Business Overview and History
Keros Therapeutics, Inc. was incorporated in 2015 as a Delaware corporation with its principal offices located in Lexington, Massachusetts. The company was founded with the ambitious goal of unlocking the therapeutic potential of the TGF-β signaling pathway. Keros’ co-founders, Jasbir S. Seehra, Ph.D., and Christopher Rovaldi, recognized the critical role this family of proteins plays in regulating cellular growth, repair, and maintenance across multiple tissues, including blood, bone, skeletal muscle, adipose, and the cardiovascular system.
In its early years, Keros devoted the majority of its resources to business planning, research and development of its product candidates, including conducting preclinical studies and early-stage clinical trials, raising capital, and recruiting management and technical staff to support these operations. The company did not generate any revenue from product sales during this time, as none of its product candidates had been approved for commercialization.
A significant milestone was reached in 2016 when Keros entered into an exclusive patent license agreement with The General Hospital Corporation, providing the company with key intellectual property related to its product candidates. This agreement was crucial in allowing Keros to advance the development of its pipeline. Over the next few years, the company made progress on its lead product candidates, elritercept and cibotercept, by initiating early-stage clinical trials.
In 2021, Keros faced a challenge when it had to pause development of one of its small molecule product candidates, KER-47, due to a decision to deprioritize that asset. This setback required the company to shift resources and focus more heavily on its other pipeline programs. Despite this challenge, Keros was able to continue advancing elritercept and cibotercept through the clinic.
Another important milestone was achieved in 2021 when Keros entered into a licensing agreement with Hansoh Shanghai Healthtech Co., Ltd. for the development and commercialization of elritercept in mainland China, Hong Kong and Macau. This deal provided Keros with an upfront payment and the potential for future milestone and royalty payments, which helped to bolster the company’s financial position as it progressed its clinical programs.
Leveraging its deep understanding of TGF-β biology, Keros has built a diversified pipeline of product candidates targeting various indications. The company’s lead asset, elritercept (KER-050), is being developed for the treatment of low blood cell counts (cytopenias), including anemia and thrombocytopenia, in patients with myelodysplastic syndromes (MDS) and myelofibrosis. Cibotercept (KER-012), Keros’ second candidate, is being evaluated for the treatment of pulmonary arterial hypertension (PAH) and cardiovascular disorders. The company’s third program, KER-065, is focused on obesity and neuromuscular diseases.
Keros has made significant strides in advancing its pipeline, with multiple ongoing clinical trials and positive regulatory feedback. In June 2024, the company reported additional data from its Phase 2 trial of elritercept in patients with lower-risk MDS, demonstrating durable transfusion independence and improvements in patient-reported measures of fatigue. Furthermore, the U.S. Food and Drug Administration (FDA) provided positive feedback on the elritercept MDS program, leading to general alignment on the design and endpoints for the planned pivotal Phase 3 trial.
Keros has also made progress with its cibotercept program, announcing the completion of enrollment in the Phase 2 TROPOS trial evaluating the candidate in patients with PAH. The company expects to present topline data from this trial in the second quarter of 2025. Additionally, the Phase 1 trial of KER-065 in healthy volunteers is ongoing, with initial data expected in the first quarter of 2025.
Financials and Liquidity
Keros’ financial position remains strong, with $530.7 million in cash and cash equivalents as of September 30, 2024. This robust cash balance is expected to fund the company’s operations into the third quarter of 2027, providing ample runway to advance its clinical programs and support its ongoing research and development efforts.
For the nine months ended September 30, 2024, Keros reported a net loss of $141.3 million, compared to a net loss of $112.7 million for the same period in 2023. The increase in net loss was primarily driven by higher research and development expenses, which rose to $128.0 million from $97.8 million, as the company continued to invest in the advancement of its clinical trials and preclinical studies.
General and administrative expenses also increased to $30.1 million from $25.7 million, reflecting the company’s growth and expansion to support its expanding pipeline and operations. Keros generated $508,000 in revenue during the first nine months of 2024, primarily from the company’s licensing agreement with Hansoh for the development and commercialization of elritercept in China, Hong Kong, and Macau.
