Krystal Biotech, Inc. Price & Performance (KRYS)

Thank you for holding. We look forward to talking with you soon.

We appreciate your time and patience. Please stay on the line. And we'll be back in just a moment.

Thanks for holding. We appreciate your time and patience. Please stay on the line and we'll be back in just a moment.

Thank you for waiting. Your patience is appreciated. Please hold the line and we'll be right back with you.

Thank you for holding. We look forward to talking with you soon.

Thanks for holding. We appreciate your time and patience. Please stay on the line. Anne will be back in just a moment.

Thank you for holding. We sincerely appreciate your patience. Please stay on the line and we'll be back in a moment.

Thank you for holding. We look forward to talking with you soon. Please hold the line. And we'll be right back with you.

Thank you for holding. We look forward to talking with you soon.

And we'll be back in just a moment.

Thanks for holding. We appreciate your time and patience. Please stay on the line and we'll be back in just a moment.

Thank you for waiting. Your patience is appreciated. Please hold the line and we'll be right back with you.

Thank you for holding. We look forward to talking with you soon. Please hold the line and we'll be right back with you.

Thanks for holding. We appreciate your time and patience. Please stay on the line. Anne will be back in just a moment.

Thank you for holding. We sincerely appreciate your patience. Please stay on the line and we'll be back in a moment.

Thank you for holding. We look forward to talking with you soon. Please hold the line. And we'll be right back with you.

Thank you for standing by. And welcome to the Krystal Biotech Q4 twenty twenty four Earnings Call. At this time, all participants are in a listen only mode.

After the speakers' presentations, there will be a question and answer session. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Stefan Paquette. Vice President of Corporate Development.

You may begin.

Good morning, and thank you all for joining today's call. Earlier today, released our financial results for the fourth quarter and full year of 2024.

The press release is available on our website www.crystalbio.com Krystal. We also filed our earnings eight ks and 10 ks with the SEC earlier today. Joining me today will be Krish Krishnan, Chairman and Chief Executive Officer. Suma Krishnan, President of Research and Development Jennifer McDonough, Senior Vice President of Patient Access Analytics and Operations. Christine Wilson Krystal, Senior Vice President and Head of U. S. Sales and Marketing. And Kate Vermaeno, Chief Accounting Officer. This conference call will, and our responses to questions may, contain forward looking statements. [indiscernible] You are cautioned not to rely on these forward looking statements which are based on current expectations using the information available as of the date of this call, are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected. A description of these risks, uncertainties and other factors can be found in our SEC filings. With that, I will turn the call over to Krish. [indiscernible] Thank you. Good morning and welcome to the call. 2024 was a strong year for Crystel Krystal. Vyjevac U. S. Launch and tracks in the top tier of rare disease launches. The strength of the launch speaks to the robust efficacy and safety profile of VASUVAX and our relentless focus on patient and physician experience.

In addition, in 2024, we demonstrated that we can safely and repeatedly deliver genes to the lung with a nebulizer across our Krystal fibrosis alpha-one antitrypsin and NSCLC programs clearly validating the lung as a second target tissue for our platform. There were also strong early signs of efficacy in our readouts and we fully expect the data to mature later this year. Looking ahead at 2025, we have three primary things to accomplish. First, a successful visorvac launch in EU and Japan second, to translate the early signs of efficacy into strong results, across our CF [indiscernible] A180 programs. And the third is to prepare for the anticipated launch of BVAC to treat lesions in the eye of DEP patients. If we do these right, we believe the company will be in a much stronger place with respect to revenue, net income and market cap going into 2026. For the year, net income per share was $3.12 per share up sequentially from $0.4 per share in 2023.

This is our sixth straight quarter of positive EPS and fourth straight quarter of sequential earnings growth. In addition to operational success, We have also put ourselves in a strong financial position for future growth. In aesthetics, June Aesthetics reported a strong KB301 Phase one data for the treatment of declitre, and we plan to start a Phase two study later this year. We're in the process of building out a season management team at Genaesthetics with more to come on this later. In 2025. Dollars $341,000,000 in net revenue within eighteen months of launch and sequential revenue growth for six straight quarters is a tremendous achievement and a testament to the tireless contributions by our commercial and patient support teams on behalf of patients with DEB. Net Vyzhivac revenue for the Q came in at 91,100,000.0 bringing revenue for 2024 to $290,500,000 Gross margins in GTN were consistent with prior Qs. I'll now turn it over to Jen and Christine to share more details on The U. S. Launch. Thank you, Krish. Looking back on 2024 and now the early days of 2025, I'm incredibly proud of what our team has been able to accomplish. With steady progress over the entire year and a strong access landscape, carrying over from 2024 into 2025, a growing number of dead patients have or will soon benefit from fundamentally corrective BIJUVAC therapy.

