krys-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________

FORM 10-Q

_____________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38210

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Krystal Biotech, Inc.

(Exact name of registrant as specified in its charter)

_____________________________________________________


Delaware						82-1080209
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

2100 Wharton Street, Suite 701

Pittsburgh, Pennsylvania 15203

(Address of principal executive offices and zip code)

(412) 586-5830

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

_____________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KRYS	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company ☐

If emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 30, 2023, there were 28,206,330 shares of the registrant’s common stock issued and outstanding.

Krystal Biotech, Inc.

TABLE OF CONTENTS


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss ) for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51

SIGNATURES		52

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Krystal Biotech, Inc.

Condensed Consolidated Balance Sheets

(unaudited)



(In thousands, except share and per share data)	September 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	373,241	$	161,900
Short-term investments	188,828		217,271

Accounts receivable, net	9,316		—
Inventory	5,278		—
Prepaid expenses and other current assets	5,465		4,608
Total current assets	582,128		383,779
Property and equipment, net	164,029		161,684
Long-term investments	36,548		4,621
Right-of-use assets	7,360		8,042
Other non-current assets	285		324
Total assets	$	790,350	$	558,450
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	4,340	$	3,981
Current portion of lease liability	1,501		1,561
Accrued expenses and other current liabilities	21,742		23,305

Total current liabilities	27,583		28,847
Lease liability	6,819		7,372
Total liabilities	34,402		36,219
Commitments and contingencies (Note 7)
Stockholders' equity
Common stock; $0.00001 par value; 80,000,000 shares authorized at September 30, 2023 and December 31, 2022; 28,194,655 shares issued and outstanding at September 30, 2023; and 25,763,743 shares issued and outstanding at December 31, 2022	—		—
Additional paid-in capital	1,034,849		803,718
Accumulated other comprehensive loss	(382)		(728)
Accumulated deficit	(278,519)		(280,759)
Total stockholders' equity	755,948		522,231
Total liabilities and stockholders' equity	$	790,350	$	558,450

The accompanying notes are an integral part of these condensed consolidated financial statements.

Krystal Biotech, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except share and per share data)	2023		2022		2023		2022
Product revenues, net	$	8,556	$	—	$	8,556	$	—
Expenses:
Cost of goods sold	223		—		223		—
Research and development	10,629		11,516		35,061		31,720
Selling, general, and administrative	23,697		19,935		73,637		53,705
Litigation settlement	—		—		12,500		25,000
Total operating expenses	34,549		31,451		121,421		110,425
(Loss) from operations	(25,993)		(31,451)		(112,865)		(110,425)
Other income:
Gain from sale of priority review voucher	100,000		—		100,000		—
Interest and other income, net	6,740		1,601		15,105		2,502

Net income (loss)	$	80,747	$	(29,850)	2,240		(107,923)
Unrealized (loss) gain on available-for-sale securities and currency translation adjustment	(146)		70		346		(1,312)
Comprehensive income (loss)	$	80,601	$	(29,780)	$	2,586	$

SEC Form 10-Q filed by Krystal Biotech Inc.