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Item 9A. Controls and Procedures

2026-03-04 compared with 2025-02-26 · 383 added, 253 removed, 758 unchanged (46% of the section changed)

19 unchanged sentences

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the fiscal quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We have not experienced any material impact to our internal controls over financial reporting despite the fact that certain of our employees are continuing to partially work remotely.

We are continually monitoring and assessing the hybrid work model on our internal controls to minimize any potential impact on the design and operating effectiveness of such controls.

Inherent Limitations on Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives.

Our management recognizes that any control system, no matter how

well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

Our independent registered public accounting firm, Deloitte & Touche LLP, has audited our internal control over financial reporting as of December 31, 2024 as stated in their report set forth below:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Keros Therapeutics, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Keros Therapeutics, Inc.

and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 26, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Boston, Massachusetts

February 26, 2025

OTHER INFORMATION

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

During the three months ended December 31, 2025, the following directors and officers of the Company adopted a “Rule 10b5-1 trading arrangement” as that term is defined in Item 408(a) of Regulation S-K, all of which were entered into during an open trading window in accordance with the Company’s Insider Trading Policy and all of which were intended to satisfy Rule 10b5-1(c):

• On December 11, 2025 , Keith Regnante , our Chief Financial Officer , adopted a Rule 10b5-1 trading plan that provides for the sale of up to 24,741 shares of our common stock to be acquired upon the settlement of restricted stock units, or RSUs, vesting on February 17, 2026 and August 15, 2026, owned by Mr.

The plan will expire on December 31, 2026 , subject to early termination for certain specified events set forth in the plan.

• On December 10, 2025 , Lorena Lerner , our Chief Scientific Officer , adopted a Rule 10b5-1 trading plan that provides for the sale of up to 19,577 shares of our common stock to be acquired upon the settlement of RSUs vesting on February 17, 2026 and August 15, 2026, owned by Dr.

The plan will expire on December 31, 2026 , subject to early termination for certain specified events set forth in the plan.

• On December 5, 2025 , Nima Farzan , a member of our board of directors , adopted a Rule 10b5-1 trading plan that provides for the sale of up to 7,875 shares of our common stock to be acquired upon the exercise of stock options or settlement of RSUs.

The plan will expire on June 30, 2026 , subject to early termination for certain specified events set forth in the plan.

• On December 5, 2025 , Julius Knowles , a member of our board of directors, adopted a Rule 10b5-1 trading plan that provides for the sale of up to 2,625 shares of our common stock to be acquired upon the settlement of RSUs.

The plan will expire on June 30, 2026 , subject to early termination for certain specified events set forth in the plan.

• On December 9, 2025 , Alpna Seth , a member of our board of directors , adopted a Rule 10b5-1 trading plan that provides for the sale of up to 2,625 shares of our common stock to be acquired upon the settlement of RSUs.

The plan will expire on June 30, 2026 , subject to early termination for certain specified events set forth in the plan.

• On December 5, 2025 , Jean-Jacques Bienaimé , a member of our board of directors , adopted a Rule 10b5-1 trading plan that provides for the purchase of up to 7,000 shares of our common stock.

The plan will expire on August 31, 2026 , subject to early termination for certain specified events set forth in the plan .

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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3.2 Amended and Restated Bylaws of the Registrant.

8-K 001-39264 3.1 March 6, 2025

3.3 Certificate of Designation of Series A Junior Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 9, 2025.

8-K 001-39264 3.1 April 10, 2025

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S-1/A 333-237212 4.2 April 1, 2020

Rights Agreement, dated as of April 9, 2025 between Registrant and Computershare Trust Company, N.A., which includes the form of Certificate of Designation as Exhibit A, the form of Right Certificate as Exhibit B.

8-K 001-39264 4.1 April 10, 2025

4.4* Description of the Registrant’s Securities.

8 unchanged sentences

10.5+ Forms of Stock Option Grant Notice, Option Agreement, Notice of Exercise, Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement for the 2020 Equity Incentive Plan.

10-K 001-39264 10.5 February 26, 2025

10.6+ 2020 Employee Stock Purchase Plan.

1 unchanged sentence

Amended and Restated Non-Employee Director Compensation Policy

001-39264 10.1

August 7, 2024

Offer Letter Agreement by and between the registrant and Jasbir Seehra, dated as of December 14, 2015.

15 unchanged sentences

February 28, 2024

Lease Agreement by and between the registrant and 128 Spring Street Lexington, LLC, dated March 20, 2017, as amended by the First Amendment to Lease Agreement by and between the registrant and 128 Spring Street Lexington, LLC, dated July 1, 2019 and by the Second Amendment to Lease Agreement by and between the registrant and 128 Spring Street Lexington, LLC, dated August 8, 2019.

S-1 333-237212 10.12 March 16, 2020

Third Amendment to Lease Agreement by and between the registrant and 99 Hayden LLC, dated August 4, 2021.

10-Q 001-39264 10.3 August 5, 2021

Offer Letter Agreement by and between the registrant and Keith Regnante, dated as of February 7, 2020.

4 unchanged sentences

S-1/A 333-237212 10.17 April 1, 2020

Employment Agreement by and between the registrant and Simon Cooper, dated as of July 30, 2021 effective as of August 2, 2021.

8-K 001-39264 10.2 August 2, 2021

Employment Agreement by and between the registrant and Christopher Rovaldi, dated as of January 28, 2022 effective as of February 1, 2022.

8-K 001-39264 10.1 January 31, 2022

Separation and Release Agreement by and between the r egistrant and Christopher Rovaldi, dated as of August 6, 2025.

8-K 001-39264 10.2 August 6, 2025

First Amendment to the Employment Agreement by and between the registrant and Keith Regnante, dated as of January 1, 2022.

10-K 001-39264 10.21 March 9, 2022

First Amendment to the Employment Agreement by and between the registrant and Simon Cooper, dated as of January 1, 2022.

10-K 001-39264 10.22 March 9, 2022

Employment Agreement by and between the registrant and Lorena Lerner, dated as of August 6, 2025.

001-39264 10.1 August 6, 2025

Employment Agreement by and between Registrant and Esther Cho, dated as of August 6, 2025.

8-K 001-39264 10.3 August 6, 2025

Indenture of Lease by and between the registrant and Revolution Labs Owner, LLC, dated September 7, 2021.

10-Q 001-39264 10.1 November 4, 2021

001-39264 10.1 November 4, 2021

First Amendment to Lease, by and between the registrant and Revolution Labs Owner, LLC, dated January 6, 2023.

10-Q 001-39264 10.1 May 4, 2023

E xclusive License Agreement by and between the registra nt and Takeda Pharmaceuticals U.S.A., Inc., dated as of December 3, 2024.

Employment Agreement by and between the registrant and Yung H.

Chyung , dated as of October 15, 2024 effective as of November 1, 202 4 .

001-39264 10.1

October 16, 2024

Exclusive License Agreement by and between the registrant and Takeda Pharmaceuticals U.S.A., Inc., dated as of December 3, 2024.

10-K 001-39264 10.24

February 26, 2025

Amendment No.

1, dated as of March 24, 2025, Amendment No.

2, dated as of April 23, 2025, Amendment No.

3, dated as of June 5, 2025 and Amendment No.

4, dated as of June 13, 2025 to Exclusive License Agreement by and between the registrant and Takeda Pharmaceuticals U.S.A., Inc.

Letter Agreement, dated April 17, 2025, by and between the registrant and Pontifax (Israel) IV, L.P., Pontifax (Cayman) IV, L.P., Pontifax (China) IV, L.P.

and Pontifax Late Stage Fund L.P.

8-K 001-39264 10.1 April 18, 2025

Stock Purchase Agreement, dated as of October 15, 2025, by and between the Registrant and certain entities affiliated with ADAR1 Capital Management.

8-K 001-39264 2.1 October 15, 2025

First Amendment to the Employment Agreement by and between the registrant and Esther Cho , dated as of February 24, 2026 .

Stock Purchase Agreement, dated as of October 15, 2025, by and between the Registrant and certain entities affiliated with Pontifax Venture Capital.

8-K 001-39264 2.2 October 15, 2025

Insider Trading Policy.

February 26, 2025

21.1* Subsidiaries of Keros Therapeutics, Inc.

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97 Incentive Compensation Recoupment Policy.

February 28, 2024

101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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+ Indicates management contract or compensatory plan.

Certain exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Registrant will furnish supplementally a copy of any omitted exhibit to the SEC upon request.

The Registrant may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any exhibits so furnished.

# Certain portions of this exhibit (indicated by asterisks) have been omitted because they are not material and would likely cause competitive harm to Keros Therapeutics, Inc.

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Keros Therapeutics, Inc.

February 26, 2025

March 4, 2026

/s/ Jasbir Seehra

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(Principal Executive Officer)

February 26, 2025

March 4, 2026

Jasbir Seehra, Ph.D.

