Keros Therapeutics Inc Stock

All right. 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. And we have the cocktail slot, meaning we're preventing everyone from drinking a cocktail. So we're going to keep this interesting, I hope. And it's great to see you today.

So maybe just first, Jas, we could talk about kind of 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.

Yes. I think, first of all. We are a company that's been focused on TGF-Beta biology. And it's a complex area of biology, but we've been working in it through various iterations for the last 25-plus years. So 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. And then when it comes to the remainder of core competencies, clinical development, manufacturing and so on, they're transportable from one company to another. So 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. So I know it's not the lead program in the sense that 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?

Yes. So like many other tissues, the TGF-Beta pathway is involved in differentiation. So 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, ready on their path to senescence.

Great. And 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?

So in the context of muscle, there's the TGF-Beta members that are involved in as negative regulators. So they keep the cells from differentiating. And then there's those okay, that allow differentiation to occur. And 25 years ago, 26 years ago, Se-Jin Lee discovered one of those that is a negative regulator of skeletal muscle. So when he knocked it out, the mice were twice as muscular as their normal peers, and they call that myostatin. But and others soon learned that myostatin was not the only regulator because it acts through a particular receptor. Other ligands can signal through. So today, we know that myostatin is important, but activin is equally and sometimes more important. And especially in primates, including humans, activin is more important than in rodents and myostatin is less important in adult humans than in rodents, okay, right? So I think you have to go and inhibit both of these ligands in order to increase muscle regeneration and thereby build stronger muscles

Great. So I guess with that in mind, how is 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?

Yes. So as you started this conversation, you said there's lots of members of the TGF-Beta pathway. And indeed, there are 33 ligands plus, a dozen receptors and tens of receptors, co-receptors and other members of the family that regulate this pathway. So 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. So inhibiting myostatin and activin important increases skeletal muscle.

On the other hand, if you start inhibiting some of the bone morphogenic proteins, then you can have bleeding events if it's BMP9 because that's involved in vascular development. And then as was observed with bimagrumab, Lilly molecule, you can have gastrointestinal symptoms like diarrhea because BMPs are involved in the motility of the gastrointestinal tract, okay, right? So you want to inhibit activin myostatin, but minimize these other binding so that you don't have the safety signals. And that's how we thought about coming up with 065 rinvatercept.

Okay. So it was originally developed in the context of muscular dystrophies. There was a pivot a period to obesity and 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 DMD in particular?

Yes. So I think when you're increasing skeletal muscle, you are going to increase energy expenditure, right? So 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 sotatercept advancing, we could even think about 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. But it was always the same thing. You can increase skeletal muscle. If you increase skeletal muscle, it can lead to stronger muscles, right, and more functional benefit. But that, in turn, is also going to lead to increased energy expenditure and therefore, loss of fat, right? And just because these molecules do bind activin A, activin A is also a potent negative regulator of bone. So you're going to make the bone stronger, right, as well.

Okay. So then narrowed back to muscular dystrophies, but then specifically selected DMD. I guess why does DMD make sense from a both kind of scientific basis, but also a strategic basis?

Yes. So from a scientific point of view, okay, right, it's muscle that is weak. But then as a consequence of that muscle being weaker, every time it's used, it breaks down, leads to inflammation and the inflammation then lead to replacement of that muscle with fatty and a fibrotic tissue, okay?

So 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. And any one of those can be weak, and therefore, okay, that muscle is weak and breaks down easily. But the pathology that follows is always the same, inflammation, fibrosis, fat. Now the difference, right, between all these is the time of onset, some of the congenital muscular dystrophies, for example, onset at birth, right? And therefore, the endpoint there becomes survival. That's a real challenging endpoint, right, to show and you're going to treat babies and newborns, right? Very, very difficult, right, to go after.

And then there's others like the limb-girdles that don't get diagnosed until late ad -- late childhood into early adult. And there, the progression is so slow that it's going to take you multiple years to get to your endpoint. So you want to find something that's sort of right in the middle, and Duchenne falls into that category. These boys get diagnosed between the ages of 18 months and 3 years of age because they're slow to walk, but they all eventually walk, okay? And then they go into the decline phase of their life. But they all start off at a point, right, where they're getting stronger and then they get into that decline phase, right? So you can get to an endpoint in 12 months, right, as opposed to 2, 3 years with some of the other indications.

