Keros Therapeutics is considering whether it needs to find a buyer, while strengthening its stockholder rights as activist investors circle.
The Lexington, Massachusetts-based biotech, which scrapped a phase 2 study of its hypertension drug at the start of this year, announced this morning that it is considering all strategic alternatives, including "a sale of the company or other business combination transaction, continued investment in the company’s pipeline and/or return of excess capital to stockholders.”
Alongside this, Keros has adjusted its stockholder rights plan to inflict a penalty on anyone who accumulates more than 10% of the biotech’s outstanding shares without the board’s approval.
The company made this move in response to “significant and rapid accumulations” of Keros’ stock by “a number of investors who have indicated a desire to influence the control of Keros.” These included a single investor who had scooped up 11.2% of Keros’ stock as of last week.
Keros’ share price sat at $10.33 as of close of trade Wednesday, a slide of 85% from the $69 it traded at in December before the company disclosed that excessive buildup of fluid in the lungs had been observed during a phase 2 trial of its TGF-β inhibitor cibotercept.
The rights plan announced this morning is designed to protect Keros stockholders' investment "during a period in which it believes shares of the company do not reflect the company’s intrinsic value,” the biotech said in the April 10 release.
While Keros got off to a bumpy start this year by scrapping the phase 2 cibotercept trial, it hasn’t been all bad news for the company recently. Also in December, Takeda paid $200 million upfront for Keros’ activin inhibitor elritercept, which is being developed to treat anemia seen in blood cancers.
In February, the biotech said it expects the upfront cash from Takeda, combined with the $560 million it entered the year with, to cover operating costs into 2029.
Last month, Keros announced its intent to take KER-065 into a phase 2 study for Duchenne muscular dystrophy after the ligand trap candidate successfully completed an early-stage trial in healthy volunteers.