major European markets. In Germany and France, pricing negotiations remain ongoing.

Speaker #5: Looking ahead, our focus is clear: we are working to deepen penetration in our current launch market, secure positive access and reimbursement outcomes, and expand to additional major European markets.

Speaker #5: In Germany and France, pricing negotiations remain ongoing. We continue to expect the decision in Germany in the second half of 2026. In France, we continue to expect the decision in 2027, which would further support broader access and reimbursement stability.

Laurent Goux: We continue to expect a decision in Germany in H2 2026. In France, we continue to expect a decision in 2027, which would further support broader access and reimbursement stability. We are also advancing discussions with reimbursement authorities in Italy and are actively preparing for potential launch in H2 2026, pending the outcome of those negotiations. In Spain, I'm pleased to report that our discussions with authorities have accelerated. Based on our latest interactions, we now see a potential opportunity to launch in Spain in H2 of the year, again pending the outcome of negotiations. In the interim, we are also responding to opportunities to start patients on VYJUVEK through early reimbursement access pathways. Overall, we are very encouraged by the early tractions we are seeing internationally.

Speaker #5: We are also advancing discussions with reimbursement authorities in Italy and are actively preparing for potential launch in the second half of 2026, pending the outcome of those negotiations.

Speaker #5: And in Spain—I’m pleased to report that our discussions with authorities have accelerated. Based on our latest interactions, we now see a potential opportunity to launch in Spain in the second half of the year, again pending the outcome of negotiations.

Laurent Goux: In Spain, I'm pleased to report that our discussions with authorities have accelerated. Based on our latest interactions, we now see a potential opportunity to launch in Spain in H2 of the year, again pending the outcome of negotiations. In the interim, we are also responding to opportunities to start patients on VYJUVEK through early reimbursement access pathways. Overall, we are very encouraged by the early tractions we are seeing internationally.

Speaker #5: In the interim, we are also responding to opportunities to start patients on Visulac through early reimbursement access pathways. Overall, we are very encouraged by the early traction we are seeing internationally.

Speaker #5: The launch is progressing market by market, physician by physician, and patient by patient. We remain focused on disciplined execution of our global commercialization strategy and on bringing Visulac to more DEB patients around the world.

Laurent Goux: The launch is progressing market by market, physician by physician, and patient by patient. We remain focused on disciplined execution of our global commercialization strategy and on bringing VYJUVEK to more DEB patients around the world. I will now hand the call off to Christine to share updates on VYJUVEK launch in the US. Christine.

Speaker #5: I will now hand the call off to Christine to share updates on the Visulac launch in the US. Christine, thank you, Laurent. Our team has been making great progress in recent months.

Christine Wilson: Thank you, Laurent. Our team has been making great progress in recent months, building on our leadership position and delivering transformational outcomes for patients across the United States. Strong sales force execution is expanding our community reach and allowing us to meet patients wherever they seek care, whether that is at the center of excellence with a pediatric dermatologist or in a family practice office in the community. By bridging this gap, we have now been able to secure over 695 reimbursement approvals for DEB patients nationwide, even as access teams were navigating a higher volume of insurance switchovers. Upstream demand metrics are even better, with over 60 new prescribers in Q1 and over 570 unique prescribers since launch, underpinning a strong team approval outlook for the rest of the year.

Speaker #5: Building on our leadership position and delivering transformational outcomes for patients across the United States, strong Salesforce execution is expanding our community reach and allowing us to meet patients wherever they seek care.

Speaker #5: Whether that is at the center of excellence with a pediatric dermatologist or in a family practice office in the community. By bridging this gap, we have now been able to secure over 695 reimbursement approvals for DEB patients nationwide.

Christine Wilson: By bridging this gap, we have now been able to secure over 695 reimbursement approvals for DEB patients nationwide, even as access teams were navigating a higher volume of insurance switchovers. Upstream demand metrics are even better, with over 60 new prescribers in Q1 and over 570 unique prescribers since launch, underpinning a strong team approval outlook for the rest of the year.

Speaker #5: Even as access teams were navigating a higher volume of insurance switchovers, upstream demand metrics are even better. With over 60 new prescribers in the first quarter, and over 570 unique prescribers since launch, underpinning a strong team approval outlook for the rest of the year.

Speaker #5: Net Visulac revenues for the United States were $87.5 million for the quarter. Revenues were impacted by insurance switchovers in the quarter, which are now behind us, as well as the start-stop treatment cadence characteristics of a patient population shifting towards maintenance treatment regimens.

Christine Wilson: Net VYJUVEK revenues for the United States were $87.5 million for the quarter. Revenues were impacted by insurance switchovers in the quarter, which are now behind us, as well as the start-stop treatment cadence characteristics of a patient population shifting towards maintenance treatment regimens. With VYJUVEK now on the market in the United States for nearly 3 years, a growing number of patients have been able to achieve dramatic and transformational wound closure outcomes. Patients have been able to take control of their disease and their lives, opening up new opportunities and autonomy never before possible. These quality of life gains, made possible by the robust efficacy and safety profile of VYJUVEK, are deeply motivating and the foundation for the long-term trust-based relationships we are building with the DEB patient community.

Speaker #5: With Visulac now on the market in the United States for nearly three years, a growing number of patients have been able to achieve dramatic and transformational wound closure outcomes.

Christine Wilson: With VYJUVEK now on the market in the United States for nearly 3 years, a growing number of patients have been able to achieve dramatic and transformational wound closure outcomes. Patients have been able to take control of their disease and their lives, opening up new opportunities and autonomy never before possible. These quality of life gains, made possible by the robust efficacy and safety profile of VYJUVEK, are deeply motivating and the foundation for the long-term trust-based relationships we are building with the DEB patient community.

Speaker #5: Patients have been able to take control of their disease and their lives, opening up new opportunities and autonomy never before possible. These quality-of-life gains made possible by the robust efficacy and safety profile of Visulac are deeply motivating, and the foundation for the long-term, trust-based relationships we are building with the DEB patient community.

Speaker #5: These improvements are also a natural and anticipated evolution of the launch. As patient motivations and support needs shift to reflect their newfound autonomy, this is where the flexibility of Visulac administration and last year's label updates are especially valuable.

Christine Wilson: These improvements are also a natural and anticipated evolution of the launch as patient motivations and support needs shift to reflect their newfound autonomy. This is where the flexibility of VYJUVEK administration and last year's label updates are especially valuable, providing patients with the option to self-administer or receive nurse support where and when they want it. To this end, we have launched patient support initiatives to communicate and educate around recent VYJUVEK label updates, which provide greater administration flexibility and help DEB patients and families conveniently integrate VYJUVEK into lifelong wound healing routines as part of their standard of care. Our goal is to establish long-term relationships with VYJUVEK patients, ensuring ongoing connectivity and ease of use throughout their lifelong treatment journey. Skin cells do turn over, and wounds eventually reopen, particularly as patients get more active.

Speaker #5: Providing patients with the option to self-administer or receive nurse support where and when they want it. To this end, we have launched patient support initiatives to communicate and educate around recent Visulac label updates.

Christine Wilson: To this end, we have launched patient support initiatives to communicate and educate around recent VYJUVEK label updates, which provide greater administration flexibility and help DEB patients and families conveniently integrate VYJUVEK into lifelong wound healing routines as part of their standard of care.

Speaker #5: Which provide greater administration flexibility and help DEB patients and families conveniently integrate Vyjuvek into lifelong wound healing routines, as part of their standard of care.

Speaker #5: Our goal is to establish long-term relationships with Visulac patients, ensuring ongoing connectivity and ease of use throughout their lifelong treatment journey. Skin cells do turn over, and wounds eventually reopen, particularly as patients get more active.

Christine Wilson: Our goal is to establish long-term relationships with VYJUVEK patients, ensuring ongoing connectivity and ease of use throughout their lifelong treatment journey. Skin cells do turn over, and wounds eventually reopen, particularly as patients get more active.

Speaker #5: As patients transition into these start-and-stop phases, we are focused on enabling timely access to Visulac whenever it is needed. This focus is driving continued assessment of our infrastructure to better support patients where they are in their journey, and to further enhance the ease of delivering Visulac across the United States.

Christine Wilson: As patients transition into these start and stop phases, we are focused on enabling timely access to VYJUVEK whenever it is needed. This focus is driving continued assessment of our infrastructure to better support patients where they are in their journey and to further enhance the ease of delivering VYJUVEK across the United States. At the recent American Academy of Dermatology conference, key opinion leaders underscored their appreciation for VYJUVEK and the positive outcomes achieved by their treated patients. In a patient population where, prior to VYJUVEK's approval, there were no treatment options beyond palliative wound care, VYJUVEK represents a meaningful advancement and fueling an increased focus on the long-term clinical and quality-of-life benefits that might come with long-term VYJUVEK therapy. As we progress in our launch, we are excited about the opportunity ahead.

Speaker #5: At the recent American Academy of Dermatology conference, key opinion leaders underscored their appreciation for Visulac and the positive outcomes achieved by their treated patients.

