Keros Therapeutics Inc.

Company Overview

Business Model: Keros Therapeutics, Inc. is a clinical-stage biopharmaceutical company dedicated to discovering and commercializing novel therapeutics. The Company focuses on treating a broad spectrum of disorders linked to dysfunctional signaling of the transforming growth factor-beta (TGF-ß) family of proteins, which are critical regulators of tissue growth, repair, and maintenance across skeletal muscle, bone, adipose, heart tissue, and blood. Keros Therapeutics, Inc. leverages its deep understanding of these pathways to develop protein therapeutics with the potential for meaningful, disease-modifying benefits. Its pipeline includes rinvatercept (KER-065) for neuromuscular diseases and elritercept (KER-050) for low blood cell counts (cytopenias) in myelodysplastic syndromes (MDS) and myelofibrosis. The Company generates revenue primarily through licensing agreements and collaborations, as it currently has no products approved for commercial sale.

Market Position: Keros Therapeutics, Inc. positions itself as a leader in understanding the TGF-ß family of proteins. The Company operates in highly competitive biotechnology and pharmaceutical markets, facing significant competition from large multinational pharmaceutical companies, established biotechnology firms, specialty pharmaceutical companies, and research institutions. These competitors often possess greater financial resources, R&D expertise, and established commercial infrastructures. Key competitive factors include efficacy, safety, tolerability, reliability, convenience of use, price, and reimbursement. Keros Therapeutics, Inc.'s strategy involves leveraging its proprietary discovery approach to develop differentiated product candidates and pursuing commercialization independently or through strategic collaborations.

Recent Strategic Developments:

• Rinvatercept (KER-065):
  • In March 2025, Keros Therapeutics, Inc. announced initial topline results from its Phase 1 clinical trial in healthy adult volunteers, showing rinvatercept was generally well-tolerated with no major safety signals. The trial demonstrated evidence of activin inhibition, leading to increased lean muscle mass, thigh muscle volume, bone formation, whole body bone mineral density, and fat mobilization, alongside decreased bone resorption and fat mass.
  • The Company expects to commence a Phase 2 clinical trial in patients with Duchenne muscular dystrophy in the second quarter of 2026.
  • Plans are underway to engage regulators on the design of a Phase 2 clinical trial in patients with amyotrophic lateral sclerosis in the second half of 2026.
  • In August 2025, the FDA granted orphan drug designation for rinvatercept for the treatment of Duchenne muscular dystrophy.
• Elritercept (KER-050):
  • In December 2024, Keros Therapeutics, Inc. entered into an exclusive license agreement with Takeda Pharmaceuticals U.S.A., Inc. for the development, manufacturing, and commercialization of elritercept globally, excluding mainland China, Hong Kong, and Macau. This agreement became effective on January 16, 2025.
  • Keros Therapeutics, Inc. received a $200.0 million upfront payment from Takeda Pharmaceuticals U.S.A., Inc. in February 2025.
  • In July 2025, the first patient was dosed in the placebo-controlled Phase 3 RENEW clinical trial for lower-risk MDS, triggering a $10.0 million milestone payment from Takeda Pharmaceuticals U.S.A., Inc., which was received in August 2025.
  • In December 2024, Keros Therapeutics, Inc. initiated the global, multicenter, double-blind, randomized, placebo-controlled Phase 3 RENEW clinical trial for transfusion-dependent anemia with lower-risk MDS.
  • The Company received Fast Track Designation for elritercept for the treatment of anemia in adults with lower-risk MDS.
• Cibotercept:
  • In January 2025, Keros Therapeutics, Inc. announced the early termination of its Phase 2 clinical trial (TROPOS) evaluating cibotercept in patients with pulmonary arterial hypertension due to unanticipated pericardial effusion adverse events.
  • Following this, cibotercept was deprioritized in August 2025, with all material internal development activities discontinued.
• KER-047:
  • In November 2023, the small molecule product candidate KER-047 was deprioritized, and all associated development activities were paused.
• Capital Allocation & Corporate Restructuring:
  • In October 2025, Keros Therapeutics, Inc. repurchased 10,176,595 shares of common stock from ADAR1 Capital Management and Pontifax Venture Capital for $180.6 million.
  • In November 2025, the Company completed an issuer tender offer, repurchasing an additional 10,950,165 shares of common stock for approximately $194.4 million, completing its $375.0 million capital return program.
  • In May 2025, Keros Therapeutics, Inc. implemented a corporate restructuring, including a reduction in force of approximately 45% of its employee base, which was substantially completed by July 2025, with estimated average annualized cost savings of approximately $17 million.

