Good afternoon. I have to disclose the research disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Good afternoon, Jas. Great to have you here, and it's been a year since you've been in front of the audience, at least at the Morgan Stanley Conference, and there's been incredible progress at the company. Before we dive into the specific programs, perhaps you can just give a very brief overview in Keros and your vision for the company.
Thank you, Jessica. It's wonderful to be given this opportunity, a year later. I think for us, the vision has always been to be a commercial company, and we're progressing towards that with KER- 050, our lead product candidate, progressing through the phase II trials, and we're now looking forward to engaging with the regulators in the beginning of the year on the design of the phase III registration trials. That's an exciting place. We just announced a few months ago that we've got our phase II- 012 trial started, and we've got our second 012 trial starting in this half of the year, whereby we'll be able to have some biomarker data next year. And just a few weeks ago, in our quarterly, we announced a new product candidate that increases skeletal muscle and bone for Duchenne muscular dystrophy.
I think it's a pretty exciting time, where we've got programs that are maturing, getting to registration trials, and a pipeline that's constantly filling, coming forward with new product candidates and diversifying our portfolio.
Great. Well, let's start with KER-050. And you mentioned the progress in terms of phase II, and there obviously are two indications you're pursuing, MDS and myelofibrosis. Again, perhaps you can give the audience, like, the backdrop in terms of what the clinical profile is, and there's obviously a product out there in the market, but the really differentiating features that we see from KER-050.
Yeah, I mean, Reblozyl is out there, right? And Reblozyl was in second-line therapy, and the MEDALIST trial was in RS patients only, and there they got a 38% response rate. But very importantly, the response rate was predominantly in the low transfusion burden patient, those that have two or three units over an eight-week period. As the transfusion burden increased, that response rate declined very rapidly, so that when you have four or more units, that response rate goes down to 20%. So what we've been showing over the last year and a half is data that's emerging from our phase II trial, where we've got both RS and non-RS patients, low transfusion burden, high transfusion burden patients. And what we've been seeing is a response rate in RS, non-RS, which is roughly in the mid-40s.
At ASH, the number got closer to 50, and at EHA, it dropped down to 42%. But we're seeing a response rate in the 40s in RS and in non-RS. And equally importantly, we have a lot of patients that have a high transfusion burden in our trial, and we're seeing a response rate in the 40-50% there as well. And that is a differentiation from Reblozyl, both in terms of the broad patient population, but also the fact, okay, that we are seeing a better response rate in the high transfusion burden patients. And I think that's indicative of the differentiated mechanism of the drug, where Reblozyl was designed to bind only a subset of the members of the TGF-β pathway ligands, where...
KER-050 binds more broadly, and that one ligand that luspatercept does not bind, Reblozyl does not bind, is activin A, and that's a potent driver of inflammation and fibrosis in many, many tissues. We think that a lot of the biology that we're seeing is a consequence of that. The impact of that is that we see this more broad response rate, but we're also seeing changes in biomarkers that are indicative of changes in the bone marrow microenvironment. The reduction in serum ferritin that we see in 12 weeks of treatment, 350 µg/L is much much bigger than what was observed with with Reblozyl where in 32-48 week readout they got 120 µg/L.
So this is consistent with a drug that's having a broader response and also changing the osteometabolic niche in the bone marrow.
Great. In terms of the actual program, I believe you'll be disclosing, maybe later this year, additional data. What, what should we expect from that data set?
Yeah. So at EHA, a few months ago, we had about 59 patients in the safety database. So about 20 of, about a quarter, of the patients had not received more than three dose levels, so more than three doses, so they were not efficacy evaluable. So they're all gonna become, or most of them are gonna become efficacy evaluable by the time we have a data readout at the end of the year. And I think that puts us in a great position to use that data set, then to initiate dialogue with regulators on the design of the phase III trial. So we'll see more efficacy in terms of patient numbers, but at EHA, we showed that the median duration of treatment was just over 40 weeks.
Those patients would have progressed and had longer-term treatment, so now you're seeing the durability of the response a lot. So it's not just the total number of patients and therefore getting a better idea on what your response rate is, but it's also the durability. And that's really important for patients and for payers to see a more durable response. Again, with Reblozyl in the MEDALIST trial, it was about 30 weeks, right? And therefore, seeing a more durable response would be another differentiation.
