Krystal Biotech, Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 2 November 2026: press release. Guidance figures: 5 lowered, 2 new, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• VYJUVEK revenue rose 30%: Global VYJUVEK net product revenue was $127.3 million, up 30% from the prior year third quarter, and $1.1 billion has been recorded since launch. Source
• Net income fell on higher tax expense: Net income was $63.1 million, or $2.05 diluted, versus $79.4 million a year earlier. Pre-tax income rose to $80.1 million; income tax expense was $17.1 million against a $31.4 million benefit. Source
• Germany and Italy pricing complete: Pricing negotiations are complete in Germany and Italy. The 2Q release had said German pricing talks would continue until at least 2H 2026. Source
• FY2026 expense range lowered: Full-year 2026 non-GAAP combined R&D and SG&A expense is now guided to $155.0 to $165.0 million, down from $175.0 to $195.0 million in the 2Q release. Source
• KB113 regression in lesions: In a three-patient pilot of KB113 in Gorlin syndrome, investigator-assessed regression was seen in more than 80% of assessed basal cell carcinoma lesions, including non-injected lesions. Source
• EMERALD-1 enrollment slower than planned: Enrollment has run behind expectations because of narrow eligibility and a placebo-controlled design in an indication with an approved therapy. Top-line results are now expected in 2027. Source
• KB707 combination shows 31% response: In KYANITE-1, inhaled KB707 with pembrolizumab showed a 31% objective response rate and 75% disease control rate in advanced NSCLC; results were presented at ASCO in May. Source
• Up to $400 million buyback authorized: The board authorized repurchases of up to $400 million of common stock, through open-market, privately negotiated, or Rule 10b5-1 plan purchases. Source

“Continued growth in VYJUVEK revenue is supporting profitability and funding the advancement of our pipeline”

Krish S. Krishnan, Chairman and Chief Executive Officer of Krystal Biotech

Guidance

What changed from last quarter

• Guidance lowered: FY2026 non-GAAP combined R&D and SG&A expense range moved from $175.0 to $195.0 million to $155.0 to $165.0 million. Source
• New: Board authorized a share repurchase program of up to $400 million of outstanding common stock, with no expiration date. Source
• Guidance lowered: KB801 EMERALD-1 enrollment target of about 60 patients moved from before year end to top-line results in 2027. Source
• Guidance lowered: KB803 IOLITE timing moved from top-line readout in 4Q 2026 to last patient visit in February 2027. Source
• Guidance lowered: KB407 interim results moved from before year end to the first half of 2027. Source
• New: Pricing negotiations completed in Germany and Italy; the 2Q release had said German talks would continue until at least 2H 2026. Source
• New: KB407 cystic fibrosis study was selected for the FDA Complex Innovative Trial Design Meeting Program in the third quarter. Source
• New: Positive clinical update on KB113 for basal cell carcinoma in Gorlin syndrome was announced in October. Source
• Ended: The 2Q release described intratumoral KB707 in the OPAL-1 study for Gorlin syndrome; the 3Q release describes KB113 for the same indication.
• New: A marketing authorization application for VYJUVEK in Australia was submitted in the third quarter. Source

Quarter results and growth

• VYJUVEK revenue rose 30%: Global VYJUVEK net product revenue was $127.3 million, up 30% from the prior year third quarter, and $1.1 billion has been recorded since launch. Source
• Net income fell on higher tax expense: Net income was $63.1 million, or $2.05 diluted, versus $79.4 million a year earlier. Pre-tax income rose to $80.1 million; income tax expense was $17.1 million against a $31.4 million benefit. Source
• Nine-month product revenue rose: Nine-month product revenue, net was $362.9 million, compared with $282.0 million in the same period of 2025. Source
• Nine-month diluted EPS of $5.66: Nine-month net income was $173.8 million, or $5.66 diluted, against $153.4 million, or $5.14 diluted, a year earlier. Source

VYJUVEK demand and reimbursement

• Over 760 US reimbursement approvals: Management said US patient demand continues to grow, with over 760 reimbursement approvals nationwide, up from over 730 cited in the 2Q release. Source
• US prescriber base keeps expanding: The company said steady growth in the US prescriber base supports continued adoption; the 2Q release reported over 640 unique prescribers. Source
• Reach widened in launch markets: The company is widening reach in Germany, France and Japan, converting physician interest and engagement into patient starts and broadening the prescriber base. Source

“Our financial strength allows us to invest fully in these programs and our global commercial expansion while returning capital to shareholders.”

