Karyopharm Therapeutics Inc (KPTI) 2016 Q1 法說會逐字稿

Good morning. My name is Kaylee and I will be your conference operator today. At this time, I would like to welcome everyone to the Karyopharm Therapeutics first-quarter 2016 financial results conference call. (Operator Instructions). Please be advised that this call is being taped at the Company's request.

I would now like to turn the call over to Mr. Justin Renz, Executive Vice President, Chief Financial Officer, and Treasurer of Karyopharm Therapeutics.

Thank you, Kaylee, and good morning. Welcome to the first-quarter 2016 earnings call. This is Justin Renz, and I'm joined today by Dr. Michael Kauffman, Chief Executive Officer of Karyopharm, who will provide a brief overview; Dr. Sharon Shacham, our Founder, President, and Chief Scientific Officer, who will provide an update on selinexor's clinical and regulatory progress and development plans; and Chris Primiano, our Senior Vice President of Corporate Development, General Counsel, and Secretary.

Earlier today, we issued a press release detailing Karyopharm's results for the first-quarter 2016. The release is available on our website at karyopharm.com.

Various remarks we make 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 risk factors section of our most recent annual report on Form 10-K, which is on file with the SEC, and any other filings we may make with the SEC.

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. We expect to file our Form 10-Q later on today. We are happy to take questions following the prepared comments.

I will now turn the call over to Dr. Michael Kauffman, the Chief Executive Officer of Karyopharm.

Thank you, Justin, and good morning, everyone. Thank you for joining us on our call today.

Since the beginning of the year, we have made great progress towards executing on our clinical strategy -- that is, to complete the clinical trials necessary to seek regulatory approval and commercialization of our lead product candidate selinexor and to develop a broad and deep clinical pipeline for the longer term.

Selinexor is our first-in-class oral selective inhibitor of nuclear export, or SINE, compound that we are developing for cancer with significant unmet medical need. Selinexor is being evaluated in multiple later-phase clinical trials in hematologic cancers and solid tumors. Near term, we expect to report topline data from two of our ongoing studies, STORM and STOMP, in relapsed/refractory multiple myeloma during the second half of 2016, and in 2017 we expect data from the SOPRA study in AML, the SADAL study in DLBCL, and the SEAL study in liposarcoma. Sharon will discuss these trials in more detail later in the call.

We are also preparing to establish the commercial infrastructure necessary to support a potential launch of selinexor in North America and Europe as appropriate. We will evaluate potential collaborations within these geographies that enable us to further extend the selinexor development program into additional tumor types, earlier lines of therapy, and additional combination regimens. We intend to enter into collaborations for further development, marketing, and commercialization of selinexor in particular geographies outside of North America and Europe at an appropriate time as well.

Continuing with the expansion of our selinexor pipeline, in January we initiated the Phase II/III SEAL study evaluating single agent oral selinexor versus placebo in liposarcoma. This study was designed based on promising clinical data showing durable stable disease and improvement in progression-free survival compared to previous chemotherapies in patients with liposarcoma. The FDA has communicated to us that progression-free survival is an acceptable primary endpoint and we expect topline data from the Phase II portion of SEAL in mid-2017.

With respect to our non-selinexor pipeline, we are pleased to have initiated a first-in-human study of KPT-8602, our novel second-generation SINE compound in patients with relapsed refractory myeloma. We initiated this study in January and expect topline safety and tolerability data later this year.

We also plan to initiate a Phase I clinical trial with another compound, KPT-9274, an oral dual inhibitor of PAK4 and NAMPT in patients with advanced solid tumor malignancies or lymphomas. We expect this first-in-human study to commence shortly.

Since the beginning of the year, we also presented data at several medical conferences highlighting the depth and breadth of our development pipeline, including encouraging preclinical activity with selinexor in combination with immune checkpoint inhibitors in oncology. We also presented preclinical data on our other SINE compounds outside of oncology.

At the 2016 American Association for Cancer Research annual meeting in April, we presented preclinical data demonstrating selinexor's ability to promote rapid tumor burden reduction in combination with immunotherapy checkpoint modulators in renal cell carcinoma models. Selinexor may be acting in combination with immunotherapy by priming the inflammatory and immune environment to maximize the effect of checkpoint inhibitors.

