KRYS Q3 2026 earnings call transcript, November 2, 2026

Good morning and thank you for standing by and welcome to Crystal Biotech's third quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode.

After the speaker's presentations, there will be a question and answer session.

During the question and answer session, there will be a limit of two questions per participant. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your... host, Stephan Paquette, Chief...or, sorry, Senior Vice President of Corporate Development. Please begin.

Good morning, and thank you all for joining today's call. Earlier today, we released our financial results for the third quarter of 2026. The press release is available on our website at www.crystalbio.com. We also filed our earnings 8K and 10Q with the SEC earlier today. Joining me today... Will B. Krish Krishnan, Chairman and Chief Executive Officer. Sumut Krishnan, President of Research and Development. Therana Gux, Executive Vice President and General Manager for Europe. Christine Wilson, Senior Vice President and Head of U.S. Commercial. And Kate Romano, Chief Accounting Officer. 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... ...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 file. With that, I will turn the call over to Krish.

Good morning, and thank you for joining us. Q3 was another strong Q for Crystal. We delivered $127.3 million in Vaishavik revenue. An increase of 30% from the same period last year, and reported diluted earnings of $2.05 a share, and ended September with $1.2 billion in cash and investments. Those results, they reflect a business that's growing, that's profitable, and generating the resources to advance our pipeline. They also reflect the work our teams have done to build Crystal into a global company with commercial operations, manufacturing capabilities, clinical development programs. that we own and control. And today, we have generated approximately $1.1 billion in Vaisovac revenue since launch, and that is an important milestone for a medicine developed here at Crystal. Behind that number are so many patients receiving treatment, physicians incorporating a new paradigm of genetic medicines into their practices, and families getting access to a medicine that addresses the underlying cause of DEB. In the U.S., demand continues to grow, as does the prescribing physician base. And internationally, we continue to translate physician interest into patient stocks across Germany, France, and Japan. The pricing secure for Vaisovac in Japan and Germany and Italy today reflects recognition of the meaningful benefits that Vaisovac provides patients and families. I'm proud of our team's thoughtful work to demonstrate that value and establish a strong foundation for patient access internationally.

We'll continue to build on this progress in ensuing pricing discussions across additional markets, and Laurent will discuss those markets in more detail. We also made meaningful progress in development. We were really encouraged by the recent Golan syndrome day clinical results that demonstrated regression in both injected and non-injected lesions, together with the histologically confirmed clearance of an injected lesion in each patient. So that gives us a very strong foundation to have conversations with the FDA on next. Steps. I want to address the updated timing of some of our clinical readouts, and while we had hoped to share these readouts sooner, I want to be clear that the programs continue to progress well, and we look forward to sharing results in the upcoming months. Someone will elaborate more in a few minutes. Alongside these developments, our board authorized a shared repurchase program of up to $400 million that we expect to deploy over the next two years. We have reached a position where our financial resources allow us to support global commercial expansion, pipeline and clinical development, and have the flexibility to return capital to shareholders. And the authorization reflects our confidence in Crystal's long-term prospects and our responsibility to allocate this capital thoughtfully. So taken all together, this queue demonstrated the strength of the business we've built. It demonstrated continued commercial growth, substantial profitability, and progress.

across the pipeline. For that, I'd like to thank our employees, our investigators, and the patients and families participating in our studies for helping make that progress possible. And with that, I'll turn it over to our team to walk through commercial, clinical, and financial updates. Thank you, Krish. By Jurek International Revenue reached $32 million in the third quarter. We continue to translate physician interest into patient starts while strengthening the Growth Foundation through reimbursement progress and greater access to treatment at home. In Germany, pricing negotiations have concluded, providing greater visibility as we expand our reach across the country. More than 20 centers have now initiated patients on Veidruvec, up circa 15% from last quarter. Doing so, we continue to broaden the treatment network to reach patients on Veidruvec. Patients who are not routinely seen at established expert centers. In France, we achieved an important milestone with the first home administration through the retrocession pathway. This creates an opportunity to reduce the practical burden of treatment on patients and families and support treatment continuity. We are now working to extend this approach to additional eligible patients and centers, while national pricing discussions continue. And in Japan, our team is making steady progress, bringing new patients to treatment and expanding our prescriber network. We are also advancing support initiatives to help the DEB community maximize the potential benefits of Vyjuvex therapy and navigate the complexity of Vyjuvex GMO status. Looking ahead, pricing and reimbursement negotiation

in the future. In Italy have also concluded and we now expect to launch Vyjuvex in early 2027. In Spain, pricing discussions are progressing with a decision expected before the end of the year. Some patients already have access to exceptional regional funding arrangements, providing a foundation for a potential launch next year. We are also advancing regulatory and market access activities in additional contracts. KRYS to expand Vaidjuvex reach over time. Taking together, these developments give us confidence in the international opportunity. Health systems are recognizing Vaidjuvex value, physicians are gaining treatment experience, and barriers to administration are beginning to come down. Our focus is on turning that progress into more patients starting and continuing treatment. With that, I'll hand the call over to KRYS.

