Q2 2026 Krystal Biotech Inc Earnings Call & Business Update

August 3, 2026

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Speaker #3: Thank you for standing by, and welcome to the Krystal Biotech Q2 2026 conference call. At this time, all participants have been placed in listen-only mode.

Operator 1: Thank you for standing by, and welcome to the Krystal Biotech Q2 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, Senior Vice President of Corporate Development. Please begin.

Operator: Thank you for standing by, and welcome to the Krystal Biotech Q2 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, Senior 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, Senior 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 second 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 Q2 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.

Speaker #4: This conference call, 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 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 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, 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, and thank you for joining us. We were focused on execution in Q2, making solid progress across both our commercial and clinical programs.

Krish Krishnan: Good morning, thank you for joining us. We were focused on execution in Q2, making solid progress across both our commercial and clinical programs. Internationally, strong underlying demand and high patient excitement underpin our launch. We're working diligently to meet that demand and broaden access for DEB patients around the world. We're advancing pricing and reimbursement discussions in Germany, France, Italy, Spain, and the UK, while working through the country-specific requirements associated with each launch. In the United States, demand continues to grow, supported by our increasing focus on reaching patients and physicians in the community setting. Laurent and Christine will provide additional detail on our commercial performance and international launch progress. Our clinical pipeline is also advancing across multiple important programs. We currently have two registrational studies underway. Our study in neurotrophic keratitis and our study of ocular lesions in patients with dystrophic epidermolysis bullosa.

Speaker #5: Internationally, strong underlying demand and high patient excitement underpin our launch. We're working diligently to meet that demand and broaden access for DEB patients around the world.

Speaker #5: We're advancing pricing and reimbursement discussions in Germany, France, Italy, Spain, and the UK, while working through the country-specific requirements associated with each launch. In the United States, demand continues to grow, supported by our increasing focus on reaching patients and physicians in the community setting.

Speaker #5: Laurent and Christine will provide additional detail on our commercial performance and international launch progress. Our clinical pipeline is also advancing across multiple important programs.

Speaker #5: We currently have two registrational studies underway: our study in neurotrophic keratitis and our study of ocular lesions in patients with dystrophic epidermolysis bullosa. In addition, our repeat-dose studies in cystic fibrosis and Hailey-Hailey disease are progressing, and, assuming supportive data, we believe both programs have the potential to advance into registrational development in 2027.

Krish Krishnan: In addition, our repeat dose studies in cystic fibrosis and Hailey-Hailey disease are progressing. Assuming supportive data, we believe both programs have the potential to advance into registrational development in 2027. We're also making great progress with our KB707 program in oncology. Our inhaled 707 formulation for the treatment of NSCLC is on track for a registrational study next year. We are now evaluating our intratumoral KB707 formulation in Gorlin syndrome, a rare skin indication that fits in well with our therapeutic focus and growing commercial footprint. Suma will provide a more comprehensive update on our clinical program shortly. Finally, we remain in a very strong financial position. Our continued financial strength reflects both the growing performance of our commercial business and the operating discipline we have maintained over the past 12 quarters.

Speaker #5: We're also making great progress with our KB707 program in oncology. Our inhaled 707 formulation for the treatment of NSCLC is on track for a registrational study next year.

Speaker #5: And we are now evaluating our intratumoral KB707 formulation in Gordon syndrome, a rare skin indication that fits in well with our therapeutic focus and growing commercial footprint.

Speaker #5: Suma will provide a more comprehensive update on our clinical program shortly. Finally, we remain in a very strong financial position. Our continued financial strength reflects both the growing performance of our commercial business and the operating discipline we have maintained over the past 12 quarters.

Speaker #5: This allows us to invest confidently in global expansion and pipeline development, while continuing to manage the business responsibly. With that, let's get into the details.

Krish Krishnan: This allows us to invest confidently in global expansion and pipeline development while continuing to manage the business responsibly. With that, let's get into the details. Laurent?

Speaker #5: Laurent, thank you, Krish.

Laurent Goux: Thank you, Krish. We are very encouraged by the recent progress in our VYJUVEK launch. Commercial momentum across Europe and Japan is strong and building, supported by growing physician familiarity, high engagement from leading treatment centers, and sustained interest across the dystrophic epidermolysis bullosa community. In July, Krystal had a strong presence at the 3rd World Congress on Rare Skin Diseases in France, including a well-attended symposium. This was another important step in building awareness and advancing our ambition to establish VYJUVEK as an essential treatment for DEB patients. Demand is high in France, Germany, and Japan, driving growth in both treated patients and treatment volumes. This growth also reflects the excellent work of our country teams as they navigate the access and operational dynamics unique to each market.

Speaker #2: We are very encouraged by the recent progress in our Vejuvec launch. Commercial momentum across Europe and Japan is strong and building, supported by growing physician familiarity, high engagement from leading treatment centers, and sustained interest across the dystrophic epidermolysis bullosa community.

Speaker #2: In July, Krystal had a strong presence at the third World Congress of Rare Skin Diseases in France, including a well-attended symposium. This was another important step in building awareness and advancing our ambition to establish Vejuvec as an essential treatment for DEB patients.

Speaker #2: Demand is high in France, Germany, and Japan, and is driving growth in both treated patients and treatment volumes. This growth also reflects the excellent work of our country teams as they navigate the access and operational dynamics unique to each market.

Speaker #2: In Germany, for example, the care landscape is fragmented, and only a limited proportion of DEB patients are routinely seen at established SPECT centers. Our team is therefore engaging a broader network of physicians and supporting patients in continuing treatment at home.

Laurent Goux: In Germany, for example, the care landscape is fragmented and only a limited proportion of DEB patients are routinely seen at established SBEC centers. Our team is therefore engaging a broader network of physicians and supporting patients in continuing treatment at home. In France, VYJUVEK is available through the early access pathway, where administration is currently concentrated in hospital settings due to the requirement associated with its GMO classification. Our team is working closely with centers to facilitate access and treatment continuity while exploring solutions that could support home administration over time. In Japan, an important nuance is the requirement for intensive prescription renewal, which can put a heavy burden on patients in the first year of launch. We are working closely with prescribers and patients to ensure all stakeholders understand the importance of consistent weekly administration and minimize potential disruptions. Turning to revenues.

Speaker #2: In France, Vejuvec is available through the early access pathway, where administration is currently concentrated in hospital settings. Due to requirements associated with its GMO classification, our team is working closely with centers to facilitate access and treatment continuity, while exploring solutions that could support home administration over time.

Speaker #2: And in Japan, an important nuance is the requirement for intensive prescription renewals, which can put a heavy burden on patients in the first year of launch.

Speaker #2: We are working closely with prescribers and patients to ensure all stakeholders understand the importance of consistent weekly administration and to minimize potential disruptions. Turning to revenues, reported revenue in Europe and Japan was broadly flat in the quarter, primarily due to a reserve provision related to the ongoing pricing process in Germany.

Laurent Goux: Reported revenue in Europe and Japan was broadly flat in the quarter, primarily due to a reserve provision related to the ongoing pricing process in Germany. This does not change our assessment of the underlying launch trajectory or our confidence in the longer-term opportunity across Europe and worldwide as we continue to grow patient and treatment volumes in our overseas markets. Turning to market access, pricing and reimbursement work continue across the EU4. In Germany, Italy, and Spain, we continue to expect key outcomes before the end of 2026, subject to each country's process. In France, formal pricing and reimbursement discussions are expected to progress into 2027. Our engagement with authorities remains constructive, and we believe VYJUVEK's clinical evidence and potential value to patients provide a strong foundation for these discussions. In the United Kingdom, we also achieved two important milestones.

Speaker #2: This does not change our assessment of the underlying launch trajectory or our confidence in the longer-term opportunity across Europe and worldwide, as we continue to grow patient and treatment volumes in our overseas markets.

Speaker #2: Turning to market access, pricing, and reimbursement work continue across the EU4. In Germany, Italy, and Spain, we continue to expect key outcomes before the end of 2026, subject to each country's process.

Speaker #2: In France, formal pricing and reimbursement discussions are expected to progress into 2027. Our engagement with authorities remains constructive, and we believe Vejuvec's clinical evidence and potential value to patients provide a strong foundation for these discussions.

Speaker #2: In the United Kingdom, we also achieved two important milestones. On May 15, the MHRA granted marketing authorization for Vejuvec, making it the first genetic medicine approved in the UK for DEB.