I'm also happy to share a major milestone achievement for our United States team as we recently crossed 500 reimbursement approvals nationwide. As of February, the number of patients with reimbursement approvals exceeds five This is in spite of losing a few weeks to holidays in the fourth quarter.

With a good pickup of the pace and approvals to start 2025 as well as strong underlying demand trends we remain confident in our ability to hit our ambitious prelaunch penetration targets. Reimbursement approval splits were again largely in line with recent quarters and roughly evenly split between commercial and government plans. Approvals continue to come across the entire DEB population including patients of all ages and with either dominant or recessive forms of the disease.

With effectively full nationwide commercial and Medicaid coverage, the access landscape for VIGEIVEC remains strong. Reauthorizations are getting processed smoothly, all have either been approved or are in process, In the community, we are still seeing a lag from prescription to approval dictated primarily by the availability of genetic test results As always, our Krystal team is working closely with home healthcare providers to meet patient needs and preferences. It is this infrastructure and patient centric constraints and holidays to ensure patients can get on and stay on treatment. Patient preference for at home administration is again effectively unchanged. With ninety seven percent of the weekly treatments occurring in the home setting, Patient applies to weekly treatments while on drug with eighty five percent as of the end of the fourth quarter and in the third quarter it was at eighty seven percent.

As we progress our U. S. Launch, we are thrilled to see that patients are achieving durable wound closure and getting to live fuller, more active lives. This of course is the whole point of VIGUVAX. As patients enjoy their first into a more regular maintenance regimen, we do expect to see compliance to continue to trend towards the rates that we guided at launch. We are learning from real world experience that the treatment journey for A 21 year old initiating therapy after decades of Bliss than a very active toddler. The time to wound closure and durability are dependent on a myriad of input. Including nutritional status on iron levels as well as the patient's age, their mobility and activity levels and of course the location and the age of the specific wound treated.

Because each patient and each wound area is unique, the length and frequency of treatment pauses are personalized to the patient.

Critically, patients and their prescribers understand the importance of treatment persistence and patients that have benefited maintenance routine with BIJUVAC helped by our CrystalConnect team. As always, our team will be with them every step of the way to ensure they have a steady access and continue to enjoy the benefits of regular VIGUVAX treatment. I will now hand it off to Christine to discuss recent sales and marketing activities, which are keeping us on our top tier launch trajectory. Christine Krystal? Thank you, Jen. As we enter 2025, it is my pleasure to report that tactics that we developed in 2024 driving significant growth in reimbursement approvals and strong patient demand across the country. Prescribing claims analytics, and patient engagement all point to strong and sustained underlying demand. Education and patient activation remain core focus areas for our field team as we look to further penetrate into the identified patient pool.

We partnered with multiple advocacy groups in EB in the fourth quarter to host live webinars led by prescribing physicians and patients who shared their experience with BIJUVIK and positive progress that they've experienced starting on therapy in 2023. In addition and in honor of EB awareness week, we hosted a national broadcast led by Doctor. John Browning. The virtual platform allowed us to reach healthcare professionals across The United States and showcase our clinical trial data.

Longer term safety and efficacy data and case studies of patients on BIJUVAX. This event also included a patient ambassador on BIJUVAX during their first hand experience. This comprehensive showcase of trial data and real world insights emphasize the clear and durable benefits of therapy. And critically demonstrated the significant impact it can have for patients. We also equipped our sales team with new promotional material that emphasizes the long term safety and efficacy of BIJUVAX. These materials not only reinforce the durable wound healing benefits that can be achieved only with a corrective therapy like IGUVAX. They also underscore that all DEB patients can benefit from therapy. With actual patient images demonstrating healing in both the R Jeb and DDEB subtypes across both the adult and pediatric spectrum. Most importantly, these efforts have yielded tangible results Not only did we achieve significant reimbursement approval growth over the past few months, we also continue to expand our prescriber base. Over sixty five percent of prescribers in the fourth quarter were new writers.

