Keros will be down to 85 full-time employees after the layoffs and expects to generate annualized savings of $17 million.
Keros Therapeutics will no longer develop the fusion protein cibotercept for pulmonary arterial hypertension, a move that the biotech on Thursday said triggered a 45% reduction in force.
The layoffs will start after the 60-day notice period required by law and will help the company realize annualized savings of some $17 million, as per Thursday’s news release.
In a note to investors on Thursday, William Blair analysts said that the discontinuation of cibotercept was “not surprising,” noting that while the asset will end its run in pulmonary arterial hypertension (PAH), the company is still evaluating its potential for other diseases. “We do believe that there could be an opportunity for cibotercept in other indications such as osteoporosis,” the analysts wrote.
Thursday’s announcement comes after Keros in December 2024 detected “unanticipated” cases of pericardial effusion, an abnormal accumulation of fluid around the heart, in patients treated with cibotercept. The safety signal caused the company’s stock to plummet more than 70% and pushed the Keros to suspend dosing in two of the higher-dose treatment arms in the study, though it continued treating patients in the 1.5-mg/kg arm.
A month later, however, Keros ran into more cases of pericardial effusion, including in the remaining dose group, which ultimately forced the company to completely halt dosing in the trial.
On Thursday, Keros revealed in a slide deck that cibotercept also disappointed on the efficacy front, failing to elicit clinically meaningful improvements in pulmonary vascular resistance and six-minute walk distance. While the analysis “was confounded by the trial halt so the data is difficult to interpret,” according to William Blair, the analysts noted that “it does not appear that cibotercept would be competitive with sotatercept [Merck’s Winrevair] on the preliminary evidence.”
Of note, two cibotercept-treated patients died, both of whom had worsening PAH. There was one death in the placebo group linked to worsening right heart failure. All mortalities were deemed unrelated to cibotercept.
Keros is in the midst of a sweeping strategic assessment of its business. Last month, the biotech launched a formal review of potential business alternatives, including a sale of the company, a business combination, continued investment into the pipeline and other transactions. Keros has engaged an outside and independent panel of directors to oversee the review.
Keros is not making any promises that the strategic review will result in any transaction, though the company on Thursday said it plans to provide a preliminary update of the review no later than June 9.
As of March 31, Keros had $720.5 million in cash and cash equivalents, enough to keep the lights on into 2029.
