Started here. So welcome, everyone. Thanks for joining. I'm Gavin Clark-Gartner from the Evercore ISI Biotech Research team, and really happy to be here with Krish Krishnan, who is the CEO of Krystal Biotech. Thanks so much for joining.
Thanks, Gavin. Thanks for having me.
Absolutely. All right, so I'll just kick it over to you to give any opening remarks where things stand today, and then we'll run into Q&A.
Yeah, so I would say, commercially, we're in a good place. The Vyjuvek launch in the US has gone really well, probably exceeded our expectations to date. Clinically, we seem in a really good place. We have two readouts upcoming before the end of the year and a readout and a couple of readouts in the first half of next year. It's kind of like the pipeline's evolving pretty nicely. Financially, strong balance sheet, Q5 of positive EPS. So overall, I'd say, look, I think we've done a good job of setting a base business, and the pipeline hopefully leverages that to another level over time. So pretty pleased with where we are, and we're going internationally, looking for an approval in Europe before the end of the year, Japan by the middle Q2, Q3 of next year for Vyjuvek globally, so we feel good. Yeah.
Awesome. All right, I thought we could start off with the AATD data, given that's upcoming very soon in an area of investor focus. So maybe I'll ask with a few more tactical questions, then we'll go bigger picture for the program. To just clarify the patients with this update, this is going to be. Maybe just remind us, which patients are you doing the BALs in, how many patients will you have, and how many of these patients are on IV augmentation therapy versus not?
So we'll be reporting on cohort one and two of the Alpha-1 antitrypsin study. Cohort one is about three patients, primarily safety. Cohort two is a total of four patients. We're getting BALs on two of them. One of them is on augmentation, one is not on augmentation.
Got it. Very clear. What should our expectation be on the baseline AAT levels in the BAL?
In normal human beings, the AAT levels in the lung are thought to be between 5%-10% of systemic circulating levels. The systemic trough level is about 11 micromolar. So a range to start from is between 0.5 and 1 micromolar. We do, given our ability to redose, have the ability to influence levels over time. And there are a lot of conversations: is it really 11 micromolars, should it be 15, should it be 20, depending on different companies and different. But what we feel good about is if we start at a decent level and we do the redosing at the right time, we could, over a period of time, build the levels in AAT to some extent. And that's so we just need to start at a decent level to build from there.
Are there any considerations for BAL factors? I mean, there's a good amount of variability with the assay, right? Are there any beyond that, though? Are there any considerations about what you can detect on the lower limit of quantification, how much specificity, et cetera, there is with the assay? What should we think about?
Yeah, you're right. Look, dilution is a big part of that. Like every time you talk about testing limits, extent of dilution, I would say at a high level, like it can, it's ironic. Picomolar type concentrations can be detected, but we're hoping not to be there. We're talking micro. So to some extent, if we're at the pico level, we don't have a starting point, right? So I get that.
That makes sense. Just remind us when the BALs are performed in relation to dosing also.
Pretty shortly after, within 24 to 48 hours, we have consistently seen our vector transduce the cells pretty quickly. Like the whole, even in B-VEC, right? Transduction into keratinocytes fibroblasts are pretty quick. Protein gets expressed in a matter of hours. Like within 24 hours, protein gets secreted. So depending on patient schedule, hospital logistics, 24 to 48 hours is the flexibility we have to talk about that.
All right. All right, great. And let's go a little higher level then for this program. What exactly is your target, not only with this first update, but additionally longer term in terms of what BAL level you're looking to get/maintain?
That's an interesting question. Look, at some point, if we're going towards a biomarker way of approval, the answer is probably an FDA answer than what we speculate, right? Like are they expecting to get two micromolar as a and there's also variability within the way you collect, upper lobe, lower lobe, which part of the lung you're collecting, what's your dilution. So at the present moment, we'd like to see where we start. We'd like to go into the redosing study, see how much we're able to build on. And I'll have a much better answer at that point than rush to say, this is the target we're going after at the moment. But as close as we can get to two micromolar over time is kind of an unspoken objective, but.
Yeah. And maybe remind us what you saw preclinically in terms of how concentrations built up with multiple dosing. And I guess to phrase differently, like if you are looking to get to two over time, let's just say, hypothetically, you're looking to get to two over time, what tells you with a single dose that you're on the right track and getting there?
If we end up, and I think it's the same question asked differently. If you get up at an alpha-1 antitrypsin level close to one micromolar, that's a starting point for us. In terms of preclinical, what we saw with the non-human primate study in CF is we were able, where we redosed NHPs, we saw expression up to 28 days. So that gives us a guiding post on how to think about redosing, when do we redose, and hopefully build over time.