With each new prescriber awareness of DEV and BIJUVA grows. Extending our reach in a new community.

As the number of patients on therapy grows, would also like to highlight that we have personalized and ongoing communication with patients and their to ensure they are supported throughout their journey. These communications are via phone call, email or text, all based on the preferences of patients and their families. These touch points are another part of our commitment to patients allowing us to move proactively to meet their needs with practical resources and ED community connections, while also gaining valuable insights to support new patient start.

With strong underlying demand, growing awareness and a broadening prescriber base, are excited to continue growing the number of patients on BIJUVIKA across The U. S. Now I will hand it back to Krish to share an overview of our global expansion plans for 2025. Thanks, Christine Krystal.

We expect the positive CHMP opinion on our application later this month and based on this timeline, we expect our first EU launch in Germany around midyear along with commencing an access pre close AP2 program in France. The opportunity that exists in Europe is significant with many already identified DEP patients in urgent need of fundamentally corrective therapy.

In Germany and France alone, there are over 1,000 identified DEP patients. As in The U. S, our initial focus will be to penetrate the identified patient pool. We're also on track for regulatory decision in Japan later this year enabling launch with hundreds of already identified DEP patients. In support of this filing and our launch, we have established our head office team in Tokyo and have started hiring our field force. It has always been our goal. To treat debt globally and comprehensively. And thanks to the continued efforts of our development team, also working steadily towards treating lesions in the eye of DEB patients. Suma will now share more detail on both our ophthalmic BVIC program and our broader pipeline. Thank you, Krish.

As Krish just noted, we are committed to treating DEB comprehensively and are very excited to be progressing our second product KB-eight zero three towards a potential approval to address the ocular complications associated with DEB. In support of this goal, we initiated a natural history study last year to prospectively collect data on the frequency of corneal abrasions in DEP patients.

This study is providing valuable information on the burden of disease and is helping us refine endpoint selection for our Phase three study.

The natural history study may also serve as a run-in to our registrational trial adding more baseline data to contextualize our Phase three results. The high rate of enrollment in the study with approximately fifty patients enrolled underscores the unmet need and demand for a corrective therapy for the eye and given the run-in options should provide us an opportunity to rapidly enroll our Phase three once initiated.

We are finalizing the study design and statistical analysis plan with the agency and remain on track to initiate our registrational Phase three which we refer to as our IOLITE study. In the first half of the year, assuming rapid enrollment, given the run-in option, we continue to expect top line data before year end.

We look forward to sharing updates on IOLITE and our natural history study in the coming months.

We also announced a series of updates on our inhaled programs last quarter that in our view validate the lung as a second target tissue for our HSC1 based gene delivery platform. Included in these updates was a first look at safety and gene delivery data for our KB-four zero eight program which collectively demonstrated that we could safely deliver functional genetic cargoes to the lung. KB-four08, is designed to deliver two copies of the SERPEN one TENS gene, which encodes for normal human AAT protein to enable local AAT production in the lung itself. KB-four zero eight is currently being evaluated in our first in human [indiscernible] at open label single dose escalation study in adult patients with AATD, serpentine one is designed to include up to three dose escalation cohorts evaluating single administration [indiscernible] twenty nine, twenty ten and twenty eleven PFU of KB-four zero eight via inhalation. In December of last year, we announced an interim clinical data update including safety data for seven patients enrolled in the first two dose escalation cohort of SERPTEN-one as well as molecular data from two patients in the second cohort that add consented to bronchoscopy. KB-four zero eight was found to be well tolerated at both tested dose levels with only mild to moderate and transient adverse events observed.