Thank you, Laurent. U.S. net revenue for the third quarter was $95.3 million, reflecting continued demand for Vaidjuvex and our efforts to reach more patients. We have now secured more than 760 reimbursement approvals nationwide. During the quarter, we added over 80 new prescribers. This expanding physician base supports continued adoption, and we believe substantial opportunity remains among diagnosed patients who have not. yet started treatment as well as those who remain undiagnosed or misdiagnosed. We are also seeing the benefits of greater treatment flexibility. Approximately 80% of patients now self-administer Visevec, helping patients and caregivers incorporate treatment into their wound care routines at home. As patients gain experience, our focus extends beyond treatment initiation to supporting continued use as their wound care needs evolve. Our Visevec voices and Visevec connection programs provide education, practical support, and opportunities for patients and caregivers to learn from one another. Engagement with physicians, advocacy organizations, and the broader DEB community also helps us understand barriers to treatment and improve the support we provide. Looking ahead, our priorities remain clear. Reach more patients, expand the prescribing network, and support long-term treatment. With continued demand, a growing physician space, and greater flexibility in administration, we believe Visevec is well-positioned for sustained U.S. growth. We are proud of the progress we have made and excited about the opportunities ahead as we continue working to establish Visevec as the long-term standard of care for patients living with DEB. With that, I'll turn the call over to Summa. Thank you, Christine, and good morning, everyone. We have encouraging progress to share this morning, including our initial Garland syndrome results,

the upcoming Haley-Haley readout, and the ongoing dosing in cystic fibrosis. But before I get into the update, I want to acknowledge that some clinical results are going to take a bit longer than we initially expected. We recognize the importance of these milestones. Our teams are working diligently to advance each study, and we look forward to sharing the data as they become available. Importantly, the studies themselves are progressing well, and we remain encouraged by their eventual outcome. I'll walk through our rationale and expectations from here shortly. With that, I would like to start today's update with the latest addition to our pipeline, KB113 for Gorman syndrome. Collins syndrome is the rarest genetic disease estimated to affect more than 10,000 Americans. Patients can develop hundreds of basal cell carcinomas, or BCCs, over their lifetime, requiring repeated surgeries that can lead to tissue loss, disfigurement, and significant psychological burden. With no therapy specifically approved for Gorman syndrome, there is a substantial need for a safe, effective treatment to reduce BCC burden. KB707 is our HSC-1-based immune system. So, therapy designed to drive sustained localized expression of human IL-2 and IL-12 in the tumor microenvironment and promote systemic immune-mediated tumor clearance. We recently completed a pilot study evaluating a low dose of intratumor KB707, which we now refer to as KB113 in three adult patients with correlants in

syndrome. Each received six doses over 14 weeks. Investigators assessed regression in both injected and non-injected landmark BCCs throughout treatment and 30 days after the final dose using a pre-specified five-point scale. Profound treatment benefits were observed following KB113 treatment, including broad anti-tumor responses in all three Garland syndrome patients. As summarized in the table on the left, over 80% of the assessed lesions regressed over the course of the study and more than half of all lesions regressed by over 50%. Critically, substantial regression was observed in lesions that were never directly injected, providing preliminary evidence of systemic immune activation and an ebscopal effect. Investigators also reported that a meaningful proportion, roughly 10% of all assessed tumors, had shrunk by at least 90%, indicating potential for tumor eradication with KB113 treatment. To further assess depth of response, one injected tumor from each patient was biopsied for histological assessment. In all three cases, complete clearance was confirmed with no evidence from each patient. Residual tumor tissue in the biopsy. Images shown on the right highlight the rapid improvement achieved in Gorlin patients with KB113, and add to the body of evidence suggesting significant potential for KB113 to dramatically reduce PCC burden in patients with Gorlin syndrome. With the addition of KB113 to our pipeline, we are now building out a robust development...