Christine Wilson: At the recent American Academy of Dermatology conference, key opinion leaders underscored their appreciation for VYJUVEK and the positive outcomes achieved by their treated patients. In a patient population where, prior to VYJUVEK's approval, there were no treatment options beyond palliative wound care, VYJUVEK represents a meaningful advancement and fueling an increased focus on the long-term clinical and quality-of-life benefits that might come with long-term VYJUVEK therapy.

Speaker #5: In a patient population where, prior to Visulac's approval, there were no treatment options beyond palliative wound care, Visulac represents a meaningful advancement and is fueling an increased focus on the long-term clinical and quality-of-life benefits that might come with long-term Visulac therapy.

Speaker #5: As we progress in our launch, we are excited about the opportunity ahead. There are still hundreds of known diagnosed patients we hope to bring to therapy, and many more not yet identified that we believe could benefit from Visulac.

Christine Wilson: As we progress in our launch, we are excited about the opportunity ahead. There are still hundreds of known diagnosed patients we hope to bring to therapy and many more not yet identified that we believe could benefit from VYJUVEK. By driving new patient starts and maximizing convenience for patients already on therapy, we see an opportunity to deliver significant growth in the years ahead. With that, I'll turn the call over to Suma to share the latest on our development pipeline. Suma.

Christine Wilson: There are still hundreds of known diagnosed patients we hope to bring to therapy and many more not yet identified that we believe could benefit from VYJUVEK. By driving new patient starts and maximizing convenience for patients already on therapy, we see an opportunity to deliver significant growth in the years ahead. With that, I'll turn the call over to Suma to share the latest on our development pipeline. Suma.

Speaker #5: By driving new patient starts and maximizing convenience for patients already on therapy, we see an opportunity to deliver significant growth in the years ahead.

Speaker #5: With that, I'll turn the call over to Suma to share the latest on our development pipeline. Suma, thank you. Christine, and good morning, everyone.

Suma Krishnan: Thank you, Christine, and good morning, everyone. I am excited to share that we are faced with 2 registrational study readouts expected later this year and 2 more in 2027. With respect to the ophthalmology registrational readouts this year, we are excited to announce we completed enrollment in our registrational study evaluating KB803 for the treatment and prevention of corneal abrasions in DEB patients. A total of 16 patients were enrolled in the study. IOLITE is a randomized, intrapatient, double-blind, decentralized, placebo-controlled study with crossover design, in which patients are randomized 1 to 1 to receive KB803 3 times weekly for 12 weeks, followed by placebo 3 times weekly for 12 weeks, or vice versa.

Speaker #5: I am excited to share that we are faced with two registrational study readouts expected later this year and two more in 2027. With respect to the ophthalmology registrational readouts, this year we are excited to announce the completed enrollment in our registrational study evaluating KV803 for the treatment and prevention of corneal abrasions in dead patients.

Suma Krishnan: A total of 16 patients were enrolled in the study. IOLITE is a randomized, intrapatient, double-blind, decentralized, placebo-controlled study with crossover design, in which patients are randomized 1 to 1 to receive KB803 3 times weekly for 12 weeks, followed by placebo 3 times weekly for 12 weeks, or vice versa.

Speaker #5: A total of 16 patients were enrolled in the study. Iolite is randomized intrapatient double-blind decentralized placebo-controlled study with crossover design in which patients are randomized one-to-one to receive KV803 three times weekly for 12 weeks, followed by placebo three times weekly for 12 weeks, or vice versa.

Suma Krishnan: The primary efficacy endpoint, the change from baseline in the average number of days per month with symptoms will be assessed at 24 weeks, putting us on a path for a readout in Q4 of this year. This is an exciting milestone for our team and the many DEB patients suffering from ocular complications of this terrible disease. Our second registrational study evaluating KB801 for the treatment of neurotrophic keratitis is also progressing well. Our focus here is operational, supporting our trial sites, expanding our network, and driving enrollment. This is an 8-week study. We expect to enroll 60 patients and are on track for a data readout later this year.

Speaker #5: The primary efficacy endpoint, the change from baseline in the average number of days per month with symptoms, will be assessed at 24 weeks, putting us on a path for a readout in the fourth quarter of this year.

Speaker #5: This is an exciting milestone for our team and the many patients suffering from ocular complications of this terrible disease. Our second registrational study evaluating KV801 for the treatment of neurotrophic keratitis is also progressing well.

Suma Krishnan: Our second registrational study evaluating KB801 for the treatment of neurotrophic keratitis is also progressing well. Our focus here is operational, supporting our trial sites, expanding our network, and driving enrollment. This is an 8-week study. We expect to enroll 60 patients and are on track for a data readout later this year.

Speaker #5: Our focus here is operational, supporting our trial sites, expanding our network, and driving enrollment. This is an eight-week study. We expect to enroll 60 patients and are on track for a data readout later this year.

Speaker #5: We are moving quickly on our broader pipeline as well, including the initiation of two open-label studies evaluating repeat-dose KB407 and KB111, which we expect to read out later this year.

Suma Krishnan: We are moving quickly on our broader pipeline as well, including the initiation of 2 open label studies evaluating repeat dose KB407 and KB111, which we expect to read out later this year. Based on FDA interactions, we are initiating an open label single arm study to evaluate safety of repeat dose KB407 for 24 weeks in 5 patients with CF who are ineligible for, do not tolerate, or do not benefit from modulate therapy. Dosing is expected to start later this month. With strong backing from the Cystic Fibrosis Foundation, the CFF, we expect to complete enrollment in the study later this quarter and report data by end of the year.

Speaker #5: Based on FDA interactions, we are initiating an open-label single-arm study to evaluate safety of repeat-dose KB407 for 24 weeks in five patients with CF who are ineligible for do-not-tolerate or do-not-benefit from modulate therapy.

Suma Krishnan: Dosing is expected to start later this month. With strong backing from the Cystic Fibrosis Foundation, the CFF, we expect to complete enrollment in the study later this quarter and report data by end of the year. Concurrently, we are working closely with the FDA and the CFF on an innovative registrational study design and statistical analysis plan that may include prospectively collected natural history data from the CFF to supplement placebo-controlled data for evaluation of KB407 treatment effect.

Speaker #5: The dosing is expected to start later this month. With strong backing from the Cystic Fibrosis Foundation, the CFF, we expect to complete enrollment in the study later this quarter and report data by the end of the year.

Suma Krishnan: Concurrently, we are working closely with the FDA and the CFF on an innovative registrational study design and statistical analysis plan that may include prospectively collected natural history data from the CFF to supplement placebo-controlled data for evaluation of KB407 treatment effect. We will share the design and associated statistical analysis plan of the registrational study following alignment with the FDA, which we expect in H2 of 2026. We expect the registrational study to commence in H1 of 2027. Strong patient and care engagement is also helping us move quickly on our KB111 program for the treatment of Hailey-Hailey disease. We are making steady progress on our HHD severity scale and expect to complete both the development and validation in the H1 of this year.

Speaker #5: Concurrently, we are working closely with the FDA and the CFF on an innovative registrational study design and statistical analysis plan that may include prospectively collected natural history data from the CFF to supplement placebo-controlled data for evaluation of KB407 treatment effect.

Speaker #5: We will share the design and associated statistical analysis plan of the registrational study following alignment with the FDA, which we expect in the second half of 2026.

Suma Krishnan: We will share the design and associated statistical analysis plan of the registrational study following alignment with the FDA, which we expect in H2 of 2026. We expect the registrational study to commence in H1 of 2027. Strong patient and care engagement is also helping us move quickly on our KB111 program for the treatment of Hailey-Hailey disease. We are making steady progress on our HHD severity scale and expect to complete both the development and validation in the H1 of this year.

Speaker #5: We expect the registrational study to commence in the first half of 2027. Strong patient and caregiver engagement is also helping us move quickly on our KB11 program for the treatment of Haley-Haley disease.

Speaker #5: We are making steady progress on our eight-HD severity scale and expect to complete both the development and validation in the first half of this year.

Speaker #5: We also plan to initiate an open-label safety study, Haley-1, to evaluate KB111 for 12 weeks in seven patients with HHD. We expect to dose the first patient in Haley-1 later this month.

Suma Krishnan: We also plan to initiate an open-label safety HALITE-1 to evaluate KB111 for 12 weeks in 7 patients with HHD. We expect to dose the first patient in the HALITE-1 later this month and submit our registrational study design to FDA in H2 of the year. Based on the current timelines, we expect the registrational study to start in 2027. We have our KB408 program for AATD lung disease and our KB707 program for non-small cell lung cancer. Both are advancing steadily in the clinic and on track for data updates later this year, including in the case of KB707, a data update at ASCO next month. Altogether, this sets up for 6 potential readouts before year-end, including 2 registrational study readouts. With that, I'll hand the call over to Kate.

Speaker #5: And submit our registrational study design to the FDA in the second half of the year. Based on the current timelines, we expect the registrational study to start in 2027.

Speaker #5: And then we have our KB408 program for AATD lung disease, and our KB707 program for non-small cell lung cancer. Both are advancing steadily in the clinic and on track for data updates later this year.

Suma Krishnan: We have our KB408 program for AATD lung disease and our KB707 program for non-small cell lung cancer. Both are advancing steadily in the clinic and on track for data updates later this year, including in the case of KB707, a data update at ASCO next month. Altogether, this sets up for 6 potential readouts before year-end, including 2 registrational study readouts. With that, I'll hand the call over to Kate.