No serious adverse events or dose limiting toxicities were reported. In addition, clear evidence of successful gene delivery was observed in both patients underwent bronchoscopies with the proportion of conducting airway epithelial cells [indiscernible] for AAT, increasing from zero percent thirty nine percent in one patient and from three percent to thirty five percent in the other. Sequretion and functionality of Encoded AAT was also demonstrated in the patient with available labart samples. With AAT levels in epithelial lining fluid reaching seven twenty nine nanomolar and the proportion of free neutrophil elastase dropping from 97.2% to 40.2% after a single KB-four zero eight dose. Following this data update, we simultaneously expanded the second SERCENTINE-one cohort and opened enrollment in the third for more comprehensive molecular assessment at both dose levels, we are working closely with the Alpha-one Foundation and their therapeutic development network on the serpentine-one study and expect to announce complete study results later this year. Our second rare respiratory disease program KB-four zero seven, is also progressing well. [indiscernible] is a reducible inhaled therapy designed to deliver two copies of full length CFTR transgene for the mutation agnostic treatment of cystic fibrosis, As summarized on this slide, we have built out a robust preclinical data package that demonstrates that KB-four zero seven efficiently transduzes airy epithelial cells leading to the expression of full length properly localized glycosylated and functional CFTR.

On the back of this data, a growing clinical dataset I'm pleased to report we recently received full sanctioning of our KB-four zero seven Phase one protocol providing further validation of our program and opening up access to network trial sites for future clinical development efforts. We also recently announced initial safety update on cystic fibrosis patients treated with KB-four zero seven in the first two dose escalation cohorts of CORAL-one. Our ongoing first in human Phase one study. Both single and repeat inhaled administration of KB-four zero seven was well tolerated with only mild to moderate and transient adverse events. Again, there were no reports of serious adverse events or dose limiting toxicities Reinforcing the attractive safety profile of our vector when delivered via inhalation. With the first two cohorts successfully cleared, and KB-four zero seven well tolerated we have progressed to our third cohort and expect to report top line results including molecular data, around the middle of this year. These are just a few of the recent highlights from our clinical stage pipeline. We also recently reported early evidence of monotherapy activity with inhaled KB-seven zero seven heavily pretreated patients with advanced lung cancer, and earlier in the year shared positive safety and efficacy results of our aesthetic candidate KB301 which we are progressing into Phase two.

As we look forward, 2025 is shaping up to be another busy year. Some of the key development milestones for our team are laid out here. In addition to the initiation and completion of our registrational study evaluating KB-eight zero three for ocular complications of death. We are also expecting to provide molecular data updates for our rare respiratory disease program KB-four zero eight and KB-four zero seven. As for the human data for our second aesthetic product candidate KB-three zero four, written quotes [indiscernible] Type three collagen and Alaskan. Our oncology programs will continue to progress with potential of interim updates later in the year. As our recent data announcement have demonstrated the potential HSV-one based gene delivery goes well beyond the skin. We are looking forward to making rapid progress of our pipeline in twenty twenty five and further validating the breadth of the opportunities in front of us targeting the skin, lung and eye. With that, I would like to turn the call to Kate. Thank you, Suma. In the fourth quarter, Crystal saw continued Vyjevac revenue growth with net product revenue of $91,100,000 representing an increase of approximately $49,000,000 over the fourth quarter of twenty twenty three which was the first full quarter that Crystl had revenue after our approval in May of twenty twenty three.

Cost of goods sold for resulting in a gross margin of 95%. In the fourth quarter of twenty twenty three, cost of goods sold was $2,900,000 resulting in a 93% gross margin.

Research and development expenses for the quarter were $13,500,000 inclusive of stock based compensation of $2,300,000 compared to $11,400,000 for the prior year's fourth quarter inclusive of $2,400,000 of stock based compensation. Higher research and development expenses in the fourth quarter of twenty twenty four were mainly due to increased clinical trial related costs, increased R and D manufacturing costs for our pipeline candidates, and increased license and regulatory fees. Selling, general and administrative expenses for the quarter were $31,300,000 inclusive of stock based compensation of $11,000,000 compared to $24,800,000 for the prior year's fourth quarter which was inclusive of stock based compensation of $7,500,000 Higher selling, general and administrative expenses in the fourth quarter of twenty twenty four were primarily the result of increased personnel related costs increased professional service fees, and increased VytoVax sales and marketing costs as compared to the prior year's fourth quarter. Net income for the quarter was $45,500,000 which represented $1.58 per basic and $1.52 per diluted share.

I'd also like to provide some perspective on our forecast for operating expenses in 2025.

