Release Date: May 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Krystal Biotech Inc (KRYS, Financial) reported a strong start to 2024, continuing the momentum from 2023 with robust demand and rapid growth in U.S. commercial launch.
- Net Visorback revenues for the quarter were $45.3 million, with total net revenues since launch now exceeding $95 million, keeping pace with top tier recent rare disease launches.
- Gross margins improved to 95% for the quarter, with expectations of maintaining margins above 90% in future quarters.
- Expansion into international markets is progressing, with successful completion of an efficacy study in Japan and ongoing regulatory processes in Europe and Japan for expected launches in 2025.
- Krystal Biotech Inc (KRYS) has a strong pipeline with multiple clinical trials underway, including advancements in treatments for solid tumors and cystic fibrosis.
Negative Points
- The switch to a permanent J-Code negatively impacted revenues in Q1 2024 due to the need to bridge patients with free vials, approximately costing 403 vials.
- A cybersecurity incident affecting the specialty pharmacy provider temporarily slowed down reimbursement approvals during Q1.
- Conversion times to get patients started on treatment are longer than expected, particularly in community settings where additional support is needed.
- The company faces the challenge of ensuring continuity of therapy amidst insurance verification processes and the reauthorization of the permanent J-Code.
- Despite high compliance rates, there is a noted need for flexibility as patients may occasionally miss weekly doses, which could impact overall treatment efficacy.
Q & A Highlights
Q: Hey, guys. Thanks for the questions. Just two quick ones from me. First, could you maybe talk about patient compliance that you saw in the quarter? What has the feedback been I'm from the field on this today and then I didn't see any mention of new start forms on, but any trends here that you would have highlight?
A: Jennifer McDonough, SVP, Patient Access, Analytics and Operations, responded that patient compliance has been stellar, with patients understanding the importance of weekly dosing for wound healing. Compliance remains high, and patients appreciate the home dosing flexibility. Krish Krishnan, CEO, added that the company has shifted focus from start forms to reimbursement approvals as a better predictor of net revenue. Christine Wilson, Head of U.S. Sales and Marketing, noted strong new start volumes and increasing transition from COEs to community bases.
Q: Thank you for taking the question. Chris, I believe you mentioned that you're confident in hitting revenue projections in 2024? And despite you what was a disruption this quarter given the J code switch, can you just talk a bit about I see consensus around $255 million this year. Is that just something we are generally comfortable with?
A: Krish Krishnan, CEO, expressed confidence in meeting 2024 revenue projections, acknowledging a light first quarter but emphasizing the strong fundamentals of the commercial launch. He detailed the impact of the J-code switch, which involved providing free vials to ensure patient continuity but viewed it as a transitory issue.
Q: I wanted to ask about on Europe and Japan on specifically why you guys are planning on commercial build-out for Europe right now. And if you can just give us an update on the M&A and the story and a process whether you're past the 180-day questions and whether you anticipate oral arguments there.
A: Krish Krishnan, CEO, outlined plans for launching in Germany and setting up for named patient sales in Europe, with good demand experienced. Suma Krishnan, President of R&D, provided updates on regulatory progress in Europe and Japan, noting successful interactions with the EMA and plans to file a Japanese NDA by year-end.
Q: Good morning. Thanks for taking our question. And Krish, maybe one for you just on as patients have been on commercial drug now for quite a bit of time. Just wondering if you could provide an update on what you're hearing on the experience of these patients with respect to wound closure, curious if you're starting to hear of any patient starting to come off therapy as their wounds closure Do you still believe the induction phase on that previously you had projected at two years is still intact?
A: Krish Krishnan, CEO, confirmed high compliance and continued adherence to the projected induction period of 15-18 months for wound healing, with very few patients discontinuing treatment. Jennifer McDonough added that patient feedback on skin improvement has been very positive.
Q: Hi, this is Benazir on for Dae Gon Ha. Can you guys hear me? Okay.
A: Christine Wilson, Head of U.S. Sales and Marketing, emphasized the importance of all three strategic pillars (data analysis, HCP education, and patient engagement) in the launch of their product. She highlighted the broad geographic distribution of patient identification across the U.S., including rural areas and various specialties.
Q: Hey, thanks for taking my questions. I have a few, so I'll just go one by one off first for the reimbursement approvals. Are all these patients going on to receive paid drug? Or is there any leakage along the way?
A: Jennifer McDonough, SVP, Patient Access, Analytics and Operations, confirmed that the majority of patients with reimbursement approvals proceed to receive therapy, with efforts ongoing to ensure all approved patients start treatment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
