Keros Therapeutics (KROS) risk factors, FY2025 10-K

Other

1. 01SUMMARY OF SELECTED RISKS ASSOCIATED WITH OUR BUSINESS

Risks Related to Our Financial Position and Need for Additional Capital

1. 02We have a limited operating history, have incurred net losses in every year since our inception and anticipate that we will continue to incur net losses in the future26% rewritten
2. 03We will need substantial additional funding in order to complete the development and commence commercialization of our product candidates. Failure to obtain this necessary capital when needed may force us to delay, reduce or eliminate certain of our product development or research operations
3. 04Raising additional capital may cause dilution to holders of our common stock, restrict our operations or require us to relinquish rights to our technologies or product candidates

Risks Related to the Discovery, Development and Regulatory Approval of our Product Candidates

1. 05elritercept encounters safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business would be significantly harmedNew
2. 06Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy or safety, purity and potency of our product candidates or any future product candidates, which would prevent or delay or limit the scope of regulatory approval and commercialization
3. 07The results of preclinical studies and early-stage clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Initial success in our ongoing clinical trials may not be indicative of results obtained when these trials are completed or in later-stage trials
4. 08Additionally, 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
5. 09We may find it difficult to enroll patients in our clinical trials, which could delay or prevent us from proceeding with, or otherwise adversely affect, clinical trials of our product candidates
6. 10Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
7. 11Preclinical development is uncertain. Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all, which would have an adverse effect on our business
8. 12Our research and development activities could be affected or delayed as a result of shortages in animal availability or possible restrictions on animal testing
9. 13The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed
10. 14The FDA and any comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction65% rewritten
11. 15or a comparable foreign regulatory authority approves our product candidates, we will have to comply with requirements including submissions of safety and other post-marketing information and reports and registrationNew
12. 16If approved, our investigational products regulated as biologics, including rinvatercept and elritercept, may face competition from biosimilars approved through an abbreviated regulatory pathway
13. 17If 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
14. 18We may become exposed to costly and damaging liability claims, either when testing our product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims
15. 19We may seek Fast Track Designation by the FDA for product candidates that we develop, and we may be unsuccessful. If we are successful, the designation may not actually lead to a faster development or regulatory review or approval process
16. 20We may seek orphan drug designation for product candidates we develop, and we may be unsuccessful or may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity

Risks Related to Commercialization of Our Product Candidates

1. 21If 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
2. 22We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively24% rewritten
3. 23In March 2024, Italfarmaco S.p.A. announced that the FDA approved Duvyzat (givinostat), a histone deacetylase inhibitor for the treatment of DMD in patients aged six years and older37% rewritten
4. 24Other companies that are developing product candidates that are designed to target the TGF-ß signaling pathways include Scholar Rock Holding Corporation, Biogen Inc. and Regeneron Pharmaceuticals, Inc
5. 25If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we may not be successful in commercializing our products, if any, which in turn would have a material adverse effect on our business, financial condition and results of operations64% rewritten
6. 26Enacted and future healthcare legislation may increase the difficulty and cost for us to progress our clinical programs and obtain marketing approval of and commercialize our product candidates and may affect the prices we may set60% rewritten
7. 27Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers may be subject to applicable healthcare regulatory laws, which could expose us to penalties
8. 28In addition, our activities are also subject to certain federal, state consumer and foreign protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers
9. 29If the market opportunities for our product candidates are smaller than we believe they are, even assuming approval of a product candidate, our business may suffer
10. 30Any product candidates we develop may become subject to unfavorable third-party coverage and reimbursement practices, as well as pricing regulations

Risks Related to Our Intellectual Property

1. 31Our success depends in part on our ability to protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection
2. 32We depend on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business
3. 33If we fail to comply with our obligations under our patent license with a third party, we could lose license rights that are important to our business
4. 34If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
5. 35Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts
6. 36Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
7. 37Because our programs may involve additional product candidates that may require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license or use these proprietary rights
8. 38We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful
9. 39Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
10. 40Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO
11. 41We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world
12. 42We may incur substantial costs as a result of litigation or other proceedings relating to patents, and we may be unable to protect our rights to our products, if approved, and technology
13. 43Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
14. 44If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed
15. 45If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected

Risks Related to Our Reliance on Third Parties

1. 46Public health crises and government measures taken in response also impact our CROs, and may affect our ability to initiate and complete our preclinical studies and clinical trials51% rewritten
2. 47We are dependent on our existing third-party collaborations with Takeda and Hansoh to commercialize elritercept, and if Takeda and Hansoh are not successful in commercializing elritercept in their respective licensed territories, we will lose a significant source of potential revenue
3. 48Our current and future collaborations are and will be important to our business. If we are unable to enter into new collaborations, or if these or our current collaborations are not successful, our business could be adversely affected83% rewritten
4. 49activities under our collaboration with Takeda. This could lead to potential disputes in the future over the terms of the collaboration and the respective rights of the parties, and these risks and uncertainties could be present with respect to our potential future collaborations as wellNew
5. 50Additionally, if one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected
6. 51If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks

Risks Related to Our Employee Matters, Managing Our Growth and Other Risks Relating to Our Operations

1. 52We are highly dependent on our key personnel, including our Chief Executive Officer and Chief Scientific Officer. If we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy55% rewritten
2. 53Our corporate restructuring announced in May 2025 may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our businessNew
3. 54We will need to grow the size of our organization, and we may experience difficulties in managing this growth
4. 55In addition, certain state and foreign laws govern the privacy and security of health information in certain circumstances, some of which are more stringent than U.S. federal law and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts92% rewritten
5. 56Our employees, independent contractors, vendors, principal investigators, CROs and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
6. 57Public health crises could adversely impact our business, including the timing or results of our preclinical studies and clinical trials
7. 58A variety of risks are associated with operating our business internationally which could materially adversely affect our business
8. 59If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business
9. 60Changes in tax laws or regulations that are applied adversely to us may have a material adverse effect on our business, cash flow, financial condition or results of operations20% rewritten
10. 61Our ability to use our net operating loss, or NOL, carryforwards and certain tax credit carryforwards may be subject to limitation40% rewritten

Risks Related to Our Common Stock

1. 62An active, liquid and orderly trading market may not develop for our common stock and as a result it may be difficult for you to sell your shares of our common stock
2. 63Our 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
3. 64The market price of our common stock has been and is likely to continue to be volatile and fluctuate substantially22% rewritten
4. 65We could be subject to securities class action litigation
5. 66Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall
6. 67We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock
7. 68Our capital allocation strategy may not be effective at enhancing stockholder value, or providing other benefits we expectNew
8. 69Conflicts of interest may arise because some members of our board of directors are representatives of our principal stockholders
9. 70Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall52% rewritten
10. 71If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
11. 72We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices55% rewritten
12. 73We are a “smaller reporting company” and, as a result of the reduced disclosure requirements applicable to smaller reporting companies, our common stock may be less attractive to investorsNew
13. 74Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
14. 75Our stockholder rights plan and provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management53% rewritten
15. 76In addition, our amended and restated certificate of incorporation provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, unless we consent in writing to the selection of an alternative forum