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, 2025 (the “2025 10-K”), as filed with the SEC on February 17, 2026.

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 Part I, Item 1 of this Quarterly Report on Form 10-Q and with the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 10-K”), as filed with the Securities and Exchange Commission (the “SEC”) on February 17, 2026.

Previous wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. These statements relate to future events or to our future operating or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. These statements relate to future events or to our future operating or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Previous wording

•our commercialization plans in the United States, the European Union (the “EU”), Japan, the United Kingdom (the “UK”), and elsewhere for our first commercial product, VYJUVEK (beremagene geperpavec-svdt) for the treatment of dystrophic epidermolysis bullosa (“DEB”), including timing of pricing negotiations and potential commercial launches;

Current wording

•our commercialization plans in the United States, the European Union (the “EU”), Japan, the United Kingdom (the “UK”), and elsewhere for our first commercial product, VYJUVEK (beremagene geperpavec-svdt) for the treatment of dystrophic epidermolysis bullosa (“DEB”), including timing and outcomes of pricing and reimbursement negotiations, the timing of potential commercial launches, and the timing and outcomes of additional marketing authorization applications;

Previous wording

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

Current wording

•the design, initiation, enrollment, timing, progress, and results of clinical trials for our product candidates, as well as expected timing of regulatory filings, interactions with regulatory authorities, and reporting of data readouts from our clinical trials;

Previous wording

•our expectations regarding future fluctuations in revenue and anticipated increases in certain expenses; and

Current wording

•our expectations regarding future fluctuations in revenue and anticipated increases in certain expenses;

Previous wording

•our commercialization, marketing, and manufacturing capabilities and strategy.

Current wording

•our commercialization, marketing, and manufacturing capabilities and strategy; and

Previous wording

Forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those referenced in Part I, Item 1A of the 2025 Form 10-K 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. You should read this Quarterly Report on Form 10-Q 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 Part I, Item 1A of the 2025 10-K, Part II, Item 1A 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. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect.

Previous wording

We launched VYJUVEK in the United States in 2023, in Germany in August 2025, and in France and Japan in October 2025. The launch in France is under the post-marketing authorization early reimbursed access Accès Précoce program.

Current wording

We launched VYJUVEK in the United States in 2023, in Germany in August 2025, and in France and Japan in October 2025. The launch in France is under the post-marketing authorization early reimbursed access Accès Précoce program. Pricing negotiations were successfully completed in Germany in October 2026 and remain ongoing in France, where they are expected to continue until at least 2027. Pricing negotiations were successfully completed in Japan prior to launch.

Previous wording

We are also advancing pricing discussions across Europe and the UK, including discussions with Italian and Spanish reimbursement authorities to enable potential launches in both Italy and Spain in the second half of 2026. The timing of additional launches is uncertain and will depend on the cadence and outcomes of ongoing and planned regulatory interaction and pricing negotiations.

Current wording

We are advancing additional VYJUVEK pricing discussions across Europe and the UK. In October 2026, we successfully completed pricing negotiations with Italian authorities and now expect to launch VYJUVEK in Italy in early 2027. We also expect a pricing decision in Spain before the end of the year. The timing of additional pricing decisions and launches is uncertain and will depend on the cadence and outcomes of ongoing pricing negotiations.

Previous wording

We are preparing multiple additional marketing authorization applications for VYJUVEK, including for Switzerland and Australia, which we expect to submit in the second half of 2026.

Current wording

We are progressing multiple additional marketing authorization applications for VYJUVEK and have submitted a marketing authorization application for VYJUVEK in Australia. We also expect to submit a marketing authorization application in Switzerland before the end of the year.

Previous wording

Net VYJUVEK product revenue was $119.2 million for the three months ended June 30, 2026, and $965.9 million in cumulative net product revenue since our first launch of VYJUVEK in the United States in 2023.

Current wording

VYJUVEK product revenue, net, was $127.3 million for the three months ended September 30, 2026, and cumulative VYJUVEK product revenue, net, was $1,093.3 million since our first launch of VYJUVEK in the United States in 2023.