effort in rare dermatology diseases, an area we know well and where we can move fast. In the case of KB113, we've already started engaging with FDA regarding potential clinical development pathways in Gorlin syndrome. We will share an update on our plans once aligned with the FDA. We're also making good progress on our KB111 program for 8HD. We have completed enrollment of five patients in our repeat dose study for Halite 1 and expect to share a data update before year end. We then expect to meet with the FDA to discuss next steps. Turning to our ophthalmology pipeline, I want to start by saying that both NK program and the ophthalmic BVAC program are progressing well. In the case of KB803, we enrolled three additional patients in our registrational ILI study. Two of these additional patients have been enrolled to replace two patients who withdrew for reasons unrelated to safety. The third patient, a child one year of age, was enrolled to generate evidence to support potential treatment of corneal aberrations in dead patients from birth. We now expect that the last patient last visit in February 2020 with top-line results to be reported shortly thereafter. In KB 801 for NK patients, enrollment has progressed more slowly than we initially anticipated, reflecting the study's narrowly defined eligibility criteria and the challenges of enrolling patients in a placebo-controlled trial in an indication with an available approved therapy. We are also working diligently to expand

our clinical trial infrastructure. We have activated 22 sites in the United States, and we are close to activating sites in France, Spain, and United Kingdom. With continued investment and expansion of our trial network, we now expect to complete the enrollment and report top-line results in 2027. In the lung, we are steadily advancing our program in CF and AATD, starting with KB4. We are currently dosing three patients in our repeat dose study and expect to enroll and dose three additional patients before the year end. Based on this enrollment timeline, we now anticipate interim study results in the first half of 2027. We are progressing in parallel our discussion with the FDA regarding our potential registrational study design, having recently been selected for FDA's complex innovative design meeting program. This is enabling intensive FDA engagement and has us on track for a 27 registrational study start. We also continue to enroll in our KB408 repeat-dose study and are on track to report interim data next year with successful gene delivery already confirmed by biopsies for both KB407 and KB407. KB408, we believe we are uniquely positioned to fill urgent treatment gaps for CF and AATD patients. We look forward to sharing more in 2027. Finally, we are making great progress on our in-health KB707 program, enrolling patients with advanced NSCLC and the Global Kinite 1 expansion cohort evaluating in-health KB707

plus chemotherapy. We have completed dose optimization in 10 patients to inform chemotherapy dose selection and expect to enroll and dose 70 patients at the selected regimen by mid-2027. Results from this cohort will help us finalize our plans for subsequent registrational study of KB707. Each disease that we are targeting with our pipeline is an urgent unmet need. We recognize the importance of progressing deliberately and quickly to fill these treatment gaps. With our expanded R&D infrastructure, I'm confident that we can deliver on our ambitions and dramatically grow our impact. With that, I'll hand the call over to Kate.

Thank you, Suma. I'll now provide a few additional highlights from our third quarter. Financial results, as reported in our press release and 10Q filing earlier today. Net revenue from global sales of Vyjevec was $127.3 million for the quarter, driven by the continued growth from our Europe and Japan launches and representing a 30% increase over the prior year's third quarter of $97.8 million, which included only a partial quarter of sales from Europe and excludes sales from Japan. Cost of goods sold for the quarter was $7.6 million compared to $4.3 million in the prior year's third quarter. Gross margin for the quarter was 94% as compared to 96% in the third quarter of 2025. The 2% decrease in gross margin was due in part to the increase in sales of product in Europe and Japan, which do not yet benefit from major manufacturing process optimizations approved in the U.S., as well as the sale of lower cost R&D batches in the prior year quarter following FDA approval of the optimized process. R&D expenses for the quarter were $14.9 million compared to the prior year of $14.6 million. GNA expenses were $33.7 million compared to $37.6 million in the prior year's third quarter. This $3.8 million decrease was primarily due to the receipt of insurance proceeds as reimbursement of legal costs previously incurred along with a reduction in period-over-period legal costs, professional services, and marketing costs offset by increased payroll costs. Operating expenses for the quarter included non-cash stock-based compensation of $13.9 million

$13.9 million. Compared to $13.2 million in the third quarter of last year. Net income for the quarter was $63.1 million which represented $2.13 per basic and $2.05 per diluted share. In the third quarter of 2025, net income was $79.4 million and EPS was $2.74 per basic and $2.66 per diluted share. In the third quarter of last year, we had released a majority of the valuation allowance that was historically recorded against our deferred tax assets, and we also benefited from the reversal of the Section 174 R&D capitalization requirement under the One Big Beautiful Bill legislation. Both of these items were non-recurring. Looking ahead to the remainder of the year, we are also revising our full year non-GAAP R&D and SG&A guidance to $155 to $165 million from our prior guidance of $175 to $195 million. And finally, we continue to build on our solid financial position, now exceeding $1.2 billion in overall cash and investments. With this foundation, we remain focused on disciplined capital allocation to support our pipeline and global commercial strategies. While maintaining the ability to return capital to shareholders through our newly authorized share repurchase program. And now, I'll turn the call back over to Krish.

