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What changed in Krystal Biotech, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Krystal Biotech, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+574 added−573 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-19)

Top changes in Krystal Biotech, Inc.'s 2025 10-K

574 paragraphs added · 573 removed · 433 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

117 edited+67 added−35 removed204 unchanged
Biggest changeA summary of granted composition of matter and/or methods of use patents that we own, which cover our technology platform, VYJUVEK, and our product candidates in the United States and elsewhere, is provided below. 17 Our Technology Platform Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,441,614 United States Composition of Matter & Methods of Use – Delivery platform for targeted therapeutics, as well as methods of its use for delivering any effector to the skin 12/28/2036 Krystal U.S. 11,185,564 United States Methods of Use – Methods of use of replication-defective HSV vectors for delivering any effector to skin-targeted therapeutics 12/28/2036 Krystal U.S. 11,865,148 United States Methods of Use – Methods of use of replication-defective HSV-1 for delivering any effector to the eye 12/28/2036 Krystal JP 7,480,105 Japan Composition of Matter & Uses Thereof – Delivery platform for targeted therapeutics, as well as uses thereof, including for delivery of any effector to the skin 12/28/2036 Krystal AU 2019280069 Australia Composition of Matter & Methods of Use – Delivery platform for targeted therapeutics, as well as methods of its use for delivering any effector to the skin 12/28/2036 Krystal VYJUVEK / B-VEC Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 9,877,990 United States Composition of Matter & Methods of Use – Compositions comprising HSV vectors encoding certain effectors, including the effector encoded in B-VEC, and methods of using the same for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal U.S. 10,155,016 United States C omposition of Matter – Covers compositions containing B-VEC, formulated for alternate routes of administration 12/28/2036 Krystal EP 3,377,637 Europe C omposition of Matter – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal JP 6,970,086 Japan C omposition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal AU 2016401692 Australia C omposition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal CL 69.593 Chile Composition of Matter & Uses Thereof – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal 18 Patent Number Country / Region * Patent Type Expiration Date ** Owner IN 498868 India Composition of Matter – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC 12/28/2036 Krystal MX 394867 Mexico C omposition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal NZ New Zealand Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal SG 11201808314Q Singapore Composition of Matter & Uses Thereof – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal Respiratory KB407 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,829,529 United States Methods of Use – Methods of using KB407 for the treatment of cystic fibrosis and other disease causing progressive lung destruction 2/7/2040 Krystal ZA 2022/05420 South Africa Methods of Use – Methods of using KB407 for the treatment of cystic fibrosis and other disease causing progressive lung destruction 2/7/2040 Krystal Oncology KB707 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 11,779,660 United States Composition of Matter – Pharmaceutical compositions comprising HSV vectors encoding IL-2 and IL-12 4/14/2042 Krystal U.S. 11,918,660 United States Composition of Matter – Pharmaceutical compositions comprising HSV-1 vectors encoding IL-2 and IL-12 4/14/2042 Krystal Dermatology KB105 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,525,090 United States C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising herpes virus vectors encoding TGM1, as well as methods of providing prophylactic, palliative, or therapeutic relief to TGM1-deficient ARCI subjects 4/11/2039 Krystal 19 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 11,717,547 United States C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding TGM, as well as methods of delivering TGM to cells 4/11/2039 Krystal AU 2019252658 Australia C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising herpes virus vectors encoding TGM1, as well as methods of providing prophylactic, palliative, or therapeutic relief to TGM1-deficient ARCI subjects 4/11/2039 Krystal AU 2023222939 Australia Composition of Matter & Methods of Use – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding TGM, as well as methods of delivering TGM to cells 4/11/2039 Krystal Other Dermatology Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 11,642,384 United States Composition of Matter – Pharmaceutical compositions comprising eplication-defective HSV vectors encoding SPINK5 9/24/2039 Krystal JP 7,562,515 Japan Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising herpes virus vectors encoding SPINK, as well as uses thereof, including for providing prophylactic, palliative, or therapeutic relief of one or more signs or symptoms of Netherton Syndrome and/or atopic dermatitis 9/24/2039 Krystal AU 2019346549 Australia Compositions of Matter - Pharmaceutical compositions comprising replication-defective HSV vectors encoding SPINK5 9/24/2039 Krystal JP 7,560,449 Japan Composition of Matter & Uses Thereof – Herpes virus vectors and pharmaceutical compositions encoding laminin, as well as uses thereof, including for treating one or more signs or symptoms of Junctional Epidermolysis Bullosa 9/25/2039 Krystal 20 Aesthetics KB301 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,786,438 United States C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance 4/26/2039 Krystal U.S. 12,128,122 United States Composition of Matter & Methods of Use –Compositions comprising replication-defective HSV-1 vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance, and for treating one or more signs or symptoms of dermatological aging 4/26/2039 Krystal JP 7,602,999 Japan Compositions of Matter & Uses Thereof – Cosmetic compositions comprising herpes virus vectors encoding one or more cosmetic proteins, as well as uses thereof, including for improving skin condition, quality, and/or appearance 4/26/2039 Krystal AU 2019260757 Australia C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance 4/26/2039 Krystal ZA 2023/06237 South Africa Composition of Matter & Uses thereof – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as uses thereof, including for improving skin condition, quality, and/or appearance 4/26/2039 Krystal * Granted patents in the U.S. and elsewhere are shown.
Biggest changeOur Technology Platform Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,441,614 United States Composition of Matter & Methods of Use – Delivery platform for targeted therapeutics, as well as methods of its use for delivering any effector to the skin 12/28/2036 Krystal U.S. 11,185,564 United States Methods of Use – Methods of use of replication-defective HSV vectors for delivering any effector to skin-targeted therapeutics 12/28/2036 Krystal 19 U.S. 11,865,148 United States Methods of Use – Methods of use of replication-defective HSV-1 for delivering any effector to the eye 12/28/2036 Krystal JP 7,480,105 Japan Composition of Matter & Uses Thereof – Delivery platform for targeted therapeutics, as well as uses thereof, including for delivery of any effector to the skin 12/28/2036 Krystal AU 2019280069 Australia Composition of Matter & Methods of Use – Delivery platform for targeted therapeutics, as well as methods of its use for delivering any effector to the skin 12/28/2036 Krystal AU 2022204729 Australia Methods of Use – Methods of use of replication-defective HSV vectors for delivering any effector to skin-targeted therapeutics 12/28/2036 Krystal AU 2025200334 Australia Composition of Matter & Methods of Use – Delivery platform for targeted therapeutics, as well as methods of its use for delivering any effector to the skin 12/28/2036 Krystal NZ 778381 New Zealand Composition of Matter & Uses Thereof – Delivery platform for targeted therapeutics, as well as uses thereof, including for delivery of any effector to the skin 12/28/2036 Krystal NZ 783621 New Zealand Composition of Matter & Uses Thereof – Delivery platform for targeted therapeutics, as well as uses thereof, including for delivery of any effector to the skin 12/28/2036 Krystal VYJUVEK / B-VEC Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 9,877,990 United States Composition of Matter & Methods of Use – Compositions comprising HSV vectors encoding certain effectors, including the effector encoded in B-VEC, and methods of using the same for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal U.S. 10,155,016 United States C omposition of Matter – Covers compositions containing B-VEC, formulated for alternate routes of administration 12/28/2036 Krystal EP 3,377,637 Europe C omposition of Matter – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal JP 6,970,086 Japan C omposition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal AU 2016401692 Australia C omposition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal 20 Patent Number Country / Region * Patent Type Expiration Date ** Owner CL 69.593 Chile Composition of Matter & Uses Thereof – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal CL 70.567 Chile Composition of Matter & Uses Thereof – Compositions comprising HSV vectors encoding certain effectors, including the effector encoded in B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal IN 498868 India Composition of Matter – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC 12/28/2036 Krystal MX 394867 Mexico C omposition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal NZ 746213 New Zealand Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal SG 11201808314Q Singapore Composition of Matter & Uses Thereof – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin 12/28/2036 Krystal 21 Respiratory KB407 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,829,529 United States Methods of Use – Methods of using herpes virus vectors encoding CFTR for the treatment of cystic fibrosis and other disease causing progressive lung destruction 2/7/2040 Krystal U.S. 12,522,636 United States Composition of Matter – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding CFTR 2/7/2040 Krystal AU 2020219343 Australia Composition of Matter & Uses Thereo f – Pharmaceutical compositions comprising herpes virus vectors encoding CFTR, as well as uses thereof, including for the treatment of cystic fibrosis and other disease causing progressive lung destruction 2/7/2040 Krystal CO 44406 Colombia Composition of Matter – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding CFTR 2/7/2040 Krystal NZ 778665 New Zealand Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising herpes virus vectors encoding CFTR, as well as uses thereof, including for the treatment of cystic fibrosis and other disease causing progressive lung destruction 2/7/2040 Krystal ZA 2022/05420 South Africa Methods of Use – Methods of using herpes virus vectors encoding CFTR for the treatment of cystic fibrosis and other disease causing progressive lung destruction 2/7/2040 Krystal KB408 Patent Number Country / Region * Patent Type Expiration Date ** Owner JP 7,773,468 Japan Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising HSV vectors encoding certain effectors, including the effector encoded in KB408, and methods of using the same for treating a disease affecting the airways and/or lungs 51488 Krystal Oncology KB707 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 11,779,660 United States Composition of Matter – Pharmaceutical compositions comprising HSV vectors encoding IL-2 and IL-12 4/14/2042 Krystal U.S. 11,918,660 United States Composition of Matter – Pharmaceutical compositions comprising HSV-1 vectors encoding IL-2 and IL-12 4/14/2042 Krystal U.S. 12,364,775 United States Methods of Use - Methods of use of HSV vectors encoding IL-2 and IL-12 for providing therapeutic relief of one or more signs or symptoms of lung cancer 4/1/2042 Krystal 22 ZA 2025/02822 South Africa Composition of Matter – Pharmaceutical compositions comprising HSV vectors encoding IL-2 and IL-12 4/1/2042 Krystal ZA 2025/02821 South Africa Composition of Matter – Pharmaceutical compositions comprising HSV-1 vectors encoding IL-2 and IL-12 4/1/2042 Krystal Dermatology Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,525,090 United States C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising herpes virus vectors encoding TGM1, as well as methods of providing prophylactic, palliative, or therapeutic relief to TGM1-deficient ARCI subjects 4/11/2039 Krystal U.S. 11,717,547 United States C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding TGM, as well as methods of delivering TGM to cells 4/11/2039 Krystal AU 2019252658 Australia C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising herpes virus vectors encoding TGM1, as well as methods of providing prophylactic, palliative, or therapeutic relief to TGM1-deficient ARCI subjects 4/11/2039 Krystal AU 2023222939 Australia Composition of Matter & Methods of Use – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding TGM, as well as methods of delivering TGM to cells 4/11/2039 Krystal U.S. 11,642,384 United States Composition of Matter – Pharmaceutical compositions comprising eplication-defective HSV vectors encoding SPINK5 9/24/2039 Krystal JP 7,562,515 Japan Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising herpes virus vectors encoding SPINK, as well as uses thereof, including for providing prophylactic, palliative, or therapeutic relief of one or more signs or symptoms of Netherton Syndrome and/or atopic dermatitis 9/24/2039 Krystal AU 2019346549 Australia Compositions of Matter - Pharmaceutical compositions comprising replication-defective HSV vectors encoding SPINK5 9/24/2039 Krystal JP 7,560,449 Japan Composition of Matter & Uses Thereof – Herpes virus vectors and pharmaceutical compositions encoding laminin, as well as uses thereof, including for treating one or more signs or symptoms of Junctional Epidermolysis Bullosa 9/25/2039 Krystal Antibody 23 Patent Number Country / Region * Patent Type Expiration Date ** Owner JP 7,749,055 Japan Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising replication-defective HSV vectors encoding one or more antibodies, and methods of using the same for treating a disease 6/28/2039 Krystal Aesthetics KB301 Patent Number Country / Region * Patent Type Expiration Date ** Owner U.S. 10,786,438 United States C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance 4/26/2039 Krystal U.S. 12,128,122 United States Composition of Matter & Methods of Use –Compositions comprising replication-defective HSV-1 vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance, and for treating one or more signs or symptoms of dermatological aging 4/26/2039 Krystal JP 7,602,999 Japan Compositions of Matter & Uses Thereof – Cosmetic compositions comprising herpes virus vectors encoding one or more cosmetic proteins, as well as uses thereof, including for improving skin condition, quality, and/or appearance 4/26/2039 Krystal AU 2019260757 Australia C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance 4/26/2039 Krystal NZ 769822 New Zealand Composition of Matter –Compositions comprising HSV vectors encoding one or more cosmetic proteins 4/26/2039 Krystal ZA 2023/06237 South Africa Composition of Matter & Uses thereof – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as uses thereof, including for improving skin condition, quality, and/or appearance 4/26/2039 Krystal ZA 2025/01799 South Africa Composition of Matter & Uses thereof – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as uses thereof, including for improving skin condition, quality, and/or appearance 4/26/2039 Krystal * Granted patents in the U.S. and elsewhere are shown.
Over 50% of patients with recessive form of DEB and an estimated 10% of patients with the dominant form of DEB are thought to suffer from ocular complications. Correspondingly, we believe there are over 750 patients in the United States and over 2,000 worldwide that are affected.
Over 50% of patients with the recessive form of DEB and an estimated 10% of patients with the dominant form of DEB are thought to suffer from ocular complications. Correspondingly, we believe there are over 750 patients in the United States and over 2,000 worldwide that are affected.
Low AAT serum levels can result in life threatening, progressive pulmonary impairment and severe respiratory insufficiency, manifesting as chronic obstructive pulmonary disease and panacinar emphysema. The lung degeneration observed in AATD patients derives from an unopposed, and therefore enhanced, neutrophil elastase (“NE”) activity, leading to an excessive degradation of elastin, collagen, and fibronectin.
Low AAT serum levels can result in life threatening, progressive pulmonary impairment and severe respiratory insufficiency, manifesting as chronic obstructive pulmonary disease and panacinar emphysema. The lung degeneration observed in AATD patients derives from unopposed, and therefore enhanced, neutrophil elastase (“NE”) activity, leading to an excessive degradation of elastin, collagen, and fibronectin.
Patients included in the efficacy analysis were heavily pre-treated with four median lines of prior therapy and all had received at least one line of prior immunotherapy. In this NSCLC patient analysis cohort, as of data cut-off, an ORR of 27%, with three partial responses, was achieved.
Patients included in the efficacy analysis were heavily pre-treated with four median lines of prior therapy and all had received at least one line of prior immunotherapy. In this NSCLC patient cohort, as of data cut-off, an ORR of 27%, with three partial responses, was achieved.
Once the CTA request is approved in accordance with the EU and the EU Member State’s requirements, clinical trial development may proceed. The requirements and processes governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.
Once the CTA request is approved in accordance with the EU and the EU Member State’s requirements, clinical trial development may proceed. The requirements and processes governing the conduct of clinical trials, product licensing, pricing and reimbursement in the EU vary from country to country.
These can be generally classified into four broad categories: • Gene Silencing Approaches: We are aware of two companies, Takeda Pharmaceutical Company Limited (in partnership with Arrowhead Pharmaceutical Inc.) and Novo Nordisk A/S (in partnership with Alnylam Pharmaceuticals, Inc.), which are developing interfering RNA medicines to treat the liver manifestations of AATD. • Alternate Augmentation Approaches: We are aware of companies, such as Kamada Ltd. and Sanofi S.A., which are developing new augmentation treatments with modified frequency or routes of administration to treat the lung manifestations of AATD. • Direct Protease Inhibition: We are aware of companies, such as Peak Bio, Inc. and Mereo BioPharma Group plc, which are developing protease inhibitors to treat the lung manifestations of AATD. • Gene Editing Approaches: We are aware of companies, such as Wave Life Sciences Ltd. and Beam Therapeutics Inc., which are developing gene editing therapies inhibitors to treat both the lung and liver manifestations of AATD.
These can be generally classified into four broad categories: • Gene Silencing Approaches: We are aware of two companies, Takeda Pharmaceutical Company Limited (in partnership with Arrowhead Pharmaceutical Inc.) and Novo Nordisk A/S (in partnership with Alnylam Pharmaceuticals, Inc.), which are developing interfering RNA medicines to treat the liver manifestations of AATD. • Alternate Augmentation Approaches: We are aware of companies, such as Kamada Ltd. and Sanofi S.A., which are developing new augmentation treatments with modified frequency or routes of administration to treat the lung manifestations of AATD. • Direct Protease Inhibition: We are aware of companies, such as Peak Bio, Inc. and Mereo BioPharma Group plc, which are developing protease inhibitors to treat the lung manifestations of AATD. 17 • Gene Editing Approaches: We are aware of companies, such as Wave Life Sciences Ltd. and Beam Therapeutics Inc., which are developing gene editing therapies inhibitors to treat both the lung and liver manifestations of AATD.
If a product with orphan status receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, meaning that the FDA may not approve any other applications to market the same drug or biologic product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or if the party holding the exclusivity fails to assure the availability of sufficient quantities of the drug to meet the needs of patients with the disease or condition for which the drug was designated.
If a product with orphan status receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, meaning that the FDA may not approve any other applications to market the same drug or biologic product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or if the party holding the exclusivity fails to assure the availability of sufficient quantities of the drug to meet the needs of patients with the disease or condition for which the drug was 28 designated.
The IRA includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government, including allowing Medicare to negotiate prices for certain prescription drugs, requiring drug manufacturers to pay a rebate to the federal government if prices for single-source drugs and biologicals covered under Medicare Part B and nearly all covered drugs under Part D increase faster than the rate of inflation (CPI-U), and limiting out of pocket spending for Medicare Part D enrollees.
