Keros Therapeutics, Inc. ($KROS)

All right. Good afternoon, everyone. Thanks for joining us here at the Goldman Sachs Global Healthcare Conference, including to all the people who are joining us online, and we have the cocktail slot, meaning we're preventing everyone from drinking our cocktail. So we're going to keep this interesting, I hope. And it's great to see you today.

So maybe just first, Jos, we could talk about kind of A little bit of background on the company and what you think about as the core competencies of cars, particularly as you embark on a new development program here?

Yes, I think, first of all, -- we are a company that's been focused on TGF-beta biology. And it's a complex area of biology. -- but we've been working in it through various iterations for the last 25-plus years. So I think we have a deep understanding that is unique to us in terms of what's druggable -- and what are the indications that you can target? And when it comes to the remainder of core competencies, clinical development, manufacturing and so they're transportable from 1 company to another. So focusing on TGF-beta biology, focusing on biologics in the TGF-beta space gives us a unique perspective on which molecules and which pretty curious to target.

Great. So I know it's not the lead permit since it's not the most advanced, but it has become kind of the focal point of your development program, which is -- maybe we could just start with some background. What's the rationale for TGF-beta directed therapies in the context of muscle generation and regeneration.

Yes. So like many other tissues, the TGF-beta pathway is involved in differentiation. So it's really involved in both self renewal of stem cells that then go on to populate the tissue, that happened during embryogenesis. But in the adult, these this pathway is constantly involved in generating new differentiated cells to replace the ones that are aging, okay, and therefore, ready on their path to senescence.

Great. And then in terms of the specifically relevant TGF-beta members, obviously, it's a very large family as you know probably better than most. What are the specifically relevant family members in the context of muscle.

So in the context of muscle, there's the TTF members that are involved in as negative regulators. So they keep the cells from differentiating. And then there's those okay, that allow differentiation to occur. And 25 years ago, 26 years ago, seeding discovered 1 of those that is a negative regulator of skeletal muscle. So when you knocked it out, the mice were twice as muscular as their normal peers, and he called that myostatin. -- for it and others soon learned that myostatin was not the only regulator because it acts through a particular receptor, other ligands can signal through. So today, we know that myostatin is important. -- but active in is equally and sometimes more important and especially in primates, including humans, activin is more important than in rodents. -- and myostatin is less important in adult humans than in ROADMs, okay, right? So I think you have to go and inhibit both of these ligands in order to increase muscle regeneration and thereby build stronger muscles.

Right. So I guess with that in mind, how is developed to specifically target these numbers? And what can you share around its interaction with those specific family members for some of the others that would be less relevant in this context.

Yes. So as you started this conversation, you said there's lots of members of the TTP pathway. And indeed, 33 ligands plus a dozen receptors. And tens of receptors, co-receptors and other members of the family that regulate this pathway. So it's really important that you target the ligands that have the benefit that you desire, and not have the off-target biology that can lead to safety events. So inhibiting myostatin and active important increase in colo muscle -- on the other hand, if you start inhibiting some of the bone morphogenic proteins then you can have bleeding events if it's BMP9 because that's involved in vascular development. And then as was observed with bimagrumab, Lilly molecule. You can have gastrointestinal symptoms like diarrhea because BNP is involved in the motility of the gastrointestinal track, okay, right? So you want to inhibit activins but minimize okay, these other binding so that you don't have the safety signals. And that's how we thought about coming up with 065 invade.

Okay. So it was originally developed in the context of muscular dystrophies. There is a pivot a period to obesity and then you're kind of back to focusing on the muscular dystrophies. Maybe you could walk through some of the clinical background here and why you feel like this is now the right approach to be targeting DMD in particular? .

