Krystal Biotech, Inc.

As of December 31, 2025, we also leased international office space in Switzerland, Netherlands, France, Germany, Japan, Italy, and Spain.

• Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
• We are subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.
• If we fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
• We are subject to stringent and evolving U.S. and foreign laws, regulations, and other obligations related to privacy and data security. Our actual or perceived failure to comply with such obligations could lead to regulatory inquiries or actions, litigation, fines and penalties, disruptions to our business operations, reputational harm, loss of revenue, and other adverse business consequences.
• Unfavorable global economic and geopolitical conditions could adversely affect our business, financial condition, or results of operations.
• Our internal computer systems, or those of any third-party with whom we do business may fail or suffer a cyber-security incident, such as a data breach or computer virus, which could harm our business by damaging our reputation, exposing us to liability, adversely impacting our revenue, or materially disrupting our operations, including production of VYJUVEK or our product development programs.
• Artificial intelligence presents risks and challenges that could negatively impact our business.
• Our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
• Our international operations may expose us to business, regulatory, political, operational, financial, pricing and reimbursement, and economic risks associated with doing business outside of the United States.
• We are subject to U.S. and certain foreign export and import controls, anti-corruption laws and anti-money laundering laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We could face criminal liability and other serious consequences for violations, which could harm our business.
• The effect of pandemics, epidemics, outbreaks of infectious diseases, or similar public health crises on our operations and the operations of our customers, suppliers, third-party partners, and regulators could have an adverse impact on our business.
• Inadequate funding for the FDA and other government agencies, including from government shut downs, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
• Risks Related to the Development, Regulatory Review, and Approval of Our Product Candidates
• If we are unable to advance our product candidates through clinical trials, obtain regulatory approval and ultimately commercialize our product candidates, or if we experience significant delays in doing so, our business will be materially harmed.
• Our gene therapy platform is based on novel technology, which makes it difficult to predict the time and cost of obtaining regulatory approvals for our product candidates.
• Our product or product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial potential, or result in significant negative consequences before or following any potential marketing approval.
• Our product candidates that are in preclinical stages of development may never advance to clinical development and for those product candidates that do progress to clinical development, we may encounter substantial delays in our clinical trials, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
• We rely on third parties to conduct certain of our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, meet expected deadlines, or comply with regulatory requirements, we may not be able to obtain regulatory approval for, or commercialize, our product candidates.
• Interim, “top-line,” and preliminary data from our clinical trials that we announce or publish from time to time may change as more data becomes available or as additional analyses are conducted, and as the data are subject to audit and verification procedures that could result in material changes in the final data.
• Even if we obtain and maintain approval for our product candidates from the FDA, we may never obtain approval for them outside of the United States, which would limit our market opportunities and adversely affect our business.
• VYJUVEK and our product candidates that receive marketing approvals remain subject to regulatory oversight even after regulatory approval. We will continue to incur costs related to regulatory compliance and are subject to risks related to non-compliance with or changes to applicable laws and regulations, which could cause VYJUVEK or any of our product candidates that obtain regulatory approval to lose that approval.
• While we have obtained orphan drug exclusivity for VYJUVEK in the United States, and orphan drug designation for certain product candidates in the United States and other jurisdictions, it may not effectively protect us from competition, and we may be unable to obtain orphan drug designation for other product candidates. If our competitors are able to obtain orphan drug exclusivity before us, we may not be able to have competing products approved by the applicable regulatory authority for a significant period of time.
• Accelerated approval by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval.
• Breakthrough Therapy Designation, Fast Track Designation, Regenerative Medicine Advanced Therapy (“RMAT”) Designation, or Priority Review by the FDA, or PRIority MEdicines (“PRIME”) Scheme by the EMA, even if granted for any of our product candidates, may not lead to a faster development, regulatory review, or approval process, and such designations may not increase the likelihood that any of our product candidates will receive marketing approval.
• We have obtained a rare pediatric disease designation for certain of our product candidates; however, there is no guarantee that FDA approval will result in issuance of a priority review voucher.
• We have received designation for our platform technology as a designated platform technology, but such designation may not lead to a faster development or regulatory review or approval process.
• Risks Related to Manufacturing
• Delays in obtaining regulatory approvals of the process, or changes to the process, and facilities needed to manufacture VYJUVEK or our product candidates or disruptions in our manufacturing process may disrupt our production of VYJUVEK or delay or disrupt our development and commercialization efforts with respect to our product candidates.
• Although we have established our own manufacturing facilities for VYJUVEK and our product candidates, we may also utilize third parties to conduct our product manufacturing or components thereof. We are also dependent on a limited number of third-party suppliers for some of the components and materials used in manufacturing VYJUVEK and our product candidates and in commercially supplying VYJUVEK. Therefore, we are subject to the risk that these third parties may not perform satisfactorily.
• Any contamination in, or changes to, our manufacturing process, shortages of raw materials or failure of any of our key suppliers to deliver necessary components could result in delays in our ability to produce VYJUVEK or any other approved product for commercial supply or any product candidate for clinical development.
