Krystal Biotech, Inc.

Thank you for standing by and welcome to Crystal Biotech's third quarter earnings conference call. At this time, all participants are on a listen-only mode. After the speakers' presentations, there will be a question and answer session. During the question and answer sessions, there will be a limit of two questions per participant. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Stephane Paquette, Vice President of Corporate Development. Please begin.

Good morning and thank you all for joining today's call. Earlier today, we released our financial results for the third quarter of 2024. The press release is available on our website at .crystalbio.com. We also filed our earnings 8K and 10Q with the SEC earlier today. Joining me today will be Krish Krishnan, Chairman and Chief Executive Officer, Suma Krishnan, President of Research and Development, Jennifer McDonough, Senior Vice President of Patient Access, Analytics, and Operations, Christine Wilson, Senior Vice President and Head of U.S. Sales and Marketing, and Kate Romano, Chief Accounting Officer. This conference call will and our responses to questions may contain forward-looking statements. You are cautioned not to rely on these forward-looking statements, which are based on current expectations using the information available as of the date of this call and are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected. A description of these risks, uncertainties, and other factors can be found in our SEC filings. With that, I will turn the call over to Krish.

Thank you, Stephane. Good morning and welcome to the call. Look, as I mentioned in my PR attribution, we are well on our way to achieving the two-year target that we set at the time of the launch. And by comparison to any other launch in orphan diseases or genetic therapies, we believe our launch has exceeded all expectations to date. In my mind, there are two primary drivers for this success. The first, obviously, being the drug itself with all its attributes of efficacy, safety, patient convenience, etc. And the second being our assiduous focus on patient and physician experience. We have allowed the physician and the patient to drive demand at a pace they're comfortable with, and it's been rewarding, especially in an indication where the expectation is that they will be on drug for a long time. On top of that, global opportunities for Visevec come into focus. Optalmic formulation is progressing towards a registrational study in the next few months. And so, we're starting to see increasing upside in the total market opportunity for the Visevec franchise overall as we work toward treating deaf patients globally and comprehensively. In Europe, we're presently on track for a CHMP opinion before year end, and our recent breakthrough with HAS granting early reimbursement taxes in France reflects the significant demand for Visevec in Europe. And with our J&DA submitted last month, we're also on track for a 2025 launch in Japan. And so, all preparations are underway for launch in EU4, UK, and Japan sequentially next year. Meanwhile, we had a positive readout for gene aesthetics, KB3R1 and Q3, where we saw clear efficacy signals. And that propels us forward to a phase two study expected to start next year and also continue to work on the gene aesthetics pipeline. That was the first of many data readouts upcoming from our deep clinical stage pipeline. We're looking forward to reporting on two more programs before year end, including our first data on HSV1-based gene delivery to the lung, a tissue that has to date been hard to reach with other approaches. So both on the commercial and clinical fronts, we're excited and look forward to the rest of 2024 and 2025. Finally, I'm happy to report that Crystal was again profitable this quarter at 95 cents per share, up sequentially from 54 cents per share in the second quarter of 2024. In Q3, we accrued $12.5 million in litigation expenses that once again mitigated our EPS as it did in our two prior quarters. This is the final approval related to the litigation expense, and there will be no additional litigation approvals moving forward. With increasing profitability, a strong balance sheet, and upcoming expansion of our Visevec franchise, both in the US and through ex-US launches and our iDrop formulation, we're super stoked about both the near term and the long term outlook for Crystal. Moving now to our results. Net Visevec revenue for the Q came in at $83.8 million, while gross margins and GTN continue to behave as expected. Thanks to the strong growth we achieved this quarter, total Net Visevec revenue since launch in August 2023 has already surpassed $250 million. Achieving this milestone only a little over a year after our first sale is a tremendous achievement for our organization and a testament to the value Visevec is providing to patients suffering from DEP. Also, please note that Net Visevec revenue reported today again includes an accrual for patients on contracted commercial plans who are projected to potentially hit the cap of $900,000 gross per patient per calendar year in 2024. With that, I'll hand it off to Jen and Christine to share more detail on our recent accomplishments and strong fundamentals which we expect will sustain our launch for years to come. Jen?

