ADAR1 Critiques Keros Therapeutics' Director Election and Capital Return Strategy

On June 9, 2025, ADAR1 Capital Management, the foremost shareholder of Keros Therapeutics (Nasdaq: KROS), publicly addressed the disconcerting outcomes of the company's 2025 Annual Meeting of Stockholders. In their statement, ADAR1 highlighted significant disapproval from shareholders regarding the current board's decisions related to capital allocation and overall stewardship.

ADAR1 emphasized their prior intent to withhold votes from directors Mary Ann Gray and Alpna Seth, who faced substantial resistance from shareholders. With only 34% and 37% of voting shares respectively choosing to elect Gray and Seth, the figures reflect a growing discontent among shareholders towards the management's approach. ADAR1 stated that the election results reveal a glaring loss of confidence in Keros' board, urging immediate reassessment of their strategies.

In a notable move, Keros Therapeutics recently decided to halt development on cibotercept for pulmonary arterial hypertension, signaling a shift in their operational focus. Although ADAR1 welcomed this development and the accompanying reduction in headcount, they contended that these actions came too late and were not enough to instigate real change. The crux of their critique lies in the company's decision to retain a significant portion of its cash reserves despite a limited clinical pipeline, with CEO Jasbir Seehra admitting that the funds held exceed the current developmental needs.

In their assessment, ADAR1 challenged the rationale behind retaining such capital and criticized the board for offering vague proposals regarding capital returns. They advocated for the company to commit to returning an additional $100 million to investors via a special dividend before the end of the third quarter of 2025. ADAR1 further urged the establishment of mechanisms to enable shareholders to benefit directly from the potential cash flow from Keros' partnership with Takeda—suggestions they believe are crucial for rebuilding trust with investors.

Despite their criticisms, ADAR1 expressed optimism about Keros’ potential but reinforced the need for fresh perspectives and stricter fiscal discipline in the boardroom to realize that potential. They noted that if the current management persists with ineffective strategies, ADAR1 is prepared to hold them accountable, including nominating new directors for the upcoming 2026 Annual Meeting.

In conclusion, ADAR1 insists that the board of Keros must address the expressed concerns of their shareholders decisively. The investment manager reaffirmed its commitment to ensuring that the voices of investors are acknowledged and advocated for a more responsible approach to capital management. As they continue to engage with the company and their fellow shareholders, ADAR1 aims to reshape the trajectory of Keros Therapeutics while maximizing investor value.

About ADAR1 Capital Management

ADAR1 Capital Management, established in Austin, Texas, specializes in public and private equity investments in the life sciences and biotechnology sectors. Founded by Dr. Daniel Schneeberger in October 2018, the firm boasts over 20 years of combined experience in healthcare consulting, institutional investments, and executive leadership. Supported by a skilled team, ADAR1 is committed to navigating the complexities of biopharmaceutical investing while seeking to enhance shareholder value.