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Item 1. Business

2025-02-19 compared with 2024-02-26 · 239 added, 209 removed, 592 unchanged (43% of the section changed)

We are a fully integrated, commercial-stage biotechnology company focused on the discovery, development, and commercialization of genetic medicines to treat diseases with high unmet medical needs.

Our first commercial product, VYJUVEK ® , was approved by the FDA on May 19, 2023 for the treatment of DEB, and we subsequently initiated our U.S.

commercial launch.

VYJUVEK is the first medicine approved by the FDA for the treatment of DEB.

Using our patented gene therapy technology platform that is based on engineered HSV-1, we create vectors that efficiently deliver therapeutic transgenes to cells of interest in multiple organ systems.

The cell’s own machinery then transcribes and translates the encoded effector to treat or prevent disease.

We formulate our vectors for non-invasive or minimally invasive routes of administration at a healthcare professional’s office or in the patient’s home by a healthcare professional.

Our goal is to develop easy-to-use medicines to dramatically improve the lives of patients living with rare and serious diseases.

Our innovative technology platform is supported by an in-house, FDA-inspected commercial scale Current Good Manufacturing Practice (“CGMP”) manufacturing facility and a second, completed and qualified, commercial scale CGMP facility to support future expansion.

We are a fully integrated, commercial-stage biotechnology company focused on the discovery, development, manufacturing and commercialization of genetic medicines to treat diseases with high unmet medical needs.

Using our patented gene therapy technology platform that is based on engineered herpes simplex virus-1 (“HSV-1”), we create vectors that efficiently deliver therapeutic transgenes to cells of interest in multiple organ systems.

The cell’s own machinery then transcribes and translates the transgene to treat the disease.

Our vectors are amenable to formulation for non-invasive or minimally invasive routes of administration at a healthcare professional’s office or in the patient’s home by a healthcare professional.

Our innovative technology platform is supported by two in-house, commercial scale Current Good Manufacturing Practice (“CGMP”) manufacturing facilities.

Our development pipeline includes multiple clinical stage programs for rare and serious diseases, and we are investing in research and development to advance and grow this pipeline.

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HSV-1 has a natural affinity, or tropism, for epithelial cells.

Consequently, we believe our vector penetrates and delivers its payload much more efficiently than other vectors,

resulting in transduction efficiencies or cell penetration as high as 95% in cell-based studies.

The greater payload capacity of our vector and the high transduction efficiencies achieved allow us to deliver a full gene (or genes) directly to any patient’s tissues for off-the-shelf, in vivo gene expression without additional manipulation.

Consequently, we believe our vector penetrates and delivers its payload much more efficiently than other vectors, resulting in transduction efficiencies or cell penetration as high as 95% in cell-based studies.

The greater payload capacity of our vector and the high transduction efficiencies achieved allow us to deliver a

full gene (or genes) directly to any patient’s tissues for off-the-shelf, in vivo gene expression without additional manipulation.

• Direct Delivery :

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Successful and reproducible execution of both processes is critical for commercial manufacturing.

Our scientific team’s collective decades of experience and expertise in HSV engineering and purification has allowed us to successfully optimize our engineered HSV-1 vector production process and develop in-house Chemistry, Manufacturing and Control (“CMC”) capabilities.

• First Approval for Platform Builds on Existing Regulatory Precedent :

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VYJUVEK (beremagene geperpavec-svdt, or B-VEC;

referred to as B-VEC outside the U.S.)

referred to as B-VEC outside the United States)

Disease Background

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DEB patients may suffer from open wounds, skin infections, fusion of fingers and toes, ocular complications that can result in severe vision loss, and gastrointestinal tract problems throughout their lifetime, and may eventually develop squamous cell carcinoma, a potentially fatal condition.

We believe that there are, at present, approximately 3,000 DEB patients in the United States and approximately 9,000 worldwide.

We believe that there are, at present, over 3,000 DEB patients in the United States and over 9,000 worldwide.

Prior to the approval of VYJUVEK, the standard of care for DEB patients had been limited to palliative measures that seek to provide relief from some of the symptoms of DEB but do not meaningfully impact disease outcomes.

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Commercial Launch

We launched VYJUVEK, the first FDA approved treatment for DEB and the first and only corrective therapy for DEB globally, in the United States in the second quarter of 2023.

We estimate that there are approximately 3,000 patients in the United States suffering from DEB, of which 1,200 were identified at launch through claims analytics and pre-launch patient identification activities conducted by our commercial field force.

Since our commercial launch of VYJUVEK in the United States in the second quarter of 2023, we have reported $50.7 million in net product revenue.

Commercial readiness efforts had been underway over two years prior to the FDA approval of VYJUVEK.

In the United States, prior to FDA approval and VYJUVEK launch, as part of our disease awareness program, our medical science liaisons had been interacting with and educating health care professionals (“HCPs”) on DEB and the importance of genetic testing in ensuring an accurate diagnosis.

We also built-out Krystal Connect TM , our U.S.

in-house patient services call center staffed with Krystal employees, which was launched subsequent to FDA approval to assist patients, caregivers and HCPs interested in accessing VYJUVEK.

Additionally, we hired, trained and deployed commercial field teams to educate on DEB and to prepare for launch of VYJUVEK.

Our field force has been fully deployed since launch and is covering both centers of excellence and community physicians treating patients with DEB.

Our market access team had successfully secured positive policies or coverage decisions from plans covering over 93% of commercial and Medicaid lives in the United States, including positive coverage determinations from all major commercial national health plans and several regional health plans.

In January 2024, we announced that the United States Centers for Medicare & Medicaid Services (“CMS”) had assigned a permanent and product-specific J-code (J3401) for VYJUVEK, effective on January 1, 2024.

VYJUVEK is distributed in the U.S.

through a limited network of specialty pharmacy providers that administer the medication to patients in their homes and specialty distributors that distribute VYJUVEK for administration to patients at the site of care.

Preparations and infrastructure buildout are underway in Europe and Japan to support direct commercial launch by Krystal in these regions, which is expected by 2025.

We have also initiated a named patient program in Europe to provide initial access to VYJUVEK.

Outside of Germany, France, Italy, Spain, the United Kingdom, and Japan, our strategy is to enter into distribution arrangements with local distributors to commercialize VYJUVEK.

We launched VYJUVEK, the first FDA approved treatment for DEB and the first and only corrective therapy for DEB, in the United States in August 2023.

We estimate that there are over 3,000 patients in the United States suffering from DEB, of which 1,200 were identified at launch through claims analytics and pre-launch patient identification activities conducted by our commercial field force.

Since our commercial launch of VYJUVEK in the United States, we have reported $341.2 million in net product revenue.

Our market access team has successfully secured strong nationwide coverage across the United States including, as of February 2025, positive policies or coverage decisions from plans covering over 97% of commercial and Medicaid lives.

In January 2024, we announced that the United States Centers for Medicare & Medicaid Services (“CMS”) had assigned a permanent and product-specific J-code for VYJUVEK, effective on January 1, 2024.

Preparations and infrastructure build out are underway in Europe and Japan to support direct commercial launch by Krystal in these regions, which is expected in 2025.

Outside of the United States, major European markets and Japan, we intend to and have started entering into distribution arrangements with specialty distributors to commercialize VYJUVEK.

We sell VYJUVEK to a limited number of specialty pharmacy (“SPs”) providers that mix the medication to be administered by a healthcare professional in either a healthcare professional or home setting and to a limited number of hospitals or specialty distributors (“SDs”) who deliver to hospitals where patients are administered the medication in a healthcare setting.

Regulatory Status

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We sold the PRV in the third quarter of 2023 for $100 million.

The FDA had previously granted B-VEC Orphan Drug Designation (“ODD”), Fast Track Designation, Rare Pediatric Designation, and granted Regenerative Medicine Advanced Therapy to B-VEC for the treatment of DEB.

The FDA had previously granted Orphan Drug Designation (“ODD”), Fast Track Designation, Rare Pediatric Designation (“RPDD”), and Regenerative Medicine Advanced Therapy to B-VEC for the treatment of DEB.

In September 2023, we received a positive opinion from the EMA Pediatric Committee on the Pediatric Investigation Plan for B-VEC for the treatment of DEB.

Based on this positive opinion, we expect to be eligible for up to an additional two years of marketing exclusivity in the European Union (“EU”), on top of the ten-year EU market exclusivity after market approval in the EU.

Based on this positive opinion, we expect to be eligible for up to an additional two years of marketing exclusivity in the EU, on top of the ten-year EU market exclusivity after market approval in the EU.

The European regulatory authorities have also granted B-VEC Orphan Designation and PRIority MEdicines eligibility for B-VEC to treat DEB.

