We're going to go ahead and get started. Thank you very much for joining us for the Krystal Biotech fireside chat here at the 45th Annual TD Cowen Healthcare Conference. I'm covering analyst Ritu Baral. And with us from Krystal, we have CEO Krish Krishnan. Krish, thank you for joining us today. Thanks for having me. Let's start with VYJUVEK. Late last week, you guys got the positive CHMP opinion. Krystal previously guided to a second-half EU launch in Germany, followed by France. What should we expect from an investor perspective about the initial EU launch as far as pricing and pace of prescriptions? Yeah, we were pretty pleased with the label we got from the EMA. We expect there are about 1,000 diagnosed patients between Germany and France that are in registries and ready to go. The label was incrementally positive to an already good U.S. label with respect to being able to dose from birth, giving the patient the optionality at home to be dosed by a caregiver or by themselves. So it's definitely an incrementally better label, which is remarkably good for the patients in the long term. That said, the one thing we have to be careful about with respect to the EU launch is the first visit has to be by a HCP, by a patient in a healthcare setting. So to start, you have to go to a doctor's office to initiate treatment. That, depending on the country we're talking about, whether it's France or Germany, could take a certain amount of time to get an appointment and go to a physician. Do you know what the capacity of the clinics in Germany and France are? Like how many and how many sort of clinic day visits there are? Not completely, but I do know France is, in general, much more, it's a much more concentrated patient base than the U.S., which means a majority of patients are tied to a Center of Excellence, and one area we are trying, since we got the opinion we have started to work on, is to try and figure out what these Centers of Excellence do in France, and if there's anything we could help between now and then, for example, you know how they have EB clinics in the U.S., maybe simulate or create such opportunities for the Center of Excellence to bring in a bunch of patients, get them all trained at the same time, as opposed to one at a time. Oh, right, because they can dose themselves. So you have to have kids they train. Yeah. And Germany is less concentrated than France is, but more than the U.S. And again, on the COEs, we're trying to think about ways to help patients get on drug faster than the normal process would allow. What about pricing? Look, so pricing, there are two aspects to pricing in our opinion. One is the accrual. We're going to be very conservative in the way we accrue for the eventual price. But I want people to understand what we accrue doesn't point to where we think we're going to end up. We're hoping to end up at a higher price than what we are accruing for when we accrue, and you know. So you're going to accrue at an aggressive discount, which would be the worst-case scenario. Correct. Okay, and that's what, 40%, 50%? What's a good proxy in the orphan drug space for how you think Europe will approach VYJUVEK? There have been enzyme replacements in the past that have gotten up to 60%-70% of the U.S. price. It does vary by country. And there are also macroeconomic factors that contribute, budgets and change of governments. But we do believe VYJUVEK has a very strong value proposition in Europe. It is a loud disease. It is a highly. What do you mean by loud disease? That the patient is vocal. Everyone can see it. Like you don't have to, it doesn't take much to help people understand how debilitating the disease is. And it's an ultra-rare disease. So there are a lot of things going for it. And if you look at our pivotal trial, it was a double-blinded separation from placebo, has been great. The patient experience to date in the U.S. has been great. So we do believe we have a strong dossier to present to the HTA or the agency. All of the things that you mentioned, you know the fact that it's a loud disease and a motivated patient population, are those things, I can't believe I have to ask this, but are those things even considered as part of the health technology assessment in Europe? Does it matter to the pricing authorities? I believe they're important and relevant. At the end of the day, you're making a case of benefit. But on what endpoint? I'm trying to figure out. It's almost hard to figure out what matters to them. I mean, at the end of the day, they want to save money. But the different proxies and different diseases that in that analysis equates to saving money can be varied. So I'm just wondering, like for EB, what is it? Yeah, and I think, look, it's ultra-rare. If you tally up all the patients in a particular country times the price of the drug, it doesn't blow the budget, relatively speaking, compared to some of the bigger indications. No, but you make a good point. Like we actually believe we have enough to make. If you connect all the dots, we have a strong case to make, and we'll see how it turns out. You already have insight into the levers in the health technology assessments right now, correct? Yeah, we have a pretty good understanding of how it works and how we have to get prepared for negotiations. Got it. And so with that in mind, what is the investment in commercial infrastructure going to look like and the timing of the