Karyopharm Therapeutics Inc

Previous wording

This Quarterly Report on Form 10-Q, contains forward-looking statements regarding the expectations of Karyopharm Therapeutics Inc., herein referred to as “Karyopharm,” the “Company,” “we,” or “our,” with respect to the possible achievement of discovery and development milestones, our future discovery and development efforts, including regulatory submissions and approvals, our commercialization efforts, our partnerships and collaborations with third parties, our future operating results and financial position, our business strategy, and other objectives for future operations. We often use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and other words and terms of similar meaning to help identify forward-looking statements, although not all forward-looking statements contain these identifying words. You also can identify these forward-looking statements by the fact that they do not relate strictly to historical or current facts. There are a number of important risks and uncertainties that could cause actual results or events to differ materially from those indicated by forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Part II, Item 1A - Risk Factors of this Quarterly Report on Form 10-Q. As a result of these and other factors, we may not actually achieve the plans, intentions, expectations or results disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Current wording

This Quarterly Report on Form 10-Q, contains forward-looking statements regarding the expectations of Karyopharm Therapeutics Inc., herein referred to as “Karyopharm,” the “Company,” “we,” or “our,” with respect to the possible achievement of discovery and development milestones, our future discovery and development efforts, including regulatory submissions and approvals, our commercialization efforts, our partnerships and collaborations with third parties, our future operating results and financial position, our ability to continue as a going concern, our business strategy, and other objectives for future operations. We often use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and other words and terms of similar meaning to help identify forward-looking statements, although not all forward-looking statements contain these identifying words. You also can identify these forward-looking statements by the fact that they do not relate strictly to historical or current facts. There are a number of important risks and uncertainties that could cause actual results or events to differ materially from those indicated by forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Part II, Item 1A - Risk Factors of this Quarterly Report on Form 10-Q. As a result of these and other factors, we may not actually achieve the plans, intentions, expectations or results disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Previous wording

The commercialization of XPOVIO and NEXPOVIO®(selinexor) (the brand name for selinexor in Europe and the United Kingdom) outside of the U.S. is managed by our partners in their respective territories. XPOVIO/NEXPOVIO has received regulatory approval in various indications in over 40 countries outside the U.S. and is commercially available in a growing number of countries as our partners continue to secure reimbursement approvals.

Current wording

The commercialization of XPOVIO and NEXPOVIO®(selinexor) (the brand name for selinexor in Europe and the United Kingdom) outside of the U.S. is managed by our partners in their respective territories. XPOVIO/NEXPOVIO has received regulatory approval in various indications in 45 countries outside the U.S. and is commercially available in a growing number of countries as our partners continue to secure reimbursement approvals.

Previous 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.

Current wording

As of September 30, 2024, we had an accumulated deficit of $1.5 billion. We had net losses of $45.6 million and $101.3 million for the nine months ended September 30, 2024 and 2023, respectively. Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. See “Liquidity and Capital Resources” below for a further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern.

Previous 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.

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 the 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 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.

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 in the 2029 Notes (as defined below) 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, (ii) our estimated credit spread and (iii) an estimate of when the warrants will be exercised based on an option pricing model.

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 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.

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 months ended September 30, 2024 decreased as compared to the three months ended September 30, 2023, primarily due to higher gross-to-net discounts driven by increased Medicare rebates and 340B discounts.

Previous 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.

Current wording

License and other revenue for the three months ended September 30, 2024 increased by $3.5 million as compared to the three months ended September 30, 2023 primarily due to $6.0 million of milestone revenue recognized from Menarini during the three months ended September 30, 2024, partially offset by a $3.3 million decrease in revenue for the reimbursement of development-related expenses from Menarini due to the timing of the reimbursement we receive, up to a limit of $15.0 million per calendar year.

Previous 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.

Current wording

Cost of sales in aggregate dollars were consistent for the three and nine months ended September 30, 2024 and 2023. We expect cost of sales to remain relatively consistent in the in the fourth quarter of 2024 as compared to the third quarter of 2024.

Previous 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.

Current wording

Research and development expenses for the three months ended September 30, 2024 increased by $0.6 million as compared to the three months ended September 30, 2023 primarily due to increased activity in our ongoing pivotal Phase 3 trial in myelofibrosis, partially offset by decreases in clinical trial and related costs in other programs.

Previous wording

Research and development expenses for the six months ended June 30, 2024 increased by $10.0 million as compared to the six months ended June 30, 2023. The $12.7 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 compound, and eltanexor. The decrease in personnel costs of $3.6 million was primarily due to a reduction in headcount and contractors for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

Research and development expenses for the nine months ended September 30, 2024 increased by $10.6 million as compared to the nine months ended September 30, 2023. The $13.9 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. The decrease in personnel costs of $4.8 million was primarily due to a reduction in headcount and contractors for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily due to our ongoing cost reduction initiatives.

Previous 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.