Geographic Footprint: Keros Therapeutics, Inc.'s principal executive office and all 78 full-time employees (as of December 31, 2025) are based in Lexington, Massachusetts, United States. The Company conducts research and development and clinical operations in Australia, New Zealand, Europe, the United Kingdom, and other foreign countries. Its licensing agreements for elritercept cover global markets, with Takeda Pharmaceuticals U.S.A., Inc. holding rights outside mainland China, Hong Kong, and Macau, and Hansoh (Shanghai) Healthtech Co., Ltd. holding rights within those territories. All revenues are currently derived from agreements originated in the United States.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: N/A
• Operating Margin: 27.7%
• Net Margin: 35.6%

Investment in Growth:

• R&D Expenditure: $129.6 million (53.1% of revenue)
• Capital Expenditures: $1.6 million
• Strategic Investments:
  • Upfront payment received from Takeda Pharmaceuticals U.S.A., Inc.: $200.0 million (February 2025).
  • Development milestone payment received from Takeda Pharmaceuticals U.S.A., Inc.: $10.0 million (August 2025).
  • Share repurchases: $375.0 million (October/November 2025).

Business Segment Analysis

Keros Therapeutics, Inc. operates as a single reportable segment, focusing on the discovery and development of novel therapeutics targeting the TGF-ß family of proteins. The Company manages its operations on a consolidated basis for performance assessment and operating decisions. Program-level expenses are tracked internally to allocate resources.

Program-Level Expenses (Operating Segment)

Rinvatercept:

• Revenue: N/A
• Expenses: $38.0 million (2025) vs. $44.3 million (2024) (-14.3% YoY)
• Key Growth Drivers: Decrease in expenses primarily due to a net decrease of $7.8 million in manufacturing and preclinical activities and a $1.2 million decrease in clinical spend associated with the completed Phase 1 clinical trial. The Company expects to commence a Phase 2 clinical trial in patients with Duchenne muscular dystrophy in Q2 2026 and engage regulators for a Phase 2 clinical trial in patients with amyotrophic lateral sclerosis in H2 2026.

Elritercept:

• Revenue: $243.9 million (2025) from Takeda Pharmaceuticals U.S.A., Inc. (license revenue and service revenue)
• Expenses: $12.6 million (2025) vs. $29.8 million (2024) (-57.7% YoY)
• Key Growth Drivers: Decrease in expenses primarily due to a decrease of $8.4 million in clinical spend associated with ongoing Phase 2 clinical trials and the advancement of the Phase 3 RENEW clinical trial, as clinical activities transitioned to Takeda Pharmaceuticals U.S.A., Inc. during 2025. This was partially offset by a $2.1 million increase in manufacturing activities. The Company received a $200.0 million upfront payment and a $10.0 million development milestone payment from Takeda Pharmaceuticals U.S.A., Inc. in 2025.

Cibotercept:

• Revenue: N/A
• Expenses: $6.8 million (2025) vs. $12.0 million (2024) (-43.2% YoY)
• Key Growth Drivers: Decrease in expenses primarily due to a $9.5 million decrease in clinical spend associated with the terminated Phase 2 clinical trial and a net decrease of $7.7 million in manufacturing and preclinical activities. Cibotercept was deprioritized in August 2025.

