Karyopharm Therapeutics Inc (KPTI) 2018 Q1 法說會逐字稿

Good morning. My name is Ayela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Karyopharm Therapeutics First Quarter 2018 Financial Results Conference Call. (Operator Instructions) Please be advised that this call is being recorded at the company's request.

I would now like to turn the call over to Mr. Christopher Primiano, Chief Business Officer of Karyopharm Therapeutics.

Thank you, Ayela, and thank you all for joining us on today's conference call to discuss Karyopharm's fourth -- first quarter 2018 financial results. This is Chris Primiano, and I'm joined today by Dr. Michael Kauffman, Chief Executive Officer; Mr. Michael Falvey, Chief Financial Officer; Dr. Sharon Shacham, our Founder, President and Chief Scientific Officer; and Dr. Jatin Shah, Senior Vice President of Clinical Development.

On the call today, Michael Kauffman will make some introductory comments. Then Mike Falvey will provide an overview of the first quarter 2018 financial results. Dr. Kauffman will then discuss our key upcoming milestones and provide some summary remarks. We will then open the call up for questions for which Sharon, Jatin and I will also be available.

Earlier this morning we issued a press release detailing Karyopharm's results for the first quarter 2018. This release is available on our website at karyopharm.com.

Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and time lines for the potential success of our product candidates, financial projections and our plans and prospects. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on March 15, 2018, and any other filings we may make with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, which we expect to file later today.

Any forward-looking statements represent our views as of today only and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

In addition, please note that any references we make to clinical trial data during today's discussion refer to interim unaudited site data, unless otherwise specified.

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

Thank you, Chris. And good morning, everyone. Thank you for joining us on today's call. Last week, we reported exciting top line results from part 2 of the Phase IIb STORM study evaluating selinexor in 122 patients with heavily pretreated penta-refractory myeloma. For the STORM study's primary objective, oral selinexor achieved a 25.4% overall response rate, assessed by the independent review committee. This included 2 stringent complete responses and 29 partial or very good partial responses. One of the stringent complete responses was negative for minimal residual disease, or MRD, which is particularly significant in this penta-refractory population. The median duration of response, a key secondary objective, was 4.4 months. Responding patients had a significantly prolonged overall survival as compared with nonresponders.

To our knowledge, this was the first large study in patients with penta-refractory myeloma; and these results are an important advance for myeloma patients, their families and for their physicians and caregivers who provide treatment for this difficult disease.

Oral selinexor demonstrated a predictable and manageable safety tolerability profile, consistent with that previously reported from part 1 of the STORM study and from other selinexor studies. No new safety signals were identified. When occurring, adverse effects were often reversible, transient and manageable with dose modification and/or standard supportive care. We look forward to submitting the detailed STORM study results for presentation at an upcoming medical oncology meeting.

As you may know, selinexor was recently granted Fast Track designation by the FDA for the penta-refractory population evaluated in the STORM study. We believe this is an acknowledgment from the FDA that the patient population of STORM represents a true unmet medical need where new therapies remain critical. As a reminder, patients on STORM with penta-refractory myeloma have disease that progress after receiving some of the best anticancer agents available in all of oncology, including Revlimid, Pomalyst, Kyprolis, Velcade, alkylating agents as well as Darzalex. Moreover, we required that all patients entering the study have myeloma that is refractory to their last immunomodulatory drug, their last proteasome inhibitor and to Darzalex as well as progressing on their most recent therapy, indicating that their disease is unlikely to benefit from retreatment with these classes of anti-myeloma drugs.

Looking ahead, we plan to submit a New Drug Application to the FDA during the second half of 2018, with a request for accelerated approval for oral selinexor as a new treatment for patients with penta-refractory multiple myeloma. We also plan to submit a Marketing Authorization Application to the European Medicines Agency in early 2019 with a request for conditional approval for selinexor in the same indication.

On the commercial front, we are actively designing and building our infrastructure and preparing our first potential selinexor product launch in the United States. In parallel, we are exploring strategic commercial collaborations with potential partners in Europe and other key markets. Importantly, the activity in the STORM patient population further support the ongoing pivotal randomized Phase III BOSTON study, where selinexor is being evaluated in earlier lines of therapy.

BOSTON evaluates the oral Sel-Dex regimen in combination with once-weekly Velcade compared to standard twice-weekly Vel-Dex alone in patients with myeloma who have had 1 to 3 prior lines of therapy. We expect to complete enrollment in BOSTON this year and report top line data in 2019. Assuming a positive outcome, we believe the data from the BOSTON study will support a full approval for Sel-Dex in combination with Velcade as a second-line treatment for myeloma.