Previous wording

Gross margin for the three months ended June 30, 2026 was 95%. 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, 2026 was 94%. We define gross margin as product revenue, net less cost of goods sold expressed as a percentage of product revenue, net.

Previous wording

In October 2025, the FDA cleared our investigational new drug application to evaluate KB111 in the clinic and, in January 2026, the FDA granted KB111 Fast Track Designation for the treatment of HHD. In April 2026, the FDA also granted platform technology designation to the engineered HSV-1 viral vector used in KB111, affording the program the same potential development and manufacturing efficiencies as KB801 and KB407.

Current wording

In October 2025, the FDA cleared our investigational new drug application to evaluate KB111 in the clinic and, in January 2026, the FDA granted KB111 Fast Track Designation for the treatment of HHD. In April 2026, the FDA also granted platform technology designation to the engineered HSV-1 viral vector used in KB111, a designation which affords development and manufacturing efficiencies for the development of KB111.

Previous wording

We have developed and are currently validating an HHD-specific severity scale required for the clinical evaluation of KB111. We have also initiated an open label, single-arm study, HALITE-1, to evaluate the safety of repeat dose KB111, administered once weekly for 12 weeks, in approximately seven patients with HHD. Enrollment in HALITE-1 is ongoing. Details of the study can be found at www.clinicaltrials.gov under NCT identifier: NCT07717346. We expect to complete enrollment and report HALITE-1 interim study results before the end of the year. We plan to submit the results from HALITE-1 along with the registrational study design and scale for discussions with the FDA before year end to enable a potential registrational study start in 2027.

Current wording

We have developed and are currently validating an HHD-specific severity scale required for the clinical evaluation of KB111. We are also conducting an open-label, single-arm study, HALITE-1, to evaluate the safety of repeat-dose KB111, administered once weekly for 12 weeks, in patients with HHD. Enrollment in HALITE-1 is complete, with a total of five patients enrolled in the study. Dosing is ongoing. We expect to report HALITE-1 interim study results before the end of the year. Details of the study can be found at www.clinicaltrials.gov under NCT identifier: NCT07717346. We expect to meet with the FDA in the first quarter of 2027, following completion of scale validation, to discuss HALITE-1 study results, the HHD-specific severity scale, and study designs to enable a registrational study start later in 2027.

Previous wording

KB803 is a redosable eye drop formulation of B-VEC, designed for the treatment of ocular complications that are thought to affect over 25% of DEB patients. These complications, which include corneal erosions, abrasions, blistering and scarring, can lead to progressive vision loss. There is currently no corrective therapy available.

Current wording

KB803 is a redosable eye drop formulation of B-VEC, designed for the treatment of ocular complications that are estimated to affect over 25% of DEB patients. These complications, which include corneal erosions, abrasions, blistering and scarring, can lead to progressive vision loss. There is currently no corrective therapy available.

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 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. After observing a promising clinical safety profile in the initial patients treated with Krystal’s eye drop gene therapies, we modified the KB803 dosing schedule to reduce the potential impact of human error in eye drop administration. In April 2026, we completed study enrollment, with a total of 16 patients enrolled under the updated IOLITE protocol. We expect to report top-line results from IOLITE before the end of the year. The primary efficacy endpoint of the IOLITE study is 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, are being collected through to the end of the 24-week study period.

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. After observing a promising clinical safety profile in the initial patients treated with our eye drop gene therapies, we modified the KB803 dosing schedule to reduce the potential impact of human error in eye drop administration. After reaching the initial IOLITE enrollment target of 16 patients in April 2026, we enrolled three additional patients to replace two patients who withdrew for reasons unrelated to safety and to generate additional evidence to support the potential treatment of corneal abrasions in DEB patients from birth. The additional patients include one child one year of age. We expect the last patient visit for IOLITE in February 2027 with top-line results reported shortly thereafter. The primary efficacy endpoint of the IOLITE study is 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, are being collected through to the end of the 24-week study period.

