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

Good morning, and welcome to the 19th Annual Morgan Stanley Healthcare Conference. I'm one of the analysts, David Lebowitz. Before I get started, let me begin with the requisite disclosures. 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 introducing this morning Karyopharm. It's an oncology company with selinexor or XPOVIO recently launched in second-line in multiple myeloma. I guess if we could get started, if you could introduce yourselves and give us a quick introduction to the company.

Sure, David. Thanks very much, and it's a pleasure to be here. I'm Richard Paulson, the CEO and President of Karyopharm.

And my name is Jatin Shah. I'm the Chief Medical Officer of Karyopharm.

Mike Mason, CFO.

And Sohanya?

Sohanya Cheng, Senior Vice President of Sales and Commercial Operations.

So David, just as you highlighted, I mean, Karyopharm is an innovation and science-based company, which is focused in cancer, and really, pioneering novel approaches to improve cancer patients' lives. Our foundation really is in XPO1 inhibition. And with XPO1 inhibition, we attack a foundation of cancer. We are the first and only nuclear export inhibitor. By inhibiting XPO1, we reactivate the tumor suppressor proteins, which lead to cancer cell death. And for Karyopharm right now, we're currently approved in 3 indications in the U.S. Our focus is on multiple myeloma, still very much the early days of our launch in the XVd second-line plus setting, where we're driving depths and breadths to establish multiple myeloma and XPOVIO as a cornerstone of Karyopharm. We're also expanding globally, as we've been providing access and getting approval for XPOVIO ex U.S., and we can talk to that. Over the near term, I'm very excited about the evolution of selinexor in the solid tumor as we're working to bring forward our data with our SIENDO trial in the maintenance setting of endometrial, a key Phase III study for us. Also, a couple of other key areas we're focused on in terms of our next generation, which is eltanexor in MDS, and also, I think, some really exciting potential data in myelofibrosis. So as an organization, again, very focused on moving forward on multiple myeloma and continuing to expand our portfolio in the very near term as we move forward with key studies to bring the impact of the inhibition nuclear export to more patients in cancer.

Let's start right in with multiple myeloma. I guess, before we dig into the specifics on XPOVIO itself, let's talk about the market from a top-level perspective. There's a lot of players in the market, a lot of large blockbuster drugs, but the therapy, the paradigm is evolving, and XPOVIO has a very unique mechanism versus all the therapies that are currently on the market. So can you talk to us about why XPOVIO could theoretically fit in this type of environment?

Yes. Maybe I'll kick it off, David, then I'll turn it to Dr. Jatin Shah, who can talk to -- from a previous multiple myeloma treating physician. But I think as you touched on, what's really exciting about multiple myeloma and the evolution of treatment is, with all the opportunities, I think we're making significant impact for patients and continuing to expand the opportunities for patients to have durable, deep and sustained responses to fight their multiple myeloma is, I think, what we're all working to in the industry. So for XPOVIO, when you look at multiple myeloma, as you know, probably PIs, IMiDs, anti-CD38s are kind of the foundation of treatment through the first line or 2 of therapy. And looking at multiple myeloma, what's critically important for physicians and for treating physicians is continuing to have new mechanisms of action, new modalities to really make sure they can extend the survival for patients. And I think that's where we play a key role, especially as we moved up into the earlier lines. Maybe, Jatin, if you can talk to that.