The IRA includes several provisions to lower prescription drug costs for 31 people with Medicare and reduce drug spending by the federal government, including allowing Medicare to negotiate prices for certain prescription drugs, requiring drug manufacturers to pay a rebate to the federal government if prices for single-source drugs and biologicals covered under Medicare Part B and nearly all covered drugs under Part D increase faster than the rate of inflation (CPI-U), and limiting out of pocket spending for Medicare Part D enrollees.
Human clinical trials typically are conducted in three sequential phases that may overlap or be combined: • Phase 1. The biologic product candidate initially is introduced into a small number of healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain an early understanding of its effectiveness.
Human clinical trials typically are conducted in three sequential phases that may overlap or be combined: 26 • Phase 1. The biologic product candidate initially is introduced into a small number of healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain an early understanding of its effectiveness.
We have made significant investments in developing the most comprehensive and optimized manufacturing process for VYJUVEK and our vector product candidates, including: • A proprietary vector manufacturing technique and a series of high-efficiency purification processes that produce highly purified therapeutic vectors and can be adapted for each product candidate; and • A critical list of CGMP assays to accurately characterize our process and the HSV-1 vectors we produce.
We have made significant investments in developing the most comprehensive and optimized manufacturing process for VYJUVEK and our product candidates, including: • A proprietary vector manufacturing technique and a series of high-efficiency purification processes that produce highly purified therapeutic vectors and can be adapted for each product candidate; and • A critical list of CGMP assays to accurately characterize our process and the HSV-1-based vectors we produce.
Our process requires three critical components: • Production of a master virus seed stock (“MVSS”); • Production of complementing master cell bank (“MCB”); and • Optimized transduction parameters. 14 For VYJUVEK and each of our product candidates, we generate a MVSS which is scaled up from a single purified clone of the modified HSV-1 vector expressing the therapeutic effector.
Our process requires three critical components: • Production of a master virus seed stock (“MVSS”); • Production of complementing master cell bank (“MCB”); and • Optimized transduction parameters. For VYJUVEK and each of our product candidates, we generate a MVSS which is scaled up from a single purified clone of the modified HSV-1 vector expressing the therapeutic effector.
Demand is expected to grow driven by increasing aesthetic injectable adoption in emerging markets and shifting consumer attitudes about wellness, beauty, and healthy aging that have increased awareness and acceptance of aesthetic treatments among new consumer segments. One area of the skin that can experience early aging is the female décolleté (upper chest).
This demand is expected to grow driven by increasing aesthetic injectable adoption in emerging markets and shifting consumer attitudes about wellness, beauty, and healthy aging that have increased awareness and acceptance of aesthetic treatments among new consumer segments. One area of the skin that can experience early aging is the female décolleté (upper chest).
We are aware of several preclinical or early clinical stage nucleic-acid-based programs for treatment of this patient population including Vertex Pharmaceuticals Inc., ReCode Therapeutics, Inc., Spirovant Sciences, Inc., and 4D Molecular Therapeutics, Inc. Alpha-1 Antitrypsin Deficiency Currently approved treatments for AATD consist of IV administered AAT augmentation therapy, administered weekly.
We are aware of several preclinical or early clinical stage nucleic-acid-based programs for treatment of this patient population including programs at Vertex Pharmaceuticals Inc., ReCode Therapeutics, Inc., Spirovant Sciences, Inc., and 4D Molecular Therapeutics, Inc. Alpha-1 Antitrypsin Deficiency Currently approved treatments for AATD consist of IV administered AAT augmentation therapy, administered weekly.
The process required by the FDA before a biologic product candidate may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and in vivo studies in accordance with the FDA’s Current Good Laboratory Practice (“CGLP”), regulations and applicable requirements for the humane use of laboratory animals or other applicable regulations; • submission to the FDA of an IND application, which allows human clinical trials to begin unless FDA objects within 30 days; • approval by each clinical trial site’s Institutional Review Board (“IRB”) and, if applicable, Institutional Biosafety Committee (“IBC”), before the clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials according to the FDA’s Current Good Clinical Practice (“CGCP”) regulations and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed biologic product candidate for its intended use; • preparation and submission to the FDA of an application for marketing approval that includes substantial evidence of safety, purity and potency from results of nonclinical testing and clinical trials; • review of the product by an FDA advisory committee, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biologic product candidate is produced to assess compliance with Current Good Manufacturing Practice (“CGMP”) requirements and to assure that the facilities, methods and controls are adequate to preserve the biologic product candidate’s identity, safety, strength, quality, potency and purity; • potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the application; and • payment of user fees and FDA review and marketing authorization.
The process required by the FDA before a biologic product candidate may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and in vivo studies in accordance with the FDA’s Current Good Laboratory Practice (“CGLP”), regulations and applicable requirements for the humane use of laboratory animals or other applicable regulations; • submission to the FDA of an IND application, which allows human clinical trials to begin unless the FDA objects within 30 days; • approval by each clinical trial site’s Institutional Review Board (“IRB”) and, if applicable, Institutional Biosafety Committee (“IBC”), before the clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials according to the FDA’s Current Good Clinical Practice (“CGCP”) regulations and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed biologic product candidate for its intended use; • preparation and submission to the FDA of an application for marketing approval that includes substantial evidence of safety, purity and potency from results of nonclinical testing and clinical trials; • review of the product by an FDA advisory committee, if applicable; 25 • satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biologic product candidate is produced to assess compliance with CGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the biologic product candidate’s identity, safety, strength, quality, potency and purity; • potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the application; and • payment of user fees and FDA review and marketing authorization.
The greater payload capacity of our vector and the high transduction efficiencies achieved allow us to deliver a 4 full gene (or genes) directly to any patient’s tissues for off-the-shelf, in vivo gene expression without additional manipulation. • Direct Delivery : Our engineered HSV-1 vector allows for noninvasive or minimally invasive local gene delivery.
The greater payload capacity of our vector and the high transduction efficiencies achieved allow us to deliver a full gene (or genes) directly to any patient’s tissues for off-the-shelf, in vivo gene expression without additional manipulation. • Direct Delivery : Our engineered HSV-1 vector allows for noninvasive or minimally invasive local gene delivery.
The primary objective of the study is to evaluate safety and tolerability of KB707 delivered via 10 inhalation, alone or in combination. Efficacy is also being assessed by multiple measures, including objective response rate (“ORR”), as are the immune effects of KB707 monotherapy. The first patient in KYANITE-1 was dosed in April 2024.
The primary objective of the study is to evaluate safety and tolerability of KB707 delivered via inhalation, alone or in combination. Efficacy is also being assessed by multiple measures, including objective response rate (“ORR”), as are the immune effects of KB707 monotherapy. The first patient in KYANITE-1 was dosed in April 2024.
The FDA may refer applications for novel biologic products or biologic products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.
The FDA may refer applications for novel biologic products or biologic products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians 27 and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.
Therapies designated as breakthrough therapies by the FDA may also be eligible for priority review and accelerated approval. Regenerative Medicine Advanced Therapy (“RMAT”) Designation 25 Established under the 21st Century Cures Act, RMAT designation is a program designed to expedite the development and approval of regenerative medicine products, including gene therapy products.
Therapies designated as breakthrough therapies by the FDA may also be eligible for priority review and accelerated approval. Regenerative Medicine Advanced Therapy (“RMAT”) Designation Established under the 21st Century Cures Act, RMAT designation is a program designed to expedite the development and approval of regenerative medicine products, including gene therapy products.
HSV-1 has a natural affinity, or tropism, for epithelial cells. Consequently, we believe our vector penetrates and delivers its payload much more efficiently than other vectors, resulting in transduction efficiencies or cell penetration as high as 95% in cell-based studies.
HSV-1 has a natural affinity, or tropism, for 4 epithelial cells. Consequently, we believe our vector penetrates and delivers its payload much more efficiently than other vectors, resulting in transduction efficiencies or cell penetration as high as 95% in cell-based studies.
Clear evidence of successful gene delivery and AAT expression was observed in both patients that underwent bronchoscopies, with the proportion of conducting airway epithelial cells positive for AAT increasing from 0% to 39% in one patient and from 3% to 9 35% in the other.
Clear evidence of successful gene delivery and AAT expression was observed in both patients that underwent bronchoscopies, with the proportion of conducting airway epithelial cells positive for AAT increasing from 0% to 39% in one patient and from 3% to 35% in the other.
In addition, the ACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value to physicians, certain other healthcare providers and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members; • the federal Health Care Fraud statute imposes criminal and civil liability for executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, and as amended again by the final HIPAA omnibus rule (together with HIPAA and HITECH, the “HIPAA Rules”) which imposes privacy, security, and breach obligations, including mandatory contractual terms, with respect to safeguarding the security and privacy of individually identifiable health information by certain entities subject to the HIPAA Rules, such as health plans, health care clearinghouses, and health care providers that engage in certain covered transactions; • the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for federally sponsored healthcare benefits, items or services; and • state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of 27 personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
In addition, the ACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value to physicians, certain other healthcare providers and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members; • the federal Health Care Fraud statute imposes criminal and civil liability for executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, and as amended again by the final HIPAA omnibus rule (together with HIPAA and HITECH, the “HIPAA 30 Rules”) which imposes privacy, security, and breach obligations, including mandatory contractual terms, with respect to safeguarding the security and privacy of individually identifiable health information by entities subject to the HIPAA Rules, such as health plans, health care clearinghouses, and health care providers that engage in certain covered transactions, as well as their business associates; • the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for federally sponsored healthcare benefits, items or services; and • state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and data security of personal information and health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
It is 28 illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
Item 1. Business. Overview We are a fully integrated, commercial-stage biotechnology company focused on the discovery, development, manufacturing and commercialization of genetic medicines to treat diseases with high unmet medical needs.
Item 1. Business. Overview We are a fully integrated, global, commercial-stage biotechnology company focused on the discovery, development, manufacturing and commercialization of genetic medicines to treat diseases with high unmet medical needs.
We have screened hundreds of cell line clones to find the best complementing cell lines, and similarly designed and generated the optimal virus seed stocks for VYJUVEK and each of our product candidates.
We have screened hundreds of cell line clones to find the best complementing cell lines and designed and generated the optimal virus seed stocks for VYJUVEK and each of our product candidates.
In addition to patent protection, regulatory exclusivity, and trade secret protection, we also protect our approved product, product candidates 16 and platform technology with trademarks and contractual protections.
In addition to patent protection, regulatory exclusivity, and trade secret protection, we also protect our approved product, product candidates and platform technology with trademarks and contractual protections.
We do not have patents or patent applications in every jurisdiction where there is a potential commercial market for our approved product or our product candidates.
We do not have patents or patent applications in every jurisdiction where there is a potential commercial market for 18 our approved product or our product candidates.
Building on the results from Cohort 2, we opened two additional open-label, single-arm PEARL-1 cohorts to evaluate KB301 in two potential target indications for Phase 2, lateral canthal lines at rest and dynamic wrinkles of the décolleté, referred to as Cohorts 3 and 4, respectively.
Building on the results from Cohort 2, we opened two additional open-label, single-arm PEARL-1 cohorts to evaluate KB301 in two potential target indications for a Phase 2 trial, lateral canthal lines at rest and dynamic wrinkles of the décolleté, referred to as Cohorts 3 and 4, respectively.
We also believe the ability to redose, as well as the large payload capacity of our proprietary vectors, will allow us to deliver multiple genes and other effectors, which could enable development of therapies for more common conditions that are not necessarily the result of an inherited genetic defect, such as KB707.
We also believe the ability to redose, as well as the large payload capacity of our proprietary vectors, will allow us to deliver multiple genes and other effectors, which could enable development of therapies for more common conditions that are not necessarily the result of an inherited genetic defect.
In the United States, for example, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected and continues to face major uncertainty due to the status of major legislative initiatives surrounding healthcare reform. On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law.
In the United States, for example, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected and continues to face major uncertainty due to the status of proposed and enacted legislative initiatives surrounding healthcare reform. On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law.
KB301 for Dynamic Wrinkles of the Décolleté Background The skin is largely composed of collagen-rich connective tissue, with dermal collagen, composed primarily of type 1 and 3 collagen fibrils (“COL1” and “COL3”, respectively), representing over 90% of the dry weight of human skin. These fibrils provide strength to the skin and are critical for the maintenance of skin tissue architecture.
KB304 for Dynamic Wrinkles of the Décolleté Background The skin is largely composed of collagen-rich connective tissue, with dermal collagen, composed primarily of type 1 and 3 collagen fibrils (“COL1” and “COL3”, respectively), representing over 90% of the dry weight of human skin. These fibrils provide strength to the skin and are critical for the maintenance of skin tissue architecture.
Following completion of the GEM-3 trial, we initiated an OLE to provide extension of B-VEC treatment for participants who completed the GEM-3 trial (“rollover participants”) and B-VEC treatment for newly enrolling participants (“naïve participants”) with DEB. The OLE was a multi-center, open-label study of B-VEC for the topical treatment of DEB wounds.
Following completion of the GEM-3 trial, we initiated an open label extension (“OLE”) study to provide extension of B-VEC treatment for participants who completed the GEM-3 trial (“rollover participants”) and B-VEC treatment for newly 7 enrolling participants (“naïve participants”) with DEB. The OLE was a multi-center, open-label study of B-VEC for the topical treatment of DEB wounds.
Recombinant viral vectors are rendered incapable of, or attenuated for, replacing in human cells by removal of specific viral machinery, including packaging proteins. However, to produce the recombinant virus, these viral proteins have to be re-introduced into the virus production process so that the viral vector can be packaged.
Recombinant viral vectors are rendered incapable of, or attenuated for, replication in human cells by removal of specific viral machinery, including packaging proteins. However, to produce the recombinant virus, these viral proteins have to be re-introduced into the virus production process so that the viral vector can be packaged.
In December 2024, we announced an interim clinical data update including safety data for seven patients enrolled in the first two dose escalation cohorts of SERPENTINE-1 as well as molecular data from two patients in the second cohort that had consented to bronchoscopy.
In December 2024, we announced an interim clinical data update including safety data for seven patients enrolled in the first two dose escalation cohorts of SERPENTINE-1 as well as molecular data from two patients in the second cohort (“Cohort 2”) that had consented to bronchoscopy.
B-VEC B-VEC is a redosable, off-the-shelf gene therapy designed to deliver two copies of the COL7A1 gene when applied topically, directly onto an open wound. Unlike the previous standard of care, B-VEC treats DEB at the molecular level by providing the patient’s skin cells the template to make normal COL7 protein, thereby addressing the fundamental disease-causing mechanism.
VYJUVEK VYJUVEK is a redosable, off-the-shelf gene therapy designed to deliver two copies of the COL7A1 gene when applied topically, directly onto an open wound. Unlike the previous standard of care, VYJUVEK treats DEB at the molecular level by providing the patient’s skin cells the template to make normal COL7 protein, thereby addressing the fundamental disease-causing mechanism.
If we are able to successfully generate product candidates to treat these more common conditions, we intend to seek collaborative alliances towards the development and potential commercialization of these therapies. Manufacturing In-House CGMP Facilities We have built in-house CGMP facilities to enable better quality control, shorten lead times, lower costs and strengthen command over our intellectual property.
If we are able to successfully generate product candidates to treat these more common conditions, we intend to seek collaborative alliances towards the development and potential commercialization of these therapies. 15 Manufacturing In-House CGMP Facilities We have built in-house CGMP facilities in the United States to enable better quality control, shorten lead times, lower costs and strengthen command over our intellectual property.
In small animal models, analysis of lung tissue biopsies, serum, and bronchoalveolar lavage fluid harvested 24 and 48 hours after inhalation of KB408 shows secretion of full-length AAT protein, with no evidence of significant or systemic toxicity. In September 2023, the FDA granted KB408 ODD for the treatment of AATD.
In small animal models, analysis of lung tissue biopsies, serum, and bronchoalveolar lavage fluid harvested 24 and 48 hours after inhalation of KB408 shows secretion of full-length AAT protein, with no evidence of significant or systemic toxicity. The FDA has granted KB408 ODD for the treatment of AATD.
OPAL-1 was subsequently amended to add two dose expansion cohorts, in addition to the monotherapy dose expansion cohort, evaluating intratumoral KB707 in combination with anti-PD-1 and anti-lymphocyte activation gene 3 therapy or anti-PD-1 therapy alone, in patients with advanced melanoma that is relapsed or refractory to standard of care. Evaluation of intratumoral KB707 as monotherapy and in combination is ongoing.
OPAL-1 was subsequently amended to add two dose expansion cohorts, in addition to the monotherapy dose expansion cohort, evaluating intratumoral KB707 in combination with anti-PD-1 and anti-lymphocyte activation gene 3 therapy or anti-PD-1 therapy alone, in patients with advanced melanoma that is relapsed or refractory to standard of care.
Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. In the EU, pricing and reimbursement schemes vary widely from country to country.
Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. In the EU, pricing and reimbursement schemes vary widely from member state to member state.
Our FDA Approved Product and Pipeline The following table summarizes information regarding our FDA approved product, VYJUVEK, and product candidates in various stages of clinical and preclinical development as of the date of this Annual Report: 5 Our FDA Approved Commercial Product VYJUVEK (beremagene geperpavec-svdt, or B-VEC; referred to as B-VEC outside the United States) Disease Background DEB is a rare and severe monogenic skin disease.
Our Commercial Product and Pipeline The following table summarizes information regarding our commercial product, VYJUVEK, and product candidates in various stages of clinical and preclinical development as of the date of this Annual Report: 5 Our Commercial Product VYJUVEK (beremagene geperpavec-svdt, or B-VEC; referred to as B-VEC outside the United States, Europe, and Japan) Disease Background DEB is a rare and severe monogenic skin disease.