The data also indicated that the efficacy of selinexor might be enhanced by disrupting immune checkpoints in effector cells, that is in T cells and NK cells. These data show selinexor synergizes with anti-PD-1 to inhibit tumor cell proliferation and to induce apoptosis in vivo.

Based on these results in renal cell carcinoma models and in the previously reported promising preclinical data in colon cancer and melanoma models, combination studies are planned at the M.D. Anderson Cancer Center with selinexor and Merck's checkpoint inhibitor Keytruda in patients with melanoma or non-small cell lung cancer.

Outside of oncology, we presented preclinical data on our other oral SINE compounds, KPT-350 in traumatic brain injury, or TBI, and verdinexor, or KPT-335, across a number of viral disease indications.

At the 2016 annual meeting of the American Academy of Neurology in April, we presented preclinical data demonstrating the activity of KPT-350 for the treatment of neuro-inflammatory disorders, including TBI. Along with its effects on key cancer-related protein, XPO mediates the nuclear export of multiple proteins that impact neurological, autoimmune, and inflammatory processes. Data were presented demonstrating that inhibition of XPO1 with KPT-350 exhibited good tolerability and brain penetration, neuroprotective and anti-inflammatory activities with improved functional outcomes, including antiepileptic effects in rodent models of traumatic brain injury.

Oral KPT-350 is an IND-ready compound. We have a preclinical data package supporting safety and biological activity across a number of neurological, autoimmune, and inflammatory conditions, and we plan to identify a partner to advance the clinical development of KPT-350.

At the 29th International Conference on Antiviral Research annual meeting in April, we presented preclinical data demonstrating the activity of oral verdinexor across a number of viral disorders, including influenza, HIV, respiratory syncytial virus, and Venezuelan equine encephalitis virus. We plan to continue development of verdinexor as a potential treatment for influenza, and these preclinical data provide strong support for other potential viral indications as well.

With that, I will now turn the call over to Sharon to provide more details on our clinical development plans for selinexor and our pipeline of other drug candidates. Sharon?

Thank you, Michael.

As Michael mentioned, we are actively enrolling patients in several later-phase clinical studies evaluating the activity of selinexor in hematological malignancies. These include STORM, a Phase IIb study in patients with multiple myeloma, in which we expect data from the first 80 patients to be available in mid-2016. At that point, we will review the data and evaluate whether to expand the study. SOPRA, a randomized Phase II trial in older patients with relapsed refractory AML, for which we expect report the outcome from an interim analysis in late 2016 and topline data in mid-2017; and SADAL, a randomized Phase IIb trial in patients with relapsed/refractory DLBCL, for which topline data are expected in early 2017.

For solid tumor indication, we are currently conducting Company-sponsored trial for single agent selinexor in three solid tumor types. These include SEAL, a randomized Phase II/III trial in advanced unresectable dedifferentiated liposarcoma, for which we expect topline data from the Phase II portion in mid-2017; SIGN, a Phase II study in heavily pretreated patients with gynecological malignancies; and KING a Phase II study in recurrent glioblastoma multiforme, for which updated data will be presented at the American Society of Clinical Oncology annual meeting in June.

Beyond selinexor, we are leveraging our leadership in nuclear transport and related targets with the advancement of our earlier-stage oncology programs, and as Michael discussed, we initiated a Phase I/II study of oral KPT-8602 in patients with relapsed refractory multiple myeloma. KPT-8602 has reduced brain penetration compared with selinexor and in preclinical models can be given daily with good tolerability. We expect data from the Phase I portion in late 2016.

We're also planning to initiate a Phase I clinical trial to test the safety, tolerability, and efficacy of KPT-9274, an oral dual inhibitor of PAK4 and NAMPT in patients with advanced solid malignancies or non-Hodgkin's lymphoma in the near future. Co-inhibition of PAK4 and NAMPT leads to synergistic antitumor effect through a variety of pathways. PAK4 is a critical link between Ras oncogenic signaling and downstream effector pathway, including beta patterning, ERK, and NSTB pathways. In addition of PAK4 therefore, blood signaling through these key oncogenic pathways.

Separately, NAMPT plays a critical role in supplying a high level of energy to cancer cells by replenishing NAD. Blockage of NAMPT leads to energy depletion and growth arrest. Normal cells are more resistant to inhibition by KPT-9274 compared with cancer cells, due in part to their genomic stability and lower metabolic rates.

