Karyopharm Therapeutics Inc (KPTI) 2014 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Second Quarter Earnings Call for Karyopharm Therapeutics.

(Operator Instructions)

I would now like to turn the call over to your host, Dr. Michael Kauffman, Chief Executive Officer. Dr. Kauffman, you may begin.

Thank you and good afternoon. This is Michael Kauffman, Chief Executive Officer of Karyopharm. I'm here with Sharon Shacham, our Founder, President and Chief [Executive Officer]; and Chris Primiano, our Vice President of Corporate Development and General Counsel.

Welcome to the Second Quarter 2014 Earnings Call, where we will provide a brief review of our finances, followed by a clinical and regulatory update. We will then have limited time for questions. Earlier today, we issued a press release detailing Karyopharm's Second Quarter 2014 results, which is available on our website at Karyopharm.com.

Various remarks we make can constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments, and regulatory timelines, the potential success of our product candidates, financial projections, and our plans and prospects. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the, quote, Risk Factors, end quote, section of our most recent annual report on Form 10-K, which is on file with the Securities and Exchange Commission.

Any forward-looking statements represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

Over the next 30 minutes we will provide a brief review of our financial results through the second quarter of 2014 and then update our clinical development programs and regulatory strategy in some detail. We are happy to take questions following the prepared comments. Concerning the financials, since we issued a press release earlier outlining our second quarter 2014 financial results, I'll just review the highlights and then speak to our cash balance and our financial guidance.

As you are aware, the Company completed a follow-on offering of our common stock on July 2, 2014, with net proceeds of approximately $113 million, including an exercise of the full over-allotment option. The Company had reported a net loss of $30.1 million including stock-based compensation of $6.7 million for the six months ended June 30, 2014. That compares with a net loss of $12.5 million including a stock-based compensation expense of $446,000 for the six months ended June 30, 2013.

Based on current operating plans, we expect our existing cash including the proceeds from our recent follow-on offering will fund our R&D programs and operations into the second half of 2017. We expect to end 2014 with a cash balance in excess of $200 million.

2014 continues to be a critical year for Karyopharm as we move our first-in-class selective inhibitors and nuclear export compounds, which we refer to as SINE compounds, forward in several malignancies. Our reception in the capital markets has allowed us to take a multi-pronged approach to maximizing the value of our lead drug candidate, Selinexor or KPT-330, and our other novel assets. Thus our primary goal remains the expeditious approval of oral Selinexor in the US, Canada, and Europe.

With funding from our IPO and our recent follow-on offering, we are also able to evaluate the antitumor activity of Selinexor alone, and in combination in a large variety of malignancies, thereby potentially extending its utility. Finally, we have additional product candidates in preclinical development that we expect will enter the clinic within the next year.

I will now turn the meeting over to Dr. Sharon Shacham, our Founder, President, and Chief Scientific Officer, to discuss our clinical and regulatory process with Selinexor. Sharon?

Thank you, Michael. We are pleased to update all of you today on the development of Selinexor. To date, approximately 400 patients across various hematological and solid tumor indication have received oral Selinexor.

As described at the 2014 American Society of Clinical Oncology and European Hematology Association meetings, we have observed the broad antitumor activity of Selinexor in our expanded Phase I program with particular activity in several hematological consults with high unmet medical need. We therefore have multiple potential paths to approval of single-agent Selinexor. Given our financial position, we are able to initiate several registration-directed studies in parallel and we will now review our progress.

First, from a regulatory perspective, we have received orphan designation for the use of Selinexor in acute myeloid leukemia, or AML, and diffuse large B-cell lymphoma, or DLBCL. We reported these designations from the FDA and now reported that European Medicine Agency, or EMA, have also granted us orphan status in this indication.

Orphan designation is granted to promote the development of drugs that are expected to provide significant therapeutic advantage over existing treatment for indications with relatively small patient population. Orphan designation qualifies a company for benefits that apply across all stages of drug development, including a period of market exclusivity, tax credits for clinical trials, eligibility for orphan drug grants, and a waiver of certain regulatory administrative fees.