Thank you, Krish. I am pleased to report another quarter of strong Visevec access growth across the U.S. in spite of summer seasonality headwinds as our team works tirelessly to help more and more patients gain control over this terrible disease. As of October, the number of patients with reimbursement approvals is up to over 460. Reimbursement approvals were modestly impacted by transient summer seasonality effects in this quarter. These scheduling disruptions are now behind us. More importantly, and thanks to our flexible support infrastructure that adapts to patient schedules and timelines, we have been able to keep patients and their applications for reimbursement on track to achieve positive access outcomes. Reimbursement approval splits are largely in line with recent quarters and roughly evenly split between commercial and government plans. Approvals continue to come across the entire dead patient population, including patients of all ages and with either dominant or recessive forms of the disease. With near complete coverage for commercial and Medicaid lives nationwide, the access for Visevec is strong. This has enabled us to achieve 100% success rate on reauthorizations. All have either been approved or are in process and sets us up well for sustained success in the U.S. Our Crystal Connect team works closely with the home health care providers, employing a patient-centric approach that focuses on patient needs and preferences. The team navigates things such as summer vacations, family activities, work and back to school schedules to successfully integrate weekly treatments into the family's normal routine. Patient preference for at-home administration is effectively unchanged, and currently 97% of the weekly treatments occur in the home setting. With now over one year of real-world experience, the team is developing and implementing strategies to ensure patients receive the best possible experience starting and staying on Visevec. This includes developing enhanced education, tools, and other resources for patients and nurses. We focus on topics such as preparing for treatment, practical considerations for wound selection, and options for hydrophobic dressings. We recognize that every patient has unique needs, and the impact of the disease varies for each patient. Our program and resources include regular touch points to support monitoring treatment progress and identifying potential issues early and addressing them promptly. While we continue to see a high compliance to weekly treatment at 87% across our dead patient population, including new starts for both recessive and dominant dystrophic EB, please note that for some patients that have been on Visevec for over an extended period of time, in particular who have participated in our OLE study, we are seeing maintenance treatment patterns emerge. This includes cycling between periods of treatment pauses due to wound closure. While it's early and we believe it would be premature to estimate the frequency or the duration of treatment pauses, we can expect reported compliance to weekly treatment across the entire patient base to trend down in upcoming quarters. As we continue our launch, the Crystal Connect team is fully focused on ensuring patients have a smooth experience starting and staying on therapy. We are developing and investing in strategies that lead to better treatment outcomes and overall satisfaction. We are building long-term patient relationships and are committed to providing sustained, worry-free access to corrective therapy where and when they need it. I will now hand it off to Christine to discuss recent sales and marketing activities that would have us on track to hit our most ambitious pre-launch penetration targets. Christine.

