BofA Bullish On This Gene Therapy Biotech Transitioning Into A Commercial Enterprise

Krystal Biotech Inc KRYS shares have potential to nearly double from current levels, according to an analyst at BofA Securities.

The Krystal Biotech Analyst: Geoff Meacham initiated coverage of Krystal Biotech shares with a Buy rating and a $110 price target.

The Krystal Biotech Thesis: Krystal Biotech, a clinical-stage biotech, is developing differentiated HSV-based gene therapies for inherited dermatological and respiratory diseases, Meacham said in a note.

Krystal differentiates itself due to its ability to package large transgenes and re-dose their gene therapies in a transient manner, which significantly increases the breadth of potential applications, the analyst said. Nominated therapeutic areas include cystic fibrosis, alpha-1 antitrypsin deficiency and aesthetics, and offer a high valuation ceiling, he added.

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The biotech's solid platform IP, Meacham said, creates partnership opportunities for later-stage studies or new pipeline candidates. Positive phase 3 data for Krystal's lead asset, Vyjuvek for dystrophic epidermolysis bullosa reads positively to the rest of the pipeline, he added.

Launch readiness activities for Vyjuvek are underway ahead of anticipated 2023 approvals, the analyst noted.

BofA's bullish initiation comes ahead of a period of transition for Krystal into a commercial enterprise, with expanded disease areas. These factors will become increasingly important over the next 6-12 months, he added.

Krystal Biotech Price Action: At last check, Krystal Biotech shares were slipping 4.78% to $59.30.

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Photo: Courtesy of Glasgow School of Art on Flickr