All right. Good afternoon, and thank you for joining us on the inaugural Guggenheim Healthcare Innovations Conference. Sorry. I'm Debjit, and one of the therapeutic analysts here. Joining me today is Krish Krishnan, Chairman and CEO of Krystal Biotech. Thank you for your time, Krish. Thanks for having me. It's been sort of an eventful two years for you guys since the approval, you know, phase III data approval. Now we can finally focus on the pipeline beyond VYJUVEK. That's great. Yeah, we're pretty stoked about the launch today and the opportunities globally to get the drug to patients. And so, yeah, we're keen on talking about the pipeline. So why don't we start with the Alpha-1 antitrypsin side? You should have some, at least the data from the first two cohorts back end of this year. How are you sort of setting expectations? And And within your framework, what would be a good outcome? Yeah, sure. So the first thing, so you're right. We're going to be announcing data from cohorts one and two of the Alpha-1 antitrypsin program. We were fortunate that we were able to bronch the patients in cohort two, which is a big added benefit because this gives us the optionality to look at the data and make an informed decision of whether we need to progress into cohort three or just go directly into redosing of the patients in cohort two. But that said, in terms of expectations, the first most important thing for us is it answers the question, are we able to safely and reliably deliver to the lung? You know, we started in the skin, and so from a platform perspective, being able to redose in the lung safely is a big opening step for us. The second thing, because it's an early phase I study, is about the safety of the patients. Are the doses right? What kind of adverse events? Are Are they minimal, so safety is an important question, and the third is about the early read into what levels of alpha-1 antitrypsin are we going to see in the lung? It's about three patients in cohort two, but it will inform us, are we at the right micromolar levels of alpha-1 antitrypsin in cohort two, or do we need to progress into cohort three, bearing in mind that we are a redosable platform, and so one of the unique attributes of our platform is to build upon efficacy with redosing over time. Got it. So the original plan of the study, was it a standard three plus three design? If you're going to just have three patients in the cohort two, isn't it safe to assume that the safety looks clean? You didn't really have a DLT, so you don't really need to get to the next three patients? We are in the middle of cohort two at the moment. But it is fair to assume that to date, the safety has been great and we're able to progress forward pretty nicely. But having a window into bronch data just informs one better of the need to go into the next cohort. That's the only point I was trying to make. What made the company change the protocol to have bronchoscopy for cohort two? That the site was willing to bronch in cohort two. The site was able to get patients to allow to be bronched, which is, you know, it's not an easy procedure, and so when those two things aligned, we were super happy to amend the protocol to get bronch in cohort two. The original idea was to just bronch in three. Got it. These patients, are they still on, or were they on background replacement therapy? Some and some not. Yeah, some in augmentation, some not in augmentation. We'll provide the details when we announce the data. So given a handful of patients with, you know, some variability associated with replacement, how are you setting sort of the thresholds for what would make you excited and not have to go to cohort three? Or so what if you go to cohort three? Yeah, look, it's been written up and established that trough levels of 11 micromolar in the serum, the trough level, is considered a good enough level in terms of serum levels. And there are publications that say one should expect a 5%-10% comparable levels in the lung. So that puts us somewhere between 0.5 and 1 micromolar at a base case level. Our expectation is if we will look at the alpha-1 antitrypsin data comprehensively, we'll look obviously at current levels. We'll look at extent of neutrophil elastase binding, maybe some downstream proteolytic activity. So our decision to move forward with cohort three or just go into redosing will be more comprehensive than simply levels. But if we get a level that's between 0.5 and one, somewhere in that range, given our ability to redose, and assuming all the other parameters are in line, safety, extent of binding, if everything else matches up, levels between 0.5 and one, potentially closer to one, will give us a lot of confidence not to go into cohort three, but redose. But there is also a school of thought at Krystal that we try and do both. Like while we're redosing cohort two, it may be also worthwhile to explore cohort three to the extent, maybe not all three patients, one or two patients, to see is it that much of a difference or are we good with the cohort two data? So lots of decisions to be made once we announce the data. Got it. And you're going to specifically look for the neutrophil elastase binding assays. So you're comfortable that the protein being expressed as functional? Correct. That would be the idea. Got it. I will say some of the issues with functionality have stemmed from people, not exactly in alpha-1, but in other areas, trimming large genes into a mini gene. There's always a question debate between extent of transfection and functionality. What we do, whether it's a CF program or alpha-1, we encode two full copies of the full gene into the backbone. Our expectation is usually when we see high levels of transfection translation, we believe the protein, the chance of the protein being functional are extremely high. Got it. Has the company had any discussions with the agency or with the FDA on what next steps could look like? Not yet. What we plan to do, the agency wants you to identify a dose before they let you redose a patient. So that's step one. Once we're able to redose a patient and collect all the biomarker data, then the company can start thinking about what package to go negotiate an accelerated approval with the agency. That is a 2025 