What changed in this filing

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Item 1. Business

2022-03-09 compared with 2021-03-25 · 317 added, 283 removed, 790 unchanged (43% of the section changed)

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Our lead protein therapeutic product candidate, KER-050, is being developed for the treatment of low blood cell counts, or cytopenias, including anemia and thrombocytopenia, in patients with myelodysplastic syndromes, or MDS, and in patients with myelofibrosis.

We have initiated a Phase 2 clinical trial in patients with MDS and expect to report initial data from Part 1 of this trial in mid-2021.

We also plan to initiate a Phase 2 clinical trial in patients with myelofibrosis in mid-2021.

Our lead small molecule product candidate, KER-047, is being developed for the treatment of anemia resulting from iron imbalance, as well as for the treatment of fibrodysplasia ossificans progressiva, or FOP, a rare musculoskeletal disorder.

We have completed our expanded Phase 1 clinical trial of KER-047 and expect to commence two open-label Phase 2 clinical trials in the second half of 2021, one in patients with iron deficiency anemia, or IDA, and one in patients with iron-refractory iron deficiency anemia, or IRIDA.

Our third product candidate, KER-012, is being developed for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta, and for the treatment of pulmonary arterial hypertension, or PAH.

We plan to progress KER-012 into a Phase 1 clinical trial in the second half of 2021.

We have initiated a Phase 2 clinical trial in patients with MDS and reported preliminary data from Part 1 of this trial most recently in December 2021.

We expect to report additional data from this ongoing trial in mid-2022.

We have also commenced a Phase 2 clinical trial in patients with myelofibrosis and expect to report initial data from this trial by the end of 2022.

Our lead small molecule product candidate, KER-047, is being developed for the treatment of anemia resulting from iron imbalance.

We have completed our Phase 1 clinical trial of KER-047 and expect to commence two open-label Phase 2 clinical trials in the first half of 2022, one in patients with iron deficiency anemia, or IDA, and one in patients with iron-refractory iron deficiency anemia, or IRIDA.

Our third product candidate, KER-012, is being developed for the treatment of pulmonary arterial hypertension, or PAH, and for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta.

We have commenced a Phase 1 clinical trial of KER-012 in healthy volunteers and expect to report initial data from Part 1 of this trial in the second quarter of 2022.

We believe KER-047 and KER-012 offer substantial opportunities for us to continue to apply our understanding of TGF-ß signaling pathways and expand our development programs in related hematological and musculoskeletal disorders with high unmet medical need.

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We believe KER-050 has the potential to provide benefit to patients suffering from red blood cell and platelet differentiation and maturation defects occurring across the spectrum from early through terminal stages of hematopoiesis, and consequently may be effective for many patients that have limited treatment options or are refractory to available therapies.

We have completed a Phase 1 clinical trial evaluating the safety, tolerability and pharmacokinetics of KER-050 in healthy post-menopausal women.

In this trial, we observed rapid and sustained increases in red blood cells, hemoglobin and reticulocytes, in addition to clinically meaningful increases in platelets after a single dose.

Based on these findings and the results from preclinical studies, we believe KER-050 has a differentiated pharmacologic effect on red blood cells and platelets and has the potential to treat multiple cytopenias in diseases of ineffective hematopoiesis.

In October 2020, we announced the dosing of the first two participants in our Phase 2 clinical trial evaluating KER-050 for the treatment of anemia and thrombocytopenia in very low-, low-, or intermediate-risk MDS.

We expect to report initial data from Part 1 of this trial in mid-2021.

Additionally, we plan to commence an open-label Phase 2 clinical trial evaluating KER-050 for the treatment of patients with myelofibrosis-associated cytopenias in mid-2021 and expect to report initial data from this trial in 2022.

Based on data from our completed Phase 1 clinical trial of KER-050 in healthy volunteers and from our preclinical studies, we believe KER-050 has a differentiated pharmacologic effect on red blood cells and platelets and has the potential to treat multiple cytopenias in diseases of ineffective hematopoiesis.

In December 2021, we announced additional preliminary results from Cohorts 1, 2 and 3 of our ongoing Phase 2 clinical trial evaluating KER-050 for the treatment of anemia and thrombocytopenia in patients with very low-, low-, or intermediate-risk MDS.

We expect to report additional data from this trial in mid-2022.

Additionally, in December 2021, we commenced an open-label Phase 2 clinical trial evaluating KER-050 for the treatment of patients with myelofibrosis-associated cytopenias and expect to report initial data from this trial by the end of 2022.

KER-047 is designed to selectively and potently inhibit activin receptor-like kinase-2, or ALK2, a TGF-ß receptor.

We believe that KER-047 has the potential to ameliorate excessive ALK2 signaling, which is directly implicated in anemias arising from iron imbalance and musculoskeletal disorders where the transformation of soft tissue into bone, referred to as heterotopic ossification, leads to devastating immobility.

We believe that KER-047 has the potential to ameliorate excessive ALK2 signaling, which is directly implicated in anemias arising from iron imbalance.

We are developing KER-047 for the treatment of anemia resulting from iron imbalance as a direct consequence of elevated ALK2 signaling, including our initial target, IRIDA.

We are also developing KER-047 as a treatment for FOP, a rare genetic disease resulting from mutations in the ALK2 receptor that results in gain-of-function activity.

In these patients, soft tissue, including muscles and tendons, develops normally, but remodels into bone after injury.

In August 2020, we announced the completion of our planned single and multiple ascending dose cohorts in a Phase 1 clinical trial of KER-047 in healthy volunteers, as well as the expansion of this trial to evaluate additional cohorts of healthy volunteers.

We evaluated one additional cohort of healthy volunteers in the trial expansion.

The data from this cohort supported the observations from the planned cohorts, after which we concluded the trial.

We reported topline data from this trial in December 2020.

We expect to commence two open-label Phase 2 clinical trials in the second half of 2021, one in patients with IDA and one in patients with IRIDA, and expect to report initial data from both trials in 2022.

KER-012 is designed to bind to and inhibit the signaling of TGF-ß ligands, including activin A and activin B, which are key regulators of bone remodeling that act to suppress bone growth, to potentially increase bone mass.

We believe that

KER-012 has the potential to increase the signaling of bone morphogenic protein, or BMP, pathways through this inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.

We are developing KER-012 for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta, and for the treatment of PAH.

In a rat model of PAH, rats receiving a rodent version of KER-012, or RKER-012, were protected from the thickening of the right ventricular wall.

In addition, rats receiving a rodent version of KER-012 were protected from PAH-associated bone loss which we believe demonstrates proof-of-mechanism of KER-012 for the treatment of PAH and bone loss.

We plan to advance KER-012 into a Phase 1 clinical trial in the second half of 2021 and expect to report initial data from Part 1 of this trial in the first half of 2022.

In December 2020, we reported topline data from our completed Phase 1 clinical trial of KER-047 in healthy volunteers.

We expect to commence two open-label Phase 2 clinical trials in the first half of 2022, one in patients with IDA and one in patients with IRIDA, and expect to report initial data from both trials by the end of 2022.

KER-012 is designed to bind to and inhibit the signaling of TGF-ß ligands that suppress bone growth, including activin A and activin B, to potentially promote bone growth.

We believe that KER-012 has the potential to increase the signaling of bone morphogenic protein, or BMP, pathways through this inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.

We are developing KER-012 for the treatment of PAH and for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta.

In a rat model of PAH, a rodent version of KER-012, or RKER-012, reduced PAH-associated inflammation, fibrosis and vascular remodeling was observed.

Furthermore, KER-012 did not increase red blood cell production in non-human primates, indicating a lack of a potential dose-limiting red blood cell side effect.

Additionally, in a pulmonary arterial banding, or PAB, mouse model of right ventricle overload, mice receiving RKER-012 did not have the changes in cardiac function and tissue remodeling exhibited in the PAB mice that received vehicle.

These data support that RKER-012 has a cardio-protective mechanism of action that could potentially provide benefit in diseases such as PAH and other cardiovascular diseases.

In addition, rats receiving RKER-012 were protected from PAH-associated bone loss, which we believe demonstrates proof-of-mechanism of KER-012 for the treatment of PAH and bone loss.

In September 2021, we commenced a Phase 1 clinical trial of KER-012 in healthy volunteers and expect to report initial data from Part 1 of this trial in the second quarter of 2022 and additional data from Part 2 of this trial in the second half of 2022.

Our strategy focuses on the role of members of the TGF-ß family of proteins in the development of blood cells, muscle and bone.

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▪ Targeting the TGF-ß family of proteins, which are highly conserved throughout evolution, permitting the use of animal models to potentially predict with high confidence the therapeutic benefit in patients.

We are led by a highly experienced management team and scientific advisory board who have more than 100 combined years of research and development on therapeutics in the TGF-ß family of proteins.

Our team has collectively worked on marketed therapeutics such as Reblozyl, Tecfidera, Kalydeco and Waylivra, and led drug discovery and clinical development at companies including Acceleron Pharma Inc., Biogen Inc., Wyeth Pharmaceuticals Inc., Seres Therapeutics, Inc., Vertex Pharmaceuticals Incorporated and Akcea Therapeutics, Inc.

We are led by a highly experienced management team and scientific advisory board who have significant experience and expertise researching and developing therapeutics in the TGF-ß family of proteins.

Our team has collectively worked on marketed therapeutics such as Reblozyl, Rituxan, Benlysta, Skyrizi, Kevzara, Rezurock, Cubicin, Tyzeka and Cosentyx, and led drug discovery and clinical development at companies including Acceleron Pharma Inc.

(which was acquired by Merck & Co.

in November 2021), Wyeth Pharmaceuticals Inc., F.

Hoffman-La Roche Ltd (Roche), Novartis International AG, AbbVie Inc., Human Genome Sciences (with was acquired by GlaxoSmithKline plc in July 2012), Seres Therapeutics, Inc., Kadmon Holdings, Inc., Anokion SA and Sanofi S.A.

The following table sets forth our product candidates, their current development stages and anticipated upcoming milestones.

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▪ Rapidly advance the clinical development of KER-050 for the treatment of patients with MDS- and myelofibrosis-associated cytopenias.