Yes. And absolutely, there's a couple of reasons why we're confident that XPOVIO will be a standard of care in that second- to fourth-line setting. And it's really based on 3 specific facts. Number one is that we know that daratumumab-based combinations are being used earlier in the therapy. So 80% of patients are going to get a daratumumab-based combination in the first and second line. So the question comes, so what do we do after that? And I think that's where you can provide a lot of data. We have a lot of different regimens out there. It's good to go back to the foundations, principles of myeloma management, to provide clarity with all these [indiscernible], with all these regimens, as you mentioned. And those 2 foundational principles that myeloma physicians are very comfortable with for the last 20 years is class switching, so switching from one class of drugs to another. And number two is early incorporation of novel therapies, bringing new classes of drugs and hitting the different -- disease differently. So if you take those 2 principles and apply it to what we're doing here, in this setting, as patients progress or their disease progresses on daratumumab in second and third and fourth line, that's where we see that you can have XPOVIO-based combinations through changing from a dara-based combination or a CD38-based combination to an XPOVIO-based combination. And recently, at ASCO, we presented data with various combinations including in combination with Velcade, Kyprolis and pomalidomide, all post daratumumab. And that leverages those 2 principles to kind of close the circuit where you're now switching the class of drugs. And we're also bringing early incorporation of novel therapies into that setting. And that's why in this space, when you said there's a lot of different options for patients in that second line, there is, but there's also very little data post daratumumab. And that's the area that we're in right now, and that's the area that we're getting ahead of the curve with, with data to -- what to do in that setting. And that's why we're confident with this that XPOVIO-based combinations will be a standard of care in that second- and fourth-line post daratumumab or isatuximab.

So with all these moving parts and Velcade before XPOVIO was kind of drifting a little bit later from -- more from second line towards third line. How does the physician weigh out changing what they're doing in first and second line at the same time, as how they're going to be able to change the later lines, the second line and plus with all these different moving parts, different data? And what do you do when you speak to them?

So I think that's where we go back to going through this evolution thing. What are we using in first and second line? And they were going to be using either RVd, PI and IMiD together or add in daratumumab, anti-CD38. And as they evolve from that, walking through that process, saying, okay, what are we going to do in that second and third line as we progress on that? And now here's the opportunity, we're giving you the data, for example, with XPOVIO-pomalidomide, all-oral combination, if they just progress on a carfilzomib-dara combination, we switch both classes of drugs. We have an all-oral combination that's on the NCCN guidelines. Response rate is 65%, and post daratumumab, it's 58%, so it's still quite robust, with a PFS of 12 months for those pom-naive patients, so really durable responses. So as you walk them through that patient journey, I think that's where it starts crystallizing their mind. This is where it makes sense as I start incorporating how I move from various classes over to an XPOVIO-based therapy. The same thing for an XPOVIO-carfilzomib combination. So for example, if they had a pom-dara, which is a common regimen, or Revlimid-dara, so IMiD plus dara, now you're switching to a PI plus an XPO1 inhibitor, so switching both classes of drugs, they get a very potent combination, or XPOVIO-Velcade based on the positive data. So I think it's really just walking through the patient journey because there are different journeys that patients take.

When the drug is being launched and given all these changes, how should we look at the revenue ramp in multiple myeloma going forward? I mean, clearly, the potential revenues are quite large. However, given all the moving pieces, it's hard to determine what type of cadence of growth it could have to meet those ultimately large expectations.

Okay. I think, David, when you look at the revenue ramp, it's still early days in terms of our second-line plus launch. Obviously, we're kind of launching it just at the beginning of this year with the approval in December of last year. And when you look at 2Q, I do think the important number to look at really is the demand revenue growth because in 2Q, we had 9% demand revenue growth that didn't come through in terms of the net numbers because we introduced 3 new tablet strengths in the second quarter. So worked through adjustment of inventory, which will be a onetime kind of inventory adjustment. And so I think when you look on a continual basis, given the fact that we introduced our new positioning at the beginning of 2Q, as Jatin talked to, we brought in place kind of data to really support that positioning, and then to be not really engaging and bringing that to life with physicians that we look to continue to see kind of strong growth moving forward through the rest of the year, and potentially, accelerating our growth as we move forward. And I think when you think about multiple myeloma, it's important to look that as you talk to, given the number of agents that are there for patients given the overall growth of the market, which is helping, again, patients have extended life as they're managing their multiple myeloma that it's an area that grows strongly over time. It isn't something that's going to peak in kind of 12 months or 18 months, but you're going to see that peak happen over a longer period of time. And we're going to continue to support that. We're going to support that through more data as we're doing through our STOMP trial, and even more -- moving forward with more indications as we're moving with an all-oral regimen and moving forward and initiating the XPd trial, which will be a registrational trial to continue to expand and drive the growth. So multiple myeloma is an area that will grow. I think we're going to see accelerated growth, and we're going to see a long-term growth pattern that we can drive from multiple myeloma.