Preclinical efforts to date have shown that KB407 successfully transduces patient-derived epithelial cells and delivers functional CFTR in vitro in 2D and 3D organotypic systems, and is amendable to non-invasive inhaled administration in vivo , as indicated by successful delivery to the lungs through the use of a clinically relevant nebulizer in small animal models.
Preclinical efforts show that KB407 successfully transduces patient-derived epithelial cells and delivers functional CFTR in vitro in 2D and 3D organotypic systems, and is amendable to non-invasive inhaled administration in vivo , as indicated by successful delivery to the lungs through the use of a clinically relevant nebulizer in small animal models.
We believe our approach to treating DEB is positively differentiated relative to palliative approaches, which do not address the underlying genetic cause of DEB or impact the durability of wound closure, and other known efforts to develop corrective treatments that employ autologous approaches. Autologous treatments use a patient’s own tissues and cells to manufacture an individualized therapy.
We believe our approach to treating DEB is positively differentiated relative to palliative approaches, which do not address the underlying genetic cause of DEB or impact the durability of wound closure, and corrective treatments that employ autologous approaches. Autologous treatments use a patient’s own tissues and cells to manufacture an individualized therapy.
In addition, our experience in clinical trials, obtaining FDA and other regulatory approvals, and manufacturing and commercialization of products may be more limited. VYJUVEK / B-VEC Dystrophic Epidermolysis Bullosa A number of companies are developing drug candidates for the treatment of DEB. VYJUVEK is the only corrective therapy for DEB approved worldwide.
In addition, our experience in clinical trials, obtaining FDA and other regulatory approvals, and manufacturing and commercialization of products may be more limited. VYJUVEK / B-VEC Dystrophic Epidermolysis Bullosa A number of companies are developing or commercializing drug candidates for the treatment of DEB. VYJUVEK is the first corrective therapy for DEB approved worldwide.
In January 2022, August 2022, December 2022, August 2023, March 2024, November 2024, and December 2024 we incorporated wholly-owned subsidiaries in Switzerland, Netherlands, France, Germany, Japan, Italy, and Spain respectively, for the purpose of establishing initial operations in Europe and Japan for the commercialization of VYJUVEK and our product pipeline. Our website address is www.krystalbio.com.
In January 2022, August 2022, December 2022, August 2023, March 2024, November 2024, December 2024 and July 2025 we incorporated wholly-owned subsidiaries in Switzerland, Netherlands, France, Germany, Japan, Italy, Spain, and the UK, respectively, for the purpose of establishing operations in Europe and Japan for the commercialization of VYJUVEK ® and our product pipeline. Our website address is www.krystalbio.com.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available free of charge on the investor relations section of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to the Securities and Exchange Commission, or the SEC.
Access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our Proxy Statements, and amendments to these reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available free of charge on the investor relations section of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to the Securities and Exchange Commission, or the SEC.
Our vectors are amenable to formulation for non-invasive or minimally invasive routes of administration at a healthcare professional’s office or in the patient’s home by a healthcare professional. Our innovative technology platform is supported by two in-house, commercial scale Current Good Manufacturing Practice (“CGMP”) manufacturing facilities.
Our vectors are amenable to formulation for non-invasive or minimally invasive routes of administration at a healthcare professional’s office or in the patient’s home by a healthcare professional, caregiver, or directly by the patient themselves. Our innovative technology platform is supported by two in-house, commercial scale Current Good Manufacturing Practice (“CGMP”) manufacturing facilities.
In the skin, neocollagenesis is affected by the deposition of, and complex interactions between, COL1 and COL3. COL3 appears early during collagen fibril formation and has been shown to both regulate the dimensions of COL1 fibers and enhance COL1 elasticity.
In the skin, new collagen synthesis is affected by the deposition of, and complex interactions between, COL1 and COL3. COL3 appears early during collagen fibril formation and has been shown to both regulate the dimensions of COL1 fibers and enhance COL1 elasticity.
Enrollment in both cohorts is ongoing. Details of the KYANITE-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06228326. Clinical Development of Intratumoral KB707 In July 2023, we announced that the FDA had accepted our initial KB707 IND application to evaluate intratumoral KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors.
Details of the KYANITE-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06228326. Clinical Development of Intratumoral KB707 In July 2023, we announced that the FDA had accepted our initial KB707 IND application to evaluate intratumoral KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors.
Complete results from Cohort 1 focused on safety were presented at the 2021 SID Annual Meeting. In March 2022, we announced positive proof-of-concept efficacy and safety data from Cohort 2 of the PEARL-1 study of KB301 for the treatment of aesthetic skin indications.
Complete results from Cohort 1 focused on safety were presented at the 2021 Society for Investigative Dermatology Annual Meeting. In March 2022, we announced positive proof-of-concept efficacy and safety data from Cohort 2 of the PEARL-1 study of KB301 for the treatment of aesthetic skin indications.
We believe that our approach of directed expression of full-length human COL3 via intradermal application of KB301 provides a unique and straightforward approach to restoring collagen homeostasis, and by extension, reconstructing an optimal physiologic environment in the skin to treat wrinkles or other presentations of aged or damaged skin.
We believe that our approach of directed expression of full-length human COL3 and ELN via intradermal application of KB304 provides a unique, comprehensive, and straightforward approach to restoring collagen homeostasis and skin elasticity, and by extension, reconstructing an optimal physiologic environment in the skin to treat wrinkles or other presentations of aged or damaged skin.
The study enrolled 47 participants in total, comprising of 24 rollover participants and 23 naïve participants, at five sites in the United States. In April 2022, following feedback from the FDA, we announced that patients enrolled in the OLE study would have the option to be dosed in their homes by a health care professional.
The study enrolled 47 participants in total, comprising 24 rollover participants and 23 naïve participants, at five sites in the United States. In April 2022, following feedback from the FDA, we announced that patients enrolled in the OLE study would have the option to be dosed in their homes by a HCP.
The FDCA, PHSA and their corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, importation, advertising and other promotional practices involving biologic products. IND applications to the FDA are required before conducting human clinical 21 testing of biologic products.
The FDCA, PHSA and their corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, importation, advertising and other promotional practices involving biologic products. Investigational new drug, or IND, applications to the FDA are required before conducting human clinical testing of biologic products.
We are also aware of a recombinant-protein based approach being developed by BridgeBio Pharma, Inc.’s affiliate company, Phoenix Tissue Repair. • Palliative Treatments: We are aware of companies, such as Chiesi Farmaceutici S.p.A. and RHEACELL GmbH & Co., which are developing product candidates taking a palliative approach to treating the disease.
We are also aware of a recombinant-protein-based approach being developed by BridgeBio Pharma, Inc.’s affiliate company, Phoenix Tissue Repair. • Palliative Treatments: We are aware of companies, such as Chiesi Farmaceutici S.p.A. and RHEACELL GmbH & Co., which are developing or have commercialized products taking a palliative approach to treating the disease.
Human Capital As of February 12, 2025, we had 275 full-time employees, primarily engaged in research and development, pre-clinical and clinical trials, manufacturing VYJUVEK and our pipeline product candidates, commercial activities for VYJUVEK in the United States and commercialization preparations for VYJUVEK in the European Union and Japan, regulatory matters, strategic business development, finance and other technical matters, supply chain, and general and administrative services.
Human Capital As of February 11, 2026, we had 295 full-time employees, primarily engaged in research and development, pre-clinical and clinical trials, manufacturing VYJUVEK and our pipeline product candidates, commercial activities for VYJUVEK in the United States, the European Union, and Japan, regulatory matters, strategic business development, finance and other technical matters, supply chain, and general and administrative services.
The conduct of the preclinical tests must comply with federal regulations and requirements including CGLPs. 22 Concurrent with clinical trials, companies usually must complete some long-term preclinical testing, such as animal studies of reproductive adverse events and carcinogenicity and must also develop additional information about the chemistry and physical characteristics of the biological product and finalize a process for manufacturing the biological product in commercial quantities in accordance with CGMP requirements.
Concurrent with clinical trials, companies usually must complete some long-term preclinical testing, such as animal studies of reproductive adverse events and carcinogenicity and must also develop additional information about the chemistry and physical characteristics of the biological product and finalize a process for manufacturing the biological product in commercial quantities in accordance with CGMP requirements.
Our development pipeline includes multiple clinical stage programs for rare and serious diseases, and we are investing in research and development to advance and grow this pipeline. We possess exclusive rights to develop, manufacture, and commercialize our FDA approved product and our pipeline candidates throughout the world.
Our development pipeline includes multiple clinical stage product candidates for the treatment of rare and serious diseases, and we are investing in research and development to advance and grow this pipeline. We possess exclusive rights to develop, manufacture, and commercialize VYJUVEK and our pipeline product candidates throughout the world.
This includes the eye, where COL7 anchors the corneal epithelium. For a meaningful proportion of DEB patients, the genetic defect in COL7A1 results in loss or malfunctioning of these anchoring fibrils causing ocular complications, such as corneal erosions, abrasions, blistering, and scarring, that can lead to progressive vision loss.
For a meaningful proportion of DEB patients, the genetic defect in COL7A1 results in loss or malfunctioning of these anchoring fibrils causing ocular complications, such as corneal erosions, abrasions, blistering, and scarring, that can lead to progressive vision loss.
Based on this positive opinion, we expect to be eligible for up to an additional two years of marketing exclusivity in the EU, on top of the ten-year EU market exclusivity after market approval in the EU. The European regulatory authorities have also granted B-VEC Orphan Designation and PRIority MEdicines eligibility for B-VEC to treat DEB.
Based on this positive opinion, we expect to be eligible for up to an additional two years of marketing exclusivity in the EU, on top of the ten-year EU market exclusivity granted upon marketing authorization in the EU. European regulatory authorities also previously granted Orphan Designation and PRIority MEdicines eligibility to B-VEC for the treatment of DEB.
Clinical Development of Inhaled KB707 In January 2024, the FDA accepted an amendment to our KB707 investigational new drug (“IND”) application to evaluate inhaled KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors of the lung.
Clinical Development of Inhaled KB707 12 In January 2024, the FDA accepted an amendment to our KB707 IND application to evaluate inhaled KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors of the lung.
Even with optimized reagents and methods, significant batch-to-batch variability is seen in viral vector yield and titer that, we believe, drives up the cost of viral vector manufacturing and scale-up and increases the risk of failure during manufacturing. Our proprietary upstream process for HSV-1 production avoids the aforementioned issues.
Even with optimized reagents and methods, other viral vector production systems exhibit significant batch-to-batch variability in viral vector yield and titer that, we believe, drives up the cost of viral vector manufacturing and scale-up and increases the risk of failure during manufacturing. Our proprietary upstream production process avoids the aforementioned issues.
Solid tumor malignancies similarly impose a heavy burden on patients in the United States, with the National Cancer Institute estimating that over 300,000 patients will have died from lung, colon and rectum, pancreas, breast, prostate, liver and bile duct, and melanoma of the skin cancers in 2023.
Solid tumor malignancies similarly impose a heavy burden on patients in the United States, with the National Cancer Institute estimating that hundreds of thousands of patients died from lung, colon and rectum, pancreas, breast, prostate, liver and bile duct, and melanoma of the skin cancers in 2025.
B-VEC was well tolerated in the Japanese study population, with a safety profile consistent with previous studies, and all four patients that completed the study achieved the primary endpoint of complete wound closure at six months.
B-VEC was well tolerated in the Japanese study population, with a safety profile consistent with previous studies, and all four patients that completed the study achieved the primary endpoint of complete wound closure at six months. Results of the Japan OLE study were published the Journal of Dermatology in July 2025.
Trademark registrations generally are for fixed but renewable terms. Government Regulation and Product Approval In the United States, the FDA regulates biologic products including gene therapy products under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), the Public Health Service Act (“PHSA”), and regulations and guidance implementing these laws.
Government Regulation and Product Approval In the United States, the FDA regulates biologic products including gene therapy products under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), the Public Health Service Act (“PHSA”), and regulations and guidance implementing these laws.
To that end, in April 2019, we incorporated Jeune Aesthetics, a wholly-owned subsidiary, for the purposes of undertaking preclinical and clinical studies for aesthetic skin conditions.
We incorporated Jeune Aesthetics, a wholly-owned subsidiary, for the purposes of undertaking preclinical and clinical studies for aesthetic skin conditions.
We estimate that there are over 3,000 patients in the United States suffering from DEB, of which 1,200 were identified at launch through claims analytics and pre-launch patient identification activities conducted by our commercial field force. Since our commercial launch of VYJUVEK in the United States, we have reported $341.2 million in net product revenue.
We first launched VYJUVEK in the United States in 2023. We estimate that there are over 3,000 patients in the United States suffering from DEB, of which 1,200 were identified at launch through claims analytics and pre-launch patient identification activities conducted by our commercial field force.
A decision on the JNDA by the PMDA is expected in the second half of 2025. Clinical Development We initiated Phase 1 testing of a topical formulation of B-VEC in May 2018 at Stanford University, and we announced positive interim results from this clinical study on two patients in October 2018.
Clinical Development We initiated Phase 1 testing of a topical formulation of B-VEC in May 2018 at Stanford University, and we announced positive interim results from this clinical study on two patients in October 2018.
Regulatory Exclusivity The various types of regulatory exclusivity or designations for which VYJUVEK and our product candidates have been granted, or which our current or future product candidates may be eligible to receive are generally discussed above or below, under “Government Regulation and Product Approval”.
Regulatory Exclusivity The various types of regulatory exclusivity or designations for which VYJUVEK and our product candidates have been granted, or which our current or future product candidates may be eligible to receive are generally discussed above or below, under “Government Regulation and Product Approval”. 24 Trademarks Our trademarks are important to us and are generally filed to protect our corporate brand, our approved product, our product candidates, and our platform technology.
We are working closely with the Alpha-1 Foundation and their Therapeutic Development Network on the SERPENTINE-1 study and expect to announce complete SERPENTINE-1 study results in the second half of 2025. Details of the SERPENTINE-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06049082.
We are working closely with the Alpha-1 Foundation and their 9 Therapeutic Development Network on the SERPENTINE-1 study. Details of the SERPENTINE-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06049082.
The CFF estimates that there are close to 40,000 children and adults living with CF in the United States, and an estimated 105,000 people diagnosed with CF across 94 countries.
The CFF estimates that there are close to 40,000 children and adults living with CF in the United States, and an estimated 105,000 people diagnosed with CF across 94 countries. People of every racial and ethnic group are affected by this debilitating disease.
Both intratumoral and inhaled KB707 have also been granted RPDD by the FDA, with intratumoral KB707 receiving RPDD for the treatment of rhabdomyosarcoma in August 2024 and inhaled KB707 receiving RPDD for the treatment of osteosarcoma in May 2024.
Both intratumoral and inhaled KB707 have also been granted RPDD by the FDA, with intratumoral KB707 receiving RPDD for the treatment of rhabdomyosarcoma in August 2024 and inhaled KB707 receiving RPDD for the treatment of osteosarcoma in May 2024. In February 2026, the FDA also granted RMAT designation to KB707 for the treatment of advanced or metastatic NSCLC.
In all cases, the clinical trials are conducted in accordance with CGCPs and the applicable regulatory requirements of the country or countries in which the clinical trial is performed, as well as the ethical 26 principles that have their origin in the Declaration of Helsinki (whichever provides the greater protection to the clinical trial participants).
In all cases, the clinical trials are conducted in accordance with the applicable EU laws and regulatory requirements of the country or countries in which the clinical trial is performed, as well as the International Council for Harmonisation of Technical Requirements of Pharmaceuticals for Human Use’s guidelines on good clinical practice and ethical principles that have their origin in the Declaration of Helsinki (whichever provides the greater protection to the clinical trial participants).
With the approval, the FDA issued a Rare Pediatric Disease Priority Review Voucher (“PRV”), which confers priority review to a subsequent drug application that would not otherwise qualify for priority review. We sold the PRV in the third quarter of 2023 for $100 million.
No clinical post-marketing commitments or Risk Evaluation and Mitigation Strategies program were required by the FDA. With the approval, the FDA issued a Rare Pediatric Disease Priority Review Voucher (“PRV”), which confers priority review to a subsequent drug application that would not otherwise qualify for priority review. We sold the PRV in the third quarter of 2023 for $100 million.
We believe our competitors fall into two broad categories: • Corrective Approaches: We are aware of two companies, Abeona Therapeutics Inc. and Castle Creek Biosciences, Inc., which are developing autologous or grafting gene therapy approaches to treating DEB.
We believe our competitors fall into two broad categories: • Corrective Approaches: We are aware of companies, Abeona Therapeutics Inc. and Castle Creek Biosciences, Inc., which are developing or have commercialized autologous or grafting gene therapy approaches to treating DEB. Abeona Therapeutics Inc.’s autologous gene therapy product Zevaskyn ® (prademagene zamikeracel) was approved by the FDA in 2025.
We are aware that LEO Pharma A/S has recently completed a clinical trial of a product for the treatment of congenital ichthyosis. Aesthetics Aesthetic Skin Conditions There are multiple approved therapies for aesthetic skin conditions, including hyaluronic acid and botulinum toxin based products marketed by AbbVie Inc., Revance Therapeutics, Inc., Merz Pharma GmbH & Co., KGaA, Galderma S.A., and others.
Aesthetics Aesthetic Skin Conditions There are multiple approved therapies for aesthetic skin conditions, including hyaluronic acid and botulinum toxin based products marketed by AbbVie Inc., Revance Therapeutics, Inc., Merz Pharma GmbH & Co., KGaA, Galderma S.A., and others.
People of every racial and ethnic group are affected by this debilitating disease. 8 KB407 KB407 is a redosable off the-shelf gene therapy designed to deliver two copies of the full-length CFTR transgene directly to the airway epithelia via inhaled (nebulized) administration.