What excites me most is the opportunity we have to build a company whose impact extends well beyond its first medicine. And with each program, we can apply what we've learned, deepen our capabilities, and pursue additional diseases where patients need better options. Thank you very much. With pricing negotiations behind us in Japan, Germany, and Italy, we can now more clearly see meaningful room for Waijavec growth internationally. We have a rich pipeline with several important readouts in the upcoming months. And as I said before, the initial Gorlin findings are very encouraging, and we look forward to the upcoming Haley-Haley results along with CF and NK. Each program will generate evidence that helps us determine how best to bring additional medicine to patients. Financially, we've put ourselves in a good place. The growing commercial business allows us to invest, not just in global expansion, but also in development, and buy back shares opportunistically, and so we'll allocate capital with a clear focus on building lasting value per share. I'm confident in the future. We have a strong foundation. We have the resources to invest and a team that's super committed to turning scientific potential into meaningful medicines, and our responsibility is to translate all those strengths. into more patients treated. So, thank you to the employees, the patients, investigators, and our shareholders for your continued support, and I'll open the call up for questions. Thank you.

Thank you. At this time, we'll be conducting our question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound. quality. I would like to remind you to please limit yourself to two questions. Thank you. Please hold while we poll for questions. Our first question today is coming from Lachlan Hanbury-Brown with William Blair. Your line is live.

Hey on the Japan question I mean that's valid like that in the next I think upcoming I don't remember the timing which should be November December the prescription day kind of lifts off and it goes from maybe twice a month to once a month and we definitely believe that that would incentivize a faster adoption especially in a country where people commute long distances to get the physician office go thanks thank you our next question is coming from Ritu Burrell with TD Cowan your line is live good morning guys I wanted to keep my two questions to 801 in NK can you talk a little bit about how much how much you're expanding sites beyond the 22

the lesion that we are seeing is persistent. So if you see any decrease in the lesion size between our first and second screening, we do not enroll that patient because obviously, as you know, with this disease, there is a lot of waning and ebbing of the corneal lesion. And we want to make sure we know our drug is therapeutically effective. So we want to make sure we are really enrolling the chronic patients because it's a placebo-controlled study and our chances of winning against the placebo is robust. So these two factors have delayed NK, but we feel confident that we can get back on track and get the enrollment going early next year with all these multiple sites.

Thank you. Our next question is coming from Yigal Nkhamovic with Citigroup. Your line is live.

Hey, thanks for the question. I will say the following. You know, the whole point of initiating a buyback is a high level of comfort that we have enough, both in terms of the revenues from budget back and in terms of supporting our pipeline before we embark on such a thing, such as cash buyback. And you have to, I mean, we definitely, if in any place, whether it's NK or CF or oncology or Gorlin, if additional investment would immediately translate. To either increasing enrollment or conducting a faster study or opening a site. Of course, we are very open to doing that. And we have done some of that. That feels like something we should be doing and we are doing. So I think the whole timing of the buyback was based on, look, with pricing in Germany and Italy behind us, we have much more clarity on what Vaiso Revenues could be globally and really please. with how that is trending. We have a really good idea of the amount it would take to bring some of these pipeline products to the market in a timely manner. We also internally believe that the intrinsic value of what the stock value is and what we believe is intrinsic value are dislocated at the moment. And a balance of like $1.2 billion and $400 million gives us plenty of questions to do all of the above.

Okay. Thank you very much.

Thank you. Our next question is coming from Gavin Clark-Gartner with Evercore. Your line is live.

NK, again, as I mentioned, we have 21 sites up and running. We do have a bunch of screen failures. It's not because of lack of enrolling these patients. Because of our stringent inclusion-exclusion criteria, as you know, when you have sites open, they do want to put patients in, and they put in milder patients or patients that tend to, you know, sporadically, spontaneously close their lesions. So we wanted to ensure that we didn't want to enroll these patients. But now we understand, you know, with enrollment, what kind of patients. And we are actively getting additional sites in the US. As I mentioned, there were some academic sites that were delayed because unfortunately, as I said, because of some of the virus safety requirements, I think we have just crossed those hurdles. So we expect with all of these academic sites up and running, and the European sites up and running, we are very confident that we should be able to get back on track with enrolling the NK patients. Hey, Gavin. Just a couple of things. You mentioned some kind of sickness, but that was a comment on 407, not on 803. The second point I'll make on NK is to date the study is progressing really well, and we feel good about the limited number of patients on the trial. All right, great. That's super helpful. Thank you. Thank you. Our next question is coming from Lisa Walter with RBC. Your line is live.

