krys-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________

FORM 10-Q

_____________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38210

_____________________________________________________

Krystal Biotech, Inc.

(Exact name of registrant as specified in its charter)

_____________________________________________________


Delaware						82-1080209
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

2100 Wharton Street, Suite 701

Pittsburgh, Pennsylvania 15203

(Address of principal executive offices and zip code)

(412) 586-5830

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

_____________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KRYS	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company ☒

If emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 30, 2021, there were 22,205,642 shares of the registrant’s common stock issued and outstanding.

Krystal Biotech, Inc.

TABLE OF CONTENTS


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of June 3 0 , 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Si x Months Ended Ju ne 3 0 , 2021 and 2020	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 3 0 , 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.	Defaults Upon Senior Securities	59
Item 4.	Mine Safety Disclosures	59
Item 5.	Other Information	59
Item 6.	Exhibits	60

SIGNATURES		61

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Krystal Biotech, Inc.

Condensed Consolidated Balance Sheets


	(unaudited)
(In thousands, except shares and per share data)	June 30, 2021		December 31, 2020
Assets
Current assets
Cash and cash equivalents	$	329,527	$	268,269
Short-term investments	38,203		2,993
Prepaid expenses and other current assets	2,197		3,796
Total current assets	369,927		275,058
Property and equipment, net	44,972		30,876
Long-term investments	21,411		—
Right-of-use assets	7,136		3,298
Other non-current assets	110		1,612
Total assets	$	443,556	$	310,844
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	1,265	$	2,105
Current portion of lease liability	934		638
Accrued expenses and other current liabilities	15,920		5,109
Build to suit lease liability	—		7,600
Total current liabilities	18,119		15,452
Lease liability	6,897		3,308
Total liabilities	25,016		18,760
Commitments and contingencies (Note 6)
Stockholders' equity
Preferred stock; $0.00001 par value; 20,000,000 shares authorized at June 30, 2021 (unaudited) and December 31, 2020; 2,061,773 shares issued, and no shares outstanding at June 30, 2021 (unaudited) and December 31, 2020	—		—
Common stock; $0.00001 par value; 80,000,000 shares authorized at June 30, 2021 (unaudited) and December 31, 2020; 22,205,032 and 19,714,220 shares issued and outstanding at June 30, 2021 (unaudited) and December 31, 2020, respectively	—		—
Additional paid-in capital	521,950		363,292
Accumulated other comprehensive income (expense)	(21)		6
Accumulated deficit	(103,389)		(71,214)
Total stockholders' equity	418,540		292,084
Total liabilities and stockholders' equity	$	443,556	$	310,844

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Krystal Biotech, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except share and per share data)	2021		2020		2021		2020
Expenses
Research and development	$	6,594	$	3,639	$	12,795	$	7,164
General and administrative	9,799		3,315		17,951		5,735
Total operating expenses	16,393		6,954		30,746		12,899
Loss from operations	(16,393)		(6,954)		(30,746)		(12,899)
Other Income (Expense)
Interest and other income, net	30		121		64		725
Interest expense	—		—		(1,492)		—
Net loss	(16,363)		(6,833)		(32,174)		(12,174)
Unrealized gain (loss) on available-for-sale securities	(24)		16		(27)		30
Comprehensive loss	$	(16,387)	$	(6,817)	$	(32,201)	$	(12,144)

Net loss per common share: Basic and diluted	$	(0.74)	$	(0.37)	$	(1.48)	$	(0.68)

Weighted-average common shares outstanding: Basic and diluted	22,204,659		18,383,941		21,731,711		17,871,648

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Krystal Biotech, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(unaudited)



	Common Stock			Additional Paid-in		Accumulated Other Comprehensive		Accumulated		Total Stockholders'
(In thousands, except shares)	Shares	Amount		Capital		Income		Deficit		Equity
Balances at January 1, 2021	19,714,220	$	—	$	363,292	$	6	$	(71,214)	$	292,084
Issuance of common stock, net	2,489,837	—		152,033		—		—		152,033
Stock-based compensation expense	—	—		2,350		—		—		2,350
Unrealized loss on investments	—	—		—		(3)		—		(3)
Net loss	—	—		—		—		(15,812)		(15,812)
Balances at March 31, 2021	22,204,057	$	—	$	517,675	$	3	$	(87,026)	$	430,652
Issuance of common stock, net	975	—		14		—		—		14
Stock-based compensation expense	—	—		4,261		—		—		4,261
Unrealized loss on investments	—	—		—		(24)		—		(24)
Net loss	—	—		—		—		(16,363)		(16,363)
Balances at June 30, 2021	22,205,032	$	—	$	521,950	$	(21)	$	(103,389)

SEC Form 10-Q filed by Krystal Biotech, Inc.