Since hematologic and solid tumor cells become dependent on both PAK4 and NAMPT pathways, KPT-9274's ability to simultaneously inhibit both these targets in a single agent represents a potentially important (inaudible) advantage.

We look forward to continue to provide you with updated results as they become available.

Now I will turn the call over to Justin to discuss our financials.

Thank you, Sharon.

Since we issued a press release earlier today outlining our first-quarter 2016 financial results, I will just review the highlights and then speak to our cash balance and financial guidance.

Karyopharm reported a net loss of $27.1 million or $0.75 per share for the quarter ended March 31, 2016, compared to a net loss of $26.1 million or $0.74 per share for the quarter ended March 31, 2015. Our net loss includes stock-based compensation expense of $5.2 million and $3.7 million for the quarters ended March 31, 2016, and 2015, respectively.

Research and development expense was $21.8 million for the quarter ended March 31, 2016, compared to $20.8 million for the quarter ended March 31, 2015. General and administrative expense was $5.6 million for the quarter ended March 31, 2016, compared to $5.4 million for the quarter ended March 31, 2015. Our increase in expenditures is primarily related to the expanded clinical development activities for our lead drug candidate, selinexor, that Sharon just highlighted.

Cash, cash equivalents, and investments as of March 31, 2016, including restricted cash, totaled $187.1 million, compared to $210 million as of December 31, 2015. We expect to end 2016 with a cash balance greater than $120 million. Based on our current operating plans, we expect our existing cash will fund our R&D programs and operations into the middle of 2018, including moving the STORM, SOPRA, SADAL, and SEAL studies, our four ongoing later-phase clinical trials, to their next data inflection points.

I will now turn the call over to the operator to poll for questions. Operator?

(Operator Instructions). Brian Abrahams, Jefferies.

(technical difficulty).

Ying Huang, Bank of America Merrill Lynch.

Thanks for taking my questions. The first one I have is about the multiple myeloma trial STORM. Are you seeing any impact from the availability of two new recent approvals in myeloma, including the CD38 antibody and also another drug, Empliciti? And also, are you seeing that you're taking more patients with the experience of those two agents from even clinical trials?

Secondly, can you highlight the key difference between selinexor and KPT-8602 in terms of the clinical safety findings? Thank you.

Thank you. I will start with the STORM. In the STORM study that include 80 patients, at least a quarter will be post-daratumumab. So we definitely see that there is a relatively wide use of daratumumab and we have not had issues and involvement patient post-daratumumab. And when the results will be available, we will report them.

Anything else? Michael, you want to --

No, I think that's good.

Regarding selinexor and 8602, they are both [coalent] inhibitors of XPO1 that are slowly reversible. However, 8602 has minimal brain penetration and, as a result, we were able to dose it in the IND toxicology studies five days a week out of seven with no -- with minimal reported anorexia.

And we expect -- this was in both monkeys and rats and we see similar phenomena with mice in which we dosed in the efficacy models every day. And we hope that this will be also translated into patients.

Thanks.

Brian Abrahams, Jefferies.

(technical difficulty).

Michael Schmidt, Leerink Partners.

This is Varun Kumar on behalf of Michael Schmidt. My first question is for the STORM trial in multiple myeloma. What are the efficacy and safety criteria to expand the trial in terms of response rate which you guys are looking for?

Yes, our internal hurdle, and I stress this is an internal hurdle and based on KOL feedback, to expand the study is a response rate of 20% or higher with a focus on the Penta-refractory, that is patients whose myeloma is refractory to their last therapy and at least has exposure to Velcade, Kyprolis, Pomalyst, Revlimid, as well as a CD38 antibody, most likely daratumumab.

For comparison purposes, as you are all aware, Velcade's ORR for its Accelerated Approval is 28%, Pom-Dex combination was 29%, carfilzomib was 23%, and daratumumab was 29% in patients whose disease was refractory to both proteasome inhibitors and IMiDs. But we should also point out that dara's activity in patients who are more like the patients we are enrolling, at least [cloud] refractory, had a response rate of about 21%.

So we believe that we are treating some of the most heavily pretreated and, importantly, myeloma that is refractory to more classes of drugs that has previously been reported, to our knowledge.

