0001711279-24-000056 | 10-Q | XBRL Viewer

Leases

9 Months Ended

Sep. 30, 2024

As of September 30, 2024, future minimum commitments under the Company’s operating leases with lease terms in excess of 12 months were as follows:


(in thousands)	Operating Leases
2024 (remaining three months)	$	386
2025	1,277
2026	1,277
2027	1,300
2028	1,325
Thereafter	9,437
Future minimum operating lease payments	15,002
Less: Interest	(7,526)
Present value of lease liability	$	7,476

As of September 30, 2024 and December 31, 2023, the Company’s weighted-average remaining lease term for operating leases was 12.2 years and 12.3 years, respectively, and the Company’s weighted-average discount rate for operating leases was 9.5% as of September 30, 2024 and December 31, 2023.

The components of the Company’s lease expense are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Lease cost:
Operating lease expense	$	260	$	379	$	905	$	1,282
Variable lease expense	66		62		156		150
Total lease expense	$	326	$	441	$	1,061	$	1,432

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Changes in Allowances and Discounts

The following table summarizes changes in allowances and discounts for the nine months ended September 30, 2024:


(in thousands)	Rebates		Prompt Pay		Other Accruals		Total
Balance as of December 31, 2023	$	5,977	$	858	$	279	$	7,114
Provisions	30,762		6,612		586		37,960
Payments/Credits	(6,433)		(4,881)		(307)		(11,621)
Balance as of September 30, 2024	$	30,306	$	2,589	$	558	$	33,453

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]
Foreign currency translation gain (loss)	$ 306	$ (83)	$ (62)	$ (112)	$ 57	$ (35)

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net income	$ 27,180	$ 15,568	$ 932	$ 80,747	$ (33,210)	$ (45,297)	$ 43,680	$ 2,240

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Net Income Per Share Attributable to Common Stockholders - Schedule of Basic and Diluted Net Loss Per Share and Per Unit (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net income	$ 27,180	$ 15,568	$ 932	$ 80,747	$ (33,210)	$ (45,297)	$ 43,680	$ 2,240
Denominator:
Weighted-average basic common shares (in shares)	28,716,000			28,042,000			28,537,000	26,812,000
Dilutive effect of stock options and unvested restricted stock (in shares)	1,186,000			850,000			1,132,000	573,000
Weighted-average diluted common shares (in shares)	29,902,000			28,892,000			29,669,000	27,385,000
Net income (loss) per common share - basic (in dollars per share)	$ 0.95			$ 2.88			$ 1.53	$ 0.08
Net income (loss) per common share - diluted (in dollars per share)	$ 0.91			$ 2.79			$ 1.47	$ 0.08

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company recorded an income tax provision of $2.6 million and $3.1 million for the three and nine months ended September 30, 2024, respectively. The tax provision for interim periods is calculated using an estimate of the annual effective tax rate, adjusted for discrete items. If there are any changes to the estimated annual tax rate, the Company will make a cumulative adjustment to the income tax provision in the period the change becomes known. The Company did not record an income tax provision for the three and nine months ended September 30, 2023 as it generated sufficient tax losses, after consideration of discrete items, during each of the periods. The Company expects to maintain a full valuation allowance against its net deferred tax assets for the year.

- Definition

The entire disclosure for income tax.

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+ Details

Leases - Minimum Commitments (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Leases [Abstract]
2024 (remaining nine months)	$ 386
2025	1,277
2026	1,277
2027	1,300
2028	1,325
Thereafter	9,437
Future minimum operating lease payments	15,002
Less: Interest	(7,526)
Present value of lease liability	$ 7,476

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Agreements with Contract Manufacturing Organizations and Contract Research Organizations The Company enters into various agreements in the normal course of business with Contract Manufacturing Organizations (“CMOs”), Contract Research Organizations (“CROs”) and other third parties for preclinical research studies, clinical trials and testing and manufacturing services. The agreements with CMOs primarily relate to the manufacturing of our sterile gel that is mixed with in-house produced vectors as part of the final drug product for VYJUVEK. Agreements with third parties may also include research and development consulting activities, clinical-trial agreements, testing of our clinical-stage, pre-commercial and commercial stage products and/or storage, packaging and labeling. The Company is obligated to make milestone payments under certain of these contracts. The Company may also be responsible for the payment of a monthly service fee for project management services for the duration of any agreements. The estimated remaining commitments as of September 30, 2024 under these agreements was approximately $736 thousand. The Company has incurred research and development expenses under CMO and CRO agreements of $2.7 million and $5.8 million for the three and nine months ended September 30, 2024 and $1.9 million and $5.0 million for the three and nine months ended September 30, 2023. Legal Proceedings In May 2020, PeriphaGen, Inc. (“PeriphaGen”) commenced litigation against the Company alleging breach of contract and misappropriation of trade secrets. In April 2022, the Company and PeriphaGen entered into a final settlement agreement, and the Company paid PeriphaGen an upfront payment of $25.0 million for: (i) the release of all claims in the litigation with PeriphaGen; (ii) the acquisition of certain PeriphaGen assets and (iii) the grant of a license by PeriphaGen for dermatological applications. The final settlement agreement also includes a $12.5 million payment upon FDA approval of VYJUVEK and three additional $12.5 million contingent milestone payments upon the Company reaching $100.0 million in cumulative sales, $200.0 million in cumulative sales and $300.0 million in cumulative sales. If all milestones are achieved, the total consideration for settling the dispute, acquiring certain assets, and granting of a license from PeriphaGen will be $75.0 million. In May 2024, the parties entered into an amendment to the final settlement agreement (“Amendment”). As defined in the final settlement agreement and clarified in the Amendment, cumulative sales means the total cumulative revenue from sales of the Company’s products by the Company and its affiliates and licensees. The Amendment modified the timing of the $12.5 million contingent milestone payment triggered by the Company reaching $100.0 million in cumulative sales, such that $6.25 million would be payable following the Company’s filing of a Quarterly Report on Form 10-Q that reports $100.0 million in cumulative sales, and the remaining $6.25 million would be payable within 120 days following the end of the fiscal year in which the initial $6.25 million is paid. There were no other revisions to the final settlement agreement, and the contingent payments triggered upon reaching $200.0 million in cumulative sales and $300.0 million in cumulative sales remain payable within 30 days following the filing(s) by the Company of an Annual Report(s) on Form 10-K reporting $200.0 million in cumulative sales and $300.0 million in cumulative sales. During the three months ended June 30, 2023, the Company obtained FDA approval of VYJUVEK and, in accordance with the final settlement agreement, paid PeriphaGen $12.5 million in June 2023. During the three months ended June 30, 2024, the Company reached cumulative sales of $100.0 million and, in accordance with the Amendment, the Company paid PeriphaGen the $6.25 million milestone payment in September 2024. The Company is required to make the remaining $6.25 million milestone payment within 120 days following December 31, 2024. During the three months ended September 30, 2024, the Company reached cumulative sales of $200.0 million and, in accordance with the final settlement agreement and Amendment, is required to make the associated $12.5 million milestone payment within 30 days following the filing by the Company of its Annual Report on Form 10-K for the year ended December 31, 2024. During the three months ended September 30, 2024, in accordance with ASC 450, “Contingencies,” the Company determined that reaching $300.0 million in cumulative sales was probable and recorded litigation settlement expense of $12.5 million on the condensed consolidated statements of operations and comprehensive income. If the Company reaches $300.0 million in cumulative sales, it is required to pay PeriphaGen the associated $12.5 million milestone payment within 30 days following the filing of its Annual Report on Form 10-K that reports $300.0 million in cumulative sales. The Company recorded litigation settlement expense of $12.5 million and $37.5 million for the three and nine months ended September 30, 2024, respectively, and zero and $12.5 million for the three and nine months ended September 30, 2023, respectively, on the condensed consolidated statements of operations and comprehensive income. As of September 30, 2024, the Company has paid $43.75 million of the total $75.0 million of total consideration discussed above and has recorded accrued litigation expense within accrued expenses and other current liabilities on its condensed consolidated balance sheet for the remaining $31.25 million.

