Krystal Biotech Inc. (KRYS) shares tumbled 5.61% in pre-market trading on Monday, as investors reacted to the company’s second-quarter financial results and its forward-looking expense guidance.

The biotech firm reported Q2 net income of $54.768 million, or $1.79 per share, on product revenue of $119.222 million. Operating income came in at $58.417 million. However, the company also provided a forecast for fiscal 2026 non-GAAP research and development and selling, general and administrative expenses, projecting a range of $175 million to $195 million, which may have raised concerns about future profitability and spending levels.

The stark pre-market decline suggests that the expense guidance weighed heavily on sentiment, potentially dampening the otherwise solid quarterly figures. Traders appeared to focus on the anticipated cost structure, overshadowing the revenue and earnings beat.