In October 2023, we submitted a marketing authorization application (“MAA”) to the EMA for B-VEC for the treatment of DEB in patients from birth.

In November 2023, we were notified that the MAA had been validated and was now under Committee for Medicinal Products for Human Use review.

We currently expect an EMA decision on our MAA in the second half of 2024.

In November 2023, we were notified that the MAA had been validated and was now under Committee for Medicinal Products for Human Use (“CHMP”) review.

In February 2024, the EMA completed inspection of our manufacturing facility as part of the MAA review process and, in May 2024, European Union good manufacturing practice (“EU GMP”) certification was granted by the EMA.

Based on recent interactions with the EMA, we expect a CHMP opinion on the MAA in the first quarter of 2025.

In December 2023, B-VEC was granted ODD status for the treatment of DEB by the Japan Ministry of Health, Labour and Welfare, a designation which confers specific benefits for orphan drug development including priority review of applications, extended registration validity, and reduced development costs.

We anticipate filing our Japan New Drug Application with Japan’s Pharmaceuticals and Medical Devices Agency (“PMDA”) in the second half of 2024 enabling a potential authorization in 2025.

In October 2024, we filed a Japan New Drug Application (“JNDA”) with Japan’s Pharmaceuticals and Medical Devices Agency (“PMDA”).

The JNDA includes the results from an open label extension (“OLE”) study of B-VEC in Japanese patients (the “Japan OLE”), the design of which had been approved by the PMDA in July 2023.

A decision on the JNDA by the PMDA is expected in the second half of 2025.

Clinical Development

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In March 2022, results from the complete Phase 1/2 study of topical B-VEC for the treatment of DEB were published in Nature Medicine.

We initiated a pivotal Phase 3 trial (“GEM-3 trial”) in July 2020.

We initiated a pivotal Phase 3 trial (the “GEM-3 trial”) in July 2020.

The GEM-3 trial of topical B-VEC for the treatment of DEB was a randomized, double-blind, intra-patient placebo-controlled multicenter study designed to evaluate the efficacy and safety of B-VEC for patients suffering from both recessive and dominant forms of DEB.

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We announced positive results from the GEM-3 trial in November 2021 and in December 2022 full results from the GEM-3 trial were published in the New England Journal of Medicine.

Following completion of the GEM-3 trial, we initiated an open label extension study (“OLE”) to provide extension of B-VEC treatment for participants who completed study GEM-3 (“rollover participants”) and B-VEC treatment for newly enrolling (“naïve participants”) participants with DEB.

Following completion of the GEM-3 trial, we initiated an OLE to provide extension of B-VEC treatment for participants who completed the GEM-3 trial (“rollover participants”) and B-VEC treatment for newly enrolling participants (“naïve participants”) with DEB.

The OLE was a multi-center, open-label study of B-VEC for the topical treatment of DEB wounds.

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The OLE study was concluded in the third quarter of 2023, and the safety profile continued to support the overall benefit-risk of B-VEC, with no new safety concerns noted with extended duration of dosing of B-VEC.

We expect to disclose detailed study data at upcoming scientific meetings or in scientific publications.

In July 2023, the PMDA in Japan officially accepted our OLE study of B-VEC in Japanese patients (the “Japan OLE”).

We expect to disclose additional detailed study data at upcoming scientific meetings or in scientific publications.

In July 2023, the PMDA in Japan officially accepted our OLE study of B-VEC in Japanese patients.

Following that acceptance, we initiated the Japan OLE study and completed study enrollment.

A total of 5 Japanese DEB patients have been enrolled.

In April 2024, the efficacy portion of the Japan OLE study was completed with results that closely mirrored those of our Phase 3 GEM-3 trial in the United States.

B-VEC was well tolerated in the Japanese study population, with a safety profile consistent with previous studies, and all four patients that completed the study achieved the primary endpoint of complete wound closure at six months.

Details of the study can be found at jrct.niph.go.jp under JRCT ID jRCT2053230075.

included on this website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

We expect to complete the study in 2024.

Our Pipeline Programs

Ophthalmology

Ophthalmic B-VEC for Ocular Complications of DEB

KB803 (Ophthalmic B-VEC) for Ocular Complications of DEB

Disease Background

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For a meaningful proportion of DEB patients, the genetic defect in COL7A1 results in loss or malfunctioning of these anchoring fibrils causing ocular complications, such as corneal erosions, abrasions, blistering, and scarring, that can lead to progressive vision loss.

Over 50% of patients with recessive form of DEB are thought to suffer from ocular complications.

Over 50% of patients with recessive form of DEB and an estimated 10% of patients with the dominant form of DEB are thought to suffer from ocular complications.

Correspondingly, we believe there are over 750 patients in the United States and over 2,000 worldwide that are affected.

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No corrective or FDA approved therapies are presently available.

Ophthalmic B-VEC

Ophthalmic B-VEC is a redosable eye drop formulation of B-VEC, designed to deliver two copies of the COL7A1 transgene to the epithelial cells in a patient’s eye to produce COL7 protein.

As with VYJUVEK, the goal of therapy with ophthalmic B-VEC is to treat the disease locally, at the molecular level, by providing the patient’s epithelial cells of the eye the template to make normal COL7 protein, and thereby address the fundamental disease-causing mechanism.

KB803 (Ophthalmic B-VEC)

KB803 is a redosable eye drop formulation of B-VEC, designed to deliver two copies of the COL7A1 transgene to the epithelial cells in a patient’s eye to produce COL7 protein.

As with VYJUVEK, the goal of therapy with KB803 is to treat the disease locally, at the molecular level, by providing the patient’s epithelial cells of the eye the template to make normal COL7 protein, and thereby address the fundamental disease-causing mechanism.

In preclinical studies, single and repeated topical B-VEC administration to the eye in a mouse corneal lesion model resulted in localized COL7A1 expression with no adverse effects noted histologically.

Ophthalmic B-VEC has been applied topically to the eye of one DEB patient under a compassionate use protocol.

B-VEC has been applied topically to the eye of one DEB patient under a compassionate use protocol.

The clinical observations of this compassionate use case were published in the New England Journal of Medicine in February 2024.

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B-VEC was well tolerated with no drug-related adverse events noted.

Full corneal healing was observed at 3 months, as well as significant visual acuity improvement from hand motion to 20/25 by 8 months.

In February 2024, the FDA agreed with our proposed single arm, open label study in approximately 10 patients to enable approval of B-VEC eyedrops to treat ocular complications secondary to DEB.

We plan to initiate this study in the second half of 2024.

Full corneal healing was observed at three months, as well as significant visual acuity improvement from hand motion to 20/25 by eight months.

In February 2024, the FDA agreed with our proposed single arm, open label registrational Phase 3 study design to enable approval of KB803 to treat ocular complications secondary to DEB.

We expect to initiate the study in the first half of 2025 and plan to enroll up to 30 DEB patients.

In August 2024, we initiated a natural history study to prospectively collect data on the frequency of corneal abrasions in patients with DEB and serve as a run-in period for patients who may be eligible to participate in the registrational Phase 3 study.

We have enrolled approximately 50 DEB patients in the natural history study to date.

Enrollment in the study is ongoing.

Details of the natural history study can be found at www.clinicaltrials.gov under NCT identifier NCT06563414.

KB407 for Cystic Fibrosis (“CF”)

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CF is characterized by recurrent chest infections, increased airway secretions, and eventually, respiratory failure.

While CF comprises a multiorgan pathology affecting the upper and lower airways, gastrointestinal and reproductive tracts, and the endocrine system, the primary cause of morbidity and mortality in CF is due to progressive lung destruction.

According to the U.S.

Cystic Fibrosis Foundation (“CFF”), the median age at death for patients with CF in the United States was 36.6 years in 2022.

According to the Cystic Fibrosis Foundation (“CFF”), the median age at death for patients with CF in the United States was 36.9 years in 2023.

Currently approved CFTR modulating therapies are limited to patients with specific genetic mutations and there is a significant unmet medical need for the approximately 10%-15% of patients with CF who have genetic mutations non-amenable to currently approved CFTR small molecule “modulators”.

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KB407 is a redosable off the-shelf gene therapy designed to deliver two copies of the full-length CFTR transgene directly to the airway epithelia via inhaled (nebulized) administration.

By inducing expression of full length, normal CFTR protein in the lung, treatment with KB407 has potential to restore ion and water flow into and out of lung cells to correct the lung manifestations of the disease in patients regardless of their underlying genetic mutation.

By enabling expression of full-length, normal CFTR protein in the lung, treatment with KB407 has potential to restore ion and water flow into and out of lung cells to correct the lung manifestations of the disease in patients regardless of their underlying genetic mutation.

