Keros Therapeutics, Inc. (KROS) Earnings Call Transcript & Summary

Hi, everyone. This is Eun Yang, a biotech analyst at Jefferies. This is my pleasure to host a fireside chat with Jas Seehra, Chief Executive Officer of Keros at the Jefferies Virtual Healthcare Conference. So as a reminder, Jas will be taking questions from the audience later. So feel free to type any question you might have in the box under the [ video ]. So before we go into Q&A, Jas is going to give a short overview, and then we'll go to Q&A. Jas?

Sure. Thank you, Eun. Thanks for this opportunity to have this discussion. As you know, okay, right, Keros is [ a duopoly in ] therapeutics that target the TGF-Beta pathway. And we've shared, [ opened ] 3 product candidates, KER-050 in MDS and myelofibrosis, 047 in diseases where iron imbalance leads to failure to incorporate iron into hemoglobin and leads also in anemia, and then 012 for treatment of bone disorders and PAH. So all 3 programs are on schedule as we've highlighted before in our filings and shared with investors. I think when I look at the preceding 5 months of 2021, I think the highlights of the year so far [ in bits ] was our multiple presentations at multiple meetings, starting with the European School of Hematology. We'll have some presentations at EHA. We also had the presentation at the American Thoracic Society. And importantly, for us, our foundational patent on the activin receptors was issued. So it really provides us with a very, very strong scientific and operational stance, okay, going into the remainder of the year. And with that, I'll hand it back to you.

Great. So let's just start with a kind of a like a big-picture question on TGF-Beta pathway. So you are developing, potentially differentiating the product compared to Acceleron, but targeting the same biological pathway. So aside from the different ligand-binding properties, can you talk about how Keros approached the knowhow, how they differentiated it from Acceleron's approach?

Yes. Look, I think Acceleron's approach has really highlighted the translation of biology from lower species to higher species. They've got approved product, Reblozyl, which is approved for treatment of anemia in MDS patients that are ring sideroblast positives. I think the early biology with 050 shows that it not only has the impact on red blood cell production, but it is a drug that targets multiple [ immunities ], including platelets. So it is having an effect on the [ myeloidic ] genes. And for us, okay, that's very, very exciting. Furthermore, when we look at just the erythropoiesis, Reblozyl, which has been shown to have the effect on the terminal stages of differentiation, whereas 050, we've now continued to provide additional data in 2020 as well as in 2021, that it actually impacts all stages of erythropoiesis. And that, I think, gives us reason to believe that it could work in correcting anemia in patients that are ring sideroblast as well as those that are non-ring sideroblast. I think that's where the differentiation can come. It can come, okay, at the number of different levels. First of all, we're going to be treating the patients on a monthly basis. So it's our decision to treat on a monthly base panned out by the data, which is supported by the data because that's the first level of differentiation. Then, of course, it's ring sideroblast versus non-ring sideroblast. Do we have the activity in both sets of patients? And that's the next level of differentiation. And then on the platelets, that's the third level of differentiation. So we've got multiple opportunities to differentiate 050 from the approved Reblozyl.

Okay. So obviously, your focus is on the Phase II data, initial data for 050 expected by the end of June. So as you pointed out, there are multiple levels of differentiation that you can potentially show. So this is going to be 2 low-dosing cohort data at 0.75 milligram per kg and then 1.5. So maybe Jas, you can talk about it's monthly dosing, but at the same time, in current Phase II, too, you have 3 additional months of follow-up after the last dose to see if you can potentially dose even less frequently than monthly. So can you talk about -- I mean, although you may not able to talk about much on what we should expect, but from those 3 key differentiating points, can you give us kind of a data that you have in healthy volunteers as well as preclinical data to support your confidence in [ products that you're looking to ] differentiate from Reblozyl?

