TSCM U.S. Small Cap Growth Strategy Reduced Its Position in Krystal Biotech (KRYS)

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 11.28% (gross) and 11.02% (net), compared to the Russell 2000 Growth Index by 11.97%. Equities posted double-digit returns in the second quarter as global economic activity measures lifted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, TimesSquare Capital Small Cap Growth Strategy highlighted stocks such as Krystal Biotech, Inc. (NASDAQ:KRYS). Krystal Biotech, Inc. (NASDAQ:KRYS) is a commercial-stage biotechnology company that develops genetic medicines for patients with rare diseases. The one-month return of Krystal Biotech, Inc. (NASDAQ:KRYS) was -3.97%, and its shares lost 26.21% of their value over the last 52 weeks. On September 11, 2025, Krystal Biotech, Inc. (NASDAQ:KRYS) stock closed at $144.36 per share, with a market capitalization of $4.178 billion.

TimesSquare Capital U.S. Focus Growth Strategy  stated the following regarding Krystal Biotech, Inc. (NASDAQ:KRYS) in its second quarter 2025 investor letter:

"Our preferences among Health Care stocks are those companies providing novel therapies for unmet needs that deserve premium pricing, or specialized service providers. Krystal Biotech, Inc. (NASDAQ:KRYS) is a biotechnology company developing and commercializing genetic medicines for patients with rare diseases. First quarter results missed the mark with declining levels of new patient starts and sales. While the quarterly results are disappointing, Vyjuvek is viewed as a durable and high-margin business. That therapy is a topical gel that promotes wound healing for patients with a rare and serious skin disorder called dystrophic epidermolysis. Krystal Biotech currently has seventeen sales reps and plans to add eight more. We reduced the position, which declined by -24% during the quarter."

Krystal Biotech, Inc. (NASDAQ:KRYS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Krystal Biotech, Inc. (NASDAQ:KRYS) at the end of the second quarter, which was 30 in the previous quarter. While we acknowledge the potential of Krystal Biotech, Inc. (NASDAQ:KRYS) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Krystal Biotech, Inc. (NASDAQ:KRYS) and shared the list of best cancer stocks to invest in for long term gains. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.