KPTI - Karyopharm Therapeutics: Seeking Upside Potential But Catalysts Too Far Away

2023-08-21 03:07:26 ET

Summary

• Karyopharm Therapeutics reported $37.6 million in total revenue, with a net loss of $32.6 million.
• The company holds $80.9 million in cash and equivalents, as well as $156 million in investments.
• KPTI has a commercialized drug and potential for growth in its selinexor program.
• With no clear picture of how to raise revenues, KPTI is likely to struggle to the footing in the near term.

Topline Summary

With an approved drug in the books and product revenues, as well as hot indications maturing within the next 2 years, what's not to love about Karyopharm ( KPTI )? Unfortunately, quite a bit on the financial side, as the company doesn't currently have the resources it needs to get to goal on some key trials. This one can't be justified just yet, but give it a year and re-assess.

Pipeline and Product Overview

To date, KPTI has brought one drug to commercialization: the exportin inhibitor selinexor. This agent was first approved for the treatment of multiple myeloma in patients who have progressed on at least 4 prior lines of therapy. Since then, it has been moved forward in combination with bortezomib plus dexamethasone for patients who had received one prior line of therapy.

Selinexor was also granted accelerated approval for patients with DLBCL arising from follicular lymphoma after 2 prior lines of therapy.

Further development of selinexor in other indications has been the primary focus of KPTI since the initial drug approval in 2019. Late-stage trials include the following:

• XPORT-DLBCL-030 - Studying the addition of selinexor to the R-GDP regimen for patients with relapsed/refractory DLBCL. Note that R-GDP is one of the NCCN-preferred second-line regimens in patients intending to proceed to a transplant or CAR T-cell therapy
• SIENDO - As maintenance therapy after taxane-platinum chemotherapy for stage IV endometrial cancer
• XPORT-EC-042 - As maintenance therapy for p53-wildtype advanced or recurrent endometrial cancer (intended as the registrational trial for selinexor maintenance)
• XPORT-MM-031 - In combination with pomalidomide and dexamethasone versus elotuzumab plus pomalidomide and dexamethasone
• XPORT-MF-034 - Various doses of selinexor plus ruxolitinib for primary myelofibrosis ((MF)) or MF secondary to polycythemia vera or essential thrombocythemia, then transitioning into a randomized comparison of the combination versus ruxolitinib

As you can see, a lot of irons in the first at this time in a pretty wide range of tumor areas. Data presentations in 2023 so far have been notable in the myelofibrosis and endometrial cancer spaces. Let's focus on these for a moment.

Myelofibrosis

I first heard the signals of selinexor in this space during ASH 2021 . Selinexor was given to patients as monotherapy after resistance or intolerance to a JAK inhibitor, the standard of care. The most notable finding was the SVR35 (spleen reduced in size by 35% or more) rate of 40%, which a faculty I interviewed at the time was skeptical about.

Why? Because in this setting, therapies after ruxolitinib failure have been shown to give an SVR35 rate of between 8% and 13%. Of course, we can't make cross-trial comparisons, but you can see why this feels quite high.

Granted, that was in 10 patients, so their skepticism was very much warranted. Small numbers in trials tend to carry a risk of anomalous results. So I charted the phase 2 study as "interesting, but not something to get that excited about until it's confirmed." These experts also had serious reservations about toxicity. Selinexor is notorious for its treatment-limiting toxicities when given at doses of 80 to 100 mg.

This helps to explain the dose-finding portion of the phase 1/3 MF study, where selinexor is given at 40 mg or 60 mg, so it remains to be seen whether this reduction in dose will help make the toxicity more manageable. In the phase 2 study, selinexor was given at between 60 and 80 mg, and 10 out of 12 patients needed a dose reduction due to toxicity.

In a more recent update, selinexor plus ruxolitinib yielded SVR35 in 11 of 14 patients in the intention-to-treat population, for an SVR35 rate of 78.6%. This appears in line with other promising agents like pelabresib, although recent updates for this agent include quite a few more patients. Still, KPTI has disclosed that selinexor has received Fast Track designation from the FDA, potentially opening the door to another accelerated approval.

