TGM1

• VYJUVEK™ approved in the U.S. as the first and only topical redosable gene therapy for the treatment of dystrophic epidermolysis bullosa • 121 Patient Start Forms in the first six weeks of launch • First cystic fibrosis patient dosed in Phase 1 Clinical Trial of KB407 • IND for KB707, Krystal’s first oncology candidate for solid tumors, accepted by FDA and granted Fast Track Designation • Strong balance sheet, closing the quarter with $505.9 million in cash, cash equivalents and investments PITTSBURGH, Aug. 07, 2023 (GLOBE NEWSWIRE) -- Krystal Biotech, Inc. (the “Company”) (NASDAQ: KRYS), a commercial-stage biotechnology company focused on the discovery, development and commercialization of genetic medicines to treat diseases with high unmet medical needs, today reported financial results and key operational progress updates for the second quarter ended June 30, 2023. “2023 is off to a very strong start and we expect the momentum to continue for the rest of the year. In the first half of the year, we received FDA approval for VYJUVEK, dosed our first patient in the cystic fibrosis trial and obtained IND clearance for our first oncology candidate,” said Krish S. Krishnan, Chairman and CEO of Krystal Biotech. “I am particularly thrilled with the enthusiasm that physicians and patients are expressing for VYJUVEK in these early days of launch. With 121 Patient Start Forms in the first six weeks since approval, I am pleased with the initial pace of the launch, and we look forward to promptly initiating treatment for these patients.” VYJUVEKTM On May 19, the Company announced that VYJUVEK (beremagene geperpavec-svdt, or B-VEC) was approved by the U.S. Food & Drug Administration (FDA) for the treatment of patients six months of age or older with either recessive or dominant dystrophic epidermolysis bullosa (DEB) to be administered by a healthcare professional either in a healthcare professional setting (e.g., clinic) or a home setting.As of June 30, the Company received 121 Patient Start Forms of which 30 start forms were generated for patients with dominant dystrophic epidermolysis bullosa. The Company will continue to report on the number of Patient Start Forms submitted to the Company for the first three quarters following VYJUVEK approval and will transition to reporting on the number of Patients on Therapy beginning in the first quarter of 2024.The Company also received positive coverage determinations from several of the national health plans, including UnitedHealthcare, as well as regional plans such as BlueCross BlueShield, state Medicaid plans and other smaller regional health plans. The Company expects that additional payer policies will continue to publish that cover VYJUVEK for both recessive and dominant DEB patients.In July, the Company received a positive opinion from the European Medical Agency (EMA) on the Pediatric Investigation Plan for B-VEC for the treatment of DEB with no additional studies required. The Company plans to submit a market authorization application to the EMA in the second half of 2023 and anticipates a potential launch in the EU in the second half of 2024.In July, the Pharmaceuticals and Medical Agency in Japan accepted the open label extension study of B-VEC, and the Company intends to start an open label extension study of B-VEC in Japan in the second half of 2023 and file for approval in Japan in 2024. The Company will provide details of the open label extension study when it doses the first patient in Japan. Respiratory KB407 for the treatment of Cystic Fibrosis (CF) In July, the Company announced that the first patient had been dosed at the Cystic Fibrosis Institute of Chicago in the Company’s Phase 1 CORAL-1/U.S. study evaluating KB407, a mutation agnostic genetic medicine, delivered via a nebulizer, for the treatment of patients with CF. The Phase 1/CORAL-1 study is a multi-center, dose-escalation trial of KB407 in patients with CF, regardless of their underlying genotype. The Company anticipates announcing data from the Phase 1 study in 2024. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05504837. KB408 for the treatment of Alpha-1 Antitrypsin Deficiency (AATD) The Company intends to file an Investigational New Drug (IND) application with the FDA and initiate a Phase 1 clinical trial of KB408 for the treatment of AATD in the second half of 2023. Oncology KB707 for the treatment of solid tumors In July, the Company announced that the FDA had accepted its IND application to evaluate intratumoral KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumor malignancies. KB707 targets solid tumors that are accessible via intratumoral injection or inhalation, and we intend to advance both routes of administration into clinical studies. Details of the Phase 1 (OPAL-1) study can be found www.clinicaltrials.gov under NCT identifier NCT05970497. The Company expects to dose the first patient in the second half of 2023.The FDA also granted KB707 fast track designation to delay disease progression in the treatment of patients with anti-PD-1 relapsed/refractory locally advanced or metastatic melanoma.The Company plans to file an amendment to the existing KB707 IND in the second half of 2023 to allow the Company to evaluate inhaled (nebulized) KB707 in a clinical trial to treat tumors in a patient’s lungs. The Company expects to dose the first patient with inhaled KB707 in the first half of 2024. Dermatology KB105 for the treatment of TGM1 deficient autosomal recessive congenital ichthyosis The Company plans to initiate the Phase 2 cohort of its KB105-02 (JADE-1) trial in 2024 and is currently working with the FDA to ensure alignment on the clinical endpoints in the pivotal trial prior to initiating a Phase 2 study in pediatric patients. The Phase 2 cohort will enroll both pediatric and adult patients with TGM1 deficient autosomal recessive congenital ichthyosis for assessment of KB105 safety and efficacy. Details of the Phase 1/2 study can be found at www.clinicaltrials.gov under NCT identifier NCT04047732. KB104 for the treatment of Netherton Syndrome With an expanding pipeline portfolio, the Company now anticipates filing an IND application with the FDA and initiating a clinical trial of KB104 to treat patients with Netherton Syndrome in late 2024. Aesthetics KB301 for the treatment of aesthetic indications In April, Jeune Aesthetics, Inc., a wholly-owned subsidiary of the Company, announced the dosing of the first subject in the Phase 1, Cohort 3 study of KB301 for the improvement of lateral canthal lines at rest. The study is on-going, and the Company plans to announce results from this study in the second half of 2023. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04540900. Financial results for the quarter ended June 30, 2023: Cash, cash equivalents, and investments totaled $505.9 million on June 30, 2023.Research and development expenses for the quarter ended June 30, 2023 were $12.1 million, inclusive of $2.9 million of stock-based compensation, compared to $10.9 million, inclusive of stock-based compensation of $2.0 million for the quarter ended June 30, 2022.General and administrative expenses for the quarter ended June 30, 2023 were $25.9 million, inclusive of stock-based compensation of $8.5 million, compared to $17.9 million, inclusive of stock-based compensation of $6.2 million, for the quarter ended June 30, 2022.Net losses for the quarters ended June 30, 2023 and 2022 were $33.2 million and $28.1 million, or $(1.25) and $(1.10), respectively, per common share (basic and diluted).For additional information on the Company’s financial results for the quarter ended June 30, 2023, please refer to the Form 10-Q filed with the SEC. Financial results for the six months ended June 30, 2023: Research and development expenses for the six months ended June 30, 2023 were $24.4 million, inclusive of stock-based compensation of $5.4 million, compared to $20.2 million, inclusive of stock-based compensation of $3.4 million for the six months ended June 30, 2022.General and administrative expenses for the six months ended June 30, 2023 were $49.9 million, inclusive of stock-based compensation of $16.4 million, compared to $33.8 million, inclusive of stock-based compensation of $11.3 million for the six months ended June 30, 2022.Net losses for the six months ended June 30, 2023 and 2022 were $78.5 million and $78.1 million or $(3.00) and $(3.08), respectively, per common share (basic and diluted).For additional information on the Company’s financial results for the six months ended June 30, 2023, please refer to the Form 10-Q filed with the SEC. About VYJUVEK VYJUVEK is a non-invasive, topical, redosable gene therapy designed to deliver two copies of the COL7A1 gene when applied directly to DEB wounds. VYJUVEK was designed to treat DEB at the molecular level by providing the patient’s skin cells the template to make normal COL7 protein, thereby addressing the fundamental disease-causing mechanism. Indication VYJUVEK is a herpes-simplex virus type 1 (HSV-1) vector-based gene therapy indicated for the treatment of wounds in patients six months of age and older with dystrophic epidermolysis bullosa with mutation(s) in the collagen type VII alpha 1 chain (COL7A1) gene. IMPORTANT SAFETY INFORMATION Adverse Reactions The most common adverse drug reactions (incidence >5%) were itching, chills, redness, rash, cough, and runny nose. These are not all the possible side effects with VYJUVEK. Call your healthcare provider for medical advice about side effects. To report SUSPECTED ADVERSE REACTIONS, contact Krystal Biotech, Inc. at 1-844-557-9782 or FDA at 1-800-FDA-1088 or http://www.fda.gov/medwatch. Contraindications None. Warnings and Precautions VYJUVEK gel must be applied by a healthcare provider. After treatment, patients and caregivers should be careful not to touch treated wounds and dressings for 24 hours. Wash hands and wear protective gloves when changing wound dressings. Disinfect bandages from the first dressing change with a virucidal agent, and dispose of the disinfected bandages in a separate sealed plastic bag in household waste. Dispose of the subsequent used dressings in a sealed plastic bag in household waste. Patients should avoid touching or scratching wound sites or wound dressings. In the event of an accidental exposure flush with clean water for at least 15 minutes. For more information, see full U.S. Prescribing Information. About Fast Track Designation Fast Track Designation is designed