Thanks everyone for joining the next half hour with me. My name is Dae Gon Ha, one of the biotech analysts at Stifel. This session, I have the pleasure of being with Krystal Biotech with Krish Krishnan. So we'll, we'll do this in a fireside chat, Q&A format, and anyone in the audience with questions, please feel free. How about we just start with a brief intro of the Krystal story, and we'll dive into the various aspects? Sure. Hey, Dae, thanks for having us. Krystal was founded in 2016, and we're now a commercial, fully integrated, biotech company focused primarily on rare diseases. We go after diseases that are caused by a missing or a mutated gene, and we provide the patient cells a copy of that gene through a modified HSV-1 herpes simplex virus vector. That's the idea. And then you can formulate it, depending on the disease, into topical, intradermal, nebulizer in some cases. So we got the drug approved on May 19, earlier this year, and currently are in the full throes of the second quarter of launch of the lead drug, VYJUVEK, for the treatment of a disease called DEB. Headquartered in Pittsburgh, with offices in Boston and Zug, Switzerland. I didn't know you had an office in Boston, so that's my neck of the woods. Let's talk about the launch. How has it been tracking? You've had the second quarter, including the six weeks of launch, and then third quarter was your first full quarter. What's been your experience? Were you seeing greater uptake? Where have you seen sort of the surprises than what you had internally expected? So we announced after the first 18 weeks post-approval that we had about 284 adjudicated or authenticated Start forms, which, if you think about the 1,200 or so identified base of patients, is north of 20%, and I would consider that a really good launch off the gate. And I say adjudicated Start forms because we have a high degree of confidence that a lot of those Start forms will convert to patients on drug. In terms of access, so just to think about what has gone really well, access has gone really well to date, whether it's on the government side or the commercial side. We feel really good. We have most of them in place, and if not, over the upcoming weeks and months. What's been a bit surprising to us in the launch is the time it takes to get an adjudicated Start Form and to put a patient on drug. Given we are transitioning patients who are used to going to a Center of Excellence a couple of times a year, to transitioning them to a home dose setting, it took us 12-13 weeks when we started. We're currently at eight, hoping to get to three to four early in 2024 in terms of the length of time. Mm-hmm. So that's been a surprise, that the amount of time. Second has been the overwhelming start with home dosing, as opposed to we had expected that patients would like to start treatment in a clinic and transition to a home setting, but that has not been the case. Pretty much every patient on drug today is being dosed at home by HCP. Mm-hmm. On one hand, it helps us with compliance, but getting to a home dosing, getting a nurse you like to come home at a time when you have time open, they take a certain amount of time to schedule. Mm-hmm. But outside of that, we believe the launch is in a really strong place. Especially the patient experience has been very positive. We focus on that. The physician feedback, whether through independent checks or the new KOLs or the KOLs that have had prior exposure to the drug, has been positive. So overall, we feel very good about where we are. Mm-hmm ... on the VYJUVEK launch. Mm-hmm. Let's go into a little bit more of the dynamics with these centers of excellence and the KOLs. What's sort of the dynamic there? I guess on the call, your first ever earnings call, you talked about sort of physicians maybe looking at a handful of patients rather than opening the floodgates to treat everybody on VYJUVEK. What kind of discussions went in and kind of what are they waiting to see from those initial handful of patients before they can basically open the floodgates? Right. So, there are two aspects to it, and I'll come to your aspect in one second. One, physicians at Centers of Excellence, KOLs, see their patients often during EB clinics, which happen sometimes, depending on the center, once a month, in some cases, once every two months, depending on the size. And they bring a subset of their patients to these clinics. And that's the point at which they start putting them on start forms. So while they may want to put all their patients on start forms, it does not happen the very next day. It could take some time. So that's one dynamic. There have been a few KOLs, although fewer and far between, who have a certain number of patients and want to make sure that a subset of them get on drug, are being reimbursed, happy on the drug before they open it to the remaining. We are very careful to keep our relationship with the KOLs at the center of excellence without pushing them too hard to get a patient on drug. So that's one dynamic where we understand their need to see a patient, we understand their need to get some experience before opening the floodgates. But our medical MSLs, our medical science liaisons, do spend a lot of time educating them on the urgency of putting a patient on VYJUVEK. In some cases, the patients are a bit more impatient, and they call us through Krystal Connect and ask to find the local physicians who potentially might write a script faster. And so we got to keep all these things, moving in a way where the patient is not frustrated, and the KOL at a center of excellence is not frustrated. But that's what predominantly happens at the COEs. I see. So based on your 284 Start Forms, curious, what—just even a rough ballpark, what proportion of that is being represented by these quote, unquote, "non-COE," more local community dermatologists? Oh, in terms of physicians? Yeah. So we said about 45% came from centers of excellence, 55% of the start forms from community across 136. 