Leerink starts Krystal Biotech at buy; FVE $29

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Leerink launched coverage of Krystal Biotech (NASDAQ:KRYS) with a “buy” rating and $29 fair value estimate. The stock closed at $15.07 on July 9.

Krystal is developing novel gene therapies for skin diseases, with lead candidate, KB103, in a Phase 1/2 trial for the treatment of dystrophic epidermolysis bullosa, a rare and severe genetic disease affecting the skin and mucosal tissues caused by one or more mutations in the COL7A1 gene, with no currently approved therapies. 

Analyst Raju Prasad writes that KB103 leverages Krystal’s Skin TARgeted Delivery platform, which consists of a proprietary engineered viral vector based on herpes simplex virus 1 that is both non-integrating and non-replicating. 

“We believe the shares hold a positive risk/reward profile ahead of clinical data expected by year end as a result of KB103’s mechanism of action and preclinical data, recent proof-of-concept with gene-corrected autologous skin grafts, and Amgen’s Imlygic, an HSV-1-based product already approved for the local treatment of unresectable cutaneous, subcutaneous and nodal lesion in patients with melanoma recurrent after initial surgery,” he added.

Melane LaBelle Sampson