Company Performance - Keros Therapeutics reported a quarterly loss of $0.76 per share, which was better than the Zacks Consensus Estimate of a loss of $1.14, and an improvement from a loss of $1.25 per share a year ago, representing an earnings surprise of +33.33% [1] - The company posted revenues of $18.17 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 135.95%, compared to revenues of $0.04 million in the same quarter last year [2] - Over the last four quarters, Keros Therapeutics has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Keros Therapeutics shares have declined approximately 9.1% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is -$1.08 on revenues of $4.37 million, and for the current fiscal year, it is $0.21 on revenues of $219 million [7] Industry Outlook - The Medical - Biomedical and Genetics industry, to which Keros Therapeutics belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Keros Therapeutics may be influenced by the overall outlook of the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Core Viewpoint - Keros Therapeutics is discontinuing the development of cibotercept to focus on its key clinical program, KER-065, which is aimed at treating Duchenne muscular dystrophy (DMD) [1][2][4] Strategic Realignment - The company will cease all internal development activities related to cibotercept following the termination of its development in pulmonary arterial hypertension (PAH) due to safety and efficacy data from the TROPOS Phase 2 clinical trial [2] - Keros is reallocating resources to enhance the development of KER-065, which has shown promising results in initial clinical trials [1][4] Leadership Changes - Keros announced several transitions in its Board of Directors and leadership to support its streamlined operational structure [3][5] - Jasbir S. Seehra, Ph.D., will take on the additional role of President while stepping down as Chair of the Board, with Jean-Jacques Bienaimé appointed as the new Chair [5] - Christopher Rovaldi will leave the company, and Lorena Lerner, Ph.D., will be promoted to Chief Scientific Officer [5] Clinical Development Plans - Keros plans to initiate a Phase 2 clinical trial for KER-065 in patients with DMD in the first quarter of 2026, pending positive regulatory interactions [4] - The company has reported initial topline results from the Phase 1 clinical trial of KER-065, achieving key objectives related to safety, tolerability, pharmacokinetics, and pharmacodynamics [4] Financial Results - Keros has released its financial results for the second quarter ended June 30, 2025, which can be accessed on its website [6]

Special Note Regarding Forward-Looking Statements [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) The report contains forward-looking statements involving risks and uncertainties, and actual results may differ materially - The report contains forward-looking statements, which are not historical facts and involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[12](index=12&type=chunk)[14](index=14&type=chunk) - Investors are cautioned not to unduly rely on these statements, and the company does not plan to publicly update or revise them, except as required by applicable law[13](index=13&type=chunk)[14](index=14&type=chunk) - Key forward-looking statements include timing of regulatory engagement and Phase 2 clinical trial initiation for KER-065 in Duchenne muscular dystrophy - Risks associated with public health crises impacting business, preclinical studies, and clinical trials - Ability to receive required regulatory approvals and successfully market products - Ability to obtain funding, sufficiency of capital resources, and ability to establish and maintain collaborations - Ability to protect intellectual property rights and operate without infringing third-party rights - Statements regarding future revenue, hiring plans, expenses, capital expenditures, and stock performance[15](index=15&type=chunk) Special Note Regarding Company References [Company References Definition](index=6&type=section&id=Company%20References%20Definition) Terms like 'Keros,' 'the Company,' 'we,' 'us,' and 'our' refer to Keros Therapeutics, Inc. and its subsidiaries - The terms 'Keros,' 'the Company,' 'we,' 'us,' and 'our' refer to Keros Therapeutics, Inc. and its subsidiaries[18](index=18&type=chunk) Special Note Regarding Trademarks [Trademarks Ownership](index=6&type=section&id=Trademarks%20Ownership) All trademarks, trade names, and service marks in this report are the property of their respective owners - All trademarks, trade names, and service marks in this report are the property of their respective owners[20](index=20&type=chunk) Summary of Selected Risks Associated with Our Business [Key Business Risks](index=7&type=section&id=Key%20Business%20Risks) The company faces significant risks including limited operating history, funding needs, product dependence, competition, and IP challenges - Limited operating history and recurring net losses since inception, with anticipated future losses - Need