Krystal Biotech, Inc. (KRYS) Bundle
Understanding Krystal Biotech, Inc. (KRYS) Revenue Streams
Understanding Krystal Biotech, Inc.’s Revenue Streams
Product Revenue, Net: For the three months ended September 30, 2024, product revenue, net was $83.8 million, compared to $8.6 million for the same period in 2023. The year-over-year increase reflects a significant growth of 880%.
Nine-Month Revenue Comparison: For the nine months ended September 30, 2024, product revenue, net was $199.4 million, up from $8.6 million in the prior year, marking a growth rate of 2230%.
Cost of Goods Sold (COGS): COGS for the three months ended September 30, 2024, was $6.7 million, a sharp increase from $223 thousand in the same quarter of 2023. For the nine months ended September 30, 2024, COGS was $15.1 million, compared to $223 thousand in the prior year, reflecting a growth of 6677%.
Research and Development Expenses: R&D expenses increased to $13.5 million for the three months ended September 30, 2024, from $10.6 million in 2023, representing a 27% increase. For the nine months, R&D expenses rose to $40.1 million from $35.1 million, a 14% increase.
Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the three months ended September 30, 2024, were $28.7 million, up from $23.7 million in 2023, a 21% increase. For the nine months, SG&A rose to $82.4 million from $73.6 million, an increase of 12%.
Litigation Settlement Expenses: The litigation settlement expense for the three months ended September 30, 2024, was $12.5 million, with no comparable expense in 2023. For the nine months, this expense totaled $37.5 million, compared to $12.5 million in the prior year, marking a 200% increase.
| Period | Product Revenue, Net | COGS | R&D Expenses | SG&A Expenses | Litigation Settlement |
|---|---|---|---|---|---|
| Q3 2024 | $83.8 million | $6.7 million | $13.5 million | $28.7 million | $12.5 million |
| Q3 2023 | $8.6 million | $223 thousand | $10.6 million | $23.7 million | $0 |
| 9M 2024 | $199.4 million | $15.1 million | $40.1 million | $82.4 million | $37.5 million |
| 9M 2023 | $8.6 million | $223 thousand | $35.1 million | $73.6 million | $12.5 million |
Revenue Segmentation: The majority of product revenue is attributed to the sales of VYJUVEK, which has been pivotal since its FDA approval on May 19, 2023. Cumulative net product revenue since launch is approximately $250.1 million as of September 30, 2024.
Future Projections: The company anticipates continued growth in revenue streams, particularly with ongoing marketing efforts and expansion into international markets planned for 2025.
Reimbursement Approvals: By October 2024, over 460 reimbursement approvals for VYJUVEK have been secured in the U.S., with positive access determinations achieved for 97% of lives covered under commercial and Medicaid plans.
A Deep Dive into Krystal Biotech, Inc. (KRYS) Profitability
Profitability Metrics
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was 92%, calculated as product revenue, net of $83.8 million minus cost of goods sold of $6.7 million.
Operating Profit: The income (loss) from operations for the three months ended September 30, 2024 was $22.4 million, compared to a loss of $26.0 million for the same period in 2023.
Net Profit Margin: The net income for the three months ended September 30, 2024 was $27.2 million, compared to $80.7 million for the same period in 2023. This reflects a net profit margin of approximately 32.4%.
Trends in Profitability Over Time
For the nine months ended September 30, 2024, the product revenue, net was $199.4 million, a significant increase from $8.6 million for the same period in 2023, indicating a growth rate of 2230%.
Research and development expenses increased to $40.1 million for the nine months ended September 30, 2024, from $35.1 million in the prior year. Total operating expenses for the period were $175.1 million, up from $121.4 million, representing a 44% increase.
Comparison of Profitability Ratios with Industry Averages
The gross margin of 92% for the third quarter of 2024 is significantly higher than the biotechnology industry average, which typically ranges between 70% to 80%. The net income margin of 32.4% also exceeds the average for biotech companies, which often report single-digit margins due to high R&D costs.
Analysis of Operational Efficiency
Cost of goods sold for the nine months ended September 30, 2024 was $15.1 million, compared to $223 thousand in the prior year. The increase correlates directly with the commercial launch of VYJUVEK, demonstrating effective cost management as revenue scales up.
Research and development expenses accounted for 20% of total revenue, down from 409% in the previous year, indicating improved operational efficiency.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Product Revenue, Net | $83.8 million | $8.6 million | $75.2 million (880%) |
| Cost of Goods Sold | $6.7 million | $223 thousand | $6.5 million (2897%) |
| Gross Profit | $77.1 million | $8.4 million | $68.7 million (817%) |
| Net Income | $27.2 million | $80.7 million | $(53.6 million) (-66%) |
Debt vs. Equity: How Krystal Biotech, Inc. (KRYS) Finances Its Growth
Debt vs. Equity: How Krystal Biotech, Inc. Finances Its Growth
As of September 30, 2024, Krystal Biotech, Inc. reported a total debt of $31.25 million related to accrued litigation settlements. This figure reflects the company's obligations under a settlement agreement with PeriphaGen, which requires milestone payments based on cumulative sales of their product, VYJUVEK.
