Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39264 | |
Entity Registrant Name | KEROS THERAPEUTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-1173868 | |
Entity Address, Address Line One | 1050 Waltham Street, | |
Entity Address, Address Line Two | Suite 302 | |
Entity Address, City or Town | Lexington, | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02421 | |
City Area Code | 617 | |
Local Phone Number | 314-6297 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | KROS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 29,584,173 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001664710 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 351,429 | $ 279,048 |
Prepaid expenses and other current assets | 10,793 | 6,719 |
Total current assets | 362,222 | 285,767 |
Operating lease right-of-use assets | 16,364 | 15,548 |
Property and equipment, net | 2,933 | 2,021 |
Restricted cash | 1,327 | 1,327 |
Other long-term assets | 1,590 | 2,118 |
TOTAL ASSETS | 384,436 | 306,781 |
CURRENT LIABILITIES: | ||
Accounts payable | 4,682 | 3,339 |
Current portion of operating lease liabilities | 0 | 455 |
Accrued expenses and other current liabilities | 10,776 | 12,753 |
Total current liabilities | 15,458 | 16,547 |
Operating lease liabilities, net of current portion | 13,994 | 12,811 |
Total liabilities | 29,452 | 29,358 |
STOCKHOLDERS' EQUITY: | ||
Common stock, par value of $0.0001 per share; 200,000,000 shares authorized as of March 31, 2023 and December 31, 2022, respectively; 29,548,649 and 27,543,453 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 3 | 2 |
Additional paid-in capital | 619,219 | 505,855 |
Accumulated deficit | (264,238) | (228,434) |
Total stockholders' equity | 354,984 | 277,423 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 384,436 | $ 306,781 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 29,548,649 | 27,543,453 |
Common stock, shares outstanding (in shares) | 29,548,649 | 27,543,453 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING EXPENSES: | ||
Research and development | $ (31,091) | $ (18,078) |
General and administrative | (7,778) | (6,048) |
Total operating expenses | (38,869) | (24,126) |
LOSS FROM OPERATIONS | (38,869) | (24,126) |
OTHER INCOME (EXPENSE), NET | ||
Interest expense, net | 0 | (1) |
Other income (expense), net | 3,065 | (59) |
Total other income (expense), net | 3,065 | (60) |
Net loss | (35,804) | (24,186) |
Net loss attributable to common stockholders—basic | (35,804) | (24,186) |
Net loss attributable to common stockholders— diluted | $ (35,804) | $ (24,186) |
Net loss per share attributable to common stockholders - basic (in USD per share) | $ (1.26) | $ (1.01) |
Net loss per share attributable to common stockholders - diluted (in USD per share) | $ (1.26) | $ (1.01) |
Weighted-average common stock outstanding - basic (in shares) | 28,369,453 | 23,993,698 |
Weighted-average common stock outstanding - diluted (in shares) | 28,369,453 | 23,993,698 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | At the Market Offering | COMMON STOCK | COMMON STOCK At the Market Offering | ADDITIONAL PAID-IN CAPITAL | ADDITIONAL PAID-IN CAPITAL At the Market Offering | ACCUMULATED DEFICIT |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Ending balance (in shares) | 23,974,834 | ||||||
Ending balance | $ 243,174 | $ 2 | $ 366,927 | $ (123,755) | |||
Beginning balance (in shares) at Dec. 31, 2021 | 23,974,834 | ||||||
Beginning balance at Dec. 31, 2021 | 243,174 | $ 2 | 366,927 | (123,755) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 28,269 | ||||||
Exercise of common stock options | 118 | 118 | |||||
Stock-based compensation | 4,388 | 4,388 | |||||
Net loss | (24,186) | (24,186) | |||||
Ending balance (in shares) | 24,003,103 | ||||||
Ending balance | 223,494 | $ 2 | 371,433 | (147,941) | |||
Ending balance (in shares) | 27,543,453 | ||||||
Ending balance | 277,423 | $ 2 | 505,855 | (228,434) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 27,543,453 | ||||||
Beginning balance at Dec. 31, 2022 | $ 277,423 | $ 2 | 505,855 | (228,434) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock, net of underwriting discounts, commissions and offering costs (in shares) | 1,990,927 | ||||||
Issuance of common stock, net of underwriting discounts, commissions and offering costs | $ 107,308 | $ 1 | $ 107,307 | ||||
Exercise of common stock options (in shares) | 14,269 | 14,269 | |||||