Current wording

Selling, general and administrative expenses for the nine months ended September 30, 2024 decreased by $12.9 million as compared to the nine months ended September 30, 2023. The decrease in personnel costs of $8.0 million was primarily due to a reduction in headcount and contractors. The $4.5 million decrease in consulting, professional and other costs was primarily due to our ongoing cost reduction initiatives.

Previous 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.

Current wording

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

Previous wording

The increases for the three and six month periods were primarily due to a $44.7 million gain on extinguishment of debt from the Refinancing Transactions and a $14.3 million gain from the remeasurement of embedded derivatives and liability classified common stock warrants, both of which are non-cash items. These gains were partially offset by an increase in interest expense due to the new term loan and new secured convertible senior notes.

Current wording

Other income (expense), net for the nine months ended September 30, 2024 increased by $52.0 million as compared to the nine months ended September 30, 2023, primarily due to a $44.7 million gain on extinguishment of debt from the Refinancing Transactions and a $18.3 million gain from the remeasurement of embedded derivatives and liability classified common stock warrants, both of which are non-cash items. These gains were partially offset by an increase in interest expense related to the new term loan and new secured convertible senior notes.

Previous wording

We expect Other income (expense), net to decrease in the second half of 2024 as compared to the first half of 2024, as the $44.7 million gain on extinguishment of debt is a non-recurring gain. This will be partially offset by an increase in interest expense on the new term loan and new secured convertible senior notes. The future impact from remeasurements of the embedded derivatives and liability classified common stock warrants will depend on a variety of factors, including movements in our stock price.

Current wording

We expect Other income (expense), net to remain relatively consistent in the fourth quarter of 2024 as compared to the third quarter of 2024, however the future impact from remeasurements of the embedded derivatives and liability classified common stock warrants will depend on a variety of factors, including movements in our stock price.

Previous 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.

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 September 30, 2024, our principal source of liquidity was $133.5 million of cash, cash equivalents and investments. We have had recurring losses since inception and incurred a loss of $45.6 million for the nine months ended September 30, 2024.

Previous 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.

Current wording

Operating activities. The $27.5 million increase in net cash used in operating activities for the nine months ended September 30, 2024 compared to the nine months ended September 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 $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.

Current wording

Investing activities. The $99.6 million increase in net cash provided by investing activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was driven by a $85.3 million decrease in purchases of investments and a $14.5 million increase in proceeds from the maturities of investments.

Previous wording

Financing activities. The $40.1 million increase in net cash provided by financing activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was driven by $83.3 million of proceeds from our new term loan, partially offset by a $40.5 million payment of our deferred royalty obligation and a $2.6 million payment of debt issuance costs related to the Refinancing Transactions.

Current wording

Financing activities. The $40.1 million increase in net cash provided by financing activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was driven by $83.3 million of proceeds from our new term loan, partially offset by a $40.5 million payment of our deferred royalty obligation and a $2.6 million payment of debt issuance costs related to the Refinancing Transactions.

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 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.

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 nine months ended September 30, 2024 and 2023. As of September 30, 2024, $100.0 million of Shares was available for issuance and sale under the 2023 Open Market Sale Agreement.

Previous 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.

Current wording

During the nine months ended September 30, 2024, we received $17.7 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 $13.0 million of reimbursements under the Menarini Agreement during the nine months ended September 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 $4.8 million from June 30, 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. As of September 30, 2024, we expect to incur total lease costs of $3.9 million from September 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 six months ended June 30, 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 nine months ended September 30, 2024 and 2023.

Previous wording

We currently expect that 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 while we continue to commercialize XPOVIO in the U.S. and continue the clinical trials of our product candidates. Our future long-term capital requirements will depend on many factors, as described more fully in the risk factor entitled “We will need additional funding to achieve our business objectives. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs and/or commercialization efforts,” under the heading“Risk Factors” in this Quarterly Report on Form 10-Q.

Current wording

Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. See Note 1 “Nature of Business” to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q for a further discussion of the conditions that raise substantial doubt regarding our ability to continue as a going concern. We currently expect that cash, cash equivalents and investments as of September 30, 2024 will be sufficient to fund our current operating plans and debt obligation requirements into the fourth quarter of 2025 while we continue to commercialize XPOVIO in the U.S. and continue the clinical trials of our product candidates. Our future long-term capital requirements will depend on many factors, as described more fully in the risk factor entitled “We will need additional funding to achieve our business objectives. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs and/or commercialization efforts,” under the heading“Risk Factors” in this Quarterly Report on Form 10-Q.

Previous wording

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

Current wording

Lease costs for our headquarters in Newton, Massachusetts of $3.9 million from September 30, 2024 to September 30, 2025;

Previous wording

Future obligations related to the 2029 Notes of $150.8 million over the next five years;

Current wording

Future obligations related to the 2029 Notes of $148.1 million over the next five years;

Previous wording

Future obligations related to the Credit Agreement of $154.2 million; and

Current wording

Future obligations related to the Credit Agreement of $154.3 million; and

Previous wording

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

Current wording

Future royalty obligations to HCRx under the Amended Revenue Interest Agreement of $122.4 million.