Karyopharm Therapeutics Inc. (KPTI) Earnings Call Transcript & Summary

And welcome once again to the Morgan Stanley 18th Annual Global Healthcare Conference. I'm one of the biotech analysts. I'm David Lebowitz. Before we get going, let me just go through the requisite disclosures. Please note that this webcast is for Morgan Stanley clients and appropriate Morgan Stanley employees only. The webcast is not for members of the press. If you are a member of the press, please disconnect and reach out separately. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'm going to kick it off by introducing Karyopharm, and I have with us from Karyopharm, CEO, Michael Kauffman.

I guess if you could kick it off by telling us about Karyopharm, the history of the company and the overall mission, that would be great.

Sure, David. Thanks. Pleasure. The company was started by Dr. Sharon Shacham, who's a computational biophysicist, incorporated 2008. She's actually my wife, and she came up with this idea on her own and began embarking on a search for new chemicals to block XPO1, Exportin 1, in the cells and provide not only any cancer activity but potentially of activity in other places. This target had really not been investigated properly before. There were no small molecule inhibitors, drug-like compounds available. And we took a big chance because this is a very important pathway in biology but seemed that if it did work out, it could potentially be a ubiquitous anti-cancer drug. We were in the clinic with selinexor, originally KPT-330, in 2012 and took the company public in 2013. We had some patients with very durable responses, our first patient with the most durable response within diffuse large B-cell lymphoma for which we recently received approval. And our second and third patients had refractory multiple myeloma, for which we received our first FDA approval about a year ago. Fast forward, we've been a commercial company now just over a year. We've launched the first-in-class drug, selinexor, which is branded XPOVIO. We have a pipeline of other inhibitors of nuclear export that target the same molecule and have slightly different properties. One of them partnered with Biogen for neurodegenerative diseases. One of them partnered with an animal health company for treatment of dogs with lymphoma called verdinexor and a number of other products in development. Our lead product, as I mentioned, XPOVIO, has 2 approvals now, both accelerated and relapsed or refractory myeloma lymphoma. We are in the middle of an FDA approval process for approval in second-line myeloma, which we think is a substantial market, approximately a $700 million U.S. market for second-line myeloma. And we'll be investigating that compound in additional cancers with Phase III data expected in the couple of months in solid tumors and then again next year and several other interesting areas recently highlighted at ESMO. So lots going on with the company, about 400 people total in -- centered in Newton, Massachusetts. Of course, these days, centers don't really matter anywhere. It's all about where you Zoom. And what you can see is, is when we are in our office and really never closed down during the pandemic.

So right now, your first approval was in late-line multiple myeloma from the Phase III STORM trial -- or Phase II STORM trial. Could you run us through what that trial demonstrated with respect to XPOVIO and how that regimen is carried out?

Yes, sure. So I think, David, a lot in that question. In order to treat patients with refractory myeloma, you really need a drug that attacks a novel target, and in our case, you needed a pretty hefty dose of this. Remember, these are patients, even back then, whose disease have progressed on some of the best drugs that we have in all of cancer medicine, Revlimid, Pomalyst, Velcade, Kyprolis, Darzalex. And all of the patients had also received alkylating agents, either in the form of a transplant or as chronic therapy. They had also received multiple courses of steroids. And so these patients have a disease that has figured out how to get around some of the best drugs available. The average disease time was about 6.5 years. The patients tend to be older at about 67, 68 years old. And what our oral selinexor did was the first nuclear export inhibitor and the first oral drug with single-agent activity that was approved since Pomalyst, was to show about a 26% response rate in patients whose disease, which was documented to be refractory to all of those great drugs that I mentioned. The duration of response is about 4.5 months. The paper -- the results of that study were published in the New England Journal of Medicine. And the FDA, following a difficult but somewhat, I would say, balanced ODAC panel, which went against us 8 to 5 but was sufficiently close that the FDA said we need to look at this more carefully, took a look at some of the early data, the blinded data from BOSTON, our Phase III -- ongoing Phase III trial. They saw some unblinded data. Obviously, they liked what they saw, and they decided, mostly for regulatory reasons, to give us the approval in patients whose disease with refractory to 5 drugs. Net effect was about a response rate of 25% instead of 26% and a duration of response of close to 4 months. So we got the approval. The dose used there, as I alluded to, was a high dose. It's the highest dose we ever use in any cancer. It's 80 milligrams, 8-0 milligrams orally on days 1 and 3 each week. So you take this at home. There are no major acute side effects. We have some side effects like nausea, anorexia, fatigue and low platelets. All of these, you can prevent or treat. They generally are reversible and they're definitely dose and frequency related. So this was the highest dose we saw. Not an easy side effect profile, but remember, these patients have about 2 to 3 months to live. And in about 1/4 of them, we could show really a marked effect. And the overall survival in the patients that did respond was north of 15 months as compared to the 2 to 3 months you'd expect anyway. So this was the first new mechanism of action after Darzalex was approved. It's the fourth major mechanism of action in myeloma after the IMiDs and proteasome inhibitors and CD38 monoclonals and really represented, I think, a new opportunity for patients who had nothing left to try something orally at home and see if it could slow down or stop their cancer for a time.