Speaker #5: Including, in the case of KB707, a data update at ASCO next month. Altogether, this sets up for six potential readouts by the full year-end, including two registrational study readouts.

Speaker #5: With that, I'll end the call over to Kate.

Speaker #1: Thank you, Suma, and good morning, everyone. I'll now provide some highlights from our Q1 financial results reported in our press release and 10-Q filing earlier today.

Kathryn Romano: Thank you, Suma. Good morning, everyone. I'll now provide some highlights from our Q1 financial results reported in our press release and Form 10-Q filing earlier today. Net revenue from global sales of VYJUVEK was $116.4 million for Q1, which included sales from our commercial launches in Europe and Japan. This marked growth as compared to the prior quarter of 9% and was a 32% increase compared to Q1 2025. Cost of goods sold for the quarter was $6.3 million compared to $5 million in the prior year's Q1. Gross margin for the quarter was 95%, slightly up from 94% in Q1 2025.

Kate Romano: Thank you, Suma. Good morning, everyone. I'll now provide some highlights from our Q1 financial results reported in our press release and Form 10-Q filing earlier today. Net revenue from global sales of VYJUVEK was $116.4 million for Q1, which included sales from our commercial launches in Europe and Japan.

Speaker #1: Net revenue from global sales of Vyjavec was $116.4 million for the first quarter, which included sales from our commercial launches in Europe and Japan.

Speaker #1: This marked growth as compared to the prior quarter of 9%, and was a 32% increase compared to the first quarter of 2025. Cost of goods sold for the quarter was $6.3 million, compared to $5 million in the prior year's first quarter.

Kate Romano: This marked growth as compared to the prior quarter of 9% and was a 32% increase compared to Q1 2025. Cost of goods sold for the quarter was $6.3 million compared to $5 million in the prior year's Q1. Gross margin for the quarter was 95%, slightly up from 94% in Q1 2025.

Speaker #1: Gross margin for the quarter was 95%, slightly up from 94% in Q1 2025. We are seeing the benefits of manufacturing process improvements related to our US-approved product and are actively working to achieve similar efficiencies for our other markets.

Kathryn Romano: We are seeing the benefits of manufacturing process improvements related to our US approved product and are actively working to achieve similar efficiencies for our other markets. R&D expenses for the quarter were $15.3 million compared to $14.3 million in the prior year's Q1. This was driven mainly by payroll, materials, and support costs for production runs across several product candidates. G&A expenses were $41 million compared to $32.6 million in the prior year. This $8.4 million increase was primarily due to increased headcount and related compensation expense, as well as higher legal, consulting, and launch support costs for VYJUVEK globally. Operating expenses for the quarter included non-cash stock-based compensation of $13.6 million compared to $13.5 million in the Q1 of last year.

Kate Romano: We are seeing the benefits of manufacturing process improvements related to our US approved product and are actively working to achieve similar efficiencies for our other markets. R&D expenses for the quarter were $15.3 million compared to $14.3 million in the prior year's Q1. This was driven mainly by payroll, materials, and support costs for production runs across several product candidates.

Speaker #1: R&D expenses for the quarter were $15.3 million, compared to $14.3 million in the prior year's first quarter. This was driven mainly by payroll, materials, and support costs for production runs across several product candidates.

Kate Romano: G&A expenses were $41 million compared to $32.6 million in the prior year. This $8.4 million increase was primarily due to increased headcount and related compensation expense, as well as higher legal, consulting, and launch support costs for VYJUVEK globally. Operating expenses for the quarter included non-cash stock-based compensation of $13.6 million compared to $13.5 million in the Q1 of last year.

Speaker #1: G&A expenses were $41 million, compared to $32.6 million in the prior year. This $8.4 million increase was primarily due to increased headcount and related compensation expense, as well as higher legal, consulting, and launch support costs for Vyjavec globally.

Speaker #1: Operating expenses for the quarter included non-cash stock-based compensation of $13.6 million, compared to $13.5 million in the first quarter of last year. The guidance we previously issued relating to non-GAAP operating expenses remains unchanged.

Kathryn Romano: The guidance we previously issued relating to non-GAAP operating expenses remains unchanged. We anticipate approximately $175 to 195 million in non-GAAP R&D and SG&A expenses for the full year of 2026. Net income for the quarter was $55.9 million, which represented $1.91 per basic and $1.83 per diluted share. We are pleased to report growth as compared to the prior year's Q1's net income of $35.7 million, an EPS of $1.24 per basic and $1.20 per diluted share. Finally, we continue to build on our strong cash position, now exceeding $1 billion in combined cash and investments, which positions us well to support our pipeline and global commercial efforts.

Kate Romano: The guidance we previously issued relating to non-GAAP operating expenses remains unchanged. We anticipate approximately $175 to 195 million in non-GAAP R&D and SG&A expenses for the full year of 2026. Net income for the quarter was $55.9 million, which represented $1.91 per basic and $1.83 per diluted share.

Speaker #1: We anticipate approximately $175 million to $195 million in non-GAAP R&D and SG&A expenses for the full year of 2026. Net income for the quarter was $55.9 million, which represented $1.91 per basic share and $1.83 per diluted share.

Speaker #1: We are pleased to report growth as compared to the prior year's first quarter net income, of $35.7 million, and EPS of $1.24 per basic share and $1.20 per diluted share.

Kate Romano: We are pleased to report growth as compared to the prior year's Q1's net income of $35.7 million, an EPS of $1.24 per basic and $1.20 per diluted share. Finally, we continue to build on our strong cash position, now exceeding $1 billion in combined cash and investments, which positions us well to support our pipeline and global commercial efforts. With that, I'd like to turn the call back over to Krish.

Speaker #1: And finally, we continue to build on our strong cash position, now exceeding $1 billion in combined cash and investments, which positions us well to support our pipeline and global commercial efforts.

Speaker #1: And with that, I'd like to turn the call back over to Krish.

Kathryn Romano: With that, I'd like to turn the call back over to Krish.

Speaker #2: Thanks, Kate. I want to circle back and underscore our excitement in the global Vyjavec launch trajectory. While there are nuances to a launch in every country—for example, prescription renewal frequency in Japan in the first year, mandatory first physician visit, and ongoing pricing negotiations in Europe, or the start-stop paradigm in the US that we're now starting to see three years into launch—but taken as a whole, all these geographies, the resilience in our launch, dramatically increased the number of patients able to benefit from Vyjavec.

Krish Krishnan: Thanks, Kate. I want to circle back and underscore our excitement in the global VYJUVEK launch trajectory. While there are nuances to a launch in every country, for example, prescription renewal frequency in Japan in the first year, mandatory first physician visit, and ongoing pricing negotiations in Europe, or the start-stop paradigm in the US that we're now starting to see 3 years into launch. Taken as a whole, all these geographies, the resilience in our launch dramatically increase the number of patients able to benefit from VYJUVEK and strengthens our conviction in the long-term growth outlook. Country-level fluctuations quarter to quarter are inevitable, but mitigated by the diversification that geographic expansion brings. I am pleased that VYJUVEK continues to work well for patients living with DEB, which, as you all know, is a devastating and a debilitating disease.

Krish Krishnan: Taken as a whole, all these geographies, the resilience in our launch dramatically increase the number of patients able to benefit from VYJUVEK and strengthens our conviction in the long-term growth outlook. Country-level fluctuations quarter to quarter are inevitable, but mitigated by the diversification that geographic expansion brings. I am pleased that VYJUVEK continues to work well for patients living with DEB, which, as you all know, is a devastating and a debilitating disease.

Speaker #2: And strengthens our conviction in the long-term growth outlook. Country-level fluctuations, quarter to quarter, are inevitable but mitigated by the diversification that geographic expansion brings. I am pleased that Vyjavec continues to work well for patients living with DEB, which, as you all know, is a devastating and debilitating disease.

Speaker #2: We're hearing meaningful stories from patients and families globally whose lives have improved, including patients who are now able to participate in activities they had never imagined before.

Krish Krishnan: We're hearing meaningful stories from patients and families globally whose lives have improved, including patients who are now able to participate in activities they have never imagined before. Many are also able to pause weekly administration and return to treatment when wounds recur. We're deeply humbled to play a role in helping these patients and their families as they navigate a lifelong journey with this disease. On the pipeline, we have multiple data readouts coming later this year, including 2 registrational readouts in DEB, initial repeat dose data from KB407 in CF, and KB111 in Hailey-Hailey disease. Along with data updates for KB707 in NSCLC and KB408 in AATD. It's turning out to be a really busy clinical and a commercial year for Krystal Biotech. Overall, we're set up for an exciting 2026. Thank you, and may the fourth be with you. Operator.

Speaker #2: Many are also able to pause weekly administration and return to treatment when wounds recur. We're deeply humbled to play a role in helping these patients and their families as they navigate a lifelong journey with this disease.

Speaker #2: And on the pipeline, we have multiple data readouts coming later this year, including two registrational readouts in the eye, initial repeat dose data from KB407 in CF, and KB111 in Haley-Haley disease.