Okay. So it was a development strategy...

Well the pathology and the molecular biology fit in very, very nicely.

Perfect. DMD is something of a crowded field, although there has been a number of clinical challenges and failures and -- 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 065 is therefore positioned to address relative to that competitive landscape?

So when you really look at the landscape, there's a lot of molecules, but many of them don't provide functional benefit. When you really think about it, glucocorticoids are the standard of care, and they slow down progression of the disease, so the time to a wheelchair is extended. The exon skippers, they increase a truncated dystrophin, but we still have not seen any meaningful benefit from that.

I think if you go back 15 years ago, you would have been talking about gene therapy in the future as being a cure. We now know that gene therapy is not a cure, okay? It slowed down the progression. But after 2 to 3 years, nevertheless, the effect starts waning off. So there is room for additional treatments as a consequence. And what I think rinvatercept does uniquely is that it's taking care of the pathology that arises as a consequence of missing dystrophin. So as the landscape continues to change with molecules that are targeting dystrophin, okay, right? Nevertheless, okay, right, they're not taking care of the underlying pathology that arose in the first place.

So there's always going to be room for combination treatment. And we've seen that preclinically in the presence of glucocorticoid. Rinvatercept has additional benefit. It makes the muscle stronger. It ameliates the bone loss, okay, right, and decreases the fat. So taking care of the pathology that arises from the treatment itself. And then in the presence of exon skippers, you actually see more truncated dystrophin because exon skippers 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.

You're kind of alluding to this, but 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, 5-plus years?

Yes. I think you're still going to have gene therapy, right? They're going to get better. You're going to have better exon skippers. You're still going to have many patients on glucocorticoids. HDAC inhibitors have got approved. They do provide some benefit, okay, right? But these are all incremental. So I think regardless of what the background therapy is rinvatercept can be used on top of that, right, to provide additional benefit. But in many instances, it will actually improve the efficacy of those other treatments.

Okay. You previously have reported Phase I data evaluating 065 a year ago. These are primarily safety and tolerability, but can you remind us what that showed?

Yes. So 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, 3 and 5 mg per kg. The drug was well tolerated, and we moved on to the multiple ascending dose. And because it was well tolerated, by the time we started the first cohort in the multiple ascending dose, we've already gone up to 5 mg per kg in the SAD. And therefore, our initial dose was 2 mg per kg in that cohort.

As we found out more about the PK properties, we found that we're very close to full target engagement. Therefore, knowing that we were going to go into 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. But in terms of skeletal muscle, we saw increases in lean mass by DEXA, and we saw reductions in fat mass. So increasing skeletal muscle increases energy expenditure.

Therefore, you should see a decrease in fat mass. We see that in 3 months of treatment and then increases in bone mineral density, right? Small study, not powerful statistical significance, right? And 2 doses of 2 mg per kg and 1.25 in the MAD overlapping exposures, right.

Okay. Another thing that you did disclose was the grade 4 increase in CK levels, but I didn't believe it was related to study drug. Maybe you could just walk through that patient history.

Yes. So that particular participant did 45 minutes of curls prior to coming to the Phase I center for their first dosing, okay? So they got dosed.

A lot of bicep curls.

Yes, okay, right? And as you will note that every time you exercise, you do damage your muscle, right? So 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 2 more doses where there was no increases in creatine kinase. So 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?

Yes. So 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. So you have to dose titrate. You start at a lower dose, you allow that hemoglobin to increase, right. And then at the next dose, you can either go up, right 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.

And sotatercept is exactly that, right? 0.3 followed by 0.7 and you continue at 0.7.

Okay. I think you also showed biomarkers of increased bone mineral density. And could you talk about the importance of BMD in this patient population?

