Breaking Down Keros Therapeutics, Inc. (KROS) Financial Health: Key Insights for Investors

You're looking at Keros Therapeutics, Inc. (KROS) and wondering if the recent financial shifts are a real turning point or just a blip, especially given the volatility baked into clinical-stage biotech. Honestly, the third quarter 2025 results give us a clear, actionable signal: the Takeda Pharmaceuticals U.S.A., Inc. collaboration is fundamentally de-risking the balance sheet, translating directly into a much longer cash runway. The net loss for Q3 2025 narrowed dramatically to just $7.3 million, a massive improvement from the $53.0 million loss a year prior, largely driven by the license agreement revenue that also helped slash Research and Development (R&D) expenses to $19.5 million. Plus, the company's cash and cash equivalents stood at a strong $693.5 million as of September 30, 2025, which, even after the board determined to return $375.0 million of excess capital to stockholders, is expected to fund operations into the first half of 2028. That's a three-year window to execute. Now, let's dig into what this extended runway means for the KER-065 Phase 2 trial and the consensus price targets ranging from $20.80 to $30.22.

Revenue Analysis

You need to understand that Keros Therapeutics, Inc.'s revenue profile for the 2025 fiscal year is not typical; it's almost entirely driven by a major, non-recurring strategic partnership, not product sales. For the first nine months of 2025, the company reported a total revenue of $243.7 million, a massive shift from prior periods, which is what you need to focus on.

The primary revenue source is collaboration revenue, specifically from the licensing agreement with Takeda Pharmaceuticals U.S.A., Inc. (Takeda). This is a one-time event that fundamentally changed the balance sheet, so don't expect this level of revenue to be sustainable without new deals or product commercialization. The total revenue for the nine months ended September 30, 2025, breaks down almost entirely into this collaboration stream.

Here's the quick math on where the $243.7 million came from, which is a critical breakdown for any investor:

• Upfront License Payment: $200.0 million from the Takeda deal for elritercept (KER-050).
• Milestone Payment: $10.0 million recognized after the first patient was dosed in the Phase 3 RENEW trial.
• Service and Other Revenue: The remainder, including revenue from transition services related to the Takeda partnership.

This is a clinical-stage biopharmaceutical company, so revenue is inherently lumpy. The Q3 2025 revenue alone was $14.26 million, which represents a staggering year-over-year quarterly growth rate of 3585.6% compared to Q3 2024's $0.39 million. That's a huge number, but honestly, it just shows how low the revenue base was before the Takeda infusion. The nine-month revenue of $243.7 million compares to just $0.5 million in the same period a year ago, which is the real story here. The revenue is not from selling a drug; it's from monetizing a pipeline asset.

The significant change in the revenue stream is the transition from a nearly zero-revenue profile-typical for a company focused purely on research and development (R&D)-to one flush with cash from a major licensing deal. This deal has allowed Keros Therapeutics, Inc. to extend its financial runway into the first half of 2028, even after committing to return $375.0 million of excess capital to shareholders. This strategic pivot de-risks the development of their core remaining asset, KER-065, by insulating it from near-term capital market pressures. The future revenue stream is now tied to subsequent milestones from Takeda and the eventual commercialization of KER-065, so revenue visibility is limited outside of these collaboration payments. For more on the long-term plan, you should review the Mission Statement, Vision, & Core Values of Keros Therapeutics, Inc. (KROS).

Here is a quick snapshot of the key revenue segments from the Q3 2025 report:

What this estimate hides is the one-time nature of the initial $200.0 million upfront payment recognized earlier in the year. The Q3 breakdown is a better view of the continuing collaboration activities, but the annual results will be dominated by that large, non-recurring licensing fee. Your next step should be to model the probability and timing of future Takeda milestones to get a defintely more realistic view of 2026 revenue.

Profitability Metrics

You need to understand one thing about Keros Therapeutics, Inc. (KROS): their profitability is not driven by product sales; it's driven by collaboration milestones. The numbers for the first three quarters of 2025 show a dramatic, but volatile, swing to profitability, which is typical for a clinical-stage biotech that hits a major licensing deal.