Now I guess the drug's been on the market now for really about a year. And could you run us through, I guess, how the launch has progressed given that there has been some shifts in inventory along the way? But -- and of course, you've dealt with this pandemic, which is obviously the challenge for everyone. I guess could you run us through that?

Sure. Well, the expectations around the time of the launch, given the difficult ODAC and given the concerns around side effects, were pretty darn low. We had much higher expectations inside the company because our view and the doctors that we work with view is that if a patient is looking at almost certain death and has minimal opportunities to get anything else except maybe multi-agent intravenous chemotherapy or hospice -- and by the way, multi-agent intravenous chemo, which is, I would argue, worst tolerated, has a much more difficult tolerability profile than we do, is given in hospital. And it gives you about a 25% response rate, the same as our single oral therapy that you can take at home. We thought it would do better. We had about $12 million in the first quarter, which was far better than the expectations. We did well in the second quarter at about 18-or-so million. And then as David alluded to, the third quarter for our launch, really, we got started to hit -- really got hit by COVID. I would say we were a little bit hit earlier than most of the other drugs, and what we've been able to figure out in doing some of the detective work around what happened, certainly, the end of February, early March, when things started to get a bit tighter and sales reps were not allowed in but even more concerned about how do I manage, how would I give a patient a completely novel therapy that I barely used or haven't used when they have a chance of getting a virus. I have no idea if this is going to make the virus better or worse. I don't know if the side effects that I might see would come from the virus and so on. So there was a lot of consternation around -- in the early days of COVID-19. And our sales force definitely was put on the back burners pretty quickly and our ability to move the product in the middle of a launch was pretty severely impacted in Q1. And so we had a tough Q1 and was basically flat on new prescriptions as compared to Q4. And we started to actually see recovery, I would say. We got hit earlier than other brands, but we started to see recovery already in Q2 this year when there were several publications that suggested that it might actually be salutary to give an XPO1 inhibitor in patients who would -- were infected with the coronavirus, and we've shown some data to support that idea in our own study in COVID but also that you could safely give patients with myeloma XPOVIO and they would do okay. And there were some early anecdotes where patients didn't know they were infected, were getting XPOVIO and actually did pretty well. And then there were some that were started on XPOVIO as a rescue therapy in order to avoid bringing them to the hospital for parenteral agents. So obviously, it became more exciting to use an oral agent in the middle of the pandemic. But still, our sales force has really been working on mostly on Zoom when they can, on telephone calls them they can and largely through e-mail. And this represents a huge paradigm shift for all companies but particularly difficult during a launch.

Makes sense. Makes sense. Given that you've been on the market for a year, have the patients, I guess, on average, ended up staying on drug about a similar amount that they did in trial?