• Our failure to maintain or continuously improve our quality management program could have an adverse effect upon our business, subject us to regulatory actions, and cause patients to lose confidence in us or our products, among other negative consequences.
• If demand for VYJUVEK or any product for which we obtain marketing approval increases more than previously estimated or we wish to improve manufacturing efficiencies to lower cost of production, we may need or choose to scale up or change a current FDA-approved commercial manufacturing process, which is subject to risks and uncertainties and could require us to submit a Prior Approval Supplement (“PAS”) to the FDA and obtain the agency’s approval for the manufacturing process changes before they can be implemented.
• We may need or desire to transfer VYJUVEK or an approved product candidate manufacturing from ANCORIS, our commercial scale CGMP-compliant manufacturing facility where VYJUVEK is currently manufactured to ASTRA, our recently completed and qualified state-of-the-art CGMP manufacturing facility, or transfer an approved product manufacturing from ASTRA to ANCORIS, and technical transfer of a manufacturing process is subject to risks and uncertainties and requires FDA inspection and approval of the facility where manufacturing is planned to be transferred.
• Risks Related to Commercialization of VYJUVEK and Our Product Candidates
• We have limited experience as a commercial company and the sales, marketing, and distribution of VYJUVEK or any future approved products may be unsuccessful or less successful than anticipated.
• If we are unable to maintain our agreements with third parties to distribute VYJUVEK to patients in the United States, our results of operations and business could be adversely affected.
• Using specialty distributors to market and sell VYJUVEK in certain jurisdictions outside of the United States, the United Kingdom, certain EU countries, and Japan subject us to certain risks.
• In connection with the commercial launch of VYJUVEK in the United States, Europe, and Japan, we have recruited a sales force and established marketing, market access, and medical affairs teams and distribution capabilities and if the commercial launch of VYJUVEK is not successful for any reason, we could incur substantial costs and our investment would be lost if we cannot retain or reposition our sales, marketing, market access, and medical affairs personnel.
• If we are unable to expand our medical affairs, marketing, market access, sales, and distribution capabilities or collaborate with third parties to market and sell our product candidates for which we obtain marketing approval, we may be unable to generate sufficient product revenue.
• If the market opportunities for VYJUVEK or our product candidates are smaller than we believe they are, our product revenue may be adversely impacted, and our business may suffer.
• The commercial success of VYJUVEK and our product candidates will depend upon their degree of market acceptance by physicians, patients, third-party payors, and others in the medical community.
• Government price controls or other changes in pricing regulation could restrict the amount that we are able to charge for VYJUVEK and our product candidates, if approved, which would adversely affect our revenue and results of operations.
• The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for VYJUVEK or our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue.
• Ethical, legal, and social issues related to genetic testing may reduce demand for our product candidates, if approved.
• Increasing demand for compassionate use or expanded access of our unapproved therapies could negatively affect our reputation and harm our business.
• Risks Related to Our Intellectual Property
• If we are unable to obtain and maintain adequate United States and foreign patent protection for VYJUVEK, our current product candidates, and any future product candidates we may develop, and/or our vector platform, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technologies similar or identical to ours, and our ability to successfully commercialize VYJUVEK, our current product candidates, any future product candidates we may develop, and our platform technologies may be adversely affected.
• We may not be able to protect our intellectual property rights throughout the world.
• Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
• Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.
• We have been subject to claims asserting that we, our employees, or our advisors have wrongfully used or disclosed alleged trade secrets of other parties, and we may face such claims in the future or claims asserting ownership of what we regard as our own intellectual property.
• Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect VYJUVEK or our product candidates.
• If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
• Intellectual property rights and regulatory exclusivity rights do not necessarily address all potential threats.
• Risks Related to Our Financial Position and Need for Additional Capital
• We have incurred net losses in the past and may not sustain profitability.
• We may need to raise additional funding to maintain and expand our commercialization capabilities and to complete the development of, and obtain the regulatory approvals necessary to, commercialize our product candidates. Such funding may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit, or terminate certain of our product development efforts or other operations.
• Changes in tax law may adversely affect our business and financial condition
• Our ability to use our net operating loss carryforwards and certain tax credit carryforwards may be subject to limitation.
• Risks Related to Ownership of Our Common Stock
• Our Chief Executive Officer and Chairman of the Board of Directors and our Founder, President, Research & Development and Director have the ability to substantially influence all matters submitted to stockholders for approval.
• If securities analysts publish negative evaluations of our stock, the price of our stock could decline.
• Raising additional capital could cause the price of our common stock to decline and cause dilution to our stockholders, restrict our operations, or require us to relinquish rights.
• The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for holders of our common stock.
• If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
• Provisions in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could make an acquisition of our company that may be beneficial to our stockholders more difficult and could prevent or deter our stockholders from replacing or removing our current management.
• We have broad discretion in the use of our cash, cash equivalents, and marketable securities and may not use them effectively.
• Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be stockholders’ sole source of gain.