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What changed in Keros Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Keros Therapeutics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+665 added−626 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in Keros Therapeutics, Inc.'s 2024 10-K

665 paragraphs added · 626 removed · 512 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

205 edited+77 added−72 removed288 unchanged
Biggest changeAdditional data from the efficacy evaluable patients as of the data cut-off date include: • Increases in hemoglobin were observed in non-transfusion dependent patients in both arms, suggesting that KER-050 has the potential to address anemia due to myelofibrosis and ruxolitinib-associated anemia. ◦ Additionally, most patients had reductions in transfusion burden, including patients receiving up to 15 red blood cell units per 12 weeks at baseline. • Non-transfusion dependent patients, who received a median of three red blood cell units per 12 weeks at baseline, experienced sustained increases in hemoglobin within the first 12 weeks of treatment in both the monotherapy and combination arms (pooled across dose cohorts). ◦ Additionally, observed increases in soluble transferrin receptor, reticulocytes and hemoglobin were generally higher with increasing dose levels between 0.75 mg/kg to 3.0 mg/kg (pooled across both monotherapy and combination arms at each dose level). • At Week 24, reduction in spleen size was observed in 57.1% (n=4/7) of patients with baseline spleen size ≥ 450 cm 3 and a Week 24 spleen assessment, including in one of three patients in the monotherapy arm and in three of four patients in the combination arm. • At Week 24, a decrease in disease symptoms was observed in 66.7% (n=8/12) of patients with at least two symptoms with an average score ≥ 3 or an average total score of ≥ 10 on the MF-SAF-TSS questionnaire at baseline and a Week 24 MF-SAF-TSS assessment.
Biggest changeAdditional data from the efficacy evaluable patients as of the data cut-off date include: • Increases in hemoglobin were observed in 82.8% (n=24/29) of evaluable non-transfusion dependent patients in both arms over a 12-week period within the first 24 weeks, suggesting that elritercept has the potential to address anemia due to MF and ruxolitinib-associated anemia. • 63.4% (n=26/41) of patients that received at least three red blood cell units per 12 weeks at baseline in both arms and all dose levels tested showed reductions in transfusion burden over 12 weeks within the first 24 weeks. 24.4% (n=10/41) of the patients who showed reductions in transfusion burdens achieved TI. ◦ Additionally, within the subgroup of these patients in the combination arm who received a starting dose of 3.0 mg/kg of elritercept or higher, 62.5% (n=10/16) had reductions of 50% or greater, and 37.5% (n=6/16) achieved TI. • At week 24, reduction in spleen volume was observed in 40% (n=8/20) of patients with baseline spleen size ≥ 450 cm 3 and a week 24 spleen assessment, including three patients who had reductions of 35% or greater.
In addition, Hansoh will use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize licensed products in any region in the Territory. Pursuant to the terms of the Hansoh Agreement, we received an upfront payment in 2022.
In addition, Hansoh will use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize licensed products in any region in the Hansoh Territory. Pursuant to the terms of the Hansoh Agreement, we received an upfront payment in 2022.
During the royalty term, neither party will directly or indirectly commercialize a competing product in the Territory. The Hansoh Agreement will continue in force on a region-by-region basis until the expiration of the royalty term. Hansoh may terminate the Hansoh Agreement in its entirety for convenience, with notice.
During the royalty term, neither party will directly or indirectly commercialize a competing product in the Hansoh Territory. The Hansoh Agreement will continue in force on a region-by-region basis until the expiration of the royalty term. Hansoh may terminate the Hansoh Agreement in its entirety for convenience, with notice.
The process required by the FDA before biopharmaceutical product candidates may be marketed in the United States generally involves the following: ▪ completion of extensive preclinical laboratory tests and animal studies performed in accordance with applicable regulations, including the FDA’s Good Laboratory Practice, or GLP, requirements; ▪ submission to the FDA of an Investigational New Drug, or IND, application which must become effective before human clinical trials may begin; ▪ approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before the trial may be initiated; ▪ performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational drug product for each proposed indication and to establish the safety, purity and potency of the investigational biologic product candidate for each proposed indication; ▪ preparation of and submission to the FDA of an NDA for a small molecule product candidate or a BLA for a biologic after completion of all pivotal clinical trials; ▪ payment of user fees for FDA review of the NDA or BLA; ▪ a determination by the FDA within 60 days of its receipt of the NDA or BLA to file the application for review; ▪ satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities at which the proposed product will be produced to assess compliance with current Good Manufacturing Practice, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s continued identity, strength, quality and purity; ▪ potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA or BLA; ▪ satisfactory completion of an FDA Advisory Committee review, if applicable; ▪ FDA review and approval of an NDA or licensure of a BLA, including consideration of the views of any FDA Advisory Committee, prior to any commercial marketing or sale of the product for particular indications for use in the United States; and ▪ compliance with any post-approval requirements, including the potential requirement to conduct post-approval studies.
The process required by the FDA before biopharmaceutical product candidates may be marketed in the United States generally involves the following: ▪ completion of extensive preclinical laboratory tests and animal studies performed in accordance with applicable regulations, including the FDA’s Good Laboratory Practice, or GLP, requirements; ▪ submission to the FDA of an Investigational New Drug, or IND, application which must become effective before human clinical trials may begin; ▪ approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before the trial may be initiated; ▪ performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice, or GCP, requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational drug product for each proposed indication and to establish the safety, purity and potency of the investigational biologic product candidate for each proposed indication; ▪ preparation of and submission to the FDA of an NDA for a small molecule product candidate or a BLA for a biologic after completion of all pivotal clinical trials; ▪ payment of user fees for FDA review of the NDA or BLA; 33 ▪ a determination by the FDA within 60 days of its receipt of the NDA or BLA to file the application for review; ▪ satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities at which the proposed product will be produced to assess compliance with current Good Manufacturing Practice, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s continued identity, strength, quality and purity; ▪ potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA or BLA; ▪ satisfactory completion of an FDA Advisory Committee review, if applicable; ▪ FDA review and approval of an NDA or licensure of a BLA, including consideration of the views of any FDA Advisory Committee, prior to any commercial marketing or sale of the product for particular indications for use in the United States; and ▪ compliance with any post-approval requirements, including the potential requirement to conduct post-approval studies.
We are also subject to additional similar U.S. state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or that apply regardless of payor, state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, state and local laws which require pharmaceutical companies to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, state laws which require the reporting of information related to drug pricing, state and local laws requiring the registration of pharmaceutical sales representatives, and state and foreign laws governing the privacy and security of health information which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts.
We are also subject to additional similar U.S. state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare 42 items or services reimbursed by non-governmental third-party payors, including private insurers, or that apply regardless of payor, state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, state and local laws which require pharmaceutical companies to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, state laws which require the reporting of information related to drug pricing, state and local laws requiring the registration of pharmaceutical sales representatives, and state and foreign laws governing the privacy and security of health information which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts.
These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. ▪ Phase 2 clinical trials involve studies in a limited population of disease-affected patients to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. ▪ Phase 3 clinical trials generally involve a large number of patients at multiple geographically dispersed clinical trial sites and are designed to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety.
These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. 34 ▪ Phase 2 clinical trials involve studies in a limited population of disease-affected patients to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. ▪ Phase 3 clinical trials generally involve a large number of patients at multiple geographically dispersed clinical trial sites and are designed to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety.
These vasodilators fall into one of three categories: (i) prostanoids, which are agonists of the prostacyclin signaling pathway; (ii) endothelin receptor antagonists, or ERAs; or (iii) therapies that stimulate the nitric oxide-soluble guanylate cyclase-cyclic 14 guanosine monophosphate axis, such as (a) phosphodiesterase 5 inhibitors, or PDE5i, or (b) soluble guanylate cyclase activators, which augment cGMP signaling, a key mediator in pulmonary arterial vasodilation.
These vasodilators fall into one of three categories: (i) prostanoids, which are agonists of the prostacyclin signaling pathway; (ii) endothelin receptor antagonists, or ERAs; or (iii) therapies that stimulate the nitric oxide-soluble guanylate cyclase-cyclic guanosine monophosphate axis, such as (a) phosphodiesterase 5 inhibitors, or PDE5i, or (b) soluble guanylate cyclase activators, which augment cGMP signaling, a key mediator in pulmonary arterial vasodilation.
Further corporate governance information, including our corporate governance guidelines and board committee charters, is also available on our investor relations website under the heading "Corporate Governance." The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 44
Further corporate governance information, including our corporate governance guidelines and board committee charters, is also available on our investor relations website under the heading "Corporate Governance." The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
Decisions regarding whether to cover any of our product candidates, if approved, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis Third-party payors often 41 rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.
Decisions regarding whether to cover any of our product candidates, if approved, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.
These non-RS patients have differentiation and maturation defects occurring across the spectrum from early through terminal stages of hematopoiesis. Limitations of Current Treatment Options for Cytopenias in Patients with MDS Patients with MDS-associated anemia are generally treated with red blood cell transfusions and erythropoiesis-stimulating agents, or ESAs, which are not approved for such treatment.
These non-RS patients have differentiation and maturation defects occurring across the spectrum from early through terminal stages of hematopoiesis. 18 Limitations of Current Treatment Options for Cytopenias in Patients with MDS Patients with MDS-associated anemia are generally treated with red blood cell transfusions and erythropoiesis-stimulating agents, or ESAs, which are not approved for such treatment.
Myelofibrosis is characterized by ineffective hematopoiesis, an enlarged spleen, bone marrow fibrosis and shortened survival. Patients often experience multiple disease-associated and treatment-emergent cytopenias, including anemia and thrombocytopenia. The ineffective hematopoiesis in myelofibrosis is driven by molecular abnormalities in the Janus kinase 2, or JAK2, -signal transducers and activators of transcription, or JAK-STAT, signaling pathway of transcriptional activators.
Myelofibrosis is characterized by ineffective hematopoiesis, an enlarged spleen, bone marrow fibrosis and shortened survival. Patients often experience multiple disease-associated and treatment-emergent cytopenias, including anemia and thrombocytopenia. 19 The ineffective hematopoiesis in myelofibrosis is driven by molecular abnormalities in the Janus kinase 2, or JAK2, -signal transducers and activators of transcription, or JAK-STAT, signaling pathway of transcriptional activators.
We may terminate the agreement for any reason upon specified prior written notice to MGH. Intellectual Property Overview We strive to protect the proprietary technology, inventions and improvements that we believe are commercially important to our business, including obtaining, maintaining, enforcing and defending our intellectual property rights, including patent rights, whether developed internally or licensed from third parties.
We may terminate the agreement for any reason upon specified prior written notice to MGH. 31 Intellectual Property Overview We strive to protect the proprietary technology, inventions and improvements that we believe are commercially important to our business, including obtaining, maintaining, enforcing and defending our intellectual property rights, including patent rights, whether developed internally or licensed from third parties.
Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicinal product will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones.
Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or 39 treatment in the EU or, if there is, the new medicinal product will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones.
The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law. 36 A biological product can also obtain pediatric market exclusivity in the United States.
The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law. A biological product can also obtain pediatric market exclusivity in the United States.
If a licensed product is approved for marketing in the Territory, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales in each region within the Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions.
If a licensed product is approved for marketing in the Hansoh Territory, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales in each region within the Hansoh Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions.
Additionally, bone marrow analysis performed 24 hours post-dose demonstrated that administration of RKER-050 increased the megakaryocyte precursor population, and that these cells had increased ploidy, compared to vehicle. These data suggest that RKER-050 promoted the maturation of early megakaryocyte populations and primed megakaryocytes for proplatelet production. • Reduced accumulation of progenitor cells.
Additionally, bone marrow analysis performed 24 hours post-dose demonstrated that administration of RKER-050 increased the megakaryocyte precursor population, and that these 21 cells had increased ploidy, compared to vehicle. These data suggest that RKER-050 promoted the maturation of early megakaryocyte populations and primed megakaryocytes for proplatelet production. • Reduced accumulation of progenitor cells.
Additionally, appropriate 33 packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical study investigators.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical study investigators.
Platelet-stimulating agents for the treatment of thrombocytopenia, which are not currently indicated for MDS, carry the risk of thromboembolic events and bone marrow fibrosis. 5 ESAs are a class of drugs that work on the proliferation stage of red blood cell development by expanding the pool of early-stage progenitor cells.
Platelet-stimulating agents for the treatment of thrombocytopenia, which are not currently indicated for MDS, carry the risk of thromboembolic events and bone marrow fibrosis. ESAs are a class of drugs that work on the proliferation stage of red blood cell development by expanding the pool of early-stage progenitor cells.
In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our collaborators, employees and consultants use intellectual 31 property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
A deficiency of neutrophils in the blood, or neutropenia, also increases the risk of serious infections in patients with MDS and has been reported to affect approximately 20% of patients with MDS. 4 To guide decisions on risk stratification and the treatment of patients with MDS, clinicians typically use the International Prognostic Scoring System-Revised, or the IPSS-R.
A deficiency of neutrophils in the blood, or neutropenia, also increases the risk of serious infections in patients with MDS and has been reported to affect approximately 20% of patients with MDS. To guide decisions on risk stratification and the treatment of patients with MDS, clinicians typically use the International Prognostic Scoring System-Revised, or the IPSS-R.
Like a conditional MA, an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard 38 MA.
Like a conditional MA, an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard MA.
The FDA is not bound by recommendations of the advisory committee, but it considers such 34 recommendations when making decisions on approval. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs.
The FDA is not bound by recommendations of the advisory committee, but it considers such recommendations when making decisions on approval. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs.
In a third-party Phase 3 clinical trial of Jakafi and a third-party Phase 3 clinical trial of Inrebic, treatment led to significant reductions in spleen volume 6 and improvement in total symptom scores. However, JAK inhibitors interfere with normal hematopoiesis and treatment with Jakafi and Inrebic also resulted in clinically significant anemia and thrombocytopenia in these Phase 3 trials.
In a third-party Phase 3 clinical trial of Jakafi and a third-party Phase 3 clinical trial of Inrebic, treatment led to significant reductions in spleen volume and improvement in total symptom scores. However, JAK inhibitors interfere with normal hematopoiesis and treatment with Jakafi and Inrebic also resulted in clinically significant anemia and thrombocytopenia in these Phase 3 trials.
The term remuneration has been interpreted broadly to include anything of value, including stock options. The U.S. federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand 40 and prescribers, purchasers, and others on the other hand.
The term remuneration has been interpreted broadly to include anything of value, including stock options. The U.S. federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, and others on the other hand.
The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops when additional information or written or oral explanation 37 is to be provided by the applicant in response to questions of the CHMP.
The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP.
Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the application fee.
Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the 36 same drug or biologic for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the application fee.
The FDA will not approve the NDA or BLA without an approved 35 REMS, if required. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications.
The FDA will not approve the NDA or BLA without an approved REMS, if required. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications.
In both standard and priority reviews, the FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification.
In both standard and priority reviews, the FDA does not always meet its PDUFA goal dates, and the review process is 35 often significantly extended by FDA requests for additional information or clarification.
Treatment with twice weekly subcutaneous 10 mg/kg dosing of RKER-012 was observed to protect against both the PAB-related cardiac dysfunction and remodeling, which we believe demonstrates that KER-012 has the potential to have a cardioprotective effect that could potentially provide benefit in diseases such as PAH and other cardiovascular diseases in patients. 22 ESPVR, MPI, Fulton Index, RVFWT and Cardiac Fibrosis in a Mouse PAB Model *** P value Our Obesity and Neuromuscular Franchise KER-065 KER-065 is a novel ligand trap comprised of a modified ligand-binding domain derived from ActRIIA and ActRIIB that is fused to the portion of the human antibody known as the Fc domain.
Treatment with twice weekly subcutaneous 10 mg/kg dosing of RKER-012 was observed to protect against both the PAB-related cardiac dysfunction and remodeling, which we believe demonstrates that cibotercept has the potential to have a cardioprotective effect that could potentially provide benefit in diseases such as PAH and other cardiovascular diseases in patients. 10 ESPVR, MPI, Fulton Index, RVFWT and Cardiac Fibrosis in a Mouse PAB Model *** P value Our Neuromuscular Franchise KER-065 KER-065 is a novel ligand trap comprised of a modified ligand-binding domain derived from ActRIIA and ActRIIB that is fused to the portion of the human antibody known as the Fc domain.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the 40 initial MA of the reference product in the EU.
Any patents issuing from these applications will have expiration dates between January 11, 2039 and February 13, 2045, absent any patent term adjustments or extensions. KER-065 KER-065 is a ligand trap comprised of a modified ligand-binding domain derived from ActRIIA and ActRIIB that is designed to bind to different TGF-ß ligands that signal through a TGF-ß signaling pathway.
Any patents issuing from these applications will have expiration dates between January 11, 2039 and February 27, 2045, absent any patent term adjustments or extensions. KER-065 KER-065 is a ligand trap comprised of a modified ligand-binding domain derived from ActRIIA and ActRIIB that is designed to bind to different TGF-ß ligands that signal through a TGF-ß signaling pathway.
