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Item 1. Business

2023-03-03 compared with 2022-03-09 · 292 added, 356 removed, 751 unchanged (46% of the section changed)

We are a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel treatments for patients suffering from hematological and musculoskeletal disorders with high unmet medical need.

We are a leader in understanding the role of the transforming growth factor-beta, or TGF-ß, family of proteins, which are master regulators of red blood cell and platelet production as well as of the growth, repair and maintenance of muscle and bone.

We have leveraged this understanding and developed a discovery approach to generate large and small molecules to address diseases of these tissues.

Targeting TGF-ß signaling pathways has been clinically proven to elicit robust changes in blood cells, muscle and bone, which we believe provides a precedent and strong rationale for our strategy.

We are a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel treatments for patients suffering from hematological, pulmonary and cardiovascular disorders with high unmet medical need.

We are leveraging this understanding to develop large and small molecules that have the potential to provide meaningful and potentially disease-modifying benefit to patients.

Targeting TGF-ß signaling pathways has been clinically proven to elicit robust changes in blood cells, blood vessels, skeletal muscle and heart tissue, which we believe provides a precedent and strong rationale for our strategy.

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 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.

Our lead small molecule product candidate, KER-047, is being developed for the treatment of functional iron deficiency.

Our third product candidate, KER-012, is being developed for the treatment of pulmonary arterial hypertension, or PAH, and for the treatment of cardiovascular disorders .

KER-050 is an engineered ligand trap comprised of a modified ligand-binding domain of the TGF-ß receptor known as activin receptor type IIA, or ActRIIA, that is fused to the portion of the human antibody known as the Fc domain.

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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.

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.

Based on data from our completed Phase 1 clinical trial of KER-050 in healthy volunteers and from multiple 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 while also improving bone health and altering the bone marrow microenvironment to slow down disease progression.

In December 2022, we announced additional data from Part 2 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 Part 2 of this trial in each of the first and second half of 2023.

Additionally, in December 2022, we announced initial data from our ongoing Phase 2 clinical trial evaluating KER-050 for the treatment of patients with myelofibrosis-associated cytopenias.

We expect to report additional dose escalation data from this trial in the second half of 2023.

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.

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.

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.

Excessive ALK2 signaling causes elevated levels of hepcidin, a key regulator of iron absorption and recycling.

We believe that KER-047 has the potential to ameliorate excessive ALK2 signaling, which would normalize hepcidin expression and mobilize iron out of tissues.

We believe this effect will result in increased iron bioavailability, potentially leading to a restoration of erythropoiesis and reduction in iron overload in patients with functional iron deficiency.

We are developing KER-047 for the treatment of functional iron deficiency which is a consequence of elevated ALK2 signaling, including our initial target, iron-refractory iron deficiency anemia, or IRIDA.

In December 2022, we announced initial data from one patient enrolled in our ongoing Phase 2 clinical trial in patients with IRIDA, and expect to report additional data from this trial in the second half of 2023.

We also expect to commence an open-label Phase 2 clinical trial in MDS and myelofibrosis patients with functional iron deficiency in the first half of 2023, and expect to report initial data from this trial in the second half of 2023.

KER-012 is designed to bind to and inhibit the signaling of TGF-ß ligands that stimulate smooth muscle hypertrophy and fibrosis, including activin A, activin B and myostatin (GDF8).

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, including inactivating mutations in the BMP receptors.

We are developing KER-012 for the treatment of PAH and for the treatment of cardiovascular disorders.

We have completed a Phase 1 clinical trial of KER-012 in healthy volunteers, and expect to commence a Phase 2 clinical trial evaluating KER-012 in patients with PAH in the first half of 2023.

We also expect to commence an open-label Phase 2 biomarker clinical trial of KER-012 in the second half of 2023.

Our strategy focuses on the role of members of the TGF-ß family of proteins in the development of a number of tissues, including blood vessels , skeletal muscle and heart tissue.

Aged and damaged cells are routinely replaced by new cells in normally functioning organs.

These new cells are derived from stem cells that have the ability to differentiate into cells with specialized function when appropriate signals are provided to maintain the homeostatic state of the tissue.

Members of the TGF-ß family of proteins, including activins and bone morphogenetic proteins, or BMPs, provide the necessary signals for this process of self-renewal and repair.

Members of the TGF-ß family of proteins, including activins and BMPs, provide the necessary signals for this process of self-renewal and repair.

We seek to address the limitations of current therapeutic approaches to treating diseases whose manifestations are linked to dysfunction of TGF-ß signaling pathways by:

▪ Leveraging our comprehensive insights into the TGF-ß signaling pathways to discover therapeutics to treat hematological and musculoskeletal disorders.

▪ Expanding our library of proprietary molecules that are engineered to induce desired biological effects, such as increased blood cell production, inhibit heterotopic ossification and increased muscle and bone mass.

▪ Leveraging our comprehensive insights into the TGF-ß signaling pathways to discover therapeutics to treat hematological, pulmonary and cardiovascular disorders.

▪ Expanding our library of proprietary molecules that are engineered to induce desired biological effects, such as increased blood cell production and increased muscle mass and strength.

▪ Engineering proprietary molecules to selectively target specific proteins in the TGF-ß signaling pathways to provide therapeutic benefit while potentially minimizing safety risks.

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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.

* Anticipated clinical milestones are subject to the impact of COVID-19 on our business.

Our mission is to deliver significant clinical benefit to patients suffering from hematological and musculoskeletal diseases by developing differentiated product candidates that are designed to alter TGF-ß signaling pathways.

The following table sets forth our product candidates and their current development stages.

Our mission is to deliver significant clinical benefit to patients suffering from hematological, pulmonary and cardiovascular disorders.

With a focus on developing differentiated product candidates that are designed to alter TGF-β signaling, we aim to target the pathways critical for the growth, repair and maintenance of a number of tissue and organ systems.

The key elements of our strategy include:

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

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 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.

We are continuing to progress 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 who either have or have not previously received treatment with an erythropoiesis-stimulating agent.

We expect to report additional data from Part 2 of this trial in each of the first and second half of 2023.

We also expect to announce additional data from our ongoing open-label Phase 2 clinical trial evaluating the treatment of patients with myelofibrosis-associated cytopenias in the second half of 2023.

▪ Advance the clinical development of KER-047 for the treatment of functional iron deficiency.

We are continuing to progress our open-label Phase 2 clinical trial in patients with IRIDA and expect to report additional data from this trial in the second half of 2023.

▪ Rapidly advance the clinical development of KER-012 for the treatment of PAH and for the treatment of cardiovascular disorders.

We expect to commence a Phase 2 clinical trial evaluating KER-012 in patients with PAH in the first half of 2023.

We also expect to commence an open-label Phase 2 biomarker clinical trial of KER-012 in the second half of 2023.

▪ 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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▪ Leverage our proprietary discovery approach and knowledge base to develop new therapeutics.

Our discovery efforts are focused on expanding our pipeline of wholly-owned assets for the treatment of hematological and musculoskeletal diseases.

Our discovery efforts are focused on expanding our pipeline of wholly-owned assets for the treatment of hematological, pulmonary and cardiovascular disorders.

Accordingly, we intend to identify and develop product candidates to treat diseases where targeting the TGF-ß signaling pathways has clinical validation or biological rationale.

Our Hematology Program

Our two lead product candidates, KER-050 and KER-047, are designed to target TGF-ß signaling pathways to address diseases that arise from ineffective hematopoiesis as well as anemias that result from iron imbalance.

Our Hematology Franchise

KER-050 and KER-047, which form the backbone of our hematology franchise, are designed to target TGF-ß signaling pathways to address diseases that arise from ineffective hematopoiesis and functional iron deficiency, respectively.

