ADAR1 Capital Management Issues Open Letter to Keros Therapeutics Stockholders
ADAR1 Capital Management, Keros Therapeutics' (NASDAQ: KROS) largest stockholder with a 13.3% stake, has released an open letter expressing concerns about the company's performance and direction. The activist investor announced plans to withhold votes for directors Dr. Mary Ann Gray and Dr. Alpna Seth at the June 4, 2025 stockholder meeting.
ADAR1 criticizes Keros for concerning clinical results in two drug candidates (KER-012 and KER-065) and calls for major restructuring, including a 70% headcount reduction and return of excess capital to shareholders. The company holds over $720 million in cash as of March 31, 2025. ADAR1 believes their proposed changes could deliver $24-35 per share in value, focusing on KER-050's partnership with Takeda, which they estimate could achieve $2 billion in peak sales.
ADAR1 Capital Management, il maggiore azionista di Keros Therapeutics (NASDAQ: KROS) con una quota del 13,3%, ha pubblicato una lettera aperta esprimendo preoccupazioni riguardo alle performance e alla direzione dell'azienda. L'investitore attivista ha annunciato l'intenzione di non sostenere la rielezione dei direttori Dr.ssa Mary Ann Gray e Dr.ssa Alpna Seth all'assemblea degli azionisti del 4 giugno 2025.
ADAR1 critica Keros per i risultati clinici preoccupanti di due candidati farmaci (KER-012 e KER-065) e chiede una ristrutturazione importante, che includa una riduzione del personale del 70% e la restituzione del capitale in eccesso agli azionisti. La società detiene oltre 720 milioni di dollari in liquidità al 31 marzo 2025. ADAR1 ritiene che le modifiche proposte potrebbero generare un valore di 24-35 dollari per azione, concentrandosi sulla partnership di KER-050 con Takeda, che stimano possa raggiungere un picco di vendite di 2 miliardi di dollari.
ADAR1 Capital Management, el mayor accionista de Keros Therapeutics (NASDAQ: KROS) con una participación del 13,3%, ha publicado una carta abierta expresando su preocupación por el desempeño y la dirección de la empresa. El inversor activista anunció que planea abstenerse de votar a favor de los directores Dra. Mary Ann Gray y Dra. Alpna Seth en la reunión de accionistas del 4 de junio de 2025.
ADAR1 critica a Keros por los resultados clínicos preocupantes de dos candidatos a fármaco (KER-012 y KER-065) y solicita una reestructuración importante, incluyendo una reducción del 70% del personal y la devolución del capital excedente a los accionistas. La compañía tiene más de 720 millones de dólares en efectivo al 31 de marzo de 2025. ADAR1 cree que los cambios propuestos podrían generar un valor de 24-35 dólares por acción, enfocándose en la asociación de KER-050 con Takeda, que estiman podría alcanzar ventas máximas de 2 mil millones de dólares.
ADAR1 Capital Management는 Keros Therapeutics(NASDAQ: KROS)의 최대 주주로서 13.3%의 지분을 보유하고 있으며, 회사의 성과와 방향성에 대한 우려를 표명하는 공개 서한을 발표했습니다. 이 행동주의 투자자는 2025년 6월 4일 주주총회에서 이사인 Dr. Mary Ann Gray와 Dr. Alpna Seth에 대한 투표를 보류할 계획임을 밝혔습니다.
ADAR1은 두 약물 후보(KER-012 및 KER-065)의 임상 결과가 우려스럽다며, 70% 인력 감축과 초과 자본의 주주 환원을 포함한 대대적인 구조조정을 요구하고 있습니다. 회사는 2025년 3월 31일 기준으로 7억 2,000만 달러 이상의 현금을 보유하고 있습니다. ADAR1은 제안된 변화가 주당 24~35달러의 가치를 창출할 수 있다고 보고 있으며, Takeda와의 KER-050 파트너십에 주목해 최대 매출 20억 달러 달성을 예상하고 있습니다.
ADAR1 Capital Management, principal actionnaire de Keros Therapeutics (NASDAQ : KROS) avec une participation de 13,3%, a publié une lettre ouverte exprimant ses inquiétudes concernant la performance et l'orientation de l'entreprise. L'investisseur activiste a annoncé son intention de ne pas soutenir les votes en faveur des administrateurs Dr Mary Ann Gray et Dr Alpna Seth lors de l'assemblée des actionnaires du 4 juin 2025.