We have initiated a Phase 2 clinical trial evaluating KER-050 for the treatment of anemia and thrombocytopenia in participants with very low-, low-, or intermediate-risk MDS who either have or have not previously received treatment with an erythropoiesis-stimulating agent.

We also plan to commence an open-label Phase 2 clinical trial evaluating the treatment of patients with myelofibrosis-associated cytopenias in mid-2021 and expect to report initial data from this trial in 2022.

▪ Rapidly advance the clinical development of KER-047 for the treatment of anemias resulting from iron imbalance and musculoskeletal disorders where heterotopic ossification leads to devastating immobility.

In August 2020, we announced the completion of our planned single and multiple ascending dose cohorts in a Phase 1 clinical trial of KER-047 in healthy volunteers.

We subsequently expanded the trial and evaluated one additional cohort of healthy volunteers.

We terminated the trial after determining that the data from this cohort, in addition to the data from the planned cohorts, were sufficient to inform the design of the expected Phase 2 clinical trials of KER-047, and reported topline data from this trial in December 2020.

We also expect to commence two open-label Phase 2 clinical trials in the second half of 2021, one in patients with IDA and one in patients with IRIDA, and expect to report initial data from both trials in 2022.

Following the completion of the expected Phase 2 clinical trial in patients with IDA, we plan to commence a Phase 2 clinical trial in patients with FOP.

We are continuing to progress our ongoing Phase 2 clinical trial evaluating KER-050 for the treatment of anemia and thrombocytopenia in participants with very low-, low-, or intermediate-risk MDS who either have or have not previously received treatment with an erythropoiesis-stimulating agent.

We have also commenced an open-label Phase 2 clinical trial evaluating the treatment of patients with myelofibrosis-associated cytopenias and expect to report initial data from this trial by the end of 2022.

▪ Rapidly advance the clinical development of KER-047 for the treatment of anemias resulting from iron imbalance.

We expect to commence two open-label Phase 2 clinical trials in the first half of 2022, one in patients with IDA and one in patients with IRIDA and expect to report initial data from both trials by the end of 2022.

We also may develop KER-047 as a potential treatment option for patients who manifest anemia caused by iron imbalance as a secondary consequence of more common diseases.

▪ Advance KER-012 into and through clinical development for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta, and for the treatment of PAH.

We have generated preclinical data that we believe demonstrated proof-of-mechanism of KER-012 for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta, and for the treatment of PAH.

We plan to advance KER-012 into a Phase 1 clinical trial in the second half of 2021 and expect to report initial data from Part 1 of this trial in the first half of 2022.

▪ Advance the clinical development of KER-012 for the treatment of PAH and for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta.

We have generated preclinical data that we believe demonstrated proof-of-mechanism of KER-012 for the treatment of PAH and for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta.

We commenced a Phase 1 clinical trial of KER-012 in healthy volunteers and expect to report initial data from Part 1 of this trial in the second quarter of 2022 and additional data from Part 2 of this trial in the second half of 2022.

▪ Pursue development and, if approved, commercialization of our product candidates in indications and regions where we believe we can maximize their value independently or through strategic collaborations.

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These cells progress through a series of intermediate stages before becoming a mature cell with a specialized function.

At any given time, pools of each progenitor cell are maintained and primed to rapidly respond to a reduction of red blood cells, white blood cells and platelets.

any given time, pools of each progenitor cell are maintained and primed to rapidly respond to a reduction of red blood cells, white blood cells and platelets.

The graphic below depicts the stages of hematopoiesis for red blood cells and platelets.

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Patients with splicing factor mutations often have been observed to have defects in the differentiation of red blood cells at the terminal stage.

The majority of patients with MDS that develop cytopenias lack ring sideroblasts or a single, defining splicing factor mutation

and are termed non-RS.

The majority of patients with MDS that develop cytopenias lack ring sideroblasts or a single, defining splicing factor mutation and are termed non-RS.

These non-RS patients have differentiation and maturation defects occurring across the spectrum from early through terminal stages of hematopoiesis.

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While ESAs have been shown to alleviate anemia in a subset of patients with MDS, patients that have elevated endogenous erythropoietin levels are unlikely to respond.

In two controlled Phase 3 clinical trials evaluating darbepoetin alfa (Aranesp) for the treatment of MDS-associated anemia, 15% to 31% of patients responded.

However, this response was limited to patients with mildly elevated endogenous erythropoietin levels and to patients who largely did not require regular red blood cell transfusions.

These treatment options also represent a significant burden to patients, as they must be administered up to three times a week.

In two controlled Phase 3 clinical trials evaluating darbepoetin alfa (Aranesp) and epoetin alpha (Epogen/Procrit) for the treatment of MDS-associated anemia, 15% to 31% of patients responded, respectively.

However, this response was limited to patients with low endogenous erythropoietin levels at baseline and to patients who had a low transfusion burden at baseline.

These treatment options also represent a significant burden to patients;

epoetin alpha must be administered up to three times a week.

Additionally, the effect of ESAs is limited to the red blood cell lineage and, therefore, ESAs only treat MDS-associated anemia and do not provide benefit to cytopenia of other cell lineages, including thrombocytopenia and neutropenia.

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The National Comprehensive Cancer Network describes all therapeutic options to address myelofibrosis-associated cytopenias, including transfusions, as only minimally effective.

Currently approved products for the treatment of myelofibrosis, including JAK inhibitors ruxolitinib (Jakafi) and fedratinib (Inrebic), have been observed to exacerbate myelofibrosis-associated cytopenias.

Currently approved products for the treatment of myelofibrosis, including JAK inhibitors ruxolitinib (Jakafi), fedratinib (Inrebic) and pacritinib (Vonjo), have been observed to exacerbate myelofibrosis-associated cytopenias.

In a third-party Phase 3 clinical trial of Jakafi and a third-party Phase 3 clinical trial of Inrebic, treatment led to significant reductions in spleen volume and improvement in total symptom scores.

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KER-050 is designed to bind to and inhibit the signaling of TGF-ß ligands involved in the regulation of hematopoiesis, resulting in increased red blood cell and platelet production.

Combined data from our preclinical studies and our Phase 1 clinical trial demonstrate that treatment with KER-050 increased red blood cell and platelet production.

These data indicate that KER-050 is differentiated from available therapies because it appears to have both sustained and rapid effects on multiple cellular lineages in the hematopoietic pathway.

We believe KER-050’s promotion of differentiation of early- and terminal-stage progenitor cells contributes to these

sustained and rapid effects, respectively, and consequently, KER-050 may be effective for many patients that are refractory to available therapies and may potentially provide benefit in multiple cytopenias simultaneously.

Combined data from our preclinical studies, our Phase 1 clinical trial in healthy volunteers and our Phase 2 clinical trial in patients with MDS demonstrate that treatment with KER-050 increased red blood cell and platelet production.

These data indicate that KER-050 is differentiated from available therapies because it appears to have both sustained and rapid effects on multiple cellular lineages in the

hematopoietic pathway.

We believe KER-050’s promotion of differentiation of early- and terminal-stage progenitor cells contributes to these sustained and rapid effects, respectively, and consequently, KER-050 may be effective for many patients that are refractory to available therapies and may potentially provide benefit in multiple cytopenias simultaneously.

Mechanism of Action of KER-050

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We are conducting an open label, two-part, multiple ascending dose Phase 2 clinical trial to evaluate KER-050 in participants with very low-, low-, or intermediate-risk MDS who either have or have not previously received treatment with an ESA.

The primary objective of this trial is to assess the safety and tolerability of KER-050 in participants with MDS that either have ring sideroblasts (RS+) or do not have ring sideroblasts (non-RS).

We expect to use the data from Part 1 of this trial to help define the dose level to be evaluated in Part 2 of this trial, in which the primary objective is confirmation of

the safety and tolerability of the selected dose levels.

The primary objective of this trial is to assess the safety and tolerability of KER-050 in participants with MDS that either have ring sideroblasts, or RS positive, or do not have ring sideroblasts, or non-RS.

The primary objective of Part 2 of this trial is confirmation of the safety and tolerability of the selected dose levels.

The secondary objectives of this trial are to evaluate the pharmacokinetics, pharmacodynamics and efficacy of KER-050.

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Phase 2 Clinical Trial Design

KER-050 is being administered to patients subcutaneously once every four weeks.

In December 2021, we presented additional data from this ongoing trial at the 63rd American Society of Hematology, or ASH, Annual Meeting and Exposition.

As of October 25, 2021, which was the data cut-off date, 24 patients in Cohorts 1, 2, 3 and 4 had received at least one dose of KER-050, 16 of whom, in Cohorts 1, 2 and 3, had completed eight weeks of treatment and evaluation, which we refer to as the evaluable patients.

The 16 evaluable patients were comprised of four non-transfused, or NT, three low transfusion burden, or LTB, and nine high transfusion burden, or HTB, patients.

Of the 12 LTB and HTB patients, six were non-RS and six were RS positive.

As of the data cut-off date, 50% (n=8/16) of the evaluable patients, three of whom were non-RS and five of whom were RS positive, achieved an overall erythroid response, which is defined as meeting one of the following two endpoints:

• IWG 2006 Hematological improvement-erythroid, or HI-E, which is defined as either:

◦ a ≥ 1.5 g/dL increase in hemoglobin for eight weeks in LTB and NT patients;

◦ a reduction by ≥ 4 red blood cell units transfused during any eight-week period during the trial, compared with the eight-week period prior to Cycle 1, Day 1 in HTB patients.

• Transfusion independence, or TI, for at least eight weeks in transfusion-dependent patients who required ≥ 2 red blood cell units transfused at baseline.

Additional data from the evaluable patients in Cohorts 1, 2 and 3 of the trial, as of the data cut-off date, include:

• 43.8% (n=7/16) of the evaluable population achieved HI-E over an eight-week period.

• 45.5% (n=5/11) of the transfused patients receiving ≥ 2 red blood cell units at baseline achieved TI for at least eight weeks.

In addition, the following pharmacodynamic effects were observed:

• Reticulocyte increases observed in patients achieving HI-E or TI endpoints.

• Increases in serum soluble transferrin receptor and decreases in serum ferritin observed in patients achieving HI-E or TI endpoints.