event, maybe in the second half of 2025, not sooner. Got it. And once you sort of establish proof of concept with alpha-1 antitrypsin, how much does it de-risk your CF program? I believe it points in the right direction, not just for the CF program, but also for the immuno-oncology lung program. It points in the right direction. You know, the CF lung is always talked about as the most difficult lung to penetrate, given all the mucus barrier. But being able to deliver to the lung in the AAT program definitely gives us a lot of confidence, not just CF, but there are other indications in the lung that Krystal could potentially go after in the future. So yeah, I think it's a directionally, cautiously optimistic window into the pulmonary franchise at Krystal. So this is a nebulizer, right, that you're using. How easy is it to manufacture? And from a redosing perspective, at least on your preclinical data, how often do you think you need to redose? Obviously, it'll depend upon diseases, but in alpha-1 antitrypsin, for example. Right. I'll start at the end. Look, our timing of redosing, just purely speaking, depends on two things: the cell that the vector transfects and the half-life of the protein that is secreted. If you look at B-VEC, VYJUVEK, the cells turn over pretty fast, but the protein has a half-life of 30 days. So redosing in VYJUVEK was every 90 days. I mean, at least scientifically. Varies by type of wound and how active the patient is and all that, but in general. If you look at alpha-1 antitrypsin, the half-life of A1AT is pretty small. However, the cells in the lung, as we saw in the NHP study we did in CF, we saw expression out to end of a month, right, out to 28 days, 29 days. If it's the same type of cells we're transfecting, our assumption would be that maybe, and we won't know the answer till we redose and actually have the data, but hypothesis would be we could easily contemplate once a month dosing in A1AT, if not further delay, if not longer. The entire package is designed for at-home dosing? You don't have to get patients to healthcare provider, et cetera? Look, we got that in VYJUVEK. We're not at the point of discussing home dosing on the pulmonary programs yet, but it would be something we would definitely pursue at the right time. For example, the registrational trial we're doing for VYJUVEK in the eye, we're dosing at home. The clinical trial is being conducted in a patient's home as opposed to in a center of excellence, right? So we are making inroads with the agency in terms of taking the VYJUVEK home dosing forward into pipeline, and at the right time, we will definitely work with the agency to see if it can be a nebulizer in a home setting. Got it. Just quickly on the oncology program, I know we don't talk about this very often, but where are you with the dose escalation protocol? And are you still on track to put out some biomarker data by year end? Yes, we are on track to put out some biomarker data by year end, both in the lung and in the skin. We are in the expansion cohort at the present moment. But in terms of data readout, look, oncology is, we're a bit early with respect to oncology studies to be definitive about the efficacy part of the data announcement. Given we're using IL-2, safety will be an important aspect of the readout because traditionally high levels of IL-2 in systemic circulation have caused all kinds of adverse events. Our ability to show meaningful levels of IL-2 in a local environment and minimal levels in systemic circulation will be a positive in terms of, hey, it can be safely administered. We did start off with the broad types of tumors we were targeting. And one of the reasons to go into the expansion cohort is we're able to narrow that down to some extent in terms of where do you think you potentially could have benefit. What we do not know is if we will have sufficient number of patient data to be convincing that these shortlisted bunch of tumors are the right indications for us at the moment. But it will definitely point, it'll definitely provide a signal into what types of tumors we're going after, both in the lung and the skin. Got it. So since you're in the expansion cohort, you have identified a dose, go forward dose. Is that right? In both cases. Got it. And you've also narrowed down the tumor types that you're going after. Correct. So, what those two decisions? What were they based on? In certain types of tumors, we saw meaning, I'm going to be careful on the word meaningful because there have been so many examples of different companies with different ORRs that have either done well or not done well, but we saw enough of a signal to warrant enrolling more patients with a particular type of tumor than what we were doing was just a shotgun approach to anybody in late stage gets into the Krystal program, so one was based on certain preliminary signals we saw with respect to safety and efficacy, and I'll leave it at that without going further because the sample size is too small for me to say something definitive about. So how are you thinking of putting this data out? And would you have the initial response rate data as well with the biomarker or are you just going to purely focus on biomarker? On the oncology side, we're still discussing and debating with the KOLs on what constitutes on the efficacy side. So we don't know at the moment what exactly we're going to announce in the oncology program on the efficacy side, but definitely safety, some immune profiling data, which are very relevant to cytokine delivery. Got it. So let's move to VYJUVEK. I believe the goal, at least internally, was to get to roughly 720-ish patients on reimbursed therapy by the middle of 2025. Two years since launch. August, I mean, I'm counting August when the drug went into the channels. Yes. So you're roughly at about 460-ish right now? Yeah. So that would mean 200 plus new patients between now and middle of next year. That would be correct, yeah. Where do you think these patients are currently housed? Look, the thing to remember is there are patients at centers of excellence. There are patients continuing or at least hitting claims data on 81.2 in the community. And then there are a handful of patients who are out of the system for DEB. So DEB patients out of