Thank you, Jen. As Jen just mentioned, at launch we set an ambitious target for the commercial organization. We established a goal of 60% penetration of the identified patient pool, equating to roughly 720 reimbursement approvals within two years of launch. I'm happy to say that based on our progress to date, our ongoing sales and marketing efforts, and the sustained demand we are seeing in the field, we remain on track to achieve this goal. Our core commercial strategy, focused on the three pillars of claims analytics, medical education, and patient activation, is paying off. We are seeing strong demand across both key centers and in the community. As we continue to drive awareness of iJuvic and the real-world impact to healthcare professionals, patients, and caregivers. Healthcare professional education remains a major focus. We continue to educate physicians and their support staff on how iJuvic is the only FDA-approved therapy that treats the genetic cause of death, sharing the clinical data that supports long-term use in wound healing for all patients, from localized to severe disease, and showing the stunning real-world results patients are seeing at home. In addition, we are working with physicians, particularly those in the community who may not regularly see these dead patients, to educate them on the streamlined process for getting their patients started on iJuvic. This is a high-touch, customer-centric model that delivers a positive onboard experience for both the prescriber and the patient. The prescriber base is expanding. Over 70% of the prescribers in 3Q were new writers. This demonstrates that our targeting efforts are effective and that both KOLs and community physicians see the value of iJuvic and ease of prescribing. We have also made significant progress recently in our -to-consumer outreach. We are now live on all planned social media channels, showcasing real-world experiences for both pediatric and adult patients, some of whom have been on therapy since 2020. Since January of this year, our paid social -to-consumer advertising has served over 31.3 million impressions, connecting prospective patients and caregivers with iJuvic. The 3Q launch into new social platforms, along with lead generation advertising on social media, will continue to drive user engagement and expand our reach. Finally, as part of our annual recognition and support of EB Awareness Week, which took place just last week, the Crystal team hosted educational webinars for our target physician audience, as well as sponsored a patient and caregiver webinar in conjunction with one of our EB advocacy partners. These live webinars feature dermatologists with real-world Deb and iJuvic experience, as well as iJuvic-treated patients, sharing their personal experience of the positive impact that iJuvic has brought to their condition. Members of the Crystal team also attended the Deborah of America benefit during EB Awareness Week, which honors those in the EB community and champions their ongoing mission to advance EB research and patient care. These are just a few highlights from our ongoing commercial efforts to drive awareness, streamline the physician experience, and help more patients get on treatment faster. It has been deeply rewarding to see these efforts translate into reimbursement approvals, and with continued education, we are optimistic that we can achieve not only the near-term targets we have set, but ultimately grow well past them in later years. Now I will hand it off to Summa to share pipeline results. Thank you, Christine.

Our

development

team continues to execute at a high level, and over the past few months, we have achieved key milestones to not only broaden patient access, but also advance a diverse pipeline of redosable genetic medicines. Leading off with an update on the global development of BVAC, steady progress has poised for commercial launches in both Europe and Japan next year. In Europe, EMA's review of our marketing authorization application is progressing well. EU GMP certification was granted for our commercial manufacturing facility, Encorus, earlier this year, and our latest interactions with the EMA suggest support for home dosing and a broad label including dead patients from birth. Based on the current pace of discussions, we expect a CHMP decision before the end of the year and a first launch in Germany in the first half of 2025. In interim, we also achieved an access breakthrough in France. In September, Haute Autorité de Sante in France approved pre-marketing early reimbursed access to BVAC under the Accès Procautio Program. Dead patient access to BVAC under AP1 is expected to start later this year. AP1 allows for early access to innovative therapies in France prior to European regulatory approval and is a reflection of the strongly positive benefit-risk ratio provided by BVAC in a patient population with high unmet need. In addition to rapidly broadening patient access in France, this approval will also provide physicians with an opportunity to build clinical experience with BVAC even in advance of commercial launch. In Japan, we also achieved a major milestone with the recent submission of our Japan New Drug Application. Our application to the Japanese authorities include the results of our Open Label Extension study in Japanese patients in which overall results closely mirrored those from our Registrational Phase III trial. Having previously received orphan drug designation by Japan's Pharmaceuticals and Medical Device Agency, we expect a priority review putting us on track for both a decision by Japanese authorities as well as launch in 2025. Shifting focus to our broader pipeline, we are very excited to report the first of many upcoming data readouts last quarter. In this data readout for June Esthetics KB301, we reported clear and clinically significant improvements in not only wrinkles but many other skin attributes including radiance, hydration, and creepiness. This robust efficacy signal taken together with our previous report of durable benefits positions KB301 as a potentially transformational product in the field of regenerative aesthetics. We look forward to progressing KB301 into Phase II next year. This is just the beginning. Before the end of the year, we expect to disclose interim updates on the KB408 and KB707 programs. KB408 is our redosable inhale therapy for Alpha-1 antitrypsin deficiency which is currently being evaluated in a Phase I Serpentine I study. Serpentine I is an open-label single-dose escalation study in adult patients with AATD to allow assessment of safety, tolerability, Alpha-1 antitrypsin levels, and key pharmacodynamic biomarkers. With strong enrollment and a recent protocol amendment to include bronchoscopies in Cohort II, we hope to provide interim molecular data before the end of the year. A readout we expect to showcase the significant potential of HSV1 for gene delivery to the lung. KB707 is a modified HSV1 vector designed to deliver genes encoding both human IL-12 and IL-2 to the tumor microenvironment and promote systemic immune-mediated tumor clearance. Two formulations, one for the intertumor injection and the other for delivery via inhalation, are being evaluated in Phase I dose escalation and expansion studies. Both studies are enrolling well, and with this phase, we expect to share an interim data update focused on safety and early immune profiling data before the end of the year. I'm also happy to share that intratumor KB707 was granted a rare pediatric disease designation for the treatment of rhabdomyosarcoma. Both inhaled and intratumor KB707 has now been granted rare pediatric disease designation and fast-track designation by the FDA. We expect additional data updates in 2025, including follow-on updates on our oncology program, as well as initial data from an ongoing Phase I study evaluating inhaled KB407 for cystic fibrosis. We recently activated two additional clinical sites in our Phase I, QoR1 study evaluating KB407 and are now on a path to report interim molecular data for KB407 in the first half of 2025. Finally, we are on track to both start and report interim data from our registrational trial, IL-LITE, next year. IL-LITE will be a single-arm, open-label study designed to evaluate KB803, our newly developed ophthalmic formulation of BVAC, for the treatment of ocular complications in DEP patients. In the interim, we continue to enroll in our natural history study to prospectively collect data on the frequency of corneal abrasions in patients with DEP. This study will also serve as a run-in period for patients who may be eligible to participate in IL-LITE and should enable us to accelerate enrollment in this registrational study. We have entered an exciting period for Crystal as we unveil trial results that we expect will highlight the versatility of our gene delivery program. We look forward to sharing these updates as they unfold and advancing our pipeline of uniquely differentiated genetic therapies. With that, I would like to turn the call to Kate.