KB407 KB407 is a redosable off the-shelf gene therapy designed to deliver two copies of the full-length CFTR transgene directly to the airway epithelia via inhaled (nebulized) administration.
Our website and the information contained on, or that can be accessed through, the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K. You should not rely on any such information in making your decision whether to purchase our common stock.
Our website and the information contained on, or that can be accessed through, the website are not incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K.
Aesthetics While our focus is on the development of gene therapies to treat patients with severe, life‑threatening, or rare diseases with high unmet medical needs, we are also evaluating the potential of our platform to address more prevalent and/or non-genetic conditions.
While our focus is on the development of gene therapies to treat patients with rare diseases with high unmet medical needs, we are also evaluating the potential of our platform to address more common severe or life-threatening diseases, such as non-small cell lung cancer (“NSCLC”), as well as aesthetic conditions via our wholly-owned subsidiary Jeune Aesthetics, Inc.
The FDA will not approve the product candidate unless it determines that the manufacturing processes and facilities are in compliance with CGMP requirements and adequate to assure consistent production of the product candidate within required specifications. 24 Additionally, before approving a BLA, the FDA typically will inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with the IND application trial requirements and CGCP requirements.
Before approving a BLA, the FDA will inspect the facilities at which the product candidate is manufactured. The FDA will not approve the product candidate unless it determines that the manufacturing processes and facilities are in compliance with CGMP requirements and adequate to assure consistent production of the product candidate within required specifications.
Whether or not a sponsor obtains FDA approval for a product, a sponsor must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.
Because biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries. Whether or not a sponsor obtains FDA approval for a product, a sponsor must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.
Some of the most established companies in the marketing and development of new cancer drugs include Merck & Co Inc., Bristol Myers Squibb Company, Johnson & Johnson, and Pfizer Inc. Dermatology Lamellar Ichthyosis There are no approved therapies for LI at this time.
Some of the most established companies in the marketing and development of new cancer drugs include Merck & Co Inc., Bristol Myers Squibb Company, Johnson & Johnson, and Pfizer Inc.
In Phase 3 studies, the biologic product candidate is administered to an expanded patient population, generally at multiple geographically dispersed clinical trial sites in adequate and well-controlled clinical trials to generate sufficient data to statistically confirm the potency and safety of the product for approval. 23 These clinical trials are intended to establish the overall risk/benefit ratio of the product candidate and provide an adequate basis for product labeling. • Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after marketing approval.
In Phase 3 studies, the biologic product candidate is administered to an expanded patient population, generally at multiple geographically dispersed clinical trial sites in adequate and well-controlled clinical trials to generate sufficient data to statistically confirm the potency and safety of the product for approval.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCases against pharmaceutical manufacturers support the view that certain marketing practices, including off-label promotion, may implicate the FCA; • the federal Health Care Fraud statute imposes criminal and civil liability for executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • the HIPAA Rules, which impose certain requirements relating to the privacy, security, and transmission of individually identifiable health information by certain entities subject to the HIPAA Rules, such as health plans, health care clearinghouses, and health care providers that engage in certain covered transactions, known as covered entities, as well as their business associates that perform certain services that involve the use or disclosure of individually identifiable health information for or on behalf of covered entities; 35 • federal transparency laws, including the federal Physician Payment Sunshine Act, that require certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to: (i) payments or other “transfers of value” made to physicians and teaching hospitals, and (ii) ownership and investment interests held by physicians and their immediate family members; • state and foreign law equivalents of each of the above federal laws, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and • state and foreign laws governing data privacy and security of health information, many of which differ from each other and require attention to frequently changing regulatory requirements, thus complicating compliance efforts in certain circumstances and increasing exposure to liability.
Biggest changeCases against pharmaceutical manufacturers support the view that certain marketing practices, including off-label promotion, may implicate the FCA; • the federal Health Care Fraud statute imposes criminal and civil liability for executing or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • the Health Insurance Portability and Accountability Act of 1996 Rules (“HIPAA Rules”), which impose certain requirements relating to the privacy, security, and transmission of individually identifiable health information by certain entities subject to the HIPAA Rules, such as health plans, health care clearinghouses, and health care providers that engage in certain covered transactions, known as covered entities, as well as their business associates that perform certain services that involve the use or disclosure of individually identifiable health information for or on behalf of covered entities; • federal transparency laws, including the federal Physician Payment Sunshine Act, that require certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the United States Centers for Medicare and Medicaid Services (“CMS”) information related to: (i) payments or other “transfers of value” made to physicians and teaching hospitals, and (ii) ownership and investment interests held by physicians and their immediate family members; • our operations in Europe and Japan may be directly or indirectly subject to European and Japanese law equivalents of each of the above U.S. federal laws, some of which may not have been applicable prior to the recent European Commission and MHLW approvals and commercial launch of VYJUVEK in Europe and Japan; • U.S. state and foreign law equivalents of each of the above federal laws, state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and • state and foreign laws governing data privacy and security of health information, many of which differ from each other and require attention to frequently changing regulatory requirements, thus complicating compliance efforts in certain circumstances and increasing exposure to liability.
In addition, the successful commercialization of VYJUVEK will depend on a number of factors and involves risk, including some of the risks identified in these “Risk Factors.” One or more of these factors, many of which are beyond our control, could cause significant delays or an inability to successfully commercialize VYJUVEK.
In addition, the successful commercialization of VYJUVEK will depend on a number of factors and involves risk, including some of the risks identified in these “Risk Factors.” One or more of these risks, many of which are beyond our control, could cause significant delays or an inability to successfully commercialize VYJUVEK.
Our resource allocation decisions may cause us to fail to timely capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs may not yield any commercially viable products.
Our resource allocation decisions may cause us to fail to capitalize timely on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs may not yield any commercially viable products.
We may at times fail (or be perceived to have failed) in our efforts to comply with our privacy and data security obligations. Moreover, despite our efforts, our personnel or third parties on whom we rely on may fail to comply with such obligations, which could negatively impact our business operations.
We may at times fail (or be perceived to have failed) in our efforts to comply with our privacy and data security obligations. Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.
AI may amplify biased and discriminatory decision making, perform unreliably and malfunction, generate insights which are difficult to interpret and explain, and cause direct harm to individuals or groups.
AI may amplify biased and discriminatory decision making, perform unreliably, malfunction, generate insights which are difficult to interpret and explain, and cause direct harm to individuals or groups.
If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to review and process our regulatory submissions in a timely manner, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital.
If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to review and process our regulatory submissions in a timely manner, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain capital, if necessary.
To successfully commercialize any products for which we obtain marketing approvals, we will need to expand our sales force, marketing, market access, and medical affairs teams and distribution capabilities, either on our own or in collaboration with others.
To successfully commercialize any products for which we obtain marketing approvals, we will need to expand our sales force, marketing, market access, medical affairs teams, and distribution capabilities, either on our own or in collaboration with others.
Outside the United States, international operations generally are subject to extensive government price controls and other market regulations and increasing emphasis on cost-containment initiatives in the European Union and other countries may put pricing pressure on us. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems.
Outside the United States, international operations generally are subject to extensive government price controls and other market regulations. Increasing emphasis on cost-containment initiatives in the European Union and other countries may put pricing pressure on us. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems.
Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our product candidates, we may: • be delayed in obtaining marketing approval, if at all, or be required to conduct additional confirmatory safety and/or efficacy studies; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, precautions, or contraindications; • obtain approval without labeling claims that are necessary or desirable for the successful commercialization of our product candidates; • be subject to additional and costly post-marketing testing requirements or clinical trials; • be required to perform additional clinical trials to support approval; • have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution; • be sued; or • experience damage to our reputation.
Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our product candidates, we may: • be delayed in obtaining marketing approval, if at all, or be required to conduct additional confirmatory safety and/or efficacy studies; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, precautions, or contraindications; • obtain approval without labeling claims that are necessary or desirable for the successful commercialization of our product candidates; • be subject to additional and costly post-marketing testing requirements or clinical trials; • be required to perform additional clinical trials to support approval; 48 • have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution; • be sued; or • experience damage to our reputation.
Events that may prevent successful or timely completion of clinical trials include: 44 • delays in reaching a consensus with regulatory authorities on trial design; • delays in opening sites and recruiting a sufficient number and diversity of suitable study subjects to participate in our clinical trials; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event or concerns with a class of product candidates, or after an inspection of our clinical trial operations or trial sites; • delays in having study subjects complete participation in a trial or return for post-treatment follow-up; • occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits; or • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.
Events that may prevent successful or timely completion of clinical trials include: • delays in reaching a consensus with regulatory authorities on trial design; • delays in opening sites and recruiting a sufficient number and diversity of suitable study subjects to participate in our clinical trials; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event or concerns with a class of product candidates, or after an inspection of our clinical trial operations or trial sites; • delays in having study subjects complete participation in a trial or return for post-treatment follow-up; • occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits; or • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.
If we fail to comply with applicable regulatory requirements, a regulatory authority may, among other actions: • issue a warning letter asserting that we are in violation of the law; • seek an injunction or impose administrative, civil, or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; 47 • suspend any ongoing clinical trials; • refuse to approve a pending BLA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners, if any; • restrict the marketing or manufacturing of the product; • seize or detain the product or otherwise require the withdrawal of the product from the market; • refuse to permit the import or export of product candidates; or • refuse to allow us to enter into government contracts.
If we fail to comply with applicable regulatory requirements, a regulatory authority may, among other actions: • issue a warning letter asserting that we are in violation of the law; • seek an injunction or impose administrative, civil, or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; • suspend any ongoing clinical trials; • refuse to approve a pending BLA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners, if any; • restrict the marketing or manufacturing of the product; • seize or detain the product or otherwise require the withdrawal of the product from the market; • refuse to permit the import or export of product candidates; or • refuse to allow us to enter into government contracts.
In 2017, the FDA established the RMAT designation as part of its implementation of the 21st Century Cures Act to expedite review of any drug that meets the following criteria: it qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; it is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition.
In 2017, the FDA established the RMAT designation as part of its implementation of the 21st Century Cures Act to expedite review of any drug that meets the following criteria: it qualifies as a RMAT, which is defined as a cell 53 therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; it is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such a disease or condition.
Our use of distributors in these markets to market and sell VYJUVEK involves certain risks, including, but not limited to, risks that these organizations will not comply with applicable laws and regulations, not effectively sell or support VYJUVEK or reduce or discontinue their efforts to sell or support VYJUVEK, not devote the resources necessary to market and sell VYJUVEK in the volumes and within the time frame we expect, not be able to satisfy financial obligations to us or others, not provide us with accurate or timely information regarding their inventories of VYJUVEK or the number of patients who are using VYJUVEK, or not provide us with accurate or timely information regarding serious adverse events and/or product complaints.
Our use of distributors in these markets to market and sell VYJUVEK involves certain risks, including, but not limited to, risks that these organizations will not comply with applicable laws and regulations, not effectively sell or support VYJUVEK or reduce or discontinue their efforts to sell or support VYJUVEK, not devote the resources necessary to market 58 and sell VYJUVEK in the volumes and within the time frame we expect, not be able to satisfy financial obligations to us or others, not provide us with accurate or timely information regarding their inventories of VYJUVEK or the number of patients who are using VYJUVEK, or not provide us with accurate or timely information regarding serious adverse events and/or product complaints.
If we or the third parties that process personal information or other sensitive data our behalf fail, or are perceived to have failed, to address or comply with applicable privacy and data security obligations, we could face significant consequences, including but not limited to government enforcement actions (e.g., investigations, fines, penalties, audits, and inspections), litigation (including class-action claims), additional reporting requirements and/or oversight, bans on processing personal information, and orders to destroy or not use personal information.
If we or the third parties that process personal information or other sensitive data on our behalf fail, or are perceived to have failed, to address or comply with applicable privacy and data security obligations, we could face significant consequences, including but not limited to government enforcement actions (e.g., 41 investigations, fines, penalties, audits, and inspections), litigation (including class-action claims), additional reporting requirements and/or oversight, bans on processing personal information, and orders to destroy or not use personal information.
If demand for VYJUVEK or any product for which we obtain marketing approval increases more than previously estimated or we wish to improve manufacturing efficiencies to lower cost of production, we may need or choose to scale up or change a current FDA-approved commercial manufacturing process, which is subject to risks and uncertainties and could require 53 us to submit a Prior Approval Supplement (“PAS”) to the FDA and obtain the agency’s approval for the manufacturing process changes before they can be implemented.
If demand for VYJUVEK or any product for which we obtain marketing approval increases more than previously estimated or we wish to improve manufacturing efficiencies to lower cost of production, we may need or choose to scale up or change a current FDA-approved commercial manufacturing process, which is subject to risks and uncertainties and could require us to submit a Prior Approval Supplement (“PAS”) to the FDA and obtain the agency’s approval for the manufacturing process changes before they can be implemented.
Serious adverse events in our clinical trials or other clinical trials involving gene therapy products, even if not ultimately attributable to the relevant product candidates, and the resulting publicity, could result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates.
Serious adverse events in our clinical trials or other clinical trials involving gene therapy products, even if not ultimately attributable to the relevant product candidates, and the resulting publicity, could result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, 35 stricter labeling requirements for those product candidates that are approved, and a decrease in demand for any such product candidates.
Additionally, the use of AI solutions by us or third parties on which we rely could lead to (i) the public disclosure of confidential information (including personal data of our employees, clinical trial participants, or other third parties) in 39 contravention of our internal policies, data protection laws, other applicable laws, or contractual requirements, and/or (ii) the loss of proprietary information, trade secrets, or other intellectual property.
Additionally, the use of AI solutions by us or third parties on which we rely could lead to (i) the public disclosure of confidential information (including personal data of our employees, clinical trial participants, or other third parties) in contravention of our internal policies, data protection laws, other applicable laws, or contractual requirements, and/or (ii) the loss of proprietary information, trade secrets, or other intellectual property.
The ten-year market exclusivity in the European Union may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for 48 which it received orphan designation, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity, or where the prevalence of the condition has increased above the threshold.
The ten-year market exclusivity in the European Union may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for which it received orphan designation, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity, or where the prevalence of the condition has increased above the threshold.
If we are unsuccessful in accomplishing our objectives and executing on our business plan, or if our commercialization efforts do not develop as planned, we may not be able to successfully commercialize VYJUVEK and any future approved products, we may require significant additional capital and financial resources, we may not become profitable on a consistent basis, and we may not be able to compete against more established companies in our industry.
If we are unsuccessful in accomplishing our objectives and executing on our business plan, or if our commercialization efforts do not develop as planned, we may not be able to successfully commercialize VYJUVEK and any future approved products, we may require significant additional capital and financial resources, we may not be profitable on a consistent basis, and we may not be able to compete against more established companies in our industry.
If VYJUVEK or any of our product candidates that are approved fails to achieve market acceptance among physicians, patients, or third-party payors, we will not be able to generate significant revenue from such product, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
If VYJUVEK or any of our product 59 candidates that are approved fails to achieve market acceptance among physicians, patients, or third-party payors, we will not be able to generate significant revenue from such product, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
Additionally, the severity and frequency of weather-related natural disasters have been amplified, and are expected to continue to be amplified by, global climate change. Such natural and technological disasters may cause damage to and/or disrupt our operations, which may result in a material adverse effect on our VYJUVEK sales, our other product candidates, business, and results of operations.
Additionally, the severity and frequency of weather-related natural disasters have been amplified, and are expected to continue to be amplified, by global climate change. Such natural and technological disasters may cause damage to and/or disrupt our operations, which may result in a material adverse effect on our VYJUVEK sales, our product candidates, business, and results of operations.
Additionally granting of an authorization for another similar orphan medicinal product where another product has market exclusivity can happen at any time: (i) that the second applicant can establish that its product, although similar, is safer, more effective, or otherwise clinically superior, (ii) that the applicant cannot supply enough orphan medicinal product, or (iii) where the applicant consents to a second orphan medicinal product application.
Additionally granting of an authorization for another similar orphan medicinal product where another product has market exclusivity can happen at any time: (i) that the second applicant can establish that its product, although similar, is safer, more effective, or otherwise clinically superior, (ii) that the first applicant cannot supply enough orphan medicinal product, or (iii) where the first applicant consents to a second orphan medicinal product application.
This distribution network requires significant coordination with our sales 54 and marketing and finance organizations. In addition, failure to coordinate financial systems could negatively impact our ability to accurately report product revenue from VYJUVEK. If we are unable to effectively manage the distribution process, the sales of VYJUVEK could be compromised and our results of operations may be harmed.
This distribution network requires significant coordination with our sales and marketing and finance organizations. In addition, failure to coordinate financial systems could negatively impact our ability to accurately report product revenue from VYJUVEK. If we are unable to effectively manage the distribution process, the sales of VYJUVEK could be compromised and our results of operations may be harmed.
If we are unable to demonstrate that such adverse events were caused by the administration process or related procedures and not by our product candidates, the FDA, the European Commission, the EMA, or other regulatory authorities could order us to cease further development of, or deny approval of, our product candidates for any or all targeted indications.
If we are unable to demonstrate that such adverse events were caused by the administration process or related procedures and not by our product candidates, the FDA, the European Commission, or other regulatory authorities could order us to cease further development of, or deny approval of, our product candidates for any or all targeted indications.
Krishnan, our Chief Executive Officer and Chairman of the Board and our Founder, President, Research & Development and Director, respectively, in the aggregate, beneficially own over 10% of our outstanding common stock. As a result, they will be able to substantially influence all matters submitted to our stockholders for approval, as well as our management and affairs.
Krishnan, our Chief Executive Officer and Chairman of the Board and our Founder, President, Research & Development and Director, respectively, in the aggregate, collectively beneficially own over 10% of our outstanding common stock. As a result, they will be able to substantially influence all matters submitted to our stockholders for approval, as well as our management and affairs.