Preclinical efforts to date have shown that KB407 successfully transduces patient-derived epithelial cells and delivers functional CFTR in vitro in 2D and 3D organotypic systems, and is amendable to non-invasive inhaled administration in vivo , as indicated by successful delivery to the lungs through the use of a clinically relevant nebulizer in small animal models.

Successful delivery and distribution throughout the lung also was observed in a nonhuman primate.

The FDA and the EMA have granted KB407 ODD and Orphan Designation, respectively, for the treatment of cystic fibrosis, and the FDA has granted KB407 Rare Pediatric Designation for the treatment of cystic fibrosis.

Successful delivery and distribution throughout the lung also was observed in nonhuman primates.

The FDA and the EMA have granted KB407 ODD and Orphan Designation, respectively, for the treatment of CF, and the FDA has granted KB407 RPDD for the treatment of CF.

Clinical Development of KB407

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The CORAL-1 study is a multi-center, dose-escalation trial of KB407 in patients with CF, regardless of their underlying genotype.

In the fourth quarter of 2023, we completed the first cohort of the CORAL-1 study with no severe or serious adverse events and, in January 2024, we initiated dosing in the second of three cohorts.

Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05504837.

Nothing included on this website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

KB408 for Alpha-1 Antitrypsin Deficiency (“AATD”)

In December 2024, we announced an interim safety data update for patients treated with KB407 in the first two dose escalation cohorts.

Both single and repeat inhaled administration of KB407 were well tolerated with only mild to moderate and transient adverse events observed.

We expect to report safety and CFTR delivery data from patients in the third and final cohort in the middle of 2025.

Details of the CORAL-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05504837.

In January 2025, the CFF Therapeutic Development Network (“TDN”) Clinical Research Executive Committee granted full sanctioning of our KB407 Phase 1 CORAL-1 study protocol.

KB408 for Alpha-1 Antitrypsin Deficiency (“AATD”) Lung Disease

Disease Background

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Clinical Development of KB408

In September 2023, we announced that the FDA had accepted our Investigational New Drug (“IND”) application to evaluate KB408, delivered via a nebulizer, in a clinical trial to treat patients with AATD.

In February 2024, the Company dosed the first patient in the KB408 Phase 1 SERPENTINE-1 study for the treatment of Alpha-1 Antitrypsin Deficiency.

SERPENTINE-1 is a Phase 1 open-label, single dose escalation study in adult patients with AATD with a PI*ZZ genotype.

Three planned dose levels of KB408 will be evaluated in up to 12 patients to evaluate the safety, tolerability, and proof-of-mechanism of KB408.

Cohorts 1 and 2 will focus predominantly on safety with dose escalation and pharmacodynamic activity in the lung will be assessed at the highest dose by bronchoscopy in Cohort 3.

The Company is working closely with the Alpha-1 Foundation and their Therapeutic Development Network on the SERPENTINE-1 study and intends to announce interim data from the study in the second half of 2024.

Details about the Phase 1 study can be found at www.clinicaltrials.gov under NCT

Nothing included on this website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

In February 2024, we announced that we had dosed the first patient in our Phase 1 SERPENTINE-1 study evaluating KB408, delivered via a nebulizer, for the treatment of patients with AATD.

SERPENTINE-1 is a Phase 1 open-label, single dose escalation study in adult patients with AATD with a Pi*ZZ or Pi*ZNull genotype.

In December 2024, we announced an interim clinical data update including safety data for seven patients enrolled in the first two dose escalation cohorts of SERPENTINE-1 as well as molecular data from two patients in the second cohort that had consented to bronchoscopy.

Clear evidence of successful gene delivery and AAT expression was observed in both patients that underwent bronchoscopies, with the proportion of conducting airway epithelial cells positive for AAT increasing from 0% to 39% in one patient and from 3% to

35% in the other.

Secretion and functionality of encoded AAT was also demonstrated in the patient with available lavage samples, with AAT levels in epithelial lining fluid reaching 729 nM, and the proportion of free NE dropping from 97.2% to 40.2%, after a single KB408 dose.

KB408 was also found to be well-tolerated at both tested dose levels, with only mild to moderate and transient adverse events observed.

Following this data update, we simultaneously expanded the second cohort and opened enrollment in the third and final cohort of SERPENTINE-1 for more comprehensive molecular assessments at both dose levels.

We are working closely with the Alpha-1 Foundation and their Therapeutic Development Network on the SERPENTINE-1 study and expect to announce complete SERPENTINE-1 study results in the second half of 2025.

Details of the SERPENTINE-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06049082.

KB707 for Solid Tumors

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The World Health Organization lists cancer as a leading cause of death globally and estimates that the disease was responsible for nearly 10 million deaths in 2020.

Of these, an estimated 5 million deaths were attributed to solid tumor malignancies of the lung, colon and rectum, liver, stomach, and breast alone.

Solid tumor malignancies similarly impose a heavy burden on patients in the U.S., with the National Cancer Institute estimating that over 300,000 patients will have died from lung, colon and rectum, pancreas, breast, prostate, liver and bile duct, and melanoma of the skin cancers in 2023.

Of these, an estimated five million deaths were attributed to solid tumor malignancies of the lung, colon and rectum, liver, stomach, and breast alone.

Solid tumor malignancies similarly impose a heavy burden on patients in the United States, with the National Cancer Institute estimating that over 300,000 patients will have died from lung, colon and rectum, pancreas, breast, prostate, liver and bile duct, and melanoma of the skin cancers in 2023.

KB707 is a redosable, immunotherapy designed to deliver genes encoding both human interleukin-2 (“IL-2”) and interleukin-12 (“IL-12”) to the tumor microenvironment and promote systemic immune-mediated tumor clearance.

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IL-2 and IL-12 are secreted cytokines with complementary functions promoting cell-mediated immunity in humans.

Both IL-2 and IL-12 have been shown to elicit anti-tumor immune responses in preclinical or clinical models and have been extensively studied for their potential in cancer immunotherapy.

Both IL-2 and IL-12 have been shown to elicit anti-tumor immune responses in preclinical models and/or in the clinic and have been extensively studied for their potential in cancer immunotherapy.

Despite promising signs of efficacy, it has proven difficult to effectively harness IL-2 and IL-12 for therapeutic benefit, as systemic administration is often poorly tolerated, and the inherently short half-lives of these cytokines necessitate high dose levels and extremely frequent dose intervals.

KB707 leverages the Company’s HSV-1 vector platform – and its ability to efficiently deliver a durable DNA payload without active replication and minimal cytotoxicity – to drive local and sustained cytokine expression within the tumor microenvironment and maximize the therapeutic window and benefit of IL-2 and IL-12.

KB707 leverages our HSV-1 vector platform – and its ability to efficiently deliver a durable DNA payload without active replication and minimal cytotoxicity – to drive local and sustained cytokine expression within the tumor microenvironment and maximize the therapeutic window and benefit of IL-2 and IL-12.

In preclinical studies, KB707 has been shown to efficiently transduce mammalian cells in vitro leading to the secretion of bioactive IL-2 and IL-12 and drive localized, durable cytokine expression in mouse skin after intradermal injection.

Furthermore, in stringent, checkpoint inhibitor refractory ‘cold’ syngeneic mouse models, HSV-1 vector based delivery of murine equivalent IL-2 and IL-12 elicited robust antitumor responses and survival benefits, including via intratumoral injection in single and dual flank B16F10 melanoma models, as well as via intratracheal delivery in a metastatic K7M2 osteosarcoma model, with evidence of protection from tumor rechallenge in both models suggestive of prolonged adaptive immunity.

In February 2024, the FDA also granted inhaled KB707 Fast Track Designation for the treatment of patients with solid tumors with pulmonary metastases that are relapsed or refractory to standard of care therapy.

Clinical Development of KB707

In July 2023, we announced that the FDA had accepted our IND application to evaluate intratumoral KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors.

The study, OPAL-1, is an open-label, multi-center, monotherapy, dose escalation and expansion Phase 1 study, enrolling patients with locally advanced or metastatic solid tumors, who relapsed or are refractory to standard of care, with at least one measurable and injectable tumor accessible by transcutaneous route.

The primary objective of the study is to evaluate safety and tolerability of KB707.

Efficacy will also be assessed by multiple measures including overall response rate, progression free survival, and overall survival, and the immune effects of KB707 monotherapy will be assessed in tumor tissue, lymph nodes, and blood.

The first patient in OPAL-1 was dosed in October 2023 and enrollment is ongoing.

In July 2023, the FDA granted intratumoral KB707 Fast Track Designation for the treatment of anti-programmed cell death protein-1 (“PD-1”) relapsed/refractory locally advanced or metastatic melanoma and, in February 2024, the FDA granted inhaled KB707 Fast Track Designation for the treatment of patients with solid tumors with pulmonary metastases that are relapsed or refractory to standard of care therapy.