Krish Krishnan: On the pipeline, we have multiple data readouts coming later this year, including 2 registrational readouts in DEB, initial repeat dose data from KB407 in CF, and KB111 in Hailey-Hailey disease. Along with data updates for KB707 in NSCLC and KB408 in AATD. It's turning out to be a really busy clinical and a commercial year for Krystal Biotech. Overall, we're set up for an exciting 2026. Thank you, and may the fourth be with you. Operator.

Speaker #2: Along with data updates for KB707 in NSCLC and KB408 in AATD. So it's turning out to be a really busy clinical and commercial year for Krystal Biotech.

Speaker #2: Overall, we're set up for an exciting 2026. Thank you. And may the 4th be with you. Operator.

Speaker #1: Thank you. At this time, we will be conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time.

Operator: Thank you. At this time, we will be conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Once again, that is star one to ask a question. Please hold while we poll for questions. Your first question comes from Roger Song with Jefferies.

Speaker #1: We ask that, while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Once again, that is star 1 to ask a question.

Speaker #1: Please hold while we pull for questions. Your first question comes from Roger Song with Jefferies.

Roger Song: Great. Congrats for the quarter. Thank you for taking our question. Maybe just two questions. One relates to the commercial and then the pipeline. For the commercial, looking at the 10-Q, you have a US $87.5 and then Europe at $20.7, Japan $8.1. Seems a very strong launch ex-US. How should we think about the growth trajectory in the US for the rest of 2026? Then, how this strong trend in ex-US, Europe, Japan will continue for the rest of the year? I know long term I totally hear you for the outlook. How about 2026? Then just quickly on the pipeline. On the CF, this 24-week data, what will be the endpoint for that data readout?

Speaker #3: Great. Congrats for the quarter. Thank you for taking our question. Maybe just two questions. One related to the commercial and then the pipeline. For the commercial, looking at the 10Q, so you have a US 87.5 and then Europe 20.7, Japan 8.1, seems very strong launch ex-US.

Speaker #3: How should we think about the growth trajectory in the US for the rest of 2026, and then how this strong trend in ex-US—Europe, Japan—will continue for the rest of the year?

Roger Song: How should we think about the growth trajectory in the US for the rest of 2026? Then, how this strong trend in ex-US, Europe, Japan will continue for the rest of the year? I know long term I totally hear you for the outlook. How about 2026? Then just quickly on the pipeline. On the CF, this 24-week data, what will be the endpoint for that data readout? What will be the go/no-go decision before you start the pivotal? Thank you.

Speaker #3: I know long-term, I totally hear you for the outlook, but how about 2026? And then just quickly on the pipeline, on the CF, this 24-week data—what would be the endpoint for that data readout, and then what would be the go/no-go decision before you start the pivotal?

Roger Song: What will be the go/no-go decision before you start the pivotal? Thank you.

Speaker #3: Thank you.

Speaker #4: Hey, Roger. Thanks for your question—both super relevant. Here on the commercial in the U.S., as you can see from the reimbursement approvals, the top-line demand continues to grow.

Krish Krishnan: Hey, Roger. Thanks for your question. Both, super relevant. Yeah, on the commercial in the US, as you can see from the reimbursement approvals, the top-line demand continues to grow very nicely. I know, we've previously said there's maybe about 1,200 identified patients and we're steadily marching towards that and even hope to get to that 720 number by next quarter, right? We're at 60% market share, and so the top line's growing well. What's a bit difficult to predict is the start-stop paradigm on a Q-by-Q basis.

Speaker #4: Very nicely. I know we've previously said there's maybe about 1,200 identified patients, and we're steadily marching towards that. And we even hope to get to that 720 number by next quarter.

Speaker #4: Right? So, we're at 60% market share, and so the top line's growing well. What's a bit difficult to predict is the start-stop paradigm on a Q-by-Q basis.

Krish Krishnan: The point I made in the call in my script was, look, people are pretty, patients are really happy with their experience on VYJUVEK. We've seen many instances of patients stopping and coming back on drug, which is what we had always wanted this to be. That's the tail on the drug. On a Q-by-Q basis, it's really tough to predict the ups and downs. You could have a down 1 Q, up the 2nd Q. Overall, we expect the trend to be pointed in the positive direction.

Speaker #4: But the point I made in the call in my script was, look, people are pretty—patients are really happy with their experience on Vyjuvek.

Speaker #4: We've seen many instances of patients stopping and coming back on drug, which is what we had always wanted this to be. That's the tail on the drug.

Speaker #4: But on a Q-by-Q basis, it's really tough to predict—the ups and downs. So you could have a down one Q, up the second Q, but overall, we expect the trend to be pointed in the positive direction.

Speaker #5: Yeah, Krish, and if I may add, we're continuing to launch support programs that really educate them on the label updates that will help these patients continue to integrate this into their daily life as we look to establish lifelong partnerships with these patients.

Christine Wilson: Yeah, Krishan, if I may add, you know, we're continuing to launch support programs that really educate them on the label updates that will help these patients continue to integrate this into their daily life as we look to establish lifelong partnerships with these patients and support their ongoing trajectory with VYJUVEK as they start and stop through natural wound healing.

Speaker #5: And support their ongoing trajectory with Vyjuvek, as they start and stop through natural wound healing.

Krish Krishnan: Suma, the clinical-

Speaker #3: Simon, the clinical.

Speaker #1: I can take the CF question.

Suma Krishnan: I can take the CF question.

Krish Krishnan: I can briefly have a question.

Speaker #3: I can replay the question.

Suma Krishnan: No, I know. I got it. Yeah. As you guys are aware, we finished the single-dose study in these patients, and clearly we were able to establish molecular correction. As we discussed in our last call, we are, you know, obviously, working collaboratively with the CFF Foundation and the FDA. We met with the agency. I mean, the agency is convinced with our expression data, and they, I mean, they seem to, you know, agree that we do see nice positive expression. The only feedback that we got from the agency is obviously, we don't have safety regarding repeat dose administration. That was not established. In order to satisfy that requirement, we set up this, you know, interim 5-patient study to establish safety in repeat dose administration safety in these patient populations.

Speaker #1: No, I know. I got it. Yeah. So as you guys are aware, we finished the single-dose study in these patients. And clearly, we were able to establish molecular correction.

Speaker #1: And as we discussed in our last call, we are obviously working collaboratively with the CFF Foundation and the FDA. We met with the agency.

Speaker #1: I mean, the agency is convinced with our expression data. And they, I mean, they seem to agree that we do see nice, positive expression.

Speaker #1: The only feedback that we got from the agency was, obviously, we don't have safety regarding repeat dose administration. That was not established. So, in order to satisfy that requirement, we set up this interim five-patient study to establish safety in repeat dose administration safety in these patient populations.

Suma Krishnan: The only feedback that we got from the agency is obviously, we don't have safety regarding repeat dose administration. That was not established. In order to satisfy that requirement, we set up this, you know, interim 5-patient study to establish safety in repeat dose administration safety in these patient populations.

Speaker #1: Obviously, in the interim, we are actively in discussion with the agency and the CFF Foundation on the design of the registrational trial.

Suma Krishnan: Obviously, in the interim, we are in discussion, actively in discussion with the agency and the CFF Foundation on the design of the registrational trial. I mean, obviously we are proposing some sort of innovative trial design. Working with the CFF, we have really come up with a very good, you know, we feel confident in our study design. We hope to sit with the agency and, you know, basically get their concurrence on this design so we can start the registrational trial early next year.

Speaker #1: I mean, obviously, we are proposing some sort of innovative trial design, and I think we have, working with the CFF, really come up with a very good— we feel confident in our study design.

Speaker #1: And so we hope to sit with the agency and basically get their concurrence on this design so we can start the registrational trial early next year.

Krish Krishnan: Hey, Roger, you know, I was looking at my, at the question. You had a comment about global trajectory. That's the point I wanted to emphasize. We feel really good about the direction of the global trajectory launch. The individual ones, especially mature markets like the US, are tough to predict up and down. It's also difficult on a quarterly basis to think about is Japan up versus versus France versus Germany. Really, we feel really good about the overall global trajectory launch in 2026. Got it. Thank you so much. Congrats again.

Speaker #4: Hey, and Roger, I was looking at the question. You had a comment about global trajectory. That's the point I wanted to emphasize. We feel really good about the direction of the global trajectory launch.

Speaker #4: And the individual ones, especially mature markets like the US, are tough to predict up and down. It's also difficult on a quarterly basis to think about, as Japan up versus France versus Germany.

Speaker #4: But really, we feel really good about the overall global trajectory launch in 2026.

Speaker #3: Got it. Thank you so much. Congrats again.

Roger Song: Got it. Thank you so much. Congrats again.

Speaker #1: Your next question is from Alex Stranahan with Bank of America.

Operator: Your next question is from Alec Stranahan with Bank of America.

[Analyst] (Bank of America): Hey, guys, this is Matthew on for Alec. I appreciate you taking our questions. First, on KB803, assuming positive data in Q4 of this year, can you maybe speak to how we should think about the potential launch trajectory vis-à-vis VYJUVEK in terms of overlap with existing prescribers/patients, reimbursement or site of care dynamics? Maybe one on Hailey-Hailey. I guess, you know, in terms of the data that we should expect later this year and sort of why, you know, the registrational was pushed out to 2027, just any commentary on that would be helpful. Thanks.

