Good afternoon, everyone. Thanks for joining us here at the Goldman Sachs Global Healthcare Conference, including to all the people who are joining us online. We have the cocktail slot, meaning we're preventing everyone from drinking a cocktail, we're going to keep this interesting, I hope. It's great to see you today. Maybe just first, Jas, we could talk about a little bit of background on the company and what you think about as the core competencies of Keros, particularly as you embark on a new development program here.
Yeah. I think, first of all, we are a company that's been focused on TGF-beta biology, it's a complex area of biology, we've been working in it through various iterations for the last 25 plus years. I think we have a deep understanding that is unique to us in terms of what's druggable and what are the indications that you can target.
When it comes to the remainder of core competencies, clinical development, manufacturing, and so on, they're transportable from one company to another. Focusing on TGF-beta biology, focusing on biologics in the TGF-beta space gives us a unique perspective on which molecules and which therapeutic areas to target.
Great. I know it's not the lead program in the sense of it's not the most advanced, but it has become kind of the focal point of your development program, which is KER-065. Maybe we could just start with some background. What's the rationale for TGF-beta-directed therapies in the context of muscle generation and regeneration?
Yeah. Like many other tissues, the TGF-beta pathway is involved in differentiation. It's really involved in both self-renewal of stem cells that then go on to populate the tissue. That happens during embryogenesis, but in the adult, this pathway is constantly involved in generating new differentiated cells to replace the ones that are aging, okay, and therefore are already on their path to senescence.
Great. Then in terms of the specifically relevant TGF-beta members, obviously it's a very large family, as you know, probably better than most. What are the specifically relevant family members in the context of muscle?
In the context of muscle, there's the TGF-beta members that are involved in as negative regulators. They keep the cells from differentiating.
Then there's those, okay, that allow differentiation to occur. 25 years ago, 26 years ago, Se-Jin Lee discovered one of those that is a negative regulator of skeletal muscle. When he knocked it out, the mice were twice as muscular as their normal peers. He called that myostatin. He and others soon learned that myostatin was not the only regulator, because it acts through a particular receptor other ligands can signal through. Today, we know that myostatin is important, but activin is equally and sometimes more important.
Especially in primates, including humans, activin is more important than in rodents. Myostatin is less important in adult humans than in rodents. Okay, right? I think you have to go and inhibit both of these ligands in order to increase muscle regeneration and thereby build stronger muscles.
Right. I guess with that in mind, how was 065 developed to specifically target these members, and what can you share around its interaction with those specific family members versus some of the others that would be less relevant in this context?
Yeah. As you started this conversation, you said there's lots of members of the TGF-beta pathway. Indeed, there are 33 ligands plus-
Yeah
a dozen receptors and tens of receptors, co-receptors, and other members of the family that regulate this pathway. It's really important that you target the ligands that have the benefit that you desire and not have the off-target biology that can lead to safety events. inhibiting myostatin and activin important increases skeletal muscle. On the other hand, if you start inhibiting some of the bone morphogenetic proteins, then you can have bleeding events if it's BMP9, because that's involved in vascular development. then, as was observed with bimagrumab, Lilly-
small molecule, you can have gastrointestinal symptoms like diarrhea because BMPs are involved in-
Yeah
the motility of the gastrointestinal tract, right? You want to inhibit activin, myostatin, but minimize these other binding so that you don't have the safety signals. That's how we thought about coming up with 065, rinvatercept.
It was originally developed in the context of muscular dystrophies. There was a pivot to obesity, then you're kind of back to focusing on the muscular dystrophies. Maybe you could walk through some of the clinical background here and why you feel like this is now the right approach to be targeting-
Yeah
DMD in particular.
Yeah. I think when you're increasing skeletal muscle, you are going to increase energy expenditure, right?
Really, rinvatercept could have been taken into any indications and hence, okay, right, we were originally thinking about neuromuscular indications. But as we had, at that time, elritercept advancing and cibotercept advancing, we could even think about KER-065 in the context of obesity and a partnerable asset, right?
There's only so many things that you can have in your own pipeline that you can develop on your own. However, once we got to the stage of having found a partner with Takeda for elritercept, it was clear we needed to have another asset that we could develop on our own, hence the pivot back to neuromuscular. It was always the same thing. You can increase skeletal muscle. If you increase skeletal muscle, it can lead to stronger muscles and more functional benefit.
That, in turn, is also going to lead to increased energy expenditure and therefore loss of fat. Just because these molecules do bind activin A, activin A is also a potent negative regulator of bone. You're going to make the bone stronger, okay? Right, as well.
