Executive Summary

Q1 2025: Net product revenue was $88.2M with gross margin of 94%; diluted EPS was $1.20. Year-over-year revenue nearly doubled versus $45.3M in Q1 2024, while sequential revenue was modestly below Q4 2024’s $91.1M as patient pauses and insurance change-over dynamics weighed on the quarter .
Versus Wall Street consensus: Revenue of $88.18M missed the $96.21M consensus and diluted EPS of $1.20 was below the $1.37 consensus; both were driven by quarter-specific factors (insurance resets, pausing after induction) discussed by management. These consensus values are from S&P Global data.*
Guidance: Non-GAAP combined R&D+SG&A for FY 2025 maintained at $150–$175M (excludes stock-based comp), unchanged from Q4 2024 .
Catalysts: EC approved VYJUVEK in Europe (first launches planned in Germany mid-2025), Japan PMDA decision expected 2H 2025, and clinical readouts slated for CF (KB407, mid-2025), AATD (KB408, 2H 2025), ocular DEB (KB803, Phase 3 dosing in May), and oncology (KB707 ASCO update) .

What Went Well and What Went Wrong

What Went Well

EU approval with a broad, flexible label and home dosing option; first EU launch planned in Germany mid-2025, positioning ex‑US expansion as a near-term growth driver .
Commercial execution remains strong: 540+ reimbursement approvals in the U.S., 97% access across commercial/Medicaid, and continued high weekly on‑therapy compliance (83%) .
Durable product economics: Q1 gross margin of 94% and net income of $35.7M; cash and investments ended at $765.3M, supporting pipeline and global launch execution .
Management tone confident on long-term utilization: “patient pausing patterns…are inherently unpredictable quarter-to-quarter,” but viewed as evidence of durable wound closure and a long revenue tail .

What Went Wrong

Sequential softness vs Q4 2024 as patient start forms slowed and pausing increased after intensive induction; reps require longer cycles with deeper community HCP education .
Missed consensus on revenue and EPS due to Q1 seasonality (insurance changes, reauthorizations) and treatment pauses; management noted catch-up in Q2 from insurance changes each year .
DOJ subpoena related to genetic testing was acknowledged; the company is cooperating and provided no further comment, a potential overhang for investor perception .
Competitor product questions surfaced; management emphasized differences (indication scope, safety, convenience) and did not view it as competitive, but investor debate may persist .

Financial Results

Income Statement Snapshot (USD, $ Millions except per-share)

Metric	Q3 2024	Q4 2024	Q1 2025
Product Revenue, net	$83.8	$91.1	$88.2
Cost of Goods Sold	$6.7	$4.9	$5.0
Gross Margin %	92%	95%	94%
R&D Expense	$13.5	$13.5	$14.3
SG&A Expense	$28.7	$31.3	$32.7
Operating Income	$22.4	$41.4	$36.2
Interest & Other Income, net	$7.3	$7.2	$7.4
Income Tax Expense	$(2.6)	$(3.1)	$(7.9)
Net Income	$27.2	$45.5	$35.7
Diluted EPS ($)	$0.91	$1.52	$1.20
Weighted Avg Diluted Shares (M)	29.9	29.9	29.9

Balance Sheet Highlights (USD, $ Thousands)

Metric	Dec 31, 2024	Mar 31, 2025
Cash & Cash Equivalents	$344,865	$308,770
Short-term Investments	$252,652	$308,076
Long-term Investments	$152,114	$148,472
Total Assets	$1,055,838	$1,074,416
Total Liabilities	$109,458	$89,742
Stockholders’ Equity	$946,380	$984,674

Segment/Revenue Breakdown

Segment	Q3 2024	Q4 2024	Q1 2025
VYJUVEK Net Product Revenue	$83.8	$91.1	$88.2

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
U.S. Reimbursement Approvals	460+	510+ (as of Feb 2025)	540+ (as of Apr 2025)
Access Determinations (Commercial + Medicaid)	97%	97%	97%
Weekly On‑Therapy Compliance	87%	85%	83%
At-Home Administration	97%	97%	97%
Gross Margin %	92%	95%	94%
Cash & Investments ($M)	$694.2	$749.6	$765.3

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-GAAP combined R&D+SG&A (ex stock comp)	FY 2025	$150–$175M	$150–$175M	Maintained