Exercise of common stock options | $ 370 | 370 | |||||
Stock-based compensation | 5,687 | 5,687 | |||||
Net loss | (35,804) | (35,804) | |||||
Ending balance (in shares) | 29,548,649 | ||||||
Ending balance | $ 354,984 | $ 3 | $ 619,219 | $ (264,238) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares | |
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 |
At the Market Offering | |
Issuance costs | $ 1,665 |
Issuance of common stock, net of underwriting discounts, commissions and offering costs | 107,308 |
At the Market Offering | Common stock | |
Issuance of common stock, net of underwriting discounts, commissions and offering costs | $ 1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (35,804) | $ (24,186) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation expense | 167 | 113 | |
Loss on disposal of fixed asset | 4 | 0 | |
Stock-based compensation expense | 5,687 | 4,388 | |
Non-cash lease expense | 522 | 203 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 0 | 18,000 | |
Prepaid expenses and other current assets | (4,074) | 764 | |
Accounts payable | 1,322 | (668) | |
Right-to-use assets and operating lease liabilities | (82) | (402) | |
Accrued expenses and other current liabilities | (1,977) | 361 | |
Net cash used in operating activities | (34,235) | (1,427) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (1,062) | (147) | |
Net cash used in investing activities | (1,062) | (147) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock, net of offering cost | 107,308 | 0 | |
Proceeds from exercise of stock options | 370 | 118 | |
Net cash provided by financing activities | 107,678 | 118 | |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 72,381 | (1,456) | |
Cash, cash equivalents and restricted cash at beginning of period | 280,375 | 231,369 | $ 231,369 |
Cash, cash equivalents and restricted cash at end of period | 352,756 | 229,913 | 280,375 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Right-of-use assets obtained in exchange for operating lease obligation | 1,338 | 0 | |
Property and equipment purchases in accounts payable | 21 | 87 | |
Reconciliation of cash, cash equivalents and restricted cash | |||
Cash and cash equivalents | 351,429 | 228,586 | 279,048 |
Restricted cash | 1,327 | 1,327 | |
Total cash, cash equivalents and restricted cash | $ 352,756 | $ 229,913 | $ 280,375 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | NATURE OF BUSINESS AND BASIS OF PRESENTATION Keros Therapeutics, Inc. (“Keros” or the “Company”) was incorporated in 2015 as a Delaware corporation. Its principal offices are in Lexington, Massachusetts. The Company is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel treatments for patients suffering from hematological, pulmonary and cardiovascular disorders with high unmet medical need. The Company’s lead protein therapeutic product candidate, KER-050, is an engineered ligand trap comprised of a modified ligand-binding domain of the transforming growth factor-beta (“TGF-ß”) receptor known as activin receptor type IIA that is fused to the portion of the human antibody known as the Fc domain. 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. The Company’s lead small molecule product candidate, KER-047, is designed to selectively and potently inhibit activin receptor-like kinase-2 (“ALK2”), a TGF-ß receptor. KER-047 is being developed for the treatment of functional iron deficiency which is a consequence of elevated ALK2 signaling, including the Company’s initial target, iron-refractory iron deficiency anemia (“IRIDA”). The Company’s third product candidate, KER-012, is designed to bind to and inhibit the signaling of TGF-ß ligands that stimulate smooth muscle hypertrophy and fibrosis, including activin A, activin B and myostatin (GDF8). KER-012 is being developed for the treatment of pulmonary arterial hypertension (“PAH”) and for the treatment of cardiovascular disorders. Since its inception in 2015, the Company has devoted the majority of its resources to business planning, research and development of its product candidates, including conducting clinical trials and preclinical studies, raising capital and recruiting management and technical staff to support these operations. To date, the Company has not generated any revenue from product sales as none of its product candidates have been approved for commercialization. In May 2021, the Company filed a registration statement on Form S-3, which was automatically effective upon filing (the "Shelf Registration Statement"). Pursuant to the Shelf Registration Statement, the Company could issue up to $150.0 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”), and, 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 December 2022, the Company filed a prospectus supplement to the Shelf Registration Statement for the issuance and sale, if any, of up to an additional $250.0 million in common stock in sales deemed to be an “at the market offering,” as defined by the Securities Act. Liquidity and Capital Resources The Company’s condensed 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 existing $351.4 million in cash and cash equivalents will allow the Company to continue its operations for at least the next 12 months. In the absence of a significant source of recurring revenue, the continued viability of the Company beyond that point is dependent on its ability to continue to raise additional capital to finance its operations. If the Company is unable to obtain additional funding, the Company may be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. The accompanying unaudited interim condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 have been prepared by the Company in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and, pursuant to the rules and regulations of Article 10 of Regulation S-X of the Securities Act published by the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes the disclosures are adequate. These unaudited interim condensed consolidated financial statements should be read in |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies The significant accounting policies and estimates used in preparation of the unaudited interim condensed consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Annual Report. Except as detailed below, there have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2023. Risks and Uncertainties Recent trends towards rising inflation may materially affect the Company's business and corresponding financial position and cash flows. Inflationary factors, such as increases in the cost of materials and supplies relating to the Company's clinical trials, interest rates and overhead costs may adversely affect its operating results. Rising interest rates impacting the U.S. economy also 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. Additionally, the general consensus among economists suggests that the Company should expect a higher recession risk to continue over the next year, which, together with the foregoing, could result in further economic uncertainty and volatility in the capital markets in the near term, and could negatively affect the Company's operations. Furthermore, such economic conditions have produced downward pressure on share prices. Although the Company does not believe that inflation has 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 continue to rise) 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 as a result of the ongoing war between Russia and Ukraine, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on the Company's working capital resources. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands): DESCRIPTION MARCH 31, 2023 QUOTED PRICES ACTIVE MARKETS FOR IDENTICAL ASSETS SIGNIFICANT OTHER OBSERVABLE INPUTS SIGNIFICANT OTHER OBSERVABLE INPUTS Assets Money market funds $ 346,660 $ 346,660 $ — $ — Total financial assets $ 346,660 $ 346,660 $ — $ — DESCRIPTION DECEMBER 31, 2022 QUOTED PRICES ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1) SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 3) Assets Money market funds $ 271,734 $ 271,734 $ — $ — Total financial assets $ 271,734 $ 271,734 $ — $ — |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following (in thousands): MARCH 31, DECEMBER 31, Prepaid service contracts $ 8,040 $ 3,319 Prepaid sales tax 92 872 Prepaid rent — 96 Prepaid subscription 847 470 Prepaid insurance 154 941 Interest and dividend receivable 1,145 841 Other 515 180 Total prepaid expenses and other current assets $ 10,793 $ 6,719 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following (in thousands): MARCH 31, DECEMBER 31, Accrued external R&D costs $ 2,136 $ 2,429 Accrued external manufacturing costs 5,179 4,240 Accrued compensation and benefits 2,761 4,811 Accrued tax 50 50 Accrued professional fees 389 523 Other 261 700 Total accrued expenses and other current liabilities $ 10,776 $ 12,753 |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Common