I believe consensus for this year is around $109 million for XPOVIO, and next year, about $160 million. Are those numbers reasonable?

Yes. We're still staying away from giving guidance yet as we're all kind of still in the early days and working through the uptake. But I think when we look at, again, the positioning we put in place, when we look at the kind of feedback we're getting from the marketplace, look at the expansion of prescribers we're getting and the fact that we're getting kind of greater duration of therapy in the earlier lines of treatment, I feel positive about our evolution moving forward.

Is there any ability to granulate how the duration has changed at this point?

Yes. I think we're looking to make sure we can share those kind of numbers as we move forward. I think what's important to recognize is, unfortunately, there isn't any one clear data set, which captures the entire marketplace because there's a lot of issues with regards to the different lines of therapy patients may get and where they start. So what we're working to bring to light is really showing in those earlier-line patients if the earlier-line patients have a greater duration of therapy, which is what you would expect. I mean that's what the clinical trials show. That's what we're seeing with increasing confidence from physicians in terms of keeping patients on therapy. And that's what we're seeing from kind of our qualitative research. And so as we move forward, we'll look to share more of that qualitative research and have people understand that in the earlier lines, the duration of therapy is increasing.

Now as you move earlier in the paradigm, how does that impact the way you market the original indication, penta-refractory, which is different regimen much later in the paradigm, higher dose? How do you market one versus the other?

Yes. Maybe I'll turn it to Sohanya on that.

Yes. Our primary focus is in the earlier-line setting. So it's entirely focused on that second-line to fourth-line setting. And so we will continue to get some later-line patients as we are about 8 months into the launch of the second-line plus indication, but we are starting to see now better growth in earlier lines.

That certainly makes sense. I guess from a modeling perspective, how should we look at that penta-refractory number going forward? Given the emphasis on earlier lines, should we assume a slow but steady decline of the penta-refractory? Or do you see a more straight lining?

Sohanya?

Yes. I think, generally, the proportion of patients, like I said, were from the original label until about 8, 9 months ago, mostly were housed in that penta-refractory. And I think you're going to start to see -- you're not going to see a patient -- a physician moving a patient from a fifth-line setting immediately to a second line. It's a phased approach. So I think what you'll see over time is that later-line settings sort of flattening out. And over time, you'll start to see the earlier-line settings' share move up. But again, that doesn't happen quickly. That takes time, and it happens kind of line by line.

That makes perfect sense. Now as far as educating physicians, what ultimately needs to be done at this point? And in the current environment, just with COVID, how has it -- your ability to educate physicians been challenged?

Go ahead, Sohanya.

Yes, I can take that. So our -- in terms of our primary content around our messaging, it's really about this positioning that we just spoke to. It's our strong efficacy messaging from BOSTON as well as our dosing and easy-to-manage tolerability profile. So those are kind of the key messages that we're focused on. In terms of activity level, of course, COVID did have an impact over time. And even in the industry, we're in line with -- about reaching close to pre-COVID level baselines in terms of activity. We're about 95% of the way there in terms of activity. Initially, through COVID, we saw most of our activity was virtual. That has started to shift increasingly this year towards live. And we're doing a lot of peer-to-peer education, which remains live to a large extent around the country. There are definitely regional pockets where there is higher COVID surges, where there is more virtual. Having said that, we are also supplementing very heavily with a targeted digital strategy in those areas.

Now if we look over to the international experience, how has that been proceeding thus far?