Great. I believe Reblozyl was just approved in first-line MDS. How does that impact, if at all, the development of your product?
Yeah. So with Reblozyl in the COMMANDS study, it's first line. It was in comparison to ESAs, and there you're seeing a response in RS patients that is better than ESAs. In the non-RS, it was similar to ESAs. In fact, numerically, the number was lower. But as a consequence, they've got a broad label where they can go into RS and non-RS. I don't think it's gonna change the practice, though. ESAs are inexpensive, right? They're 1/5 the cost of Reblozyl. Therefore, it's still gonna be staging of patients through the treatment of ESAs and then going over to Reblozyl. But what it is giving the license to physicians to do is to move their patient to Reblozyl sooner when a response to ESAs is waning, right.
So we don't think it's gonna change overall the practice of medicine in, in this patient population. It's always gonna be ESA because they're inexpensive. And then what's next? Okay, right, and that where Reblozyl is today, we think with KER-050, when we're there, it's gonna be very, very competitive. It's the better product, and therefore, I think it's gonna be an exciting data set that we're gonna continue to have that will allow us to be second line after ESA, and it'll be in competition to Reblozyl.
Great. And you're also developing KER-050 for myelofibrosis.
Yes.
Perhaps again, just a little bit of background in terms of the profile there and anticipated data.
Yeah. So the profile there is in myelofibrosis; it's failure to have the megakaryocyte lineage mature. That's resulting in breakdown of those precursors and inflammation and fibrosis in the bone marrow. And as a consequence, hematopoiesis stops in the bone marrow and migrates to the spleen, and you get the enlarged spleen that is the symptom. And current therapy, JAK-STAT inhibitors, simply are antiproliferative and therefore reduce the size of the spleen, and you end up with anemia, thrombocytopenia, and neutropenia, right? So that's the consequence. We think by allowing those cells to mature, you're going to reduce the inflammation and fibrotic response in the bone marrow and allow bone hematopoiesis to resume in that bone marrow. So initially, we're looking at changes in red blood cells and platelets, and so it's a treatment of cytopenias.
We believe that that's something that can be easily achieved, and we shared some data last year that showed that the drug was doing exactly what we thought mechanistically. We'll have more data later this year. We've been going through the dose escalation. We are now at the highest dose, 4.5 mg per kg. We believe that we will get through that and open up part two before the end of the year, and therefore we'll have the data at the end of the year from through the dose escalation. But that then puts us in a really exciting place where we've got the optimal dose. Going forward, we're getting more patients into that, into the treatment.
Then in mid-year 2024 and later, now you're beginning to see patients that have been on treatment for six months or longer at an optimal dose. What else are you seeing? Are you seeing changes in the symptomatic score? Are you seeing changes in spleen? Because now you start pivoting from a treatment for the cytopenias to a treatment for the disease. So I think treatment for cytopenias is achievable. Could we see more than that? We're not gonna see it this year, but 2024? Could be.
Fantastic. Fantastic. Any questions on KER-050 for Jas?... Okay, great! Well, we'll move on then to KER-012 , where, again, very exciting clinical underpinnings have been disclosed. So perhaps give a little bit of background there and where we stand.
Yeah. KER-012 capitalizes on the mechanism in PAH, where one arm of the pathway is dysregulated, and therefore, you have too much signaling through that arm of the pathway at the expense of the other. You're trying to restore the balance. The first-generation molecule, sotatercept, has provided proof of concept that you can change the course of the disease.
Mm-hmm.
That data read out last year. With sotatercept, you're limited to low doses because of increases in hemoglobin.
Mm-hmm.
With KER-012, it was selected to have much of the biology that is beneficial in sotatercept without increases in hemoglobin, but at the same time, also ensuring that you minimize any impact on the biology that's desirable as well, in this pathway. So we're now in a phase II trial, placebo-controlled trial in PAH patients. The study design is a placebo-controlled study with three dose levels at 1.5, 3, and 4.5 mg per kg. And at 1.5 mg per kg, our lowest dose, we have greater target engagement than sotatercept at the 0.7mg per kg So, you know, people ask me all the time, "Well, where's the differentiation?" Well, the differentiation is already there, in that we have a drug that doesn't have increase in hemoglobin. Therefore, we don't have any monitoring to do.