Thank you, Summa. In the third quarter, Crystal saw continued Visevec revenue growth with net product revenue of $83.8 million, representing an increase of approximately $75.3 million over the third quarter of 2023, which was the first quarter that we had revenue after our approval in May of 2023. Cost of goods sold was $6.7 million for the quarter, or about 8% of net product revenue, resulting in a gross margin of 92%. In the third quarter of 2023, cost of goods sold was artificially low at $223,000 as a result of a significant portion of the cost to manufacture being previously expensed to research and development expense prior to product approval. Research and development expenses for the quarter were $13.5 million, inclusive of stock-based compensation of $2.3 million, compared to $10.6 million for the prior year's third quarter, inclusive of $2.3 million of stock-based compensation. Higher research and development expenses in the third quarter of 2024 were due to increased clinical development costs, increased &D-related manufacturing costs for our pipeline candidates, and increased R&D facilities and equipment costs this quarter. These increases were partially offset by capitalization of direct and indirect overcost to manufacture Visavac, being charged to inventory following our FDA approval. Selling general and administrative expenses for the quarter were $28.7 million, inclusive of stock-based compensation of $11 million, compared to $23.7 million for the prior year's third quarter, inclusive of stock-based compensation of $6 million. Higher selling general and administrative expenses in the third quarter of 2024 compared to the prior year's third quarter were primarily the result of increased commercial-related professional service fees and Visavac marketing costs. The most significant increase in SG&A is related to the increase in stock compensation expense of $5 million quarter over quarter. We again recorded litigation settlement expense this quarter of $12.5 million due to our anticipation of reaching the third and final milestone payment in the Perifogen settlement, which is triggered at $300 million in cumulative sales, payable within 30 days following the filing of our Form 10-K, in which the $300 million milestone is achieved. We now have fully accrued for the entirety of this matter and, if achieved, anticipate making the final related payments in early 2025. Net income for the quarter was $27.2 million, which represented $0.95 per basic and $0.91 per diluted share. We have reduced and narrowed the range of our non-GAAP R&D and SG&A expense guidance, which is now expected to be between $115 million and $125 million for the full year ending December 31, 2024. As a reminder, this guidance excludes the non-cash impact of stock-based compensation. Finally, we ended the third quarter with $374 million in cash on hand and $694.2 million in total cash plus short-term and long-term investments, marking continued quarterly growth in our overall cash and investments position with an increase over our second quarter of 2024 cash and investments balance by about $65 million. And now I will turn the call back over to Krish.

