Everyone. I'm Josh Schimmer from the Cantor Biotech Equity Research Team. Very pleased to introduce from Krystal Biotech, Krish Krishnan. Krish, thanks so much for joining. Maybe give us a very quick snapshot of Krystal and maybe some of the upcoming milestones we should be looking for.
Great. Thanks for having me, Josh. So Krystal, the basic technology uses a modified viral vector to deliver genes to cells of interest. That's the essence of the technology. We got the lead product approved for dystrophic epidermolysis bullosa, May of last year. We started the launch. We're, like, about 12, 13 months into the U.S. launch. It's gone pretty well, and the expectations are, that we launch in Europe in the first half of next year and in Japan sometime towards the end of next year, beginning of 2026. Outside of the lead drug, it's supported by a pretty healthy pipeline. We have about four in clinical trials at the moment. Using the basic approach, but different tissue, different formulations.
And so with respect to upcoming readouts, we're on target to announce two clinical readouts by the end of the year. One for alpha-1 antitrypsin, and the other for immuno-oncology, one of the solid tumor. We're actually in immuno-oncology in both solid tumors and in the lung, and the readout this year is directed more towards solid tumors.
Awesome. So the VYJUVEK launch has gone quite, quite well thus far. Maybe tell us a little bit about how, you know, how you've evolved with how Crystal's evolved with the product, what you've learned along the way, and, and how you've adapted to kind of the, the dynamics of getting patients on therapy.
Great. No, yeah, the launch has gone really well by any benchmark and compared to probably any other rare disease or gene therapy or in general, it's done really well and continues to do well. The few good learnings for us have been how much convenience is important to patients with DEB. And what I mean by that is about 98%, if not higher, of our patients get dosed at home, in a home setting, which was a bit of a surprise. We thought they would start in the physician office and transition into home, and that hasn't happened. It's convenient in a home setting, so that's been kind of a big learning for us in the process.
We've also been surprised by how many people, patients in this country either do not have the genetic information on hand or have never had been genetically sequenced, and I mean, how many patients with DEB in the U.S., and so obtaining a copy of the genetic record has taken a few weeks and has been interesting. You would think that in such a horrific disease, we will have the relevant identified specific section of the disease, et cetera, so that's been interesting to me, but outside of that, like, look, patient experience on the drug has been really good. Physician experience on the drug has been really good. The drug is working well, and we're really pleased with the way the launch has progressed to date and is ongoing.
Maybe we can talk about some of the barriers to adoption, starting first with getting prescriptions written. As of the last quarter, you're around 400 patients on therapy, which still leaves around, you know, potentially close to 1,000 or 900 patients not on therapy in the U.S. What are the gating steps for those not on therapy? Is it finding the patients? Is it convincing them to go on therapy? Is it convincing the docs to write the prescription?
Hey, so there's a couple minor comments on your question. 400 reimbursement approvals as of July, not exactly end of the quarter, for those of the people modeling this to a specific number of weeks-
Fair, fair enough.
The second comment I want to say is, look, when you get a reimbursement approval, which means everything's in place, it still takes a few weeks for the patient to get dosed. Some of them are picky on the nurses that come home. We help them figure out which nurse is ideal for the particular patient. So there's some logistics involved, but there's a high probability that they are gonna get on drug at some point. Having said that, look, in every disease that I know, you know, the question of: Where are the other 900? Why haven't they gotten on drug? Look, to get to, like, a 60% market share in two years is a really big target for pretty much every launch, right?
You could ask the same question about every disease: Why hasn't everyone started in eight, nine months? In our case, the patients whose families are aware and educated, they talk to the KOLs and get on quickly. There are many families in this country that used to be at a COE and have kind of given up because there has never been a treatment for this disease, and so they're inside their homes, maintaining the wounds in a manner. So you gotta, like, get them out, get the physician educated, get them educated, get them on genetic testing, tell them they don't have to go anywhere, the nurse is gonna come home to you. So that's just the nature of the disease, as opposed to anything that's drug specific.
