Krystal Biotech, Inc.

Thank you for standing by and welcome to the Crystal Biotech 2Q2026 conference call. At this time, all participants have been placed on a listen-only mode. After the speaker's presentations, there will be a question and answer session. As a reminder, today's conference is being recorded. I would now like to hand the conference over to your host, Stephane Paquette, Senior 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 second quarter of 2026. The press release is available on our website at www.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, Gerard Goux, Executive Vice President and General Manager for Europe, Christine Wilson, Senior Vice President and Head of U.S. Commercial, and Kate Romano, Chief Account 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 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 STC filings. With that, I'll turn the call over to Krish.

Good morning, and thank you for joining us. We were focused on execution in Q2, making solid progress across both our commercial and clinical programs. Internationally, strong underlying demand and high patient excitement Thank you for joining us. supported by our increasing focus on reaching patients and physicians in the community setting. Laurent and Christine will provide additional detail on our commercial performance and international launch progress. Our clinical pipeline is also advancing across multiple important programs. We currently have two registrational studies underway, our study in neurotropic keratitis and our study of ocular lesions in patients with dystrophic epidemiolosis bullosa. In addition, our repeat dose studies in cystic fibrosis and Haley-Haley disease are progressing and assuming supportive data, we believe both programs have the potential to advance into registrational development in 2027. We're also making great progress with our KB707 program in oncology Our inhaled 707 formulation for the treatment of NSCLC is on track for a registrational study next year. And we are now evaluating our intratumoral KB707 formulation in Gordland syndrome, a rare skin indication that fits in well with our therapeutic focus and growing commercial footprint. Suma will provide a more comprehensive update on our clinical program shortly. Finally, we remain in a very strong financial position. Our continued financial strength reflects both the growing performance of our commercial business and the operating discipline we have maintained over the past 12 quarters. This allows us to invest confidently in global expansion and pipeline development while continuing to manage the business responsibilities. With that, let's get into the details. Laurent?

Thank you, Krish. We are very encouraged by the recent progress in our Vajuvec launch. Commercial momentum across Europe and Japan is strong and building, supported by growing physician familiarity, high engagement from leading treatment centers, and sustained interest across the dystrophic epidemiologist bullosa community. In July, Crystal had a strong presence at the Third World Congress of Rare Skin Diseases in France, including a well-attended symposium. This was another important step in building awareness and advancing our ambition to establish Vijuvec as an essential treatment for DEV patients. Demand is high in France, Germany, and Japan, and driving growth in both treated patients and treatment volumes. This growth also reflects the excellent work of our country teams as they navigate the access and operational dynamics unique to each market. In Germany, for example, the care landscape is fragmented and only a limited proportion of DEB patients are routinely seen at established SPEX centers. Our team is therefore engaging a broader network of physicians and supporting patients in continuing treatment at home. In France, VIJUVEC is available through the Early Access Pathway where administration is currently concentrated in hospital settings due to the requirement associated with its GMO classification. Our team is working closely with centers to facilitate access and treatment continuity while exploring solutions that could support home administration over time. And in Japan, an important nuance is the requirement for intensive prescription renewal, which can put a heavy burden on patients in the first year of launch. We are working closely with prescribers and patients to ensure all stakeholders understand the importance of consistent weekly administration and minimize potential disruptions. Turning to revenues, reported revenue in Europe and Japan was broadly flat in the quarter, primarily due to a reserve provision related to the ongoing pricing process in Germany. This does not change our assessment of the underlying launch trajectory or our confidence in the longer-term opportunity across Europe and worldwide. as we continue to grow patient and treatment volumes in our overseas markets. Turning to market access, pricing and reimbursement work continue across the EU4. In Germany, Italy and Spain, we continue to expect key outcomes before the end of 2026, subject to each country's process. In France, formal pricing and reimbursement discussions are expected to progress into 2027. Our engagement with authorities remains constructive and we believe VIJUVEX clinical evidence and potential value to patients provide a strong foundation for these discussions. In the United Kingdom, we also achieved two important milestones. On May 15, the MHRA granted marketing authorization for Vyduvec, making it the first genetic medicine approved in the UK for DEB. This was followed in June by Vyduvec receiving the 2026 Prix Gallien UK Award for Best Product for Orphan Disease. This is the third pre-Galien for Vijuvec, following similar recognitions in France and Italy last year. Together, these milestones reinforce the strength of the evidence supporting Vijuvec and its significance for patients and families living with DEB. Our ultimate objective is sustainable patient access. NISIS appraisal in the UK remains ongoing and our team is engaging constructively to address NISIS questions and showcase the transformational benefit achievable with BiJubec. Finally, we are planning multiple additional regulatory submissions in the coming months, including Switzerland and Australia, representing another step towards bringing Vijuvec to more DEB patients globally. Overall, we are pleased with the momentum across our international business. We remain focused on discipline execution, navigating market-specific challenges, securing sustainable reimbursement, and converting strong physician engagement and patient demand into durable patient-centered access. With that, I will hand the call over to Christine.