Preclinical and Development Activities:

• Expenses: $47.6 million (2025) vs. $55.9 million (2024) (-14.9% YoY)

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Keros Therapeutics, Inc. repurchased 21,126,760 shares of common stock for an aggregate of $375.0 million in October and November 2025. This included $180.6 million for 10,176,595 shares from ADAR1 Capital Management and Pontifax Venture Capital, and approximately $194.4 million for 10,950,165 shares through an issuer tender offer.
• Dividend Payments: The Company has never declared or paid any dividends on its capital stock and does not anticipate doing so in the foreseeable future, intending to retain future earnings for business development and expansion.
• Future Capital Return Commitments: Keros Therapeutics, Inc. plans to distribute 25% of any net cash proceeds received from the Takeda Agreement on or before December 31, 2028, to its stockholders.

Balance Sheet Position:

• Cash and Equivalents: $287.4 million as of December 31, 2025.
• Total Debt: The Company's balance sheet does not show long-term debt. Operating lease liabilities totaled $16.9 million as of December 31, 2025.
• Net Cash Position: $287.4 million (assuming no other significant debt).
• Credit Rating: Not disclosed.
• Debt Maturity Profile: Operating lease liabilities mature through 2031.

Cash Flow Generation:

• Operating Cash Flow: $107.5 million (2025) compared to $(160.9) million (2024). The positive operating cash flow in 2025 was primarily driven by the net income from the Takeda Agreement.
• Free Cash Flow: Approximately $105.9 million (2025), calculated as operating cash flow less capital expenditures.

Operational Excellence

Production & Service Model: Keros Therapeutics, Inc. relies entirely on third-party contract manufacturing organizations (CMOs) for the production of its product candidates for preclinical and clinical testing, and for potential commercial manufacture. These CMOs are required to adhere to current Good Manufacturing Practices (cGMPs) and other applicable regulations. The Company maintains an internal quality management organization responsible for auditing and qualifying its CMOs and has confidentiality and intellectual property provisions in place with its manufacturers. Supplies are procured on a purchase order basis, and the Company currently does not have long-term supply arrangements or redundant supply sources.

Supply Chain Architecture: Key Suppliers & Partners:

• Contract Manufacturing Organizations (CMOs): Engaged for the manufacture of bulk drug substances and finished drug products for preclinical and clinical use, as well as for labeling, packaging, and distribution.
• Contract Research Organizations (CROs): Utilized for conducting preclinical studies and clinical trials, and for managing associated data.
• Independent Clinical Investigators: Supervise the administration of investigational products in human clinical trials.
• Contracted Laboratories: Perform laboratory evaluations and analyses for preclinical studies.

Facility Network:

• Manufacturing: No internal manufacturing facilities; relies on third-party CMOs.
• Research & Development: Operates laboratory space at its principal executive office in Lexington, Massachusetts.
• Distribution: Relies on third-party CMOs for distribution of drug product for preclinical and clinical use.
• Office & Laboratory: Principal executive office at 1050 Waltham Street, Suite 302, Lexington, Massachusetts, comprising approximately 35,662 square feet (lease expires February 2031). The Company expanded its headquarters by subleasing an additional 20,000 square feet at the same address (sublease expires September 2029).

Operational Metrics:

• Total Employees: 78 full-time employees as of December 31, 2025.
• Workforce Composition: 59 employees are engaged in research and development, and 19 in management or general and administrative activities. 27 employees hold Ph.D. or M.D. degrees.
• Workforce Restructuring: In May 2025, the Company implemented a corporate restructuring that included a reduction in force of approximately 45% of its employee base, substantially completed by July 2025, with estimated average annualized cost savings of approximately $17 million.

Market Access & Customer Relationships

Go-to-Market Strategy: Keros Therapeutics, Inc. plans to independently advance its product candidates in indications and regions where it believes regulatory paths and commercialization strategies are clearly defined. The Company also opportunistically evaluates strategic collaborations to maximize the commercial value of its product candidates and discovery programs. For elritercept, Keros Therapeutics, Inc. has entered into exclusive license agreements with Takeda Pharmaceuticals U.S.A., Inc. for global commercialization (excluding mainland China, Hong Kong, and Macau) and with Hansoh (Shanghai) Healthtech Co., Ltd. for commercialization within mainland China, Hong Kong, and Macau. The Company currently lacks its own sales or marketing infrastructure and experience in biopharmaceutical product sales and marketing.