For the most recent fiscal year ended December 31, 2023, Keros reported revenue of $151,000, net income of -$152,992,000, operating cash flow (OCF) of -$124,508,000, and free cash flow (FCF) of -$126,972,000.
For the quarter ended September 30, 2024, Keros reported revenue of $388,000, net income of -$52,956,000, OCF of -$30,500,000, and FCF of -$30,886,000. This represents year-over-year revenue growth, but net income, OCF, and FCF all declined compared to the prior year quarter. The decrease in profitability was primarily due to increased research and development expenses to advance Keros’ clinical pipeline.
Keros operates primarily in the United States and has not reported any material revenue contributions from international markets.
Keros’ financial ratios remain strong, with a current ratio of 19.03, a quick ratio of 19.03, and a cash ratio of 18.30, indicating a robust liquidity position to fund its ongoing operations and development activities. As of September 30, 2024, Keros had a debt-to-equity ratio of 0, indicating no debt on the balance sheet. The company had $530.68 million in cash and cash equivalents, with no available credit lines disclosed.
Risks and Challenges
As a clinical-stage biopharmaceutical company, Keros faces a number of risks and challenges common to the industry, including the inherent uncertainty of drug development, regulatory approval hurdles, and intense competition.
The success of Keros’ product candidates is heavily dependent on the outcomes of its ongoing and future clinical trials. Failure to demonstrate the safety and efficacy of its candidates in these trials could significantly delay or prevent their approval and commercialization, adversely impacting the company’s prospects.
Additionally, Keros operates in a highly competitive landscape, with established pharmaceutical and biotechnology companies developing their own therapies targeting similar indications. The ability of Keros to successfully commercialize its products, if approved, will depend on its capacity to differentiate its offerings, navigate regulatory requirements, and effectively market and distribute its treatments.
The company also faces risks related to its reliance on third-party manufacturers and contract research organizations, as well as potential challenges in securing and maintaining intellectual property protection for its innovations.
Outlook and Catalysts
Keros remains focused on advancing its robust pipeline and achieving key milestones in 2024 and beyond. In the fourth quarter of 2024, the company plans to provide additional details on the planned pivotal Phase 3 trial of elritercept in patients with lower-risk MDS, following the positive feedback from the FDA.
Furthermore, Keros expects to announce additional data from its ongoing Phase 2 trials of elritercept in patients with MDS and myelofibrosis in the fourth quarter of 2024. The company anticipates presenting topline data from the Phase 2 TROPOS trial of cibotercept in PAH in the second quarter of 2025.
Keros has also commenced a Phase 1 clinical trial of KER-065 in a healthy volunteer adult population and expects to announce initial data from this trial in the first quarter of 2025.
The successful execution of these clinical programs, along with the continued advancement of the KER-065 candidate, could serve as significant catalysts for Keros, potentially unlocking new avenues for growth and solidifying the company’s position as a leader in TGF-β-targeted therapies.
Conclusion
Keros Therapeutics is a clinical-stage biopharmaceutical company at the forefront of developing innovative treatments for a wide range of disorders linked to dysfunctional TGF-β signaling. With a robust pipeline, strategic collaborations, and an experienced management team, the company is poised to make a transformative impact on the lives of patients suffering from these complex conditions.
The company’s three main product candidates – elritercept (KER-050), cibotercept (KER-012), and KER-065 – target a variety of indications, including cytopenias in myelodysplastic syndromes and myelofibrosis, pulmonary arterial hypertension, cardiovascular disorders, obesity, and neuromuscular diseases. By focusing on the TGF-β family of proteins, Keros aims to address underlying disease mechanisms and potentially offer new treatment options for patients with limited alternatives.
As Keros continues to execute on its clinical development strategy and navigate the inherent challenges of the biopharmaceutical industry, investors will closely monitor the company’s progress and the potential value creation opportunities that may arise from its promising pipeline. With a strong financial position, no debt, and a clear focus on advancing its leading product candidates, Keros remains well-positioned to drive long-term growth and deliver meaningful solutions for patients in need.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.