For the first nine months of the 2025 fiscal year (Q1-Q3), Keros Therapeutics, Inc. (KROS) reported cumulative revenue of approximately $243.46 million, largely due to the Takeda Pharmaceuticals U.S.A., Inc. license agreement. This translated into a cumulative net income of about $110.5 million, a massive reversal from prior-year losses. Here's the quick math on the key margins:

• Gross Profit Margin: Approximately 99.9% (Q1-Q3 2025)
• Operating Profit Margin: Approximately 39.7% (Q1-Q3 2025)
• Net Profit Margin: Approximately 45.4% (Q1-Q3 2025)

A nearly 100% Gross Profit Margin is defintely a red flag if you expect a traditional business, but for a biotech, it simply means the revenue recorded is almost entirely license fees or milestones, with essentially zero Cost of Goods Sold (COGS). This is a one-time revenue event, not an indicator of sustainable, product-based profitability.

Profitability Trend and Volatility

The trend in 2025 is the most important story. Keros Therapeutics, Inc. (KROS) saw a massive spike in Q1 2025, reporting a net income of $148.5 million on $211.2 million in revenue, which gave them a 70% Net Margin. But that margin quickly evaporated as the one-time revenue was recognized. By Q3 2025, the company was back to a net loss of $7.3 million, despite a significant beat on analyst expectations.

To be fair, the Q3 2025 net loss of $7.3 million was a huge improvement from the Q3 2024 net loss of $53.0 million. This is a clinical-stage company; losses are the norm. The key is how efficiently they manage those losses.

Operational Efficiency and Industry Context

The real operational efficiency win in 2025 is the shift in Research and Development (R&D) costs. In Q3 2025, R&D expenses dropped sharply to $19.5 million, down from $49.2 million in Q3 2024. This wasn't a cost-cutting measure; it was the transfer of elritercept R&D costs to their partner, Takeda. That's a massive positive for the cash runway.

Comparing Keros Therapeutics, Inc. (KROS) to the broader US Biotechnology industry, which is expected to see a 6.3% revenue growth in 2025, you have to remember most clinical-stage biotechs operate at a negative net margin. KROS's ability to generate a positive cumulative net income of $110.5 million through the first three quarters of 2025 puts it in a rare, though temporary, position of profitability. The money is now in the bank, and cash and cash equivalents totaled $693.5 million as of September 30, 2025.

Your next step is to look past the income statement to the balance sheet, specifically the cash runway, to see how long that capital will fund operations. You can read more about this in our full analysis: Breaking Down Keros Therapeutics, Inc. (KROS) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You want to know how Keros Therapeutics, Inc. (KROS) funds its operations, and the short answer is: almost entirely through equity. This is a clinical-stage biotech company, and its balance sheet reflects the sector's preference for cash and equity over debt, especially given the long, high-risk development timelines.

As of the second quarter of 2025, Keros Therapeutics, Inc.'s capital structure is remarkably conservative. The company's total debt stood at approximately $17.95 million USD as of June 2025, which is a near-zero figure when compared to its equity base.

Here's the quick math on their leverage, or how much debt they use to finance assets:

• Total Debt (June 2025): $17.95 million USD
• Total Shareholders' Equity (Approx. Q3 2025): ~$703.6 million
• Debt-to-Equity Ratio (D/E): 0.0254

A Debt-to-Equity (D/E) ratio of 0.0254 means that for every dollar of shareholder equity, the company has only about 2.5 cents of debt. To put this in perspective, the average D/E ratio for the US Biotechnology industry is around 0.17, though some broader industry metrics place it higher at 1.377. Keros Therapeutics, Inc. is operating with minimal financial leverage, which is defintely a sign of an 'EXCELLENT' financial health score.

The small amount of total debt is primarily composed of short-term liabilities, like operating lease obligations and accrued expenses, rather than long-term bank loans or bonds. In fact, their long-term debt to capital ratio is essentially 0.00%.