• Increases in platelets observed in patients achieving HI-E or TI.

Together, these data demonstrate the effects of KER-050 on both erythropoiesis and thrombopoiesis and support the continued development of KER-050 as a potential treatment option for ineffective hematopoiesis in MDS.

As of the data cut-off date, 24 patients in Cohorts 1, 2, 3 and 4 had received at least one dose of KER-050.

KER-050 was observed to be generally well-tolerated as of the data cut-off date in these 24 patients.

No drug-related serious adverse events or dose-limiting toxicities were reported.

The most commonly reported treatment-emergent adverse events were nausea, fatigue, diarrhea and dyspnea, none of which were deemed related to study drug.

Treatment-related adverse events

were reported in four patients, which were mild or moderate in severity, and did not lead to dose modification or treatment discontinuation.

No patients developed high-risk MDS or acute myeloid leukemia.

Two patients withdrew from the trial prior to completing eight weeks of treatment with KER-050, one due to death deemed unrelated to study drug and one due to withdrawn patient consent.

Ongoing Phase 2 Clinical Trial in Patients with Myelofibrosis-Associated Cytopenias

We are conducting an open label, two-part, multiple ascending dose Phase 2 clinical trial to evaluate KER-050 as a monotherapy and in combination with ruxolitinib in participants with myelofibrosis-associated cytopenias.

The primary objective of this trial is to assess the safety and tolerability of KER-050 in participants with myelofibrosis-associated cytopenias.

The primary objective of Part 2 of this trial is confirmation of the safety and tolerability of the selected dose levels.

The secondary objectives of this trial are to evaluate the pharmacokinetics, pharmacodynamics and efficacy of KER-050 administered with or without ruxolitinib.

The trial design is summarized in the figure below.

Phase 2 Clinical Trial Design

Clinical Development Strategy

We expect to report initial data from Part 1 of the Phase 2 clinical trial in patients with MDS in mid-2021.

We also expect to commence an open-label Phase 2 clinical trial evaluating the treatment of patients with myelofibrosis-associated cytopenias in mid-2021 and expect to report initial data from this trial in 2022.

We expect to report additional data from the Phase 2 clinical trial in patients with MDS in mid-2022 and initial data from the Phase 2 clinical trial in patients with myelofibrosis-associated cytopenias by the end of 2022.

Completed Phase 1 Clinical Trial

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Additionally, we observed reductions in follicle-stimulating hormone, a biomarker of activin inhibition, following administration of KER-050, which we believe is indicative of target engagement and activin inhibition.

We also observed

an increase in bone-specific alkaline phosphatase, a biomarker of bone remodeling, which we believe demonstrates that KER-050 has the potential to increase bone mass.

We also observed an increase in

bone-specific alkaline phosphatase, a biomarker of bone remodeling, which we believe demonstrates that KER-050 has the potential to increase bone mass.

Preclinical Data

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KER-050 observed to target ligands that signal through ActRIIA and ActRIIB

KER-050 is a modified ActRIIA ligand trap that contains sequences from both wild-type ActRIIA and wild-type activin receptor type IIB, or ActRIIB.

KER-050 is a modified ActRIIA ligand trap that contains sequences from both wild-type ActRIIA and wild-type ActRIIB.

KER-050 was observed to bind to and inhibit multiple ligands that signal through these cell surface receptors, including activin A, activin B and growth differentiation factor 11.

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We believe the rapid onset of the effect is consistent with terminal maturation of late-stage erythroid precursors.

RKER-050 has been modified to have a murine Fc domain in place of the human Fc domain present

in KER-050, in order to minimize results confounded by the development of anti-drug antibodies in mice treated with a human protein.

RKER-050 has been modified to have a murine Fc domain in place of the human Fc domain present in KER-050, in order to minimize results confounded by the development of anti-drug antibodies in mice treated with a human protein.

Increase in Red Blood Cells and Reticulocytes in Mice

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NS = not significant

We also observed increases in colony forming unit-erythroid progenitors as soon as Day 2, consistent with an effect on early stages of erythropoiesis, followed by changes in polychromatophilic/early-orthochromatic erythroid precursors as soon as Day 4 and late orthochromatic erythroblasts/reticulocytes by Day 7, which is consistent with progression of cells through erythropoiesis.

Day 4 and late orthochromatic erythroblasts/reticulocytes by Day 7, which is consistent with progression of cells through erythropoiesis.

RKER-050 also observed to increase numbers of erythroid progenitors in mice

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Given that KER-050 increased early erythroid precursor cell pools in this preclinical study and its effect on upregulating serum erythropoietin, we believe KER-050 has the potential to treat patients with MDS that have hypocellular bone marrow.

We believe the observed increases in serum erythropoietin in mice that were dosed with KER-050 support the potential of KER-050 as a therapy for patients with low serum erythropoietin across a diverse set of diseases, including chronic kidney diseases and polycythemia.

We believe the observed increases in serum erythropoietin in mice that were dosed with KER-050 support the potential of

KER-050 as a therapy for patients with low serum erythropoietin across a diverse set of diseases, including chronic kidney diseases and polycythemia.

KER-050 also observed to increase red blood cells in non-human primates

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Increase in Red Blood Cells, Hematocrit and Hemoglobin in Cynomolgus Monkeys

RKER-050 observed to rescue ruxolitinib-induced reduction in red blood cell parameters in mice

In a preclinical study conducted in mice, 37 days of daily treatment with 120 mg/kg ruxolitinib, or Rux, a JAK2 inhibitor, resulted in reductions in red blood cells, hemoglobin and hematocrit.

RKER-050 dosed twice weekly between study days 41 and 55 in combination with continued Rux treatment reversed the Rux-induced effects on red cell parameters.

These data indicate RKER-050 potentially functions independently of the JAK-STAT pathway, a system known to be defective in patients with myelofibrosis.

Further, we believe that these data observed in mice support the potential that treatment with KER-050 has the potential to mitigate the dose-limiting effects of Rux and enhance the duration of therapy in patients.

Observed Increase in Red Blood Cells, Hemoglobin and Hematocrit in Mice Treated with RKER-050 in Combination with Ruxolitinib

KER-050 observed to stimulate platelet release into circulation in wild-type mice

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Mice that received KER-050 were observed to have increased platelet counts compared to mice in the vehicle cohort.

In a separate preclinical study conducted in mice, changes in platelets after a single intraperitoneal dose of 10 mg/kg RKER-050 were observed as

early as 12 hours post-dose.

These data suggest that RKER-050 potentially increases terminal maturation of proplatelets into platelets.

Observed Increase in Platelet Count in Mice

**** P value <0.005

RKER-050 observed to affect the early precursors in thrombopoiesis in mice

To evaluate the effect of RKER-050 on platelet precursors, mice were administered a single, intraperitoneal 10 mg/kg dose of RKER-050.

Bone marrow analysis performed 24 hours post-dose demonstrated that RKER-050 treatment increased the CD41+ megakaryocyte precursor population, and that these cells had increased ploidy compared to vehicle-treated mice.

These data suggest that RKER-050 promoted the maturation of early megakaryocyte populations and primed megakaryocytes for proplatelet production.

Observed Levels of CD41+ Cells and Degree of Ploidy in Mice Treated with Vehicle or RKER-050

* P value < 0.05, ** P value < 0.01

Additionally, to understand the potential contribution that inhibiting activin A has on KER-050’s potential effect on the thrombopoiesis pathway, we compared the effects of RKER-050 and an activin A neutralizing antibody on platelet levels after 24 hours.

Observed Platelet Levels in Mice Treated with Vehicle, Activin A Neutralizing Antibody or RKER-050

** P value < 0.01, *** P value < 0.001

Treatment with either RKER-050 or an activin A antibody both led to an increase in platelet count.

These results suggest that inhibition of activin A may be partially responsible for the platelet effects observed in mice treated with RKER-050.

We believe that the findings from our preclinical studies and from our Phase 1 clinical trial of KER-050 in healthy post-menopausal women demonstrate the translation of biological action from rodents to humans.

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We believe KER-047 is a potent and selective inhibitor of ALK2, a receptor whose excessive signaling is the underlying cause of the elevated levels of hepcidin, the key regulator of iron absorption and recycling, that leads to low iron bioavailability and anemia in a broad range of diseases.

One additional cohort of healthy volunteers was evaluated in the trial expansion.

Data from this cohort supports the effect of KER-047 observed in the planned cohorts.

In December 2020, we reported topline data from our completed Phase 1 clinical trial of KER-047 in healthy volunteers.

Hepcidin and Iron Homeostasis

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This feedback loop prevents this system from shifting out of balance.

The system is down regulated through the activity of matriptase-2, or MT-2, a cell surface protease,

which is encoded by the TMPRSS6 gene.

The system is down regulated through the activity of matriptase-2, or MT-2, a cell surface protease, which is encoded by the TMPRSS6

This protein reduces the ability of BMP6 to signal through ALK2.

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We expect to commence two open-label Phase 2 clinical trials of KER-047 in the second half of 2021, one in patients with IDA and one in patients with IRIDA, and expect to report initial data from both trials in 2022.

We expect to commence two open-label Phase 2 clinical trials of KER-047 in the first half of 2022, one in patients with IDA and one in patients with IRIDA, and expect to report initial data from both trials by the end of 2022.

Additionally, we intend to develop KER-047 as a potential treatment for patients who manifest anemia caused by high hepcidin levels as a secondary consequence of more common diseases.

Completed Expanded Phase 1 Clinical Trial

Completed Phase 1 Clinical Trial

In November 2020, we completed a randomized, double-blind, placebo-controlled, two-part Phase 1 clinical trial to evaluate single and multiple ascending doses of KER-047 in healthy volunteers.

The primary objectives of this trial were to assess safety, tolerability and pharmacokinetics of KER-047.

The expanded trial design is summarized in the figure below.

The trial design is summarized in the figure below.

Phase 1 Clinical Trial Design

Observed tolerability data

The majority of adverse events observed in this expanded Phase 1 clinical trial were mild or moderate in severity, and only two were severe.

There were no serious adverse events reported in this expanded trial.

