Krystal Biotech, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the audited financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“2024 10-K”), as filed with the SEC on February 19, 2025.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the audited financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 10-K”), as filed with the SEC on February 19, 2025.

Previous wording

•our commercialization plans in the United States, the European Union (“EU”), and Japan for our first commercial product, VYJUVEK® (beremagene geperpavec-svdt), which was approved by the U.S. Food and Drug Administration (“FDA”) in May 2023, the European Commission (“EC”) in April 2025, and Japan’s Ministry of Health, Labour and Welfare (“MHLW”) in July 2025 for the treatment of dystrophic epidermolysis bullosa (“DEB”);

Current wording

•our commercialization plans in the United States, the European Union (“EU”), Japan, and elsewhere for our first commercial product, VYJUVEK® (beremagene geperpavec-svdt), which was approved by the U.S. Food and Drug Administration (“FDA”) in May 2023, the European Commission (“EC”) in April 2025, and Japan’s Ministry of Health, Labour and Welfare (“MHLW”) in July 2025 for the treatment of dystrophic epidermolysis bullosa (“DEB”);

Previous wording

•our plans and expected timing of commercial launch of VYJUVEK in Europe and Japan;

Current wording

•our plans and expected timing of commercial launches of VYJUVEK in Europe outside of Germany and France and expected timing of pricing negotiations in Germany and France;

Previous wording

•the initiation, timing, progress, and results of clinical trials for our product candidates;

Current wording

•the initiation, timing, progress, and results of clinical trials for our product candidates, as well as expected timing of reporting of data readouts from our clinical trials;

Previous wording

Forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Item 1A of Part II of this Quarterly Report on Form 10-Q and other filings we make with the SEC from time to time. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect.

Current wording

Forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those referenced in Item 1A of Part II of this Quarterly Report on Form 10-Q and other filings we make with the SEC from time to time. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect.

Previous wording

Throughout this Quarterly Report on Form 10-Q, unless the context requires otherwise, all references to “Krystal,” “the Company,” “we,” “our,” “us” or similar terms refer to Krystal Biotech, Inc., together with its consolidated subsidiaries. Web links throughout this document are provided for convenience only and are not intended to be active hyperlinks to the referenced websites. No content on the referenced websites shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q.

Current wording

Throughout this Quarterly Report on Form 10-Q, unless the context requires otherwise, all references to “Krystal,” the “Company,” “we,” “our,” “us,” or similar terms refer to Krystal Biotech, Inc., together with its consolidated subsidiaries. Web links throughout this Quarterly Report on Form 10-Q are provided for convenience only and are not intended to be active hyperlinks to the referenced websites. No content on the referenced websites shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q.

Previous wording

VYJUVEK is a non-invasive, topical, redosable gene therapy approved in the United States, Europe, and Japan for the treatment of dystrophic epidermolysis bullosa (“DEB”), a rare and severe monogenic disease that affects the skin and mucosal tissues and is caused by one or more mutations in a gene called COL7A1. VYJUVEK is designed to deliver two copies of the COL7A1 gene when applied directly to DEB wounds, providing the patient’s skin cells the template to make normal type VII collagen protein and thereby addressing the fundamental disease-causing mechanism.

Current wording

VYJUVEK is a non-invasive, topical, redosable gene therapy approved in the United States, Europe, and Japan for the treatment of DEB, a rare and severe monogenic disease that affects the skin and mucosal tissues and is caused by one or more mutations in a gene called COL7A1. VYJUVEK is designed to deliver two copies of the COL7A1 gene when applied directly to DEB wounds, providing the patient’s skin cells the template to make normal type VII collagen protein and thereby addressing the fundamental disease-causing mechanism.

Previous wording

Previously, in May 2023, the FDA approved VYJUVEK, the first ever redosable gene therapy, for the treatment of wounds in patients, six months of age or older, suffering from DEB. VYJUVEK is the first and only corrective medicine approved by the FDA for the treatment of both recessive and dominant subtypes of DEB, and is approved in the United States for administration by a HCP in either a clinical setting or in the home.

Current wording

VYJUVEK was first approved by the FDA in May 2023 for the treatment of wounds in patients, six months of age or older, suffering from DEB, making it the first ever redosable gene therapy and the first and only corrective medicine approved by the FDA for the treatment of both recessive and dominant subtypes of DEB. In September 2025, the FDA approved a label update for VYJUVEK that expanded the treatment eligible population to include DEB patients from birth and provided patients with greater dosing flexibility, including the option for VYJUVEK to be applied by a healthcare professional (“HCP”), caregiver, or directly by the patient themselves, either at home or in a healthcare setting.

