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Keros Therapeutics, Inc. (KROS)·Q2 2025 Earnings Summary
Executive Summary
- Clean beat on consensus despite loss-making quarter: Q2 EPS of -$0.76 vs -$1.13 consensus and revenue of $18.17M vs $4.21M consensus; upside driven by service/other revenue tied to the Takeda agreement, partially offset by higher R&D and G&A .
- Strategy pivot complete: Board concluded strategic review, committing to focus exclusively on KER-065 (DMD) and discontinuing internal development of cibotercept; company also announced plans to return $375M in excess capital to shareholders .
- Cash runway updated: Cash/equivalents of $690.2M at 6/30/25; runway into 1H 2028 after factoring the $375M capital return (vs into 2029 communicated in Q1) .
- Operating profile stabilizing: OpEx rose YoY on R&D and external costs, but total OpEx was roughly flat QoQ; Operating loss narrowed YoY on higher revenue recognition .
What Went Well and What Went Wrong
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What Went Well
- EPS and revenue beat consensus; service/other revenue of $18.17M outperformed very low expectations, narrowing YoY loss *.
- Strategic clarity: “Following the review, our focus remains on creating long-term value through advancing the development of our pipeline of novel therapeutics, including our lead asset, KER-065 … Phase 2 … in the first quarter of 2026.” — Jasbir S. Seehra, Ph.D., CEO .
- Balance sheet strength maintained: $690.2M cash/equivalents at 6/30/25; supports multi‑year runway even after contemplated capital return .
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What Went Wrong
- Discontinuation of cibotercept program: After TROPOS Phase 2 PAH data and safety concerns (pericardial effusions), Keros terminated PAH development and later ceased internal work on cibotercept altogether .
- Higher OpEx: R&D ($43.5M) and G&A ($14.5M) rose YoY, reflecting continued development efforts and external costs .
- Runway shortened vs Q1 commentary due to capital return: from “into 2029” (Q1) to “into 1H 2028” after $375M capital return plan .
Financial Results
P&L Summary vs Prior Periods (oldest → newest)
Operating Expenses Detail (oldest → newest)
Balance Sheet / Liquidity
Actuals vs S&P Global Consensus (Q2 2025)
Values marked with * retrieved from S&P Global.
Guidance Changes
Earnings Call Themes & Trends
Note: A Q2 2025 earnings call transcript was not available in our document set; themes compiled from company press releases and 8‑K filings.
Management Commentary
- “Following the review, our focus remains on creating long-term value through advancing the development of our pipeline … including our lead asset, KER-065, which the team is progressing towards initiation of a Phase 2 clinical trial in patients with Duchenne muscular dystrophy in the first quarter of 2026.” — Jasbir S. Seehra, Ph.D., CEO .
- “In line with Keros’ commitment to delivering value for stockholders and patients, we have made the decision to streamline our operations and focus exclusively on advancing KER-065 … we expect Keros to operate with greater precision and urgency…” — Jasbir S. Seehra, Ph.D. .
- “Our Board and management team are taking action to enhance stockholder value. To that end, we intend to return a significant amount of excess capital to stockholders…” — Jean‑Jacques Bienaimé, Lead Independent Director (later appointed Chair) .
Q&A Highlights
- The Q2 2025 earnings call transcript was not available in our document repository and could not be located via our document search; therefore, Q&A themes and any clarifications from the call are unavailable based on primary sources reviewed. We relied on the 8‑K and press releases for management commentary [List: 0 transcripts in period; see search results] .
Estimates Context
- S&P Global consensus for Q2 2025: Revenue $4.21M*, EPS -$1.1267*; Actuals: Revenue $18.17M, EPS -$0.76; both beats. Six EPS estimates and ten revenue estimates contributed to the consensus* *.
- Implications: Street likely revises near-term revenue run‑rate expectations higher for service/transition revenue tied to Takeda, while normalizing EPS loss trajectory ex-license revenue; the larger driver remains expense cadence and timing to KER‑065 Phase 2.
Values marked with * retrieved from S&P Global.
S&P Global Consensus Detail (Q2 2025)
Values marked with * retrieved from S&P Global.
Key Takeaways for Investors
- Strategic overhang cleared: completion of the strategic review, program triage, and a $375M capital return clarify the equity story and could act as a nearer‑term catalyst .
- Execution shifts to KER‑065: the single‑asset focus concentrates risk but also investment and operational intensity on DMD; Phase 2 start guided for Q1 2026, with post‑quarter Orphan Drug designation supportive of the path .
- Revenue quality: Q2 beat driven by service/transition revenue; absent license revenue, P&L remains loss‑making as expected; focus should be on cash burn, OpEx control, and milestone timing .
- Balance sheet supports development plus capital return: $690.2M cash at quarter‑end with runway into 1H 2028 post‑distribution; watch execution and potential additional partnering to extend runway without equity .
- Risk profile tightened: discontinuation of cibotercept reduces pipeline breadth and optionality; upside now more tightly linked to KER‑065 clinical execution and DMD regulatory path .
- Organizational alignment: workforce and leadership changes should reduce cash burn and streamline decision‑making; monitor retention of critical R&D talent .
- Trading setup: clarity on capital return mechanics/timing, any incremental KER‑065 updates, and quarterly service revenue cadence vs Street will likely drive near‑term price action .
Additional Supporting Materials Reviewed
- Q2 2025 8‑K Item 2.02 and press release with full financial statements .
- Q1 2025 press release and 8‑K for comparison .
- Q4/FY 2024 press release and 8‑K for baseline trends .
- TROPOS topline and restructuring (May 29) and strategic realignment (Aug 6) press releases .
- Capital return announcement (June 9) .