On Friday, Piper Sandler adjusted its outlook on Keros Therapeutics (NASDAQ:KROS), significantly reducing the price target from $40.00 to $15.00, while still maintaining an Overweight rating on the company's stock. The revision follows Keros Therapeutics' announcement that it halted dosing in certain arms of its Phase II TROPOS trial for cibotercept, a potential treatment for pulmonary arterial hypertension (PAH). The stock, currently trading at $11.14, has fallen nearly 80% over the past year, according to InvestingPro data, with analyst targets now ranging from $15 to $76.
The decision to stop dosing within the 1.5 mg/kg and placebo arms came after additional pericardial effusion events were observed. This issue had previously prompted the cessation of dosing in the 3.0 and 4.5 mg/kg arms last month. Despite these setbacks, Keros Therapeutics expects to release topline data from the ongoing study in the second quarter of 2025. InvestingPro analysis shows the company maintains a strong liquidity position with a current ratio of 19.03, though it's currently burning through cash reserves.
Analysts at Piper Sandler have removed cibotercept from their discounted cash flow (DCF) analysis due to the recent developments, leading to the lowered price target. Nevertheless, they noted that Keros Therapeutics' shares are trading at a significant discount to cash, which might offer an attractive entry point for investors, especially with the upcoming initial Phase I data for KER-065, another clinical stage asset focusing on hypercholesterolemia and obesity, expected later this quarter. According to InvestingPro, the stock appears undervalued based on its Fair Value calculation, with 14 additional ProTips available to subscribers for deeper analysis.
The TROPOS trial's recent changes and the shift in focus towards KER-065 signify a pivotal moment for Keros Therapeutics as it navigates the challenges in its clinical development pipeline.
The company is conducting further analyses to better understand the pericardial effusion events associated with cibotercept. Piper Sandler's maintained Overweight rating suggests that, despite the hurdles, they see a potential upside in the biopharmaceutical company's stock.
In other recent news, Keros Therapeutics has been the focus of several major developments. The company announced the voluntary termination of its Phase 2 TROPOS study for the treatment of pulmonary arterial hypertension with its drug cibotercept due to observations of pericardial effusions. Despite this, Keros plans to release comprehensive results from the trial in the second quarter of 2025.
In response to these developments, analyst firms have revised their outlooks on the company. Oppenheimer reduced its price target for Keros shares to $23 but maintained its Outperform rating. Scotiabank (TSX:BNS) also maintained a Sector Outperform rating for the company but reduced its price target to $41. Truist Securities maintained a Buy rating and reduced its price target to $43.
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