Laurent Goux: On 15 May, the MHRA granted marketing authorization for VYJUVEK, making it the first genetic medicine approved in the UK for DEB. This was followed in June by VYJUVEK receiving the 2026 Prix Galien UK award for best product for orphan disease. This is the third Prix Galien for VYJUVEK, following similar recognitions in France and Italy last year. Together, these milestones reinforce the strength of the evidence supporting VYJUVEK and its significance for patients and families living with DEB. Our ultimate objective is sustainable patient access. NICE's appraisal in the UK remains ongoing, and our team is engaging constructively to address NICE's question and showcase the transformational benefit achievable with VYJUVEK. Finally, we are planning multiple additional regulatory submissions in the coming months, including Switzerland and Australia, representing another step towards bringing VYJUVEK to more DEB patients globally. Overall, we are pleased with the momentum across our international business.

Speaker #2: This was followed in June by Vejuvec receiving the 2026 Prix Gallien UK Award for Best Product for Orphan Disease. This is the third Prix Gallien for Vejuvec, following similar recognitions in France and Italy last year.

Speaker #2: Together, these milestones reinforced the strength of the evidence supporting Vejuvec, and its significance for patients and families living with DEB. Our ultimate objective is sustainable patient access.

Speaker #2: NICE's appraisal in the UK remains ongoing, and our team is engaging constructively to address NICE's questions and showcase the transformational benefit achievable with Vejuvec.

Speaker #2: Finally, we are planning multiple additional regulatory submissions in the coming months, including Switzerland and Australia, representing another step towards bringing Vejuvec to more DEB patients globally.

Speaker #2: Overall, we are pleased with the momentum across our international business. We remain focused on disciplined execution, navigating market-specific challenges, securing sustainable reimbursement, and converting strong physician engagement and patient demand into durable, patient-centered access.

Laurent Goux: We remain focused on disciplined execution, navigating market-specific challenges, securing sustainable reimbursement, and converting strong physician engagement and patient demand into durable patient-centered access. With that, I will hand the call over to Kristy.

Speaker #2: With that, I will hand the call over to Christine.

Christine Wilson: Thank you, Laurent. I am pleased to report another strong quarter of commercial performance. US net revenue was $91.6 million for the quarter. Our field team continues to perform exceptionally well as we extend our reach deeper into the community and across the country. Working in close partnership with healthcare providers nationwide, they are filling education gaps, raising awareness, and helping us reach more patients through the DEB community. To that end, I am also very happy to report that we have achieved more than 730 US reimbursement approvals for VYJUVEK. We have now surpassed our initial penetration target of 60% and have no plans of stopping there. With a strong pace of approvals over the last year and a growing prescriber base, we expect continued penetration of the diagnosed DEB patient pool in the quarters to come.

Speaker #1: Laurent, I am pleased to report another strong quarter of commercial performance. U.S. net revenue was $91.6 million for the quarter. Our field team continues to perform exceptionally well as we extend our reach deeper into the community and across the country.

Speaker #1: Working in close partnership with healthcare providers nationwide, they are filling education gaps, raising awareness, and helping us reach more patients through the DEB community.

Speaker #1: To that end, I am also very happy to report that we have achieved more than 730 U.S. reimbursement approvals for Vejuvec. We have now surpassed our initial penetration target of 60% and have no plans of stopping there.

Speaker #1: With a strong pace of approvals over the last year and a growing prescriber base, we expect continued penetration of the diagnosed DEB patient pool in the quarters to come.

Speaker #1: In addition to driving new patient starts, we continue to strengthen our patient engagement efforts to help patients and caregivers successfully incorporate Vejuvec into their long-term wound care routines.

Christine Wilson: In addition to driving new patient starts, we continue to strengthen our patient engagement efforts to help patients and caregivers successfully incorporate VYJUVEK into their long-term wound care routines. Based on ongoing feedback from the DEB community, we know that virtual education and peer-to-peer connection remain preferred ways to access information and support. As a result, we continue to invest in scalable, community-driven programs that educate, engage, and empower patients through their treatment journey. During Q2, we partnered with debra of America to host a virtual education webinar focused on recent VYJUVEK label updates and practical bandaging techniques presented by our Krystal Connect team. The program was developed in direct response to questions from the patient community as treatment needs continue to evolve.

Speaker #1: Based on ongoing feedback from the DEB community, we know that virtual education and peer-to-peer connection remain preferred ways to access information and support. As a result, we continue to invest in scalable, community-driven programs that educate, engage, and empower patients throughout their treatment journey.

Speaker #1: During the second quarter, we partnered with Deborah of America to host a virtual education webinar focused on recent Vejuvec label updates and practical bandaging techniques, presented by our Crystal Connect team.

Speaker #1: The program was developed in direct response to questions from the patient community, as treatment needs continue to evolve. As more patients achieve complete wound closure in larger wound areas and transition to managing smaller or more anatomically challenging wounds—including the scalp, ears, and other sensitive locations—the educational needs of patients and caregivers continue to change.

Christine Wilson: As more patients achieve complete wound closure in larger wound areas and transition to managing smaller or more anatomically challenging wounds, including the scalp, ears, and other sensitive locations, the educational needs of patients and caregivers continue to change. The webinar attracted more than 100 live attendees and remained available on demand, extending its impact across the DEB community. Our VYJUVEK Voices program continues to provide peer-to-peer education and support by connecting patients and caregivers with trained ambassadors who share firsthand experience, practical insights, and ongoing encouragement through the treatment journey. During the Q, we also launched Krystal Connect, a virtual discussion series that brings together patients, caregivers, and VYJUVEK ambassadors to discuss topics selected by the community. These sessions foster meaningful peer engagement while addressing the real-world questions that arise as patients gain experience with therapy.

Speaker #1: The webinar attracted more than 100 live attendees and remained available on demand, extending its impact across the DEB community. Our Vejuvec Voices program continues to provide peer-to-peer education and support by connecting patients and caregivers with trained ambassadors who share firsthand experiences, practical insights, and ongoing encouragement throughout the treatment journey.

Speaker #1: During the quarter, we also launched Vejuvec Connections, a virtual discussion series that brings together patients, caregivers, and Vejuvec Ambassadors to discuss topics selected by the community.

Speaker #1: These sessions foster meaningful peer engagement while addressing the real-world questions that arise as patients gain experience with therapy. Collectively, these initiatives support patients as they adopt greater self-administration at home following our recent label expansion and further integrate Vejuvec into their long-term treatment routines.

Christine Wilson: Collectively, these initiatives support patients as they adopt greater self-administration at home following our recent label expansion and further integrate VYJUVEK into their long-term treatment routines. These programs also provide Krystal with valuable real-world insights into the evolving needs of the DEB community, enabling us to continuously refine and strengthen our patient engagement strategy. Just a few weeks ago, we were also proud to serve as a diamond sponsor of the debra of America Care Conference, one of the largest gatherings of the EB community. The conference provided an important opportunity to engage directly with patients, caregivers, healthcare professionals, and advocacy leaders. These interactions not only strengthen our connection with the community but also allow us to see firsthand the meaningful impact VYJUVEK continues to have on patients' lives.

Speaker #1: These programs also provide Krystal with valuable real-world insights into the evolving needs of the DEB community, enabling us to continuously refine and strengthen our patient engagement strategy.

Speaker #1: Just a few weeks ago, we were also proud to serve as a Diamond Sponsor of the Deborah of America CARE Conference, one of the largest gatherings of the EB community.

Speaker #1: The conference provided an important opportunity to engage directly with patients, caregivers, healthcare professionals, and advocacy leaders. These interactions not only strengthen our connection with the community, but also allow us to see firsthand the meaningful impact Vejuvec continues to have on patients' lives.

Speaker #1: These advancements, combined with our continued investment in patient support, education, and community engagement, further strengthen our reach and impact as we establish Vejuvec as the long-term standard of care for patients living with DEB.

Christine Wilson: These advancements, combined with our continued investment in patient support, education, and community engagement, further strengthen our reach and impact as we establish VYJUVEK as the long-term standard of care for patients living with DEB. I will now hand the call off to Suma to share pipeline highlights.

Speaker #1: I will now hand the call off to Suma to share pipeline highlights.

Speaker #3: Thank you, Christine, and good morning, everyone. I'm happy to share today's update on our progress. Thanks to the tireless commitment of our team, we are rapidly approaching two registrational study readouts in the front of the eye.