Previous 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. In October 2025, the FDA granted platform technology designation to the engineered HSV-1 viral vector used in KB801, a designation which affords development and manufacturing efficiencies for the development of KB801. Following receipt of this designation, we amended the EMERALD-1 protocol to enable the study to serve as a registrational trial supporting the potential registration of KB801. Under the updated protocol, we expect to enroll approximately 60 adult patients with Stage 2 or Stage 3 NK, as defined by the Mackie criteria, randomized 1:1 to receive either KB801 or placebo. The primary efficacy endpoint of EMERALD-1 is the proportion of patients with complete healing of corneal epithelium at eight weeks. Enrollment in EMERALD-1 is ongoing. We expect to complete enrollment before the end of the year. 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. In October 2025, the FDA granted platform technology designation to the engineered HSV-1 viral vector used in KB801, affording the program the same potential development and manufacturing efficiencies as KB111. Following receipt of this designation, we amended the EMERALD-1 protocol to enable the study to serve as a registrational trial supporting the potential registration of KB801. Under the updated protocol, we expect to enroll approximately 60 adult patients with Stage 2 or Stage 3 NK, as defined by the Mackie criteria, randomized 1:1 to receive either KB801 or placebo. The primary efficacy endpoint of EMERALD-1 is the proportion of patients with complete healing of corneal epithelium at eight weeks. Enrollment in EMERALD-1 is ongoing. We have activated 22 sites across the United States and are close to activating sites in France, Spain and the UK. Enrollment has progressed slower than initially anticipated, reflecting the study’s narrowly defined eligibility criteria and the challenges of enrolling patients in a placebo-controlled trial in an indication with an available approved therapy. We now expect to complete enrollment and report top-line results in 2027. More details of the EMERALD-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06999733.

Previous wording

In July 2023, we announced that we had dosed the first patient in our Phase 1 CORAL-1 study, a multi-center, dose-escalation trial of KB407 in patients with CF that included molecular assessments of CFTR delivery and expression in the third and highest dose cohort. In December 2024, we announced an interim safety data update from the first two dose cohorts of CORAL-1 and, in January 2026, interim safety and molecular data updates from the third dose cohort. KB407 was generally well tolerated across all three dose cohorts, and molecular assessments by bronchoscopy confirmed the successful delivery and expression of wild-type CFTR protein in patient’s lungs, with broad airway distribution and confirmation of KB407 transduction in all six CF patients with successful bronchoscopies.

Current wording

In July 2023, we announced that we had dosed the first patient in our Phase 1 CORAL-1 study, a multicenter, dose-escalation trial of KB407 in patients with CF that included molecular assessments of CFTR delivery and expression in the third and highest dose cohort. In December 2024, we announced an interim safety data update from the first two dose cohorts of CORAL-1 and, in January 2026, interim safety and molecular data updates from the third dose cohort. KB407 was generally well tolerated across all three dose cohorts, and molecular assessments by bronchoscopy confirmed the successful delivery and expression of wild-type CFTR protein in patients’ lungs, with broad airway distribution and confirmation of KB407 transduction in all six CF patients with successful bronchoscopies.

Previous wording

Based on our interactions with the FDA, we initiated an open label, single-arm study to evaluate the safety of repeat dose KB407 for 24 weeks in five patients with CF who are ineligible for, do not tolerate, or do not benefit from modulator therapy. Enrollment in the study is ongoing. We expect to complete enrollment and report interim results before the end of the year. Details of the study can be found at www.clinicaltrials.gov under NCT identifier: NCT05504837. Concurrently, we are in discussions with the FDA, CFF, and TDNCC regarding a potential innovative registrational study design and statistical analysis plan that explores using prospectively collected natural history data from the CFF and TDNCC to supplement placebo control data for evaluation of KB407 treatment effect. We expect to share the design and associated statistical analysis of the registrational study following alignment with the FDA, which is anticipated in the second half of 2026, and initiate the registrational study in 2027.