Customer Portfolio: Strategic Partnerships:

• Takeda Pharmaceuticals U.S.A., Inc.: Exclusive license for the development, manufacture, and commercialization of elritercept and certain derivative compounds globally, excluding mainland China, Hong Kong, and Macau.
• Hansoh (Shanghai) Healthtech Co., Ltd.: Exclusive license for the development, manufacture, and commercialization of elritercept and licensed products containing elritercept within mainland China, Hong Kong, and Macau.
• The General Hospital Corporation: Exclusive patent license agreement for certain patents and technical information. Customer Concentration: The Company's revenue from licensing agreements is concentrated with Takeda Pharmaceuticals U.S.A., Inc. and Hansoh (Shanghai) Healthtech Co., Ltd. for elritercept.

Geographic Revenue Distribution: All revenues recognized by Keros Therapeutics, Inc. are derived from agreements originated in the United States. The Company's R&D and clinical operations, however, extend to Australia, New Zealand, Europe, the United Kingdom, and other foreign countries.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The biotechnology and pharmaceutical industries are characterized by rapid technological advancements, intense competition, and a strong emphasis on proprietary rights. Product development is lengthy, expensive, and uncertain, with a high failure rate in clinical trials. The regulatory landscape is complex and evolving, with significant legislative and regulatory changes (e.g., ACA, OBBBA, Medicare Drug Price Negotiation Program, EU Pharma Package) impacting pricing, coverage, and reimbursement. There is also increasing scrutiny on data privacy and security (e.g., HIPAA, CCPA, GDPR).

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Duchenne Muscular Dystrophy (DMD):
  • Corticosteroids: EMFLAZA (PTC Therapeutics, Inc.), Agamree (Catalyst Pharmaceuticals).
  • Exon skipping drugs: EXONDYS 51, VYONDYS 53, AMONDYS 45 (Sarepta Therapeutics, Inc.), VILTEPSO (Nippon Shinyaku Co. Ltd.).
  • Gene therapies: ELEVIDYS (Sarepta Therapeutics, Inc.), REGENXBIO Inc., Solid Biosciences Inc.
  • Other therapies: Duvyzat (Italfarmaco S.p.A.), RNA-targeted treatments (Avidity Biosciences, Inc., Wave Life Sciences Ltd., Dyne Therapeutics, Inc.), myosin ATPase inhibitors (Edgewise Therapeutics, Inc.), AAK1 inhibitors (Satellos Bioscience Inc.).
• Amyotrophic Lateral Sclerosis (ALS):
  • Approved therapies: riluzole, edaravone, tofersen.
  • Other mechanisms: Otsuka Pharmaceutical Co., Ltd., Novartis AG, Genervon Biopharmaceuticals LLC. Keros Therapeutics, Inc. is not aware of other companies specifically targeting skeletal muscle for ALS.
• Anemia/Myelodysplastic Syndromes (MDS) & Myelofibrosis:
  • Anemia treatments: Kyntra Bio Inc. (formerly FibroGen Inc.), Astellas Pharma Inc., Reblozyl (Merck & Co. Inc. and Bristol-Myers Squibb Company), imetelstat (Geron Corporation).
  • Myelofibrosis treatments: pacritinib (Swedish Orphan Biovitrum AB), Ojjaara (GSK plc), MorphoSys AG (acquired by Novartis AG), Incyte Corporation, Geron Corporation.
• TGF-ß Signaling Pathway Targeting: Scholar Rock Holding Corporation, Biogen Inc., Regeneron Pharmaceuticals, Inc.

Emerging Competitive Threats: The Company anticipates intense and increasing competition from new treatments, advanced technologies, and industry consolidation. Competitors may develop safer, more effective, more convenient, or less expensive products, or achieve faster regulatory approvals, potentially impairing Keros Therapeutics, Inc.'s market entry and commercial success.