Organization (Detail) $ in Thousands	Sep. 30, 2024 USD ($) facility	Dec. 31, 2023 USD ($)
Accounting Policies [Abstract]
Number of in-house manufacturing facilities \| facility	2
Accumulated deficit	$ 226,147	$ 269,827
Cash, cash equivalents and short-term investments	$ 588,300

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Balance Sheet Components (Tables)

9 Months Ended

Sep. 30, 2024

Balance Sheet Related Disclosures [Abstract]

Schedule of Inventories

Inventory consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	8,981	$	3,154
Work-in-process	6,390		3,204
Finished goods	3,210		627
Inventory	$	18,581	$	6,985

Schedule of Property and Equipment, Net

Property and equipment, net consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023

Building and building improvements	$	111,438	$	111,180
Leasehold improvements	25,643		25,068
Manufacturing equipment	26,793		24,905
Construction in progress	5,500		7,291
Laboratory equipment	3,141		2,339
Computer equipment and software	2,054		1,614
Furniture and fixtures	1,814		1,632
Total property and equipment	176,383		174,029
Accumulated depreciation	(19,791)		(12,827)
Property and equipment, net	$	156,592	$	161,202

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of September 30, 2024 and December 31, 2023:


(in thousands)	September 30, 2024		December 31, 2023
Accrued litigation settlement	$	31,250	$	—
Accrued payroll and benefits	6,714		8,778
Accrued construction-in-progress	4,873		5,182
Accrued preclinical and clinical expenses	3,091		1,248
Other current liabilities	2,604		1,876
Accrued professional fees	2,200		1,810
Accrued inventory	1,805		334
Accrued taxes	573		2,283

Accrued expenses and other current liabilities	$	53,110	$	21,511

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2024
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). In the opinion of management, all adjustments, which consist of all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented, are reflected in the interim condensed consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassified amounts have no impact on the Company’s previously reported financial position or results of operations. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 10-K”), as filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2024. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates in the period these variances become known. Estimates are used in the following areas, among others: variable consideration associated with revenue recognition, stock-based compensation expense, accrued expenses, the fair value of financial instruments and the valuation allowance included in the deferred income tax calculation. Concentration of Credit Risk and Off-Balance Sheet Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, short-term investments, long-term investments, and accounts receivable, net. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company is exposed to credit risk in the event of default by the financial institutions to the extent amounts recorded on the condensed consolidated balance sheets are in excess of insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds. One counterparty accounted for 87% and 100% of accounts receivable, net as of September 30, 2024 and December 31, 2023, respectively. No other counterparty exceeded 10% of the Company’s accounts receivable, net as of September 30, 2024. As of September 30, 2024, the credit profiles for these counterparties were deemed to be in good standing and, as such, an allowance for credit losses was not recorded. For accounts receivable arising from named patient sales, the Company evaluates the creditworthiness of each counterparty on a regular basis. For the nine months ended September 30, 2024 and 2023, approximately 92% and 100%, respectively, of the Company’s product revenue, net was generated from a single customer in the U.S. No other customer exceeded 10% of the Company’s product revenue, net. The Company has no financial instruments with off-balance sheet risk of loss. Summary of Significant Accounting Policies See Note 2 to our consolidated financial statements included in our 2023 10-K. There were no material changes to the Company’s significant accounting policies during the nine months ended September 30, 2024. Recent Accounting Pronouncements There were no accounting pronouncements issued or adopted during the nine months ended September 30, 2024 that are expected to have a material impact on the Company’s condensed consolidated financial statements. In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The purpose of this guidance is to enhance the transparency and usefulness of income tax disclosures and provide comprehensive income tax information, particularly in relation to rate reconciliation and income taxes paid in the U.S. and foreign jurisdictions. This new standard will be effective for fiscal years starting after December 15, 2024, with the option to apply it retrospectively. Early adoption is also allowed. Currently, the Company is assessing the potential impact of this guidance on its consolidated financial statement disclosures.

Capitalization (Detail) - USD ($) $ / shares in Units, $ in Millions	May 23, 2023	May 23, 2023	May 22, 2023	May 08, 2023
Placement Shares
Schedule of Capitalization, Equity [Line Items]
Sale of stock, aggregate offering price				$ 150.0
2023 Private Placement Offering
Schedule of Capitalization, Equity [Line Items]
Sale of stock, number of shares issued in transaction		9,629	1,720,100
Sale of stock, price per share (in dollars per share)	$ 92.50	$ 92.50	$ 92.50
Sale of stock, consideration received on transaction	$ 160.0

Fair Value Instruments - Summary of Cash, Cash Equivalents and Available-for-Sale Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 373,966	$ 358,328
Gross Unrealized Gains	1,526	835
Gross Unrealized (Losses)	(36)	(58)
Amortized Cost	692,722	593,355
Aggregate fair value, total	694,212	594,132
Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate fair value, total	373,966	358,328
Short-term Marketable Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate fair value, total	214,358	173,850
Long-term Marketable Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate fair value, total	105,888	61,954
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	318,756	235,027
Gross Unrealized Gains	1,526	835
Gross Unrealized (Losses)	(36)	(58)
Aggregate Fair Value	320,246	235,804
Level 2 \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	23,211	17,124
Gross Unrealized Gains	15	5
Gross Unrealized (Losses)	0	(1)
Aggregate Fair Value	23,226	17,128
Level 2 \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	134,920	111,824
Gross Unrealized Gains	780	407
Gross Unrealized (Losses)	(23)	(27)
Aggregate Fair Value	135,677	112,204
Level 2 \| U.S. government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	160,625	106,079
Gross Unrealized Gains	731	423
Gross Unrealized (Losses)	(13)	(30)
Aggregate Fair Value	161,343	106,472
Level 2 \| Short-term Marketable Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	$ 214,358	173,850
Debt securities, available-for-sale, term	1 year
Level 2 \| Short-term Marketable Securities \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	$ 23,226	17,128
Level 2 \| Short-term Marketable Securities \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	66,134	70,996
Level 2 \| Short-term Marketable Securities \| U.S. government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	124,998	85,726
Level 2 \| Long-term Marketable Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	105,888	61,954
Level 2 \| Long-term Marketable Securities \| Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	0	0
Level 2 \| Long-term Marketable Securities \| Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	69,542	41,208
Level 2 \| Long-term Marketable Securities \| U.S. government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate Fair Value	$ 36,346	20,746
Level 2 \| Long-term Marketable Securities \| Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities, available-for-sale, term	1 year
Level 2 \| Long-term Marketable Securities \| Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities, available-for-sale, term	2 years
Cash and cash equivalents \| Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 373,966	358,328
Aggregate Fair Value	$ 373,966	$ 358,328

Leases - Additional Information (Details)	Sep. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Weighted average remaining lease term	12 years 2 months 12 days	12 years 3 months 18 days
Weighted average discount rate	9.50%	9.50%

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Schedule of Future Minimum Operating Lease Payments

As of September 30, 2024, future minimum commitments under the Company’s operating leases with lease terms in excess of 12 months were as follows:


(in thousands)	Operating Leases
2024 (remaining three months)	$	386
2025	1,277
2026	1,277
2027	1,300
2028	1,325
Thereafter	9,437
Future minimum operating lease payments	15,002
Less: Interest	(7,526)
Present value of lease liability	$	7,476