ADAR1 critique Keros pour les résultats cliniques préoccupants de deux candidats médicaments (KER-012 et KER-065) et appelle à une restructuration majeure, incluant une réduction de 70 % des effectifs et le retour des capitaux excédentaires aux actionnaires. L'entreprise dispose de plus de 720 millions de dollars en liquidités au 31 mars 2025. ADAR1 estime que les changements proposés pourraient générer une valeur de 24 à 35 dollars par action, en se concentrant sur le partenariat de KER-050 avec Takeda, qu'ils estiment pouvoir atteindre 2 milliards de dollars de ventes au pic.
ADAR1 Capital Management, der größte Aktionär von Keros Therapeutics (NASDAQ: KROS) mit einem Anteil von 13,3%, hat einen offenen Brief veröffentlicht, in dem Bedenken hinsichtlich der Leistung und Ausrichtung des Unternehmens geäußert werden. Der aktivistische Investor kündigte an, bei der Hauptversammlung am 4. Juni 2025 gegen die Wiederwahl der Direktoren Dr. Mary Ann Gray und Dr. Alpna Seth zu stimmen.
ADAR1 kritisiert Keros für besorgniserregende klinische Ergebnisse bei zwei Wirkstoffkandidaten (KER-012 und KER-065) und fordert eine umfassende Umstrukturierung, einschließlich einer 70%igen Reduzierung der Mitarbeiterzahl und die Rückführung von überschüssigem Kapital an die Aktionäre. Das Unternehmen hält zum 31. März 2025 über 720 Millionen US-Dollar in bar. ADAR1 ist der Ansicht, dass die vorgeschlagenen Änderungen einen Wert von 24-35 US-Dollar pro Aktie schaffen könnten, wobei der Fokus auf der Partnerschaft von KER-050 mit Takeda liegt, die sie auf 2 Milliarden US-Dollar Spitzenumsatz schätzen.
- Partnership with Takeda for KER-050 has potential for $2 billion in peak sales
- Strong cash position of $720 million as of March 31, 2025
- Potential for $24-35 per share in value through proposed restructuring
- Concerning side effects in clinical trials for two drug candidates (KER-012 and KER-065)
- Negative total stockholder returns across all timeframes since IPO
- Significant underperformance compared to proxy peers and market benchmarks
- Excessive cost structure and unfocused strategy according to largest shareholder
Insights
Activist investor ADAR1 challenges Keros' strategy after poor clinical results, demanding 70% staff reduction and focus solely on Takeda partnership program.
ADAR1 Capital Management's activist letter represents a significant escalation in shareholder pressure on Keros Therapeutics, with potential structural implications for the company's future. With a 13.3% ownership stake, ADAR1's criticisms carry substantial weight in this battle for strategic control.
The letter's most damaging assertion is that two of Keros' three drug candidates—KER-012 and KER-065—have allegedly demonstrated "concerning side effects" in clinical trials. According to ADAR1, these programs should be discontinued immediately to prevent further value destruction. Instead, ADAR1 advocates focusing exclusively on KER-050 (elritercept), being developed with Takeda, which they believe could achieve
The performance data included in the letter presents a compelling case for intervention. Keros has generated negative returns across every timeframe since its IPO, underperforming its proxy peers by
ADAR1's proposed restructuring is extraordinarily aggressive even by biotech standards—a
The coordinated voting strategy between ADAR1 and Pontifax (which owns
This activist campaign arrives at a critical juncture, essentially forcing a wholesale reassessment of Keros' clinical priorities, capital structure, and governance. With over
Announces Intention to Withhold Votes for Directors Dr. Mary Ann Gray and Dr. Alpna Seth
In the letter, ADAR1 details the Company's alarming clinical results for two of its three drug candidates — KER-012 and KER-065 — and expresses serious concern that continued investment in these programs risks further shareholder value destruction. ADAR1 calls for Keros to restructure the business, significantly reduce headcount, return excess capital to stockholders, and ensure the Takeda licensing partnership is managed to maximize value for investors.
Given its loss of confidence in the Company's management and Board of Directors, ADAR1 announced its intention to "WITHHOLD" votes on the re-election of Dr. Mary Ann Gray and Dr. Alpna Seth at Keros' upcoming Annual Meeting of Stockholders, scheduled to be held on June 4, 2025.
The full text of the letter is below.
* * *
Dear Fellow Stockholders,
Keros Therapeutics ("Keros" or the "Company") is at a crossroads. Two of the Company's three drug candidates, KER-012 and KER-065, have demonstrated concerning side effects in clinical trials. In our view, any further development would be dilutive to stockholder value and, potentially, put patients at risk.
As Keros' largest stockholder with approximately
Unfortunately, the Company has dismissed our recommendations and continues to operate with what we believe is an excessive cost structure, an unfocused strategy, and an unnecessarily bloated balance sheet with too much cash. Rather than right-sizing its capital structure and concentrating on high-potential opportunities, the Company has persisted with developing programs that we believe are value-destructive.
