Keros (KROS) Shares Plunge 7.69% to Intraday Low on PAH Trial Halt Due to Safety Risks

Keros (KROS) shares plunged to an intraday low of 7.69% today, marking the lowest level since August 2025, following a two-day decline of 8.81%. The selloff reflects ongoing investor concerns over the company’s flagship drug candidate, cibotercept, which was abruptly halted in its development for pulmonary arterial hypertension (PAH) due to severe safety risks. The TROPOS Phase 2 trial revealed dose-dependent pericardial effusions at higher doses, exceeding safety thresholds observed in both placebo and comparator studies, including Merck’s Winrevair. This adverse event profile, coupled with lack of meaningful efficacy in key metrics, prompted Keros to discontinue all PAH-related trials in January 2025, triggering a 77% stock price collapse at the time.

The drug’s failure has cascading implications for Keros’ strategic and financial stability. The company announced a 45% workforce reduction, trimming its team to 85 employees, to cut annual costs by $17 million. While exploring potential repurposing opportunities for cibotercept in other indications, no concrete plans have been disclosed. Regulatory scrutiny has intensified, with global authorities notified of the safety findings, which could delay future trials or lead to stricter oversight. This follows a history of volatility, including a 2024 market cap drop from $1.5 billion to $500 million before a partial recovery.

Investor sentiment remains divided. Despite some analysts maintaining “Buy” ratings, institutional activity has shown mixed signals, with entities like Candriam S.C.A. and American Century increasing holdings in late 2024. However, the broader biopharma sector’s competitive landscape, dominated by therapies like Merck’s Winrevair, highlights Keros’ challenges in regaining market traction. Financial pressures persist, with Q1 2023 losses of $1.26 per share and ongoing costs from clinical trials and regulatory reviews. The path forward hinges on transparent communication of strategic alternatives, cost optimization, and addressing regulatory hurdles to rebuild credibility and attract capital.