Current wording

Based on our interactions with the FDA, we initiated an open-label, single-arm study to evaluate the safety of repeat-dose KB407 for 24 weeks in patients with CF who are ineligible for, do not tolerate, or do not benefit from modulator therapy. Three patients are currently being dosed on the study and we expect to enroll and dose an additional three patients before year end, with interim study results now anticipated in the first half of 2027. Details of the study can be found at www.clinicaltrials.gov under NCT identifier: NCT05504837. In the third quarter of 2026, we were selected for the FDA’s Complex Innovative Trial Design (“CID”) Meeting Program. The CID Meeting Program is intended to facilitate and advance the use of complex and novel clinical trial designs and is providing us with the opportunity for increased FDA interaction to align on our innovative registrational study design. We expect to share the design and associated statistical analysis of the registrational study following alignment with the FDA and initiate the registrational study in 2027.

Previous wording

In April 2026, the FDA also granted platform technology designation to the engineered HSV-1 viral vector used in KB407, affording the program the same potential development and manufacturing efficiencies as KB801.

Current wording

In April 2026, the FDA also granted platform technology designation to the engineered HSV-1 viral vector used in KB407, affording the program the same potential development and manufacturing efficiencies as KB111 and KB801.

Previous wording

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 2027. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier: NCT06049082.

Current wording

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 generally 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 2027. Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier: NCT06049082.

Previous 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. In February 2026, the FDA also granted Regenerative Medicine Advanced Therapy designation to KB707 for the treatment of advanced or metastatic non-small cell lung cancer (“NSCLC”).

Current wording

Inhaled KB707 for Non-Small Cell Lung Cancer (“NSCLC”)

Previous wording

We are developing inhaled KB707 for the treatment of NSCLC based on early evidence of efficacy from 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 June 2025, we disclosed our most recent clinical update on patients treated with inhaled KB707 as monotherapy in KYANITE-1. In an evaluable cohort of 11 patients with heavily pre-treated advanced NSCLC, patients treated with inhaled KB707 as monotherapy achieved an objective response rate (“ORR”) of 36% and a disease control rate (“DCR”) 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 were mild to moderate in severity and transient with no Grade 4 or 5 adverse events observed. In May 2026, we disclosed interim clinical results from a KYANITE-1 dose expansion cohort evaluating the safety and efficacy of inhaled KB707 plus pembrolizumab in patients with advanced NSCLC. The safety analysis included 21 patients who received at least one dose of the combination regimen of which 16 patients were also evaluable for efficacy. The combination regimen was well tolerated and effective in a late-line setting, achieving an ORR of 31% and a DCR of 75%. Responses were also durable with median duration of response and progression free survival not reached as of data cut-off.

Current wording

We are developing inhaled KB707 for the treatment of NSCLC based on preliminary evidence of antitumor activity from KYANITE-1, an open-label, multicenter, 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.

Previous wording

There have been no material changes during the six months ended June 30, 2026 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 2025 10-K.

Current wording

There have been no material changes during the nine months ended September 30, 2026 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 2025 10-K.

Previous wording

Product revenue, net was $235.6 million for the six months ended June 30, 2026 as compared to $184.2 million for the six months ended June 30, 2025. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior period, primarily due to launches in our EU and Japan markets, partially offset by a reduction in United States VYJUVEK sales.

Current wording

Product revenue, net was $127.3 million for the three months ended September 30, 2026, as compared to $97.8 million for the three months ended September 30, 2025. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior year, primarily due to launches in our Europe and Japan markets.

Previous wording

Research and development expenses increased by $0.1 million for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase in research and development expenses was primarily attributable to:

Current wording

Research and development expenses increased by $0.3 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase in research and development expenses was primarily attributable to:

Previous wording

•an increase of $0.5 million in unallocated materials and other support costs for our product candidates.

