Good morning, everyone, and welcome to TD Cowen's 46th Annual Healthcare Conference. For our next session, we have Keros Therapeutics, and I'm pleased to welcome Jasbir from the company, the CEO of the company. This is a hybrid presentation and then Q&A session. We'll get started with the presentation now. Whenever you're ready.
Thank you, Nick. I wanna thank TD Cowen for giving us the opportunity to talk today. I will be making some forward-looking statements, and the risks associated are in our quarterly filing, the 10-Q filed with the SEC in November of 2025, so please take a look at that. Keros is a clinical-stage biopharmaceutical company focused on the TGF-beta pathway. This pathway is active throughout embryogenesis and into adulthood, and when the pathway is imbalanced, it can lead to pathology, either as a direct consequence in a disease or alternatively, following a different trigger, such as mutations in certain genes. We believe that we have product candidates that can fully unlock the therapeutic benefit of this pathway.
With that, I'll talk about our pipeline, which is our lead asset now is rinvatercept, KER-065, which is going into phase II trials in DMD and ALS. Our most advanced asset that was partnered with Takeda in late 2024 is in phase III trials. We have initiated the phase II trial in second line, and Takeda is now about to start the phase III in first line. Behind this, we have number of assets that target neuromuscular and neurodegenerative diseases, bone and fibrosis, broad indications like frailty and obesity. Let me talk about rinvatercept, KER-065. KER-065 is a activin receptor II-derived ligand trap.
It is designed to inhibit myostatin and activin, two most potent negative regulators of skeletal muscle and bone. Treatment with a ligand trap, KER-065 , improves skeletal muscle regeneration, which in turn builds the muscle size and strength. In addition, by building muscle, you're reducing fat mass. Activin is a very potent driver of fibrosis and inflammation, you're reducing inflammation and fibrosis with these ligand traps. Additionally, activin is a negative regulator of bone, therefore you're improving bone health by increasing bone formation. Now, it is an activin receptor ligand trap, activin receptor ligand traps can bind bone morphogenetic proteins, the first generation activin receptor ligand traps have shown bleeding events due to binding to BMP9. Therefore, KER-065 was designed to have reduced binding to BMP9 thereby reduce the risk of bleeding events.
Rinvatercept is going into neuromuscular indications, This is a broad set of diseases with some very common features. One of them is that when you look at muscular dystrophies, they all have the same pathology, regardless of what the underlying mutations that lead to that disease, which is that muscle is weak, and as a consequence, when it's used, it breaks down. That breakdown leads to inflammation. That inflammation, it then leads to fibrotic tissue, and a reduction in the regenerative capacity of that muscle. That muscle just keeps wasting away through these progressive cycles of damage and reduced regeneration. There's the other set of diseases where you have failure to stimulate the muscle. As a consequence, the muscle atrophies, which again leads to the same pathology.
With the biology I just shared with you for rinvatercept, it has the opportunity to treat a broad set of indications, including those muscular dystrophies such as Duchenne, Becker, and so on, as well as the neuromuscular diseases such as ALS, SMA, and myasthenia gravis. Based upon our preclinical as well as our phase I clinical data, we really do believe that KER-065 can treat a broad range of neuromuscular indications. The first of those indications that we're targeting is Duchenne. Why? Because in Duchenne, you have a failure to regenerate that muscle, right? KER-065 has the potential to increase muscle, increase bone, reduce fat, and thereby really improve function in the muscle. Glucocorticoids are standard of care in boys with DMD. Glucocorticoids are catabolic on muscle.
They cause muscle wasting as well as bone loss. KER-065 ameliorates both of those, okay. In addition, I talked about inflammation as a consequence of the breakdown of the muscle. KER-065 , by inhibiting activin A, is inhibiting or ameliorating the inflammation there and promoting muscle regeneration. Because we're promoting muscle regeneration, we see in our preclinical studies that in combination with exon skippers, there is more truncated dystrophin that is expressed because it is these precursor cells that are the vehicles for delivering these exon skippers. By increasing muscle regeneration, you're increasing the pool of cells that can act as vehicle for delivery of these exon skippers.