to facilitate the development and expedite the review of drugs to treat serious conditions and treat a serious or unmet medical need, enabling drugs to reach patients sooner. Clinical programs with Fast Track designation may benefit from early and frequent communication with the FDA throughout the regulatory review process, and such clinical programs may be eligible to apply for Accelerated Approval and Priority Review if relevant criteria are met. About Krystal Biotech, Inc. Krystal Biotech, Inc. (NASDAQ: KRYS) is a commercial-stage biotechnology company focused on the discovery, development and commercialization of genetic medicines to treat diseases with high unmet medical needs. VYJUVEKTM is the Company’s first commercial product, the first-ever redosable gene therapy, and the only medicine approved by the FDA for the treatment of dystrophic epidermolysis bullosa. The Company is rapidly advancing a robust preclinical and clinical pipeline of investigational genetic medicines in respiratory, oncology, dermatology, ophthalmology, and aesthetics. Krystal Biotech is headquartered in Pittsburgh, Pennsylvania. For more information, please visit http://www.krystalbio.com, and follow @KrystalBiotech on LinkedIn and Twitter. About Jeune Aesthetics, Inc. Jeune Aesthetics, Inc., a wholly-owned subsidiary of Krystal Biotech, Inc., is a biotechnology company leveraging a clinically validated gene-delivery platform to develop products to fundamentally address – and reverse – the biology of aging and/or damaged skin. For more information, please visit http://www.jeuneinc.com. Forward-Looking Statements Any statements in this press release about future expectations, plans and prospects for Krystal Biotech, Inc. or Jeune Aesthetics, Inc., including statements about our commercial launch of VYJUVEK; our plans to report on Patient Start Forms and Patients on Therapy; our plans to submit a market authorization application to the EMA in the second half of 2023 and our anticipation of a potential launch of B-VEC in the EU in the second half of 2024; our plans for an open label extension study of B-VEC in Japan in the second half of 2023, filing for approval in Japan in 2024, and the timing of our provision of details of the open label extension study; our expectation that we will announce data from the Phase 1 study of KB407 in 2024; our intention to file an IND application with the FDA and initiate a Phase 1 clinical trial of KB408 for the treatment of AATD in the second half of 2023; our expectations regarding dosing the first patient with KB707 in the second half of 2023; our plans to file an amendment to the existing KB707 IND in the second half of 2023 to evaluate inhaled KB707 in a clinical trial in the first half 2024; our plans to initiate the Phase 2 cohort of the KB105-02 (JADE-1) trial in 2024; our plans to file an IND application and initiate a clinical trial of KB104 in late 2024; our expectation that we will announce results of the Phase 1, Cohort 3 study of KB301 for the improvement of lateral canthal lines at rest in the second half of 2023, and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “likely,” “will,” “would,” “could,” “should,” “continue,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: uncertainties associated with regulatory review of clinical trials and applications for marketing approvals, the availability or commercial potential of product candidates including VYJUVEK, the sufficiency of cash resources and need for additional financing and such other important factors as are set forth under the caption “Risk Factors” in the Company’s annual and quarterly reports on file with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company’s views as of the date of this release. The Company anticipates that subsequent events and developments will cause its views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this release. Disclosures The Company is using the Aerogen Solo® Nebulizer System and Aerogen® Ultra in its Phase 1 CORAL-1/U.S. study evaluating KB407. CONTACT:Investors and Media:Meg DodgeKrystal Biotechmdodge@krystalbio.com Consolidated Balance Sheet Data: (In thousands)June 30,2023 December 31,2022 Balance sheet data: Cash and cash equivalents$275,875 $161,900 Short-term investments 201,642 217,271 Long-term investments 28,410 4,621 Total assets 684,026 558,450 Total liabilities 30,912 36,219 Total stockholders’ equity$653,114 $522,231 Consolidated Statements of Operations: Three Months EndedJune 30, (In thousands, except shares and per share data) 2023 2022 ChangeExpenses Research and development$12,144 $10,890 $1,254 General and administrative 25,904 17,863 8,041 Total operating expenses 38,048 28,753 9,295 Loss from operations (38,048) (28,753) (9,295)Other Income Interest and other income, net 4,838 645 4,193 Net loss$(33,210) $(28,108) $(5,102) Net loss per common share: Basic and diluted$(1.25) $(1.10) Weighted-average common shares outstanding: Basic and diluted 26,656,883 25,545,167 Six Months Ended June 30, 2023 2022 Change(In thousands)(unaudited) Expenses Research and development$24,432 $20,204 $4,228 General and administrative 49,939 33,771 16,168 Litigation settlement 12,500 25,000 (12,500)Total operating expenses 86,871 78,975 7,896 Loss from operations (86,871) (78,975) (7,896)Other Income Interest and other income, net 8,364 902 7,462 Net loss$(78,507) $(78,073) $(434) Net loss per common share: Basic and diluted$(3.00) $(3.08) Weighted-average common shares outstanding: Basic and diluted 26,187,161 25,331,000