Okay. Narrowed back to the muscular dystrophies, specifically selected DMD. I guess, why does DMD make sense from both kind of scientific basis, but also strategic basis?
Yeah. From a scientific point of view, it's muscle that is weak, as a consequence of that muscle being weaker, every time it's used, it breaks down, leads to inflammation, and that inflammation then lead to replacement of that muscle with fatty and fibrotic tissue.
Okay.
Okay? It's a complex biology that arises from one missing protein dystrophin. That is a common feature of all of the muscular dystrophy. It's just a different protein in that linkage from the contractile apparatus all the way to the extracellular matrix of the muscle fiber. Any one of those can be weak, therefore, okay, that muscle is weak and breaks down easily. The pathology that follows is always the same: inflammation, fibrosis, fatty infiltration. Now, the difference between all these is the time of onset. Some of the congenital muscular dystrophies, for example, onset at birth, right?
Therefore, the endpoint there becomes survival. That's a real challenging endpoint to show, and you're going to treat babies, newborns? Right. Very difficult to go after. Then there's others, like the limb girdles, that don't get diagnosed until late childhood into early adulthood. There, the progression is so slow that it's going to take you multiple years-
Yeah
to get to your endpoint. You want to find something that's sort of right in the middle, Duchenne falls into that category. These boys get diagnosed between the ages of 18 months and three years of age because they're slow to walk, they all eventually walk, okay, they go into the decline phase of their life. They all start off at a point where they're getting stronger, they get into that decline phase.
Okay? You can get to an endpoint in 12 months as opposed to two, three years with some of the other indications.
Okay. It was a development strategy.
Right.
Yeah. Sure.
Where the pathology and the biology fit in very nicely.
Perfect. DMD is something of a crowded field, although there has been a number of clinical challenges and failures, it's been a bit of a messy one as well in terms of drug development. How do you think about the unmet need that KER-065 is therefore positioned to address relative to that competitive landscape?
When you really look at the landscape, there's a lot of molecules, many of them don't provide functional benefit. When you really think about it, glucocorticoids are the standard of care, they slow down progression of the disease, the time to a wheelchair is extended. The exon skipping, they increase a truncated dystrophin, we still have not seen any meaningful benefit from that.
I think if you go back 15 years ago, you would've been talking about gene therapy in the future as being a cure. We now know that gene therapy is not a cure, okay? It slow downs the progression, but after two to three years, nevertheless, the effect starts waning off. There is room for additional treatments as a consequence. What I think rinvatercept does uniquely is that it's taking care of the pathology that arises as a consequence of missing dystrophin.
As the landscape continues to change with molecules that are targeting dystrophin, okay.
Nevertheless, they're not taking care of the underlying pathology that arose in the first place. There's always going to be room for combination treatment. We've seen that pre-clinically. In the presence of glucocorticoid, rinvatercept has additional benefit. It makes the muscle stronger. It ameliorates the bone loss, okay, and decreases the fat. Taking care of the pathologies that arises from the treatment itself. In the presence of exon skipping, you actually see more truncated dystrophin because exon skipping don't get into muscle fibers. They get into the myoblasts, which fuse with the muscle fibers, and therefore, if you increase the population of myoblasts, which by increasing muscle regeneration, that's what you're doing. You're actually providing more vehicles for delivery of that genetic material to the existing muscle fibers.
Okay. You're kind of alluding to this, maybe you could put a finer point on this. What do you think the treatment landscape is going to look like for boys with DMD in the next, let's call it five plus years?
I think you're still going to have gene therapy, right? They're going to get better. You're going to have better exon skipping. You're still going to have many patients on glucocorticoids. HDAC inhibitors have got approved. They do provide some benefit, okay. These are all incremental. I think regardless of what the background therapy is, rinvatercept can be used on top of that to provide additional benefit. In many instances, it will actually improve the efficacy of those other treatments.
You previously have reported phase I data evaluating KER-065 a year ago. These are primarily safety and tolerability, but can you remind us what that showed?
In the phase I healthy volunteer study, there was the single ascending dose and the multiple ascending dose. In the single ascending dose, we had 1 mg/kg , 3 mg/kg , and 5 mg/kg. The drug was well-tolerated, and we moved on to the multiple ascending dose. Because it was well-tolerated, by the time we started the first cohort in the multiple ascending dose, we'd already gone up to 5 mg/kg in the SAD, and therefore our initial dose was 2 mg/kg in that cohort. As we found out more about the PK properties, we found that we're very close to full target engagement. Knowing that we were going to go potentially into pediatric population, you always wanted to look at lower doses, hence our second dose was the lower dose.