Yes. So early on -- and as you can imagine, first of all, we had certainly the first -- most of the first group of patients were patients that were really on the edge of hospice and were just waiting for the last hope. And thankfully, for some of them, we could provide a good therapy that can hold their disease at bay for a time and in some cases, even get them to another transplant or to another experimental therapy, which was life extending for those patients. But of course, as these difficult diseases go, for a lot of patients, it wasn't -- we weren't able to save them. And that sort of bolus effect, if you will, meant that we had patients that were a bit sicker than were even seen in the trial and would never have made it into the trial. Early on, we had a duration of therapy of just under 2 prescriptions. Now we're closer to 3. That's coupled -- a couple of things. One, it's better patients, meaning less sick patients. And really, it's better treatment by the doctors in knowing how exactly how to prophylax and prevent the side effects that we caused. Obviously, there's a lot of good drugs to prevent nausea and low appetite in cancer. Ironically, people that treat myeloma aren't very versed with those drugs because most of the myeloma drugs we have don't cause those side effects. They do other things like low white counts, infection risk, infusion reactions and those sorts of things, cardiovascular, renal. We don't have that set of problems. We have a different set that is more akin to some of the solid tumor drugs. So people learn better. And the other thing that's pushed the use of the drug and we see patients now entering -- some patients that have been on -- approaching a year now is most like -- most of those patients seem to be getting XPOVIO in combination with other agents. They are on label in the sense that there are patients who have penta-refractory myeloma. But their doctors, based on the clinical data that we and others have produced, believe that the most efficient way and the most effective way to give XPOVIO is, like all other candidate myeloma drugs, is to give it in combination. And we have a growing group of patients getting XPOVIO plus Velcade plus dex, which is the so-called BOSTON regimen; XPOVIO-Kyprolis-dex, which is probably the most potent regimen for patients with very refractory disease. For a little bit lighter would be XPOVIO-dara-dex; for all-oral regimen, XPOVIO-Pomalyst-dex, which is listed on the Mayo Clinic mSMART myeloma treatment guidelines; and even some doctors that treat with XPOVIO in combination with Revlimid as an all-oral regimen. So the beauty is, is that you can use XPOVIO with pretty much any one of the other anti-cancer drugs. It does seem to enhance the effect. We would argue, in many cases, it's the other drug that enhance our effect because almost all these patients have disease. It's already refractory to the other drugs. But the nice thing is the combinations have lower side effect burdens and they seem to have higher efficacy anecdotally than pure XPOVIO. And this is not new. This is true of all anti-cancer drugs.

That's a nice segue into the BOSTON data. Could you bring us up to speed? You reported data early this year, and then you did -- of the deeper dive into the data over the summer. Run us through the data how that regimen differs from the STORM regimen. And I guess what are the next steps?

