ADAR1 Issues Statement on Keros Therapeutics' Troubling 2025 Director Election Results and Insufficient Capital Return Proposal

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]