In the worst-case scenario, maybe there's only so much biology that can be captured with a drug acting on this pathway. In which case, we could see that 1.5 or 3 mg per kg maxes it out, and there's no further efficacy to be achieved. But that means that we will have a drug that, where there's no monitoring for hemoglobin changes. In addition, we can go forward with a fixed dose that is truly self-administered. Sotatercept will never be that because it, of the increase in hemoglobin, there's always going to be a... It's always going to be a milligrams per kilogram weight-based drug.
Mm-hmm.
Right. So I think we're excited. We're moving forward. We're going to be able to test the hypothesis that with sotatercept, where you're leaving target engagement on the table, that could contribute to higher efficacy. We're going to get to try and see that. But even today, we have a product that's differentiated.
Mm-hmm.
Now it's about can we capture more efficacy and a better safety profile? We're going to know that when the trial reads out.
Great. Fantastic. And I believe you're developing KER-012 for a second indication.
Yeah. So the biology here actually has broad, has applicability in a broad range of indications. PAH is a great place for us to start.
Mm-hmm.
But the biology plays out in heart failure.
Mm-hmm
on one extreme, and then, fibrotic lung disease, IPF, on the other.
Mm-hmm.
So as we think about moving this program forward and eventually needing partners for ex-U.S., we think, okay, right, that we can demonstrate the power of the biology and this molecule in another indication, and it's in HFpEF patients, where we've got an open-label trial looking at biomarkers. And in these patients, they have elevated NT-proBNP. So we can see to what extent can we reduce that, okay. And then in our phase I healthy volunteer study in postmenopausal women, we showed that you can reduce NT-proBNP from a single dose.
Mm-hmm.
We also showed changes in fibrotic markers, in inflammation markers. We can look for all of those in this trial, and that will give us confidence that the mechanism that we've believed based upon preclinical data that translated to healthy individuals is also translating to these different populations. That just increases the opportunity for this drug. But because we've got multiple molecules in our preclinical pipeline, it also gives us the opportunity to have different molecules for different indications.
Mm-hmm. Yeah, fantastic. Any questions on KER-012? Okay, great. Excellent. So you just introduced another product, at least visibly, in terms of your portfolio, dubbed KER-065.
Mm-hmm.
Very exciting in terms of the neuromuscular arena, but perhaps again, give some background there. You know, we've got the common foundation in terms of TGF-β signaling, which is really supporting everything that you're doing.
Yeah. So it's another activin receptor ligand trap, but now it's been optimized to increase skeletal muscle. It increases bone, has many of the anti-fibrotic, anti-inflammatory activities that are there with KER-012. But because of the increase in skeletal muscle, it is well positioned for neuromuscular diseases, where the muscle wasting results in further complications in lots of different tissues. And DMD is exciting for us because in patients with DMD, there's already proof of concept from an earlier molecule that we worked on at Acceleron, and that was the ACE-031, where in a three-month trial, three-month treatment, it was demonstrated that you could stabilize muscle function as measured in a six-minute walk test.
Boys that were treated lost no ambulation, whereas the placebo arm lost 39 m of ambulation, which is roughly what you would predict from the natural history studies, where 85m of ambulation are lost in the course of a year. Study showed increase in skeletal muscle, bone, reductions in fat mass. But what happens to boys with DMD? They don't have dystrophin, so their muscle is fragile. They eventually become non-ambulatory. All of this results in increase in body adiposity. They are also on corticosteroids. Corticosteroids increase the body adiposity. They're catabolic on muscle, catabolic on bone. So by the time the boys are in their teenage years, they are 4,000 x the increased risk of vertebral fractures compared to normal individuals, right? So we think we can correct all of those things. And what do the boys eventually die of?
As young men, they die of respiratory failure.
Mm-hmm.
and from cardiac failure. KER-012 can have a benefit on those axes as well, because those boys still have intercostal muscles. They still have a diaphragm that's functioning, and therefore strengthening that could delay loss of respiratory capacity. Their heart failure is due to increased fibrosis. Once again, we could have an impact on cardiac
Mm-hmm.
tissue as well.
Mm-hmm.
So I think just because they don't make dystrophin, they are continuing to function, and we can improve the function of these other tissue, including the muscle.
Mm-hmm.
Right.
Mm-hmm. So for this specific program, what should we envision in the next year or so in terms of the clinical data that emerges?
Yeah. So the clinical data is going to be in a healthy volunteer study.
Mm-hmm.