Based upon the biology, we do believe that we will also have the potential to have, protect the respiratory and cardiac function in these patients. We've completed a phase I study. It was a two-part, randomized, placebo-controlled, double-blind study. Three doses were explored in the single ascending dose, and then two were explored in the multiple ascending dose. Primary objective, as always with any of these studies, is safety, PK, but we did include a large number of biomarkers to assess the target engagement and the biology that arises from that. The drug was well-tolerated. There were most of the TAs were mild. There were no dose-limiting toxicities whatsoever.
Most importantly, with the first generation, bleeding events were observed in tox studies, which were then observed in the phase I studies and subsequently in the phase II study. No bleeding events were observed in this study, okay, consistent with all of the preclinical studies. We did see increases in red blood cells, hemoglobin. They were asymptomatic and reversible and therefore can be managed in this patient population. The healthy volunteer data supports potential for rinvatercept to address multiple aspects of DMD. We talked about the muscle and where as a consequence of damage, the muscle is replaced by fibrotic and fatty tissues. Rinvatercept in the phase I study increased lean mass and increased thigh muscle volume, consistent with the preclinical data. Bone loss is a characteristic of boys with DMD.
We saw increases in the phase I healthy volunteer study of bone-specific alkaline phosphatase, which says that you're making more of the bone-forming cells, decreases in the NTX, which is a marker of the cells that resolve the bone, and we saw improvements in the bone mineral density by DEXA scan. Really, illustrating how the biology is translating from rodents to humans. At the same time, we saw decreases in fat mass, okay, right? And in boys with DMD, because of lack of use of the muscles as well as the use of glucocorticoid, these patients not only become osteoporotic, but they also develop metabolic syndrome by the time they're in their late single digits. Therefore, they have insulin resistance, they have elevated A1C, and all of the parameters that we look at when we think of patients with metabolic syndrome.
Rinvatercept treatment showed increases in adiponectin, which is a biomarker of fat mobilization. If you're increasing muscle, you need to feed that muscle, and therefore you're gonna increase fat mobilization. We saw decreases in leptin, which is a biomarker of total fat mass, okay, right? Consistent with that. Corresponding to this, we saw decreases in fat mass, both in whole body fat mass as well as in visceral fat mass, by imaging techniques. We think really rinvatercept is perfectly aligned for the pathology that arises in these muscular dystrophies. I want to move to ALS, and you might say why, right? ALS has been the graveyard of drug development, so why the hell are you going there, Jasbir? Okay, right. The reason is that this is a different approach.
In ALS, it's a progressive neurodegenerative disease that destroys the motor neuron. That leads to muscle weakness again, and then loss of function and eventually paralysis, right? Large indication, unknown causes, generally speaking, okay, right, except that in small population there are mutations that have been identified that are familiar lead to familial ALS. We think this approach is unique in that in we are going to preserve the muscle. In healthy muscle, you have a single motor neuron that provides innervation to many, many, many myofibers, right, through branching, and each myofiber has a neuromuscular junction. When that neuromuscular junction starts breaking apart, that muscle fiber will start atrophying. But all the other ones are still innervated, and therefore, if you could strengthen those muscles, you can compensate for the atrophying muscle.
That's really the concept behind KER-065's mechanism. You're not going to do anything about the neuromuscular junction and the motor neuron, but you are going to preserve the innervated muscle and make it stronger and maintain functionality for a longer period of time, which is really important to patients. Therefore, okay, right, we believe that you can address the pathology of ALS, right, because while we will address the muscle, that microenvironment of the muscle and the neuromuscular junction, is in that degenerative state. Therefore, by increasing the and by improving the environment so that it's more regenerative, we do believe we will counter the muscle atrophy. There's also the opportunity of helping preserve the neuromuscular junction indirectly, not directly.