Thanks, Kate. So in closing, I'd like to highlight the significant potential for value creation in the years ahead to be driven both by VizUac and our deep clinical stage pipeline. Our VizUac launch, having already achieved over $250 million in net revenue, is progressing very well. However, as we saw in Q4 of last year, we do anticipate some disruption over the holiday season as life gets in the way for many families. That said, our conviction in the overall trajectory of our launch remains unchanged. More importantly, this is only the beginning of the opportunity we see for the VizUac franchise. In the coming years, we expect ex-US expansion, development and launch of our eyedrop formulation for KB803, both driving significant revenue growth. Meanwhile, our KB301 readout is a reminder of the significant -be-tapped potential that we see in our pipeline. With multiple readouts coming up, we think we're on the verge of demonstrating the true potential of our HSV1-based gene therapy platform. And with the benefit of commercial-scale in-house GMP manufacturing infrastructure, growing revenues, five quarters of positive EPS, we have the necessary resources to pursue these opportunities efficiently and in such a way to maximize value for our shareholders. Thanks for listening. I'd like to open the call for Q&A.

Certainly. At this time, we will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. As a reminder, during the question and answer session, there will be a limit of two questions per participant. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is from Alex Stranahan with BOA.

Hey, guys. Thanks for taking our questions. Just two from us. First, could you give us a sense of how many patients are at or near their annual cap currently? Is this something we should be looking for when we model sales into year end, or should the new patient ads throughout the year sort of offset this? And second, appreciate this data is probably still evolving, but on the duration of wound closures over time. If there's any trends coming out of your clinical studies, you could point to for duration of wound closure, just trying to get a sense of how long a pause due to wound could last before a patient would need to receive therapy again.

Thanks. Yeah, like, on your first question, on your first question on how many patients are going to hit the cap. We're not particularly disclosing that aspect of it. You can kind of glean that the cap is in the GTM. And the whole point of crewing was to make sure there's no volatility with respect to net revenues in any of the quarters. That's the whole point. And I think we're on track to make sure that the net revenue growth is pretty smooth over Q1, Q2, Q3 and Q4. We'll have a much better sense as we go further into the launch on that point. With respect to duration of enclosure. A couple of things I want to mention, look, that are depending on the location of the wound and the nature of the activity. This can be pretty varied across individuals. Our thesis is still to stick on, even though we've seen much larger durations of one closure than some patients, we still stick to the science behind it, which is given the half life of collagen. We expect the average wound to be durable for about 90 days.

And I'm also agreed. I mean, we get we are seeing very good clinical benefits. The wounds are closing and they're seeing durable. But also what happens is these patients are now increasing their activity. We are from patients now they can go out and do more physical activities. They can walk as a result. They see breakdown in the skin, but now they're very, they want the wound to be treated because they see the benefit of treating. So the patients are being extra cautious. So even if the wounds are closed and if they write open, they want the drop back on. So that's the trend that we see in the commercial setting.

Makes sense. Thank you. Your next question

is from you go not to mode it with city group.

Hi, thanks very much. I was just curious about your broader marketing campaign. So I think you mentioned something about the very broad footprint on the social media platforms. Thirty one point three impression. Can you comment to what extent that's actually helping identify patients or obviously it's a low conversion rate given the market size, but I'm just curious how that's working as far as identifying patients and if any of that effort has translated to a new starts.