Hematopoiesis

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Platelets are a key component of the coagulation system and are responsible for stopping bleeding by forming a blood clot.

Hematopoiesis is the production of red blood cells, white blood cells and platelets from common progenitor stem cells, or progenitor cells.

Hematopoiesis is the production of red blood cells, white blood cells and platelets from common progenitor stem cells, or progenitor cells, in the bone marrow.

This process begins when a hematopoietic progenitor cell becomes committed to a specific cellular lineage.

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

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.

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.

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

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Myelodysplastic Syndromes

Myelodysplastic syndromes, or MDS, is a collection of bone marrow disorders characterized by ineffective hematopoiesis, often with a dramatic expansion of progenitor cells that are unable to mature into functioning blood cells.

MDS is a collection of bone marrow disorders characterized by ineffective hematopoiesis, often with a dramatic expansion of progenitor cells that are unable to mature into functioning blood cells.

In the United States, there are 60,000 to 170,000 patients with MDS and 15,000 to 20,000 new cases of MDS reported each year.

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Limitations of Current Treatment Options for Cytopenias in Patients with MDS

Patients with MDS-associated anemia are generally treated with red blood cell transfusions and erythroid stimulating agents, or ESAs, which are not approved for such treatment.

The treatment of MDS-associated thrombocytopenia is platelet transfusions and platelet-stimulating agents.

Patients with MDS-associated anemia are generally treated with red blood cell transfusions and erythropoises-stimulating agents, or ESAs, which are not approved for such treatment.

The current treatment of MDS-associated thrombocytopenia is platelet transfusions and platelet-stimulating agents.

Severe cytopenia and transfusion dependence are independent predictors of poor prognosis for patients with MDS and are inversely correlated with quality of life.

Red blood cell and platelet transfusions provide temporary benefits to patients with MDS, but are associated with both acute and chronic health risks, including risk of bacterial infection and allergic reactions to the donor blood, and place a significant burden on both the patient and the healthcare system.

Red blood cell transfusions are also associated with iron overload, which can lead to organ dysfunction over time.

Repeated red blood cell transfusions are also associated with iron overload, further exacerbating damage to the bone marrow and increasing the risk of acute myeloid leukemia progression and cardiovascular disease.

Additionally, the benefit from a platelet transfusion is typically short-lived and availability is limited.

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Myelofibrosis is a group of rare cancers of the bone marrow in which the marrow is replaced by scar tissue and is not able to produce healthy blood cells.

As a result, the spleen begins to produce cells to compensate for this ineffective hematopoiesis, which ultimately causes the spleen to enlarge.

Myelofibrosis is characterized by ineffective hematopoiesis, an enlarged spleen, bone marrow fibrosis and shortened survival.

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KER-050 is a ligand trap comprised of a modified ligand-binding domain of ActRIIA that is fused to the portion of the human antibody known as the Fc domain.

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, 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.

KER-050 is designed to bind to and inhibit the signaling of TGF-ß ligands involved in the regulation of hematopoiesis, including activin A, activin B and growth differentiation factor 11, that restrict blood cell progenitors from continuing through differentiation and developing into mature cells with specialized function.

The KER-050-mediated inhibition of these regulators has been shown in preclinical studies to stimulate the progenitors to progress to maturation and, consequently, increase the number of mature cells in the blood.

Specifically related to red blood cells, we have demonstrated in multiple preclinical studies that administration of a mouse version of KER-050, or RKER-050, elicited increases in red blood cell production in healthy mice by stimulating multiple stages in the maturation of erythroid precursors.

The rapid and sustained increase in red blood cells observed in these preclinical studies suggests that RKER-050 potentially stimulated both terminal maturation of late-stage erythroid precursors to rapidly increase red blood cells and maturation of early-stage precursor populations to increase the pool of progenitors that can be mobilized for a sustained upregulation of erythropoiesis.

Additionally, by increasing the pool of early erythroid precursor cells and serum erythropoietin, we believe KER-050 can potentially treat patients with MDS that have hypocellular bone marrow.

We have also observed an increase in erythropoietin in healthy mice in preclinical studies of RKER-050, which we believe could contribute to the durability in red blood cell production and is supportive of the durability of the red blood cell increase we observed in our Phase 1 clinical trial of KER-050 in healthy post-menopausal women.

We have also demonstrated in preclinical studies that treatment with a single dose of RKER-050 resulted in rapid and sustained increases in platelets in healthy mice.

We observed an increase in platelets 12 hours after administration of RKER-050, which we believe supports that KER-050 can potentially promote production of platelets by blocking inhibitory TGF-ß ligands so that megakaryocytes can fully differentiate.

Additionally, bone marrow analysis performed 24 hours post-dose demonstrated that administration of RKER-050 increased the 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.

Separately, in a preclinical study in wild type mice, treatment with ruxolitinib resulted in reductions in red blood cells, hemoglobin and hematocrit, recapitulating the anemia observed in myelofibrosis patients.

Administration of RKER-050 reversed the observed ruxolitinib-associated reductions in the red blood cell parameters, which we believe supports the potential of KER-050 to mitigate the dose-limiting effects of ruxolitinib and enhance the duration of therapy in myelofibrosis patients.

Data from our Phase 1 clinical trial in healthy volunteers and our two ongoing Phase 2 clinical trials, one in patients with MDS and one in patients with myelofibrosis, also 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

Consistent with our preclinical studies, which showed improvement in bone health, we observed an increase in b one-specific alkaline phosphatase, a biomarker of bone remodeling , in our Phase 1 clinical trial in healthy volunteers following administration of KER-050.

Based on these data, we believe KER-050 also has the potential to regenerate a healthy bone marrow and slow disease progression.

We intend to develop KER-050 for the treatment of both MDS- and myelofibrosis-associated cytopenias.

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Patients with MDS can have defects occurring anywhere along the differentiation and maturation spectrum of erythropoiesis, and often have multiple mutations that cause ineffective erythropoiesis.

By acting on cell types throughout the erythropoiesis pathway, KER-050 may lead to robust responses in RS positive patients who have a characteristic defect in terminal maturation, and may also address anemia in the broader MDS population that has defects in earlier-stage erythroid cell development.

By acting on cell types throughout the erythropoiesis pathway, KER-050 may lead to robust responses in RS positive patients who have a characteristic defect in terminal maturation, and may also address anemia in the broader MDS population, including non-RS patients, that has defects in earlier-stage erythroid cell development.

• Increased platelet counts in blood.

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We believe treatment with KER-050 has the potential to address the MDS- and myelofibrosis-associated thrombocytopenia.

Additionally, by promoting thrombopoiesis, we believe KER-050 has the potential to aid the differentiation of megakaryocytes to platelets in myelofibrosis patients and reactivate hematopoiesis in the bone marrow.

• Reduced accumulation of progenitor cells.

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We believe treatment with KER-050 will stimulate these progenitors to progress to maturation, ameliorating the accumulation of these cells that lead to MDS- and myelofibrosis-associated cytopenias.

• Regeneration of the bone marrow microenvironment to potentially slow disease progression.

The bone marrow microenvironment is composed of bone cells, stromal cells, immune cells, blood vessels and nerves.

Crosstalk in this osteo-hematopoietic niche determines the maintenance, self-renewal and eventual differentiation of hematopoietic stem cells and progenitor cells to blood cells.

Accordingly, a disease-impacted bone marrow microenvironment contributes to ineffective hematopoiesis and bone loss.

In a preclinical study, administration of RKER-050 in a mouse model of MDS prevented the anemia and bone loss observed in the vehicle-treated MDS mice.

We believe these data support the potential of KER-050 to alter the bone marrow microenvironment that is supportive of self-renewal and maintenance of normal hematopoietic stem cells and progenitor cells in patients with MDS and other hematological diseases, including myelofibrosis.