Previous wording

VYJUVEK was also approved in Europe earlier this year. On April 23, 2025, the EC granted marketing authorization to VYJUVEK for the treatment of wounds in patients with DEB who have mutations in the COL7A1 gene, starting from birth. VYJUVEK is currently the only corrective medicine approved in Europe for the treatment of DEB wounds. The approval granted by the EC also allows for flexible VYJUVEK dosing either at home or in a healthcare setting, with the option for patient or caregiver administration if deemed appropriate by a healthcare professional (“HCP”).

Current wording

In April 2025, the EC granted marketing authorization to VYJUVEK for the treatment of wounds in patients with DEB who have mutations in the COL7A1 gene, starting from birth. The approval granted by the EC also allows for flexible VYJUVEK dosing either at home or in a healthcare setting, with the option for patient or caregiver administration if deemed appropriate by a HCP.

Previous wording

On July 24, 2025, Japan’s MHLW approved VYJUVEK for the treatment of patients with DEB, starting from birth. With this approval, VYJUVEK is now the first and only genetic medicine approved in Japan for the treatment of DEB. The Japanese approval allows for dosing at home or in a healthcare setting, with the option for administration by patients or their family members. As per the approval issued by the MHLW, VYJUVEK is intended for use only in patients with a definite diagnosis of dystrophic epidermolysis bullosa. Genetic testing is not a requirement for treatment. The re-examination period for VYJUVEK in Japan is ten years.

Current wording

In July 2025, Japan’s MHLW approved VYJUVEK for the treatment of patients with DEB, starting from birth. The Japanese approval allows for dosing at home or in a healthcare setting, with the option for administration by patients or their family members. As per the approval issued by the MHLW, VYJUVEK is intended for use only in patients with a definite diagnosis of dystrophic epidermolysis bullosa. Genetic testing is not a requirement for treatment. The re-examination period for VYJUVEK in Japan is ten years.

Previous wording

We possess exclusive rights to develop, manufacture, and commercialize VYJUVEK and all our pipeline candidates throughout the world and intend to commercialize VYJUVEK directly in the United States, major European markets, and Japan. We currently sell VYJUVEK in the United States to a limited number of specialty pharmacy providers that mix the medication to be administered by a HCP in either a healthcare or home setting and to a limited number of hospitals or specialty distributors who deliver to hospitals where patients are administered the medication in a healthcare setting. We intend to and have started entering into distribution arrangements with specialty distributors to commercialize VYJUVEK outside of the United States, in major European markets, and in Japan.

Current wording

We possess exclusive rights to develop, manufacture, and commercialize VYJUVEK and all our pipeline candidates throughout the world and intend to commercialize VYJUVEK directly in the United States, major European markets, and Japan. We launched VYJUVEK in the United States in 2023 and recently commenced the commercial launch of VYJUVEK in Europe and Japan.

Previous wording

Net VYJUVEK product revenue was $96.0 million for the three months ended June 30, 2025, and $525.4 million in cumulative net product revenue since launch.

Current wording

Net VYJUVEK product revenue was $97.8 million for the three months ended September 30, 2025, and $623.2 million in cumulative net product revenue since launch.

Previous wording

Gross margin for the three months ended June 30, 2025 was 93%. We define gross margin as product revenue, net less cost of goods sold expressed as a percentage of product revenue, net.

Current wording

Gross margin for the three months ended September 30, 2025 was 96%. We define gross margin as product revenue, net less cost of goods sold expressed as a percentage of product revenue, net.

Previous wording

KB407 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the full-length cystic fibrosis transmembrane conductance regulator (“CFTR”) transgene for the treatment of CF, a serious rare lung disease caused by missing or mutated CFTR protein. In July 2023, we announced that we had dosed the first patient in CORAL-1, a Phase 1 multi-center, dose-escalation study evaluating KB407, delivered via a nebulizer, in patients with CF, regardless of their underlying genotype. In December 2024, we announced an interim safety data update for patients treated with KB407 in the first two dose escalation cohorts, in which we found single and repeat inhaled administration of KB407 to be safe and well tolerated. In January 2025, the Cystic Fibrosis Foundation Therapeutic Development Network Clinical Research Executive Committee granted full sanctioning of our KB407 Phase 1 CORAL-1 study protocol. Four patients have been enrolled in the third and final cohort of CORAL-1 and enrollment is ongoing. We expect to report safety and CFTR delivery data from patients in the third and final cohort before year end. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05504837.