Okay, great. Second question on the second-gen KPT-8602, you guys are going to report safety and tolerability data in late 2016. How do you foresee the dosing regimen change compared to the first gen in multiple myeloma? Are you guys looking for less frequent or maybe expecting a higher MTD?

The dosing of selinexor twice weekly was 48 hours apart, so a Monday/Wednesday kind of a schedule. 8602 is being dosed five days a week, so, for example, starting on Monday, Monday through Friday and then the weekend off. So, it will be hard to compare the overall -- the actual dose, but for a cycle, we do expect that we will able to or we hope that we will be able to allow more higher level of dosing per cycle of 8602 compared to selinexor.

Okay, great. And my final quick question, for STORM trial in multiple myeloma, the Phase Ib topline data expected late 2016, will it include response rate? And around how many patient data will be there?

Can you clarify which trial you mean again? For the (multiple speakers)

So it's the STORM trial, multiple myeloma STORM trial?

STORM has three arms. We are looking at three different combination. One, so selinexor with pomalidomide, the other one with Velcade, and the third one with lenalidomide. The first part is a dose escalation, so it is following a 3 plus 3 design, and depending on the MTD that we will reach in each one of them, we will report these results by the end of the year.

Okay, great. Thank you. Thanks for taking questions.

Brian Abrahams, Jefferies.

Can you guys hear me okay this time?

Yes, you had two strikes, Brian (multiple speakers)

The third time is the charm, I guess. Sorry about that. A couple of quick questions. I guess, first off, I know you have had a couple questions on 8602 differences from selinexor. Can you maybe talk a little bit strategically where that could fit in? What's the bar for further advancement when you see the Phase I data at the end of the year? And could we think about this as a follow-on to selinexor or potentially having differentiated efficacy or safety that might position more optimally in other indications where you are not necessarily pursuing selinexor?

Yes, obviously it is a difficult question to answer in the absence of data. Just going along with the animal data, though, if the humans behave similar to what we have seen in preclinical models, we think it is more of what you suggested in the second part of your question, which is to say it would be optimally positioned for different diseases with different kinds of unmet medical need profiles.

For example, you could imagine this in earlier lines of therapy. You can imagine it in MDS, CLL, and other diseases where prolonged therapy is required and the disease doesn't progress quite as far.

Additionally, we might look at specific combination of 8062 that are different from selinexor. It depends on the partner of the combination, and one that have associated with higher fatigue and anorexia on the combination side might be better suited for combination with 8602.

Got it. And then, along the lines of this idea of combinations for either 8602 or selinexor, Michael, you mentioned in your opening remarks some thoughts about potential collaborations. I am curious where you stand in terms of your thinking on types of partnerships, whether you would be looking for partnerships with a preference on economics outside the US or if you are more focused on collaborations to explore combinations of developmental or marketed agents further.

Yes, we have had a robust investigator-sponsored trial program that, as you can see from clinicaltrials.gov, has a large number of studies in combination. So, we haven't felt impeded by a specific -- we haven't needed specific partnerships to get these kinds of combination studies started or done and we will be reporting on those in the near future.

Just to reiterate, the M.D. Anderson study, for example, will have 13 arms now with this new amendment, including a Keytruda arm which will focus on melanoma and non-small cell lung cancer. So we really are not inhibited by -- or we are not required to do collaborations to get the appropriate kinds of combinations done.

As far as external work, we are comfortable with the development of our drug certainly in all of North America and Europe. We routinely interact with EMA, as well as Health Canada, and of course the FDA. So we will really be thinking down the line about relationships that have more to do with commercialization, marketing, et cetera, ex US.

Makes sense. And one more quick one, if I may. Sharon, you gave a really helpful overview of 9274's mechanism. I was wondering if you could provide any more color on the potential Phase I/II trial design, whether that is going to include solid tumor and NHL patients in one study, and what the potential timelines for data might be there? Thanks.

So, the study will start soon in Q2 and it will be in five different centers in the US, including patients with solid tumors and non-Hodgkin's lymphoma, as we mentioned before.

It will have a straightforward 3 plus 3 design. It is a first-in-human new mechanism of action, and we're working with, I think, the best centers in the US to learn how to dose these drugs in patients.

Following that and based on the results, we will identify key indications. Obviously, the mechanism of action that involves inhibition of KRAS signaling, inhibition of beta [containing] pathways, and inhibition of or depletion of NAD level will help us identify key population that should be more sensitive to KPT-9274.