5 Yes. So I think when you're increasing skeletal muscle, you are going to increase energy expenditure, right? So really, renvatrecep could have been taken into any indications. And hence, okay, we were originally thinking about neuromuscular indications. But as we had at that time, eritocept advancing and Sibodoseb advancing, we could even think about 065 in the context of obesity and a partner of asset -- there's only so many things that you can have in your own pipeline that you can develop on your own. However, once we go to the stage of having found a partner with Takeda for Aridicept, -- it was clear we needed to have another asset that we could develop on our own, hence the pivot back colette neuromuscular. But it was always the same thing. You can increase scotomas if you increase skeletal muscle, it can lead to stronger muscles, okay, right, and more functional benefit. But that in turn is also going to lead to increased energy expenditure and therefore, loss of fat, right? And just because these molecules do bind active, active as also a potent negative regulator of bone so you're going to make the bone stronger, okay, right, as well?

Okay. So then narrowed back to the muscular dystrophies have been specifically selected DMD. I guess why does DMD make sense from both kind of scientific basis but also a strategic basis?

Yes. So from a scientific point of view, okay, right, it's muscle that is weak. But then as a consequence of that muscle, being weaker every time it's used, it breaks down these 2 information and the information then lead to replacement of that muscle with fatty and a fibrotic tissue Okay? So it's a complex biology that arises from 1 missing protein dystrophin. That is a common feature of all of the muscular is. It's just a different protein in that linkage from the contract or apparatus all the way to the extra cellar of the muscle fiber. And any 1 of those can be weak and therefore, okay, that muscle is weak and breaks down easily. But the pathology that follows is always the same, inflammation, fibrosis, flat. Now the difference, okay, within all these is the time of onset -- some of the congenital muscular distribute, for example, onset at birth. And therefore, the endpoint there becomes survival. That's a real challenging endpoint, okay, right, to show you're going to treat babies newborns right? Very, very difficult, right, to go out. And then there's others like the limb girdles that don't get diagnosed until late adult -- late childhood into early adult -- and then the progression is so low that it's going to take you multiple years to get to your endpoint. So you want to find something that's sort of right in the middle. And Duchenne falls into that category. These boys get diagnosed between the 18 months and 3 years of age. -- because they're slow to work, but they all eventually work, okay? And then they go into the decline phase of their life, but they all start off at a point, okay, right, where they're getting stronger and then they get into that decline phase get right? So you can get to an endpoint in 12 months, okay, right, as opposed to 2, 3 years with some of the other indications.

Okay. So it was a development strategy. Where the pathology and the molecules by already fit in very, very nicely. SP1 Perfect. DMD is something of a crowd field, although there has been a number of clinical challenges and failures, and it's been a bit of a messy 1 as well in terms of drug development. How do you think about the unmet need that 065 is therefore positioned to address relative to that competitive landscape?

So when you really look at the landscape, there's a lot of molecules but many of them don't provide functional benefit. When you really think about it, glucocorticoids are the standard of care and the slow down progression of the disease, so the time to water is extended. The exon skippers, they increased a truncated dystrophin, but we still have not seen any meaningful benefit from that. I think if you go back 15 years ago, you would have been talking about gene therapy in the future as being a cure. We now know that gene therapy is not a cure, okay. Slowdowns of progression. But after 2 to 3 years. Nevertheless, the effect starts waning off. So there is room for additional treatments as a consequence. And what I think Benaderet does uniquely is that it's taking care of the pathology that arises as a consequence of missing dystrophin. So as the landscape continues to change with molecules that are targeting dystrophin, okay, right? Nevertheless, okay, right, they're not taking care of the underlying pathology that arose in the first place. So there's always going to be room for a combination treatment. And we've seen that preclinically in the presence of glucocorticoid. Invitae has additional benefit. It makes the muscle stronger. It ameliates the bone loss, okay, right, and decreases the fat. So taking care of the pathology that arises from the treatment itself. And then in the presence of exon skippers, you actually see more truncated dystrophin because exon skippers don't get into muscle fibers. They get into the myoblast, which fused with the muscle fibers. And therefore, if you increase the population of myoblast, which by increasing muscle regeneration, that's what you're doing, you're actually providing more vehicles for delivery of that genetic material to the existing muscle fibers.

You're kind of alluding to this, but maybe you can put a finer point on this. What do you think the treatment landscape is going to look like for Boise DMD in the next, let's call it, 5-plus years?