Top-line data are anticipated from this study in 2025.

Endometrial cancer

The story with selinexor maintenance in endometrial cancer has been mixed to date. The SIENDO study did meet its primary endpoint of progression-free survival, improving by 1.9 months over placebo. This has not been deemed clinically relevant, despite achieving statistical significance.

However, a pre-specified subgroup analysis was presented during the July ASCO plenary series . The group of patients with TP53 wildtype disease ( TP53 being the gene that encodes for p53, a key regulator of controlled cell death) had a striking "apparent" progression-free survival benefit, with a median of 20.8 months, compared with 5.2 months in the placebo group.

Two notes about this follow-up analysis. First, the rate of adverse events leading to stopping selinexor was fairly high at 15%, versus 0% in the placebo group. Second, the number of patients in the placebo group with TP53 wildtype disease was rather low, with only 36 patients included in the analysis. This is part by design of the study with its 2:1 randomization. But this is why KPTI has quickly pivoted to a full-blown phase 3 trial enrolling only patients with endometrial cancer and TP53 wild-type disease.

The company has guided that they expect results from this phase 3 trial in late 2024 or into 2025.

Financial Overview

Per their Q2 2023 filing , KPTI achieved product revenue or $28.5 million, with another $9.1 million in licensing revenue, for a total of $37.6 million in total revenue. These revenues were slightly down from the same time in 2022; however, so were research and development expenses, which went from $44.3 million in Q2 2022 to $31.5 million in 2023.

The total net loss for the company was $32.6 million, and at the end of the quarter they held $80.9 million in cash and equivalents, as well as another $156 million in investments. Total current assets sat at $291.4 million, down from $350.2 million in Q2 2022.

With this level of cash burn, KPTI has enough funds in its coffers to last for approximately 2 more years, assuming that neither costs nor revenues go up. Revenues have been relatively stagnant for selinexor compared with 2022. They need more indications to boost the market penetration of this agent, and that is most likely going to take a few more years. Costs are not likely to stay stagnant, though, placing more pressure on the company to remain solvent until some potentially big indications can come through.

Strengths and Risks

Certainly you can't have a nicer proposition for investment than a company that has a commercialized drug and yet sits at a depressed market cap. KPTI has a fairly matured program in selinexor, with some strong signals of where the company can go.

Bottom line here: if the phase 3 trials are able to reproduce the efficacy findings we've seen in myelofibrosis and endometrial cancer, these will most likely be approved, even if there are some challenges relating to toxicity.

But the big caveat is that top-line data are not coming until late next year at the earliest, putting KPTI in a very uncertain position regarding news for...the next year and a half? This, coupled with the lackluster sales growth of selinexor, explains a lot about why the company is valued below $200 million at the time of writing despite having 3 approved indications.

This would appear to be a company that's going to need some more help to get selinexor to the goal line in myelofibrosis and endometrial cancer. I don't think the big question is whether these will be approved, but how much pain investors are going to need to endure before getting there. At the rate they're going, it will not be through growth of net product revenues, which have fallen and remained steady so far this year.

Bottom-line Summary

KPTI has some exciting clinical studies brewing, but little clarity on how long it might take to get these online. Unfortunately, it's difficult to see a painless path forward, outside of a buyout. This is possible; Constellation Pharma was acquired by Morphosys for $1.7 billion, and that was on the back of just one drug in myelofibrosis. Granted, that drug had very strong signals in place that still has hematologists excited. KPTI isn't there yet, but there are interesting signs.

Still, the shaky financial grounds mean that KPTI doesn't have that much to leverage just yet, since there doesn't appear to be anything in the weeds to come. I would hold off on jumping in here until they solidify their path forward. Take a second look in summer of 2024 to see how they stand financially, since the catalysts are then only a few months away, not the year-plus where we are now.

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