Hansoh’s obligation to pay royalties for a given licensed product in a given region in the Territory will begin on the date of the first commercial sale for such licensed product in such region and continue until the latest of (i) ten years from the date of the first commercial sale for such licensed product in such region, (ii) the expiration of the last valid claim of certain licensed 29 patents or joint patents, and (iii) expiration of regulatory exclusivity in such region.
Hansoh’s obligation to pay royalties for a given licensed product in a given region in the Hansoh Territory will begin on the date of the first commercial sale for such licensed product in such region and continue until the latest of (i) ten years from the date of the first commercial sale for such licensed product in such region, (ii) the expiration of the last valid claim of certain licensed patents or joint patents, and (iii) expiration of regulatory exclusivity in such region.
We plan to independently advance our product candidates in indications and regions that we believe have clearly defined regulatory paths and 2 commercialization strategies. We intend to opportunistically evaluate strategic collaborations to maximize the potential commercial value of our product candidates and discovery programs. ▪ Leverage our proprietary discovery approach and knowledge base to develop new therapeutics.
We plan to independently advance our product candidates in indications and regions that we believe have clearly defined regulatory paths and commercialization strategies. We intend to also opportunistically evaluate strategic collaborations to maximize the potential commercial value of our product candidates and discovery programs. ▪ Leverage our proprietary discovery approach and knowledge base to develop new therapeutics.
The SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov.
The SEC maintains an internet site 45 that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov.
Administration of RKER-050, a mouse version of KER-050, reversed the observed ruxolitinib-associated reductions in the red blood cell parameters, which we believe supports the potential of KER-050 to mitigate the dose-limiting effects of ruxolitinib and enhance the duration of therapy in myelofibrosis patients. We intend to develop KER-050 for the treatment of both MDS- and myelofibrosis-associated cytopenias.
Administration of RKER-050, a mouse version of elritercept, reversed the observed ruxolitinib-associated reductions in the red blood cell parameters, which we believe supports the potential of elritercept to mitigate the dose-limiting effects of ruxolitinib and enhance the duration of therapy in myelofibrosis patients. We intend to develop elritercept for the treatment of both MDS- and myelofibrosis-associated cytopenias.
Additionally, by promoting thrombopoiesis, we believe KER-050 has the potential to aid the differentiation of megakaryocytes to platelets in myelofibrosis patients and reactivate hematopoiesis in the bone marrow. We have demonstrated in preclinical studies that treatment with a single dose of RKER-050 resulted in rapid and sustained increases in platelets in healthy mice.
Additionally, by promoting thrombopoiesis, we believe elritercept has the potential to aid the differentiation of megakaryocytes to platelets in myelofibrosis patients and reactivate hematopoiesis in the bone marrow. We have demonstrated in preclinical studies that treatment with a single dose of RKER-050 resulted in rapid and sustained increases in platelets in healthy mice.
We have also observed an increase in erythropoietin in healthy mice in preclinical studies of RKER-050, which we believe could contribute to the durability in red blood cell production and is supportive of the durability of the red blood cell increase we observed in our Phase 1 clinical trial of KER-050 in healthy post-menopausal women. • Increased platelet counts in blood.
We have also observed an increase in erythropoietin in healthy mice in preclinical studies of RKER-050, which we believe could contribute to the durability in red blood cell production and is supportive of the durability of the red blood cell increase we observed in our Phase 1 clinical trial of elritercept in healthy post-menopausal women. • Increased platelet counts in blood.
The trial design is summarized in the figure below. Observed tolerability data KER-050 was well tolerated in this Phase 1 clinical trial at dose levels up to 4.5 mg/kg, the highest dose level tested, and multiple doses of 0.75 mg/kg. While one subject in the placebo group withdrew consent, there were no discontinuations due to treatment-related adverse events.
The trial design is summarized in the figure below. Observed tolerability data Elritercept was well tolerated in this Phase 1 clinical trial at dose levels up to 4.5 mg/kg, the highest dose level tested, and multiple doses of 0.75 mg/kg. While one subject in the placebo group withdrew consent, there were no discontinuations due to treatment-related adverse events.
An IND is a request for authorization from the FDA to administer an investigational new drug product 32 to humans.
An IND is a request for authorization from the FDA to administer an investigational new drug product to humans.
In this trial, similar reductions in spleen volume reduction were observed with both Ojjaara (31%) and ruxolitinib (33%). We believe KER-050 has the potential to not only ameliorate myelofibrosis-associated cytopenias, but also improve spleen volume and patient-reported outcomes, alone or in combination with approved products regardless of the underlying mechanism of action of such products, including JAK inhibitors and Ojjaara.
In this trial, similar reductions in spleen volume reduction were observed with both Ojjaara (31%) and ruxolitinib (33%). We believe elritercept has the potential to not only ameliorate myelofibrosis-associated cytopenias, but also improve spleen volume and patient-reported outcomes, alone or in combination with approved products regardless of the underlying mechanism of action of such products, including JAK inhibitors and Ojjaara.
We believe these data support the potential of KER-050 to alter the bone marrow microenvironment that is supportive of self-renewal and maintenance of normal hematopoietic stem cells and progenitor cells in patients with MDS and other hematological diseases, including myelofibrosis. ▪ Robust and sustained increase in red blood cells, hemoglobin and reticulocytes, supporting monthly or less frequent dosing.
We believe these data support the potential of elritercept to alter the bone marrow microenvironment that is supportive of self-renewal and maintenance of normal hematopoietic stem cells and progenitor cells in patients with MDS and other hematological diseases, including myelofibrosis. ▪ Robust and sustained increase in red blood cells, hemoglobin and reticulocytes, supporting monthly or less frequent dosing.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is unclear how any such challenges and additional healthcare reform measures of the Biden administration will impact the ACA and our business.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is unclear how any such challenges and additional healthcare reform measures of the second Trump administration will impact the ACA and our business.
We observed an increase in platelets 12 hours after administration of RKER-050, which we believe supports that KER-050 can potentially promote production of platelets by blocking inhibitory TGF-ß ligands so that megakaryocytes can fully differentiate.
We observed an increase in platelets 12 hours after administration of RKER-050, which we believe supports that elritercept can potentially promote production of platelets by blocking inhibitory TGF-ß ligands so that megakaryocytes can fully differentiate.
We believe KER-050 has the potential to provide benefit to patients suffering from red blood cell and platelet differentiation and maturation defects occurring across the spectrum from early through terminal stages of hematopoiesis, and consequently may be effective for many patients that have limited treatment options or are refractory to available therapies.
We believe elritercept has the potential to provide benefit to patients suffering from red blood cell and platelet differentiation and maturation defects occurring across the spectrum from early through terminal stages of hematopoiesis, and consequently may be effective for many patients that have limited treatment options or are refractory to available therapies.
KER-050 is designed to alter TGF-ß signaling pathways at multiple stages of hematopoietic differentiation in both red blood cells and platelets. Consequently, we believe KER-050 has the potential to provide therapeutic benefit in a broader subset of patients with MDS that have varying defects in commitment, differentiation and maturation of multiple cell types found in blood.
Elritercept is designed to alter TGF-ß signaling pathways at multiple stages of hematopoietic differentiation in both red blood cells and platelets. Consequently, we believe elritercept has the potential to provide therapeutic benefit in a broader subset of patients with MDS that have varying defects in commitment, differentiation and maturation of multiple cell types found in blood.
We also observed a dose-dependent increase in the proportion of subjects with hemoglobin increases of at least 1.5 g/dL. We believe a 1.5 g/dL increase would be considered clinically meaningful in patients with low red blood cell counts. In addition to the changes in erythroid parameters, robust, dose-dependent increases in platelet count were observed after a single dose of KER-050.
We also observed a dose-dependent increase in the proportion of subjects with hemoglobin increases of at least 1.5 g/dL. We believe a 1.5 g/dL increase would be considered clinically meaningful in patients with low red blood cell counts. In addition to the changes in erythroid parameters, robust, dose-dependent increases in platelet count were observed after a single dose of elritercept.
All subjects who received a 4.5 mg/kg dose of KER-050, the highest dose evaluated, demonstrated an increase of 30 x 10 9 cells/L or greater at any one point in the trial, which we believe would be considered clinically meaningful in patients with low platelet counts.
All subjects who received a 4.5 mg/kg dose of elritercept, the highest dose evaluated, demonstrated an increase of 30 x 10 9 cells/L or greater at any one point in the trial, which we believe would be considered clinically meaningful in patients with low platelet counts.
These ligands are key regulators of bone remodeling that act to suppress bone growth. BMP9 is a ligand capable of signaling through the ActRIIB and bone morphogenetic receptor II. Inhibition of BMP9 results in disruption of vascular remodeling, which can lead to the development of epistaxis and telangiectasias. KER-012 did not bind BMP9 or inhibit BMP9 signaling in preclinical studies.
These ligands are key regulators of bone remodeling that act to suppress bone growth. BMP9 is a ligand capable of signaling through the ActRIIB and bone morphogenetic receptor II. Inhibition of BMP9 results in disruption of vascular remodeling, which can lead to the development of epistaxis and telangiectasias. Cibotercept did not bind BMP9 or inhibit BMP9 signaling in preclinical studies.
(which was acquired by Swedish Orphan Biovitrum AB in June 2023) received FDA accelerated approval of its product, pacritinib (Vonjo), for the treatment of adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 × 109/L.
(which was acquired by Swedish Orphan Biovitrum AB in June 2023) received FDA accelerated approval of its product, pacritinib (Vonjo), for the treatment of adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 × 10 9 /L.
Based on these data, we believe KER-050 also has the potential to regenerate a healthy bone marrow and slow disease progression. Separately, in a preclinical study in wild type mice, treatment with ruxolitinib resulted in reductions in red blood cells, hemoglobin and hematocrit, recapitulating the anemia observed in myelofibrosis patients.
Based on these data, we believe elritercept also has the potential to regenerate a healthy bone marrow and slow disease progression. Separately, in a preclinical study in wild type mice, treatment with ruxolitinib resulted in reductions in red blood cells, hemoglobin and hematocrit, recapitulating the anemia observed in myelofibrosis patients.
By acting on cell types throughout the erythropoiesis pathway, KER-050 may lead to robust responses in RS positive patients who have a characteristic defect in terminal maturation, and may also address anemia in the broader MDS population, including non-RS patients, that has defects in earlier-stage erythroid cell development.
By acting on cell types throughout the erythropoiesis pathway, elritercept may lead to robust responses in RS positive patients who have a characteristic defect in terminal maturation, and may also address anemia in the broader MDS population, including non-RS patients, that has defects in earlier-stage erythroid cell development.
Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
Completed Phase 1 Clinical Trial In January 2020, we completed a randomized, double-blind, placebo-controlled, two-part, dose-escalation Phase 1 clinical trial of KER-050 in 48 healthy post-menopausal women. The primary objectives of this trial were safety, tolerability and pharmacokinetics. We also investigated changes in hematology and bone biomarkers in this clinical trial.
Completed Phase 1 Clinical Trial In January 2020, we completed a randomized, double-blind, placebo-controlled, two-part, dose-escalation Phase 1 clinical trial of elritercept in 48 healthy post-menopausal women. The primary objectives of this trial were safety, tolerability and pharmacokinetics. We also investigated changes in hematology and bone biomarkers in this clinical trial.
KER-012 is designed to normalize blood vessel thickness and heart function by binding to and inhibiting the signaling of select TGF-ß ligands, including activin A, activin B and myostatin (GDF8), that stimulate the proliferation of vascular endothelial and smooth muscle cells and fibroblasts, without a dose-limiting increase in red blood cells.
Cibotercept is designed to normalize blood vessel thickness and heart function by binding to and inhibiting the signaling of select TGF-ß ligands, including activin A, activin B and myostatin (GDF8), that stimulate the proliferation of vascular endothelial and smooth muscle cells and fibroblasts, without a dose-limiting increase in red blood cells.
Bone Mineral Density in Mice and Representative Microct Scans *** P value In a separate preclinical study, we observed that treatment with KER-012 increased the ratio of osteoblasts, which are bone forming cells, to osteoclasts, which are bone resorbing cells, which further supports that KER-012 acts via an anabolic effect on bone.
Bone Mineral Density in Mice and Representative Microct Scans *** P value In a separate preclinical study, we observed that treatment with cibotercept increased the ratio of osteoblasts, which are bone forming cells, to osteoclasts, which are bone resorbing cells, which further supports that cibotercept acts via an anabolic effect on bone.
Ongoing Phase 2 Clinical Trial in Patients with Myelofibrosis-Associated Cytopenias We are conducting an open label, two-part, multiple ascending dose Phase 2 clinical trial to evaluate KER-050 as a monotherapy and in combination with ruxolitinib in patients with myelofibrosis-associated cytopenias. The primary objective of this trial is to assess the safety and tolerability of KER-050 in patients with myelofibrosis-associated cytopenias.
Ongoing Phase 2 Clinical Trial in Patients with Myelofibrosis-Associated Cytopenias We are conducting an open label, two-part, multiple ascending dose Phase 2 clinical trial to evaluate elritercept as a monotherapy and in combination with ruxolitinib in patients with myelofibrosis-associated cytopenias. The primary objective of this trial is to assess the safety and tolerability of elritercept in patients with myelofibrosis-associated cytopenias.
We also believe that data from our preclinical studies and clinical trials support that treatment with KER-050 has the potential to address ineffective hematopoiesis in diseases where multiple cytopenias arise from the blockage in progression of progenitor cells to mature blood cells, such as in MDS and myelofibrosis.
We also believe that data from our preclinical studies and clinical trials support that treatment with elritercept has the potential to address ineffective hematopoiesis in diseases where multiple cytopenias arise from the blockage in progression of progenitor cells to mature blood cells, such as in MDS and myelofibrosis.
We believe that KER-012 has the potential to increase the signaling of bone morphogenic protein, or BMP, pathways through this inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling, including inactivating mutations in the BMP receptors.
We believe that cibotercept has the potential to increase the signaling of bone morphogenic protein, or BMP, pathways through this inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling, including inactivating mutations in the BMP receptors.
KER-050 is designed to bind to and inhibit the signaling of TGF-ß ligands involved in the regulation of hematopoiesis, including activin A, activin B and growth differentiation factor 11, that restrict blood cell progenitors from continuing through differentiation and developing into mature cells with specialized function.
Elritercept is designed to bind to and inhibit the signaling of TGF-ß ligands involved in the regulation of hematopoiesis, including activin A, activin B and growth differentiation factor 11, that restrict blood cell progenitors from continuing through differentiation and developing into mature cells with specialized function.
We believe treatment with KER-050 will stimulate these progenitors to progress to maturation, ameliorating the accumulation of these cells that lead to MDS- and myelofibrosis-associated cytopenias. • Regeneration of the bone marrow microenvironment to potentially slow disease progression. The bone marrow microenvironment is composed of bone cells, stromal cells, immune cells, blood vessels and nerves.
We believe treatment with elritercept will stimulate these progenitors to progress to maturation, ameliorating the accumulation of these cells that lead to MDS- and myelofibrosis-associated cytopenias. • Regeneration of the bone marrow microenvironment to potentially slow disease progression. The bone marrow microenvironment is composed of bone cells, stromal cells, immune cells, blood vessels and nerves.
No treatment-related serious adverse events were reported. The most common adverse events observed in subjects in this trial were nausea, gastroenteritis, injection site erythema and, consistent with the mechanism of action of KER-050, increased hemoglobin and hypertension. The reversible, mild hypertension events were observed in subjects with an approximately 3 g/dL increase in hemoglobin.
No treatment-related serious adverse events were reported. The most common adverse events observed in subjects in this trial were nausea, gastroenteritis, injection site erythema and, consistent with the mechanism of action of elritercept, increased hemoglobin and hypertension. The reversible, mild hypertension events were observed in subjects with an approximately 3 g/dL increase in hemoglobin.
Orphan Designation in the EU In the EU, Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition. 39 Regulation (EC) No 847/2000 sets out further provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product.
Orphan Designation in the EU In the EU, Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition.
KER-012 targeted ligands that signal through ActRIIA and ActRIIB in preclinical studies KER-012 is a modified ActRIIB ligand trap that contains sequences from both wild-type ActRIIB and wild-type ActRIIA. In preclinical studies, KER-012 bound to and inhibited multiple ligands that signal through these cell surface receptors, including activin A, activin B and growth differentiation factor 11.
Cibotercept targeted ligands that signal through ActRIIA and ActRIIB in preclinical studies Cibotercept is a modified ActRIIB ligand trap that contains sequences from both wild-type ActRIIB and wild-type ActRIIA. In preclinical studies, cibotercept bound to and inhibited multiple ligands that signal through these cell surface receptors, including activin A, activin B and growth differentiation factor 11.