Stock | COMMON STOCK As of March 31, 2023, 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 May 3, 2021, the Company entered into a Sales Agreement (the “ATM Sales Agreement”) with SVB Securities LLC (formerly SVB Leerink LLC) (“SVB Securities”), as agent, pursuant to which the Company may offer and sell, from time to time, shares of its common stock through SVB Securities (the "ATM Offering"). On May 3, 2021, the Company filed the Shelf Registration Statement, including a base prospectus and sales agreement prospectus, with the SEC, which became effective immediately upon filing, for the issuance and sale of up to $150.0 million of shares of the Company’s common stock under the ATM Sales Agreement. On December 12, 2022, the Company filed a prospectus supplement to the Shelf Registration Statement for the issuance and sale, if any, of up to an additional $250.0 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. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION 2017 Stock Incentive Plan The Board adopted the 2017 Stock Incentive Plan (the "2017 Plan") in February 2017, and the stockholders approved the 2017 Plan in March 2017. The 2017 Plan was most recently amended in March 2020. As of March 31, 2023, there was an aggregate of 582,831 shares of common stock issuable upon the exercise of outstanding options under the 2017 Plan. Any options or awards outstanding under the 2017 Plan remain outstanding and effective. 2020 Equity Incentive Plan In April 2020, the 2020 Equity Incentive Plan (the "2020 Plan") became effective, and, as a result, no further awards will be made under the 2017 Plan. The 2020 Plan provides for the grant of stock options qualifying as incentive stock options ("ISOs"), to employees and for the grant of nonstatutory stock options ("NSOs"), restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to employees, consultants and directors. The 2020 Plan also provides for the grant of performance cash awards to employees, consultants and directors. Any previously granted awards under the 2017 Plan will remain outstanding in accordance with their respective terms. Under the 2020 Plan, there is an annual increase on January 1 of each year from January 1, 2021 continuing through January 1, 2030, by 4.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board. On January 1, 2023, the Company increased the number of shares available for future grant under the 2020 Plan by 1,101,738 shares. As of March 31, 2023, there was an aggregate of 3,704,733 shares of common stock issuable upon the exercise of outstanding options under the 2020 Plan. Additionally, there were an aggregate of 1,305,451 shares reserved for future issuance under the 2020 Plan, including shares forfeited from the 2017 Plan. Stock Options A summary of option activity during the three months ended March 31, 2023 is as follows (in thousands except share and per share data): NUMBER OF OPTIONS WEIGHTED-AVERAGE EXERCISE PRICE Outstanding as of December 31, 2022 3,533,169 $ 30.26 Granted 826,895 54.36 Exercised (14,269) 25.87 Cancelled or Forfeited (55,138) 41.80 Expired (3,093) $ 48.84 Outstanding as of March 31, 2023 4,287,564 $ 34.76 Options exercisable as of March 31, 2023 2,022,137 $ 22.29 The weighted-average grant date fair value price per share of options granted during the three months ended March 31, 2023 and 2022 was $39.02 and $33.64, respectively. As of March 31, 2023, there was $69.4 million of unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 2.87 years. The aggregate intrinsic value of the stock options outstanding and stock options exercisable was $58.5 million and $48.2 million for the three months ended March 31, 2023, respectively. The aggregate intrinsic value of stock options exercised was $0.4 million and $1.3 million during the three months ended March 31, 2023 and 2022, respectively. Stock-Based Compensation Expense Total stock-based compensation expense recorded for employees, directors and non-employees during the three months ended March 31, 2023 and 2022 was as follows (in thousands): THREE MONTHS ENDED MARCH 31, 2023 2022 Research and development $ 2,658 $ 1,863 General and administrative 3,029 2,525 Total stock-based compensation expense $ 5,687 $ 4,388 |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Share | LOSS PER SHARE The Company’s potentially dilutive securities, which includes stock options, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following from the computation of diluted net loss per share attributable to common stockholders at March 31, 2023 and 2022 because including them would have had an anti-dilutive effect: MARCH 31, MARCH 31, Options to purchase common stock 4,287,564 3,373,110 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Operating Leases Operating lease liabilities are measured based on the present value of future lease payments over the expected remaining lease term. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and are initially equal to their corresponding lease liabilities, subject to certain adjustments such as prepaid lease payments, initial direct costs and lease incentives. When the rate implicit in the lease is not readily determinable, the Company uses an incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate represents the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The Company estimates this rate based on prevailing market conditions, comparable company and credit analyses, the impact of collateralization, and the term of each of the Company’s lease agreements. On September 7, 2021, the Company entered into an indenture of lease (as amended, 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, inclusive of lease payments made prior to commencement of the 1050 Waltham Lease, and a lease liability of $12.9 million on the consolidated balance sheets as of December 31, 2022. 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 initially fixed at $0.2 million per month in total for the Premises. Under the 1050 Waltham Lease, base rent 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. In connection with its entry into the 1050 Waltham Lease, the Company has provided the Landlord a letter of credit in the amount of approximately $1.2 million, which is recognized as restricted cash within other assets on the consolidated balance sheets. The Company has the option to extend the term of the 1050 Waltham Lease for a period of an additional 5 years. As of March 31, 2023, the Company has no reasonable certainty that this option to extend will be exercised. Total lease costs were $0.8 million and $0.2 million for the three months ended March 31, 2023 and 2022, respectively. Cash paid for operating leases was $0.5 million and $0.2 million for the three months ended March 31, 2023 and 2022, respectively. The weighted average remaining lease term is 8.7 years at March 31, 2023. The weighted average discount rate is 10.34%. Maturities of operating lease liabilities at March 31, 2023 are as follows (in thousands): MATURITY OF LEASE LIABILITY 2023 1,248 2024 2,449 2025 2,523 2026 2,598 2027 2,676 2028 2,757 2029 2,839 2030 2,925 2031 1,988 Total lease payments 22,003 Less: imputed interest (8,009) Total operating lease liabilities $ 13,994 Included in the consolidated balance sheet: Current portion of lease liabilities — Lease liabilities 13,994 Total operating lease liabilities $ 13,994 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS Hansoh License Agreement On December 12, 2021, the Company entered into a license agreement (the “Hansoh Agreement”) with Hansoh (Shanghai) Healthtech Co., Ltd. ("Hansoh"). Under the Hansoh Agreement, the Company granted to Hansoh the exclusive right to develop, manufacture and commercialize KER-050 and licensed products containing KER-050 within the territories of mainland China, Hong Kong and Macau (the “Territory”). In connection with the Hansoh Agreement, Hansoh will purchase clinical trial supply of KER-050 from the Company, and the parties will also negotiate in good faith to enter into an agreement for commercial supply prior to any anticipated commercialization in the Territory. In addition, Hansoh will use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize licensed products in any region in the Territory. Pursuant to the Hansoh Agreement, the Company received a one-time, net $18.0 million upfront license payment and will also be eligible to receive up to an aggregate of (i) $26.5 million upon the achievement of specified development milestones and (ii) $144.0 million upon the achievement of specified net sales thresholds for all licensed products in the Territory. If a licensed product is approved for marketing in the Territory, the Company will be entitled to receive royalty payments based on a tiered percentage of annual net sales in each region within the Territory, with such percentage ranging from the low double digit to high