Current wording

KB407 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the full-length cystic fibrosis transmembrane conductance regulator (“CFTR”) transgene for the treatment of CF, a serious rare lung disease caused by missing or mutated CFTR protein. In July 2023, we announced that we had dosed the first patient in CORAL-1, a Phase 1 multi-center, dose-escalation study evaluating KB407, delivered via a nebulizer, in patients with CF, regardless of their underlying genotype. In December 2024, we announced an interim safety data update for patients treated with KB407 in the first two dose escalation cohorts, in which we found single and repeat inhaled administration of KB407 to be safe and well tolerated. In January 2025, the Cystic Fibrosis Foundation Therapeutic Development Network Clinical Research Executive Committee granted full sanctioning of our KB407 Phase 1 CORAL-1 study protocol. Enrollment in CORAL-1 is ongoing and we expect to report safety and CFTR delivery data from patients in the third and final cohort of CORAL-1 before year end. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05504837.

Previous wording

KB408 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the SERPINA1 transgene, that encodes for normal human alpha-1 antitrypsin (“AAT”) protein, for the treatment of AATD, a serious rare lung disease. In February 2024, we announced that we dosed the first patient in SERPENTINE-1, a Phase 1, open-label, single dose escalation study evaluating KB408, delivered via a nebulizer, in adult patients with AATD with a PiZZ or a PiZNull genotype. In December 2024, we announced an interim clinical update from the first two dose escalation cohorts of SERPENTINE-1. Inhaled KB408 was safe and well-tolerated at both tested dose levels and clear evidence of successful SERPINA1 delivery and AAT expression was observed in both patients that underwent bronchoscopies. We have since confirmed SERPINA1 delivery and functional AAT expression in a third patient dosed with KB408 in Cohort 2 and amended the SERPENTINE-1 protocol to investigate repeat dosing at the Cohort 2 dose level (the repeat dose cohort now referred to as “Cohort 2B”). A total of five patients were dosed in Cohort 2 of which three underwent bronchoscopy. The first patient in Cohort 2B was dosed earlier this month and enrollment in this repeat dose cohort is ongoing. Enrollment in single dose cohorts is now closed. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier: NCT06049082.

Current wording

KB408 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the SERPINA1 transgene, that encodes for normal human alpha-1 antitrypsin (“AAT”) protein, for the treatment of AATD, a serious rare lung disease. In February 2024, we announced that we dosed the first patient in SERPENTINE-1, a Phase 1, open-label, dose escalation study evaluating KB408, delivered via a nebulizer, in adult patients with AATD with a PiZZ or a PiZNull genotype. In December 2024, we announced an interim clinical update from the first two dose escalation cohorts of SERPENTINE-1. Inhaled KB408 was safe and well-tolerated at both tested dose levels and clear evidence of successful SERPINA1 delivery and AAT expression was observed in both patients that underwent bronchoscopies. We have since confirmed SERPINA1 delivery and functional AAT expression in a third patient dosed with KB408 in Cohort 2 and amended the SERPENTINE-1 protocol to investigate repeat dosing at the Cohort 2 dose level (the repeat dose cohort now referred to as “Cohort 2B”). A total of five patients were dosed in Cohort 2 of which three underwent bronchoscopy. The first patient in Cohort 2B was dosed in August 2025 and enrollment in this repeat dose cohort is ongoing. We expect to report interim safety and SERPINA1 delivery data from the repeat dose Cohort 2B in the first half of 2026. Enrollment in single dose cohorts is now closed. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier: NCT06049082.

Previous wording

In June 2025, we announced that we dosed the first patient in IOLITE, an intra-patient, double-blind, placebo-controlled, multicenter Phase 3 study with a crossover design to evaluate KB803 for the treatment and prevention of corneal abrasions in DEB patients, six months of age or older. We expect to enroll approximately 16 patients in the IOLITE study. Enrolled patients will initially receive either a single eye drop of placebo or KB803, at a concentration of 109 PFU/mL, to each eye once weekly for 12 weeks. At the conclusion of the first 12 weeks, patients will be switched from placebo to KB803, or vice versa, and continue with once weekly administration for a second 12 week period. IOLITE is a decentralized study and drug administration will occur at the patient’s home by a HCP. The primary study endpoint will be the change in the average number of days per month with corneal abrasion symptoms while receiving KB803 versus placebo. Safety and secondary efficacy data, including weekly assessments of eye pain and monthly Epidermolysis Bullosa Eye Disease Index questionnaires, will be collected through to the end of the 24-week study period. Enrollment in IOLITE is ongoing. More details of the IOLITE study can be found at www.clinicaltrials.gov under NCT identifier NCT07016750.

