Gene Therapy Firm Krystal Biotech Files for $35 Million IPO

August 22, 2017
By Alex Keown, BioSpace.com Breaking News Staff

PITTSBURGH – Gene therapy company Krystal Biotech is looking to raise $35 million in an initial public offering.

In a filing with the U.S. Securities and Exchange Commission, the company said proceeds from the offering will be used for “general working capital purposes including the payment of payroll.” The company plans to list its stock on the Nasdaq under the ticker symbol KRYS. According to one of the filings with the SEC, the company has raised $11.3 million in equity financing.

According to the Krystal website, which requires a log in to get beyond the main page, the company is developing therapies for rare and orphan diseases using gene therapy technologies. The company was founded in 2015. The company has a particular focus on dermatological issues.

The company’s gene therapy platform is called the Skin TARgeted Delivery Platform. The platform, also called the STAR-D platform consists of an engineered patent pending viral vector based on herpes simplex virus 1, or HSV-1, and skin-optimized gene transfer technology, according to Renaissance Capital. The company is looking to use the STAR-D platform to develop “develop treatments for rare or orphan dermatological indications caused by the absence of or a mutation in a single gene, and plan to leverage our platform in the future to expand our pipeline to include other dermatological indications.”

According to Market Watch, the company has no revenue. The company reported a net loss of $1.2 million for 2016. Ladenburg Thalmann & Co. was listed as the underwriter for the IPO, Market Watch said.

Earlier this month Sun Pharmaceuticals, India’s biggest drugmaker, plunked $7 million into Krystal, acquiring a 15.9 percent stake in the company.

For 2017, the biotech IPO market is looking to be on par with about 2016, John Carroll of Endpoints News said in a recent report. Citing independent biotech investor Brad Loncar, Carroll said the first half of 2017 has “more difficult year for IPOs than in previous years.”

“It seems that the deals that are getting done have required a significant amount of insider participation to succeed, or they are European companies and/or spin-offs that the market is already familiar with. You aren’t seeing investors throwing money at new companies blindly like you do in peak years, and I guess that is a good thing of course,” Loncar said, according to Carroll’s report.

For this year, a total of 16 of 22 biotech IPOs are now priced at a higher mark than their debut, Carroll said.