We seek to address the limitations of current therapeutic approaches to treating diseases whose manifestations are linked to dysfunction of TGF-ß signaling pathways by: 1 ▪ leveraging our comprehensive insights into the TGF-ß signaling pathways to discover therapeutics to treat disorders that are linked to dysfunctional TGF-ß signaling; ▪ expanding our library of proprietary molecules that are engineered to induce desired biological effects, such as increased blood cell production, reduced body fat and increased muscle mass and strength; ▪ engineering proprietary molecules to selectively target specific proteins in the TGF-ß signaling pathways to provide therapeutic benefit while potentially minimizing safety risks; ▪ developing product candidates for the treatment of diseases where targeting the TGF-ß signaling pathways has clinical validation or biological rationale to improve our probability of success in the clinic; and ▪ targeting the TGF-ß family of proteins, which are highly conserved throughout evolution, permitting the use of animal models to potentially predict with high confidence the therapeutic benefit in patients.
We seek to address the limitations of current therapeutic approaches to treating diseases whose manifestations are linked to dysfunction of TGF-ß signaling pathways by: ▪ leveraging our comprehensive insights into the TGF-ß signaling pathways to discover therapeutics to treat disorders that are linked to dysfunctional TGF-ß signaling; 1 ▪ expanding our library of proprietary molecules that are engineered to induce desired biological effects, such as increased muscle mass and strength, improved muscle quality and reduced intramuscular fat, improved bone mineral density and modulated blood cell production; ▪ engineering proprietary molecules to selectively target specific proteins in the TGF-ß signaling pathways to provide therapeutic benefit while potentially minimizing safety risks; ▪ developing product candidates for the treatment of diseases where targeting the TGF-ß signaling pathways has clinical validation or biological rationale to improve our probability of success in the clinic; and ▪ targeting the TGF-ß family of proteins, which are highly conserved throughout evolution, permitting the use of animal models to potentially predict with high confidence the therapeutic benefit in patients.
ESAs can require dosing up to three times a week. We believe that treatment with KER-050 has the potential to reduce the frequency of dosing to every four weeks or less frequently, thereby decreasing the burden on patients and potentially improving compliance.
ESAs can require dosing up to three times a week. We believe that treatment with elritercept has the potential to reduce the frequency of dosing to every four weeks or less frequently, thereby decreasing the burden on patients and potentially improving compliance.
Increases in reticulocytes were observed as early as Day 2 and reached a peak 12 around Day 15. Increases in hemoglobin concentration were also observed as early as Day 2, reached a peak around Day 29 and remained elevated for several weeks.
Increases in reticulocytes were observed as early as Day 2 and reached a peak 26 around Day 15. Increases in hemoglobin concentration were also observed as early as Day 2, reached a peak around Day 29 and remained elevated for several weeks.
We also observed an increase in bone-specific alkaline phosphatase, a biomarker of bone remodeling, which we believe demonstrates that KER-050 has the potential to increase bone mass. We believe that the findings from this Phase 1 clinical trial demonstrate the translation of biological action from rodents to humans.
We also observed an increase in bone-specific alkaline phosphatase, a biomarker of bone remodeling, which we believe demonstrates that elritercept has the potential to increase bone mass. We believe that the findings from this Phase 1 clinical trial demonstrate the translation of biological action from rodents to humans.
In Part 2 of this trial, one subject discontinued after receiving two doses of placebo due to a serious adverse event unrelated to treatment and another subject withdrew consent after receiving two 1.5 mg/kg doses of KER-012. None of the discontinuations in this trial were due to treatment-related adverse events.
In Part 2 of this trial, one subject discontinued after receiving two doses of placebo due to a serious adverse event unrelated to treatment and another subject withdrew consent after receiving two 1.5 mg/kg doses of cibotercept. None of the discontinuations in this trial were due to treatment-related adverse events.
The primary objective of Part 2 of this trial is confirmation of the safety and tolerability of the selected dose levels. The secondary objectives of this trial are to evaluate the pharmacokinetics, pharmacodynamics and efficacy of KER-050 administered with or without ruxolitinib. The trial design is summarized in the figure below.
The primary objective of Part 2 of this trial is confirmation of the safety and tolerability of the selected dose levels. The secondary objectives of this trial are to evaluate the pharmacokinetics, pharmacodynamics and efficacy of elritercept administered with or without ruxolitinib. The trial design is summarized in the figure below.
In Part 2 of this trial, only one dose level was evaluated, as it was deemed to provide the necessary data, in addition to that from Part 1 of the trial, to inform the design of the Phase 2 clinical trials of KER-050 in patients with MDS and in patients with myelofibrosis.
In Part 2 of this trial, only one dose level was evaluated, as it was deemed to provide the necessary data, in addition to that from Part 1 of the trial, to inform the design of the Phase 2 clinical trials of elritercept in patients with MDS and in patients with myelofibrosis.
We believe that KER-012 has the potential to increase the signaling of BMP pathways through this inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.
We believe that cibotercept has the potential to increase the signaling of BMP pathways through this inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.
In Part 1 of this trial, 30 subjects received a single dose of KER-050 and eight subjects received a single dose of placebo, each administered subcutaneously with a 12-week safety follow-up. The subjects were enrolled in sequential single-ascending dose escalation cohorts of up to ten subjects each.
In Part 1 of this trial, 30 subjects received a single dose of elritercept and eight subjects received a single dose of placebo, each administered subcutaneously with a 12-week safety follow-up. The subjects were enrolled in sequential single-ascending dose escalation cohorts of up to ten subjects each.
We believe that KER-012 has the potential to increase the signaling of BMP pathways through the inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.
We believe that cibotercept has the potential to increase the signaling of BMP pathways through the inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.
Under the terms of the license agreement with Hansoh, or the Hansoh Agreement, we granted to Hansoh the exclusive right to develop, manufacture and commercialize KER-050 and licensed products containing KER-050 within the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Territory.
Under the terms of the license agreement with Hansoh, or the Hansoh Agreement, we granted to Hansoh the exclusive right to develop, manufacture and commercialize elritercept and licensed products containing elritercept within the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Hansoh Territory.
We own 13 pending U.S. patent applications and 20 pending ex-U.S. applications that contain claims or supporting disclosure directed to ligand traps comprised of a modified ligand-binding domain derived from ActRIIA and ActRIIB and use thereof to treat muscle disease, bone disease, anemia, fibrosis, pulmonary hypertension, metabolic disease, thrombocytopenia, and neutropenia, among others.
We own 15 pending U.S. patent applications and 27 pending ex-U.S. applications that contain claims or supporting disclosure directed to ligand traps comprised of a modified ligand-binding domain derived from ActRIIA and ActRIIB and use thereof to treat muscle disease, bone disease, anemia, fibrosis, pulmonary hypertension, metabolic disease, thrombocytopenia, and neutropenia, among others.
Long half-life observed, potentially supporting monthly or less frequent dosing We observed that KER-050 drug levels were dose proportional in Part 1 of this trial, with a mean half-life of approximately ten to 12 days.
Long half-life observed, potentially supporting monthly or less frequent dosing We observed that elritercept drug levels were dose proportional in Part 1 of this trial, with a mean half-life of approximately ten to 12 days.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions began to take effect progressively in fiscal year 2023, although they may be subject to legal challenges.
Following completion of Part 1, eligible patients were given the opportunity to escalate up to the RP2D and receive long-term treatment with KER-050 for up to an additional 20 cycles, which we refer to as the Part 1 Extension.
Following completion of Part 1, eligible patients were given the opportunity to escalate up to the RP2D and receive long-term treatment with elritercept for up to an additional 20 cycles, which we refer to as the Part 1 Extension.
We also observed in preclinical studies conducted in mice with established osteoporosis that twice weekly intraperitoneal 20 mg/kg dosing of KER-012 increased bone mass compared to vehicle-treated mice 46 days post-treatment.
We also observed in preclinical studies conducted in mice with established osteoporosis that twice weekly intraperitoneal 20 mg/kg dosing of cibotercept increased bone mass compared to vehicle-treated mice 46 days post-treatment.
In connection with the Hansoh Agreement, Hansoh will purchase clinical trial supply of KER-050 from us, and the parties will also negotiate in good faith to enter into an agreement for commercial supply prior to any anticipated commercialization in the Territory.
In connection with the Hansoh Agreement, Hansoh will purchase clinical trial supply of elritercept from us, and the parties will also negotiate in good faith to enter into an agreement for commercial supply prior to any anticipated commercialization in the Hansoh Territory.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe anticipate that our expenses will increase substantially if, and as, we: ▪ progress and complete our two ongoing Phase 2 clinical trials of KER-050, one evaluating the treatment of cytopenias, including anemia and thrombocytopenia, in patients with myelodysplastic syndrome, or MDS, and one evaluating the treatment of cytopenias, including anemia and thrombocytopenia, in patients with myelofibrosis; ▪ progress and complete our two ongoing Phase 2 clinical trials of KER-012, one in patients with pulmonary arterial hypertension, or PAH, and one in patients with chronic heart failure with preserved ejection fraction and in such patients with reduced ejection fraction; ▪ progress and complete our ongoing Phase 1 clinical trial of KER-065 in healthy volunteers; ▪ continue the research and development of our other clinical- and preclinical-stage product candidates and discovery-stage programs; ▪ increase the amount of research and development activities to identify and develop product candidates using our proprietary discovery approach; ▪ make milestone, royalty or other payments under in-license or collaboration agreements; ▪ maintain, expand and protect our intellectual property portfolio; ▪ expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company; ▪ establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with third parties; ▪ invest in or in-license other technologies; and ▪ experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, manufacturing challenges, safety issues or other regulatory challenges.
Biggest changeWe anticipate that our expenses will increase substantially if, and as, we: ▪ progress and complete our ongoing Phase 2 clinical trial of cibotercept in patients with pulmonary arterial hypertension, or PAH; ▪ progress and complete our ongoing Phase 1 clinical trial of KER-065 in healthy volunteers; ▪ commence a Phase 3 clinical trial of elritercept in patients with lower-risk myelodysplastic syndrome, or MDS; ▪ continue the research and development of our other clinical- and preclinical-stage product candidates and discovery-stage programs; ▪ increase the amount of research and development activities to identify and develop product candidates using our proprietary discovery approach; ▪ make milestone, royalty or other payments under in-license or collaboration agreements; ▪ maintain, expand and protect our intellectual property portfolio; ▪ expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company; ▪ establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any products for which we may obtain marketing approval and intend to commercialize on our own or jointly with third parties; ▪ invest in or in-license other technologies; and ▪ experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, manufacturing challenges, safety issues or other regulatory challenges.
Risks Related to Our Employee Matters, Managing Our Growth and Other Risks Relating to Our Operations We are highly dependent on our key personnel, including our Chief Executive Officer, Chief Medical Officer and Chief Operating Officer. If we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
Risks Related to Our Employee Matters, Managing Our Growth and Other Risks Relating to Our Operations We are highly dependent on our key personnel, including our Chief Executive Officer, Chief Operating Officer and Chief Medical Officer. If we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
As applicable, such rights include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
Any future collaborations we enter into may pose a number of risks, including, but not limited to, the following: ▪ collaborators have significant discretion in determining the efforts and resources that they will apply; ▪ collaborators may not perform their obligations as expected; ▪ collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs or license arrangements based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities; ▪ collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ▪ collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products, if approved, and product candidates if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ▪ product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; ▪ collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; ▪ collaborators with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; ▪ disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; ▪ collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; ▪ collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; 77 ▪ if a collaborator of ours is involved in a business combination, the collaborator might de-emphasize or terminate the development or commercialization of any product candidate licensed to it by us; and ▪ collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Any future collaborations we enter into may pose a number of risks, including, but not limited to, the following: ▪ collaborators have significant discretion in determining the efforts and resources that they will apply; ▪ collaborators may not perform their obligations as expected; ▪ collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs or license arrangements based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities; ▪ collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ▪ collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products, if approved, and product candidates if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ▪ product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; ▪ collaborators may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; ▪ collaborators with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; ▪ disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; ▪ collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; ▪ collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; ▪ if a collaborator of ours is involved in a business combination, the collaborator might de-emphasize or terminate the development or commercialization of any product candidate licensed to it by us; and ▪ collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
For example: ▪ others may be able to make or use compounds or cells that are similar to the biological compositions of our product candidates but that are not covered by the claims of our patents; ▪ the active biological ingredients in our current product candidates will eventually become commercially available in biosimilar drug products, and no patent protection may be available with regard to formulation or method of use; ▪ we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss of patent rights; ▪ we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; ▪ others may independently develop similar or alternative technologies or duplicate any of our technologies; ▪ it is possible that our pending patent applications will not result in issued patents; ▪ it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; ▪ it is possible that others may circumvent our owned or in-licensed patents; ▪ it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products, if any, or technology similar to ours; ▪ the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; ▪ the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; ▪ our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or be held invalid or unenforceable as a result of legal challenges by third parties; ▪ the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors; ▪ it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; ▪ we have engaged in scientific collaborations in the past, and will continue to do so in the future.
For example: ▪ others may be able to make or use compounds or cells that are similar to the biological compositions of our product candidates but that are not covered by the claims of our patents; ▪ the active biological ingredients in our current product candidates will eventually become commercially available in biosimilar drug products, and no patent protection may be available with regard to formulation or method of use; ▪ we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss of patent rights; ▪ we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; ▪ others may independently develop similar or alternative technologies or duplicate any of our technologies; ▪ it is possible that our pending patent applications will not result in issued patents; ▪ it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; 68 ▪ it is possible that others may circumvent our owned or in-licensed patents; ▪ it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products, if any, or technology similar to ours; ▪ the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; ▪ the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; ▪ our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or be held invalid or unenforceable as a result of legal challenges by third parties; ▪ the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors; ▪ it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; ▪ we have engaged in scientific collaborations in the past, and will continue to do so in the future.
In addition, if any of our product candidates receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by such products, a number of potentially significant negative consequences could result, including: ▪ regulatory authorities may withdraw approvals of such product and require us to take our approved product off the market; 51 ▪ regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies; ▪ regulatory authorities may require a medication guide outlining the risks of such side effects for distribution to patients, or that we implement a risk evaluation and mitigation strategy, or REMS, plan to ensure that the benefits of the product outweigh its risks; ▪ we may be required to conduct additional clinical trials, which may lead to additional interactions with regulatory authorities; ▪ we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product; ▪ we may be subject to limitations on how we may promote the product; ▪ sales of the product may decrease significantly; ▪ we may be subject to litigation or product liability claims; and ▪ our reputation may suffer.
In addition, if any of our product candidates receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by such products, a number of potentially significant negative consequences could result, including: ▪ regulatory authorities may withdraw approvals of such product and require us to take our approved product off the market; ▪ regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies; ▪ regulatory authorities may require a medication guide outlining the risks of such side effects for distribution to patients, or that we implement a risk evaluation and mitigation strategy, or REMS, plan to ensure that the benefits of the product outweigh its risks; ▪ we may be required to conduct additional clinical trials, which may lead to additional interactions with regulatory authorities; ▪ we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product; ▪ we may be subject to limitations on how we may promote the product; ▪ sales of the product may decrease significantly; ▪ we may be subject to litigation or product liability claims; and ▪ our reputation may suffer.
Patient enrollment and trial completion is affected by many factors, including the: ▪ size and nature of the patient population and process for identifying patients; ▪ proximity and availability of clinical trial sites for prospective patients; ▪ ability of patients to travel to clinical trial sites; ▪ eligibility and exclusion criteria for the trial; ▪ design of the clinical trial; ▪ safety profile, to date, of the product candidate under study; ▪ perceived risks and benefits of the product candidate under study; ▪ perceived risks and benefits of our approach; ▪ approval of competing product candidates currently under investigation for the treatment of similar diseases or conditions, or competing clinical trials for similar product candidates or targeting patient populations meeting our patient eligibility criteria; ▪ severity of the disease under investigation; ▪ degree of progression of the patient’s disease at the time of enrollment and throughout the clinical trial; ▪ ability to obtain and maintain patient consent; ▪ risk that enrolled patients will drop out before completion of the trial; ▪ patient referral practices of physicians; and ▪ ability to adequately monitor patients during and after treatment.
Patient enrollment and trial completion is affected by many factors, including the: ▪ size and nature of the patient population and process for identifying patients; 53 ▪ proximity and availability of clinical trial sites for prospective patients; ▪ ability of patients to travel to clinical trial sites; ▪ eligibility and exclusion criteria for the trial; ▪ design of the clinical trial; ▪ safety profile, to date, of the product candidate under study; ▪ perceived risks and benefits of the product candidate under study; ▪ perceived risks and benefits of our approach; ▪ approval of competing product candidates currently under investigation for the treatment of similar diseases or conditions, or competing clinical trials for similar product candidates or targeting patient populations meeting our patient eligibility criteria; ▪ severity of the disease under investigation; ▪ degree of progression of the patient’s disease at the time of enrollment and throughout the clinical trial; ▪ ability to obtain and maintain patient consent; ▪ risk that enrolled patients will drop out before completion of the trial; ▪ patient referral practices of physicians; and ▪ ability to adequately monitor patients during and after treatment.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; 63 ▪ the U.S. federal civil and criminal false claims laws, including the civil False Claims Act, which can be enforced by private individuals on behalf of the government through civil whistleblower or qui tam actions, and civil monetary penalties laws prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ▪ the U.S. federal civil and criminal false claims laws, including the civil False Claims Act, which can be enforced by private individuals on behalf of the government through civil whistleblower or qui tam actions, and civil monetary penalties laws prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the U.S. federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. federal government.
Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including: ▪ the scope of rights granted under the license agreement and other interpretation-related issues; whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; 67 ▪ our right to sublicense patent and other rights to third parties under collaborative development relationships; ▪ our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; and ▪ the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including: ▪ the scope of rights granted under the license agreement and other interpretation-related issues; whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ▪ our right to sublicense patent and other rights to third parties under collaborative development relationships; ▪ our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; and ▪ the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Food and Drug Administration, or the FDA, or any comparable foreign regulatory authority agree with the design, endpoints or implementation; ▪ sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; ▪ receiving regulatory approvals or authorizations for conducting our planned clinical trials or future clinical trials; ▪ commencement of and successful patient enrollment in, and completion of, additional clinical trials on a timely basis; ▪ our ability to demonstrate to the satisfaction of the FDA or any comparable foreign regulatory authority that the applicable product candidate is safe and effective as a treatment for our targeted indications or, in the case of an applicable product candidate which is regulated as a biological product, that the applicable product candidate is safe, pure, and potent for our targeted indications; ▪ our ability to demonstrate to the satisfaction of the FDA or any comparable foreign regulatory authority that the applicable product candidate’s risk-benefit ratio for its proposed indication is acceptable; ▪ timely receipt of marketing approvals for our product candidates from applicable regulatory authorities; ▪ the extent of any required post-marketing approval commitments to applicable regulatory authorities; ▪ establishing and scaling up, either alone or with third-party manufacturers, manufacturing capabilities of clinical supply for our clinical trials and commercial manufacturing, if any of our product candidates are approved; ▪ obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates, both in the United States and internationally; ▪ successfully scaling a sales and marketing organization and launching commercial sales of our product candidates, if approved; 48 ▪ acceptance of our product candidates’ benefits and uses, if approved, by patients, the medical community and third-party payors; ▪ maintaining a continued acceptable safety profile of our product candidates following approval; ▪ effectively competing with companies developing and commercializing other therapies in the indications which our product candidates target; ▪ obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; and ▪ enforcing and defending intellectual property rights and claims.
Food and Drug Administration, or the FDA, or any comparable foreign regulatory authority agree with the design, endpoints or implementation; ▪ sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; ▪ receiving regulatory approvals or authorizations for conducting our planned clinical trials or future clinical trials; 49 ▪ commencement of and successful patient enrollment in, and completion of, additional clinical trials on a timely basis; ▪ our ability to demonstrate to the satisfaction of the FDA or any comparable foreign regulatory authority that the applicable product candidate is safe and effective as a treatment for our targeted indications or, in the case of an applicable product candidate which is regulated as a biological product, that the applicable product candidate is safe, pure, and potent for our targeted indications; ▪ our ability to demonstrate to the satisfaction of the FDA or any comparable foreign regulatory authority that the applicable product candidate’s risk-benefit ratio for its proposed indication is acceptable; ▪ timely receipt of marketing approvals for our product candidates from applicable regulatory authorities; ▪ the extent of any required post-marketing approval commitments to applicable regulatory authorities; ▪ establishing and scaling up, either alone or with third-party manufacturers, manufacturing capabilities of clinical supply for our clinical trials and commercial manufacturing, if any of our product candidates are approved; ▪ obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates, both in the United States and internationally; ▪ successfully scaling a sales and marketing organization and launching commercial sales of our product candidates, if approved; ▪ acceptance of our product candidates’ benefits and uses, if approved, by patients, the medical community and third-party payors; ▪ maintaining a continued acceptable safety profile of our product candidates following approval; ▪ effectively competing with companies developing and commercializing other therapies in the indications which our product candidates target; ▪ obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; and ▪ enforcing and defending intellectual property rights and claims.
A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the 49 imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Disruptions at the FDA, the SEC and other government agencies or comparable regulatory authorities caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, otherwise prevent new products and services from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Disruptions at the FDA, the SEC and other government agencies or comparable regulatory authorities caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, otherwise prevent new products and services from being developed, approved or commercialized in a 64 timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
In each case, these consequences may include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class action claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
In each case, these consequences may include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; 82 restrictions on processing sensitive information (including personal data); litigation (including class action claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program, or comparable foreign program.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of 56 post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program, or comparable foreign program.
If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, constructs or molecules used in or formed during the manufacturing process, or any final product itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a 69 license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable.
If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, constructs or molecules used in or formed during the manufacturing process, or any final product itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable.
Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly as they develop novel approaches to treating disease indications that our product candidates are also focused on treating.
Many of our competitors have substantially greater financial, technical and other 60 resources, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces. Smaller or early-stage companies may also prove to be significant competitors, particularly as they develop novel approaches to treating disease indications that our product candidates are also focused on treating.
Reliance on third-party providers may expose us to more risk than if we were to manufacture our product candidates ourselves. We are dependent on our CMOs for the production of our product candidates in accordance with relevant regulations, such as cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation.
Reliance on third-party providers may expose us to more risk than if we were to manufacture our product candidates ourselves. We are dependent on our CMOs for the production of our product candidates in accordance with relevant regulations, such as cGMP, which includes, among other things, quality control, quality assurance and the maintenance of 77 records and documentation.
Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.
Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.
If a court were to find the exclusive-forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business. 91 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If a court were to find the exclusive-forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
The Health Technology Assessment, or HTA, of medicinal products is becoming an increasingly common part of the pricing 62 and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
The Health Technology Assessment, or HTA, of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
Our independent registered public accounting firm is also required, pursuant to Section 404 of the Sarbanes-Oxley Act, to report on the effectiveness of our internal control over financial reporting, beginning with our fiscal year ended December 31, 2023. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
Our 91 independent registered public accounting firm is also required, pursuant to Section 404 of the Sarbanes-Oxley Act, to report on the effectiveness of our internal control over financial reporting, beginning with our fiscal year ended December 31, 2023. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Such mechanisms include re-examination, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment 73 to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
The failure of our manufacturers to comply with regulatory requirements could also result in an enforcement action against us, including the seizure of products and shutting down of production. If any of our third-party suppliers fails to comply with cGMP 76 or other applicable manufacturing regulations, our ability to develop and commercialize the products could suffer significant interruptions.
The failure of our manufacturers to comply with regulatory requirements could also result in an enforcement action against us, including the seizure of products and shutting down of production. If any of our third-party suppliers fails to comply with cGMP or other applicable manufacturing regulations, our ability to develop and commercialize the products could suffer significant interruptions.
These claims might be made by patients who use the product, healthcare providers, pharmaceutical companies, our collaborators or others selling such products. Any claims against us, regardless of their merit, could be difficult and costly to defend and could materially adversely affect the market for our product candidates or any prospects for commercialization of our product candidates.
These claims might be made by patients who use the product, healthcare providers, pharmaceutical companies, our collaborators or others selling such 58 products. Any claims against us, regardless of their merit, could be difficult and costly to defend and could materially adversely affect the market for our product candidates or any prospects for commercialization of our product candidates.
CMS decides whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party payors often follow CMS’s decisions regarding coverage and reimbursement to a substantial degree. However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate.
CMS 66 decides whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party payors often follow CMS’s decisions regarding coverage and reimbursement to a substantial degree. However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate.
In addition, we take other appropriate precautions, such 68 as physical and technological security measures, to guard against misappropriation of our proprietary technology by third parties. We have also adopted policies and conduct training that provides guidance on our expectations, and our advice for best practices, in protecting our trade secrets.
In addition, we take other appropriate precautions, such as physical and technological security measures, to guard against misappropriation of our proprietary technology by third parties. We have also adopted policies and conduct training that provides guidance on our expectations, and our advice for best practices, in protecting our trade secrets.
If we, our investigators or any of our CROs or contracted laboratories fail to comply with applicable GLPs and GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical studies or clinical trials before approving our marketing applications.
If we, our investigators or any of our CROs or contracted laboratories fail to comply with applicable GLPs and GCPs, the clinical data generated in our clinical 76 trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical studies or clinical trials before approving our marketing applications.
Laws such as these give rise to an increasingly complex set of compliance obligations on us. These data protection rules continue to evolve and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and 82 sanctions and increased costs of compliance. We strive to comply with these rules and obligations to the extent possible.
Laws such as these give rise to an increasingly complex set of compliance obligations on us. These data protection rules continue to evolve and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions and increased costs of compliance. We strive to comply with these rules and obligations to the extent possible.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal or comparable foreign healthcare programs, additional reporting 83 requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business, financial condition and results of operations.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal or comparable foreign healthcare programs, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve 85 allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business, financial condition and results of operations.
Moreover, the extent to which a biosimilar, once licensed, will be substituted for any one of our reference products in a way that is similar to traditional generic 56 substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
Moreover, the extent to which a biosimilar, once licensed, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.
For example, in November 2023, we announced the 57 deprioritization of our small molecule product candidate, KER-047, a potent and selective inhibitor of activin receptor-like kinase-2, a TGF-ß superfamily receptor, including our decision to pause all development activities associated with this asset.
For example, in November 2023, we announced the deprioritization of our small molecule product candidate, KER-047, a potent and selective inhibitor of activin receptor-like kinase-2, a TGF-ß superfamily receptor, including our decision to pause all development activities associated with this asset.
In the past few years, numerous U.S. states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
In the past few years, numerous U.S. states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures 83 in privacy notices and affording residents with certain rights concerning their personal data.
These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests.
These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have 92 the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests.
In order to further advance development of our product candidates, discover additional product candidates and pursue our other business objectives, we will need to seek additional funds. 47 We cannot guarantee that future financing will be available in sufficient amounts or on commercially reasonable terms, if at all.
In order to further advance development of our product candidates, discover additional product candidates and pursue our other business objectives, we will need to seek additional funds. We cannot guarantee that future financing will be available in sufficient amounts or on commercially reasonable terms, if at all.
These diagnostic test or tests may be covered by intellectual property rights held by others. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights 70 from third parties that we identify as necessary or important to our business operations.
These diagnostic test or tests may be covered by intellectual property rights held by others. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary or important to our business operations.
In addition, we may obtain health information from third parties, including research institutions from which we obtain clinical trial data, that are subject to privacy and security requirements under HIPAA, as amended by HITECH, which imposes specific requirements relating to the privacy, security, and transmission of individually identifiable protected health information.
In addition, we obtain health information from third parties, including research institutions from which we obtain clinical trial data, that are subject to privacy and security requirements under HIPAA, as amended by HITECH, which imposes specific requirements relating to the privacy, security, and transmission of individually identifiable protected health information.
Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands. Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security.
Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands. Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security.
Consequently, we have no meaningful operations upon which to evaluate our business and predictions about our 45 future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing drug products.
Consequently, we have no meaningful operations upon which to evaluate our business and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing drug products.
Our future capital requirements for KER-050, KER-012, KER-065 or our other preclinical programs will depend on many factors, including: ▪ the progress, timing and completion of preclinical studies and clinical trials for our current or any future product candidates, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to public health crises or other causes; ▪ the timing and amount of milestone and royalty payments we are required to make or are eligible to receive under our license agreements with each of The General Hospital Corporation and Hansoh (Shanghai) Healthtech Co., Ltd., or Hansoh; ▪ the number of potential new product candidates we identify and decide to develop; ▪ the need for additional or expanded preclinical studies and clinical trials beyond those that we plan to conduct with respect to our current and future product candidates; ▪ the costs involved in growing our organization to the size needed to allow for the research, development and potential commercialization of our current or any future product candidates; ▪ the costs involved in filing patent applications, maintaining and enforcing patents or defending against infringement or other claims raised by third parties; ▪ the maintenance of our existing license and collaboration agreements and the entry into new license and collaboration agreements; ▪ the time and costs involved in obtaining regulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of our product candidates; ▪ the effect of competing technological and market developments; ▪ the cost of manufacturing KER-050, KER-012, KER-065 and future product candidates for clinical trials in preparation for marketing approval applications and in preparation for commercialization; ▪ the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products, if approved, on our own; ▪ the amount of revenues, if any, we may derive either directly or in the form of royalty payments from future sales of our product candidates, if approved; and ▪ market acceptance of any approved product candidates.
Our future capital requirements for cibotercept, KER-065, elritercept or our other preclinical programs will depend on many factors, including: ▪ the progress, timing and completion of preclinical studies and clinical trials for our current or any future product candidates, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to public health crises or other causes; ▪ the timing and amount of milestone and royalty payments we are required to make or are eligible to receive under our license agreements with each of The General Hospital Corporation and Hansoh (Shanghai) Healthtech Co., Ltd., or Hansoh; ▪ the number of potential new product candidates we identify and decide to develop; ▪ the need for additional or expanded preclinical studies and clinical trials beyond those that we plan to conduct with respect to our current and future product candidates; ▪ the costs involved in growing our organization to the size needed to allow for the research, development and potential commercialization of our current or any future product candidates; ▪ the costs involved in filing patent applications, maintaining and enforcing patents or defending against infringement or other claims raised by third parties; ▪ the maintenance of our existing license and collaboration agreements and the entry into new license and collaboration agreements; ▪ the time and costs involved in obtaining regulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of our product candidates; ▪ the effect of competing technological and market developments; ▪ the cost of manufacturing cibotercept, KER-065, elritercept and future product candidates for clinical trials in preparation for marketing approval applications and in preparation for commercialization; ▪ the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products, if approved, on our own; ▪ the amount of revenues, if any, we may derive either directly or in the form of royalty payments from future sales of our product candidates, if approved; and ▪ market acceptance of any approved product candidates.
As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. 75 Switching or adding additional laboratories or CROs (or investigators) involves additional cost and requires management time and focus.
As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. Switching or adding additional laboratories or CROs (or investigators) involves additional cost and requires management time and focus.
The market price for our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors listed below and other factors described in this “Risk Factors” section: ▪ results of preclinical studies and clinical trials of KER-050, KER-012, KER-065 and any other product candidate we may develop or those of our competitors; ▪ actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ▪ commencement or termination of collaboration, licensing or similar arrangements for our development programs; ▪ announcements by our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; ▪ failure or discontinuation of any of our development programs; ▪ results of clinical trials of product candidates of our competitors; ▪ regulatory or legal developments in the United States and other countries; ▪ developments or disputes concerning patent applications, issued patents or other proprietary rights; ▪ the recruitment or departure of key personnel; ▪ the level of expenses related to the development of KER-050, KER-012, KER-065 and any other product candidate we may develop; ▪ variations in our financial results or those of companies that are perceived to be similar to us; ▪ announcements or expectations of additional financing efforts by us; ▪ sales of our common stock by us, our insiders or other stockholders; ▪ recommendations and changes in estimates or recommendations by securities analysts, if any, that cover our stock; ▪ changes in the structure of healthcare payment systems; ▪ market conditions in the pharmaceutical and biotechnology sectors; ▪ general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad, such as potential future disruptions in access to bank deposits or lending commitments due to bank failures; and ▪ investors’ general perception of us and our business.
The market price for our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors listed below and other factors described in this “Risk Factors” section: ▪ results of preclinical studies and clinical trials of cibotercept, KER-065, elritercept and any other product candidate we may develop or those of our competitors; ▪ actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ▪ commencement or termination of collaboration, licensing or similar arrangements for our development programs; ▪ announcements by our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; ▪ failure or discontinuation of any of our development programs; ▪ results of clinical trials of product candidates of our competitors; ▪ regulatory or legal developments in the United States and other countries; ▪ developments or disputes concerning patent applications, issued patents or other proprietary rights; ▪ the recruitment or departure of key personnel; ▪ the level of expenses related to the development of cibotercept, KER-065, elritercept and any other product candidate we may develop; ▪ variations in our financial results or those of companies that are perceived to be similar to us; ▪ announcements or expectations of additional financing efforts by us; ▪ sales of our common stock by us, our insiders or other stockholders; ▪ recommendations and changes in estimates or recommendations by securities analysts, if any, that cover our stock; ▪ changes in the structure of healthcare payment systems; ▪ market conditions in the pharmaceutical and biotechnology sectors; ▪ general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad, such as potential future disruptions in access to bank deposits or lending commitments due to bank failures; and ▪ investors’ general perception of us and our business.
If competitors are able to obtain marketing approval for biosimilars referencing our products, if approved, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. The EU provides opportunities for data and market exclusivity related to marketing authorizations.
If competitors are able to obtain marketing approval for biosimilars referencing our products, if approved, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. The EU also provides opportunities for data and market exclusivity related to marketing authorizations.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. These provisions take effect progressively starting in fiscal year 2023.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will 63 continue to issue and update guidance as these programs are implemented. These provisions take effect progressively starting in fiscal year 2023.
Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from or license to third parties and are reliant on our licensors or licensees.
Moreover, in some circumstances, we may 67 not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from or license to third parties and are reliant on our licensors or licensees.
Additionally, adverse developments in clinical trials of pharmaceutical and biopharmaceutical products conducted by others may cause the FDA or other regulatory oversight bodies to suspend or terminate our clinical trials or to change the requirements for approval of any of our product candidates.