Suma Krishnan: Thank you, Kristy, and good morning, everyone. I'm happy to share today's update and our progress. Thanks to the tireless commitment of our team, we are rapidly approaching two registrational study readouts in the front of the eye. These readouts have exciting implications both for the patients we aim to serve as well as our platform. Due to the rapid cell turnover and protein clearance, the front of the eye has historically been a difficult to shoot target with gene therapies and biologics. Our HSV1 vectors, which be easily and repeatedly administered as an eye drop, are uniquely positioned to fill this treatment gap. In sentinel patient cases, repeat dosing of our vectors has been well-tolerated and delivered profound clinical improvement, underscoring the therapeutic potential of our HSV1-based approach. With our registrational programs for KB-803 and KB-801 nearing readouts, we are on the cusp of validating that potential.

Speaker #3: These readouts have exciting implications both for the patients we aim to serve as well as for our platform. Due to the rapid cell turnover and protein clearance, the front of the eye has historically been a difficult-to-shoot target with gene therapies and biologics.

Speaker #3: Our HSV-1 vectors, which we easily and repeatedly administer as an eye drop, are uniquely positioned to fill this treatment gap. In sentinel patient cases, repeat dosing of our vectors has been well tolerated and delivered profound clinical improvement, underscoring the therapeutic potential of our HSV-1-based approach.

Speaker #3: With our registrational programs for KB803 and KB801 nearing readouts, we are on the cusp of validating that potential. Our registrational IOLITE study evaluating KB803 in DEB patients was fully enrolled in April and is on track for a readout later this year.

Suma Krishnan: Our registrational IOLITE study evaluating KB-803 in DEB patients was fully enrolled in April and is on track for a readout later this year. On success, we expect to move rapidly to BLA submission, leveraging the extensive CMC work already completed for VYJUVEK. Our registrational EMERALD-1 study evaluating KB801 in NK patients is also progressing well. We expect to complete enrollment before year-end, and given the short 8-week primary endpoint, we expect a readout soon thereafter. Our KB407 and KB111 programs are advancing on similar timelines to deliver clinical data this year and registrational study start in 2027. Dosing is underway in our open label, single-arm study evaluating the safety of repeat-dose KB407 in patients with cystic fibrosis who are either ineligible or refractory to modulator therapy. We expect to enroll approximately 5 patients and report interim results before year-end.

Speaker #3: On success, we expect to move rapidly to BLA submission, leveraging the extensive CMC work already completed for Vejuvec. Our registrational EMERALD-1 study evaluating KB801 in NK patients is also progressing well.

Speaker #3: We expect to complete enrollment before year-end, and given the short eight-week primary endpoint, we expect a readout soon thereafter. Our KB407 and KB11 programs are advancing on similar timelines to deliver clinical data this year and registrational study starts in 2027.

Speaker #3: Dosing is underway in our open-label, single-arm study evaluating the safety of repeat-dose KB407 in patients with cystic fibrosis who are either ineligible for or refractory to modulator therapy.

Speaker #3: We expect to enroll approximately five patients and report interim results before year-end. We are also working with the FDA, the Cystic Fibrosis Foundation, and the CF Therapeutic Development Network Coordinating Center, or TDN, on our innovative registrational study design.

Suma Krishnan: We are also working with the FDA, the Cystic Fibrosis Foundation, and the Cystic Fibrosis Therapeutics Development Network Coordinating Center, or TDN, on our innovative registrational study design. We are making good progress on the details of our design and statistical analysis plan. We expect study design alignment later this year and registrational study start in 2027. Dosing is also underway in our open label, single-arm study evaluating the safety of repeat-dose KB111 in patients with Hailey-Hailey disease. We expect to enroll approximately 7 patients and report interim results before year-end. We have completed development of our HHD assessment scale and validations are now underway. All together, we are on track to discuss our repeat dosing safety results, scale, and study design with the FDA before the end of the year, again, enabling a registrational study start in 2027.

Speaker #3: We are making good progress on the details of our design and statistical analysis plan. We expect study design alignment later this year, and the registrational study to start in 2027.

Speaker #3: Dosing is also underway in our open-label, single-arm study evaluating the safety of repeat-dose KB111 in patients with Hailey-Hailey disease. We expect to enroll approximately seven patients and report interim results before year-end.

Speaker #3: We have completed development of our HHD assessment scale and validations are now underway. Altogether, we are on track to discuss our repeat dosing safety results, scale, and study design with the FDA before the end of the year, again enabling a registrational study start in 2027.

Speaker #3: We look forward to sharing clinical updates on both programs in the coming months as we work to deliver meaningful benefits to the 10,000s of patients with untreated cystic fibrosis or Hayley-Haley disease.

Suma Krishnan: We look forward to sharing clinical updates on both programs in the coming months as we work to deliver meaningful benefits to the tens of thousands of patients with untreated cystic fibrosis or Hailey-Hailey disease. In addition to our work in rare disease, we continue to advance our broader pipeline, which leverages the flexibility of HSV1 to target more common diseases of the lung, skin, and eye. The most advanced of this program in our inhaled KB707 program for the treatment of non-small cell lung cancer, or NSCLC. Inhaled KB707 is currently under investigation in our Phase I/II dose escalation and expansion study, KYANITE-1. Last year, we disclosed the inhaled KB707, a monotherapy achieved 36% response rate in heavily treated late-line NSCLC patients. Inhaled KB707 was also generally well-tolerated with a safety profile amenable to outpatient management.

Speaker #3: In addition to our work in rare disease, we continue to advance our broader pipeline, which leverages the flexibility of HSV-1 to target more common diseases of the lungs, skin, and eye.

Speaker #3: The most advanced of this program is our in-health KB707 program for the treatment of non-small cell lung cancer, or NSCLC. In-health KB707 is currently under investigation in our Phase 1/2 dose escalation and expansion study, KINITE-1.

Speaker #3: Last year, we disclosed that in-health KB707 as a monotherapy achieved a 36% response rate in heavily treated, late-line NSCLC patients. In-health KB707 also generally showed a safety profile amenable to outpatient management.

Speaker #3: At ASCO this year, we provided a clinical update on our dose expansion cohort evaluating KB707 in combination with pembrolizumab. We again saw strong response in late-line NSCLC patients with an objective response rate of 31% and encouraging durability.

Suma Krishnan: At ASCO this year, we provided a clinical update on our dose expansion cohort evaluating KB707 in combination with pembrolizumab. We again saw strong response in late-line NSCLC patients with an objective response rate of 31% and encouraging durability. Response were achieved in a diverse array of tumor types, including those with driver mutation, squamous histology, and low PD-L1 expression. The combination regimen was also well-tolerated, a positive indicator for KB707 combination potential with checkpoint inhibitors and immunotherapies more broadly. We expect to complete enrollment in our final dose expansion cohort evaluating inhaled KB707 in combination with chemotherapy later this year. Once data from this cohort is available, we expect to have full information needed to finalize and initiate a registrational study in second-line NSCLC, expected in 2027.

Speaker #3: Responses were achieved in a diverse array of tumor types, including those with driver mutations, squamous histology, and low PD-L1 expression. The combination regimen was also well tolerated—a positive indicator for KB707’s combination potential with checkpoint inhibitors and immunotherapies more broadly.

Speaker #3: We expect to complete enrollment in our final dose expansion cohort evaluating in-health KB707 in combination with chemotherapy later this year. Once data from this cohort are available, we expect to have the full information needed to finalize and initiate a registrational study in second-line NSCLC, expected in 2027.

Speaker #3: We are also moving intratumoral KB707 forward. Building on early signals of efficacy in patients with basal cell carcinoma from our Phase 1/2 OPAL-1 study, we expanded the scope of OPAL-1 to evaluate intratumoral KB707 in patients with Garland syndrome.

Suma Krishnan: We are also moving intratumoral KB707 forward. Building on early signals of efficacy in patients with basal cell carcinoma from our phase I/II OPAL-1 study, we expanded the scope of OPAL-1 to evaluate intratumoral KB707 in patients with Gorlin syndrome. Gorlin syndrome is a rare genetic disease which imposes a heavy burden on patients, dramatically increasing the risk of developing basal cell carcinomas. Patients with Gorlin syndrome can suffer from hundreds of BCCs over their lifetime, requiring frequent and potential disfiguring surgeries. There is no specific therapy approved for Gorlin, and as a result, there exists a clear and urgent need for a safe and effective therapy that reduces BCC burden for these patients. We have now enrolled three patients with Gorlin syndrome and expect to provide a clinical update on these patients, as well as a development plan in Gorlin later this year.

Speaker #3: Garland syndrome is a rare genetic disease which imposes a heavy burden on patients, dramatically increasing the risk of developing basal cell carcinomas. Patients with Garland syndrome can suffer from hundreds of BCCs over their lifetimes, requiring frequent and potentially disfiguring surgeries.