What we saw was one, is in red blood cells, hemoglobin that we have to manage by dose titration. In terms of skeletal muscle, we saw increases in lean mass by DEXA, and we saw reductions in fat mass. Increasing skeletal muscle increases energy expenditure, therefore you should see a decrease in fat mass. We see that in three months of treatment. Increases in bone mineral density. Small study, not powered for statistical significance, okay. Two doses of 2 mg/kg and 1.25 mg/kg in the MAD, overlapping exposures. Okay, right.
Another thing that you did disclose was a grade four increase in CK levels, but you didn't believe it was related to study drug. Maybe you could just walk through that patient history.
That particular participant did 45 minutes of curls prior to coming to the phase I center for their first dosing, okay. They got dosed.
That's a lot of bicep curls.
Yes. Okay, right. As you will note that every time you exercise, you do damage your muscle, okay. You see increases in creatine kinase. That individual had high elevated creatine kinase. It resolved in about a week, as would be anticipated, and then they went on to get two more doses where there was no increases in creatine kinase.
Okay.
It's not drug related.
Okay. You mentioned the increases in hemoglobin, though. Maybe you could talk about the strategy around managing those on the forward.
Yeah. With many of these ligand traps, you do get increases in hemoglobin. The magnitude of the increase in hemoglobin is usually the greatest from the first dose. You have to dose titrate. You start at a lower dose. You allow that hemoglobin to increase. At the next dose, you can either go up, or remain at the same time so that you get to that stable hemoglobin. After that, you can continue dosing at that dose level.
Okay.
That has been exactly that, right?
Yeah.
0.3 followed by 0.7, you continue at 0.7.
Okay. I think you also showed biomarkers of increased bone mineral density. Could you talk about the importance of BMD in this patient population?
Yeah.
Yeah.
When you don't put weight on your limbs, the bone mineral density start decreasing. Those bones become more fragile. You hear about it with astronauts, okay, up on the space station.
Yeah.
That happens with each one of us, okay. If you're not moving around and not using your limbs, then you're actually losing bone mineral density. In boys with DMD, it's worsened by the fact that they're all on glucocorticoids. Glucocorticoids catabolize not only bone, but muscle, okay. They've got accelerated bone loss. By the time they're in their late ambulatory stage, they are actually 4x to 5x at higher risk of vertebral fractures than their peers. They are osteoporotic.
We never think of these boys as being osteoporotic or having metabolic disease, because of glucocorticoids, they put on a lot of fat, right? They become insulin resistance, hence the metabolic syndrome that they have, and at the same time, lose bone and become osteoporotic.
Okay. I think some of the changes you reported were not necessarily dose-dependent. Maybe you could speak to what that reflects and how the data then informed your dose selection in future studies.
Yeah. It was a small study.
with Ns that are small. What you want to see is directionality and not necessarily a dose response, especially when you've got two doses, 2 mg / kg and a 1.25 mg / kg , where in some individuals, okay, there's going to be overlap. It's not surprising. When you look at the data closely, okay, you can convince yourself that you're getting close to maximum target engagement, and you're seeing individual variability rather than a true biological difference.
Okay.
Okay, right. I think it tells us, okay, that 2 mg/ kg is maximum target engagement, and we need to titrate up to that.
Okay. As you look to the phase II design, what were some of the aims you had in mind when designing that trial, and how did you think about the key parameters for that study?
Yeah. I think when you think about it's boys with DMD. Early on, they're actually getting stronger, you don't want to enroll those individuals because now each individual is getting stronger. How do you show other stabilization-
Yeah
or improvements? You want to pick a cohort that is in the late ambulatory stage, where they've got to stable muscle function, or they're in decline. Okay. You can show differences as a consequence. The early non-ambulatory are the patients that got into a wheelchair within the last 6 - 12 months. They still have upper body functionality, and that's really important for continuing with their everyday activities, and maintaining that is important. I think that's the first criteria. The second criteria really is do you put patients that are on gene therapies, on exon skipping, on glucocorticoids. That becomes pretty heterogeneous. You have to start thinking about cohorts that are specific to the type of treatment that are on. More than 60% of the patients are not eligible for exon skipping. They don't have the mutations that are amenable to exon skipping.
60 odd percent are on glucocorticoids. Small percentage are on gene therapy. By focusing on the glucocorticoids, you are actually dealing with a larger population that don't have any other treatments at the moment, and then the non-ambulatory. That's how we came to the design. That doesn't preclude us at future adding cohorts that are on exon skipping. That's at a later date.
Okay. In terms of what you're looking for to establish early proof of concept, what would be the data you need to see to feel like this is a program worth investing further behind? How long a follow-up do you need before that can start to emerge?
