Karyopharm Therapeutics Inc

Previous wording

As of March 31, 2024, we had an accumulated deficit of $1.5 billion. We had net losses of $37.4 million and $34.1 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

As of June 30, 2024, we had an accumulated deficit of $1.5 billion. We had net losses of $13.6 million and $66.8 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

In May 2024, we entered into a series of transactions to limit our aggregate indebtedness, extend the maturity of certain of our indebtedness and provide us with additional working capital. Pursuant to these transactions, we borrowed $100.0 million from existing lenders and certain entities managed by HealthCare Royalty Management, LLC (“HCRx”) under a new, senior secured term loan facility and used a portion of the proceeds of that loan to repay obligations under our existing financing arrangement with HCRx pursuant to an amendment that made other changes to our existing financing arrangement with HCRx. We also entered into privately negotiated agreements to exchange $148.0 million aggregate principal amount of our existing unsecured convertible senior notes for (i) $111.0 million aggregate principal amount of our new secured convertible senior notes and (ii) warrants to purchase up to 46.0 million shares of our common stock. In addition, HCRx agreed to purchase $5.0 million aggregate principal amount of our new secured convertible senior notes through satisfaction of $5.0 million of our existing obligations to HCRx. Please refer to Note 10 “Long-Term Obligations”, to the condensed consolidated financial statements contained within Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details of these refinancing transactions.

Current wording

In May 2024, we entered into a series of transactions (the “Refinancing Transactions”) to limit our aggregate indebtedness, extend the maturity of certain of our indebtedness and provide us with additional working capital. Pursuant to these transactions, we borrowed $100.0 million from existing lenders and certain entities managed by HealthCare Royalty Management, LLC (“HCRx”) under a new, senior secured term loan facility and used a portion of the proceeds of that loan to repay obligations under our existing financing arrangement with HCRx pursuant to an amendment that made other changes to our existing financing arrangement with HCRx. We also exchanged, pursuant to privately negotiated agreements, an aggregate principal amount of $148.0 million of our existing 3.00% unsecured convertible senior notes for (i) $111.0 million aggregate principal amount of our new 6.00% secured convertible senior notes and (ii) warrants to purchase up to 45.8 million shares of our common stock. In addition, HCRx purchased $5.0 million aggregate principal amount of our new 6.00% secured convertible senior notes through satisfaction of $5.0 million of our existing obligations to HCRx. Please refer to Note 10 “Long-Term Obligations”, to the condensed consolidated financial statements contained within Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details of these refinancing transactions.

Previous wording

There have been no changes to the critical accounting estimates we identified in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report.

Current wording

There have been no changes to the critical accounting estimates we identified in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report except for our estimated value of the gain on extinguishment of debt, the embedded derivatives, and the liability classified common stock warrants related to the Refinancing Transactions, which were valued using methodologies that incorporate certain unobservable inputs including (i) the volatility of our common stock price and (ii) our estimated credit spread.

Previous wording

To date, our only source of product revenue has been from the U.S. sales of XPOVIO. Net product revenue for the three months ended March 31, 2024 decreased as compared to the three months ended March 31, 2023, primarily due to decreased demand as a result of increasing competition and higher gross-to-net driven by increased Medicare/Medicaid rebates and 340B discounts.

Current wording

To date, our only source of product revenue has been from the U.S. sales of XPOVIO. Net product revenue for the three and six months ended June 30, 2024 decreased as compared to the three and six months ended June 30, 2023, primarily due to decreased demand as a result of increasing competition and higher gross-to-net driven by increased Medicare/Medicaid rebates and 340B discounts.

Previous wording

We expect product revenue to increase slightly in the second quarter of 2024 as compared to the first quarter of 2024 driven largely by gross-to-net favorability.

Current wording

We expect product revenue to slightly increase in the second half of 2024 as compared to the first half of 2024.

Previous wording

License and other revenue for the three months ended March 31, 2024 decreased by $3.3 million as compared to the three months ended March 31, 2023 primarily due to $3.5 million of non-recurring license-related revenue recognized from Menarini during the three months ended March 31, 2023, partially offset by a $1.0 million increase in revenue for the reimbursement of development-related expenses from Menarini due to a corresponding increase in the underlying expenses during the three months ended March 31, 2024.

Current wording

License and other revenue for the three months ended June 30, 2024 increased by $5.6 million as compared to the three months ended June 30, 2023 primarily due to $4.0 million of license-related revenue recognized from Menarini during the three months ended June 30, 2024 and a $2.3 million increase in revenue for the reimbursement of development-related expenses from Menarini due to an increase in the corresponding expenses.