I guess maybe to ask the question one slightly different way, which is, let's lay out three scenarios for kind of a single dose update, which is one scenario you get half a micromolar increase, another scenario you get a one micromolar increase, another one you get 1.5, again, theoretically, right? How does that inform your development and next steps?
Oh, so look, if we are in the range of somewhere between 5%-15% of systemic levels, we hope to put the patients into a redosing paradigm while we enroll one or two patients in cohort three. If we are way below 0.5, obviously we have to go to the higher, higher, higher cohort three. If we really, which is tough with two patients to say definitively if we're really high on the micromolar, one could argue there's really no reason to go to cohort three. I will say, I want people to understand it's not just about BAL levels because there's variability. You are talking to patients. We look at bronchoscopy to show transduction in the airways. We look at extent of neutrophil elastase binding to the extent we can.
And so it's a much more comprehensive evaluation than saying if the AAT level is 0.4, you stop working on the program, right? That's the point I'm trying to get to.
Yeah. All right, that makes sense. What about the bronchoscopies that are also done? How do we interpret those?
Pictures and % infected cells, we're working through it. I mean, we're not far away, so I'd rather not get too specific, but yeah.
All right, that makes sense. Translating this data over to the Cystic Fibrosis side, which is definitely a big question, how do we make that translation? What translates, what doesn't?
BAL translates less, bronch translates more. So I would, at a high level, say, look, it doesn't guarantee success in CF, but if the bronch data looks really good, it increases the odds of CF incrementally, right? Because the bigger objective, whether you think about CF or AAT or the oncology program we have in the lung, one big objective for Krystal is lung as a tissue where we can safely redose because that opens up a big door for us at some point. Obviously, we've established presence in the skin. So yes, it leads into CF directionally, but there is a bigger picture. If it's safe in CF, it's safe in AAT, safe in 707 delivering IL-2, IL-12. Internally, we'll feel really good about lung being a very strategic tissue for us at some point going forward.
That makes sense. Are you planning to lay out that translation when you do show the AAT data to kind of evaluate the bronchoscopies and say, hey, this is how we're thinking about the translation to the CF side or given the proximity to the CF data, are you planning to let that speak for itself?
We'll let that speak to itself.
Yeah. All right, let's switch gears here. Let's go over to Vyjuvek, the commercial business in the US. Probably a good place to start. Would you consider providing revenue guidance for the US as we look into 2025? And when do you look to make that distinction? And I guess a follow-on question here is, when you do consider providing guidance or not, how much longer do you plan to keep reporting reimbursement approvals, compliance, all these ongoing metrics?
We set a target of 720 reimbursement approvals two years from launch. I think our first launch was first week in August, something to that effect. So at least for Q1, Q2, Q3 of next year, at the very least, we'll continue to provide exactly the same metrics we've been providing, and reimbursement approvals, if you think through the time aspect of it, are a good proxy for net revenue. Where people get a little confused, they think, if I have a reimbursement approval today, my revenue starts coming in tomorrow. There's a few weeks of delay for a variety of reasons. In terms of revenue guidance, honestly, I don't think we will be ready to provide meaningful guidance next year because this drug is neither a one-and-done nor is it completely chronic. Over time, there could be stops and starts. As the wounds heal, people take a break.
Without much experience to stops and starts, it would be difficult to provide a tight revenue guidance that is meaningful. Our present thinking is to continue the way we are, at least through 2025, see what we learn, and then go from there.
Got it. To get a little more granular then, the patients who were the Start forms that were coming in last quarter, I think roughly 50% of them were on the dominant side, if I did my math correctly. Is that maybe reflecting quarterly variations, or do you expect that as we go into 2025, there's going to be more dominant patients as you yeah?
I don't recall the stat, but I think it's too small of a sample for me to say this is a trend. If we start seeing similar things over Q2,3 , then obviously it's a trend and it's happening. But just looking at Q3, what we're happy about is the word getting out to dominant patients and they are getting on drug, right? It's easy to think about severe patients getting on Vyjuvek, but it's really meaningful that our message is getting out and even people with milder symptoms are getting on the drug. So from that perspective, I was pretty pleased to see that.
Yeah, that's fair. And switching over to the compliance side of the equation, just wanted to be very clear on how you're reporting that. That's being reported as since launch, correct?
Correct.
Are you planning to change that moving forward to maybe show more of snapshots in time on a quarterly basis, or what should we think as you go through 2025?