Thanks very much.

Arlinda Lee, Canaccord Genuity.

Thanks for taking my questions. I had some questions about the myeloma program. Can you maybe characterize -- I think you mentioned on SCORE previously that you were in discussions with US regulatory agencies, and I was wondering what -- can you maybe characterize some of the discussions you have been having and what the next steps would be? Thanks.

Yes, we intend to start SCORE in the middle of the year.

We are in discussions with FDA and other regulators, largely because the landscape in myeloma is changing very rapidly, so we continue to be extremely excited about the combination of Kyprolis with selinexor DEX and also, frankly, about other proteasome's inhibitors with selinexor DEX, but we want to refine that so it is appropriate to the current myeloma regimens, which are a little bit changed even over the last six months. So we will have an update later in the middle of this year.

Great, and then maybe on STORM, you mentioned that your internal hurdle was in the 20% range for the Penta refractory. What is the size and scope of the next part of the trial for STORM?

What is -- I missed the word, the what scope?

The size and the scope of (multiple speakers)

Yes, so based -- clearly, Velcade was in the 250 range and Kyprolis in the 260 range. Numbers have come down recently with Pom-Dex north of 100 and dara in the same region.

So, assuming that we have 20-plus patients that have Penta-refractory disease in the first part of the study, if we were to expand it, we think that somewhere north of 100 to 150, somewhere in that range total would be a relevant number, based on recent approvals.

Great, and then, I guess, how does that -- maybe to a prior question, how does that fit with the 8602 plans and timelines?

Yes, we really need to not get ahead of ourselves with 8602. We are quite encouraged from the preclinical data, but the use of these drugs could end up being very different. And don't forget, we have over 1,500 patients treated across a large number of cancers with selinexor and we're just beginning our studies with 8602. So we have a much larger safety database.

So we don't think that these are going to antagonize each other, and on the contrary, their clinical profiles may look very different and we will be able to move appropriately either alone or in combination with both agents.

Okay, great. Thanks.

Whitney Ijem, JPMorgan.

So going back to the 8602 study, is there a similar requirement for a percent of patients who are CD38 refractory or some goal there?

Not in the first portion of the study, but as you can imagine, the population that goes into Phase I studies in myeloma are very heavily pretreated and many of them have already been treated with all available classes of agents. But this is not a requirement toward the study design.

Okay, and then you mentioned the combinability of that versus selinexor, so just curious. Are there combinations that you have not been able to pursue with selinexor that you think you could now with 8602 or is it just that some of the combinations may be better tolerated?

So data on the combination of selinexor will be presented later this year and early next year, and we will discuss it. But as you can see from clinicaltrials.gov, we are pursuing a fairly large number of combination with selinexor, including standard chemotherapy on both solid and hematological malignancies, as well as targeted therapies in both. And all of these studies are still ongoing.

Okay, and then last question. You mentioned you are continuing or have plans to continue to develop verdinexor in flu. I guess, what are the next steps there?

Yes, so we are taking a very deliberate approach here. You can imagine it is a very complicated area.

We have done a number of preclinical models. There are a few more we are still pursuing and we are looking for potential partnerships or additional funding sources to move the flu along.

We should be clear that our current financial situation is very focused on selinexor and 8602, and then shortly 9274. We have completed a healthy volunteer study with verdinexor and we are quite pleased with the results, so this will enable it to move into a Phase II in a flu situation, but we will not pursue that immediately until we have appropriate partnership or other backing.

Got it. Thanks for taking the questions.

(Operator Instructions). Maury Raycroft, Jefferies. (Operator Instructions).

I am showing no further questions at this time. I would like to turn the call back to Mr. Kauffman for closing remarks.

Thank you, Operator.

Over the next six to 18 months, we expect several significant potentially value-creating milestones for the Company, including data from our four ongoing later-phase clinical trials -- the STORM, SOPRA, SADAL, and SEAL studies. We are now well capitalized, with $187 million in cash as of March 31, 2016, which should be sufficient to take us through the middle of 2018, beyond advancing these four later-phase clinical studies to their next important key data inflection points.

We look forward to sharing with you these several key clinical data readouts through the remainder of the year and into 2017.

Thank you for participating on our call today and we look forward to seeing many of you at our upcoming medical and investor conferences. Have a good day, everyone.

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