Keros Therapeutics, a US-based musculoskeletal disorder treatment developer backed by pharmaceutical services provider Medison Pharma and healthcare provider Partners Healthcare, floated yesterday in a $96m initial public offering.
The company increased the number of shares in the offering from 5 million to 6 million and priced them at the top of the IPO’s $14 to $16 range. It was valued at approximately $306m in the IPO.
Keros is developing drugs to treat musculoskeletal and haematological disorders with a high unmet medical need.
Approximately $8.3m of the proceeds from the offering will fund phase 2 clinical trials for the company’s lead candidate, KER-050, which is intended to treat low blood cell counts for patients suffering from bone marrow cancer and a musculoskeletal disorder known as FOP.
An additional $13.1 million will support the completion of a phase 1 trial for KER-047 and the initiation of a phase 2 trial while $5.3m will go to preparing a third candidate, KER-012, for a phase 1 trial expected to begin in late 2021.
Foresite Capital, OrbiMed, Cowen Healthcare Investments and Venrock co-led a $56m series C round for Keros last month that included Medison Pharma. Partners Healthcare’s Partners Innovation Fund, Pontifax, Arkin Bio Ventures and Global Health Sciences Fund.
Partners Innovation Fund, Medison Pharma, Arkin Bio Ventures, Global Health Sciences Fund and GF Securities had previously supplied $23m in funding for the company in January 2019 following $11m from unnamed investors in 2017.
The stake held by Partners Innovation Fund was cut from 8.7% to 6% in the offering. Pontifax remains the largest Keros shareholder, with a 22.4% stake post-IPO, followed by Arkin Bio (9.9%), Foresite Capital (6.8%) and OrbiMed (5.8%).
The company’s shares opened at $20.85 on their first day of trading on the Nasdaq Global Market yesterday and closed at $20.08.
Joint book-running managers Jefferies, SVB Leerink and Piper Sandler, and co-manager HC. Wainwright have the 30-day option to buy a further 900,000 shares which would boost the size of the offering to just over $110m.