the system, not as in not getting any type of treatment, but dealing with comorbidity or other types of blood transfusion, other types of issues, not primarily the wounds, because until recently there was no medication for DEB wound treatment. So they are out there and it takes a certain amount of effort, which we've started to go outside of the DEB claims data. We still have work to do on the DEB claims data, but it also takes more work to go outside of that and find these patients and get them on VYJUVEK now that there's a medication for them. And so where are they housed at? They're pretty much everywhere. You feel you have enough of a visibility that you can literally add all of these 200 plus patients? Yeah, we're doing a lot of phenotypic matching. We now know a lot about what other comorbidities patients have. So we're looking at different claims codes besides DEB, which is why we feel really good about getting to that 60% market share number, 60% of the identified number two times. Like we're on a good pace and a good track in the U.S. towards achieving that goal. Do you think these patients are not being captured currently or on a regular basis because they have a milder phenotype? And if so, what do you think the utilization is going to look like? I wouldn't say milder. Some could be definitely skewed towards older in some cases who have been in the system, maybe been at a COE, maybe at a community, and they've kind of given up with no medication, found a way to live with their wounds while dealing with other issues. So I wouldn't skew them towards mild versus severe. I definitely have a skew towards young versus old. In terms of utilization, look, at 80%, in the mid-80s, some percentage that we announced with respect to compliance were well ahead of the 50% compliance we projected at the time of launch, 18 months post-launch. We're well ahead of that. Some of that has to do with a lot of our patients are pretty severe, 75% are our DEB patients. They're pretty severe. But long term, when the number of our DEB patients and the number of DEB patients are on a 50/50 split, one should expect compliance to get to 50%. It hasn't happened yet, but slowly but surely over time, we believe we'll get there. But by and large, I will say that patient experience on the drug has been fantastic. The physician experience has been good. People love the convenience of being dosed at home. The OLE patients who have been on the drug for over two years are starting to do more than they ever did in their lives. So overall, as a company, we're very pleased about how we've handled this high-touch launch, which is not easy. You think about a topical gel in a derm space where no one's ever heard of gene therapy being dosed in a patient's home every week, and in some cases by the caregiver. So it's a pretty high-touch launch. And I think Krystal has done a great job of managing expectations and making sure that the patients are in a good place and the physicians are also educated about VYJUVEK. And we also need a lot of these patients to get on the eye drop formulation at some point in the future. So I think it's being set up pretty nicely at the moment. So let's talk about the eye drop formulation. But before we get to that, just want to clear up one thing. I know you don't want to put specific numbers for guidance for the fourth quarter, but there is the concern that it might be a sequentially down quarter simply because patients are hitting their ceiling. Obviously, that may or may not be correct because the way you've accounted for how you bill is different. Maybe just spell that out in a minute. Yeah, it's definitely not correct. If we've done our accrual right, you'll barely see anything with respect to net revenue. That's the whole objective of accruing, is to make sure there's no noise, there's no sudden dip, there's no sudden increase with respect to net revenue. And I truly believe we've done a very nice job of accruing to date, given it was our first year of launch. And it can only get better over time. So we do not expect that to have any impact on Q4. The only thing I'd always tell people to be cautious about Q4 is that life gets in the way. There's a week of Thanksgiving and a week of Christmas. And if you account for that in your model, we will not be that far apart, right? And that's just a cautionary comment. It is from someone who went through a bunch of questions Q1 earlier this year from last Q4. People forget that patients do not want to get dosed. Sometimes they may choose not to over Thanksgiving with family being there or over Christmas, but outside of that, it should be like any other quarter that we've gone through. It's going pretty well. In terms of the prevalence, ocular manifestations, what would you put that number at? I would say at least 50% of the recessive patients. In the natural history study we're doing, we are seeing 10%-15% of dominant patients raising their hand to be part of the natural history study, if not the clinical study, so I think a conservative estimate would be half the severe population would be a starting point, and then maybe a little bit up from there. Got it. And as far as the European prep for the European launch, first CHMP opinion coming shortly, I believe. By the end of the year. Any showstoppers to date since you've probably gone through day 120, day 180? Not yet. How are you prepping for that launch? We have a team in Germany being hired. We have a core team and we continue to hire the few remaining employees getting ready for the launch. We've done a good job of educating the KOLs in Germany. There's a lot of awareness of the drug. Some point in Q2 is the timing for launch in Germany. Meanwhile, in France, as we announced at Q3, we have the AP1 program that's going to start in Q4. So we hope to start getting patients in France on drug, if not late this year, early next year. So that'll be good. In addition, we're starting to work with distributors on countries. And then Japan is on track for, we filed the JNDA, is on track for an approval in the middle of next year. So overall, I think global launch of VYJUVEK is going well. Awesome. Unfortunately, we are right on time. Thank you so much for your presence today. No, thanks for having me. Debjit. Debjit.