Thank you, Laurent. I am pleased to report another strong quarter of commercial performance. U.S. net revenue was $91.6 million for the quarter. Our field team continues to perform exceptionally well as we extend our reach deeper into the community and across the country. Working in close partnership with healthcare providers nationwide, they are filling education gaps, raising awareness, and helping us reach more patients through the DEP community. To that end, I am also very happy to report that we have achieved more than 730 U.S. reimbursement approvals for Vizuvac. We have now surpassed our initial penetration target of 60% and have no plans of stopping there. With a strong pace of approvals over the last year and a growing prescriber base, we expect continued penetration of the diagnosed dead patient pool in the quarters to come. In addition to driving new patient starts, we continue to strengthen our patient engagement efforts to help patients and caregivers successfully incorporate PfizerVac into their long-term wound care routines. Based on ongoing feedback from the Deb community, we know that virtual education and peer-to-peer connection remain preferred ways to access information and support. As a result, we continue to invest in scalable, community-driven programs that educate, engage, and empower patients through their treatment journey. During the second quarter, we partnered with Deborah of America to host a virtual education webinar focused on recent VigeVac label updates and practical bandaging techniques presented by our Crystal Connect team. The program was developed in direct response to questions from the patient community as treatment needs continue to evolve. As more patients achieve complete wound closure in larger wound areas and transition to managing smaller or more anatomically challenging wounds, including the scalp, ears and other sensitive locations, the educational needs of patients and caregivers continue to change. The webinar attracted more than 100 live attendees and remain available on demand, extending its impact across the DEP community. Our Vijuvik Voices program continues to provide peer-to-peer education and support by connecting patients and caregivers with trained ambassadors who share firsthand experience, practical insights, and ongoing encouragement through the treatment journey. During the quarter, we also launched Vijuvik Connections. A virtual discussion series that brings together patients, caregivers, and Vyjavec Ambassadors to discuss topics selected by the community. These sessions foster meaningful peer engagement while addressing the real-world questions that arise as patients gain experience with therapy. Collectively, these initiatives support patients as they adopt greater self-administration at home following our recent label expansion and further integrate Vigevec into their long-term treatment routines. These programs also provide Crystal with valuable real-world insights into the evolving needs of the Deb community, enabling us to continuously refine and strengthen our patient engagement strategy. Just a few weeks ago, we were also proud to serve as a diamond sponsor of the Deborah of America Care Conference, one of the largest gatherings of the EB community. The conference provided an important opportunity to engage directly with patients, caregivers, healthcare professionals, and advocacy leaders. These interactions not only strengthen our connection with the community, but also allow us to see firsthand the meaningful impact PfizerVac continues to have on patients' lives. These advancements, combined with our continued investment in patient support, education, and community engagement, further strengthen our reach and impact as we establish PfizerVac as the long-term standard of care for patients living with death. I will now hand the call off to Suma to share pipeline highlights.