The company's debt-to-equity ratio stands at 0.04, indicating a low reliance on debt financing compared to equity. This ratio is significantly lower than the industry average of approximately 0.5, suggesting a conservative approach to leveraging and financing growth.
In the last nine months, Krystal Biotech has not issued any new long-term debt. Instead, they have focused on equity financing, raising $159.7 million from common stock issuances during the previous fiscal year. This approach aligns with their strategy to support ongoing operational needs and fund product development without incurring additional debt.
As of September 30, 2024, the company maintained cash, cash equivalents, and short-term investments totaling $588.3 million. This robust liquidity position provides a buffer against potential market volatility and supports future growth initiatives.
The following table summarizes the company's debt and equity structure:
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Debt | $31,250 |
| Debt-to-Equity Ratio | 0.04 |
| Industry Average Debt-to-Equity Ratio | 0.5 |
| Cash, Cash Equivalents, and Short-term Investments | $588,300 |
| Funds Raised from Common Stock Issuances | $159,700 |
Krystal Biotech's strategy reflects a balanced approach to financing, primarily favoring equity over debt. This conservatism in leveraging allows the company to mitigate financial risk while still pursuing its growth objectives effectively.
Assessing Krystal Biotech, Inc. (KRYS) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
As of September 30, 2024, the current ratio of the company is calculated as follows:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Current Ratio |
|---|---|---|
| $588,300 | $107,250 | 5.48 |
The quick ratio, which excludes inventory from current assets, is as follows:
| Quick Assets (in thousands) | Current Liabilities (in thousands) | Quick Ratio |
|---|---|---|
| $580,319 | $107,250 | 5.41 |
Analysis of Working Capital Trends
Working capital is defined as current assets minus current liabilities. As of September 30, 2024, working capital is:
| Working Capital (in thousands) |
|---|
| $481,050 |
This reflects an increase from the previous year, indicating improved liquidity and operational efficiency.
Cash Flow Statements Overview
Operating Cash Flow Trends
For the nine months ended September 30, 2024, cash flows from operating activities are as follows:
| Cash Flow from Operating Activities (in thousands) |
|---|
| $70,577 |
Investing Cash Flow Trends
Investing activities showed net cash used as follows:
| Cash Flow from Investing Activities (in thousands) |
|---|
| ($79,661) |
Financing Cash Flow Trends
Cash flows from financing activities for the same period are as follows:
| Cash Flow from Financing Activities (in thousands) |
|---|
| $24,586 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company holds cash, cash equivalents, and short-term investments of approximately $588.3 million, with an accumulated deficit of $226.1 million. The liquidity position appears robust, with sufficient resources to fund operations for at least 12 months. However, future cash flows may fluctuate due to varying product sales and ongoing clinical trials.
Is Krystal Biotech, Inc. (KRYS) Overvalued or Undervalued?
Valuation Analysis
Assessing whether a company is overvalued or undervalued can be accomplished through various valuation metrics. For this analysis, we will examine the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
As of September 30, 2024, the company's earnings per share (EPS) is reported as $0.95 for the third quarter. With a current stock price of approximately $89.12 (as of October 2024), the P/E ratio calculates to:
- P/E Ratio = Stock Price / EPS = $89.12 / $0.95 = 93.3
Price-to-Book (P/B) Ratio
The company's total stockholders’ equity is approximately $885.8 million. Given the number of shares outstanding is 28,757,000, the book value per share is:
- Book Value per Share = Total Equity / Shares Outstanding = $885,846,000 / 28,757,000 = $30.8
- P/B Ratio = Stock Price / Book Value per Share = $89.12 / $30.8 = 2.9
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) can be computed by combining market capitalization, total debt, and subtracting cash and cash equivalents. As of September 30, 2024, the company had:
- Cash and cash equivalents: $373.97 million
- Debt: $0
- Market Capitalization = Stock Price Shares Outstanding = $89.12 28,757,000 = $2.56 billion
- EV = Market Capitalization + Debt - Cash = $2.56 billion + $0 - $373.97 million = $2.19 billion
Assuming an EBITDA of approximately $70 million, the EV/EBITDA ratio is:
- EV/EBITDA = EV / EBITDA = $2.19 billion / $70 million = 31.3
Stock Price Trends
Over the past 12 months, the stock price has shown significant volatility, with a high of approximately $104.50 and a low of around $45.60. The stock has generally trended upwards since the FDA approval of its main product in May 2023, leading to increased investor interest.
Dividend Yield and Payout Ratios
The company does not currently pay dividends, thus both the dividend yield and payout ratio are 0%.
Analyst Consensus on Stock Valuation
As of October 2024, the consensus among analysts is a Hold rating, reflecting a balanced view on future growth potential against current valuation metrics.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 93.3 |
| P/B Ratio | 2.9 |
| EV/EBITDA Ratio | 31.3 |
| Current Stock Price | $89.12 |
| Market Capitalization | $2.56 billion |
| Cash and Cash Equivalents | $373.97 million |
| Analyst Rating | Hold |
Key Risks Facing Krystal Biotech, Inc. (KRYS)
Key Risks Facing Krystal Biotech, Inc.
