Krystal Biotech (NASDAQ:KRYS) reported third-quarter 2026 revenue growth driven by continued adoption of its VYJUVEK treatment in the United States and international markets, while also outlining updated timelines for several clinical programs and authorizing a share repurchase program of up to $400 million.
VYJUVEK revenue reached $127.3 million in the quarter, up 30% from $97.8 million in the prior-year period. The company reported net income of $63.1 million, or $2.05 per diluted share, and ended September with more than $1.2 billion in cash and investments.
VYJUVEK Growth in U.S. and International Markets
U.S. net revenue was $95.3 million during the quarter. Christine Wilson, senior vice president and head of U.S. commercial, said the company had secured more than 760 reimbursement approvals nationally and added more than 80 prescribers during the period.
About 80% of patients are now self-administering VYJUVEK, Wilson said, allowing patients and caregivers to incorporate treatment into home wound-care routines. The company sees additional opportunity among diagnosed patients who have not started treatment, as well as people who remain undiagnosed or misdiagnosed.
International VYJUVEK revenue totaled $32 million. In Germany, more than 20 centers have initiated patients on the treatment, an increase of about 15% from the prior quarter, according to Laurent Goux, executive vice president and general manager for Europe.
Krystal said pricing negotiations have concluded in Germany, Japan and Italy. The company expects to launch VYJUVEK in Italy in early 2027. In Spain, pricing discussions remain underway, with a decision anticipated before year-end, while some patients have received treatment through regional funding arrangements. In France, the company completed its first home administration through the retrocession pathway as national pricing discussions continue.
Goux said the company expects France’s pricing discussions to follow a typical 13-month timeline. Krystal is about six months into that process, he said.
Pipeline Updates Include Gorlin Data and Delayed Readouts
Krystal highlighted initial results for KB113, its program for Gorlin syndrome. The company evaluated the therapy, previously referred to as low-dose intratumoral KB707, in three adult patients who received six doses over 14 weeks.
According to President of Research and Development Suma Krishnan, more than 80% of assessed lesions regressed during the study, with more than half declining by over 50%. Roughly 10% of assessed tumors shrank by at least 90%, and biopsies of one injected tumor from each patient showed complete histological clearance with no residual tumor tissue.
The company also observed regression in lesions that were not injected, which it said provides preliminary evidence of systemic immune activation. Krystal has begun discussions with the Food and Drug Administration regarding potential development pathways for the program. Suma Krishnan said a potential pivotal study could involve fewer than 100 patients, based on the initial response rate, though the company has not provided a final trial design.
For its KB111 program in Hailey-Hailey disease, Krystal has completed enrollment of five patients in the repeat-dose HALITE-1 study and expects to provide a data update before year-end. The company plans to assess investigator-based clinical improvement, molecular correction and ATP2C1 protein expression through biopsies.
Several other programs will require more time than initially expected. For KB803, an ophthalmic VYJUVEK program in dystrophic epidermolysis bullosa, the company expects the last patient visit in February 2027 and top-line results shortly afterward. Two patients withdrew for reasons unrelated to safety, and Krystal enrolled replacements, as well as a one-year-old patient to generate evidence related to corneal abrasions in DEB patients from birth.
Enrollment in the KB801 program for neurotrophic keratitis has been slower than expected, reflecting strict eligibility criteria and the challenges of conducting a placebo-controlled study where an approved treatment is available. Krystal has activated 22 U.S. sites, is expanding by another 10 to 15 U.S. sites, and is nearing activation of sites in France, Spain and the United Kingdom. The company now expects to complete enrollment and report top-line results in 2027.
In cystic fibrosis, Krystal is dosing three patients in a repeat-dose KB407 study and expects to dose three more before year-end. Interim data, including FEV1 measures, are now expected in the first half of 2027. The company said it has been selected for the FDA’s Complex Innovative Trial Design Meeting Program and remains on track to begin a registrational study in 2027.
Financial Results and Capital Allocation
Third-quarter gross margin was 94%, compared with 96% a year earlier. Chief Accounting Officer Kate Romano said the decline reflected a greater share of sales in Europe and Japan, where manufacturing process optimizations approved in the U.S. have not yet been approved, as well as sales of lower-cost research and development batches in the prior-year quarter.
- Cost of goods sold was $7.6 million, compared with $4.3 million a year earlier.
- Research and development expense was $14.9 million, compared with $14.6 million.
- Selling, general and administrative expense declined to $33.7 million from $37.6 million, primarily due to insurance proceeds reimbursing previously incurred legal costs and lower legal, professional-services and marketing costs.
- Stock-based compensation totaled $13.9 million.
Krystal lowered its full-year non-GAAP R&D and SG&A expense guidance to $155 million to $165 million, from prior guidance of $175 million to $195 million.
The board authorized repurchases of up to $400 million of shares over the next two years. Krish Krishnan said the authorization reflects the company’s confidence that its resources can support commercial expansion and pipeline development while returning capital to shareholders.
“The growing commercial business allows us to invest not just in global expansion, but also in development and buy back shares opportunistically,” Krish Krishnan said.
About Krystal Biotech (NASDAQ:KRYS)
Krystal Biotech, Inc is a biotechnology company focused on developing and commercializing genetic medicines for rare diseases. The company’s platform uses modified herpes simplex virus type 1 vectors to deliver functional genes to target tissues, with an emphasis on therapies that can be administered repeatedly.
Krystal’s lead product, VYJUVEK, is a topical gene therapy for wounds associated with dystrophic epidermolysis bullosa, a rare inherited skin disorder caused by mutations affecting type VII collagen.
