Keros Therapeutics: Potential Beyond KER-050 For Targeting Of Blood Cancers (NASDAQ:KROS)

Keros Therapeutics, Inc. (NASDAQ:KROS) is gearing up to report long-term results from its phase 2 study using KER-050 [elritercept] for the treatment of patients with myelodysplastic syndrome [MDS]. Matter of fact, it is expected that it will present 5 abstracts at the upcoming 29th Annual Congress of the European Hematology Association [EHA] medical conference between June 13th – 16th of 2024. This is one catalyst that investors might want to keep an eye on, where it is possible that shareholder value could be increased because of all of this data to be presented.

However, there is so much more based on this program beyond what is to be shown with the release of these 5 abstracts. It has already met with the FDA and both have concluded on a design to be used for a phase 3 study, using KER-050 for the treatment of patients with low-risk myelodysplastic syndrome [LR-MDS].

This proposed design is what is to carry this program forward. However, there is a third catalyst relating to this program, which is that additional data from Part 2 of the phase 2 study using this drug to treat this patient population will be released in Q4 of 2024. Plus, because KER-050 is capable of helping this patient population, it is also being developed to treat patients with Myelofibrosis [MF] as well.

Having said that, in Q4 of 2024, it is also expected that data from a phase 2 study targeting this patient population will also be released then. This biotech though is so much more than just KER-050 only. It has KER-012, it is developing for the treatment of patients with pulmonary arterial hypertension [PAH] and chronic heart failure with preserved ejection fraction/reduced ejection fraction.

The last product to note which may also yield massive potential might be the advancement of KER-065 for the treatment of patients with obesity. However, this program is only in preclinical testing. The premise here is that it may not only have an advantage of once-a-month subcutaneous dosing, but also that it might have synergistic effects when combined with a GLP-1 agonist. Preclinical testing showed that when KER-065 was combined with semaglutide, not only was there a more significant amount of preserved lean mass, but greater fat loss was achieved. With the advancement of KER-050 for a few big target market indications, plus several catalysts on the way in the coming year, I believe that investors might benefit from any potential gains made.

KER-050 For The Treatment Of Patients With Low-Risk Myelodysplastic Syndrome

The first and main clinical program to note for Keros Therapeutics would be the development of KER-050 for the treatment of patients with myelodysplastic syndrome [MDS]. The use of this drug is going to soon be tested in a larger phase 3 study, but has been extensively tested already in a phase 2 study.

Before going over this entire program, plus the catalysts to come out of it, it is first important to note what Myelodysplastic syndrome is and what the possible market opportunity for it could be. Myelodysplastic Syndrome [MDS] is a group of blood disorders where the body doesn’t produce enough blood cells or red blood cells for the body. Thus, it is where cytopenia and anemia are major issues for these patients. Think of it in a way where spongy material in the bone [bone marrow] doesn’t work right and is unable to create said blood cells necessary for a patient’s well-being.

Some symptoms that these patients with MDS experience are as follows:

• Easy bruising and/or bleeding [thrombocytopenia].
• Paleness of skin color [caused by anemia].
• Fatigued easily.
• Shortness of breath.
• Constantly getting infections.

The most unfortunate thing is that some patients with MDS may get acute myeloid leukemia [AML], which is just as bad. The global myelodysplastic syndrome market is projected to reach $6.10 billion by 2029. This is a considerable market opportunity for sure, and these patients could actually benefit from a more effective treatment option.

Wait a second, how can KER-050 help? Well, it is a disruptor of TGF-beta signaling that occurs in patients with MDS. Such signaling causes a host of Activin A cytokines to come about, which results in the blocking of adequate blood cell formation. Thus, the goal of this therapy from Keros Therapeutics is to inhibit Activin A cytokine and allow proper functioning of the TGF-beta signaling pathway to take place. In turn, increases the production of blood cells and red blood cells, which should result in reduced disease burden. This is important because current treatment options are not ideal.

