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Krystal Biotech Stock Surges 21.9% in 3 Months: More Room to Grow?

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Shares of Krystal Biotech, Inc. (KRYS - Free Report) , a commercial-stage biotechnology company, have surged 21.9% year to date compared with the industry’s growth of 7.8%. The stock has also outperformed the Medical sector and S&P 500 Index during the same timeframe.

The rally can be mostly attributed to the strong uptake of its newly approved drug Vyjuvek and encouraging pipeline progress.

Earlier this month, the company reported better-than-expected second-quarter results, wherein both earnings and sales beat their respective estimates.

KRYS Outperforms Industry, Sector & S&P 500

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KRYS’ Vyjuvek: Strong Update 

In May 2023, the FDA approved Vyjuvek, the first-ever revocable gene therapy for treating patients aged six months or older with dystrophic epidermolysis bullosa (DEB).

DEB is a rare and severe monogenic disease that affects the skin and mucosal tissues. It is caused by one or more mutations in a gene called COL7A1.

The drug, launched in the second quarter of 2023, generated sales of $70.3 in the second quarter of 2024, up 55.3% sequentially.

Krystal has made steady progress, securing access and reimbursement for Vyjuvek since its launch in the United States. As of July, KRYS secured more than 400 reimbursement approvals for Vyjuvek in the country.

The U.S. Centers for Medicare & Medicaid Services assigned a permanent and product-specific J-code (J3401) for Vyjuvek, effective Jan. 1, 2024. As of July 2024, positive access was achieved for 97% of lives covered under commercial and Medicaid plans.

Vyjuvek is referred to as B-VEC outside the country. In May, Krystal’s manufacturing facility, Ancoris, received GMP certification from the European Medicines Agency (“EMA”). The EMA’s review of the company’s marketing authorization application (“MAA”) for B-VEC for the treatment of DEB is ongoing. A decision on the MAA is anticipated in the second half of 2024.

Krystal also remains on track to submit an application for approval in Japan in the second half of 2025 and anticipates a potential authorization in 2025.

In August, a study was initiated to prospectively collect data on the frequency and severity of corneal abrasions in patients with DEB and serve as a run-in period for patients who may be eligible to participate in a registrational study evaluating B-VEC eyedrops for ocular complications of DEB. The registrational, single-arm, open-label study is expected to be commenced in the fourth quarter of 2024.

Krystal’s Deep Pipeline Holds Potential

Krystal is also advancing a robust preclinical and clinical pipeline of investigational genetic medicines in the fields of respiratory, oncology, dermatology, ophthalmology and aesthetics.

The company is evaluating KB407 for the treatment of cystic fibrosis. It completed dosing in cohort 2 of the phase I CORAL-1 study of KB407 and intends to initiate the third and the fourth cohorts in the second half of the year.

Another candidate, KB408, is being evaluated for the treatment of alpha-1 antitrypsin deficiency (AATD). In May, Krystal completed dosing in cohort 1 of the phase I SERPENTINE-1 study. Enrolment in cohort 2 is ongoing and Krystal is on track to report interim data from the study in the fourth quarter.

In June, the company cleared the first dose escalation cohort in the open label, multi-center, monotherapy, dose escalation and expansion phase I KYANITE-1 study in patients with locally advanced or metastatic solid tumors of the lung. Enrollment in the second dose escalation cohort is currently underway.

Other pipeline candidates, KB707 for the treatment of injectable solid tumors and KB301 for the treatment of aesthetic indications, are also progressing well.

KRYS has also resumed the development of KB105 for the treatment of lamellar ichthyosis and expects to commence the phase II portion of the JADE-1 trial in pediatric patients in the first half of 2025.

Conclusion

The prospects for Krystal look good as Vyjuvek is the first FDA-approved gene therapy treatment for DEB. The successful development of other pipeline candidates should bode well too.

With a cash balance of $628.9 million as of June 30, 2024, the company seems to be in a good position to develop its pipeline candidates.

Krystal’s Rank & Other Stocks to Consider

Krystal carries a Zacks Rank #1 (Strong Buy) at present. 

Some other top-ranked stocks in the biotech industry are Illumina, Inc. (ILMN - Free Report) and Fulcrum Therapeutics, Inc. (FULC - Free Report) , both currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Illumina’s 2024 earnings per share have moved up from $1.18 to $3.62. Earnings per share estimates for 2025 have improved from $2.93 to $4.50. ILMN’s earnings beat estimates in each of the trailing four quarters, the average surprise being 463.46%.

In the past 60 days, estimates for Fulcrum Therapeutics’ 2024 loss per share have narrowed from $1.24 to 48 cents. Loss per share estimates for 2025 have narrowed from $1.71 to $1.51. Year to date, shares of FULC have jumped 29%.

 


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