Lease, Cost

The components of the Company’s lease expense are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Lease cost:
Operating lease expense	$	260	$	379	$	905	$	1,282
Variable lease expense	66		62		156		150
Total lease expense	$	326	$	441	$	1,061	$	1,432

Fair Value Instruments

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Instruments

The following tables show the Company’s cash, cash equivalents and available-for-sale securities by significant investment category as of September 30, 2024 and December 31, 2023:


	September 30, 2024
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Aggregate Fair Value		Cash and Cash Equivalents		Short-term Marketable Securities(1)		Long-term Marketable Securities(2)
Level 1:
Cash and cash equivalents	$	373,966	$	—	$	—	$	373,966	$	373,966	$	—	$	—
Subtotal	373,966		—		—		373,966		373,966		—		—
Level 2:

Commercial paper	23,211		15		—		23,226		—		23,226		—
Corporate bonds	134,920		780		(23)		135,677		—		66,134		69,542
U.S. government agency securities	160,625		731		(13)		161,343		—		124,998		36,346
Subtotal	318,756		1,526		(36)		320,246		—		214,358		105,888
Total	$	692,722	$	1,526	$	(36)	$	694,212	$	373,966	$	214,358	$	105,888

(1)The Company’s short-term marketable securities mature in one year or less.

(2)The Company’s long-term marketable securities mature between one and two years.


	December 31, 2023
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Aggregate Fair Value		Cash and Cash Equivalents		Short-term Marketable Securities(1)		Long-term Marketable Securities(2)
Level 1:
Cash and cash equivalents	$	358,328	$	—	$	—	$	358,328	$	358,328	$	—	$	—
Subtotal	358,328		—		—		358,328		358,328		—		—
Level 2:
Commercial paper	17,124		5		(1)		17,128		—		17,128		—
Corporate bonds	111,824		407		(27)		112,204		—		70,996		41,208
U.S. government agency securities	106,079		423		(30)		106,472		—		85,726		20,746
Subtotal	235,027		835		(58)		235,804		—		173,850		61,954
Total	$	593,355	$	835	$	(58)	$	594,132	$	358,328	$	173,850	$	61,954

(1)The Company’s short-term marketable securities mature in one year or less.

(2)The Company’s long-term marketable securities mature between one and two years.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Summary of Significant Accounting Policies - Narrative (Details) - Customer Concentration Risk	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Accounts Receivable, Net Benchmark \| Single Counterparty
Product Information [Line Items]
Concentration risk (as a percent)	87.00%		100.00%
Revenue Benchmark \| Single U.S. Customer
Product Information [Line Items]
Concentration risk (as a percent)	92.00%	100.00%

Stock-Based Compensation - Schedule of Company's Other Stock Activity (Details) - $ / shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Restricted Stock
Number of Shares
Beginning balance (in shares)	44,400	66,600
Granted (in shares)	0	0
Vested (in shares)	(14,523)	(12,649)
Forfeited/surrendered for taxes (in shares)	(7,677)	(9,551)
Ending balance (in shares)	22,200	44,400
Weighted-Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 78.89	$ 78.89
Granted (in dollars per share)
Forfeited/ surrendered for taxes (in dollars per share)	78.89	78.89
Ending balance (in dollars per share)	$ 78.89	$ 78.89
Restricted Stock Units (RSUs)
Number of Shares
Beginning balance (in shares)	160,900	0
Granted (in shares)	225,290	186,900
Vested (in shares)	(40,075)	0
Forfeited/surrendered for taxes (in shares)	(36,562)	(24,700)
Ending balance (in shares)	309,553	162,200
Weighted-Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 81.91
Granted (in dollars per share)	159.63	81.91
Vested (in dollars per share)	81.91
Forfeited/ surrendered for taxes (in dollars per share)	110.11	81.91
Ending balance (in dollars per share)	$ 135.14	$ 81.91
Performance Shares
Number of Shares
Beginning balance (in shares)	50,000	0
Granted (in shares)	112,500	60,000
Vested (in shares)	(25,000)	0
Forfeited/surrendered for taxes (in shares)	0	(10,000)
Ending balance (in shares)	137,500	50,000
Weighted-Average Grant Date Fair Value
Beginning balance (in dollars per share)	$ 81.91
Granted (in dollars per share)	159.47	81.91
Vested (in dollars per share)	81.91
Forfeited/ surrendered for taxes (in dollars per share)		81.91
Ending balance (in dollars per share)	$ 145.37	$ 81.91

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	28,757,000	28,237,000
Common stock, shares outstanding	28,757,000	28,237,000

Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2024

Sep. 30, 2023

Sep. 30, 2024

Sep. 30, 2023

Income Statement [Abstract]

Revenue from Contract with Customer, Product and Service [Extensible Enumeration]

Product [Member]

Product revenue, net

$ 83,841

$ 8,556

$ 199,376

$ 8,556

Expenses

Cost, Product and Service [Extensible Enumeration]

Product [Member]

Cost of goods sold

$ 6,684

$ 223

$ 15,112

$ 223

Research and development

13,511

10,629

40,050

35,061

Selling, general and administrative

28,713

23,697

82,398

73,637

Litigation settlement

12,500

37,500

12,500

Total operating expenses

61,408

34,549

175,060

121,421

Income (loss) from operations

22,433

(25,993)

24,316

(112,865)

Other income

Gain from sale of priority review voucher

100,000

Interest and other income, net

7,336

6,740

22,430

15,105

Income before income taxes

29,769

80,747

46,746

2,240

Income tax expense

(2,589)

(3,066)

Net income

27,180

80,747

43,680

2,240

Unrealized gain (loss) on available-for-sale securities and other

2,146

^[1]

(146)

^[2]

874

346

Comprehensive income

$ 29,326

$ 80,601

$ 44,554

$ 2,586

Net income per common share:

Basic (in dollars per share)

$ 0.95

$ 2.88

$ 1.53

$ 0.08

Diluted (in dollars per share)

$ 0.91

$ 2.79

$ 1.47

$ 0.08

Weighted-average common shares outstanding:

Basic (in shares)

28,716,000

28,042,000

28,537,000

26,812,000

Diluted (in shares)

29,902,000

28,892,000

29,669,000

27,385,000

[1]	Includes foreign currency translation losses of $62 thousand, $83 thousand and gain of $306 thousand for the three months ended March 31, 2024, June 30, 2024 and September 30, 2024, respectively.
[2]	Includes foreign currency translation loss of $35 thousand, gain of $57 thousand and loss of $112 thousand for the three months ended March 31, 2023, June 30, 2023 and September 30, 2023, respectively.

Stock-Based Compensation - Summary of Stock Based Compensation Expense Related to Issuance of Stock Option Awards and Restricted Stock Awards (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation	$ 13,316	$ 8,311	$ 35,771	$ 30,080
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation	2,267	2,336	6,907	7,695
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation	$ 11,049	$ 5,975	$ 28,864	$ 22,385

Revenue Recognition - Allowances And Discounts (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Accounts Receivable, Allowance For Credit Loss [Roll Forward]
Balance as of December 31, 2023	$ 7,114
Provisions	37,960
Payments/Credits	(11,621)
Balance as of September 30, 2024	33,453
Other long-term liabilities	761	$ 0
Rebates
Accounts Receivable, Allowance For Credit Loss [Roll Forward]
Balance as of December 31, 2023	5,977
Provisions	30,762
Payments/Credits	(6,433)
Balance as of September 30, 2024	30,306
Prompt Pay
Accounts Receivable, Allowance For Credit Loss [Roll Forward]
Balance as of December 31, 2023	858
Provisions	6,612
Payments/Credits	(4,881)
Balance as of September 30, 2024	2,589
Other Accruals
Accounts Receivable, Allowance For Credit Loss [Roll Forward]
Balance as of December 31, 2023	279
Provisions	586
Payments/Credits	(307)
Balance as of September 30, 2024	$ 558

Balance Sheet Components - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 176,383	$ 174,029
Accumulated depreciation	(19,791)	(12,827)
Property and equipment, net	156,592	161,202
Building and building improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	111,438	111,180
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	25,643	25,068
Manufacturing equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	26,793	24,905
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	5,500	7,291
Laboratory equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	3,141	2,339
Computer equipment and software
Property, Plant and Equipment [Line Items]
Total property and equipment	2,054	1,614
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 1,814	$ 1,632

Gain from Sale of Priority Review Voucher (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Gain from sale of priority review voucher	$ 0	$ 100,000	$ 0	$ 100,000

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Oct. 28, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-38210
Entity Registrant Name	Krystal Biotech, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-1080209
Entity Address, Address Line One	2100 Wharton Street
Entity Address, Address Line Two	Suite 701
Entity Address, City or Town	Pittsburgh
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15203
City Area Code	412
Local Phone Number	586-5830
Title of 12(b) Security	Common Stock
Trading Symbol	KRYS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,760,548
Entity Central Index Key	0001711279
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31

Gain from Sale of Priority Review Voucher	9 Months Ended
Gain from Sale of Priority Review Voucher	Sep. 30, 2024
Property, Plant and Equipment [Abstract]
Gain from Sale of Priority Review Voucher	Gain from Sale of Priority Review Voucher In August 2023, the Company entered into an agreement to sell the rare pediatric disease priority review voucher (“PRV”), which was awarded to the Company in connection with the FDA’s approval of VYJUVEK. The transaction closed in August 2023 and was not subject to any commissions or closing costs. The proceeds of $100.0 million from the sale of the PRV were recorded as a gain from sale of priority review voucher on the Company’s condensed consolidated statement of operations and comprehensive income as it did not have a carrying value at the time of the sale.

Capitalization	9 Months Ended
Capitalization	Sep. 30, 2024
Equity [Abstract]
Capitalization	Capitalization ATM Program On May 8, 2023, the Company entered into a sales agreement with Cowen and Company, LLC (“Cowen”) with respect to an at-the-market equity offering program (“ATM Program”), under which the Company may issue and sell from time to time through Cowen, acting as agent and/or principal, shares of its common stock having an aggregate offering price up to $150.0 million (“Placement Shares”). The Placement Shares will be offered and sold pursuant to the Company’s effective shelf registration statement on Form S-3 filed with the SEC on April 6, 2023 (the “Form S-3”), and a prospectus supplement relating to the Placement Shares that was filed with the SEC on May 8, 2023. We may terminate the ATM Program at any time upon 10 days’ notice to Cowen. If not earlier terminated, the ATM Program will automatically terminate upon issuance of all of the Placement Shares or the expiration of the Form S-3 on April 6, 2026. The ATM Program is not and has never been active. 2023 Private Placement Offering On May 22, 2023 and May 23, 2023, the Company sold 1,720,100 and 9,629 shares of Common Stock, respectively, in a private placement to certain institutional investors at a price of $92.50 per share for aggregate net proceeds of $160.0 million. In addition, the Company entered into a Registration Rights Agreement with the investors (“Registration Rights Agreement”) that required the Company to file a registration statement with the SEC within 60 days of the date of the Registration Rights Agreement registering the resale of the shares of Common Stock issued in the private placement. On July 18, 2023, the Company filed the resale registration statement on Form S-3ASR with the SEC, which became effective upon filing.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). In the opinion of management, all adjustments, which consist of all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented, are reflected in the interim condensed consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassified amounts have no impact on the Company’s previously reported financial position or results of operations. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 10-K”), as filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2024.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates in the period these variances become known. Estimates are used in the following areas, among others: variable consideration associated with revenue recognition, stock-based compensation expense, accrued expenses, the fair value of financial instruments and the valuation allowance included in the deferred income tax calculation.
Concentration of Credit Risk	Concentration of Credit Risk and Off-Balance Sheet Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, short-term investments, long-term investments, and accounts receivable, net. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company is exposed to credit risk in the event of default by the financial institutions to the extent amounts recorded on the condensed consolidated balance sheets are in excess of insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds.
Off-Balance Sheet Risk	Concentration of Credit Risk and Off-Balance Sheet Risk Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents, short-term investments, long-term investments, and accounts receivable, net. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company is exposed to credit risk in the event of default by the financial institutions to the extent amounts recorded on the condensed consolidated balance sheets are in excess of insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds.
Recent Accounting Pronouncements	Recent Accounting Pronouncements There were no accounting pronouncements issued or adopted during the nine months ended September 30, 2024 that are expected to have a material impact on the Company’s condensed consolidated financial statements. In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The purpose of this guidance is to enhance the transparency and usefulness of income tax disclosures and provide comprehensive income tax information, particularly in relation to rate reconciliation and income taxes paid in the U.S. and foreign jurisdictions. This new standard will be effective for fiscal years starting after December 15, 2024, with the option to apply it retrospectively. Early adoption is also allowed. Currently, the Company is assessing the potential impact of this guidance on its consolidated financial statement disclosures.

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating Activities
Net income	$ 43,680	$ 2,240
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Gain (Loss) on Disposition of Intangible Assets	0	(100,000)
Depreciation	4,603	3,483
Accretion on marketable securities	(1,535)	(1,585)
Amortization of operating lease right-of-use assets	556	671
Stock-based compensation expense, net	35,771	30,080
Realized gain on investments	(4,427)	(3,886)
Other, net	725	(77)
Changes in operating assets and liabilities
Accounts receivable, net	(55,257)	(9,316)
Inventory	(5,386)	(3,983)
Prepaid expenses and other current assets	(2,636)	(464)
Other non-current assets	11	(48)
Lease liability	(617)	(603)
Other long-term liabilities	761	0
Accounts payable	1,602	121
Accrued expenses and other current liabilities	(2,092)	875
Accrued rebates	23,568	920
Accrued litigation settlement	31,250	0
Net cash provided by (used in) operating activities	70,577	(81,572)
Investing Activities
Proceeds from sale of priority review voucher	0	100,000
Purchases of property and equipment	(3,437)	(9,952)
Purchases of investments	(314,268)	(425,870)
Maturities of investments	238,044	428,620
Net cash (used in) provided by investing activities	(79,661)	92,798
Financing Activities
Proceeds from exercise of stock options	0	159,716
Proceeds from exercise of stock options	29,972	41,164
Net cash provided by financing activities	24,586	200,131
Effect of exchange rate changes on cash and cash equivalents	136	(16)
Net increase in cash and cash equivalents	15,638	211,341
Cash and cash equivalents at beginning of period	358,328	161,900
Cash and cash equivalents at end of period	373,966	373,241
Supplemental Disclosures of Non-Cash Investing Activities
Unpaid purchases of property and equipment included in accounts payable and accrued expenses	8,292	11,103
Supplemental Cash Flow Information
Income taxes paid	5,150	0
Restricted Stock Units (RSUs)
Financing Activities
Taxes paid related to settlement of restricted stock awards	(4,181)	0
Restricted Stock
Financing Activities
Taxes paid related to settlement of restricted stock awards	$ (1,205)	$ (749)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income tax expense	$ (2,589)	$ 0	$ (3,066)	$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/exampleRef
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+ Details

Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2024 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2017 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period increase in shares authorized			0.04
Stock options granted (in shares) \| shares			297,202	419,780
Exercised \| $	$ 5,900	$ 13,500	$ 50,200	$ 41,400
Inventories
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount capitalized \| $	946	410	2,300	522
Property, Plant and Equipment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount capitalized \| $	$ 0	$ 0	$ 0	$ 162
Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares remaining available for grant \| shares	2,400,000		2,400,000
2017 IPO Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved (in shares) \| shares					900,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant-date fair value per share of options granted (in dollars per share) \| $ / shares	$ 130.85	$ 85.93	$ 114.29	$ 62.87
Stock Options \| Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $	$ 63,400		$ 63,400
Estimated weighted average period			2 years 6 months
Stock Options \| 2017 IPO Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved (in shares) \| shares					900,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $	713		$ 713
Estimated weighted average period			5 months
Granted (in shares) \| shares			0	0
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $	35,300		$ 35,300
Estimated weighted average period			3 years 2 months 12 days
Granted (in shares) \| shares			225,290	186,900
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $	$ 13,500		$ 13,500
Estimated weighted average period			1 year 4 months 24 days
Granted (in shares) \| shares			112,500	60,000
Stock option vesting period			2 years
Eligible to vest	1		1

Balance Sheet Components - Schedule of Inventory (Detail) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Raw materials	$ 8,981	$ 3,154
Work-in-process	6,390	3,204
Finished goods	3,210	627
Inventory	$ 18,581	$ 6,985

Net Income Per Share Attributable to Common Stockholders - Additional Information (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Stock Options and Unvested Restricted Stocks Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common share equivalents outstanding, excluded from the calculation of diluted net loss per common share	229	378	207	1,300

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 373,966	$ 358,328
Short-term investments	214,358	173,850
Accounts receivable, net	97,298	42,040
Inventory	18,581	6,985
Prepaid expenses and other current assets	8,961	6,706
Total current assets	713,164	587,909
Property and equipment, net	156,592	161,202
Long-term investments	105,888	61,954
Right-of-use assets	6,471	7,027
Other non-current assets	203	263
Total assets	982,318	818,355
Current liabilities
Accounts payable	5,580	4,132
Current portion of lease liability	1,292	1,474
Accrued rebates	29,545	5,977
Accrued expenses and other current liabilities	53,110	21,511
Total current liabilities	89,527	33,094
Lease liability	6,184	6,620
Other long-term liabilities	761	0
Total liabilities	96,472	39,714
Commitments and contingencies (see note 7)
Stockholders’ equity
Common stock; $0.00001 par value; 80,000 shares authorized as of September 30, 2024 and December 31, 2023; 28,757 and 28,237 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.	0	0
Additional paid-in capital	1,110,481	1,047,830
Accumulated other comprehensive gain	1,512	638
Accumulated deficit	(226,147)	(269,827)
Total stockholders’ equity	885,846	778,641
Total liabilities and stockholders’ equity	$ 982,318	$ 818,355

Leases - Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases - Lease Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Operating lease expense	$ 260	$ 379	$ 905	$ 1,282
Variable lease expense	66	62	156	150
Total lease expense	$ 326	$ 441	$ 1,061	$ 1,432

Balance Sheet Components - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Supply Commitment [Line Items]
Depreciation expense	$ 1,300	$ 1,200	$ 4,603	$ 3,483
Depreciation expense capitalized	1,000	$ 391	2,400	$ 464
ASTRA Facility
Supply Commitment [Line Items]
Contractual obligation	$ 7,900		$ 7,900		$ 8,200

Stock-Based Compensation - Schedule of Company's Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Stock Options Outstanding
Beginning balance (in shares)	2,606,592	3,582,181	3,582,181
Granted (in shares)	297,202	419,780
Exercised (in shares)	(489,152)	(710,734)
Cancelled or forfeited (in shares)	(335,449)	(623,967)
Ending balance (in shares)	2,079,193	2,667,260	2,606,592	3,582,181
Exercisable end of period (in shares)	867,025	707,277
Weighted-Average Exercise Price
Beginning balance (in dollars per share)	$ 66.39	$ 61.50	$ 61.50
Granted (in dollars per share)	168.54	91.38
Exercised (in dollars per share)	61.27	57.98
Cancelled or forfeited (in dollars per share)	70.52	64.19
Ending balance (in dollars per share)	81.53	66.04	$ 66.39	$ 61.50
Exercisable end of period (in dollars per share)	$ 63.68	$ 55.51
Weighted-Average Remaining Contractual Life (in years)
Weighted-average remaining contractual life (Years)	7 years 6 months	8 years 2 months 12 days	7 years 10 months 24 days	8 years 8 months 12 days
Weighted-average remaining contractual life (Years), exercisable	6 years 8 months 12 days	7 years 1 month 6 days
Aggregate Intrinsic Value
Aggregate intrinsic value, beginning balance, outstanding	$ 150,405	$ 64,880	$ 64,880
Aggregate intrinsic value, ending balance, outstanding	209,854	133,648	$ 150,405	$ 64,880
Exercisable as of September 30, 2024	$ 102,627	$ 42,793

Balance Sheet Components

9 Months Ended

Sep. 30, 2024

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

Inventory

Inventory consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	8,981	$	3,154
Work-in-process	6,390		3,204
Finished goods	3,210		627
Inventory	$	18,581	$	6,985

Property and Equipment, Net

Property and equipment, net consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023

Building and building improvements	$	111,438	$	111,180
Leasehold improvements	25,643		25,068
Manufacturing equipment	26,793		24,905
Construction in progress	5,500		7,291
Laboratory equipment	3,141		2,339
Computer equipment and software	2,054		1,614
Furniture and fixtures	1,814		1,632
Total property and equipment	176,383		174,029
Accumulated depreciation	(19,791)		(12,827)
Property and equipment, net	$	156,592	$	161,202

Depreciation expense was $1.3 million and $1.2 million for the three months ended September 30, 2024 and 2023, respectively, and $4.6 million and $3.5 million for the nine months ended September 30, 2024 and 2023, respectively. Depreciation expense capitalized into inventory was $1.0 million and $391 thousand for the three months ended September 30, 2024 and 2023, respectively, and $2.4 million and $464 thousand for the nine months ended September 30, 2024 and 2023, respectively.

In March 2023, the Company received the permanent occupancy permit for its second commercial scale CGMP facility, ASTRA, which allowed the Company to begin utilizing certain portions of the building. As a result, and as qualification of assets occurred through 2023 and the first half of 2024, the majority of assets relating to ASTRA were reclassified from construction in progress to leasehold improvements, manufacturing equipment, buildings and building

improvements, furniture and fixtures, or computer equipment and software as it was determined that assets were ready for their intended use. As certain pieces of equipment are not yet qualified, the Company will continue to hold the remaining assets within construction in progress until qualification has been completed and the assets are ready for their intended use. Estimated remaining payments related to ASTRA were $7.9 million and $8.2 million as of September 30, 2024 and December 31, 2023, respectively, and are recorded in accounts payable and accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of September 30, 2024 and December 31, 2023:


(in thousands)	September 30, 2024		December 31, 2023
Accrued litigation settlement	$	31,250	$	—
Accrued payroll and benefits	6,714		8,778
Accrued construction-in-progress	4,873		5,182
Accrued preclinical and clinical expenses	3,091		1,248
Other current liabilities	2,604		1,876
Accrued professional fees	2,200		1,810
Accrued inventory	1,805		334
Accrued taxes	573		2,283

Accrued expenses and other current liabilities	$	53,110	$	21,511

Fair Value Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Cash, Cash Equivalents and Available-for-Sale Securities

The following tables show the Company’s cash, cash equivalents and available-for-sale securities by significant investment category as of September 30, 2024 and December 31, 2023:


	September 30, 2024
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Aggregate Fair Value		Cash and Cash Equivalents		Short-term Marketable Securities(1)		Long-term Marketable Securities(2)
Level 1:
Cash and cash equivalents	$	373,966	$	—	$	—	$	373,966	$	373,966	$	—	$	—
Subtotal	373,966		—		—		373,966		373,966		—		—
Level 2:

Commercial paper	23,211		15		—		23,226		—		23,226		—
Corporate bonds	134,920		780		(23)		135,677		—		66,134		69,542
U.S. government agency securities	160,625		731		(13)		161,343		—		124,998		36,346
Subtotal	318,756		1,526		(36)		320,246		—		214,358		105,888
Total	$	692,722	$	1,526	$	(36)	$	694,212	$	373,966	$	214,358	$	105,888

(1)The Company’s short-term marketable securities mature in one year or less.

