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Keros Therapeutics(KROS) - 2024 Q4 - Annual Report
KROSKeros Therapeutics(KROS)2025-02-26 21:10

Financial Performance - The net loss for the year ended December 31, 2024, was 187.4million,withanaccumulateddeficitof187.4 million, with an accumulated deficit of 568.8 million as of the same date [592]. - Total revenue for the year ended December 31, 2024, was 3.55million,asignificantincreasefrom3.55 million, a significant increase from 151,000 in 2023 and no revenue in 2022 [620]. - The net loss for the year ended December 31, 2024, was 187.4million,comparedtoanetlossof187.4 million, compared to a net loss of 153.0 million in 2023 [620]. - The company reported net losses of 187.4million,187.4 million, 153.0 million, and 104.7millionfortheyearsendedDecember31,2024,2023,and2022,respectively,withanaccumulateddeficitof104.7 million for the years ended December 31, 2024, 2023, and 2022, respectively, with an accumulated deficit of 568.8 million as of December 31, 2024 [631]. Cash and Liquidity - As of December 31, 2024, the company had cash and cash equivalents of 559.9million,which,alongwitha559.9 million, which, along with a 200 million upfront payment from Takeda Pharmaceuticals, is expected to fund operations into 2029 [596]. - Cash and cash equivalents totaled 559.9millionasofDecember31,2024,which,alongwitha559.9 million as of December 31, 2024, which, along with a 200.0 million upfront payment from a license agreement, is expected to fund liquidity requirements into 2029 [634]. - The company experienced a net increase in cash and cash equivalents of 229.0millionfortheyearendedDecember31,2024[637].−Thecompanyhadcashandcashequivalentsof229.0 million for the year ended December 31, 2024 [637]. - The company had cash and cash equivalents of 559.9 million as of December 31, 2024, compared to 331.1millionasofDecember31,2023,indicatingasignificantincreaseinliquidity[662].−ThecompanyhasnooutstandingdebtsubjecttointerestratevariabilityasofDecember31,2024,mitigatinginterestrateriskrelatedtodebt[663].RevenueGeneration−Thecompanyhasnotgeneratedanyrevenuefromproductsalessinceitsinceptionin2015,asnoneofitsproductcandidateshavebeenapprovedforcommercialization[587].−Thecompanydoesnotexpecttogeneraterevenuefromproductsalesuntilsuccessfuldevelopmentandregulatoryapprovalofitsproductcandidates,whichmaytakeseveralyears[632].−Thecompanyhasrecognized331.1 million as of December 31, 2023, indicating a significant increase in liquidity [662]. - The company has no outstanding debt subject to interest rate variability as of December 31, 2024, mitigating interest rate risk related to debt [663]. Revenue Generation - The company has not generated any revenue from product sales since its inception in 2015, as none of its product candidates have been approved for commercialization [587]. - The company does not expect to generate revenue from product sales until successful development and regulatory approval of its product candidates, which may take several years [632]. - The company has recognized 3.0 million in revenue from a development milestone related to the Hansoh Agreement for the year ended December 31, 2024 [603]. - The company’s revenue consists solely of payments received related to research collaborations and licensing of intellectual property [653]. Expenses - Research and development expenses rose to 173.6millionin2024,upfrom173.6 million in 2024, up from 135.3 million in 2023, reflecting an increase of 38.4millionprimarilyduetohigherprogram−relatedcosts[622].−Generalandadministrativeexpensesincreasedto38.4 million primarily due to higher program-related costs [622]. - General and administrative expenses increased to 40.8 million in 2024, compared to 34.8millionin2023,drivenbyhigherpersonnelandprofessionalfees[626].−Thecompanyexpectstoincursignificantexpensesrelatedtodevelopingitsinternalcommercializationcapabilityifanyproductcandidatesreceiveregulatoryapproval[593].−Thecompanyanticipatessignificantincreasesinoperatingexpensesrelatedtoresearchanddevelopmentasitadvancesclinicaltrialsandpreclinicalactivities[634].