Overall, Josh, I think the drug has been really safe and really good, and the feedback that we get has been really positive.
Maybe sticking on those patients who've not yet started therapy. I think, you know, from many of our perspectives, the sense of how devastating the disease is, the age of the patients that are affected combined with really the transformational data that B-VEC has shown, still kind of leaves many of us wondering, like, like I get your point that maybe they're a little out of the system, but it's not like they're out of the system and doing well. They're out of the system, really not doing well. So if you could, flesh out a little bit, you know, the approach to reach them, and you know, if there are patients who just, you can't get on drug, why do you think? What would be the reason for that?
There are no scientific type arguments for why you should not get on drug. You should get on drug. It does help, and sometimes it takes a certain amount of time when you tell somebody it's gene therapy. While we don't really do anything to the patient's existing DNA, but it is adeno-associated viral or episomal. When people hear the word gene, there is a certain level of education that needs to happen in certain communities. They get to hear that we're using a herpes vector to deliver that gene. But these things go away. At the end of the day, it is a debilitating disease. They do wanna get on drug. The only expectation one should not have is the minute they hear about VYJUVEK, the very next day they're on the drug.
Like, if you give it a certain amount of time, there has been no reluctance on the part of the physician, on the part of the patient to get and stay on drug.
Got it. On the last quarter update, you had mentioned that the patient identification efforts had started to expand the number of identified patients by around 10%, going from, I guess, 1,200- 1,300 estimated in the U.S. What have you done thus far to find those patients, and what else do you have planned?
It's been mostly organic to date, so if you think about the prevalence of this population in the U.S., it's about 1,200 identified, and we estimate overall prevalence to be 3,000. We're still chipping away at the 1,200, so there has not been a serious effort to go hunt for new patients. The word hunt, so a lot of patients who used to be at COEs when they were born, when they turn 10, 11, 12, they are out of the COEs and into the community, so we are finding patients in the community, who maybe at one point were associated with a center of excellence, but we haven't started seriously on identifying new patients. We're still on the 1,200 that we're chipping away.
But I do expect that sometime next year, we're gonna think about having conversations with families on family trees, looking to encourage more and more to get genetic testing, looking at claims data, not just in the reimbursement codes, but looking at comorbidities and seeing maybe people who get blood transfusion of a certain age with lesions could be. So we're gonna start thinking about those efforts towards the end of this year, and I think next year will be a part of the arsenal.
And why next year as opposed to this year?
Because right now, the focus is primarily on the 1,200 and getting to about 60% market share in a two-year timeframe.
Yeah.
Incremental efforts are always ongoing, but it's not like, "Okay, we're done. We need to find new patients." We're not there yet.
On the last call, you also mentioned that as you kind of moved more into the community setting and the DEB population, you're sensing a little less urgency to get onto therapy, to get those nursing visits scheduled. Maybe you can elaborate a little bit on why that might have been the case and what you've been able to do about it, if anything, to accelerate that?
No, it's not all of DEB, it's older DEB patients. Imagine a DEB patient, 20, 30 years old, when you talk about a nurse coming into their home or a HCP on a weekly basis, they wanna make sure that they start at a point where they're not gonna get off and get back on, and so they time it. That tends to happen in a few percentage of the cases. But the good thing about dominant also is they only have a limited number of wounds, and so there is a good possibility, and we educate them, that in a matter of few weeks, few months, you could get most of your wounds healed, and you could take a break and come back and get back on drug. The word is getting out.
We're also implementing a couple, depending on the state, depending on rules and regulations, we're getting the caregiver at home to administer the drug, so we go through a training process, where instead of a nurse coming on a weekly basis, with the conversation with the physician and the patient, is it okay for the caregiver to help administer, so we're doing different things to make it easier and easier as part of product life cycle extension, but to date, the original paradigm has worked really well, and it continues to do well.
