Keros Therapeutics enters agreement with Pontifax

LEXINGTON, MA – Keros Therapeutics, Inc. (NASDAQ:KROS), a biopharmaceutical company currently trading near InvestingPro’s Fair Value estimate, has entered into a material definitive agreement with investment entities collectively known as Pontifax, according to a recent SEC filing. The company maintains a strong liquidity position with a current ratio of 21.45, indicating robust short-term financial health.

The agreement, signed on Wednesday, stipulates that Keros will nominate Mary Ann Gray, Ran Nussbaum, and Alpna Seth for re-election to its Board of Directors at the upcoming 2025 Annual Meeting of Stockholders. These nominees are current members of the Board, ensuring continuity in Keros’s governance.

Additionally, Pontifax has agreed to customary standstill restrictions effective until December 31, 2025, or until the thirtieth day prior to the nomination deadline for the 2026 Annual Meeting of Stockholders, whichever comes first. These restrictions may terminate earlier under specific conditions detailed in the Letter Agreement.

Both Keros and Pontifax have also committed to mutual non-disparagement obligations. The specifics of the agreement are outlined in the Letter Agreement attached as Exhibit 10.1 to the SEC filing.

This strategic move comes as Keros continues to advance its pipeline of treatments in the pharmaceutical preparations sector. The agreement with Pontifax may influence the company’s direction and governance as it navigates the competitive landscape of biopharmaceuticals. InvestingPro data reveals the company is quickly burning through cash, though it maintains more cash than debt on its balance sheet.

The company’s stock, listed on The Nasdaq Stock Market, has shown mixed performance with a significant 15.52% gain over the past week, despite a challenging six-month period that saw a 77.03% decline. With the next earnings report due on May 1, 2025, and analysts setting price targets ranging from $15 to $76, investors seeking deeper insights can access additional analysis and 13 more exclusive ProTips through InvestingPro.

The information in this article is based on a press release statement filed with the SEC.

In other recent news, Keros Therapeutics announced it is exploring strategic alternatives, which may include a sale or other business combinations, to maximize stockholder value. This move follows the adoption of a stockholder rights plan to prevent hostile takeovers. Keros has engaged Goldman Sachs & Co. LLC as its financial advisor to assist with the strategic review. In addition, the company has entered into a global license agreement with Takeda, which became effective recently, resulting in a $200 million upfront payment to Keros. This agreement is expected to bolster Keros’s financial position and support the development of elritercept.

Meanwhile, Truist Securities lowered its price target for Keros to $25 but maintained a Buy rating, emphasizing that the company’s stock trades below its cash value. Similarly, H.C. Wainwright adjusted its price target to $40, maintaining a Buy rating, despite a temporary halt in the Phase 2 TROPOS study due to safety concerns. Cantor Fitzgerald, however, downgraded Keros from Buy to Neutral following a pause in the Phase 2 trial for Cibotercept due to safety issues. Despite these challenges, Keros is expected to present topline data from the trial soon. The company remains well-capitalized, with over $700 million in cash, including funds from Takeda, to support its pipeline expansion.

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