You can't see that in rodent studies, but we think there might be an opportunity to see that, as well as enhancing that muscle regeneration. We will be initiating interactions with regulators in the second half of the year in this design of the ALS trial. I just want to give you a little bit of preclinical data to support what I just told you. In the mouse model of ALS, the SOD mouse, we see treatment results in greater grip strength than the vehicle-treated animals, right? You still have a deficit compared to wild-type animal, but it is better than the placebo-treated animals.
If you now take these animals and you stimulate the nerve to see how much, what properties or contraction properties that muscle has, you can actually see that normal muscle does not lose much in terms of its function when it's repetitively stimulated. In the placebo-control, placebo-treated animals, you see this rapid loss. Treatment with KER-065 preserves that muscle and the ability for that muscle to contract. This is why we think you can have a better, you can have a functional benefit in the patient.
Now, preclinical data also shows that to some extent you've got in the SOD placebo animals, you lost all of the axon, okay, and you're just left with where the neuromuscular junction was on the muscle side of the equation. And in normal animals, you can see, okay, elements of the axon, okay, pre-synaptic junction being seen. In treatment, you're seeing some of that, okay, but to a lesser extent than in normal animals. Consistent with the preclinical data. All right. Very quickly, elritercept, our most advanced program, which is a treatment of anemia and thrombocytopenia in patients with myelodysplastic syndrome and myelofibrosis. We've presented phase II data over the last many years, and we partnered the program with Takeda.
It is an out-license to Takeda. They there was a $200 million upfront, $1.1 billion in milestones, development, commercial, and approval milestones. From low to high teens royalties. Takeda is now in two phase II trials that are listed on ClinicalTrials.gov. Under this agreement, all costs for the programs are borne by Takeda once, okay, we completed the transition, which we completed in 2025. We are focused on the TGF-beta pathway. We think there's lots of opportunities for product candidates. I've just shared with you some of the neuromuscular indication, but we think there's broader opportunity in bone disorders, in fibrotic diseases, as well as in obesity and frailty.
We have a large library of agonists and antagonists, which consist of a proprietary library of modified activin receptor ligand traps, mono, bi, and multimodal antagonists, as well as systemically deliverable ligands. Many of these are in preclinical development at this point in time, we will share more in the future. Rinvatercept and elritercept came out of our proprietary library of modified activin receptor ligand trap. I think the future is very exciting. I want to thank you for the opportunity to talk.
Great.
Thank you very much for that very detailed and informative presentation. We can move now to the Q&A session. You can sit there, you can come here, wherever you want. All right. We have about 12 minutes left, but let's start in DMD with rinvatercept. I was gonna start with the differentiation of rinvatercept compared to the standard of care and how it allows to the combination, but I feel like that's gonna lead into my second question. I'm gonna ask the second question first, which is, what is the potential I know you haven't disclosed it yet, but what is the potential phase II design? How are you thinking about that across the multiple different types of DMD patients with different standard of care agents in combination? What are your thoughts behind that?
Yeah. I think it's a very good question.
Mm-hmm
Because you could have many, many different cohorts in a study. Okay, right? That gets to be somewhat cumbersome.
Mm-hmm.
I think it's important to focus on where, one, there's an unmet need.
Mm-hmm
That's greatest. Two, where you can provide enough data to regulators say, "I'm seeing what I should be seeing.
Mm-hmm.
Now let's have a conversation about the registrational trial.
Mm-hmm.
Okay. If you look at the DMD boys, about little over 60% are not eligible for anything other than glucocorticoids or gene therapy.
Mm-hmm.
Okay? Very few are gonna get gene therapy. 60% of the population is on glucocorticoids. That's your biggest opportunity to start with.
Mm-hmm.
Okay? You can imagine, okay, right, there, you wanna treat ambulatory boys as well as non-ambulatory. There's your two cohorts.
Mm-hmm.
Okay? The ambulatory, you don't want very young children in that because boys with DMD get diagnosed between the ages of 18 months and three years of age. Why? Because they're slow to start walking.
Mm-hmm.
Every one of them walks, right?
Mm-hmm.
Every single one of them walks.
Mm-hmm.
They actually run, although be it with a altered gait. Okay, right? They all run. They're actually improving.
Mm-hmm.