Krish S. Krishnan, Chairman and Chief Executive Officer of Krystal Biotech

European pricing and launches

• Germany and Italy pricing complete: Pricing negotiations are complete in Germany and Italy. The 2Q release had said German pricing talks would continue until at least 2H 2026. Source
• Italy launch moved to early 2027: The 2Q release expected commercial launches in Italy and Spain before year end. The 3Q release gives the Italy launch as early 2027.
• Spain decision and France timing: Decisions in Spain are expected later this year, and in France no earlier than 2027. Talks continue in several other European countries and the UK. Source
• Australia filing submitted, Switzerland pending: A marketing authorization application for VYJUVEK in Australia has been submitted; a Switzerland application is expected before year end. Source

Costs and expense guidance

• Cost of goods sold rose: Cost of goods sold was $7.6 million against $4.3 million a year earlier. The company reported a 94% gross margin for the quarter. Source
• R&D spend near prior-year level: R&D expense was $14.9 million against $14.6 million a year earlier, with $2.6 million of stock-based compensation in both periods. Source
• SG&A fell year over year: SG&A was $33.7 million against $37.6 million a year earlier; stock-based compensation within SG&A was $11.3 million, up from $10.6 million. Source
• FY2026 expense range lowered: Full-year 2026 non-GAAP combined R&D and SG&A expense is now guided to $155.0 to $165.0 million, down from $175.0 to $195.0 million in the 2Q release. Source
• Stock compensation excluded from guidance: Expense guidance excludes stock-based compensation because the company cannot confidently estimate it for 2026; no GAAP reconciliation is provided. Source

“The $400 million share repurchase program, under which we expect to repurchase shares opportunistically over the next two years, reflects our confidence in Krystal’s long-term growth prospects”

Krish S. Krishnan, Chairman and Chief Executive Officer of Krystal Biotech

Dermatology and Gorlin pipeline

• KB111 HALITE-1 dosing ongoing: Dosing is ongoing in the open-label Hailey-Hailey disease study with 12 weekly doses; five patients are enrolled and interim results are expected before year end. Source
• KB111 FDA meeting in Q1 2027: The company plans to meet the FDA after scale validation to discuss study results, the HHD severity scale, and designs for a 2027 registrational start. Source
• KB113 regression in lesions: In a three-patient pilot of KB113 in Gorlin syndrome, investigator-assessed regression was seen in more than 80% of assessed basal cell carcinoma lesions, including non-injected lesions. Source
• KB113 adverse events mild or moderate: All reported adverse events were mild or moderate, transient, and resolving during the study, according to the company. Source
• KB113 FDA discussions started: The company has begun discussions with the FDA on advanced development of KB113 for basal cell carcinoma in Gorlin syndrome and will update plans after alignment. Source

Ophthalmology and respiratory pipeline

• IOLITE last visit moved to February 2027: IOLITE added three patients, including a one-year-old child, after two withdrew for reasons unrelated to safety. Last patient visit is now expected in February 2027. Source
• EMERALD-1 enrollment slower than planned: Enrollment has run behind expectations because of narrow eligibility and a placebo-controlled design in an indication with an approved therapy. Top-line results are now expected in 2027. Source
• EMERALD-1 sites activated across US: 22 sites are activated across the United States, with sites close to activation in France, Spain and the United Kingdom. Source
• KB407 interim results moved to 2027: The company expects to enroll and dose three more cystic fibrosis patients before year end, with interim results now anticipated in the first half of 2027. Source
• KB407 selected for FDA CID program: KB407 was selected in the third quarter for the FDA Complex Innovative Trial Design Meeting Program; the registrational study is on track for 2027. Source
• KB408 repeat-dose cohort enrolling: Cohort 2B of SERPENTINE-1 continues to enroll, testing repeat KB408 dosing at the level shown to deliver SERPINA1 to the lungs after one dose; interim results are expected in 2027. Source