▪ Robust and sustained increase in red blood cells, hemoglobin and reticulocytes, supporting monthly or less frequent dosing.

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Ongoing Phase 2 Clinical Trial in Patients with Myelodysplastic Syndromes

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, or RS positive, or do not have ring sideroblasts, or non-RS.

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

primary objective of this trial is to assess the safety and tolerability of KER-050 in patients 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.

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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:

In Part 2, the dose confirmation portion of the trial, an identical dosing schedule was followed, and patients initiated treatment at a starting dose of 3.75 mg/kg, the recommended Part 2 dose, or RP2D, with the opportunity to dose escalate to 5.0 mg/kg or to down-titrate based on individual titration rules.

Following completion of Part 1, eligible patients were given the opportunity to escalate up to the RP2D and receive long-term treatment with KER-050 for up to an additional 20 cycles, which we refer to as the Part 1 Extension.

In December 2022, we presented additional data from this ongoing trial at the 64th American Society of Hematology, or ASH, Annual Meeting and Exposition.

As of October 1, 2022, which was the data cut-off date, 25 patients from Part 1, including the Part 1 Extension, and 11 patients from Part 2 had received at least one dose of KER-050 at RP2D, which we refer to as the safety population.

29 of these patients had completed eight weeks of treatment and the applicable assessments as of the data cut-off date, which we refer to as the evaluable RP2D patients.

Of the 36 patients in the safety population, 63.9% (n=23/36) were RS positive while 36.1% (n=13/36) were non-RS.

The safety population was comprised of ten non-transfused, or NT, six low transfusion burden, or LTB, and 20 high transfusion burden, or HTB, patients.

As of the data cut-off date, 51.7% (n=15/29) of the evaluable RP2D patients 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:

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• 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.

Additional data from the evaluable RP2D patients, as of the data cut-off date, include:

• 51.7% (n=15/29) of the evaluable RP2D population achieved HI-E over an eight-week period.

• 50.0% (n=9/18) of the transfused RP2D patients receiving ≥ two red blood cell units at baseline achieved TI for at least eight weeks.

Of these 18 patients, 12 were RS positive and six were non-RS.

◦ 50.0% (n=6/12) of these RS positive patients achieved TI for at least eight weeks.

◦ 50.0% (n=3/6) of these non-RS patients achieved TI for at least eight weeks.

• Of the transfused RP2D patients, 50.0% (n=8/16) of those who are HTB achieved TI for at least eight weeks.

Of these 16 patients, 11 were RS positive and five were non-RS.

◦ 45.5% (n=5/11) of these RS positive HTB patients achieved TI for at least eight weeks.

◦ 60.0% (n=3/5) of these non-RS HTB patients achieved TI for at least eight weeks.

• 53.3% (n=8/15) of the transfused RP2D patients receiving ≥ two red blood cell units at baseline, with the opportunity to extend treatment beyond four cycles, achieved TI for at least 12 weeks, demonstrating a sustained TI benefit with continued treatment.

◦ Of these transfused RP2D patients, 50.0% (n=7/14) of those who are HTB achieved TI for at least 12 weeks.

As of the data cut-off date, sustained increases in platelet counts were observed for patients achieving HI-E or TI over a 24-week treatment period, supporting a potentially differentiated mechanism of KER-050 to promote hematopoiesis across multiple cell lineages.

As of the data cut-off date, KER-050 was generally well tolerated by the 36 patients in the safety population.

No dose-limiting toxicities were reported, and no patients progressed to acute myeloid leukemia.

There was one case of a fatal treatment-emergent adverse event, or TEAE, in the trial that was determined to be unrelated to treatment.

There were three additional TEAEs that led to discontinuation of treatment, one of which was deemed treatment related (injection site reaction) and two of which were determined to be unrelated to treatment (dyspnea and chronic obstructive pulmonary disease).

The most commonly reported TEAEs were diarrhea, fatigue, dyspnea and nausea.

The following data from one patient enrolled in this trial was also presented:

• A 72-year-old non-RS, HTB male patient with MDS with multi-lineage dysplasia and concomitant iron chelation therapy achieved an initial HI-E response, but not TI, when treated with four 1.5 mg/kg doses of KER-050 in Part 1 of the trial.

The patient was re-screened and initiated Part 1 Extension following a 112-day gap between the last dose he received in Part 1 of the trial and the first dose he received in the Part 1 Extension.

The patient achieved TI upon recommencement of treatment at a 2.5 mg/kg dose of KER-050 every four weeks.

After 24 weeks, the patient dose escalated to 3.75 mg/kg every four weeks per the trial protocol, and remained TI for at least 44 weeks as of the data cut-off date.

• As of January 9, 2023, this patient had remained TI for 60 weeks.

We also presented an exploratory analysis of biomarkers of iron overload, or IO, with data from the 31 patients who received up to four cycles of treatment in the completed Part 1.

58.1% (n=18/31) of these patients were classified as HTB.

At baseline, transfusion-dependent patients exhibited biomarkers suggestive of a greater degree of ineffective hematopoiesis than NT patients, including lower levels of hemoglobin, reticulocytes and soluble transferrin receptor.

In addition, lower levels of transferrin and elevated levels of serum ferritin at baseline, especially among HTB patients, suggest more severe IO in transfusion-dependent patients as compared to NT patients.

Key observations from this analysis, as of the data cut-off date, are as follows:

• Soluble transferrin receptor levels generally increased with KER-050 treatment, particularly in HTB patients, while ferritin levels decreased.

• On an individual level, most patients who achieved HI-E or TI also showed decreases in serum ferritin.

Such decreases were generally greater in patients with baseline ferritin of >500 ng/mL, suggesting potential for KER-050 to reduce IO in the most impacted patients.

• Reductions in transfusion burden, based on transfused red blood cells over eight weeks, were generally associated with reductions in serum ferritin, especially for patients who achieved TI.

Taken together, the results from the trial and the exploratory analysis as of the data cut-off date suggest that KER-050 has the potential to improve hematopoiesis, reduce transfusion burden and reduce IO, particularly in patients receiving frequent red blood cell transfusions.

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.

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 patients with myelofibrosis-associated cytopenias.

The primary objective of this trial is to assess the safety and tolerability of KER-050 in patients 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.

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Phase 2 Clinical Trial Design

In December 2022, we presented initial data from this ongoing trial at the 64th ASH Annual Meeting and Exposition.

As of October 1, 2022, which was the data cut-off date, 12 patients were enrolled in Part 1, with six patients in each arm receiving 0.75 mg/kg dose of KER-050.

For the patients in the combination therapy arm, the median ruxolitinib dose was 12.5 mg twice daily at baseline.

As of the data cut-off date, in each of the arms, at least half of the enrolled patients had received three or more doses of KER-050.

At baseline, 41.7% (n=5/12) were transfusion-dependent, with an average transfusion burden of 9.8 red blood cell units in the 12 weeks preceding cycle 1, Day 1.

As of the data cut-off date, KER-050 was generally well tolerated, with no drug-related serious adverse events or dose-limiting toxicities reported.

No patients had a treatment-related dose reduction of KER-050 or ruxolitinib as of the data cut-off date.

The most commonly reported TEAEs were diarrhea, COVID-19, dyspnea and fatigue.

One patient withdrew from the trial due to an unrelated adverse event.

Although variability was observed, as of the data cut-off date, treatment with KER-050 at the lowest dose in the trial (0.75 mg/kg) resulted in increased reticulocytes and platelets on aggregate across cycles 1 and 2.

These increases were observed in both monotherapy and combination arms, as well as in both non-transfusion-dependent and transfusion-dependent patients.