Speaker #6: Hey, guys. This is Matthew Wong for Alex. Appreciate you taking our questions. First, on KB803—assuming positive data in the fourth quarter of this year—can you maybe speak to how we should think about the potential launch trajectory vis-à-vis Fijuvic, in terms of overlap with existing prescribers and patients, reimbursement, or site-of-care dynamics?

Speaker #6: And then maybe one on Haley Haley. I guess in terms of the data that we should expect later this year and sort of why the registration was pushed out to 2027, just any commentary on that would be helpful.

[Analyst] (Bank of America): Maybe one on Hailey-Hailey. I guess, you know, in terms of the data that we should expect later this year and sort of why, you know, the registrational was pushed out to 2027, just any commentary on that would be helpful. Thanks.

Speaker #6: Thanks.

Speaker #4: On KB803, look, you should expect a really positive launch trajectory. Because now that we have identified these patients, we have a good sense of who these patients are, the whole supply chain mechanism of getting the drug to a patient's home, when needed, self-administration versus needing a nurse to administer—all the kinks in the launch have been ironed out with Vyjavec.

Krish Krishnan: Great. On KB803, look, you should expect a really positive launch trajectory, because now that we have identified these patients, we have a good sense of who these patients are. The whole supply chain mechanism of getting the drug to a patient's home when needed, self-administration versus needing a nurse to administer, like all the kinks in the launch have been ironed out with VYJUVEK. Should the drug get approved and should the label have a really strong profile, we expect the launch to be really positive. It's tough for me to quantify to what extent. It affects about 50% of the RDEB population according to publications, and maybe 10% to 15% of the dominant population.

Speaker #4: And so should the drug get approved and should the label have a really strong profile, we expect the launch to be really positive. It's tough for me to quantify to what extent.

Krish Krishnan: It's tough for me to quantify to what extent. It affects about 50% of the RDEB population according to publications, and maybe 10% to 15% of the dominant population. There are evidences of many more patients having lesions in the eye, but it is positioned as somewhat like a prophylactic. We expect the launch to be really good should the drug get approved.

Speaker #4: It affects about 50% of the RDEP population, according to publications. And maybe 10 to 15 percent of the dominant population. And there are evidences of many more patients having lesions in the eye but it is positioned as somewhat like a prophylactic and so we expect the launch to be really good so the drug get approved.

Krish Krishnan: There are evidences of many more patients having lesions in the eye, but it is positioned as somewhat like a prophylactic. We expect the launch to be really good should the drug get approved.

Speaker #1: I can take Haley Haley. Yeah, Haley Haley—again, this is a disease that nobody has ever embarked upon. So, there was a little bit of learning and understanding.

Suma Krishnan: I can take Hailey-Hailey. Hailey-Hailey, again, this is a disease that nobody has, you know, ever embarked upon. There was a little bit of learning and understanding, and this is where we have, you know, we talked with the agency. At least we came to an agreement on a patient-reported outcome scale. The agency wanted us to basically validate the scale. We are in the process of validating the scale, which should be done shortly. In the process of validating the scale, we were able to really reach out, and we have a lot of patients that technically reached out and to participate in this scale. Now we have a repository of these patients where we are actually, it's like our mini natural history sort of database.

Speaker #1: And this is where we have we talked with the agency. At least we came to an agreement on a patient-reported outcome scale. So the agency wanted us to basically validate the scale.

Suma Krishnan: The agency wanted us to basically validate the scale. We are in the process of validating the scale, which should be done shortly. In the process of validating the scale, we were able to really reach out, and we have a lot of patients that technically reached out and to participate in this scale. Now we have a repository of these patients where we are actually, it's like our mini natural history sort of database.

Speaker #1: So we are in the process of validating the scale, which should be done shortly. But in the process of validating the scale, we were able to really reach out and we have a lot of patients that technically reached out and to participate in this scale.

Speaker #1: So now we have a repository of these patients, where we are actually—our mini natural history sort of database—we collect the data on these patients.

Suma Krishnan: We collect the data on these patients as we are validating the scale, and we have a lot of interest from these patients to participate in the trial. Again, since we don't have any clinical data, I think the best approach for us was to do a small Phase 1 study where we have 5 to 6 patients. I mean, we already have patients in our system. The scales are being validated. To just, you know, collect both safety, dosing regimen and also some sort of, you know, the scale validation to really validate. Before we want to go into the registration trial, we want to be really comfortable with our scales, really understand the disease, so we position ourselves for success. That's the goal.

Speaker #1: As we are validating the scale, and we have a lot of interest from these patients to participate in the trials. But again, since we don't have any clinical data, I think the best approach for us was to do a small phase one study where we have five to six patients.

Speaker #1: I mean, we are already the patients in our system. The scales are being validated. And to just collect both safety dosing regimen and also some sort of the scale validation to really validate because before we want to go into the registration trial, we want to be really comfortable with our scales, really understand the disease.

Suma Krishnan: The scales are being validated. To just, you know, collect both safety, dosing regimen and also some sort of, you know, the scale validation to really validate. Before we want to go into the registration trial, we want to be really comfortable with our scales, really understand the disease, so we position ourselves for success. That's the goal.

Speaker #1: So we position ourselves for success. So that's the goal. So I think this phase one study in this handful of patients will allow us to really evaluate these patient populations.

Suma Krishnan: I think this Phase 1 study in this handful of patients will allow us to really evaluate this patient population, the timing of the evaluation, and the robustness of the scale. I think all of this will be completely established by end of the year, and then we expect to, you know, get into the registration trial early. I think the study should go pretty quickly because we have the patient population. I mean, as I said, with the validation of the scale, establishing these patients, we've been genetically testing them. I think once we have this, the registrational trial should be pretty fast because, again, this is a decentralized study. The patient-reported outcome, the drug is shipped to the patient's house.

Speaker #1: The timing of the evaluation and the robustness of the scale—so I think all of this will be completely established by the end of the year.

Speaker #1: And then we expect to get into the registration trial early. And I think the study should go pretty quickly because we have the patient population.

Suma Krishnan: I think the study should go pretty quickly because we have the patient population. I mean, as I said, with the validation of the scale, establishing these patients, we've been genetically testing them. I think once we have this, the registrational trial should be pretty fast because, again, this is a decentralized study. The patient-reported outcome, the drug is shipped to the patient's house because of the decentralized nature and the, you know, PRO outcome of the endpoint, we expect once the registrational trial, that this trial could, you know, pretty much be fully enrolled pretty rapidly.

Speaker #1: I mean, as I said, as we—with the validation of the scale, establishing these patients—we have been genetically testing them. So I think once we have this, the registration trial should be pretty fast.

Speaker #1: Because again, this is a decentralized study. The patient-reported outcome, the patients, the drug is shipped to the patient's house. So because of the decentralized nature and the PRO outcome of the endpoint, we expect once the registration trial—that this trial could pretty much be fully enrolled pretty rapidly.

Suma Krishnan: Because of the decentralized nature and the, you know, PRO outcome of the endpoint, we expect once the registrational trial, that this trial could, you know, pretty much be fully enrolled pretty rapidly.

Krish Krishnan: Thanks.

[Analyst] (Bank of America): Thanks.

Speaker #6: Thanks.

Speaker #1: Your next question is from Joe Pangenius with HC Wainwright.

Operator: Your next question is from Joseph Pantginis with H.C. Wainwright.

Speaker #6: Hey, guys. Good morning. Thanks for the questions and the updates. So, Krish, at the end of your prepared comments, you started to highlight some of the key factors or differences with regard to ex-US launch of Vyjavec.

Joseph Pantginis: Hey, guys. Good morning. Thanks for the questions and the updates. Krish, at the end of your prepared comments, you started to highlight some of the key factors or differences with regards to ex-US launch of VYJUVEK. I was hoping to get a little more color on that. Do you see any key education steps that are needed for ex-US doctors versus US? What are some of the key negotiation points besides, say, pricing or any other factors you'd like to highlight that might be different from the US launch? Thanks a lot.

Speaker #6: I was hoping to get a little more color on that. So, do you see any key education steps that are needed for ex-US doctors versus US?

Speaker #6: What are some of the key negotiation points besides, say, pricing, or any other factors you'd like to highlight that might be different from the US launch?

Speaker #6: Thanks a lot.

Speaker #4: Thanks, Joe. Look, given that Europe launched after the US, a lot of physicians in Europe—especially in Germany, France, and the countries who are going after Italy and Spain—are aware of the significant benefit that Vyjavec has been affording to patients in the US.

Krish Krishnan: Thanks, Joe. Look, given that Europe launched after the US, a lot of physicians in Europe, especially like Germany, France, the countries we're going after, Italy, Spain, are aware of the significant benefit that VYJUVEK has been affording to patients in the US. In terms of bringing them up to speed, teaching them about the disease, the benefits of VYJUVEK and how it works and the application, it's been a lot easier relative to the US in terms of physician education and getting them up to speed. That's true in Japan too. That part, like, we feel really good about what the physicians think about VYJUVEK. So much so, it's kind of helped us accelerate launches in both Spain and Italy, given the voice of the physicians in these countries.

Speaker #4: So, in terms of bringing them up to speed, teaching them about the disease, the benefits of Vyjavec and how it works, and the application, it's been a lot easier.