Current wording

•an increase of $0.7 million in unallocated materials and other support costs for our product candidates; and

Previous wording

•a net decrease of $0.5 million in research and development payroll and manufacturing costs driven by the timing of production runs across our product candidates, mainly due to a decrease in B-VEC, KB111 and other unallocated expenses, partially offset by increases in KB707 and KB801; and

Current wording

•a net increase of $0.6 million in research and development payroll and manufacturing costs driven by the timing of production runs across our product candidates. This change is mainly due to an increase in KB113, KB801, other product candidates and other unallocated expenses, partially offset by a decrease in B-VEC and KB111 expenses.

Previous wording

•a net increase of $0.8 million in clinical development costs, primarily due to increased costs for KB407, KB707, KB801, and KB803 partially offset by a decrease in KB304 costs; and

Current wording

•a net decrease of $0.7 million in clinical development costs, primarily due to decreased costs for KB304 and KB707, partially offset by increased costs for in KB111 and KB801; and

Previous wording

•a decrease of $0.4 million in B-VEC pre-commercialization regulatory fees.

Current wording

•a decrease of $0.3 million in B-VEC pre-commercialization regulatory fees.

Previous wording

Selling, general and administrative expenses increased $4.8 million in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily driven by the following:

Current wording

Selling, general and administrative expenses decreased $3.8 million during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The decrease was primarily driven by the following:

Previous wording

•an increase of $2.0 million related to professional services, including legal and consulting services; and

Current wording

•a decrease of $2.3 million in professional services including legal and consulting services; and

Previous wording

•an increase of $6.3 million in payroll costs, including stock-based compensation;

Current wording

•an increase of $1.6 million in payroll costs, including stock-based compensation; and

Previous wording

•an increase of $1.4 million in other general and administrative costs primarily related to $0.6 million in travel and conferences and $0.3 million in subscriptions; and

Current wording

•an increase of $1.1 million in other general and administrative costs primarily related to $0.5 million in travel and sponsorships supporting the global sales of VYJUVEK and $0.3 million in subscriptions.

Previous wording

Interest and other income, net was $7.7 million and $7.4 million for the three months ended June 30, 2026 and 2025, 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.

Current wording

Interest and other income, net was $9.0 million and $6.6 million for the three months ended September 30, 2026 and 2025, 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 was $11.3 million and $8.4 million for the three months ended June 30, 2026 and June 30, 2025, respectively, which relates to state, federal and foreign income taxes.

Current wording

Income tax expense was $17.1 million for the three months ended September 30, 2026 and income tax benefit was $31.4 million for the three months ended September 30, 2025, respectively, 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 $119.2 million for the three months ended June 30, 2026, as compared to $96.0 million for the three months ended June 30, 2025. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior year, primarily due to launches in our Europe and Japan markets, partially offset by a reduction in United States VYJUVEK sales.

Current wording

Product revenue, net was $362.9 million for the nine months ended September 30, 2026 as compared to $282.0 million for the nine months ended September 30, 2025. The increase in product revenue, net was driven by an increase in VYJUVEK sales as compared to the prior period, primarily due to launches in our Europe and Japan markets, partially offset by a reduction in United States VYJUVEK sales.

Previous wording

Cost of goods sold was $12.8 million for the six months ended June 30, 2026 as compared to $12.2 million for the six months ended June 30, 2025, due to an increase in units sold partially offset by manufacturing process optimizations that resulted in lower average costs per unit of VYJUVEK.

Current wording

Cost of goods sold was $20.3 million for the nine months ended September 30, 2026 as compared to $16.5 million for the nine months ended September 30, 2025, due to an increase in units sold, primarily as a result of our launches in Europe and Japan, partially offset by manufacturing process optimizations that resulted in lower costs per unit related to our United States VYJUVEK sales.

Previous wording

The following table summarizes our research and development expenses by product candidate or program, and for unallocated expenses, by type, for the six months ended June 30, 2026 and 2025:

Current wording

The following table summarizes our research and development expenses by product candidate or program, and for unallocated expenses, by type, for the nine months ended September 30, 2026 and 2025:

Previous wording

Research and development expenses increased by $1.2 million in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase in research and development expenses was primarily attributable to:

Current wording

Research and development expenses increased by $1.5 million during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase in research and development expenses was primarily attributable to: