Organization

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Organization

1. Organization

Krystal Biotech, Inc. and its consolidated subsidiaries (the “Company,” or “we” or other similar pronouns) commenced operations in April 2016. In March 2017, the Company converted from a California limited liability company to a Delaware C-corporation, and changed its name from Krystal Biotech LLC to Krystal Biotech, Inc. On June 19, 2018, the Company incorporated Krystal Australia Pty Ltd., an Australian proprietary limited company, for the purpose of undertaking preclinical and clinical studies in Australia. On April 24, 2019, the Company incorporated Jeune, Inc. in Delaware, a wholly-owned subsidiary, for the purpose of undertaking preclinical studies for aesthetic skin conditions.

We are a clinical-stage gene therapy company dedicated to developing and commercializing novel medicines for patients suffering from skin diseases. We have developed a proprietary gene therapy platform to develop off-the-shelf treatments for skin diseases for which we believe there are no known effective treatments. Our platform consists of a patented engineered viral vector based on the herpes simplex virus type 1 (“HSV-1”) containing skin-optimized gene transfer technology, which we refer to as the Skin TARgeted Delivery (“STAR-D”) platform. We are initially using our STAR-D platform to develop treatments for rare or orphan monogenic dermatological indications caused by the absence of or a mutation in a single gene. We plan to leverage our platform in the future to expand our pipeline to include non-monogenic dermatological indications and skin conditions.

Liquidity and Risks

As of December 31, 2019, the Company had an accumulated deficit of $39.0 million. With the net proceeds raised upon the close of our initial public offering (“IPO”) in September 2017, and as described in Note 7 “Capitalization”, a private placement in August 2018, two follow-on public offerings in October 2018 and June 2019, the Company believes that its cash, cash equivalents and short-term investments of approximately $193.7 million as of December 31, 2019 will be sufficient to allow the Company to fund its operations for at least 12 months from the filing date of this Form 10-K. As the Company continues to incur losses, a transition to profitability is dependent upon the successful development, approval and commercialization of its product candidates and the achievement of a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does the Company will continue to need to raise additional capital or obtain financing from other sources. Management intends to fund future operations through the sale of equity and debt financings and may also seek additional capital through arrangements with strategic partners 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 development of technological innovations by its competitors, risks of failure in clinical studies, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to commercialize product candidates.