Competitive Response Strategy: Keros Therapeutics, Inc. aims to maintain its competitive advantage by leveraging its deep scientific expertise in TGF-ß signaling, expanding its proprietary pipeline of engineered ligand traps, and strategically pursuing development either independently or through collaborations. The Company focuses on indications with strong biological rationale and clinical validation, including neuromuscular and neurodegenerative disorders, rare bone and fibrosis diseases, and obesity/frailty.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: Keros Therapeutics, Inc. has a limited operating history, has incurred net losses in most fiscal years, and anticipates continued losses, creating uncertainty regarding future profitability. The Company is heavily dependent on the successful clinical development, regulatory approval, and commercialization of its product candidates, rinvatercept and elritercept. Clinical trials are inherently lengthy, expensive, and unpredictable, with potential for delays or failures (as seen with cibotercept's early termination). Regulatory approval processes are complex and may not accept foreign trial data, requiring additional costly studies. Even if approved, products may face challenges in market acceptance and unfavorable third-party coverage and reimbursement practices, which could limit commercial success. Healthcare legislation and government agency disruptions further add to market uncertainty.

Operational & Execution Risks

Supply Chain Vulnerabilities: The Company relies entirely on third-party contract manufacturing organizations (CMOs) for its product candidates, including single-source suppliers for rinvatercept and elritercept. Any disruption in supply, failure of CMOs to meet quality standards (cGMP), or non-compliance with regulations could severely delay or halt development and commercialization. The absence of redundant supply arrangements exacerbates this risk. Similarly, reliance on third-party contract research organizations (CROs) and clinical investigators for preclinical and clinical trials introduces risks related to resource allocation, performance, and regulatory compliance (GLP/GCP). The corporate restructuring in May 2025, including a 45% workforce reduction, may not yield anticipated savings, could disrupt operations, and impact talent attraction and retention.

Financial & Regulatory Risks

Market & Financial Risks: Keros Therapeutics, Inc. will require substantial additional funding to complete development and commercialization. Future capital raises may dilute existing stockholders, incur debt, or necessitate relinquishing rights to technologies. Quarterly operating results are expected to fluctuate significantly due to R&D expenses, trial outcomes, and collaboration payments. The Company's ability to utilize its substantial net operating loss (NOL) and tax credit carryforwards is subject to limitations due to past and future ownership changes (e.g., Section 382 of the Code). Changes in tax laws (e.g., Tax Act, IRA, OBBBA) could also materially impact financial results.

Regulatory & Compliance Risks: The Company's operations are subject to extensive and evolving healthcare regulatory laws, including anti-kickback statutes, false claims laws, and privacy regulations (HIPAA, CCPA, GDPR). Non-compliance could lead to significant penalties, fines, litigation, and reputational damage. The use of generative AI technologies by employees also presents risks of personal information disclosure and increased compliance costs. International operations expose the Company to diverse foreign regulations, including anti-corruption (FCPA), export controls, and trade sanctions, with potential for severe consequences for violations. Compliance with environmental, health, and safety laws related to hazardous materials also poses risks of fines or operational disruptions.

Geopolitical & External Risks

Geopolitical Exposure: Operating internationally exposes Keros Therapeutics, Inc. to risks such as differing standards of care, varied intellectual property protection, economic and political instability, and foreign currency fluctuations. Geopolitical conflicts (e.g., Russia-Ukraine war, Middle East war) could have broader impacts on global markets, supply chains, and the ability to conduct clinical trials. New export or import restrictions could limit international sales and revenue.

Innovation & Technology Leadership

Research & Development Focus: Keros Therapeutics, Inc.'s R&D is centered on the TGF-ß family of proteins, which are master regulators of tissue growth and repair. The Company's core technology involves discovering and developing protein therapeutics, specifically engineered ligand traps. Rinvatercept (KER-065) is designed to inhibit myostatin (GDF8) and activin A to enhance muscle and bone health and reduce fat/fibrosis. Elritercept (KER-050) is an engineered ActRIIA ligand trap aimed at increasing red blood cell and platelet production by modulating TGF-ß family signaling. The Company's proprietary discovery approach has generated a library of ActRII ligand traps, combining sequences from ActRIIA and ActRIIB, engineered to achieve therapeutic benefits while mitigating adverse effects observed with earlier-generation molecules. The innovation pipeline is focused on expanding wholly-owned assets for neuromuscular and neurodegenerative disorders, rare bone and fibrosis diseases, and obesity/frailty indications.