investment? Roughly about 10 employees per country. We also have a HQ, a headquarters in Switzerland. Zug, right, you said? Zug, where some areas like medical affairs and pricing are centralized, even though there could be some decentralization, so about 10 per country, so the investment would be 10 in France, 10 in Germany, and we are close to six or seven already who are employed, so we have one or two more reps to fill out the gaps, and we'll be ready for the launch in the second half. How is Japan progressing, the timelines? Can you walk us through that? We're in the middle of going back and forth with the PMDA as we speak. We have an inspection scheduled in the upcoming weeks from the Japanese authorities. You've been going back and forth on the application? On the application. The application is in, so you're in the Q&A portion. I'm in the Q&A. Got it. So what is the go-to market strategy for Japan? How should we think about commercial investment? About 350-500 patients, a total Japanese employment size of 15 or so. How many Centers of Excellence are there in Japan? It must be small. It's less than 10, but I can't recall the exact. Are there any other countries or regions where we should expect regulatory submissions near term that would be meaningful? Yeah, we're looking to submit in the U.K. in the middle of this year. You now have to have EC approval because you said EC approval makes it easy. Relatively easy. They have a lot of patients DEB. I've heard pricing can be more challenging in the U.K. so we have to go through that process and Japan by the end of the year. Along the way, we are thinking about establishing distributor relationships in areas like one or two of these, like in MENA. MENA is in the Middle East or Israel. Like we're working through a few conversations with distributors for some of the other countries. With other rare diseases, the Japanese prices come between Europe and U.S. Is that a fair statement? Yeah. Okay. And then there are definitely some therapies that have walked from the U.K. because pricing was not reasonable. Pricing could not be set. Given the disease and the unmet need, is this something within the realm of possibility? And isn't there pressure on you to make the drug available as well? Or is there re-importation or something like that? Purely from the foundational reasons, our objective is to get VYJUVEK to as many patients in as many countries as possible. With that, we're hopeful that we're able to convince these pricing authorities in different countries on the value that VYJUVEK brings. So I hope we don't get to one of those situations where we have to walk away from a country on some. But would you? I'm inclined not to at the moment, but it'll be a bigger conversation with my board and the other management team. It's not a sole decision. So on the Q4 earnings, you mentioned that over 65% of total prescribers are new prescribers. What are you seeing the largest barrier to new community dermatologists prescribing and dosing VYJUVEK? Is it still that sort of scheduling of the outpatient nurse, or is there some other aspect? No, what happens out in the community is a general lack of knowledge of DEB among a lot of derms and ped derms. So patient education is a very important aspect of community physicians, not just in the nature of the disease, but in all the experiences in the types of bandages to use, how frequent should they be looking at, which wounds to start treatment, expectations in terms of wound healing, chronic versus recurring. There's a place to start. And obviously, with respect to gene therapy and gene delivery and repeat administration, a lot of patients have either not worried about or don't have that genetic information or have lost it or have access. And we got to find a way to make sure they're genetically tested for DEB prior to putting them on VYJUVEK. You're still running that free genetic screening? We're not. We have a partner. Okay. When was that? But it's a hands-off type relation. When was that moved? When was that moved out of handout? I think you heard. It was always that way. Oh, Krystal Connect was always. No, no, no, no. Krystal Connect is not the genetic testing. Oh, Decode. Decode. Decode DEB. Somebody else always ran Decode DEB. Is that what you're saying? Okay, got it. And that provides free genetic testing, correct? We help pay for the genetic testing. Got it. That said, the relationship is hands-off. It's very arm's length. Okay. At Q4 earnings, you indicated conversion times for NRx to first treatment are now generally within 45-60 days. How does Krystal Connect help patients remain on drug and easily return after drug holidays to schedule home administration? Yeah, so Krystal Connect is basically a patient support team. It's different than commercial. Commercial is primarily sales and marketing. Krystal Connect is a place where we help with reimbursement, educate families on what's been working, like key learning lessons. The patient liaison, they stay close to the patient. One of the things about VYJUVEK is it's a, in some ways, we're going to be connected with the patients for a very long time. So it's important that we work very hard to ensure the patient experience on the drug is very positive. And to that extent, the liaisons are very close to the patient. If the wounds are healed and they want to pause, we keep in touch. And they are educated that when they see a new