Previous wording

We expect license and other revenue to increase in the second quarter of 2024 as compared to the first quarter of 2024 due to milestone achievements and increased royalties expected from our partners.

Current wording

We expect license and other revenue to decrease slightly in the second half of 2024 as compared to the first half of 2024 due to a decrease in the reimbursement of development-related expenses from Menarini partially offset by an increase in expected milestone revenue.

Previous wording

Cost of sales were consistent for the three months ended March 31, 2024 and 2023. We expect cost of sales to continue to remain relatively consistent in the second quarter of 2024 as compared to the first quarter of 2024.

Current wording

Cost of sales were consistent for the three and six months ended June 30, 2024 and 2023. We expect cost of sales to remain relatively consistent in the second half of 2024 as compared to the first half of 2024.

Previous wording

At any one time, we have a number of ongoing clinical development programs that we are conducting independently or in collaboration with third parties. We track our external clinical trial and related costs on a program-by-program basis. Our major programs include our three core clinical development programs in myelofibrosis, multiple myeloma and endometrial cancer. To the extent that external clinical trial and related costs are not attributable to a major program, they are included in “Other programs” and to the extent external clinical trial and related costs cannot be allocated to a specific program, they are included in “Non-program specific clinical trial and related costs.” We also have unallocated research and development costs, which we do not track on a program-by-program basis. These costs represent costs that are incurred across multiple programs or to support our general research and development operations.

Current wording

At any one time, we have a number of ongoing clinical development programs that we are conducting independently or in collaboration with third parties. We track our external clinical trial and related costs on a program-by-program basis. Our major programs include our three core clinical development programs in myelofibrosis, endometrial cancer and multiple myeloma. To the extent that external clinical trial and related costs are not attributable to a major program, they are included in “Other programs” and to the extent external clinical trial and related costs cannot be allocated to a specific program, they are included in “Non-program specific clinical trial and related costs.” We also have unallocated research and development costs, which we do not track on a program-by-program basis. These costs represent costs that are incurred across multiple programs or to support our general research and development operations.

Previous wording

Research and development expenses for the three months ended March 31, 2024 increased by $3.1 million as compared to the three months ended March 31, 2023. The $5.3 million increase in clinical trial and related costs was primarily due to increased activity in each of our three ongoing pivotal Phase 3 trials, including increased purchases of comparator drugs. These increases were partially offset by decreases of clinical trial and related costs in other programs, primarily KPT-1200, our IL-12 product that we sold to Libo Pharma Corp. in December 2023, and eltanexor.

Current wording

Research and development expenses for the three months ended June 30, 2024 increased by $6.9 million as compared to the three months ended June 30, 2023. The $7.4 million increase in clinical trial and related costs was primarily due to increased activity in our ongoing pivotal Phase 3 trials in myelofibrosis and multiple myeloma, including increased purchases of comparator drugs. These increases were partially offset by decreases of clinical trial and related costs in other programs, primarily KPT-1200, our IL-12 compound that we sold to Libo Pharma Corp. in December 2023.

Previous wording

We expect our research and development expenses to increase slightly in the second quarter of 2024 as compared to the first quarter of 2024 as we continue to progress our three pivotal Phase 3 trials.

Current wording

We expect our research and development expenses to be relatively consistent in the second half of 2024 as compared to the first half of 2024.

Previous wording

Selling, general and administrative expenses for the three months ended March 31, 2024 decreased by $6.4 million as compared to the three months ended March 31, 2023. The decrease in personnel costs of $2.9 million was primarily due to a reduction in headcount and contractors. The $3.6 million decrease in consulting, professional and other costs was primarily due to our ongoing cost reduction initiatives.

Current wording

Selling, general and administrative expenses for the six months ended June 30, 2024 decreased by $9.8 million as compared to the six months ended June 30, 2023. The decrease in personnel costs of $5.5 million was primarily due to a reduction in headcount and contractors. The $4.4 million decrease in consulting, professional and other costs was primarily due to our cost reduction initiatives.

Previous wording

We expect our selling, general and administrative expenses to remain relatively consistent in the second quarter of 2024 as compared to the first quarter of 2024.

Current wording

We expect our selling, general and administrative expenses to remain relatively consistent in the second half of 2024 as compared to the first half of 2024.