(2)The Company’s long-term marketable securities mature between one and two years.


	December 31, 2023
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Aggregate Fair Value		Cash and Cash Equivalents		Short-term Marketable Securities(1)		Long-term Marketable Securities(2)
Level 1:
Cash and cash equivalents	$	358,328	$	—	$	—	$	358,328	$	358,328	$	—	$	—
Subtotal	358,328		—		—		358,328		358,328		—		—
Level 2:
Commercial paper	17,124		5		(1)		17,128		—		17,128		—
Corporate bonds	111,824		407		(27)		112,204		—		70,996		41,208
U.S. government agency securities	106,079		423		(30)		106,472		—		85,726		20,746
Subtotal	235,027		835		(58)		235,804		—		173,850		61,954
Total	$	593,355	$	835	$	(58)	$	594,132	$	358,328	$	173,850	$	61,954

(1)The Company’s short-term marketable securities mature in one year or less.

(2)The Company’s long-term marketable securities mature between one and two years.

Balance Sheet Components - Schedule of Accrued Expenses And Other Current Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Accrued litigation settlement	$ 31,250	$ 0
Accrued payroll and benefits	6,714	8,778
Accrued construction-in-progress	4,873	5,182
Accrued preclinical and clinical expenses	3,091	1,248
Other current liabilities	2,604	1,876
Accrued professional fees	2,200	1,810
Accrued inventory	1,805	334
Accrued taxes	573	2,283
Accrued expenses and other current liabilities	$ 53,110	$ 21,511

Commitments and Contingencies (Detail) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended		53 Months Ended
	May 31, 2024	Jun. 30, 2023	Apr. 30, 2022	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024
Operating Leased Assets [Line Items]
Litigation settlement				$ 12,500	$ 0	$ 37,500	$ 12,500
PeriphaGen
Operating Leased Assets [Line Items]
Litigation settlement			$ 25,000	12,500				$ 43,750
Litigation settlement, total consideration				75,000		75,000		75,000
PeriphaGen \| Milestone One
Operating Leased Assets [Line Items]
Litigation settlement	$ 12,500	$ 12,500		12,500
Litigation settlement, amount awarded to other party	$ 6,250		12,500
Litigation settlement, milestone payments, sales threshold			100,000
PeriphaGen \| Milestone Two
Operating Leased Assets [Line Items]
Litigation settlement, amount awarded to other party			12,500
Litigation settlement, milestone payments, sales threshold			200,000	200,000
PeriphaGen \| Milestone Three
Operating Leased Assets [Line Items]
Litigation settlement, amount awarded to other party			12,500
Litigation settlement, milestone payments, sales threshold			$ 300,000	300,000
Clinical Supply Agreements
Operating Leased Assets [Line Items]
Estimated remaining commitment				736		736		$ 736
Project management service fee				$ 2,700	$ 1,900	$ 5,800	$ 5,000

Organization	9 Months Ended
Organization	Sep. 30, 2024
Accounting Policies [Abstract]
Organization	Organization Founded in 2016, Krystal Biotech, Inc. (the “Company,” or “we” or other similar pronouns) is a fully integrated, commercial-stage biotechnology company focused on the discovery, development, manufacturing and commercialization of genetic medicines to treat diseases with high unmet medical needs. Using our patented gene therapy technology platform that is based on engineered herpes simplex virus-1 (“HSV-1”), we create vectors that efficiently deliver therapeutic transgenes to cells of interest in multiple organ systems. The cell’s own machinery then transcribes and translates the transgene to treat the disease. Our vectors are amenable to formulation for non-invasive or minimally invasive routes of administration at a healthcare professional’s office or in the patient’s home by a healthcare professional. Our innovative technology platform is supported by two in-house, commercial scale Current Good Manufacturing Practice (“CGMP”) manufacturing facilities. Liquidity As of September 30, 2024, the Company had an accumulated deficit of $226.1 million. Our operating profitability is dependent upon the continued successful commercialization of VYJUVEK®, as well as successful development, approval, and commercialization of our other product candidates. Management intends to fund future operations through its on hand cash, cash equivalents and investments and revenue generated from the sale of VYJUVEK, and may also seek additional capital through the sale of equity, arrangements with strategic partners, debt financings or other sources. There can be no assurance that additional funding will be available on terms acceptable to the Company, if at all. The Company is subject to risks common to companies in the biotechnology industry, including but not limited to the failure of product candidates in preclinical and clinical studies, the development of competing product candidates or other technological innovations by competitors, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to commercialize product candidates. The Company expects to incur significant costs to further its pipeline and to expand its commercialization capabilities in advance of the potential global regulatory approvals of VYJUVEK, the Company’s U.S. Food and Drug Administration (“FDA”) approved redosable gene therapy, for treating patients, six months of age or older, suffering from dystrophic epidermolysis bullosa, a rare and severe monogenic disease that affects the skin and mucosal tissues. The Company believes that its cash, cash equivalents and short-term investments of approximately $588.3 million as of September 30, 2024 will be sufficient to allow the Company to fund its planned operations for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

Net Income Per Share Attributable to Common Stockholders (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Net Income (Loss) Per Share Attributable to Common Stockholders


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income	$	27,180	$	80,747	$	43,680	$	2,240
Denominator:
Weighted-average basic common shares	28,716		28,042		28,537		26,812
Dilutive effect of stock options and unvested restricted stock	1,186		850		1,132		573
Weighted-average diluted common shares	29,902		28,892		29,669		27,385

Net income per common share—basic	$	0.95	$	2.88	$	1.53	$	0.08
Net income per common share—diluted	$	0.91	$	2.79	$	1.47	$	0.08

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events The Company evaluates events or transactions that occur after the balance sheet date, but prior to the issuance of the financial statements, to identify matters that require recognition or disclosure. The Company concluded that no subsequent events have occurred, that would require recognition or disclosure in the condensed consolidated financial statements.

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Company's Stock Option Activity

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2024:


	Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1) (in thousands)
Outstanding as of December 31, 2023	2,606,592	$	66.39	7.9	$	150,405
Granted	297,202	$	168.54
Exercised	(489,152)	$	61.27
Cancelled or forfeited	(335,449)	$	70.52

Outstanding as of September 30, 2024	2,079,193	$	81.53	7.5	$	209,854
Exercisable as of September 30, 2024	867,025	$	63.68	6.7	$	102,627

(1)Aggregate intrinsic value represents the difference between the closing stock price of our Common Stock on December 31, 2023 and September 30, 2024, respectively, and the exercise price of outstanding in-the-money options.