136, if I'm- Prescribers ... saying the number right, prescribers. Given there are maybe 25-30 centers of excellence, with some having two or three physicians, some having one, you can see there's a lot of, local physicians who are writing scripts for VYJUVEK. Mm-hmm. That was a deliberate strategy by Krystal as we started to realize that the COEs may take some time, and much more of a steady state, flow of Start Forms. Mm-hmm. Because the, you know, some people expect the Center of Excellence would be a bolus number into the overall number of 284 Start Forms. It's more like a steady state, given the nature of the EB Clinic. So our commercial team strategy was we need to pursue both simultaneously, community and COE- Mm-hmm ... as opposed to simply waiting and focusing on Center of Excellence, which could take some time. Got it. That's what is reflected in the diversity of the physician base and the diversity of the scripts by COE versus community. Got it. Okay. What was also unique was you also reported about 20% of your start forms were represented by the dominant DEB patients. Maybe just taking a step back, can you remind us what your approval label said when it comes to the different subtypes of DEB and also the flexibility you have with in-clinic as well as at home? I think we already kind of touched that, but might as well be formally touching on it. Yeah. VYJUVEK is approved for dystrophic epidermolysis bullosa, comes into the recessive form and the dominant form, and it's approved for both. Recessive tends to be characterized by more severe patients, by and large, there are exceptions, and the dominant patients and tend to be on the moderate to milder side, and we're approved for both. Given that the severe patients tend to go more frequently to the centers of excellence and are in the reimbursement claim and need the drug quicker than moderate to mild, our focus in the launch has been predominantly on the severe patients for the most part. Hoping to get to the moderate to mild in 2024. So happy to see 50 or so Start Forms to date, at least at the end of Q3, coming from dominant points to expanding our base of identified patients. Mm-hmm. As we identified a lot of the severe ones ahead of launch, and now, surprised by the nature of a continuous, you know, constant stream. We had 25 in Q2, 25 in Q3, and that's great because it allows us a channel to start finding newer patients through these patients and their communities and their physicians. So that's been very positive- Mm-hmm ... on the dominant side. The 50 or so dominant that you have then, curious, were they part of the 1,200 identified, or were they presenting themselves after approval? Most, I mean, predominantly presenting themselves after approval. Okay. ...because a lot of them are not in the claims data, and if they're not in the claims data or out of the system, we have no way of identifying them. So we're encouraged by that number, and our plan is to—we have started, through Krystal Decode and some other initiatives we have in place, we've started targeting the non-identified base, but it'll be a bigger focus next year. Mm-hmm. Okay. When we leave out the COEs and the KOLs that have participated in the study, folks like Dr. Marinkovich, I guess first approval is always, you know, a tough ask. Like, the company has to present a lot of data and have to show a lot of backing up kind of evidence. But here, we're also uniquely positioned in that it's not only topical, but it's a gene therapy, which is a novel technology on its own, but it's also got this herpes simplex virus. I know it's engineered, but I think for the layman, it can be a little bit surprising. So what have you kind of heard from your interactions with KOLs or physicians who have never tried this, or have not participated in clinical trials? Yeah, even prior to launch, we spent a lot of time educating some of these KOLs on the attributes of the modified vector. Like you said, getting them over the idea that this is not really a replicating vector, but a non-replicating vector, whose sole purpose is to deliver the missing gene. Mm-hmm. We talked to them about other drugs, IMLYGIC, for example, which has been in the market over five years. It's HSV-1 based and has had no adverse events, even though IMLYGIC is a repeat vector. There hasn't been too many of these with these physicians. There's always one or two, maybe not COE, but what we call a second-tier center of excellence. So it may not be Cincinnati, but there could be some children's hospital in the vicinity or where they haven't heard about gene therapy, especially dermatologists, be replicating. So we continue, and look, the data and the publication in NEJM helps us a lot. The Nature Medicine publication on the phase I or II helps us a lot. So it's I wouldn't call it a challenge that's tough to... And we are enrolling in aesthetics. I wouldn't even call them patients, but customers looking for, Beautiful faces ... absence of wrinkles or whatever. So we're able to get over it, but it does come up sporadically, but we have a lot of ways to address any of