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LEXINGTON, Mass. - Keros Therapeutics, Inc. (NASDAQ:KROS), a clinical-stage biopharmaceutical company with a "GREAT" financial health score according to InvestingPro, announced today the discontinuation of its development of cibotercept for the treatment of pulmonary arterial hypertension (PAH) following the TROPOS trial results. The company also reported a significant corporate restructuring, including a workforce reduction of approximately 45%.
The TROPOS trial, a Phase 2 clinical study of cibotercept combined with background therapy in PAH patients, was halted due to safety concerns after pericardial effusion adverse events were observed. Following a comprehensive review of the trial data, Keros has decided to cease all development activities for cibotercept in the PAH indication.
Jasbir S. Seehra, Ph.D., Chair and Chief Executive Officer of Keros, expressed gratitude to patients, investigators, and company colleagues for their commitment to finding new treatments for PAH, despite the unfavorable outcome of the trial.
In response to the termination of the cibotercept program, Keros is undertaking a corporate restructuring. The company will reduce its headcount by 45%, leaving 85 full-time employees after the required 60-day notice period under the Worker Adjustment and Retraining Notification Act. These measures are expected to result in annualized cost savings of approximately $17 million. The news comes as the stock has experienced a significant 74.6% decline over the past six months, though analysis suggests the stock may be undervalued at current levels.
Dr. Seehra stated that the restructuring aligns with Keros’s data-driven approach and strategic priorities, aiming to enhance shareholder value. The company is focused on advancing its remaining development programs and completing a strategic review process. The Strategic Committee of the Board is considering various options, including a potential sale of the company or other business transactions, and plans to provide a preliminary update by June 9, 2025.
Keros Therapeutics is known for its expertise in TGF-ß protein signaling, with product candidates like KER-065 for neuromuscular diseases and elritercept (KER-050) for cytopenias. Despite the setback with cibotercept, the company maintains a strong financial position with a robust current ratio of 19.29 and more cash than debt on its balance sheet. According to InvestingPro, which offers 12 additional investment insights for KROS, analysts expect revenue growth of 58.6% this year as the company progresses with its other development programs.
This news article is based on a press release statement from Keros Therapeutics, Inc.
In other recent news, Keros Therapeutics has been in the spotlight due to several significant developments. The company announced that Glass Lewis & Co., a prominent proxy advisory firm, has endorsed all three of Keros’s director nominees for the upcoming Annual Meeting. Meanwhile, ADAR1 Capital Management, a major shareholder, has urged Keros to disclose the results of its strategic review before the meeting. ADAR1 has expressed dissatisfaction with the company’s governance and called for operational changes, including the discontinuation of certain drug candidates. Additionally, H.C. Wainwright analyst Andrew Fein lowered the price target for Keros to $25 from $40, while maintaining a Buy rating, following the early termination of the TROPOS trial due to safety concerns. Keros also entered into an agreement with Pontifax, nominating three board members for re-election and establishing mutual non-disparagement obligations. These recent developments highlight ongoing strategic and governance challenges for the company.
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