Any security breach involving the misappropriation, loss or other unauthorized disclosure or use of confidential information of others, whether by us or a third-party, could: (i) subject us to civil and criminal penalties; (ii) have a negative impact on our reputation; or (iii) expose us to liability to third parties or government authorities.
Any security breach involving the 42 misappropriation, loss or other unauthorized disclosure or use of confidential information of others, whether by us or a third-party, could: (i) subject us to civil and criminal penalties; (ii) have a negative impact on our reputation; or (iii) expose us to liability to third parties or government authorities.
Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could materially and adversely affect our business, financial condition, results of operations, and prospects. Our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could materially and adversely affect our business, financial condition, results of operations, and prospects. 43 Our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
We have contracted with a third-party packaging company to package VYJUVEK, a third-party logistics company to warehouse, process, and ship VYJUVEK to a limited number of specialty pharmacies that mix the medication and administer it to patients in the patient’s home by a healthcare professional and to a limited number of hospitals and distributors where patients are administered the medication in a hospital or clinic.
We have contracted with a third-party packaging company to package VYJUVEK, a third-party logistics company to warehouse, process, and ship VYJUVEK to a limited number of specialty pharmacies that mix the medication and may administer it to patients in the patient’s home by a healthcare professional and to a limited number of hospitals and distributors where patients are administered the medication in a hospital or clinic.
Revenue will be derived from VYJUVEK until we have another product candidate receive marketing approval. Accordingly, we may need to continue to rely on additional financing to achieve our business objectives. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates.
Revenue will be derived from VYJUVEK until we have another product candidate receive marketing approval. Accordingly, we may need to rely on additional financing to achieve our business objectives. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates.
Orphan drug marketing exclusivity generally prevents the FDA from approving another application to market the same drug or biological product for the same disease or condition for seven years, except in limited circumstances, including if the FDA concludes that the later drug is safer, more effective, or makes a major contribution to patient care.
Orphan drug marketing exclusivity generally prevents the FDA from approving another application to market the same drug or biological product for the same disease or condition for seven years, except in limited circumstances, including if 51 the FDA concludes that the later drug is safer, more effective, or makes a major contribution to patient care.
A quality or safety issue may result in adverse inspection reports, warning letters, monetary sanctions, injunctions to halt manufacture and distribution of VYJUVEK or our product candidates, civil or criminal sanctions, costly litigation, refusal of a government to grant approvals and licenses, restrictions on operations, or withdrawal, suspension or variation of existing approvals and licenses.
A quality or safety issue may result in adverse inspection reports, warning letters, monetary sanctions, injunctions to halt manufacture and distribution of VYJUVEK or our product candidates, civil or criminal sanctions, costly litigation, refusal of a government regulator to grant approvals and licenses, restrictions on operations, or withdrawal, suspension or variation of existing approvals and licenses.
A finding of infringement could prevent us from manufacturing and commercializing our products and technologies or force us to cease some or all our business operations. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations, and prospects.
A finding of infringement could prevent us from manufacturing and commercializing our products and technologies or force us to cease some or all our business operations. Claims that we 64 have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations, and prospects.
These provisions also switched the United States from a “first-to-invent” system to a “first-to-file” system, allowed third-party submissions of prior art to the United States Patent and Trademark Office (“USPTO”) during patent prosecution, and set forth additional procedures to attack the validity of a patent through various post grant proceedings administered by the USPTO.
These provisions also switched the United States from a “first-to-invent” system to a “first-to-file” system, allowed third-party submissions of prior art to the United States Patent and Trademark Office (“USPTO”) during patent prosecution, and set forth 65 additional procedures to attack the validity of a patent through various post grant proceedings administered by the USPTO.
Accelerated approval by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval. We may seek approval of our current or future product candidates using the FDA’s accelerated approval pathway.
Accelerated approval by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval. 52 We may seek approval of our current or future product candidates using the FDA’s accelerated approval pathway.
Therefore, we are subject to the risk that these third parties may not perform satisfactorily. We may maintain third-party manufacturing capabilities in order to provide multiple sources of supply of VYJUVEK or a product candidate that is approved for sale. In addition, we may utilize third parties to manufacture components of VYJUVEK or our product candidates.
Therefore, we are subject to the risk that these third parties may not perform satisfactorily. 55 We may maintain third-party manufacturing capabilities in order to provide multiple sources of supply of VYJUVEK or a product candidate that is approved for sale. In addition, we may utilize third parties to manufacture components of VYJUVEK or our product candidates.
The availability of our competitors’ products could limit the demand, and the price we are able to charge, for VYJUVEK or any product candidate that we may develop and commercialize. If any product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may be required to limit commercialization of VYJUVEK or our product candidates.
The availability of our competitors’ products could limit the demand, and the price we are able to charge, for VYJUVEK or any product candidate that we may develop and commercialize. 34 If any product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may be required to limit commercialization of VYJUVEK or our product candidates.
In addition, the California Privacy Rights Act of 2020 (“CPRA”), which came into effect on January 1, 2023, expanded the CCPA’s requirements, extending it to cover personal information of business representatives and employees and the CPRA established a new regulatory agency to implement and enforce the law.
In addition, the California Privacy Rights Act of 2020 (“CPRA”), which came into effect on January 1, 2023, expanded the CCPA’s requirements, extending it to cover personal 40 information of business representatives and employees and the CPRA established a new regulatory agency to implement and enforce the law.
Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can face criminal liability and other serious consequences for violations, which can harm our business. We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S.
Compliance with these legal standards could impair our ability to compete in domestic and international markets. We could face criminal liability and other serious consequences for violations, which could harm our business. We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S.
We face an inherent risk of product liability lawsuits related to the sale of VYJUVEK, use of VYJUVEK and our product candidates, and testing of our product candidates. Product liability claims may be brought against us by participants enrolled in our clinical trials, patients, health care providers, or others using or administering VYJUVEK and our product 31 candidates.
We face an inherent risk of product liability lawsuits related to the sale of VYJUVEK, use of VYJUVEK and our product candidates, and testing of our product candidates. Product liability claims may be brought against us by participants enrolled in our clinical trials, patients, health care providers, or others using or administering VYJUVEK and our product candidates.
Artificial intelligence presents risks and challenges that could negatively impact our business. Artificial intelligence (“AI”)-based platforms and tools are increasingly being used in the biopharmaceutical industry, and we have adopted and integrated in limited situations artificial intelligence platforms for limited specific business uses and may adopt and integrate additional artificial intelligence platforms and/or tools into our business.
Artificial intelligence presents risks and challenges that could negatively impact our business. Artificial intelligence (“AI”)-based platforms and tools are increasingly being used in the biopharmaceutical industry, and we have adopted and integrated in limited situations artificial intelligence platforms for limited specific business uses and may adopt and integrate additional AI platforms and/or tools into our business.
It can be difficult to identify relevant tests and animal models for preclinical studies. If preclinical studies of our product candidates do not generate strong data, our preclinical stage programs may never progress to clinical development and may prove to be worthless. In addition, the results of preclinical studies may not be predictive of the results of clinical trials.
It can be difficult to identify relevant tests and animal models for preclinical studies. If preclinical studies of our product candidates do not generate strong data, our preclinical stage programs may never progress to clinical development and may prove to be worthless. In addition, the results of preclinical 47 studies may not be predictive of the results of clinical trials.
For instance, VYJUVEK, KB105, and KB707 (intratumoral and inhaled) were granted Fast Track Designation by the FDA. If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the sponsor may apply for Fast Track Designation.
For instance, VYJUVEK and KB707 (intratumoral and inhaled) were granted Fast Track Designation by the FDA. If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the sponsor may apply for Fast Track Designation.
VYJUVEK and any product candidate that we commercialize may not gain acceptance by physicians, patients, health care payors, and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue 56 and may not become consistently profitable.
VYJUVEK and any product candidate that we commercialize may not gain acceptance by physicians, patients, health care payors, and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become consistently profitable.
Although we maintain workers’ compensation insurance for certain costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities.
Although we maintain workers’ compensation insurance for certain costs and expenses that we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities.
Even if a product candidate is approved, the FDA or the European Commission, as the case may be, may limit the indications for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval.
Even if a product candidate is approved, the FDA, the European Commission, or the MHLW, as the case may be, may limit the indications for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval.
We may encounter problems achieving adequate quantities and quality of materials that meet FDA, EMA, or other applicable standards or specifications with consistent and acceptable production yields and costs, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
We may encounter problems achieving adequate quantities and quality of materials that meet FDA or other applicable standards or specifications with consistent and acceptable production yields and costs, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
Thus, in some cases, we may not have the opportunity to obtain patent protection for certain technologies in some jurisdictions outside the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
Thus, in some cases, we may not have the opportunity to obtain patent protection for certain technologies in some jurisdictions outside the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same 63 extent as federal and state laws in the United States.
For example, in 2024, our specialty pharmacy provider was affected by a cybersecurity incident that delayed reimbursement approvals and had a negative impact on our product revenue. A cybersecurity incident, even if promptly 38 addressed, may harm our reputation, damage our brand, and erode trust.
For example, in 2024, our specialty pharmacy provider was affected by a cybersecurity incident that delayed reimbursement approvals and had a negative impact on our product revenue. A cybersecurity incident, even if promptly addressed, may harm our reputation, damage our brand, and erode trust.
Risks Related to Ownership of Our Common Stock Our Chief Executive Officer and Chairman of the Board of Directors and our Founder, President, Research & Development and Director will have the ability to substantially influence all matters submitted to stockholders for approval. Krish S. Krishnan and Suma M.
Risks Related to Ownership of Our Common Stock Our Chief Executive Officer and Chairman of the Board of Directors and our Founder, President, Research & Development and Director have the ability to substantially influence all matters submitted to stockholders for approval. Krish S. Krishnan and Suma M.
We have broad discretion in the use of our cash, cash equivalents, and marketable securities and may not use them effectively. Our management has broad discretion in the application of our cash, cash equivalents, and marketable securities and could spend these funds in ways that do not improve our results of operations or enhance the value of our common stock.
We have broad discretion in the use of our cash, cash equivalents, and marketable securities and may not use them effectively. 71 Our management has broad discretion in the application of our cash, cash equivalents, and marketable securities and could spend these funds in ways that do not improve our results of operations or enhance the value of our common stock.
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect VYJUVEK or our product candidates. 61 Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect VYJUVEK or our product candidates. Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.
The inability to recruit, or loss of services of 33 certain executives, key employees, or advisors, may impede the progress of our research, development, and commercialization objectives and have a material adverse effect on our business, financial condition, results of operations, and prospects.
The inability to recruit, or loss of services of certain executives, key employees, or advisors, may impede the progress of our research, development, and commercialization objectives and have a material adverse effect on our business, financial condition, results of operations, and prospects.
For example, as we commercialize VYJUVEK in the United States and learn more about market dynamics and engage with regulators on additional potential marketing approvals, our view of VYJUVEK’s initial potential market opportunity will become more refined.
For example, as we commercialize VYJUVEK in the United States and abroad and learn more about market dynamics and engage with regulators on additional potential marketing approvals, our view of VYJUVEK’s initial potential market opportunity will become more refined.
We cannot assure you that our efforts to seek patent protection for our technology and product candidates will not be negatively impacted by future court decisions or changes in guidance or procedures issued by the USPTO.
We cannot assure you that our efforts to seek patent protection for our technology, commercial product, and product candidates will not be negatively impacted by future court decisions or changes in guidance or procedures issued by the USPTO.
Further, the cost to comply with such laws, regulations or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI).
Further, the cost to comply with such laws, regulations or decisions and/or guidance interpreting existing laws, could be significant and could increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI).
In addition, if a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the drug is entitled to orphan drug marketing exclusivity for a period of seven years.
In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the drug is entitled to orphan drug marketing exclusivity for a period of seven years.
Our actual or perceived failure to comply with such obligations could lead to regulatory inquiries or actions, 36 litigation, fines and penalties, disruptions to our business operations, reputational harm, loss of revenue, and other adverse business consequences.
Our actual or perceived failure to comply with such obligations could lead to regulatory inquiries or actions, litigation, fines and penalties, disruptions to our business operations, reputational harm, loss of revenue, and other adverse business consequences.
The terms of additional financing may be impacted by, among other things, general market conditions, the market’s perception of our approved product, VYJUVEK, 64 and product candidates, our growth potential, and the market price per share of our common stock.
The terms of additional financing may be impacted by, among other things, general market conditions, the market’s perception of our approved product, VYJUVEK, and product candidates, our growth potential, and the market price per share of our common stock.
Privacy and data security have become significant areas of legal and regulatory focus in the United States, European Union, and in many other jurisdictions where we conduct or may conduct our operations.
Privacy and data security have become significant areas of legal and regulatory focus in the United States, European Union, Japan, and in many other jurisdictions where we conduct or may conduct our operations.
Regulatory authorities in countries outside of the United States and the European Union also have requirements for approval of product candidates with which we must comply prior to marketing in those countries.
Regulatory authorities in countries outside of the United States, the European Union, and Japan also have requirements for approval of product candidates with which we must comply prior to marketing in those countries.
It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in the United States, the European Union, or elsewhere, or how long it will take to commercialize our product candidates.
It is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our product candidates in the United States, the European Union, Japan, or elsewhere, or how long it will take to commercialize our product candidates.
For example, patients may use social media channels to comment on their experience in an ongoing clinical trial of our product candidates, or to report an alleged adverse event.
For example, patients may use social media to comment on their experience in an ongoing clinical trial of our product candidates, or to report an alleged adverse event.
Our gene therapy platform is based on a novel technology, which makes it difficult to predict the time and cost of obtaining regulatory approvals for our product candidates.
Our gene therapy platform is based on novel technology, which makes it difficult to predict the time and cost of obtaining regulatory approvals for our product candidates.
Factors that may inhibit our efforts to commercialize VYJUVEK or any other product candidates, if approved, on our own in the United States or elsewhere include: • our inability to train and retain adequate numbers of effective sales, marketing, training, and support personnel; • the inability of sales personnel to obtain access to physicians, including key opinion leaders, or to educate an adequate number of physicians of the benefits of VYJUVEK or any approved product candidate; • the lack of complementary products to be offered by our sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive or integrated product offerings; and • unforeseen costs and expenses associated with establishing and maintaining an independent sales, marketing, training, and support organization.
Factors that may inhibit our efforts to commercialize VYJUVEK or any other product candidates, if approved, on our own in the United States, European Union, Japan, or elsewhere include: • our inability to train and retain adequate numbers of effective sales, marketing, training, and support personnel; • the inability of sales personnel to obtain access to physicians, including key opinion leaders, or to educate an adequate number of physicians of the benefits of VYJUVEK or any approved product candidate; • the lack of complementary products to be offered by our sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive or integrated product offerings; and • unforeseen costs and expenses associated with establishing and maintaining an independent sales, marketing, training, and support organization.
Alternatively, we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.
Alternatively, we may 33 allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.
Material adverse changes 46 between preliminary, “top-line,” or interim data and final data could significantly harm our business, financial condition, results of operations, and prospects.
Material adverse changes between preliminary, “top-line,” or interim data and final data could significantly harm our business, financial condition, results of operations, and prospects.
Use of CROs for our animal studies subjects us to a number of risks, including a CRO going out of business, failing to meet deadlines or appropriately performing an animal study, or altering their internal practices that prevent future collaboration (e.g., change the types or biosafety levels of materials they are willing to handle).
Use of CROs for our animal studies subjects us to a number of risks, including a CRO going out of business, failing to meet deadlines or appropriately performing an animal study, or altering their internal practices (e.g., changing the types or biosafety levels of materials they are willing to handle) that prevent future collaboration.
In addition, 42 government funding of government agencies on which our operations may rely is subject to the political process, which is inherently fluid and unpredictable.
In addition, government funding of government agencies on which our operations may rely is subject to the political process, which is inherently fluid and unpredictable.
Our failure or any failure by these third parties to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be adversely affected if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
Our failure or any failure by these third parties to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be adversely affected if any of these third parties violate federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers, and formulary managers on the other.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand, and prescribers, purchasers, and 38 formulary managers on the other.
Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.
Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal, state, and foreign laws.
Foreign Corrupt Practices Act, its books and records provisions, or its anti-bribery provisions. 41 Any of these factors could significantly harm our potential international expansion and operations and, consequently, our results of operations. We are subject to U.S. and certain foreign export and import controls, anti-corruption laws and anti-money laundering laws and regulations.
Foreign Corrupt Practices Act, its books and records provisions, or its anti-bribery provisions. Any of these factors could significantly harm our potential international expansion and operations and, consequently, our results of operations. 44 We are subject to U.S. and certain foreign export and import controls, anti-corruption laws and anti-money laundering laws and regulations.
If we or a third-party supplier or manufacturer fails to comply with applicable CGMP regulations, the FDA and foreign regulatory authorities can impose regulatory sanctions including, among other things, refusal to approve a pending application for a new product candidate or suspension or revocation of a pre-existing approval.
If we or a third-party supplier or manufacturer fails to comply with applicable CGMP regulations, the FDA and foreign regulatory authorities can impose regulatory sanctions including, among other things, refusal to approve a pending marketing application for a product candidate or suspension or revocation of a pre-existing approval.
Any of these scenarios could decrease demand for VYJUVEK and our product candidates, if approved. Increasing demand for compassionate use or expanded access of our unapproved therapies could negatively affect our reputation and harm our business. We are developing our product candidates principally for illnesses for which there are currently limited to no available therapeutic options.
Any of these scenarios could decrease demand for VYJUVEK and our product candidates, if approved. 62 Increasing demand for compassionate use or expanded access of our unapproved therapies could negatively affect our reputation and harm our business. We are developing our product candidates principally for illnesses for which there are currently limited or no available therapeutic options.