for substantial additional funding to complete development and commercialization; failure to obtain capital may force delays or elimination of programs - Heavy dependence on the success of product candidates (KER-065, elritercept) in clinical development; inability to advance, obtain approval, or commercialize will materially harm the business - Clinical trials are lengthy, expensive, and have uncertain outcomes, potentially leading to delays or inability to complete development - Significant competition from other biotechnology and pharmaceutical companies - Challenges in protecting intellectual property rights - Reliance on third parties for preclinical studies, clinical trials, and manufacturing - Dependence on collaborations with Takeda and Hansoh for elritercept commercialization - Public health crises could adversely impact business and clinical trials[22](index=22&type=chunk) Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, for Keros Therapeutics, Inc [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - Cash and cash equivalents increased by **$130.28 million (23.27%)** from **$559.93 million** at December 31, 2024, to **$690.22 million** at June 30, 2025[25](index=25&type=chunk) - Accounts receivable significantly increased by **$13.07 million (476.66%)** from **$2.74 million** to **$15.82 million**, primarily due to the Takeda Agreement[25](index=25&type=chunk) - Total assets increased by **$141.28 million (22.94%)** from **$615.89 million** to **$757.17 million**[25](index=25&type=chunk) - Total stockholders' equity increased by **$135.18 million (23.65%)** from **$571.55 million** to **$706.73 million**[25](index=25&type=chunk) Financial Assets (in thousands) | ASSETS (in thousands) | JUNE 30, 2025 | DECEMBER 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $690,215 | $559,931 | | Accounts receivable | $15,816 | $2,742 | | Total current assets | $732,808 | $588,893 | | TOTAL ASSETS | $757,165 | $615,886 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | JUNE 30, 2025 | DECEMBER 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accounts payable | $5,267 | $4,602 | | Total current liabilities | $34,707 | $27,450 | | Total liabilities | $50,431 | $44,333 | | Total stockholders' equity | $706,734 | $571,553 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $757,165 | $615,886 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) - Total revenue for the six months ended June 30, 2025, significantly increased to **$229.41 million** from **$0.12 million** in the prior year, primarily due to **$195.36 million** in license revenue from the Takeda Agreement[28](index=28&type=chunk)[150](index=150&type=chunk) - Net income for the six months ended June 30, 2025, was **$117.76 million**, a substantial improvement from a net loss of **$88.37 million** in the same period of 2024, driven by the Takeda Agreement[28](index=28&type=chunk)[151](index=151&type=chunk) - Research and development expenses increased by **$13.44 million (17.06%)** for the six months ended June 30, 2025, to **$92.21 million**, mainly due to increased elritercept-related clinical and manufacturing activities[28](index=28&type=chunk)[152](index=152&type=chunk) - General and administrative expenses increased by **$4.71 million (23.24%)** for the six months ended June 30, 2025, to **$24.98 million**, primarily due to professional fees and other operational support[28](index=28&type=chunk)[154](index=154&type=chunk) - Diluted EPS for the six months ended June 30, 2025, was **$2.86**, compared to **$(2.46)** in the prior year[28](index=28&type=chunk) Financial Performance (in thousands, except per share data) | (in thousands, except per share data) | THREE MONTHS ENDED JUNE 30, 2025 | THREE MONTHS ENDED JUNE 30, 2024 | SIX MONTHS ENDED JUNE 30, 2025 | SIX MONTHS ENDED JUNE 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service and other revenue | $18,168 | $37 | $34,059 | $120 | | License revenue | $— | $— | $195,355 | $— | | Total revenue | $18,168 | $37 | $229,414 | $120 | | Research and development | $(43,503) | $(40,515) | $(92,212) | $(78,773) | | General and administrative | $(14,482) | $(9,961) | $(24,979) | $(20,269) | | Total operating expenses | $(57,985) | $(50,476) | $(117,191) | $(99,042) | | Net income (loss) | $(30,696) | $(45,257) | $117,755 | $(88,371) | | Net income (loss) per share — basic | $(0.76) | $(1.25) | $2.90 | $(2.46) | | Net income (loss) per share — diluted | $(0.76) | $(1.25) | $2.86 | $(2.46) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) - Total stockholders' equity increased by **$135.18 million** from **$571.55 million** at December 31, 2024, to **$706.73 million** at June 30, 2025[31](index=31&type=chunk) - The accumulated deficit decreased by **$117.76 million**, from **$(568.78) million** to **$(451.02) million**, primarily due to net income for the six months ended June 30, 2025[31](index=31&type=chunk)[115](index=115&type=chunk)