Speaker #3: There is no specific therapy approved for Garland, and as a result, there is a clear and urgent need for a safe and effective therapy that reduces BCC burden for these patients.

Speaker #3: We have now enrolled three patients with Garland syndrome and expect to provide a clinical update on these patients, as well as our development plan in Garland, later this year.

Speaker #3: With multiple registrational study readouts and starts upcoming, as well as growing momentum in our oncology pipeline, we are uniquely positioned to deliver transformational impact to patients.

Suma Krishnan: With multiple registrational study readouts and starts upcoming, as well as growing momentum in our oncology pipeline, we are uniquely positioned to deliver transformational impact to patients. This is an addition to our ongoing work on Alpha-1 antitrypsin lung disease, aesthetics, and earlier-stage preclinical programs. We look towards to sharing many updates in the months ahead. With that, I'll hand the call over to Kate.

Speaker #3: This is an addition to our ongoing work on alpha-1 antitrypsin lung disease aesthetics and earlier stage preclinical programs. We look forward to sharing many updates in the months ahead.

Speaker #3: With that, I'll hand the call over to Kate.

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

Kathryn Romano: Thank you, Suma, and good morning, everyone. I'll now provide some highlights from our Q2 financial results, as reported in our press release and 10-Q filing earlier today. Net revenue from global sales of VYJUVEK was $119.2 million for the quarter, which included sales from our commercial launches in Europe and Japan as compared to $96 million, or a 24% increase from Q2 2025. Note that this quarter also included a full quarter of accrued pricing for Germany as we started our pricing negotiations mid-last quarter, which contributed to reduced quarter-over-quarter net European revenue despite growth in related vial sales. Cost of goods sold for the quarter was $6.4 million compared to $7.2 million in the prior year's Q2. Gross margin for the quarter was 95%, improved from 93% in Q2 2025.

Speaker #1: Net revenue from global sales of VYJUVEK was $119.2 million for the quarter, which included sales from our commercial launches in Europe and Japan, as compared to $96 million, or a 24% increase from the second quarter of 2025.

Speaker #1: Note that this quarter also included a full quarter of accrued pricing for Germany, as we started our pricing negotiations mid-last quarter, which contributed to reduced quarter-over-quarter net European revenue despite growth in related vial sales.

Speaker #1: Cost of goods sold for the quarter was $6.4 million, compared to $7.2 million in the prior year's second quarter. Gross margin for the quarter was 95%, improved from 93% in the second quarter of 2025.

Speaker #1: R&D expenses for the quarter were $14.5 million, which was essentially flat compared to the prior year's $14.4 million. G&A expenses were $39.9 million, compared to $35.1 million in the prior year.

Kathryn Romano: R&D expenses for the quarter were $14.5 million, which was essentially flat to the prior year of $14.4 million. G&A expenses were $39.9 million, compared to $35.1 million in the prior year. This $4.8 million increase was primarily due to increased headcount and related compensation expense, as well as commercial costs related to global sales of VYJUVEK. Operating expenses for the quarter included non-cash stock-based compensation of $14.2 million, compared to $14.1 million in Q2 last year. Net income for the quarter was $54.8 million, which represented $1.85 per basic and $1.79 per diluted share. This marks an increase compared to the prior year's Q2 net income of $38.3 million, and EPS of $1.33 per basic and $1.29 per diluted share. I'll also note that the guidance we previously issued relating to non-GAAP operating expenses remains unchanged.

Speaker #1: This $4.8 million increase was primarily due to increased headcount and related compensation expense, as well as commercial costs related to global sales of VYJUVEK.

Speaker #1: Operating expenses for the quarter included non-cash stock-based compensation of $14.2 million, compared to $14.1 million in the second quarter of last year. Net income for the quarter was $54.8 million, which represented $1.85 per basic share and $1.79 per diluted share.

Speaker #1: This marks an increase compared to the prior year's second quarter net income of $38.3 million, and EPS of $1.33 per basic share and $1.29 per diluted share.

Speaker #1: I'll also note that the guidance we previously issued relating to non-GAAP operating expenses remains unchanged. We continue to expect to incur in the range of $175 million to $195 million in non-GAAP R&D and SG&A expenses for the full year of 2026.

Kathryn Romano: We continue to expect to incur in the range of $175 to $195 million in non-GAAP R&D and SG&A expenses for the full year of 2026. Finally, we continue to further strengthen our cash and investments foundation, now exceeding $1.1 billion in overall cash and investments. We remain committed to thoughtfully and efficiently deploying our capital as we execute on our upcoming pipeline milestones and continued global commercial strategy. With that, I'd like to turn the call back over to Krish.

Speaker #1: And finally, we continue to further strengthen our cash and investments foundation, now exceeding $1.1 billion in overall cash and investments. We remain committed to thoughtfully and efficiently deploying our capital as we execute on our upcoming pipeline milestones and continued global commercial strategy.

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

Speaker #2: Thanks, Kate. To summarize on the commercial side, we're working through typical overseas launch dynamics, including accruals and pricing negotiations, as we build the foundation to sustain our launch for years to come.

Krish Krishnan: Thanks, Kate. To summarize on the commercial side, we're working through typical overseas launch dynamics, including accruals and pricing negotiations as we build a foundation to sustain our launch for years to come. We're confident that the work we're doing this year will put us in a position to provide access to thousands of patients worldwide and provide a clear path for VYJUVEK to reach its full commercial potential. On the clinical side, we're focused on completing the ongoing registrational trials and initiating at least two more registrational trials in 2027. When we do that in the next 12 to 18 months, Krystal has the potential to transition from a commercial success story into a multiproduct genetic medicines company. Thank you. We're now ready to answer questions.

Speaker #2: We're confident that the work we're doing this year will put us in a position to provide access to thousands of patients worldwide and provide a clear path for VYJUVEK to reach its full commercial potential.

Speaker #2: On the clinical side, we're focused on completing the ongoing registrational trials and initiating at least two more registrational trials in 2027. When we do that in the next 12 to 18 months, Krystal has the potential to transition from a commercial success story into a multi-product genetic medicines company.

Speaker #2: Thank you. And we're now ready to answer questions.

Speaker #4: Certainly. 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 1: Certainly. 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. Please hold while we poll for questions. Your first question for today is from Roger Song with Jefferies.

Operator: Certainly. 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. Please hold while we poll for questions. Your first question for today is from Roger Song with Jefferies.

Speaker #4: We ask that, while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions.

Speaker #4: Your first question for today is from Roger Song with Jefferies.

Speaker #5: Great. Congrats on the quarter, and thank you for taking our question. Maybe one for commercial, one for pipeline. For the commercial side—seeing the European sales down a little bit from the first quarter, understanding some pricing dynamics—can you just give us some color around the demand side, and then maybe the compliance differences between Germany and France?

Roger Song: Great. Congrats for the quarter. Thank you for taking our question. Maybe one for commercial, one for pipeline. For the commercial side, seeing the European sales down a little bit from the Q1, understanding some pricing dynamic, can you just give us some color around the demand side and then maybe the compliance between Germany and France? That would be very helpful. Then on the pipeline, HHD seems very interesting indication and appreciated right now. Given you will have phase I data by year-end, what should we expect from that data readout? Then also what the current thinking about the epidemiology and then the overall market opportunity for HHD. Thank you.

Speaker #5: That would be very helpful. And then on the pipeline, Haiti Haiti seems very interesting indication and appreciated right now. So given you will have phase one data by year end, so how should we what should we expect from that data readout?

Speaker #5: And then also, what is the current thinking about the epidemiology and the overall market opportunity for HHT? Thank you.

Speaker #6: I'm Roger. Thanks for the question. Laurent, do you want to take a first stab at the European question?

Krish Krishnan: Roger, thanks for the question. Laurent, do you want to take a first stab at the European question?

Speaker #3: Yeah. As we said earlier, the market dynamics are pretty strong. We are facing strong growth in both patient inclusion and volume, and the overall revenues.

Laurent Goux: Yeah. As we said earlier, the market dynamics are pretty strong. We're facing a strong growth in both patient inclusion and volume. The overall revenues, the full quarter of the German reserve for the future.

Speaker #3: The full quarter of the German reserve for the future price.

Speaker #6: Hey Laurent, do you want to make any comment on demand? Because there was a question on demand.

Krish Krishnan: Hey, Laurent, do you want to make any comment on demand? There was a question on demand.