We expect to incur between $150,000,000 R and D and SG and A costs this year. This projection excludes stock based compensation. This expected increase in operating is driven primarily by increased SG and A costs for our planned commercial launches outside of The United States and increased R and D costs from our continued associated with our expanded pipeline programs.

In closing, on hand and $749,600,000 in total cash plus short term and long term investments. Noting quarterly growth in our overall cash and investments position. With an increase over our third quarter of twenty twenty four cash and investments balance by about $55,000,000 And now I will turn the call back over to Krish. Thanks Kate. As you heard from Christine and Jen, patients are achieving profound benefits with Vyzhurek.

And getting to live fuller, more active lives. We're steadily expanding our prescriber base and further penetration into the community setting. With one full calendar year of launch in The U. S. Behind us. An increasing presence in key European markets in Japan, Our conviction in the global peak sales estimate of over $1,000,000,000 for Vyjevac has only strengthened. As we look forward, I'd like to share a few key lessons we have learned since launch. So we're aligned on how we get to realize the opportunity in front of us. The first lesson has to do with timing. From initial patient interest to starting treatment. As Jen mentioned earlier, patients and prescribers in the community often need more support to navigate the path to success. Our turnaround time on average is still Between forty five and sixty days with respect to these patients. The second lesson is a realization. That we never really get a full quarter when we are talking about Vaijuvant. VIGUEVAC is a weekly therapy administered at home by HCP. And life gets in the way for these patients in each quarter. In the first quarter, many families will be changing insurance In the second we have to work through summer holidays in the third Labor Day and back to school for families, and in the fourth we navigate around major U. S. Holidays.

In spite of that, I'm pleased and proud to report sequential net PHYZUVAC revenue growth and continue to have strong conviction in our global ViseuVec peak sales estimates. The third lesson has to do with high compliance. Which has been well above what we estimated at the time of launch. That said, we are entering a phase where some patients are now able to take initial pauses enjoy the benefits of durable wound closure and come back on drug when there is wound disruption. This is a fantastic outcome for patients and their families. Our Krystal Connect team remains in close contact with all of our patients and when new wounds emerge, reinitiation of treatment is seamless. Our relationship with our patients is for the long term and we want them to feel as they choose. Independently actively with the confidence of knowing that they can now control their wounds Finally, We've done a terrific job of accruing for the price cap of Vyzhivac. We've had no volatility in net revenues in 2024 and we do not expect to have any going forward. Finally, in closing, as you can see from the slide, we have several important clinical and regulatory milestones in 2025 to demonstrate the full breadth of our platform and we're excited for 2025 with what we can deliver to patients and shareholders.

I'd like to thank Microsoft colleagues for their dedication and perseverance that underscore our excitement in the long term outlook for Krystal and the patients we aim to serve. Thanks for listening. And I'd like to open the call for Q and A. Certainly. At this time, we will be conducting a question and answer session. Your first question for today is from Alex Stranahan with Bank of America.

Hey, guys. Thanks for taking our questions and congrats on the continued progress. Just two from us. First on VYJUVEC, wondering if you sign a year end stocking in 4Q.

And maybe you could just remind us how accounting for patient annual cap fed into the 4Q results and sequentially into 1Q twenty twenty five as this is reset.

Thanks, Alex. Thanks for your question. Nothing substantially different in Q4 versus any other quarters. So there was no any change in stocking or inventory with respect to Q4 as compared to Q3 or Q2 or Q1? And in terms of price cap I think I've gone through this many times. At the end of every quarter, we look back starting at the beginning of twenty twenty four see how we're going to how patients are doing We revisit their calculations at the end of Q2 Q3 and Q4. So we actually believe, as I said in my speech, that we do a really good job of making sure there's no volatility in revenue. Of course, cap calculation is complicated. Because it is at a payer level. And has a lot to do with the mix within each payer the number of patients and when they start during the year, But we've done a pretty good job of maintaining Taking bullets already out of the question.

Okay. That makes sense. And maybe one quick one on the CF study.

I guess how is enrollment going? Is cohort three maybe a accruing faster or in line with Cohorts one and two? And maybe walk us through how the CFF TDN sanctioning maybe helps with this? Thank you. No, it's definitely super helpful. We just got started So there's always a time lag when you just get started, it takes a few months to get a few patients on drug enrollment in Cohort three has already begun. And I'll let Suma add some more color to this story.