[Second Quarter 2025 Financial Results and Business Update](index=1&type=section&id=Keros%20Therapeutics%20Reports%20Second%20Quarter%202025%20Financial%20Results) Keros Therapeutics reported Q2 2025 financial results, outlining strategic pipeline advancements, financial performance, and liquidity position [Company Highlights and Strategic Direction](index=1&type=section&id=Company%20Highlights%20and%20Strategic%20Direction) Keros Therapeutics announced Q2 2025 financial results after a strategic review, reaffirming focus on pipeline advancement with KER-065 progressing to Phase 2 for Duchenne muscular dystrophy in Q1 2026 - Keros' Board completed a comprehensive strategic review, reaffirming focus on creating **long-term value** through pipeline advancement[2](index=2&type=chunk) - The lead asset, KER-065, is progressing towards initiation of a **Phase 2 clinical trial** in patients with Duchenne muscular dystrophy in the first quarter of 2026[2](index=2&type=chunk) [Financial Performance Summary](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Keros reported a net loss of $30.7 million in Q2 2025, a $14.6 million decrease from Q2 2024, primarily due to Takeda license revenue partially offset by increased R&D and G&A expenses Second Quarter Financial Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :---------------------- | :------ | :------ | :------- | | Net Loss | $(30.7) | $(45.3) | $(14.6) decrease | | Research and development expenses | $43.5 | $40.5 | $3.0 increase | | General and administrative expenses | $14.5 | $10.0 | $4.5 increase | - The decrease in net loss was largely due to **revenue recognized** related to Keros' license agreement with Takeda Pharmaceuticals U.S.A., Inc[3](index=3&type=chunk) - Increased research and development efforts and additional investments to support clinical and corporate goals partially offset the net loss improvement[3](index=3&type=chunk)[4](index=4&type=chunk) [Liquidity and Capital Resources](index=1&type=section&id=Liquidity%20and%20Capital%20Resources) Keros' cash and cash equivalents significantly increased to $690.2 million by June 30, 2025, with a projected cash runway into the first half of 2028, even after returning $375.0 million to stockholders Cash and Cash Equivalents (in millions) | Metric | June 30, 2025 | December 31, 2024 | Change | | :----------------------- | :------------ | :---------------- | :------- | | Cash and cash equivalents | $690.2 | $559.9 | $130.3 increase | - Keros expects to return **$375.0 million** of excess capital to stockholders[5](index=5&type=chunk) - Based on current operating assumptions, Keros expects its cash and cash equivalents to fund operating expenses and capital expenditure requirements into the **first half of 2028**[5](index=5&type=chunk) [Company Profile](index=1&type=section&id=About%20Keros%20Therapeutics%2C%20Inc.) Keros Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for TGF-ß family protein signaling disorders [Business Overview and Pipeline](index=1&type=section&id=Business%20Overview%20and%20Pipeline) Keros Therapeutics is a clinical-stage biopharmaceutical company developing novel therapeutics for TGF-ß family protein signaling disorders, with lead candidates KER-065 for neuromuscular diseases and elritercept for cytopenias - Keros is a clinical-stage biopharmaceutical company focused on developing and commercializing novel therapeutics for disorders linked to dysfunctional **TGF-ß family protein signaling**[6](index=6&type=chunk) - Keros' lead product candidate, **KER-065**, is being developed for the treatment of neuromuscular diseases, with an initial focus on Duchenne muscular dystrophy[6](index=6&type=chunk) - Keros' most advanced product candidate, **elritercept**, is being developed for the treatment of cytopenias in patients with myelodysplastic syndrome and myelofibrosis[6](index=6&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents Keros Therapeutics' condensed consolidated statements of operations and balance sheets for recent periods [Statements of Operations](index=3&type=section&id=KEROS%20THERAPEUTICS%2C%20INC.%20Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, Keros reported $18.168 million in revenue and a $30.696 million net loss, while the six months ended June 30, 2025, saw $229.414 million in revenue and a $117.755 million net income, driven by license revenue Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Total revenue | 18,168 | 37 | 229,414 | 120 | | Research and development | (43,503) | (40,515) | (92,212) | (78,773) | | General and administrative | (14,482) | (9,961) | (24,979) | (20,269) | | Net income (loss) | (30,696) | (45,257) | 117,755 | (88,371) | | Net income (loss) per share — basic | (0.76) | (1.25) | 2.90 | (2.46) | | Net income (loss) per share — diluted | (0.76) | (1.25) | 2.86 | (2.46) | - License revenue of **$195,355 thousand** was a key contributor to the net income for the six months ended June 30, 2025[12](index=12&type=chunk) - Operating expenses, including R&D and G&A, increased year-over-year for both the three-month and six-month periods, reflecting ongoing development and operational investments[12](index=12&type=chunk) [Balance Sheets](index=4&type=section&id=KEROS%20THERAPEUTICS%2C%20INC.