KRYSTAL BIOTECH, INC. STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (the Agreement ) is made as of

KRYSTAL BIOTECH, INC.

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (the Agreement ) is made as of August 16, 2018 (the Effective

Date ), by and among Krystal Biotech, Inc., a Delaware corporation (the Company ), and the purchasers whose names and addresses are set forth on the signature pages hereof (each, a Purchaser and,

collectively, the Purchasers ).

WHEREAS, in furtherance of such desire, the Purchasers desire to purchase, and the

Company has agreed to sell, up to 625,000 shares of the Company s common stock, par value $0.00001 per share (the Common Stock ), for a purchase price of $16.00 per share, for aggregate gross proceeds to the Company of

In consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the Company and the Purchasers hereby agree as follows:

SECTION 1. AUTHORIZATION

OF SALE OF SECURITIES.

The Company has authorized the sale and issuance of shares of its Common Stock to the Purchasers on the terms

and subject to the conditions set forth in this Agreement. The shares of Common Stock that may be sold to the Purchasers hereunder at the Closing (as defined in Section 3.1) shall be referred to as the

SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.

2.1 Purchase. At the Closing, the Company will issue, sell and deliver to each Purchaser, and such Purchaser will

purchase from the Company (the Purchase ), that number of shares of Common Stock (the Shares ) set forth opposite such Purchaser s name on Schedule A hereto, for the purchase price set forth therein

(the Purchase Price ).

2.2 Definitions. For purposes of this Agreement, the following

terms shall have the following meanings:

(a) Business Day means a day, other than a Saturday or

Sunday, on which banks in New York City are open for the general transaction of business.

of the Company shall mean, with respect to the Company, the knowledge of any of Krish S. Krishnan, Suma M. Krishnan or Antony A. Riley. Such individuals will be deemed to have knowledge of a particular fact or other matter

if (i) such individual has or at any time had actual knowledge of such fact or other matter or (ii) a prudent individual would be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a

reasonably diligent review concerning the existence thereof.

(c) Governmental Entity means any

nation, federal, state, county municipal, local or foreign government, or other political subdivision thereof or any other governmental, administrative, judicial, arbitral, legislative, executive, regulatory or self-regulatory authority,

instrumentality, agency, commission or body and any entity exercising executive, legislative, judicial, regulatory, taxing or administrative functions of or pertaining to government.

(d) Law means any federal, state, local or foreign

law (including common law), statute, code, ordinance, rule, regulation, order, judgment, writ, stipulation, award, injunction, decree, arbitration award or finding or any other legally enforceable requirement.

(e) Material Adverse Effect means any change, event, development, condition, occurrence or effect

that (a) is, or would reasonably be expected to be, materially adverse to the business, financial condition, prospects, assets, liabilities or results of operations of the Company, or (b) materially impairs the ability of the Company to

comply, or prevents the Company from complying, with its material obligations with respect to the Closing (as defined below) or would reasonably be expected to do so; provided, however, that none of the following will be deemed in

themselves, either alone or in combination, to constitute, and that none of the following will be taken into account in determining whether there has been or will be, a Material Adverse Effect under subclause (a) of this definition:

(f) Person means an individual, corporation, partnership, limited liability company, trust, business

trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

(g) Placement Agent shall mean Chardan Capital Markets LLC.

(h) Trading Market means the Nasdaq Capital Market.

SECTION 3. CLOSING, CLOSING CONDITIONS AND CLOSING DELIVERIES.

3.1 Closing. The closing of the purchase and sale of the Shares pursuant to this Agreement (the

Closing ) shall occur at 5:00 p.m., Pacific time, on August 16, 2018, subject to the satisfaction or

waiver of all of conditions set forth in Section 3.2 and the delivery of all of the closing deliveries set forth in Section 3.3 (such date, the

Closing Date ), at the offices of Morrison & Foerster LLP, 425 Market Street, San Francisco, California 94105, or at such other time and place as may be agreed to by the Company and the Purchasers. At or prior to the

Closing, each of the Company and the Purchasers shall execute any related agreements or other documents required to be executed as of the Closing hereunder, each dated as of the date of the Closing.

3.2 Closing Conditions.

(a) Mutual Closing Condition. There shall have been no Law enacted, entered, promulgated, enforced or deemed

applicable by any Governmental Entity of competent jurisdiction that is in effect and makes illegal or otherwise prohibits or materially delays the consummation of the Closing.

(b) Conditions to Purchaser s Obligations. Each Purchaser s obligation to purchase the

Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless waived:

(c) Conditions to the Company s Obligations. The Company s obligation to issue and sell

the Shares at the Closing to a Purchaser is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless waived:

3.3 Closing Deliveries.

(a) Payment of the Purchase Price at Closing. At the Closing, each Purchaser shall deliver, or cause to be

delivered, to the Company, an amount equal to the Purchase Price by wire transfer of immediately available funds to the account set forth on Exhibit A. Each Purchaser s obligations to pay the Purchase Price shall be several and not joint.