Intellectual Property Portfolio: As of February 27, 2026, Keros Therapeutics, Inc. holds a substantial patent portfolio, including 23 issued U.S. patents, 27 pending U.S. patent applications, 45 issued ex-U.S. patents, and 102 pending ex-U.S. applications, with expected expiry dates ranging from March 13, 2029, to October 29, 2046.

• Rinvatercept: Covered by 1 issued U.S. patent, 11 pending U.S. patent applications, and 26 pending ex-U.S. applications, with expected expiry between March 19, 2041, and May 8, 2046. These claims are directed to modified ActRIIA/ActRIIB ligand traps and their use in various diseases.
• Elritercept: Protected by 6 issued U.S. patents, 21 issued ex-U.S. patents, 10 pending U.S. patent applications, and 58 pending ex-U.S. applications, with expected expiry between November 9, 2037, and February 27, 2045. These claims cover ActRIIA ligand traps and their therapeutic uses.
• Other Technologies: The portfolio also includes patents and applications for cibotercept, GDNF fusion polypeptides, ALK2 antibodies, and other ActRII chimera ligand traps, with expected expiry between November 9, 2037, and November 9, 2043. The Company also relies on trade secrets and know-how, protected by non-disclosure and invention assignment agreements.

Technology Partnerships:

• Takeda Pharmaceuticals U.S.A., Inc.: Exclusive license for elritercept development, manufacturing, and commercialization globally (ex-mainland China, Hong Kong, and Macau).
• Hansoh (Shanghai) Healthtech Co., Ltd.: Exclusive license for elritercept development, manufacturing, and commercialization in mainland China, Hong Kong, and Macau.
• The General Hospital Corporation: Exclusive patent license agreement for certain foundational patents and technical information.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company is highly dependent on its key personnel, including its Chief Executive Officer, Jasbir Seehra, Ph.D., and Chief Scientific Officer, Lorena Lerner, Ph.D. The loss of these individuals could significantly impact R&D objectives.

Board Composition: The Board of Directors includes Jean-Jacques Bienaimé (Chair), Nima Farzan, Carl Gordon, Ph.D., C.F.A., Mary Ann Gray, Ph.D., Julius Knowles, and Alpna Seth, Ph.D. Two directors, Tomer Kariv and Ran Nussbaum, resigned in October 2025. In April 2025, the Board adopted a stockholder rights plan to protect stockholder interests and encourage negotiation for control. Certain board members represent principal stockholders, which may introduce potential conflicts of interest.

Human Capital Strategy

Workforce Composition: As of December 31, 2025, Keros Therapeutics, Inc. had 78 full-time employees, all based in the United States. Of these, 59 are engaged in research and development, and 19 in management or general and administrative activities. 27 employees hold Ph.D. or M.D. degrees. In May 2025, the Company implemented a corporate restructuring, reducing its workforce by approximately 45%, which was substantially completed by July 2025.

Talent Management: Acquisition & Retention: The Company emphasizes attracting, motivating, and retaining highly qualified managerial, scientific, and medical personnel in a competitive industry. It offers competitive pay and benefits, including stock options and restricted stock units for all employees, health insurance, paid parental leave, retirement plans with employer contributions, and life/disability/accident coverage. Diversity & Development: Keros Therapeutics, Inc. is committed to fostering an inclusive culture that reflects diverse experiences and identities. It provides formal and informal training and development opportunities at all levels and promotes from within. The Company also offers an education assistance program for full-time employees.

Regulatory Environment & Compliance

Regulatory Framework: Keros Therapeutics, Inc.'s product candidates are subject to extensive regulation by the FDA in the U.S. (Food, Drug, and Cosmetic Act, Public Health Service Act) and comparable foreign regulatory authorities. The regulatory process involves rigorous preclinical testing (GLP), IND applications, multi-phase clinical trials (GCP), and submission of NDAs or BLAs for marketing approval. Post-approval, products are subject to ongoing requirements for manufacturing (cGMP), labeling, safety monitoring, and potential post-marketing studies or Risk Evaluation and Mitigation Strategies (REMS).