Yes. So from a global perspective, we have our penta-refractory label in the EU, in the U.K., Israel and South Korea. Now we're continuing to work forward and have our acceptance of our BOSTON file in the EU. So working to that approval for the first half of next year. And I'm excited about how that's continuing to move forward, really positive engagements with the agency. And then also, we're looking to bring on board a partner in the EU, which will be coming on board in time to be able to make sure they can launch in that second-line plus setting and also looking for a partner that really engages and is able to bring to light kind of the full power of the pipeline, which we're excited about as we continue to move forward as well.

Now the STOMP trial is looking at other combinations. And we've seen data that does look like it could potentially lead in a direction to maybe adding additional indications to the labels, other combos. Where do you see going forward with this -- these studies? And which might go into registrational combination studies?

Yes. The STOMP trial is a really broad-based trial, which allows us to engage in a number of areas and really find some great data and move forward with potential registrational trials or just find some great data that's important for us to know in multiple myeloma. So as we move forward now, out of STOMP, we're moving forward with XPd, which will be a registrational trial. I think we have some really, really strong data with Kyprolis, too. So that's something that we have to consider and determine as we move forward. Also moving earlier into quads, actually into quadruplets, some interesting data. And so as we move forward, we're going to continue to use that to find, I think, interesting data for patients. And then based on that outcome, we'll determine if we move forward to registrational trial, or potentially, the data is utilized by NCCN, and they potentially may use it for NCCN listings.

Got it. Now of course, people think in terms of hematologic tumors with XPOVIO, but you have some rather important data coming up later this year from the SIENDO study. Could you tell us about this trial?

Sure. Yes. I mean the SIENDO trial that's coming forward in the very near term, as we know, I think the recruitment continues to move forward very much on track. It's an event-driven study. So we are looking to have the data by the end of this year, but if that does take a little bit longer, that may not be bad as well. I just mean the events have been being pushed out. But with regards to the trial and the data, maybe I'll turn it to Jatin who can touch on why we really are excited about SIENDO, the SIGN trial in terms of what that showed us and then what we're looking to show in the SIENDO trial. Jatin?

Yes. No, thanks so much. And I think it's a very -- we're very excited about this specifically in endometrial cancer. And I think if we take a step back, I think this concept of maintenance therapy has been well established in gynecologic malignancies with PARP inhibitors in ovarian cancer. So it's in this space in context that we're talking about, where this concept has been well established and people are looking for a maintenance therapy in endometrial. We follow that up with the fact that there are no approved therapies in the setting of maintenance therapy patients with endometrial cancer post chemotherapy. So here's the space that we're comfortable with, and here's the space that we're looking for it because there is no data and there's no approved therapies. So then as we start focusing in this space, in our initial Phase II SIGN study where we look at single-agent selinexor in patients with chemotherapy-refractory disease with high disease burden that's growing, we showed that single-agent selinexor has an approximate PFS of 3 months, 2.8 months, specifically. So we take that data and move into the SIENDO study, which is looking at maintenance therapy in patients with chemotherapy-sensitive disease and low disease burden for patients in a CR or PR. And within that setting, if we can have a median PFS improvement of 3 months, exactly what we saw in SIGN in later lines and recapitulate that in the SIENDO study and see an improvement from 4.5 months to 7.5 months, we have confidence from our early experience this will translate over to the SIENDO study in patients from a chemotherapy subset. And so it's in this setting with a hazard ratio of 0.6. And we think that we're really optimistic. There's a real need, both from a physician and a patient perspective, or a need that we can meet for the standard study.

Could you characterize the market opportunity for endometriosis?

