Keros Plummets 73%: Unexpected Side Effects Shake Investor Confidence

Keros Therapeutics (KROS) stock plummeted 73% on Thursday, December 12, following the company's announcement that it had halted two arms of a Phase 2 clinical study of its lead drug, cibotercept, due to safety concerns. The unexpected side effects, including pericardial effusion, have left investors shocked and questioning the company's future.

The company's stock price fell from $73.00 to $15.67, a 78.5% drop, as investors reacted to the news. Keros Therapeutics' management expressed their surprise at the setback, with William Blair analyst Matt Phipps stating, "We believe the clinical setback will make it difficult to regain investor interest in cibotercept, which was the company's lead program and main value driver."

The halt in the clinical trial comes as Keros Therapeutics was preparing to present topline data from all treatment arms in the second quarter of 2025. The company continues to expect to present these data, but the setback has cast a shadow over the drug's future.

The unexpected side effects have raised questions about the drug's safety and the company's ability to manage risks in its drug development process. Investors are now closely watching the company's response and the outcome of the clinical trial.



Keros Therapeutics faces a significant challenge in regaining investor trust and confidence in its lead drug candidate, cibotercept. To address these concerns, the company must demonstrate a robust and transparent approach to safety and efficacy data, work closely with regulatory authorities, and provide clear communication on the root cause of the side effects and a revised clinical trial plan that prioritizes patient safety.

The incident also raises regulatory concerns, as the U.S. Food and Drug Administration (FDA) may scrutinize the company's clinical trial processes and data integrity. If the FDA finds issues, it could result in delays or even halts in future drug development and approval processes, further impacting investor confidence.

In conclusion, Keros Therapeutics' stock plunge following the unexpected side effects in its lead drug candidate, cibotercept, has left investors shocked and questioning the company's future. To regain investor trust and confidence, Keros must address the safety concerns, demonstrate a robust approach to drug development, and cooperate with regulatory authorities. The long-term impact on the company's stock price and investor confidence will depend on how Keros handles this setback and the outcome of the clinical trial.