Yes, I think you're token gene therapy, right? They're going to get better. You're going to have better exon skippers. You're still going to have many patients on glucocorticos. ATEC inhibitors have got approved they do provide some benefit, okay, right? But these are all incremental. So I think regardless of what the background therapy is renvatrercept can be used on top of that, right, to provide additional benefit. But in many instances, it will actually improve the efficacy of those other treatments.

Okay. You previously have reported Phase I data evaluating 65 a year ago. These are primarily safety and tolerability, but can you remind us what that showed.

Yes. So in the Phase I healthy volunteer study, there was the single ascending dose and the multiple ascending dose -- in the single ascending dose, we had 1, 3 and 5 mg per kg. The drug was well tolerated, and we moved on to the multiple ascending dose -- and because it is well tolerated by the time we started the first cohort in the multiple ascending dose, we'd already gone up to 5 mg per kt in the set. And therefore, our initial dose was 2 mg per kg in that cohort. As we found out more about the PK properties, we found that we very close to full target engagement. Therefore, knowing that we were going to go into potentially into pediatric population, you always wanted to look at lower doses and our second dose was the lower dose [Audio Gap] per kg is maximum target engage, and we need to titrate up to that.

Okay. So then as you look to the Phase II design, what were some of the names you had in mind when designing that trial? And how did you think about the key parameters for that study?

So I think when you think about it, it's boys with DMD. -- early on, they're actually getting stronger. So you don't want to enroll those individuals because -- now each individual, okay, right, is getting stronger. So how do you show it, right, either stabilization or improvement. So you want to pick a court that is in the late ambulatory stage where they've got to stable muscle function or they're in decline, okay? Now you can show differences, okay, right, as a console. And then the early non-ambulatory are the patients that got into a water within the last 6 months to 12 months, they still have upper body functionality. And that's really important for continuing with their everyday activities, right? And maintaining that is important. So I think that's the first criteria. The second criteria, okay, right, really is, do you put patients that are on gene therapy, so exon skippers on glucocort -- that becomes pretty heterogeneous okay, right? So you have to start thinking about cohorts that are specific to the type of treatment that are on. More than 60% of the patients are not eligible for Axonight? They don't have the mutations that are amenable to exon skip 60-odd percent are on glucosmall percentage are on gene therapy. So by focusing on the glucocorticoids you are actually dealing with a larger population, that don't have any other treatments at the moment and then the non-amort -- so that's how we came to the design. That doesn't preclude us at future adding cohorts, okay, right, that are on exon skippers, okay, right? But that's at a later date.

Okay. And then in terms of like what you're looking for to establish early proof of concept, what would kind of be the data you need to see to feel like this is a program worth investing further behind -- and how long a follow-up do you need before that can start to emerge?

Yes. So I think let's look at the quick wins First of all, it's still a safety study in pediatric public. So we need to demonstrate safety. I think by the time you treat it 3 to 6 months, you are beginning to understand the safety profile. It just so happens that, that's the time in which you can see changes in lean mass, fat mass and bone mass, okay, right? And for all intent or purposes, when you're using imaging methods. They're almost like laboratory measurements, okay, right? So those are the early things that you can see. Now as you're seeing increases in lean mass, eventually, they're going to start showing functional benefit. And when you look at the boys with DMD. As we said earlier, over 12 months, right, you can actually see decline, okay, right, in the late ambulatory. And therefore, cadre, if they're stabilizing or improving, that's the time that you're going to begin to see -- this is an open-label study. So we'll be able to look at the data on a constant basis and start reporting that to investors through medical meetings as we get more and more confidence with the data.

Remind me in this patient population, what you would expect to see in boys in these kind of populations treated with glucocorticoid after 12 months. with respect to the clinical and functional endpoints.

Yes. So in the late ambultry,okay right what used to be a very popular endpoint, which was a 6-minute walk test. In the late ambulatory, you would have seen an 85-meter decline in the course of a year. So at Alora, right, was able to reduce that down to 65 meters, I believe, okay, right? And there was a benefit there, okay, right? So I think if you're able to get it down to half that, okay, right, then that would be clinically meaningful. And that today, 6-minute walk test is not used, okay? So a 10-meter walk around test. It's easier for the kids to do. So you're seeing changes, okay, in that appropriately would also be the way to look at it.

