Krystal Biotech, Inc. (NASDAQ:KRYS) shares declined 3.70% in pre-market trading on Monday despite the biotechnology company reporting third-quarter 2026 earnings and revenue above analyst expectations, supported by continued growth in sales of its VYJUVEK gene therapy.
The company reported adjusted earnings of $2.05 per share, exceeding the consensus estimate of $1.84 by $0.21. Revenue increased 30% year over year to $127.34 million, compared with $97.8 million in the corresponding period of 2025, and surpassed analysts’ forecast of $126.77 million.
The results were driven by global sales of VYJUVEK, a gene therapy for dystrophic epidermolysis bullosa, which achieved a gross margin of 94% during the quarter.
VYJUVEK Sales Support Revenue Growth and Profitability
VYJUVEK remained the principal driver of Krystal Biotech’s financial performance, contributing to higher quarterly revenue and continued profitability.
The treatment has secured more than 760 reimbursement approvals in the United States, while the company reported further expansion of its prescribing physician network.
Chairman and Chief Executive Officer Krish S. Krishnan highlighted the contribution of VYJUVEK to the company’s financial position.
“Continued growth in VYJUVEK revenue is supporting profitability and funding the advancement of our pipeline,” Krishnan said. “Our financial strength allows us to invest fully in these programs and our global commercial expansion while returning capital to shareholders.”
The company’s 94% gross margin on VYJUVEK reflects the product’s contribution to profitability as Krystal continues investing in research and international commercial expansion.
European Expansion Progresses With New Market Launches Planned
Krystal Biotech reported progress in expanding VYJUVEK’s availability across European markets.
Pricing negotiations have been completed in Germany and Italy, with the company targeting an Italian commercial launch in early 2027.
Discussions remain underway in several other European countries and the United Kingdom.
Krystal expects a pricing decision in Spain before the end of 2026, while a decision in France is not anticipated before 2027.
These developments form part of the company’s strategy to expand VYJUVEK’s international commercial presence and establish additional sources of revenue.
The timing of launches will depend on the completion of country-specific pricing and reimbursement processes.
Cash Position Reaches $1.2 Billion as Buyback Programme Announced
Krystal Biotech ended the third quarter with approximately $1.2 billion in cash and investments, providing financial resources to support its development pipeline and international expansion.
The company’s board also authorised a share repurchase programme of up to $400 million.
Repurchases are expected to take place opportunistically over the next two years, allowing management flexibility over the timing and scale of purchases.
The programme reflects the company’s intention to return capital to shareholders while maintaining investment in its clinical and commercial activities.
However, the authorisation does not require Krystal to repurchase the full amount.
Full-Year Operating Expense Guidance Set at $155 Million–$165 Million
For fiscal 2026, Krystal Biotech expects combined adjusted research and development and selling, general and administrative expenses of between $155 million and $165 million.
The guidance excludes stock-based compensation.
The forecast reflects planned spending on clinical development programmes and the continued expansion of VYJUVEK’s commercial operations.
The company is using revenue generated by its existing treatment to support investment in additional programmes while pursuing opportunities in international markets.
Outlook
Krystal Biotech’s third-quarter results showed continued commercial growth, with revenue increasing 30% to $127.34 million and adjusted earnings exceeding analyst expectations.
VYJUVEK’s strong gross margin and expanding US reimbursement coverage supported profitability, while progress in European pricing negotiations could provide additional commercial opportunities in 2027.
Despite the earnings beat, shares declined 3.70% in pre-market trading.
Investors will be monitoring VYJUVEK prescription and reimbursement trends, the planned Italian launch, further European pricing decisions and the implementation of the company’s $400 million share repurchase programme.