Yes. So when you don't put weight on your limbs, the bone start -- bone mineral density start decreasing. Those bones become more fragile. You hear about it with astronauts, okay, up on the space that happens with each one of us, okay, right? If you're not moving around and not using your limbs, then you're actually losing bone mineral density. Now in boys with DMD, it's worsened by the fact that they're all on glucocorticoids. And glucocorticoids metabolize not only bone, but muscle, right? So they've got accelerated bone loss.

So by the time they're in their late ambulatory stage, they are actually 4 to 5x at higher risk of fracture, vertebral fractures than their peers. And they are osteoporotic. We never think of these boys as being osteoporotic or being having metabolic disease. But 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.

I think some of the changes you reported were not necessarily dose dependent. And so maybe you could speak to what that reflects and how the data then informed your dose selection in future studies.

Yes. So it was a small study with Ns are small. And what you want to see is directionality and not necessarily a dose response, especially when you got 2 doses, 2 mgs per kg and 1.25, where in some individuals, okay, there's going to be overlap. So it's not surprising. But 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, right? So I think it tells us, okay, that 2 mg per kg is maximum target engagement, and we need to titrate up to that.

Okay. So then 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?

Yes. So I think when you think about it, it's boys with DMD early on, they're actually getting stronger. So you don't want to enroll those individuals because now each individual, right, is getting stronger. So how do you show, right, either stabilization or improvements. So 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?

Now you can show differences, right, as a consequence. And then the early non-ambulatory are the patients that got into a wheelchair within the last 6 months to 12 months, they still have upper body functionality. And that's really important for continuing with their everyday activities, right, and maintaining that is important. So I think that's the first criteria. The second criteria, right, really is do you put patients that are on gene therapies on exon skippers, on glucocorticoid. That becomes pretty heterogeneous okay, right? So 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 skippers, right? They don't have the mutations that are amenable to exon skippers. So 60-odd percent are on glucocorticoids, small percentage are on gene therapy. So 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. So that's how we came to the design. Now that doesn't preclude us at future adding cohorts, right, that are on exon skippers, right? But that's at a later date.

Okay. And then in terms of like what you're looking for to establish early proof of concept, what would kind of be the data you need to see to feel like this is a program worth investing further behind? And how long a follow-up do you need before that can start to emerge?

Yes. So I think -- let's look at the quick wins. First of all, it's still a safety study in pediatric population. So we need to demonstrate safety. I think by the time you've treated 3 to 6 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? And for all intended purposes, when you're using imaging methods, they're almost like laboratory measurements, okay, right? So those are the early things that you can see.

Now as you're seeing increases in lean mass, eventually, they're going to start showing functional benefit. And when you look at the boys with DMD, as we said earlier, over 12 months, right, you can actually see decline, okay, right, in the late ambulatory -- and therefore, okay, right, if they're stabilizing or improving, that's the time that you're going to begin to see. This is an open-label study. So 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.

Yes. So in the late ambulatory, right, what used to be a very popular endpoint, which was a 6-minute walk test. In the late ambulatory, you would have seen an 85-meter decline in the course of a year. So [ ataluren ], right, was able to reduce that down to 65 meters, I believe, okay, right? And there was a benefit there, okay, right? So I think if you're able to get it down to half that, right, then that would be clinically meaningful. And that today, 6-minute walk test is not used, okay? It's a 10-meter walkaround test. It's easier for the kids to do. So seeing changes in that appropriately would also be the way to look at it.

Okay. So I guess, how should 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? And at what point would you move forward into a larger study? And what does that kind of trial design look like?

Yes. 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, okay, 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 would 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, okay, right? So 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 time lines do you think you would need to run to generate that?

It's really hard to say that today, okay, right? But I don't think it's a 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 discussions with regulators and with patient advocacy groups, right? Is it 12 months of placebo control? Or is it just 6 months of placebo controlled? Don't know that today, okay? I think my suspicion is it's probably around 100-patient trial, but it all depends upon the magnitude the trial, of course.

We talk about competitive clinical candidates in DMD. But 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?

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 in muscle, right? I think that's the well established. When you look at the exon skippers, right, they didn't really have biological activity that you could measure, right? In the case of gene therapy, you're treating very young kids that are already getting stronger anyway. So it's really hard to compare to any one of these...