Speaker #4: Relative to the US in terms of physician education and getting them up to speed. And that's true in Japan, too. So in that part, we feel really good about what the physicians think about Vyjavec, so much so it's kind of helped us accelerate launches in both Spain and Italy, given the voice of the physicians in these countries.

Krish Krishnan: That's true in Japan too. That part, like, we feel really good about what the physicians think about VYJUVEK. So much so, it's kind of helped us accelerate launches in both Spain and Italy, given the voice of the physicians in these countries. With respect to negotiations, look, that's a tough question. Beyond the nature of the drug itself, which is very powerful, the clinical benefits are great.

Krish Krishnan: With respect to negotiations, look, that's a tough question. Beyond the nature of the drug itself, which is very powerful, the clinical benefits are great. There are also political factors that come into negotiations in these countries. They have budgets for rare diseases. To date, the negotiations have been progressing well. We've been able to make a good, compelling benefit. We'll obviously know the outcome first in Germany, H2 of this year, followed by maybe Italy ahead of that. We'll have a couple European benchmarks, which will probably indicate the direction of the French and UK and subsequent Spanish pricing. All in all, given what we were able to do in Japan, given the benefits of the drug, we feel really good about making a compelling value proposition.

Speaker #4: With respect to negotiations, look, that's a tough question. That beyond the nature of the drug itself, which is very powerful, the clinical benefits are great.

Speaker #4: There are also political factors that come into negotiations in these countries. They have budgets for rare diseases, but today, the negotiations have been progressing well.

Krish Krishnan: There are also political factors that come into negotiations in these countries. They have budgets for rare diseases. To date, the negotiations have been progressing well. We've been able to make a good, compelling benefit. We'll obviously know the outcome first in Germany, H2 of this year, followed by maybe Italy ahead of that.

Speaker #4: We've been able to make a good, compelling benefit. We'll obviously know the outcome first in Germany, second half of this year, followed by, oh, maybe Italy ahead of that.

Speaker #4: So, we'll have a couple of European benchmarks, which will probably dictate the direction of the French and UK, and subsequent Spanish pricing. But all in all, given what we were able to do in Japan, given the benefits of the drug, we feel really good about making a compelling value proposition.

Krish Krishnan: We'll have a couple European benchmarks, which will probably indicate the direction of the French and UK and subsequent Spanish pricing. All in all, given what we were able to do in Japan, given the benefits of the drug, we feel really good about making a compelling value proposition. The question always is: What are the macroeconomic factors in these countries that could potentially influence the pricing outcome?

Speaker #4: The question always is, what are the macroeconomic factors in these countries that could potentially influence the pricing outcome?

Krish Krishnan: The question always is: What are the macroeconomic factors in these countries that could potentially influence the pricing outcome?

Speaker #5: Thank you, Chris. Very helpful.

Joseph Pantginis: Thank you, Krish. Very helpful.

Speaker #1: Your next question for today is from Ritu Barral with TD Cowan.

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

Speaker #7: Hi, guys. Thanks for taking the question. I’ve got one on Vyjavec and then a couple on CS. Krish, we have been hearing just sort of insurance friction around the stop-start drug holidays.

Ritu Baral: Hi, guys. Thanks for taking the question. I've got one on VYJUVEK and then a couple on CF. Krish, we have been hearing just of sort of insurance friction around the stop-start drug holidays that insurance companies are sort of coming down on patients whose wounds are closing. We wonder if there might be friction on restarts, whether it's requirements for, you know, documentation of reopened wounds or things like that, and how insurance companies are sort of monitoring whether wounds are closed or not. If you could elaborate just on insurance dynamics around stop and start and, you know, reauthorization of coverage. I've got a couple on CF.

Speaker #7: That insurance companies are sort of coming down on patients whose wounds are closing, and we wonder if there might be friction on restarts—whether it's requirements for documentation of reopened wounds or things like that.

Ritu Baral: We wonder if there might be friction on restarts, whether it's requirements for, you know, documentation of reopened wounds or things like that, and how insurance companies are sort of monitoring whether wounds are closed or not. If you could elaborate just on insurance dynamics around stop and start and, you know, reauthorization of coverage. I've got a couple on CF.

Speaker #7: And how insurance companies are sort of monitoring whether wounds are closed or not. So if you could elaborate just on insurance dynamics around stop and start, and reauthorization of coverage.

Speaker #7: And then I've got a couple on CS.

Speaker #4: Yeah, thanks, Ritu. I mean, we have had—I mean, since the launch, we've had no issues with access to date, whether that's in terms of reimbursement, re-authorization, start and stop effect. The start and stop decisions are obviously made by the patient in consultation with their physician.

Krish Krishnan: Yeah. Thanks, Ritu. I mean, we have had, I mean, from since the launch, we've had no issues with access to date, whether that's in terms of reimbursement, reauthorization, start and stop effect. The start and stop decisions are obviously made by the patient in consultation with their physician. Once they're ready to start, we've had no delays with respect to getting them back on drug at all. It's been really smooth. Fingers crossed. Yeah, it's great.

Speaker #4: But once they're ready to start, we've had no delays with respect to getting them back on drug at all. So it's been really smooth.

Speaker #4: Fingers crossed. Yeah. It's great.

Speaker #7: Okay, thanks. And then on CS, you mentioned that the patients include those that do not tolerate modulators or do not benefit from modulators. Are there sort of prescribed definitions around either liver enzyme elevations or sweat chloride changes—either changes or absolute levels—that define this sort of population, subpopulation of CF patients?

Ritu Baral: Okay, thanks. On CF, you mentioned that the patients include those that do not tolerate modulators or do not benefit from modulators. Are there sort of prescribed definitions around either liver enzyme elevations or sweat chloride changes, either changes or absolute levels that define this to sort of population, subpopulation of CF patients? We noted that on your Q2 call, you said that you had already enrolled 4 patients in cohort 3 of CORAL-1, and this was like the 4 weekly doses. Why do you need the repeat dose data on top of it? Is it just longer retreatment periods that the FDA wanted? If so, why?

Speaker #7: And then we noted that on your Q2 call, you said that you had already enrolled four patients in cohort three of CORAL1. And this was the four weekly doses.

Ritu Baral: We noted that on your Q2 call, you said that you had already enrolled 4 patients in cohort 3 of CORAL-1, and this was like the 4 weekly doses. Why do you need the repeat dose data on top of it? Is it just longer retreatment periods that the FDA wanted? If so, why? Would it be possible to get functional data from these 24 week patients ahead of pivotal?

Speaker #7: Why do you need the repeat dose data on top of it? Is it just, sort of, earlier—I'm sorry. Is it just longer retreatment periods that the FDA wanted?

Speaker #7: If so, why? And would it be possible to get functional data from these 24-week patients ahead of Pivotal? So Ritu, I'll answer that question.

Ritu Baral: Would it be possible to get functional data from these 24 week patients ahead of pivotal?

Suma Krishnan: Ritu, I'll answer that question. Yes, we are enrolling patients that are null and that are modulator intolerant. With regards to sweat chloride, I mean, I don't think there is any marker because we are nebulizing the drug, it directly goes into the lung, and that's where the action is. We don't have systemic levels or measurements. Yes, I mean, we have a lot of null patients ready to go on this trial, in our, you know, the study that we are evaluating repeat dose. We are evaluating patients who are ineligible for modulators. Either they don't tolerate it or, you know, they cannot take these drugs. With regarding to your second question, Ritu, we never did a repeat dose administration. Ours was a single dose.

Speaker #7: Yes, we are enrolling patients that are naïve and that are modulator intolerant. With regards to sweat chloride, I mean, I don't think there is any marker because we are nebulizing the drug, it indirectly goes into the lung.

Speaker #7: And that's where the action is. So we don't have systemic levels or measurements. But yes, we are—I mean, we have a lot of now patients ready to go on this trial.

Suma Krishnan: Yes, I mean, we have a lot of null patients ready to go on this trial, in our, you know, the study that we are evaluating repeat dose. We are evaluating patients who are ineligible for modulators. Either they don't tolerate it or, you know, they cannot take these drugs. With regarding to your second question, Ritu, we never did a repeat dose administration. Ours was a single dose.

Speaker #7: In our study, where we are evaluating repeat dosing, we are evaluating patients who are ineligible for modulators. Either they don't tolerate it, or they cannot take these drugs.

Speaker #7: So, with regard to your second question, Ritu, we never did a repeat dose administration. Ours was a single dose. When you see four doses or applications, this is something that we discussed with the agency.

Suma Krishnan: When you see 4 dose of applications, this is something that we discussed with the agency because when we made the first batch, our titers, the dose was not enough to deliver all of it in one sitting. Obviously now we have manufacturing, and we have doses that can be done as a single administration. We discussed with the agency, and the agency recommended that we divide the dose over 4 days. It was not, it was immediately. It was day 1, day 2, day 3, day 4. It was still considered as a single dose. The entire dose is now was within 4 days. If you look at the study that we are proposing, it's the same dose as a single administration, as a single dose, but as a repeat administration.

Speaker #7: Because when we made the first batch—our titers, I mean—the dose was not enough to deliver all of it in one sitting. I mean, obviously, now we have manufacturing and we have doses that can be done as a single administration.