Hey, Lisa, to answer your question directly, the ocular DEB will come ahead of end care at the moment. Got it. Thanks so much.

Thank you. Our next question is coming from Josh Shimmer with Cantor Fitzgerald. Your line is live.

Along with the biopsy and the scale validation improvement.

Okay. Awesome. Thank you so much.

Thank you. Our next question is coming from Roger Song with Jeffries. Your line is live.

Hey, on the ex-U.S. EU revenue, as Laurent mentioned, demand continues to grow really nicely. We're really pleased that pricing in some of the leading countries like Germany and Italy are behind us, and we're not too far away from Spain. And because there are a lot of countries and pricing hasn't been done in many of those countries, approvals will continue to be part of the story until many of those countries, at least the five like Italy, Spain and UK are behind us. Spain and UK are behind us. I wouldn't use the word volatility because demand continues to go up in some of the big countries. Pricing is already done, but we are excited and looking forward to bringing more and more patients in Europe on the drug as soon as possible. But Germany was the big one with the accrual and that's behind us at the moment. Yeah, on Ocular DB, I think we're all set from a CMC to Spain. We have all the requirements. I think from a BLA, we should be ready to go as soon as we have the last patient enrolled and we have locked the database and we analyzed the data. So obviously we are working very diligently to, you know, get the BLA started. So it will be just once we have the data, we should be able to file the application shortly after that. Super helpful. Thank you. Thank you.

Our next question is coming from Alex Stranahan with Bank of America. Your line is live.

And it's following its normal course.

I'll take the Gordlin question. I mean, as you can see from the three patient study where we looked at it, the data was pretty remarkable. You can see response in all three patients. I think we were also surprised to see the response. It was consistent across the three patients. And we were also able to confirm this by histology to show that the injected key. that show complete response and no BCCs in them. So again, very exciting. I mean, as you know, with gorilin, gorilin lesions do not heal on its own. So whatever we see is a drug effect. So even if you assume placebo as a 0% response, and for us to see a pretty good response, we don't expect to see, you know, have this to be a large study. So again, you know, it should be well within less than 100% patients that we should be able to do a pivotal trial if we have to, you know, based on the response rate that we see in these three patients.

Thank you. Our next question is coming from Andrea Newkirk with Goldman Sachs. Your line is live.

Thank you. Sorry, Mom, did you have another question? Oh, no, thank you so much. Yeah, maybe I could just ask one other question on 407. Could you just confirm if we'll see FEV1 data in the first half of next year when that data set comes and what threshold of lung function improvement or disease stabilization would you view as the benchmark to support the plans for the pivotal? program thanks again yes we will have FEV1 data in these patients obviously we are also collecting some of the natural history of these patients so I think we will have I mean it's not like a number hopefully we will have it holistically we will look at these patients what are their lung function over the period of time and the lung function of these patients that are with on 407 so that's what we are expecting to announce

thank you our next question is coming from morgan lamberti with goldman sachs your line is live

hi team thanks for taking our question um can you please speak to the rate of recurrence for patients taking oxervate and then how that informs your view on the expected tam for kb801 in terms of it's if the tam is actually patients who have not been treated with oxervate just had to think about that thank you so much yeah i mean we do not really uh ask those questions if we are we do not look at the history the field and off the weight of this recurrence we do collect some medical history at this point it's too early to tell for us we have not looked at all the data but all of that we will have collected as a medical history we tried to calculate but we have not it means too early to look at look at that data population to make that you know determination Thank you. Thank you. Our final question today is coming from Kalpate Patel with Wolf Research. Your line is live.

NK?

I assume the question was the spontaneously increase. Yeah. Did Oxavate also observe that in their study? We don't know, but they did have an inclusion criteria for some persistence, but I can't comment on the Oxavate. What was that level? But I think they did have something. The inclusion criteria. But I don't know the level of decrease for them to enroll that patient. Not sure. Got it. Okay. Thank you very much. Thank you. Ladies and gentlemen, this does conclude today's

question and answer session and will also conclude today's conference. You may disconnect your lines at this time, and we thank you for your participation.