Additionally, adverse developments in clinical trials of pharmaceutical and biopharmaceutical products conducted by others may cause the FDA or other foreign regulatory oversight bodies to suspend or terminate our clinical trials or to change the requirements for approval of any of our product candidates.
Supreme Court held that certain claims to DNA molecules are not patentable. We cannot predict how these decisions or any future 72 decisions by the courts, the U.S. Congress or the USPTO may impact the value of our patents.
Supreme Court held that certain claims to DNA molecules are not patentable. We cannot predict how these decisions or any future decisions by the courts, the U.S. Congress or the USPTO may impact the value of our patents.
In September 2023, GSK plc announced that the FDA approved its product, Ojjaara, for the treatment of intermediate or high-risk myelofibrosis, including primary myelofibrosis or secondary myelofibrosis (post-polycythaemia vera and post-essential thrombocythaemia), in adults with anemia.
In September 2023, GSK plc announced that the FDA approved its product, Ojjaara, for the treatment of intermediate or high- 61 risk myelofibrosis, including primary myelofibrosis or secondary myelofibrosis (post-polycythaemia vera and post-essential thrombocythaemia), in adults with anemia.
In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current 90 management by making it more difficult for stockholders to replace members of our board of directors.
In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
We may experience delays in completing, or ultimately be unable to complete, the development and commercialization of KER-050, KER-012, KER-065 or any future product candidates. • If we are unable to successfully commercialize any product candidate for which we receive regulatory approval, or experience significant delays in doing so, our business will be materially harmed. • We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. • Our success depends in part on our ability to protect our intellectual property.
We may experience delays in completing, or ultimately be unable to complete, the development and commercialization of cibotercept (KER-012), KER-065, elritercept (KER-050) or any future product candidates. • If we are unable to successfully commercialize any product candidate for which we receive regulatory approval, or experience significant delays in doing so, our business will be materially harmed. • We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. • Our success depends in part on our ability to protect our intellectual property.
To date, we have funded our operations primarily through private placements of our equity securities, upfront and expense reimbursement payments received from our collaborators, from our initial public offering, or IPO, in April 2020, from our public offerings of common stock in November 2020 and January 2024, and from our “at the market offering,” in connection with our Sales Agreement with Leerink Partners LLC, or Leerink, as agent, pursuant to which we may offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $400.0 million through Leerink, or the ATM Offering.
To date, we have funded our operations primarily through private placements of our equity securities, upfront and expense reimbursement payments received from our collaborators, from our initial public offering, or IPO, in April 2020, from our public offerings of common stock in November 2020 and January 2024, and from our “at the market offering,” in connection with our Sales Agreement with Leerink Partners LLC, or Leerink, as agent, pursuant to which we may offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $350.0 million through Leerink, or the ATM Offering.
The time required to obtain approval by the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the 53 substantial discretion of the regulatory authorities.
The time required to obtain approval by the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.
Even if we believe the data collected from clinical trials of our product candidates are promising, such data may not be sufficient to support approval by the FDA or comparable foreign regulatory authorities.
Even if we 55 believe the data collected from clinical trials of our product candidates are promising, such data may not be sufficient to support approval by the FDA or comparable foreign regulatory authorities.
Neither the principal stockholders nor the representatives of the principal stockholders on our board of directors, by the terms of our amended and restated certificate of incorporation, are required to offer us any transaction opportunity of which they become aware and could take any such opportunity for themselves or offer it their other affiliates, unless such opportunity is expressly offered to them solely in their capacity as members of our board of directors. 88 Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.
Neither the principal stockholders nor the representatives of the principal stockholders on our board of directors, by the terms of our amended and restated certificate of incorporation, are required to offer us any transaction opportunity of which they become aware and could take any such opportunity for themselves or offer it their other affiliates, unless such opportunity is expressly offered to them solely in their capacity as members of our board of directors. 90 Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.
If any of these claims succeed, we may be forced to pay damages on behalf of our customers, suppliers or distributors, or may be required to obtain licenses for the product candidates or services they use.
If any of these claims succeed, we may be forced to pay damages on behalf of our customers, suppliers or distributors, or may be 71 required to obtain licenses for the product candidates or services they use.
An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing.
An adverse result in 72 any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing.
We also may experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize KER-050, KER-012, KER-065 or any future product candidates, including: ▪ delays in or failure to obtain regulatory authorizations to commence a trial; ▪ delays in reaching a consensus with regulatory agencies as to the design or implementation of our clinical trials; ▪ delays in or failure to reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ▪ delays in or failure to obtain institutional review board, or IRB, or positive ethics committee opinions at each site; ▪ delays in or failure to recruit a sufficient number of suitable patients to participate in a trial; ▪ failure to have patients complete a trial or return for post-treatment follow-up, including disruptions in our ability to treat patients or conduct post-treatment follow-up due to public health crises; ▪ clinical sites deviating from trial protocol, missing data or dropping out of a trial; ▪ delays in adding new clinical trial sites; ▪ failure to manufacture sufficient quantities of our product candidates for use in clinical trials in a timely manner; ▪ occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits, or safety or tolerability concerns that could cause us or our collaborators, as applicable, to suspend or terminate a trial if we or our collaborators find that the participants are being exposed to unacceptable health risks; ▪ failure to perform clinical trials in accordance with the FDA’s or any other regulatory authority’s good clinical practices, or GCP, requirements, or regulatory guidelines in other countries; ▪ changes in regulatory requirements, policies and guidelines; ▪ failure of our third-party research contractors to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; ▪ delays in establishing the appropriate dosage levels and frequency of dosing in clinical trials; ▪ the quality or stability of our product candidates falling below acceptable standards; and ▪ business interruptions resulting from geopolitical actions, including war, such as the current Russia-Ukraine war and the war in Israel, and terrorism or the perception that such hostilities may be imminent, another outbreak of a contagious disease, or natural disasters including earthquakes, typhoons, floods and fires.
We also may experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize cibotercept, KER-065, elritercept or any future product candidates, including: ▪ delays in or failure to obtain regulatory authorizations to commence a trial; ▪ delays in reaching a consensus with regulatory agencies as to the design or implementation of our clinical trials; ▪ delays in or failure to reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ▪ delays in or failure to obtain institutional review board, or IRB, or positive ethics committee opinions at each site; ▪ delays in or failure to recruit a sufficient number of suitable patients to participate in a trial; ▪ failure to have patients complete a trial or return for post-treatment follow-up, including disruptions in our ability to treat patients or conduct post-treatment follow-up due to public health crises; ▪ clinical sites deviating from trial protocol, missing data or dropping out of a trial; ▪ delays in adding new clinical trial sites; ▪ failure to manufacture sufficient quantities of our product candidates for use in clinical trials in a timely manner; ▪ occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits, or safety or tolerability concerns that could cause us or our collaborators, as applicable, to suspend or terminate a trial if we or our collaborators find that the participants are being exposed to unacceptable health risks; 50 ▪ failure to perform clinical trials in accordance with the FDA’s or any comparable foreign regulatory authority’s good clinical practices, or GCP, requirements, or regulatory guidelines in other countries; ▪ changes in regulatory requirements, policies and guidelines; ▪ failure of our third-party research contractors to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; ▪ delays in establishing the appropriate dosage levels and frequency of dosing in clinical trials; ▪ the quality or stability of our product candidates falling below acceptable standards; and ▪ business interruptions resulting from geopolitical actions, including war, such as the current Russia-Ukraine war and the war in Israel, and terrorism or the perception that such hostilities may be imminent, another outbreak of a contagious disease, or natural disasters including earthquakes, typhoons, floods and fires.
Public Health Service Act, which prohibits, among other things, the introduction into interstate commerce of a biological product unless a biologics license is in effect for that product; ▪ the U.S.
Public Health Service Act, which prohibits, among other things, the introduction into interstate commerce of a biological product unless a biologics license is in effect for that product; 65 ▪ the U.S.
These lawsuits are expensive and would consume time and other resources even if we or they, as the case may be, 73 were successful in stopping the infringement of these patents.
These lawsuits are expensive and would consume time and other resources even if we or they, as the case may be, were successful in stopping the infringement of these patents.
In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
If we are successful in obtaining marketing approval from applicable regulatory authorities for KER-050, KER-012, KER-065 or any other product candidate, our ability to generate revenues from any such products will depend on our success in: ▪ launching commercial sales of such products, whether alone or in collaboration with others; ▪ receiving approved labels with claims that are necessary or desirable for successful marketing, and that do not contain safety or other limitations that would impede our ability to market such products; ▪ creating market demand for such products through marketing, sales and promotion activities; ▪ hiring, training, and deploying a sales force or contracting with third parties to commercialize such products in the United States; ▪ creating strategic collaborations with, or offering licenses to, third parties to promote and sell such products in foreign markets where we receive marketing approval; ▪ manufacturing such products in sufficient quantities and at acceptable quality and cost to meet commercial demand at launch and thereafter; ▪ establishing and maintaining agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms; ▪ maintaining patent and trade secret protection and regulatory exclusivity for such products; ▪ achieving market acceptance of such products by patients, the medical community, and third-party payors; ▪ achieving coverage and adequate reimbursement from third-party payors for such products; 58 ▪ patients’ willingness to pay out-of-pocket in the absence of such coverage and adequate reimbursement from third-party payors; ▪ effectively competing with other therapies; and ▪ maintaining a continued acceptable safety profile of such products following launch.
If we are successful in obtaining marketing approval from applicable regulatory authorities for cibotercept, KER-065, elritercept or any other product candidate, our ability to generate revenues from any such products will depend on our success in: ▪ launching commercial sales of such products, whether alone or in collaboration with others; ▪ receiving approved labels with claims that are necessary or desirable for successful marketing, and that do not contain safety or other limitations that would impede our ability to market such products; ▪ creating market demand for such products through marketing, sales and promotion activities; ▪ hiring, training, and deploying a sales force or contracting with third parties to commercialize such products in the United States; ▪ creating strategic collaborations with, or offering licenses to, third parties to promote and sell such products in foreign markets where we receive marketing approval; ▪ manufacturing such products in sufficient quantities and at acceptable quality and cost to meet commercial demand at launch and thereafter; ▪ establishing and maintaining agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms; ▪ maintaining patent and trade secret protection and regulatory exclusivity for such products; ▪ achieving market acceptance of such products by patients, the medical community, and third-party payors; ▪ achieving coverage and adequate reimbursement from third-party payors for such products; ▪ patients’ willingness to pay out-of-pocket in the absence of such coverage and adequate reimbursement from third-party payors; ▪ effectively competing with other therapies; and ▪ maintaining a continued acceptable safety profile of such products following launch.
Accordingly, in markets outside the United States, the reimbursement for our products, if approved, may 65 be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.
Accordingly, in markets outside the United States, the reimbursement for our products, if approved, may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.
Some 79 actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
Similarly, any adverse changes in the patent laws of other jurisdictions could have a material adverse effect on our business and financial condition. Some of our in-licensed intellectual property that was discovered through government-funded programs may be subject to federal regulation such as “march-in” rights, certain reporting requirements and a preference for U.S. industry.
Similarly, any adverse changes in the patent laws of other jurisdictions could have a material adverse effect on our business and financial condition. Some of our in-licensed intellectual property that is discovered through government-funded programs may be subject to federal regulation such as “march-in” rights, certain reporting requirements and a preference for U.S. industry.
Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 85 Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities.
Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. 87 Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities.
An inactive trading market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to enter into collaborations or acquire other companies or technologies using our shares as consideration. 86 Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.
An inactive trading market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to enter into collaborations or acquire other companies or technologies using our shares as consideration. 88 Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.
The overall ten-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
The overall 10-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.
For example, physicians are often reluctant to switch their patients and patients may be reluctant to switch from existing therapies even when new and potentially more effective or safer treatments enter the market. 60 Efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may not be successful.
For example, physicians are often reluctant to switch 62 their patients and patients may be reluctant to switch from existing therapies even when new and potentially more effective or safer treatments enter the market. Efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may not be successful.
We own pending patent applications covering our proprietary technologies or our product candidates that if issued as patents are expected to expire from 2037 through 2045, without taking into account any possible patent term adjustments or extensions. However, we cannot be assured that the USPTO or relevant foreign patent offices will grant any of these patent applications.
We own pending patent applications covering our proprietary technologies or our product candidates that if issued as patents are expected to expire from 2037 through 2046, without taking into account any possible patent term adjustments or extensions. However, we cannot be assured that the USPTO or relevant foreign patent offices will grant any of these patent applications.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as do federal and state laws in the United States.
In addition, the laws of some 74 foreign countries do not protect intellectual property rights to the same extent as do federal and state laws in the United States.
The costs of these opposition or similar proceedings could be substantial, and may result in a loss of scope of some claims or a loss of the entire patent.
The costs of these opposition or similar proceedings could be substantial, and may result in a loss of scope of some claims or 75 a loss of the entire patent.
For so long as we qualify as a “well-known seasoned issuer” as defined in Rule 405 of the Securities Act, we may also issue an unspecified amount of shares of our common stock, preferred stock, debt securities and warrants pursuant to the Registration Statement.
For so long as we qualify as a “well-known seasoned issuer” as defined in Rule 405 of the Securities Act, we may also issue an unspecified amount of shares of our common stock, preferred stock, debt securities and warrants pursuant to the New Shelf Registration Statement.
If we are unable to enter into new collaborations, or if these collaborations are not successful, our business could be adversely affected. • Public health crises could adversely impact our business, including the timing or results of our preclinical studies and clinical trials.
If we are unable to enter into new collaborations, or if these or our current collaborations are not successful, our business could be adversely affected. 46 • Public health crises could adversely impact our business, including the timing or results of our preclinical studies and clinical trials.
As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or BLA, other marketing application, and previous responses to inspection observations.
As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or BLA, other foreign marketing authorization application, and previous responses to inspection observations.
In addition, the trading prices for common stock of other pharmaceutical, biopharmaceutical and biotechnology companies have been highly volatile as a result of public health crises, geopolitical tensions and a resulting 87 global slowdown of economic activity.
In addition, the trading prices for common stock of other pharmaceutical, biopharmaceutical and biotechnology companies have been highly volatile as a result of public health crises, geopolitical tensions and a resulting 89 global slowdown of economic activity.
We also announced additional preliminary efficacy results from Parts 1 and 2 of that trial most recently in December 2023. Preliminary or interim data from our clinical trials are not necessarily predictive of final results.
We also announced additional preliminary efficacy results from Parts 1 and 2 of that trial most recently in December 2024. Preliminary or interim data from our clinical trials are not necessarily predictive of final results.
The long transition periods necessary to switch manufacturers and suppliers, if necessary, could significantly delay our clinical studies and the commercialization of our products, if approved, which could materially adversely affect our business, financial condition and results of operation.
The long transition periods necessary to switch manufacturers and suppliers, if necessary, could significantly delay our clinical trials and the commercialization of our products, if approved, which could materially adversely affect our business, financial condition and results of operation.
(which was acquired by Swedish Orphan Biovitrum AB in June 2023) received FDA accelerated approval of its product, pacritinib (Vonjo), for the treatment of adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 × 109/L.
(which was acquired by Swedish Orphan Biovitrum AB in June 2023) received FDA accelerated approval of its product, pacritinib (Vonjo), for the treatment of adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 × 10 9 /L.
In addition, if KER-050, or a licensed product containing KER-050, is approved for marketing within the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Territory, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales in each region within the Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions.
In addition, if elritercept, or a licensed product containing elritercept, is approved for marketing within the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Hansoh Territory, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales in each region within the Hansoh Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions.
KER-050, KER-012, KER-065 and any future product candidates we develop will require additional preclinical and clinical development, management of clinical, preclinical and manufacturing activities, marketing approval in the United States and other jurisdictions for specific indications for use, demonstrating effectiveness to pricing and reimbursement authorities, obtaining sufficient manufacturing supply for both clinical development and commercial production, building of a commercial organization and substantial investment and significant marketing efforts before we generate any revenues from product sales.
Cibotercept, KER-065, elritercept and any future product candidates we develop will require additional preclinical and clinical development, management of clinical, preclinical and manufacturing activities, marketing approval in the United States and other jurisdictions for specific indications for use, demonstrating effectiveness to pricing and reimbursement authorities, obtaining sufficient manufacturing supply for both clinical development and commercial production, building of a commercial organization and substantial investment and significant marketing efforts before we generate any revenues from product sales.
Future growth would impose significant added responsibilities on members of management, including: ▪ identifying, recruiting, integrating, maintaining and motivating additional employees; ▪ managing our development efforts effectively, including the clinical and FDA review process for KER-050, KER-012, KER-065 and any future product candidates, while complying with our contractual obligations to contractors and other third parties; and ▪ improving our operational, financial and management controls, reporting systems and procedures.
Future growth would impose significant added responsibilities on members of management, including: ▪ identifying, recruiting, integrating, maintaining and motivating additional employees; ▪ managing our development efforts effectively, including the clinical and FDA review process for cibotercept, KER-065, elritercept and any future product candidates, while complying with our contractual obligations to contractors and other third parties; and ▪ improving our operational, financial and management controls, reporting systems and procedures.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives. 92 Our cybersecurity risk assessment and management processes are implemented and maintained by leaders from our IT, finance and legal teams, including our Head of IT, who has experience in various roles involving information technology and cybersecurity.