Okay. So I guess, how should we think about next steps -- maybe first, what should we look for in terms of the cadence of clinical data that you'll share in 2027 and beyond? And at what point would you move forward into a larger study? And what does that kind of trial does that look like?

I think in 2027, we'll start reporting the data, starting with safety and then the biomarkers of changes in muscle as we talked about through imaging methods and then the functional benefits, okay? That's going to be the cadence of events. I think once you see robust changes in the biomarkers and you begin to see changes in functional benefits. That's the time you take that data package and engage with the regulator and say, okay, what are the primary endpoints that you are looking for at this point in time that would get us approval. This is going to be functional benefit that we're going to be providing. We're not going to be able to go on the basis of increasing in a biomarker like dystrophy and, okay, right? So we are going to have to demonstrate functional benefit.

Okay. What kind of patient number -- recognizing a lot of this is going to be contingent on the magnitude of clinical benefit you see. What kind of patient numbers and time lines do you think need to run to generate that -- it's really hard to say that today, okay, right? But I don't think it's a study of hundreds of patients. It's probably a placebo-controlled study with placebo for some period of time. that would have to be determined in discussions with regulators and with patient advocacy groups, okay, right? Is it 12 months of placebo controlled? Or is it just 6 months of placebo controlled? Don't know that okay I think my suspicion is it's probably around 100 patient trial, but it all depends upon the magnet anode trial, of course. competitive clinical candidates in DMD, but in terms of the development path that you think most closely mirrors what you would need to show for the patient population you're talking about and the breadth of applicability of this drug across different patient populations in DMD. Are there any that you'd point to as good proxies for what you.

I think I would go back to the glucocorticoid where in 12 months, you can actually see improvements or slowing down, okay, right, in loss of function and muscle okay, right? I think that's the well-established -- when you look at the exon skippers, okay, right, they didn't really have a biological activity that you could measure, right? In the case of gene therapy, you're treating very young kids that are already getting stronger anywhere. So it's really hard to compare to any 1 of these.

Okay. What about the market opportunity as you think about it in DMD?

Well, as I said, it's on top of any other standard of care that there may be I think we've seen data from our preclinical studies that it could be glucocorticoid sparing or replace gluco o I think we have to let the data speak for it. But I think it's a treatment that can be on top of everything else.

In terms of then broadening the development path beyond DMD, the next indication you guys have talked about as ALS, -- maybe you could walk through the rationale for that indication selection and the role you think that it could play there.

So in the case of ALS, like SMA and other neuromuscular indications. It is muscle wasting that is arising as a consequence of failure to stimulate that muscle. Now -- in the case of ALS, you've got a single motor neuro that branches off and innovate okay, individual muscle fiber. And it is that neuromuscular junction loses that ability to be stimulated. But that 1 modern neuro is terminating hundreds of myofibers. So even though you've lost one, okay, there's many others that are still being stimulated. If you increase muscle regeneration and strength of those that are innovative, you can compensate for those, okay, that are atrophy, okay, due to the loss of neuromuscular junction. After all, that's what happens in ability medicine, okay, right? Often, you're not really able to deal with the muscle group that far. You're strengthening the joining muscle. -- here, you're doing the individual myofibers, within the muscle, okay, right? So what it means, okay, right, is that you'll be able to make the muscle stronger, maintain its functionality for a longer period of time and, therefore, provide a quality of life benefit. You may not have an effect at all on survival whatsoever, right? But you may have an effect on something like trimer, okay, right? Because that's dependent upon your diaphragm, right, and your intercostal muscles, right? There, you might be able to have some effect. So we think of this as a treatment that's going to improve muscle function in the innovative muscle and therefore, maintain functionality. So it's going to be a clinically meaningful improvements in quality of life for these patients, not necessarily a survival.

So in terms of then the endpoints that you would be testing in the clinical trial, what are the relevant endpoints that you're looking to improve? And what are kind of the clinical -- clinically meaningful benchmarks there?