These data support the potential of KER-050 to potentially promote differentiation of erythroid and megakaryocytic precursors and treat anemia and thrombocytopenia in patients with myelofibrosis.

The following data from two patients enrolled in this trial were also presented:

• In a 60 year-old, non-transfusion-dependent female patient with primary myelofibrosis in the monotherapy arm, an increase in reticulocytes was observed after a single 0.75 mg/kg dose of KER-050, which was followed by a sustained increase in hemoglobin of >1.5 g/dL over baseline with continued dosing for >12 consecutive weeks in the first 24 weeks of the trial.

The observed increases in erythropoietic markers corresponded with sustained decreases in ferritin and erythropoietin, which is consistent with upregulation of erythropoiesis.

An overall increase in platelet count was also observed in this patient.

• In a 75 year-old, transfusion-dependent male patient with high-risk myelofibrosis and severe thrombocytopenia in the combination arm, increases in reticulocytes and soluble transferrin receptor levels were observed following the first cycle of treatment.

Though platelet counts fluctuated over the treatment period, improvements were observed following the second and third cycles.

The patient experienced a reduction in red blood cell transfusion burden from nine units per 12 weeks pre-treatment to six units per 12 weeks post-treatment.

Clinical Development Strategy

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.

We expect to complete enrollment in the transfusion-dependent cohorts in the Phase 2 clinical trial in patients with MDS in the second half of 2023, and expect to report additional data from Part 2 of the trial in the first half and the second half of 2023.

We also expect to expand this trial to MDS patients with iron overload in the second half of 2023.

Separately, we expect to announce dose escalation data from the Phase 2 clinical trial in patients with myelofibrosis-associated cytopenias and initiate Part 2 of this trial in the second half of 2023.

Completed Phase 1 Clinical Trial

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Consistent with the underlying biology, increases in reticulocytes were observed early with increases of hemoglobin following thereafter.

Increases in reticulocytes were observed as early as Day 2 and reached a peak around Day 15.

Increases in reticulocytes were observed as early as Day 2 and reached a peak

around Day 15.

Increases in hemoglobin concentration were also observed as early as Day 2, reached a peak around Day 29 and remained elevated for several weeks.

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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.

Preclinical Data

KER-050 was observed to inhibit ligands that signal through activin receptors in in vitro assays, and to potently regulate hematopoiesis in in vivo studies.

Specifically, KER-050 demonstrated in these studies:

▪ high affinity for and potent inhibition of ligands involved in the regulation of hematopoiesis;

▪ increased maturation of early- and terminal-stage erythroid progenitors in wild-type mice;

• increased serum erythropoietin levels in wild-type mice;

• increased red blood cell production in mice and non-human primates;

• increased platelets in wild-type mice.

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 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.

These ligands are key regulators of hematopoiesis that restrict blood cell progenitors from continuing through differentiation and developing into mature cells with specialized function.

The KER-050-mediated inhibition of these regulators stimulated the progenitors to progress to maturation and, consequently, increased the number of mature cells in the blood.

Mouse version of KER-050 observed to potently stimulate red blood cell parameters and to increase the populations of erythroid progenitors

In a preclinical study conducted in mice, a single, subcutaneous 10 mg/kg dose of a mouse version of KER-050, or RKER-050, increased red blood cell parameters, including red blood cell number and reticulocytes, as early as 12 hours.

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.

Increase in Red Blood Cells and Reticulocytes in Mice

* P value <0.05;

** P value <0.01;

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.

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

To evaluate the mechanism of action of RKER-050 in erythropoiesis, we collected and analyzed bone marrow from RKER-050-treated mice for erythroid progenitors.

We observed a RKER-050-mediated increase in the proerythroblast, or Pro-E, population in a flow cytometry analysis that used antibodies directed against cell surface markers to label-specific cell populations.

Increase in Overall Numbers of Proerythroblasts in Mice

The rapid expansion of the Pro-E population also coincided with decreased numbers of erythroid burst-forming units and erythroid colony-forming units, the cells that give rise to Pro-E cells, which demonstrates that treatment with RKER-050 stimulated the erythroid burst-forming units and erythroid colony-forming units into erythroid differentiation.

Since treatment with RKER-050 stimulated the earliest progenitors in the erythroid lineage to progress to maturation and increased the Pro-E pool, the first cells to start synthesis of hemoglobin, we believe KER-050 has the potential to affect the early stages of erythropoiesis.

RKER-050 also observed to increase serum erythropoietin and bone marrow erythropoietin receptor expression in mice

In addition, a single dose of RKER-050 increased red blood cells and hemoglobin through at least Day 51 (+8.5% and +3%, respectively).

Concurrently, despite increased erythropoiesis, erythropoietin levels were greater than two-fold higher than controls, starting at Day 4, continuing through Day 37 and returning to baseline by Day 51.

* P value <0.05;

** P value <0.01;

**** P value <0.0001

We believe that these results suggest that RKER-050 potentially elicits the combined effects of stimulating terminal maturation of late-stage erythroid precursors to rapidly increase red blood cells and potentially mobilizes a prolonged supply of progenitors through expansion of early-stage precursor populations that allows for sustained upregulation of erythropoiesis.

Additionally, we believe the observed increase in erythropoietin could contribute to the durability in red blood cell production we observed in preclinical studies and supports the durability of the red blood cell increase we observed in our Phase 1 clinical trial of KER-050 in healthy post-menopausal women.

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.

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

We believe that our observations in preclinical studies of KER-050 in non-human primates indicate that the red blood cell effects of KER-050 also translate to higher-order species.

In this study, cynomolgus monkeys received subcutaneous administration every other week for three months of either vehicle or doses of 3 mg/kg, 10 mg/kg or 50 mg/kg of KER-050.

Hematology was measured at baseline and on Day 92.

Red cell mass, including red blood cell number, hematocrit and hemoglobin were dose-dependently increased in the cohorts receiving KER-050.

These data demonstrate the translatability of red blood cell, hematocrit and hemoglobin increases observed in preclinical studies of KER-050 from mice to non-human primates.

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

To evaluate the effect of KER-050 on blood cell types other than red blood cells, mice were administered a single, subcutaneous 7.5 mg/kg dose of KER-050 and had blood sampled and analyzed 4 days post-dose.

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.

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 believe that the findings from this Phase 1 clinical trial demonstrate the translation of biological action from rodents to humans.

We also believe that data from our preclinical studies and clinical trials support that treatment with KER-050 has the potential to address ineffective hematopoiesis in diseases where multiple cytopenias arise from the blockage in progression of progenitor cells to mature blood cells, such as in MDS and myelofibrosis.

For the Treatment of Anemia Arising from Iron Imbalance

We are developing KER-047, our lead small molecule product candidate, for the treatment of anemia resulting from iron imbalance.

For the Treatment of Functional Iron Deficiency

We are developing KER-047, our lead small molecule product candidate, for the treatment of functional iron deficiency.

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.

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

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.

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

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Regulation of Iron in the Body

Anemia Arising from Iron Imbalance, including Iron Deficiency Anemia and IRIDA

Functional Iron Deficiency

Failure to suppress ALK2 signaling can result in elevated hepcidin levels, which are associated with decreased dietary iron absorption, increased iron sequestration in storage tissues and low iron bioavailability in the bone marrow.

These effects culminate in a shortage of serum iron, which leads to insufficient red blood cell production that manifests as mild to moderate anemia.

Iron deficiency anemia, or IDA, is a common form of anemia that is caused by patients not having enough iron to manufacture healthy red blood cells.

IDA is associated with fatigue, lethargy, decreased quality of life, cardiovascular complications, hospitalizations and increased mortality.

IDA is prevalent in many different patient populations, including patients with IDA due to chronic kidney disease, chemotherapy-induced anemia and gastrointestinal diseases or disorders.