Second, we know that all clinical studies are subject to regulatory agency review. We also believe that it is best practice to receive regulatory feedback prior to study initiation. Therefore initiation of our studies is contingent upon receipt of such feedback by FDA, EMA, Health Canada, or any other appropriate regulatory body.

We have previously commented on three of our current or planned registration-directed clinical trials. The first in AML, the second in Richter's Syndrome, and the third in DLBCL. We will provide an update on each of those trials and will discuss additional planned clinical trials, including a trial in patients with multiple myeloma that could serve as our fourth potential registration path.

We recently initiated the SOPRA study, Selinexor in Older Patients with Relapsed or Refractory AML. This trial has been reviewed by FDA and EMA and enrollment has begun. So far it is a 150-patient study in second-line AML with an overall survival endpoint. The study has two to one randomization to Selinexor versus physician's choice in older patients with AML, which has relapsed from, or was refractory to, front-line therapy.

Consistent with previous guidance that we have given, we anticipate that data from SOPRA will be available in approximately two years. In order to further define the use of Selinexor in AML, several investigator-sponsored studies, or IST, have been initiated or will begin soon.

For example, Selinexor in combination with decitabine is being studied by Dr. Ramiro Garzon and colleagues at the Ohio State University. And Selinexor in combination with low dose Ara-C is being studied by Dr. Alan Burnett in the UK.

And in the near future, Selinexor in combination with standard 7 + 3, cytarabine plus daunorubicin, will begin with Dr. Walter Fiedler in the University of Hamburg Hospital in Germany. Additional studies are planned as well.

Along with SOPRA, our first registration-directed study, we are planning at least two additional registration-directed studies, one in patients with previously treated Richter's Syndrome, and another in patients with relapse/refractory DLBCL. Richter's Syndrome is an uncommon form of highly aggressive and treatment-refractory lymphoma, which usually arises in patients who have had chronic lymphocytic leukemia, or CLL, following treatment with standard or novel targeted drugs.

There are approximately 1,200 diagnoses of Richter's Syndrome in the USA each year, and because the disease is highly refractory to treatment, the medial survival is less than 10 months. There are currently no therapies specifically approved for Richter's Syndrome.

Following two partial responses, out of five patients treated with Selinexor, as reported at ASCO 2014, we designed the [SIRRS] study, Selinexor in Relapsed Richter's Syndrome as a single-armed study of Selinexor in approximately 50 patients who have received one to two prior immunochemotherapy regimens specifically for the Richter's Syndrome. The primary endpoint is overall response rate, or ORR, as assessed by standard lymphoma response criteria.

The FDA has reviewed and accepted the SIRRS protocol and we expect to initiate this study in the fourth quarter of this year. In addition, the protocol is under review at the EMA. Given the unmet need in this indication and the promising preliminary data, we have in Richter's and closely related DLBCL in our ongoing Phase I program, we believe that SIRRS could serve as a registration-directed study.

Along with AML and Richter's Syndrome, we believe that our emerging clinical data from the Phase I program show important activity in patients with very heavily pretreated DLBCL who have exhausted all therapies with no clinical benefit. At the present time there are no standard therapies for treatment of DLBCL following relapse after two immunochemotherapy regimens such as R-CHOP, [R-DHOP], or R-ICE.

As presented at 2014 ASCO and EAJ meetings, Selinexor has shown nearly 30% overall response rate in both the Activated B-Cell, or ABC, and Germinal-Center B-Cells, or GCB, subtypes of DLBCL. Of course a wide range of doses from 12 to 45 milligrams per meter squared twice weekly.

Responses have also been observed in patients with therapeutic factoid double-hit DLBCL, a form of lymphoma that over-expresses both c-Myc and BCL2 or BCL6. The responses and prolonged disease stabilization across all of the DLBCL subtypes also appeared to be independent of prior therapies. Several patients with heavily pretreated DLBCL have remained on single agent Selinexor for over 10 months with the longest for nearly two years.