%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Keros' total assets increased to $757.165 million, and total stockholders' equity rose to $706.734 million, primarily due to higher cash and receivables Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | 690,215 | 559,931 | | Accounts receivable | 15,816 | 2,742 | | Total current assets | 732,808 | 588,893 | | Total assets | 757,165 | 615,886 | | Total current liabilities | 34,707 | 27,450 | | Total liabilities | 50,431 | 44,333 | | Total stockholders' equity | 706,734 | 571,553 | - The accumulated deficit decreased from **$(568,779) thousand** at December 31, 2024, to **$(451,024) thousand** at June 30, 2025, indicating a positive shift in retained earnings due to the six-month period's net income[14](index=14&type=chunk) - Deferred revenue of **$925 thousand** was reported as a current liability as of June 30, 2025, compared to none at December 31, 2024[14](index=14&type=chunk) [Legal Disclosures and Contacts](index=1&type=section&id=Legal%20Disclosures%20and%20Contacts) This section provides cautionary notes on forward-looking statements and essential company contact information [Cautionary Note Regarding Forward-Looking Statements](index=1&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a standard disclaimer for forward-looking statements, noting that actual results may differ due to risks such as limited operating history, funding needs, product candidate dependence, clinical trial delays, competition, and reliance on third parties - Statements regarding matters that are not historical facts are 'forward-looking statements' subject to risks and uncertainties, meaning actual results may differ materially[8](index=8&type=chunk) - Identified risks include Keros' limited operating history, ability to raise additional funding, dependence on product candidates, potential delays in clinical trials, competition, intellectual property, and reliance on third parties[8](index=8&type=chunk) - Keros undertakes no obligation to update such statements to reflect events or circumstances after the date on which they were made, except as required by law[9](index=9&type=chunk) [Company Contacts](index=2&type=section&id=Contacts) This section provides contact information for investor relations and media inquiries for Keros Therapeutics - Investor Contact: **Justin Frantz**, jfrantz@kerostx.com, **617-221-6042**[10](index=10&type=chunk) - Media Contact: **Mahmoud Siddig / Adam Pollack / Viveca Tress**, Joele Frank, Wilkinson Brimmer Katcher, **212-355-4449**[10](index=10&type=chunk)

Core Insights - Keros Therapeutics, Inc. reported a net loss of $30.7 million for Q2 2025, a decrease from a net loss of $45.3 million in Q2 2024, primarily due to revenue from a license agreement with Takeda Pharmaceuticals [3][4] - The company is focusing on advancing its pipeline, particularly KER-065, which is set to enter a Phase 2 clinical trial for Duchenne muscular dystrophy in Q1 2026 [2][6] - Keros' cash and cash equivalents increased to $690.2 million as of June 30, 2025, compared to $559.9 million at the end of 2024, allowing for operational funding into the first half of 2028 [5][12] Financial Performance - Total revenue for Q2 2025 was $18.2 million, compared to $37,000 in Q2 2024, with a significant portion attributed to service and other revenue [10] - Research and development expenses rose to $43.5 million in Q2 2025 from $40.5 million in Q2 2024, reflecting increased R&D efforts [4][10] - General and administrative expenses increased to $14.5 million in Q2 2025 from $10.0 million in Q2 2024, mainly due to higher external expenses [4][10] Balance Sheet Highlights - Keros' total assets as of June 30, 2025, were $757.2 million, up from $615.9 million at the end of 2024 [12][13] - The company reported total liabilities of $50.4 million as of June 30, 2025, compared to $44.3 million at the end of 2024 [12][13] - Stockholders' equity increased to $706.7 million as of June 30, 2025, from $571.6 million at the end of 2024, driven by a reduction in accumulated deficit [13]

Core Viewpoint - Keros Therapeutics, Inc. (KROS) is currently more attractive to value investors compared to Exact Sciences (EXAS) based on various valuation metrics and analyst outlooks [1][3]. Valuation Metrics - KROS has a forward P/E ratio of 70.11, significantly lower than EXAS's forward P/E of 303.06 [5]. - The PEG ratio for KROS is 2.62, while EXAS has a much higher PEG ratio of 10.35, indicating KROS may be undervalued relative to its expected earnings growth [5]. - KROS's P/B ratio stands at 0.81, compared to EXAS's P/B of 3.82, further suggesting KROS is more favorably valued [6]. Analyst Ratings - KROS holds a Zacks Rank of 1 (Strong Buy), while EXAS has a Zacks Rank of 2 (Buy), indicating a stronger earnings estimate revision activity for KROS [3][7]. - The Value grade for KROS is B, whereas EXAS has a Value grade of C, reflecting KROS's superior valuation metrics [6].