Both intratumoral and inhaled KB707 have also been granted RPDD by the FDA, with intratumoral KB707 receiving RPDD for the treatment of rhabdomyosarcoma in August 2024 and inhaled KB707 receiving RPDD for the treatment of osteosarcoma in May 2024.

Clinical Development of Inhaled KB707

In January 2024, the FDA accepted an amendment to our KB707 investigational new drug (“IND”) application to evaluate inhaled KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors of the lung.

The study, KYANITE-1, is an open-label, multi-center, dose escalation and expansion Phase 1/2 study, evaluating inhaled KB707, as monotherapy or in combination, in patients with advanced solid tumor malignancies affecting the lungs, who relapsed or are refractory to standard of care.

The primary objective of the study is to evaluate safety and tolerability of KB707 delivered via

inhalation, alone or in combination.

Efficacy is also being assessed by multiple measures, including objective response rate (“ORR”), as are the immune effects of KB707 monotherapy.

The first patient in KYANITE-1 was dosed in April 2024.

In August 2024, the monotherapy dose escalation portion of the study was completed, and the monotherapy dose expansion cohort was opened.

In December 2024, we announced an initial clinical update for the monotherapy dose escalation and expansion cohorts, including safety data for 37 patients that had received at least one dose of inhaled KB707 and efficacy data from 11 patients with advanced non-small cell lung cancer (“NSCLC”) evaluable for response with at least one radiographic scan and RECIST v1.1 evaluation.

Patients included in the efficacy analysis were heavily pre-treated with four median lines of prior therapy and all had received at least one line of prior immunotherapy.

In this NSCLC patient analysis cohort, as of data cut-off, an ORR of 27%, with three partial responses, was achieved.

The disease control rate (“DCR”) was 73% with 7 out of 11 patients still remaining on treatment.

Duration of treatment for patients included in the analysis ranged from 10.3 to 33.3 weeks as of data cut-off.

Inhaled KB707 was also found to be safe and generally well tolerated and amenable to administration in an outpatient setting.

The majority of treatment-related adverse events were mild to moderate in severity and transient, with no Grade 4 or 5 adverse events observed.

Building on promising initial monotherapy data, KYANITE-1 was amended to add two dose expansion cohorts evaluating inhaled KB707 in combination with anti-PD-1 therapy or anti-PD-1 therapy and chemotherapy in patients with advanced NSCLC.

Enrollment in both cohorts is ongoing.

Details of the KYANITE-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT06228326.

Clinical Development of Intratumoral KB707

In July 2023, we announced that the FDA had accepted our initial KB707 IND application to evaluate intratumoral KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors.

The study, OPAL-1, is an open-label, multi-center, dose escalation and expansion Phase 1/2 study, evaluating intratumoral KB707, as monotherapy or in combination, in patients with locally advanced or metastatic solid tumors, who relapsed or are refractory to standard of care, with at least one measurable and injectable tumor accessible by transcutaneous route.

The primary objective of OPAL-1 is to evaluate safety and tolerability of KB707 alone and in combination.

Efficacy is also being evaluated by multiple measures, including ORR, as are the immune effects of KB707 monotherapy.

The first patient in OPAL-1 was dosed in October 2023 and, in May 2024, the third and final monotherapy dose escalation cohort was cleared.

OPAL-1 was subsequently amended to add two dose expansion cohorts, in addition to the monotherapy dose expansion cohort, evaluating intratumoral KB707 in combination with anti-PD-1 and anti-lymphocyte activation gene 3 therapy or anti-PD-1 therapy alone, in patients with advanced melanoma that is relapsed or refractory to standard of care.

Evaluation of intratumoral KB707 as monotherapy and in combination is ongoing.

Details of the OPAL-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05970497.

Nothing included on this website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

In January 2024, the FDA accepted an amendment to our IND application to evaluate inhaled KB707 in a clinical trial to treat patients with locally advanced or metastatic solid tumors of the lung.

We plan on initiating this open-label, multi-center, monotherapy, dose escalation and expansion Phase 1 study, KYANITE-1, in the first half of 2024.

Details of the KYANITE-1

study can be found at www.clinicaltrials.gov under NCT identifier NCT06228326.

Nothing included on this website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

KB105 for TGM1-Deficient Autosomal Recessive Congenital Ichthyosis (“ARCI”)

KB105 for TGM1-Deficient Lamellar Ichthyosis (“LI”)

Disease Background

ARCI is a life-long, severe monogenic skin disease.

While a number of genetic mutations have been associated with the development of ARCI, the most common cause of ARCI is an inactivating mutation in the human TGM1 gene encoding the enzyme transglutaminase-1 (“TGM1”), a protein that is essential for the proper formation of the skin barrier.

LI is a form of autosomal recessive congenital ichthyosis (“ARCI”) and a life-long, severe monogenic skin disease.

While a number of genetic mutations have been associated with the development of ARCI and LI, the most common cause is an inactivating mutation in the human TGM1 gene encoding the enzyme transglutaminase-1 (“TGM1”), a protein that is essential for the proper formation of the skin barrier.

Mutations in the TGM1 gene, and the subsequent disruption to the epidermal barrier, leads to pronounced dehydration, trans-epidermal exposure to unwanted toxins and surface microorganisms, and a greatly increased risk of infection.

Transglutaminase-1 deficiency is associated with increased mortality in the neonatal period and has a dramatic impact on quality of life.

Patients suffering from ARCI often exhibit life-long pronounced plate-like scaling of the skin, which is often of a dark color and can cover the whole body.

Such patients frequently suffer from exposure of the inner eyelid surface due to turning away of the eyelids from the eye (ectropion), the turning outwards of the lips (eclabium), deformities of joint and nasal cartilage (hypoplasia), scarring alopecia (especially at the edge of the scalp) and a thickening of the skin on the palms of the hands and soles of the feet (palmoplantar keratoderma).

Additional complications experienced by ARCI patients include episodes of sepsis, fluid and electrolyte imbalances due to impaired skin barrier function, and failure to thrive, especially during the neonatal period and infancy.

TGM1 deficiency is associated with increased mortality in the neonatal period and has a dramatic impact on quality of life.

Patients suffering from LI often exhibit life-long pronounced plate-like scaling of the skin, which is often of a dark color and can cover the whole body.

Such patients frequently suffer from exposure of the inner eyelid surface due to turning away of the eyelids from the eye (ectropion), the turning outwards of the lips (eclabium), deformities of joint and nasal cartilage (hypoplasia), scarring alopecia and a thickening of the skin on the palms of the hands and soles of the feet (palmoplantar keratoderma).

Additional complications can include episodes of sepsis, fluid and electrolyte imbalances due to impaired skin barrier function, and failure to thrive, especially during the neonatal period and infancy.

Severe heat intolerance and nail dystrophy are also frequently observed.

There are currently no treatments targeting molecular correction of this disease.

We estimate there are approximately 2,000 to 6,000 patients with of TGM1-deficient ARCI in the United States and Europe.

We estimate there are approximately 2,000 to 5,000 patients with TGM1-deficient LI in the United States and Europe.

KB105 is a redosable, off the-shelf gene therapy designed to deliver two copies of the TGM1 gene when applied topically, directly to a patient’s exfoliated skin.

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Like B-VEC, KB105 was designed to be easily administered by a healthcare professional in the doctor’s office or, potentially, at the patient’s home.

The FDA and the EMA have each granted KB105 ODD and Orphan Designation, respectively, for the treatment of TGM1-ARCI, and the FDA has granted KB105 Fast Track Designation and Rare Pediatric Designation for the treatment of TGM1-ARCI.

The FDA and the EMA have each granted KB105 ODD and Orphan Designation, respectively, for the treatment of TGM1-ARCI, and the FDA has granted KB105 Fast Track Designation and RPDD for the treatment of TGM1-ARCI.

Clinical Development of KB105

In September 2019, we initiated a Phase 1/2 trial in TGM1-ARCI patients.

In September 2019, we initiated a Phase 1/2 trial, JADE-1, in TGM1-deficient ARCI patients.

In May 2020, initial clinical data from the Phase 1 portion of the study which enrolled adult patients were presented at the Society for Investigative Dermatology (“SID”) meeting.

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Each treatment area was assigned to receive repeat doses of 4.0x10 9 PFU (n=2 treatment areas) or 1.0x10 10 PFU (n=2 treatment areas).

Each area was dosed on Day 1 and 3, after which dosing continued either every 3 days (n=2 treatment areas) or every 6 days (n=2 treatment areas) up to day 30.

Each area was dosed on Day 1 and 3, after which dosing continued either every three days (n=2 treatment areas) or every six days (n=2 treatment areas) up to day 30.