TUESDAY, Aug. 1, 2023 -- In a study of families that have multiple children with autism, researchers have unearthed new insights into genes that might drive the disorder. “Study design is critical, and not enough attention has been paid to studying families with more than one affected child,” said lead author Dr. Daniel Geschwind , a professor of human genetics, neurology and psychiatry at UCLA in Los Angeles. While past research has mostly focused on families with one child who has autism, few have examined the role of rare inherited variations or their interaction with the combined effect of multiple common genetic variations that contribute to the risk of developing autism, according to this study. At least 50% of genetic risk is predicted by common genetic variation and another 15% to 20% is due to spontaneous mutations or predictable inheritance patterns. The remaining genetic risk is yet to be determined. To study this, researchers did whole genome sequencing in more than 4,550 people from just over 1,000 families with at least two children diagnosed with autism. This group included more than 1,800 children with autism and more than 400 children without an autism diagnosis. The researchers found seven potential genes that are predicted to increase the risk of autism: PLEKHA8, PRR25, FBXL13, VPS54, SLFN5, SNCAIP and TGM1. Most of the new genes were supported by rare inherited DNA variations that were transmitted from parents to children. They also examined what is called polygenic risk, in which a combination of commonly found genetic variations can raise the likelihood of developing autism. Children who inherited rare mutations from unaffected parents in combination with polygenic risk were more likely to have autism, the study showed. The findings help explain why parents who carry a single rare mutation may not show signs of autism even if their children do, according to the study. It also supports the liability threshold model, a concept in behavioral genetics that holds there is an additive effect of genes that influences the probability that someone develops a certain trait. Children who had a language delay had a higher likelihood of inheriting a polygenic score associated with autism. There was not a similar relationship for children without language delays. This pattern was specific to autism. It was not seen in educational attainment, schizophrenia or bipolar disorder, according to the authors, who said this suggests there’s a link between the genetic risk for autism and language delay. "This association of general risk for [autism] that was strongest in those with language delay suggests that language is actually a core component of [autism]," Geschwind said. The findings were published July 28 in the Proceedings of the National Academy of Sciences. Sources University of California, Los Angeles, Health Sciences, news release, July 28, 2023 Posted August 2023

A rare skin disorder that leads to fragile skin susceptible to frequent wounds and blisters now has its first FDA-approved therapy, a topically applied gel that facilitates healing. The Krystal Biotech drug is a gene therapy, and in a first for this treatment modality, dosing can be repeated as needed. The regulatory decision announced Friday covers the treatment of dystrophic epidermolysis bullosa (DEB) in patients age 6 months or older. The approval spans both the recessive and dominant forms of the genetic disorder. Pittsburgh-based Krystal will market its new product under the brand name Vyjuvek. “Throughout Vyjuvek’s development, people were asking, can gene therapy really be redosable,” Krystal Chairman and CEO Krish Krishnan said, speaking during a Friday evening conference call. “Will Vyjuvek be able to treat not just recessive but even the dominant form of the disease? Are you limited to small wounds or can you treat larger wounds? Are you able to dose a patient at home? And I’m pleased to say the answer to all of the above questions is a resounding yes. Our dream is to treat this disease comprehensively.” DEB is an inherited disorder affecting the connective tissue in the skin and nails. It stems from mutations in COL7A1, a gene that encodes COL7, a type of collagen important in strengthening and stabilizing the outer and middle skin layers. Without enough COL7, those layers can separate, making patients susceptible to blisters and wounds. Standard treatment is palliative care for those blisters and wounds. The disease can also lead to an aggressive form of skin cancer. Vyjuvek is a gene therapy designed to address the mutation at the root of DEB. Like other gene therapies, Vyjuvek reaches its cellular destination carried aboard an engineered virus. Krystal’s therapy employs herpes-simplex virus engineered to eliminate its ability to replicate in normal cells. The virus’s genetic payload is a normal version of the COL7A1 gene, which gets skin cells to produce collagen that forms long and thin fibrils that