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LEXINGTON, Mass. - Keros Therapeutics, Inc. (NASDAQ:KROS), currently trading at $14.41 and identified as undervalued by InvestingPro analysis, announced Wednesday it will discontinue development of cibotercept (KER-012) as part of a strategic realignment to focus resources on its KER-065 clinical program. The company maintains a strong financial position with more cash than debt on its balance sheet.
The decision follows the May 29 termination of cibotercept development for pulmonary arterial hypertension after analysis of data from the TROPOS Phase 2 clinical trial.
As part of the restructuring, CEO Jasbir S. Seehra will assume the additional role of President effective August 18, while stepping down as Board Chair. Jean-Jacques Bienaimé, currently Lead Independent Director, will become Board Chair on the same date. Christopher Rovaldi, President and Chief Operating Officer, will leave the company on August 18.
"By prioritizing our most promising clinical program, we expect Keros to operate with greater precision and urgency to unlock additional value for stockholders," said Seehra in the press release.
The company plans to initiate a Phase 2 clinical trial of KER-065 in patients with Duchenne muscular dystrophy in the first quarter of 2026, pending regulatory approval. This follows what the company described as positive Phase 1 results in healthy volunteers, meeting objectives for safety, tolerability, pharmacokinetics and pharmacodynamics.
Keros also announced the promotion of Lorena Lerner to Chief Scientific Officer, effective immediately, and the elimination of several senior vice president positions as part of its streamlined operational structure.
The clinical-stage biopharmaceutical company focuses on developing therapeutics targeting dysfunctional signaling of transforming growth factor-beta proteins, which regulate tissue growth and repair.
In other recent news, Keros Therapeutics has dosed the first patient in its Phase 3 RENEW clinical trial for elritercept, targeting adults with transfusion-dependent anemia in myelodysplastic syndromes. This milestone triggers a $10 million payment to Keros under its global license agreement with Takeda. Additionally, Keros plans to return $375 million in excess capital to shareholders, following a strategic review aimed at maximizing stockholder value. However, BofA Securities recently downgraded Keros’ stock from Buy to Neutral, lowering the price target to $18. This decision reflects concerns about limited near-term stock price appreciation and anticipated delays in obtaining key insights on KER-065. Furthermore, Keros has halted the development of cibotercept for pulmonary arterial hypertension and plans to reduce its workforce by approximately 45%, expecting to save around $17 million annually. Shareholder dissatisfaction has also been highlighted, with significant opposition to two board directors, Dr. Mary Ann Gray and Dr. Alpna Seth, due to concerns over capital allocation strategies.
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