The valuation [record] of DLBCL treated with Selinexor 50 milligrams per meter squared twice weekly is ongoing and we anticipate presenting data in this cohort and others at the upcoming scientific conferences. Based on this data, in an area of high unmet medical need, we have met with FDA in a so-called end of Phase I meeting to discuss the development of Selinexor for the treatment of DLBCL. FDA noted Selinexor antitumor activity in heavily pretreated and highly refractory DLBCL including responses at low-dose Selinexor, doses of 35 milligrams per meter squared or less.

FDA emphasized that some patients may derive long-term benefit from doses well below the highest recommended Phase II dose which is 60 milligrams per meter squared. With this FDA feedback and discussion at the end of the Phase I meeting concerning the documented activity of lower doses of Selinexor, we have modified our DLBCL trial design. Our study, called SADAL, Selinexor and Dexamethasone in Aggressive Lymphoma, is a Phase II day clinical study of Selinexor in heavily pretreated patients with DLBCL, randomized to either low versus high dose of Selinexor.

A similar designed was used in the accelerated approval study of ibrutinib in heavily pretreated CLL. The SADAL study will still utilize [all hour] as the primary endpoint and include approximately 200 patients with DLBCL after two to four prior lines of immunochemotherapy randomized in a one-to-one fashion to low versus high doses of Selinexor given twice weekly by mouth. At least 50% of patients on each arm will have DLBCL of GCB subtype which is less responsive to available DLBCL therapies.

Based on careful analysis of our dose PK response relationship, we have also simplified the dosing regimen for this study. Low-dose Selinexor will be a flat dose of 60 milligrams corresponding to approximately 35 milligrams per meter squared. And high-dose Selinexor will be a flat dose of 100 milligrams, corresponding to approximately 60 milligrams per meter squared.

All patients will receive 8 to 12 milligrams of dexamethasone with each dose of Selinexor in order to reduce anorexia, fatigue, and nausea. Regulators have accepted that this dose of dexamethasone is consistent with a supportive care level, rather than a level with anticancer activity.

Finally, and most importantly, FDA has indicated that these two-armed study designs could potentially support an accelerated approval in patients with heavily pretreated relapsed/refractory DLBCL in the ORR and their biliary responses are likely to predict clinical benefit and with an acceptable safety profile. We expect that this randomized registration-directed SADAL study will begin in the fourth quarter of this year.

We also sought scientific advice from EMA on our development program in DLBCL, and they indicated their belief that preclinical and clinical data supports further development of Selinexor in DLBCL. Thus SADAL will be an international study in the US and Europe, and could potentially serve for accelerated or conditional approval in any or all of these venues. We expect to move Selinexor into earlier lines of treatment for DLBCL while Selinexor containing regimen could be compared with current standards.

Along these lines we are enrolling patients with heavily pretreated non-Hodgkin's lymphoma into a Phase I cohort of Selinexor in combination with anti-CD20 monoclonal antibody rituximab in order to define the recommended Phase II dose of this combination. We anticipate that Selinexor-rituximab could be an active regimen against aggressive lymphoma and might be used in future randomized trials. Additional combinations with various chemotherapies and chemoimmunotherapy are planned.

In addition to studies described above, we continue to see antitumor activity in patients with highly refractory multiple myeloma and in T-cell lymphoma. At EAJ, we presented a 50% overall response rate in eight myeloma patients treated with a combination of moderate dose Selinexor, 45 milligrams per meter squared, and low-dose dexamethasone, which is 20 milligrams twice weekly. We continue to be encouraged as patients on this combination have remained on therapy and two additional patients have been treated at this dose.

More recently we have opened a cohort of up to 10 myeloma patients treated with a high-dose, 60 milligrams per meter squared Selinexor, with low-dose dexamethasone. Assuming patients continue to show durable responses, we anticipate designing an accelerated and conditional approval study in patients with myeloma refractory to standard therapies, including both pomalidomide and carfilzomib. We believe this proposed trial could serve as our fourth potential registration path and we expect to share details of such a trial in the future.