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(Principal Financial Officer and Principal Accounting Officer)

February 26, 2025

March 4, 2026

Keith Regnante

/s/ Jean-Jacques Bienaimé

Director February 26, 2025

Chair of the Board of Directors

March 4, 2026

Jean-Jacques Bienaimé

/s/ Nima Farzan Director February 26, 2025

/s/ Carl Gordon Director February 26, 2025

/s/ Nima Farzan Director March 4, 2026

/s/ Carl Gordon Director March 4, 2026

Carl Gordon, Ph.D., C.F.A.

/s/ Mary Ann Gray Director February 26, 2025

/s/ Mary Ann Gray Director March 4, 2026

Mary Ann Gray, Ph.D.

/s/ Tomer Kariv Director February 26, 2025

/s/ Julius Knowles Director February 26, 2025

/s/ Julius Knowles Director March 4, 2026

Julius Knowles

/s/ Ran Nussbaum Director February 26, 2025

/s/ Alpna Seth

Director February 26, 2025

Director March 4, 2026

Alpna Seth, Ph.D.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Keros Therapeutics, Inc.

To the shareholders and the Board of Directors of Keros Therapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Keros Therapeutics, Inc.

and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity, and cash flows, for each of the years then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

1 unchanged sentence

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued and Prepaid Research and Development and Manufacturing Expenses — Refer to Notes 2, 4 and 6 to the financial statements

Revenue Recognition — Takeda License Agreement – Refer to Notes 2 and 15 to the financial statements

Critical Audit Matter Description

As disclosed in Note 2 to the financial statements, the Company records accrued and prepaid research and development expenses for external clinical trial costs and manufacturing activities based on estimates of the progress to completion of specific tasks within individual contract research and contract manufacturing arrangements.

Estimates of expenses incurred are determined by reviewing information provided to the Company by its service providers and through discussions with both internal personnel and external service providers as to the status of specific tasks within arrangements.

Expenses incurred in excess of amounts invoiced are recorded as accrued expenses.

Payments made in excess of expenses incurred are recorded as prepaid costs.

As of December 31, 2024, the Company has recorded accrued external research, development, and manufacturing costs of $9.4 million and prepaid research, development and manufacturing costs of $21.3 million.

We identified auditing the estimates of the progress to completion of specific tasks performed by contract research and contract manufacturing service providers as a critical audit matter due to the (i) the level of judgment required by management and the volume of such estimates made by management and (ii) the high degree of auditor judgment, subjectivity, and an increased extent of effort in performing procedures to evaluate the reasonableness of management’s estimates of progress to completion.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to accrued and prepaid external research and development expenses and manufacturing costs included the following, among others:

• We tested the design and effectiveness of relevant controls over the estimation of accrued and prepaid research and development expenses and manufacturing costs.

• For a sample of contracts with service providers performing research and development, and manufacturing activities, we performed the following:

◦ Evaluated the appropriateness of the method used by management to develop its estimates of progress to completion of specific tasks.

◦ Tested the completeness and accuracy of the underlying data used in the estimates of progress to completion through inspection of the terms of contracts and statements of work between the Company and its service providers and testing of actual billed expenses under the contracts.

◦ Performed corroborating inquiries with Company personnel responsible for overseeing the activities performed by the Company’s contract research and contract manufacturing service providers, which may include the service providers’ estimate of completed tasks or progress of completion of certain tasks within the arrangement.

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

As described in Note 15 to the financial statements, the Company entered into a license agreement with Takeda (the “Takeda Agreement”), which became effective January 16, 2025, and concurrently entered into a separate transition services agreement with Takeda (the “TSA”), pursuant to which the Company will provide certain transitional services to Takeda, including, but not limited to, clinical trial and manufacturing services, during the term of the TSA (the "Transition Services").

Pursuant to the terms of the Takeda Agreement, the Company received a $200.0 million upfront payment in February 2025, which was included in the transaction price at inception.

The transaction price also included estimated variable consideration of $51.4 million relating to Transition Services.

The Company evaluated the Takeda Agreement and the TSA as a single contract under ASC 606 and identified two performance obligations, which included the license to the Company’s intellectual property (“License and Know-How”) and the Transition Services.

The Company determined that the License and Know-How were distinct from the Transition Services.

The Company allocated $195.4 million of the upfront payment to the License and Know-How, which was recognized as revenue at a point in time when control of the License and Know-How was transferred to Takeda.

The remaining transaction price was allocated to the Transition Services, which was recognized over time as services were provided.

As of December 31, 2025, the Company recognized $38.5 million of service revenue for the Transition Services and such services are substantially complete.

We identified the revenue recognition for the Takeda Agreement and the TSA as a critical audit matter.

Auditing the Company’s application of the relevant accounting guidance required significant auditor judgment, including the need to involve an internal subject matter expert.

Our audit procedures related to the Company’s revenue recognition for the Takeda Agreement and the TSA included the following, among others:

• Agreed the $200 million upfront payment to cash received and verified cash receipt for all payments received by the Company from Takeda for Transition Services performed during the year.

• Obtained and read the Company’s accounting position paper assessing the accounting treatment for the Takeda Agreement and the TSA pursuant to ASC 606.

• Utilized the assistance of our professionals with specialized knowledge and skills in the relevant technical accounting guidance, to evaluate (1) the Company’s determination of performance obligations, (2) the timing of revenue recognition for the License and Know-How and (3) the determination of the transaction price.

/s/ Deloitte & Touche LLP

Boston, Massachusetts

February 26, 2025

March 4, 2026

We have served as the Company's auditor since 2019.

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Prepaid expenses and other current assets 22,202 26,220

Current income tax receivable

Total current assets 315,434 588,893

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Preferred stock, par value of $ 0.0001 per share;

10,000,000 shares authorized as of December 31, 2024 and December 31, 2023;

10,000,000 shares authorized as of December 31, 2025 and 2024;

no shares issued and outstanding

Series A junior participating preferred stock, par value of $ 0.0001 per share;

500,000 and no shares authorized as of December 31, 2025 and December 31, 2024, respectively;

no shares issued and outstanding

Common stock, par value of $ 0.0001 per share;

200,000,000 shares authorized as of December 31, 2025 and December 31, 2024;

40,554,705 and 31,841,084 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

40,670,466 shares issued and 19,543,706 shares outstanding as of December 31, 2025 and 40,554,705 shares issued and outstanding as of December 31, 2024

Treasury stock, at cost;

21,126,760 and no shares as of December 31, 2025 and December 31, 2024, respectively

( 384,558 ) —

Additional paid-in capital 1,169,451 1,140,328

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YEAR ENDED DECEMBER 31,

2024 2023 2022

Service and other revenue $ 38,706 $ 550

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Total operating expenses ( 176,492 ) ( 214,383 )

LOSS FROM OPERATIONS ( 210,833 ) ( 169,941 ) ( 114,790 )

INCOME (LOSS) FROM OPERATIONS 67,569 ( 210,833 )

OTHER INCOME (EXPENSE), NET:

Interest expense, net — — ( 1 )

Research and development incentive income — 1,238

1 unchanged sentence

Other expense, net ( 539 ) ( 954 )

Total other income (expense), net 23,780 16,949 10,111

Loss before income taxes ( 187,053 ) ( 152,992 ) ( 104,679 )

Total other income, net 24,328 23,780

Income (loss) before income taxes 91,897 ( 187,053 )

Income tax provision ( 4,883 ) ( 300 )

Net loss $ ( 187,353 ) $ ( 152,992 ) $ ( 104,679 )

Net loss attributable to common stockholders—basic and diluted $ ( 187,353 ) $ ( 152,992 ) $ ( 104,679 )

Net loss per share attributable to common stockholders—basic and diluted $ ( 5.00 ) $ ( 5.20 ) $ ( 4.15 )

Weighted-average common stock outstanding—basic and diluted 37,437,652 29,447,119 25,241,030

Net income (loss) $ 87,014 $ ( 187,353 )

Net income (loss) attributable to common stockholders — basic and diluted (Note 11) $ 87,014 $ ( 187,353 )

Weighted-average common stock outstanding—basic 37,221,211 37,437,652

Weighted-average common stock outstanding—diluted 37,859,106 37,437,652

Net income (loss) per share of common stock — basic $ 2.34 $ ( 5.00 )

Net income (loss) per share of common stock — diluted $ 2.30 $ ( 5.00 )

See notes to consolidated financial statements.

