Item 1.01
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Entry into a Material Definitive Agreement
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On October 18, 2018, Krystal Biotech, Inc. (the Company) entered into an underwriting agreement (the Underwriting Agreement) with
the several underwriters named therein (collectively, the Underwriters), with Cowen and Company, LLC, William Blair & Company, L.L.C. and Cantor Fitzgerald & Co. acting as representatives of the Underwriters, in
connection with the public offering and sale (the Offering) to the Underwriters of 3,000,000 shares of its common stock, $0.00001 par value per share (Common Stock), at $20.00 per share. As a component of the Offering, the
Company granted the Underwriters a 30-day option to purchase up to an additional 450,000 shares of Common Stock from the Company. The Company estimates that the gross proceeds from the Offering will be approximately $60 million, or $69 million if
the Underwriters exercise in full their option to purchase additional shares of Common Stock, in each case before deducting underwriting discounts and commissions and estimated offering expenses. The Offering is scheduled to close on October 23,
2018, subject to customary closing conditions.
The Company currently intends to use the net proceeds from this Offering, if any, together with its
existing cash, cash equivalents and short-term investments: (i) to continue to advance KB103 through clinical trials; (ii) to advance the pre-clinical development of KB105 with clinical trials anticipated to commence in the first half of
2019; (iii) to complete development of a good manufacturing practices certified manufacturing facility for scale-up production of its pipeline compounds and commencement of operations of that facility; and (iv) 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, 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 Form 8-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 on Form 8-K.