It is estimated that approximately five million people in the United States have IDA and we believe that a small fraction of the patients who are diagnosed with IDA regardless of the underlying cause are currently being treated with intravenous, or IV, iron.

According to a 2021 Grand View Research, Inc.

report, the global IV iron market size was approximately $2.2 billion in 2020 and was forecasted to reach $4.2 billion by 2028 at a compound annual growth rate of 8.5% during the forecast period.

Approximately $685 million, or 31%, of the total IV iron market in 2020 was associated with the treatment of patients with IDA due to chronic kidney disease, which represented the largest segment.

Additionally, the same report estimated that, in 2020, the North American IV iron market share was approximately $887.7 million, or 40%, the European market share was approximately $699.0 million, or 31.5%, the Asia Pacific market share was approximately $456.0 million, or 20.5%, and the Latin American and Middle Eastern/African market share were each approximately $85.0 million to $94.0 million, or 4%.

These conditions of functional iron deficiency culminate in a shortage of serum iron, which leads to insufficient red blood cell production that manifests as mild to moderate anemia.

High hepcidin levels can also be the result of genetic disease.

Iron-refractory iron deficiency anemia, or IRIDA, is a rare, inherited form of IDA that results in loss of function of MT-2, resulting in elevated ALK2 signaling and high hepcidin levels.

Iron-refractory iron deficiency anemia, or IRIDA, is a rare, inherited form of iron deficiency anemia that results in loss of function of MT-2, resulting in elevated ALK2 signaling and high hepcidin levels.

Patients with IRIDA have the typical symptoms of anemia, including fatigue, weakness and shortness of breath, in addition to other symptoms associated with low iron.

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All these factors contribute to an inability to accurately determine the prevalence of IRIDA.

Proinflammatory cytokines can also result in inappropriately high ALK2 signaling, increased hepcidin expression and anemia.

Patients with chronic inflammation have mild to moderate anemia resulting from low serum iron that is driven by abnormally high hepcidin levels through sustained cytokine-mediated ALK2 activation.

Anemia of inflammation is the second most common cause of anemia worldwide.

The prevalence of anemia varies among different inflammatory rheumatic diseases.

In the United States, approximately 1,000,000 people older than age 65 suffer from diseases of chronic inflammation, including rheumatoid arthritis, systemic lupus erythematosus and ankylosing spondylitis.

Anemia with high hepcidin levels has also been reported in patients with primary myelofibrosis.

Limitations of Current Treatment Options for Anemia Arising from Iron Imbalance, including IRIDA

There are no current treatments that address the underlying cause of anemia arising from iron imbalance, including in patients with IDA associated with co-morbidities and in patients with IRIDA.

Currently, there are two common methods of iron therapy used to treat IDA:

oral iron supplements and IV iron.

While oral iron supplements are used as first-line iron replacement therapy for most patients, they are poorly absorbed and not well tolerated by some patients, which may adversely impact their effectiveness.

The beneficial effect of oral iron supplements on increasing hemoglobin levels can require an extended treatment period, and, at times, treatment is inadequate to achieve the targeted hemoglobin levels.

Conversely, iron administered by IV infusion allows larger amounts of iron to be delivered to patients in a shorter time frame, which can result in faster rises in hemoglobin levels.

However, for patients with IDA associated with co-morbidities, neither of these treatments address the underlying cause of the disease.

Additionally, these treatments can also cause mild side effects, such as constipation, diarrhea and cramping, and can increase the risk of very serious, life-threatening side effects, such as hypersensitivity reactions, opportunistic infections and the deposition of excess iron in organs in patients with co-morbidities such as chronic kidney disease.

Separately, patients with anemia due to ineffective erythropoiesis that require frequent red blood cell transfusions may have elevated levels of hepcidin with accompanying iron overload in multiple organ systems.

Hepcidin levels are also elevated due to chronic inflammation in MDS and myelofibrosis, which limits the availability of iron for hemoglobin production, resulting in anemia.

Red blood cell transfusions, which are used to treat anemia, can lead to iron overload and toxicity in cardiovascular and other tissues.

Limitations of Current Treatment Options for Functional Iron Deficiency

There are no current treatments that address the underlying cause of functional iron deficiency, including in patients with IRIDA and in MDS and myelofibrosis patients with functional iron deficiency.

Patients with functional iron deficiency anemia have elevated levels of hepcidin, potentially with accompanying iron overload in multiple organ systems.

This chronic iron overload can lead to multiple organ dysfunction, including in the liver, heart and endocrine.

Accordingly, iron chelation therapy is used to reduce iron deposits in those organs.

According to a 2021 GlobalInfoResearch report, the global iron chelation market was estimated to be $1.1 billion in 2019, approximately 82% of which was associated with the treatment of patients with transfusional iron overload.

Additionally, approximately 48% and 41% of the market share was in North America and Europe, respectively, in 2019.

We believe that a treatment option that reestablishes normal iron homeostasis has the potential to benefit a broad range of patients, from patients with IDA to patients with anemia associated with iron overload.

Iron chelators can be administered by intravenous or subcutaneous twice daily injections (deferoxamine) or taken orally once (deferasirox) to three times daily (deferiprone).

While orally available chelators, particularly Deferasirox (Exjade) are currently prescribed due to their ease of administration, some patients still need to receive deferoxamine infusions.

Regardless of administration profile, chelator use carries a known risk of severe side effects with several restrictions of use and black box warnings regarding potential renal, ophthalmic, hepatic and gastrointestinal, or GI, toxicity/failure, with common acute GI side effects including abdominal pain, diarrhea, nausea and vomiting.

The side effect profile as well as frequency of administration and perceived bad taste are reported as drivers of poor patient compliance with this existing treatment option.

We believe that a treatment option that reestablishes normal iron homeostasis has the potential to benefit a broad range of patients with functional iron deficiency.

Our Solution:

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Mechanism of Action of KER-047

We believe that KER-047 has the potential to address the underlying cause of diseases arising from iron imbalance, including IDA, IRIDA and iron overload, by suppressing ALK2 signaling to normalize hepcidin expression and mobilizing iron out of tissues.

We believe this effect will result in increased iron bioavailability, resulting in restoration of the production of red blood cells and a reversal of anemia in patients with IDA and patients with IRIDA.

By ameliorating anemia arising from iron imbalance, we believe KER-047 can potentially eliminate the need for excessive supplementary iron or IV iron treatments and avoid the adverse events associated with those treatment options.

In addition, we believe KER-047, if approved, has the potential to be beneficial in diseases of iron overload by mobilizing excess iron being stored in tissues into the serum.

We believe that KER-047 has the potential to address the underlying cause of diseases arising from functional iron deficiency by suppressing ALK2 signaling to normalize hepcidin expression and mobilize iron out of tissues.

We believe this effect will result in increased iron bioavailability, resulting in restoration of the production of red blood cells and a reversal of anemia in patients with functional iron deficiency anemia and patients with IRIDA.

By ameliorating anemia arising from functional iron deficiency, we believe KER-047 can potentially eliminate the need for excessive supplementary iron or IV iron treatments and avoid the adverse events associated with those treatment options.

In addition, we believe KER-047, if approved, has the potential to mobilize excess iron being stored in tissues into the serum.

By ameliorating the excess iron in tissues, we believe KER-047 can potentially eliminate or reduce the need for phlebotomy and/or treatment with iron chelators, while allowing patients to avoid the adverse events associated with these treatments and providing benefit to patients where the current treatment options are largely ineffective.

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.

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

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 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.

Ongoing Phase 2 Clinical Trial in Patients with IRIDA

We are conducting an open label, two-part, dose-escalation and dose-expansion Phase 2 clinical trial to evaluate KER-047 in patients with IRIDA.

