Keros Therapeutics(KROS) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements Forward-Looking Statements Disclaimer 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][14] - 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][14] - 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] Special Note Regarding Company References Company References Definition 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] Special Note Regarding Trademarks Trademarks Ownership 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] Summary of Selected Risks Associated with Our Business Key Business Risks 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] Part I. Financial Information Item 1. Financial Statements (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 - 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] - 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] - Total assets increased by $141.28 million (22.94%) from $615.89 million to $757.17 million[25] - Total stockholders' equity increased by $135.18 million (23.65%) from $571.55 million to $706.73 million[25] 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 - 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][150] - 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][151] - 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][152] - 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][154] - Diluted EPS for the six months ended June 30, 2025, was $2.86, compared to $(2.46) in the prior year[28] 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 - 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] - 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][115]