Keros Plummets 77% After Unexpected Side Effects 'Shock' Its Lead Drug

Keros Therapeutics, Inc. (KROS) stock plummeted by a staggering 77% on Thursday, following the company's announcement of unexpected side effects in its lead drug candidate, cibotercept. The biopharmaceutical company halted dosing in two higher-dose treatment arms of its Phase 2 TROPOS trial due to unanticipated pericardial effusion adverse events. This setback has raised concerns about the drug's safety profile and market acceptance, as well as the potential impact on the company's financial performance.

The TROPOS trial is a Phase 2 clinical trial of cibotercept (KER-012) in combination with background therapy in patients with pulmonary arterial hypertension (PAH). The trial is fully enrolled, and dosing in the 1.5 mg/kg treatment arm remains ongoing following a risk and benefit assessment conducted by the independent Data Monitoring Committee (DMC) and a select group of unblinded individuals at Keros. The decision to halt the dosing in the 3.0 mg/kg and 4.5 mg/kg treatment arms and continue dosing in the 1.5 mg/kg treatment arm was made in consultation with the independent DMC for the trial.

The Company intends to continue ongoing safety and efficacy data collection for all treatment arms in the trial. However, the halt in higher-dose trials may extend the trial duration and potentially delay the presentation of topline data from all arms, which was originally expected in Q2 2025. Additionally, the safety review and regulatory notifications may incur additional costs for the company.

The unexpected side effects observed in Keros Therapeutics' TROPOS trial have significant regulatory implications. The U.S. Food and Drug Administration (FDA) and other regulatory authorities have been notified, indicating a potential review of the company's clinical trial practices. Future clinical trials may face stricter scrutiny, potentially leading to delays or additional requirements. This could impact Keros' ability to bring its lead drug, cibotercept, to market, affecting its stock price and investor confidence.

Keros Therapeutics' stock price has been volatile in recent months, with a significant decline in early 2024 followed by a recovery in late 2024. The company's market capitalization has fluctuated, with a peak of around $1.5 billion in late 2024 and a trough of approximately $500 million in early 2024. The recent setback in the TROPOS trial has led to a significant decline in the company's stock price, which may impact its ability to raise capital and fund its ongoing drug development efforts.

In conclusion, the unexpected side effects observed in Keros Therapeutics' TROPOS trial have had a significant impact on the company's stock price and its ability to bring its lead drug, cibotercept, to market. The halt in higher-dose trials may extend the trial duration and potentially delay regulatory approval, while the regulatory implications of the side effects could impact future clinical trials and the company's financial performance. Investors should monitor the company's response and regulatory actions, as well as the drug's clinical trial progress, to assess the long-term impact on KROS' stock performance.