teens, subject to specified potential royalty reductions. Hansoh’s obligation to pay royalties for a given licensed product in a given region in the Territory will begin on the date of the first commercial sale for such licensed product in such region and continue until the latest of (i) 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 or joint patents, and (iii) expiration of regulatory exclusivity in such region. During the royalty term, neither party will directly nor indirectly commercialize a competing product in the Territory. The Hansoh Agreement will continue in force on a region-by-region basis until the expiration of the royalty term. Hansoh may terminate the Agreement in its entirety for convenience, with notice. The Company may terminate the Hansoh Agreement in its entirety for a patent challenge brought by Hansoh or its affiliates or their sublicensees. Either party may terminate the Hansoh Agreement in its entirety (i) if the other party materially breaches the Hansoh Agreement and fails to cure such breach or (ii) upon the bankruptcy of the other party. The Company evaluated the Hansoh Agreement and concluded that it was subject to ASC 606, as the Company viewed the Hansoh Agreement as a contract with a customer. As such, the Company assessed the terms of the Hansoh Agreement and identified a single performance obligation for the Company to provide Hansoh an exclusive license to develop, manufacture and commercialize KER-050 and licensed products containing KER-050 in the Territory, including the underlying know-how related to such licenses. All other promised goods/services were deemed immaterial in the context of the Hansoh Agreement. Under the Hansoh Agreement, the Company recorded a one-time, upfront license fee of net $18.0 million from Hansoh during the year ended December 31, 2021. The Company received the payment of $18.0 million during the three months ended March 31, 2022. The Company will recognize development milestone payments as revenue at the point in time when it is determined that it is probable such milestones will be achieved as all performance obligations will have been satisfied at the point which a milestone might occur (i.e., Hansoh will have assumed all responsibility for the activities under the Hansoh Agreement). 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. No milestones have been received as of March 31, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | The significant accounting policies and estimates used in preparation of the unaudited interim condensed consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included in the Annual Report. Except as detailed below, there have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2023. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands): DESCRIPTION MARCH 31, 2023 QUOTED PRICES ACTIVE MARKETS FOR IDENTICAL ASSETS SIGNIFICANT OTHER OBSERVABLE INPUTS SIGNIFICANT OTHER OBSERVABLE INPUTS Assets Money market funds $ 346,660 $ 346,660 $ — $ — Total financial assets $ 346,660 $ 346,660 $ — $ — DESCRIPTION DECEMBER 31, 2022 QUOTED PRICES ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1) SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 3) Assets Money market funds $ 271,734 $ 271,734 $ — $ — Total financial assets $ 271,734 $ 271,734 $ — $ — |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): MARCH 31, DECEMBER 31, Prepaid service contracts $ 8,040 $ 3,319 Prepaid sales tax 92 872 Prepaid rent — 96 Prepaid subscription 847 470 Prepaid insurance 154 941 Interest and dividend receivable 1,145 841 Other 515 180 Total prepaid expenses and other current assets $ 10,793 $ 6,719 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): MARCH 31, DECEMBER 31, Accrued external R&D costs $ 2,136 $ 2,429 Accrued external manufacturing costs 5,179 4,240 Accrued compensation and benefits 2,761 4,811 Accrued tax 50 50 Accrued professional fees 389 523 Other 261 700 Total accrued expenses and other current liabilities $ 10,776 $ 12,753 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Option Activity | A summary of option activity during the three months ended March 31, 2023 is as follows (in thousands except share and per share data): NUMBER OF OPTIONS WEIGHTED-AVERAGE EXERCISE PRICE Outstanding as of December 31, 2022 3,533,169 $ 30.26 Granted 826,895 54.36 Exercised (14,269) 25.87 Cancelled or Forfeited (55,138) 41.80 Expired (3,093) $ 48.84 Outstanding as of March 31, 2023 4,287,564 $ 34.76 Options exercisable as of March 31, 2023 2,022,137 $ 22.29 |
