Vyjuvek keeps growing. Krystal Biotech keeps hoarding cash. Like a dragon protecting treasure…

Although the growth rate of Vyjuvek is slowing, new and upcoming approvals in European countries and Japan promise to keep nudging the epidermolysis bullosa treatment closer to its peak sales potential. Investors aren't complaining considering the drug developer is sitting on a cash balance that now tops $1 billion.

Management is finally reversing its R&D austerity policy by investing in diverse assets. That includes a formulation of Vyjuvek for eye lesions and KB801 for neurotrophic keratitis, another eye disorder. Both are expected to have pivotal data readouts in Q4 2026. Both are relatively small market opportunities, but could add over $100 million in annual revenue with minimal additional commercial infrastructure.

KB111 is being developed for a rare skin disorder called Hailey-Hailey disease (HHD). It's a smart, ultra-rare condition that leverages the company's existing commercial infrastructure for Vyjuvek. However, Krystal Biotech is taking the unusual step to develop its own clinical scale for measuring responses, then using that for evaluating its own drug candidate. It did the same thing for its aesthetics pipeline with all the controversial fallout you might expect.

The assets with high-impact potential continue to face stalled or slow development.

KB407 has the potential to treat all forms of cystic fibrosis, potentially neutering Vertex Pharmaceuticals, but Krystal Biotech is choosing an ultra-slow study design in just five patients for half a year. The upside is that data are expected by the end of 2026 or early 2027, but perfect efficacy might be required to get the market excited. Then again, perfect efficacy in even five patients would send shares soaring.

Similarly, KB408 has the potential to functionally cure alpha-1 antitrypsin (A1AT) deficiency lung disease, but the asset has been moving through development at a glacial pace. Repeat dosing data are expected later this year. However, base editors and RNA editors capable of fixing faulty genes and mRNA transcripts could be a much simpler approach to treating the condition. These competitors have leapfrogged Krystal Biotech in the clinic.