Thank you, Christine, and good morning, everyone. I'm happy to share today's update in our progress. Thanks to the tireless commitment of our team, we are rapidly approaching two registrational study readouts in the front of the eye. These readouts have exciting implications both for the patients we aim to serve as well as our platform. Due to the rapid cell turnover and protein clearance, the front of the eye has historically been a difficult to shoot target with gene therapies and biologics. Our HSV-1 vectors, which be easily and repeatedly administered as an eye drop, are uniquely positioned to fill this treatment gap. In sentinel patient cases, repeat dosing of R-vectors has been well-tolerated and delivered profound clinical improvement, underscoring the therapeutic potential of our HSV1-based approach. With our registrational programs for KB803 and KB801 nearing readouts, we are on the cusp of validating that potential. Our registrational IOLITE study evaluating KB803 in dead patients was fully enrolled in April and is on track for a readout later this year. On success, we expect to move rapidly to BLA submission, leveraging the extensive CMC work already completed for RYJUAC. Our Registrational Emerald I Study evaluating KB801 in NK patients is also progressing well. We expect to complete enrollment before year-end, and given the short eight-week primary endpoint, we expect a readout soon thereafter. Our KB407 and KB11 programs are advancing on similar timelines to deliver clinical data this year, and registration study starts in 2027. Dosing is underway in our open-label single-arm study Evaluating the safety of repeat dose KB407 in patients with cystic fibrosis who are either ineligible or refractory to modulator therapy, we expect to enroll approximately five patients and report interim results before year-end. We are also working with the FDA, the Cystic Fibrosis Foundation, and the CF Therapeutic Development Network Coordinating Center, or TDM, on our innovative registrational study design. We are making good progress on the details of our design and statistical analysis plan. We expect study design alignment later this year and registrational study start in 2027. Dosing is also underway in our open-label single-arm study evaluating the safety of repeat dose KB111 in patients with Haley-Haley disease. We expect to enroll approximately seven patients and report interim results before year end. We have completed development of our HHD assessment scale and validations are now underway. Altogether, we are on track to discuss our repeat dosing safety results, scale, and study design with the FDA before the end of the year We look forward to sharing clinical updates on both programs in the coming months as we work to deliver meaningful benefits to the tens of thousands of patients with untreated cystic fibrosis or Haley-Haley disease. In addition to our work in rare disease, we continue to advance our broader pipeline which leverages the flexibility of HSC-1 to target More Common Diseases of the Lung, Skin, and Eye. The most advanced of these programs in our InHealth KB707 program for the treatment of non-small cell lung cancer, or NSCLC, InHealth KB707 is currently under investigation in our Phase 1-2 Dose Escalation and Expansion Study, KINITE-1. Last year, we disclosed the InHealth KB707 A monotherapy achieved 36% response rate in heavily treated late-line NSCLC patients. In-health KB707 was also generally well-tolerated with a safety profile amenable to outpatient management. At ASCO this year, we provided a clinical update on our dose expansion cohort evaluating KB707 in combination with Pembrolizumab We again saw strong response in late-line SCLC patients with an objective response rate of 31% and encouraging durability. Response were achieved in a diverse array of tumor types, including those with driver mutation, squamous histology, and low PD-L1 expression. The combination regimen was also well tolerated, a positive indicator for KB707 combination potential with checkpoint inhibitors and immunotherapies more broadly. We expect to complete enrollment in our final dose expansion cohort evaluating inhaled KB707 in combination with chemotherapy later this year. Once data from this cohort is available, we expect to have full information needed to finalize and initiate a registration study in second line NSCLC expected in 2027. We are also moving intratumoral KB707 forward. Building on early signals of efficacy in patients with basal cell carcinoma from our Phase I to Opal I study, we expanded the scope of Opal I to evaluate intratumoral KB707 in patients with Garland syndrome. Garland syndrome is a rare genetic disease Thank you. Thank you. We have now enrolled three patients with Golan Syndrome and expect to provide a clinical update on these patients as well as our development plan in Golan later this year. With multiple registration study readouts and starts upcoming, as well as growing momentum in our oncology pipeline, we are uniquely positioned to deliver transformational impact to patients. This is an addition to our ongoing work on Alpha-1 antitrypsin lung disease, aesthetics, and earlier stage preclinical programs. We look forward to sharing many updates in the months ahead. With that, I'll hand the call over to Kate.

Thank you, Suma, and good morning, everyone. I'll now provide some highlights from our second quarter financial results as reported in our press release and 10Q filing earlier today. Net revenue from global sales of Weisbach was $119.2 million for the quarter, which included sales from our commercial launches in Europe and Japan, as compared to $96 million, or a 24% increase from the second quarter of 2025. Note that this quarter also included a full quarter of accrued pricing for Germany. As we started our pricing negotiations mid-last quarter, which contributed to reduced quarter-over-quarter net European revenue despite growth in related vial sales. Cost of goods sold for the quarter was $6.4 million compared to $7.2 million in the prior year's second quarter. Gross margin for the quarter was 95% improved from 93% in the second quarter of 2025. R&D expenses for the quarter were $14.5 million, which was essentially flat to the prior year of $14.4 million. G&A expenses were $39.9 million compared to $35.1 million in the prior year. This $4.8 million increase was primarily due to increased headcount and related compensation expense, as well as commercial costs related to global sales of VigeVec. Operating expenses for the quarter included non-cash stock-based compensation of $14.2 million compared to $14.1 million in the second quarter of last year. Net income for the quarter was $54.8 million, which represented $1.85 per basic and $1.79 per diluted share. This marks an increase compared to the prior year's second quarter net income of $38.3 million and EPS of $1.33 per basic and $1.29 per diluted share. I'll also note that the guidance we previously issued relating to non-GAAP operating expenses remains unchanged. We continue to expect to incur in the range of $175 to $195 million in non-GAAP R&D and SG&A expenses for the full year of 2026. And finally, we continue to further strengthen our Cash and Investments Foundation, now exceeding $1.1 billion in overall cash and investments. We remain committed to thoughtfully and efficiently deploying our capital as we execute on our upcoming pipeline milestones and continued global commercial strategy. And with that, I'd like to turn the call back over to Krish.