Yes. So Eun, you're absolutely right, okay, that we're going to be sharing data from the first 2 cohorts, so the 0.7 and the 1.5 mg per kg dose. And we're in the -- currently in the 1.5 mg/kg dose. So I think the first thing is that the 0.7 mg per dose was deemed to be safe by the SRC, allowed us to dose escalate. And when we go back and look at the healthy volunteer data, what did we see? We saw that in the healthy volunteer study that the 0.75 mg, which was this single dose that we tested in the multiple ascending dose, we saw signals of changes in hematologic parameters, red blood cells as well as in platelet. So are we seeing those changes? Because I think that's the first thing. Do we have the biology that we saw in the healthy volunteers now translating to patients? Because then that it tells us we have a drug that's working. And it's all about finding the right dose level at that point. So I think the first thing, okay, is are we seeing changes of hematologic parameters in patients at the 0.75 and at the 1.5? And how does that relate, okay, to what we saw in the healthy volunteer study? I remember, okay, that in the healthy volunteer study, those are individuals that are relatively normal individuals, okay, right, where they don't have any significant disease or inflammation. Whereas here, these patients are very heterogeneous. So there's going to be patients that are ring sideroblast, those that don't have ring sideroblast. And then within each category, you're going to have patients that have not had a transfusion, so no transfusion, to those that have had transfusion. Therefore, you're going to be looking for signals of activity. So I think the way I tend to think about it is on an individual patient basis, did you see any changes in hematologic parameters? Okay, right. And the first one of those is indeed reticulocytes, can you see changes in the reticulocytes? And if you are, that's saying that the drug is trying to do something in those patients. And then the next question, okay, I think, is in patients that never saw a transfusion, where their bone marrow, while it's progressively declining in function is still functioning enough that they're making red blood cells. So do you see an increase in reticulocyte that lead to an increase in hemoglobin? And what is the magnitude of that change? So that's one level. And then in patients that have had a transfusion, they're further along in the journey on -- in terms of progression of the disease. Those patients' bone marrow is further advanced, okay, where it's not producing enough red blood cells that they're needing transfusion. So now do you see a change in reticulocyte and does that reticulocyte increase then lead to either an increase in hemoglobin or maintenance of hemoglobin? And that would be a measure of -- early indicator of transfusion reduction or transfusion independence. So you want to see that in both RS patients as well as in non RS patients because then that gives you confidence that you can see that in both patient population. And now it's a matter of what's the dose, okay, that's optimal for each patient population. And it could well be that the dose that's optimal for RS and the dose that's optimal for non-RS is different, okay, right? And so remember, okay, that this is a Phase II dose escalation study with the primary endpoint of safety. But because you can see changes in red blood cells and platelets rapidly, you're actually getting data about the response in these patients.

Do you expect to see -- so okay, RS and non RS patients, okay, so you want to see the hematologic changes, but at the same time, let's just say we're determining what the optimal dose will be. But for patients -- on transfusion versus non transfusion patients, do you expect to see differences there as well in terms of dosing -- potential dosing requirement?

I don't know, okay, right? I think, okay, right, one of the things, okay, that you can see from the data that was there with sotatercept. And with the sotatercept there were patients that did not have any transfusions that were pretty strong responders, okay, right? Because it depends upon where you are on the journey, right? I mean, when we talk about transfusion-independent patients, those that haven't had any transfusion, they're still heterogenous, okay, right, those that you catch early on in the disease, those that you catch a little bit further along. So what is the response? Don't know, okay, right, how to characterize that. We have to see that, okay, right? And it may well be that some patients are responding at a lower dose and others require a higher dose. And that could be both for RS and non RS. After all, when you look at, okay, how Reblozyl is being treated, they start at a lower dose with a dose escalation, okay, right, even in the RS patient. So you don't have to dose at the higher dose if the patient is responding. But I would suspect that as the patient progresses in the disease, you might -- you're going to have to modify that dose.

Okay. So earlier, Jas, you mentioned that currently, you're at 1.5-milligram dose, second cohort in the trial. I don't know if you have disclosed, but we're now moving to the third dosing cohort which is a 2.25 gram -- milligram?