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$ 0.0001 PAR VALUE

TREASURY STOCK ADDITIONAL

CAPITAL ACCUMULATED

DEFICIT TOTAL STOCKHOLDERS’ EQUITY

SHARES AMOUNT

SHARES AMOUNT SHARES AMOUNT

BALANCE, January 1, 2024 31,841,084 $ 3 — $ — $ 713,636 $ ( 381,426 ) $ 332,213

Issuance of common stock under the ATM agreement, net of commissions and offering cost of $ 1,971

Issuance of common stock, net of underwriting discounts, commissions and offering costs of $ 9,943

4,025,000 — — — 151,057 — 151,057

Exercise of common stock options 158,235 — 818 — 818

Stock-based compensation — — 18,682 — 18,682

Net loss — — — ( 104,679 ) ( 104,679 )

BALANCE, December 31, 2022 27,543,453 $ 2 $ 505,855 $ ( 228,434 ) $ 277,423

Issuance of common stock under the ATM agreement, net of commissions and offering cost of $ 3,655

2 unchanged sentences

Stock-based compensation — — — — 34,872 — 34,872

Net loss — — — ( 152,992 ) ( 152,992 )

Net income (loss) — — — — — ( 187,353 ) ( 187,353 )

BALANCE, December 31, 2024 40,554,705 $ 4 — $ — $ 1,140,328 $ ( 568,779 ) $ 571,553

Issuance of common stock, net of underwriting discounts, commissions and offering costs of $ 9,943

4,025,000 — 151,057 — 151,057

Issuance of common stock under the ATM agreement, net of commissions and offering cost of $ 3,655

Issuance of common stock under the employee stock purchase plan 11,806 — — — 138 — 138

Repurchase of treasury stock, including excise tax, direct fees and expenses of $ 9,558

— — ( 21,126,760 ) ( 384,558 ) — — ( 384,558 )

Short-swing profit settlement — — — — 139 — 139

Exercise of common stock options 73,655 — — — 150 — 150

Vesting of restricted stock units 30,300 — — — — — —

Stock-based compensation — — — — 28,696 — 28,696

Net loss — — — ( 187,353 ) ( 187,353 )

Net income (loss) — — — — — 87,014 87,014

BALANCE, December 31, 2025 40,670,466 $ 4 ( 21,126,760 ) $ ( 384,558 ) $ 1,169,451 $ ( 481,765 ) $ 303,132

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YEAR ENDED DECEMBER 31,

2024 2023 2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ ( 187,353 ) $ ( 152,992 ) $ ( 104,679 )

Adjustments to reconcile net loss to net cash used in operating activities:

Net income (loss) $ 87,014 $ ( 187,353 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation expense 1,509 1,229

Loss on disposal of fixed asset — 4 12

Gain on disposal of fixed asset ( 13 ) —

Stock-based compensation expense 28,696 34,872

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Prepaid expenses and other current assets 4,018 ( 10,217 )

Current income tax receivable ( 2,250 ) —

Other assets 2,056 ( 4 )

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Accrued expenses and other current liabilities ( 10,131 ) 2,952

Net cash used in operating activities ( 160,869 ) ( 124,508 ) ( 70,062 )

Net cash provided by (used in) operating activities 107,505 ( 160,869 )

CASH FLOWS FROM INVESTING ACTIVITIES:

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Payment of issuance costs associated with issuance of common stock under the ATM agreement — ( 171 )

Proceeds from issuance of common stock under the employee stock purchase plan 138 —

Repurchase of treasury stock ( 375,000 ) —

Payment of direct expenses associated with the treasury stock repurchase ( 3,897 ) —

Short-swing profit settlement 139 —

Proceeds from exercise of stock options 150 12,141

Net cash provided by financing activities 391,821 178,956 120,309

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 229,021 51,984 49,006

Net cash provided by (used in) financing activities ( 378,470 ) 391,821

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 272,516 ) 229,021

Cash, cash equivalents and restricted cash at beginning of year 561,380 332,359

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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Property and equipment purchases in accounts payable $ — $ 599 $ 75

Issuance costs in accrued and accounts payable

Cash paid for taxes $ 7,145 $ —

Property and equipment purchases in accounts payable and accrued expenses $ 5 $ —

Treasury stock repurchase costs in accounts payable and accrued expenses $ 5,661 $ —

Right-of-use assets obtained in exchange for operating lease obligation $ — $ 5,737

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YEAR ENDED DECEMBER 31,

2024 2023 2022

Cash and cash equivalents $ 287,415 $ 559,931

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The Company is a clinical-stage biopharmaceutical company focused on developing and commercializing novel therapeutics to treat a wide range of patients with disorders that are linked to dysfunctional signaling of the transforming growth factor-beta (“TGF-ß”) family of proteins.

One of the Company’s product candidates, cibotercept (KER-012), is being developed for the treatment of pulmonary arterial hypertension (“PAH”) and for the treatment of cardiovascular disorders.

The Company's second product candidate, KER-065, is being developed for the treatment of neuromuscular diseases.

The Company's lead product candidate, rinvatercept (KER-065), is being developed for the treatment of Duchenne muscular dystrophy and for the treatment of amyotrophic lateral sclerosis.

The Company’s most advanced product candidate, elritercept (KER-050), is being developed for the treatment of low blood cell counts (“cytopenias”), including anemia and thrombocytopenia, in patients with myelodysplastic syndromes (“MDS”) and in patients with myelofibrosis.

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To date, the Company has not generated any revenue from product sales as none of its product candidates have been approved for commercialization.

In December 2022, the Company filed a prospectus supplement to a registration statement on Form S-3ASR (the “Prior Shelf Registration Statement”) for the issuance and sale, if any, of up to $ 250.0 million in common stock in sales deemed to be an “at the market offering,” as defined by the Securities Act of 1933, as amended (“Securities Act”).

In May 2024, the Company filed a registration statement on Form S-3ASR to replace the Prior Shelf Registration Statement, which became effective immediately upon filing (the “New Shelf Registration Statement”).

The New Shelf Registration Statement included a base prospectus under which the Company could issu e, so long as the Company qualifies as a “well-known seasoned issuer” as defined in Rule 405 of the Securities Act, an unspecified amount of shares of the Company common stock, preferred stock, debt securities and warrants .

In June 2024, the Company filed a prospectus supplement to the New Shelf Registration Statement for the issuance and sale, if any, of up to an additional $ 350.0 million of shares of its common stock i n sales deemed to be an “at-the-market offering,” as defined by the Securities Act.

The Company anticipates that the filing of this Annual Report on Form 10-K will render it unable to use its currently effective New Shelf Registration Statement as the Company expects that, on the date of filing of this report, it will no longer meet the criteria of a well-known seasoned issuer.

Liquidity and Capital Resources

The Company’s consolidated financial statements have been prepared on the basis of the Company continuing as a going concern for the next 12 months.

Management believes that the Company’s $ 559.9 million cash and cash equivalents as of December 31, 2024 will allow the Company to continue its operations for at least the next 12 months.

Management believes that the Company’s $ 287.4 million cash and cash equivalents as of December 31, 2025 will allow the Company to continue its operations for at least the next 12 months from the date these consolidated financial statements are issued.

In the absence of a significant source of recurring revenue, the continued viability of the Company is dependent on its ability to continue to raise additional capital to finance its operations.

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The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances.

This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate,

even if such assumptions are reasonable when made.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, useful lives assigned to property and equipment and accrued and prepaid research and development expenses.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition, useful lives assigned to property and equipment and accrued and prepaid research and development expenses.

The Company assesses estimates on an ongoing basis;

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A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The Company had no financial instruments measured at level 3 as of December 31, 2024.

The Company had no financial instruments measured at level 3 as of December 31, 2025 or 2024.

Cash, Cash Equivalents, and Restricted Cash

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The Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents.

The Company had restricted cash in the form of a certificate of deposit related to its operating lease in Lexington, Massachusetts of $ 1.4 million and $ 1.2 million as of December 31, 2024 and December 31, 2023, respectively.

The Company provided Accent Therapeutics, Inc.

("Accent Therapeutics") a letter of credit in the amount of approximately $ 0.2 million upon commencement of the sublease.

The Company had restricted cash in the form of certificates of deposit related to its operating leases in Lexington, Massachusetts of $ 1.4 million as of December 31, 2025 and 2024.

Concentrations of Credit Risk

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Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the

carrying amount of the assets exceed the fair value of the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

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The interest rate implicit in lease contracts is typically not readily determinable.

As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

For all asset classes of its leases, the Company has elected to account for the lease and non-lease components together for existing classes of underlying assets.

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The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related liabilities have been established.

Treasury Stock

The Company records its repurchases of shares of common stock at cost.

These shares are classified as treasury stock, which is a reduction of stockholders’ equity.

Repurchased shares are held as treasury stock until they are retired or re-issued.

Treasury stock is included in shares authorized and issued but excluded from shares outstanding.

Research and Development Costs

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This estimate is also reviewed by the Company’s external tax advisors on an annual basis.

The Company’s estimate of the cash refund it expects to receive related to the R&D Incentive is included in other assets in the accompanying consolidated balance sheet and such amounts are recorded as research and development incentive

income in the statement of operations.

The Company recognizes research and development incentive income when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured.

The Company has received payments and has recorded other income from the R&D Incentive of $ 1.2 million, $ 2.4 million, and $ 7.1 million for the years ended December 31, 2024, 2023 and 2022, respectively, related to the R&D Incentive as defined above.

The Company did not record other income from the R&D Incentive for the year ended December 31, 2025.