Speaker #3: I mean, the demand is strong. Yeah, with the European and other regions, over 180 patients have been treated in Western Europe and Japan.

Laurent Goux: The demand is strong. With Europe, Spain, and other countries, over 180 patients have been treated in Western Europe and Japan so far. As we are expanding in more centers and countries, it is more and more difficult to have a precise estimation in Europe. That's why we might not have explicitly given the number.

Speaker #3: So far, we are, but as we are expanding into more centers and countries, it is becoming more and more difficult to have a precise estimation in Europe.

Speaker #3: So that's why we might not have explicitly given the number.

Speaker #6: And I will add, Roger, just to close on that, I think compliance in the early days of launch in any country tends to be really good as we start off treating severe patients.

Krish Krishnan: I will add, Roger, just to close on that, I think compliance in the early days of launch in any country tends to be really good as we start off treating severe patients. Your question on compliance in Germany and France, we see pretty good, strong compliance similar to what we saw in the US. Suma?

Speaker #6: So, your comment on your question on compliance—in Germany and France, we see pretty good, strong compliance, similar to what we saw in the US.

Speaker #6: Suma.

Speaker #1: Yeah, I can take the Haiti Haiti. Haiti Haiti is an interesting disease. I mean, again, underappreciated, not well studied. There's not a lot of information in the literature or—but this is the beauty of this, is we have done a natural history study.

Suma Krishnan: Yeah, I can take the HHD. HHD is an interesting disease. Again, underappreciated, not well-studied. There's not a lot of information in the literature. The beauty of this is we have done a natural history study. It's been five months. We have over 60 to 70 patients already enrolled in this natural history because we use these patients to understand the disease. We've been collecting data over the past four to five months, so we have extensive knowledge and understanding now about the disease, the cycle time and all of that good stuff. We've also used these patients to obviously validate our scale. As you can tell, we're nearing the end of the scale validation. We feel pretty confident, like now we understand the disease and what the endpoint we should go after.

Speaker #1: It's been five months. We have over 60 to 70 patients already enrolled in those natural history studies. Because we use these patients to understand the disease, we've been collecting data over the past four to five months.

Speaker #1: So, we have extensive knowledge and understanding now about the disease's cycle time and all of that good stuff. And we have also used these patients to, obviously, validate our scale.

Speaker #1: So as you can tell, we are nearing the end of the valid scale validation. We feel pretty confident that now we understand the disease and what endpoints we should go after.

Speaker #1: Obviously, we have also put together scientific experts and KOLs in this space to develop the scale and also to determine the endpoints.

Suma Krishnan: We have also put together scientific experts and KOLs in the space together to develop the scale and also to the endpoint. The phase I study is basically what we learned from the natural history. Everybody's excited to be part of this trial, we'll have no problem enrolling. We have already got patients on the study and started dosing them. We will, again, through imaging and investigators evaluation over three months, just like we did with VYJUVEK, pretty similar. Again, it's going to be a gel. We have learned a lot from VYJUVEK, how to administer, how to have these patients maintain the treatment and use the right bandages. It's very useful. It is very easy for us to take the VYJUVEK experience into HHD. I think in the three months, we will look at treated versus non-treated.

Speaker #1: So, the phase one study is basically what we learned from the natural history. So, we already have most of the patients; already, everybody's excited to be part of this trial.

Speaker #1: So we have no problem enrolling. We have already got patients on the study and started dosing them. So we will, again, through imaging and investigators' evaluation over three months—just like we did with Vizhbek—pretty similar.

Speaker #1: Again, it's going to be a gel, and we have learned a lot from Vizhbek—how to administer, how to have these patients maintain the treatment, and use the right bandages.

Speaker #1: So it's very useful. It is very easy for us to take the VYJUVEK experience into Haiti, Haiti. And I think in three months, we will look at treated versus non-treated.

Speaker #1: We also have biopsied these patients at baseline and see some sort of correction of the treated area. So I think we'll have enough data for us to basically then sit with the agency and let them know what the endpoints are, because their peer has no idea.

Suma Krishnan: We'll also biopsy these patients at baseline and see some sort of correction of the treated area. I think we'll have enough data for us to basically then sit with the agency and let them know what the endpoints are, because the FDA has no idea. We are going to let them know based on our data that we generated, we're going to propose the endpoint. We expect to start registrational style early next year. As I said, we have over 60 to 70 patients already in our natural history, and new patients continue to enroll into that study.

Speaker #1: So we are going to let them know, based on our data that we generate, that we're going to propose the endpoints. And we expect to start registrational study early next year. As I said, we have over 60 to 70 patients already in our natural history, and new patients continue to enroll into that study.

Speaker #6: Got it. Thank you.

Roger Song: Got it. Thank you.

Speaker #4: Your next question is from Alec Stranahan with Bank of America.

Operator 1: Your next question is from Alec Stranahan with Bank of America.

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

Alec Stranahan: Hey, guys. Thanks for taking my questions and good to see all the progress in the quarter. I guess first maybe on NK, could you talk a bit about the patient treated with KB801 that had a complete closure? Is this patient still being followed, and I guess how does their disease stage or demographic compare to the population that's being enrolled in EMERALD-1? Then on CF, just on the five-patient follow-up study, could you maybe just remind us what kind of functional metrics the study is designed to show, or is it maybe more around the dosing PK side? Just hoping to link the CFTR expression to improve lung function, possible this is maybe something we see more with the typical study. Thank you.

Speaker #6: Hey guys, thanks for taking my questions and good to see all the progress in the quarter. I guess, first, maybe on NK, could you talk a bit about the patient treated with KB801 that had a complete closure?

Speaker #6: Is this patient still being followed, and, I guess, how does their disease stage or demographic compare to the population that's being enrolled in Emerald One?

Speaker #6: And then on CF, just on the five-patient follow-up study, could you maybe just remind us what kind of functional metrics the study is designed to show, or is it maybe more around the dosing PK side?

Speaker #6: Just hoping to link the CFTR expression to improved lung function, but possibly this is something we may see more with the pivotal study. Thank you.

Speaker #6: Hey Alex, before Suma gets into the comment on the NK patients, I want to say, look, it was a legal requirement that made us disclose that one patient data stemming from some of the patent disclosures that ensued as we were supporting the patent.

Krish Krishnan: Yeah, Alec. Before Suma gets into the comment on NK patients. I want to say, look, it was a legal requirement that made us disclose that one-patient data, stemming from some of the patent disclosures that ensued as we were supporting the patent with clinical information. We have always said and expressed, to not have the investment community read too much into a single patient data. I mean, the data was fantastic on that single patient. It is a one-patient data, and the new study that we are working on is a different design. With that, I'll turn it over to Suma.

Speaker #6: With clinical information, we have always said and expressed that the investment community should not read too much into single-patient data. I mean, the data was fantastic on that single patient.

Speaker #6: But it is one patient’s data, and the new study that we are working on is a different design. And so, with that, I'll turn it over to Suma.

Speaker #1: Correct. Okay. This patient, again, had a chronic wound in the eye. I mean, from his records, we treated the patient. Obviously, you can see that there was complete closure and we monitored this patient over a couple of weeks after, and we see durability of that wound healing.

Suma Krishnan: Correct. Okay. This patient, again, was chronic at chronic wounding in the eye. From his records, we treated the patient. Obviously, you can see that there was complete closure, and we monitored this patient over a couple of weeks after, and we see durability of that wound healing. We are done with this patient because that study got closed out. As in the past, we've explained why we changed the dosing regimen because it made more sense to give daily. It's just not only for compliance, it makes sense when you're administering them into the eye, these are older patients, to maximize the dose. There was no safety concern. Again, very similar population.

Speaker #1: So, and the patient is—I mean, we are done with this patient because that study got closed out. As in the past, we've explained why we changed the dosing regimen, because it made more sense to give daily.

Speaker #1: It's not just for compliance—it also makes sense when you're administering them into the eye. These are older patients, so you want to maximize the dose.

Speaker #1: And there were no safety concerns. So again, very similar population. We want to make sure that we get patients that have chronic wound healing, because that's important—because if you want to separate from placebo, you want to treat those patients so that when you express NGF, you're going to see the better effect or the efficacy from that drug.

Suma Krishnan: We want to make sure that we get patients that have chronic wound healing, because that's important, because if you want to separate from placebo, you want to treat those patients that when you express NGF, you're going to see the better effect or the efficacy from that drop when you compare to placebo. We're very excited because we opened this trial globally. We have filed our CTA, we have identified several sites across EU. We want to expand it because we think we want to go for a global trial, just like we did with VYJUVEK and hope to get approval just if everything is successful, not just in the US, but globally. That's the intent for the NK study.