those concerns today. Got it. Okay, and if you could just remind us the pricing and the pricing cap that you also disclosed as of the approval. I think the gross-to-net aspect, if you can also touch on that. Yeah, so gross price per vial, which is administered on a weekly basis, is $24,250. Gross to net varies in the early days, where predominantly it's commercial insurance, where gross to net can be in the low teens. As more and more government Medicaid comes into the story with mandatory... It's a mandatory 23.1% discount. The blended GTN over time, we expect it to be in the mid-teens to slightly north of it. So that's the GTN calculation. For those commercial payers who enter into a contract with us, we provide them a cap of no more than $900,000, I believe is the cap. I don't think it's $950. I do believe it's 900. $900,000 per patient cap in a calendar year. Given the induction phase, where we think patients will use a lot of vials, and the maintenance phase, where the number of vials per year could drop, this cap predominantly comes into play possibly in the first full calendar year, which is 2024. Mm-hmm. Maybe in 2025, but not too far beyond, because once a lot of patients are transitioning to maintenance phase, it's tough to envision, at this point, exceeding the cap. Mm-hmm. Um. Okay, any questions on Vyjuvek DEB? All right, hearing none, let's pivot over to your pipeline, which is pretty expansive. Maybe we'll start with the 407. This seems to be your first foray into rare respiratory diseases, this one specifically going after cystic fibrosis. I guess, what are the key learnings that you have on this engineered HSV-1 vector that is applicable in the case of the CF program, and what's your cargo? HSV-1 has a high propensity for epithelial cells. It's part of the reason why we thought about an indication like cystic fibrosis, where there's a lot of epithelial cells in the lung. HSV-1 has the ability, innately and through some of our modifications to evade the immune system. Another way of saying it, it's very amenable to repeat dosing. Something that has been a question with some of the other vectors delivering payloads. HSV is very episomal in nature, which means there is zero random integration into your existing DNA. So if you put all these attributes together, we're talking about a delivery vehicle that delivers an exogenous genetic material to the cell of interest repeatedly at some frequency. What our 407 carries, which is a big differentiator, is 2 full copies of the complete CFTR gene. So we're not limited by some mini or micro gene, where there's always some kind of question between transfection or staining and functional expression. Like, one looks good, the other looks bad, one looks good, the other looks bad. One can never correlate the two when you trim a gene and you don't know what the outcome's gonna be. Mm-hmm. So I think our differentiating attributes in CFR: A, we can deliver the full copy of the gene. B, we're mutation agnostic. C, we can repeat dose, so FEV can be built over time and doesn't have to be on the first dose. And D, we have an approved drug that points to the safety of repeat dosing over time. Mm-hmm. So we completed cohort one, which was the low dose, primarily for safety, and now starting to get going on cohort two and three. Mm-hmm. That kind of rounds out the phase I. I don't think you've disclosed your cohort doses per se. Would you say cohort one is therapeutic, or is it considered therapeutic? I would say we're expecting it to be therapeutic based on the non-human primate data, starting with the mid to the high dose. The cohort one, at least the way we envisioned, was primarily to get over safety. Mm-hmm. We enroll patients. We do not wane patients—wean patients out of modulators, so we're looking for an improvement on top of an existing modulator. And we plan to announce when we have all 10 or 12 of those patients done, as opposed to provide a patient-by-patient readout- Mm-hmm ... which can sometimes be confusing. You're talking about N of 10 per cohort. What kind of metrics would you be providing at that update besides safety and tolerability? From an efficacy perspective, improvements in FEV1, and I think 10 is a good number to at least directionally think whether the drug is working or not. Expression level data, we're doing bronchoscopy in the high dose. So expression data, whether it be staining and then CFTR expression. Some early insight into our thoughts on frequency of dosing. Okay. Okay, and then timing of that data, any guidance on that? 2024. We haven't had exposure to the TDN network yet, and it makes our enrollment slower than one would normally expect. But given the completion of cohort one, enrollment has picked up a bit, and we feel good about announcing data in 2024. Not guiding to first or second at the moment. Okay, so we'll stay tuned on that. When we think about the 408 program, which is also recently cleared IND, how should we think about sort of the cadence of that program versus 407, given both are inhaled administration, but you pointed out sort of this nuanced challenge of CF being the TDN or not in TDN. Is 408... Like, first of all, introduce us to the 408 program, and is there a possibility 408 starts kinda lapping around the 407 program? Yes. The answer to the question- The latter question. The latter question about lapping around. We really have great access to the Alpha-1 Foundation. We have a lot of centers excited, these are big centers, getting on drug with full capability of doing bronchoscopy and getting