This preference for equity funding is clear in their recent capital actions. In November 2025, the company announced a massive $375.0 million capital return plan to shareholders, which included a cash tender offer to repurchase up to $194.4 million of its common stock. When a company is sitting on a cash reserve of $693.5 million (as of September 30, 2025) and is repurchasing shares instead of issuing debt, it tells you they have ample liquidity and are returning excess capital to stockholders. They are funding growth and pipeline development with cash and equity, not debt, which substantially lowers their financial risk profile. You can read more about this in our full analysis: Breaking Down Keros Therapeutics, Inc. (KROS) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if Keros Therapeutics, Inc. (KROS) has the cash to keep its clinical programs running, and the short answer is a resounding yes. Their liquidity position is defintely exceptional, driven by a massive cash reserve and a significant licensing deal that has shifted their cash flow profile.

Assessing Keros Therapeutics, Inc. (KROS)'s Liquidity

The most recent data confirms Keros Therapeutics, Inc. (KROS) is sitting on a mountain of easily accessible capital. Their current ratio, which measures the ability to cover short-term debts with short-term assets, stands at an extraordinary 29.86. For context, anything above 2.0 is usually considered strong. This tells you they have nearly 30 times more current assets than current liabilities.

The quick ratio (or acid-test ratio), which strips out less-liquid assets like inventory, is almost identical at 29.02. This is a clinical-stage biotech company, so inventory is minimal anyway, but this ratio confirms that cash and equivalents alone can cover their immediate obligations many times over. This is a very clean balance sheet.

• Current Ratio: 29.86 (Exceptional liquidity)
• Quick Ratio: 29.02 (Immediate solvency confirmed)

Working Capital Trends and Cash Flow Overview

The trend in working capital is overwhelmingly positive. As of September 30, 2025, Keros Therapeutics, Inc. (KROS) held $693.5 million in cash and cash equivalents. This is up significantly from the end of 2024. The company has a clear liquidity runway, projecting that even after returning a substantial $375.0 million of excess capital to stockholders, they can fund operations and capital expenditures into the first half of 2028. That's a three-year cash cushion, which is gold in the volatile biotech space.

Here's the quick math on the cash flow statement trends for the last twelve months (LTM) leading up to late 2025, showing where the cash is coming from and going:

The positive Operating Cash Flow of $88.79 million over the last twelve months is a crucial turning point. For a clinical-stage company, seeing this number in the black is rare and signals that the revenue from the Takeda Pharmaceuticals U.S.A., Inc. license agreement is effectively covering, or at least significantly offsetting, their substantial research and development expenses. This is a huge de-risking factor for investors.

Potential Liquidity Concerns or Strengths

The primary strength is the sheer size of the cash balance and the projected runway into 2028. This removes the near-term risk of dilutive equity financing (selling more stock to raise cash), which is a common problem for biotechs. The only real liquidity-related action to watch is the execution of the $375.0 million capital return program, which is a financing cash outflow. While it reduces the cash balance, it's a deliberate, shareholder-friendly move that still leaves them with an exceptionally long runway.

The liquidity is excellent, but remember, the core value still rests on successful clinical trial data for candidates like KER-065 and elritercept. Cash only buys time for the science to work. If you want a deeper dive into the valuation and strategy, you can find more here: Breaking Down Keros Therapeutics, Inc. (KROS) Financial Health: Key Insights for Investors.

Next step: Analyst team should model the burn rate against the remaining cash post-capital return to stress-test the 2028 runway projection by Friday.

Valuation Analysis

You are looking at Keros Therapeutics, Inc. (KROS) and asking the core question: is it overvalued or defintely undervalued? The answer is complex, as is typical for a clinical-stage biopharmaceutical company where valuation hinges on pipeline success, not current profits.

On a traditional earnings basis, the stock's valuation metrics are skewed. The trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio as of November 2025 sits at a high 45.7, which usually signals extreme growth expectations. But here's the quick math: the consensus full-year 2025 Earnings Per Share (EPS) estimate is a loss of ($4.74), meaning the forward P/E is negative. This just tells us the company is in a heavy investment phase, not that it's overvalued in the traditional sense.