In 2018, the Right to Try Law was enacted, allowing eligible patients to request access to certain investigation drugs, including biologics, that have not been FDA approved. New and emerging legislation regarding expanded access to unapproved drugs for life-threatening illnesses could negatively impact our business in the future.
In 2018, the Right to Try Law was enacted, allowing eligible patients to request access to certain investigational drugs, including biologics, that have not been FDA approved. New and emerging legislation regarding expanded access to unapproved drugs for life-threatening illnesses could negatively impact our business in the future.
Certain data breaches must be reported to affected individuals and various government and/or regulatory agencies, and in some cases to the media, under provisions of HIPAA, other U.S. federal and state laws, and requirements of non-U.S. jurisdictions, including the EU GDPR and relevant member state law in the European Union and other foreign laws.
Certain data breaches must be reported to affected individuals and various government and/or regulatory agencies, and in some cases to the media, under provisions of HIPAA, other U.S. federal and state laws, and requirements of non-U.S. jurisdictions, including the EU GDPR and relevant member state law in the EU and other foreign laws.
If a manufacturing process is approved by the FDA, implementing a new or changed manufacturing processes is difficult, time consuming, and would require regulatory approvals, which could potentially delay commercial availability of an approved product, which, in turn, could harm our results of operations and cause reputational damage.
If a manufacturing process is approved by the FDA or other regulator, implementing a new or changed manufacturing processes is difficult, time consuming, and would require regulatory approvals, which could potentially delay commercial availability of an approved product, which, in turn, could harm our results of operations and cause reputational damage.
The market price of our common stock may be influenced by many factors, including: • our ability to successfully commercialize VYJUVEK; • our ability to successfully proceed to and conduct clinical trials; • results of clinical trials of our product candidates or those of our competitors; • our ability to obtain regulatory approval for our product candidates and our ability to successfully commercialize any of our approved product candidates; • the success of competitive products or technologies; • commencement or termination of collaborations; • regulatory or legal developments in the United States and other countries; • the recruitment or departure of key personnel; • the level of expenses related to VYJUVEK or any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire, or in-license additional product candidates; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • our inability to manufacture adequate product supply for VYJUVEK and any other approved product or inability to do so at acceptable prices; • disputes or other developments relating to proprietary rights, including patent applications, and issued patents; • our ability to obtain patent protection for our product candidates and technologies; • significant lawsuits, including patent or stockholder litigation; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
The market price of our common stock may be influenced by many factors, including: • our ability to continue to successfully sell VYJUVEK in the United States and internationally; • our ability to successfully proceed to and conduct clinical trials; • results of clinical trials of our product candidates or those of our competitors; • our ability to obtain regulatory approval for our product candidates and our ability to successfully commercialize any of our approved product candidates; • the success of competitive products or technologies; • commencement or termination of collaborations; • regulatory or legal developments in the United States and other countries; • the recruitment or departure of key personnel; • the level of expenses related to VYJUVEK and any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire, or in-license additional product candidates; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • our inability to manufacture adequate product supply for VYJUVEK and any other approved product or inability to do so at acceptable costs; • disputes or other developments relating to proprietary rights, including patent applications, and issued patents; • our ability to obtain patent protection for our product candidates and technologies; • significant lawsuits, including patent or stockholder litigation; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; 70 • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
Healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
Healthcare reform measures that may be adopted could result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
This could result in a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of marketing approval of our current and future product candidates. Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
This could result in a delay in approval, or rejection, of our marketing applications by the FDA or foreign regulators and may ultimately lead to the denial of marketing approval of our current and future product candidates. Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeA part of our strategy for managing risks from cybersecurity threats is assessment and testing of the effectiveness of our cybersecurity measures. We engage third parties to perform assessments on our cybersecurity measures, and we adjust our cybersecurity measures as necessary based on the information provided by the assessments. Governance The Board oversees the management of risks from cybersecurity threats.
Biggest changeA part of our strategy for managing risks from cybersecurity threats is assessment and testing of the effectiveness of our cybersecurity measures. We engage third parties to perform assessments on our cybersecurity measures, including annual penetration testing, and we adjust our cybersecurity measures as necessary based on the information provided by the assessments.
We generally approach cybersecurity threats through a cross-functional, multilayered approach, with specific goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store; (iii) protecting the Company’s intellectual property; (iv) maintaining the confidence of our customers, suppliers and other third parties; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.
We generally approach cybersecurity threats through a cross-functional, multilayered approach, with specific goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store; (iii) protecting the Company’s intellectual property; (iv) maintaining the confidence of our employees, patients, HCPs, suppliers, and other third parties; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.
At least once each year, the Board discusses the Company’s approach to cybersecurity risk management with the Company’s Senior Director of Cyber Security, who is the member of management that is principally responsible for overseeing cybersecurity at the Company, in partnership with other business leaders across the Company, including our Chief Executive Officer, Chief Accounting Officer, General Counsel, and Human Resources leader.
At least once each year, the Board discusses the Company’s approach to cybersecurity risk management with the Company’s Executive Director of Information Technology Operations and Information Security, who is the member of management that is principally responsible for overseeing cybersecurity at the Company, in partnership with other business leaders across the Company, including our Chief Executive Officer, Chief Accounting Officer, General Counsel, and Human Resources leader.
The Board receives regular presentations and reports on cybersecurity, which address a wide range of topics and also receives prompt and timely information regarding any cybersecurity incident that is or may become material, as well as ongoing updates regarding such incident until it has been addressed.
Governance The Board oversees the management of risks from cybersecurity threats. The Board receives regular presentations and reports on cybersecurity, which address a wide range of topics and also receives prompt and timely information regarding any cybersecurity incident that is or may become material, as well as ongoing updates regarding such incident until it has been addressed.
Our Senior Director of Cyber Security has served in various roles in information technology and information security for over 20 years, including serving as Information Security Officer for a global medical device manufacturer . He holds degrees in Global Business Management and Computer Science.
Our Senior Director of Cyber Security has served in various roles in information technology and information security for over 20 years, including serving as Information Security Officer for a global medical device manufacturer.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition. 68
He holds degrees in Global Business Management and Computer Science. 73 Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition.
Added
Our cybersecurity program is developed using industry standards and best practices as a guide, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. The NIST framework provides us with a common language and structure for identifying, assessing, and managing cybersecurity risks across our organization.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAstra was completed and validated in 2023. As of December 31, 2024, we also leased international office space in Switzerland, Netherlands, Germany, Japan, Italy and Spain. Item 3. Legal Proceedings.
Biggest changeASTRA was completed and validated in 2023. As of December 31, 2025, we also leased international office space in Switzerland, Netherlands, France, Germany, Japan, Italy, and Spain. Item 3. Legal Proceedings.
The information set forth in Note 7 of the Notes to the Consolidated Financial Statements included in Part II Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures. Not applicable. 69 PART II
The information set forth in Note 7 of the Notes to the Consolidated Financial Statements included in Part II Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures. Not applicable. 74 PART II
Item 2. Properties. As of December 31, 2024, we leased approximately 54,000 square feet of combined laboratory and office space in Pittsburgh, Pennsylvania that we use for our research, development and manufacturing efforts. The lease for combined laboratory and office space expires in October 2031.
Item 2. Properties. As of December 31, 2025, we leased approximately 67,000 square feet of combined laboratory and office space in Pittsburgh, Pennsylvania that we use for our research, development and manufacturing efforts. The lease for combined laboratory and office space expires in October 2031.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny further determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors considers relevant.
Biggest changeAny further determination to pay dividends on our capital stock will be at the discretion of our Board, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our Board considers relevant.
Securities Authorized for Issuance Under Equity Compensation Plans Information about securities authorized for issuance under existing equity compensation plans is incorporated by reference from Part III, Item 12 of this Annual Report on From 10-K.
Securities Authorized for Issuance Under Equity Compensation Plans Information about securities authorized for issuance under existing equity compensation plans is incorporated by reference from Part III, Item 12 of this Annual Report on Form 10-K.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers There were no repurchases of shares of common stock made during the three months ended December 31, 2024.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers There were no repurchases of shares of common stock made during the three months ended December 31, 2025.
Stock Performance Graph Set forth below is a graph comparing the cumulative total return on an indexed basis of a $100 investment in the Company’s common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index commencing on December 31, 2019 and continuing through December 31, 2024.
Stock Performance Graph Set forth below is a graph comparing the cumulative total return on an indexed basis of a $100 investment in the Company’s common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index commencing on December 31, 2020 and continuing through December 31, 2025.
The graph assumes our closing sale price on December 31, 2019 of $55.38 per share as the initial value of our common stock for indexing purposes. Points on the graph represent the performance as of the last business day of each of the months indicated. The comparisons shown in the graph below are based upon historical data.
The graph assumes our closing sale price on December 31, 2020 of $60.00 per share as the initial value of our common stock for indexing purposes. Points on the graph represent the performance as of the last business day of each of the months indicated. The comparisons shown in the graph below are based upon historical data.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol KRYS. Holders of Record As of February 12, 2025, there were two stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol “KRYS.” Holders of Record As of February 11, 2026, there were four stockholders of record of our common stock.
The past performance of our common stock is no indication of future performance. 70 71 Item 6. [Reserved]
The past performance of our common stock is no indication of future performance. 75 76 Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table summarizes our research and development expenses by product candidate or program, and for unallocated expenses, by type, for the years ended December 31, 2024, 2023 and 2022: Years Ended December 31, Change (in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 B-VEC $ 8,760 $ 9,039 $ 8,096 $ (279) $ 943 KB105 935 282 276 653 6 KB301 635 460 1,312 175 (852) KB304 1,342 66 3 1,276 63 KB407 1,877 1,668 1,895 209 (227) KB408 1,630 1,043 972 587 71 KB707 8,677 3,828 400 4,849 3,428 KB803 604 — — 604 — Other dermatology programs — 2 500 (2) (498) Other aesthetics programs 6 25 111 (19) (86) Other ophthalmology programs 1,868 71 — 1,797 71 Other research programs 1,274 567 876 707 (309) Other development programs 823 939 645 (116) 294 Stock-based compensation 9,237 10,051 7,897 (814) 2,154 Other unallocated manufacturing expenses (1) 9,087 12,550 15,036 (3,463) (2,486) Other unallocated expenses (2) 6,818 5,840 4,442 978 1,398 Research and development expense $ 53,573 $ 46,431 $ 42,461 $ 7,142 $ 3,970 (1) Unallocated manufacturing expenses consist of shared pre-commercial manufacturing costs, primarily relating to raw materials, contract manufacturing, contract testing, process development, quality control and quality assurance activities and other manufacturing costs which support the development of multiple product candidates in our preclinical and clinical development programs.
Biggest changeThe following table summarizes our research and development expenses by product candidate or program, and for unallocated expenses, by type, for the years ended December 31, 2025, 2024 and 2023: Years Ended December 31, Change (in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 B-VEC $ 6,690 $ 8,760 $ 9,039 $ (2,070) $ (279) KB111 1,837 — — $ 1,837 $ — KB301 184 635 485 (451) 150 KB304 960 1,342 66 (382) 1,276 KB407 1,805 1,877 1,668 (72) 209 KB408 882 1,630 1,043 (748) 587 KB707 10,856 8,677 3,828 2,179 4,849 KB801 2,175 1,314 — 861 1,314 KB803 2,564 604 — 1,960 604 Other dermatology programs 12 935 284 (923) 651 Other ophthalmology programs 44 554 71 (510) 483 Other programs 2,493 2,098 1,506 395 592 Stock-based compensation 10,375 9,237 10,051 1,138 (814) Other unallocated expenses (1) 17,168 15,917 18,392 1,251 (2,475) Research and development expense $ 58,045 $ 53,580 $ 46,433 $ 4,465 $ 7,147 (1) Other unallocated expenses consist of shared pre-commercial manufacturing costs, primarily relating to certain raw materials, process development, quality control and quality assurance activities, as well as other manufacturing and facility related costs including rent, storage and depreciation which support the development of multiple product candidates.
Stock-Based Compensation We have applied the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic 718, Compensation—Stock Compensation (“ASC 718”), to account for stock-based compensation. We recognize compensation costs related to stock granted based on the estimated fair value of the awards on the date of grant.
Stock-Based Compensation We have applied the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic 718, Compensation—Stock Compensation (“ASC 718”), to account for stock-based compensation. We recognize compensation costs related to stock-based awards granted based on the estimated fair value of the awards on the date of grant.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased $15.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Selling, general and administrative expenses increased $15.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $163.4 million and consisted of $457.7 million in purchases of short-term and long-term investments and $4.2 million in purchases of property and equipment, partially offset by $298.5 million received from the maturities of investments.
Net cash used in investing activities for the year ended December 31, 2024 was $163.4 million and consisted of $457.7 million in purchases of short-term and long-term investments and $4.2 million in purchases of property and equipment, partially offset by $298.5 million received from the maturities of investments.
Our future funding requirements will depend on many factors, including, but not limited to: • the costs needed to commercialize and market our lead product, VYJUVEK; • the progress, timing and costs of clinical trials of our current product candidates; • the progress, timing and costs of manufacturing of VYJUVEK and revenue received from commercial sale of VYJUVEK; • the continued development and the filing of an IND application for current and future product candidates; • the initiation, scope, progress, timing, costs and results of drug discovery, laboratory testing, manufacturing, preclinical studies and clinical trials for any product candidates that we may pursue in the future, if any; • the costs of maintaining our own commercial-scale CGMP manufacturing facilities; • the outcome, timing and costs of seeking regulatory approvals; • the costs associated with the manufacturing process development and evaluation of third-party manufacturers; • the extent to which the costs of VYJUVEK and our product candidates, if approved, will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors; • the costs of commercialization activities for our current and future product candidates if we receive marketing approval for such product candidates, including the costs and timing of establishing product sales, medical affairs, marketing, distribution and manufacturing capabilities; • subject to receipt of marketing approval, if any, revenue received from commercial sale of our current and future product candidates; • the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish; • the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or other intellectual property rights, including milestone and royalty payments and patent prosecution fees that we are obligated to pay pursuant to our license agreements; • our current license agreements remaining in effect and our achievement of milestones under those agreements; • our ability to establish and maintain collaborations and licenses on favorable terms, if at all; and • the extent to which we acquire or in-license other product candidates and technologies.
Our future funding requirements will depend on many factors, including, but not limited to: • the costs needed to commercialize and market our lead product, VYJUVEK; • the progress, timing and costs of clinical trials of our current product candidates; • the progress, timing and cost of manufacturing VYJUVEK and revenue received from commercial sale of VYJUVEK; • the continued development and the filing of an IND application for current and future product candidates; • the initiation, scope, progress, timing, costs and results of drug discovery, laboratory testing, manufacturing, preclinical studies and clinical trials for any product candidates that we may pursue in the future, if any; • the costs of maintaining our own commercial-scale CGMP manufacturing facilities; • the outcome, timing and costs of seeking regulatory approvals; • the costs associated with the manufacturing process development and evaluation of third-party manufacturers; • the extent to which the costs of VYJUVEK and our product candidates, if approved, will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or will be reimbursed by government authorities, private health coverage insurers and other third-party payors; • the costs of commercialization activities for our current and future product candidates if we receive marketing approval for such product candidates, including the costs and timing of establishing product sales, medical affairs, marketing, distribution and manufacturing capabilities; • subject to receipt of marketing approval, if any, revenue received from commercial sale of our current and future product candidates; 85 • the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish; • the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, maintenance, defense and enforcement of any patents or other intellectual property rights, including milestone and royalty payments and patent prosecution fees that we are obligated to pay pursuant to our license agreements; • our current license agreements remaining in effect and our achievement of milestones under those agreements; • our ability to establish and maintain collaborations and licenses on favorable terms, if at all; and • the extent to which we acquire or in-license other product candidates and technologies.
Under these rebate programs, the Company pays a rebate to the commercial entity or third-party administrator of the program. 76 Accrued commercial rebates are estimated using the expected value method based on estimated percentages of VYJUVEK that will be prescribed to qualified patients and estimated levels of inventory in the distribution channel.
Under these rebate programs, the Company pays a rebate to the commercial entity or third-party administrator of the program. Accrued commercial rebates are estimated using the expected value method based on estimated percentages of VYJUVEK that will be prescribed to qualified patients and estimated levels of inventory in the distribution channel.
Determining the amount of stock-based compensation to be recorded requires us to develop estimates of the fair value of stock-based awards as of their measurement date. We recognize stock-based compensation expense over the requisite service period, which is the vesting period of the award. Calculating the fair value of stock-based awards requires that we make assumptions.
Determining the amount of stock-based compensation to be recorded requires us to develop estimates of the fair value of stock-based awards as of their measurement date. We recognize stock-based compensation expense over the requisite service period, which is the vesting period of the award. Calculating the fair value of stock-based awards requires that we make 81 assumptions.
We estimate the expected term of stock options using the “simplified” method as prescribed by SEC Staff Accounting Bulletin No. 107, Share-Based Payments , whereby the expected term equals the arithmetic mean of the vesting term and the 77 original contractual term of the option.
We estimate the expected term of stock options using the “simplified” method as prescribed by SEC Staff Accounting Bulletin No. 107, Share-Based Payments , whereby the expected term equals the arithmetic mean of the vesting term and the original contractual term of the option.
Variable consideration reduces the transaction price to reflect the Company’s best estimate of the amount of consideration to which the Company is entitled based on the terms of the contracts and is recorded in the same period the related product revenue is recognized.
Variable consideration reduces the transaction price to reflect the Company’s best estimate of the amount of consideration to which the Company is entitled based on the terms of the contracts and is recorded in the same period the 80 related product revenue is recognized.