serve as anchors to hold skin layers together. The gene therapies that first entered the market are administered as injections or infusions. Those products are one-time treatments because the immune system produces antibodies against the adeno-associated viruses that are the delivery vehicle of choice for carrying the genetic payload. Krystal’s gene therapy stands apart in that it’s formulated as a gel for topical administration. It’s also redosable. The herpes-simplex virus persists in the body and hides from the immune system, a capability that makes a gene therapy delivered with a version of this virus suitable for repeat dosing. Vyjuvek’s approval is based on two clinical trials, one of them an open-label study and the other one placebo-controlled. In the open label study, results showed durable wound closure, expression of full-length COL7 in the skin, and assembly of the anchoring fibrils. Results from this Phase 1/2 test were published last spring in Nature Medicine. In the placebo-controlled test, which enrolled 31 patients ranging from 1 to 44 years of age, the participants served as their own controls. Investigators identified two wounds of comparable size on each patient. One wound was randomly selected to be treated with the study drug while the other received a placebo. This study met its main goal of showing complete wound healing at six months. It also met a key secondary goal of showing complete wound healing at three months. The therapy was well tolerated and no drug-related serious adverse events were reported in the clinical trials. The most common adverse reactions were itching, redness, chills, rash, cough, and runny nose. Results were published last December in the New England Journal of Medicine. Vyjuvek can only be administered by a clinician, but this treatment can happen in a healthcare setting or the patient’s home. The therapy is applied as droplets placed on a patient’s wounds once a week. In a note sent to investors, William Blair analyst Tim Lugo said that approval for treating both recessive and dominant forms of DEB as well as home dosing together represent the best-case outcome for the Vyjuvek’s label. But he added that outstanding question is the market size given the rareness of DEB. Chief Commercial Officer Andy Orth said Krystal estimates that there are 9,000 DEB patients in reimbursable markets around the world, including about 3,000 in the U.S. The company has set a wholesale price of $24,250 per vial of Vyjuvek. Use of the therapy will vary depending on the severity of the disease in a patient and the surface area of the wounds. Also, use is expected to decrease over time as the therapy lowers a patient’s wound burden. But Orth said that after an initial treatment period, Krystal projects patients will reach a steady state usage of 26 vials per year, bringing the annual cost to $631,500, or $485,000 following mandatory government discounts. Other companies are pursuing treatments for DEB. Abeona Therapeutics is developing a cell therapy for the recessive form of the disorder. The company expects to submit an application seeking FDA approval later in the current quarter or early in the third quarter of this year. The approach of new biotech startup Telaria is similar to Krystal’s. Launched last year, Telaria is developing a gene therapy that employs an engineered version of the herpes simplex virus. But some DEB research efforts have fallen short. An experimental wound-healing DEB therapy that Amicus Therapeutics acquired failed its pivotal test in 2017. Vyjuvek will become available in the U.S. in July, Orth said. With the FDA approval, Krystal receives a rare pediatric disease priority review voucher. The company may apply this voucher toward another drug to speed up its regulatory review. But such vouchers have become commodities sold for prices of $100 million or more. Chief Accounting Officer Kate Romano said Krystal had a $355.5 million cash position at the end of March. She added that the company has enough capital to support the company through the end of next year. Krishnan said the company has not yet decided whether to sell the voucher. Krystal expects to begin the process of seeking European approval for its DEB gene therapy in the second half of this year. Discussions are also ongoing with regulators in Japan. Krishnan said the company believes Vyjuvek could top more than $750 million in annual sales worldwide. But the drug is just the first of what Krystal hopes is several gene therapies—all of them based on the same viral vector technology. The next most advanced program in the Krystal pipeline, KB105, delivers a genetic payload to treat TGM1-deficient autosomal recessive congenital ichthyosis, a rare skin disorder. KB105 is being readied for Phase 2 testing. The company has six additional programs in development. Krishnan said the home dosing and redosability features of Vyjuvek apply to all of them. “The approval of Vyjuvek finally validates our platform,” he said. “With safety and [chemistry, manufacturing and controls] of our platform clearly established with this approval, we believe the development risk of our pipeline products going forward is mostly limited to clinical efficacy.” Public domain photo by the CDC