Speaker #1: When you compare to placebo, we're very excited because we opened this trial globally. We have filed our CTA, and we have identified several sites across the EU.

Speaker #1: We want to expand it because we think we want to go for a global trial, just like we did with Vyzbek, and hope to get approval—if everything is successful—not just in the US but globally.

Speaker #1: So that's the intent for the NK study. Oh, sorry. On the CF, again, as we have said earlier in our previous calls, the intent of this study is, I mean, as per our discussions—which are ongoing with the FDA—where the FDA wanted to see some repeat dosing data in these patients.

Krish Krishnan: On the CF-

Suma Krishnan: Oh, sorry. On the CF, again, as we have said earlier in our previous calls, the intent of this study is, as per our discussions, which is ongoing with the FDA, where the FDA wanted to see some repeat dosing data in these patients. We have enrolled and dosed patients already. We expect to enroll five patients. This is going to be a weekly repeat dosing study. They come in monthly, we check for FEV1 and other safety outcomes. It's going to be a measurement of FEV1 over six months. Every month, the patient comes in, hopefully by six months, we'll have data on what's with repeat dosing and what's the improvement in this patient. Again, remember, we are enrolling really sick patients. These patients have very low FEV1. They have no other options.

Speaker #1: So, we have enrolled those patients already. We expect to enroll five patients, and this is going to be a weekly repeat dosing study.

Speaker #1: They come in monthly and we check for FEV1 and other safety outcomes. So, it's going to be a measurement of FEV1 over six months.

Speaker #1: Every month, the patient comes in and hopefully by six months, we will have an we'll have data on what's what repeat dosing and what's the improvement in this patient.

Speaker #1: And again, remember, we are enrolling really sick patients. These patients have very low FEV1. They have no other options. So, they're null patients and patients that have no other options today.

Suma Krishnan: The null patients and patients that have no other option today. It's a very sick patient population.

Speaker #1: So, it's a very sick patient population, high demand.

Krish Krishnan: Got it. Thank you.

Alec Stranahan: Got it. Thank you.

Speaker #6: Thank you.

Suma Krishnan: With high demand.

Krish Krishnan: Thank you.

Speaker #4: Your next question for today is from Yigal Natumovis with Citi Group.

Operator 1: Your next question for today is from Yigal Nochomovitz with Citigroup.

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

Speaker #6: Hi, great. Thank you for taking the questions. I'm just wondering if you could be perhaps a little more specific with respect to the progress in Germany, in terms of the quarter-over-quarter vial growth, the demand growth relative to the accrual process, and what the headwind is on the accrual, given that starting in Q2, I believe there was accrual throughout the quarter.

Yigal Nochomovitz: Hi. Great. Thank you for taking the questions. I'm just wondering if you could be perhaps a little more specific with respect to the progress in Germany in terms of the quarter-over-quarter vial growth, the demand growth relative to the accrual process and what the headwind is on the accrual, given that starting in Q2, I believe there was accrual throughout the quarter. Then on NK, if you could just clarify, it sounds like you're going to finish enrollment before the end of the year and then 8 weeks to the endpoint, but it appears, unless I'm correct, that the data will be likely in early 2027, or could it still be in this year? Thank you.

Speaker #6: And then on NK, if you could just clarify, it sounds like you're going to finish enrollment before the end of the year, and then eight weeks to the endpoint.

Speaker #6: But it appears I'm correct that the data will likely be in early '27, or could it still be this year? Thank you. Laurent, do you want to take the German question?

Krish Krishnan: Laurent, do you want to take the German question?

Laurent Goux: Yeah. We don't provide country-by-country details for the number of patients and revenues. The dynamic in terms of patient inclusion and vial increase is very solid in Germany.

Speaker #3: Yeah. We don't provide country-by-country details for the number of patients and revenues, but the dynamic in terms of patient inclusion and vial increases is very solid in Germany.

Speaker #6: And Yigal, on the accrual process—look, we are expecting at this moment to complete pricing negotiations in Germany in Q3. Assuming successful completion of the negotiation, the impact of accrual—I mean, our whole objective is to be conservative in the accrual and get it over with once the pricing is established in Germany.

Krish Krishnan: Yigal, on the accrual process, look, we are expecting, at this moment, to complete negotiations in Q3, pricing negotiations in Germany. Assuming successful completion of the negotiation, the impact of accrual, I mean, our whole objective is to be conservative in the accrual and get it over with once the pricing is established in Germany. We did experience some accrual in the first half of Q1, completely in Q2, and maybe a partial in Q3, and hopefully by the time Q4 comes around, we'll be back to an actual net revenue number in Germany. On NK, Suma?

Speaker #6: So we did experience some accrual in the first about half of Q1, completely in Q2, and maybe a partial in Q3. And hopefully, by the time Q4 comes around, we'll be back to an actual net revenue number in Germany.

Speaker #6: On NK, Suma.

Speaker #1: Yeah. NK, again, as I mentioned, we are going globally. So, I mean, as I said, we're getting all the sites activated in EU countries and regions because we want to do one global filing.

Suma Krishnan: Yeah. NK, again, as I mentioned, we are going globally. As I said, we're getting all the sites activated in EU countries and regions because we want to do one global filing. Yeah, we expect, we are targeting and getting all of it enrolled by end of the year. Potentially early 2027, by the time we clean the database and announce data. Again, keep in mind, the thing is the CMC, right? That's the stuff. We have the platform technology. We have all of the stuff ready to go. Once data is out, in its entirety, I think we'll be ready to file the BLA.

Speaker #1: So, yeah, we expect—I mean, we are targeting—getting all of it enrolled by the end of the year. So, potentially in '27, by early '27, by the time we clean the database and announce data.

Speaker #1: But again, keep in mind I mean, the thing is the CMC, right? I mean, if we have still that's the stuff. We have to we have the platform technology.

Speaker #1: We have all the stuff ready to go, so once the data is out, I think we all—I mean, in its entirety, I think we'll be ready to file the BLA.

Speaker #6: Okay. Thank you.

Yigal Nochomovitz: Okay. Thank you.

Speaker #4: Your next question is from Ritu Baral with TD Cowen.

Operator 1: Your next question is from Ritu Baral with TD Cowen.

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

Speaker #5: Good morning, guys. Thanks for taking the question. Suma, I just want to clarify on NK enrollment. Are you pushing out the enrollment completion and the data just slightly in order to, for the sake of the European patients?

Ritu Baral: Good morning, guys. Thanks for taking the question. Suma, I just want to clarify on NK enrollment. Are you pushing out the enrollment completion and the data just slightly for the sake of the European patients? I wanted to just ask how enrollment rate was going overall, as far as a reflection of the interest in the therapy. Are you upsizing the trial at all to include these European patients? My second question was a commercial question just on VYJUVEK in the US. In your remarks, Krish, you mentioned that you were going more to the community setting. What commercial opportunity or patient number opportunity is left in the community setting for DEB? Is it mostly Dominant DEB? What sort of market research trends have you seen to sort of drive that interest? Thanks.

Speaker #5: I wanted to just ask how enrollment rate was going overall, as far as a reflection of the interest in the therapy. And also, are you upsizing the trial at all to include these European patients?

Speaker #5: And then my second question was a commercial question, just on VYJUVEK in the US. In your remarks, Krish, you mentioned that you were going more to the community setting.

Speaker #5: What opportunity—what commercial opportunity or patient number opportunity—is left in the community setting for DEB? Is it mostly dominant DEB, and what sort of market research trends have you seen to kind of drive that interest?

Speaker #5: Thanks.

Speaker #1: So Ritu, I'll take the NK study. I mean, obviously, it makes sense for us to go global. It makes sense to file in Europe. And obviously, in Europe, there is auxiliary that is not available.

Suma Krishnan: Ritu, I'll take the NK study. Obviously, it makes sense for us to go global. It makes sense to file in Europe, and obviously in Europe, OXERVATE is not available, so there is a need for these patients. It'll be hopefully, when we talk to all of the KOLs in Europe, they all want to participate because there's nothing for these patients. Obviously, we want to take advantage of that so we can speed up some of the enrollments with adding more patients in Europe that are willing to get. There's a need. That's the intent. Again, we are not upsizing the study trial, it's just we want to do global filing. We want to increase recruitment with keeping the study design the same and the numbers the same. The intent is to get a global filing.

Speaker #1: So, there is a need for these patients. I mean, hopefully when we talk to all of the KOLs in Europe, they all want to participate because there's nothing for these patients.