Current wording

In June 2025, we announced that we dosed the first patient in IOLITE, an intra-patient, double-blind, placebo-controlled, multicenter Phase 3 registrational study with a crossover design to evaluate KB803 for the treatment and prevention of corneal abrasions in DEB patients, six months of age or older. We expect to enroll approximately 16 patients in the IOLITE study. Enrolled patients will initially receive either a single eye drop of placebo or KB803, at a concentration of 109 PFU/mL, to each eye once weekly for 12 weeks. At the conclusion of the first 12 weeks, patients will be switched from placebo to KB803, or vice versa, and continue with once weekly administration for a second 12 week period. IOLITE is a decentralized study and drug administration will occur at the patient’s home by a HCP. The primary study endpoint will be the change in the average number of days per month with corneal abrasion symptoms while receiving KB803 versus placebo. Safety and secondary efficacy data, including weekly assessments of eye pain and monthly Epidermolysis Bullosa Eye Disease Index questionnaires, will be collected through to the end of the 24-week study period. We continue to enroll patients in IOLITE and expect to complete enrollment by the end of the year. More details of the IOLITE study can be found at www.clinicaltrials.gov under NCT identifier NCT07016750.

Previous wording

Patients seeking to participate in IOLITE must first enroll in an ongoing natural history study and complete a 12-week run-in period, during which they report the number of days that they experience symptoms of corneal abrasions. Patients meeting the inclusion criteria following the 12-week run-in are eligible to participate in the IOLITE trial. The natural history study was initiated in August 2024 and remains open for enrollment. As of June 2025, we had enrolled 48 patients in the study. Details of the natural history study can be found at www.clinicaltrials.gov under NCT identifier NCT06563414.

Current wording

Patients seeking to participate in IOLITE must first enroll in an ongoing natural history study and complete a 12-week run-in period, during which they report the number of days that they experience symptoms of corneal abrasions. Patients meeting the inclusion criteria following the 12-week run-in are eligible to participate in the IOLITE trial. The natural history study was initiated in August 2024 and remains open for enrollment. Details of the natural history study can be found at www.clinicaltrials.gov under NCT identifier NCT06563414.

Previous wording

KB801 is an eye drop formulation of our novel HSV-1 based vector designed to deliver two transgene copies to the corneal epithelium for the sustained, localized expression and secretion of nerve growth factor (“NGF”) and treatment of NK, a rare, degenerative corneal disease caused by nerve damage in the eye that leads to corneal epithelial defects, ulcers, and perforation. Recombinant NGF eye drops have been shown to significantly improve corneal healing and are approved for the treatment of NK in multiple jurisdictions worldwide, including the United States, but rapid clearance from the eye requires intensive administration six times a day, with eye pain frequently reported, and may result in suboptimal treatment outcomes. In preclinical studies presented the Association for Research in Vision and Ophthalmology 2025 Annual Meeting in May 2025, KB801 was shown to efficiently transduce corneal epithelial cells in vitro and in vivo leading to sustained NGF production in the front of the eye. By transducing the cells of the corneal epithelium to produce and secrete NGF, KB801 has the potential to significantly reduce the treatment burden for patients while also maintaining more consistent NGF levels in the front of the eye.

Current wording

KB801 is an eye drop formulation of our novel HSV-1 based vector designed to deliver two transgene copies to the corneal epithelium for the sustained, localized expression and secretion of nerve growth factor (“NGF”) and treatment of NK, a rare, degenerative corneal disease caused by nerve damage in the eye that leads to corneal epithelial defects, ulcers, and perforation. Recombinant NGF eye drops have been shown to significantly improve corneal healing and are approved for the treatment of NK in multiple jurisdictions worldwide, including the United States, but rapid clearance from the eye requires intensive administration six times a day, with eye pain frequently reported, and may result in suboptimal treatment outcomes. In preclinical studies presented at the Association for Research in Vision and Ophthalmology 2025 Annual Meeting in May 2025, KB801 was shown to efficiently transduce corneal epithelial cells in vitro and in vivo leading to sustained NGF production in the front of the eye. By transducing the cells of the corneal epithelium to produce and secrete NGF, KB801 has the potential to significantly reduce the treatment burden for patients while also maintaining more consistent NGF levels in the front of the eye.