You wanna show improvements on top of what they're improving. That's gonna be really challenging.
Mm-hmm.
You gotta go to when they're stable or losing, which is the late ambulatory boys. At the same time, in the non-ambulatory, when they get to be in their 20s, they've lost a lot of their function.
Mm-hmm.
it's gonna be very hard to demonstrate any improvements there.
Mm-hmm.
You want early, non-ambulatory. Okay, right? There's your two cohorts.
Mm-hmm.
I think that's where you start.
Mm-hmm
B ut I think the exon skipping, once you establish the safety, you could go to exon skipping. I think a decade ago, everybody that talked about gene therapy talked about it as a cure.
Mm-hmm.
I always doubted that based upon the biology, in that these boys are lacking dystrophin.
Mm-hmm.
Each one of us only had utrophin during embryogenesis, and dystrophin expression starts postnatally.
Mm-hmm.
The only difference between utrophin and dystrophin is dystrophin has a few extra repeats. dystrophin has 20 of these repeats. The ends are the same, but in the middle, there are 20 repeats.
Mm-hmm.
and mini-dystrophin, we reduce those repeats to 3 or 5. If nature thought 17 wasn't enough and it needed 20 repeats, and we're gonna go in and have 3 or 5, that's gonna be a cure? No, it's gonna provide benefit. I think the data that are now coming out is, yes, gene therapy provides benefit, but it's short-lived.
Mm-hmm.
Okay, right? Relative to the lifespan of these boys. I think even on top of gene therapy, KER-065 can provide benefit.
Yeah.
Did I answer your question?
Yeah, you did. Without telling me the exact design, yes, you did. You can always tell me the design at any point if you want.
Two cohorts.
Yeah, 2 cohorts.
Okay.
It makes sense. What proportion of patients? You said there's 60% of patients, right, that are receiving the glucocorticoids. What percentage would you say are?
Actually, all receive glucocorticoids.
Mm-hmm.
60% don't get any other treatments, okay, right?
Got it. Mm-hmm.
Other than the few that get gene therapy.
Yes. What would you say is the % of the late ambulatory or early non-ambulatory of that 60% that don't receive anything else?
you know, I think the numbers of the non-ambulatory are increasing. I don't have those at today.
Yeah.
Okay, right. Yeah. It's a good question.
It's also probably hard to figure out.
Yeah
E xact % as well.
Yeah.
Would you think about using rinvatercept in combination with glucocorticoids, or would this be a replacement for glucocorticoids?
I think initially, okay, right, it's gonna be unethical.
Yeah
to take patients off glucocorticoids.
Got it.
That is why we wanted to do the experiment.
Mm-hmm
in preclinical studies of looking in combination with glucocorticoid.
Mm-hmm.
Are we seeing improvements in muscle? Are we seeing improvements in bone? Are we seeing reduction in fat? Are we seeing improvements in that muscle function?
Mm-hmm.
The answer is, on top of glucocorticoids, we see all that.
Mm-hmm.
Right? I think it's unethical to take patients off standard of care.
Mm-hmm.
There are patients that don't tolerate glucocorticoids. As we progress, maybe, okay, right, thinking about patients that are not tolerating glucocorticoids, switching, okay, right, to rinvatercept. Once you've established the.
Mm-hmm
right, you can start doing that.
Yeah, that's helpful. What are you thinking about for a potential endpoint for this trial as a primary endpoint to look at really as we think about when data could come, right? If this trial is gonna initiate in Q1, what's the type of endpoint that you would have for this so given that it's not an exon skipper, right, so you can't look at like the dystrophin levels. What would you look at?
Yeah. I think two things.
Mm-hmm.
One, you wanna establish the safety first.
Mm-hmm.
Okay? You want to have reasons to believe that you can have improvements in functional benefits.
Mm-hmm
over a longer period of time.
Mm-hmm.
What are those that you can see early on? It will be by imaging techniques, changes in lean mass, fat mass.
Mm-hmm
M uscle volume, the quality of that muscle. You can look at that by imaging.