Speaker #7: So, we discussed with the agency, and the agency recommended that we divide the dose over four days. So, it was not—it was immediately.

Suma Krishnan: We discussed with the agency, and the agency recommended that we divide the dose over 4 days. It was not, it was immediately. It was day 1, day 2, day 3, day 4. It was still considered as a single dose. The entire dose is now was within 4 days. If you look at the study that we are proposing, it's the same dose as a single administration, as a single dose, but as a repeat administration.

Speaker #7: It was day one, day two, day three, day four. But it was still considered dose, and the entire dose now was between four days.

Speaker #7: But if you look at the study that we are proposing, it's the same dose as a single administration—as a single dose—but as a repeat administration.

Speaker #7: So now we are going—so this has never been done. So we're going to do it weekly, the same dose, but once a day.

Suma Krishnan: Now we are going. This has never been done. We're gonna do it weekly, the same dose, but once a day, weekly over the entire 6-month period, and we will evaluate. Obviously, safety is going to be the primary endpoint of this study. We will look at all. We will also evaluate, obviously, we will be measuring FEV1. We will look at patient-reported out, you know, PO, PR, PRO scales to see the benefits. We are going to look at all of that in an explorative fashion because more data that will help us. Be, you know, the better for us as we embark upon our Phase 3 registration trial.

Speaker #7: Weekly over the entire six months period. And we will evaluate obviously safety is going to be the is the primary endpoint of the study.

Speaker #7: We will look at all. We will also evaluate—obviously we will be measuring FEV1. We will look at patient-reported out PRO scales to see the benefits.

Suma Krishnan: We will look at patient-reported out, you know, PO, PR, PRO scales to see the benefits. We are going to look at all of that in an explorative fashion because more data that will help us. Be, you know, the better for us as we embark upon our Phase 3 registration trial.

Speaker #7: So we are going to look at all of that in the next laboratory fashion, because more data will help us—so the better for us as we embark upon our phase three registration trial.

Speaker #7: Got it. Thank you.

Ritu Baral: Got it. Thank you.

Speaker #1: Your next question is from Yigal Natumovitz with Citi.

Operator: Your next question is from Yigal Nochomovitz with Citi.

Speaker #8: Hi. Great. Thank you very much for taking the questions. Just a few on Europe. Could you just comment as to whether you've entered the second six months of the accrual phase in Germany?

Yigal Nochomovitz: Hi. Great. Thank you very much for taking the questions. Just a few on Europe. Could you just comment as to whether you've entered the H2 of the accrual phase in Germany? With regard to Spain and Italy, could you clarify whether this is going to be a pricing first model where there's no accrual, or will it be an accrual model where you'll launch and then negotiate similar to Germany and France? I have one other one on KB803.

Speaker #8: And then with regard to Spain and Italy, could you clarify whether this is going to be a pricing-first model where there's no accrual, or will it be an accrual model where you'll launch and then negotiate, similar to Germany and France?

Speaker #8: And then I have one other one on KB803.

Krish Krishnan: Hey, Laurent, do you wanna start?

Speaker #6: Hey, Laurent. You want to start?

Laurent Goux: Yep. Yeah, yeah. Maybe we start, to start with the second question on the pricing model in Italy and Spain. What we expect is definitive reimbursement in those countries, so it will not be advanced, you know, like the one in France or Germany currently. With regard to the Germany situation, yes, we've entered within the second 6 months of the launch. That's the first semester where we start accruing for future potential pricing.

Speaker #8: Yep. Yeah, yeah. So maybe to start with the second question on the pricing model—in Italy and Spain, what we expect is definite reimbursement in those countries.

Speaker #8: So it will not be advanced like the one in France or Germany currently. And with regard to the Germany situation, yes, we've entered—we've within the second six months of the launch.

Speaker #8: So that's the first semester where we start accruing for future potential price. Okay, thank you. And then on 803, I'm just curious if you could comment on the natural history run-in data—if those are tracking with expectations—and if you have any comments on the diary, the blinded symptom diaries, in terms of compliance with logging that during the trial.

Yigal Nochomovitz: Okay. Thank you. And then on KB803, I am just curious if you could comment on the natural history run-in data, if those are tracking with expectations, and if you have any comments on the blinded symptom diaries, in terms of compliance with logging that during the trial.

Speaker #7: Sure. I mean, as you know, we do have a natural—it's the same diary that, I mean, the same information or data that we are collecting in the natural history study.

Suma Krishnan: Sure. I mean, as you know, It's the same diary that, I mean, the same information or data that we are collecting in the natural history study. Once they qualify to be in the main study, at that point we have a database where every, the, it's blinded, randomized, the patients, I mean, the drug is randomized, and the patients are assigned to either placebo or drug. Then they start a new diary, which is, I mean, a complete different database. All is blinded. The patient is blinded, the physician is blinded, we are blinded, except the, you know, the pharmacy that ships the drug to the patients where they do the randomization and the blinding. It's a completely blinded system which is completely maintained.

Speaker #7: Once they qualify to be in the main study, at that point, we have a database where it's blinded, randomized, the patient's I mean, the drug is randomized and the patients are assigned to either placebo or drug.

Speaker #7: And they have, so then they start a new diary, which is, I mean, a completely different database. All is blinded, so the patient is blinded.

Suma Krishnan: Then they start a new diary, which is, I mean, a complete different database. All is blinded. The patient is blinded, the physician is blinded, we are blinded, except the, you know, the pharmacy that ships the drug to the patients where they do the randomization and the blinding. It's a completely blinded system which is completely maintained.

Speaker #7: The physician is blinded. We are blinded, except the pharmacy that ships the drug to the patients, where they do the randomization and the blinding.

Speaker #7: So, it's a completely blinded system, which is completely maintained. And then the patient just fills the diary on a weekly basis, just like the natural history.

Suma Krishnan: The patient just fills the diary on a weekly basis, just like the natural history, so they have their practice and experience. Obviously, the clinical operations teams will help them answer or address any questions they have or, you know, I mean, the external CRO that is managing the diary. If there is a patient that's missing information, then we can prompt them to say, Make sure you fill so the data can be, you know, there's nothing, no missing information. It's a completely blinded system.

Speaker #7: So they have their practice and experience. Obviously, the clinical operations teams will help them answer or address any questions they have. Or we have—I mean, the external CRO that is managing the diary. If there is a patient that's missing information, then we can prompt them to say, 'Make sure you fill so the data can be—there's nothing, no missing information.' So it's a completely blinded system.

Speaker #8: Thanks.

Krish Krishnan: Thanks.

Yigal Nochomovitz: Thanks.

Speaker #1: Your next question for today is from Bill Mohan with ClearStreet.

Operator: Your next question for today is from Bill Mahon with Clear Street.

Bill Mahon: Good morning, and thanks. You mentioned in the press release that your KB803 trial is powered to detect at least a 25% reduction in symptom days. How conservative would you describe that bar as being? Might we see something, you know, meaningfully, a meaningfully larger separation? I guess how much does that, does that delta matter in terms of supporting commercialization down the road?

Speaker #9: Good morning, and thanks. So, you mentioned in the press release that your 803 trial is powered to detect at least a 25% reduction in symptom days.

Speaker #9: How conservative would you describe that bar as being? And might we see something—meaningfully, a meaningfully larger separation? And I guess, how much does that delta matter in terms of supporting commercialization down the road?

Speaker #7: I mean, again, I think any improvement in these patients—because, I mean, it's such a debilitating disease—and once they have one of these abrasions or symptoms, it can be pretty rough on these patients because they can't open their eyes.

Suma Krishnan: I mean, again, I think any improvement in these patients because, I mean, it's such a debilitating disease, and once they have one of these abrasions or symptoms, it can be pretty, you know, rough on these patients because they can't open their eyes. They can be, you know, decommissioned for 3 days in addition to all of the other comorbidities that they have to experience. I think from a, any improvement, I think is a benefit to these patients. The good thing is we have this natural history study that we have been collecting over 1 year. We have a ton of data that so as we embark upon this study, we'll have some flexibility to even, you know, use some of this natural history as we do the analysis.

Speaker #7: They can be decommissioned for three days, in addition to all of the other comorbidities that they have experienced. So I think any improvement, I think, is a benefit to these patients.

Suma Krishnan: I think from a, any improvement, I think is a benefit to these patients. The good thing is we have this natural history study that we have been collecting over 1 year. We have a ton of data that so as we embark upon this study, we'll have some flexibility to even, you know, use some of this natural history as we do the analysis.

Speaker #7: The good thing is we have this natural history study that we have been collecting over a year. So we have a ton of data.

Speaker #7: So as we embark upon this study, we'll have some flexibility to even use some of this natural history as we do the analysis. So again, I think any improvement—the prospectively collected natural history—I mean, a lot of the reasons that you see the agencies have issues with external controls, of using them as controls, is because much of that data is not prospectively collected.

Suma Krishnan: Again, I think any improvement, the prospectively collected natural history, I mean, a lot of the, I mean, reasons that you see the agencies have issues with external controls, of using them as controls, is because many of that data is not prospectively collected. In our case, we have over 100 patients in this natural history, very prospectively collected, which simulates exactly what they're going to do in the clinical. I think we can leverage that data to, you know, in the analysis as we move forward.