In addition, the STORM data support the variety of selinexor combinations being evaluated in the ongoing STOMP study in patients with relapsed or newly diagnosed myeloma.

I also want to mention that we are on track to report top line results in another important unmet medical need population by the end of this year: patients with relapsed/refractory diffuse large B-cell lymphoma who are currently being evaluated in our ongoing SADAL study. If the final results of the SADAL study are consistent with the interim data presented last year at the European Hematology Association Annual Meeting, we plan to file a request for accelerated approval in the first half of 2019 for this indication.

Following the STORM data announcement last week, we successfully completed an underwritten public offering, which secured approximately $155 million in gross proceeds to Karyopharm. We are grateful for the continued support of our existing holders and would also like to extend a sincere thank you and welcome to our newest shareholders.

With that, I'll turn the call over to Mike.

Thank you, Michael. Since we issued a press release earlier today outlining our full financial results, I'll just review our first quarter 2018 financial highlights.

As of March 31, 2018, cash, cash equivalents and investments including restricted cash totaled $141.5 million compared to $176.4 million as of December 31, 2017. As Michael mentioned, on May 7, 2018, Karyopharm completed an underwritten public offering of just over 10.5 million shares of its common stock at a price to the public of $14.75 per share.

The gross proceeds to Karyopharm from the offering were $155.3 million, and after deducting the underwriting discounts, the commissions and other estimated offering expenses, our net proceeds were $145.6 million.

For the quarter ended March 31, 2018, Karyopharm recognized $10 million in revenue compared to $0.1 million for the 3 months ended March 31, 2017. The increase in revenue was the result of the upfront payment received from the asset sale of KPT-350 to Biogen in January of 2018.

For the first quarter 2018, research and development expense was $41.3 million compared to $24.1 million for the same period in 2017.

General and administrative expenses for the first quarter of 2018 were $7.6 million compared to $6.3 million for the same period in 2017.

Comparing the first quarter of 2018 to the prior quarter, the fourth quarter of 2017, R&D expense increased by $6.5 million, reflecting increased spending on our late-stage clinical trials.

For the first quarter of 2018, we reported a net loss of $38.5 million or $0.78 per share compared to a net loss of $29.9 million or $0.71 per share for the first quarter of 2017.

Net loss includes stock-based compensation expense of $4.2 million and $5.9 million for the first quarters of 2018 and 2017, respectively.

Karyopharm expects its operating cash burn, including research and development and general and administrative expenses, for the year ended December 31, 2018, to be in the range of $175 million to $185 million. Based on our current operating plans, we expect that our existing cash, cash equivalents and investments will be sufficient to fund our operations into the third quarter of 2019. And importantly, this run rate takes us through the planned launch of selinexor in the first half of next year. These plans include the continuous clinical development of selinexor in our lead indications, submitting an NDA during the second half of 2018 and preparing the commercial infrastructure, including hiring a sales force to support the potential launch of selinexor in the United States.

I'll now turn the call back over to Michael Kauffman for concluding remarks. Michael?

Thank you, Mike. We are very excited about the team's recent achievement, and we continue to believe that 2018 will be a transformational year for Karyopharm. We have several upcoming milestones that I'd like to highlight.

During the second half of the year, we plan to submit an NDA for oral selinexor as a new treatment for patients with penta-refractory myeloma. Following that, we plan to submit to the EMA for conditional approval in the same indication. For our SADAL study in DLBCL, we expect to report top line data by the end of this year, which could support a regulatory filing in 2019. For the pivotal Phase III BOSTON study, we expect to complete enrollment this year, with top line data expected in 2019 and regulatory filings in 2020. For the STOMP study combination in myeloma, we will continue to update at appropriate medical meetings, and we look forward to initiating a new arm of STOMP evaluating the all-oral regimen of selinexor plus Rev-Dex in patients with newly diagnosed myeloma. Beyond hematologic malignancies, the ongoing SEAL and SIENDO Phase III trials in liposarcoma and endometrial cancer, respectively, continue to advance.

In closing, I'd just like to reiterate on behalf of the entire Karyopharm team that we are extremely enthusiastic about the data reported last week from the STORM study. We believe these data are great news for all of our stakeholders, including the patients battling myeloma, their families, physicians and caregivers, the foundations that have supported and believed in us from the beginning as well as the many new investors that recently purchased shares. We have evolved from an entrepreneur and an idea into a well-integrated team of close to 200 people, all working passionately to prepare the regulatory submissions for selinexor in our first potential indication and to refractory multiple myeloma.