Still, other metrics offer a different view. The Price-to-Book (P/B) ratio is approximately 0.8x. A P/B below 1.0 can suggest a stock is undervalued relative to its balance sheet assets, but for a biotech, this mostly reflects cash and tangible assets, not the future value of its drug pipeline (KER-050, KER-012, etc.). The Enterprise Value-to-EBITDA (EV/EBITDA) ratio is not a meaningful metric here because the company is not yet profitable and has negative EBITDA, a common situation for companies focused on research and development. It's simply not applicable.

The stock price trend over the last year shows extreme volatility, which is a near-term risk you must consider. The 52-week range runs from a low of $9.12 to a high of $72.37. The stock's closing price around November 21, 2025, was approximately $17.40, which is much closer to the low end of that range. The average stock price over the last 52 weeks was $16.75. This volatility is the cost of entry for a binary biotech play.

As for investor returns outside of capital gains, Keros Therapeutics, Inc. is a growth-focused company and does not pay a dividend. Consequently, the dividend yield and payout ratio are 0.00% and not applicable, respectively.

Wall Street analysts are split, but the overall sentiment leans positive, mapping a clear opportunity. The most recent consensus rating from 14 firms is a Hold, but six of those firms rate it a Buy. The average 12-month price target is $30.11, suggesting a potential upside of over 70% from the current price. This consensus target is a strong signal that the market sees significant value in the pipeline that is not captured by current earnings.

• Current Price (Nov 2025): $17.40
• 52-Week High: $72.37
• Analyst Consensus Target: $30.11

For a deeper dive into the company's operational health, you can read more here: Breaking Down Keros Therapeutics, Inc. (KROS) Financial Health: Key Insights for Investors.

Risk Factors

You've seen the strong cash position and the narrowed net loss, but a clinical-stage biotech like Keros Therapeutics, Inc. (KROS) is a high-stakes game. The risks are concentrated and binary, meaning success or failure often hinges on just a few key events. Honestly, the biggest near-term risk has already materialized, but its fallout still shapes the company's future.

The core challenge is that Keros is a clinical-stage company with a limited operating history, and they are still reporting a net loss, even if it narrowed to $7.3 million in the third quarter of 2025. This means they are not yet generating sustainable product revenue. Here's the quick math: while their cash and cash equivalents of $693.5 million as of September 30, 2025, give them a runway into the first half of 2028, that cash is a finite resource funding all their development efforts.

• Clinical Failure is Real: The development of cibotercept (KER-012) for pulmonary arterial hypertension (PAH) was completely discontinued in May 2025. This was a major setback, driven by dose-dependent safety issues-specifically, pericardial effusions-observed in the Phase 2 TROPOS trial. One key pipeline asset is now off the board.
• Pipeline Concentration: The company's value is now heavily dependent on two remaining lead candidates: elritercept (KER-050) and KER-065. Elritercept is in Phase 3 for myelodysplastic syndromes (MDS) under their partner, Takeda Pharmaceuticals U.S.A., Inc. (Takeda), and KER-065 is slated for a Phase 2 start in Q1 2026. Any delay in Takeda's execution or a negative regulatory interaction for KER-065 will directly impact KROS's valuation.

The good news is that Keros has implemented a clear mitigation strategy by leveraging the Takeda partnership. This collaboration has shifted a significant portion of the financial burden for elritercept's development, which is why Research and Development (R&D) expenses dropped to $19.5 million in Q3 2025, a decrease of $29.7 million from the same period in 2024. This transition has dramatically improved their cash burn rate, plus they returned $375.0 million in excess capital to shareholders, concluding a tender offer for approximately $194.4 million in November 2025. That's a strong signal of financial discipline.

For a full picture of the company's financial standing, including a deeper dive into their valuation, you should check out the full post: Breaking Down Keros Therapeutics, Inc. (KROS) Financial Health: Key Insights for Investors.