The most common adverse events observed in healthy volunteers in this expanded trial were abdominal discomfort, chills, decreased appetite, diarrhea, dizziness, fatigue, gastroenteritis, headache, lymphopenia, myalgia, nausea, neutropenia, pyrexia, rhinorrhea, tonsilitis, upper abdominal pain and vomiting.

In Part 2 of this expanded trial, ten of 40 participants administered KER-047 and one of 11 participants administered placebo discontinued study drug due to adverse events.

The majority of adverse events observed in this Phase 1 clinical trial were mild or moderate in severity, and only two were severe.

There were no serious adverse events reported in this trial.

The most common adverse events observed in healthy volunteers in this trial were abdominal discomfort, chills, decreased appetite, diarrhea, dizziness, fatigue, gastroenteritis, headache, lymphopenia, myalgia, nausea, neutropenia, pyrexia, rhinorrhea, tonsilitis, upper abdominal pain and vomiting.

In Part 2 of this trial, ten of 40 participants administered KER-047 and one of 11 participants administered placebo discontinued study drug due to adverse events.

Adverse events that led to study drug discontinuation in three or more participants in the KER-047 groups included lymphopenia and chills.

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Rapid mobilization of iron stores resulted in increased reticulocyte hemoglobin content of newly-produced immature red blood cells

In this expanded Phase 1 clinical trial, we observed rapid, robust and sustained dose-related increases in serum iron and transferrin saturation in the volunteers who received KER-047, which was associated with decreases in ferritin, an effect that is consistent with mobilization of iron stores.

We also observed a reduction in serum hepcidin in Cohorts 1 through 3 of Part 2 of this expanded trial (50 mg, 100 mg and 200 mg dose groups), which we believe is consistent with KER-047’s mechanism of action.

In this Phase 1 clinical trial, we observed rapid, robust and sustained dose-related increases in serum iron and transferrin saturation in the volunteers who received KER-047, which was associated with decreases in ferritin, an effect that is consistent with mobilization of iron stores.

We also observed a reduction in serum hepcidin in Cohorts 1 through 3 of Part 2 of this trial (50 mg, 100 mg and 200 mg dose groups), which we believe is consistent with KER-047’s mechanism of action.

These data were not collected in Part 1 of this trial or in Cohort 4 of Part 2 of this trial (350 mg dose group).

Part 2 of the Expanded Trial:

Part 2 of the Trial:

Hepcidin Percent Change from Baseline at Day 7, 8 Hours Post-Dose

Additionally, we observed a decrease in hepcidin as early as four hours after administration of the first dose in Cohort 5 of Part 2 of this expanded trial (100 mg dose group).

We also observed an increase in reticulocyte hemoglobin in Cohorts 1 through 4 of Part 2 of this expanded trial, starting on Day 4 of treatment.

Additionally, we observed a decrease in hepcidin as early as four hours after administration of the first dose in Cohort 5 of Part 2 of this trial (100 mg dose group).

We also observed an increase in reticulocyte hemoglobin in Cohorts 1 through 4 of Part 2 of this trial, starting on Day 4 of treatment.

Mean Reticulocyte Hemoglobin at Each Visit

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These erythroid precursors potentially would continue maturation into hemoglobin-rich red blood cells.

We also observed decreases in lymphocytes following peak increases in serum iron in this expanded trial, which we believe is consistent with KER-047’s mechanism of action and suggestive of depletion of tissue iron.

We believe the data from this expanded Phase 1 clinical trial support the potential for KER-047 to be developed as a treatment for diseases arising from iron imbalance.

We also observed decreases in lymphocytes following peak increases in serum iron in this trial, which we believe is consistent with KER-047’s mechanism of action and suggestive of depletion of tissue iron.

We believe the data from this Phase 1 clinical trial support the potential for KER-047 to be developed as a treatment for diseases arising from iron imbalance.

Observed reductions in total cholesterol

Reductions in total cholesterol, low-density lipoproteins, or LDL, and high-density lipoproteins were observed in Part 2 of this expanded trial.

Reductions in total cholesterol, low-density lipoproteins, or LDL, and high-density lipoproteins were observed in Part 2 of this trial.

The reductions in total cholesterol and LDL were achieved rapidly with a mean reduction of greater than 20% at the highest dose, following seven days of dosing.

Clinical Development Strategy

In August 2020, we completed the planned single and multiple ascending dose cohorts in this trial.

Based upon preliminary analysis, we expanded the Phase 1 trial and evaluated one additional cohort of healthy volunteers.

terminated the trial after determining that the data from this additional cohort, in addition to the data from the planned cohorts, were sufficient to inform the design of the expected Phase 2 clinical trials of KER-047, and reported topline data from this expanded trial in December 2020.

In December 2020, we reported topline data from our completed Phase 1 clinical trial of KER-047 in healthy volunteers.

Preclinical Data

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We evaluated serum iron, total iron binding capacity and transferrin saturation in Sprague-Dawley rats that received daily, oral administration of either vehicle or doses of 1 mg/kg, 2.5 mg/kg, 5 mg/kg or 15 mg/kg of KER-047 for three months.

Rats that were treated with KER-047 were observed to have a dose-dependent increase in serum iron levels and a concomitant increase in transferrin saturation, with no change in total iron binding capacity.

that were treated with KER-047 were observed to have a dose-dependent increase in serum iron levels and a concomitant increase in transferrin saturation, with no change in total iron binding capacity.

Increased Serum Iron, Total Iron Binding Capacity and Transferrin Saturation in Rats

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This model recapitulated the increased hepcidin levels and reduced hemoglobin that are characteristic of patients with IRIDA.

Treatment of the mice receiving the TMPRSS6 siRNA with an ALK2 inhibitor normalized levels of both hepcidin gene

expression and hemoglobin levels compared to the control siRNA cohort receiving vehicle treatment, which we believe indicates that ALK2 inhibition can reverse anemia resulting from iron imbalance.

Treatment of the mice receiving the TMPRSS6 siRNA with an ALK2 inhibitor normalized levels of both hepcidin gene expression and hemoglobin levels compared to the control siRNA cohort receiving vehicle treatment, which we believe indicates that ALK2 inhibition can reverse anemia resulting from iron imbalance.

Serum Hepcidin and Hemoglobin Levels in Mice with siRNA-induced IRIDA

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These data substantiate the role of ALK2 signaling in anemia arising from high hepcidin and illustrate the potential therapeutic benefit of specific ALK2 inhibition in these diseases, including anemia of inflammation.

Our Fibrodysplasia Ossificans Progressiva Program

We are also developing KER-047 for the treatment of fibrodysplasia ossificans progressiva, or FOP.

FOP is a rare genetic disease resulting from gain-of-function mutations in the ALK2 receptor.

In patients with FOP, soft tissue, including muscles and tendons, develops normally, but remodels into bone spontaneously or after injury.

currently no approved treatments for FOP.

We believe KER-047 has the potential to prevent progression of disease in these patients by normalizing ALK2 signaling.

Fibrodysplasia Ossificans Progressiva

FOP results from single amino acid mutations in the ALK2 receptor that result in gain-of-function activity of the receptor.

An estimated 97% of patients with FOP have an R206H mutation that results in excessive ALK2 receptor signaling.

Multiple processes drive this excessive signaling.

The ALK2/R206H receptor is inappropriately activated by activins A and B, hyperresponsive to the endogenous BMP ligands and can be active in the absence of ligands.

These changes all result in increased kinase-mediated signaling and upregulation of bone-forming cellular activity, such as heterotopic ossification.

Heterotopic ossification in patients with FOP can occur spontaneously or can be triggered by soft tissue trauma, such as from immunizations, falls, surgery or viral illnesses.

The bony lesions from heterotopic ossification are painful and restrict movement.

These lesions are permanent and their accumulation leads to progressive loss of function and immobility, eventually resulting in patients becoming wheelchair-dependent, making independent living difficult.

Patients can have additional morbidity due to severe weight loss resulting from bone developing in and essentially locking the jaw, as well as respiratory problems due to constriction of the rib cage.

Additionally, development of pneumonia and heart failure results in a high mortality rate, with a median age of death of 40 years.

The International Fibrodysplasia Ossificans Progressiva Association estimates that there are 3,500 people worldwide with FOP, with approximately 800 patients identified.

There are 285 known cases in the United States.

Limitations of Current Treatment Options for FOP

There are no therapies approved to treat FOP.

Patients are administered anti-inflammatory agents to minimize tissue damage and alleviate pain, but these treatment options do not reduce or prevent bone formation.

Surgical removal of the heterotopic ossification is performed in extreme cases, such as when the bony lesion is hindering jaw movement.

However, this intervention only provides temporary benefit, as bone that is surgically removed is quickly replaced by a similar volume of new bone in its place.

Our Solution:

KER-047 is designed as an ALK2 inhibitor that is also designed to inhibit the ALK2/R206H mutant receptor, which we believe presents the potential to address the underlying cause of FOP as well as prevent the development of new, and the expansion of existing, heterotopic ossification.

Additionally, we believe that KER-047 has the potential to prevent the regrowth of bone after surgical resection and de novo bone formation resulting from surgery-induced trauma.

FOP treatments currently in development, such as palovarotene, were observed to hamper the healing process in preclinical studies.

We believe treatment with KER-047 would not interfere with a patient’s ability to undergo and recover from surgery.

Additionally, treatment with palovarotene has been observed in a Phase 2 clinical trial to cause premature closure of growth plates in pediatric patients.

ALK2 signaling is not required for normal skeletal growth and development, and in our preclinical studies, we did not observe changes to normal bone growth when treating mice with dose levels of KER-047 that resulted in a reduction in the amount of heterotopic ossification.

Based on these data, KER-047 would not be expected to affect normal skeletal development and could be used to treat patients with FOP of all ages.

Following the completion of our expected Phase 2 clinical trial of KER-047 in patients with IDA, we plan to commence a Phase 2 clinical trial in patients with FOP.

Preclinical Data

We have generated compelling biochemical and preclinical data that we believe demonstrated proof-of-mechanism of KER-047 for the treatment of FOP.

Specifically, KER-047 demonstrated in these studies:

▪ potent ALK2/R206H mutant receptor inhibitor;

▪ dose-dependent reduction in the formation of heterotopic ossification in multiple mouse models;

▪ no shortening of long bones in mice receiving the ALK2 inhibitor.

