Lexington, MA Biotech Pushes DMD Phase 2 Start to 3Q26 on Regulatory Hurdles
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Disclosures for Wedbush, Keros Therapeutics Inc., May 19, 2026

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On May 19, 2026, analyst Yun Zhong of Wedbush Securities reiterated a Neutral rating and US$16.00 price target on Keros Therapeutics Inc. (KROS:NASDAQ), implying meaningful upside from the recent closing price of US$10.16, following the company's 1Q26 earnings release and an update indicating that the Phase 2 study initiation in Duchenne muscular dystrophy (DMD) has been pushed from 2Q26 to 3Q26 due to regulatory delays.

The 1Q26 press release disclosed that partner Takeda Pharmaceutical Co. Ltd. (TAK:NYSE; 4502:TYO) plans to advance elritercept into a Phase 3 study in patients with anemia associated with myelofibrosis (MF). On Keros's wholly-owned program rinvatercept (KER-065), the 10-Q indicated that Phase 2 initiation in DMD will now occur in 3Q26 versus prior guidance of 2Q26, while plans to discuss the design of a new Phase 2 study in amyotrophic lateral sclerosis (ALS) with regulators in 2H26 remain unchanged. Keros ended 1Q26 with total cash of US$281.5 million, and management reiterated guidance of a cash runway into 1H28.

Regarding the DMD delay, management communicated to Wedbush that the holdup is primarily tied to operational and regulatory hurdles, noting that the regulatory delays to date have been "procedural in nature, and are not specific to either KROS or rinvatercept." Management confirmed that progress is being made across all critical workstreams and that engagement with KOLs and physicians in the DMD community is ongoing. As a result of those interactions, Keros is incorporating changes to the study design intended to reduce patient burden, enhance recruitment, and facilitate study execution. Based on current plans, management believes that a 3Q26 study initiation will allow Keros to present initial data from the study in 1H27.

On the elritercept program, Zhong highlighted that the Takeda partnership announced in December 2024 includes a USUS$200 million upfront payment booked by Keros in 1Q25, total milestone payments of over USUS$1.1 billion, and tiered royalties ranging from low double digits to high-teens percentages of elritercept net revenues. A randomized, double-blind, placebo-controlled Phase 3 study in patients with very low, low, or intermediate risk myelodysplastic syndrome (MDS) requiring regular blood transfusions is ongoing (NCT06499285), with estimated completion in May 2028. A new open-label, randomized Phase 3 study comparing elritercept with epoetin alfa in the same patient population (NCT07422480) appears to have been initiated recently. In MF, an open-label Phase 2 study evaluating elritercept alone or in combination with ruxolitinib (NCT05037760) is ongoing.

Zhong's valuation is based on elritercept for anemia associated with MDS/MF, using discounted earnings, DCF, and clinical NPV models to derive the US$16 price target. Key risks to the rating and target include clinical risks tied to ongoing Phase 3 development, regulatory risks related to FDA and EMA approvals, manufacturing risks associated with reliance on third-party contract manufacturers, commercial execution risks at Takeda, competition risks from approved therapies including luspatercept with a similar mechanism of action, and financial risks given the need for additional capital to support KER-065 and other pipeline candidates.

Zhong maintained the Neutral rating even though the US$16 price target, based on the partnered elritercept program alone, already represents meaningful upside from current levels. Wedbush views rinvatercept as the main value driver for Keros and believes that "the confirmation of a regulatory pathway forward will be needed for us to have stronger conviction in the long-term potential of the stock."