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AUSTIN - ADAR1 Capital Management, LLC, the major shareholder of Keros Therapeutics (NASDAQ:KROS), has urged the biotechnology firm to disclose the results of its strategic review before its upcoming Annual Meeting. This request follows a recommendation from Institutional Shareholder Services Inc. (ISS) to withhold votes from two incumbent directors at the meeting scheduled for June 4, 2025. The company, currently valued at $574.3 million, appears undervalued according to InvestingPro analysis, despite trading at a P/E ratio of 125.
ISS has expressed serious concerns about Keros’s governance, suggesting the need for improved accountability. Dr. Daniel Schneeberger, Managing Partner of ADAR1, stated that ISS’s recommendation supports their stance for the need of fresh, independent directors on the Keros board. ADAR1, which holds roughly 13.3% of Keros’s outstanding shares, has been vocal about its dissatisfaction with the company’s governance. InvestingPro data shows the company maintains strong financial health with a current ratio of 19.29, indicating robust liquidity management.
Keros plans to reveal the outcome of its strategic review five days after the Annual Meeting. ADAR1 argues that stockholders should be informed of the review results beforehand to make informed voting decisions. Dr. Schneeberger criticized the company’s decision to delay this announcement, highlighting concerns about the board’s stewardship and the need for accountability.
ADAR1 also pointed out what it views as an excessive cash balance in Keros’s accounts, which does not align with its clinical opportunities or strategic use. The investment firm is pushing for a significant return of capital to stockholders. Indeed, InvestingPro analysis confirms the company holds more cash than debt on its balance sheet, while its stock has declined by over 73% in the past six months. Subscribers to InvestingPro can access 11 additional investment tips and comprehensive financial metrics for KROS.
Founded in 2018, ADAR1 Capital Management specializes in investments in the life sciences and biotechnology sectors. The firm is led by Dr. Schneeberger, who has over two decades of experience in healthcare and investment.
The information in this article is based on a press release statement. It should be noted that forward-looking statements involve risks and uncertainties, and actual results may differ materially. The estimates and projections provided by ADAR1 are based on assumptions they believe to be reasonable as of today’s date.
In other recent news, Keros Therapeutics has been a focal point for investors following several significant developments. The company is exploring strategic alternatives, including a potential sale, to maximize stockholder value, with an independent Strategic Committee evaluating options. Meanwhile, Keros has entered a definitive agreement with Pontifax, nominating Mary Ann Gray, Ran Nussbaum, and Alpna Seth for re-election to its Board of Directors, a move that may influence its governance strategy. In terms of financial outlook, H.C. Wainwright has adjusted its price target for Keros to $25, down from $40, but maintained a Buy rating despite the early termination of a clinical trial due to safety concerns. Similarly, Truist Securities has revised its price target to $25 from $43, also retaining a Buy rating, highlighting the company’s cash value and long-term potential. ADAR1 Capital Management, a major shareholder, has voiced dissatisfaction with Keros’s strategic direction, urging a restructuring and focus on a promising drug candidate, KER-050. This comes as Keros adopts a stockholder rights plan to prevent hostile takeovers during its strategic review. The company is well-capitalized, with funds projected to last until 2029, as noted by Truist Securities, which remains confident in Keros’s management and pipeline potential.
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