KER-047 observed to be a potent ALK2 receptor inhibitor and ALK2/R206H mutant receptor inhibitor

In an in vitro assay, KER-047 was observed to be a potent ALK2 receptor inhibitor.

In cell-based reporter assays, KER-047 also exhibited low nanomolar potency against the ALK2/R206H mutant receptor.

KER-047 inhibited ALK2 signaling and was associated with reduced bone formation in a mouse model of heterotopic ossification

In patients with FOP, heterotopic ossification is driven by excessive signaling through a mutated ALK2 receptor.

We evaluated treatment with KER-047 in an R206H mouse model of FOP and observed a dose-dependent reduction in heterotopic ossification.

In our preclinical study, mice were treated with either vehicle or doses of 1 mg/kg or 6 mg/kg of KER-047, dosed daily by oral gavage, starting three days prior to mice receiving the pinch injury and continuing through 14 days post-injury.

Micro-CT scans were analyzed for the presence of heterotopic ossification lesions in muscle.

In mice with the ALK2/R206H mutant receptor receiving KER-047, a statistically significant, dose-dependent reduction in the formation of heterotopic ossification after pinch injury was observed.

Reduced Formation of Heterotopic Ossification in a Mouse Model of FOP Representative MicroCT Images

Treatment with a selective ALK2 inhibitor did not affect skeletal development in young mice

Third-party reports have described how treatment of young mice with palovarotene, a RAR-gamma agonist, resulted in growth plate closure in the normal skeleton, which led to a shortening of the long bones.

We dosed two-week old mice with a potent ALK2 inhibitor closely related to KER-047 and measured changes in length of the long bones.

While ALK2 inhibition failed to alter the length of the long bone, we observed a statistically significant shortening of the long bones in mice treated with palovarotene.

Our Preclinical Pipeline

Our Musculoskeletal and Pulmonary Program

KER-012 is a ligand trap comprised of a modified ligand-binding domain of ActRIIB that is fused to the portion of the human antibody known as the Fc domain.

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We believe that KER-012 has the potential to increase the signaling of BMP pathways through this inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.

We are developing KER-012 for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta, and for the treatment of pulmonary arterial hypertension, or PAH.

We plan to advance KER-012 into a Phase 1 clinical trial in the second half of 2021 and expect to report initial data from Part 1 of this trial in the first half of 2022.

We are developing KER-012 for the treatment of pulmonary arterial hypertension, or PAH, and for the treatment of disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta.

We have commenced a Phase 1 clinical trial of KER-012 in healthy volunteers and expect to report initial data from Part 1 of this trial in the second quarter of 2022 and additional data from Part 2 of this trial in the second half of 2022.

Pulmonary Arterial Hypertension

PAH is a debilitating disorder characterized by elevated pulmonary vascular resistance due to severe constriction and progressive obliteration of the pulmonary vessels.

PAH results in diminished oxygenation, impaired cardiac output and symptoms stemming from overload of the right ventricle, such as shortness of breath, fatigue, fainting, chest pain, palpitations and swelling of extremities and abdomen.

We estimate that there are approximately 40,000 addressable patients in the United States living with this condition.

Despite current treatment options, survival with PAH remains only slightly above 50% at five years, with mortality typically resulting from right ventricle failure.

Loss-of-function mutations in the gene encoding the BMP type II receptor, or BMPR2, are present in over 70% of cases of heritable PAH, or HPAH, while loss-of-function mutations in certain BMPR2 co-receptors are present in other cases of HPAH and idiopathic PAH.

Histology and gene expression studies from the lungs of human and experimental PAH showed diminished BMPR2 expression and BMP signaling even in the absence of loss-of-function mutations, as well as enhanced TGF-ß signaling.

Consistent with an imbalance in the signaling of these families of ligands, it was recently found that PAH due to cirrhosis and portal hypertension is marked by a severe deficiency of circulating BMP9, while circulating TGF-ß, activin and growth differentiation factor, or GDF, ligands were found to be increased in PAH, even in the absence of causative mutations.

Multiple experimental third-party models also demonstrated the efficacy of augmenting BMP signaling or suppressing TGF-ß, activin or GDF signaling, which we believe supports the notion that imbalanced homeostatic BMP and pathogenic TGF-ß, activin and GDF signaling drive the development and progression of pulmonary vascular disease.

Limitations of Current Treatment Options for PAH

All of the currently-approved therapies for PAH are vasodilators, which are medications that dilate blood vessels.

These vasodilators fall into one of three categories:

(i) prostanoids, which are agonists of the prostacyclin signaling pathway;

(ii) endothelin receptor antagonists, or ERAs;

or (iii) (a) phosphodiesterase 5 inhibitors, or PDE5i, which are agents that enhance nitric oxide metabolism, or (b) soluble guanylate cyclase activators, which cause downstream cGMP signaling.

One common approach to treating early-stage or mild PAH is an oral combination therapy using ERA and PDE5i medications.

More severe PAH generally requires the addition of prostanoid, via oral or inhaled administration, while advanced PAH typically requires continuous parenteral administration.

Each of these individual therapies may modestly improve a patient’s functional status and in some cases survival, but is limited by systemic hypotension, systemic side effects and tachyphylaxis, which is an acute, sudden decrease in response to a product after its administration.

Additionally, combination therapy is

limited by the combined side effect profiles.

Although existing treatments may modestly slow the progression of PAH, none appear to halt or reverse the disease’s progression.

While the key physiologic and pathologic features of PAH include vasoconstriction, scar tissue and vascular smooth muscle cell proliferation and inflammation, the main pharmacological effect for all currently approved therapies is believed to be vasodilation.

Accordingly, we believe there is a significant unmet need for a treatment that primarily targets the proliferative pathological processes and can be used alone or in combination with other PAH therapies.

We believe that potent therapies that do not exhibit tachyphylaxis, are orally bioavailable or do not require continuous infusion therapy would have advantages over the currently available treatments for PAH.

Therapies that arrest pulmonary vascular remodeling could have a long-term clinical stabilizing effect in PAH, or reverse vascular obliteration.

We believe that KER-012 has the potential to increase the signaling of BMP pathways through the inhibition of activin A and activin B signaling, and consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.

Osteoporosis is a highly prevalent disease characterized by low bone mineral density and deterioration of bone structure, which leads to an increase in bone fractures.

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We believe there is a large unmet need for patients with osteoporosis, as existing therapies have shortcomings in efficacy, tolerability, convenience and safety.

Given these shortcomings, we believe there is a significant market opportunity for an anabolic agent such as KER-012, which is designed to be a potent and selective inhibitor of certain TGF-ß ligands, including activin A and activin B, that are key regulators of bone remodeling that act to suppress bone

Additionally, with a growing population of older adults, the number of patients with osteoporosis is predicted to expand in the coming years.

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People with osteogenesis imperfecta have bones that fracture easily, often from mild trauma or with no apparent cause.

Osteogenesis imperfecta affects approximately one out of every 10,000 to 20,000 people worldwide, while an estimated 25,000 to 50,000 people in the United States are living with the condition.

Osteogenesis imperfecta affects

approximately one out of every 10,000 to 20,000 people worldwide, while an estimated 25,000 to 50,000 people in the United States are living with the condition.

Limitations of Current Treatment Options for Osteogenesis Imperfecta

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Additionally, we are not aware of any long-term clinical trials demonstrating a reduction in fractures in adults, and the effect of long-term therapy with these existing products remains unclear.

Pulmonary Arterial Hypertension

PAH is a debilitating disorder characterized by elevated pulmonary vascular resistance due to severe constriction and progressive obliteration of the pulmonary vessels.

We estimate that in the United States there are 750 to 2,000 new cases of PAH each year and 10,000 to 20,000 individuals living with this condition.

Despite current treatment options, survival with PAH remains only slightly above 50% at five years, with mortality typically resulting from right ventricle failure.

Limitations of Current Treatment Options for PAH

All of the currently-approved therapies for PAH are vasodilators, which are medications that dilate blood vessels.

These vasodilators fall into one of three categories:

(i) prostanoids, which are agonists of the prostacyclin signaling pathway;

(ii) endothelin receptor antagonists, or ERAs;

or (iii) (a) phosphodiesterase 5 inhibitors, or PDE5i, which are agents that enhance nitric oxide metabolism, or (b) soluble guanylate cyclase activators, which cause downstream cGMP signaling.

One common approach to treating early-stage or mild PAH is an oral combination therapy using ERA and PDE5i medications.

More severe PAH generally requires the addition of prostanoid, via oral or inhaled administration, while advanced PAH typically requires continuous parenteral administration.

Additionally, combination therapy is limited by the combined side effect profiles.

Although existing treatments may modestly slow the progression of PAH, none appear to halt or reverse the disease’s progression.

Accordingly, we believe there is a significant unmet need for a treatment that primarily

targets the proliferative pathological processes and can be used alone or in combination with other PAH therapies.

Therapies that arrest pulmonary vascular remodeling could have a long-term clinical stabilizing effect in PAH, or reverse vascular obliteration.

Ongoing Phase 1 Clinical Trial in Healthy Volunteers

We have initiated a randomized, double-blind, placebo-controlled, two-part Phase 1 clinical trial to evaluate single and multiple ascending doses of KER-012 in healthy volunteers.

The primary objectives of this trial are to assess safety, tolerability and pharmacokinetics of KER-012.

The trial design is summarized in the figure below.

Phase 1 Clinical Trial Design

Clinical Development Strategy

We expect to report initial data from Part 1 of this trial in the second quarter of 2022 and additional data from Part 2 of this trial in the second half of 2022.

Preclinical Data

Specifically, in preclinical studies, KER-012:

▪ showed high affinity for and potent inhibition of ligands involved in the regulation of bone homeostasis;

▪ lacked binding to BMP9, a ligand critical in vascular remodeling, vascular stability and vascular quiescence;

• Demonstrated effects on bone, including:

◦ Exhibited high affinity for, and potent inhibition of, ligands involved in the regulation of bone homeostasis;

◦ Increased bone mineral density and trabecular bone volume in wild-type mice and mice with established osteoporosis;

◦ Rats receiving a rodent version of KER-012, or RKER-012, were protected from hypoxia-associated bone loss.