Christine

sure. Yeah, we're excited about our goal is to receive patients wherever they may be and our social media campaigns are allowing us to do that. We are seeing benefit of finding some patients that are not yet engaged or haven't been engaged for some period of time with the healthcare system that is allowing to reach them educate them and engage them in. We are really accessing their so we are pleased as you mentioned the volumes will write from a patient base to begin with right as we're in this ultra rare space, but our opportunity to reach every patient is ultimately our goal and one by one we're getting there.

Okay, thanks. And then I think Chris on the last call, you mentioned that you identified about ten percent more patients from the twelve hundred base that was sort of forecast at the at the launch. I'm just curious if you had any updated thoughts in terms of that number or you're comfortable with that. That statement now.

Thanks. In terms of comfortable, yeah, we were comfortable when we reported the number, the trend continues to go up and if we hit a significant milestone moving forward, we'll report again. But more and more patients as tends to be well used and the volume of patients increases, the awareness goes up. We are starting to see the market expand beyond the original estimate.

Your next

question for today is from Ritu Baral with TD Cowan.

Hi guys, thanks for taking the question. I'm going to focus on Europe with my two questions today. Have you guys received the hundred eighty day questions? And if so, can you comment on the topics and whether you've responded and whether at this point you're expecting oral arguments? And then I think it was too much to your point on label expectations. You mentioned that it sounded like you could go down to. .E.B. patients from birth literally, but you didn't comment on recessive versus dominant. Is that a question in Europe? And then the follow up question is for Chris on pricing in Europe. What can you say on how we should be thinking about European pricing versus U.S. pricing and how to best model that? Thanks.

Thanks for the question. Yes, we did receive the one eighty day questions. And in fact, today's response as our response date to the one eighty question. Yes. I mean, most of the issues, all the issues are resolved. There doesn't seem to be an oral meeting at the point set with the EMA at the moment. So that's where we stand with regarding to the label, the label right now as the way it goes based on our one eighty day comment on the .B.C.

We're going to do our very best to get the maximum price possible. We're starting. Excuse me. You think about pricing in Germany, for example, we get to launch with the U.S. price for the first six months as we start to begin negotiations in Germany, the first country of launch at the end of six months. We'll start a crewing expecting a certain price that we land with at the end of twelve months. So the actual pricing in Europe in the first country doesn't really get set. Till once you are, say, twenty, twenty six at this moment, we will have an amount of price given the .B.P. So what will be public is that you are sending out that price. But overall expectations for us, if you combine all of Europe, look some, you know, at the conservative end, about fifty percent of the U.S. price, and we'll do our very best given all the product differentiators for to make a strong case in an ultra rare disease to land somewhere between the fifty percent and the U.S.

I just want to add one more thing is we are still on track to get home dosing in your so based on the one eighty days. So that's something very

positive for us.

Your next question is from Sammy Corwin with William Blair.

Hey,

there, thanks for taking my question. How do you expect the planning compliance to impact revenue? And do you plan on giving any revenue guidance for twenty, twenty five? And this is a follow up. You've kind of pointed out to reimbursement approvals as a measure of advice at the vice, like, launched in the U.S. What metrics are we kind of looking for for the launch as it progresses in Europe and Japan next year?

Hey, Sammy, I missed the first half of your first question ahead of the guidance. What were you saying?

How you expect the declining compliance to impact revenue.

Oh, in the U.S. you mean? Yes. Yes. Look, when we launch at the time of the launch, our expectation was that patients would be utilizing four vials a month. And our expectation was that it would get to about two vials a month, eighteen months post launch. That was the expectation we had at the time of launch. We seem to be much ahead with respect to compliance because the overwhelming proportion of patients in the study were recessive and potentially more severe in the early days of launch. So we're tracking a little bit higher of that. You know, we're already at like fifteen months and we don't expect to get to fifty percent over the next three months. So we're ahead. And that, as I mentioned before, is primarily because the percentage of our patients is much higher than the dominant patients in the study. With respect to revenue guidance next year, we're still thinking and internally talking about it. We have put ourselves in a position where we're actually expecting a launch early in one queue. And we have to get closer to figure out the rate at which the German launch progresses. And then we're up in France under the AP two or the AP one program. So a lot of moving parts next year to be extremely definitive about guidance at this point. But hopefully by the time the next queue comes around, we'll have more clarity on what we're going to talk about with respect to guidance in twenty, twenty five. With respect to your last question in the US, we had reimbursement approvals in the EU. Everything's a bit different. Germany is a bit different than France is a bit different than Japan. And so we haven't