Previous wording

Other Expense, net (in thousands, except for percentages)

Current wording

Other Income (Expense), net (in thousands, except for percentages)

Previous wording

Other expense, net for the three months ended March 31, 2024 increased by $0.4 million, as compared to the three months ended March 31, 2023, primarily due to a $0.7 million decrease in interest income resulting from lower investment balances during the three months ended March 31, 2024.

Current wording

Other income (expense), net for the three months ended June 30, 2024 increased by $54.9 million, as compared to the three months ended June 30, 2023 and for the six months ended June 30, 2024 increased by $54.6 million as compared to the six months ended June 30, 2023.

Previous wording

To date, we have financed our operations primarily through a combination of product revenue sales, private placements of our common stock, proceeds from public offerings of our common stock, proceeds from the issuance of convertible debt, proceeds pursuant to the deferred royalty obligation, proceeds from a term loan, and cash generated from our business development activities. As of March 31, 2024, our principal source of liquidity was $148.6 million of cash, cash equivalents and investments. We have had recurring losses since inception and incurred a loss of $37.4 million for the three months ended March 31, 2024. We expect that our cash, cash equivalents and investments at March 31, 2024 will be sufficient to fund our current operating plans and capital expenditure requirements for at least twelve months from the date of issuance of the financial statements contained in this Quarterly Report on Form 10-Q.

Current wording

We have historically financed our operations primarily through a combination of proceeds from (i) product revenue sales, (ii) public and private placements of equity securities, (iii) the issuance of convertible debt, (iv) a term loan, (v) our deferred royalty obligation, (vi) at the market offerings and (vii) business development activities. As of June 30, 2024, our principal source of liquidity was $152.1 million of cash, cash equivalents and investments. We have had recurring losses since inception and incurred a loss of $13.6 million for the six months ended June 30, 2024. We expect that our cash, cash equivalents and investments at June 30, 2024 will be sufficient to fund our current operating plans and capital expenditure requirements for at least twelve months from the date of issuance of the financial statements contained in this Quarterly Report on Form 10-Q.

Previous wording

Operating activities. The $24.8 million increase in net cash used in operating activities for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily driven by the collection of $22.4 million of milestone payments from Antengene in the first quarter of 2023.

Current wording

Operating activities. The $37.6 million increase in net cash used in operating activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily driven by working capital changes, including the collection of $22.4 million of milestone payments from Antengene in the first quarter of 2023.

Previous wording

Investing activities. The $54.3 million decrease in net cash used in investing activities for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was driven by a $25.8 million increase in proceeds from the sales and maturities of investments and a $28.7 million decrease in purchases of investments.

Current wording

Investing activities. The $84.4 million increase in net cash provided by investing activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was driven by a $60.0 million decrease in purchases of investments and a $24.6 million increase in proceeds from the maturities of investments.

Previous wording

Pursuant to the Revenue Interest Agreement, HCRx paid us $75.0 million, less certain transaction expenses, on September 27, 2019, and pursuant to the Amended Revenue Interest Agreement, HCRx paid us $60.0 million, less certain transaction expenses, on June 23, 2021. For additional information on the Amended Revenue Interest Agreement, see Note 10, “Long-Term Obligations”, to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q.

Current wording

On September 14, 2019, we and certain of our subsidiaries entered into the Revenue Interest Financing Agreement with HealthCare Royalty Partners III, L.P. and HealthCare Royalty Partners IV, L.P. (“HCRx”), which was subsequently amended on June 23, 2021, August 1, 2023 and May 8, 2024 (the “Revenue Interest Agreement” and, as amended, the “Amended Revenue Interest Agreement”), pursuant to which, HCRx paid us a total of $135.0 million, less certain transaction expenses. For additional information on the Amended Revenue Interest Agreement, see Note 10, “Long-Term Obligations”, to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q.

Previous wording

On February 17, 2023, we entered into an Open Market Sale Agreement (the “2023 Open Market Sale Agreement”) with Jefferies LLC, as agent (“Jefferies”). Under the 2023 Open Market Sale Agreement, we may issue and sell shares of our common stock having an aggregate offering price of up to $100.0 million (the “Shares”) from time to time through Jefferies. We did not sell any Shares under the 2023 Open Market Sales Agreement during the three months ended March 31, 2024 and 2023. As of March 31, 2024, $100.0 million of Shares was available for issuance and sale under the 2023 Open Market Sale Agreement.