Mm-hmm
T echniques. Previous experience with the first generation molecule show that in three months you can see increases in lean mass, decreases in fat mass, and improvements in bone mineral density.
Mm-hmm.
Therefore, okay, right, are they going to be statistically significant? The answer is no, but you're gonna be looking for directionality on those.
Mm-hmm.
Okay. You can do that at three months. You should see continued improvement in all of those at six months and beyond.
Mm-hmm.
At some point, probably at six months and beyond, right, you should begin to see, compared to baseline, stabilization of muscle function, okay?
Mm-hmm.
Right? No further a loss or a change in the rate of loss, okay?
Mm-hmm.
Now because it's not a placebo-controlled trial, I think those functional benefits are going to be helpful in us deciding to go forward.
Mm-hmm.
I'm not sure, okay, right, the community at large is gonna give us a lot of credit for it.
Yeah. Yeah. It's hard in placebo-controlled trial
Right
N on-placebo controlled trial for functional endpoints.
But for us, okay, right, to see those changes, then that really allows us the opportunity to engage with regulators.
Mm-hmm
A nd have that discussion. What would be the registrational endpoints?
Mm-hmm.
Right? None of these treatments actually ameliorate the bone loss in boys with DMD.
Mm-hmm.
They are osteoporotic.
Mm-hmm.
We know we're going to improve bone mineral density, and just last in December, the FDA came out that for osteoporosis, the surrogate bone mineral density is the approvable endpoint instead of fracture rate, reducing the size of trials to very, very small trials compared to what they were. If we're seeing improvements in bone, we're seeing improvements in muscle, I think that's a point, okay, where you engage with the regulator and say, "Well, we're seeing all these benefit. What would you-
Mm-hmm
A ccept as a endpoint? Of course, we'll suggest a whole bunch of them.
Yeah.
Okay, right?
Hopefully they don't.
Right
Choose the functional endpoints as only that, and then you get faster to the clinic.
Yeah, I think, you know, if you look at functional benefits, right?
Mm-hmm.
The natural history studies that were conducted with 6-minute walk tests.
Mm-hmm
S how that in the course of a year, in that late ambulatory.
Mm-hmm
B oys, you lose 85 meters of ambulation in 48 weeks, right? Ataluren didn't get approved in the US, but was approved, okay, on conditionally every year in Europe, changed that rate of loss from 85 to 60 something.
Mm-hmm.
Okay? There was a functional benefit.
Mm-hmm.
I think there's opportunities.
Mm-hmm
right, once you have some data to engage with the regulators.
Yeah. It's exciting, especially when you're gonna be initiating this trial this quarter. Given we have 2 minutes left, we have to ask about ALS. The phase II, the design obviously is probably a little bit less figured out at this point given that.
Yes
Y ou're gonna initiate in the second half. Is it fair to assume that this would be in combination with the standard of care, albeit not fantastic standard of care as well, like similar to DMD?
Yeah, I think, you know, some patients are on riluzole.
Mm-hmm.
Not many.
Mm-hmm.
Okay? 'Cause it doesn't provide much benefit.
Mm-hmm.
The familial SOD patients are on antisense.
Mm-hmm.
There appears to be some benefit there. I think, again, if you're gonna preserve muscle, where do you have the opportunity? It's in the slow progressing, not in the very rapidly progressing. Okay.
Yeah.
I think we have to think through what are the endpoints that we can show improvements in or reduce the rate of loss in a slow progressing patient population to start with, and then move to the more rapidly progressing, the bulbar patients.
Yep. With the last about 30 seconds, one question we always like to ask the companies during these is what's the most underappreciated aspect of your story, of the Keros story, by investors right now?
I think everything.
Yeah.
Okay, right? I think we get zero credit for, elritercept.
Mm-hmm
P hase III trials.
Mm-hmm.
Has demonstrated the efficacy in phase II trials in DMD, in MDS, as well as in myelofibrosis, okay? The economics on that are tremendous.
Mm-hmm.
We get zero credit for that, okay, right? I mean, we're basically at, trading at below cash. Okay, right.
Well, with that, thank you very much for this.