−Thecompanyexpectsresearchanddevelopmentexpensestocontinueincreasingasnewclinicaltrialsareinitiatedandongoingtrialsprogress[613].FinancingActivities−ThecompanyhasenteredintoanATMSalesAgreementallowingfortheissuanceandsaleofupto34.8 million in 2023, driven by higher personnel and professional fees [626]. - The company expects to incur significant expenses related to developing its internal commercialization capability if any product candidates receive regulatory approval [593]. - The company anticipates significant increases in operating expenses related to research and development as it advances clinical trials and preclinical activities [634]. - The company expects research and development expenses to continue increasing as new clinical trials are initiated and ongoing trials progress [613]. Financing Activities - The company has entered into an ATM Sales Agreement allowing for the issuance and sale of up to 250 million of common stock, with approximately 228.6millionraisedasofDecember31,2024[589][590].−ApublicofferinginJanuary2024raisedapproximately228.6 million raised as of December 31, 2024 [589][590]. - A public offering in January 2024 raised approximately 151.1 million from the sale of 4,025,000 shares at a price of 40.00pershare[591].−Thecompanygeneratednetcashprovidedbyfinancingactivitiesof40.00 per share [591]. - The company generated net cash provided by financing activities of 391.8 million for the year ended December 31, 2024, primarily from a public offering and sales under the ATM Program [643]. - The company has sold a total of 4,290,096 shares of common stock under the ATM Program for net proceeds of approximately 228.6millionduringtheyearendedDecember31,2024[633].RisksandUncertainties−Economicuncertainties,includinginflationandrisinginterestrates,mayadverselyaffectthecompany′soperatingresultsandfinancialposition[598].−Thecompanyissubjecttorisksthatcouldaffectitsabilitytoaccessadditionalcapital,whichmayimpactitsresearchanddevelopmentprograms[636].DevelopmentandLicensing−Thecompanyisdevelopingmultipleproductcandidates,includingelriterceptforcytopeniasandciboterceptforpulmonaryarterialhypertension[586].−ThecompanyhaslicensingagreementswithTakedaandHansoh,withpotentialmilestonepaymentsofupto228.6 million during the year ended December 31, 2024 [633]. Risks and Uncertainties - Economic uncertainties, including inflation and rising interest rates, may adversely affect the company's operating results and financial position [598]. - The company is subject to risks that could affect its ability to access additional capital, which may impact its research and development programs [636]. Development and Licensing - The company is developing multiple product candidates, including elritercept for cytopenias and cibotercept for pulmonary arterial hypertension [586]. - The company has licensing agreements with Takeda and Hansoh, with potential milestone payments of up to 370 million and 144million,respectively,basedondevelopmentandsalesachievements[608][603].−Contractualobligationsincludemilestonepaymentsrangingfrom144 million, respectively, based on development and sales achievements [608][603]. - Contractual obligations include milestone payments ranging from 50,000 to $10.0 million under the MGH Agreement, with royalties on sales ranging from low-single digits to mid-single digits [647]. - The company has deprioritized the KER-047 program, leading to changes in the reporting of related expenses [625]. Accounting and Estimates - Revenue recognition is based on ASC 606, with revenue recognized when customers obtain control of promised goods or services [653]. - The company estimates accrued research and development expenses based on known facts and circumstances, with no material adjustments to prior estimates reported [658]. - Stock-based compensation expense is recognized based on fair value, with the Black-Scholes option-pricing model used for valuation [659]. - The company has not entered into investments for trading or speculative purposes, focusing on capital preservation with short-term maturities [662]. - The company evaluates its estimates and assumptions on an ongoing basis, acknowledging that actual results may differ from these estimates [651]. - The company’s investment portfolio is conservative, and it does not expect a one percentage point change in interest rates to materially affect its operating results or cash flows [662].