If you’re a thrill-seeking investor, the biotech sector is your go-to destination. It’s the ultimate risk/reward play, with the roll of the dice often resulting in either crushing share declines or explosive gains.
Fortunately for investors of Krystal Biotech (KRYS), the week’s first session brought with it plenty of the latter; shares soared by 122%, after the company reported strong results from a late-stage clinical trial.
Specifically, the Phase 3 GEM-3 study of Vyjuvek, indicated for the treatment of dystrophic Epidermolysis Bullosa (dystrophic EB) – an inherited disease which affects the skin and other organs -met its primary endpoint of 100% wound healing following 6 months of treatment. 67% of wounds completely healed following the treatment’s application compared to 22% with the placebo.
The treatment was shown to be well-tolerated, with no drug-related serious adverse events or discontinuations noted. Vyjuvek is not only the first topical gene therapy to be developed for DEB, but because it doesn’t set off an immune response, it could also be the first gene therapy which can be repeated.
Next up, the company should submit the BLA to the FDA in 1H22, following which, Krystal will file a MAA in Europe. The company is also looking at the regulatory path forward for the treatment in other regions.
While not entirely surprised, Cowen’s Ritu Baral is impressed with the study’s outcome.
“The positive Phase 3 results were in-line with our high expectations and represent what we see as the best case scenario for Vyjuvek and the STAR-D platform,” the analyst said. “Vyjuvek continues to demonstrate strong efficacy in terms of complete wound healing and a clean safety profile in DEB, building off prior encouraging Ph1/2 data. Detailed data was not released, but we see topline as supportive of potential US/EU approval in DEB and as representing a compelling gold-standard treatment for DEB with the convenience of topical administration.”
Accordingly, to “reflect the increase in probability of success” for Vyjuvek, the analyst has raised the price target from $89 to $111. Since Monday’s huge share haul, the stock has given back to the market some of the gains following a common stock offering; Baral’s new target suggests there’s still room for a 57% uptick from current levels. No need to add, Baral’s rating stays an Outperform (i.e., Buy). (To watch Baral’s track record, click here)
The rest of the Street’s take is even more upbeat; the forecast calls for additional gains of 42%, given the average price target clocks in at $125. Moreover, all 5 recent reviews are positive, naturally resulting in a Strong Buy consensus rating. (See Krystal Biotech stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