• Special Designations: The Company may seek Orphan Drug Designation (7 years market exclusivity in U.S. for rare diseases) and Fast Track Designation to expedite development. Biologics, like rinvatercept and elritercept, may face biosimilar competition after 12 years of exclusivity in the U.S.
• International Regulations: Clinical trials and marketing authorizations in the EU are governed by the Clinical Trials Regulation (CTR) and require Marketing Authorization Applications (MAA) through centralized or national procedures, with 8 years data exclusivity and 10 years market exclusivity. The UK has also updated its clinical trial framework. Recent EU pharmaceutical legislation (Pharma Package) may reduce baseline market protection and reshape orphan medicinal product incentives. Trade & Export Controls: The Company is subject to U.S. export control laws, trade sanctions, and anti-corruption laws (e.g., FCPA), which apply to international operations and interactions with foreign officials. Recent U.S. regulations also impose restrictions on data transactions involving "countries of concern." Legal Proceedings: Keros Therapeutics, Inc. is not currently a party to any material arbitration or legal proceedings.

Tax Strategy & Considerations

Tax Profile: Keros Therapeutics, Inc. reported an effective tax rate of 5.3% for the year ended December 31, 2025, compared to -0.2% in 2024. The increase in 2025 was attributed to taxable income generated from the Takeda Agreement. As of December 31, 2025, the Company had $159.1 million in U.S. federal net operating loss (NOL) carryforwards (indefinite carryforward) and $27.9 million in state NOL carryforwards (expiring from 2039). It also had $0.3 million in U.S. federal and $0.1 million in state research and development tax credit carryforwards. Geographic Tax Planning: The Company maintains a full valuation allowance against its net deferred tax assets due to its history of losses. Ownership changes under Section 382 of the Code in 2016, 2020, and November 2025 have limited the annual utilization of NOL and tax credit carryforwards, resulting in the write-off of $14.0 million in federal R&D tax credits, $169.4 million in state NOLs, and $5.9 million in state R&D tax credits due to the November 2025 change. Tax Reform Impact: Recent legislative changes, including the Tax Cuts and Jobs Act, CARES Act, Inflation Reduction Act, and the One Big Beautiful Bill Act (OBBBA) (signed July 4, 2025), impact corporate taxation. The OBBBA retroactively restored the current tax deductibility of U.S.-based R&D expenditures for tax years beginning after December 31, 2024, and reinstated 100% bonus depreciation for qualified assets placed in service after January 19, 2025. Income Tax Provision: The income tax provision for 2025 was $4.9 million, with $7.1 million in cash paid for taxes ($4.9 million related to Australia and $2.3 million to U.S. federal income taxes).

Insurance & Risk Transfer

Risk Management Framework: Keros Therapeutics, Inc. maintains product liability insurance for its product candidates and intends to expand coverage for commercial products upon approval. The Company also carries workers’ compensation insurance. However, it does not hold specific biological waste or hazardous waste insurance coverage. Cybersecurity Risk Management: The Company has implemented various information security processes to identify, assess, and manage cybersecurity threats to its Information Systems and Data. This includes an incident response plan, vulnerability management, disaster recovery, business continuity plans, risk assessments, security standards, network/access controls, systems monitoring, employee training, and encryption. Cybersecurity risk management is integrated into the Company’s overall risk management processes, with the IT team working with management to prioritize and mitigate threats. Third-party service providers are utilized for cybersecurity assistance, and third-party risk management is performed for vendors handling sensitive data. The Company also maintains cybersecurity insurance. Cybersecurity Governance: The Board of Directors, through its Audit Committee, oversees the Company’s cybersecurity risk management processes. Senior management, including the Head of IT and Cybersecurity (with 20 years of experience), CFO, and General Counsel, are responsible for implementing and monitoring cybersecurity risk assessment and management processes, and for escalating significant incidents to the Audit Committee.