Current wording

On February 17, 2023, we entered into an Open Market Sale Agreement (the “2023 Open Market Sale Agreement”) with Jefferies LLC, as agent (“Jefferies”). Under the 2023 Open Market Sale Agreement, we may issue and sell shares of our common stock having an aggregate offering price of up to $100.0 million (the “Shares”) from time to time through Jefferies. We did not sell any Shares under the 2023 Open Market Sales Agreement during the three and six months ended June 30, 2024 and 2023. As of June 30, 2024, $100.0 million of Shares was available for issuance and sale under the 2023 Open Market Sale Agreement.

Previous wording

During the three months ended March 31, 2024, we received $7.1 million in milestone and upfront payments under our license and distribution agreements pursuant to which we are entitled to receive additional milestone payments, if certain development goals and sales milestones are achieved as well as royalties on future net sales of the licensed and sold products in the territories under such arrangements. In addition, under the license agreement we entered into with Menarini in December 2021 (the “Menarini Agreement”), Menarini will reimburse us for 25% of all documented expenses we incur for the global development of selinexor from 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year. We did not receive any reimbursements under the Menarini Agreement during the three months ended March 31, 2024.

Current wording

During the six months ended June 30, 2024, we received $13.0 million in milestone payments under our license and distribution agreements pursuant to which we are entitled to receive additional milestone payments, if certain development goals and sales milestones are achieved as well as royalties on future net sales of the licensed and sold products in the territories under such arrangements. In addition, under the license agreement we entered into with Menarini in December 2021 (the “Menarini Agreement”), Menarini will reimburse us for 25% of all documented expenses we incur for the global development of selinexor from 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year. We received $5.8 million of reimbursements under the Menarini Agreement during the six months ended June 30, 2024.

Previous wording

We are party to an operating lease of 98,502 square feet of office and research space in Newton, Massachusetts with a term through September 30, 2025 (the “Newton, MA Lease”). Pursuant to the Newton, MA Lease, we have provided a security deposit in the form of a cash-collateralized letter of credit in the amount of $0.3 million which is classified in long-term restricted cash on our condensed consolidated balance sheets. We expect to incur total lease costs of $5.8 million from March 31, 2024 to September 30, 2025.

Current wording

We are party to an operating lease of 98,502 square feet of office and research space in Newton, Massachusetts with a term through September 30, 2025 (the “Newton, MA Lease”). Pursuant to the Newton, MA Lease, we have provided a security deposit in the form of a cash-collateralized letter of credit in the amount of $0.3 million which is classified in long-term restricted cash on our condensed consolidated balance sheets. We expect to incur total lease costs of $4.8 million from June 30, 2024 to September 30, 2025.

Previous wording

In addition, we are party to certain short-term leases having a term of twelve months or less at the commencement date. We recognize short-term lease expense on a straight-line basis and do not record a related right-of-use asset or lease liability for such leases. These costs were insignificant for both the three months ended March 31, 2024 and 2023.

Current wording

In addition, we are party to certain short-term leases having a term of twelve months or less at the commencement date. We recognize short-term lease expense on a straight-line basis and do not record a related right-of-use asset or lease liability for such leases. These costs were insignificant for both the six months ended June 30, 2024 and 2023.

Previous wording

We have contractual obligations under our 3.00% Convertible Senior Notes due 2025 (the “Notes”) and under our Amended Revenue Interest Agreement as disclosed in Note 10, “Long-Term Obligations”, to the condensed consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

We have contractual obligations under (i) our 3.00% Convertible Senior Notes due 2025 (the “2025 Notes”); (ii) our Credit Agreement, (iii) our 6.00% Convertible Senior Notes due 2029 (the “2029 Notes”), and (iv) our Amended Revenue Interest Agreement as disclosed in Note 10, “Long-Term Obligations”, to the condensed consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Lease costs for our headquarters in Newton, Massachusetts with a term through September 30, 2025. We expect to incur total lease costs of $5.8 million from March 31, 2024 to September 30, 2025;

Current wording

Lease costs for our headquarters in Newton, Massachusetts of $4.8 million from June 30, 2024 to September 30, 2025;

Previous wording

Future long-term debt obligations related to the 2025 Notes of $182.9 million over the next two years; and

Current wording

Future obligations related to the 2025 Notes of $25.6 million over the next two years;

Previous wording

Future royalty obligations to HCRx under the Amended Revenue Interest Agreement of $197.5 million.

Current wording

Future royalty obligations to HCRx under the Amended Revenue Interest Agreement of $124.9 million.