Thanks, Kate. To summarize, on the commercial side, we're working through typical overseas launch dynamics, including accruals and pricing negotiations, as we build a foundation to sustain our launch for years to come. We're confident that the work we're doing this year will put us in a position to provide access to thousands of patients worldwide and provide a clear path of Isovec to reach its full commercial potential. On the clinical side, we're focused on completing the ongoing registration trials and initiating at least two more registration trials in 2027. When we do that in the next 12 to 18 months, Crystal has the potential to transition from a commercial success story into a multi-product genetic medicines company. Thank you, and we're now ready to answer questions.

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. 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 Roger Song with Jefferies.

Great. Congrats for the call and thank you for taking our question. Maybe one for commercial, one for pipeline. For the commercial side, seeing the The European sales down a little bit from the first quarter understanding some pricing dynamic. Can you just give us some color around the demand side and then maybe the compliance between Germany and France? That would be very helpful. And then on the pipeline, Haiti seems, you know, very interesting indication and appreciated right now. So given you will have phase one data by year end, so how should we, what should we expect from that data readout? and then also what the current thinking about the epidemiology and then the overall market opportunity for Hedy Hedy.

Thank you. Roger, thanks for the question. Laurent, do you want to take a first stab at the European question?

Yeah. As we said earlier, the market dynamics are pretty strong. We're facing a strong growth in both patient inclusion and volume. and the overall revenues, the full quarter of the German reserve for the future project.

Hey Laurent, do you want to make any comment on demand? Because there was a question on demand. I mean, the demand is strong.

Yeah, with the earthquake in other countries, Over 180 patients have been treated in Western Europe and Japan so far. But as we are expanding in more centers and countries, it is more and more difficult to have a precise estimation in Europe. So that's why we might not have explicitly given the number.

And I will add, Roger, just to close on that, I think compliance in the early days of launch in any country tends to be really good as we start off treating severe patients. So your comment on, your question on compliance in Germany and France, we see pretty good, strong compliance similar to what we saw in the U.S. Suma?

Yeah, I can take the Haley-Ailey. Haley-Ailey is an interesting disease. I mean, again, underappreciated, not well studied. There's not a lot of information in the literature or, you know, but this is, The beauty of this is we have done a natural history study. It's been five months. We have over 60 to 70 patients already enrolled in this natural history because we use these patients to understand the disease. We've been collecting data over the past four to five months. So we have extensive knowledge and understanding now about the disease, the cycle time and all of that good stuff. and we've also used these patients to obviously validate our scale. So we, as you can tell, we're nearing the end of the valid scale validation. We feel pretty confident, like now we understand the disease and what the endpoints we should go after. We have obviously, we have also put together scientific experts and KOs in the space together to develop the scale and also to the endpoints. So the phase one study is basically what we learned from the natural history. So we have already, most of the patients already, you know, everybody's excited to be part of this trial. So we'll have no problem enrolling. We have already got patients on the study and started dosing them. So we will, again, through imaging and investigators' evaluation over three months, just like we did with VigeVac, pretty similar. Again, it's going to be a gel. And we have learned a lot from VigeVac, how to administer, how to have these patients maintain the treatment and use the right bandages. So it's very useful. It is very easy for us to take the Biotech experience into Haley Haley. And I think in the three months, we will look at treated versus non-treated. We also have biopsy these patients at baseline and see some sort of correction of the treated area. So I think we will have enough data for us to basically then sit with the agency and let them know what the endpoints are because the FDA has no idea. So we are going to let them know based on our data that we generated, we're going to propose the endpoints. And we expect to start registrational style early next year. As I said, we have over 60 to 70 patients already in our natural history and new patients continue to enroll into that study.