Treatment areas were clinically evaluated at pre- and post-KB105 application timepoints using a 5-point IGA scale (0 = clear;

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Improvement on the IGA scale was observed in each treatment area, with the maximum effect observed in TA3 and TA4 that received the highest dose;

at day 27, the investigator assigned an IGA score of 2, which was improved as compared to baseline score of 4 in each area.

at day 27, the investigator assigned an IGA score of two, which was improved as compared to baseline score of four in each area.

Variable 1-point improvements were observed at other time points and in the treatment areas that received the lowest dose.

As in the Phase 1 portion of the trial, TGM1 turnover was observed to be variable but relatively rapid, and the observed IGA improvements were not sustained through day 60.

We plan to resume enrollment in the Phase 2 portion of this trial later in 2024.

KB104 for Netherton Syndrome

Disease Background

Netherton Syndrome is a debilitating monogenic autosomal recessive skin disorder.

The disease arises due to mutations in the SPINK5 gene, resulting in loss of activity of its encoded serine protease inhibitor Kazal-type 5 (“SPINK5”), also known as Lympho-Epithelial Kazal type-related Inhibitor.

In healthy individuals, SPINK5 is one of the serine protease inhibitors

expressed in the outermost layers of the skin, and it plays a critical role in the regulation of serine proteases which hydrolyze extracellular proteins that hold corneocytes together.

In patients suffering from Netherton Syndrome, the suppressive effects of SPINK5 on these serine proteases are abolished due to underlying genetic mutations in the SPINK5 gene.

Consequently, hyperactivated serine proteases in the skin cause uncontrolled desquamation, leading to a defective skin barrier.

In infants, severe Netherton Syndrome can be associated with failure to thrive, hypernatremic dehydration secondary to excess fluid loss, delayed growth, short stature, and recurrent infections.

Clinically, Netherton Syndrome is characterized by congenital ichthyosiform erythroderma, hair shaft defects, recurrent infections, and a defective skin barrier.

A predisposition to allergies, asthma, and eczema is also characteristic of Netherton Syndrome.

Ultimately, those afflicted by Netherton Syndrome often experience chronic skin inflammation, severe dehydration, and stunted growth.

There are approximately 38,000 cases of patients with Netherton Syndrome worldwide and about 700 new cases per year globally.

There are no current approved treatments for Netherton Syndrome.

Existing approaches are limited to palliative treatments, including topical moisturizers, repair formulas and steroids.

KB104 is a redosable off-the-shelf gene therapy designed to deliver two copies of the SPINK5 gene to relevant skin cells when applied topically.

By directly supplementing the skin with functional SPINK5, the goal of therapy is to locally correct the desquamation and improve the barrier function of the skin.

In preclinical testing, a properly localized human SPINK5 gene was detected 48 hours after topical KB104 application in mice without toxicity.

KB104-mediated human SPINK5 was expressed in the correct layer of skin at the transcript and protein levels.

The FDA has granted KB104 Rare Pediatric Designation for the treatment of Netherton Syndrome.

We plan to file an IND application with the FDA and initiate a clinical trial of KB104 in Netherton Syndrome following initiation of the KB105 Phase 2 study.

We plan to initiate the Phase 2 portion of the JADE-1 trial evaluating KB105 for the treatment of TGM1-deficient LI in pediatric patients in 2026.

Details of the JADE-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04047732.

While our focus is on the development of gene therapies to treat patients with severe, life‑threatening, or rare diseases with high unmet medical needs, we are also evaluating the potential of our platform to address more prevalent and/or non-genetic conditions.

To that end, in April 2019, we incorporated Jeune Aesthetics, a wholly-owned subsidiary, for the purposes of undertaking preclinical and clinical studies for aesthetic skin conditions.

KB301 for Aesthetic Skin Conditions

The skin is largely composed of collagen-rich connective tissue, with dermal collagen, composed primarily of types 1 and 3 collagen fibrils, representing >90% (dry weight) of human skin.

The characteristics of skin aging are largely due to aberrant collagen homeostasis, including reduced collagen biosynthesis, increased collagen fibril fragmentation, and progressive loss of dermal collagen culminating in a net collagen deficiency, resulting from both intrinsic ( e.g.

, passage of time, genetics) and extrinsic ( e.g.

, chronic light exposure, pollution) pressures.

Facial injectables, including hyaluronic acid, botulinum toxin type A, collagen, polymer fillers, and calcium hydroxyapatite microparticles, are intended to correct perceived facial defects ( e.g.

, fine lines, shallow wrinkles, and deeper furrows), and are administered for both cosmetic and therapeutic indications.

The global aesthetic injectable market was valued at $8.5 billion in 2022 and is projected to grow to $13.8 billion by 2030.

The United States remains the largest market but emerging markets’ growth rates are significant.

The growth drivers are expanded access to services at medical spas and beauty bars combined with growing consumer purchasing power, especially in emerging markets.

Shifting consumer attitudes about wellness, beauty and healthy aging have increased awareness and acceptance of aesthetics, generating demand from new patient segments, including men and millennials.

KB301 leverages our clinical experience in delivering genes of interest to the skin and is designed to stimulate biorejuvenation of the skin via delivery of the gene that encodes for type III collagen when administered via intradermal injection.

We believe that our approach of directed expression of full-length human type III collagen via intradermal application of KB301 provides a unique and straightforward approach to restoring collagen homeostasis, and by extension, reconstructing an optimal physiologic environment in the skin to treat wrinkles or other presentations of aged or damaged skin.

KB301 for Dynamic Wrinkles of the Décolleté

The skin is largely composed of collagen-rich connective tissue, with dermal collagen, composed primarily of type 1 and 3 collagen fibrils (“COL1” and “COL3”, respectively), representing over 90% of the dry weight of human skin.

These fibrils provide strength to the skin and are critical for the maintenance of skin tissue architecture.

Many characteristics of skin aging are largely due to aberrant collagen homeostasis, including reduced collagen biosynthesis, increased collagen fibril fragmentation, and progressive loss of dermal collagen culminating in a net collagen deficiency, resulting from both intrinsic (e.g., passage of time, genetics) and extrinsic (e.g., chronic light exposure, pollution) pressures.

These factors together lead to cumulative structural and physiological alterations to the skin, ultimately leading to the onset and eventual worsening of skin wrinkles.

Skin rejuvenation is the process of reversing or repairing irregularities in the skin and is achieved, in part, by the synthesis of new collagen (neocollagenesis).

In the skin, neocollagenesis is affected by the deposition of, and complex interactions between, COL1 and COL3.

COL3 appears early during collagen fibril formation and has been shown to both regulate the dimensions of COL1 fibers and enhance COL1 elasticity.

Significant consumer demand exists for fundamentally rejuvenative aesthetic products, including among younger consumers that are seeking more preventative interventions to maintain a natural-looking, youthful appearance.

Demand is expected to grow driven by increasing aesthetic injectable adoption in emerging markets and shifting consumer attitudes about wellness, beauty, and healthy aging that have increased awareness and acceptance of aesthetic treatments among new consumer segments.

One area of the skin that can experience early aging is the female décolleté (upper chest).

This skin is naturally thinner than other areas of the body and has fewer sebaceous glands, making it more susceptible to visible signs of aging.

The female décolleté is considered an extension of the face and demand for aesthetic solutions is high, yet there are no FDA-approved aesthetic injectable products for the décolleté, and aesthetic procedures for the delicate skin of the décolleté are challenging and can cause hyperpigmented and hypopigmented skin.

KB301 leverages our clinical experience in delivering genes of interest to the skin and is designed to stimulate biorejuvenation of the skin via delivery of two copies of a COL3A1 transgene that encodes for COL3.

KB301 is administered via intradermal injection.

We believe that our approach of directed expression of full-length human COL3 via intradermal application of KB301 provides a unique and straightforward approach to restoring collagen homeostasis, and by extension, reconstructing an optimal physiologic environment in the skin to treat wrinkles or other presentations of aged or damaged skin.

Clinical Development of KB301

We initiated a Phase 1 clinical trial, the PEARL-1 trial, for the treatment of aesthetic skin conditions in August 2020.

The Phase 1 dose-ranging trial evaluated the safety, tolerability, and initial efficacy of intradermal injections of KB301 in adult

subjects aged 18-75.

The Phase 1 dose-ranging trial evaluated the safety, tolerability, and initial efficacy of intradermal injections of KB301 in adult subjects aged 18-75.

KB301 was well tolerated, and we were able to biopsy and demonstrate proof-of-mechanism.

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In November 2022, we announced nine-month durability of effect in Cohort 2 of the PEARL-1 study of KB301.

In April 2023, we initiated and treated the first subject in the PEARL-1 Cohort 3 study.

The PEARL-1 Cohort 3 study is an open label study to evaluate different doses of KB301 for the improvement of lateral canthal lines (“LCL”) at rest in up to 20 subjects.