Note: Company does not provide a reconciliation to GAAP due to variability in stock-based compensation .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Patient pausing & compliance	Noted emerging maintenance/pauses; expected compliance to trend down as duration on therapy extends	Pauses after induction drove quarter waviness; weekly on‑therapy compliance still high; long-tail utilization emphasized	Stable narrative: pauses normal; long-term tail positive
EU launch readiness	CHMP opinion expected; French AP1 early access approved; Germany first half 2025 launch anticipated	EC approval granted; first launch in Germany mid-2025; broad label, home dosing flexibility	Positive inflection (approval achieved)
Japan	JNDA filed; 2025 launch target	PMDA decision expected 2H 2025; manufacturing inspection complete; potential Q4 2025 start	On track; visibility improving
Sales force & community penetration	Expanding prescriber base; high-touch education model	Sales force expansion to address longer cycles with community HCPs; expect momentum to return	Scaling commercial effort
Regulatory/legal	—	DOJ subpoena acknowledged; cooperating; no further comment	New watch item
Competition	—	Management does not view recent approval as competition; cites safety/indication/convenience differences	Monitoring
Pipeline readouts	KB301 positive interim; KB407/KB408 updates expected	KB407 mid-2025; KB408 later 2025; KB803 Phase 3 dosing; ASCO update for KB707	Multiple near-term catalysts
Macro/tariffs/supply chain	—	Company insulated: U.S.-based manufacturing/IP, no transfer pricing; diversified ex‑US strategy	Risk mitigation highlighted

Management Commentary

“With the positive EC decision now behind us and the broad label… we’re excited about launching in Europe… It is a full approval and not a conditional approval… no post-approval efficacy study requirements” — Krish Krishnan, CEO .
“Patient pausing patterns… are inherently unpredictable quarter-to-quarter… upcoming quarters may have some waviness… [but] patient adds in the U.S., Europe and worldwide will continue to drive long-term growth for years to come” — Krish Krishnan .
“Our OLE study… demonstrated that long-term use of VYJUVEK is safe and delivers durable wound closure… benefits compounding over time” — Suma Krishnan, President R&D .
“We are seeing meaningful treatment pauses and maintenance treatment… Success on VYJUVEK… will result in lifetime VYJUVEK usage” — Jennifer McDonough, SVP Patient Access .
“We are excited to announce our second clinical stage ophthalmology program, KB801… enable sustained local production of NGF… significantly reducing the treatment burden” — Suma Krishnan .

Q&A Highlights

Seasonality and insurance resets: Management expects lag effects to catch up in Q2; noted J‑code reduces friction versus prior year .
Reimbursement approvals cadence: Slowed due to deeper community engagement; sales force expansion initiated to accelerate patient start forms .
Compliance/persistence: Weekly compliance on‑therapy remains high; pauses/restarts vary by patient; compliance reported includes missed doses while on therapy .
EU launch logistics: First dose in-office, then home dosing; gating factor is initial appointment capacity; teams are prepped to mitigate .
Japan market: ~500 prevalence, ~200–225 identified; pricing expected between U.S. and EU; inspection went well .
DOJ subpoena: Company cooperating; no details provided .
Competition: Recent approval viewed as non-competitive due to indication and safety/convenience differences; continued confidence in VYJUVEK positioning .

Estimates Context

Metric	Q1 2025 Actual	Q1 2025 Consensus*	# of Estimates*
Revenue ($USD)	$88,183,000	$96,209,530*	9*
Diluted EPS ($)	$1.20	$1.37*	8*

Notes: Consensus values and counts are from S&P Global; KRYS missed revenue and EPS versus consensus in Q1 2025.*
Forward consensus (for context): Street models rising quarterly revenue and EPS through 2026, supported by EU launch and pipeline catalysts.*

Key Takeaways for Investors

Q1 underperformed consensus due to predictable quarter-specific factors (insurance transitions, patient pauses post-induction) but did not alter long-term trajectory; watch for Q2 normalization in U.S. trends .
EU approval is a major catalyst with flexible home dosing and anticipated first launch in Germany mid-2025; label breadth supports robust ex‑US adoption .
Commercial execution remains solid (540+ approvals; 97% access), though deeper community penetration requires more rep cycles—near-term variability possible, but actions underway to reaccelerate .
Strong unit economics (94–95% gross margins) and cash/investments of $765.3M provide ample firepower to fund ex‑US launches and multiple clinical readouts in 2025 .
Pipeline has multiple near-term data catalysts (KB407 CF mid-2025; KB408 AATD 2H 2025; KB803 ocular DEB Phase 3 dosing; KB707 ASCO update) that can reshape narrative and valuation .
Monitor DOJ subpoena developments and competitive messaging; management’s stance minimizes competitive risk and highlights VYJUVEK’s safety/convenience advantages .
Medium-term thesis: EU/Japan launches plus ocular DEB expansion and lung/oncology proof points can drive multi-year revenue and earnings growth with potential upward estimate revisions once ex‑US uptake is visible.*

* Values retrieved from S&P Global.

Krystal Biotech, Inc. (KRYS)·Q1 2025 Earnings Summary