Biggest changeOur cybersecurity risk assessment and management processes are implemented and maintained by leaders from our IT, finance and legal teams, including our Executive Director who serves as the Head of IT and Cybersecurity, who has twenty years of experience in various roles involving information technology and cybersecurity.
We implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: maintaining an incident response plan and policy, incident detection and response, maintaining a vulnerability management policy, maintaining disaster recovery and business continuity plans, conducting risk assessments, implementing security standards and certifications, maintaining network security controls, access controls, and physical security measures, asset management, systems monitoring, conducting proactive privacy and cybersecurity reviews of systems and applications, performing penetration testing using external third-party tools and techniques to test security controls, conducting employee training, monitoring emerging laws and regulations related to data protection and information security and implement appropriate changes and encrypting Information Systems and Data.
We implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, 93 for example: maintaining an incident response plan and policy, incident detection and response, maintaining a vulnerability management policy, maintaining disaster recovery and business continuity plans, conducting risk assessments, implementing security standards and certifications, maintaining network security controls, access controls, and physical security measures, asset management, systems monitoring, conducting proactive privacy and cybersecurity reviews of systems and applications, performing penetration testing using external third-party tools and techniques to test security controls, conducting employee training, monitoring emerging laws and regulations related to data protection and information security and implement appropriate changes and encrypting Information Systems and Data.
Our Head of IT works with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, our incident response plan includes reporting to our audit committee for certain cybersecurity incidents.
Our Head of IT works with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, our incident response plan includes reporting to our audit committee for certain cybersecurity incidents. 94
“Risk Factors” in this Annual Report on Form 10-K, including under the heading “ If our internal computer systems, or those used by our contract research organizations, or other contractors or consultants upon which we rely, fail, suffer security incidents, or are or were otherwise compromised, we could experience adverse consequences, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. ” Cybersecurity Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
“Risk Factors” in this Annual Report on Form 10-K, including under the heading “ If our internal computer systems, or those used by our contract research organizations, or other contractors or consultants with whom we work, fail, suffer security incidents, or are or were otherwise compromised, we could experience adverse consequences, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences. ” Cybersecurity Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional services firms, including legal counsel, threat intelligence service providers, cybersecurity consultants and software providers, managed cybersecurity service providers, penetration testing firms and dark web monitoring services.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional services firms, including legal counsel, threat intelligence service providers, cybersecurity consultants and software providers, managed cybersecurity service providers and penetration testing firms.
Our information technology and security, or IT, team and risk committee, together with our third-party service providers, help identify, assess and manage our cybersecurity threats and risks.
Our information technology and security, or IT, management team, and legal, and risk management teams, together with our third-party service providers, help identify, assess and manage our cybersecurity threats and risks.
In doing so, they identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using a multi-faceted approach including use of automated tools, internal and external IT audits, and IT security, governance, risk and compliance reviews, reviewing reports and using services that identify cybersecurity threats, conducting threat and vulnerability assessments, and evaluating reported threats as well as the industry’s risk profile.
In doing so, they identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using a multi-faceted approach including use of manual and automated tools, internal and external IT audits, and IT security, governance, risk and compliance reviews, reviewing reports and using services that identify cybersecurity threats, conducting threat and vulnerability assessments, evaluating reported threats as well as the industry’s risk profile, and third-party-conducted red/blue team testing and tabletop incident response exercises.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider, including completion of security questionnaires, review of the vendor’s written security program, review of security assessments and reports, audits, and security assessment calls with the vendor’s security personnel.
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This includes existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePrior to that date, our principal office was located at 99 Hayden Avenue, Suite 120, Building E, Lexington, Massachusetts 02421, which provided approximately 15,622 square feet of office and laboratory space. The lease for the prior principal office expired on March 31, 2023. We believe that these facilities will be adequate for our near-term needs.
Biggest changePrior to that date, our principal office was located at 99 Hayden Avenue, Suite 120, Building E, Lexington, Massachusetts 02421, which provided approximately 15,622 square feet of office and laboratory space. The lease for the prior principal office expired on March 31, 2023.
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In July 2024, we entered into a sublease for approximately 20,000 square feet of office and laboratory space located at 1050 Waltham Street, Suite 302, Lexington, Massachusetts 02421, expanding our existing headquarters. The sublease expires in September 2029. We believe that these facilities will be adequate for our near-term needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe results of any future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 93 PART II
Biggest changeThe results of any future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 95 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of February 22, 2024, there were 15 stockholders of record of our common stock, one of which is Cede & Co., a nominee for Depository Trust Company, or DTC.
Biggest changeHolders As of February 20, 2025, there were 16 stockholders of record of our common stock, one of which is Cede & Co., a nominee for Depository Trust Company, or DTC.
We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. 94 Recent Sales of Unregistered Securities None. Use of Proceeds None. Purchase of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. [Reserved]
We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. 96 Recent Sales of Unregistered Securities None. Use of Proceeds None. Purchase of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. [Reserved]
The graph set forth below compares the cumulative total stockholder return on our common stock between April 8, 2020 (the date our common stock commenced trading on the Nasdaq Global Market) and December 31, 2023, with the cumulative total return of (a) the Nasdaq Composite Index and (b) the Nasdaq Biotechnology Index, over the same period.
The graph set forth below compares the cumulative total stockholder return on our common stock between April 8, 2020 (the date our common stock commenced trading on the Nasdaq Global Market) and December 31, 2024, with the cumulative total return of (a) the Nasdaq Composite Index and (b) the Nasdaq Biotechnology Index, over the same period.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase of $32.1 million was primarily due to an increase in program-related costs, including (i) a net increase of $8.0 million of KER-050-related expenses, primarily driven by (a) a $5.0 million increase in clinical and preclinical program activities due to the progression of our two Phase 2 clinical trials of KER-050, one in patients with MDS and one in patients with myelofibrosis and (b) an increase of $3.0 million in manufacturing activities; (ii) a $3.8 million increase in KER-065-related expenses, primarily driven by (a) $3.6 million increase in manufacturing costs and preclinical activities and (b) a $0.2 million increase in clinical trial activities; (iii) a $3.0 million increase in preclinical pipeline and development activities; (iv) a $14.4 million increase in personnel costs, including an increase of $3.9 million of additional stock-based compensation costs, driven by the increase in headcount to support the advancement of our pipeline; (v) a $1.2 million increase in professional fees to support our organizational growth and the continued advancements in our pipeline; and (vi) a $2.5 million increase in facilities and supplies and other expenses due to the continued growth of our organization.
Biggest changeThe increase of $38.4 million was primarily due to an increase in program-related costs, including (i) an $8.8 million increase of cibotercept-related expenses, which was driven by a $7.1 million increase in clinical spend associated with our Phase 2 clinical trial and a $1.7 million increase in manufacturing costs; (ii) a $10.1 million increase in KER-065-related expenses, primarily driven by a net increase of $5.8 million in manufacturing and preclinical activities and an increase of $4.3 million in clinical spend associated with our ongoing Phase 1 clinical trial; (iii) a net increase of $3.1 million of elritercept-related expenses, primarily driven by a $9.7 million increase in clinical spend associated with our ongoing Phase 2 clinical trials, one in 102 patients with MDS and one in patients with myelofibrosis, and the advancement of a Phase 3 clinical trial in patients with MDS, partially offset by a decrease of $6.6 million in manufacturing and preclinical activities; (iv) a $12.5 million increase in personnel costs, including an increase of $4.2 million of additional stock-based compensation costs, driven by the increase in headcount to support the advancement of our pipeline; (v) a $1.8 million increase in professional fees; and (v) a $2.4 million increase in facilities and supplies and other expenses due to the continued growth of our organization.
In addition, Hansoh will use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize licensed products in any region in the Territory. Pursuant to the terms of the Hansoh Agreement, we received a net $18.0 million upfront payment in January 2022.
In addition, Hansoh will use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize licensed products in any region in the Hansoh Territory. Pursuant to the terms of the Hansoh Agreement, we received a net $18.0 million upfront payment in January 2022.
The $14.3 million of cash used in operating assets and liabilities was primarily comprised of (i) an $18.0 million decrease in accounts receivable and (ii) a $4.9 million increase in accounts payable and accrued expenses to support the advancement of our programs, which was partially offset by (a) a $4.9 million increase in prepaid expenses and other assets due to timing of expense recognition for our research and development costs and (b) a $3.7 million change in our operating lease liabilities.
The $14.3 million of cash used in operating assets and liabilities was primarily comprised of (i) an $18.0 million decrease in accounts receivable and (ii) a $4.9 million increase in accounts payable and accrued expenses to support the advancement of our programs, which was partially offset by (a) a $4.9 million increase in prepaid expenses and other assets 105 due to timing of expense recognition for our research and development costs and (b) a $3.7 million change in our operating lease liabilities.
Cash Provided by Financing Activities Net cash provided by financing activities was $179.0 million for the year ended December 31, 2023, which was primarily related to (i) net proceeds of $175.7 million received from sales of our common stock under the ATM Program, after 103 deducting sales agent commissions and offering expenses; and (ii) proceeds of $3.2 million related to exercises of options to purchase common stock.
Net cash provided by financing activities was $179.0 million for the year ended December 31, 2023, which was primarily related to (i) net proceeds of $175.7 million received from sales of our common stock under the ATM Program, after deducting sales agent commissions and offering expenses; and (ii) proceeds of $3.2 million related to exercises of options to purchase common stock.
The increase of $7.3 million was primarily due to (i) a $6.0 million increase in personnel expenses, which includes an increase of $4.2 million of additional stock-based compensation costs, to support our organizational growth and achievement of our corporate goals; (ii) a $1.5 million increase in facilities, supplies and other expenses due to growth of our organization; and (iii) a $0.7 million increase in professional fees.
The increase of $7.3 million was primarily due to (i) a $6.0 million increase in personnel expenses, which includes an increase of $4.2 million of additional stock-based compensation costs, to support our organizational growth and achievement of our corporate goals; (ii) a $1.5 million increase in facilities, supplies and other office expenses due to growth of our organization; and (iii) a $0.7 million increase in professional fees.
If a licensed product is approved for marketing in the Territory, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales in each region within the Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions.
If a licensed product is approved for marketing in the Hansoh Territory, we will be entitled to receive royalty payments based on a tiered percentage of annual net sales in each region within the Hansoh Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.
Although we do not expect our estimates to 107 be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.
(1) Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. 105
(1) Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
Rising interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for 96 us to obtain traditional financing on acceptable terms, if at all, in the future.
Rising interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future.
Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as prepaid or accrued research and development expenses.
Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and 100 are reflected in our consolidated financial statements as prepaid or accrued research and development expenses.
During the royalty term, neither party will directly or indirectly commercialize a competing product in the Territory. 97 Effective in June 2023, in connection with the Hansoh Agreement, we entered into a manufacturing technology transfer agreement, or the Tech Transfer Agreement, with Hansoh.
During the royalty term, neither party will directly or indirectly commercialize a competing product in the Hansoh Territory. Effective in June 2023, in connection with the Hansoh Agreement, we entered into a manufacturing technology transfer agreement, or the Tech Transfer Agreement, with Hansoh.
Inflationary factors, such as increases in the cost of materials and supplies relating to our preclinical studies, clinical trials, interest rates and overhead costs may adversely affect our operating results.
Inflationary factors, such as increases in the cost of materials and 98 supplies relating to our preclinical studies, clinical trials, interest rates and overhead costs may adversely affect our operating results.
The $2.7 million of cash used by operating assets and liabilities was primarily comprised of (i) a $9.8 million increase in prepaid expenses and other assets due to timing of expense recognition for our research and development costs and (ii) a $0.1 million increase in accounts receivable, which was partially offset by (a) a $6.9 million increase in accounts payable and accrued expenses to support the advancement of our programs and (b) $0.4 million provided by our operating lease liabilities.
The $2.7 million of cash used in operating assets and liabilities was primarily comprised of (i) a $9.8 million increase in prepaid expenses and other assets due to timing of expense recognition for our research and development costs and (ii) a $0.1 million increase in accounts receivable, which was partially offset by (a) a $6.9 million increase in accounts payable and accrued expenses to support the advancement of our programs and (b) a $0.4 million change in operating lease liabilities.
The aggregate net proceeds to us from the public offering were approximately $151.0 million, after deducting underwriting discounts and commissions and estimated offering expenses. We have incurred recurring operating losses since inception in 2015. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and commercialization of one or more of our product candidates.
The aggregate net proceeds to us from the public offering were approximately $151.1 million, after deducting underwriting discounts and commissions and estimated offering expenses. We have incurred recurring operating losses since inception in 2015. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and commercialization of one or more of our product candidates.
To date, there have not been any material adjustments to our prior estimates of accrued and prepaid research and development expenses. Stock-Based Compensation We account for all stock-based compensation awards granted to employees and non-employees as stock-based compensation expense at fair value. Our stock-based payments include stock options.
To date, there have not been any material adjustments to our prior estimates of accrued and prepaid research and development expenses. Stock-Based Compensation We account for all stock-based compensation awards granted to employees and non-employees as stock-based compensation expense at fair value. Our stock-based awards include stock options and performance-based stock options.
Net cash provided by financing activities was $120.3 million for the year ended December 31, 2022, which was primarily related to (i) net proceeds of $119.5 million received from sales of our common stock under the ATM Program, after deducting sales agent commissions and offering expenses; and (ii) proceeds of $0.8 million related to exercises of options to purchase common stock.
Net cash provided by financing activities was $120.3 million for the year ended December 31, 2022, which was primarily related to (i) net proceeds of $119.5 million received from sales of our common stock under the ATM Sales Agreement, after deducting sales agent commissions and before deducting offering expenses; and (ii) proceeds of $0.8 million related to exercises of options to purchase common stock.
The increase of $48.0 million was primarily due to an increase in program-related costs, including (i) a net increase of $16.8 million of KER-050-related expenses, primarily driven by (a) a $5.5 million increase in clinical and preclinical program activities due to the progression of our two Phase 2 clinical trials of KER-050, one in patients with MDS and one in patients with myelofibrosis, and the initial expenses associated with our planned advancement of KER-050 into a Phase 3 clinical trial and (b) an increase of $11.3 million in manufacturing activities; (ii) a $8.5 million increase of KER-012-related expenses, which was driven by 100 a $6.8 million increase in activities to support the clinical advancement of the program and a $1.7 million increase in manufacturing costs and preclinical activities; (iii) a $3.6 million increase in preclinical pipeline and development activities; (iv) a $15.7 million increase in personnel costs, including an increase of $5.9 million of additional stock-based compensation costs, driven by the increase in headcount to support the advancement of our pipeline; and (v) a $4.4 million increase in facilities and supplies and other expenses due to the continued growth of our organization.
The increase of $48.0 million was primarily due to an increase in program-related costs, including (i) an $8.5 million increase of cibotercept-related expenses, which was driven by a $6.8 million increase in activities to support the clinical advancement of the program and a $1.7 million increase in manufacturing costs and preclinical activities; (ii) a net increase of $16.8 million of elritercept-related expenses, primarily driven by (a) a $5.5 million increase in clinical and preclinical program activities due to the progression of our two Phase 2 clinical trials of elritercept, one in patients with MDS and one in patients with myelofibrosis, and the initial expenses associated with our planned advancement of elritercept into a Phase 3 clinical trial in patients with MDS and (b) an increase of $11.3 million in manufacturing activities; (iii) a $3.2 million increase in preclinical pipeline and development activities; (iv) a $15.7 million increase in personnel costs, including an increase of $5.9 million of additional stock-based compensation costs, driven by the increase in headcount to support the advancement of our pipeline; and (v) a $4.4 million increase in facilities and supplies and other expenses due to the continued growth of our organization.
Under the terms of the license agreement with Hansoh, or the Hansoh Agreement, we granted to Hansoh the exclusive right to develop, manufacture and commercialize KER-050 and licensed products containing KER-050 within the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Territory.
Under the terms of the license agreement with Hansoh, or the Hansoh Agreement, we granted to Hansoh the exclusive right to develop, manufacture and commercialize elritercept and licensed products containing elritercept within the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Hansoh Territory.
In connection with the Hansoh Agreement, Hansoh will purchase clinical trial supply of KER-050 from us, and the parties will also negotiate in good faith to enter into an agreement for commercial supply prior to any anticipated commercialization in the Territory.
In connection with the Hansoh Agreement, Hansoh will purchase clinical trial supply of elritercept from us, and the parties will also negotiate in good faith to enter into an agreement for commercial supply prior to any anticipated commercialization in the Hansoh Territory.
The increase of $6.8 million is primarily related to an increase of $11.1 million of dividend income partially offset by a decrease of $4.7 million in R&D Incentive income in Australia. Total other income (expense), net was $10.1 million for the year ended December 31, 2022, compared to $(0.4) million for the year ended December 31, 2021.