At Karyopharm, our mission since inception has been to advance the treatment of cancer through the discovery and development of novel oral therapies beginning with selinexor. We are very proud to be developing the first-in-class nuclear export inhibitor with the potential for activity across a number of hematologic and solid tumor malignancies.

As we look ahead, we will continue to foster innovation, courage, urgency, resilience and energy, our (inaudible) culture. And we are actively working to recruit and hire talented professionals who embody our ideals and lay the important groundwork for our future growth and commercial success.

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

(Operator Instructions) Our first question is from Brian Abrahams with RBC Capital Markets.

This is Rick, on for Brian, who's on a flight at the moment. First off, could you please walk us through what preparations for commercialization are currently underway and maybe speak to what you hope to accomplish in the coming months?

Sure. So we announced on our last earnings call that we had hired 3 very seasoned VPs into our commercial organization: VP of sales, a VP of marketing and a VP of market access. What you'll see over the course of the rest of the year is that those 3 leaders, together with Bill Hatfield, our head of commercial, will be building out and blocking out our launch plans and starting to fill in the senior -- the rest of the senior positions in our commercial organization and then also begin to do the work towards preparing for the launch. So this includes preparing our marketing materials for the launch, which, as you know, need to be submitted with our NDA. We'll start to build out our distribution channels. We'll hire an agency to help with our marketing campaigns. And then as we get into the fourth quarter, you'll see us taking steps like purchasing data to understand the markets deeper, building our CRM systems and really laying all of the foundation that we'll need to do a full-fledged launch in the United States. But the one thing that will be missing to support that launch would be the hiring of the sales force, which we plan to pull the trigger on immediate -- probably about 3 months before the launch of selinexor in the middle of next year.

All right. Great. That's very helpful. Next, I wanted to just maybe get your most recent thoughts on partnering. And have you (inaudible) at all since you received the positive STORM data last week?

Yes, go ahead.

Yes. Hey, this is Chris. Give you a couple of the highlights and how we're thinking about partnering. So I think it would be somewhat arbitrary to give a timing expectation around partnering, but I think it's probably more instructive to think about what does that collaboration look like and what kind of a partner are we looking for. So as you know, we recently, towards the end of last year, established a collaboration with Ono Pharmaceutical for some of the Asian territories. And I think that's probably a good guideline for how you might see a collaboration come together for some of the ex U.S. ex Ono territories. And you could expect to see something of a multiple of what you would see in that particular arrangement in terms of the upfront, the milestones, the cost sharing around clinical development expenses and those types of things. But I think even more important than that is the kind of partners that we'd be looking for. And obviously, one of the key territories that we're discussing around an ex U.S, ex Ono territory partner is experience in [keymong] and solid tumors broadly and in particular with respect to the reimbursement landscape and the commercial landscape across Europe, which is an increasingly complicated area in which to launch a new product. And in addition to that, we're looking for someone who is really philosophically aligned with us from the way that we view selinexor and the long-term development plan for selinexor. This is not, as we've talked about many times, simply a drug in myeloma and lymphoma but actually has a much longer and broader development plan behind it, and we'd want someone who's philosophically aligned with us on that perspective as well. So that's how we're thinking about partnering.

All right. Got it. One more question, if I can. How long do you expect the overall survival data in the STORM study to take to mature? Could we expect these data to be included into maybe a rolling NDA submission? And will we see these data at medical meetings maybe later this year? I'll hop back in the queue.

Yes. So it's a little hard to tell when the data will mature, but Part 1 is already published, as you're aware, and importantly showed that the response rate which we saw there was a little bit lower with -- associated with an improved survival compared to the nonresponders, which is a really key point as you evaluate the overall activity of the drug. We mentioned on our call, and as well as today, that in Part 2 we're seeing the same kind of -- actually, statistically significant differences that the patients who respond with any response to selinexor have a clinically and statistically significant improved survival over the patients who do not respond, indicating that response is associated with longer survival and also that there really isn't a good rescue therapy available for those who do not respond. We are -- given the Fast Track designation, we are in ongoing discussions with FDA about planning our submission, and we are strongly considering a Fast Track -- use of the Fast Track rolling submission guidelines in order to facilitate the review of selinexor, and we'll keep you posted.

Our next question is from Maury Raycroft with Jefferies.