And in that study, we're going to look for changes in lean mass. We're going to look for changes in bone, and fat, right? So we can demonstrate all of those, which then translates to a patient population. And the great thing, okay, right, with that study is that it gives us the flexibility to go into many, many different indications.
Mm-hmm.
Neuromuscular DMD being just one, but there are other neuromuscular indications. In the recent months, there's been a lot of excitement about obesity, and that's also an opportunity, but it's not something, okay, right, that we can develop on our own. Okay.
Right. Yeah, I mean, I, I guess there's such a broad base of applications to your technology that you need to think about prioritization.
Yeah.
There has been a lot of focus. It does seem, maybe it makes sense to document the milestones that are coming in the next year or two, to review with these programs, because it is very substantive in terms of what is transpiring.
Yeah. So I think going back to KER-050, we're going to have additional data from the phase II in MDS and myelofibrosis at the end of the year. In 2024, we get input from the regulator and decide on what the phase III registration trial is. We haven't guided as to when it would be, but typically it's six months to a year after you've got alignment around the design of the study.
Mm-hmm.
You know, it could be as early as end of 2024, moving into 2025.
Mm-hmm.
Right? I mean, that sort of seems about the right timeframe. The myelofibrosis data next year could show us that it's more than a cytopenia drug. Next year, the open-label trial with KER-012 will be reading out. And then with hopefully adequate recruitment rates in the placebo-controlled trial, based upon past history with similar trials, it's 21months-24 months for top-line data readout. So you're looking at KER-012 placebo-controlled trial reading out in 2025.
Mm-hmm.
We talked about KER-065. That trial is going to commence in Q1 of next year.
Mm-hmm.
Probably about a year to read out from the MAD-
Yeah
... where we will have multiple doses like we had in KER-012. And, so it's not going to be a very different design in terms of and duration of treatment than KER-012. So that's gonna take about a year, okay, to read out. So early 2025, you're getting that readout, and we're then starting a trial in boys with DMD.
Mm-hmm.
I think that's a pretty full plate.
That is a very full plate. Now, do you have the resources to manage this, both from a people and capital standpoint?
We have enough capital, and we've guided cash runway into Q4 2025.
Right.
All the readouts that we talk about, yes, we can get to them-
Mm.
But we will need to add additional capital.
Mm-hmm.
Right? To support the programs beyond that.
Mm-hmm.
So.
How do you think about partnering in terms of, again, lots going on in the pipeline and, you know, providing access ultimately on a global basis to patients?
Yeah. I think my aspirations has been to be a commercial company, but we've got to be realistic, and that's gonna be U.S., right? We're not gonna be global to start with. And in hematology and in PH, we're gonna have to seek partners that are ex-U.S. Pharma doesn't like to do regional deals, so as long as we've got some presence, those are things that we can do. Whereas with neuromuscular, the commercial infrastructure you need is much, much smaller, therefore, you can develop that all the way on your own.
Mm-hmm.
So I think for us, we're open for business, for partnerships.
Mm-hmm.
I didn't want to do partnerships early on, simply because when you don't know the profile of the drug, it is a difficult time for biop harma to see their way through, and you need the entrepreneurial spirit to get through that. And once your profile begins to mature, then I think taking on a partner is the right thing. And by that point, you've also built enough value in the program that any partnership you do actually brings in enough capital to fuel the rest of the pipeline.
Mm.
You do a preclinical or a phase I deal, yeah, extend your runway, but it doesn't really fuel the pipeline.
Mm-hmm.
Right.
Yeah. Okay. I think as we wrap up here, what are the three critical success factors or points that you'd really like to leave with the audience today?
We have product candidates in an area of biology that is now proven. There's marketed product, Reblozyl.
Mm-hmm.
There's a product that's waiting for review by the FDA, sotatercept.
Mm-hmm.
So, this pathway is de-risked.
Mm-hmm.
Been working in this for over 20 years. We understand the biology, and we have better molecules for both of those. And then, now we're showing with KER-065, the ability to come up with different molecules that are really tailored for indication. KER-050 first, then with KER-012, now with KER-065. That's an exciting place for us to be. So we understand the biology, it's de-risked, and there's substantial market opportunity for each one of these products.
Fantastic. Well, I think next year, again, we're gonna continue to hear incredible things with respect to the advances of the portfolio, so I look forward to that discussion. Thank you again, Jas.
Thank you, Jessica.