The Company has received payments and has recorded other income from the R&D Incentive of $ 1.2 million for the year ended December 31, 2024 related to the R&D Incentive as defined above.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company enters into certain agreements that are within the scope of ASC 606, under which the Company licenses, may license or grants an option to license rights to certain of the Company’s product candidates and performs research and development services in connection with such arrangements.

The Company enters into certain agreements that are within the scope of ASC 606, under which the Company licenses or grants an option to license rights to certain of the Company’s product candidates and may perform research and

development services in connection with such arrangements.

The terms of these arrangements typically include payment of one or more of the following:

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To date, the Company has not recognized any royalty revenue resulting from any of the Company’s collaboration or strategic alliance arrangements.

The Company allocates the transaction price based on the estimated standalone selling price.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative stand-alone selling price basis.

The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract.

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The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services.

For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from consideration allocated to the license when the license is transferred to the customer and the customer can use and benefit from the license.

For combined performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.

If performance obligations are satisfied over time, the Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

The Company generally recognizes revenue using the cost incurred to date as compared to the total estimated cost.

Changes in estimates of total internal and external costs expected to be incurred and the timing of when those costs are expected to be incurred are recognized in the period of change as a cumulative catch-up adjustment.

If estimates of the total estimated cost change, or if contract amendments change the scope of the performance obligations, the impacts could be material.

The Company receives payments from its customers based on billing schedules established in each contract.

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The Company has one reportable segment and manages its operations on a consolidated basis for the purposes of assessing performance and making operating decisions.

The Company’s singular concentration is focused on the discovery and development of breakthrough therapeutics for hematological, pulmonary and cardiovascular disorders with high unmet medical need.

The Company’s singular concentration is focused on the discovery and development of novel therapeutics to treat a wide range of patients with disorders that are linked to dysfunctional signaling of the TGF-ß family of proteins.

Stock-Based Compensation

The Company accounts for all stock-based awards granted to employees and non-employees as stock-based compensation expense at fair value.

The Company’s stock-based awards include stock options.

The measurement date for employee and non-employee awards is the date of grant, and stock-based compensation costs are recognized as expense over the requisite service period, which is the vesting period, on a straight-line basis.

The Company’s stock-based awards include stock options and restricted stock unit ("RSU") awards.

The measurement date for employee and non-employee awards is the date of grant.

For stock-based awards that vest based on service conditions, stock-based compensation costs are recognized as expense over the requisite service period, which is the vesting period, on a straight-line basis.

For stock options and RSUs with performance conditions, stock-based compensation costs are recognized as expense using the accelerated attribution method when it is probable that the performance condition will be achieved.

Stock-based compensation expense is classified in the accompanying consolidated statement of operations based on the function to which the related services are provided.

The Company recognizes stock-based compensation expense for the portion of awards that have vested.

Forfeitures are recorded as they occur.

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The Company lacks company-specific historical and implied volatility information.

Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price.

Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies weighted with its own volatility for the period in which its stock has been publicly traded.

The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

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As of December 31, 2025, there have been no interest or penalties recorded.

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Comprehensive loss is equal to net loss for all periods presented.

Net Loss Per Share

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Comprehensive income (loss) is equal to net income (loss) for all periods presented.

Net Income (Loss) Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential dilutive securities.

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The Company excluded the following from the computation of diluted net loss per share attributable to common stockholders as of December 31, 2025 and 2024 because including them would have had an anti-dilutive effect:

2024 2023 2022

Unvested RSU awards 41,207 —

Options to purchase common stock 4,470,286 5,384,760

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Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280) (“ASU No.

The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements.

This update was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU No.

2023-07 for its consolidated financial statements for the fiscal year ended December 31, 2024 and included a new disclosure Note 13.

Segment Reporting in accordance with ASU No.

The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board issued ASU No.

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In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

An entity may apply the amendments in ASU No.

2023-09 prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU No.

2023-09 disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented.

The Company is currently evaluating the impact of ASU No.

2023-09 on its consolidated financial statements and related disclosures.

The new standard was effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU No.

2023-09 for its consolidated financial statements for the fiscal year ended December 31, 2025.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued ASU No.

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This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and the guidance is to be

applied prospectively and may be applied retrospectively.

Early adoption is permitted and the guidance is to be applied prospectively and may be applied retrospectively.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

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Inflationary factors, such as increases in the cost of materials and supplies relating to the Company’s preclinical studies and clinical trials, interest rates and overhead costs may adversely affect its operating results.

Rising interest rates present a recent challenge impacting the U.S.

Implementation of tariffs present a recent challenge impacting the U.S.

economy and could make it more difficult for the Company to obtain traditional financing on acceptable terms, if at all, in the future.

Although the Company does not believe that inflation or higher interest rates have had a material impact on its financial position or results of operations to date, the Company may experience increases in the near future (especially if inflation rates rise more quickly) on its operating costs, including its labor costs and research and development costs, due to supply chain constraints, consequences associated with public health crises and global geopolitical tensions, such as the ongoing war between Russia and Ukraine and the war in Israel, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on the Company's working capital resources.

Although the Company does not believe that inflation, higher interest rates or tariffs have had a material impact on its financial position or results of operations to date, the Company may experience increases in the near future (especially if inflation rates rise more quickly) on its operating costs, including its labor costs and research and development costs, due to supply chain constraints, consequences associated with public health crises and global geopolitical tensions, such as the ongoing war between Russia and Ukraine and the war in the Middle East, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on the Company’s working capital resources.

As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities.

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Interest and dividend receivable 555 1,714

Prepaid legal and consultants 1,207 31

Refunds due from contract research organizations 14,480 —

Other 2,397 1,450

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Property and equipment, net $ 4,297 $ 4,237

Depreciation expense was $ 1.2 million, $ 0.8 million, and $ 0.7 million for each of the years ended December 31, 2024, 2023, and 2022, respectively.

Depreciation expense was $ 1.5 million and $ 1.2 million for the years ended December 31, 2025 and 2024, respectively.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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Accrued compensation and benefits 5,870 10,130

Accrued excise tax 3,377 —

Accrued legal and consultants 3,484 877

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Refer to Note 15, Revenue from Contracts with Customers, for more information regarding this agreement.

Takeda Agreement

On December 3, 2024, the Company entered into a license agreement with Takeda Pharmaceuticals U.S.A., Inc.

Refer to Note 15, Revenue from Contracts with Customers, for more information regarding this agreement.

STOCKHOLDERS’ EQUITY

As of December 31, 2025, the Company’s amended and restated certificate of incorporation authorized the Company to issue 200,000,000 shares of common stock at a par value of $ 0.0001 per share.

On December 12, 2022, the Company filed a prospectus supplement to its registration statement on Form S-3ASR for the issuance and sale, if any, of up to $ 250.0 million of shares of its common stock under a sales agreement with Leerink Partners LLC (the “ATM Sales Agreement”).The Company anticipates that the filing of this Annual Report on Form 10-K will render it unable to use its currently effective New Shelf Registration Statement as the Company expects that, on the date of filing of this report, it will no longer meet the criteria of a well-known seasoned issuer.

On May 3, 2024, the Company filed the New Registration Statement to replace the Prior Shelf Registration Statement that was set to expire, including a base prospectus, which became effective immediately upon filing, under which the Company could issue an unspecified amount of shares of the Company common stock, preferred stock, debt securities and warrants.

On June 17, 2024, the Company filed a prospectus supplement to the New Shelf Registration Statement for the issuance and sale, if any, of up to an additional $ 350.0 million of shares of its common stock under the ATM Sales Agreement.

For the year ended December 31, 2022, the Company raised gross proceeds of $ 121.4 million pursuant to the ATM Offering through the sale of 3,410,384 shares of common stock at a weighted average price of $ 35.60 per share.

The net proceeds from the ATM Offering for the year ended December 31, 2022 were approximately $ 119.4 million after deducting sales agent commissions of $ 1.8 million and offering expenses of $ 0.2 million.

For the year ended December 31, 2023, the Company raised gross proceeds of $ 178.5 million pursuant to the ATM Offering through the sale of 4,061,606 shares of common stock at a weighted average price of $ 43.95 per share.

The net proceeds from the ATM Offering for the year ended December 31, 2023 were approximately $ 175.8 million after deducting sales agent commissions of $ 2.7 million.

For the year ended December 31, 2024, the Company raised gross proceeds of $ 232.3 million pursuant to the ATM Offering through the sale of 4,290,096 shares of common stock at a weighted average price of $ 54.14 per share.

For the year ended December 31, 2024, the Company raised gross proceeds of $ 232.3 million pursuant to the “at the market offering,” in connection with our Sales Agreement with Leerink Partners LLC, as agent (“ATM Offering”), pursuant to which we sold 4,290,096 shares of common stock at a weighted average price of $ 54.14 per share.

The net proceeds from the ATM Offering for the year ended December 31, 2024 were approximately $ 228.6 million after deducting sales agent commissions of $ 3.5 million and offering expenses of less than $ 0.2 million.

As of December 31, 2024, the Company was eligible to offer and sell, from time to time, shares of its common stock for an aggregate offering amount of up to $ 117.7 million (less any sales agent commissions) available under the ATM Offering.