blister or an existing wound opens up, that it's important they get back on drug. What's more important is type VII collagen. Like, absence of type VII collagen has all kinds of negative issues from anemia to weight loss to osteoporosis to inflammation. So it's important that all wounds, all parts of your body have type VII collagen. So those kind of reinforcements keep them on drug and stay on drug. When a patient goes on a drug holiday and they want to return, is there, I mean, is it as simple as calling their physician's office and saying, "I want to start back up again," or is there some gating factor to finding another nurse and finding another schedule? Is it harder to do a restart after a holiday than maintenance? No, not really. Okay. It depends on the length of the pause, and this is hypothetical. If you've been gone for more than six months, then your prescriptions probably expired. Like, then it's a different circumstance, but for the majority of the patients, taking a pause for a week or two weeks and getting back on drug is pretty easy and pretty smooth. On Q4 earnings, you also mentioned that compliance has been very good. Again, going to this concept of drug holidays, how frequent are patients going on drug holidays, and how does that differ from missed doses? Holidays. Look, Q2, we see some summer vacations. In Q3, we see a little bit of, you know, a lot of them. The families have other kids who start school, and they plan a few, a couple of days before in Q4 holidays. So holiday breaks are very predictable year-over-year. It kind of happens. As you get more patients, there are going to be more patients who take breaks. But as a percentage, I think that is pretty consistent year-over-year. The other aspect is the wounds are healed, which is a very positive outcome for us. Sure. We actually appreciate the patients taking a pause, getting away from nurse fatigue because you are scheduling a nurse week after week, over week, over week, it gets to you. So they take a breather, and they are fully aware that when they see a, and they actually enjoy life a bit more than they ever did before, which is great to see. And then we're pretty close to them to get back on drug. That is a little less predictable in terms of, you know, a good guiding principle is the half-life of type VII collagen. Like on average, wounds are healed for about 90 days. Now they all heal at different times and different locations. But it's kind of a guiding principle that they're back within 90 days. On Q4 earnings, you mentioned that your phase III IOLITE, this is ocular. Yeah. IOLITE trial will start in the first half with data a year later. Can you review for us the proposed design of IOLITE? I will at a high level. But when we dose our first patient, we'll be granular with respect to trial design and statistical analysis. A certain percentage of RDEB and DDEB population have lesions in the eye. What percent? 50% of the RDEB and maybe 10%-15% of DDEB. And you can think of them as very similar to lesions in the skin. Some are recurring, some are chronic, some stay for a long time, some come and go. You know, they heal and they come back. And we had earlier in the life of VYJUVEK, we treated one patient who had very strong lesions in the eye. And within a certain amount of time, I believe three months, we kind of restored vision for this kid. And that kid has been really without lesions for a long period of time. It was a great outcome. The concept of this trial in terms of trial design is to have a natural history study of 50 patients, look at how many lesions they have, what is the frequency of the lesions, the duration of the lesion, kind of establish a baseline. The whole point of the clinical trial is to show that if you potentially used VYJUVEK, you have reduced the severity and the frequency and the occurrence of lesions. That's at a high level. Whether we pick one or more of this as a primary endpoint and which one as a secondary, we'll talk about that later. What does good data look like with the top line? What are the most important efficacy measures in IOLITE? We were talking about this a little last night. Like was this visual acuity? But this is B-VEC for the eye. Yes. Is it visual acuity or? No, we're not looking at visual acuity as an endpoint. We're thinking about it as reducing the number or the frequency of lesions in these patients. So you're still seeing it or arguing that this is a collagen disease, just manifesting in the eye, therefore visual acuity? Correct. Look, there is a just similar to B-VEC, there's a range of severity in lesions in the eye. Some are really severe. Like you saw that patient, that one patient who was blind and reduced her vision. Some of them have lesions that happen maybe once or twice a month and last for a few days and go away. Some have lesions that have been persistent for a longer period. And so what we're trying to do is to find a way to keep the lesions healed, if you can call it that, for a longer period. How are you thinking about pricing? Because I struggle with potentially bundling it and giving a certain price or a separate, because you said, I think 50% of patients have ocular manifestations. This drug, when approved, we're looking to. We'll have a new NDC number, its own label. So we're not looking at it as any kind of bundle or an extension of B-VEC, but as a separate drug for a separate indication. We do a lot about