expression. We have said we hope to dose our patient early in 2024, our first patient, but the number of patients in a center and the number of centers interested, it can go really fast, relative to CF, I'm talking. We are primarily targeting people with this disease in the lung, as opposed to the- Different ... other companies who try to treat in the liver. We'll be looking for some expression data, I mean, safety expression data, neutrophil elastase levels. We're targeting the KOLs, at least on the phase I. Mm-hmm. Assuming a very positive readout in phase I, this is a candidate. We are looking forward to partnering with somebody else. It's a big program, it's a longer study, definitely a partnerable program for us. In CF, even though it's a big disease, our primary focus is on the null mutation, which is about 10%-15% of the patient population, and so we believe that we can kind of handle in-house and maybe partner mutations 2, 3, and 4 if somebody were interested. Mm-hmm. But A1AT is. But you're right in the comment that, and that's. I'm gonna say the same comment on oncology, where we've dosed the patient already. A lot of centers signed on or very close to signing on, a lot of patients interested between the two types of solid tumors and the lung cancer we're going after. So it's very difficult for me to sit here and say which one of the three is gonna read out first. But they all point to a very exciting clinical year in 2024. Mm-hmm. I mean, launch, of course, will be the primary focus. But as launch continues, we have a rich clinical 2024 at Krystal. Mm-hmm. Remind us of the, the phase I trial design for the 408, the A1AT. It is also it's very similar to 407, to the best of what I can recall. It's a dose-ascending study, looking for safety in the low dose, Some symptoms of safety. Higher in the upper doses. Okay, any number on the cohorts that you've disclosed? I don't think 407, again, remind me what the disclosure was on how many dose cohorts there are in the 407 as well as the 408 studies. 3 in the 407, 3 in the 408 cohorts. Okay. Okay, sounds good. Pivoting once again to your, recent, recently disclosed, I mean, you were just talking about the, the oncology side, the 717, I believe it's, where it's going. What is—what was sort of the genesis of this program, given that you have exposure in, DEB? How did this program come about, and what is sort of the mechanism of action that you're pursuing? Oncology came about because of a desire, or IO, because of a desire to treat DEB patients comprehensively. A lot of DEB patients suffer from squamous cell carcinoma, and the whole point, we call it solid tumors, a bit broader, but primarily, we're going after SCC of the skin. But typically in a phase one, you try different types, and so we're looking at Gorlin syndrome, another great example of an indication that's rare, unmet medical need. So in phase I, we're injecting a kind of like a broad variety of tumors to see if it's gonna work or not, or it's safe or not. The unique idea, there are a couple of unique ideas in our oncology program. One's the idea of combining IL-2 and IL-12, two cytokines into the backbone. At a very high level, one of them promotes the expression of T cells, and the other one ensures that they don't end up as T regs, or the, or the other way of saying it, they become functional T cells. That's a unique combination idea. They both, especially IL-2 has a short half-life, so the second idea in the immuno-oncology program is that it's a local administration. So we are trying to avoid... Traditionally, cytokines have been, they've had huge systemic issues of, toxicity. We avoid that by the dose and it being a local administration in a tumor environment. And third, that because we transfect the cell, a continuous expression of small amounts of cytokines. Three differentiating are, one, the combination itself, two, that it's local, three, that it is a continuous expression of a cytokine that traditionally has a very short half-life and has to be constantly repeat dosed to get any effect at all. Mm-hmm. So that's in the skin. That's one tissue we know about. The other tissue we know about is the lung. So just a natural extension, the IND just required minor modifications to go to the lung. And so one thought we have in big lung indications is, look, let's see if we can go after the same idea, nebulize, delivering cytokines to the lung. And lung is an area where we know it's big, definitely another partnerable story in the Krystal. We may not think about doing it on our own. For the most part, we believe monotherapy should help address some of the challenges we're going after, and presently not contemplating like a PD-1 combo in our oncology story. Mm-hmm. Okay, I know we're almost out of time, so how about we touch on your financial position, your cash and cash runway? It's good. We have about, I think we announced at Q3, $598 million or so in the balance sheet. Our burn per Q is not that high, so it's in a really good place financially, like, we're in a really good place financially, supplemented by Vyjuvek product revenues, which was really good for last quarter as we got patients in. So we don't really see an immediate or a medium reason to having to access the financial markets. Without trying to put a finer point on, like, exactly how long, it's at least one year, most likely two, maybe even longer. So from a cash position, I think we're in a good place. Okay. Well, with that, I guess, we can wrap it up. So, Krish, thank you very much. Oh, thanks for having me.