On January 8, 2024, the Company closed an underwritten public offering in which 4,025,000 shares of common stock were issued and sold, which included 525,000 shares of common stock issued and sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares, at a public offering price of $ 40.00 per share.

The aggregate net proceeds from the public offering were approximately $ 151.1 million, after deducting underwriting discounts and commissions and offering expenses.

Stockholder Rights Plan

On April 9, 2025, the Company’s board of directors (the “Board”) declared a dividend of one right (“Right”) to purchase one-thousandth of one share of the Company’s newly designated Series A Junior Participating Preferred Stock, par value $ 0.0001 per share (each, a “Preferred Share” and collectively, the “Preferred Shares”), for each outstanding share of common stock to the stockholders of record as of the close of business on April 24, 2025.

The Company also adopted a limited duration stockholder rights plan (the “Rights Plan”), effective immediately, as set forth in the Rights Agreement, dated as of April 9, 2025 (the “Rights Agreement”), by and between the Company and Computershare Trust Company, N.A., as Rights Agent.

The Rights Agent currently serves as the Company’s transfer agent with respect to the common stock and also has been appointed transfer agent with respect to the Preferred Shares, if any, that may be issued pursuant to the exercise of rights under the Rights Agreement.

The Rights will expire on April 9, 2026, unless the rights are earlier redeemed or exchanged by the Company.

The Company does not have any obligation under the Rights Agreement to seek stockholder approval for the Rights Plan.

In general terms, the Rights Plan is designed to impose a penalty upon any person or group that acquires beneficial ownership of 10 % ( 15 % in the case of a passive institutional investor) or more of the outstanding shares of Common Stock without the approval of the Board.

The Board adopted the Rights Plan in response to significant and rapid accumulations of

the common stock by a number of investors who have indicated a desire to influence the control of the Company.

The Rights Plan is intended to protect the investment of the Company's stockholders during a period in which it believes shares of the Company do not reflect the Company’s intrinsic value.

The Rights Plan will reduce the likelihood that any entity, person or group gains control of the Company through open-market accumulation without paying all stockholders an appropriate control premium.

The following is a summary of the rights and privileges of the holders of common stock as of December 31, 2025:

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The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that the Company may designate in the future.

As of December 31, 2024, 2023, and 2022, the Company has reserved the following shares of common stock for the potential exercise of stock options:

2024 2023 2022

As of December 31, 2025 and 2024, the Company has reserved the following shares of common stock for future issuance:

Unvested RSU awards

Options to purchase common stock 3,901,706 5,384,760

Employee stock purchase plan shares 47,694 — —

Available under the ESPP Plan 1,641,602 1,247,861

Available under 2020 Plan 3,146,054 861,617

Total 9,406,212 7,494,238

TREASURY STOCK

The Board may authorize the repurchase of shares of the Company’s common stock, in the open market or through negotiated transactions, at such times and at such prices as management deems appropriate.

For the year ended December 31, 2024, the Company did not acquire any shares of its common stock.

On October 15, 2025, the Company entered into stock purchase agreements with certain entities affiliated with ADAR1 Capital Management (collectively, the “ADAR1 Parties”) and certain entities affiliated with Pontifax Venture Capital (collectively, the “Pontifax Parties”).

Such stock purchase agreements for each of the Pontifax and ADAR1 Parties are collectively referred to as “Repurchase Agreements”.

Pursuant to the terms and conditions of the Repurchase Agreements, the ADAR1 Parties and the Pontifax Parties sold all of the shares of common stock beneficially owned by them, being an aggregate of 10,176,595 shares of common stock, to the Company at a price of $ 17.75 per share for an aggregate purchase price of $ 180.6 million, excluding excise tax, direct fees and expenses related to the repurchases.

The total cost of the repurchase was recorded as treasury stock using the cost method and is included as treasury stock in the Company’s consolidated balance sheets.

On October 20, 2025, the Company commenced a tender offer to repurchase shares of its common stock at a cash purchase price of $ 17.75 per share (the “Tender Offer”).

The Tender Offer expired at 5:00 p.m.

Eastern time on November 18, 2025, and following such expiration the Company accepted for purchase a total of 10,950,165 shares, for an aggregate purchase price of approximately $ 194.4 million, excluding excise tax, direct fees and expenses related to the Tender Offer.

More than 10,950,165 shares were tendered in the Tender Offer, and as such, shares were accepted for purchase on a pro rata basis, except for conditional tenders that were automatically regarded as withdrawn if the condition was not satisfied.

The total cost of the repurchase was recorded as treasury stock using the cost method and is included as treasury stock in the accompanying consolidated balance sheets.

The completion of the Repurchase Agreements in October 2025 and the Tender Offer in November 2025 concluded the Company’s previously announced $ 375.0 million capital return program.

In connection with the Repurchase Agreements and Tender Offer, the Company incurred $ 9.6 million in excise tax, direct fees and expenses that were included in the cost of treasury stock in the accompanying consolidated balance sheets as of December 31, 2025.

STOCK-BASED COMPENSATION

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Additionally, there were an aggregate of 3,146,054 shares reserved for future issuance under the 2020 Plan, including shares forfeited from the 2017 Plan.

2020 Employee Stock Purchase Plan

In March 2020, the Board adopted and the Company's stockholders approved the 2020 Employee Stock Purchase Plan ("ESPP").

The ESPP became effective on April 7, 2020.

Under the ESPP, eligible employees can purchase shares of the Company's common stock, based on a percentage of their compensation, subject to certain limits.

The purchase price per share is equal to the lower of 85 % of the fair market value of the Company's common stock on the first trading day of the twenty-four month offering period, or on the applicable purchase date.

Each offering under the ESPP consists of two twelve-month purchase periods.

Under the ESPP, there is an annual increase on January 1 of each year from January 1, 2021 continuing through January 1, 2030, by the lesser of (i) 1.0 % of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (ii) 455,852 shares or (iii) or a lesser number of shares as may be determined by the Board.

On January 1, 2025, the Company increased the number of shares available for future grant under the ESPP by 405,547 shares.

If purchase rights granted under the ESPP terminate without having been exercised, the shares of our common stock not purchased under such purchase rights will again become available for issuance under the ESPP.

As of December 31, 2024, no shares of common stock were purchased under the ESPP.

As of December 31, 2024, there was an aggregate of 1,247,861 shares reserved for future issuance under the ESPP.

Restricted Stock Units

A summary of RSU award activity during the year ended December 31, 2025 is as follows:

NUMBER OF UNITS WEIGHTED AVERAGE GRANT-DATE FAIR VALUE

Outstanding RSU awards as of January 1, 2025 — $ —

Granted 1,167,325 11.71

Vested ( 30,300 ) 12.04

Forfeited ( 420,175 ) 10.56

Outstanding RSU awards as of December 31, 2025 716,850 $ 12.37

The summary of RSU award activity includes 90,500 performance-based awards granted during the year ended December 31, 2025.

The weighted-average grant date fair value of RSU awards granted during the years ended December 31, 2025 and 2024 was $ 11.71 and zero , respectively.

The aggregate fair value of RSU awards that vested during the years ended December 31, 2025 and 2024 was $ 0.5 million and zero , respectively.

As of December 31, 2025, there has been no expense recognized for the performance-based awards, for which the performance criteria was not deemed probable as of December 31, 2025.

As of December 31, 2025, there was approximately $ 6.9 million of unrecognized stock-based compensation expense related to RSU awards that are expected to vest, including $ 1.4 million of unrecognized stock-based compensation expense related to performance-based awards for which the performance criteria is currently not deemed probable.

These costs are expected to be recognized over a weighted-average remaining vesting period of approximately 1.71 years.

Stock Option Valuation

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YEAR ENDED DECEMBER 31,

2024 2023 2022

Risk-free interest rate

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The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

The total intrinsic value of stock options exercised was $ 0.7 million and $ 10.1 million during the years ended December 31, 2025 and 2024, respectively.

The weighted-average grant date fair value per share of options granted during each of the years ended December 31, 2025 and 2024 was $ 10.36 and $ 40.92 , respectively.

As of December 31, 2024, there was $ 82.0 million of unrecognized stock-based compensation expense related to unvested stock options, including 4.9 million of unrecognized stock-based compensation expense related to unvested performance-based stock options.

As of December 31, 2025, there was $ 22.9 million of unrecognized stock-based compensation expense related to unvested service-based stock options and $ 2.9 million of unrecognized stock-based compensation expense related to performance-based stock options.

The unrecognized stock-based compensation expense is estimated to be recognized over a period of 1.49 years.

The summary of option activity includes 125,000 performance-based options granted during the year ended December 31, 2024.

The options include performance-based and service-based vesting criteria.

As of December 31, 2025, the performance criteria was deemed probable for 50% of the performance-based options.

Accordingly, the Company recorded $ 2.0 million stock-based compensation expense during the year end December 31, 2025.

