Keros and Stealth BioTherapeutics take a step back as drug programs hit major roadblocks.

Keros Shuts Down Key Trial

The biotech world is going through a rough patch, and 2025 isn’t bringing much relief yet. Keros Therapeutics, a small Massachusetts-based company, just announced it will cut nearly half of its workforce.

This came after the company decided to stop developing its lead drug, cibotercept, for a rare lung condition called pulmonary arterial hypertension.

Keros problems started late last year when some unexpected side effects caused patients to develop fluid buildup around the heart, a condition known as pericardial effusion.

At first, the company paused higher doses of the drug, hoping it would stop the side effects. But a month later, the same issue showed up again. That was a signal for Keros to halt the study completely.

Now the company’s decided to lay off about 45 percent of its team, leaving it with 85 employees. These cuts are expected to save them around 17 million dollars a year.

The company’s stock had already dropped by more than 70 percent when the safety news first came out in December, from $66 to $14.

Stealth Drops People, Not Hope

Another small biotech, Stealth BioTherapeutics, is also making job cuts. The company is letting go of about 30 percent of its workforce. According to its LinkedIn page, this could affect around 28 people.

Stealth says it’s making these changes so it can focus on getting FDA approval for its drug elamipretide, which is meant to treat a rare disease called Barth syndrome.

The FDA rejected the drug in early 2024 but offered a potential path for fast-track approval. The company now plans to resubmit the application. This comes after years of back-and-forth with the FDA and a split panel vote. Some supported the drug, but others were unsure about the data.

Barth syndrome mostly affects the heart and muscles. Stealth has been working on elamipretide for years, but getting it approved hasn’t been easy.

Bumpy Road Ahead For Biotech

Both companies are making tough calls. Cutting jobs isn’t easy, but for small biotechs like Keros and Stealth, one failed trial or a delay can shake everything up. This shows just how quickly things can change in the biotech world.

Many more companies might be facing the same kind of pressure in 2025.