The primary objective of this trial is to assess the safety of KER-047.

The secondary objectives of this trial are to evaluate the pharmacokinetics and pharmacodynamics of KER-047.

We expect to use the data from Part 1 of this trial to select the dose level and duration to be evaluated in Part 2 of this trial.

The trial design is summarized in the figure below.

Phase 2 Clinical Trial Design

In December 2022, we presented data from one patient enrolled in Cohort 1 of Part 1 of this trial who completed the 14-day treatment and washout periods, at the 64th ASH Annual Meeting and Exposition.

Treatment with KER-047 was generally well tolerated by this patient, with no serious adverse events or dose-limiting toxicities reported during treatment.

There was one TEAE reported, which was determined to be unrelated to the treatment.

In this patient, hepcidin and serum ferritin levels decreased following administration of KER-047.

Serum ferritin returned to baseline levels in the washout period, indicating that the effect was potentially treatment-associated.

Reticulocyte hemoglobin also increased in this patient during the treatment period.

Taken together, these data are suggestive of iron redistribution consistent with the mechanism of action of KER-047.

Clinical Development Strategy

We expect to report additional data from Part 1 of the Phase 2 clinical trial in patients with IRIDA in the second half of 2023.

Completed Phase 1 Clinical Trial

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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.

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

Observed reductions in total cholesterol

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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 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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Under the conditions of this assay, KER-047 exhibited at least an eight-fold selectivity over the other structurally-related TGF-ß kinases.

In a 370-member kinase panel, only two non-TGF-ß kinases were inhibited less than 75% at a KER-047 concentration of 1 µM.

In a 370-member

kinase panel, only two non-TGF-ß kinases were inhibited less than 75% at a KER-047 concentration of 1 µM.

We believe these preclinical data further support the potency and selectivity of KER-047 for the ALK2 domain.

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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.

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.

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.

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

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Likewise, the finding that the mouse models with changes in ALK2 signaling recapitulate human disease also provides evidence that the function of the ALK2 receptor is conserved across species.

For example, knockdown of the TMPRSS6 gene results in a phenocopy of the disease observed in patients with IRIDA.

example, knockdown of the TMPRSS6 gene results in a phenocopy of the disease observed in patients with IRIDA.

We believe that the conservation of biology provides confidence that treatments that are efficacious in preclinical models will have similar effects in humans.

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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 Musculoskeletal and Pulmonary Program

Our Pulmonary and Cardiovascular Franchise

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.

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.

KER-012 is designed to normalize blood vessel thickness and heart function by binding to and inhibiting the signaling of select TGF-ß ligands, including activin A, activin B and myostatin (GDF8), that stimulate smooth muscle hypertrophy and fibrosis, without a dose-limiting increase in red blood cells.

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 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.

We are developing KER-012 for the treatment of PAH and for the treatment of cardiovascular disorders.

In May 2022, we announced preliminary topline results from Part 1 of our ongoing Phase 1 clinical trial evaluating single and multiple ascending doses of KER-012 in healthy volunteers and in September 2022, we announced preliminary clinical data from the Part 2 multiple ascending dose portion of this trial.

We expect to commence a Phase 2 clinical trial of KER-012 in patients with PAH in the first half of 2023 and an open-label Phase 2 biomarker clinical trial of KER-012 in the second half of 2023.

Pulmonary Arterial Hypertension

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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.

It is estimated that more than 200 million people worldwide, including approximately 30% of all post-menopausal women in the United States and Europe, suffer from osteoporosis.

It is also estimated that 50% of women and 20% of men over the age of 50 will suffer at least one osteoporosis-related fracture in their remaining lifetime.

These fractures can lead to increased morbidity and mortality.

With the number of individuals over the age of 50 expected to increase, the incidence of osteoporosis-related fractures is predicted to double or triple in the upcoming decades.

Limitations of Current Treatment Options for Osteoporosis

Patients with osteoporosis are generally treated with anti-resorptive agents and anabolic agents.

Anti-resorptive agents act to prevent further bone loss by inhibiting the breakdown of bone, while anabolic agents stimulate bone formation to build new, high-quality bone.

Bisphosphonate anti-resorptive agents, including Aredia (pamidronate), Fosamax (alendronate) and Reclast (zoledronic acid), are the current standard of care, and these treatments inhibit the cells that resorb or take away bone.

However, bisphosphonates have limited efficacy for non-vertebral fractures, and gains in bone mineral density have been observed to plateau after a few years of treatment.

Additionally, bisphosphonate use has been associated with infrequent but serious adverse events, such as osteonecrosis of the jaw and atypical femoral fractures.

These side effects, although rare, have created increasing concern among physicians and patients.

Accordingly, the number of bisphosphonate prescriptions has declined over 50% in the last decade and physicians are seeking alternatives.

There are several alternatives to bisphosphonates that are approved for the treatment of osteoporosis, including anti-resorptive agents and anabolic agents.

The most potent anti-resorptive product that is approved for treatment is Prolia (denosumab).

Given twice a year via subcutaneous injection by a physician, Prolia increases bone density and reduces hip, spine and non-vertebral fractures.

However, in the past five years, there have been numerous reports about fractures, especially those of the spine, occurring after the cessation of Prolia, which we believe has caused many patients with osteoporosis to refrain from commencing treatment with Prolia.

Anabolic therapies approved for treatment of osteoporosis include Forteo (teriparatide) and Tymlos (abaloparatide).

Delivered by daily subcutaneous injection, these products have been observed to improve bone density and reduce vertebral fractures, but have limited evidence for reduction of hip fracture, which is frequently a debilitating fracture for patients.

Additionally, use of these products is restricted to two years and their labels include a black-box warning regarding the occurrence of bone cancer in rats treated with Forteo, which is a key deterrent to using these products for many patients.

Evenity (romosozumab-aqqg), an anabolic therapy, increases bone formation briefly while also reducing bone resorption.

The reason for the short-term nature of the anabolic effect is unclear.

Evenity is delivered via two subcutaneous injections monthly at a doctor’s office, with use restricted to 12 months.

Although Evenity exhibited robust anti-fracture efficacy and large gains in bone mineral density in a third-party Phase 3 clinical trial, the Evenity label includes a black-box warning that the product may increase the risk of heart attack, stroke or death from a cardiovascular event.

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 growth.

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

Osteogenesis Imperfecta

Osteogenesis imperfecta is a group of genetic disorders that mainly affect the bones.

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.

Limitations of Current Treatment Options for Osteogenesis Imperfecta

There are no approved therapies for the treatment of osteogenesis imperfecta in the United States or the European Union.

Current treatment of osteogenesis imperfecta is directed towards the management of fractures with casting or surgical fixation, followed by physical therapy.

Preventative surgeries, such as intramedullary, or in-bone, nailing fixation, in which a permanent nail or rod is placed into the center of the bone, are also undertaken.

However, these surgical options do not treat the underlying cause of osteogenesis imperfecta.

Additionally, bisphosphonates, which are not approved for osteogenesis imperfecta, are commonly used off-label in children.

A meta-analysis of randomized trials demonstrated that there was no evidence that current treatments, including bisphosphonates, reduce fracture risk in patients with osteogenesis imperfecta.

Controlled clinical trials also showed no improvement in bone pain, a key disability in children with osteogenesis imperfecta.

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.

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.

Completed Phase 1 Clinical Trial in Healthy Volunteers

In September 2022, we completed 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 were safety, tolerability and pharmacokinetics.

The trial design is summarized in the figure below.

Phase 1 Clinical Trial Design

Observed tolerability data

KER-012 was generally well tolerated in Part 1 of this trial at dose levels up to 5 mg/kg, the highest dose level tested, when administered as a single dose, and multiple doses of 0.75 mg/kg, 1.5 mg/kg and 4.5 mg/kg.

