Krystal Biotech, Inc. (NASDAQ:KRYS) Q3 2023 Earnings Call Transcript

Krish Krishnan: Yeah, look on cadence with the holidays I wouldn’t — I wasn’t advocating any kind of discount. I was simply saying that the pace has been good as of now as of this call. And with the upcoming holidays, we don’t know if it will continue or will there be a pause and it varies depending on the patient and the urgency and the family situation. So I wasn’t guiding to any slowdown at all, I was just saying we don’t know. On the 407, look it is tough for us to guide when without access to the TDN network where because it does take us — Suma mentioned in the call it takes a long — it takes us a bit longer to find these patients outside the network, convince them, get them on drugs. So unfortunately, not able to like with the other programs make a good prediction on when we will data.

Suma, do you want to comment on — let me say one thing on the expression, I’ll turn it over to Suma, our view on full DMT [ph] which I think you were asking look, you have to remember, it’s a micro CFTR. Right, so micro, it’s not the full gene it is a micro gene. And so I would disagree with the comment. I think one should expect that protein expression should be reverted to functionality in our opinion, but Suma do you want to add to that.

Suma Krishnan: I think you’ve covered it pretty much on the dot Krish. Agree, I mean, again if you look at the histo-chemistry, it’s not very clear where you see the expression because it’s all over. There’s a lot of questions. We also spoke with some of the experts on that expression data. And they had similar concerns. So again, we don’t know what the agenda question is. If they’re seeing this kind of expression level, is it the full CFTR protein and how does that correlate to function. It is a question that’s still unanswered. With regards to TDN we are working very diligently, we have done beyond what other companies have done with regards to joint [ph] function. And we are pretty confident we’ll get there. So we are close, we are looking at all different studies including NPD animal studies, we are looking — we know we can express the full length protein by [indiscernible].

We see it, we’re very confident. We just need to get the assay for function optimized. So we feel pretty good. I think, hopefully we will get there sooner, and we can get that study more fully, aggressively enrolled.

Dae Gon Ha: Great. Thank you very much for taking the questions.

Operator: Thank you. The next question comes from the line of Tim Lugo with William Blair. Your line is now open.

Tim Lugo: Thanks for the question. Going back to VYJUVEK. Can you talk about the progress you’ve made identifying patients outside of the initial I think 1200 or 1100 patients that you had identified during the summer? And I guess on top of that, penetrating 30% into that, as of now, I think is what you mentioned, can you talk about, I guess, really the need for CCO if you’re going to get 50% penetrated into the population within the next couple of quarters?

Krish Krishnan: Tim, I didn’t follow the second — the second part of the question, what were you saying in terms of penetration?

Tim Lugo: Yeah, the second part was I believe you mentioned you’re about 30% penetrated. And it looks like the 20% [Multiple Speakers], oh, 20%. Okay. Alright, well, just an update on just the 1200 cases, or 1100 patients that you have identified so far?

Krish Krishnan: Yeah, what I did to get to 20% just to be clear, we got 284 start forms, you multiply that by 85% conversion rate divvied by 1200, you’re close to 21%. That’s how we estimate that 20% penetration, it could be a bit higher if the 85% is higher than we estimate at the moment. With respect to finding patients, to date after one full quarter into launch, it’s been more opportunistic than deliberate. Meaning we’re still working off the tier one tier twos that we identified going after, trying to get them converted. Our objective is to get more serious about finding patients past 1200 early next year, as we start to drain out the bases, there was a wire of identified patients.

Tim Lugo: And with that I guess can you update us on your thoughts around a new Chief Commercial Officer, I feel like previously you mentioned that that would be the focus of a new CCO?

Krish Krishnan: Yes, so we are in the process of looking earnestly. We’ve gotten a few candidates at different levels in the queue at the moment. We hope to have one in place early in 2024, that’s the objective. What’s important to us is they find someone with a good fit in the way we operate and thankfully, there’s been a lot of interest from potential candidates so far.

Tim Lugo: Fantastic. Thank you for the question.

Operator: Thank you. The next question comes from a line of Gavin Clark-Gartner with Evercore ISI. Your line is now open.

Gavin Clark-Gartner: Good morning, congrats on the progress of the launch. So you noted our goal of getting to two to three weeks for the conversion cycle from PFS to paid revenue. Where did the number start from launch and how long do you think it’ll take you to get to that two to three weeks?

Krish Krishnan: Yeah, we’re hoping to get to two to three weeks in 2024 hopefully in the first half, first quarter. Right now it’s pretty, I mean, it was long and it continues to come down. When we started it was more like six, seven weeks and a lot of it had to do with submitting for reimbursement, getting denied, resubmitting single case forms. The reimbursement was not smooth. So that was a big aspect. And that has gotten steadily better over time. So that’s one of the reasons we feel good about getting to two to three weeks. We find that families take about two to three weeks to schedule a nurse visit. There’s some time in figuring out the right nurse that they’re comfortable with, finding a time that works for them. That I don’t think is compressible.

So our goal is two to three weeks in 2024. And so every month that’s gone by we’ve been steadily coming down the curve of conversion and we are at a good point at the moment, and we hope to get to two to three weeks, early in 2024.