Speaker #1: So obviously, we want to take advantage of that. We can speed up some of the enrollments by adding more patients in Europe who are willing to participate, since there is a need.

Speaker #1: So that's the intent. So again, I mean, we are not upsizing the study trial. It's just that we want to do global filing. We want to increase recruitment while keeping the study design the same and the numbers the same.

Speaker #1: And the intent is to get a global filing.

Speaker #6: And Ritu, we presently expect enrollment to be done by year-end, as we've been saying. On the commercial side—Christine, you want to take a shot?

Krish Krishnan: Ritu, we presently expect enrollment to be done year-end, as we've been saying. On the commercial side, Christine, you want to take a shot?

Speaker #1: All right. Be happy

Christine Wilson: Sure, I'd be happy to. Yes, we continue to believe there's opportunity in the community setting. While we've made a lot of great progress of finding these patients wherever they may be located across the US, as mentioned, we have surpassed our initial penetration target of 60% of the diagnosed patient population. We're continuing to see opportunities and finding opportunities which supports the demand growth that you're continuing to see. In addition, you asked about the dDEB population. We're continuing to see patients come in that are both rDEB and dDEB. As you can imagine, as the launch has gone on, we're seeing the dDEB patient population grow as they sit more on that mild to moderate spectrum. We're still also seeing rDEB patients coming in. It is still a healthy split of the opportunity that's being found in that community setting.

Speaker #5: So yes, we continue to believe there's opportunity in the community setting. We've made a lot of great progress finding these patients, wherever they may be located across the U.S.

Speaker #5: And as mentioned, we have surpassed our initial penetration target of 60% of the diagnosed patient population. We're continuing to see opportunities and finding opportunities, which supports the demand growth that you're continuing to see.

Speaker #5: In addition, you asked about the DDEB population. We're continuing to see patients come in that are both our DEB and DDEB. As you can imagine, as the launch has gone on, we're seeing the DDEB patient population grow.

Speaker #5: As they sit more on that mild to moderate spectrum, but we're still also seeing our DEB patients coming in. So, it is still a healthy split.

Speaker #5: ...of the opportunity that's being found in that community setting.

Speaker #6: Yeah. And Ritu, in terms of overall, I don't think there's any change because about 1,200 identified patients—that's the initial target. Once we get close to that number, we're going to expand our efforts to go after the 3,000 or so, the majority of whom probably are undiagnosed.

Krish Krishnan: Yeah. Ritu, in terms of overall, I don't think there's any change. There's about 1,200 identified patients. That's the initial target. Once we get close to that number, we're going to expand our efforts to go after the 3,000 or so, the majority of whom probably are undiagnosed. If you look at the number of reimbursement approvals we're able to generate every quarter, that shows that it's still a healthy demand left. We're not in any kind of stable mode. It is true that most of the new patients coming into the drug tend to be more moderate to mild than super severe. That said, demand continues to be really strong, somewhere between 35 and 50 reimbursement approvals. We keep hitting on that almost every quarter.

Speaker #6: But if you look at the number of reimbursement approvals we're able to generate every quarter, that shows there is still a healthy demand left. We're not in any kind of stable mode.

Speaker #6: It is true that most of the new patients coming into the drug tend to be more moderate to mild, rather than super severe. But that said, demand continues to be really strong.

Speaker #6: Somewhere between 35 and 50 reimbursement approvals—we keep hitting on that almost every quarter.

Speaker #5: Great. Thanks.

Ritu Baral: Great. Thanks.

Speaker #4: Your next question for today is from Lachlan Hanbury-Brown with William Blair.

Operator 1: Your next question for today is from Lachlan Hanbury-Brown with William Blair.

Operator: Your next question for today is from Lachlan Hanbury-Brown with William Blair.

Speaker #7: Hey, guys. Thanks for the questions. Maybe a couple on access. I think over the past couple of weeks, we've seen headlines out of Germany that they're passing some reforms on drug pricing or health insurance.

Lachlan Hanbury-Brown: Hey, guys. Thanks for the questions. Maybe a couple on access. I think over the past couple of weeks we've seen headlines out of Germany that they're sort of passing some reforms on drug pricing or health insurance. I know your negotiations are ongoing and this new law is still very early, is there any thoughts on your side on how, if at all, that could impact either the negotiations or the ultimate outcome there? Then in the US, maybe somewhat similar, but wondering how the sort of negotiations or pricing and coverage and access is going through the PBMs for the at home administration, given that's sort of earlier in the launch of that than the original HCP-administered product.

Speaker #7: I know your negotiations are ongoing, and this new law is still very early, but are there any thoughts on your side on how, if at all, that could impact either the negotiations or the ultimate outcome there?

Speaker #7: And then in the US, maybe somewhat similar, but I'm wondering how the negotiations or pricing and coverage and access are going through the PBMs for the at-home administration, given that's still earlier in the launch.

Speaker #7: Is that then the original ACP-administered product?

Speaker #6: I'll answer the US quickly and turn it to Laurent to talk about Germany. Look, in the US, since the beginning of the launch, we've had really good access.

Krish Krishnan: I'll answer the US quickly and turn it to Laurent to talk about Germany. Look, in the US, since the beginning of the launch, we've had really good access. We really haven't had any substantive issue with regard to access to date to really talk about. We do have some wrinkle on the early part of January every year as people transition insurances. In terms of pricing, in terms of rebates, we've had a very productive relationship with payers and payers in general. Laurent, on the German side, do you have any comments on the question?

Speaker #6: We really haven't had any substantive issue with regard to access to date, to really talk about. We do have some wrinkle in the early part of January every year, as people transition insurances.

Speaker #6: But in terms of pricing, in terms of rebates, we've had a very productive relationship with payers and payers in general. And Laurent, on the German side, do you have any comments on the question?

Speaker #3: I mean, each market has its own pricing and reimbursement framework and specificities, so the outcome will naturally vary from one country to another. But our focus is definitely on achieving sustainable reimbursement that reflects Vizhbek’s clinical value and the high unmet medical need in the countries, while being able to provide access to an expanding group of patients.

Laurent Goux: Each market has its own pricing and reimbursement framework and specificities. The outcome will naturally vary from one country to another, but our focus is definitely on achieving sustainable reimbursement that reflects VYJUVEK's clinical value, the high unmet medical need in the countries, while being able to provide access to an expanding group of patients, yet keeping it consistent with international reference pricing framework. Yeah, the news, things are evolving in Germany, but we are very aware of it and negotiation are very constructive.

Speaker #3: Yet, keeping it consistent with the international reference pricing framework. So yeah, things are evolving in Germany, but we are very aware of it, and negotiations are very constructive.

Speaker #7: Thanks.

Lachlan Hanbury-Brown: Thanks.

Speaker #4: Your next question for today is from Debjit Chattopadhyay with Guggenheim Securities.

Operator 1: Your next question for today is from Debjit Chattopadhyay with Guggenheim Securities.

Operator: Your next question for today is from Debjit Chattopadhyay with Guggenheim Securities.

Speaker #8: Hey, good morning, and thanks for taking my questions. I have a couple. So the first one, on NK—our channel checks seem to suggest patients who have undergone prior corneal surgeries or any vision correction procedures might be at risk for NK.

Debjit Chattopadhyay: Hey, good morning, and thanks for taking my questions. I have a couple. The first one on NK. Our channel checks seems to suggest patients who have undergone prior corneal surgeries or any vision correction procedures might be at risk for NK. If that's correct, how are you thinking about the commercial opportunity? The second question, the ocular DEB program will read out prior to NK. How are you thinking about the read-through from DEB to NK? Thank you so much.

Speaker #8: If that's correct, how are you thinking about the commercial opportunity? And the second question: the ocular DEB program will read out prior to NK.

Speaker #8: How are you thinking about the read-through from DEB to NK? Thank you so much.

Speaker #7: Yeah, Debjit, thanks for the question on the NK market opportunity, and for flagging the prospect of maybe a higher incidence rate of NK associated with surgeries.

Krish Krishnan: Yeah, Debjit, thanks for the question on the NK market opportunity. You're flagging the prospect of maybe a higher incidence rate of NK-associated surgeries. It's certainly something we're looking at. We look collectively across the claims data, some of which we've disclosed, and OXERVATE's performance. It's clear the number of patients being diagnosed and treated annually with NK has increased dramatically. Some of this likely awareness, but it does also point to some potential incident forces that we are investigating. I think quite clearly, the trends both on the claims side and the sales data, the recent sales data for OXERVATE point to NK being a large and growing market in the United States. As Suma alluded to, underserved disease worldwide. Plenty of opportunity here for us on KB-801.