To start, for ASCO, it seems like you're going to have Phase II -- the Phase II liposarcoma SEAL data there. And I was wondering what we should expect as far as the details go? And if there's any possibility for the HR to change or should we expect that, that will hold up in the update.

So the data at the ASCO for Phase II, as we have seen in the abstract of the current result, and that includes the vast majority of the patients reaching their events of PFS. So no significant changes are expected based on this. And as you know, we have moved into the Phase III, and the Phase III is enrolling. So -- and this was based on the results of the Phase II, as you can see them in the abstract.

Got it. And can you comment on whether that will be a presentation or poster?

Is it in the...

The public domain? I don't think we can comment.

No, it's not in the public domain, Maury.

(inaudible)

And then next, was just based on the recent approval of Darzalex in front line. I'm just wondering if you could provide thoughts or perspectives on how this could influence the current treatment paradigm and if you have any expectations to fold a newly diagnosed [sel] plus dara combo arm into the STOMP study.

Yes, I will take it, and then I'll turn it to Jatin. So we're thrilled to see Darzalex moving up to front line. We also thought this would happen. We also know that the Darzalex Rev-Dex combination is being evaluated in front line, and we anticipate that will also be successful. And it was part of the strategy here with the BOSTON study that we're doing that front line would consist of a dara regimen along with Revlimid and that we would come in as a Velcade-based regimen. Sel-Vel-Dex is one of the -- potentially the most convenient regimen if this is successful, with once-a-week dosing, a low rate of neuropathy if the Phase I/II data hold up and really a nice regimen for patients who, unfortunately, after they progress from front line need a second-line therapy. And I'll just let -- I'll turn it over to Jatin in a minute. But the other point about dara moving to front line is that it really opens up the penta-refractory population. This means that patients with 2 or 3 lines of therapy could very well meet criteria for penta-refractory diseases, that they get dara in earlier and earlier lines. And in fact, people are even using dara with Revlimid and Velcade in front line. So you can imagine that second line could be a Carfil-Pom regimen, and then third line could be a penta-refractory situation. So we think that this is going to continue to push the penta-refractory population earlier and open up the number of patients with penta-refractory disease. I'll turn it to Jatin to add and then talk about the front line strategy on our side.

So thanks, Michael. So I fully agree. I think that that's a good thing for patients getting access to Darzalex earlier. It really positions us well, as patients get Darzalex in combination either with the BMT with the approved indication now or in future with lenalidomide and [Dex]. So I think it positions the combination in the BOSTON well in the second-line therapy as well as for the current potential indication of penta-refractory setting. So I think that we're well positioned with Darzalex moving on the front line setting. And I think regarding your second question regarding newly diagnosed myeloma, so in our current STOMP study, we'll be looking at selinexor in newly diagnosed melanoma in combination with lenalidomide. And so understanding that there's still an appetite for an all-oral combination in newly diagnosed myeloma, we'll be exploring that combination in the current STOMP study.

Our next question is from Jonathan Chang with Leerink Partners.

Maybe first just for the SADAL study. Can you talk about how you view the bar for approval in third-line plus DLBCL?

I'm sorry. Can you repeat that?

(inaudible)

Yes. So the bar for potential approval in SADAL. Please remember that there are still currently no drugs that are actually approved for the treatment of DLBCL since rituximab was approved for front-line combination with CHOP back in 2006. So there's just -- other than CAR-T, which is approved as a cell therapy for very specific patients who are transplant eligible, there's nothing available now for patients in third line. There's no approved second line. There's pretty standard of care for transplant eligible and ineligible patients. We believe the bar is a response rate in the 20%, 25% to 25% or better and that the duration of response, again, should be about 4 to 5 months, much the way it is in last-line myeloma. And we think that the FDA is -- and physicians and patients are interested in drugs that are also somewhat agnostic to the subtype. So we've made sure that our SADAL study includes both GCB and ABC types of DLBCL. And the interim data, I'll remind you that we presented last year at EHA, showed a response rate of 33% and a duration of response of greater than 7 months. We think those easily meet the bar, and we think this could provide a really convenient oral option for patients who have refractory DLBCL and really no approved therapies.

And just one more question. How do you see CAR-T impacting the DLBCL landscape and the positioning of selinexor in this indication?