made

a decision at this point in time. And as we get closer to the CSC MP opinion, I'll sit down and talk about what makes the best sense in terms of expecting what revenues for twenty, twenty five will end up being.

Great. Thank you.

Your next question for today is from Gavin Clark Gartner with Evercore ISI.

Hey guys, thanks for taking the questions. I just wanted to focus in on AATD and the data coming later this year. A first question here, can you just level set on the amount of data that we'll be getting? Like, how many patients per cohort? Which patients can be on augmentation therapy and also remind us which cohorts the lavages are done in and at what time point?

Right now we are in the process of enrolling cohort two. We have finished enrolling three patients. We are going to enroll additional patients in cohort two and based on our animal study and our study, we feel this is a cohort that we really need to evaluate molecular correction for this dose. Because we did see nice expression that this equal indoors in the animal model. So we have additional patients. They are basically patients. They could be patients that right now we have patients that are not on augmentation and on augmentation. So we will do evaluate them before and after for molecular correction in their long lavage. So we hope to have a couple of patients that roll before end of the year and hope to have data on that cohort by end of the year. With regards to levels of expression, multiple biomarkers, a one eighty expression, neutral elastics, binding up neutral elastics. So we'll understand and I have a complete picture of what are inheld a molecule is doing.

That's helpful. And do you believe that the bronchoalveolar lavages or the bronchoscopies will be more informative? And what's your what's the bar on either of those measures?

So we are looking at everything. I mean, obviously these patients were subjected to bronchoscopy. So we have their baseline bronchoscopy done. We not just we have collected the lavage. We did biopsies. So we have both and brushing of the long. So all three was taken at the baseline and after dosing. So we will look at all of that in in incompleteness to understand what it looks like. As far as levels, I mean, again, we are hoping, I mean, again, we will hope hopefully we will not have a one eighty. So we're going to hope to see good expression levels of a one eighty at least one micro model in the long.

Hey, Gavin, I do want to add one point. We are a redosing mechanism. Right? So, and one of our objectives following a good read out in a is to go into a redosing type situation. So, while one is kind of like a target, we've set for ourselves. If you look at the complete package and we get close enough to it, we will look to redosing to kind of move the program forward. But I do want to be clear at this point. We do not have any sense of what the levels are in any of these spaces.

I mean, all the keep in mind, we are looking at the entirety. Right? You're looking at expression of beautiful elastic. The binding of a one eighty to the next need to pull the last day. So it's not just the expression of a one eighty. You want to make sure you're seeing wild type a one eighty and it's functional. So that's critical. So we're going to do that. That's the kind of data that's going to be critical for us. And hopefully that's what you achieve to see clinical benefit.

That's really helpful. Thank you.

Your next question is from the gun, huh? With Steve.

Very good morning. Thanks for taking our questions to from us as well. Going back to the Vajavac launch metric, you mentioned four hundred sixty being reimbursed. I was kind of curious if you can maybe give us a little bit more color around how that distribution is between centers of excellence and the primary care. I guess the community dots. Just kind of curious what kind of growth we should be expecting going into Q4 on the future. And secondly, on the AATD, just to kind of level set and clarify here, so is it the expectation that the year end update is cohort one and two and therefore you will make a go forward decision as well as the protocol amendment for redosing after the cohort two or will you still go through cohort three A and three B, which I recall was the IV augmentation. Or without IV augmentation. Thanks so much.