Yeah. I think let's look at the quick wins. First of all, it's still a safety study in pediatric population. We need to demonstrate safety. I think by the time you've treated three to six months, you are beginning to understand the safety profile. It just so happens that that's the time in which you can see changes in lean mass, fat mass, and bone mass. Okay, right. For all intents and purposes, when you're using imaging methods, they're almost like laboratory measurements. Those are the early things that you can see. As you're seeing increases in lean mass, eventually they're going to start showing functional benefit.
When you look at the boys with DMD, as we said earlier, over 12 months, you can actually see decline in the late ambulatory, and therefore, if they're stabilizing or improving, that's the time that you're going to begin to see. This is an open-label study, we'll be able to look at the data on a constant basis and start reporting that to investors through medical meetings as we get more and more confidence with the data.
Remind me, in this patient population, what you would expect to see in boys in these kind of populations treated with glucocorticoids after 12 months with respect to the clinical and functional endpoints you're looking at.
Yeah. In the late ambulatory, in what used to be a very popular endpoint, which was a six-minute walk test, in the late ambulatory, you would have seen an 85-m decline in the course of a year. Ataluren was able to reduce that down to 65 m, I believe. There was a benefit there. I think if you're able to get it down to half that would be clinically meaningful, and that today six-minute walk test is not used. It's a 10-m walk around test. It's easier for the kids to do. Seeing changes in that appropriately would also be the way to look at it.
Okay. I guess, as we think about next steps, maybe first, what should we look for in terms of the cadence of clinical data that you'll share in 2027 and beyond? At what point would you move forward into a larger study, and what does that kind of trial design look like?
Yeah. I think in 2027 we'll start reporting the data, starting with safety and then the biomarkers of changes in muscle, as we talked about, through imaging methods, and then the functional benefits. That's going to be the cadence of events. I think once you see robust changes in the biomarkers and you begin to see changes in functional benefits, that's the time you take that data package and engage with the regulator and say, "Okay, what are the primary endpoints that you are looking for at this point in time that will get us approval?" This is going to be functional benefit that we're going to be providing. We're not going to be able to go on the basis of increasing in a biomarker like dystrophin.
We are going to have to demonstrate functional benefit.
Okay. What kind of patient number, and recognizing a lot of this is going to be contingent on the magnitude of clinical benefit you see, what kind of patient numbers and timelines do you think you would need to run to generate that kind of data?
It's really hard to say that today. I don't think it's study of hundreds of patients. It's probably a placebo-controlled study with placebo for some period of time that would have to be determined in discussion with regulators and with patient advocacy groups. Is it 12 months of placebo control, or is it just six months of placebo control? Don't know that today. My suspicion is it's probably around a 100-patient trial, but it all depends upon the magnitude of the trial, of course.
Right. We talked competitive clinical candidates in DMD. In terms of the development path that you think most closely mirrors what you would need to show for the patient population you're talking about and the breadth of applicability of this drug across different patient populations in DMD, are there any that you'd point to as good proxies for what you need to do?
I think I would go back to the glucocorticoids, where in 12 months you can actually see improvements or slowing down in loss of function and muscle. I think that's the well-established. When you look at the exon skipping they didn't really have biological activity that you could measure. In the case of gene therapy, you're treating very young kids that are already getting stronger anyway. It's really hard to compare to any one of these.
Okay. What about the market opportunity as you think about it in DMD?
As I said, it's on top of any other standard of care that there may be. I think we've seen data from our preclinical studies that it could be glucocorticoid sparing or replace glucocorticoid. I think we have to let the data speak for it. I think it's a treatment that can be on top of everything else.
In terms of then broadening the development path beyond DMD, the next indication you guys have talked about is ALS. Maybe you could walk through the rationale for that indication selection-
Yeah
The role you think that it could play there.
In the case of ALS, like SMA and other neuromuscular indications, it is muscle wasting that is arising as a consequence of failure to stimulate that muscle. Now, in the case of ALS, you've got a single motor neuron that branches off and innervates individual muscle fibers. It is that neuromuscular junction loses that ability to be stimulated. That one motor neuron is stimulating hundreds of myofibers. Even though you've lost one, there's many others that are still being stimulated. If you increase muscle regeneration and strength of those that are innervated-
You can compensate for those that are atrophying due to the loss of neuromuscular junction. After all, that's what happens in rehabilitative medicine. Often, you're not really able to deal with the muscle group that's lost. You're strengthening the adjoining muscle. Here, you're doing the individual myofibers within the muscle. What it means is that you'll be able to make the muscle stronger, maintain its functionality for a longer period of time, and therefore provide a quality of life benefit. You may not have an effect at all on survival whatsoever. You may have an effect on something like tracheostomy, because that's dependent upon your diaphragm, and your intercostal muscles.
