Krystal Biotech Revenue Tops Estimates, Shares Fall 5.5% Before Market Open
Key Facts
Krystal Biotech reported results on November 2 for the third quarter ended September 30, 2026, beating analysts’ estimates for revenue and diluted earnings per share, while net income and earnings per share fell from a year earlier. Product revenue was $127.3 million, versus an estimate of $126.77 million cited by Investing.com. The company posted diluted earnings of $2.05 per share, ahead of analysts’ estimate of $1.84. But net income was $63.068 million, compared with $79.365 million in the third quarter of 2025, and diluted earnings per share fell from $2.66 to $2.05. In contrast, operating income rose 72% to $71.145 million from $41.374 million a year earlier, highlighting the divergence between operating growth and lower net income.
VYJUVEK was the main revenue driver, generating global sales of $127.3 million for the quarter, including $95.3 million in the United States and $32 million in international markets. The drug’s cumulative global revenue since launch reached about $1.1 billion. For the nine months ended September 30, product net revenue totaled $362.9 million, compared with $282.0 million in the corresponding period of 2025. Chief Executive Krish Krishnan said, "Continued growth in VYJUVEK revenue supports profitability and funds the advancement of our pipeline." The company added that it had secured more than 760 U.S. reimbursement approvals for the drug, while pricing negotiations in Germany and Italy had been completed.
Gross margin was 94% in the third quarter, compared with 96% in the same period last year. The chief executive attributed the decline in part to a higher share of sales in Europe and Japan, where those sales have not yet benefited from manufacturing improvements implemented in the United States. He also said the comparison was affected by the sale of low-cost research and development batches in the third quarter of 2025. Cost of goods sold was $7.6 million, versus $4.3 million a year earlier. On expenses, research and development costs rose to $14.9 million from $14.6 million, while selling, general and administrative expenses fell to $33.7 million from $37.6 million.
The decline in net income reflects a different tax comparison between the periods, alongside operating performance. Cash, cash equivalents and investments totaled $1.2 billion as of September 30, 2026. In light of its financial position, the board authorized a program to repurchase up to $400 million of common stock. The company said it expects to make opportunistic purchases over the next two years, but noted that the program has no expiration date and does not obligate it to buy any amount. In parallel, the company lowered its 2026 fiscal-year guidance for research and development and selling, general and administrative expenses, on a non-GAAP basis, to a range of $155–165 million.
The company continues to expand the drug’s commercial activity in Europe and expects to launch VYJUVEK in Italy in early 2027 after completing pricing negotiations there and in Germany. In a multicenter exploratory study involving 3 patients with Gorlin syndrome, more than 80% of evaluable basal cell carcinoma lesions showed clinical regression, according to investigators’ assessments. The company said histological examination confirmed complete clearance of an injected lesion in each patient. For its trials, it expects to complete enrollment of about 60 patients in the EMERALD-1 study of KB801 and announce topline results in 2027. It attributed slower enrollment to narrow eligibility criteria and the difficulty of recruiting patients for a placebo-controlled study when an approved treatment is available.
Another upcoming milestone is the IOLITE study, with the company expecting patients’ final visits to be completed in February 2027 and topline results to follow shortly afterward. It said it remains on track to begin the registrational study of KB407 in 2027, after being selected in the third quarter for the Food and Drug Administration’s program for innovative trial design meetings. The company said it will share the study design and statistical analysis after reaching alignment with the agency. In premarket trading on November 2, the company’s shares fell 5.5% to $314.03 from a previous close of $314.16, according to Investing.com. The shares had closed at $332.29 on October 30, according to EL7 data.