Total other income (expense), net was $16.9 million for the year ended December 31, 2023, compared to $10.1 million for the year ended December 31, 2022. The increase of $6.8 million is primarily related to an increase of $11.1 million of dividend income, partially offset by a decrease of $4.7 million in R&D Incentive income in Australia.
Cash Used in Investing Activities Net cash used in investing activities was $2.5 million, $1.2 million, and $1.0 million for the years ended December 31, 2023, 2022, and 2021, respectively. The cash used in investing activities in each period was due to purchases of property and equipment.
Cash Used in Investing Activities Net cash used in investing activities was $1.9 million, $2.5 million, and $1.2 million for the years ended December 31, 2024, 2023, and 2022, respectively. The cash used in investing activities in each period was due to purchases of property and equipment.
In addition to the upfront payment, we are entitled to receive up to an aggregate of (i) $26.5 million upon the achievement of specified development milestones and (ii) $144.0 million upon the achievement of specified net sales thresholds for all licensed products in the Territory.
In addition to the upfront payment and development milestones achieved to date, we are entitled to receive up to an aggregate of (i) $23.5 million upon the achievement of specified development milestones and (ii)$144.0 million upon the achievement of specified net sales thresholds for all licensed products in the Hansoh Territory.
We expect research and development expenses to fluctuate from quarter to quarter depending on the timing of clinical trial activities, clinical manufacturing and other development activities. General and Administrative Expenses General and administrative expenses were $34.8 million for the year ended December 31, 2023, compared to $27.5 million for the year ended December 31, 2022.
We expect research and development expenses to fluctuate from quarter to quarter depending on the timing of clinical trial activities, clinical manufacturing and other development activities. General and Administrative Expenses General and administrative expenses were $40.8 million for the year ended December 31, 2024, compared to $34.8 million for the year ended December 31, 2023.
Although we continue to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all. As of December 31, 2023, we had cash and cash equivalents of $331.1 million.
Although we continue to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all. As of December 31, 2024, we had cash and cash equivalents of $559.9 million.
Our net loss was $153.0 million, $104.7 million, and $58.7 million for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, we had an accumulated deficit of $381.4 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future in connection with our ongoing activities.
Our net loss was $187.4 million, $153.0 million, and $104.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of $568.8 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future in connection with our ongoing activities.
Our future funding requirements, both near and long-term, will depend on many factors, including: ▪ the progress, timing and completion of preclinical studies and clinical trials for our current or any future product candidates, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to public health crises or other causes; ▪ the timing and amount of milestone and royalty payments we are required to make or are eligible to receive under our license agreements with each of The General Hospital Corporation and Hansoh; ▪ the number of potential new product candidates we identify and decide to develop; ▪ the need for additional or expanded preclinical studies and clinical trials beyond those that we plan to conduct with respect to our current and future product candidates; ▪ the costs involved in growing our organization to the size needed to allow for the research, development and potential commercialization of our current or any future product candidates; ▪ the costs involved in filing patent applications, maintaining and enforcing patents or defending against infringement or other claims raised by third parties; ▪ the maintenance of our existing license and collaboration agreements and the entry into new license and collaboration agreements; ▪ the time and costs involved in obtaining regulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of our product candidates; ▪ the effect of competing technological and market developments; ▪ the costs of operating as a public company; ▪ the cost of manufacturing KER-050, KER-012, KER-065 and future product candidates for clinical trials in preparation for marketing approval and in preparation for commercialization; ▪ the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products, if approved, on our own; ▪ the amount of revenues, if any, we may derive either directly or in the form of royalty payments from future sales of our product candidates, if approved; and ▪ market acceptance of any approved product candidates. 102 In addition, public health crises, bank failures, geopolitical tensions and resulting global slowdown of economic activity continue to rapidly evolve and have already resulted in a significant disruption of global financial markets.
Our future funding requirements, both near and long-term, will depend on many factors, including: ▪ the progress, timing and completion of preclinical studies and clinical trials for our current or any future product candidates, as well as the associated costs, including any unforeseen costs we may incur as a result of preclinical study or clinical trial delays due to public health crises or other causes; ▪ the timing and amount of milestone and royalty payments we are required to make or are eligible to receive under our license agreements with each of The General Hospital Corporation and Hansoh; ▪ the number of potential new product candidates we identify and decide to develop; ▪ the need for additional or expanded preclinical studies and clinical trials beyond those that we plan to conduct with respect to our current and future product candidates; ▪ the costs involved in growing our organization to the size needed to allow for the research, development and potential commercialization of our current or any future product candidates; ▪ the costs involved in filing patent applications, maintaining and enforcing patents or defending against infringement or other claims raised by third parties; ▪ the maintenance of our existing license and collaboration agreements and the entry into new license and collaboration agreements; 104 ▪ the time and costs involved in obtaining regulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of our product candidates; ▪ the effect of competing technological and market developments; ▪ the costs of operating as a public company; ▪ the cost of manufacturing cibotercept, KER-065, elritercept and future product candidates for clinical trials in preparation for marketing approval and in preparation for commercialization; ▪ the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products, if approved, on our own; ▪ the amount of revenues, if any, we may derive either directly or in the form of royalty payments from future sales of our product candidates, if approved; and ▪ market acceptance of any approved product candidates.
The following table summarizes our contractual obligations as of December 31, 2023 and the effects such obligations are expected to have on our liquidity and cash flow in future periods (in thousands): PAYMENTS DUE BY PERIOD TOTAL LESS THAN 1 YEAR 1 TO 3 YEARS 4 TO 5 YEARS MORE THAN 5 YEARS Operating lease commitments $ 21,361 $ 2,431 $ 7,739 $ 5,554 $ 5,637 Total $ 21,361 $ 2,431 $ 7,739 $ 5,554 $ 5,637 On September 7, 2021, we entered into an indenture of lease, or the 1050 Waltham Lease, with Revolution Labs Owner, LLC, or the Landlord, pursuant to which we are leasing approximately 35,662 square feet of office, laboratory and vivarium space located at 1050 Waltham Street, Lexington, Massachusetts, or the Premises, for our new principal executive office.
The following table summarizes our contractual obligations as of December 31, 2024 and the effects such obligations are expected to have on our liquidity and cash flow in future periods (in thousands): PAYMENTS DUE BY PERIOD TOTAL LESS THAN 1 YEAR 1 TO 3 YEARS 4 TO 5 YEARS MORE THAN 5 YEARS Operating lease commitments $ 25,798 $ 3,800 $ 12,378 $ 6,886 $ 2,734 Total $ 25,798 $ 3,800 $ 12,378 $ 6,886 $ 2,734 On September 7, 2021, we entered into an indenture of lease, or the 1050 Waltham Lease, with Revolution Labs Owner, LLC, or the Landlord, pursuant to which we are leasing approximately 35,662 square feet of office, laboratory and vivarium space located at 1050 Waltham Street, Lexington, Massachusetts, or the Premises, for our new principal executive office.
Hansoh’s obligation to pay royalties for a given licensed product in a given region in the Territory will begin on the date of the first commercial sale for such licensed product in such region and continue until the latest of (i) ten years from the date of the first commercial sale for such licensed product in such region, (ii) the expiration of the last valid claim of certain licensed patents or joint patents, and (iii) expiration of regulatory exclusivity in such region.
Takeda’s obligation to pay royalties for a given licensed product in a given country in the Takeda Territory will begin on the date of the first commercial sale for such licensed product in such country and continue until the latest of (i) 10 years from the date of the first commercial sale for such licensed product in such region, (ii) the expiration of the last valid claim of certain licensed patents, and (iii) expiration of regulatory exclusivity in such region.
The increase of $6.2 million was primarily due to (i) a $5.2 million increase in personnel expenses, which includes an increase of $3.0 million of additional stock-based compensation costs, to support our organizational growth and achievement of our corporate goals; (ii) a $0.7 million increase in facilities, supplies and other office expenses due to growth of our organization; and (iii) a $0.3 million increase in professional fees and director and officer insurance premiums.
The increase of $5.9 million was primarily due to (i) a $3.6 million increase in personnel expenses, which includes an increase of $1.9 million of additional stock-based compensation costs, to support our organizational growth and achievement of our corporate goals; (ii) a net $0.6 million increase in facilities, supplies and other expenses due to growth of our organization; and (iii) a $2.3 million increase in professional fees.
In December 2022, we filed a prospectus supplement to the Shelf Registration Statement for the issuance and sale, if any, of up to an additional $250.0 million of shares of our common stock under the ATM Sales Agreement.
In June 2024, we filed a prospectus supplement to the New Shelf Registration Statement for the issuance and sale, if any, of up to an additional $350.0 million of shares of our common stock under the ATM Sales Agreement.
The decrease of $2.0 million in income tax provision is attributed to withholding taxes related to the taxable income generated in 2021 from the Hansoh Agreement. 101 Liquidity and Capital Resources Since our inception, we have incurred significant operating losses.
The increase of $0.3 million in income tax provision is attributed to withholding taxes related to the taxable income generated in 2024 from the Hansoh Agreement. 103 Liquidity and Capital Resources Since our inception, we have incurred significant operating losses.
Our net losses were $153.0 million, $104.7 million, and $58.7 million for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023 and December 31, 2022, we had an accumulated deficit of $381.4 million and $228.4 million, respectively.
Our net losses were $187.4 million, $153.0 million, and $104.7 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024 and December 31, 2023, we had an accumulated deficit of $568.8 million and $381.4 million, respectively.
As of December 31, 2023, we may offer and sell ATM shares at an aggregate offering price of up to the remaining $71.5 million available under the ATM Offering.
As of December 31, 2024, we may offer and sell ATM shares at an aggregate offering price of up to the remaining $117.7 million available under the ATM Offering.
These increases were partially offset by a $0.9 million decrease in director and officer insurance premiums. General and administrative expenses were $27.5 million for the year ended December 31, 2022, compared to $21.3 million for the year ended December 31, 2021.
These increases were partially offset by a $0.6 million decrease in director and officer insurance premiums. General and administrative expenses were $34.8 million for the year ended December 31, 2023, compared to $27.5 million for the year ended December 31, 2022.
We have assessed our R&D activities and expenditures to determine which activities and expenditures in Australia are likely to be eligible under the R&D Incentive. We estimate the refundable or non-refundable tax offset available to us based on available information at the time. This estimate is also reviewed by our external tax advisors on an annual basis.
We have assessed our R&D activities and expenditures to determine which activities and expenditures in Australia are likely to be eligible under the R&D Incentive. We estimate the refundable or non-refundable tax offset available to us based on available information at the time.
Income Tax (Provision) Benefit Income tax provision was zero for the years ended December 31, 2023 and December 31, 2022. Income tax provision was zero for the year ended December 31, 2022, compared to $2.0 million tax provision for the year ended December 31, 2021.
Income Tax Provision Income tax provision was $0.3 million for the year ended December 31, 2024, compared to zero for the years ended December 31, 2023, and 2022, respectively.
Our third product candidate, KER-065, is being developed for the treatment of obesity and for the treatment of neuromuscular diseases. 95 Since our inception in 2015, we have devoted the majority of our efforts into business planning, research and development of our product candidates, including by conducting clinical trials and preclinical studies, raising capital and recruiting management and technical staff to support these operations.
Since our inception in 2015, we have devoted the majority of our efforts into business planning, research and development of our product candidates, including by conducting clinical trials and preclinical studies, raising capital and recruiting management and technical staff to support these operations.
Cash Flows The following table summarizes our cash flows for each of the periods presented (in thousands): YEAR ENDED DECEMBER 31, 2023 2022 2021 Net cash used in operating activities $ (124,508) $ (70,062) $ (62,148) Net cash used in investing activities (2,464) (1,241) (1,024) Net cash provided by financing activities 178,956 120,309 28,550 Net increase (decrease) in cash and cash equivalents, and restricted cash $ 51,984 $ 49,006 $ (34,622) Cash Used in Operating Activities Net cash used in operating activities was $124.5 million for the year ended December 31, 2023, which was driven by a net loss of $153.0 million and $2.7 million net cash used by operating assets and liabilities, partially offset by non-cash charges including $28.8 million of stock-based compensation expense, $1.6 million in lease expenses and $0.8 million in depreciation.
Cash Flows The following table summarizes our cash flows for each of the periods presented (in thousands): YEAR ENDED DECEMBER 31, 2024 2023 2022 Net cash used in operating activities $ (160,869) $ (124,508) $ (70,062) Net cash used in investing activities (1,931) (2,464) (1,241) Net cash provided by financing activities 391,821 178,956 120,309 Net increase in cash and cash equivalents, and restricted cash $ 229,021 $ 51,984 $ 49,006 Cash Used in Operating Activities Net cash used in operating activities was $160.9 million for the year ended December 31, 2024, which was driven by a net loss of $187.4 million and $11.4 million net cash used by operating assets and liabilities, partially offset by non-cash charges including $34.9 million of stock-based compensation expense, $1.8 million in lease expenses and $1.2 million in depreciation.
As of December 31, 2023, we were eligible to offer and sell, from time to time, shares of our common stock for an aggregate offering amount of up to the remaining $71.5 million available under the ATM Program. As of December 31, 2023, we had cash and cash equivalents of $331.1 million.
As of December 31, 2024, we were eligible to offer and sell, from time to time, shares of our common stock for an aggregate offering amount of up to the remaining $117.7 million available under the ATM Program.
As of December 31, 2023, we have sold a total of 7,991,990 shares of our common stock pursuant to the ATM Offering for aggregate net proceeds of approximately $323.3 million after deducting sales agent commissions and estimated offering expenses.
As of December 31, 2024, we have sold a total of 4,290,096 shares of our common stock pursuant to the ATM Offering for aggregate net proceeds of approximately $228.6 million after deducting sales agent commissions and estimated offering expenses.
While our significant accounting policies are described in greater detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. 104 Revenue Recognition To date, our revenues have consisted solely of payments received related to research collaborations and licensing of intellectual property.
While our significant accounting policies are described in greater detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
During the year ended December 31, 2023, we sold a total of 4,061,606 shares of our common stock pursuant to the ATM Offering for aggregate net proceeds of $175.8 million after deducting sales agent commissions and estimated offering expenses.
As of and during the year ended December 31, 2024, we have sold a total of 4,290,096 shares of our common stock pursuant to the ATM Program for aggregate net proceeds of approximately $228.6 million after deducting sales agent commissions and estimated offering expenses.
These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and these assumptions either increase or decrease, our stock-based compensation expense could materially differ in the future. Stock-based compensation expense is classified in the accompanying statements of operations based on the function to which the related services are provided.
If factors change and these assumptions either increase or decrease, our stock-based compensation expense could materially differ in the future. Stock-based compensation expense is classified in the accompanying statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense for the portion of awards that have vested.
Net cash used in operating activities was $62.1 million for the year ended December 31, 2021, which was driven by a net loss of $58.7 million and $16.1 million in cash used in operating assets and liabilities, partially offset by non-cash charges, including $11.7 million of stock-based compensation expense and $0.4 million in depreciation.
Net cash used in operating activities was $124.5 million for the year ended December 31, 2023, which was driven by a net loss of $153.0 million and $2.7 million net cash used by operating assets and liabilities and non-cash charges, partially offset by non-cash charges including $28.8 million of stock-based compensation expense, $1.6 million in lease expenses and $0.8 million in depreciation.
We do not have any products approved for sale. We do not expect to generate any revenue from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years.
We do not expect to generate any revenue from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years. Since our inception, we have funded our operations primarily through equity financings and through research collaborations or licensing of intellectual property.
Our interest expense, net has not been significant to date. Research and Development Incentive Income Research and development incentive income includes payments received under the Research and Development Tax Incentive, or the R&D Incentive, from the Australian government.
Other Income (Expense), Net Research and Development Incentive Income Research and development incentive income includes payments received under the Research and Development Tax Incentive, or the R&D Incentive, from the Australian government.
We recognize stock-based compensation expense for the portion of awards that have vested. Forfeitures are recorded as they occur. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model.
Forfeitures are recorded as they occur. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model.
Net cash provided by financing activities was $28.6 million for the year ended December 31, 2021, which was primarily related to (i) net proceeds of $28.2 million received from sales of our common stock under the ATM Sales Agreement, after deducting sales agent commissions and before deducting offering expenses; and (ii) proceeds of $0.4 million related to exercises of options to purchase common stock.
Cash Provided by Financing Activities Net cash provided by financing activities was $391.8 million for the year ended December 31, 2024, which was primarily related to (i) net proceeds of $151.1 million received from our public offering of common stock in January 2024, after deducting underwriting discounts, commissions and offering expenses; (ii) net proceeds of $228.6 million received from sales of our common stock under the ATM Program, after deducting sales agent commissions and offering expenses; and (iii) proceeds of $12.1 million related to exercises of options to purchase common stock.
The $16.1 million of cash used in operating assets and liabilities was primarily comprised of (i) an $18.0 million increase in accounts receivable from the $20.0 million upfront payment pursuant to the Hansoh Agreement, net of $2.0 million in withholding tax; and (ii) a $1.5 million increase in prepaid expenses and other assets due to timing of expense recognition for our research and development costs, which was partially offset by a $4.1 million increase in accounts payable and accrued expenses to support the advancement of our programs.