There, you might be able to have some effect. We think of this as a treatment that's going to improve muscle function in the innervated muscle and therefore maintain functionality. It's going to be a clinically meaningful improvements in quality of life for these patients, not necessarily a survival.
Okay.
Okay.
In terms of then the endpoints that you would be testing in a clinical trial, what are the relevant endpoints that you're looking to improve, and what are kind of the clinically meaningful benchmarks there?
Yeah. I think it's a little early. We're still in the design phase of that trial. We will share that as soon as we engage with regulators. I think in the end, the approvable endpoints, the validator is the ALS Functional Rating Scale-Revised.
Yeah.
That's a collection of many abilities that a patient has. Therefore, I think it is still going to be likely that. On the other hand, we will have improvements in muscle function. Do you start prioritizing some of the muscle function over the ALS, or is it a composite? Don't know today. We need to collect the data from a pilot study.
see what we're seeing, any changes in terms of ALS Functional Rating Scale-Revised as well as the muscle, then engage with the regulators on the design of a registrational trial thereafter. It is going to be a different path from many other trials where they're totally dependent upon the ALS Functional Rating Scale-Revised.
Okay. In terms of the pilot study that you're thinking about running, I guess it sounds like there are still some key decisions to be made. What are those key decisions you have to think through in terms of designing that pilot program?
I think it's really the patients that you choose. Since this is a muscle agent that's going to improve muscle, you don't want to take patients that are very late in their disease, where they've lost most of the innervation. You want early patients.
Do you have a heterogeneous mix of rapidly progressing and slow progressing? The greatest benefit is probably in the slow progressers, because they have still innervation of those muscle. On the other hand, what is the decline in their functional, and can you measure that over a six-month or a 12-month period? Those are the sort of the key things that we're looking at. We're working with this program out of the Healey Center at MGH, MyMatch. They've been doing clinical trials in ALS patients for 30-odd years. They've got a lot of experience, a lot of data from clinical trials as well as placebo patients that they can mine to help select the right patient population for this trial. It's actually amazing the amount of information they have.
Okay.
I couldn't be prouder that we were selected as one of the four or five programs that they put into this MyMatch program.
I don't want to end the conversation without touching on elritercept, which you have licensed to Takeda. Just remind us the economics associated with that program, and if you could, an update in terms of development timelines and such.
Yeah. It was $200 million up front. It's a total outlicense to Takeda, with 2025 being the transition year, where we were transitioning all activities to Takeda. In addition, there's $1.1 billion in biobucks.
$90 million of that is development milestones, then the rest are upon approval and commercialization. From low double digits to high teens royalties on that. They're doing a great job because when we partnered, we had just initiated the phase II, phase III in second line. They've been recruiting into that trial. In the meantime, they have made the decision to start the front-line trial as well. That is on clinicaltrials.gov.
That study has started. They're recruiting into that study. Just recently, they also announced that they are going to start a phase III trial in myelofibrosis, treatment of anemia in transfusion-dependent patients. That's pretty exciting. There were three phase III trials going on, in addition, they're still continuing with the phase II MDS and myelofibrosis trial. In the MDS, they're adding a cohort of luspatercept-treated patients.
Great.
They're really thinking broadly about the opportunity for elritercept.
Okay, great. Maybe a final question from me. Just could you provide an update in terms of cash runway and the milestones and activities that are embedded in that guidance? Maybe loop that into the conversation you just had about biobucks. How does that change the picture if those things happen?
Yeah. We have $282 million, $281.5 million.
Okay
as of the Q filing, end of Q1. Does not include any milestones from Takeda, does not include interest. We have a very, very clean balance sheet, okay? That's $281.5 million was in the bank. Okay?
That provides us a runway. We've guided into H1 2028, okay? With milestones, of course, it would be extended. Included in that is the DMD trial, the ALS trial, also bringing forward another asset into the clinic, okay?
Okay.
It is pretty comprehensive development of our pipeline.
When will we get visibility on what that next asset is?
We have classically, historically only shared that as soon as we're sort of ready to start the phase I-
Okay
trial. Okay, right. I think what you can do is look at our website, at the presentations at pre-clinical scientific conferences, and you can then get a mix of what's potentially in the pipeline.
All right. That's a good teaser to end the meeting. It was great chatting with you, Jas. Thanks so much to everyone who joined us, and enjoy the rest of the conference.
Well, thank you for the opportunity.