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LEXINGTON, Mass. - Keros Therapeutics, Inc. (NASDAQ:KROS) announced Wednesday that the U.S. Food and Drug Administration has granted Orphan Drug designation to its investigational therapy KER-065 for the treatment of Duchenne muscular dystrophy (DMD). The company, which maintains impressive gross profit margins of 94% and a strong balance sheet with more cash than debt, continues to advance its pipeline while maintaining solid financial health. According to InvestingPro analysis, the stock currently appears undervalued based on its Fair Value assessment.
KER-065 is a novel ligand trap designed to inhibit myostatin and activin A, which may increase skeletal muscle regeneration and strength while reducing body fat and muscle fibrosis. The company is advancing the drug candidate into Phase 2 clinical trials for DMD patients.
"Receiving Orphan Drug designation for KER-065 highlights the significant unmet medical need for patients with DMD," said Jasbir S. Seehra, President and Chief Executive Officer of Keros.
The FDA designation, which applies to therapies addressing rare diseases affecting fewer than 200,000 people in the United States, provides potential benefits including tax credits for clinical testing, waiver or partial payment of FDA application fees, and seven years of market exclusivity upon approval.
DMD is the most common form of muscular dystrophy, affecting approximately one in every 3,500 male births worldwide according to the National Organization for Rare Disorders. The genetic disorder causes progressive muscle degeneration due to the absence of dystrophin protein, leading to muscle weakness, loss of mobility, and eventually respiratory and cardiac complications.
Keros Therapeutics is a clinical-stage biopharmaceutical company focused on developing therapeutics that target the transforming growth factor-beta (TGF-β) family of proteins. The company’s most advanced product candidate, elritercept, is being developed for cytopenias in patients with myelodysplastic syndrome and myelofibrosis. With a healthy current ratio of 21.11 and strong financial metrics, including positive earnings in the last twelve months, the company demonstrates robust operational efficiency. For detailed financial analysis and real-time updates, visit InvestingPro.
This article is based on a press release statement from Keros Therapeutics.
In other recent news, Keros Therapeutics announced a strategic focus on its KER-065 clinical program for Duchenne muscular dystrophy, leading to the discontinuation of cibotercept development due to safety concerns. This shift also included outlicensing elritercept to Takeda, which has started a Phase 3 trial in myelodysplastic syndromes (MDS), triggering a $10 million payment to Keros. Analyst firms have responded to these developments, with H.C. Wainwright lowering its price target for Keros to $20 while maintaining a Buy rating, and BofA Securities downgrading the stock from Buy to Neutral with a new price target of $18. BofA’s decision reflects concerns about the delay in obtaining insights on KER-065 and ongoing safety issues. Meanwhile, Keros plans to return $375 million in excess capital to shareholders following the conclusion of its strategic review. In corporate governance, ADAR1 Capital Management, the largest shareholder, expressed dissatisfaction with two board directors, citing a lack of alignment with shareholder interests. The directors received low levels of support in the recent Annual Meeting, highlighting broader shareholder discontent.
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