Key Takeaways
- Krystal Biotech shares fell 11% on Nov. 2 even as Vyjuvek sales jumped 30% to $127.3 million, beating estimates.
- The report also pushed three pipeline readouts into 2027.
- Vertex Pharmaceuticals has little to fear from the cystic fibrosis delay, since Krystal’s therapy targets patients Vertex’s drugs don’t help.
- The selloff looks overdone: Vyjuvek funds the pipeline and a new $400 million buyback.
Krystal Biotech (KRYS) just beat estimates, and the stock sank 11% anyway.
Vyjuvek, its gene therapy for a rare blistering skin disease, brought in $127.3 million in the third quarter, up 30%. But the same release pushed three trial readouts into 2027. In its neurotrophic keratitis eye trial, Krystal said enrollment has “progressed slower than initially anticipated.”
And Vertex Pharmaceuticals (VRTX) has little to fear from the delay in cystic fibrosis.
Vyjuvek is doing its job
Operating income jumped 72% to $71.1 million on a 94% gross margin (down from 96% a year earlier), and Vyjuvek has now brought in $1.1 billion since launch. Going into the report, analysts expected sales to more than double from last year’s total by 2028:
Nothing in the Nov. 2 report gives them a reason to cut those numbers. Pricing is now settled in Germany and Italy, and the Italian launch is planned for early 2027.
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The pipeline is running late
Here’s what slipped:
- KB801 (neurotrophic keratitis): enrollment was due to finish by year-end. Enrollment and top-line results now come in 2027.
- KB407 (cystic fibrosis): interim results, previously due before year-end, are now due in the first half of 2027.
- KB803 (eye abrasions in Vyjuvek’s patients): top-line results were due in the fourth quarter. The last patient visit is now February 2027.
Krystal blamed KB801’s narrow eligibility criteria. It also said it’s hard to enroll a placebo-controlled trial when patients already have an approved therapy. William Blair called the market’s reaction overblown, arguing the delays stem from careful trial design and strict eligibility rules.
Vertex’s cystic fibrosis drugs, the main driver of its 12% third-quarter revenue growth, can treat about 95% of people with CF in its core markets. KB407 targets the patients those drugs don’t help. Vertex dropped its own inhaled therapy for those patients in May over tolerability issues. So the delay changes little for Vertex.
Paid to wait
Krystal’s board authorized up to $400 million of buybacks, which CEO Krish Krishnan expects to make “opportunistically over the next two years.” Cash and short-term investments climbed from $588 million in September 2024 to $846 million in June:
By Sept. 30, they reached $912 million, or $1.2 billion with long-term investments.
Krystal traded at 40x forward earnings at Friday’s close, and Monday’s drop takes it to about 36x. That looks like a fair price to wait for data on a drug that’s growing 30% and paying for everything else.
Of course, investors pay up for a one-drug company because of its pipeline, and Krystal just pushed back three programs. Its next test comes before year-end, with interim results from its Hailey-Hailey disease trial. KB803’s results follow shortly after February.
So what is Krystal Biotech stock actually worth?
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