Absolutely. I mean, obviously, getting T and sanctioning was very important because all of these academic major sites that can do bronch and have expertise in CF and AbbVie patients now are very excited. In fact, many of them reached out to us directly to be participate. We have seven to eight sites active. We are in the process of doing all of the administrative stuff contracts, budgets, as Chris mentioned, but we have two sites that are part of TDN that are up and running and we have already enrolled patients. For this cohort.

That's moving pretty well. As a reminder, please limit yourself Your next question for today is from Ritu Baral with TD Cowen. Good morning, guys. Thanks for taking the question. I wanted to ask a little bit about what you guys are expecting from Europe in the second half of the year Chris, I believe you mentioned that there are about 1,000 patients total between Germany and France that are identified.

Can you give any additional breakdown of that 1,000 between the two geographies Are they treated at centers of excellence like in The U. S? And if so, so, is there a number between the two geographies?

And then I have my second question, my follow-up question is on pricing. How right now are you thinking about The initial sort of German free price range and the French at least expanded access price And how should we be thinking about modeling longer term price? In Europe.

Thanks, Sveetu. At a high level, At a high level, both Germany and France are a bit more concentrated than The United States.

That said, Germany is closer to The U. S. [indiscernible] And the spread of the 1,000 is about 600 in Germany, at a very high level, 400 in France.

In terms of [indiscernible] In Germany, for the first six months, we get to launch with The U. S. Price. As we put the dossier in place, start the negotiations, At the end of six months, depending on how we feel how the negotiations are going, we start accruing for the next six months and the expectation is in twelve months, we would get an actual judgment price and be steady state from that point on. In France, we're under the AP2 program and it kind of forces us to start accruing from day one. So the expectation I mean, so and the AP2 program [indiscernible] Maybe slightly after the German launch but not too far out.

And in France maybe in about fifteen, eighteen months from approval.

Expect to get a a price in France. And that's how Got it.

Very quick follow-up. Should we be thinking about home dosing in in Europe as well?

Yes, you should. For sure.

Okay.

Thanks for taking all the questions. Your next question is from Gavin Clark Gartner, with Evercore ISI.

Good morning. Thanks for taking the questions. Just on the reimbursement approvals first, if I'm doing my math correctly, last quarter about fifty percent of new patients coming onward dominant patients. And this quarter, that seems to be about a to seventy five percent dominant patients. Is that math correct? Do you think this trend will continue? And how do you account for that in your compliance assumptions? Gavin, look, the percentage of dominant and recessive varies quarter by quarter. As we go into that community, I mean your math is right. That we did see more dominant in Q4 than we saw in Q3. As we go into the community. [indiscernible] although at a high level, people think about recessive being more severe than dominant. There are a lot of patients who are in the cusp that are dominant patients who are just as severe as recessive and recessive patients were just as mild as dominant. So I would not I mean, in terms of compliance going forward, I do not expect a material change in the way I do not expect a big change based on the percentage of dominant in the study. [indiscernible] But it is, yes, it is true.

But that said, we don't like when we report Q1, our expectation is not. [indiscernible] dominant will continue to go up. Could easily shift back to what it was in Q3 or Q2. Very helpful. And then just one bigger picture question. So you have about $750,000,000 cash on the balance sheet. Consensus has you doing around $250,000,000 cash flow this year, ballpark $300,000,000 next year depending on how exactly ex U. S. Launch goes. Even if you did want to allocate a good chunk of capital to additional R and D, you still have a lot of financial flexibility So how are you thinking about buybacks, capital allocation overall as you kind of progress to the next phase here?

Look, I mean, it's a valid point. It's definitely a discussion point within Crystor Krystal. We're just figuring out the timing of such a buyback and the extent that is meaningful and measurable So definitely a valid question, Gaff. Gavin. And we're thinking about it pretty seriously going forward. Got it. Thank you.