Okay. What about the market opportunity as you think about it in DMD?

Well, 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. So I think we have to let the data speak for it. But I think it's a treatment that can be on top of everything else.

Okay. 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 and the role you think that it could play there.

So 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 innovates, right, individual muscle fibers. And it is that neuromuscular junction loses that ability to be stimulated. But that one motor neuron is stimulating hundreds of myofibers.

So even though you've lost one, okay, there's many others that are still being stimulated. If you increase muscle regeneration and strength of those that are innovated, you can compensate for those that are atrophying due to the loss of neuromuscular junction. After all, that's what happens in a rehabilitative medicine, okay, right? Often, you're not really able to deal with the muscle that group that's lost. You're strengthening the adjoining muscle. Here, you're doing the individual myofibers within the muscle, right?

So what it means, right, 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, right? But you may have an effect on something like tracheometry,, right, because that's dependent upon your diaphragm, right, and your intercostal muscles, right? There you might be able to have some effect. So we think of this as a treatment that's going to improve muscle function in the innovated muscle and therefore, maintain functionality. So it's going to be a clinically meaningful improvements in quality of life for these patients, not necessarily a survival.

Okay. So in terms of then the endpoints that you would be testing in the clinical trial, what are the relevant endpoints that you're looking to improve? And what are kind of the clinically meaningful benchmarks there?

Yes. So I think it's a little early. We're still in the design phase of that trial, okay? And we will share that as soon as we engage with regulators. But I think in the end, the approvable endpoints, right, the validated is the ALS functional score, right, revise. And that's a collection of many abilities that a patient has. And therefore, okay, I think it is still going to be likely that.

On the other hand, we will have improvements in muscle function, right? And so do you start, right, prioritizing some of the muscle function over the ALS or is it a composite? Don't know today, okay? We need to collect the data from a pilot study, see what we're seeing in changes in terms of ALS functional score as well as the muscle and then engage with the regulators on the design of a registrational trial thereof. But it is going to be a different path from many other trials where they're totally dependent upon the ALS functional score.

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, okay, 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, right, where they've lost most of the innervation. So you want early patients, right?

Now do you have a heterogeneous mix of rapidly progressing and slow progressing? Well, the greatest benefit is probably in the slow progressors, right, because they have still innovation of those muscles. On the other hand, right, what is the decline, right, in their functional right? And can you measure that over a 6-month or a 12-month period? So those are the sort of the key things that we're looking at. And 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. So they've got a lot of experience, a lot of data in the -- 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. I couldn't be prouder that we were selected as one of the 4 or 5 programs, okay, that they put into this my Match 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 time lines.

So it was $200 million upfront. It's a total out-license 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 and then the rest are upon approval and commercialization and from low double digits to high teens royalties on that. Now they're doing a great job because when we partnered, we had just initiated the Phase I -- Phase III in second line. They've been recruiting into that trial.

But in the meantime, they have made the decision to start the frontline trial as well. So that is on ClinicalTrials.gov. That study has started. They're recruiting into that study. And just recently, they also announced that they are going to start a Phase III trial in myelofibrosis treatment of anemia in transfusion-dependent patients, right? So that's pretty exciting. They've got 3 trials going on -- 3 Phase III trials going on. And in addition, they're still continuing with the Phase II MDS and myelofibrosis trial. And in the MDS, they're adding a cohort of luspatercept-treated patients. So they're really thinking broadly about the opportunity for Elritercept.

Okay. Great. Maybe a final question for me. Just could you provide an update in terms of cash runway and the milestones and activities that are embedded in that guidance? And maybe loop that into the conversation you just had about biobucks, how does that change the picture if things.

Yes. So 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. So we have a very, very clean balance sheet, okay, right? And that's $281.5 million was in the bank, okay? That provides us a runway. We've guided into H1 2028, okay? And with milestones, of course, will be extended, right? Included in that is the DMD trial, the ALS trial, but also bringing forward another asset into the clinic, right? So 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 trial, right? I think what you can do is look at our website at the presentations at preclinical 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.