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2023:


	Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1) (in thousands)
Outstanding as of December 31, 2022	3,582,181	$	61.50	8.7	$	64,880
Granted	419,780	$	91.38
Exercised	(710,734)	$	57.98
Cancelled or forfeited	(623,967)	$	64.19

Outstanding as of September 30, 2023	2,667,260	$	66.04	8.2	$	133,648
Exercisable as of September 30, 2023	707,277	$	55.51	7.1	$	42,793

(1)Aggregate intrinsic value represents the difference between the closing stock price of our Common Stock on December 31, 2022 and September 30, 2023, respectively, and the exercise price of outstanding in-the-money options.

Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity

The following table summarizes the Company’s RSA activity:


	Nine Months Ended September 30,
	2024			2023
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested RSAs, beginning of period	44,400	$	78.89	66,600	$	78.89
Granted	—			—
Vested	(14,523)	$	78.89	(12,649)	$	78.89
Surrendered for taxes	(7,677)	$	78.89	(9,551)	$	78.89
Non-vested RSAs, end of period	22,200	$	78.89	44,400	$	78.89

The following table summarizes the Company’s RSU activity:


	Nine Months Ended September 30,
	2024			2023
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested RSUs, beginning of period	160,900	$	81.91	—
Granted	225,290	$	159.63	186,900	$	81.91
Vested	(40,075)	$	81.91	—
Forfeited	(36,562)	$	110.11	(24,700)	$	81.91
Non-vested RSUs, end of period	309,553	$	135.14	162,200	$	81.91

Share-Based Payment Arrangement, Performance Shares, Activity

The following table summarizes the Company’s PSU activity:


	Nine Months Ended September 30,
	2024			2023
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested PSUs, beginning of period	50,000	$	81.91	—
Granted	112,500	$	159.47	60,000	$	81.91
Vested	(25,000)	$	81.91	—

Forfeited	—			(10,000)	$	81.91
Non-vested PSUs, end of period	137,500	$	145.37	50,000	$	81.91

Summary of Stock Based Compensation Expense Related to Issuance of Stock Option Awards and Restricted Stock Awards

The Company recorded stock-based compensation expense, net related to its stock options, RSAs, RSUs and PSUs in the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2024 and 2023 as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Research and development	$	2,267	$	2,336	$	6,907	$	7,695
Selling, general and administrative	11,049		5,975		28,864		22,385
Total stock-based compensation	$	13,316	$	8,311	$	35,771	$	30,080

Condensed Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands

Total

Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive (Loss)

Accumulated Deficit

Beginning balance (in shares) at Dec. 31, 2022

25,764,000

Beginning balance at Dec. 31, 2022

$ 522,231

$ 0

$ 803,718

$ (728)

$ (280,759)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options (in shares)

42,000

Issuance of common stock upon exercise of stock options

2,208

Shares surrendered for taxes and forfeitures (in shares)

(10,000)

Shares of restricted stock awards surrendered for taxes

(749)

Stock-based compensation

10,599

Unrealized gain (loss) on investments and other

^[1]

574

Net income

(45,297)

Ending balance (in shares) at Mar. 31, 2023

25,796,000

Ending balance at Mar. 31, 2023

489,566

$ 0

815,776

(154)

(326,056)

Beginning balance (in shares) at Dec. 31, 2022

25,764,000

Beginning balance at Dec. 31, 2022

$ 522,231

$ 0

803,718

(728)

(280,759)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options (in shares)

710,734

Unrealized gain (loss) on investments and other

$ 346

Net income

2,240

Ending balance (in shares) at Sep. 30, 2023

28,195,000

Ending balance at Sep. 30, 2023

755,948

$ 0

1,034,849

(382)

(278,519)

Beginning balance (in shares) at Mar. 31, 2023

25,796,000

Beginning balance at Mar. 31, 2023

489,566

$ 0

815,776

(154)

(326,056)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock in private placement offering, net of offering costs (in shares)

1,730,000

Issuance of common stock in private placement offering, net of offering costs

159,951

Issuance of common stock upon exercise of stock options (in shares)

449,000

Issuance of common stock upon exercise of stock options

25,446

Stock-based compensation

11,443

Unrealized gain (loss) on investments and other

^[1]

(82)

Net income

(33,210)

Ending balance (in shares) at Jun. 30, 2023

27,975,000

Ending balance at Jun. 30, 2023

653,114

$ 0

1,012,616

(236)

(359,266)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options (in shares)

220,000

Issuance of common stock upon exercise of stock options

13,511

Stock-based compensation

8,722

Unrealized gain (loss) on investments and other

^[1]

(146)

Net income

80,747

Ending balance (in shares) at Sep. 30, 2023

28,195,000

Ending balance at Sep. 30, 2023

755,948

$ 0

1,034,849

(382)

(278,519)

Beginning balance (in shares) at Dec. 31, 2023

28,237,000

Beginning balance at Dec. 31, 2023

778,641

$ 0

1,047,830

638

(269,827)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options (in shares)

260,000

Issuance of common stock upon exercise of stock options

15,969

Vesting of restricted stock units, net of shares withheld for taxes (in shares)

39,000

Vesting of restricted stock units, net of shares withheld for taxes

(4,181)

Shares surrendered for taxes and forfeitures (in shares)

(8,000)

Shares of restricted stock awards surrendered for taxes

(1,205)

Stock-based compensation

10,023

Unrealized gain (loss) on investments and other

^[2]

(937)

Net income

932

Ending balance (in shares) at Mar. 31, 2024

28,528,000

Ending balance at Mar. 31, 2024

799,242

$ 0

1,068,436

(299)

(268,895)

Beginning balance (in shares) at Dec. 31, 2023

28,237,000

Beginning balance at Dec. 31, 2023

$ 778,641

$ 0

1,047,830

638

(269,827)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options (in shares)

489,152

Unrealized gain (loss) on investments and other

$ 874

Net income

43,680

Ending balance (in shares) at Sep. 30, 2024

28,757,000

Ending balance at Sep. 30, 2024

885,846

$ 0

1,110,481

1,512

(226,147)

Beginning balance (in shares) at Mar. 31, 2024

28,528,000

Beginning balance at Mar. 31, 2024

799,242

$ 0

1,068,436

(299)

(268,895)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options (in shares)

181,000

Issuance of common stock upon exercise of stock options

10,637

Stock-based compensation

13,781

Unrealized gain (loss) on investments and other

^[2]

(335)

Net income

15,568

Ending balance (in shares) at Jun. 30, 2024

28,709,000

Ending balance at Jun. 30, 2024

838,893

$ 0

1,092,854

(634)

(253,327)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercise of stock options (in shares)

48,000

Issuance of common stock upon exercise of stock options

3,365

Stock-based compensation

14,262

Unrealized gain (loss) on investments and other

^[2]

2,146

Net income

27,180

Ending balance (in shares) at Sep. 30, 2024

28,757,000

Ending balance at Sep. 30, 2024

$ 885,846

$ 0

$ 1,110,481

$ 1,512

$ (226,147)

[1]	Includes foreign currency translation loss of $35 thousand, gain of $57 thousand and loss of $112 thousand for the three months ended March 31, 2023, June 30, 2023 and September 30, 2023, respectively.
[2]	Includes foreign currency translation losses of $62 thousand, $83 thousand and gain of $306 thousand for the three months ended March 31, 2024, June 30, 2024 and September 30, 2024, respectively.

Revenue Recognition

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Following FDA approval on May 19, 2023, the Company began commercial marketing and sales of VYJUVEK and began recognizing revenue in the third quarter of 2023.