Your next question for today is from Sami Korwin with William Blair. Hey, good morning. Thanks for taking my question and congrats on [indiscernible] I'm wondering if you could provide a high level update on the e regulatory process. I think we initially expected to hear a decision from CHMP in late twenty twenty four. So I was curious if you had any insight into reason behind the delay And then my second question is, Given you could face some DEB commercial competition as early as 2Q, just how you're kind of thinking about maintaining and expanding market share in the face of that competition? Yes. I can address the first question. Obviously, the delay was because we were trying to get the best label I mean, we have a very favorable label as the SMPC. So obviously, the home dosing and caregiver administrations all of those nuances needed to be ironed out. So there were training materials that needed to be prepared to support that on the label. So that was the reason for the delay. And I think the two months helped us get all of those documentations and training materials in place to achieve that. To get a favorable label. [indiscernible] [indiscernible] Look, at a high level, it's tough to beat the value proposition of Vyjevac.

Both in terms of and if you look at how ninety eight percent of our patients are opting for home dosing, and not even going to the local physician office We have learned that the profile of iZEABAC is well aligned with the expectations of the patients.

But that said, We are putting in we are not ignoring that the market could potentially become more competitive later in the year, And Our medical affairs team is having the right kind of conversations with the physicians.

Our patient services team having the right kind of conversation with patients [indiscernible] we feel pretty good about our ability to hit the two year target and the overall peak sales in spite of the competitive nature of the market.

Got it. Thank you. Your next question for today is from Ryforseth with Guggenheim. Hi, this is Ryan from DevJets team.

For four zero seven, how are you thinking about FEV1 in terms of the bar for advancing the program? And is that bar consistent across genotypes?

Look, it's a we're just starting to dose our patients in the Atrox C cohort. Realize that the long term direction for Crysto is to target the null population which is a complete unmet medical need There have been comments made interest from other competing companies that inel patients Any kind of FEV improvement over three percent, four percent, five percent, all the way up to ten percent considered a very positive outcome for these patients. Please realize we are a de redosing paradigm. So no matter where we start with these patients, we have the opportunity to build upon the FEB levels over time And so we feel really good about our focused strategy on going after the node mutation And then as a secondary effort, maybe as Suma mentioned in her speech, become mutation agnostic.

Yes.

I mean, there's now patients and there's also subset of population where they are they don't get correctors or or these kind of therapies. They're not conducive to So it's both these populations that we're targeting And obviously, as Chris mentioned, we are reducible so we have that flexibility. We will look at improvements in FEV1 that's flexibility from a regulatory strategy for us to go just like we did in the eye to do a single label, open label study with some sort of a natural history So I think from a regulatory perspective, if we have any improvements in I mean, we show functionality, we show some expression, and we show even slight improvement in FEV1 I think we have a very favorable regulatory environment and a pathway to move this program very rapidly into the into clinic and into an approval path. Just like we did with DI.

Thanks for that.

Your next question for today is from Josh Schimer With cancer, Great.

Thanks for taking the questions. Two quick ones. First, can you help quantify the impact of the annual cap on VIGAVEC in 2024 and how you think that might impact in 2025 and whether you're planning any changes? To that cap? And then second, the 10 ks has some new language around Vyjubeck manufacturing process changes and some risks around that at least theoretical. Have there been any changes to the BiTEVAX manufacturing process? And if so, can you explain a lot?

So for the cap, we have been seeing about 8% of commercial [indiscernible] Consistently, from the beginning.

For the manufacturing process, we just scaled up. And so we have gone to the higher level bioreactor level. And we have we filed the P and S and we got approval for it. So again, so we have a scale up process that is approved by the FDA. And the beauty about it is this process can be adaptable across our pipeline. So if you see four zero seven, mean the limitation is not going to be CNC anymore. We can scale up we can make the material, the processes. Pretty much cut and paste across all of our pipeline products. So CMC we de risk CMC from for these other products that may need more commercial material. So I think that was very positive for us getting that scale up approved by the FDA.

Thank you.

Your next question is from Nagal Nachovomits with Citi.

Hi, this is Rina on for Yigal. Thanks for taking my question. I just wanted to ask on ATT, could you give us a little bit more color on what we should expect to see from the expanded core two and core three data. What are more comprehensive molecular assessments that you're considering beyond AATG levels and what therapeutic effect do you hope to see that you would consider clinically meaningful for these patients? And I have a follow-up. Yes. So on Cohort two, pretty much not much of a change than what we reported previously. We're just adding more patients to confirm what we saw. We were pretty pleased with what we saw, and we just want to add one or two patients more to confirm both the levels in the lung the increase in the levels in the systemic circulation and to quantify terms of at a molecular level what they are. So COBRA-two and COBRA-three is simply exactly COVA-two, but at a higher dose.