• Demonstrated benefit in models of PAH, including:

◦ In a rat model of PAH, rats receiving RKER-012 were protected from the thickening of the right ventricular wall;

◦ In a mouse model of pulmonary arterial banding, or PAB, RKER-012 was observed to protect against both the PAB-related cardiac dysfunction and remodeling.

• Did not increase red blood cell production in cynomolgus monkeys.

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Treatment with KER-012 increased bone mineral density

*** P value <0.001

In preclinical studies conducted in wild-type mice, twice weekly intraperitoneal 20 mg/kg dosing of KER-012 increased bone mineral density compared to vehicle-treated mice 31 days post-treatment.

Additionally, we observed that treatment

with KER-012 statistically significantly increased trabecular bone formation and mineral apposition rate, which we believe is consistent with an anabolic effect on bone.

Additionally, we observed that treatment with KER-012 statistically significantly increased trabecular bone formation and mineral apposition rate, which we believe is consistent with an anabolic effect on bone.

Bone Mineral Density in Mice and Representative Microct Scans

*** P value <0.001

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We also observed in preclinical studies conducted in mice with established osteoporosis that twice weekly intraperitoneal 20 mg/kg dosing of KER-012 increased bone mass compared to vehicle-treated mice 46 days post-treatment.

Treatment with RKER-012 prevented cardiac hypertrophy in a rat model of PAH

We combined administration of SUGEN5416, a tyrosine kinase inhibitor of vascular endothelial growth factor receptors 1/2, with exposure to chronic hypoxia to recapitulate the biology in PAH.

In this model, remodeling of the arterial wall results in wall thickening, increased arterial pressure and impairment of heart function through a thickening of the right ventricle.

Treatment with twice weekly subcutaneous 10 mg/kg dosing of the rodent version of KER-012, or RKER-012, was observed to protect against a thickening of the right ventricular wall, which we believe demonstrates that KER-012 has the potential to treat PAH.

Treatment with RKER-012 prevented bone loss from hypoxia in the rat model of PAH

* P value <0.05;

Osteoblast-to-Osteoclast Ratio in Mice

** P value <0.01

Treatment with RKER-012 prevented bone loss from hypoxia in the rat model of PAH

In the rat model of PAH, chronic hypoxia induced a catabolic state that resulted in wasting of tissue, including bone and muscle.

Treatment with a subcutaneous 10 mg/kg dose of RKER-012 was observed to prevent bone loss in the rat model of PAH.

CKER-012 did not increase red blood cells in non-human primates

In a preclinical study, cynomolgus monkeys received subcutaneous administration every other week for one month of either vehicle or a 10 mg/kg dose of CKER-012, a monkey form of KER-012 comprised of the same modified ActRIIB fused to a cynomolgus Fc that has a ligand binding profile similar to that of KER-012.

Bone Volume Changes as a Result of Hypoxia in the Rat Model of PAH

* P value <0.05;

** P value <0.01

Treatment with RKER-012 prevented cardiac hypertrophy in a rat model of PAH

We combined administration of SUGEN5416, a tyrosine kinase inhibitor of vascular endothelial growth factor receptors 1 and 2, with exposure to chronic hypoxia to recapitulate the biology in PAH.

In this model, remodeling of the arterial wall results in wall thickening, increased arterial pressure and impairment of heart function through a thickening of the right ventricle.

Treatment with twice weekly subcutaneous 10 mg/kg dosing of RKER-012 was observed to protect against a thickening of the right ventricular wall, which we believe demonstrates that KER-012 has the potential to treat PAH.

Treatment with RKER-012 prevented cardiac dysfunction and remodeling in a mouse PAB model

We used mechanical restriction of the pulmonary artery in mice to increase pressure in the right ventricular of the heart.

In this model, increased ventricular pressure resulted in cardiac dysfunction, as demonstrated by increased end systolic pressure-volume relationship, or ESPVR, and increased myocardial performance index, or MPI.

The increased ventricular pressure also results in cardiac remodeling, as evidenced by an increase in the Fulton index, an increase in the right ventricular free wall thickness, or RVFWT, and increased fibrosis in the heart.

Treatment with twice weekly subcutaneous 10 mg/kg dosing of RKER-012 was observed to protect against both the PAB-related cardiac dysfunction and remodeling, which we believe demonstrates that KER-012 has the potential to have a cardioprotective effect that could potentially provide benefit in diseases such as PAH and other cardiovascular diseases in patients.

ESPVR, MPI, Fulton Index, RVFWT and Cardiac Fibrosis in a Mouse PAB Model

*** P value <0.001;

**** P value <0.0001 vs.

## P value <0.01, #### P value <0.0001 vs.

KER-012 did not increase red blood cells in non-human primates

In a preclinical study, male cynomolgus monkeys received subcutaneous administration every other week for two months of either vehicle or 3, 10 or 50 mg/kg of KER-012.

We measured hematology at baseline and on Day 64.

Changes in red blood cells, hematocrit and hemoglobin over the 35-day study were not statistically significantly different compared to changes observed in the vehicle-treated cohort.

Based on these findings that CKER-012 did not increase red blood cell production in monkeys, we believe KER-012 has the potential not to increase red blood cell production in humans.

Changes in hemoglobin and red blood cells over the 64-day study were not statistically significantly different compared to changes observed in the vehicle-treated cohort.

Based on these findings that KER-012 did not increase red blood cell production in monkeys, we believe KER-012 has the potential not to increase red blood cell production in humans.

Based on the findings from our preclinical studies, we believe KER-012 has the potential to treat disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta.

Additionally, inhibition of BMP9 signaling can result in endothelial cell apoptosis, remodeling and arterial occlusion in diseases such as PAH.

We believe that KER-012 has the potential to increase the signaling of BMP pathways through this inhibition of activin A and activin B signaling, and

consequently treat diseases such as PAH that are associated with reduced BMP signaling due to inactivating mutations in the BMP receptors.

Our Preclinical Pipeline

Our Proprietary Discovery Approach

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▪ In third-party preclinical studies in rodents and non-human primates, ActRIIB-Fc was associated with increased bone mineral density and lean muscle mass, but was not associated with changes in red blood cells.

However, ActRIIB-Fc was also observed to cause nose and gum bleeding, which we believe is due to its effect of

disrupting normal vascular remodeling.

However, ActRIIB-Fc was also observed to cause nose and gum bleeding, which we believe is due to its effect of disrupting normal vascular remodeling.

BMP9 signaling is required for normal vascular remodeling, but is not involved in regulation of muscle or bone tissues.

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We do not currently have arrangements in place for redundant supply.

We are closely monitoring the impact of the COVID-19 pandemic on our ability to procure sufficient supplies for the development of our product candidates.

The magnitude of any potential impact will depend on the severity and duration of the spread of the virus, and the actions undertaken to contain COVID-19 or treat its effects.

We are working with our CMOs to manage this process.

We have been and are continuing to closely monitor the impact of the COVID-19 pandemic on our ability to procure sufficient supplies for the development of our product candidates, and are working with our CMOs to manage this process.

However, we could be unable to find alternative suppliers of acceptable quality, in the appropriate volumes and at an acceptable cost, if needed.

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There are many other companies, including large biotechnology and pharmaceutical companies, that have commercialized and/or are developing therapies for the same therapeutic areas that our product candidates target.

For example, FibroGen Inc., Astellas Pharma Inc.

are developing product candidates for the treatment of anemia, and Acceleron Pharma Inc., or Acceleron, Bristol-Myers Squibb Company and Disc Medicine are developing product candidates targeting diseases associated with MDS and myelofibrosis, including chronic anemia.

Additionally, in April 2020, Acceleron received FDA approval of its product, Reblozyl, for the treatment of anemia failing an erythropoiesis stimulating agent and requiring two or more red blood cell

units over eight weeks in adult patients with very low- to intermediate-risk MDS with ring sideroblasts or with myelodysplastic/myeloproliferative neoplasm with ring sideroblasts and thrombocytosis.

For example, FibroGen Inc.

and Astellas Pharma Inc.

are developing product candidates for the treatment of anemia, and Acceleron Pharma Inc.

(which was acquired by Merck & Co.

in November 2021), or Acceleron, Bristol-Myers Squibb Company and Disc Medicine are developing product candidates targeting diseases associated with MDS and myelofibrosis, including chronic anemia.

Additionally, in April 2020, Acceleron received FDA approval of its product, Reblozyl, for the treatment of anemia failing an erythropoiesis stimulating agent and requiring two or more red blood cell units over eight weeks in adult patients with very low- to intermediate-risk MDS with ring sideroblasts or with myelodysplastic/myeloproliferative neoplasm with ring sideroblasts and thrombocytosis.

In June 2020, Acceleron further announced that the European Commission approved Reblozyl for the treatment of transfusion-dependent anemia in adult patients with MDS or beta thalassemia and in September 2020, Acceleron announced that Health Canada approved Reblozyl for the treatment of adult patients with red blood cell transfusion-dependent anemia associated with beta thalassemia.

Geron Corporation is developing imetelstat as a treatment for MDS and for myelofibrosis.

Sierra Oncology, Inc.

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Additionally, Constellation Pharmaceutics, Inc.

is also developing a product candidate as a treatment for myelofibrosis.

(which was acquired by MorphoSys AG in July 2021) is also developing a product candidate as a treatment for myelofibrosis and Incyte Corporation is developing an ALK2 inhibitor product candidate for the treatment of myelofibrosis.

In March 2022, CTI BioPharma Corp.

received FDA accelerated approval of its product, pacritinib (Vonjo), for the treatment of adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 × 10 9 /L.

Other companies that are developing product candidates that are designed to target the TGF-ß signaling pathways include Scholar Rock Holding Corporation, Biogen Inc.

and Regeneron Pharmaceuticals, Inc.

There are currently no approved drugs for the treatment of FOP.

However, Ipsen, through its subsidiary Clementia Pharmaceuticals Inc.

and pursuant to a collaboration with Blueprint Medicines Corporation, as well as Regeneron Pharmaceuticals, Inc., BioCryst Pharmaceuticals, Inc.

and Incyte Corporation are developing product candidates for the treatment of FOP that are intended to work, at least in part, through inhibition of aberrant ALK2 signaling.