So, I'll take your question first and then I think the commercial team will answer your question one. Yes, I think a cohort one and I mean, if we see the expression, we need to, I think we will stop at cohort two. If not, I mean, we have the option to go to go to move to go with three because so far we don't see any dose limiting toxicity in our cohort two. So we have the option, but I think we are at a pretty good dose level right now. It's going to and if we get to see what we see, then I think we will be ready to go into repeat dosing with cohort two or the option to go into cohort three.

Hi, and I'm happy to answer question number two. Our success has been built on the fact that we balanced growth in both the and the community setting. Our continue position in a very healthy way. What we see in the is either new patients that are coming in and more patients who maybe haven't yet seen the approval of back in the community setting as was mentioned 70% of our prescribers in Q3 were new prescribers. And that's because we are successful in identifying where these patients are to our claims alert that is allowing us to find these patients all across the United States, including in the community setting. So, you know, we need to do both in order for us to continue to see the growth trajectory that we see today.

I guess so much just to clarify cohort one and two data for the year end update for a.

That's that's what we're shooting for. I mean, we have patients enrolled in the long copy portion and hopefully we'll keep adding more patients to that.

Okay, thanks very much.

Once again, if you would like to ask a question, please press star one. Your next question is from that chat. Oh, Patty. I with Guggenheim securities.

Hey, good morning and thanks for taking my questions. So, as patients approach the reimbursement caps coupled with the holiday season. How should we think about for Q. Do you expect significant growth here or this is going to be a sequential a flat water. And then on the twenty, twenty five guidance, I understand lots of moving parts as far as Europe is concerned, but why not guide to the US market, especially now that you have trends, both from the summer and the holiday season under your belt. Thanks so much.

Yeah, look on the first question, the only reason I made that comment, I remember some confusion last year after we came to the Q four and the only point I'm trying to make is Thanksgiving and Christmas. Right? Those are at least two weeks where patients try to not have a dose or due to life or family or vacations or whatever. And also the nurses have their own schedules. So, the only reason for making that comment was not to directionally point to some weakening or flattening. We're still on track for the seven hundred and twenty reimbursement approvals. As we said, at the time of the launch. I just wanted to alleviate concerns post Q four right now by saying, please think about the holidays life gets in the way. With respect to guidance for twenty, twenty five, you are right. We will have a much better handle of the US. We will not have a handle on Germany or France or some of the other countries. And so, at the end of the year, we'll sit down and think about going into the Q four. If that's something that would be useful to shareholders as a way to model. Fully realizing that it will be supplemented by revenues potentially in Germany and France and

hopefully even Japan. Your next question

is from Andrea New Kirk with Goldman Sachs.

Good morning. Thanks for taking our question. Maybe one here on the European launch. Just curious if you could share what activities are currently underway as you prepare for this potential launch starting in Germany. And then, as you do look to next year, what type of step up in infrastructure do you believe is required to support the launch? Thanks so much.

Yeah, thanks Andrea with respect to activities. Look, we're starting to work on the dossiers ahead of the pricing negotiations in several countries. The commercial team in Germany is in place and would probably and a commercial team in France was expected to be in place by the end of the year. The first two countries were going to be launching in in terms of infrastructure. Look, we're not. We're expecting somewhere about ten employees per country at a high level. And that usually includes pretty much all aspects of commercial, like medical affairs reps, maybe somebody for access, et cetera. So a rough estimate would be less than ten employees per country for each of the European countries.

Got it. And should we expect those to be on board? I guess maybe closer to the to the potential launch in each of those in each of those as those countries come online.

I think in Germany, most of them will be on boarded before the end of the year in France, maybe some by the end of the year and some early next year. And so, and we're also, we also have a team out in Japan. We have like, six to eight employees in Japan today and they'll be on boarded in the first half in anticipation of a two H launch in Japan.

There are no further questions in queue. But even in the call, I think you.

Also, thank you all for joining the call. We look forward to answering any follow on questions in the upcoming days. Thank you.

Thank you for joining the crystal biotech third quarter earnings conference call. This concludes today's event. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.