Got it. Thank you.

Your next question is from Alex Stranahan with Bank of America.

Hey, guys. Thanks for taking my questions, and good to see all the progress in the quarter. I guess first, maybe on NK, could you talk a bit about the patient treated with KB801 that had a complete closure? Is this patient still being followed, and I guess how does their disease stage or demographic compare to the population that's being enrolled in Emerald One? And then on CF, just on the five-patient follow-up study, could you maybe just remind us what kind of functional metrics the study is designed to show or is it maybe more around the dosing PK side? Just hoping to link the CFTR expression to improve lung function, but possible this is maybe something we see more with the pivotal study. Thank you.

Hey, Alec. Before Suma gets into the comment on NK patients, I want to say, look, it was a legal requirement that made us disclose that one patient data stemming from some of the patent disclosures that ensued as we were supporting the patent with clinical information. We have always said and expressed to not have the investment community read too much into our single patient data. I mean the data was fantastic on a single patient but it is a one patient data and the new study that we are working on is a different design and so with that I'll turn it over to Suma.

Okay this patient again was chronic at chronic wounding in the eye I mean you know from his records we treated it I treated the patient obviously you can see that there was complete closure and we monitored this patient over you know a couple of weeks after, and we see durability of that wound healing. And the patient, I mean, we had done with this patient because that study got closed out. And in the past, we've explained why we changed the dosing regimen because it made more sense to give daily. It's just not only for compliance, and it makes sense when you're administering them into the eye, these are older patients, to maximize the dose. And there was no safety concerns. So again, very similar population. We want to make sure that we get patients that have chronic wound healing because that's important because if you want to separate from placebo, you want to treat those patients that when you express NGF, you're going to see the better effect or the efficacy from that drug when you compare to placebo. We're very excited because we opened this trial globally. We have, you know, filed our CTA and we have identified several sites across the EU. We want to expand it because we think we want to go for a global trial just like we did with WiseUX and hope to get, you know, approval just if everything is successful, not just in the US but globally. So that's the intent for the NK study.

On the CF.

Oh, sorry. On the CF, again, As we have said earlier in our previous calls, the intent of this study is, I mean, as per our discussions, which is ongoing with the FDA, where the FDA wanted to see some repeat dosing data in these patients. So we are, you know, we have enrolled and dosed patients already. We expect to enroll five patients. And this is going to be a weekly repeat dosing study. they come in monthly and we check for FEV1 and other safety, you know, outcomes. So it's going to be a measurement of FEV1 over six months. Every month the patient comes in and hopefully by six months we will have data on what's with repeat dosing and what's the improvement in this patient. And again, remember, we are enrolling really sick patients, these patients that Very low FEV1. They have no other options. So the null patients and patients that have no other option today. So it's a very sick patient population with high demand.

Thank you.

Your next question for today is from Yagal Natramovic with Citigroup.

Hi, great. Thank you for taking the questions. I'm just wondering if you could be perhaps a little more specific with respect to the progress in Germany in terms of the quarter-over-quarter vial growth, the demand growth relative to the accrual process and what the headwind is on the accrual, given that starting in 2Q, I believe there was accrual throughout the quarter. And then on NK, if you could just clarify, it sounds like you're going to finish enrollment before the end of the year and then eight weeks to the end point, but it appears I'm correct that the data will be likely in early 27 or could it still be in this year? Thank you.

Laurent, do you want to take the German question?

Yeah. We don't provide country-by-country details for the number of patients and revenues, but German, the dynamic in terms of patient inclusion and VILE increases significantly. is very solid in Germany.

And you go on the accrual process, look, we are expecting at this moment to complete negotiations in Q3, pricing negotiations in Germany. And assuming successful completion of the negotiation, the impact of accrual, I mean, our whole objective is to be conservative in the accrual and get it over with once the pricing is established in Germany. We did experience some accrual in the first half of Q1, completely in Q2, and maybe a partial in Q3, and hopefully by the time Q4 comes around, we'll be back to an actual net revenue number in Germany. On NK, Suma?