We are also studying Selinexor in combination with standard anti-myeloma agents. For example Dr. [Andre Jekyll Boviak] has recently opened a multicenter study of Selinexor with carfilzomib in a study supported by Karyopharm, Amgen, and the Multiple Myeloma Research Foundation. Studies of Selinexor in combination with bortezomib, [emibs], pegylated liposomal doxorubicin, or anti-myeloma agents, or other anti-myeloma agents, are also expected to begin in the next six to nine months.

Lastly, based on initial activity observed in pretreated T-cell lymphomas, we are planning a single-arm Phase II clinical trial in [olfactory] T-cell lymphomas. The primary endpoint will be ORR and the study is expected to begin in the first half of next year. We will await initial data from this study in order to define a potential registration-directed study in this difficult to [brid] population.

We have provided a detailed overview of our progress and trends in the metalogical malignancies. As we have said, our highest priority is to obtain regulatory approval in highly refractory tumors with high unmet medical need. Our second priority is to broadly evaluate the activity of Selinexor in both hematological and solid tumors. As shown in our solid tumor presentation at ASCO 2014, we have seen anticancer activity in colon, ovarian, prostate, cervical, and head and neck cancers, as well as in various types of sarcomas.

Based on this data we have initiated Phase II studies of single-agent Selinexor in several solid tumors and we look forward to providing results at upcoming medical meetings. Combination studies of Selinexor with chemotherapy, radiation, and targeted agents are also being planned in North America, Europe and Israel, primarily as ISTs. We are on track to select one or two major solid tumor indications around the end of 2014 with late-stage development beginning in 2015.

To summarize, we continue to be enthusiastic about the broad and durable antitumor activity of Selinexor, its long-term tolerability, and the ease of administration as a novel oral anticancer agent. I will now turn the call back over to Michael.

Thank you, Sharon. We also wanted to provide an update on a couple of organizational changes at Karyopharm.

We are very excited to announce that Justin Renz has agreed to join Karyopharm as Executive Vice President, Chief Financial Officer, and Treasurer, effective August 18. Justin was previously Executive Vice President, Chief Financial Officer and Treasurer at Zalicus, a NASDAQ listed company that recently completed a reverse merger and is now called Epirus Biopharmaceuticals, Inc.

I have served on the board of Zalicus as well as its Audit Committee for over eight years and have gotten to know Justin personally during that time. I think very highly of him and look forward to working directly with him at Karyopharm.

Paul Brannelly, who has served as our SVP of Finance and Administration and Treasurer, will be leaving to pursue other opportunities and we wish him the best. Paul was instrumental in Karyopharm's successful IPO and follow-on offering and will be missed. We are very grateful for all of his contributions to the organization.

In conclusion, as we shared with you today, Karyopharm is continuing to execute in our clinical and regulatory development strategy. The broad and durable antitumor activity of our novel XPO1 inhibitors is becoming clearer, and our regulatory paths towards potential approval are moving forward.

As Dr. Shacham described, we have at least three potential registration-directed paths, AML, Richter's Syndrome, and DLBCL, and we expect to pursue an additional potential path in hematological malignancies, including refractory multiple myeloma. We are expanding our development of Selinexor in [he] malignancies with multiple combination therapies, primarily in our growing IST program.

We continue to see durable antitumor activity and disease control in patients with a variety of heavily pretreated solid tumors, and expect to clarify our initial development path in solid tumors around the end of this year. We look forward to providing additional clinical data at the upcoming medical meetings, and we will now take questions from the participants on the call.

Thank you.

(Operator Instructions)

Yigal Nochomovitz, Oppenheimer.

On the new DLBCL trial, could you just go into a little more detail on the thinking or reasoning behind switching to the fixed dose? I'm just trying to understand if that's part of a broader plan to move to fixed dosing for Selinexor overall, or if there's something specific about DLBCL where the fixed dosing strategy is particularly advantageous?

