Ready? Okay. Let's start this next fireside chat. My name's Keay Nakae. I'm the director of research and a senior biotech analyst at Chardan. Joining me for this conversation is the CEO of Keros Therapeutics, Jas Seehra. Jas, thank you so much for being with us. Maybe to start, can I ask you to just provide a few minutes of comments about the company for investors who are new to the story?
Sure. Well, thank you for the opportunity to have this conversation. Keros is a company that's focused on a signaling pathway called the TGF-β pathway. We have an advanced product that was partnered with Takeda in 2024 in three phase III trials with good economics on that. We had a second asset that had a safety signal in a phase II trial, that we have deprioritized, and are no longer pursuing it. We have a third asset that is now increasing skeletal muscle by increasing muscle regeneration that is going into neuromuscular indications.
Okay. Let's start with eleriscept, partnered with, as you said, Takeda. Three phase IIIs, that means it's quite advanced. You're not paying for anything. They're doing the work, but you do have back-end royalties and economics. From your perspective, when we look at your market cap, what is the market missing about this opportunity?
Well, I think what happened was that we did the deal in late 2024, and shortly thereafter, we saw the safety signals. That resulted in our stock price declining. In 2025, we had activists move into the stock. We'd returned $375 million last year, and it was a reboot for us. I think, for investors, they're waiting for us to be closer to data on rinvatercept, but eleriscept is in the hands of a partner.
I think until there's line of sight on data from those phase III, we're really not going to get much credit, which could be in the 2028, 2029 timeframe. Takeda has recently indicated that they will be filing a BLA in the 2028, 2029 timeframe, so data should be coming around that time.
Okay. As you mentioned, tenetacept failed. It happens. It is drug discovery.
Yeah.
This is difficult. Everybody appreciates that. At the same time, as you said, gave back a lot of cash. Walk us through having taken those steps, where is the company positioned and where do you go next?
Yeah. Even with the $375 million of capital returned, we have received a milestone from Takeda last quarter. With that milestone, we are guiding runway into the second half of 2028. So we have got a good runway. The rinvatercept phase II trial in DMD has initiated, and we will be able to share data from that in the first half of 2027. It is an open-label study, so we will have multiple readouts from that.
In addition, we guided that in the second half of 2026, we will engage with the regulators on design of a phase II trial in ALS, and that is moving along. So that trial will start sometime in 2027. So 2027 becomes a year of data readouts and additional trial initiations. Okay? So I think we are resetting the stage for those data readouts.
Okay. For rinvatercept DMD, help us understand what your drug is trying to accomplish. I think most are familiar with Sarepta's efforts to market the naked PMOs, the exon skippers, and then their first initial gene therapy. There are other gene therapy programs that are coming down the pipe. How are you differentiating what you are going to do there?
I think with all of those, what they're trying to do is to replace the dystrophin that's lacking in the muscle in boys with DMD. I want to really talk a little bit about how our products are very different, because we're not trying to replace the dystrophin. What we're trying to do is to increase the muscle regeneration. I think when you look at the progression of the disease in boys with DMD, they get diagnosed between 18 months and three years of age because they're slow to start ambulating. But they all ambulate, every single one of them.
Even this muscle that's missing dystrophin, it's functional, and they get stronger, and then eventually go into the decline phase. What's going on? This muscle that's lacking dystrophin has a homologue protein that's there at very low levels.
It is functional, but it's subject to easily being broken down. That breakdown then leads to inflammation, and with time, that inflammation accumulates. That then retards the muscle regeneration. If you could prolong that muscle regeneration, you would continue to have functional benefit from that muscle. That's exactly what glucocorticoids do, right? They tamp down the inflammation, and as a consequence, you have a delay in the loss of ambulation by about two years.
But glucocorticoids are also catabolic on muscle. While initially they're tamping down the inflammation and the boys get stronger, but they're also wasting away the muscle. Okay, right. A drug that doesn't do that could actually prolong it longer. What does rinvatercept do? It actually inhibits two of the key ligands that are negative regulators of skeletal muscle. By inhibiting those two ligands, you're allowing muscle regeneration to take place.
In addition, one of those ligands, activin A, is actually a powerful inflammatory cytokine in the TGF-β pathway, and it also then results in inflammation and fibrosis in the skeletal muscle. At the same time, activin A leads to bone loss. Okay, right. When you look at the pathology of the patients that are lacking this dystrophin protein, they're wasting away the muscle.