Of the $ 2.9 million of unrecognized stock-based compensation expense, $ 0.4 million is related to service-based vesting criteria that the Company expects to recognize and $ 2.5 million is related to performance-based vesting criteria that are not considered probable as of December 31, 2025.

2020 Employee Stock Purchase Plan

In March 2020, the Board adopted and the Company's stockholders approved the 2020 Employee Stock Purchase Plan ("ESPP").

The ESPP became effective on April 7, 2020.

Under the ESPP, eligible employees can purchase shares of the Company's common stock, based on a percentage of their compensation, subject to certain limits.

The purchase price per share is equal to the lower of 85% of the fair market value of the Company's common stock on the first trading day of the twenty-four month offering period, or on the applicable purchase date.

Each offering under the ESPP consists of two twelve-month purchase periods.

On January 1, 2025, the Company increased the number of shares available for future grant under the ESPP by 405,547 shares.

On January 1, 2026, the Company increased the number of shares available for future grant under the ESPP by 195,437 shares.

As of December 31, 2025, 11,806 shares of common stock were purchased under the ESPP.

As of December 31, 2025, there was an aggregate of 1,641,602 shares reserved for future issuance under the ESPP.

Stock-Based Compensation Expense

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YEAR ENDED DECEMBER 31,

2024 2023 2022

Research and development $ 13,288 $ 18,294

1 unchanged sentence

Total stock-based compensation expense $ 28,696 $ 34,872

INCOME (LOSS) PER SHARE

Basic and diluted income (loss) per share of common stock are calculated as follows (in thousands, except share and per share data):

YEAR ENDED DECEMBER 31,

Net income (loss) $ 87,014 $ ( 187,353 )

Weighted-average shares of common stock outstanding - basic 37,221,211 37,437,652

Effect of potentially dilutive stock options 419,367 —

Effect of potentially dilutive employee stock purchase plan shares — —

Effect of potentially dilutive restricted stock units 218,528 —

Total potentially dilutive securities 637,895 —

Weighted-average shares of common stock outstanding used to compute diluted net income (loss) 1 37,859,106 37,437,652

Net income (loss) per share of common stock

Basic $ 2.34 $ ( 5.00 )

Diluted $ 2.30 $ ( 5.00 )

The Company excluded the following from the computation of diluted net income (loss) per share attributable to common stockholders as of December 31, 2025 and 2024 because including them would have had an anti-dilutive effect:

YEAR ENDED DECEMBER 31,

Unvested RSU awards 41,207 —

Options to purchase common stock 4,470,286 5,384,760

Employee stock purchase plan shares 8,549 47,694

Total 4,520,042 5,432,454

1 In periods where there is a net loss, zero incremental shares are included as the effect would be antidilutive.

Loss before income taxes for the years ended December 31, 2025 and 2024 consisted of the following (in thousands):

YEAR ENDED DECEMBER 31,

2024 2023 2022

United States $ 74,804 $ ( 189,315 )

Foreign 17,093 2,262

Loss before income taxes

Income (loss) before income taxes

$ 91,897 $ ( 187,053 )

1 unchanged sentence

YEAR ENDED DECEMBER 31,

2024 2023 2022

Current income tax provision:

6 unchanged sentences

$ 4,883 $ 300

A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate for the years ended December 31, 2024, 2023 and 2022 was as follows:

The following is a reconciliation of the Company’s U.S.

federal statutory income tax rate to the Company’s effective income tax rate for the years ended December 31, 2025 in accordance with the guidance in the ASU No.

2023-09, which the Company has elected to prospectively adopt:

YEAR ENDED DECEMBER 31,

2024 2023 2022

U.S Federal statutory tax rate $ 19,298 21.0 %

State and local income tax, net of federal income tax effect 2 734 0.8

Foreign tax effects

Difference between local tax rare and U.S.

federal statutory tax rate 1,538 1.7

Other ( 245 ) ( 0.3 )

Effect of changes in taw laws or rates enacted in the current period — —

Effect of cross-border tax laws — —

Research and development tax credits 13,664 14.9

Changes in valuation allowances ( 33,331 ) ( 36.3 )

Nontaxable or nondeductible items

Nondeductible executive compensation 5,048 5.5

Stock compensation 1,263 1.4

Changes in unrecognized tax benefits ( 2,784 ) ( 3.0 )

Other ( 308 ) ( 0.4 )

Effective tax rate $ 4,883 5.3 %

2 State and local income tax, net of federal income tax effect, are not material and Massachusetts is the most significant state that the Company operates in.

The following is a reconciliation of the Company’s U.S.

federal statutory income tax rate to the Company’s effective income tax rate for the year ended December 31, 2024 prior to adoption of ASU No.

YEAR ENDED DECEMBER 31,

Income at U.S.

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Accrued expenses 1,447 2,626

Intangibles — —

Other $ 269 $ 285

Total deferred tax assets $ 102,840 $ 155,202

3 unchanged sentences

Operating lease right-of-use asset ( 4,608 ) ( 5,165 )

Other ( 241 )

Net deferred tax assets

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federal and state net operating loss (“NOL”) carryforwards of $ 159.1 million and $ 27.9 million, respectively.

Of the $ 160.3 million in federal NOLs, $ 0.2 million will expire in 2035 and the remaining $ 160.1 million can be carried forward indefinitely.

The federal NOLs can be carried forward indefinitely.

The state NOL carryforwards begin to expire in 2039.

1 unchanged sentence

federal and state research and development tax credit carryforwards of $ 0.3 million and $ 0.1 million, respectively.

As of December 31, 2023, the Company had U.S.

federal and state research and development tax credit carryforwards of $ 10.4 million and $ 4.8 million, respectively.

The tax credits begin to expire in 2035.

The federal research and development tax credits expire in 2045.

The state research and development tax credits expire in 2040.

Under the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the NOL and tax credit carryforwards are subject to review and potential adjustments by the Internal Revenue Services and state tax authorities.

Under Section 382 of the Code (“Section 382”), certain substantial changes in the Company’s ownership, including the sale of the Company or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of NOL carryforwards or tax credits which could be used annually to offset future taxable income.

The Company had updated its analyses under Section 382 through September 30, 2024, and determined that on April 15, 2016 and April 13, 2020, ownership changes had occurred.

Based on the Company’s analysis, the Company has determined that $ 0.3 million and $ 0.3 million of its federal and state NOL carryforwards, respectively, are limited by Section 382 as of September 30, 2024 and have been written off in the prior period.

Based on a previous Section 382 analysis that the Company performed, the Company determined that on April 15, 2016 and April 13, 2020, Section 382 ownership changes and limitations had occurred.

Based on such analysis, the Company determined that $ 0.3 million and $ 0.3 million of its federal and state NOL carryforwards, respectively, were limited by Section 382 and therefore were previously written off.

The Company had updated its analyses under Section 382 through November 21, 2025, and determined that, in addition to the previous Section 382 ownership changes and limitations on April 15, 2016 and April 13, 2020, a Section 382 ownership change occurred on November 21, 2025.

As a result of the November 21, 2025 Section 382

ownership change and limitation, $ 14.0 million of federal research and development tax credit carryforwards, $ 169.4 million of state NOL carryforwards and $ 5.9 million of state research and development tax credit carryforwards have been written off.

Though subject to a Section 382 limitation, federal NOL carryforwards have not been written off since they can be carried forward indefinitely.

The remaining unused carryforwards remain available for future periods.

1 unchanged sentence

As a result, its ability to use its pre-change NOLs or tax credits to offset U.S.

federal taxable income may be subject to limitations, which could potentially result in increased future tax liability.

federal taxable income or tax may be subject to limitations, which could potentially result in increased future tax liability.

In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of research and development credits and NOLs.

Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of NOLs and research and development credits.

Under the applicable accounting standards, management has considered the Company’s history of losses and concluded that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets.

Accordingly, a full valuation allowance was maintained as of December 31, 2025 and 2024.

A change in the Company’s valuation allowance was recorded in 2024 and 2023 in the amount of $ 50.6 million and $ 38.7 million, respectively, due primarily to the generation of additional net deferred tax assets.

A decrease in the Company’s valuation allowance was recorded in 2025 in the amount of $ 52.0 million primarily due to the reduction of net deferred tax assets related to capitalized research and development expenses, research and development tax credits and net operating loss carryforwards.

An increase in the Company’s valuation allowance was recorded in 2024 in the amount of $ 50.6 million, primarily due to the generation of additional net deferred tax assets related to capitalized research and development expenses, net operating loss carryforwards and research and development tax credits.

The Tax Cuts and Jobs Act resulted in significant changes to the treatment of research and development (“R&D”) expenditures under Section 174.

1 unchanged sentence

Specifically, costs for U.S.-based R&D activities must be amortized over five years and costs for foreign R&D activities must be amortized over 15 years – both using a midyear convention.

On July 4, 2025, President Trump signed H.R.

1, the One Big Beautiful Bill Act into law.

The legislation included several changes to the Internal Revenue Code.