Jeune Aesthetics initiated and treated the first subject in the PEARL-1 Cohort 4 study in January 2024, an open label study to evaluate KB301 for the improvement of dynamic wrinkles of the décolleté in up to 20 subjects.

The Cohort 3 and Cohort 4 studies are running simultaneously and Jeune Aesthetics expects to announce results for both cohorts in the first half of 2024.

Following completion of these cohorts, Jeune Aesthetics plans to initiate a Phase 2 study of KB301.

Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04540900.

Nothing included on this website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

Building on the results from Cohort 2, we opened two additional open-label, single-arm PEARL-1 cohorts to evaluate KB301 in two potential target indications for Phase 2, lateral canthal lines at rest and dynamic wrinkles of the décolleté, referred to as Cohorts 3 and 4, respectively.

In August 2024, we announced positive interim safety and efficacy results from both cohorts, assessed out to two months following KB301 injections.

Meaningful and sustained improvements in multiple skin aesthetic attributes, including wrinkles, crepiness, hydration, and radiance, were reported by the study investigators and subjects alike in both the décolleté and lateral canthal regions.

Increased subject satisfaction with wrinkle appearance was also reported, including among 94% of subjects treated in the décolleté region.

Across both cohorts, the KB301 safety profile was consistent with prior clinical experience in Cohorts 1 and 2 and other injectable aesthetic products.

Adverse events were primarily injection associated, mild-to-moderate, and transient.

No drug related serious adverse events were reported.

Based on these Phase 1 results, we have selected treatment of the dynamic wrinkles of the décolleté for advanced clinical development and initiated development of a décolleté-specific evaluation scale.

We expect to complete scale development and dose the first subject in a randomized, placebo-controlled Phase 2 study evaluating KB301 for the treatment of dynamic wrinkles of the décolleté in the second half of 2025.

Details of the PEARL-1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04540900.

KB304 for Aesthetic Skin Conditions

Elastin is a key connective tissue protein and the major constituent of elastic fibers which provides resilience and elasticity to tissues and organs.

It represents only 2% of total dermal protein;

however, it is roughly 1,000-fold more flexible than collagen, and thus, is the main component providing elasticity to skin.

Elastin synthesis occurs early in life and through childhood, after which very little turnover is observed unless the elastic fibers are subject to injury.

Although elastin is a durable biopolymer that does not turn over appreciably in healthy tissue, aging of elastin is observed over time as damage to elastic fibers increases susceptibility to enzymatic degradation.

Elastin aging is induced and accelerated by environmental influences, primarily UV radiation.

UV-induced extrinsic aging leads to, among other defects, loss of elasticity.

In aged skin where elasticity loss is especially pronounced, elastin replenishment in conjunction with neocollagenesis could yield profound aesthetic improvements.

KB304 is designed to stimulate biorejuvenation of the skin via delivery of both COL3A1 and ELN transgenes encoding full-length human COL3 and elastin.

KB304 is administered via intradermal injection.

We believe that the combination of COL3 and elastin could provide additional aesthetic benefits over collagen replenishment alone in aged skin where elasticity loss is especially prominent.

Clinical Development of KB304

In November 2024, we dosed the first subject in our ongoing, randomized and placebo-controlled Phase 1 PEARL-2 study evaluating KB304 for the treatment of wrinkles.

We expect to enroll up to 21 subjects in PEARL-2, randomized 2:1 to KB304 or placebo, and report top-line results from the study in the second half of 2025.

Details of the PEARL-2 study can be found at www.clinicaltrials.gov under NCT identifier NCT06724900.

Future Opportunities

In addition to the programs specified herein, we are also conducting exploratory preclinical research and development to expand potential applications of proprietary HSV-1 based vector platform.

In addition to the programs specified herein, we are also conducting exploratory preclinical research and development to expand potential applications of our proprietary HSV-1 based vector platform.

Research focus areas include the development of new candidates for the treatment of additional monogenic rare diseases in the skin, lung, and eye, as well as exploration of new routes of administration to treat diseases in additional tissues.

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In December 2022, the FDA completed a successful audit of our ANCORIS facility.

In February 2024, the EMA completed inspection of our ANCORIS facility as part of the MAA review process and, in May 2024, EU GMP certification was granted by the EMA.

Our second commercial scale CGMP facility, ASTRA, was completed and qualified in 2023.

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We announced the ground breaking of ASTRA in January 2020 and began operational production in the third quarter of 2023.

Our proprietary manufacturing process which was initially developed for B-VEC and is now being used across our platform, was developed and optimized internally and involves both an upstream production process and downstream

purification process.

Recombinant viral vectors are rendered incapable of, or attenuated for, replacing in human cells by removal of specific viral machinery, including packaging proteins.

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Alpha-1 Antitrypsin Deficiency

Currently approved treatments for AATD consist of IV administered alpha-1 antitrypsin augmentation therapy, administered weekly.

Currently approved treatments for AATD consist of IV administered AAT augmentation therapy, administered weekly.

We are aware of at least three companies marketing augmentation therapies globally:

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• Gene Editing Approaches:

We are aware of companies, such as Intellia Therapeutics, Inc., Wave Life Sciences Ltd., and Beam Therapeutics Inc., which are developing gene editing therapies inhibitors to treat both the lung and liver manifestations of AATD.

We are aware of companies, such as Wave Life Sciences Ltd.

and Beam Therapeutics Inc., which are developing gene editing therapies inhibitors to treat both the lung and liver manifestations of AATD.

A large number of companies are focused on the development and commercialization of new therapeutics for the treatment of locally advanced or metastatic tumors.

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Some of the most established companies in the marketing and development of new cancer drugs include Merck & Co Inc., Bristol Myers Squibb Company, Johnson & Johnson, and Pfizer Inc.

Autosomal Recessive Congenital Ichthyosis

There are no approved therapies for ARCI at this time.

We are aware of LEO Pharma A/S’s clinical stage program evaluating topical isotretinoin for ARCI.

Netherton Syndrome

There are no approved therapies for Netherton Syndrome.

We are aware of Quoin Pharmaceutical Ltd.’s clinical stage program evaluating QRX003 for the treatment of Netherton Syndrome and that Novartis Inc.

had conducted clinical trials of a product for the treatment of Netherton Syndrome previously.

Lamellar Ichthyosis

There are no approved therapies for LI at this time.

We are aware that LEO Pharma A/S has recently completed a clinical trial of a product for the treatment of congenital ichthyosis.

Aesthetic Skin Conditions

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However, trade secrets can be difficult to protect.

In addition to patent protection, regulatory exclusivity, and trade secret protection, we also protect our approved product, product candidates and platform technology with trademarks and contractual protections.

In addition to patent protection, regulatory exclusivity, and trade secret protection, we also protect our approved product, product candidates

and platform technology with trademarks and contractual protections.

Additionally, we seek to protect our proprietary technology and processes, and obtain and maintain ownership of certain technologies, in part, through confidentiality agreements and intellectual property assignment agreements with our employees, consultants and commercial partners.

We also seek to preserve the integrity and confidentiality of our data, trade secrets, and know-how, including by implementing measures intended to maintain the physical and electronic security of our research and manufacturing facilities, as well as our information technology systems.

We actively seek patent protection for our product candidates and certain of our proprietary technologies by filing patent applications in the U.S.

and other countries as appropriate.

We actively seek patent protection for our product candidates and certain of our proprietary technologies by filing patent applications in the United States and other countries as appropriate.

These patent applications are directed to various inventions.

We do not have patents or patent applications in every jurisdiction where there is a potential commercial market for our approved product or our product candidates.

For each of our programs, our decision to seek patent protection in specific foreign markets, in addition to the U.S., is based on many factors, including:

For each of our programs, our decision to seek patent protection in specific foreign markets, in addition to the United States, is based on many factors, including:

• our available resources;

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Should we determine that a third party has intellectual property rights that could impact our ability to freely market a product candidate, we consider a number of factors in determining how best to prepare for the commercialization of any such product candidate.

In making this determination we consider, among other things, the stage of development of our product candidate, the anticipated date of first

regulatory approval, whether we believe the intellectual property rights of others are valid, whether we believe we infringe the intellectual property rights of others, whether a license is available upon commercially reasonable terms, whether we will seek to challenge the intellectual property rights of others, the term of the rights, and the likelihood of and liability resulting from an adverse outcome should we be found to infringe the intellectual property rights of others.

Currently, U.S.

patents, as well as most foreign patents, are generally effective for 20 years from the date the earliest regular application was filed.