Schedule of Stock-based Compensation Expense | Total stock-based compensation expense recorded for employees, directors and non-employees during the three months ended March 31, 2023 and 2022 was as follows (in thousands): THREE MONTHS ENDED MARCH 31, 2023 2022 Research and development $ 2,658 $ 1,863 General and administrative 3,029 2,525 Total stock-based compensation expense $ 5,687 $ 4,388 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded From Computation of Diluted Net Loss Per Share | The Company excluded the following from the computation of diluted net loss per share attributable to common stockholders at March 31, 2023 and 2022 because including them would have had an anti-dilutive effect: MARCH 31, MARCH 31, Options to purchase common stock 4,287,564 3,373,110 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturity of Lease Liability | Maturities of operating lease liabilities at March 31, 2023 are as follows (in thousands): MATURITY OF LEASE LIABILITY 2023 1,248 2024 2,449 2025 2,523 2026 2,598 2027 2,676 2028 2,757 2029 2,839 2030 2,925 2031 1,988 Total lease payments 22,003 Less: imputed interest (8,009) Total operating lease liabilities $ 13,994 Included in the consolidated balance sheet: Current portion of lease liabilities — Lease liabilities 13,994 Total operating lease liabilities $ 13,994 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Details) - USD ($) | 1 Months Ended | ||||
May 03, 2021 | Dec. 31, 2022 | May 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Class of Stock [Line Items] | |||||
Cash and cash equivalents | $ 279,048,000 | $ 351,429,000 | $ 228,586,000 | ||
At the Market Offering | |||||
Class of Stock [Line Items] | |||||
Stock sales agreement, maximum amount authorized to be issued | $ 150,000,000 | $ 250,000,000 | $ 150,000,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Money market funds | $ 346,660 | $ 271,734 |
Total financial assets | 346,660 | 271,734 |
QUOTED PRICES ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1) | ||
Assets | ||
Money market funds | 346,660 | 271,734 |
Total financial assets | 346,660 | 271,734 |
SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) | ||
Assets | ||
Money market funds | 0 | 0 |
Total financial assets | 0 | 0 |
SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 3) | ||
Assets | ||
Money market funds | 0 | 0 |
Total financial assets | $ 0 | $ 0 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid service contracts | $ 8,040 | $ 3,319 |
Prepaid sales tax | 92 | 872 |
Prepaid rent | 0 | 96 |
Prepaid subscription | 847 | 470 |
Prepaid insurance | 154 | 941 |
Interest and dividend receivable | 1,145 | 841 |
Other | 515 | 180 |
Total prepaid expenses and other current assets | $ 10,793 | $ 6,719 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued external R&D costs | $ 2,136 | $ 2,429 |
Accrued external manufacturing costs | 5,179 | 4,240 |
Accrued compensation and benefits | 2,761 | 4,811 |
Accrued tax | 50 | 50 |
Accrued professional fees | 389 | 523 |
Other | 261 | 700 |
Total accrued expenses and other current liabilities | $ 10,776 | $ 12,753 |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 12, 2022 | May 03, 2021 | Dec. 31, 2022 | May 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Proceeds from issuance of common stock, net of offering cost | $ 107,308,000 | $ 0 | |||||
At the Market Offering | |||||||
Class of Stock [Line Items] | |||||||
Stock sales agreement, maximum amount authorized to be issued | $ 150,000,000 | $ 250,000,000 | $ 150,000,000 | ||||
Stock sales agreement, additional (in shares) | 250,000,000 | ||||||
At the Market Offering | Common stock | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from initial public offering, net of discounts and offering costs | $ 109,000,000 | $ 121,400,000 | |||||
Sale of stock, number of shares issued in transaction (in shares) | 1,990,927 | 3,410,384 | |||||
Sale of stock, price per share (in USD per share) | $ 35.60 | $ 54.74 | $ 35.60 | ||||
Proceeds from issuance of common stock, net of offering cost | $ 107,300,000 | $ 119,400,000 | |||||
Sales agent commissions | 1,600,000 | 1,800,000 | |||||
Issuance costs | 100,000 | $ 200,000 | |||||
Sale of stock, remaining authorized amount | $ 141,000,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Jan. 01, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted in period (in shares) | 826,895 | ||