What is it about the product profile that requires a caregiver to administer?
No, nothing about the product profile. It's just they should be able to read instructions on a label, draw the product into a syringe, and apply it onto the wound. So they, we go through a training process of being able to do that. In some cases, after a nurse has been coming home for a while, they start to think about, be a lot easier if the dad or mom could administer on a baby. And we're trying to see if the laws and regulations permit that. And wherever possible, we're super accommodating on getting them trained to do that. And in some cases, the physician puts it on the prescription if they have known the caregiver from before. Some of them are nurses already, so it's not broad, but it happens sporadically.
So, I guess this was an FDA requirement to have-
An HCP administer.
HCP administer. Is there any path to have that removed from the-
Yeah, we are doing a human factors protocol study. We're in the process of submitting and getting feedback. So then it would be formal and would just no longer, at some point, be on the label, and make it a bit more easier. But everything takes a certain amount of time to get feedback and make it happen.
So one of the other things that came up on the last call was the idea that some patients may be starting to take some drug holidays. Maybe you can elaborate a little bit on, you know, how common, what you're seeing there, and what kind of trends do you expect in the coming quarters?
Yeah, so this is a good stat. So we had about 45 patients in the open label extension study, and they've been on drug for more than two years, right? A certain percentage of them, not the majority, are starting to take breaks, and we're talking about severe RDEB patients. That's the only database evidence in terms of how long it took them to be on drug, and now they're starting. Usually, the pauses are some number less than 90 days because that's the half-life of Collagen VII, and they get back on drug. I mean, that's the expectation, because wounds, there's no one and done in the skin, and the half-life is 30 days. So depending on the area affected and how friction prone it is, it varies by patient.
Mostly over the summer, if somebody took a break, it's for a week when the family is on vacation, and they ask the nurse to come the following week. That happens sporadically. That's starting to happen sporadically over the summer. We saw that kind of happen during Thanksgiving and Christmas, too. Anytime there's like a holiday thing, there is a little bit of gap in treatment. Outside of that, it's been continuing as before.
So you've indicated that compliance is very high, around 90% or more. Is that specifically for the patients who are scheduled for visits, and does that exclude drug holidaying patients from that calculation?
No, no. So a couple things to note. It's compliance is a bit of a lagging indicator for us, meaning compliance is calculated from the day a patient gets on drug, okay? And it kind of calculates how long they have been on drug. So, for example, if a patient took a pause and came back, that hurts our compliance.
Okay
Because there's a gap in between.
Right.
But if they took a pause and for some reason, say, there was mortality in the patient, then they have helped with the compliance up to the point of that because they never came back. But that said, compliance has been really good and continues to be good. We've always believed that across recessive and dominant patients, if you kinda like do a weighted average, you would start with four vials a month, and our expectation is, at the 18-month time point, you would go to a reduced frequency of not every week, but every other week, like two vials a month. That's always been our expectation as, that was an analytical determination, but definitely as of a couple of months ago when we announced, it's continued, and today continues to be high.
I'm not sure if you know the answer to this. I'm hoping you do. For individual patients, are the wounds predictable in the location? Rather like, do they tend to get the same wound in the same location, or do they tend to pop up here and there? And part of the reason that-
Yeah
I'm asking is because if you kinda know the trouble spot, you know, and if you do want a little drug holiday, you may not wanna go too long until the skin opens up again, right? You may be able to kinda keep it closed with more of a preventive-type approach, right?
Yeah.
Talking about treating the active wound as opposed to maintaining a closed wound.
Yeah. Look, the vector does not penetrate intact skin, right? And one could argue what a complete closure means. There's always a little crest or a cyst on the edges that one could consider to be disruptive enough for the vector to penetrate. But it's not easy to predict where the wounds are gonna come. It's a very dynamic environment in the human body. And then also, some areas like your elbow, the knee, and the back are more friction-prone than other areas, and so, it's tough to predict.