Oncology and aesthetics programs

• KB707 combination shows 31% response: In KYANITE-1, inhaled KB707 with pembrolizumab showed a 31% objective response rate and 75% disease control rate in advanced NSCLC; results were presented at ASCO in May. Source
• KB707 chemotherapy cohort enrolling: The final expansion cohort, combining inhaled KB707 with chemotherapy, is enrolling, with sites activated in France and Spain; about 70 patients are expected to be dosed by mid-2027. Source
• KB304 Phase 2 planned for 2027: Jeune Aesthetics, a wholly owned subsidiary, expects to start a Phase 2 study of lead wrinkle program KB304 in 2027. Source

Capital and share repurchase

• Cash and investments $1.2 billion: Cash, cash equivalents and investments were $1.2 billion at September 30, 2026, up from $1.1 billion at June 30, 2026. Source
• Up to $400 million buyback authorized: The board authorized repurchases of up to $400 million of common stock, through open-market, privately negotiated, or Rule 10b5-1 plan purchases. Source
• Repurchase program carries no obligation: The program has no expiration date and does not obligate the company to buy any amount; it may be modified, suspended or discontinued at any time. Source

Coming up, as management said on 2 November 2026

• Italy VYJUVEK launch: Italy launch is expected in early 2027, following completed pricing negotiations. Source
• Spain pricing decision: A decision in Spain is expected later this year; France is no earlier than 2027. Source
• KB111 interim results: Interim results from the HHD study are expected before the end of the year. Source
• KB111 FDA meeting Q1 2027: FDA meeting in the first quarter of 2027 to discuss results, the scale and study designs. Source
• KB113 plan update after FDA alignment: The company will update KB113 clinical development plans after alignment with the FDA. Source
• KB803 top-line results: Last IOLITE patient visit is expected in February 2027, with top-line results shortly after. Source
• KB801 top-line results in 2027: About 60 EMERALD-1 patients are to be enrolled, with top-line results reported in 2027. Source
• KB407 interim results 2027: KB407 interim results are now anticipated in the first half of 2027. Source
• KB407 registrational start in 2027: The KB407 registrational study is on track to start in 2027, after FDA alignment on design. Source
• KYANITE-1 enrollment by mid-2027: About 70 patients are expected to be dosed at the selected combination regimen by mid-2027. Source
• KB304 Phase 2 start 2027: Jeune Aesthetics expects to start a Phase 2 study of KB304 in 2027. Source
• KB408 interim results 2027: Interim results from the AATD study are expected in 2027. Source
• Repurchases over two years: Management expects to repurchase shares opportunistically over the next two years. Source
• Switzerland filing before year end: A marketing authorization application for VYJUVEK in Switzerland is expected before year end. Source

In management's words

“Patient enrollment has progressed slower than initially anticipated, reflecting the study's narrowly defined eligibility criteria”

Krystal Biotech, Inc., press release

Figures management reported

Risks management discussed

• Operational: EMERALD-1 enrollment has run slower than planned due to narrow eligibility and a placebo-controlled design in an indication with an approved therapy. Source
• Operational: Two IOLITE patients withdrew; the company says the withdrawals were unrelated to safety and replaced them with three new enrollees. Source
• External: European pricing negotiations are ongoing in several countries, with decision timing in Spain and France still open. Source
• Financial: The timing and amount of repurchases depend on market price, business conditions, liquidity, capital requirements and other factors. Source
• Financial: Expense guidance excludes stock-based compensation, which the company cannot confidently estimate for full-year 2026. Source

Earlier plans management reported on

• Not stated: The 2Q release said launches in Spain and Italy were on track for later this year; the 3Q release gives Italy as early 2027 and a Spain decision later this year.
• Not stated: The 2Q release said IOLITE was on track for a top-line readout in 4Q 2026; the 3Q release now expects the last patient visit in February 2027.
• On track: Management states the company is presently on track to initiate the KB407 registrational study in 2027. Source
• Not stated: The 2Q release expected FDA alignment on the KB407 registrational design in 4Q 2026; the 3Q release gives no date for this step.
• Not stated: The 2Q release expected enrollment completion before year end; the 3Q release now gives top-line results in 2027.

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 results
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.