Leading Independent Proxy Advisory Firm Glass Lewis Recommends Stockholders Vote “FOR” All of Keros’ Director Nominees
Keros Therapeutics, Inc. (“Keros”, the “Company” or “we”) (Nasdaq: KROS), a clinical-stage biopharmaceutical company focused on developing and commercializing novel therapeutics to treat a wide range of patients with disorders that are linked to dysfunctional signaling of the transforming growth factor-beta (“TGF-ß”) family of proteins, today announced that leading independent proxy advisory firm Glass Lewis & Co. (“Glass Lewis”) recommended that Keros stockholders vote “FOR” all three of the Company’s highly qualified director nominees in connection with its Annual Meeting of Stockholders (the “Annual Meeting”) scheduled for June 4, 2025.
Keros issued the following statement in connection with Glass Lewis’ report:
We are pleased that Glass Lewis recognizes the value that our directors bring to the Board and understands that the Board and management team’s actions taken to date to maximize stockholder value are reasonable and measured. Our Board is intentionally built, comprised of experienced individuals, many of whom directly represent stockholders, and will continue to focus on evaluating alternatives in the best interests of the Company and all stockholders. We continue to believe that the most constructive course of action for stockholders at this pivotal stage in our strategic alternatives review is to remain focused on effectively running the company and a comprehensive process rather than being sidetracked by a self-serving and value-destructive campaign.
Glass Lewis stated in its May 27, 2025 report1:
“On the other hand, we note that the magnitude of the Company’s share price collapse appears to stem primarily from inherent clinical development risk rather than board-level mismanagement. In particular, the setback in the TROPOS clinical trial – and the subsequent 73% one-day share price decline – reflects the volatile and often binary nature of clinical-stage biotech investing, especially in cases where a company’s valuation is heavily reliant on a lead product candidate that has not yet been clinically de-risked. To date, and to the best of our knowledge, no credible evidence has emerged to suggest the board mismanaged the trial or disregarded known safety signals.”“ADAR1 has not presented compelling evidence that either directors Gray or Seth played a disproportionate role in the Company’s missteps or failed to fulfill their core duties as independent directors. In the absence of such evidence – and considering the board’s recent initiation of a strategic review process and its continued willingness to engage with shareholders – we do not believe there is a sufficiently strong accountability rationale to warrant withholding support from either nominee at this time.”“Although ADAR1’s arguments for increased capital discipline may resonate with shareholders, we believe the board’s decision to retain flexibility through a formal strategic review – led by a special committee of independent, disinterested directors – represents a reasonable and measured approach at this time. While a substantial capital return may ultimately be warranted, we believe this is better determined in the context of a completed and comprehensive evaluation of strategic alternatives.”“While ADAR1 has characterized the Rights Plan as an entrenchment device, the plan’s adoption appears to us to be reasonably timed and narrowly scoped, and does not reflect the more aggressive features often seen in contested situations.”“Although shareholder rights plans are generally viewed with caution by investors and Glass Lewis, particularly in the context of public shareholder dissent, the facts of this case do not, in our view, suggest that the board acted in bad faith or sought to preempt legitimate shareholder participation.”“In our view, the board’s recent initiation of a strategic review, led by an independent special committee, represents a constructive step in addressing shareholder concerns.”
Keros issued the following statement in response to ADAR1 Capital Management, LLC (“ADAR1”)’s misleading claims:
In a recent press release, hedge fund ADAR1 makes claims that the recent voting recommendation by Institutional Shareholder Services (“ISS”) in connection with the election of directors at Keros’ upcoming Annual Meeting constitutes an endorsement of ADAR1’s aggressive campaign to oppose two highly qualified members of the Company’s Board of Directors (the “Board”). This notion is false and misleading.
To be clear, the ISS recommendation is based on their standard voting guidelines for “uncontested” director elections and was not reviewed by its special situations team that typically evaluates these types of campaigns. And unlike Glass Lewis, the report does not address any of ADAR1’s misleading allegations or arguments.
ADAR1’s aggressive campaign to oppose two of the Board’s highly qualified directors demonstrates a troubling disregard for Board diversity and critical expertise at a pivotal time for the Company.
The Keros Board comprises nine directors, all of whom are independent except for the Company’s CEO. This includes four representatives of Keros stockholders, two of whom are representatives of Pontifax, the Company’s second largest stockholder. Collectively, the Board represents diverse perspectives and brings significant experience across the biotechnology industry, including drug development and commercialization, capital allocation, M&A and business development. In short, Keros has the right Board to oversee the ongoing strategic review process to maximize stockholder value and execute on the ultimate outcome of that process.
The Board remains focused on successfully completing the strategic alternatives review process, which remains ongoing. We have always made, and will continue to make, decisions that we believe are in the best interests of the Company and ALL stockholders
We strongly urge you to vote “FOR” each of Keros’ three director nominees, Mary Ann Gray, Ph.D., Ran Nussbaum and Alpna Seth, Ph.D.