These changes are generally effective for tax years beginning after December 31, 2025 except for changes related to the expensing of U.S.-based R&D expenditures which was retroactively effective and available for tax years beginning after December 31, 2024 and the reinstatement of 100% bonus depreciation for qualified assets/property placed in service after January 19, 2025.

The changes that were retroactively effective were reflected in the year ended December 31, 2025.

The calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which it operates or does business in.

3 unchanged sentences

These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

As of December 31, 2023, the Company did no t have any gross unrecognized tax benefits related to income tax reserves.

As of December 31, 2024, the Company had certain gross unrecognized tax benefits related to income tax reserves primarily related to federal and state research credit carryforwards of $ 3.1 million, of which $ 2.0 million relate to positions taken in prior years and $ 1.1 million relate to current year positions.

As of December 31, 2025, the Company had certain gross unrecognized tax benefits related to income tax reserves primarily related to federal research credit carryforwards of $ 0.1 million, which relate to current year positions.

The Company does not have any other material gross unrecognized tax benefits related to income tax reserves.

2 unchanged sentences

As of December 31, 2025 and 2024, the Company had no interest or penalties related to unrecognized tax benefits.

For the year ended December 31, 2025, the Company paid $ 7.2 million of total income taxes, $ 4.9 million related to Australia and $ 2.3 million related to U.S.

federal income taxes.

For the year ended December 31, 2024, the Company made zero payments for income taxes.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to income tax examination by federal, state and foreign jurisdictions, where applicable.

The Company is currently subject to an income tax examination with the state of Massachusetts for the tax years ended December 31, 2021 and 2022, and does not expect a material impact to the Company's financial statements as a result of such income tax examination.

The Company recently closed an income tax examination with the state of Massachusetts for the tax years ended December 31, 2021 and 2022, with no material impact to the Company's financial statements.

The Company’s tax years are still open under statute for income tax examination by the Internal Revenue Service (“IRS”) from December 31, 2022 to the present.

There are currently no pending income tax examinations with the IRS.

To the extent the Company has tax attribute carryforwards, the tax years in which the tax attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state and foreign tax authorities to the extent utilized in a future period.

COMMITMENTS AND CONTINGENCIES

To the extent the Company has tax attribute

carryforwards, the tax years in which the tax attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state and foreign tax authorities to the extent utilized in a future period.

Operating Leases

On September 7, 2021, the Company entered into an indenture of lease (the “1050 Waltham Lease”) with Revolution Labs Owner LLC (the “Landlord”), pursuant to which the Company is leasing approximately 35,662 square feet of office, laboratory and vivarium space located at 1050 Waltham Street, Lexington, Massachusetts (the “Premises”) for its new principal executive office.

In December 2022, the Company received access to approximately 31,991 square feet of the Premises (the “Phase A Premises”) pertaining to the office and laboratory space in order to prepare for use.

Accordingly, the 1050 Waltham Lease for the Phase A Premises, which is considered a distinct lease component, was determined to be classified as an operating lease and the Company recorded an ROU asset of $ 15.4 million and a lease liability of $ 12.9 million on the consolidated balance sheet as of December 31, 2022.

The difference between the ROU asset and lease liability pertains to payments made prior to the Phase A Premises commencement date for leasehold improvements that were deemed to be lessor owned.

In January 2023, the Company entered into a first amendment to the 1050 Waltham Lease (the “Lease Amendment”).

Under the terms of the Lease Amendment, a phased delivery of the Premises by the Landlord was established as follows:

(i) the delivery of the Phase A Premises in January 2023 and (ii) the delivery of the additional approximately 3,671 rentable square feet of vivarium space (the “Phase B Premises”) in March 2023.

As a result of the Lease Amendment, the lease liability for the Phase A Premises was remeasured, resulting in a non-cash decrease to the Company’s operating lease liabilities and ROU assets of $ 0.5 million in the quarter ended March 31, 2023.

Upon delivery of the Phase B Premises in March 2023, the Phase B Premises was determined to be classified as an operating lease and the Company recorded an ROU asset of $ 1.9 million, inclusive of lease payments made prior to commencement, and a lease liability of $ 1.4 million on the consolidated balance sheets.

Upon delivery of the Phase B Premises, the rent commencement date of the Premises was determined to begin in November 2023, with base rent will initially be fixed at $ 0.2 million per month and will increase by approximately 3 % per annum until the 1050 Waltham Lease expires on November 30, 2031.

Base rent was initially fixed at $ 0.2 million per month and will increase by approximately 3 % per annum until the 1050 Waltham Lease expires on November 30, 2031.

The Company is obligated to reimburse the Landlord for certain variable costs, including its proportional share of taxes and operating expenses which are not included in the measurement of the 1050 Waltham Lease liability.

5 unchanged sentences

Upon commencement of the sublease, the Company recorded an ROU asset of $ 5.7 million and a lease liability of $ 5.7 million.

The term of the sublease commenced on July 1,

2024 (the "Sublease Commencement Date").

The term of the sublease commenced on July 1, 2024 (the "Sublease Commencement Date").

The Sublease Agreement has a term of 5 years and 3 months , measured from the Sublease Commencement Date.

6 unchanged sentences

YEAR ENDED DECEMBER 31,

2024 2023 2022

Operating lease cost $ 4,231 $ 3,521

Short-term lease cost 281 —

Variable payments 2,047 1,554

1 unchanged sentence

Other information as of December 31, 2025 and 2024 (in thousands):

2024 2023 2022

Cash paid for amounts included in the measurement of lease liabilities

13 unchanged sentences

Total operating lease liabilities $ 16,883

COMMITMENTS AND CONTINGENCIES

Purchase Commitments

4 unchanged sentences

As of December 31, 2025, the Company has committed up to approximately $ 1.6 million under these agreements which are expected to be paid through 2029.

Distribution of Proceeds

The Company plans to distribute 25 % of any net cash proceeds it receives on or before December 31, 2028 from the Takeda Agreement (as defined below) to its stockholders.

Legal Proceedings

22 unchanged sentences

The Company will recognize royalty payments and commercial milestone payments as the associated sales of licensed products are recorded by Hansoh, as they predominantly relate to the license granted with the Hansoh Agreement.

The Company recognized $ 3.0 million as revenue and $ 0.3 million in withholding tax upon the achievement of a development milestone

related to the Hansoh Agreement on its consolidated statement of operations for the year ended December 31, 2024, and a receivable, net of withholding tax, on its consolidated balance sheet as of December 31, 2024.

The Company recognized $ 3.0 million as revenue and $ 0.3 million in withholding tax upon the achievement of a development milestone related to the Hansoh Agreement on its consolidated statement of operations for the year ended December 31, 2024, and a receivable, net of withholding tax, on its consolidated balance sheet as of December 31, 2024.

Payment was received during the year ended December 31, 2025.

No milestones were achieved during the year ended December 31, 2025.

In connection with the Hansoh Agreement, the Company entered into a manufacturing technology transfer agreement (the “Tech Transfer Agreement”) with Hansoh, effective in June 2023.

1 unchanged sentence

Under the Tech Transfer Agreement, Hansoh is obligated to make certain payments to the Company, at the rates set forth in the Tech Transfer Agreement, as manufacturing technology transfer services are provided over the term of the Tech Transfer Agreement.

The Company recognized $ 96.1 thousand and $ 150.8 thousand of service and other revenue for the years ended December 31, 2024 and 2023, respectively.

The Company recognized $ 0.1 million and $ 0.1 million of service and other revenue for the years ended December 31, 2025 and 2024, respectively.

In connection with the Hansoh Agreement, the Company entered into a clinical product supply agreement (the “Supply Agreement”) with Hansoh, effective February 2024.

1 unchanged sentence

As such, the Company assessed the terms of the Supply Agreement and identified a single performance obligation for the Company to supply Hansoh with clinical product supply.

The Company will recognize revenue at a point in time when control transfers, which is deemed to be at the shipping point when the clinical product supply is ready for shipment.

As of December 31, 2024, the Company has commenced shipping clinical product supply under the Supply Agreement.

The Company recognized $ 421.1 thousand of other revenue for the year ended December 31, 2024.

The Company recognizes revenue at a point in time when control transfers, which is deemed to be at the shipping point when the clinical product supply is ready for shipment.

The Company recognized $ 0.1 million and $ 0.4 million of other revenue for the years ended December 31, 2025 and 2024, respectively.

Takeda License Agreement

On December 3, 2024, the Company entered into a license agreement with Takeda, which became effective on January 16, 2025.

Under the terms of the license agreement with Takeda (the "Takeda Agreement"), the Company granted to Takeda the exclusive right to develop, manufacture and commercialize elritercept and certain derivative compounds globally, excluding the territories of mainland China, Hong Kong and Macau (collectively, the "Takeda Territory").

Concurrent with the Takeda Agreement, the Company entered into a separate Transition Services Agreement with Takeda (“TSA”), pursuant to which the Company will provide certain transitional services to Takeda, including, but not limited to, clinical trial and manufacturing services, during the term of the TSA (the "Transition Services").

In January 2026, the initial fifteen month term of the TSA was extended for six months through October 2026.