As for the second part, we are planning to move into flat dosing in other studies as well. We did a thorough PK analysis and we see very little dependency of the dosing based on the body surface area. We see a very small viability when we translated the milligrams per meter square into flat doses and based on that we were able to choose two doses that are separated by the PK at the low and high doses.

Okay, great. I know you mentioned that the 8 to 12 milligrams of dexamethasone was more consistent with supportive care versus anticancer activity, could you give us a sense as to how much cushion you have there in terms of what dexamethasone dose would be shown to have anticancer activity in DLBCL?

Given that these patients have all received CHOP, where the P in CHOP is prednisone, at higher doses, and that steroids are known to have minimal activity and minimal durable activity in DLBCL, and finally that both DHAP, where the D is dexamethasone, and even R-ICE, which is generally given with a hefty dose of steroids to reduce side effects, all of these mean that by the time we see these patients they are refractory to essentially any dose of steroid that you could give them. Therefore, there was no real issue and discussion around giving a fairly low-dose steroid but we do have a lot of cushion, because again, even if you gave a normal dose of steroid, the patients are refractory when they come in.

Okay, got it, and on the solid tumor registrational front, can you provide any more color there in terms of which tumors may be more interesting? At least from my perspective, the sarcoma data looked very good, especially very competitive on PFS versus Votrient and Yondelis and also competitive on safety versus Votrient in particular. So I just wondered if you could say anything more on that front?

Based on our Phase II program we are [pulling] with looking at prostate cancer, and we just presented at the ASCO -- the data, encouraging -- similar, we see encouraging data in the different gynecological indication including ovarian, cervical and endometrial, and the data in sarcoma were encouraging as well.

Okay, good. Just one final question on myeloma. I guess I'm just trying to get a better understanding of the 50% response rate you showed at EHA.

In the patients with the high lines of therapy in myeloma, we know dexamethasone usually only gives you about 10% to 15%, and what we saw on the monotherapy arm for Selinexor was a 6% response rate. So it seems like there's some underappreciated synergy there, potentially, driving the 50% response rate, but if you could give some comments on what's going on mechanistically, that would be great.

We believe there is synergy there clinically, we already presented it at the last meeting in Europe at the EHA meeting, that we see synergy with dexamethasone. We have to remember that the glucocorticoid receptor is a [cargo of fix for one], the protein that we are targeting, and that might have to be with the synergy that we see and we might be resensitizing myeloma cells to dexamethasone, as well as having the Selinexor activity on these cells.

That's interesting. Any other preclinical data that would suggest synergy with some of the other targeted therapies where you're pursuing ISTs such as ibrutinib and Kyprolis?

We have presented data with the different [opportune in doxorubicin and toposide in] one of the mechanisms for resistance to topo II is nuclear localization and we can -- nuclear exclusion and we [still] nuclear localization of topo II and therefore resensitize the cell to doxorubicin and for other topo II inhibitors and we will pursue this combination with topo II inhibitors and in different lymphoma and AML and myeloma.

In addition, we see similar synergy with topo I inhibitors and this will also differ [preferred] in clinical setting in the solid tumor indication, especially with [Renoteken]. We also see synergy and we presented that with other DNA damaging agents in chemotherapy and this will also be pursued in clinical setting especially in the solid tumors.

One final one, can you give us any preview of what we might see at ESMO?

We can't discuss what's available at ESMO, it's not publicly available yet.

Okay, thank you very much for the question.

(Operator Instructions)

Michael Schmidt, Leerink.

With regard to the DLBCL study, I was wondering if you could comment on, following your meeting with the FDA, what the bar for approvability is based on this study?

FDA didn't give us any guidance as to approvability and what a, ORR would be, what a DOR would be. Obviously all of us are aware of what's been approved in the recent past and the distant past so in mantle cell lymphoma obviously ibrutinib had some impressive response rates. Prior to that, REVLIMID was recently approved in mantle cell with a 26% response rate, and Velcade, of course, was approved in mantle cell with a 31% response rate.

And single agents, those represent some of the data available in the aggressive lymphomas. As you are aware, there are no approvals of any single agents in particular for DLBCL. So this would represent a real novel therapy and a huge unmet medical need, particularly across multiple subtypes but we think that some of the precedents in the past are worth looking at.