ASC 718 requires all stock-based payments, including grants of stock options and restricted stock, to be recognized in the consolidated statements of operations and comprehensive income (loss) based on their grant-date fair values.
ASC 718 requires all stock-based payments, including grants of stock options and restricted stock, to be recognized in the consolidated statements of operations and comprehensive income based on their grant-date fair values.
Net cash used by operating activities for the year ended December 31, 2023 was $88.8 million and consisted primarily of net income of $10.9 million adjusted for $61.2 million of non-cash items and a $38.5 million decrease in cash due to an increase in net working capital.
Net cash used in operating activities for the year December 31, 2023 was $88.8 million and consisted primarily of net income of $10.9 million adjusted for $61.2 million of non-cash items and a $38.5 million decrease in cash due to an increase in net working capital.
Returns are estimated taking into consideration several factors including these limited product return rights, historical return activity, and other relevant factors. The Company has not experienced significant product returns to date, and accordingly no allowance for returns was recorded for the year ended December 31, 2024.
Returns are estimated taking into consideration several factors including these limited product return rights, historical return activity, and other relevant factors. The Company has not experienced significant product returns to date, and accordingly no allowance for returns was recorded for the year ended December 31, 2025.
Non-cash adjustments included gain on sale of priority review voucher of $100.0 million, which is classified as an investing activity, realized gain on investments of $5.1 million and accretion on marketable securities of $2.2 million, partially offset by stock-based compensation expense, net of $39.9 million, depreciation of $5.0 million, amortization of operating lease right-of-use assets of $904 thousand and other adjustments of $217 thousand.
Non-cash adjustments included gain on sale of priority review voucher of $100.0 million, which is classified as an investing activity, realized gain on investments of $5.1 million and accretion of marketable securities of $2.2 million, partially offset by stock-based compensation expense, net of $39.9 million, depreciation of $5.0 million, amortization of operating lease right-of-use assets of $0.9 million and other adjustments of $0.2 million.
Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring control of the promised good to the customer. The only performance obligation in the Company’s contracts with customers is the timely delivery of the product to the customer’s designated location.
Revenue is recognized when the Company satisfies a performance obligation by transferring control of the promised good to the customer. The only performance obligation in the Company’s contracts with customers is the timely delivery of the product to the customer’s designated location.
The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued research and development expenses and other current liabilities as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time.
The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued research and development expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time.
This section of this Annual Report on Form 10-K generally discusses 2024, 2023 and 2022 items and year-to-year comparisons between 2024 and 2023, and 2023 and 2022 of the Company ’ s results of operations and cash flows.
This section of this Annual Report on Form 10-K generally discusses 2025, 2024 and 2023 items and year-to-year comparisons between 2025 and 2024, and 2024 and 2023 of the Company ’ s results of operations and cash flows.
Non-cash adjustments included depreciation of $6.0 million, amortization of operating lease right-of-use assets of $747 thousand, stock-based compensation expense, net of $49.1 million, and other adjustments of $652 thousand offset by realized gain on investments of $6.1 million and accretion on marketable securities of $1.7 million.
Non-cash adjustments included depreciation of $6.0 million, amortization of operating lease right-of-use assets of $0.7 million, stock-based compensation expense, net of $49.1 million, and other adjustments of $0.7 million offset by realized gain on investments of $6.1 million and accretion on marketable securities of $1.7 million.
For additional details regarding our leases, see Note 8 and Note 14 to our consolidated financial statements included in this Annual Report on Form 10-K.
For additional details regarding our leases, see Note 8 to our consolidated financial statements included in this Annual Report on Form 10-K.
Operating Capital Requirements Our primary uses of capital are, and we expect will continue to be for the near future, compensation and related expenses, manufacturing costs for preclinical and clinical materials, regulatory expenses, third-party clinical trial research and development services, laboratory and related supplies, selling expenses, costs to manufacture our commercial product, legal expenses, payments of settlement amounts to PeriphaGen and general overhead costs.
Operating Capital Requirements Our primary uses of capital are, and we expect will continue to be for the near future, compensation and related expenses, manufacturing costs for preclinical and clinical materials, regulatory expenses, third-party clinical trial research and development services, laboratory and related supplies, selling expenses, costs to manufacture our commercial product, legal expenses and general overhead costs.
Refer to Part I, Item 1 - Business for more information about our FDA approved product, VYJUVEK ® , clinical development pipeline and research programs, and the status of our product candidates.
Refer to Part I, Item 1 - Business for more information about our commercial product, VYJUVEK ® , clinical development pipeline and research programs, and the status of our product candidates.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist principally of salaries and other related costs, including stock-based compensation for personnel in our executive, finance, legal, commercial, business development, information technology and other general and administrative functions.
Selling, General and Administrative Expenses Selling, general and administrative expenses consist principally of salaries and other related costs, including stock-based compensation for personnel in our executive, finance, legal, commercial, business development, information technology and other general and administrative functions and are expensed as incurred.
Net cash provided by financing activities for the year ended December 31, 2023 was $202.8 million and consisted of proceeds of $159.7 million from issuances of common stock, net of offering costs and proceeds of $43.8 million from exercises of stock options, partially offset by $749 thousand used for employee tax withholding payments for settlement of vested restricted stock awards.
Net cash provided by financing activities for the year ended December 31, 2023 was $202.8 million and consisted of proceeds of $159.7 million from issuance of common stock, net of offering costs and proceeds of $43.8 million from exercises of stock options, partially offset by $0.7 million used for employee tax withholding payments for settlement of restricted stock awards.
Cost of Goods Sold Cost of goods sold was $20.1 million for the year ended December 31, 2024 as compared to $3.1 million for the year ended December 31, 2023 and zero for the year ended December 31, 2022 due to initial sales of VYJUVEK after FDA approval was obtained on May 19, 2023.
Cost of Goods Sold Cost of goods sold was $23.0 million for the year ended December 31, 2025 as compared to $20.1 million for the year ended December 31, 2024 and $3.1 million for the year ended December 31, 2023 due to initial sales of VYJUVEK after FDA approval was obtained on May 19, 2023.
We expect our research and development expenses will increase as we continue the manufacturing of preclinical and clinical materials and manage the clinical trials of, and seek regulatory approval for, our product candidates and as we expand our product portfolio.
We expense research and development costs to operations as incurred. We expect our research and development expenses will increase as we continue the manufacturing of preclinical and clinical materials, manage the clinical trials of and seek regulatory approval for our product candidates and as we expand our product portfolio.
Litigation Settlement Litigation settlement for the years ended December 31, 2024, 2023 and 2022 was $37.5 million, $12.5 million and $25.0 million, respectively, and consisted of amounts related to the settlement of litigation with PeriphaGen. See “Legal Proceedings” in Note 7 of the notes to consolidated financial statements included in this Form 10-K for more information.
Litigation Settlement Litigation settlement for the years ended December 31, 2025, 2024 and 2023 was zero, $37.5 million and $12.5 million, respectively, and consisted of amounts related to the settlement of litigation with PeriphaGen. See “Legal Proceedings” in Note 7 of the notes to consolidated financial statements included in this Annual Report on Form 10-K for more information.
The Company sells VYJUVEK to a limited number of specialty pharmacy (“SPs”) providers that mix the medication to be administered by a healthcare professional in either a healthcare professional or home setting and to a limited number of hospitals or specialty distributors (“SDs”) who deliver to hospitals where patients are administered the medication in a healthcare setting.
The Company sells VYJUVEK to a limited number of specialty pharmacy (“SPs”) providers that mix the medication to be administered at a healthcare professional’s office or in the patient’s home and to a limited number of hospitals or specialty distributors (“SDs”) who deliver to hospitals where patients are administered the medication in a healthcare setting.
Research and Development Expenses Research and development expenses increased approximately $7.1 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Research and development expenses increased $7.1 million in the year ended December 31, 2024 compared to the year ended December 31, 2023.
Respiratory KB407 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the full-length CFTR transgene for the treatment of CF, a serious rare lung disease caused by missing or mutated CFTR protein.
Pipeline Respiratory KB407 for Cystic Fibrosis (“CF”) 77 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.
Accrued Research and Development Expenses As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses, prepaid assets and other current liabilities.
Accrued Research and Development Expenses As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses.
On an ongoing basis, we evaluate estimates which include, but are not limited to, variable consideration associated with revenue recognition, stock-based compensation expense, accrued expenses, the fair value of financial instruments, and the valuation allowance included in the deferred income tax calculation during the period.
On an ongoing basis, we evaluate estimates which include, but are not limited to, variable consideration associated with revenue recognition, stock-based compensation expense, accrued expenses, and the valuation allowance included as part of the net deferred tax assets calculation during the period.
The total future payments for our operating lease obligations that had commenced as of December 31, 2024 are $14.6 million, of which $1.3 million is due in the next twelve months and the 83 remaining payments are due over the terms of the respective leases.
The total future payments for our operating lease obligations that had commenced as of December 31, 2025 are $17.0 million, of which $1.9 million is due in the next twelve months and the remaining payments are due over the terms of the respective leases.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $27.0 million and consisted of proceeds of $32.4 million from exercises of stock options, partially offset by $4.2 million used for employee tax withholding 84 payments related to vested restricted stock units and $1.2 million used for employee tax withholding payments for settlement of vested restricted stock awards.
Net cash provided by financing activities for the year ended December 31, 2024 was $27.0 million and consisted of proceeds of $32.4 million from exercises of stock options, partially offset by $4.2 million used for employee tax withholding.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following information should be read in conjunction with the consolidated financial statements and related notes thereto included in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following information should be read in conjunction with the consolidated financial statements and related notes thereto included in this Annual Report on Form 10-K. In addition to historical information, this report contains forward-looking statements that involve risks and uncertainties.
Research and Development Expenses Research and development expenses consist primarily of costs incurred to advance our preclinical and clinical candidates, which include: • expenses incurred under agreements with contract manufacturing organizations, contract research organizations, consultants and other vendors that conduct our preclinical activities; • costs of acquiring, developing and manufacturing clinical trial materials and lab supplies; • facility costs, depreciation and other expenses, which include direct expenses for rent and maintenance of facilities and other supplies; and • payroll related expenses, including stock-based compensation expense.
Research and Development Expenses Research and development expenses consist primarily of costs incurred to advance our preclinical and clinical development programs and the development and manufacturing of our product candidates, which include: • agreements with contract research organizations, consultants and other third parties that conduct preclinical activities, clinical trials and other research and development activities on our behalf; • costs of acquiring, developing and manufacturing product candidates and clinical trial materials, lab supplies and consumables; • facility costs, depreciation and other related expenses, which include expenses for rent and the maintenance of our facilities; • other testing and support costs and supplies; and • payroll related expenses, including stock-based compensation expense.
“Risk Factors” and “Forward-Looking Statements” included at the beginning of this Annual Report on Form 10-K. The risks and uncertainties can cause actual results to differ significantly from those forecast in forward-looking statements or implied in historical results and trends.
We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A. “Risk Factors” and “Forward-Looking Statements” included at the beginning of this Annual Report on Form 10-K. The risks and uncertainties can cause actual results to differ materially from those forecast in forward-looking statements or implied in historical results and trends.
Interest and Other Income, Net Interest and other income, net for the years ended December 31, 2024, 2023 and 2022 was $29.7 million, $22.6 million and $5.2 million, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.
Interest and Other Income, Net Interest and other income, net for the years ended December 31, 2025, 2024 and 2023 was $28.2 million, $29.6 million and $22.5 million, 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.
Interest and Other Income, Net Interest and other income, net consists primarily of income earned from our cash, cash equivalents and investments. 75 Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial position and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial position and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP.
Copay assistance costs are recorded as reductions to revenue on the consolidated statements of operations and are recorded in accrued expenses and other current liabilities on the consolidated balance sheets. • Product Returns: The Company offers limited return rights relating only to product damage or defects identified upon receipt, and therefore the Company expects minimal returns.
Accrued commercial rebates are recorded as a reduction of revenue on the consolidated statements of operations and are included in accrued rebates on the consolidated balance sheets • Product Returns: The Company offers limited return rights relating only to product damage or defects identified upon receipt, and therefore the Company expects minimal returns.
The increase in interest and dividend income is the result of increased investment activity and more favorable interest rates as compared to the prior period and an increase in our balance of cash, cash equivalents, and investments.
The increase in interest and other income for the years ended December 31, 2024 compared to the year ended December 31, 2023 is the result of increased investment activity and more favorable interest rates as compared to the prior period and an increase in our balance of cash, cash equivalents, and investments.
Research and development expenses increased $4.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Research and development expenses increased $4.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The estimated remaining commitment as of December 31, 2024 under these agreements is approximately $627 thousand, all of which is expected to be due in the next twelve months.
The estimated remaining commitment expected to be due in the next twelve months as of December 31, 2025 under these agreements is immaterial.
Sources and Uses of Cash The following table summarizes our sources and uses of cash: Years Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by (used in) operating activities $ 123,420 $ (88,804) $ (100,569) Net cash (used in) provided by investing activities (163,439) 82,638 (114,083) Net cash provided by financing activities 27,014 202,750 35,347 Effect of exchange rate changes on cash and cash equivalents (458) (156) (41) Net increase (decrease) in cash $ (13,463) $ 196,428 $ (179,346) Operating Activities Net cash provided by operating activities for the year ended December 31, 2024 was $123.4 million and consisted primarily of net income of $89.2 million adjusted for $48.7 million of non-cash items and a $14.5 million decrease in cash due to an increase in net working capital.
Sources and Uses of Cash The following table summarizes our sources and uses of cash: Years Ended December 31, (in thousands) 2025 2024 2023 Net cash provided by (used in) operating activities $ 200,865 $ 123,420 $ (88,804) Net cash (used in) provided by investing activities (58,417) (163,439) 82,638 Net cash provided by financing activities 8,705 27,014 202,750 Effect of exchange rate changes on cash and cash equivalents 286 (458) (156) Net increase (decrease) in cash $ 151,439 $ (13,463) $ 196,428 Operating Activities Net cash provided by operating activities for the year ended December 31, 2025 was $200.9 million and consisted primarily of net income of $204.8 million adjusted for $32.5 million of non-cash items and a $36.4 million decrease in cash due to an increase in net working capital.
The increase was primarily driven by the following: 79 • an aggregated increase of $4.9 million related to KB304 costs, KB105 costs, KB408 costs, KB803 costs, other ophthalmology programs and other aesthetics programs all related to increases in manufacturing expenses, payroll costs and professional services related to pre-clinical contracts, • an increase of $4.8 million in KB707 costs following the expansion of our research and development pipeline to oncology consisting of an increase in payroll related costs to support our research, an increase in contract research expenses in preparation for clinical trials, and an increase in clinical trial costs associated with our Phase 1/2 clinical trial of KB707 that commenced in 2024, • an increase of $978 thousand in other unallocated expenses, which largely relates to (1) depreciation due to the Company’s second CGMP facility being placed into service throughout 2023 and 2024 partially offset by the capitalization of depreciation associated with increased commercial batches of VYJUVEK and (2) other facilities and equipment related costs, and • an increase of $707 thousand in other research programs.
The increase was primarily driven by the following: • an aggregated increase of $4.9 million related to KB304 costs, KB408 costs, KB803 costs, other dermatology programs, other ophthalmology programs and other aesthetics programs all related to increases in manufacturing expenses, payroll costs and professional services related to pre-clinical contracts; • an increase of $4.8 million in KB707 costs following the expansion of our research and development pipeline to oncology consisting of an increase in payroll related costs to support our research, an increase in contract research expenses in preparation for clinical trials, and an increase in clinical trial costs associated with our Phase 1/2 clinical trial of KB707 that commenced in 2024; and • an increase of $0.7 million in other research programs. 83 The increases were partially offset by: • a net decrease of $2.5 million in other unallocated expenses primarily due to the costs related to the manufacturing of VYJUVEK following FDA approval being recorded as inventory and cost of goods sold, partially offset by increases related to (1) depreciation due to the Company’s second CGMP facility being placed into service throughout 2023 and 2024 partially offset by the capitalization of depreciation associated with increased commercial batches of VYJUVEK and (2) other facilities and equipment related costs; and • a decrease of $0.8 million in stock-based compensation due to the allocation of labor costs related to work performed to manufacture VYJUVEK to inventory.
We anticipate that our selling, general and administrative expenses will increase in the future relating to our commercialization efforts and to support the development of our product candidates. These increases will likely include increased costs for insurance, costs related to the hiring of additional personnel and payments to outside consultants, lawyers and accountants, among other expenses.
These increases will likely include increased costs for insurance, costs related to the hiring of additional personnel and payments to outside consultants, lawyers and accountants, among other expenses. Additionally, we anticipate that we will continue to increase our salary and personnel costs and other expenses to support Vyjuvek commercialization globally.
Selling, general and administrative expenses also include professional fees associated with corporate and intellectual property-related legal expenses, consulting and accounting services, insurance, facility-related costs and expenses associated with obtaining and maintaining patents. Other selling, general and administrative costs include travel expenses, patient access program costs, management service fees, marketing expenses, and selling expenses which include transportation, shipping and handling fees.
Selling, general and administrative expenses also include professional fees associated with corporate and intellectual property-related legal expenses, consulting and accounting services, insurance, facility-related costs and expenses associated with obtaining and maintaining patents.
In order to complete the process of obtaining regulatory approval for any of our product candidates and to build the sales, manufacturing, marketing and distribution infrastructure that we believe will be necessary to commercialize our product candidates, if approved, we may require substantial additional funding. 82 We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.
In order to complete the process of obtaining regulatory approval for any of our product candidates and to build the sales, manufacturing, marketing and distribution infrastructure that we believe will be necessary to commercialize our product candidates, if approved, we may require substantial additional funding.