Right. So just to put it in sort of population perspective, the STORM regimen was approved for penta-refractory disease, which we would estimate is about 6,000 patients a year in the United States. And as I mentioned, those patients probably have 2 to 3 months to live at least at the time that the approval came through. The BOSTON population is a population of at least 1 prior treatment regimen and no more than 3. That represents about 30,000 patients in the U.S. currently, and that number will grow pretty quickly as we continue to get new therapies, including XPOVIO. So we're talking about population that's about 5x bigger. The regimen that we designed, XPOVIO-Velcade-dex, took into consideration a lot of where we thought the field was moving and it has, in fact, moved. So in the older days, standard frontline for almost any patient -- and I'm talking now 5 -- 2 -- 3 to 5 years ago, was pretty much Revlimid plus Velcade plus dexamethasone. And that's a really effective regimen where you can plan for your patient to respond to that regimen. It carries with it a pretty high rate of neuropathy from the Velcade, close to 90% actually. And you really have to taper off the Velcade, and you're ending up with Revlimid pretty much alone in sort of a chronic oral maintenance setting if you will. And it's a really effective regimen. But as people are living longer, nobody wants to get hit with neuropathy and they're looking for better tolerated regimens. So dara enters the picture. It gets approved in second line, but their -- Janssen quickly did a trial in frontline. And the one standard of care certainly today is now Revlimid-daratumumab plus dexamethasone. So you're using dara instead of Velcade. And the big advantage of it is dara doesn't really come with long-term side effects that preclude further dosing. You dose it pretty frequently at the beginning. It's an IV or subcu, but it's a really well-tolerated long-term regimen. If you're going to give Revlimid and dara in frontline, it makes sense that you would switch -- when someone relapses -- and unfortunately, everybody relapses. You might relapse after a year. You might relapse after 4 years, but you want to get 2 new mechanisms of action because you always want to switch mechanism of action when you change a drug regimen to be most effective. And so you want to move to something the patient hasn't seen, which would be a proteasome inhibitor namely Velcade plus a selective inhibitor of nuclear export or XPOVIO. And that's how we designed the BOSTON study. So we combine XPOVIO plus Velcade plus dex and we compared it to standard second-line regimen of Velcade plus dex alone. One of the subtle things we did in the trial, which we think is important for clinical practice, is that almost all, if not, all approvals in second-line myeloma with Velcade have always kept Velcade twice a week. The problem with that is, is that nobody in -- hardly anybody in practice uses twice-weekly Velcade because they have to bring the patient back to the clinic and the rates of neuropathy can approach 50%. And so you drive clinical trial data with twice-weekly Velcade, which shows good efficacy, but in clinical practice, you always use once-weekly Velcade. So no one knew what they were getting. Based on the Phase I/II data with XPOVIO-Velcade-dex, we saw an extraordinary 80% response rate with once-weekly Velcade and once-weekly XPOVIO. We took the dose of Velcade down, therefore, by 40%. We took the dose of XPOVIO compared to our original approval down by about 30% from 160 down to 100, so about 35%. We cut the dose of dexamethasone. And if you talk to myeloma patients, they'll tell you how much they hate steroids like dexamethasone. We cut it down by 25%. So XPOVIO-Velcade-dex, we believe, and we believe is one of the simplest and best triplets available, and it has lower rates of peripheral neuropathy than Velcade alone. It's the first time anybody ever showed in a Phase III trial that a triplet therapy has lower rates of peripheral neuropathy than a doublet therapy. Part of this is because we're using less Velcade, obviously, but part of it may be that XPOVIO has documented neuroprotective activity. Either way for the patient, it's really important. We had 40% less neuropathy than the Velcade arm. And we had a 76% response rate in our Phase III trial, which is pretty close to anything else that's out there with once-weekly Velcade, so a very high response rate. Only 1 patient out of the 200 or so that were on the XPOVIO-Velcade-dex actually progressed on the therapy, 1 out of 200 as compared to 10 out of 200 on the Velcade arm. So we stopped the disease at its tracks in nearly all the patients and we get responses in 3/4. And we had -- of course, we had a higher complete response rate and a higher so-called very good response rate. But most importantly, the primary end point of the study was progression-free survival. The trial showed a very highly statistically significant and clinically meaningful 30% reduction in the risk of progression or death. The p-value was 0.0075. The trial was wildly positive. It was covered by a DSMB. And even though we allowed crossover, that is patients on the Velcade-dex arm could cross over from Vd over to XVd, when they progressed, we still saw a trend to an improvement in overall survival, which was a surprising and very gratifying thing. And I can tell you today that we continue to see that separation and improvement in overall survival with further follow-up. So that appears to be real. That survival benefit did not hit statistical significance, but obviously, it's very meaningful, particularly when you consider that the majority of patients who progressed on Velcade went back to get selinexor subsequently, which means we sort of competed against ourselves. What it says is getting XPOVIO, selinexor earlier is probably better than waiting for it. We're excited about the results of this study. There were no real and new safety findings. There was a slight increase in the risk of long-term cataracts, meaning patients on XPOVIO-Vel-dex for more than 6 months tended to have a higher risk of cataracts. Interestingly, nobody left the trial because of cataracts. They simply went and got cataract surgery. People coming in -- there are -- 2/3 of the patients coming into the trial on both arms came in with cataract. So this was not a big deal. It's certainly important to mention. But other than that, we really didn't see much of anything. And as I mentioned earlier, in terms of long-term tolerability, the risk of peripheral neuropathy, which is the most important reason for people stopping Velcade and it was the most important cause of stopping XPOVIO-Vel-dex was peripheral neuropathy, so the fact that we had a lower rate of peripheral neuropathy was really meaningful. We believe that the XVd regimen, the XPOVIO-Vel-dex regimen, as I mentioned, is the simplest regimen for the treatment of relapsed myeloma. It's a once-a-week oral on the XPOVIO. It's a lower dose than our original approval. It's a once-a-week Velcade shot in the doctor's office. It doesn't require infusion, very little post-injection monitoring, well tolerated, 4 out of 5 weeks. And we've had patients on this north of 2 years now in this trial, and we've had other patients from other trials north of 3 years with this regimen. So there doesn't seem to be a long-term tolerability issue.