Shares of Krystal Biotech Inc. (KRYS) plummeted 14.64% in pre-market trading on Tuesday following the release of its first-quarter 2025 financial results, which significantly missed analyst expectations. The gene therapy company's disappointing performance has sparked concerns among investors about its growth trajectory.

Krystal Biotech reported earnings per share of $1.20, falling short of the analyst consensus estimate of $1.32 by 9.09%. While this represents a substantial year-over-year increase, it wasn't enough to satisfy market expectations. Revenue for the quarter came in at $88.18 million, missing the expected $96.24 million by 8.37%. Despite showing 94.88% year-over-year growth, the sales figures suggest a potential slowdown in the company's expansion rate.

The company's flagship product, VYJUVEK, a gene therapy used to treat dystrophic epidermolysis bullosa (DEB), generated $88.2 million in net revenue for the quarter. While this demonstrates continued adoption of the treatment, investors seem concerned about the pace of growth. The sharp stock decline indicates that the market is recalibrating its expectations for Krystal Biotech's near-term performance, particularly in light of the competitive landscape in the gene therapy sector.