Keros Therapeutics(KROS) - 2025 FY - Earnings Call Transcript

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]