In Part 1 of this trial, one subject withdrew consent after receiving a single 1.5 mg/kg dose of KER-012 and did not complete the safety follow-up.

In Part 2 of this trial, one subject discontinued after receiving two doses of placebo due to a serious adverse event unrelated to treatment and another subject withdrew consent after receiving two 1.5 mg/kg doses of KER-012.

None of the discontinuations in this trial were due to treatment-related adverse events.

No serious adverse events were reported in Part 1 of this trial.

Additionally, the majority of the adverse events that were observed in this trial were mild in severity and resolved.

Dose-dependent reductions in serum follicle-stimulating hormone observed

Suppression of follicle-stimulating hormone, or FSH, was observed in both Part 1 and Part 2 of this trial.

FSH, which is secreted by the pituitary, is controlled through signaling by the activin receptor and Gonadotropin Releasing Hormone, or GnRH.

Approximately 50% of the FSH secretion is regulated via activin signaling and the other 50% by GnRH.

Accordingly, complete inhibition of activin signaling would be expected to reduce FSH by approximately 50% in postmenopausal women, who have elevated FSH levels.

In Part 2, maximal target engagement was observed in the 4.5 mg/kg dose cohort, with five out of six volunteers who received a 4.5 mg/kg dose of KER-012 achieving a >40% reduction in serum FSH levels from baseline.

Part 2 of the Trial:

FSH Percent Change from Baseline

The magnitude of FSH reduction in the highest doses tested suggest that KER-012 treatment maximally inhibited activin signaling.

Observed changes in pharmacodynamic markers were consistent with increased BMP signaling in the bone

We observed dose-dependent increases in serum bone specific alkaline phosphatase, or BSAP, a marker of osteoblast activity, with a maximal increase observed at the highest doses evaluated in this trial.

KER-012 is designed to inhibit activins and growth differentiation factor ligands in bone, which potentially results in reduced SMAD 2/3 signaling and increased signaling of the BMP pathway (SMAD 1/5/9).

The increased BMP signaling potentially promotes bone formation through a dual mechanism of activation and recruitment of bone forming osteoblasts and repression of osteoclasts, as demonstrated in our preclinical studies.

In Part 2 of this trial, we observed increases in BSAP after each dose, which is supportive of activation of osteoblasts after each dose.

Part 2 of the Trial:

BSAP Percent Change from Baseline

Multiple doses of KER-012 did not elicit changes in erythropoiesis

Administration of KER-012 did not elicit clinically meaningful changes in hemoglobin or red blood cells in this trial, and no changes in red blood cells were observed after the second or third dose.

Observed Mean Hemoglobin Change

Observed Mean Red Blood Cell Change

The observed lack of effect on erythropoiesis in this trial is consistent with the lack of effect observed in our multiple preclinical models.

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.

We expect to commence a Phase 2 clinical trial evaluating KER-012 in patients with PAH in the first half of 2023.

We also expect to commence an open-label Phase 2 biomarker clinical trial of KER-012 in the second half of 2023.

Preclinical Data

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 cardiovascular disorders.

Specifically, in preclinical studies, KER-012:

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◦ 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;

• Demonstrated benefit in models of PAH and cardiovascular disease, including:

◦ In a rat model of PAH, rats receiving RKER-012 were protected from the thickening of the right ventricular wall and had reductions in markers of inflammation and fibrosis;

◦ 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.

KER-012 targeted ligands that signal through ActRIIA and ActRIIB in preclinical studies

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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.

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.

RKER-012 was tested in this SUGEN/hypoxia, or SH, rat model of PAH.

Adult male rats were subjected to SH and received either vehicle or 10 mg/kg RKER-012 twice weekly for three weeks.

Rats maintained under normal oxygen conditions, or normoxic controls, received only vehicle.

Consistent with the development of cardiac and pulmonary impairment, vehicle-treated SH rats exhibited increases in Fulton index, which measures enlargement of the right ventricle (p<0.0001) and systolic pulmonary arterial pressure, or sPAP, (p<0.0001) relative to normoxic controls.

Relative to the vehicle-treated SH rats, treatment of the SH rats with RKER-012 significantly attenuated increased Fulton index (p<0.01) and prevented an increase in sPAP (p<0.001).

Additionally, vehicle-treated SH rats exhibited increased lung inflammation/fibrosis (p<0.0001), smooth muscle hypertrophy (p<0.0001), and arteriole muscularization (p<0.0001) relative to normoxic controls, while treatment with RKER-012 reduced these pathologies (all p<0.0001, relative to vehicle).

Vehicle-treated SH rats also exhibited increased expression of atrial natriuretic peptide, or ANP, and brain natriuretic peptide, or BNP (both p<0.05), relative to normoxic controls.

Treatment with RKER-012 significantly reduced ANP expression (p<0.05) and trended to reduce BNP expression (p=0.11), which we believe indicates that RKER-012 could potentially reduce PAH-induced damage to the heart.

Vehicle-treated SH rats also exhibited elevated expression of genes associated with the development of PAH-associated pathology in the lung and right ventricle, both hallmarks of PAH pathology, which were reduced with RKER-012 treatment.

In a preclinical study evaluating the binding activity of KER-012, KER-012 was observed to inhibit ligands associated with endothelial dysfunction, including activins A and B, whereas KER-012 exhibited low affinity for BMP-9.

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

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## 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 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

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Our discovery approach has built on these initial observations to generate product candidates designed to target ActRII receptors without the liabilities observed in third-party preclinical studies and clinical trials of ActRIIA-Fc and ActRIIB-Fc.

We nominated KER-065, a preclinical asset, out of this proprietary library of ActRII ligand traps for further investigation.

KER-065 is a novel ligand trap comprised of a modified ligand-binding domain derived from ActRIIA and ActRIIB that is fused to the portion of the human antibody known as the Fc domain.

KER-065 is designed to bind to and inhibit TGF-ß ligands, including myostatin (GDF8) and activin A, which are negative regulators of muscle mass and strength.

Through inhibition of these TGF-ß ligands, we believe that KER-065 has the potential to induce a muscle anabolic effect.

KER-065 is also designed to inhibit TGF-ß ligands involved in bone remodeling, fat metabolism and fibrosis.

We believe that we are well positioned to advance our product candidates and realize the commercial opportunities in diseases where muscle and bone loss result in a debilitating impact on survival and quality of life, if our product candidates are successfully developed and approved.

Our deep knowledge and expertise of the TGF-ß family of proteins provides a streamlined approach to screen and develop novel product candidates for hematological and musculoskeletal diseases.

Our deep knowledge and expertise of the TGF-ß family of proteins provides a streamlined approach to screen and develop novel product candidates for hematological, pulmonary and cardiovascular disorders.

Manufacturing

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While we believe that our product candidates, discovery programs, technology, knowledge, experience and scientific resources provide us with competitive advantages, we compete in the highly competitive markets and face significant competition from many sources, including pharmaceutical and biotechnology companies, as well as academic institutions, governmental agencies and private and public research institutions.

We compete in the segments of the biotechnology, pharmaceutical and other related industries that develop and market therapies for the treatment of hematological and musculoskeletal disorders.

We compete in the segments of the biotechnology, pharmaceutical and other related industries that develop and market therapies for the treatment of hematological, pulmonary and cardiovascular disorders.

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.

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

Sierra Oncology, Inc.

is developing momelotinib as a treatment for myelofibrosis.

Sierra Oncology (which was acquired by GSK plc in July 2022) is developing momelotinib as a treatment for myelofibrosis.

Additionally, Constellation Pharmaceutics, Inc.

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and Regeneron Pharmaceuticals, Inc.

There are currently no approved drugs 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.

