Krystal Biotech Inc. (KRYS:NASDAQ) received a biologics license application PDUFA date of May 19, 2023, from the U.S. Food & Drug Administration (FDA) for B-VEC, an investigational topical gene therapeutic for dystrophic epidermolysis bullosa, reported H.C. Wainwright & Co. analyst Dr. Joseph Pantginis in a Feb. 27 research note. The company also submitted a marketing authorization application for B-VEC to the European Medicines Agency.
"We reiterate our confidence in a positive FDA review (that is also reflected in our valuation) and believe Krystal is well-equipped and prepared to successfully launch in the U.S. and the European Union upon respective regulatory acceptances," Pantginis commented.
Full Approval Expected
H.C. Wainwright expects B-VEC to get full approval, the analyst added, based on the strongly supportive safety and efficacy data behind it.
Krystal's B-VEC program for dystrophic epidermolysis bullosa accounts for 89% of H.C. Wainwright's valuation of Krystal, on which the financial institution has a Buy rating and a US$119 per share price target. In comparison, Krystal's current share price is about US$78.46.
"We believe potential upside exists as clinical data are delivered from [KB105 for autosomal recessive congenital ichthyosis and KB301 for wrinkles/acne scars] and [from] potential contributions from pipeline development," wrote Pantginis.
Upcoming Catalysts
Also, the analyst highlighted, the Pennsylvania-based biotech continues to advance various therapeutic candidates in its pipeline and has several related, catalysts on the horizon.
In H1/23, the biotech plans to launch two clinical studies. One is the Phase 1 CORAL-1 trial to evaluate KB407, a gene therapy aimed at correcting the underlying cause of cystic fibrosis. The other is a Phase 2 trial to evaluate KB105 in pediatric and adult patients with the skin disorder, TGM1-deficient autosomal recessive congenital ichthyosis.
Later this year, also in its dermatology program, Krystal plans another trial of KB301, an investigational gene-based treatment of aesthetic skin conditions, such as fine lines and wrinkles. Called PEARL-2, it will be a Phase 2 study of this lead drug candidate in patients with lateral canthal lines on "challenging areas of the face," noted Pantginis. PEARL-1, the precursor study, showed "encouraging efficacy for those with aesthetic skin conditions," reported Pantginis. Specifically, KB301 demonstrated durability for up to nine months.
"With these results in hand and the totality of the positive results from the PEARL-1 study, we have continued confidence in the success of KB301 within the aesthetic space," Pantginis wrote.
Latest Financial Results
In other news, reported Pantginis, Krystal ended 2022 "financially strong," with US$383.8 million in cash on the balance sheet.
The biotech's earnings per share (EPS) for Q4/22 was (US$1.25), in line with H.C. Wainwright and consensus' estimates of (US$1.24) and ($1.32), respectively.
Similarly, full-year 2022 EPS of (US$5.49) also was expected. H.C. Wainwright's forecast was (US$5.48) and the Street's, (US$5.41).
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Disclosures For H.C. Wainwright & Co., Krystal Biotech Inc., February 27, 2023
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.
I, Joseph Pantginis, Ph.D., Matthew Keller, Ph.D. and Sara Nik, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Krystal Biotech, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of January 31, 2023 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Krystal Biotech, Inc..
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Krystal Biotech, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Krystal Biotech, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Krystal Biotech, Inc. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited.
This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously. No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request.
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