| Item 1.01 | Entry into a Material Definitive Agreement |
On May 18, 2020, Krystal Biotech, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Cowen and Company, LLC and Evercore Group L.L.C. as representatives of the several underwriters named therein (collectively, the “Underwriters”), in connection with the public offering and sale (the “Offering”) to the Underwriters of 2,275,000 shares of its common stock, $0.00001 par value per share (“Common Stock”), at a price to the public of $55.00 per share. As a component of the Offering, the Company granted the Underwriters a30-day option to purchase up to an additional 341,250 shares of Common Stock from the Company. The Company’s net proceeds from the Offering will be $117,617,500 after deducting underwriting discounts but before other expenses incurred by the Company in connection with the Offering. The Offering closed on May 21, 2020.
The Company currently intends to use the net proceeds from this Offering, together with its existing cash, cash equivalents and short-term investments: (i) to advanceB-VEC into and through a Phase 3 clinical trial; (ii) to advance the clinical development of KB105; (iii) to advance thepre-clinical and clinical development of KB104, KB301 and KB407; (iv) to complete development of a good manufacturing practices certified manufacturing facility forscale-up production of the Company’s pipeline compounds and commencement of operations of that facility; and (v) the balance for working capital and general corporate purposes, including research and development expenses and capital expenditures.
The Underwriting Agreement contains customary representations, warranties, covenants and agreements by the Company, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, and other obligations of the parties. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and are made as of specific dates; are solely for the benefit of the parties to the Underwriting Agreement (except as specifically set forth therein); may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Underwriting Agreement, instead of establishing matters as facts; and may be subject to standards of materiality and knowledge applicable to the contracting parties that differ from those applicable to the investors generally. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement filed as Exhibit 1.1 to this Current Report on Form8-K and incorporated herein by reference.
A copy of the legal opinion as to the legality of the shares of Common Stock to be issued and sold in the Offering is filed as Exhibit 5.1 to this Current Report onForm 8-K.