Previous wording

In July 2025, we announced that we dosed the first patient in EMERALD-1, a randomized, double-masked, multicenter, placebo-controlled Phase 1/2 study evaluating KB801, administered as an eye drop, for the treatment of NK. We expect to enroll up to 27 adult patients with Stage 2 or Stage 3 NK, as defined by the Mackie criteria, in the study. Patients will be randomized 2:1 to receive either KB801, at a concentration of 1010 PFU/mL, or placebo topically to the study eye twice weekly for eight weeks. The primary objective of EMERALD-1 is to evaluate the safety and tolerability of topical ocular administration of KB801 in patients with NK. The secondary objective is evaluation of efficacy based on the proportion of patients with complete durable healing of corneal epithelium at eight weeks. Additional exploratory efficacy measures will include change in corneal lesion size from baseline, each assessed at weeks 4, 6, 8, 10, and 20, as well as evaluations of corneal sensation and patient-reported symptom burden. Enrollment in EMERALD-1 is ongoing. More details of the EMERALD-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06999733.

Current wording

In July 2025, we announced that we dosed the first patient in EMERALD-1, a randomized, double-masked, multicenter, placebo-controlled study evaluating KB801, administered as an eye drop, for the treatment of NK. We expect to enroll up to 27 adult patients with Stage 2 or Stage 3 NK, as defined by the Mackie criteria. Patients will be randomized 2:1 to receive either KB801, at a concentration of 1010 PFU/mL, or placebo topically to the study eye twice weekly for eight weeks. The primary objective of EMERALD-1 is to evaluate the safety and tolerability of topical ocular administration of KB801 in patients with NK. The secondary objective is evaluation of efficacy based on the proportion of patients with complete durable healing of corneal epithelium at eight weeks. Additional exploratory efficacy measures will include change in corneal lesion size from baseline, each assessed at weeks 4, 6, 8, 10, and 20, as well as evaluations of corneal sensation and patient-reported symptom burden. Enrollment in EMERALD-1 is ongoing. More details of the EMERALD-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06999733.

Previous wording

KB707 is a redosable, immunotherapy designed to deliver transgenes encoding both human interleukin-2 (“IL-2”) and interleukin-12 (“IL-12”) to the tumor microenvironment and promote systemic immune-mediated tumor clearance. Two formulations of KB707 are in development, a solution formulation for transcutaneous injection and an inhaled (nebulized) formulation for lung delivery. Both intratumoral and inhaled KB707 have been granted Rare Pediatric Disease Designation (“RPDD”) by the FDA, with intratumoral receiving RPDD for the treatment of rhabdomyosarcoma in August 2024 and inhaled KB707 receiving RPDD for the treatment of osteosarcoma in May 2024. Both formulations of KB707 have also been granted Fast Track Designation by the FDA.

Current wording

KB707 is a redosable, immunotherapy designed to deliver transgenes encoding both human interleukin-2 and interleukin-12 to the tumor microenvironment and promote systemic immune-mediated tumor clearance. Two formulations of KB707 are in development, a solution formulation for transcutaneous injection and an inhaled (nebulized) formulation for lung delivery. Both intratumoral and inhaled KB707 have been granted Rare Pediatric Disease Designations and Fast Track Designations by the FDA.

Previous wording

Inhaled KB707 is currently under evaluation in KYANITE-1, an open-label, multi-center, dose escalation and expansion Phase 1/2 study, evaluating inhaled KB707, as monotherapy or in combination, in patients with locally advanced or metastatic solid tumors of the lung. In December 2024 and June 2025, we announced clinical updates for the monotherapy dose escalation and expansion cohorts of KYANITE-1. Early evidence of monotherapy activity was observed in the evaluable cohort of 11 patients with heavily pre-treated advanced non-small cell lung cancer, achieving an objective response rate of 36% and a disease control rate of 54% as of the latest data cut-off. Inhaled KB707 was also reported to be safe and generally well tolerated as monotherapy in the 39 patients included in the safety analysis. The majority of treatment-related adverse events have been mild to moderate in severity and transient with no Grade 4 or 5 adverse events observed. Enrollment in KYANITE-1 is ongoing. Details of the Phase 1/2 study can be found at www.clinicaltrials.gov under NCT identifier NCT06228326.

