Keros Therapeutics, Inc. (NASDAQ: KROS) is a clinical-stage biopharmaceutical company focused on developing and commercializing novel therapeutics to treat a wide range of patients with disorders linked to dysfunctional signaling of the transforming growth factor-beta (TGF-ß) family of proteins. The company's pipeline includes several promising product candidates targeting various indications, including pulmonary arterial hypertension (PAH), neuromuscular diseases, and hematological disorders.
Business Overview and Company History
Keros was incorporated in 2015 as a Delaware corporation and is headquartered in Lexington, Massachusetts. Since its inception, the company has devoted the majority of its efforts to business planning, research and development of its product candidates, including conducting clinical trials and preclinical studies, raising capital, and recruiting management and technical staff to support these operations.
In April 2016, Keros entered into an exclusive patent license agreement with The General Hospital Corporation, doing business as Massachusetts General Hospital (MGH), which has been subsequently amended. This agreement granted Keros an exclusive, worldwide license to certain patents and technical information of MGH for use in the treatment, diagnosis, palliation, and prevention of diseases and disorders in humans and animals.
In December 2021, Keros entered into a license agreement with Hansoh Shanghai Healthtech Co., Ltd. (Hansoh), granting Hansoh the exclusive right to develop, manufacture, and commercialize elritercept and licensed products containing elritercept within the territories of mainland China, Hong Kong, and Macau. This agreement included an upfront payment to Keros and the potential for additional payments upon achieving specified development and commercial milestones, as well as tiered royalty payments based on annual net sales in the Hansoh Territory.
Keros' most advanced product candidate is cibotercept (KER-012), which is being developed for the treatment of PAH and cardiovascular disorders. The company's second product candidate, KER-065, is in development for the treatment of neuromuscular diseases, with a focus on Duchenne muscular dystrophy (DMD). Keros' lead program, elritercept (KER-050), is being developed for the treatment of cytopenias, including anemia and thrombocytopenia, in patients with myelodysplastic syndromes (MDS) and myelofibrosis.
Financial Performance and Liquidity
Keros has historically financed its operations through private placements of equity securities, upfront and expense reimbursement payments from collaborations, and proceeds from its initial public offering and follow-on public offerings. As of December 31, 2024, the company had $559.9 million in cash and cash equivalents, which it expects will enable it to fund its operating expenses and capital expenditure requirements into 2029.
For the year ended December 31, 2024, Keros reported total revenue of $3.55 million, primarily from its collaboration with Hansoh Shanghai Healthtech Co., Ltd. The company incurred a net loss of $187.35 million, with research and development expenses of $173.63 million and general and administrative expenses of $40.75 million. Keros reported a net cash used in operating activities of $160.87 million and free cash flow of -$162.8 million for the year.
In the fourth quarter of 2024, Keros reported revenue of $3.04 million and a net loss of $46.03 million. The decrease in net income in Q4 2024 compared to the full year 2024 was primarily due to increased research and development expenses as the company advanced its clinical programs. Year-over-year revenue growth for Q4 2024 is not applicable, as the company did not have any revenue in Q4 2023.
Keros operates primarily in the United States, as it is a small-cap biopharmaceutical company focused on developing novel therapeutics. The company's liquidity position remains strong, with a debt-to-equity ratio of 0.03, a current ratio of 21.45, and a quick ratio of 21.45 as of December 31, 2024.
Operational Highlights and Challenges
In January 2025, Keros announced that it had voluntarily halted dosing in the 3.0 mg/kg and 4.5 mg/kg treatment arms of its ongoing Phase 2 TROPOS trial evaluating cibotercept in patients with PAH due to the unanticipated observation of pericardial effusion adverse events. Subsequently, the company halted all dosing in the trial, including the 1.5 mg/kg and placebo treatment arms, based on the ongoing safety review. This setback has raised concerns about the future development of cibotercept and its potential impact on the company's pipeline. Following the completion of the TROPOS trial, the company plans to evaluate the appropriate development strategy for cibotercept, including in PAH and other potential indications.
Despite this challenge, Keros has made progress in other areas of its business. In December 2024, the company presented additional data from its ongoing Phase 2 clinical trials of elritercept in patients with lower-risk MDS and myelofibrosis, showcasing durable transfusion independence and improvements in patient-reported measures of fatigue.
Furthermore, in December 2024, Keros entered into an exclusive global license agreement with Takeda Pharmaceutical Company Limited to develop, manufacture, and commercialize elritercept outside of mainland China, Hong Kong, and Macau. This deal includes a $200 million upfront payment to Keros, as well as potential milestone payments of up to $1.11 billion and royalties on future sales.
Keros is also advancing its KER-065 program, which is being developed for the treatment of neuromuscular diseases, with an initial focus on Duchenne muscular dystrophy (DMD). The company has initiated a randomized, double-blind, placebo-controlled, two-part Phase 1 clinical trial to evaluate single and multiple ascending doses of KER-065 in healthy volunteers. Keros expects to report initial data from this trial in the first quarter of 2025.
Outlook and Risk Factors
Going forward, Keros will need to carefully navigate the development of its pipeline, particularly the future of cibotercept following the setback in the TROPOS trial. The company's ability to successfully advance its other product candidates, such as KER-065 and elritercept, will be crucial to its long-term success.
Risks facing Keros include the inherent uncertainties of clinical development, potential regulatory hurdles, competition from other therapies, and the company's ability to secure additional funding to support its operations. Keros also faces the challenge of effectively managing its partnerships and collaborations, which will be essential for the commercialization of its products, if approved.
Despite the recent setback with cibotercept, Keros remains a clinical-stage biotech company with a diverse pipeline and a strong balance sheet, positioning it to potentially deliver significant value to shareholders in the years ahead. The company's deep understanding of the TGF-ß signaling pathways and its ongoing efforts to develop innovative therapies for high-unmet-need indications make it a company to watch in the biopharmaceutical industry.
With its current cash position of $559.93 million as of December 31, 2024, combined with the $200 million upfront payment from the Takeda agreement, Keros expects to have sufficient funding to support its operations into 2029. This strong financial position provides the company with a runway to advance its pipeline and potentially bring its innovative therapies to market.