Yes. So I think -- it's a little early. We're still in the design phase of that trial, okay? And we will share that as soon as we engage with regulators. But I think -- in the end, the approvable end point, okay, right, the validate is the ALS functional score, right? -- revise? -- and that's a collection of many abilities that a patient has. And therefore, okay, I think it is still going to be likely that -- on the other hand, we will have improvements in muscle function, Okaright? And so do you start okay, prioritizing some of the muscle function over the LS -- or is it a composite? Okay, don't know today, okay? -- we need to collect the data from a pilot study to see what we're seeing on in changes in terms of functional score as well as the muscle and then engage with the regulators on the design of a registrational there. but it is going to be a different path from many other trials where they're totally dependent upon the ALS functional score.

In terms of the pilot study that you're thinking about running, I guess, it sounds like there are still some key decisions to be made. What are those key decisions you have to think through in terms of designing that pilot program?

I think it's really the patients that you choose or could do since this is a muscle agent that's going to improve muscle, you don't want to take patients that are very late in their disease, okay, right, where they've lost most of the innovation. So you want early patients Okay, right? Now do you have a heterogeneous mix of rapidly progressing and slow progressing? Well, the greatest benefit is probably in the slow progressers okay, right? Because they have still innovation of those muscles. On the other hand, okay, right, what is the decline, okay, right, in their functional right? And can you measure that over a 6-month or a 12-month period. So those are the sort of the key things that we're looking at. And we're working with on this program out of the Helly Center at MDH, MyMatch. They've been doing clinical trials in ALS patients for 30-odd years. So they've got a lot of experience, a lot of data in that from clinical trials as well as placebo patients that they can mine okay, to help select the right patient population for this drug. It's actually amazing the amount of information they have. I couldn't be prouder that we were selected as 1 of the 4 or 5 programs, okay, that they put into this my match program.

I don't want to end the conversation without touching on elrintercept, which you have licensed to Takeda. Just remind us the economics associated with that program. And if you could, an update in terms of development time lines and.

It was $200 million upfront. It's a total out-license to Takeda with 2025 being the transition year, where we were transitioning all activities to Takeda. In addition, there's $1.1 billion in biobox, $90 million of that is development milestones and then the rest are upon approval and commercialization and from low double digits to high teens royalties on that. Now they're doing a great job because when we partnered, we just initiated the Phase II -- Phase III in second line, they've been recruiting into that trial. But in the meantime, they have made the decision to start the frontline trial as well. So that is on clinicaltrials.com. That study has started, they're recruiting into that study. And just recently, they also announced that they are going to start a Phase III trial in myelofibrosis treatment of anemia in transfusion-dependent patients, right? So that's pretty exciting. There got 3 trials going on 3 Phase III trials going on. And in addition, there's still continued with the Phase II MDS and myelofibrosis trial. And in the they're adding a cohort of luspatercept-treated patients. So they're really thinking broadly about the opportunity for.

Okay. Great. Maybe a final question for me. Just could you provide an update in terms of cash runway and the milestones and activities that are embedded in that guidance? And maybe like that into the conversation you just had about biobox, -- how does that change the picture of those things.

Yes. So we have $282 million, $81.5 million, okay, as of the Q filing. -- end of Q1, doesn't include any milestones from Takeda does not include interest. So we have a very, very clean balance sheet, okay, right? And that's $80million. -- was in the bank, okay? That provides us a runway we've guided into H1 2028, okay? And with milestones, of course, would be extended, okay, right? Included in that is the DMD trial, the ALS trial, but also bringing forward another asset into the clinical, right? So it is pretty comprehensive. -- development of our pipeline.

When will we get visibility on what that next asset is?

We have classically historically only share that as soon as we're sort of ready to start the Phase I trial okay, right? I think what you can do is look at our website at the presentations at preclinical scientific conferences, and you can then get a mix of what's potentially in the pipeline.

Right. That's a good teaser to end the meeting. It was great chatting with you, Joe. Thanks so much to everyone who joined us. and enjoy the rest of the conference.

Well, thank you for the opportunity.