Current wording

Phase 1/2 study, evaluating inhaled KB707, as monotherapy or in combination, in patients with locally advanced or metastatic solid tumors of the lung. As of the latest data cut-off disclosed in June 2025, in an evaluable cohort of 11 patients with heavily pre-treated advanced NSCLC, we observed monotherapy activity with inhaled KB707 therapy, achieving an objective response rate of 36% and a disease control rate of 54%. Inhaled KB707 was also reported to be safe and generally well tolerated as monotherapy in the 39 patients included in the safety analysis. The majority of treatment-related adverse events have been mild to moderate in severity and transient with no Grade 4 or 5 adverse events observed.

Previous wording

Intratumoral KB707 is currently under evaluation in OPAL-1, an open-label, multi-center, dose escalation and expansion Phase 1/2 study, evaluating intratumoral KB707, as monotherapy or in combination, in patients with locally advanced or metastatic solid tumors, who relapsed or are refractory to standard of care, with at least one measurable and injectable tumor accessible by transcutaneous route of administration. The final monotherapy dose escalation cohort was cleared in May 2024 and enrollment in OPAL-1 is ongoing. Details of the Phase 1/2 study can be found at www.clinicaltrials.gov under NCT identifier NCT05970497.

Current wording

With the prioritization of inhaled KB707, we have paused enrollment in OPAL-1, an open-label, multi-center, dose escalation and expansion Phase 1/2 study, evaluating intratumoral KB707, as monotherapy or in combination, in patients with locally advanced or metastatic solid tumors, who relapsed or are refractory to standard of care, with at least one measurable and injectable tumor accessible by transcutaneous route of administration. Patients enrolled in OPAL-1 continue to be followed and based on safety and efficacy results from the study, the Company may adjust development plans for intratumoral KB707. Details of the OPAL-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05970497.

Previous wording

In addition to focusing on genetic medicines to treat patients with diseases with high unmet medical needs, we are leveraging the ability of our platform to deliver proteins of interest to cells in the skin in the context of aesthetic medicine via our wholly-owned subsidiary, Jeune Aesthetics, Inc. (“Jeune”). We recently expanded the senior leadership team at Jeune, with Marc Forth joining as Jeune CEO in April 2025 and Nishant Saxena joining as Jeune CFO in January 2025.

Current wording

In addition to focusing on genetic medicines to treat patients with diseases with high unmet medical needs, we are leveraging the ability of our platform to deliver proteins of interest to cells in the skin in the context of aesthetic medicine via our wholly-owned subsidiary, Jeune Aesthetics, Inc. (“Jeune”).

Previous wording

In July 2025, Jeune announced positive safety and efficacy results, including significant improvements in key skin aesthetic attributes such as wrinkles and elasticity, in PEARL-2, a 2:1 randomized, double-blind, placebo-controlled Phase 1 study evaluating KB304, for the treatment of wrinkles of the décolleté. KB304 is a solution formulation of our novel vector for intradermal injection designed to deliver two copies of the COL3A1 transgene and one copy of the ELNtransgene to address various signs of skin aging including elasticity loss. Meaningful aesthetic improvements in multiple skin attributes were reported by the investigator and subjects alike following KB304 treatment, with clear and statistically significant advantages over placebo. Improvements were reported not only for wrinkles but also multiple additional skin attributes, including elasticity, crepiness, hydration, and radiance. Increased subject satisfaction with wrinkle appearance was also reported, with clear separation from placebo. All adverse events were mild-to-moderate in severity and transient. The frequency and duration of adverse events also decreased with subsequent doses of KB304. No serious or severe adverse events were reported. Details of the study can be found at www.clinicaltrials.gov under NCT identifier NCT06724900.