The following table summarizes changes in allowances and discounts for the nine months ended September 30, 2024:


(in thousands)	Rebates		Prompt Pay		Other Accruals		Total
Balance as of December 31, 2023	$	5,977	$	858	$	279	$	7,114
Provisions	30,762		6,612		586		37,960
Payments/Credits	(6,433)		(4,881)		(307)		(11,621)
Balance as of September 30, 2024	$	30,306	$	2,589	$	558	$	33,453

Rebates are included in accrued rebates and other long-term liabilities on the condensed consolidated balance sheets. Other long-term liabilities includes $761 thousand of long-term accrued rebates. Prompt pay is recorded as an allowance against accounts receivable, net on the condensed consolidated balance sheets. Other accruals are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. Provisions for rebates, prompt pay and other accruals are recorded as a reduction to product revenue, net on the condensed consolidated statements of operations and comprehensive income.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

In 2017, the Company adopted the 2017 IPO Stock Plan (“Plan”), which governs the issuance of equity awards to employees, certain non-employee consultants, and directors. Initially, the Company reserved 900 thousand shares for issuance under the Plan with an initial sublimit for incentive stock options of 900 thousand shares. On an annual basis, the amount of shares available for issuance under the Plan increases by an amount equal to four percent of the total outstanding shares as of the last day of the preceding calendar year. The sublimit of incentive stock options is not subject to the increase. The Company has historically granted stock options and restricted stock awards (“RSAs”) to its employees. In February 2023, the Company began issuing restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs” and with RSUs commonly referred to collectively as “restricted stock units”) to certain employees.

Shares remaining available for grant under the Plan were 2.4 million as of September 30, 2024.

Stock Options

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2024:


	Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1) (in thousands)
Outstanding as of December 31, 2023	2,606,592	$	66.39	7.9	$	150,405
Granted	297,202	$	168.54
Exercised	(489,152)	$	61.27
Cancelled or forfeited	(335,449)	$	70.52

Outstanding as of September 30, 2024	2,079,193	$	81.53	7.5	$	209,854
Exercisable as of September 30, 2024	867,025	$	63.68	6.7	$	102,627

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2023:


	Stock Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value(1) (in thousands)
Outstanding as of December 31, 2022	3,582,181	$	61.50	8.7	$	64,880
Granted	419,780	$	91.38
Exercised	(710,734)	$	57.98
Cancelled or forfeited	(623,967)	$	64.19

Outstanding as of September 30, 2023	2,667,260	$	66.04	8.2	$	133,648
Exercisable as of September 30, 2023	707,277	$	55.51	7.1	$	42,793

The total intrinsic value (the amount by which the fair market value exceeds the exercise price) of stock options exercised was $5.9 million and $13.5 million during the three months ended September 30, 2024 and 2023, respectively, and $50.2 million and $41.4 million during the nine months ended September 30, 2024 and 2023, respectively.

The weighted-average grant-date fair value per share of options granted to employees, non-employees, and directors was $130.85 and $85.93 during the three months ended September 30, 2024 and 2023, respectively, and $114.29 and $62.87 during the nine months ended September 30, 2024 and 2023, respectively.

There was $63.4 million of unrecognized stock-based compensation expense related to employees’, non-employees’, and directors’ options that is expected to be recognized over a weighted-average period of 2.5 years as of September 30, 2024.

Restricted Stock Awards

The following table summarizes the Company’s RSA activity:


	Nine Months Ended September 30,
	2024			2023
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested RSAs, beginning of period	44,400	$	78.89	66,600	$	78.89
Granted	—			—
Vested	(14,523)	$	78.89	(12,649)	$	78.89
Surrendered for taxes	(7,677)	$	78.89	(9,551)	$	78.89
Non-vested RSAs, end of period	22,200	$	78.89	44,400	$	78.89

There was $713 thousand of unrecognized stock-based compensation expense related to employees’ RSAs that is expected to be recognized over a weighted-average period of 5 months as of September 30, 2024.

Restricted Stock Units

The following table summarizes the Company’s RSU activity:


	Nine Months Ended September 30,
	2024			2023
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested RSUs, beginning of period	160,900	$	81.91	—
Granted	225,290	$	159.63	186,900	$	81.91
Vested	(40,075)	$	81.91	—
Forfeited	(36,562)	$	110.11	(24,700)	$	81.91
Non-vested RSUs, end of period	309,553	$	135.14	162,200	$	81.91

There was $35.3 million of unrecognized stock-based compensation expense related to employees’ RSU awards that is expected to be recognized over a weighted-average period of 3.2 years as of September 30, 2024.

Performance-Based Restricted Stock Units

The following table summarizes the Company’s PSU activity:


	Nine Months Ended September 30,
	2024			2023
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested PSUs, beginning of period	50,000	$	81.91	—
Granted	112,500	$	159.47	60,000	$	81.91
Vested	(25,000)	$	81.91	—

Forfeited	—			(10,000)	$	81.91
Non-vested PSUs, end of period	137,500	$	145.37	50,000	$	81.91

PSUs vest ratably over two years based upon continued service through the vesting date and the achievement of specific regulatory and commercial performance criteria as determined by the Compensation Committee of the Company’s Board of Directors. The performance criteria are to be completed by the end of the year in which the PSU awards were granted. As of the September 30, 2024, the Company estimated that 100% of the PSUs granted in 2024 will be eligible to vest.

There was $13.5 million of unrecognized stock-based compensation expense related to employees’ PSU awards that is expected to be recognized over a weighted-average period of 1.4 years as of September 30, 2024.

Stock-Based Compensation Expense, Net


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Research and development	$	2,267	$	2,336	$	6,907	$	7,695
Selling, general and administrative	11,049		5,975		28,864		22,385
Total stock-based compensation	$	13,316	$	8,311	$	35,771	$	30,080

After the FDA approval of VYJUVEK on May 19, 2023, the Company began capitalizing stock-based compensation associated with the allocation of labor costs related to work performed to manufacture VYJUVEK. The Company capitalized stock-based compensation of $946 thousand and $410 thousand for the three months ended September 30, 2024 and 2023, respectively, and $2.3 million and $522 thousand for the nine months ended September 30, 2024 and 2023, respectively, into inventory.

Historically, the Company also capitalized the portion of stock-based compensation related to work performed on the construction of our manufacturing facilities. The Company capitalized stock-based compensation of zero for each the three months ended September 30, 2024 and 2023, respectively, and zero and $162 thousand for the nine months ended September 30, 2024 and 2023, respectively, into property and equipment, net.

Net Income Per Share Attributable to Common Stockholders

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Net Income Per Share Attributable to Common Stockholders

Basic net income per share attributable to common stockholders is calculated by dividing net income attributable to common stockholders by the weighted-average shares outstanding during the period, without consideration for common stock equivalents. Diluted net income per share attributable to common stockholders is computed by dividing the net income by the weighted-average number of shares of common stock and common stock equivalents outstanding for the period. Common stock equivalents consist of common stock issuable upon (1) exercise of stock options and (2) vesting of restricted stock awards, restricted stock units and performance-based restricted stock units (collectively, “restricted stock”).

For the three months ended September 30, 2024 and 2023, respectively, there were 229 thousand and 378 thousand common stock equivalents outstanding in the form of stock options that have been excluded from the calculation of diluted net income per common share as their effect would be anti-dilutive.

For the nine months ended September 30, 2024 and 2023, respectively, there were 207 thousand and 1.3 million common stock equivalents outstanding in the form of stock options that have been excluded from the calculation of diluted net income per common share as their effect would be anti-dilutive.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net income	$	27,180	$	80,747	$	43,680	$	2,240
Denominator:
Weighted-average basic common shares	28,716		28,042		28,537		26,812
Dilutive effect of stock options and unvested restricted stock	1,186		850		1,132		573
Weighted-average diluted common shares	29,902		28,892		29,669		27,385

Net income per common share—basic	$	0.95	$	2.88	$	1.53	$	0.08
Net income per common share—diluted	$	0.91	$	2.79	$	1.47	$	0.08