Weighted-average grant date fair value of options granted during the period (in dollars per share) | $ 39.02 | $ 33.64 | |
Unrecognized stock-based compensation expense related to unvested stock options | $ 69.4 | ||
Options outstanding, value | 58.5 | ||
Options exercisable, value | 48.2 | ||
Aggregate intrinsic value of stock options exercised | $ 1.3 | $ 0.4 | |
Employee Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested award, period for recognition | 2 years 10 months 13 days | ||
2017 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 582,831 | ||
2020 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual percentage increase in shares authorized | 4% | ||
Number of additional shares authorized (in shares) | 1,101,738 | ||
Options granted in period (in shares) | 3,704,733 | ||
Number of shares available for future grants (in shares) | 1,305,451 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
NUMBER OF OPTIONS | |
Outstanding as of beginning of period (in shares) | shares | 3,533,169 |
Granted (in shares) | shares | 826,895 |
Exercised (in shares) | shares | (14,269) |
Cancelled or Forfeited (in shares) | shares | (55,138) |
Expired (in shares) | shares | (3,093) |
Outstanding as of end of period (in shares) | shares | 4,287,564 |
Exercisable (in shares) | shares | 2,022,137 |
WEIGHTED-AVERAGE EXERCISE PRICE | |
Outstanding as of beginning of period (in USD per share) | $ / shares | $ 30.26 |
Granted (in USD per share) | $ / shares | 54.36 |
Exercised (in USD per share) | $ / shares | 25.87 |
Cancelled or Forfeited (in USD per share) | $ / shares | 41.80 |
Expired (in USD per share) | $ / shares | 48.84 |
Outstanding as of end of period (in USD per share) | $ / shares | 34.76 |
Exercisable (in USD per share) | $ / shares | $ 22.29 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 5,687 | $ 4,388 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 2,658 | 1,863 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 3,029 | $ 2,525 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,287,564 | 3,373,110 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 USD ($) ft² | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) ft² | Sep. 07, 2021 ft² | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease right-of-use assets | $ (16,364) | $ (15,548) | ||
Operating lease liability | $ 13,994 | |||
Renewal term | 5 years | |||
Total lease cost | $ 800 | $ 200 | ||
Right-to-use assets and operating lease liabilities | $ 500 | $ 200 | ||
Weighted average remaining lease term | 8 years 8 months 12 days | |||
Weighted average discount rate | 10.34% | |||
Waltham Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Area of rental space (sqft) | ft² | 3,671 | 31,991 | 35,662 | |
Operating lease right-of-use assets | $ (15,400) | |||
Operating lease liability | $ 12,900 | |||
Lessee, operating lease, monthly base rent | $ 200 | |||
Percentage of annual increase in operating lease | 3% | |||
Letters of credit outstanding, amount | $ 1,200 | |||
Waltham Lease Phase A | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease right-of-use assets | (500) | |||
Operating lease liability | 500 | |||
Waltham Lease Phase B | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease right-of-use assets | (1,900) | |||
Operating lease liability | $ 1,400 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Maturity of Lease Liability (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
MATURITY OF LEASE LIABILITY | ||
2023 | $ 1,248 | |
2024 | 2,449 | |
2025 | 2,523 | |
2026 | 2,598 | |
2027 | 2,676 | |
2028 | 2,757 | |
2029 | 2,839 | |
2030 | 2,925 | |
2031 | 1,988 | |
Total lease payments | 22,003 | |
Less: imputed interest | (8,009) | |
Total operating lease liabilities | 13,994 | |
Included in the consolidated balance sheet: | ||
Current portion of lease liabilities | 0 | $ 455 |
Lease liabilities | 13,994 | $ 12,811 |
Total operating lease liabilities | $ 13,994 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
The General Hospital Corporation | License Agreement | ||
Disaggregation of Revenue [Line Items] | ||
Expiration Period | 10 years | |
License | Hansoh Shanghai Healthtech Co Ltd | ||
Disaggregation of Revenue [Line Items] | ||
Research collaboration revenue | $ 18 | |
Revenue, remaining performance obligation, development milestones, variable consideration | $ 26.5 | |
Revenue, remaining performance obligation, sales milestones, variable consideration amount | $ 144 |