Current wording

In July 2025, Jeune announced positive safety and efficacy results, including significant improvements in key skin aesthetic attributes such as wrinkles and elasticity, in PEARL-2, a 2:1 randomized, double-blind, placebo-controlled Phase 1 study evaluating KB304, for the treatment of wrinkles of the décolleté. KB304 is a solution formulation of our novel vector for intradermal injection designed to deliver two copies of the COL3A1 transgene and one copy of the ELNtransgene to address various signs of skin aging including elasticity loss. Meaningful aesthetic improvements were reported by the investigator and subjects alike following KB304 treatment, with clear and statistically significant advantages over placebo. Improvements were reported not only for wrinkles but also multiple additional skin attributes, including elasticity, crepiness, hydration, and radiance. Increased subject satisfaction with wrinkle appearance was also reported, with clear separation from placebo. All adverse events were mild-to-moderate in severity and transient and no serious or severe adverse events were reported. The frequency and duration of adverse events also decreased with subsequent doses of KB304. Details of the PEARL-2 study can be found at www.clinicaltrials.gov under NCT identifier NCT06724900.

Previous wording

Based on the broad aesthetic improvements observed following KB304 treatment in PEARL-2, Jeune has selected KB304 for progression into Phase 2 study for the treatment of wrinkles of the décolleté. In support of the Phase 2 study, Jeune recently completed development and validation of a décolleté-specific photonumeric scale (“JDWS”). Jeune intends to submit the JDWS to the FDA and align on the Phase 2 study protocol in the second half of 2025. Jeune currently expects to initiate the Phase 2 study in the first half of 2026.

Current wording

Based on the broad aesthetic improvements observed following KB304 treatment in PEARL-2, Jeune is progressing KB304 into a Phase 2 study for the treatment of wrinkles of the décolleté. In support of the Phase 2 study, Jeune has developed and validated a décolleté-specific photonumeric scale (“JDWS”) and, following feedback from the FDA in the second half of 2025, expects to initiate the Phase 2 study in the first half of 2026.

Previous wording

Jeune’s second clinical-stage program, KB301, is a solution formulation of our novel vector for intradermal injection designed to deliver two copies of the COL3A1 transgene to address signs of aging or damaged skin caused by declining levels of, or damaged proteins within the extracellular matrix, including type III collagen. In August 2024, Jeune announced positive interim safety and efficacy results from Cohorts 3 and 4 of the Phase 1 study PEARL-1, open label studies evaluating KB301 in the treatment of lateral canthal lines at rest and dynamic wrinkles of the décolleté, respectively. Meaningful and sustained improvements in multiple skin aesthetic attributes, as well as increased subject satisfaction with wrinkle appearance, were reported. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04540900. Jeune is currently evaluating aesthetic indications most suitable for the advanced clinical development of KB301.

Current wording

Jeune’s second clinical-stage program, KB301, is a solution formulation of our novel vector for intradermal injection designed to deliver two copies of the COL3A1 transgene to address signs of aging or damaged skin caused by declining levels of, or damaged proteins within the extracellular matrix, including type III collagen. In August 2024, Jeune announced positive interim safety and efficacy results from Cohorts 3 and 4 of the Phase 1 study, PEARL-1, open label studies evaluating KB301 in the treatment of lateral canthal lines at rest and dynamic wrinkles of the décolleté, respectively. Meaningful and sustained improvements in multiple skin aesthetic attributes, as well as increased subject satisfaction with wrinkle appearance, were reported. Details of the PEARL-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04540900. Jeune is currently evaluating aesthetic indications most suitable for the advanced clinical development of KB301.

Previous wording

After FDA approval of VYJUVEK in May 2023, we began commercial marketing and sales and began recognizing revenue during the third quarter of 2023. Our future revenue will fluctuate from quarter to quarter for many reasons, including the uncertain timing and amount of any such sales. The transaction price that we recognize as revenue for VYJUVEK sales includes an estimate of variable consideration, which includes discounts, returns, copay assistance and rebates that are offered within contracts. Refer to Note 3 of the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Current wording

After FDA approval of VYJUVEK in May 2023, we began commercial marketing and sales and began recognizing revenue during the third quarter of 2023. Subsequently in April 2025 and July 2025, VYJUVEK was approved in Europe and Japan, respectively. Our future revenue will fluctuate from quarter to quarter for many reasons, including the uncertain timing and amount of any such sales. The transaction price that we recognize as revenue for VYJUVEK sales includes an estimate of variable consideration, which includes discounts, returns, copay assistance and rebates that are offered within contracts. Refer to Note 3 of the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

Interest and other income, net consists primarily of income earned from our cash, cash equivalents and investments.

Current wording

Interest and other income, net consists primarily of income earned from our cash, cash equivalents and investments and gains and losses on foreign currency transactions.