The muscle is getting replaced by fibrotic and fatty tissue, and they're also osteoporotic. Okay, right. The glucocorticoids just make it worse. Rinvatercept sort of really deals with all of the pathologies that arise from the current standard of care and the disease itself without replacing the dystrophin. Now, the good news is that it can be used in combination with all other treatments. Okay, right.
It's not exclusive of those treatments because when you increase muscle regeneration, you actually increase the population of cells that can pick up those exon skippers, gene therapy, and fuse it, okay, right, to the myofiber. As a consequence, you actually see higher levels of expression of those truncated dystrophin. Really you can think of rinvatercept going on top of glucocorticoids regardless of the mutation, and then if there are other therapies that are available, it can still be on top of those.
Okay. So help us understand the regulatory pathway for you folks. I think most understand that for the PMO exon skippers, you can get an accelerated approval. That pathway is still open, just demonstrating increased production of dystrophin. That holds true for the gene therapy. Talk about where the bar is for your approach.
Yeah, I think that was definitely the case. Okay, we'll see where the FDA is today. Right. But I think you're going to have to demonstrate functional benefit, right? It's going to have to be in a placebo-controlled trial. So I think our first trial is an open-label trial to establish the safety and also get some signals of activity to ensure that in a placebo-controlled trial, you can get rapid recruitment.
Okay. When you're taking the molecule into the clinic for the first time, patients are reluctant to go on a placebo. Right. But if they know that the drug has some benefit and that they will eventually go on, there's greater reasons to go into a trial.
By doing an open-label study, we establish safety, we establish signals of activity that can then help us recruit in a placebo-controlled trial, where eventually I do believe there will be functional benefits. So it's the NSAA score. Right. It'll be the timed functional test, like the 10-meter walk/run test for the ambulatory boys standing up from a sitting position, the four-stair climb. Then for the non-ambulatory boys, it's the ability of the upper body functions. The ability to reach out and be able to do things, be able to pull things. They're all measures that can be quantified.
For the current study, the open-label study, what's the timeline to report clinical data? At that time, what will you report on?
Yeah. We have said that we will start sharing data in the first half of 2027. The study is recruiting. You need to have enough patients and on treatment long enough to have confidence in the data, and we believe that that can happen in the first half of 2027. Thereafter, as patients remain on treatment, you will be able to see more of the functional benefits, right.
Early on, I think you are going to see tissue-level changes. We have DEXA scans every three months. You can look at the amount of muscle as reported by lean mass as well as the bone density and the fat. That is going to start coming out early. But the functional measures are always more noisy, and they are going to take a little longer with more patients and perhaps longer duration of treatment to see.
I think in 2027, we start first with safety and signals of tissue-level changes moving on to functional benefit as the year progresses.
Okay. Maybe let us talk about ALS for a sec. Again, a differentiated approach. Most focused on the motor neurons. Again, your approach from muscle. Tell us what your data tells you as to why this could be a viable approach.
Yeah. Let us sort of think about ALS. ALS is a disease where you have got a motor neuron that branches off into many, many, many neuromuscular junction, and each neuromuscular junction is at a myofiber that causes the contraction. Unlike SMA, where it is the motor neuron that is unable to conduct, it is the neuromuscular junction that starts breaking up in ALS.
But for every one neuromuscular junction that is failing to regenerate, there is many, many other neuromuscular junctions that are perfectly fine. So that muscle, okay, that has a faulty neuromuscular junction is going to start atrophying. But the other myofibers are perfectly fine, and they are innervated so they can contract. If you take each one of those by increasing muscle regeneration and make them strong, it can compensate for the atrophying muscle.
However, what will happen is eventually all of the motor neurons will go, and that muscle will fail to function. You delay the time of onset of the disease. So you're improving the clinically meaningful quality of life by preserving and increasing the skeletal muscle that is innervated, and therefore delaying some of the symptoms, such as loss of ambulation or respiratory function and so on.
You're not going to alter the eventual outcome of the disease. Which you are going to need to do by targeting the proteins that are involved in the breakdown of the neuromuscular junction, and SOD1 is one. You've got the treatments there. So in those patients, you can actually increase even survival with rinvatercept. And I think the most recent example of that is from Scholar Rock in SMA, where they're only targeting myostatin.
We target myostatin and activin A, which makes this drug much more potent than the myostatin.
Okay. So with that, we've reached the end of our time here. But Jas, thanks so much for joining us.
Thank you for the.