Great question. So -- this is Jatin. So regarding CAR-T cell. So as Michael mentioned, CAR-T cell is really limited to a small subset of patients who are transplant eligible. We all know these trials are highly selective, and as you move into the commercial space, it approved now for the last -- since fall of 2017. It's really limited for those patients who are transplant eligible and younger patients is also at the major academic medical centers that can support CAR-T cell, which is limited. So it's really limited to the special centers and not really applicable for 2 things: one, for older patients, which is the vast majority of large-cell lymphoma; and number two, for the vast majority of patients out in the community and even if they are younger patients because I think that's where selinexor is well positioned being oral therapy that can be given widely.

Our next question is from Eric Joseph with JPMorgan.

(inaudible) for oral (inaudible), confirming your expectation for EHA, whether you can provide us with an update around abstract submission, specifically the late breaker for STORM as well as any follow-up presentation related to the STOMP combinations.

Sure. We've assembled the data. We're hopeful that we can have a late breaker at EHA. And it'll really depend on what else is -- what's there. So if we don't make it there, we'll certainly make it at the next meeting. We're excited about the data. You've heard the top line, and the details will come out when they can.

Okay. So I mean -- I guess, with abstracts being released next week, we shouldn't expect abstracts from the STOMP combinations. Is it correct?

That's right, yes. So there are several STOMP abstracts that were submitted to EHA, and so we'll hear about those soon.

Our next question is from Mike King with JMP Securities.

And I'm asking on behalf of a couple of friends of mine. I just wanted to maybe follow up on the Rev-Dex-Sel front-line indication. I'm just wondering if, Michael, do you think about it -- or Jatin, do you think about this as far as transplant eligible versus ineligible? Or is that definition not as clear cut anymore? Because I'm thinking that maybe you could still go front line with Sel-Rev-Dex but without Darzalex just because there may be a population that doesn't want to or can't tolerate the IV infusion of Darzalex.

Yes. So to be clear, so right now we're looking at the combination of selinexor Rev-Dex in newly diagnosed myeloma. And it's a bit -- I think, it's quite controversial when you look across globally in terms of when folks are using transplant. And so you can clearly go in the transplant-ineligible patient population or even the delayed transplants. So those questions who -- those patients who are still transplant eligible, some centers still want a delayed approach as opposed to induction therapy. So I think that this can be for both situations. It doesn't have to be limited to a number of patients. There's clearly patients who are transplant eligible. They can get it, get their cells collected into a delayed transplant. So I think that, that line is blurry a bit now as we take think (inaudible) diagnosed myeloma and how centers approach it.

Okay. And then, just on enrollment in both BOSTON and SADAL. Have you guys achieved full enrollment in SADAL yet?

All we've say, Mike, is that we'll have top line data by the end of the year. We're comfortable with that.

Our next question is from Ying Huang with Bank of America.

This is Jenny. Just in terms of your commercial preparation, have you guys thought about the academic versus community settings and how you would definitely approach each of those? And also beyond SVd for the other STOMP indication, would you bring any into a pivotal trial or just use STOMP for like an [SPLA] after you're approved in penta-refractory?

Yes, thanks. So I'll start. For the -- the approach in the academic versus the community setting, one of the great unique things about selinexor is it clearly has applicability in both settings. Obviously, the majority -- or the vast majority of the STORM patients came from the academic setting. They were treated in academic centers. And the fact that these centers are seeing this level of activity in patients who've exhausted available therapies really sets us up nicely. But on the other hand, selinexor is a very convenient, twice-a-week oral therapy, which makes it really uniquely suited for treatment in the community as well. So we're very much looking forward to a 2-pronged approach where we focus on selinexor's activity in the heavily, heavily pretreated patients with no real options in the academic center and for the ease-of-use situation in patients with penta-refractory myeloma out in the community who are perhaps less heavily pretreated but still meet the criteria for penta-refractory disease. I think it's a great and a unique opportunity in this setting. On the question about whether we move any of our other STOMP combinations, those data will continue to mature. We're certainly excited about a lot of those combinations, the Darzalex combo, the Pomalyst combo; in particular, we'll be studying [Hiprolyst] as well coming up. Obviously, Velcade has already started, and the Revlimid combo is moving into front line. So lots of good stuff happening. We will pick -- likely pick one or more of these to move towards a Phase III. We may do that within a consortium. And we'll have to think about it as the data emerge. But we really have a unique situation there where essentially every combination has shown some level of additivity or frank synergy going forward.

And I'm showing no further questions. I would now like to turn the call back to Michael Kauffman, CEO, for any further remarks.

Just take one more time and thank everybody for your great questions, and we look forward to speaking with many of you in the coming weeks and to keep you updated on our continued progress. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. You may now disconnect. Everyone, have a great day.