Previous wording

There have been no significant changes during the six months ended June 30, 2025 to our critical accounting policies, significant judgments and estimates as disclosed in our management’s discussion and analysis of financial condition and results of operations included in our 2024 Form 10-K.

Current wording

There have been no significant changes during the nine months ended September 30, 2025 to our critical accounting policies, significant judgments and estimates as disclosed in our management’s discussion and analysis of financial condition and results of operations included in the 2024 10-K.

Previous wording

Product revenue, net was $96.0 million for the three months ended June 30, 2025, as compared to $70.3 million for the three months ended June 30, 2024. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior year.

Current wording

Product revenue, net was $97.8 million for the three months ended September 30, 2025, as compared to $83.8 million for the three months ended September 30, 2024. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior year.

Previous wording

Research and development expenses decreased by $1.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The decrease in research and development expenses was primarily attributable to:

Current wording

Research and development expenses increased by $1.1 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase in research and development expenses was primarily attributable to:

Previous wording

•a net decrease of $382 thousand in manufacturing costs mainly driven by the scheduling of production runs across our product candidates and programs, including payroll related expenses to support our research and development, primarily due to a decrease in B-VEC and KB407 costs offset by increases in KB801, KB803 and other dermatology programs costs.

Current wording

•a net increase of $549 thousand in manufacturing costs driven by the timing of production runs across our product candidates and programs, mainly due to an increase in B-VEC and KB407 runs offset by a decrease in KB408 and KB707 runs; and

Previous wording

Selling, general and administrative expenses increased $7.5 million in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily driven by the following:

Current wording

Selling, general and administrative expenses increased $8.9 million in the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily driven by the following:

Previous wording

•an increase of $3.3 million related to professional services, including legal and consulting services;

Current wording

•an increase of $3.5 million related to professional services, including legal and consulting services;

Previous wording

•an increase of $1.7 million in marketing costs to support commercial sales of VYJUVEK.

Current wording

•an increase of $1.8 million in marketing costs to support commercial sales of VYJUVEK;

Previous wording

•an increase of $1.3 million in other G&A costs, including $461 thousand in other taxes, $245 thousand in facilities expenses, and $243 thousand in subscription expense.

Current wording

•an increase of $1.2 million in other general and administrative costs, including $286 thousand in subscription expense, $250 thousand in charitable contributions, and $222 thousand in facilities expense; and

Previous wording

Litigation settlement for the three months ended June 30, 2025 and 2024 was zero and $12.5 million, respectively, and consisted of amounts related to the settlement of litigation with PeriphaGen. See discussion in Note 7 of the notes to consolidated financial statements included in the December 31, 2024 Annual Report on Form 10-K and

Current wording

Litigation settlement for the three months ended September 30, 2025 and 2024 was zero and $12.5 million, respectively, and consisted of amounts related to the settlement of litigation with PeriphaGen. See discussion in Note 7 of the notes to consolidated financial statements included in the 2024 10-K and in this Quarterly Report on Form 10-Q for more information.

Previous wording

Interest and other income, net for the six months ended June 30, 2025 and 2024 was $14.9 million and $15.1 million, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments. The decrease in interest and dividend income is primarily the result of less favorable interest rates on investments as compared to the prior period.

Current wording

Interest and other income, net was $6.6 million and $7.3 million for the three months ended September 30, 2025 and 2024, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments as well as the effects of foreign exchange rates.

Previous wording

Income tax expense for the three months ended June 30, 2025 and 2024 was $8.4 million and $477 thousand, respectively, which relates to state, federal and foreign income taxes.

Current wording

Income tax benefit for the three months ended September 30, 2025 was $31.4 million and income tax expense was $2.6 million for the three months ended September 30, 2024,, which relates to state, federal and foreign income taxes. In the third quarter of 2025, we determined that it was more likely than not that the benefit from certain of our deferred tax assets will be realized. Accordingly, the related valuation allowance was released and a one-time benefit was recognized. See discussion in Note 10 of the notes to consolidated financial statements included in this Quarterly Report on Form 10-Q for more information.

Previous wording

Product revenue, net was $184.2 million for the six months ended June 30, 2025 as compared to $115.5 million for the six months ended June 30, 2024. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior year.

Current wording

Product revenue, net was $282.0 million for the nine months ended September 30, 2025 as compared to $199.4 million for the nine months ended September 30, 2024. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior year.