Core Points - Keros Therapeutics announced the dosing of the first patient in the Phase 3 RENEW clinical trial for elritercept, which triggers a $10 million milestone payment from Takeda under their global license agreement [1][2] - The global license agreement with Takeda, effective January 16, 2025, includes a $200 million upfront cash payment and potential milestones exceeding $1.1 billion, along with tiered royalties on net sales [2] Company Overview - Keros Therapeutics is a clinical-stage biopharmaceutical company focused on developing therapeutics for disorders linked to dysfunctional signaling of the TGF-ß protein family [5] - The company is recognized for its understanding of TGF-ß proteins, which regulate growth and maintenance of various tissues, and is developing protein therapeutics aimed at providing disease-modifying benefits [5] - Keros' lead product candidate, KER-065, targets neuromuscular diseases, while elritercept (KER-050) is focused on treating cytopenias, including anemia and thrombocytopenia in patients with myelodysplastic syndromes and myelofibrosis [5] Clinical Trial Details - The Phase 3 RENEW clinical trial is a global, randomized, double-blind, placebo-controlled study aimed at evaluating the efficacy of elritercept in reducing red blood cell transfusions in adults with transfusion-dependent anemia and varying risk levels of MDS [3]

Cibotercept (KER-012) for Pulmonary Arterial Hypertension (PAH) - A Phase 2 TROPOS trial of Cibotercept in PAH patients is fully enrolled, with dosing continuing in the 1.5 mg/kg treatment arm after halting higher dose arms due to safety review[18] - Topline data from the Phase 2 TROPOS trial is expected in Q2 2025, which will inform the next steps in the development program[18] - In a Phase 1 clinical trial, monthly dosing of Cibotercept for 3 months was generally well-tolerated at doses up to 4.5 mg/kg, with observed changes in bone biomarkers suggesting biological activity from the 0.75 mg/kg dose[24] KER-065 for Neuromuscular Disorders - Keros has deprioritized the development of KER-065 in obesity to focus on neuromuscular disorders[45] - Preclinical data in a mouse model of Duchenne Muscular Dystrophy (DMD) showed that RKER-065 increased utrophin expression and muscle strength[53, 54] - In a preclinical study, co-treatment with prednisolone and RKER-065 in MDX mice increased both muscle mass and strength, as well as trabecular bone and strength[61] - Initial data from a Phase 1 healthy volunteer trial is expected in Q1 2025, which has the potential to inform development of KER-065 in neuromuscular indications, such as DMD[83] Elritercept (KER-050) for Myelodysplastic Syndromes (MDS) and Myelofibrosis (MF) - Keros entered into an exclusive license agreement with Takeda for elritercept, receiving an upfront payment of $200 million and being eligible for over $1.1 billion in milestone payments plus tiered royalties[95] - In an ongoing Phase 2 clinical trial for MDS, elritercept demonstrated an overall response rate of 55.2% (48/87) in the mITT24 population, with 48.3% (42/87) achieving modified IWG 2006 HI-E[114] - In the Phase 2 MDS trial, 39.1% (27/69) of transfusion-independent evaluable patients achieved transfusion independence (TI) for at least 8 weeks[114] - In the Phase 2 MF trial, 40% (8/20) of evaluable patients showed ≥ 10% reduction in spleen size at Week 24[129] - The Phase 3 RENEW trial in MDS is expected to commence in Q1 2025[137]

Core Viewpoint - The significant withhold votes from directors Mary Ann Gray and Alpna Seth highlight a pressing need for change in Keros Therapeutics' capital allocation strategy and governance [1][2][6] Shareholder Sentiment - ADAR1 Capital Management, the largest stockholder, noted that only approximately 34% of outstanding shares voted to elect Dr. Gray and 37% for Dr. Seth, indicating a substantial loss of shareholder confidence and dissatisfaction with the Board's performance [2][6] Company Actions and Responses - The company has recently discontinued the development of cibotercept in pulmonary arterial hypertension and implemented a reduction in headcount, which are seen as positive steps, but