Okay. And then I guess on the multiple myeloma study presented at EHA, with regards to the side effect profile in combination with dexamethasone, there was a pretty strong reduction in side effects for the combination. And I was wondering if you have already generated data or if you already have an experience in adding the 8 to 12 milligrams dexamethasone in other indications as part of the Phase I, for example, and whether you have seen a similar profound effect on the side effect profile of the drug?

Dexamethasone does help with the side effects of [divaldis] especially with the nausea, anorexia, and fatigue. We now have much more data on this cohort and we are quantifying it. We believe we'll see some reduction and we will present it in the next upcoming meetings.

Okay. Have you used dexamethasone in other indications as well, so far as supportive care?

Yes, we are using the dexamethasone at, usually, doses of 2 to 12 in many of our other studies, in other indications.

Okay, got it. And then one more on the multiple myeloma data from EHA, I was just wondering in terms of the background of the eight patients described in that poster, what percentage of those were truly refractory to both classes of approved drugs, proteasome inhibitors and [emids]?

So, 100% of them have received both and were refractory to both [emid] and proteasome inhibitors and several of them also received carfilzomib and pomalidomide.

Okay, great, thanks. And then, you made mention of potentially evolving plans to registration in multiple myeloma, I don't know if I understood that correctly but I think you were mentioning a potential triple combination, could you just sort of rephrase your comments with regards to the plan for the multiple myeloma?

In multiple myeloma, our plans are based on the data that will come up from the ongoing Phase I study, will be to potentially run a study of Selinexor plus dexamethasone in some other triple combinations just Selinexor was a low dose dexamethasone in multiple myeloma for an accelerated approval. Following that we will to follow up the registration study that could potentially be a combination study.

The combination with carfilzomib, or --

We started a Phase I study looking at the combination of Selinexor with carfilzomib, (inaudible) based on these results we might consider this combination but we are looking at other combination, as well as [emids], doxorubicin and [velcaid] separately, so based on all these results we will decide on the right combination to take for the registration study.

Okay, got it, great, thanks a lot.

Thank you. I'm not showing any further questions at this time.

Great, well thank you, everybody, for joining us and we will look forward to speaking with you in the future.

I apologize, we did have one more question queue up. Steve Byrne, Bank of America.

That combo study in multiple myeloma that you presented back in June, out of those eight original patients there were five that were still on drug back in June, can you comment on whether those five are still on drug?

Some of them, or the majority of them are still on drug.

Okay. And then in this DLBCL study, you don't have a comparator arm in that. Was that not suggested by the FDA in your discussion?

The FDA agreed with our design of having two arms, one with low-dose Selinexor and one with high-dose Selinexor as a potential for an accelerated approval path, depending on the data from that study with no control arm.

Okay, and Sharon, you were talking about the mechanism of action where the Selinexor can block the export of the glucocorticoid receptor, is it not possible that in these steroid refractory patients that adding the 8 to 12 milligrams of dexamethasone might have some therapeutic benefit just beyond prophylaxis?

It is possible.

If so, would it be worth pushing that dose to 20 milligrams?

Not at this point. We're mostly interested in benefiting from the support of the steroids to our side effects in terms of the efficacy. As Michael mentioned, these patients have received steroids in several forms before they enter the study.

Okay, and then several of the new company-sponsored studies you mentioned here are essentially monotherapy studies, and yet you do seem to have some compelling data that supports the combination approach. Do these studies that are monotherapy, do they reflect your view longer-term that perhaps the better approach is in combination? And did you consider putting in a combination arm into those studies?

Yes and yes. We are looking to [correctorize] the single-agent activity of Selinexor in other indications as you can see by the studies with our available and clinical trials [at gob] saying that we are also looking in the same indication to explore the activity of Selinexor in combination with other therapies.

Okay. All right, thank you.

Okay, with that we will close the conference call now and thank everybody. We will be presenting at Wedbush on Tuesday next week.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.