(b) Issuance of the Shares at the Closing. At the Closing, the

Company shall issue, or cause the Company s transfer agent to issue, to each Purchaser in global form through a book-entry account maintained by the Company s transfer agent the number of Shares purchased by such Purchaser, as set forth in

Schedule A hereto, at the Closing against payment by such Purchaser of the Purchase Price (including providing a copy of the irrevocable instructions delivered by the Company to the Company s transfer agent instructing the transfer agent

to issue the Shares to the Purchasers by crediting the Shares to the respective accounts of the Purchasers on the transfer agent s book-entry system on the Closing Date and confirmation from the transfer agent that such Shares were so issued on

the date thereof). Such Shares shall be appropriately legended as set forth in Section 5.4 herein.

(c) Secretary s Certificate. At the Closing, the Purchasers shall have received a certificate signed by the

Secretary of the Company, certifying the resolutions of the Board of Directors of the Company approving this Agreement and all of the transactions contemplated hereunder.

(d) Compliance Certificate. At the Closing, the Purchasers shall have received a certificate signed by the

President and Chief Executive Officer of the Company certifying to the fulfillment of the conditions set forth in Section 3.2(b).

SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

Except as disclosed in the SEC Documents (as defined below) and publicly available prior to the date of this Agreement and only as and to the

extent disclosed therein, the Company hereby represents, warrants and covenants to the Purchasers as follows:

4.1 Organization and Standing. The Company has been duly incorporated or organized and is validly existing and

in good standing under the laws of Delaware or other jurisdiction of incorporation or organization, has full corporate or other power and authority necessary to own or lease its properties and conduct its business as presently conducted, and is duly

qualified as a foreign corporation and in good standing in all jurisdictions in which the character of the property owned or leased or the nature of the business transacted by it makes qualification necessary, except where the failure to be so

qualified would not have a Material Adverse Effect.

4.2 Corporate Power; Authorization. The Company has all

requisite corporate power, and the Company and its board of directors have taken all requisite corporate action, to authorize, execute and deliver this Agreement, to consummate the transactions contemplated herein and therein, including to sell,

issue and deliver the Shares to the Purchasers, and to carry out and perform all of the Company s obligations hereunder and thereunder. This Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the

Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors rights generally and (ii) as limited

by equitable principles generally, including any specific performance.

4.3 Issuance and Delivery of the

Shares. The Shares have been duly authorized and, when issued and paid for in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The issuance and delivery of the Shares is not subject to

preemptive, co-sale, right of first refusal or any other similar rights of the stockholders of the Company or any other Person or any liens or encumbrances. Assuming the accuracy of the representations made by

the Purchasers in Section 5, the offer and issuance by the Company of the Shares is exempt from registration under the Securities Act of 1933, as amended (the Securities Act ).

4.4 SEC Documents; Financial Statements. The Company is not an ineligible issuer (as defined in Rule

405 promulgated under the Securities Act). The Company is subject to the reporting

requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act ), and has filed or will file in a timely manner all documents that the Company was or is

required to file with the Securities and Exchange Commission (the Commission ) under Sections 13, 14(a) and 15(d) of the Exchange Act, since becoming subject to the requirements of the Exchange Act (the foregoing documents

(together with any documents filed by the Company under the Exchange Act, whether or not required) being collectively referred to herein as the SEC Documents ). As of their respective filing dates (or, if amended prior to the date

of this Agreement, when amended), all SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder. None of the SEC Documents as of their respective

filing dates contained any untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not

misleading. The financial statements of the Company set forth in the SEC Documents (the Financial Statements ) comply as to form in all material respects with applicable accounting requirements and with the published rules and

regulations of the Commission with respect thereto. The Financial Statements have been prepared in accordance with United States generally accepted accounting principles consistently applied and fairly present the financial position of the Company

at the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, recurring adjustments).

4.5 Capitalization. As set forth in the SEC Documents as of the date set forth therein, all of the

Company s outstanding shares of capital stock have been duly authorized and validly issued and are fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and were not issued in violation of or

subject to any preemptive right or other rights to subscribe for or purchase securities. Except as disclosed in the SEC Documents, there are no existing options, warrants, calls, subscriptions or other rights, agreements, arrangements or commitments

of any character, relating to the issued or unissued capital stock of the Company, obligating the Company to issue, transfer, sell, redeem, purchase, repurchase or otherwise acquire or cause to be issued, transferred, sold, redeemed, purchased,

repurchased or otherwise acquired any capital stock or Voting Debt of, or other equity interest in, the Company or securities or rights convertible into or exchangeable for such shares or equity interests or obligations of the Company to grant,

extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment. Neither the execution of this Agreement nor the issuance of Common Stock or other securities pursuant to any provision of

this Agreement will give rise to any preemptive rights or rights of first refusal on behalf of any Person or result in the triggering of any anti-dilution or other similar rights. Except as disclosed in the SEC Documents, there are no other shares

of any other class or series of capital stock of the Company issued or outstanding. Except as disclosed in the SEC Documents, there are no agreements or arrangements under which the Company is obligated to register the sale of any of their

securities under the Securities Act. The Company has made available upon request of the Purchasers, a true, correct and complete copy of the Certificate of Incorporation and Bylaws (each as defined in Section 4.8) and the

Company shall not amend or otherwise modify the Certificate of Incorporation or Bylaws prior to the Closing.

4.6 Litigation. There are no legal or governmental actions, suits or other proceedings pending or, to the

Knowledge of the Company, threatened against the Company before or by any court, regulatory body or administrative agency or any other governmental agency or body, domestic or foreign, which actions, suits or proceedings, individually or in the