insufficient in addressing broader concerns [3][4] - The Board's decision to retain approximately half of its cash balance is criticized, especially given the limited clinical pipeline and commercial prospects [4] Capital Allocation Strategy - There is a call for the Board to return an additional $100 million, totaling $475 million, to shareholders through a special dividend by the end of Q3 2025, and to ensure that shareholders can capture potential cash flow from the Takeda partnership [5] - The lack of clarity regarding the terms, timing, and method of the proposed capital return reflects a disorganized approach to decision-making [4] Future Governance - ADAR1 emphasizes the need for new perspectives in the boardroom to maximize value and indicates a willingness to nominate new directors for the 2026 Annual Meeting if the current strategy persists [6][7]

Financial Data and Key Metrics Changes - The company raised capital in 2024 and plans to return $375 million to shareholders while using the remaining capital to build shareholder value [2][3][58] - The company had $720 million in cash at the end of the third quarter, but this will be significantly reduced after the capital return [61][62] Business Line Data and Key Metrics Changes - The company advanced one asset, elrotircep, through phase two to phase three in partnership with Takeda, receiving $200 million upfront and potential milestones totaling $1.1 billion [4][5] - Development of saboticep was discontinued due to safety signals observed in the phase two study [2][7] - KER065 is currently in development for Duchenne Muscular Dystrophy (DMD), showing increases in lean mass and improvements in bone mineral density during phase one safety studies [18][19] Market Data and Key Metrics Changes - The company is focusing on neuromuscular indications, particularly DMD, as a strategic pivot from obesity due to commercialization potential [26][28] - The competitive landscape in DMD is crowded, but the company believes its product can provide significant benefits by increasing muscle strength and expression of eutrophin [34][35] Company Strategy and Development Direction - The company aims to commercialize its own products rather than becoming a single asset company [28] - There is a focus on understanding the root cause of pericardial effusion related to PAH treatments and exploring opportunities in obesity and other diseases influenced by the TGF beta pathway [55] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need to understand the mechanism behind increased pericardial effusion in PAH patients before proceeding with further development in that area [16][17] - The company plans to engage with regulators regarding a phase two trial design for DMD, with a focus on patient population and starting doses [42][43] Other Important Information - The company has streamlined its organization and reduced its workforce, resulting in annual savings of approximately $17 million [62] - The strategic review has concluded, with a focus on returning capital to shareholders and investing in the pipeline [59][60] Q&A Session Summary Question: Can you provide an overview of the company's current status and value drivers? - The company is focused on its clinical stage assets, particularly KER065 for DMD, and has returned capital to shareholders while seeking to build value [2][3] Question: What are the key terms of the partnership with Takeda? - The partnership includes an upfront payment of $200 million and potential milestones totaling $1.1 billion, along with royalties [5][6] Question: What safety signals were observed in the saboticep study? - The study was halted due to unexpected pericardial effusions, which were not previously identified in clinical studies [9][10] Question: How does the company plan to approach the DMD indication? - The company plans to conduct trials across all patient populations, focusing on late ambulatory and non-ambulatory patients [39][40] Question: What is the expected cash runway after the capital return? - The cash runway will be significantly reduced, but the company has not yet provided specific guidance on the duration [61][62]