Still, external risks are always present in biotech. You need to watch for competition from third parties developing products for similar uses and any changes to the regulatory environment that could slow down trial approvals or market access. Also, the company's ability to maintain and protect its intellectual property (IP) is defintely critical to long-term value, as is the performance of their third-party manufacturers and clinical trial organizations.

Here is a summary of the operational and financial risks highlighted in their recent filings:

The action item is clear: monitor Takeda's progress with elritercept and the regulatory feedback for the KER-065 Phase 2 start in early 2026. Those are the next major catalysts that will either validate the current strategy or force another pivot.

Growth Opportunities

You're looking at Keros Therapeutics, Inc. (KROS) and seeing a clinical-stage biotech that just had a major strategic shift, so the future isn't about today's sales-it's about pipeline execution and partnership payouts. The direct takeaway is that Keros Therapeutics, Inc.'s growth hinges on advancing its lead in-house candidate, KER-065, and realizing the substantial financial benefits from its Takeda collaboration, which provides a long runway for R&D.

The company's financial health is underpinned by a significant cash reserve, totaling $693.5 million as of September 30, 2025. This cash position, plus the strategic decision to return $375.0 million in excess capital to stockholders, gives them a runway into the first half of 2028, even after the capital return. That's a long time in biotech to fund operations without needing to raise more money.

Here's the quick math on the 2025 fiscal year: The consensus revenue forecast for the full year is around $235.61 million, which is largely driven by license revenue. Q3 2025 revenue was $14.26 million, and the net loss narrowed significantly to just $7.3 million, compared to a $53.0 million loss a year earlier. That narrowing loss is defintely a positive operational signal.

• KER-065: Primary in-house growth driver, targeting neuromuscular diseases like Duchenne Muscular Dystrophy.
• Takeda Deal: Provides non-dilutive capital and validation for elritercept.
• Cash Runway: Funds operations into the first half of 2028, post-capital return.

Product Innovations and Pipeline Catalysts

The core growth drivers are Keros Therapeutics, Inc.'s product innovations, which focus on the Transforming Growth Factor-beta (TGF-β) family of proteins-a unique scientific angle. The pipeline is now streamlined, which is a good thing for focus. The lead asset, elritercept (KER-050), is now in the hands of Takeda Pharmaceuticals U.S.A., Inc. (Takeda), which plans to advance it to Phase 3 in first-line Myelodysplastic Syndromes (MDS). This transition reduced Keros' R&D expenses to $19.5 million in Q3 2025, a sharp drop from $49.2 million in Q3 2024, freeing up resources.

The company's primary internal focus is now KER-065, which is on track to start a Phase 2 trial in Duchenne Muscular Dystrophy in Q1 2026. This is the next major clinical milestone and a key catalyst for the stock. While the third candidate, cibotercept (KER-012), had its pulmonary arterial hypertension trial halted in early 2025, the company still plans to present the top-line data, so we'll get closure there.

Strategic Partnerships and Financial Projections

The partnership with Takeda is a massive financial and strategic advantage. It brought in a $200 million upfront payment and includes up to $1.11 billion in potential development, commercial, and sales milestone payments, plus tiered royalties. This is how a clinical-stage biotech can generate revenue without a commercial product yet. For 2025, analyst earnings estimates are all over the map, which is common for a biotech in transition. The consensus is a loss of ($4.74) per share, but one analyst has a high-end estimate of a $2.15 profit per share, reflecting the potential impact of license revenue recognition.

The company's competitive advantage lies in its deep expertise in TGF-β signaling, which targets a range of disorders with high unmet medical needs like anemia, thrombocytopenia, and neuromuscular diseases. That scientific moat, plus the Takeda validation, positions them well. You can get a deeper dive into the shareholder base and why they are buying in Exploring Keros Therapeutics, Inc. (KROS) Investor Profile: Who's Buying and Why?

For your next step, track the progress of Takeda's Phase 3 trial for elritercept and the initiation of the KER-065 Phase 2 trial in Q1 2026. Those are the two events that will change the value equation.