Do you have a sense when a wound does start to emerge, how quickly it evolves? You know, like, is it? Does it go from small to big very quick? And again, part of the reason for asking is, you know, if you're kind of scheduling weekly nurse visits, and you're worried that if you extend the interval between visits, if you get a wound starting, you better get it treated quickly.
Right. No, that is a good. So what we're trying, working on, is now that we've been through launch, through the fall and I mean, the holiday period and now summer, we are working with the pharmacy to schedule ahead of time, as opposed to week after week of scheduling. And it was tough to do it prior because we didn't know what family- how families behave. We had no data. Will they do it, not do it? And what scheduling ahead does, is gives us a great insight into what's coming because it's pre-scheduled. So we're starting, definitely starting to do some of those things to drive some predictability into this.
But it was tough to do it when we first launched, where we had no idea if they would get dosed at home or in the doctor's office, and it's kind of ended up in a good place at the moment.
We can talk about the unmet need ex U.S. and some of the launch timelines there, and where you think pricing will be ex U.S. compared to U.S.
We're anticipating approval in the EU by the end of the year. So hopefully we launch in Germany in the first half of next year. German pricing is a bit confusing the first year. It takes one year to get a final price in Germany. And I believe the first six months, you get to launch with the U.S. price. The second six months, you accrue, estimating a final price, and then after 12 months, you get handed down a price. The good thing about Europe is a lot of patients are identified. They're genetically sequenced, the records are in place, and so logistically, launching appears to be easier than the United States, where it's always worse, the genetic work. In France, it takes about two years to get a final price, but in the interim, they have programs called Accès Précoce.
I'm not pronouncing that right, AP1, AP2, that lets you get more and more patients on drug as soon as possible, so it's almost like a semi-commercial type launch, not officially commercial, so that's Europe, and then we have Italy and Spain, and distributor agreements next year with MENA, which is Middle East and Eastern Europe, and so we're working on all that. Japan, I think we're filing the JNDA, the second half of this year, with an approval sometime middle of next year, with the launch either late next year or first half, or early 2026. So that's going pretty well, and the good thing, in both these cases, the regulatory authorities have been very amenable to home dosing.
The word on home dosing in the U.S., for a long time, we were thinking through, "Will Europe be open to home dosing with gene therapy?" So we're pretty pleased, and then we have our B-VEC for the eye, which hopefully we're expecting a 2026 launch. So between U.S. and global, and then B-VEC for the eye in 2026, we feel the franchise is in a really good place at the moment.
Thoughts on pricing, actually, both ex-U.S. and then for the eye indication?
Ex-US pricing, look, conservatively, somewhere between 50%-70% of the U.S. price. Obviously, we believe the drug is very efficacious. It was a double-blind Phase III study. We have a strong case to make. We're hoping the dossier is really strong. But when you look at what other companies have gotten in the past and all the trials and tribulations, starting at 50% and being optimistic at 70% is a good range, in my mind. And Japan tends to always fall somewhere between U.S. and EU at a high level. So it's, it's got all the... Like the pricing-wise, we're hoping it to be better than the Europe, and access-wise, it's somewhere between the two. Yeah.
How many patients identified in some of the major European- territories in Japan?
Look, about at least north of 2,000 in the EU 4 and UK, identified in registries, genetically tested, so that's great. Japan, depending on how you look or think about it, somewhere between 350-500 patients in Japan is the estimate. But globally, we think there is about 9,000-10,000 patients with DEB.
Maybe moving over to the Jeune program, you recently gave us a data update and choosing to advance in the décolleté indication. You know, there did seem to be a little bit of a difference in efficacy between the décolleté versus the lateral canthal lines. Why do you think that is? And what might there be done to kind of even out the efficacy across sites?