Speaker #7: In our case, we have over 100 patients with this natural history very prospectively collected. We simulate exactly what they're going to do in the clinical.

Speaker #7: So, I think we can leverage that data in the analysis as we move forward.

Speaker #8: Okay. And then, with a large cash balance and growing, I guess—how are you looking at capital allocation right now?

Bill Mahon: Okay. With a large cash balance and growing, I guess, how are you looking at capital allocation right now?

Speaker #6: Yeah, yeah. So, regular question for me. I'll say a couple of things, right? Right now, we are in a growth mode, both in terms of commercial growth in the world and in terms of our pipeline.

Krish Krishnan: Yeah. Yeah. Regular question for me. I'll say a couple of things. Like right now, first, we are in a growth mode, both in terms of commercial growth in the world and in terms of our pipeline. We're not planning on licensing or buying. I've said that before in different forms. Once we have visibility into the future of our pipeline, especially on the drugs that address large markets, KB408, the oncology, the aesthetics. When we have some visibility into a launch of our next drug, that would be a great timing to think about, share about that.

Speaker #6: We're not planning on licensing or buying, and I've said that before in different forums. So, once we have visibility into the future of our pipeline, especially on the drugs that address large markets—KB408, the oncology, the aesthetics—and then when we have some visibility into the launch of our next drug, that would be a great timing to think about, share about that.

Bill Mahon: Okay. Thank you.

Speaker #8: Okay. Thank you.

Speaker #1: Your next question is from Gavin Clark Gartner with Evercore ISI.

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

Gavin Clark-Gartner: Hey, good morning. Krish, I didn't know you were a Star Wars fan. On KB803, I just wanted to double-click on the powering a little bit. For the 16 patients that you enrolled in the study from the natural history run-in, what was the average symptom days at baseline, and what was the standard deviation that you saw in the natural history portion? On the powering side, you noted the study is 90% powered for a 25% reduction in symptom days. At what point does the study become 50% powered? Like, what's the minimum detectable benefit you think you could tease out in this trial? Thank you.

Speaker #8: Hey, good morning. Chris, I didn't know you were a Star Wars fan. Anyway, on KB803, I just wanted to double-click on the powering a little bit.

Speaker #8: So, for the 16 patients that you enrolled in the study from the natural history run-in, what was the baseline? And what was the standard deviation that you saw in the natural history portion?

Speaker #8: And then, on the powering side, you noted the study's 90% powered for a 25% reduction in symptom days. At what point does the study become 50% powered?

Gavin Clark-Gartner: On the powering side, you noted the study is 90% powered for a 25% reduction in symptom days. At what point does the study become 50% powered? Like, what's the minimum detectable benefit you think you could tease out in this trial? Thank you.

Speaker #8: What's the minimum detectable benefit you think you could tease out in this trial? Thank you.

Speaker #7: I mean, obviously, we looked at our natural history data extensively. And we knew the—we know the pattern, right? I mean, we know there are patients that have the severity of the disease.

Suma Krishnan: I mean, obviously we looked at our natural history data extensively, and we know the pattern, right? I mean, we know there are patients that have the severity of the disease. I mean, you can see from our natural history, there are a subset of patients that these abrasions are pretty frequent, right, and pretty over 1-year period. The benefit we had is because of this natural history data, we could select those patients, so we can see a difference from a drug effect. I mean, that was very important to us. If you look at the patients we have, the patients that are enrolled into the 16 patients that we have meet that criteria. Hopefully, I mean, because of that, the drug effect should become evident.

Speaker #7: I mean, you can see from our natural history, there are a subset of patients that these abrasions are pretty frequent, right? And pretty frequent over a one-year period.

Speaker #7: So, the benefit we had is because of this natural history study, we could select those patients. So we can see a difference from a drug effect.

Suma Krishnan: The benefit we had is because of this natural history data, we could select those patients, so we can see a difference from a drug effect. I mean, that was very important to us. If you look at the patients we have, the patients that are enrolled into the 16 patients that we have meet that criteria. Hopefully, I mean, because of that, the drug effect should become evident.

Speaker #7: I mean, so that was very important to us. So, if you look at the patients, we have the patients that are enrolled into the 16 patients that we have, meet that criteria.

Speaker #7: So hopefully, I mean, because of that, the drug effect should become evident. And I think based on that, we were able—that's how we powered it.

Suma Krishnan: I think based on that, we were that's how we powered it. We were able to see, okay, 25% difference with what is the least amount of difference we need to see statistical significance? What is the sample size? Again, with the crossover design where patients, you know, the same patient gets either drug or placebo, that also, you know, improves our sample size and increases the chances. All of that was taken into account to calculate the sample size and the powering for this study.

Speaker #7: We were able to see, okay, a 25% difference with what is the least amount of difference we need to see statistical significance, or what is the sample size?

Speaker #7: And again, with the crossover design—where the same patient gets either drug or placebo—that also improves our sample size and increases the chances, so all of that was taken into account to calculate the sample size and the powering for this study.

Speaker #8: Got it. Thanks.

Gavin Clark-Gartner: Got it. Thanks.

Speaker #1: Your next question is from Joshua Soto with William Blair.

Operator: Your next question is from Joshua Soto with William Blair.

Joshua Soto: Good morning, team. Congrats on the quarter. This is Josh on from Sami Corwin. I have questions on VYJUVEK. The first is, ever since the company gave at-home administrations in the US at the end of Q3, I was wondering what has been the impact of that on either if that has been the driver in the decrease in such sub-dynamic or ads in the US. The second question was on the ex-US launch. I was wondering if pricing in Spain is going to be similar compared to other European territories, and how many patients does the company estimate can address the territory? Thanks.

Speaker #8: Good morning, team. Congrats on the quarter. This is Josh Ahn from Krystal and Lachlan. I have questions on biotech. The first is, ever since the company gained out-of-home administrations in the US at the end of Q3,

Speaker #8: I was wondering, what has been the impact of that on either, if that has been the driver in the decrease of in-start slow dynamic, or if these patient ads in the US?

Joshua Soto: The second question was on the ex-US launch. I was wondering if pricing in Spain is going to be similar compared to other European territories, and how many patients does the company estimate can address the territory? Thanks.

Speaker #8: Second question was on the ex-US launch. I was wondering if pricing in Spain is going to be similar compared to other European territories, and how many patients does the company estimate can address the territory?

Speaker #8: Thanks.

Speaker #9: Thank you for the question. In terms of the label updates and the home administration, it's been received incredibly well, both by patients and physicians.

Christine Wilson: Thank you for the question. In terms of the label updates in the home administration, it's been received incredibly well, both by patients and physicians, as it really offers the opportunity for patients to integrate this differently. We have seen a subset of patients who maybe didn't initiate therapy early on because they weren't comfortable with a nurse coming to their home, and now they have that flexibility and that choice. We've also seen a subset of patients that have transitioned from home nursing into self-administration.

Speaker #9: As it really offers the opportunity for patients to integrate this differently. So, we have seen a subset of patients who maybe didn't initiate therapy early on because they weren't comfortable with the nurse coming to their home, and now they have that flexibility and that choice.

Speaker #9: We've also seen a subset of patients that have transitioned from home nursing into self-administration. And if you think about our goal of being able to create a scenario where this fits comfortably into their daily routines, the label updates have allowed that flexibility, and we've seen some really positive impact of that, both from patients' receptivity to biotech and supporting their staff and start on therapy.

Christine Wilson: If you think about our goal of being able to you know, create a scenario where this fits comfortably into their daily routines, the label updates have allowed that flexibility, and we've seen some really positive impact of that, both from patients' receptivity to VYJUVEK and, you know, supporting their stop and start on therapy, but also the way physicians are thinking about initiating therapy for their patients.

Speaker #9: But also the way physicians are thinking about initiating therapy for their patients.

Joshua Soto: Hey, Laurent, do you want to talk on the international question?

Krish Krishnan: Hey, Laurent, do you want to talk on the international question?

Speaker #8: Hey, Laurent, do you want to talk on the international question?

Speaker #10: Yes, so if I understood well, the question was related to Spain, specifically. And the first one was about the pricing in Spain. We do have a pricing corridor reflecting the value of biotech.

Laurent Goux: Yes. If I understood well the question, it was related to Spain specifically. The first one was about the pricing in Spain. We do have, you know, a pricing corridor reflecting the value of VYJUVEK. We do expect Spain to be within this pricing corridor. Of course, negotiations are ongoing, so difficult to speculate at this stage. The number of patients in Spain, we would think and we would look at it as an equivalent prevalence to the other European countries. There are no difference in prevalence versus the other European countries.

Speaker #10: And so we do expect Spain to be within this pricing corridor. But of course, negotiations are ongoing, so it's difficult to speculate at this stage.

Speaker #10: And the number of patients in Spain, we would think, and we would look at it as an equivalent prevalence to the other European countries.

Speaker #10: So there are no differences in prevalence versus the other European countries.

Speaker #8: Thank you.

Joshua Soto: Thank you.

Speaker #1: Thank you. We have reached the end of the question and answer session, and today's conference call. You may disconnect your phone lines at this time, and have a wonderful day.

Operator: Thank you. We have reached the end of the question and answer session and today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.