Yes. So the next dose okay, right, it will be determined by the SRC. And it is following the Fibonacci rules, okay, whereby the first dose -- dose escalation is 2x the first dose, and then at 3x that -- for the next, so it should be 2.25, subject to the SRC modifying it, okay, right? They always have the ability to modify it. And that depends upon whether they consider it will be safe, if they're seeing a response or not, okay, right? So there's always the modification, but 2.25 was what was planned as the next dose level, subject to modification by an SRC.

So when are you moving to that dosing cohort, third dosing cohort?

We have not shared that, okay, right, but look, the study is ongoing will progress, okay, to that dose level. And when it's considered to be safe, we'll move to that. And then if that's safe, okay, right, we'll go from there to the next dose level. I can't tell you that because I don't have that full information, and we haven't speculated or shared that as yet.

Okay. So then question to you, you said it depends -- so they're initially used at certain doses, but it depends on the safety profile before you move into the next dose. So let's just say, 1.5 is safe and it's efficacious so you now move on to next dose. But then can you go above 2.25 milligram at the third dosing...

Yes, we could, okay.

You could?

Yes, we could, okay, right? Yes. Look, this is a safety study, okay, first and foremost. So this is our opportunity to look at what is the maximum dose okay, right, that we can go to where we see an effect, right? I mean, it could well be that you see a response at different dose levels in different patients. And therefore, okay, right, you want to know what is the dose that you can go to if you need in order to treat a patient. So this is our opportunity to do that. And if there's no dose-limiting talks, then you want to do that, go up as high as you can. As long as it's safe, right, and you're not putting patients at risk, this is your opportunity to test that.

I see. So let's just say you chose, or, let's say, hypothetically, you choose a third dosing cohort at 2.25 milligram, the next cohort, I think, at 3.75. So if you see a really good, I think let's say 2.25, then do you feel that you need to go to the [ fourth ] dosing cohort or you can potentially stop [ reporting in it ].

Yes. So you're really talking about starting Part 2, okay, right? Okay, right. I think that's what you're asking. And the answer, okay, right, to that is we have not shared that publicly. But I think this is where it's really important to ensure that you don't shortchange yourself in terms of understanding the drug at this point in time. It doesn't mean, okay, that you have to wait for the entire data set from the highest dose in order to start Part 2. But you should really try and find out, okay, the maximum information that you can get because it is highly likely that even in Part 2, you're not going to start everybody at the highest dose, okay, right, there is going to be some dose titration.

Okay. So, let's just say you found that the Phase III dose -- so when you start the Phase III, obviously, it's going to be sometime next year, do you think that you would need to compare 050 to luspatercept or do you think you can compare to placebo in Phase III?

Yes. I think in the U.S., okay, right, it is likely, okay, that it will be a placebo-controlled study. I think if we're only working in RS patients and we're not providing benefit in other ways, then I think, certainly, in Europe, okay, right, it is going to have to be a comparator arm, okay, right, there. I think in the U.S., it's not necessary. The FDA doesn't require it. But payers, okay, right, may want that. So we have to look at that. I think this is why our Phase II study is designed to really understand the drug. And therefore, our hope and desire is to go right from the beginning as a frontline therapy as opposed to having to do a comparator. So we're seeing activity in RS and non RS. We're seeing changes in platelets as well, okay, right? Then we design a Phase III study that is basically frontline therapy, okay, right? And as you know, in the U.S., that is still erythropoietin, okay, right? MDS patient treated with -- if they're anemic, with erythropoietin. So it will be a placebo-controlled study under those circumstances, but it might be also, one, okay, right, where you do it in comparison [ to support ]. Early days, okay, right? I think we need to see the data.

Okay. So let's just say, you have shown efficacy in RS patients as well as in non RS patients. Then would you actually run 2 different registrational trials of RS and non RS patients? Or is it going to be a combined 1 trial?

I think we have not made a decision on that, okay, right, as yet. But it behooves us the way they look at a study that includes both groups so that you minimize, okay, the size of the study. I mean, if you go back and you look at the Reblozyl study, right, it basically had, roughly speaking, 300 patients in it. If we did a placebo-controlled study in RS and on non RS separate study, then potentially that could be, okay, twice that size. On the other hand, if it's the same placebo group okay, right, then, okay, right, the study will be smaller than twice that size.

