Company: KROS
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001664710-25-000046
Chunk: 170

Company: Keros Therapeutics, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Item 8
Chunk 170
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 Know-How”) and the Transition Services. The Company determined that the License and Know-How were distinct from the Transition Services as Takeda is able to derive benefit from the License and Know-How upon delivery and the Transition Services do not modify the License and Know-How.The transaction price at inception included fixed consideration consisting of the upfront fee of $200.0 million. It also included variable consideration of $51.4 million relating to the estimated reimbursement of Transition Services costs to be incurred that were not constrained. The amount of variable consideration was estimated using the expected value method. The remaining $90.0 million of specified development milestones, $280.0 million of specified commercial milestones and $740.0 million of specified sales milestones were considered constrained at contract inception and excluded from the transaction price since the Company could not conclude it is probable that a significant revenue reversal in the amount recognized will not occur. The sales-based milestone payments and royalties will be recognized upon occurrence based on the sales and usage-based royalty exception. The Company will reevaluate the transaction price at the end of each reporting period and will adjust the estimate of the transaction price as uncertain events are resolved or other changes in circumstances occur. The Company determined that the Takeda Agreement and TSA did not contain a significant financing component. The transaction price has been allocated to the License and Know-How and the Transition Services on a relative standalone selling price basis. The Company allocated $195.4 million of the transaction price to the License and Know-How and $56.1 million to the Transition Services.Revenue allocated to the License and Know-How was recognized at a point in time, when control of the License and Know-How was transferred to Takeda. Revenue is recognized when, or as, the Company satisfies its performance obligations by transferring the promised services to Takeda. Revenue is recognized over time using the input method for the Transition Services, based on costs incurred to provide the services as the level of costs incurred over-time best reflect the transfer of services. Accounts receivable were $14.5 million as of March 31, 2025 and zero as of December 31, 2024. Accounts receivable are amounts due from Takeda for the Transition Services.A contract liability is an obligation to transfer goods or services for which consideration has been received or is due to a customer. The Company's contract liabilities as of March 31, 2025 and December 31, 2024 consisted of unearned revenue, current of $3.3 million and