There are currently no approved drugs for the treatment of osteogenesis imperfecta.

However, Mereo BioPharma Group plc is developing an anti-sclerostin product candidate for the treatment of osteogenesis imperfecta.

However, Mereo BioPharma Group plc, in collaboration with Ultragenyx Pharmaceutical Inc., is developing an anti-sclerostin product candidate for the treatment of osteogenesis imperfecta.

All of the currently-approved therapies for PAH are vasodilators, which are medications that dilate blood vessels.

However, Acceleron is developing sotatercept, an activin receptor ligand trap, for the treatment of PAH.

Many of the companies against which we are competing or against which we may compete in the future, either alone or with their strategic collaborators, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do.

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Collaborations and License Agreement

2021 License Agreement with Hansoh (Shanghai) Healthtech Co., Ltd.

In December 2021, we entered into a license agreement with Hansoh (Shanghai) Healthtech Co., Ltd., or Hansoh.

Under the terms of the license agreement with Hansoh, or the Hansoh Agreement, we granted to Hansoh the exclusive right to develop, manufacture and commercialize KER-050 and licensed products containing KER-050 within the territories of mainland China, Hong Kong and Macau, which we refer to collectively as the Territory.

In connection with the Hansoh Agreement, Hansoh will purchase clinical trial supply of KER-050 from us, and the parties will also negotiate in good faith to enter into an agreement for commercial supply prior to any anticipated commercialization in the Territory.

In addition, Hansoh will use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize licensed products in any region in the Territory.

Pursuant to the terms of the Hansoh Agreement, we received a net $18.0 million upfront payment in 2022.

In addition to the upfront payment, we are entitled to receive up to an aggregate of (i) $26.5 million upon the achievement of specified development milestones and (ii) $144.0 million upon the achievement of specified net sales thresholds for all licensed products in the Territory.

If a licensed product is approved for marketing in the Territory, we will be entitled to receive royalty

payments based on a tiered percentage of annual net sales in each region within the Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions.

Hansoh’s obligation to pay royalties for a given licensed product in a given region in the Territory will begin on the date of the first commercial sale for such licensed product in such region and continue until the latest of (i) ten years from the date of the first commercial sale for such licensed product in such region, (ii) the expiration of the last valid claim of certain licensed patents or joint patents, and (iii) expiration of regulatory exclusivity in such region.

During the royalty term, neither party will directly or indirectly commercialize a competing product in the Territory.

The Hansoh Agreement will continue in force on a region-by-region basis until the expiration of the royalty term.

Hansoh may terminate the Hansoh Agreement in its entirety for convenience, with notice.

We may terminate the Hansoh Agreement in its entirety for a patent challenge brought by Hansoh or its affiliates or their sublicensees.

Either party may terminate the Hansoh Agreement in its entirety (i) if the other party materially breaches the Hansoh Agreement and fails to cure such breach or (ii) upon the bankruptcy of the other party.

2016 Exclusive Patent License Agreement with The General Hospital Corporation

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Additionally, we are required to pay a low-five digit to mid-five digit annual maintenance fee prior to the first commercial sale of our first product or process, a mid-five digit annual maintenance fee after the first commercial sale of our first product or process that is creditable against royalties, certain clinical and regulatory milestone payments for the first three products or indications to achieve such milestones, which milestone payments are $8.6 million in the aggregate, and certain commercial milestone payments for the first three products or indications to achieve such milestones, which milestone payments are $18.0 million in the aggregate.

In 2020, we made a single payment of $50,000 with respect to achievement of the clinical and regulatory milestone of filing of an IND in the first country.

We made payments of $50,000 and $300,000 in 2020 and 2021, respectively, for the achievement of the clinical and regulatory milestones of (i) filing of an IND in the first country and (ii) the completion of a Phase 1 clinical trial, respectively.

We are also obligated to pay tiered royalties on net sales of licensed products ranging in the low-single digits to mid-single digits.

The royalty rates are subject to up to a maximum 50% reduction for lack of a valid claim, in the event that it is necessary for us to obtain a license to any third-party intellectual property related to the licensed products, and generic competition.

The obligation to pay royalties under the MGH Agreement expires on a

licensed product-by-licensed product and country-by-country basis upon the later of expiry of the last valid claim of the licensed patents that cover such licensed product in such country and ten years from the first commercial sale of such product in such country.

The obligation to pay royalties under the MGH Agreement expires on a licensed product-by-licensed product and country-by-country basis upon the later of expiry of the last valid claim of the licensed patents that cover such licensed product in such country and ten years from the first commercial sale of such product in such country.

We are also obligated to pay a percentage of non-royalty related payments received by us from sublicensees ranging in the sub-teen double digits and a change of control fee equal to a low-single digit percentage of the payments received as part of any completed transaction up to a low-seven digit amount.

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We may terminate the agreement for any reason upon specified prior written notice to MGH.

Termination of 2017 Research Collaboration and Exclusive License Agreement with Novo Nordisk

In December 2017, we entered into a research collaboration and exclusive license agreement with Novo Nordisk A/S, or Novo Nordisk.

Under the agreement with Novo Nordisk, or the Novo Nordisk Agreement, we are collaborating with Novo Nordisk on research and development of fusion molecules consisting of a ligand binder present as part of a larger molecule, or ligand traps.

Pursuant to the Novo Nordisk Agreement, Novo Nordisk had the right to select a prespecified number of ligand traps for further development and commercialization by Novo Nordisk.

Following execution, Novo Nordisk selected one existing ligand trap to further develop and commercialize and prior to the completion of the two-year research program, selected a second ligand trap arising from the collaboration.

Upon selection by Novo Nordisk of each ligand trap, we transferred the selected ligand trap to Novo Nordisk for further development and commercialization.

We are able to further develop and commercialize all other remaining declined ligand traps, subject to certain limitations as described below.

Under the Novo Nordisk Agreement, we granted Novo Nordisk an exclusive, worldwide, royalty bearing license, with the right to sublicense, under certain of our background intellectual property and collaboration intellectual property to develop, manufacture and commercialize products that contain the initial ligand trap and any selected ligand trap, whether alone or as a combination product, for use in the treatment of diabetes (including diabetes related complications of cardiovascular disease, or CVD, and chronic kidney disease, or CKD), obesity, (including obesity related complications of CVD, CKD and sarcopenic obesity), non-alcoholic steatohepatitis and cachexia, and, solely as a combination product for use in CVD and CKD.

Under the terms of the Novo Nordisk Agreement, during the term of the agreement, we are not permitted, directly or indirectly, to research, develop or commercialize any ligand trap or ligand binder for use in the licensed field or any selected ligand trap outside of the licensed field, except that we may research, develop, or commercialize any declined ligand trap for use in CVD and CKD.

Under the terms of the Novo Nordisk Agreement, we received an initial license payment of $16.0 million in 2018.

Novo Nordisk has paid us $4.0 million in research funding over the two-year research program.

On October 26, 2020, Novo Nordisk gave written notice of termination of the Novo Nordisk Agreement, effective six months following the delivery of notice, on April 26, 2021.

Upon termination, all worldwide rights to all ligand traps selected under the Novo Nordisk Agreement, along with all rights to develop our molecules in the fields of diabetes, obesity, nonalcoholic steatohepatitis and cachexia, will revert to us.

Under the terms of the Novo Nordisk Agreement, Novo Nordisk is obligated to continue to reimburse the Company for certain research and development costs through April 26, 2021.

Upon effectiveness of the termination, such reimbursements will cease.

Intellectual Property

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Intellectual property rights may not address all potential threats to our competitive advantage

As of February 28, 2021, our patent portfolio consisted of five issued U.S.

As of February 28, 2022, our patent portfolio consisted of eight issued U.S.

patents, 39 pending U.S.

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applications, with expected expiry dates not earlier than between March 13, 2029 and November 2, 2042.

Of these, 77 patent applications relate to KER-050, KER-047 and KER-012, and eight issued patents and 20 patent applications relate to other technologies, in each case as described in more detail below.

Of these, three issued patents and 93 patent applications relate to KER-050, KER-047 and

KER-012, and eight issued patents and 27 patent applications relate to other technologies, in each case as described in more detail below.

Each of our pending international patent applications has been filed under the Patent Cooperation Treaty and has not yet entered any national jurisdictions.

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KER-050 is a modified ActRIIA ligand trap that is designed to bind to different TGF-ß ligands that signal through a TGF-ß signaling pathway.

We own 10 pending U.S.

We own two issued U.S.

patents, 14 pending U.S.

patent applications and 39 pending ex-U.S.

applications that contain claims or supporting disclosure directed to ActRIIA ligand traps and use thereof to treat muscle disease, bone disease, metabolic disease, anemia, fibrosis, pulmonary hypertension, thrombocytopenia, and neutropenia.

Any patents issuing from these applications will have expiration dates between November 9, 2037 and October 2, 2041, absent any patent term adjustments or extensions.

Any patents issuing from these applications will have expiration dates between November 9, 2037 and August 19, 2042, absent any patent term adjustments or extensions.

KER-047 is an orally available small molecule ALK2 inhibitor designed to potently and selectively inhibit ALK2 signaling.

We own 15 pending U.S.

patent applications that contain claims or supporting disclosure directed to crystal forms of an ALK2 inhibitor and uses thereof.

patent applications and seven pending ex-U.S.

applications that contain claims or supporting disclosure directed to crystal forms of an ALK2 inhibitor and uses thereof.

Any patents issuing from these applications will have expiration dates between October 25, 2039 and November 2, 2042, absent any patent term adjustments or extensions.

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KER-012 is a modified ActRIIB ligand trap that is designed to bind to different TGF-ß ligands that signal through a TGF-ß signaling pathway.

We own seven pending U.S.

patent applications and nine pending ex-U.S.

applications that contain claims or supporting disclosure directed to ActRIIB ligand traps and use thereof to treat muscle disease, bone disease, anemia, fibrosis, pulmonary hypertension, metabolic disease, thrombocytopenia, and neutropenia.

Any patents issuing from these applications will have expiration dates between January 11, 2039 and October 2, 2041, absent any patent term adjustments or extensions.