In making this determination we consider, among other things, the stage of development of our product candidate, the anticipated date of first regulatory approval, whether we believe the intellectual property rights of others are valid, whether we believe we infringe the intellectual property rights of others, whether a license is available upon commercially reasonable terms, whether we will seek to challenge the intellectual property rights of others, the term of the rights, and the likelihood of and liability resulting from an adverse outcome should we be found to infringe the intellectual property rights of others.

Currently, United States patents, as well as most foreign patents, are generally effective for 20 years from the date the earliest regular application was filed.

In some countries, the patent term may be extended to recapture a portion of the term lost during regulatory review of the product candidate.

For example, in the U.S., under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, a patent that covers an FDA-approved biologic may be eligible for patent term extension (for up to 5 years, but not beyond a total of 14 years from the date of product approval) as compensation for patent term lost during the FDA regulatory review process.

For example, in the United States, under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, a patent that covers an FDA-approved biologic may be eligible for patent term extension (for up to 5 years, but not beyond a total of 14 years from the date of product approval) as compensation for patent term lost during the FDA regulatory review process.

The application for the extension must be submitted prior to the expiration of the patent and only one patent may be extended for any product based on FDA review delay.

The United States Patent and Trademark Office (“USPTO”), in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

In addition to patent term extension under the Hatch-Waxman Act, patents in the U.S.

may be granted additional term due to delays at the USPTO during prosecution of a patent application.

In addition to patent term extension under the Hatch-Waxman Act, patents in the United States may be granted additional term due to delays at the USPTO during prosecution of a patent application.

We actively strive to maximize the potential for patent protection for our product and product candidates in accordance with the law.

Our technology platform, VYJUVEK, and our product candidates are primarily protected by composition of matter and methods of use patents and patent applications.

A summary of granted composition of matter and/or methods of use patents that we own, which cover our technology platform, VYJUVEK, and our product candidates in the U.S.

and elsewhere, is provided below.

A summary of granted composition of matter and/or methods of use patents that we own, which cover our technology platform, VYJUVEK, and our product candidates in the United States and elsewhere, is provided below.

Our Technology Platform

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12/28/2036 Krystal

JP 7,480,105 Japan Composition of Matter & Uses Thereof – Delivery platform for targeted therapeutics, as well as uses thereof, including for delivery of any effector to the skin

12/28/2036 Krystal

AU 2019280069 Australia Composition of Matter & Methods of Use – Delivery platform for targeted therapeutics, as well as methods of its use for delivering any effector to the skin

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12/28/2036 Krystal

CL 69.593 Chile Composition of Matter & Uses Thereof – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin

12/28/2036 Krystal

Patent Number Country / Region *

Patent Type Expiration Date **

IN 498868 India Composition of Matter – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC

12/28/2036 Krystal

MX 394867 Mexico C omposition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin

12/28/2036 Krystal

NZ New Zealand Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin

12/28/2036 Krystal

SG 11201808314Q Singapore Composition of Matter & Uses Thereof – Compositions comprising replication-defective HSV vectors encoding certain effectors, including the effector encoded in B-VEC, as well as uses thereof, including for providing prophylactic, palliative or therapeutic relief of a wound, disorder or disease of the skin

12/28/2036 Krystal

Patent Number Country / Region *

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4/14/2042 Krystal

11,918,660 United States Composition of Matter – Pharmaceutical compositions comprising HSV-1 vectors encoding IL-2 and IL-12

4/14/2042 Krystal

Patent Number Country / Region *

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4/11/2039 Krystal

Patent Number Country / Region *

Patent Type Expiration Date **

11,717,547 United States C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding TGM, as well as methods of delivering TGM to cells

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4/11/2039 Krystal

AU 2023222939 Australia Composition of Matter & Methods of Use – Pharmaceutical compositions comprising replication-defective HSV-1 vectors encoding TGM, as well as methods of delivering TGM to cells

4/11/2039 Krystal

Other Dermatology

Patent Number Country / Region *

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9/24/2039 Krystal

JP 7,562,515 Japan Composition of Matter & Uses Thereof – Pharmaceutical compositions comprising herpes virus vectors encoding SPINK, as well as uses thereof, including for providing prophylactic, palliative, or therapeutic relief of one or more signs or symptoms of Netherton Syndrome and/or atopic dermatitis

9/24/2039 Krystal

AU 2019346549 Australia Compositions of Matter - Pharmaceutical compositions comprising replication-defective HSV vectors encoding SPINK5

9/24/2039 Krystal

JP 7,560,449 Japan Composition of Matter & Uses Thereof – Herpes virus vectors and pharmaceutical compositions encoding laminin, as well as uses thereof, including for treating one or more signs or symptoms of Junctional Epidermolysis Bullosa

9/25/2039 Krystal

Patent Number Country / Region *

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4/26/2039 Krystal

12,128,122 United States Composition of Matter & Methods of Use –Compositions comprising replication-defective HSV-1 vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance, and for treating one or more signs or symptoms of dermatological aging

4/26/2039 Krystal

JP 7,602,999 Japan Compositions of Matter & Uses Thereof – Cosmetic compositions comprising herpes virus vectors encoding one or more cosmetic proteins, as well as uses thereof, including for improving skin condition, quality, and/or appearance

4/26/2039 Krystal

AU 2019260757 Australia C omposition of Matter & Methods of Use – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as methods of their use for improving skin condition, quality, and/or appearance

4/26/2039 Krystal

ZA 2023/06237 South Africa

Composition of Matter & Uses thereof – Pharmaceutical compositions comprising HSV vectors encoding one or more cosmetic proteins, as well as uses thereof, including for improving skin condition, quality, and/or appearance

4/26/2039 Krystal

* Granted patents in the U.S.

and elsewhere are shown.

Additional patent protection in the U.S., Europe or other countries or regions through pending or granted counterparts may be available.

Additional patent protection in the United States, Europe or other countries or regions through pending or granted counterparts may be available.

** Stated expiration dates do not account for any patent term extension, supplemental protection certificate, or pediatric extensions that may be available.

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Our trademarks are important to us and are generally filed to protect our corporate brand, our approved product, our product candidates, and our platform technology.

We typically file trademark applications and pursue their registration in the U.S., Europe and other markets in which we anticipate using such trademarks.

We are the owner of several federal trademark registrations in the U.S.

and have pending trademark applications and registrations in the U.S.

and in major foreign markets.

We typically file trademark applications and pursue their registration in the United States, Europe and other markets in which we anticipate using such trademarks.

We are the owner of several federal trademark registrations in the United States and have pending trademark applications and registrations in the United States and in major foreign markets.

Trademark protection varies in accordance with local law and continues in some countries as long as the trademark is used and in other countries as long as the trademark is registered.

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Government Regulation and Product Approval

In the United States, the FDA regulates biologic products including gene therapy products under the Federal Food, Drug, and Cosmetic Act (“FDCA”), the Public Health Service Act (“PHSA”), and regulations and guidance implementing these laws.

In the United States, the FDA regulates biologic products including gene therapy products under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), the Public Health Service Act (“PHSA”), and regulations and guidance implementing these laws.

The FDCA, PHSA and their corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, importation, advertising and other promotional practices involving biologic products.

IND applications to the FDA are required before conducting human clinical testing of biologic products.

Additionally, each clinical trial protocol for a gene therapy product candidate is reviewed by the FDA, and in limited instances the National Institutes of Health (“NIH”), through its Recombinant DNA Advisory Committee, or RAC.

IND applications to the FDA are required before conducting human clinical

testing of biologic products.

Additionally, each clinical trial protocol for a gene therapy product candidate is reviewed by the FDA, and in limited instances the National Institutes of Health (the “NIH”), through its Recombinant DNA Advisory Committee, or RAC.

The FDA’s authorization also must be obtained before marketing of biologic products.

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CBER works closely with the NIH and the RAC, which makes recommendations to the NIH on gene therapy issues and engages in a public discussion of scientific, safety, ethical and societal issues related to proposed and ongoing gene therapy protocols.

The FDA has provided guidance for the development of gene therapy products generally, including a growing body of guidance documents

on CMC, clinical investigations, and other areas of gene therapy development, all of which are intended to facilitate the industry’s development of gene therapy products.

The FDA has provided guidance for the development of gene therapy products generally, including a growing body of guidance documents on CMC, clinical investigations, and other areas of gene therapy development, all of which are intended to facilitate the industry’s development of gene therapy products.

Ethical, social and legal concerns about gene therapy, genetic testing and genetic research could result in additional regulations restricting or prohibiting the processes we may use.

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It is impossible to predict whether legislative changes will be enacted, regulations, policies or guidance changed, or interpretations by agencies or courts changed, or what the impact of such changes, if any, may be.

Biologic Products Development Process

The FDA must authorize the marketing of a product candidate for marketing in the United States.

United States Biologic Products Development Process

The FDA must authorize the marketing of a product candidate in the United States.

