(Reuters) -Keros Therapeutics has adopted a poison pill defense to fend off hostile takeovers, after some investors indicated a desire to influence the control of the drug developer.
The poison pill, known as a limited-duration stockholder rights plan, was intended to protect the integrity of a strategic review process, which includes a possible sale of the company, it said on Thursday.
The defense strategy would dilute anyone amassing a stake in the company of more than 10%, or 15% in the case of passive investors, by selling more shares to other shareholders at a discount.
Shares of Lexington, Massachusetts-based Keros jumped 21.5% to $12.55 in premarket trading — still a fraction of their peak price of nearly $80 in 2021.
Its shares plummeted late last year after the company paused dosing in a mid-stage study of its blood pressure drug following reports of safety issue. It subsequently halted the trial.
Keros said on Thursday it would consider a range of strategic alternatives, including a sale of the company or other business combination transaction, continued investment in its pipeline, and or return of excess capital to stockholders.
The company said a number of its shareholders had rapidly accumulated its common stock. This included an individual investor who has informed Keros that it holds 11.2% of the company’s outstanding common stock.
The drug developer did not disclose the identity of the shareholders and did not immediately respond to a Reuters request for additional information.
(Reporting by Manas Mishra in Bengaluru; Editing by Shilpi Majumdar)
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