The financial health of Krystal Biotech, Inc. is influenced by various risk factors that can affect its operations, profitability, and overall market position.
Overview of Internal and External Risks
Krystal Biotech operates in the highly competitive biotechnology industry, which is characterized by rapid advancements and intense competition. Key external risks include:
- Industry Competition: The company faces significant competition in the gene therapy market, particularly from established pharmaceutical companies and emerging biotech firms.
- Regulatory Changes: Changes in regulations can impact product development timelines and approval processes. The company must navigate complex FDA regulations and maintain compliance to avoid delays.
- Market Conditions: Economic downturns or shifts in healthcare spending can adversely affect product sales and revenue generation.
Discussion of Operational, Financial, or Strategic Risks
Recent earnings reports highlight several operational and financial risks:
- Revenue Concentration: Approximately 92% of the company's product revenue for the nine months ended September 30, 2024, was generated from a single customer .
- Litigation Settlement Obligations: The company has incurred a litigation settlement expense of $37.5 million for the nine months ended September 30, 2024, which is a significant liability .
- Accumulated Deficit: As of September 30, 2024, the accumulated deficit stood at $226.1 million, indicating ongoing financial challenges .
Mitigation Strategies
To address these risks, the company has implemented several strategies:
- Diversification of Revenue Streams: The company aims to reduce reliance on a single customer by expanding its market presence and increasing sales to other customers.
- Regulatory Compliance Framework: Establishing robust compliance protocols to ensure adherence to changing regulations and to streamline the approval process for new products.
- Financial Management: Maintaining a strong cash position, with approximately $588.3 million in cash, cash equivalents, and short-term investments as of September 30, 2024, to support ongoing operations .
Financial Overview
The following table summarizes key financial metrics relevant to the company's risk profile:
| Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Product Revenue, Net | $83.8 million | $8.6 million | $75.2 million | 880% |
| Cost of Goods Sold | $6.7 million | $0.2 million | $6.5 million | 2897% |
| Research and Development Expenses | $13.5 million | $10.6 million | $2.9 million | 27% |
| Selling, General and Administrative Expenses | $28.7 million | $23.7 million | $5.0 million | 21% |
| Net Income | $27.2 million | $80.7 million | ($53.6 million) | (66%) |
These financial metrics reflect both the growth potential and the risks associated with the company's operations, emphasizing the importance of effective risk management strategies.
Future Growth Prospects for Krystal Biotech, Inc. (KRYS)
Future Growth Prospects for Krystal Biotech, Inc.
Analysis of Key Growth Drivers
The approval of VYJUVEK on May 19, 2023, marks a significant milestone for the company, as it is the first redosable gene therapy for treating dystrophic epidermolysis bullosa (DEB). This innovative therapy has driven substantial revenue growth, with product revenue reaching $83.8 million for the three months ended September 30, 2024, compared to $8.6 million for the same period in 2023. Cumulatively, VYJUVEK has generated $250.1 million in net product revenue since its launch.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, product revenue netted $199.4 million, a remarkable increase from $8.6 million in the same period of 2023, marking a growth of 2230%. Analysts project continued revenue growth, driven by increased sales of VYJUVEK and the anticipated launch of additional products in the pipeline.
Strategic Initiatives or Partnerships That May Drive Future Growth
Efforts to expand market access are evident, with over 460 reimbursement approvals secured for VYJUVEK as of October 2024. The company has achieved positive access determinations for 97% of lives covered under commercial and Medicaid plans. Additionally, preparations are underway for a direct commercial launch in Europe and Japan in 2025.
Competitive Advantages That Position the Company for Growth
The company possesses exclusive rights to develop, manufacture, and commercialize VYJUVEK and its other pipeline candidates globally. This exclusivity, combined with a robust gene therapy technology platform, positions the company favorably in the biotechnology sector.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Product Revenue, Net | $83.8 million | $8.6 million | 880% |
| Cost of Goods Sold | $6.7 million | $0.2 million | 2897% |
| Net Income | $27.2 million | $80.7 million | -66% |
| Gross Margin | 92% | - | - |
Research and Development Expenses
Research and development expenses increased to $40.1 million for the nine months ended September 30, 2024, up from $35.1 million in the prior year, reflecting increased clinical development and manufacturing costs.
Conclusion on Growth Opportunities
The company's strategic initiatives, including international expansion and strong reimbursement efforts, coupled with its innovative product offerings, indicate robust growth potential moving forward. With a solid financial foundation and a unique product pipeline, it is well-positioned to capitalize on future opportunities.
Krystal Biotech, Inc. (KRYS) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Krystal Biotech, Inc. (KRYS) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Krystal Biotech, Inc. (KRYS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Krystal Biotech, Inc. (KRYS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.