Aerovate Therapeutics, Inc.

and Gossamer Bio, Inc.

are also developing clinical-stage product candidates, AV-101 and seralutinib, respectively, 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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We could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.

The availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of our products.

The availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of our products, if approved.

Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

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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.

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.

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

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

As of February 28, 2023, our patent portfolio consisted of nine issued U.S.

patents, 27 pending U.S.

patent applications, three issued ex-U.S.

patent applications, eight issued ex-U.S.

patents and 88 pending ex-U.S.

applications, with expected expiry dates not earlier than between March 13, 2029 and November 10, 2043.

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.

Of these, nine issued patents and 81 patent applications relate to KER-050, KER-047 and KER-012, and eight issued patents and 34 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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We also intend to seek patent protection or rely upon trade secret rights to protect other technologies that may be used to discover and validate targets, and that may be used to manufacture and develop novel products.

We are a party to license agreements that give us rights to use specific technologies in our products and in manufacturing our products.

We are a party to license agreements that give us rights to use specific technologies in our product candidates and in manufacturing our product candidates.

Patent applications directed to our most advanced programs are summarized below.

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 two issued U.S.

We own three issued U.S.

patents, three issued ex-U.S.

patents, 11 pending U.S.

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

We own 15 pending U.S.

We own six pending U.S.

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.

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

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 nine pending U.S.

We own ten pending U.S.

patent applications and 12 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, among others.

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.

Any patents issuing from these applications will have expiration dates between January 11, 2039 and September 9, 2043, absent any patent term adjustments or extensions.

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

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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 August 19, 2042, absent any patent term adjustments or extensions.

Any patents issuing from these applications will have expiration dates between November 9, 2037 and November 10, 2043, absent any patent term adjustments or extensions.

Intellectual Property Protection

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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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Furthermore, each clinical trial must be reviewed and approved by an independent IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative, and must monitor the study until completed.

approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative, and must monitor the study until completed.

Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.

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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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Similarly, an IRB can suspend or terminate approval of a clinical study at its institution if the clinical study is not being conducted in accordance with the IRB’s requirements or if the biological product candidate has been associated with unexpected serious harm to patients.

FDA requires diversity plans to ensure that clinical trials aim to include broad racial and ethnic exposure data.

There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries.

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The NDA or BLA is a request for approval to market the drug or biologic for one or more specified indications and must contain proof of safety and efficacy for a drug or safety, purity and potency for a biologic.

The application must include all relevant data available from pertinent preclinical studies and clinical trials, including negative or ambiguous results of preclinical studies and clinical trials, as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things.

The application must include all relevant data

available from pertinent preclinical studies and clinical trials, including negative or ambiguous results of preclinical studies and clinical trials, as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things.

Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from a number of alternative sources, including studies initiated by investigators.

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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.

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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In issuing the Complete Response letter, the FDA may recommend actions that the applicant might take to place the application in condition for approval, including requests for additional information or clarification, which may include the potential requirement for additional clinical studies, including the potential requirement to conduct additional clinical trial(s) and/or to complete other significant and time-consuming requirements related to clinical trials, or to conduct additional preclinical studies or manufacturing activities.

If a Complete Response Letter is issued, the applicant may either resubmit the NDA or BLA, addressing all of the deficiencies identified in the letter, or withdraw the application or request an opportunity for a hearing.

If a Complete Response Letter is issued, the applicant may either resubmit the NDA or BLA, addressing all of the deficiencies

identified in the letter, or withdraw the application or request an opportunity for a hearing.

Even if such data and information are submitted, the FDA may decide that the NDA or BLA does not satisfy the criteria for 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.

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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Foreign Regulation

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 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.

Australia has also adopted international codes, such as those promulgated by the International Council for Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use, or the ICH.

The ICH guidelines must be complied with across all fields of clinical research, including those related to pharmaceutical quality, nonclinical and clinical data requirements and trial designs.

The basic requirements for preclinical data to support a first-in-human trial under ICH guidelines are applicable in Australia.

Requirements related to adverse event reporting in Australia are similar to those required in other major jurisdictions.

Clinical trials conducted using “unapproved therapeutic goods” in Australia, being those which have not yet been evaluated by the TGA for quality, safety and efficacy must occur pursuant to either the Clinical Trial Notification Scheme, or the CTN Scheme, or the Clinical Trial Exemption Scheme, or the CTX Scheme.

In each case, the trial is supervised by a Human Research Ethics Committee, or HREC, an independent review committee set up under guidelines of the Australian National Health and Medical Research Council that ensures the protection of rights, safety and well-being of human subjects involved in a clinical trial.

A HREC does this by reviewing, approving and providing continuing examination of trial protocols and amendments, and of the methods and material to be used in obtaining and documenting informed consent of the trial subjects.

The CTN Scheme broadly involves:

▪ completion of preclinical laboratory and animal testing;

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

▪ 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.

The CTN form must be signed by the sponsor, the principal investigator, the chairman of the HREC and a person responsible from the Approving Authority.

The TGA does not review any data relating to the clinical trial however CTN trials cannot commence until the trial has been notified to the TGA.

Under the CTX Scheme:

▪ a sponsor submits an application to conduct a clinical trial to the TGA for evaluation and comment;

▪ a sponsor must forward any comments made by the TGA Delegate to the HREC(s) at the sites where the trial will be conducted.

A sponsor cannot commence a trial under the CTX Scheme until written advice has been received from the TGA regarding the application and approval for the conduct of the trial has been obtained from an ethics committee and the institution at which the trial will be conducted.

Approval for inclusion in the Australian Register of Therapeutic Goods, or ARTG, is required before a pharmaceutical product may be marketed (or imported, exported or manufactured) in Australia.

In order to obtain registration of the product on the ARTG, it is required that:

▪ adequate and well-controlled clinical trials demonstrate the quality, safety and efficacy of the therapeutic product;

▪ evidence is compiled which demonstrates that the manufacture of the therapeutic product complies with the principles of cGMP;

▪ manufacturing and clinical data is derived to submit to the Advisory Committee on Prescription Medicines, which makes recommendations to the TGA as to whether or not to grant approval to include the therapeutic product in the ARTG;

▪ an ultimate decision is made by the TGA whether to include the therapeutic product in the ARTG.

Other Healthcare Laws and Compliance Requirements

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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.

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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Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological product for which we obtain regulatory approval.

Sales of any product, if approved, depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement, if any, for such product by third-party payors.

Sales of any product, if approved, depend, in part, on the extent to which such product

will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement, if any, for such product by third-party payors.

No uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.

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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.

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.

In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or the IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.

It is unclear how any such challenges and additional 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, 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.

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, 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 4% in the final fiscal year of this sequester.

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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.

At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.

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 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 until January 1, 2023.

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.

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.

At the federal level, 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.

In addition, the IRA, among other things, (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subject drug manufacturers to civil monetary penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” for such drugs and biologics under the law, and (ii) imposes rebates with respect to certain drugs and biologics covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation.

The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.

Further, the Biden administration released an additional executive order on October 14, 2022, directing HHS to submit a report on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models for lowering drug costs for Medicare and Medicaid beneficiaries.

It is unclear whether this executive order or similar policy initiatives will be implemented in the future.

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.

Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

Additional Regulation

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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.

Additionally, to further assist our employees, we also offer all full-time employees the option to participate in our education assistance program, where we reimburse employees for a portion of tuition fees and eligible expenses.

Conduct and Ethics

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in December 2015.

Our principal executive office is located at 99 Hayden Avenue, Suite 120, Building E, Lexington, Massachusetts 02421.

Our principal executive office is located at 1050 Waltham Street, Suite 302, Lexington, Massachusetts 02421.

Our telephone number is (617) 314-6297.

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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