Will KROS Stock's Restructuring Efforts Reap Rewards for Investors?

Clinical-stage biopharmaceutical company Keros Therapeutics KROS is 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, or TGF-ß, family of proteins.

The company is evaluating KER-065 for the treatment of neuromuscular disorders, with an initial focus on Duchenne muscular dystrophy (DMD).

The company plans to begin a phase II trial in patients with DMD in the first quarter of 2026 and explore additional indications where KER-065’s mechanism of action is believed to have a strong potential for clinical success.

Keros is making efforts to sharpen its strategic focus on KER-065. The company was previously advancing cibotercept for pulmonary arterial hypertension. However, in August 2025, the company discontinued the development of cibotercept following the analysis of all available safety and efficacy data from the phase II TROPOS study.

Following this decision, Keros redirected resources toward KER-065, which management believes presents a more compelling clinical and commercial opportunity.

To facilitate this strategic shift, Keros reduced its workforce by approximately 45%, resulting in a more focused organization of about 85 full-time employees. The restructuring is expected to deliver average annualized cost savings of roughly $17 million.

At the same time, the company announced board and leadership changes in August 2025, aimed at reinforcing a more efficient operating structure and improving execution against its strategic priorities.

As of Sept. 30, 2025, the company had $693.5 million in cash and cash equivalents. After accounting for $375.0 million of excess capital that the board has committed to return to stockholders, management expects the remaining cash to be sufficient to fund operating and capital expenditure needs into the first half of 2028.

Competition in the DMD Space

Developing treatments for DMD is challenging. At present, Sarepta Therapeutics, Inc SRPT markets three FDA-approved exon skipping drugs, EXONDYS 51 (eteplirsen), VYONDYS 53 (golodirsen) and AMONDYS 45 (casimersen), which are phosphorodiamidate morpholino oligomers, or PMOs, approved for the treatment of patients with DMD who are amenable to exon 51, exon 53 and exon 45 skipping.

In 2023, SRPT obtained the FDA’s accelerated approval of its Elevidys, an adeno-associated virus-based gene therapy for the treatment of ambulatory pediatric patients aged 4-5 years with DMD with a confirmed mutation in the DMD gene.

Thereafter, in June 2024, the FDA granted full approval to Elevidys for the treatment of ambulatory individuals aged four years and older, and accelerated approval for the treatment of non-ambulatory individuals aged four years and older. Sarepta has partnered with Roche to market the therapy outside the United States.

Several companies are developing gene therapies for DMD, including Solid Biosciences Inc SLDB, which is evaluating SGT-003 for DMD. During the first half of 2026, SLDB plans to engage in multiple discussions with the FDA to align on the design of a phase III confirmatory study and the evidence required to support a potential accelerated approval pathway for SGT-003, with an update anticipated by mid-2026. In addition, SLDB expects to report data from the phase I/II INSPIRE study on DMD in mid-2026.

KROS’ Price Performance, Valuation and Estimates

Shares of KROS have skyrocketed 77.3% in the past year compared with the industry’s gain of 20.6%.

Going by the price/book ratio, KROS is quite inexpensive. Shares currently trade at 0.83x tangible book value, lower than the industry’s average of 3.61X and its mean of 4.03X.

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased to $2.25 from $2.02 over the past 60 days. The loss per share estimate for 2026 has narrowed to $3.36 from $3.56.

KROS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.




 

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This article originally published on Zacks Investment Research (zacks.com).

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