Sure. So I think when you look at endometrial cancer, it's the most common gynecological cancer in the U.S., that might be a different company on endometriosis. But when you look at -- you have about 60,000, 63,000 patients who are newly diagnosed per year. Majority of those are going to be treated at 70% with surgery plus/minus 3%. And so really, it's looking at about 30% of the patients which are going to be treated with chemotherapy. Within that, we have about 70% of patients that will respond to chemotherapy. So as we were talking about it, that's about your 14,000 patients. Responders are above 9,000, and that's really where we see yearly, that opportunity is being able to go. And as Jatin talked to you, for patients who are responding to chemo to be able to not just have them watch and wait but really to be able to have them use an oral to extend the progression-free survival, I think, is a significant opportunity. And obviously, we need to work to get physicians to treat those patients. So as you look at those 9,000 patients, moving up and driving the kind of penetration in there would be our focus as we come to market. And also, as you first come to market, there's going to be a number of patients, whether they're first- or second-line patients who are going to be kind of that pool of patients who are going to want to engage in treatment early. And then moving forward, kind of this 9,000 yearly kind of occurrence is what we'd be targeting.

Now this is really the first major solid tumor that you're pursuing. To what extent should TheStreet look at this trial and see this as a potential read-through to other solid tumors? And beyond that, where would be the next place to look after this trial comes in successful?

It's a great question. Again, I think this is a very near-term area where we're very excited about. I think also we're going to start -- we're seeing some data that's even being shared this week at ESMO with regards to CRC and non-small cell lung. So as you look at that data and look at the impact in types of patient populations, I think those are areas that we're also going to have to further investigate. So I think as we look at XPO1 inhibition coming across both solid and hematological cancer, our focus is how do we make sure that we really deliver in the areas where there's highest unmet need, and we can have the greatest impact for patients.

Got it. Now you do have a follow-on called eltanexor. Can you tell us about that? And how it's different from selinexor?

Yes. Thanks, David. Maybe I'll turn it to Jatin for that. Eltanexor is one we're very excited about as well in the MDS setting, and also moving forward pretty quickly. But Jatin, talk to eltanexor.

Yes. Sure. So I think there's two -- a couple of key differences with eltanexor. One is that we designed it specifically to have less blood-brain barrier penetration. We thought some of the initial side effects with selinexor of GI side effects will be CNS-mediated. So those are designed specifically to have less blood-brain barrier penetration, and i.e., hopefully with less GI side effects. And number two, we also know with eltanexor, we can do continuous low-dose dosing. So daily dosing at 10 milligrams every day for days 1 through 5. And that's important because if you go back to our experience with selinexor, we know the side effects of selinexor are all schedule and dose dependent. You've seen that in our myeloma experience, we went down from 160 milligrams down to 60, 80 and 100 milligrams, and the side effect profile is much better. So with that concept in mind with eltanexor because we can't do more of low-dose therapy continuously, the side effect profile we expect also to be better as well and allow us to go into other diseases. And that really sets us up with what we're doing in MDS.

Would it also potentially extend to looking at it in multiple myeloma in indications with XPOVIO to perhaps provide an alternative that has a better tolerability profile?

So it's a great question. I mean I think the question is, are we going to take this board in myeloma to have a better side effect profile? And I would argue that we're already getting there. We've gotten to that endpoint with a once-weekly low dose. And we've gotten this with 60 milligrams with pomalidomide, 80 milligrams of Kyprolis, 100 milligrams of Velcade. We've already got to that end game with the use of once-weekly low dose and a better supportive care. So I wouldn't say that's the rationale to move eltanexor forward to have a better side effect profile because I think we've gotten there. I think the rationale to develop eltanexor is really explore how we can leverage continuous low-dose XPO1 inhibition in which disease states. And disease states like MDS, for example, or a low proliferative disease, will benefit from that where the preclinical data is guiding us is where we're moving eltanexor forward with.

Excellent. Now I have one more question here before we're reaching the end of our time. It's about current balance sheet and runway. If you could just provide us the status there?

Sure. We finished Q2 with just under $240 million in the bank, which gives us an expected runway into the middle of 2023.

Got it. And with that, we have reached the conclusion. Thank you so much for your time this morning, and look forward to seeing what you got at ESMO.

Thank you, David.

Thank you.