We own nine pending U.S.

patent applications and 11 pending ex-U.S.

Any patents issuing from these applications will have expiration dates between January 11, 2039 and August 19, 2042, absent any patent term adjustments or extensions.

We plan to seek United States and international patent protection for a variety of additional technologies.

We own 23 pending U.S.

patent applications and eight pending ex-U.S.

patent applications and 20 pending ex-U.S.

applications that contain claims or supporting disclosure directed to GDNF fusion polypeptides, ALK2 antibodies, and ActRII chimera ligand traps.

Any patents issuing from these applications will have expiration dates between November 9, 2037 and October 2, 2041, absent any patent term adjustments or extensions.

Any patents issuing from these applications will have expiration dates between November 9, 2037 and August 19, 2042, absent any patent term adjustments or extensions.

Intellectual Property Protection

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The duration of patents outside of the United States varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date.

However, the actual protection afforded by a patent varies on a

product by product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

However, the actual protection afforded by a patent varies on a product by product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position.

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We also have confidentiality agreements or invention assignment agreements with our collaborators and consultants.

These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party.

These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us

ownership of technologies that are developed through a relationship with a third party.

These agreements may be breached, and we may not have adequate remedies for any breach.

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▪ Phase 1 clinical trials generally involve a small number of healthy volunteers or patients with the target disease or condition.

These studies are designed to test the safety, dosage tolerance, absorption, metabolism and

distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.

These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.

▪ Phase 2 clinical trials involve studies in a limited population of disease-affected patients to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.

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Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the chemistry and physical characteristics of the product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency.

The manufacturing process must be capable of consistently

producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency.

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

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The FDA reviews all submitted NDAs and BLAs before it accepts them for filing, and may request additional information rather than accepting the NDA or BLA for filing.

The FDA must make a decision on accepting an NDA or BLA for filing

within sixty days of receipt.

The FDA must make a decision on accepting an NDA or BLA for filing within sixty days of receipt.

Such decision could include either issue a refusal to file letter or acceptance of the NDA or BLA for filing, indicating that it is sufficiently complete to permit substantive review.

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The FDA also may audit data from clinical trials to ensure compliance with GCP requirements.

Additionally, the FDA may refer applications for novel products or products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions, if any.

conditions, if any.

The FDA is not bound by recommendations of the advisory committee, but it considers such recommendations when making decisions on approval.

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If the FDA concludes a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS.

A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

methods, patient registries and other risk minimization tools.

The FDA will not approve the NDA or BLA without an approved REMS, if required.

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During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product.

The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.

The BPCIA also created certain exclusivity periods for

biosimilars approved as interchangeable products.

At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

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In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety, and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products.

Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign

regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions.

Our Phase 1 trial for KER-047 and our Phase 1 trial for KER-050 were both conducted in Australia, and our Phase 2 trial for KER-050 is being conducted in Australia.

Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions.

Our Phase 1 trial for KER-047 and our Phase 1 trial for KER-050 were both conducted in Australia, and our Phase 2 trial for KER-050 in patients with MDS and our Phase 1 clinical trial for KER-012 are being conducted in Australia, among other countries.

The Therapeutic Goods Administration, or the TGA, and the National Health and Medical Research Council set the GCP requirements for clinical research in Australia, and compliance with these codes is mandatory.

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▪ submission to a HREC, of all material relating to the proposed clinical trial, including the trial protocol;

▪ the institution or organisation at which the trial will be conducted, referred to as the “Approving Authority”, giving final approval for the conduct of the trial at the site, having regard to the advice from the HREC;

▪ the institution or organization at which the trial will be conducted, referred to as the “Approving Authority”, giving final approval for the conduct of the trial at the site, having regard to the advice from the HREC;

▪ the investigator submitting a ‘Notification of Intent to Conduct a Clinical Trial’ form, or CTN Form, to the TGA.

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federal Anti-Kickback Statute, the civil False Claims Act, U.S.

federal Health Insurance Portability and

Accountability Act of 1996, or HIPAA, and similar foreign, federal and state fraud and abuse, transparency and privacy laws.

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, and similar foreign, federal and state fraud and abuse, transparency and privacy laws.

federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal healthcare program.

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federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

In addition, HIPAA, as amended by HITECH, and their implementing regulations, impose certain requirements on HIPAA covered entities, which include certain healthcare providers, healthcare clearing houses and health plans, and individuals and entities that provide services on their behalf that involve individually identifiable health information, known as business associates, as well as their covered subcontractors, relating to the privacy, security and transmission of individually identifiable health information.

federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to certain payments and other transfers of value made in the prior year to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors) and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members.

Beginning in 2022, applicable manufacturers also will be required to report information regarding payments and other transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants and certified nurse midwives during the previous year.

In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, impose certain requirements on HIPAA covered entities, which include certain healthcare providers, healthcare clearing houses and health plans, and individuals and entities that provide services on their behalf that involve individually identifiable health information, known as business associates, as well as their covered subcontractors, relating to the privacy, security and transmission of individually identifiable health information.

federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to certain payments and other transfers of value made in the prior year to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members.

We are also subject to additional similar U.S.

state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or that apply regardless of payor, state laws which require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, state and local laws which require pharmaceutical companies to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, state laws which require the reporting of information related to drug pricing, state and local laws requiring the registration of pharmaceutical sales representatives, and state and foreign laws governing the privacy and security of health information which, in some cases, differ from each other in significant ways, and may not have the same effect, thus

complicating compliance efforts.

the privacy and security of health information which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, significant civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.

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For example, Congress considered legislation to repeal or repeal and replace all or part of the ACA.

While Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the ACA such as removing penalties, which started on January 1, 2019, for not complying with the ACA’s individual mandate to carry health insurance, delaying the implementation of certain ACA-mandated fees, and increasing the

point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D.

In addition, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminated the health insurer tax.

On December 14, 2018, a U.S.

District Court Judge in Texas ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act.

Additionally, on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit ruled that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well.

Supreme Court is currently reviewing the case, although it is unknown when a decision will be made.

Further, although the U.S.

Supreme Court has not yet ruled on the constitutionality of the ACA, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

On June 17, 2021 the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Thus, the ACA will remain in effect in its current form.

Further, prior to the U.S.

Supreme Court ruling, on January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which began on February 15, 2021 and remained open through August 15, 2021.

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others,

reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

It is unclear how any such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business.

Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers.

These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021, unless additional action is taken by Congress.

These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute, including the Infrastructure Investment and Jobs Act, will remain in effect through 2031, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional action is taken by Congress.

Under current legislation the actual reduction in Medicare payments will vary from 1% in 2022 to up to 3% in the final fiscal year of this sequester.

Another sequester, the PAYGO Sequester, effective with the passage of the American Rescue Plan, will add another 4% reduction in Medicare spending in 2023, unless additional Congressional action is taken.

Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

In addition, Congress is considering additional health reform measures as part of the other reform measures.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

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For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing that seek to implement several of the administration’s proposals.

As a result, the FDA released a final rule on September 24, 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada.

Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

As a result, the FDA concurrently released a final rule and guidance in September 2020 providing pathways for states to build and submit importation plans for drugs from Canada.

Further, on November 20, 2020, the Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden administration until March 22, 2021.

On November 20, 2020, CMS issued an interim final rule implementing the Trump administration’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021.

On December 28, 2020, the U.S.

District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule.

It is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.

As a result of litigation challenging the Most Favored Nation model, on December 27, 2021, CMS published a final rule that rescinded the Most Favored Nation model interim final rule.

In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

No legislation or administrative actions have been finalized to implement these principles.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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corporations and individuals from engaging in certain activities to obtain or retain business abroad or to influence a person working in an official capacity.

It is illegal to pay,

offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

The scope of the FCPA includes interactions with certain healthcare professionals in many countries.

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Employees and Human Capital Resources

As of December 31, 2020, we had 35 full-time employees, including ten who hold Ph.D.

Of these full-time employees, 25 employees are engaged in research and development and ten employees are engaged in management or general and administrative activities.

As of December 31, 2021, we had 60 full-time employees, including 15 who hold Ph.D.

Of these full-time employees, 45 employees are engaged in research and development and 15 employees are engaged in management or general and administrative activities.

None of our employees are subject to a collective bargaining agreement or represented by a trade or labor union.

We consider our relationship with our employees to be good.

Our human capital objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.

The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.

Diversity and Inclusion

At Keros, diversity means making a conscious effort to reflect the many experiences and identities of the world outside, while treating each other with fairness and without bias.

Inclusion is the choice we make every day to foster an environment where people of all backgrounds not only belong but excel, so that together, as a company, we can succeed.

Keros strives to foster an inclusive community, both inside and out of the office.

Retention, Training and Development

The development, attraction and retention of our employees is a critical success factor for Keros.

We cultivate a culture of learning and offer formal and informal training and development opportunities for employees at all levels.

We actively promote from within and continue to fill our team with strong and experienced management talent.

Compensation and Benefits

An important part of attracting and retaining key talent is competitive pay and benefits.

To ensure our compensation and benefits programs are competitive, we engage a nationally recognized outside compensation and benefits consulting firm to independently evaluate the effectiveness of our programs and to provide benchmarking against our peers within the industry.

Our pay for performance philosophy seeks to motivate and reward employees while accomplishing our short and long-term strategic goals.

As part of our performance management process, employees are evaluated both on what they accomplished and on their experience managing and mentoring other employees.

Annual salary increases and incentive bonuses are based on merit and include individual and corporate performance factors.

To encourage our employees to think like owners and share in the Company’s success, all employees are granted stock options.

All employees are eligible for health insurance, paid and unpaid leaves including paid parental leave, retirement plans with an employer contribution match, life and disability/accident coverage and access to convenient COVID-19 testing.

Conduct and Ethics

At Keros, we are committed to fostering a culture of integrity and ensuring each of our employees is equipped with resources to help them do the right thing.

We believe it is imperative that the board of directors and senior management strongly support a no-tolerance stance for workplace harassment, biases and unethical behavior.

All employees are required to abide by, review and confirm compliance to the Company’s Code of Business Conduct and Ethics and Insider Trading policies upon hire and on an annual basis thereafter.

Corporate Information

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business