The $11.4 million of cash used by operating assets and liabilities was primarily comprised of (i) a $10.2 million increase in prepaid expenses and other assets due to timing of expense recognition for our research and development costs; (ii) a $2.6 million increase in accounts receivable; and (iii) a $1.3 million change in operating lease liabilities. which was partially offset by a $2.7 million increase in accounts payable and accrued expenses to support the advancement of our programs.
The increase of $10.5 million is related to (i) an increase of $7.1 million in R&D Incentive income in Australia; and (ii) an increase of $3.6 million in dividend income, partially offset by $0.3 million primarily related to unrealized foreign exchange loss.
The increase of $6.8 million is primarily related to an increase of $8.7 million of dividend income, partially offset by (i) a decrease of $1.2 million in R&D Incentive income in Australia; and (ii) an increase of $0.7 million in other expense, net.
We have incurred and expect to continue to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services, director and officer insurance costs, and investor and public relations costs. 98 Other Income (Expense), Net Interest Expense, Net Interest expense, net primarily consists of interest earned on money market accounts and interest expense related to leasehold improvement debt amortization.
We have incurred and expect to continue to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services, director and officer insurance costs, and investor and public relations costs.
Research and Development Expenses The following table summarizes our research and development expenses for the years ended December 31, 2023, 2022, and 2021 (in thousands): YEAR ENDED DECEMBER 31, $ CHANGE 2023 2022 2021 2023 vs 2022 2022 vs 2021 KER-050 $ 41,249 $ 24,492 $ 16,515 $ 16,757 $ 7,977 KER-047 2,704 3,101 3,135 (397) (34) KER-012 20,931 12,433 13,072 8,498 (639) KER-065 5,962 6,010 2,241 (48) 3,769 Preclinical and development fees 9,716 6,120 3,119 3,596 3,001 Personnel expenses (including stock-based compensation) 43,408 27,683 13,275 15,725 14,408 Professional fees 3,298 3,844 2,671 (546) 1,173 Facilities and supplies 6,135 2,546 741 3,589 1,805 Other expenses 1,855 1,036 374 819 662 $ 135,258 $ 87,265 $ 55,143 $ 47,993 $ 32,122 Research and development expenses were $135.3 million for the year ended December 31, 2023, compared to $87.3 million for the year ended December 31, 2022.
Research and Development Expenses The following table summarizes our research and development expenses for the years ended December 31, 2024, 2023, and 2022 (in thousands): YEAR ENDED DECEMBER 31, $ CHANGE 2024 2023 2022 2024 vs 2023 2023 vs 2022 Cibotercept $ 29,777 $ 20,931 $ 12,433 $ 8,846 $ 8,498 KER-065 16,090 5,962 6,010 10,128 (48) Elritercept 44,319 41,249 24,492 3,070 16,757 Preclinical and development fees 12,008 12,420 9,221 (412) 3,199 Personnel expenses (including stock-based compensation) 55,946 43,408 27,683 12,538 15,725 Professional fees 5,083 3,298 3,844 1,785 (546) Facilities and supplies 7,832 6,135 2,546 1,697 3,589 Other expenses 2,574 1,855 1,036 719 819 $ 173,629 $ 135,258 $ 87,265 $ 38,371 $ 47,993 Research and development expenses were $173.6 million for the year ended December 31, 2024, compared to $135.3 million for the year ended December 31, 2023.
In May 2021, we filed a registration statement on Form S-3, which we refer to as the Shelf Registration Statement, including a base prospectus and sales agreement prospectus, with the Securities and Exchange Commission, or the SEC, which became effective immediately upon filing, for the issuance and sale of up to $150.0 million of shares of our common stock under the ATM Sales Agreement.
ATM Sales Agreement In December 2022, we filed a prospectus supplement to our registration statement on Form S-3ASR with the Securities and Exchange Commission, or the SEC, for the issuance and sale, if any, of up to$250.0 million of shares of our common stock pursuant to a sales agreement with Leerink Partners LLC, or Leerink, as sales agent, which we refer to as the ATM Sales Agreement, under which we may offer and sell, from time to time, shares of our common stock, or the ATM Shares, through Leerink, which we refer to as the ATM Offering.
The tax provision recorded for the year ended December 31, 2021 resulted from taxable income generated from the Hansoh Agreement. 99 Results of Operations Comparison for the years ended December 31, 2023, 2022, and 2021 The following table summarizes our results of operations for the years ended December 31, 2023, 2022, and 2021 (in thousands): YEAR ENDED DECEMBER 31, 2023 2022 2021 REVENUE: Service and other revenue $ 151 $ — $ — License revenue $ — $ — $ 20,100 Total revenue 151 — 20,100 OPERATING EXPENSES: Research and development (135,258) (87,265) (55,143) General and administrative (34,834) (27,525) (21,330) Total operating expenses (170,092) (114,790) (76,473) LOSS FROM OPERATIONS (169,941) (114,790) (56,373) OTHER INCOME (EXPENSE), NET: Interest expense, net — (1) (4) Research and development incentive income 2,400 7,081 — Dividend income 14,755 3,644 27 Other income (expense), net (206) (613) (383) Total other income (expense), net 16,949 10,111 (360) Loss before income taxes (152,992) (104,679) (56,733) Income tax provision — — (2,011) Net loss $ (152,992) $ (104,679) $ (58,744) Revenue Our revenue for the year ended December 31, 2023 consisted of service and other revenue related to the Tech Transfer Agreement.
We have not recorded any income tax benefits for the losses incurred as it is more likely than not that these benefits will not be realized based on our history of losses and expected future losses. 101 Results of Operations Comparison for the years ended December 31, 2024, 2023, and 2022 The following table summarizes our results of operations for the years ended December 31, 2024, 2023, and 2022 (in thousands): YEAR ENDED DECEMBER 31, 2024 2023 2022 REVENUE: Service and other revenue $ 550 $ 151 $ — License revenue $ 3,000 $ — $ — Total revenue 3,550 151 — OPERATING EXPENSES: Research and development (173,629) (135,258) (87,265) General and administrative (40,754) (34,834) (27,525) Total operating expenses (214,383) (170,092) (114,790) LOSS FROM OPERATIONS (210,833) (169,941) (114,790) OTHER INCOME (EXPENSE), NET: Interest expense, net — — (1) Research and development incentive income 1,238 2,400 7,081 Dividend income 23,496 14,755 3,644 Other expense, net (954) (206) (613) Total other income (expense), net 23,780 16,949 10,111 Loss before income taxes (187,053) (152,992) (104,679) Income tax provision (300) — — Net loss $ (187,353) $ (152,992) $ (104,679) Revenue Our revenue for the year ended December 31, 2024 consisted of service and other revenue substantially related to the Tech Transfer Agreement and Supply Agreement and license revenue related to the Hansoh Agreement.
The measurement date for awards is the date of grant, and stock-based compensation costs are recognized as expense over the requisite service period, which is generally the vesting period, on a straight-line basis. Our Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected volatility of the price of our common stock.
The measurement date for awards is the date of grant. For stock options that vest based on service conditions, stock-based compensation costs are recognized as expense over the requisite service period, which is the vesting period, on a straight-line basis.
We began separately disclosing KER-065-related expenses in 2023 due to the planned advancement of KER-065 into the clinic and have updated the 2022 and 2021 research and development expense tables to separately disclose KER-065-related expenses in order to provide a meaningful comparison of the year-over-year expenses.
We are no longer separately disclosing KER-047-related expenses in 2024 due to our decision to deprioritize the KER-047 program in 2023, and have updated prior period research and development expense tables to include KER-047-related expenses in preclinical expenses in order to provide a meaningful comparison of the year-over-year expenses.
By leveraging this understanding, we have discovered and are developing protein therapeutics that have the potential to provide meaningful and potentially disease-modifying benefit to patients. Our lead product candidate, KER-050 (elritercept), is being developed for the treatment of low blood cell counts, or cytopenias, including anemia and thrombocytopenia, in patients with myelodysplastic syndromes, or MDS, and in patients with myelofibrosis.
By leveraging this understanding, we have discovered and are developing protein therapeutics that have the potential to provide meaningful and potentially disease-modifying benefit to patients. One of our product candidates, cibotercept (KER-012), is being developed for the treatment of pulmonary arterial hypertension, or PAH, and for the treatment of cardiovascular disorders.
To date, we have not generated any revenue from product sales as none of our product candidates have been approved for commercialization.
To date, we have not generated any revenue from product sales 97 as none of our product candidates have been approved for commercialization. We have historically financed our operations primarily through the sale of convertible preferred stock and common stock and cash received from licensing agreements.
Research and development expenses were $87.3 million for the year ended December 31, 2022, compared to $55.1 million for the year ended December 31, 2021.
These increases were partially offset by a $0.4 million decrease in preclinical pipeline and development activities. Research and development expenses were $135.3 million for the year ended December 31, 2023, compared to $87.3 million for the year ended December 31, 2022.
Total Other Income (Expense), Net Total other income (expense), net was $16.9 million for the year ended December 31, 2023, compared to $10.1 million for the year ended December 31, 2022.
These increases were partially offset by a $0.9 million decrease in director and officer insurance premiums. Total Other Income (Expense), Net Total other income (expense), net was $23.8 million for the year ended December 31, 2024, compared to $16.9 million for the year ended December 31, 2023.
We expect that our existing cash and cash equivalents as of December 31, 2023, together with the net proceeds of approximately $151.0 million from our public offering of common stock in January 2024, will enable us to fund our operating expenses and capital expenditure requirements into 2027.
Based on our current operating assumptions, we expect that our existing cash and cash equivalents as of December 31, 2024, together with the $200 million upfront payment pursuant to the license agreement with Takeda Pharmaceuticals U.S.A., Inc., or Takeda, which we received in February 2025, will enable us to fund our operating expenses and capital expenditure requirements into 2029.
We apply the revenue recognition guidance in accordance with Financial Accounting Standards Board, Accounting Standards Codification, or ASC, Subtopic 606, Revenue from Contracts with Customers, or ASC 606, which was adopted January 1, 2018 using the full retrospective method.
Revenue Recognition To date, our revenues have consisted solely of payments received related to research collaborations and licensing of intellectual property. We apply the revenue recognition guidance in accordance with Financial Accounting Standards Board, Accounting Standards Codification, or ASC, Subtopic 606, Revenue from Contracts with Customers, or ASC 606.
Since our inception, we have funded our operations primarily through equity financings and through research collaborations or licensing of intellectual property. On May 3, 2021, we filed the Shelf Registration Statement, which permits us to offer, from time to time, an unspecified amount of common stock, preferred stock, debt securities and warrants.
On May 3, 2024, we filed a new registration statement on Form S-3ASR, or the New Shelf Registration Statement, to replace the Prior Shelf Registration Statement that was set to expire, which became automatically effective upon filing, and which permits us to offer, from time to time, an unspecified amount of common stock, preferred stock, debt securities and warrants, including through an “at the market” program with Leerink, as sales agent, or the ATM Program.
If the disruption persists and deepens, we could experience an inability to access additional capital when and if needed.
In addition, public health crises, bank failures, geopolitical tensions and resulting global slowdown of economic activity continue to rapidly evolve and have already resulted in a significant disruption of global financial markets. If the disruption persists and deepens, we could experience an inability to access additional capital when and if needed.
The Tech Transfer Agreement is set to expire on December 30, 2024, unless extended pursuant to its terms. We recognized $0.2 million of service and other revenue in connection with the Tech Transfer Agreement for the year ended December 31, 2023.
Our revenue for the year ended December 31, 2023 consisted of service and other revenue related to the Tech Transfer Agreement. We did not recognize any revenue for the year ended December 31, 2022.
We believe that our existing cash and cash equivalents, which include the net proceeds of approximately $151.0 million from our public offering of common stock in January 2024, will be sufficient to fund our projected liquidity requirements for at least the next 12 months.
Based on our current operating assumptions, we believe that our existing cash and cash equivalents, together with the $200.0 million upfront payment pursuant to the license agreement with Takeda, or the Takeda Agreement, which we received in February 2025, will be sufficient to fund our projected liquidity requirements into 2029.
Removed
Our second product candidate, KER-012, is being developed for the treatment of pulmonary arterial hypertension, or PAH, and for the treatment of cardiovascular disorders.
Added
Our second product candidate, KER-065, is being developed for the treatment of neuromuscular diseases. Our most advanced product candidate, elritercept (KER-050), is being developed for the treatment of low blood cell counts, or cytopenias, including anemia and thrombocytopenia, in patients with myelodysplastic syndromes, or MDS, and in patients with myelofibrosis.
Removed
We have historically financed our operations primarily through the sale of convertible preferred stock and common stock and cash received from licensing agreements. 2021 ATM Sales Agreement In May 2021, we entered into a Sales Agreement with Leerink Partners LLC, or Leerink, as sales agent, which we refer to as the ATM Sales Agreement, under which we may offer and sell, from time to time, shares of our common stock, or the ATM Shares, through Leerink, which we refer to as the ATM Offering.
Added
In May 2024, we filed a new registration statement on Form S-3ASR, which we refer to as the New Shelf Registration Statement, to replace the prior shelf registration statement that was set to expire, including a base prospectus, which became effective immediately upon filing, under which we could issue an unspecified amount of shares of our common stock, preferred stock, debt securities and warrants.
Removed
Income Tax (Provision) Benefit We have not recorded any income tax benefits for the losses incurred as it is not more likely than not that these benefits will be realized based on our history of losses and expected future losses.
Added
We recognized $3.0 million as revenue and $0.3 million in withholding tax upon the achievement of a development milestone related to the Hansoh Agreement on our consolidated statement of operations for the year ended December 31, 2024, and a receivable, net of withholding tax, on our consolidated balance sheet as of December 31, 2024. 99 Hansoh’s obligation to pay royalties for a given licensed product in a given region in the Hansoh Territory will begin on the date of the first commercial sale for such licensed product in such region and continue until the latest of (i) ten years from the date of the first commercial sale for such licensed product in such region, (ii) the expiration of the last valid claim of certain licensed patents or joint patents, and (iii) expiration of regulatory exclusivity in such region.
Removed
We did not recognize any revenue for the year ended December 31, 2022. Our revenue for the year ended December 31, 2021 consisted primarily of an upfront fee of $20.0 million under the Hansoh Agreement, whereby we granted to Hansoh the exclusive right to develop, manufacture and commercialize KER-050 and licensed products containing KER-050 within the Territory.
Added
We recognized $96.1 thousand and $150.8 thousand of service and other revenue for the years ended December 31, 2024 and 2023, respectively. Effective in February 2024, in connection with the Hansoh Agreement, we entered into a clinical product supply agreement with Hansoh, or the Supply Agreement.
Removed
These increases were partially offset by a net decrease of (i) a $0.4 million decrease of KER-047-related expenses, primarily driven by $0.5 million decrease in clinical trial activities corresponding to our decision to deprioritize the KER-047 program, partially offset by a $0.1 million increase manufacturing and preclinical costs; and (ii) a $0.5 million decrease in professional fees.
Added
We recognized $421.1 thousand of other revenue for the year ended December 31, 2024. 2024 License Agreement with Takeda Pharmaceuticals U.S.A., Inc. In December 2024, we entered into a license agreement with Takeda, which became effective on January 16, 2025.
Removed
These increases were partially offset by a net decrease of $0.6 million of KER-012-related expenses, which was driven by a $2.3 million decrease in manufacturing costs and preclinical activities, partially offset by a $1.6 million increase in activities to support the clinical advancement of the program.
Added
Under the terms of the license agreement with Takeda, or the Takeda Agreement, we granted to Takeda the exclusive right to develop, manufacture and commercialize elritercept and certain derivative compounds globally, excluding the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Takeda Territory.
Removed
We simultaneously entered into the ATM Sales Agreement with Leerink, as agent, to provide for the issuance and sale by us of the ATM Shares from time to time in “at the market” offerings under the Shelf Registration Statement, which we refer to as the ATM Program.
Added
Pursuant to the terms of the Takeda Agreement, we received a $200.0 million upfront payment in February 2025. In addition to the upfront payment, we are entitled to receive up to an aggregate of (i) $370.0 million upon the achievement of specified development and commercial milestones and (ii) $740.0 million upon the achievement of specified sales milestones.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed4 unchanged
Biggest changeInterest Rate Sensitivity As of December 31, 2023 and December 31, 2022, we had cash and cash equivalents of $331.1 million and $279.0 million, respectively. Our exposure to interest rate sensitivity is impacted by changes in the underlying U.S. bank interest rates.
Biggest changeInterest Rate Sensitivity As of December 31, 2024 and December 31, 2023, we had cash and cash equivalents of $559.9 million and $331.1 million, respectively. Our exposure to interest rate sensitivity is impacted by changes in the underlying U.S. bank interest rates.
As of December 31, 2023 and 2022, we had no debt outstanding that is subject to interest rate variability. Therefore, we are not subject to interest rate risk related to debt. 106 ITEM 8.
As of December 31, 2024 and 2023, we had no debt outstanding that is subject to interest rate variability. Therefore, we are not subject to interest rate risk related to debt. 108 ITEM 8.

Other KROS 10-K year-over-year comparisons