We invested in Keros because we saw enormous potential. But in our view, that potential is being squandered.
The numbers speak for themselves. Keros has generated negative total stockholder returns across every relevant timeframe since its initial public offering, underperforming its proxy peers and relevant market and biotechnology sector benchmarks.
1-Year | 2-Year | 3-Year | 4-Year | 5-Year | Since IPO | |
Keros Therapeutics | (77 %) | (69 %) | (71 %) | (75 %) | (51 %) | (34 %) |
vs. Proxy Peers | (18 %) | (20 %) | (38 %) | (25 %) | (9 %) | (50 %) |
vs. Nasdaq Composite Index | (86 %) | (116 %) | (120 %) | (109 %) | (159 %) | (167 %) |
vs. Nasdaq Biotechnology Index | (69 %) | (64 %) | (85 %) | (63 %) | (54 %) | (54 %) |
vs. SPDR S&P Biotech ETF | (62 %) | (59 %) | (81 %) | (36 %) | (30 %) | (32 %) |
Source: Bloomberg. Data as of May 6, 2025. "Proxy Peers" include Akero Therapeutics, Arcturus Therapeutics, Crinetics Pharmaceuticals, Editas Medicine, Geron Corp., IDEAYA Biosciences, Iovance Biotherapeutics, KalVista Pharmaceuticals, Kura Oncology, Mersana Therapeutics, Morphic Holding, Protagonist Therapeutics, Replimune Group, Rocket Pharmaceuticals, Scholar Rock Holding Corp., Springworks Therapeutics, Syndax Pharmaceuticals and Zentalis Pharmaceuticals. Peer data refers to median. |
The Company's current market value barely reflects our estimate of the net present value of potential milestone payments from the Takeda partnership, suggesting that investors assign zero value to the rest of Keros' pipeline and believe that the Company will deploy its substantial capital — more than
We think a new approach is urgently needed and the best path forward for Keros and its stockholders is to:
- Restructure the business and reduce headcount by at least
70% ; - Return excess cash to stockholders, preserving only what is necessary to support high-confidence opportunities; and
- Ensure that stockholders capture the upside from the Takeda partnership through a contingent value right or similar mechanism.
We believe these initiatives could ultimately deliver between
We see no reason to be optimistic about the prospects of KER-012 or KER-065. Without a change in oversight and strategy, we believe the Company's poor performance and depressed valuation will persist. Keros needs a Board that will ask tough questions, challenge management, and act with a sense of urgency. It is time for accountability.
To that end, we intend to vote "WITHHOLD" on the re-election of Dr. Mary Ann Gray and Dr. Alpna Seth — two directors who have presided over the Company's challenges — to send a clear message that stockholders are dissatisfied with the Company's current direction and that meaningful change is necessary.
We also believe that significant stockholders – such as ADAR1 and Pontifax, which owns approximately
At this Annual Meeting, stockholders have an opportunity to make an unequivocal statement that the Company cannot continue along the same path that has led to significant value destruction.
Sincerely,
Daniel Schneeberger
ADAR1 Capital Management
About ADAR1 Capital Management
ADAR1 Capital Management is an SEC-registered investment manager based in
Forward-Looking Statements
Certain financial projections and statements made in this press release and accompanying letter have been derived or obtained from filings made with the Securities and Exchange Commission ("SEC") or other regulatory authorities and from other third-party reports. Neither ADAR1 nor any of its affiliates shall be responsible or have any liability for any misinformation contained in any third-party SEC or other regulatory filing or third-party report. Select figures presented in this press release and accompanying letter have not been calculated using generally accepted accounting principles ("GAAP") and have not been audited by independent accountants. Such figures may vary from GAAP accounting in material respects and there can be no assurance that the unrealized values reflected within such materials will be realized. Nothing in this press release and accompanying letter is intended to be a prediction of the future trading price or market value of securities of the Company. Words such as "anticipate", "believe", "could", "estimate", "expect", "may", "ought to", "plan", "project", "seek", "should", "will", "would" and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Reliance on any forward-looking statements involves known and unknown risks and uncertainties and there is no assurance or guarantee that actual results or performance of the Company will not differ, and such differences may be material. In addition, there can be no assurance or guarantee with respect to the prices at which any securities of the Company will trade, and such securities may not trade at prices that may be implied herein. The estimates, projections and potential impact of the opportunities identified by ADAR1 herein are based on assumptions that ADAR1 believes to be reasonable as of the date of this press release.
Contact:
info@adar1.com
512-254-3790
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SOURCE ADAR1 Capital Management LLC
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