So not expect anything dramatically different Between the two? And we obviously we are looking for dose of response. I mean we know COVID-two. We didn't even expect at a cohort dose level to see this levels of AAT in the lung. So we're very pleased to see that. I mean, obviously, we can it was a very safe and we feel it's a dose that showed functional AAT expression a pretty decent level. So we do want to see what what we get at the third dose because again it's safe. We want to see that's an increase and what does that correlate to levels in the serum too. So it's lung and serum. If we see a good correlation and increase, then maybe that's the dose we will move forward for repeat dose administration and [indiscernible] Okay, great. Thanks. And just as a quick follow-up, we understand that plasma EUTD should be sort of a relevant benchmark if synthesis were to occur in the liver because of the need transport into the Krystal to get to the lung. But since you're already synthesizing in the lung to start with, shouldn't we maybe not put too much weight on plasma AATD since it's not as relevant to the therapeuticals.

I guess if you could give more color on that, how we should be thinking about that? Or Yes. I think what you're going to look is correlation of a dose response that's much level are we seeing in the lung and what levels are we seeing in the plasma. So we want to see that core relationship that's increasing and going to the next dose, we want to see what that increases. So once we have that correlation, then we can go to the FDA and let them know that a biomarker approach We can say, yes, we see this level of lung and the and the plasma levels to this level in the lung based on the kind of dose that we are giving these space this is the ratio. So I think that will help us to go into from a regulatory pathway to sit down with the agency and discuss about biomarker pathway. We don't have to bronch these patients, but can use serum levels that is meaningful for a lung administration for this patient population.

Yes. I do want to repeat what she just said. We do not care fundamentally you're right, we do not care about levels in the lung.

Levels in the systemic circulation, I apologize. We look for levels in the lung and maybe a correlation between the two so we could avoid [indiscernible] Thanks. Super helpful. Thanks so much.

Your next question for today is from Andrea Newkirk with Goldman Sachs.

Good morning. Thanks for taking our question. For Jen and Christine, I'm just curious here based off of what you're seeing right now in terms of the rate of reimbursement approvals What is needed to reaccelerate patients coming on drug in order to reach your 60% penetration goal within two years of launch?

Yes, I can start that. I mean, I think we definitely, as I said in the speech, saw some slowdown over the holidays virtually with physician offices in payers sort of delaying and not answering the phone during those times. So So we feel like we've increased our trajectory already We have a healthy pipeline right now of potential patients. And we're right on path for that. So we already started seeing that come Obviously, the first few weeks of January, the same thing was occurring with reverification season and payers being sort of distracted at that point. So there were delays happening there as well. Okay. And Krish, just when you think about that $1,000,000,000 plus peak sales opportunity globally, just curious if you could provide a little bit more granularity on how The U. S. Versus the EU opportunity breaks down across that billion dollars plus?

Or even with Japan as well?

Look, there are 3,000 patients in The U. S, 3,000 patients in Europe, at a high level and about 3,000 worldwide. The pricing in U. S. Versus the pricing in Europe makes accounts for the ratio. The expectation on pricing in Europe is anywhere at the high end at 60%, 70% discount, 60%, 70% off The U. S. Price to maybe 50%, 60% of The U. S. Price. But that said, if you look at our drug, it was a blinded Phase three study The efficacy results were very powerful. The convenience is amazing. A loud disease right, meaning very visible loud disease unmet medical need, some chances of getting squamous cell carcinoma in a handful in a certain percentage of these patients. So we have a compelling case to make in the dossier with respect to pricing in Europe. And so we feel good about going into the negotiations So to answer your question at a high level, the way you split the 1,000,000,000 plus across the nation is purely a function of the ratio of the pricing between across these nations. And so if your assumption is 70% of The U. S. Price, and that's how they split because the prevalence is pretty identical.

Across the three segments.

Thank you. This does conclude today's conference call. Thank you for your participation.

Thank you all. [indiscernible] [indiscernible]