Speaker #7: It's certainly something we're looking at. I mean, we look collectively across the claims data, some of which we've disclosed. And Oxford's performance, I mean, is clear.

Speaker #7: The number of patients being diagnosed and treated annually with NK has increased dramatically. I mean, some of this is likely awareness, but it does also point to some potential incident forces that we are investigating.

Speaker #7: I mean, I think quite clearly the trends, both on the claims side and the recent sales data for Oxford, point to NK being a large and growing market in the United States.

Speaker #7: And then, as Suma alluded to, this is an underserved disease worldwide, so there's plenty of opportunity here for us on 801.

Speaker #5: And I think the advantage for 801 is our CMC. I mean, if you look, we have optimized cost of goods, all of that.

Suma Krishnan: I think the advantage for KB-801 is our CMCs. If you look, they are optimized cost of goods, all of that. With regards to read-out, completely different, right? If you look at NK, it's very similar to open wounds and viral loads. You need to make sure they're chronic, you treat them. You have to then look for complete wound healing. It's mechanistically, because you have to have an open wound, and then you treat the wound in the eye and completely close them. Whereas for KB-803, it's very different. It's prophylactic. There is no ophthalmologist involved in the study. It's purely a patient-reported outcome. We have patients in a natural history study. We look at number of events, and then we treat them. They are prophylactically administered, and it's a patient-reported outcome.

Speaker #5: With regard to widows, completely different, right? I mean, if you look at NK, it's very similar to open wounds and vascular. I mean, you need to make sure they're chronic, you treat them, you have to then look for complete wound healing.

Speaker #5: So, mechanistically, you have—because they have to have an open wound, and then you treat the wound in the eye, and it’s complete closure.

Speaker #5: Whereas for 803, it's very different. It's prophylactic. There is no ophthalmologist involved in the study. It's purely a patient-reported outcome. I mean, we have patients in a natural history study.

Speaker #5: We look at number of events, and then we treat them. I mean, we prophylactically administer, and so patient-reported outcome—so the patients evaluate and say, "Hey, on a scale of 5," they measure, like, "Do I feel I have pain?"

Suma Krishnan: The patients evaluate and say, Hey, on a scale of five, they measure like, Do I feel I have pain? Do I have abrasions? It's very patient-reported outcome, apples and oranges. Whereas for NK, it's a physician, and you have to take pictures of the images, independent lab. They have to show that the wound is completely closed. Again, very different. Two endpoints are different, evaluation's different. Read-through from one to the other, either way, it's not the right thing to do.

Speaker #5: "Do I have abrasions?" So it's a very patient-reported outcome—apples and oranges. Whereas for NK, it's a physician, and you have to take pictures of the images—independent lab.

Speaker #5: They have to show that the wound is completely closed, and so again, very different. So, two endpoints—different, evaluations—different. So read-through from one to the other, either way, may not mix.

Speaker #5: It's not the right thing to do.

Speaker #8: If I may follow up with one more. When we did our channel checks, the physicians are also reporting a huge influx of downpay sales reps.

Debjit Chattopadhyay: If I may follow up with one more. When we did our channel checks, the physicians are also reporting a huge influx of down-pay sales force ramps, which is obviously being reflected in the OXERVATE sales numbers. Assuming a successful outcome of the study, how are you thinking about sales force in 2027 prepping for a launch later on, so you can address the market opportunity there?

Speaker #8: And which is obviously being reflected in the Oxford sales numbers. So, assuming a successful outcome of the study, how are you thinking about Salesforce in 2027, prepping for a launch later on so you can address the market opportunity there?

Speaker #7: Yeah, Debjit, I think it's a little early for us to be getting into phase four plans, certainly. I mean, yeah, we recognize that there is a significant unmet need and patient opportunity here.

Krish Krishnan: Yeah. Debjit, I think it's a little early for us to be getting into phase IV plans. Certainly.

Krish Krishnan: Probably.

Suma Krishnan: Probably.

Krish Krishnan: Yeah. We recognize that there is a significant unmet need and patient opportunity here, I think certainly on success of EMERALD-1, if it is successful, we would be looking to assume a dominant position in the US and worldwide, we'd do everything we could to achieve that.

Speaker #7: And I think, certainly, on the success of Emerald One—if it is successful—we would be looking to assume a dominant position in the United States and worldwide.

Speaker #7: And we did everything we could to achieve that.

Speaker #4: Your next question is from Calpit Patel with Wolf Research.

Operator 1: Your next question is from Kal Patel with Wolfe Research.

Operator: Your next question is from Kalpit Patel with Wolfe Research.

Debjit Chattopadhyay: Great.

Speaker #8: Yeah, hey, good morning, and thanks for taking the questions. For the ocular DEB program, can you remind us if that also includes global patients like you're planning for the NK program?

Kal Patel: Yeah. Hey, good morning, thanks for taking the questions. For the ocular DEB program, can you remind us if that also includes global patients like you're planning for the NK program? One for the NK program itself, can you comment on what the screening to enrollment rates are and what the demand looks like for the trial itself? Finally, for the Germany question, or Europe question, on a gross pre-pricing accrual basis, can you give us any color if European VYJUVEK sales increased sequentially, and if so, by approximately how much? Thank you.

Kalpit Patel: Yeah. Hey, good morning, thanks for taking the questions. For the ocular DEB program, can you remind us if that also includes global patients like you're planning for the NK program? One for the NK program itself, can you comment on what the screening to enrollment rates are and what the demand looks like for the trial itself? Finally, for the Germany question, or Europe question, on a gross pre-pricing accrual basis, can you give us any color if European VYJUVEK sales increased sequentially, and if so, by approximately how much? Thank you.

Speaker #8: And then one for the NK program itself: can you comment on what the screening-to-enrollment rates are, and what their demand looks like for the trial itself?

Speaker #8: And then finally, for the Germany question, or Europe question, on a gross pre-pricing accrual basis, can you give us any color if European Vygevac sales increased sequentially?

Speaker #8: And if so, by approximately how much? Thank you.

Speaker #3: Suma, you want to quickly talk about...

Krish Krishnan: Suma, you want to quickly talk about?

Suma Krishnan: Yeah. I mean, for the eye study.

Speaker #5: Yeah, I mean, for the eye study, it's not a global study because I think patient-reported outcomes are not very well accepted by Europe. So we have to first show this in the U.S.; at least we were able to negotiate that with the agency.

Krish Krishnan: Ocular

Suma Krishnan: it's not a global study because I think patient-reported outcomes are not very well accepted by Europe. We have to first show this in the US. At least we were able to negotiate that with the agency. It's just right now, it is just focused on the US. It's a US-based study. Based on the outcome, we will open up discussions with them because, again, because of the patient-reported outcome as endpoint. Unlike NK, it's a well-defined physician imaging, it's well-recognized, and it's accepted by Europe and rest of the world. That's the main difference between the two trials. With regarding to enrollment, as I said, we are really picking up enrollment at the moment because we have got most of our sites up and running. We are almost in the process of getting Europe sites up and coming.

Speaker #5: So it's just right now this it is just focused on the US. It's a US-based study. And then based on the outcome, then we will open up discussions with them because again, because of the patient-reported outcome as the endpoint.

Speaker #5: Unlike NK, it's a well-defined physician imaging. It's well recognized, and it's accepted by Europe and the rest of the world. So that's the main difference between the two trials.

Speaker #5: And with regard to enrollment, I mean, as I said, we are really picking up enrollment at the moment because we have got most of our sites up and running.

Speaker #5: We are almost in the process of getting Europe sites up and coming. So enrollment, we expect to continue—the pace is going to continue to increase.

Suma Krishnan: Enrollment, the pace is going to continue to increase.

Speaker #3: Hey, on the Germany question, the answer is yes. We try not to quantify these things because then it becomes a perpetual question that we are held responsible for.

Krish Krishnan: Hey, on the Germany question, the answer is yes. We try not to quantify these things because then it becomes a perpetual question that we are held responsible to. I will say, it's in the double digits.

Speaker #3: But I will say, it'll be in the—it's in the double digits.

Speaker #8: Okay, thank you very much.

Kal Patel: Okay. Thank you very much.

Kalpit Patel: Okay. Thank you very much.

Speaker #4: 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 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, have a wonderful day. Thank you for your participation.

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, have a wonderful day. Thank you for your participation.

Q2 2026 Krystal Biotech Inc Earnings Call & Business Update

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