The Company will receive reimbursement of certain costs incurred by the Company in connection with providing the Transition Services.

Pursuant to the terms of the Takeda Agreement, the Company received a $ 200.0 million upfront payment in February 2025.

In July 2025, a one-time $ 10.0 million development milestone was achieved upon dosing of the first patient in the Phase 3 RENEW clinical trial of elritercept.

In addition to the upfront and development milestone payments, the Company is entitled to receive up to an aggregate of (i) $ 80.0 million upon the achievement of specified development milestones;

(ii) $ 280.0 million upon the achievement of specified commercial milestones;

and (iii) $ 740.0 million upon the achievement of specified sales

If a licensed product is approved for marketing in the Takeda Territory, the Company will be entitled to receive royalty payments based on tiered increments of annual net sales in the Takeda Territory, with such percentage ranging from the low double-digits to high teens, subject to specified potential royalty reductions.

The Company recognized $ 10.0 million as revenue upon the achievement of this development milestone related to the Takeda Agreement on its consolidated statement of operations for the year ended December 31, 2025.

Payment was received during the year ended December 31, 2025.

Takeda’s obligation to pay royalties for a given licensed product in a given country in the Takeda Territory will begin on the date of the first commercial sale for such licensed product in such country and continue until the latest of (i) 10 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, and (iii) expiration of regulatory exclusivity in such region.

The Takeda Agreement will continue in force until the expiration of the royalty term.

Takeda may terminate the Takeda Agreement (i) in its entirety or on a country-by-country basis for convenience, with notice or (ii) if Takeda reasonably determines that the development, manufacture, and commercialization of the licensed compound or licensed product pose a safety or public health risk.

The Company may terminate the Takeda Agreement in its entirety in the event that Takeda or its affiliates bring a patent challenge.

Either party may terminate the Takeda Agreement in its entirety (i) if the other party materially breaches the Takeda Agreement and fails to cure such breach;

or (ii) upon the bankruptcy of the other party.

The Company assessed this arrangement in accordance with ASC 606 and concluded it is a contract with a customer as defined in ASC 606.

As the Company entered into the Takeda Agreement and the TSA concurrently, they were evaluated as a single contract under ASC 606.

The Company identified two performance obligations in the Takeda Agreement and TSA including the license to its intellectual property (“License and Know-How”) and the Transition Services.

The Company determined that the License and Know-How were distinct from the Transition Services as Takeda is able to derive benefit from the License and Know-How upon delivery and the Transition Services do not modify the License and Know-How.

The transaction price at contract inception included fixed consideration consisting of the upfront fee of $ 200.0 million.

The transaction price at inception also included estimated variable consideration of $ 51.4 million relating to the Transition Services revenue that was not constrained.

The transaction price has been allocated to the License and Know-How and the Transition Services on a relative standalone selling price basis.

The Company allocated $ 195.4 million of the transaction price to the License and Know-How, which was recognized at a point in time, when control of the License and Know-How was transferred to Takeda on the effective date of the Takeda Agreement.

The remaining $ 56.1 million of the transaction price was allocated to the Transition Services, which will be recognized over time as services are provided using the input method, based on costs incurred to provide the Transition Services, as the level of costs incurred over-time best reflect the transfer of services.

As of December 31, 2025, the Company recognized $ 38.5 million of service revenue for the Transition Services and such services are substantially complete.

Any remaining services to be performed pursuant to the TSA will be recognized as performed and based on rates agreed to in the TSA.

The $ 10.0 million development milestone was recognized as license revenue upon achievement in July 2025.

The remaining $ 80.0 million of specified development milestones, $ 280.0 million of specified commercial milestones and $ 740.0 million of specified sales milestones were considered constrained at contract inception and excluded from the transaction price since the Company could not conclude it is probable that a significant revenue reversal in the amount recognized will not occur.

The sales-based milestone payments and royalties will be recognized upon occurrence based on the sales and usage-based royalty exception.

The Company will reevaluate the transaction price at the end of each reporting period and will adjust the estimate of the transaction price as uncertain events are resolved or other changes in circumstances occur.

The Company determined that the Takeda Agreement and TSA did not contain a significant financing component.

Accounts receivable were $ 3.6 million as of December 31, 2025 and zero as of December 31, 2024.

Accounts receivable are amounts due from Takeda for the Transition Services.

Revenue recognized from Takeda for the year ended December 31, 2025 and 2024 is as follows (in thousands):

YEAR ENDED DECEMBER 31,

License revenue $ 205,355 $ —

Service revenue 38,509 —

Total revenue from Takeda $ 243,864 $ —

SEGMENT REPORTING

1 unchanged sentence

YEAR ENDED DECEMBER 31,

2024 2023 2022

Total segment revenue $ 244,061 $ 3,550

Cibotercept program expenses ( 29,777 ) ( 20,931 ) ( 12,433 )

KER-065 program expenses ( 16,090 ) ( 5,962 ) ( 6,010 )

Rinvatercept program expenses ( 7,081 ) ( 16,090 )

Elritercept program expenses ( 38,030 ) ( 44,319 )

Cibotercept program expenses ( 12,562 ) ( 29,777 )

Preclinical & development expenses ( 6,847 ) ( 12,008 )

Compensation costs (excluding stock based compensation) ( 45,331 ) ( 48,084 )

Stock-based compensation ( 34,872 ) ( 28,763 ) ( 18,682 )

Depreciation expense ( 1,229 ) ( 815 ) ( 674 )

Other external costs ( 35,095 ) ( 26,708 )

Other segment items 3 ( 12,101 ) ( 13,917 )

Interest expense — — ( 1 )

Dividend income 23,496 14,755 3,644

Income tax provision $ ( 300 ) $ — $ —

Net loss $ ( 187,353 ) $ ( 152,992 ) $ ( 104,679 )

The Company manages its operations as a single reportable segment focused on developing novel therapeutics.

Segment revenue above is 100 percent attributed to the Company’s agreements with Hansoh and is equal to consolidated total revenue.

Net income (loss) $ 87,014 $ ( 187,353 )

The Company manages operations on a consolidated basis as a single reportable and single operating segment focused on developing novel therapeutics.

Segment revenue above is 100 percent attributed to the Company’s agreements with Takeda and Hansoh and is equal to consolidated total revenue.

All revenues are derived in the United States where the agreements originated.

1 unchanged sentence

The significant expense categories outlined above align with the segment-level information that is regularly provided to the CODM to allocate resources, assess performance of the reportable segment, and make key operating decisions.

On a quarterly basis, the CODM reviews financial information, including consolidated net income, clinical expenses by program, other company expenses and a long-range cash flow projection, to make resource decisions for the Company’s programs and review and approve corporate goals.

No segment asset information is provided above as the CODM is focused on how expenses impact ending cash by period and overall cash runway.

Any review of segment assets,

1 Other segment items include professional fees, facilities and office expenses, marketing and travel expenses, research and development incentive income, and other income and expenses, primarily consisting of other taxes and fees and unrealized and realized gains and losses on foreign currency.

which would focus on cash and cash equivalents, would be at the same level as the consolidated balance sheet.

Any review of segment assets, which would focus on cash and cash equivalents, would be at the same level as the consolidated balance sheet.

All long-lived assets are held in the United States.

Subsequent Events

In December 2024, the Company entered into a license agreement with Takeda, which became effective on January 16, 2025.

Under the terms of the license agreement with Takeda (the “Takeda Agreement”), the Company granted to Takeda the exclusive right to develop, manufacture and commercialize elritercept and certain derivative compounds globally, excluding the territories of mainland China, Hong Kong and Macau (the “Takeda Territory”).

Pursuant to the terms of the Takeda Agreement, the Company received a $ 200.0 million upfront payment in February 2025.

In addition to the upfront payment, the Company is entitled to receive up to an aggregate of (i) $ 370.0 million upon the achievement of specified development and commercial milestones and (ii) $ 740.0 million upon the achievement of specified sales milestones.

CORPORATE RESTRUCTURING

In May 2025, the Board formally approved a plan to reduce the overall workforce by approximately 45 % (the "2025 Restructuring").

In connection with the 2025 Restructuring, the Company incurred one-time employee termination benefits, including severance, retention and benefits costs.

The total costs associated with the 2025 Restructuring was $ 3.1 million, including severance, retention and benefits costs, of which $ 2.5 million and $ 0.5 million were recognized as part of total research and development and general and administrative expenses , respectively, during the year ended December 31, 2025.

All costs have been incurred under the Company’s single reportable segment.

The 2025 Restructuring was complete as of December 31, 2025.

Accrued compensation and benefits costs as of December 31, 2025 is as follows (in thousands):

RESTRUCTURING LIABILITY

Balance as of January 1, 2025 $ —

Expenses incurred 3,054

Cash payments ( 2,909 )

Balance as of December 31, 2025 $ 145

3 Other segment items include other expense, income tax provision, bank fees, research and development incentive income, depreciation expense, dividend income and stock-based compensation.

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 9A. Controls and Procedures