I see. Okay. So this initial Phase II data coming out at the end of this month, it sounds like based on healthy volunteer data as well as preclinical data, you seem quite confident that you would show changes in hematologic parameters. But in terms of dosing, dosing monthly, as I mentioned, you have additional 3 months of follow-up after the last dose. So would we be able to see your ability to dose less frequently than once monthly in the initial data?

Well, I think the first thing is, okay, is the data supportive of our decision to go on a monthly basis? That's the first thing, okay, right? Then the second thing indeed is as we continue to understand the drug in that follow-up period, okay, right, are you able to dose less frequently than a monthly, every 6 weeks or every 8 weeks? Because you want to do it on that 2 week cycle where patients are actually used to having 2 visits, okay, every 2 weeks? So we'll have to see what the data showed. It may well be that. You will only get that okay, right, at a higher dose. So you may not see it at the lowest doses and you may have to go to the higher dosing to see that less frequency.

I see. Okay. And then another activin receptor, 012 in PAH, you have additional preclinical data at AATS and then you are moving into Phase I, second half of this year. So the Phase I initiation, would that be in healthy volunteers?

It would be healthy volunteer study, yes.

Okay. So there, we are looking for whether we have increases in hemoglobin levels of red blood cells, in terms of safety or should we look for in that Phase I study data?

Yes, so look, I think we showed okay, with the 050. Beyond the hematologic changes, okay, right, changes in FSH and bone biomarkers, right? So remember, this is a drug that is going to target the same biology as sotetercept and [indiscernible] in the red blood cell sets. So we can go into healthy volunteer study postmenopausal women. We can look at changes in FSH. And those changes in FSH will tell us how much target engagement we get. When you get a 50% reduction in FSH in postmenopausal women that is equivalent to 100% target engagement in terms of activin in the pituitary. So that would really provide us with where we are in terms of target engagement as we dose escalate. Furthermore, looking at bone biomarkers, which is a slower change, okay, right? That's a change, okay, that's as a result of kicking off the biology. And therefore, you'll see that over a period of time. The bone biomarkers also tell you what the changes in -- what the consequence of that target engagement are. We have shared that we'll start the study in the second half of 2021, and we'll share data from Part 1 of that study in the first half of 2022. And what is first -- in part 1? Part 1 is the single ascending dose, okay, right, component of that. And we believe, okay, right, from that information, we'd get an idea of where we are in terms of target engagement. We'll also be able to confirm that what we saw preclinically in terms of red blood cells, where we didn't see it in rodents, we don't see it in monkeys, translates okay, right, to humans. And based upon all of the experience with multiple activin receptor ligand trap, we feel confident that what we see in monkeys has a probability of success in humans.

Okay. All right. And then you have 047. So we have about a minute left. So can you talk about what should we expect with 047?

Yes. I mean 047, okay, is the sleeping giant, okay, right, in some ways because we never get to talk very much about it. But we showed the healthy volunteer data, and you'll see a number of presentations at the European Hematology Association meeting. I think the data continues to strengthen our belief that this is the best way to mobilize iron and change, okay, those iron parameters, that can lead to a correction of anemia. I think that what you will also see at the European Hematology Association meeting is an abstract that said that we have the potential to reverse iron load, iron overload in patients. And that's based upon the preclinical data, where we created iron overload and treatment with an IL-2 inhibitor is able to reduce iron in liver. And that abstract has been published. So you'll see data from that study at the European Hematology Association meeting. So I think 047 continues to show the opportunities. We start the IRIDA and the IDA studies in the second half of this year. They're going to be open-label study. So they'll start generating data once they've been started.

Okay. Jas, our time is up. Thank you for the fireside chat, and we look forward to the data toward the end of this month.

Thank you very much for the opportunity. As always, pleasure talking to you.

Thank you. Bye.