For instance, transfusion of red blood cells causes iron overload, which leads to further damage to the bone marrow. Erythroid stimulating agents [ESAs] could be a first-line treatment option as well, but are limited by two major problems. The first one being that it doesn’t help patients with endogenous erythropoietin levels >200 U/L [kidney production issue of red blood cells].

Secondly, those who have a high blood transfusion burden of >4 units of RBC over an 8-week period. There is another option for 1st and 2nd-line MDS patients, which is an erythroid maturation agent marketed as Reblozyl [luspatercept-aamt].

What’s the problem here? Well, like an ESA agent, its function is limited in those with high transfusion burden [HTB]. In 2nd-line treatment, only 20% of patients with HTB were able to achieve 8-week transfusion independence [TI] with Reblozyl versus only 4% of patients that took placebo. As you can see above, despite several treatment options, there is plenty of room for KER-050 to shine if it proves to be far more effective than these other options. The promise of this program is that there are several catalysts for investors to look forward to.

The first of which being the most important near-term catalyst would be the release of data from 5 abstracts at the upcoming 29th Annual Congress of the European Hematology Association [EHA] medical conference meeting, expected to take place between June 13th -16th of 2024. From there, you have additional data which is expected toward the end of this year from this same program as well, targeting MDS patients using KER-050 as well. In Q4 of 2024, it is expected that additional results from Part 2 of the Phase 2 study, using this therapy to treat this patient population, will be released at this time.

Lastly, this specific program is already on its way towards being tested in a phase 3 study. Keros had already met with the FDA on a proposed trial design to advance this drug forward. Having said that, another catalyst to look forward to either towards the end of 2024 or in the early part of 2025 would be the initiation of a phase 3 study, using KER-050 for the treatment of these LR-MDS patients.

The thing is that this clinical product, KER-050 has an expansion opportunity and that would be to target patients with myelofibrosis. Myelofibrosis [MF] is a rare type of hematological malignancy where scar tissue forms inside the bone marrow. How does this happen? Well, in patients with MF, the blood cells are mutated [cancerous cells]. This mutation leads to the scarring of the bone marrow and thus leads to the ineffective formation of healthy red blood cells.

The global myelofibrosis market size is expected to reach $1.16 billion by 2031. This is another indication where patients might benefit from treatment with KER-050. There is an ongoing phase 2 open-label clinical trial testing the safety/efficacy of this drug for the treatment of these patients with MF and data from it is expected in Q4 of 2024 as another catalyst for investors to consider. One thing of difference to note with this mid-stage open-label trial though is that ruxolitinib is being given alongside KER-050 for the treatment of these patients.

KER-012 Is Another Pipeline Candidate With Two Shots On Goal

A good thing about Keros Therapeutics is that it has another indication in its pipeline with a few shots on goal. This would be regarding the development of KER-012, which is being used to treat patients with pulmonary arterial hypertension [PAH] and chronic heart failure with preserved ejection fraction/reduced ejection fraction.

In terms of the study targeting patients with PAH, it is expected that phase 2 enrollment will be completed in Q4 of 2024. This could be a catalyst opportunity if it creates excitement at that time, but I believe there is a more important program with the use of KER-012, and this would be the use of treating patients with chronic heart failure. Chronic heart failure [CHF] is a type of disorder where the blood doesn’t pump blood throughout a person’s body as effectively as it should.

One other thing to know is that this disorder is also known as congestive heart failure. The global congestive heart failure drugs market is projected to reach $26.1 billion by 2032. Without this happening, this leads to these patients have a host of symptoms, such as the following: Weakness, shortness of breath, swelling of ankles/feet, a cough that won’t go away, and swelling of the stomach. A reason why I wanted to focus on this indication specifically is because data from the ongoing phase 2 open-label biomarker study using KER-012 to treat this CHF patient population, will be released in the 2nd half of 2024.