Cost of goods sold may also include period costs related to certain manufacturing services and inventory adjustment charges. Prior to receiving FDA approval in May 2023, costs associated with the manufacturing of VYJUVEK were expensed as research and development expenses.
Prior to receiving FDA approval in May 2023, costs associated with the manufacturing of VYJUVEK were expensed as research and development expenses.
Costs related to clinical trials can be unpredictable and, therefore, there can be no guarantee that we will have sufficient capital to fund the continued or planned pre-clinical and clinical studies for our product candidates, or our operations. 81 Further, we expect future revenue to fluctuate from quarter to quarter for many reasons, including the uncertain timing and amount of any product sales.
Costs related to clinical trials can be unpredictable and, therefore, there can be no guarantee that we will have sufficient capital to fund the continued or planned pre-clinical and clinical studies for our product candidates, or our operations.
Net cash used in operating activities for the year December 31, 2022 was $100.6 million and consisted primarily of a net loss of $140.0 million adjusted for $36.7 million of non-cash items and an increase in cash due to a decrease in net working capital of $2.7 million.
Net cash used by operating activities for the year ended December 31, 2024 was $123.4 million and consisted primarily of net income of $89.2 million adjusted for $48.7 million of non-cash items and a $14.5 million decrease in cash due to an increase in net working capital.
As we seek to obtain regulatory approval for our product candidates, we expect to continue to incur significant manufacturing and commercialization expenses as we prepare for product sales, marketing, commercial manufacturing, packaging, labeling and distribution.
Additionally, we currently utilize third-party contract research organizations to carry out some of our clinical development activities. As we seek to obtain regulatory approval for our product candidates and prepare for product sales, marketing, commercial manufacturing, packaging, labeling and distribution, we expect to continue to incur significant manufacturing and commercialization expenses.
Aesthetics 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.
We continue to follow patients enrolled in OPAL-1, our Phase 1/2 study, evaluating intratumoral KB707, as monotherapy or in combination, for the treatment of locally advanced or metastatic solid tumors. 78 Aesthetics 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.
Our FDA Approved Commercial Product VYJUVEK (beremagene geperpavec-svdt or B-VEC; referred to as B-VEC outside the United States) On May 19, 2023, the FDA approved VYJUVEK, the first ever redosable gene therapy, for treating patients, six months of age or older, suffering from 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 .
Our Commercial Product VYJUVEK (beremagene geperpavec-svdt or B-VEC) 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 .
Additionally, we anticipate that we will continue to increase our salary and personnel costs and other expenses to support B-VEC commercialization globally. ASTRA Capital Expenditures In March 2021, we closed on the purchase of the building that was constructed to house our second commercial scale CGMP facility, ASTRA.
ASTRA Capital Expenditures In March 2021, we closed on the purchase of the building that was constructed to house our second commercial scale CGMP facility, ASTRA.
The increases were partially offset by: • a decrease of $2.0 million in marketing costs due to the timing of marketing activities ahead of the VYJUVEK commercial launch. Selling, general and administrative expenses increased $20.7 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The increases were partially offset by: • a decrease of $2.0 million in marketing costs due to the timing of marketing activities ahead of the VYJUVEK commercial launch.
The increase in product revenue, net from 2023 to 2024 was driven by an increase in VYJUVEK sales following initial commercial sales recorded in August 2023.
The increase in product revenue, net from 2024 to 2025 was driven by an increase in VYJUVEK sales as compared to the prior year.
Net VYJUVEK product revenue was $290.5 million for the year ended December 31, 2024. Since launch in 2023, we have reported cumulative net product revenue of 341.2 million. Gross margin for the year ended December 31, 2024 was 93%. We define gross margin as product revenue, net less cost of goods sold expressed as a percentage of product revenue, net.
Gross margin for the year ended December 31, 2025 was 94%. We define gross margin as product revenue, net less cost of goods sold expressed as a percentage of product revenue, net.
We expect to report safety and CFTR delivery data from patients in the third and final cohort in mid-2025. KB408 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the SERPINA1 transgene, that encodes for normal human AAT protein, for the treatment of AATD, a serious rare lung disease.
KB408 for Alpha-1 Antitrypsin Deficiency (“AATD”) Lung Disease 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.
Results of Operations Years Ended December 31, 2024, 2023 and 2022 Years Ended December 31, Change (in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Product revenue, net $ 290,515 $ 50,699 $ — $ 239,816 $ 50,699 Operating expenses Cost of goods sold 20,061 3,094 — 16,967 3,094 Research and development 53,573 46,431 42,461 7,142 3,970 Selling, general and administrative 113,686 98,401 77,735 15,285 20,666 Litigation settlement 37,500 12,500 25,000 25,000 (12,500) Total operating expenses 224,820 160,426 145,196 64,394 15,230 Income (loss) from operations 65,695 (109,727) (145,196) 175,422 35,469 Other income Gain from sale of priority review voucher — 100,000 — (100,000) 100,000 Interest and other income, net 29,661 22,624 5,221 7,037 17,403 Income (loss) before income taxes 95,356 12,897 (139,975) 82,459 152,872 Income tax expense (6,197) (1,965) — (4,232) (1,965) Net income (loss) $ 89,159 $ 10,932 $ (139,975) $ 78,227 $ 150,907 Product Revenue, Net Product revenue, net was $290.5 million for the year ended December 31, 2024 as compared to $50.7 million for the year ended December 31, 2023 and zero for the year ended December 31, 2022 due to initial sales of VYJUVEK after FDA approval was obtained on May 19, 2023.
Results of Operations Years Ended December 31, 2025, 2024 and 2023 Years Ended December 31, Change (in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Product revenue, net $ 389,130 $ 290,515 $ 50,699 $ 98,615 $ 239,816 Operating expenses Cost of goods sold 23,049 20,061 3,094 2,988 16,967 Research and development 58,045 53,580 46,433 4,465 7,147 Selling, general and administrative 146,741 113,626 98,289 33,115 15,337 Litigation settlement — 37,500 12,500 (37,500) 25,000 Total operating expenses 227,835 224,767 160,316 3,068 64,451 Income (loss) from operations 161,295 65,748 (109,617) 95,547 175,365 Other income Gain from sale of priority review voucher — — 100,000 — (100,000) Interest and other income, net 28,176 29,608 22,514 (1,432) 7,094 Income before income taxes 189,471 95,356 12,897 94,115 82,459 Income tax benefit (expense) 15,360 (6,197) (1,965) 21,557 (4,232) Net income $ 204,831 $ 89,159 $ 10,932 $ 115,672 $ 78,227 Product Revenue, Net Product revenue, net was $389.1 million for the year ended December 31, 2025 as compared to $290.5 million for the year ended December 31, 2024 and $50.7 million for the year ended December 31, 2023 due to sales of VYJUVEK after FDA 82 approval was obtained on May 19, 2023.
Non-cash adjustments included stock-based compensation expense, net of $33.2 million, depreciation of $2.6 million, amortization of operating lease right-of-use assets of $742 thousand, amortization of marketable securities of $670 thousand and other adjustments of $34 thousand, partially offset by realized gain on investments of $570 thousand.
Non-cash adjustments included depreciation of $5.7 million, amortization of operating lease right-of-use assets of $0.8 million, stock-based compensation expense, net of $54.5 million, and other adjustments of 86 $0.7 million offset by a change in our deferred income taxes of $22.8 million, realized gain on investments of $6.0 million and accretion on marketable securities of $0.5 million.
Stock-based compensation expense recognized in the financial statements is based on awards for which service conditions are expected to be satisfied.
Stock-based compensation expense recognized in the financial statements is based on awards for which service conditions are expected to be satisfied. Income Taxes The Company is subject to tax in the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in the determination of consolidated income tax expense.
These complications, which include corneal erosions, abrasions, blistering and scarring, can lead to progressive vision loss. There is currently no corrective therapy available.
Ophthalmology KB803 (Ophthalmic B-VEC) for Ocular Complications of DEB KB803 is a redosable eye drop formulation of B-VEC, designed for the treatment of ocular complications in patients with DEB. These complications, which include corneal erosions, abrasions, blistering and scarring, can lead to progressive vision loss. There is currently no corrective therapy available.
Income Tax Expense Income tax expense for the years ended December 31, 2024, 2023 and 2022 was $6.2 million, $2.0 million, and zero, respectively. In 2023 and 2024, income tax expense related to state, federal and foreign income taxes. See Note 11 of the notes to consolidated financial statements included in this Form 10-K for more information.
Income Tax Benefit (Expense) Income tax benefit for the year ended December 31, 2025 was $15.4 million. Income tax expense for the years ended December 31, 2024 and 2023 was $6.2 million, and $2.0 million, respectively. In 2023 and 2024, income tax expense related to state, federal and foreign income taxes.
We expect to report results for both cohorts in the second half of 2025. Oncology KB707 is a redosable, immunotherapy designed to deliver genes encoding both human IL-2 and IL-12 to the tumor microenvironment and promote systemic immune-mediated tumor clearance.
Oncology KB707 for Solid Tumors KB707 is a redosable, cancer immunotherapy designed to deliver genes 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.
Overview We are a fully integrated, commercial-stage biotechnology company focused on the discovery, development, and commercialization of genetic medicines to treat diseases with high unmet medical needs. Using our patented gene therapy technology platform that is based on engineered HSV-1, we create vectors that efficiently deliver therapeutic transgenes to cells of interest in multiple organ systems.
Overview We are a fully integrated, commercial-stage, global biotechnology company focused on the discovery, development, manufacturing, and commercialization of genetic medicines to treat diseases with high unmet medical needs.
Net cash used in investing activities for the year ended December 31, 2022 was approximately $114.1 million and consisted of $318.8 million in purchases of short-term and long-term investments and $53.0 million in purchases of property and equipment on the build-out of our ASTRA facility, leasehold improvement of new office space and computer and laboratory equipment, partially offset by $257.7 million received from the maturities of short-term investments.
Investing Activities Net cash used in investing activities for the year ended December 31, 2025 was $58.4 million and consisted of $422.5 million in purchases of short-term and long-term investments and $12.0 million in purchases of property and equipment, partially offset by $375.6 million received from the maturities of investments and $0.4 million received in proceeds from disposal of assets.
Refer to Note 2 of the notes to the consolidated financial statements included in this Form 10-K for additional information. Cost of Goods Sold 74 Cost of goods sold includes direct and indirect costs related to the manufacturing of VYJUVEK. These costs consist of manufacturing costs, personnel costs including stock-based compensation, facility costs, and other indirect overhead costs.
Cost of Goods Sold Cost of goods sold includes direct and indirect costs related to the manufacturing of VYJUVEK. These costs consist of manufacturing costs, personnel costs including stock-based compensation, facility costs, and other indirect overhead costs. Cost of goods sold may also include period costs related to certain manufacturing services and inventory adjustment charges.
The increase was primarily driven by the following: • an increase of $3.4 million in KB707 spending due to increased payroll related costs and increased contract research costs in preparation for the Phase 1/2 clinical trial, • an increase of $2.2 million in stock-based compensation due to an increase in internal resources to support overall research and development growth, • an increase of $1.4 million in other unallocated expenses primarily due to increases in depreciation expense offset by a decrease from rent expense allocated to inventory, and • an increase of $943 thousand in KB103 expenses primarily due to increased payroll related expenses to support VYJUVEK’s preapproval activities, clinical trial costs, license and regulatory costs, costs associated with overseas clinical trials and regulatory agency filings, and increased allocated research.
The increase was primarily driven by the following: • an increase of $2.1 million in payroll related expenses, inclusive of $1.1 million in stock-based compensation, to support our research and development primarily due to an increase in KB111, KB801, KB803 and other research & development programs partially offset by a decrease in B-VEC and KB304; and • a net increase of $2.3 million in clinical development costs, primarily due to an increase in KB707 costs related to our Phase 1/2 clinical trials for inhaled KB707.
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.
The transaction price that we recognize as revenue for VYJUVEK sales includes an estimate of variable consideration, which may include discounts, returns, and rebates that are offered within contracts. Refer to Note 2 of the notes to the consolidated financial statements included in this Form 10-K for additional information.
While we are in the process of building out our internal vector manufacturing capacity, some of our manufacturing activities will be contracted out to third parties. Additionally, we currently utilize third-party contract research organizations to carry out some of our clinical development activities.
Further, we expect future revenue to fluctuate from quarter to quarter for many reasons, including the uncertain timing and amount of any product sales. While we are in the process of building out our internal vector manufacturing capacity, some of our manufacturing activities will be contracted out to third parties.
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 January 2026, we announced a positive interim clinical update from Cohort 3, the highest dose cohort of CORAL-1, our Phase 1 study evaluating KB407 for the treatment of patients with CF, regardless of their underlying genotype.
Research and development expenses increased $4.0 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased $33.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
In accruing service fees, we estimate the time period over which services will be performed, and the actual services performed in each period. If actual results in the future vary from our estimates, we will adjust these estimates in the period these variances become known.
Examples of accrued research and development expenses include costs associated with services for preclinical development, manufacturing of our product candidates and the conduct of clinical trials. If actual results in the future vary from our estimates, we will adjust these estimates in the period these variances become known.
The cell’s own machinery then transcribes and translates the encoded effector to treat or prevent disease. We formulate our vectors for non-invasive or minimally invasive routes of administration at a healthcare professional’s office or in the patient’s home by a healthcare professional.
Our vectors are amenable to formulation for non-invasive or minimally invasive routes of administration at a healthcare professional’s office or in the patient’s home. Our innovative technology platform is supported by two in-house, commercial scale Current Good Manufacturing Practice (“CGMP”) manufacturing facilities..
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, we announced an initial clinical update for the monotherapy dose escalation and expansion cohorts of KYANITE-1.
We have prioritized development of the inhaled KB707 formulation for the treatment of non-small cell lung cancer (“NSCLC”) based on early evidence of efficacy from KYANITE-1, our ongoing, Phase 1/2 study evaluating inhaled KB707, as monotherapy or in combination to treat patients with locally advanced or metastatic solid tumors of the lung.
Dermatology KB105 is a topical gel containing our novel vector designed to deliver two copies of the TGM1 transgene encoding the human enzyme TGM1 for the treatment of TGM1-deficient LI, a serious rare skin disorder most often caused by missing or mutated TGM1 protein.
Dermatology KB111 for Hailey-Hailey Disease (“HHD”) KB111 is a topical gel formulation of our novel vector designed to deliver two copies of the ATP2C1 transgene encoding the human calcium transporter ATPase type 2C member 1 (“ATP2C1”) for the treatment of HHD, a serious and rare monogenic skin disorder characterized by painful rash and blistering in skin folds and linked to low ATP2C1 expression levels in keratinocytes.
In February 2024, we announced that we had 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 Pi*ZZ or a Pi*ZNull genotype. In December 2024, we announced an interim clinical update from the first two dose escalation cohorts of SERPENTINE-1.
We are currently running a a Phase 1 study, SERPENTINE-1, evaluating KB408 for the treatment of AATD in adult patients with AATD with a Pi*ZZ or a Pi*ZNull genotype. We expect to report interim safety and SERPINA1 transgene delivery data from the repeat dose cohort of SERPENTINE-1 in 2026.
Liquidity and Capital Resources Overview As of December 31, 2024, our cash, cash equivalents and short-term investments balance was approximately $597.5 million. As of December 31, 2024, we had an accumulated deficit of $180.7 million.
See Note 11 of the notes to consolidated financial statements included in this Form 10-K for more information. 84 Liquidity and Capital Resources Overview As of December 31, 2025, our cash, cash equivalents and short-term investments balance was approximately $827.8 million. As of December 31, 2025, we had a retained earnings balance of $24.2 million.
The increase was primarily driven by the following: • an increase of $5.8 million in payroll related expenses which was primarily driven by an increase in personnel to support overall growth and includes a $2.2 million increase in stock-based compensation, • an increase of $2.2 million in depreciation, and • an increase of $428 thousand in other research and development expenses, primarily due to increases in facilities expenses.
The increase was primarily driven by the following: • an increase of $9.2 million of payroll costs, including stock-based compensation; • an increase of $5.5 million in other general and administrative costs mainly related to $1.5 million in charitable contributions, $1.1 million in taxes and $1.1 million in subscriptions; • an increase of $11.1 million related to professional services, including legal and consulting services; and • an increase of $6.7 million in marketing costs to support commercial sales of VYJUVEK.
Removed
In addition to historical information, this report contains forward-looking statements that involve risks and uncertainties which may cause our actual results to differ materially from plans and results discussed in forward-looking statements. We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A.
Added
Using our patented gene therapy technology platform that is based on engineered herpes simplex virus-1 (“HSV-1”), we create vectors that efficiently deliver therapeutic transgenes to cells of interest in multiple organ systems. The cell’s own machinery then transcribes and translates the transgene to treat the disease.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased on our current investment portfolio, we do not believe that our results of operations or our financial position would be materially affected by an immediate change of 10% in interest rates. We also have established operations in Europe and Japan and hold cash in Swiss Francs, Euros and Japanese Yen.
Biggest changeBased on our current investment portfolio, we do not believe that our financial position would be materially affected by an immediate change of 1% in interest rates. We also have established operations in Europe and Japan and hold cash in Swiss Francs, Euros and Japanese Yen.
Item 7A. Qualitative and Quantitative Disclosures About Market Risk We had cash, cash equivalents and short-term investments of approximately $597.5 million as of December 31, 2024, which consisted primarily of money market funds, commercial paper, corporate bonds and U.S. government agency securities.
Item 7A. Qualitative and Quantitative Disclosures About Market Risk We had cash, cash equivalents and short-term investments of approximately $827.8 million as of December 31, 2025, which consisted primarily of money market funds, commercial paper, corporate bonds and U.S. government agency securities.
Our cash, cash equivalents and short-term investments are recorded at fair value. 86
Our cash, cash equivalents and short-term investments are recorded at fair value. 88

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