pricing. It's a bit premature to talk about pricing, and we should probably wait till the pivotal data comes out before we think about it. KB407 and cystic fibrosis, is next CF data still on track for mid-year later this year? And what should we expect from the first cohort of phase III? Yeah, it's on track for data reporting. Cohort three is about six patients who are all bronched. We're hoping to have three on modulator and three with the null mutation. Three and three. Okay. Three and three is what we're shooting for. Predominantly molecular data is what one should expect. Molecular data involves extent of transduction in the airways, bronch data, very similar to the Alpha-1 data that you saw. You know, if you remember those images, being able to see good expansion across. And especially if we see that on null patients, it would give us a lot of confidence to move forward into a redosing type regimen. Right. Gotcha. Moving on to 707 in oncology. What next oncology data is on track for ASCO, and what's going to be included? We are, I mean, I think we announced early data in NSCLC towards the end of last year in about 11 patients. And if my recollection is right, in a monotherapy, ORR across all the different tumors was about 30%. It was a bit higher when talking about patients in the lung. Some of the scans were confirmed, some were not confirmed. Some of the data, by the time we go to ASCO, would be more mature. So you should expect data to be incrementally built on the data we showed at the end of last year for the ASCO presentation on the monotherapy. But presently, with respect to NSCLC, there are also a handful of patients who are on the combo therapy. For a delivery mechanism that is quite unique in lung cancer, which is, it's a nebulizer delivering a certain amount of cytokines locally to the tumor environment. It's a very innovative type delivery mechanism, pretty simple, at least to imagine in concept. The fact that the monotherapy read was directionally positive, because a lot of companies quickly go into combo, we were really encouraged by what we saw in the mono data. Got it. All right. Well, for some reason, that just shut down. Sorry about that. We haven't touched AATD yet. Yeah, you want me to talk about it? Yeah. Can you talk about AATD while I pull up my AATD questions? Sorry. Yeah. When is our next update? We're going to get. The second half of this year, so just to go back to what we showed last year, we had two patients on which we tried to show lavage and bronch data. I think a couple of things were pretty interesting with respect to AATD. It's okay. Within two days after dosing, we saw about a 50% reduction in neutrophil elastase levels, which is the best predictor of. Levels or activity? Any activity, which is the best predictor of whether a drug is working or not. Yep. The other proxy, there is a general expectation that if you had Alpha-1 levels of one micromolar in the lung, there's a high. One micromolar in the lung. One micromolar, yeah. Yeah. Or so in the lung. It's about 10% of the systemic levels. It kind of points towards an efficacious drug. We got to 0.75, but we are unique in that we're a redosing paradigm, and we actually believe we can, if we safely redose, we could build on the levels in the lung over time. That said, what we plan to show in the second half of the early second half of this year is a few more patients with respect to the same cohort to prove out the thesis a bit more concretely. And we're also looking to enroll one or two patients in a higher cohort to see if from a baseline perspective, we could start maybe not at 0.75 micromolar, but at one micromolar and build on that. That's less of a conceptually. We're just trying to see if a higher dose, assuming it's safe, starts at a higher micromolar level, and if we establish that, our objective is to quickly transition the patients into a redosing paradigm to get some. Monthly. You're assuming monthly dosing. Biweekly, monthly, something in that range. Okay. And how are your talks with FDA around what the approval path looks like, especially a serum biomarker for approval? We have not had any serious conversations with the FDA besides knowing that they are very open to thinking about an Alpha-1 approval using biomarkers. And with respect to biomarker approval, one way of demonstrating is to show Alpha-1 levels in the lung, reduction of neutrophil elastase activity. That's one path. So you. In the lung. But that would still require bronch, correct? Correct. That's a great. That's terrible. So the problem is bronch lavage is very burdensome on the patient. But one interesting thing we noticed, which created some Wall Street confusion when we announced Alpha-1 data, is we saw Alpha-1 seeping from the lung into systemic circulation through the interstitial. So we saw systemic levels of Alpha-1 go up incrementally. If we're able to show correlation between the lung levels and the seeping incremental levels and are able to make a case to the agency. Right. Then we can avoid patients being tortured with lavage or bronch. Is this something that you have talked to the Alpha-1 Foundation about as advocacy? Not yet. We would like to show that we do have a correlation between lung and systemic before we embark, but that's initial thinking. Great. Well, we're at time. Krish, thank you very much. This was very helpful. Thanks for having me. Yeah. Thanks, everyone, for coming.