Financials

According to the 10-Q SEC Filing, Keros Therapeutics had cash and cash equivalents of $442.4 million as of March 31, 2024. The truth is that this biotech has plenty of cash on hand to fund its operations. Matter of fact, it believes that it has enough cash to fund its operations into 2027. Its cash burn is roughly $48.6 million per quarter. In order for it to continuously raise cash over the years, it filed a Shelf Registration Statement back on May 3, 2021. This is where occasionally it could offer and sell shares of its common stock, preferred stock, debt securities and warrants.

Simultaneously, it entered into an ATM Sales Agreement with Leerink, as an agent, to provide for the issuance and sale of shares from time to time. As of March 31, 2024, it sold a total of 7,991,990 shares of its common stock pursuant to this agreement, generating net proceeds of approximately $323.3 million after deducting expenses. During the 3 months ending March 31, 2024, it sold no shares under this specific ATM Agreement and has up to $71.5 million worth that it could tap into.

In addition to this, it also entered into a New Shelf Registration Statement to replace the prior Shelf Registration Statement, which will allow it occasionally to sell an unspecified amount of common stock, preferred stock, debt securities and warrants.

Risks To Business

There are several risks that investors should be aware of before investing in Keros Therapeutics. The first risk to consider would be regarding the development of KER-050, which is being used for the treatment of patients with low-risk myelodysplastic syndrome [LR-MDS]. That’s because it is expected that data from 5 abstracts will be presented at the conference next week. Plus, the fact that additional data from Part 2 of the ongoing phase 2 study will be released towards the latter part of this year. There is no assurance that the data to be released at either of these time points will turn out to be positive, nor that the stock market will react accordingly.

The second risk to consider would be in terms of advancing KER-050 for the treatment of patients with myelofibrosis. Even though it appears that this protein therapy works in being able to treat patients with LR-MDS, there is no guarantee that the same can be said for the targeting of patients with MF. Data from the ongoing phase 2 study using KER-050 for the treatment of this patient population is expected towards the end of this year, and there is no assurance that the market will react properly.

The third and final risk to consider would be the advancement of KER-012, which is being developed for the treatment of patients with PAH and CHF. While the PAH program is promising, I believe that the most important near-term catalyst to focus on would be the use of this drug for the treatment of patients with chronic heart failure with preserved ejection fraction/reduced ejection fraction. That’s because biomarker data from the ongoing phase 2 open-label study, using KER-012 for the treatment of this specific patient population, will be released in the 2nd half of 2024.

There is no guarantee that the biomarker data to be released from this study will turn out to be positive. Nor, that such biomarker data be enough to warrant further investigation into the targeting of patients with CHF.

Conclusion

Keros Therapeutics has been able to do well to advance its pipeline using several drug candidates. Most notably, there is huge promise regarding this biotech because of the possible options of advancing KER-050 and KER-012. The reason why I state this is that it is developing these candidates to target two indications each, respectively.

For instance, it is advancing KER-050 to target patients with LR-MDS and MF. Then, regarding KER-012, it is advancing it to treat patients with PAH and CHF. I believe that several of these shots on goal reduce investor risk. Another highly promising program to keep an eye on would be the development of KER-065, which is being developed to treat patients with obesity.

The reason why this program is ideal is that it is not looking at only developing one drug to compete against the likes of Eli Lilly and Company (LLY) or Novo Nordisk A/S (NVO) targeting the obesity space. Instead, it hopes to beat such competition by combining current GLP-1 drugs together with its drug KER-065. This makes sense because there is a lot of competition in this space and I believe it is going to take a combination approach to counter the many drugs that are currently being developed in this particular space.

Keros Therapeutics, Inc. is already there, in terms of testing semaglutide together with KER-065, which was able to increase lean muscle mass and reduce fat mass. A phase 1 study is ongoing for this particular program. Investors won’t have to wait long to see the use of KER-065 in humans because data from this phase 1 study is expected to be released in Q1 of 2025.

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