Yeah, NK, again, as I mentioned, we are going globally. So, I mean, as I said, they're getting all the sites activated in Germany. and many more EU countries and regions because we want to do one global filing. So yeah, we expect, I mean, we are targeting and getting all of it enrolled by end of the year. So potentially early 27 by the time we clean the database and announce data. But again, keep in mind, I mean, the thing is the CMC, right? I mean, if we have still, that's the stuff. We have the platform technologies. We have all the stuff ready to go. So once data is out, I think we all, I mean, in entirety, I think we'll be ready to file the BLA.

Okay. Thank you.

Your next question is from Ritu Barrel with TD Cowen.

Good morning, guys. Thanks for taking the question. Suma, I just want to clarify on NK enrollment. Are you pushing out the enrollment completion and the data just slightly in order to, for the sake of the European patients, I wanted to just ask how enrollment rate was going overall as far as, you know, a reflection of the interest in the therapy. And also, are you upsizing the trial at all to include these European patients? And then my second question was a commercial question just on Vivek in the U.S. In your remarks, you mentioned, Krish, you mentioned that you were going more to the community setting. What opportunity, what commercial opportunity or patient number opportunity is left in the community setting for DEB? Is it mostly dominant DEB? And what sort of market research trends have you seen to sort of drive that interest? Thanks.

So I'll take the NK study. I mean, obviously, you know it makes sense for us to go global it makes you know to file in Europe and obviously in Europe there is oxalate is not available so there is a need for these patients I mean it it'll be hopefully you know we when we talk to all of the KOs in Europe they all want to participate because there's nothing for these patients so obviously we want to take advantage of that so we can speed up some of the enrollment with adding you know more patients in Europe that are willing to get, there's a need. So that's the intent. So again, I mean, we are not up-sizing the study trial. It's just trying, we want to do global filing. We want to increase recruitment with keeping the study design the same and the numbers the same. And the intent is to get a global filing.

And we do, we presently expect enrollment to be done year-end, as we've been saying. On the commercial side, Christine, you want to take a shot?

Sure, I'd be happy to. So, yes, we continue to believe there's opportunity in the community setting. While we've made a lot of great progress of finding these patients wherever they may be located across the U.S., and as mentioned, we have surpassed our initial penetration target of 60% of the diagnosed patient population, we're continuing to see opportunities and finding opportunities which supports the demand growth that you're continuing to see. In addition, you asked about the DDEV population. We're continuing to see patients come in that are both R-DEP and D-DEP. As you can imagine, as the launch has gone on, we're seeing the D-DEP patient population grow as they sit more on that mild to moderate spectrum, but we're still also seeing R-DEP patients coming in. So it is still a healthy split of the opportunity that's being found in that community setting.

Yeah, and we too, in terms of overall, I don't think there's any change. There's about 1,200 identified patients. That's the initial target. Once we get close to that number, we're going to expand our efforts to go after the 3,000 or so, the majority of whom probably are undiagnosed. But if you look at the number of reimbursement approvals we're able to generate every quarter, that shows there is still a healthy demand left. We're not in any kind of stable mode. It is true. that most of the new patients coming into the drug tend to be more moderate to mild than super severe. But that said, demand continues to be really strong, like somewhere between 35 and 50 reimbursement approvals. We keep hitting on that almost every quarter.

Great. Thanks.

Your next question for today is from Lachlan Hanbury-Brown with William Blair.

Hey guys, thanks for the questions. Maybe a couple on access. I think over the past couple of weeks we've seen headlines out of Germany that they're sort of passing some reforms on drug pricing or health insurance. I know your negotiations are ongoing and this new law is still very early, but is there any thoughts on your side on how, if at all, that could impact either the negotiations or the ultimate outcome there? And then in the US, maybe somewhat similar, but but wondering how the sort of negotiations or pricing and coverage and access is going through the PBMs for the at-home administration given that's sort of earlier in the launch of that than the original HCP-administered product?

I'll answer the U.S. quickly and turn it to Laurent to talk about Germany. Look, in the U.S., since the beginning of the launch, we've had really good access. We really haven't had Any substantive issue with regard to access to date to really talk about? We do have some wrinkle on the early part of January every year as people transition insurances, but in terms of pricing, in terms of rebates, and we've had a very productive relationship with payers and payers in general. And Laurent on the German side, do you have any comments on the... Question.

I mean, each market has its own pricing and reimbursement framework and specificities. So the outcome will naturally vary from one country to another. But our focus is definitely on achieving sustainable reimbursement that reflects Vajuvek's clinical value, the high unmet medical need in the countries, while being able to provide access to an expanding group of patients. Yet, keeping it consistent with international reference pricing framework. The new things are evolving in Germany, but we are very aware of it and negotiations are very constructive.