The process required by the FDA before a biologic product candidate may be marketed in the United States generally involves the following:

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Some preclinical testing may continue even after the IND application is submitted.

With gene therapy protocols, if

the FDA allows the IND application to proceed, but the RAC decides that full public review of the protocol is warranted, the FDA will request at the completion of its IND application review that sponsors delay initiation of the protocol until after completion of the RAC review process.

With gene therapy protocols, if the FDA allows the IND application to proceed, but the RAC decides that full public review of the protocol is warranted, the FDA will request at the completion of its IND application review that sponsors delay initiation of the protocol until after completion of the RAC review process.

The FDA also may impose clinical holds on a biologic product candidate at any time before or during clinical trials due to safety concerns or non-compliance.

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the CMC information that should be included in an IND application;

the proper design of tests to measure product potency in support of an IND or BLA application;

the proper design of tests to measure product potency in support of an IND application or Biologics License Application (“BLA”);

and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high.

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The NIH and the FDA have a publicly accessible database, the Genetic Modification Clinical Research Information System, which includes information on gene therapy trials and serves as an electronic tool to facilitate the reporting and analysis of adverse events on these trials.

Review and Approval Processes

The results of the preclinical tests and clinical trials, together with detailed information relating to the product’s CMC and proposed labeling, among other things, are submitted to the FDA as part of a Biologics License Application (“BLA”) or other submission requesting authorization to market the product for one or more indications.

United States Review and Approval Processes

The results of the preclinical tests and clinical trials, together with detailed information relating to the product’s CMC and proposed labeling, among other things, are submitted to the FDA as part of a BLA or other submission requesting authorization to market the product for one or more indications.

For gene therapies, selecting patients with applicable genetic defects is a necessary condition to effective treatment.

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The FDA has agreed to specified performance goals in the review of BLAs under the PDUFA.

One such goal is to review standard BLAs in 10 months after the FDA accepts the BLA for filing, and priority BLAs in six months, whereupon a review decision is to be made.

One such goal is to review standard BLAs in ten months after the FDA accepts the BLA for filing, and priority BLAs in six months, whereupon a review decision is to be made.

The FDA does not always meet its PDUFA goal dates for standard and priority BLAs and its review goals are subject to change from time to time.

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Other benefits include reduced regulatory fees, protocol assistance and tax credits for certain clinical research costs.

Orphan medicinal product status in the European Union (“EU”) and Japan have similar, but not identical benefits.

Orphan medicinal product status in the EU and Japan have similar, but not identical benefits.

Breakthrough Therapy

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The requirements and processes governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.

In all cases, the clinical trials are conducted in accordance with CGCPs and the applicable regulatory requirements of the country or countries in which the clinical trial is performed, as well as the ethical principles that have their origin in the Declaration of Helsinki (whichever provides the greater protection to the clinical trial participants).

principles that have their origin in the Declaration of Helsinki (whichever provides the greater protection to the clinical trial participants).

Failure to comply with applicable foreign regulatory requirements may result in, among other things, fines;

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Healthcare providers, physicians and third-party payors play a primary role in the recommendation and use of pharmaceutical products that are granted marketing approval.

Arrangements with third-party payors, existing or potential

customers and referral sources are subject to broadly applicable fraud and abuse and other healthcare laws and regulations, and these laws and regulations may constrain the business or financial arrangements and relationships through which manufacturers market, sell and distribute the products for which they obtain marketing approval.

Arrangements with third-party payors, existing or potential customers and referral sources are subject to broadly applicable fraud and abuse and other healthcare laws and regulations, and these laws and regulations may constrain the business or financial arrangements and relationships through which manufacturers market, sell and distribute the products for which they obtain marketing approval.

Such restrictions under applicable federal and state healthcare laws and regulations include the following:

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• the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value to physicians, certain other healthcare providers and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members;

• the federal Health Care Fraud statute imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, which imposes obligations, including mandatory contractual terms, with respect to safeguarding the transmission, security and privacy of protected health information;

• the federal Health Care Fraud statute imposes criminal and civil liability for executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, and as amended again by the final HIPAA omnibus rule (together with HIPAA and HITECH, the “HIPAA Rules”) which imposes privacy, security, and breach obligations, including mandatory contractual terms, with respect to safeguarding the security and privacy of individually identifiable health information by certain entities subject to the HIPAA Rules, such as health plans, health care clearinghouses, and health care providers that engage in certain covered transactions;

• the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for federally sponsored healthcare benefits, items or services;

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state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

and state and foreign laws governing the privacy and security of

personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Violation of the laws described above or any other governmental laws and regulations may result in penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of operations, the exclusion from participation in federal and state healthcare programs, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, and imprisonment.

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In the United States, sales of any product candidates for which regulatory approval for commercial sale is obtained will depend in part on the availability of coverage and adequate reimbursement from third-party payors.

Third-party payors include government authorities and health programs in the United States such as Medicare and Medicaid, managed care

providers, private health insurers and other organizations.

Third-party payors include government authorities and health programs in the United States such as Medicare and Medicaid, managed care providers, private health insurers and other organizations.

These third-party payors are increasingly reducing reimbursements for medical products and services.

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Additionally, the containment of healthcare costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort.

government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products.

The United States government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products.

Coverage policies and third-party reimbursement rates may change at any time.

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In the United States, for example, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected and continues to face major uncertainty due to the status of major legislative initiatives surrounding healthcare reform.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law.

The IRA includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government, including allowing Medicare to negotiate prices for certain prescription drugs, requiring drug manufacturers to pay a rebate to the federal government if prices for single-source drugs and biologicals covered under Medicare Part B and nearly all covered drugs under Part D increase faster than the rate of inflation (CPI-U), and limiting out of pocket spending for Medicare Part D enrollees.

Additionally, on October 14, 2022, President Biden signed Executive Order 14087 on “Lowering Prescription Drug Costs for Americans.” The Executive Order specifically requests that the Center for Medicare and Medicaid Innovation consider “models that may lead to lower cost sharing for commonly used drugs and support value-based payment that supports high-quality care.”

Additional Regulation

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Equivalent laws have been adopted in other countries that impose similar obligations.

Foreign Corrupt Practices Act

Foreign Corrupt Practices Act (“FCPA”) prohibits U.S.

corporations and individuals from engaging in certain activities to obtain or retain business abroad or to influence a person working in an official capacity.

It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

United States Foreign Corrupt Practices Act

The United States Foreign Corrupt Practices Act (“FCPA”) prohibits United States corporations and individuals from engaging in certain activities to obtain or retain business abroad or to influence a person working in an official capacity.

illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

The scope of the FCPA includes interactions with certain healthcare professionals in many countries.

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Human Capital

As of February 19, 2024, we had 229 full-time employees, primarily engaged in research and development, manufacturing, administrative activities, and commercial activities for VYJUVEK.

As of February 12, 2025, we had 275 full-time employees, primarily engaged in research and development, pre-clinical and clinical trials, manufacturing VYJUVEK and our pipeline product candidates, commercial activities for VYJUVEK in the United States and commercialization preparations for VYJUVEK in the European Union and Japan, regulatory matters, strategic business development, finance and other technical matters, supply chain, and general and administrative services.

None of our employees are represented by a labor union and we consider our employee relations to be good.

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Our principal offices are located at 2100 Wharton Street, Suite 701, Pittsburgh, PA 15203, and our telephone number is 412-586-5830.

In June 2018, the Company incorporated an Australian subsidiary, for the purpose of undertaking preclinical and clinical studies in Australia.

In April 2019, the Company incorporated Jeune Aesthetics, Inc.

in Delaware, a wholly-owned subsidiary, for the purpose of undertaking preclinical studies for aesthetic skin conditions.

In January 2022, August 2022, December 2022, and August 2023, we incorporated subsidiaries in Switzerland, Netherlands, France, and Germany, respectively, for the purpose of establishing initial operations in Europe for the development and commercialization of Krystal’s pipeline.

In April 2019, we incorporated Jeune Aesthetics, Inc., a Delaware corporation and wholly-owned subsidiary, for the purpose of undertaking preclinical and clinical studies for aesthetic skin conditions.

In January 2022, August 2022, December 2022, August 2023, March 2024, November 2024, and December 2024 we incorporated wholly-owned subsidiaries in Switzerland, Netherlands, France, Germany, Japan, Italy, and Spain respectively, for the purpose of establishing initial operations in Europe and Japan for the commercialization of VYJUVEK and our product pipeline.

Our website address is www.krystalbio.com.

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You should not rely on any such information in making your decision whether to purchase our common stock.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available free of charge on the investor relations section of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to the Securities and Exchange Commission, or the SEC.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available free of charge on the investor relations section of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to the Securities and Exchange Commission, or the SEC.

The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding the Company that we file electronically with the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business