Keros Therapeutics(US:KROS)2025-11-05 21:05Financial Performance - The company reported a net loss of $7.3 million for the three months ended September 30, 2025, and a net income of $110.5 million for the nine months ended September 30, 2025, primarily driven by revenue from the license agreement with Takeda [111]. - Total revenue for the three months ended September 30, 2025, was $14.3 million, a significant increase from $388,000 in the same period in 2024, primarily due to the Takeda Agreement [142]. - Total revenue for the nine months ended September 30, 2025, was $243.7 million, a significant increase from $0.5 million in the same period of 2024, primarily driven by $205.4 million in license revenue from the Takeda Agreement [150]. - Net income for the nine months ended September 30, 2025, was $110.5 million, compared to a net loss of $141.3 million in the same period of 2024, marking a turnaround in financial performance [156]. - The company recognized $10.0 million in license revenue related to a development milestone under the Takeda Agreement for the three months ended September 30, 2025 [143]. - The income tax benefit for the three months ended September 30, 2025, was $1.4 million, attributed to taxable income generated from the Takeda Agreement [148]. - The company incurred an income tax provision of $6.4 million for the nine months ended September 30, 2025, attributed to taxable income from the Takeda Agreement [155]. Cash and Cash Equivalents - As of September 30, 2025, the company had an accumulated deficit of $458.3 million and cash and cash equivalents of $693.5 million [111]. - Cash and cash equivalents as of September 30, 2025, were $693.5 million, with expectations to fund operations into the first half of 2028 after accounting for planned repurchases [162]. - As of September 30, 2025, cash and cash equivalents totaled $693.5 million, up from $559.9 million as of December 31, 2024 [178]. Research and Development - The company is developing KER-065 for the treatment of Duchenne muscular dystrophy, with a Phase 2 clinical trial expected to start in Q1 2026 [104]. - The company expects research and development expenses to continue to fluctuate based on clinical trial activities and anticipates a decrease in elritercept-related expenses once transitioned to Takeda [135]. - The company expects to continue incurring substantial expenses related to ongoing research and development activities, particularly for clinical trials [157]. - Research and development expenses decreased to $19.5 million for the three months ended September 30, 2025, from $49.2 million in 2024, a reduction of $29.7 million [145]. - Research and development expenses decreased to $111.7 million for the nine months ended September 30, 2025, down from $128.0 million in 2024, reflecting a reduction in expenses related to KER-065 and cibotercept [152]. - The company has not generated any revenue from product sales as none of its product candidates have been approved for commercialization [106]. - The company has not yet approved any products for sale and does not anticipate generating revenue from product sales until successful development and regulatory approval [158]. Agreements and Payments - The company entered into a license agreement with Takeda Pharmaceuticals in December 2024, receiving a $200 million upfront payment and a $10 million milestone payment upon dosing the first patient in the Phase 3 RENEW clinical trial [120]. - The company is entitled to receive up to $1.1 billion in potential milestone payments from Takeda based on the achievement of specified development and commercial milestones [120]. - The company received a net upfront payment of $18.0 million in January 2022 under the Hansoh Agreement, with potential additional payments of up to $23.5 million for development milestones and $144.0 million for net sales thresholds [125]. - The company recognized $0.1 million in service revenue related to the Hansoh Agreement for the three months ended September 30, 2025, compared to $0.4 million in 2024 [143]. - The company plans to distribute 25% of any net cash proceeds received from the Takeda license agreement to stockholders by December 31, 2028 [115]. Stock and Financing Activities - The company has sold a total of 4,290,096 shares under the ATM Offering for aggregate net proceeds of approximately $228.6 million as of September 30, 2025 [109]. - The company initiated a stock repurchase plan, repurchasing 10,176,595 shares at a price of $17.75 per share for an aggregate purchase price of $180.6 million [113]. - Net cash provided by financing activities was $316.3 million for the nine months ended September 30, 2024, primarily from a public offering of common stock and an ATM program [171]. Other Income and Expenses - Total other income, net was $6.7 million for the three months ended September 30, 2025, an increase of $1.0 million from $5.7 million in 2024, driven by higher dividend income [146]. - Total other income, net increased to $20.0 million for the nine months ended September 30, 2025, from $16.3 million in 2024, driven by a rise in dividend income [154]. - General and administrative expenses increased to $10.1 million for the three months ended September 30, 2025, compared to $9.8 million in 2024, reflecting a net increase in professional fees and other costs [146]. - General and administrative expenses increased to $35.1 million for the nine months ended September 30, 2025, from $30.1 million in 2024, primarily due to higher professional fees [153]. Cash Flow and Investments - Net cash provided by operating activities was $134.8 million for the nine months ended September 30, 2025, driven by net income and non-cash charges [165]. - Cash used in investing activities was $1.4 million for the nine months ended September 30, 2025, and $1.6 million for the nine months ended September 30, 2024, due to purchases of property and equipment [169]. - The company experienced a $5.0 million cash outflow in prepaid expenses and other assets due to timing of expense recognition for research and development costs [168]. Risk and Accounting Policies - The company had no debt outstanding subject to interest rate variability as of September 30, 2025, mitigating interest rate risk related to debt [179]. - The company is exposed to market risks primarily due to interest rate sensitivities, but does not expect significant effects from changes in market interest rates [178]. - There have been no significant changes to critical accounting policies from those described in the Annual Report [175].