Your next question for today is from Debjit Chattopadhyay with Guggenheim Securities.

Hey, good morning, and thanks for taking my questions. I have a couple. So the first one on NK, our channel checks seems to suggest patients who have undergone prior corneal surgeries or any vision correction procedures might be at risk for NK. If That's correct. How are you thinking about the commercial opportunity? And the second question, the Ocular DEB program will read out prior to NK. How are you thinking about the read-through from DEB to NK? Thank you so much.

Yeah, Devjit, thanks for the question on the NK market opportunity and, you know, you're flagging the prospect of maybe a higher incidence rate. of NK associated with surgeries is certainly something we're looking at. I mean, you know, we look collectively across, you know, the claims data, some of which we've disclosed, and observates performance. I mean, it's clear the number of patients being diagnosed and treated annually with NK has increased dramatically. I mean, some of this likely awareness, but it does also point to some, you know, potential incident forces that we are investigating. I mean, I think quite clearly, you know, the trends both on the claim side and the sales data, the recent sales data for Oxfam point to NK being a large and growing market in the United States. And then as Suma alluded to, underserved disease worldwide. So plenty of opportunity here for us on 801.

I think the advantage for 801 is our CMC. I mean, if you look, I mean, they optimize cost of goods, all of that. With regards to Rideau, it's completely different, right? I mean, If you look at NK, it's very similar to open wounds and vice versa. I mean, you need to make sure they're chronic, you treat them, you have to then look for complete wound healing. So it's mechanistically, you have, because you have to have an open wound and then you treat the wound in the eye and complete closure. Whereas for 803, it's very different. It's prophylactic. There is no ophthalmologist involved in the study. It's purely a patient-reported outcome. I mean, so we have patients in a natural history study. We looked and look at number of events and then we treat them. I mean, we did a prophylactically administered and it's a patient reported outcome. So the patients evaluate and say, hey, on a scale of five, they measure like, do I feel I have pain? Do I have abrasion? So it's very patient reported outcome, apples and oranges. Whereas for NK, it's a physician and you have to take pictures of the images, independent lab, they have to show that the wound is completely closed. And so again, very different. So two endpoints are different, evaluations different. So read through from one to the other, either way, it's not the right thing to do.

If I may follow up with one more. When we did our channel checks, the physicians are also reporting a huge influx of and Dompay Sales Reps, which is obviously being reflected in the observate sales numbers. So assuming a successful outcome of the study, how are you thinking about Salesforce in 2027 prepping for a launch later on so you can address the market opportunity there?

Yeah, Devjit, I think it's a little early for us to be getting into phase four plans, certainly. I mean, yeah, we recognize that there is a significant unmet need and patient opportunity here, and I think, you know, certainly on success of Emerald One, if it is successful, you know, we would be looking to assume a dominant position in the United States and worldwide, and we'd do everything we could to achieve that.

Your next question is from Kalpit Patel with Wolf Research.

Yeah, hey, good morning and thanks for taking the questions. For the Ocular DEB program, can you remind us if that also includes global patients like you're planning for the NK program? And then one for the NK program itself, can you comment on what the screening to enrollment rates are and what the demand looks like for the trial itself? And then finally, for the Germany question, or Europe question, on a gross pre-priceling accrual basis, can you give us any color if European Vigevec sales increased sequentially, and if so, by approximately how much? Thank you.

Suma, you want to quickly talk about... Yeah, I mean, for the eye study, it's not a global study because I think patient-reported outcomes are not very well accepted by Europe. So we have to first show this in the U.S. At least we were able to negotiate that with the agency. So it's just right now, it is just focused on the U.S. It's a U.S.-based study. And then based on the outcome, then we will open up discussions with them because, again, because of the patient-reported outcome as the endpoint. Unlike NK, it's a well-defined physician imaging. It's well-recognized, and it's accepted by Europe and the rest of the world. So that's the main difference between the two trials. And regarding to enrollment, I mean, we are, as I said, we are really picking up enrollment at the moment because we have got most of our sites up and running. We are almost in the process of getting Europe sites up and coming. So enrollment, we expect to continue, you know, the pace is going to continue to increase.

On the Germany question, the answer is yes. We try not to quantify these things because then it becomes a perpetual question that we are held responsible to, but I will say it's in the double digits.

Okay, thank you very much. Thank you.

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