Look, the data we announced, I mean, it was really solid. If you compare it to point improvements in other, by other, Allergan drugs in the past. So we were very pleased with the data, and the efficacy data on the lateral canthal lines was not that marginally inferior or superior to décolleté. They both looked pretty good. We were advised that the trick in aesthetics is to get one indication approved that is of lesser risk than other indications.
When you think about décolleté, which is the area of the chest which is covered, it's a bit from a risk perspective, visible, visibility perspective, wanting to keep patients on drug perspective, a bit easier than the face, where there could be patients who do not want to have a bump on one side or the other side, even though it's transient, right? Even if it's transient. We picked décolleté to move forward. We're pretty excited. We hope to start Phase II sometime next year, maybe first half. And also some thoughts about spinning it out of Krystal, and being its own entity, even though Krystal would be supportive and be a big shareholder in the Jeune enterprise.
What would the Phase II look like, and what are you looking to learn from that before you start Phase III?
We're hoping for a controlled, well-controlled study, so a double-blinded, 80-120 patients. The endpoints would be physician assessments on a scale, and on the subject side, could be a scale or a PRO, which is patient-reported outcome, which is usually what the FDA expects for a Phase II study. And quickly transition that into a classic pivotal study, you know. But going into the Phase II, we want to make sure the FDA is aligned on the scale, aligned on the endpoints, that it's almost a smaller replica of a pivotal study.
In the side effect table for the décolleté indication, I think it noted there were some bumps that were seen?
Bumps?
No?
No, no.
I saw that in the.
When you inject, and this is true for Botox or any kind of injections, there tends to be some local inflammation, and that inflammation is transient and is usually gone within a day, in some cases, two days, definitely before they come back for the next visit or next treatment. All I was alluding to was that inflammation is easier to think about or be with if it's covered by a piece of cloth than if it's right on the front of your face.
There weren't, like, bumps or-
Oh, no, no. We had no-
Endogenous collagen expression or something like that.
Oh, no. We had, I mean, we put the AE table on the data announcement.
All right, so we've got the AATD data readout around the corner and then CF probably next year. What are we looking for, for both of those?
Yeah. What we'll be looking for in AATD-
Yeah.
So A1AT, look, we're delivering nebulized version of alpha-1-antitrypsin to the lung, so we're expecting, looking obviously for A1AT expression in the lung, which is a local expression. We expect, based on preclinical, to be some levels of alpha-1 in systemic circulation. But we're also looking for the extent of neutrophil elastase binding, and there was some comment in last time's earnings call. Look, the levels of serum A1AT in the serum is, like, 11 micromolar, and people expect that the lung levels are usually between 5% and 10% of systemic, so 1 micromolar is like a benchmark for the lung. The only comment I'll make is, unlike one-and-done gene therapies, we are redosable.
So if we got to some number at one or close to one, with redosing, we can build upon A1AT levels over time, as opposed to the one-shot, what you see is what you get, and we're done type one-and-done gene therapy. So we do have a cumulative build-on effect when you're redosing.
What do you think about determining persistence of therapy and then just, and then determining when a patient may need another dose? Do they have to go for serial pulmonary lavage to measure the AAT levels in the, in the lung, or how do you, how do you track that?
So in the SAD, which is single ascending dose study, the FDA is very clear about not allowing you to redose until you lock in on a dose. So step one is to lock in on a dose. We'll instantly roll the patient over into a redosing type paradigm. If you look at our CF program, where we did dose non-human primates, which is clear lung, we saw expression up to 28 days. So our expectation, well, it remains to be seen, is to have a monthly dosing, which is a nebulizer for a short period of time, and it's a great augment to the technologies that treat alpha-1 in the liver, right? So it's a good augment to the technologies that treat alpha-1 in the liver. Because the disease manifests in the lung, even though the misfolded protein happens in the liver.
Unfortunately, we're out of time. So lots to talk about, but maybe we'll things to look forward to for next year.
Great. Thanks for having me, Josh.
Thanks for coming out.
That was great.