Look, we calculate compliance every different way internally within the company: three months, six months, nine months, twelve months. But we don't want to make it so confusing in a call that everyone gets confused and then, but you're right. The way we report compliance is from the start. We'll continue to keep it that way. But I will tell you, no matter how we calculate compliance to date, it's still in the 80s% range. Like we reported 87% from start. You look at three months, it's probably in the range of 85-86%, that they're all bunched together. And I feel good about that. And I'm openly stating that we just don't want to overcomplicate a slide full of different compliance metrics. Compliance is good. Compliance is stronger than we thought we would be at this point in time.
Yeah.
Yeah, I'll leave it at that.
Yeah, that's fair. It may be to ask just a bigger picture question on compliance. Remind us what your base case assumption was for where compliance would go multiple years into the launch and how you're tracking against that.
So we thought 18 months into launch, patients would no longer use four vials a month and would get on like a two vials a month type, like a 50% type utilization compliance. We're about 15-16 months into launch, we're in the 87% range. So it's gone much stronger than we thought. And I don't see any immediate dropping of compliance anywhere close to 50. So this is obviously going to take a longer time. But in some ways, you can rationalize it by saying when you start a new drug, the severe patients get on first, right? That 50% compliance is true if the population was half and half of RDEB and DDEB. And given that it's skewed so much more towards recessive, it's logical to think compliance is higher than we thought it would be.
That makes sense. I'll just ask one on the price cap side to be clear. What happens with the price cap as we hit the Q4 and then go into the first Q1? And then just looking bigger picture, do you need to keep offering this price cap to payers?
To answer your first question, at the end of every quarter, we accrue for the price cap. Nothing's going to happen. If we do it right, you're barely going to see anything with respect to net revenues. The accrual is in the GTN. At a high level, you can think about what goes into a GTN, and this is a component of that. Look, the price cap has been good for us. Payers responded well to it. Access has been really smooth. We're going into the payers hopefully next year with Vyjuvek for the eye. We don't see any reason to disrupt, gain a few points on some negotiation. It's working out well, and we don't particularly intend to do anything there.
Yeah, got it. Another bigger picture question. Could you look to move to caregiver administration of Vyjuvek over time? And this may also kind of start to bring us into the ex-US, EU side of things.
About slightly north of 20% of my patients are already caregiver administration because the physician certifies. We go through training of the caregiver, so we do see a segment of patients who could potentially benefit from caregiver administration on the label. We're starting to work towards human factors protocol studies to see if we can affect that permanently as an option on the label, so administered by a HCP in a home setting or by a caregiver. There are also a segment of patients 20 years or older, dominant patients who are invested in self-administration, so that's another human factors protocol study. At the end, we're not trying to enforce which way a patient goes. If we provide the flexibility in the label, then they could choose what option's good for them. That's the idea.
That makes sense. On the CHMP side of things, any reason Vyjuvek won't be on the CHMP agenda next week? What should we watch out for?
We're expecting a positive opinion before the end of the year. If we hear of something different, we'll obviously inform. But knowing the way the conversation has gone today with the EMA, we feel really good about the outcome in terms of obviously, we don't control it. Anything could change. I want to fully let people understand it's an EMA decision. But we think from a label perspective, from the breadth of indication perspective, home dosing perspective, we look for the label to be very similar to the US, if not better.
Yeah, that makes sense. And given we're just about at time here, we really don't have time to do justice to B-VEC for the eye drops, the oncology side, other rare derm side, et cetera. Maybe you could just kind of quickly frame what else is going on for 2025. What are you most excited about?
Look, first, global launch, EU and Japan. We're doing the registrational trial for B-VEC in the eye, potential launch sometime in 2026. That's obviously somewhat de-risked to some extent and will launch within the existing infrastructure. We're super excited actually by the oncology to the lung program because people get the mechanism IL-2, IL-12, but you have to realize whether it's AAT or CF or oncology, it's just a nebulizer, it's a 10-minute nebulization to the lung. It's autologous, it's allogeneic, it's not autologous. And there is something to say for that aspect of it from a cost and all kinds of perspectives. So we have an exciting clinical pipeline. In the 30 seconds, one is well positioned to go into phase two. So overall, like I said when I opened, commercially, clinically, financially to date, we seem to be in a good place. Yeah.
Yeah, that's great. We'll extend the session next year so we can touch on everything and do it justice.
That'd be awesome.
Really appreciate you joining, Krish.
Thanks for having me, Gavin.