Karyopharm Therapeutics Inc.
Q2 2014 Earnings Call Transcript

Published: 8 Aug 2014

[Operator:]

Good day ladies and gentleman and welcome to the Second Quarter Earnings Call for Karyopharm Therapeutics. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instruction will follow at that time (Operator Instructions) as a reminder, this conference call is being recorded. I would now like to turn the call over to your host Dr. Michael Kauffman, Chief Executive Officer. Dr. Kauffman you may begin.

[Michael G. Kauffman:]

Thank you and good after noon. This is Michael Kauffman, Chief Executive Officer of Karyopharm. I'm here with Sharon Shacham, our Founder, President and Chief Executive Officer and Christ Primiano, our Vice President of Corporate Development and General Council. Welcome to the second quarter of 2014 earnings call, where we will provide a brief review of our finances, followed by clinical and regulatory update. We will then have a limited time for questions. Earlier today, we issued a press release detailing Karyopharm’s second quarter 2014 results, which is available on our website at karyopharm.com. Various remarks we make 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 projection 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 “risk factors” section of our most recent Annual Report on Form 10-K which is on file with Securities Exchange Commission. Any forward-looking statements represent our view as of today only. We may updates these statements in the future, but we disclaim any obligation to do so therefore you should not relay on these forward-looking statements as representing our views as of any date subsequent to today. Over the next 30 minutes we will provide a brief review of our financial results of the second quarter of 2014 and then update our clinical development programs and regulatory strategy in some detail. We are happy to take questions following the prepared comments. Concerning the financials, since we issued a press release earlier outlining our second quarter 2014 financial results I’ll just review the highlights and then speak to our cash balance and our financial guidance. As you are aware, the company completed a follow-on offering of our common stock as on July 2, 2014 with net proceeds of approximately $113 million including an exercise of the full over-allotments option. The company had reported a net loss of $30.1 million including stock base compensation of $6.7 million for the six months ended June 30, 2014, that compares with the net loss of $12.5 million including a stock base compensation expense of $446,000 for the six months ended June 30, 2013. Based on current operating plans, we expect our existing including the proceeds from our recent follow-on offering will fund our R&D and operations into the second half of 2017. We expect to end 2014 with a cash balance in excess of $200 million. 2014 continues to be a critical year for Karyopharm, we move our first-in-class Selective Inhibitors of Nuclear Export compounds which we refer to as SINE compound forward in several malignancies. Our reception in the capital market has allowed us to take a multi-pronged approach to maximizing the value of our lead drug candidate Selinexor or KPT-330 and other novel assets. Thus our primary goal remains the expeditious approval of oral Selinexor in U.S, Canada and Europe. With funding from our IPO and our recent follow-on offering, we are also able to evaluate the anti-tumor activity of Selinexor alone and in combination in a large verity of malignancies, there by potentially extending its utility. Finally, we have additional product candidates in pre-clinical development that we expect will enter the clinic within the next year. I’ll now turn the meeting over to Dr. Sharon Shacham, our Founder, President and Chief Scientific Officer to discuss our clinical and regulatory progress with Selinexor. Sharon.

[Sharon Shacham:]

Thank you, Michael. We are pleased to update all of you today on the development of Selinexor, to-date approximately 400 patients across various hematological and solid tumor indications have received oral Selinexor. As described at 2014 American Society of Clinical Oncology and European Hematology Association meetings, we have observed a broad anti-tumor activity of Selinexor in our extended Phase 1 program with particular activity in several hematological consult with high unmet medical need. We therefore have multiple potential paths to approval of single agent Selinexor. Given our financial position we are able to initiate several registration-directed studies in parallel and we will now reveal our progress. First, from a regulatory perspective, we have received orphan designation for the use of Selinexor in acute myeloid leukemia or AML and in Diffuse Large B-Cell Lymphoma or DLBCL. We have reported these designations from the FDA and now reported that European Medicine Agency or EMA have also granted us open status in these indications. Orphan designation is granted to promote the development of drug and that are expect to provide significant therapeutic advantage over existing treatment for indication with relatively small patient population. Orphan designation qualifies the company full benefits that they applied across all stages of drug development including a period of market exclusivity, tax credits for clinical trial and its ability for orphan drug grants and a waiver of certain regulatory administrative fees. Second, we know that all clinical studies are subject to regulatory agency review. We also believe that it is best practice to receive regulatory feedback prior to study initiation, therefore initiation of our study is contingent upon recite of such feedback by FDA, EMA, Health Canada or any other appropriated regulatory body. We have previously commented on three of our current planned registration directed clinical trials. The first in AML, the second in Richter's syndrome and third in DLBCL, we will provide an update on each of those trial and will discuss additional planned clinical trial including a trial in patient with multiple myeloma that could serve are our first potential registration path. We recently initiated the SOPRA study, Selinexor in older patients with relapsed or refractory AML. This trial has been reviewed by FDA and EMA and enrollment has begun. SOPRA is a 150 patients study in second line AML with an overall survival endpoint. The study has 2

[Michael G. Kauffman:]

Thank you Sharon, we also wanted to provide an update on a couple of organizational changes at Karyopharm. We are very excited to announce that Justin Renz has agreed to join Karyopharm as Executive Vice President, Chief Financial Officer and Treasurer effective August 18. Justin was previously Executive Vice President and Chief Financial Officer and Treasurer at Zalicus. A NASDAQ listed company that recently completed a reverse merger and is now called EPIRUS Biopharmaceuticals Inc., I have served on the board of Zalicus as well as its audit committee for over eight years and have gotten to know Justin personally during that time. I think very highly of him and looking forward to working directly with him at Karyopharm. Paul Brannelly who serves as SVP of Finance and Administration and Treasurer will be leaving to pursue other opportunities and we wish him the best. Paul is instrumental and Karyopharm’s successful IPO and follow-on offering, it will be missed. We are very grateful for all of his contribution to the organization. In conclusion as we share with you today, Karyopharm is continuing to execute in our clinical and regulatory development strategy. A broad and adorable anti-tumor activity of our novel XPO1 inhibitors is becoming clear and our regulatory pass towards potential approval are moving forward. As Dr. Shacham described, we have at least potential registration directed pass AML, Richter's syndrome and DLBCL and we expect to pursue an additional potential path in hematological malignancies, including refractory multiple myeloma. We are expanding our development of Selinexor in HE-malignancies with multiple combination therapies primarily in our growing IST program. We continue to see durable anti-tumor activity and disease control in patients with a variety of heavy pretreated solid tumors and expected to clarify our initial development path in solid tumors around the end of this year. We look forward to provide additional clinical data at the upcoming medical meeting and we will now take question from the participants on the call.

[Operator:]

(Operator Instructions) Our first question is from Yigal Nochomovitz with Oppenheimer. Your line is open.

[Yigal D. Nochomovitz:]

Hey guys, thanks very much for taking the question and congrats on continued progress. Just on the new deal DCBCL trial, could you just go into a little more detail on the thinking or reasoning behind switching to the fixed dose. I'm just trying to understand if that’s sort of part of our broader plan to move to fixed dosing things for Selinexor overall or if there something specific about DLBCL where the fixed dosing strategy is particularly advantages? Thanks.

[Sharon Shacham:]

Thank you for the question. First of all the second part, we are planning to move into flat dosing in other studies as well. We did a several PK analysis and we see very little dependency of the dosing based on the Body Surface Area and we see very small viability when we translated the mg/m(2) into flat doses and based on that we were able to chose two dose that are separated by the PK as a low and high doses.

[Yigal D. Nochomovitz:]

Okay great and I know you mentioned that the 8 mg to 12 mg of dexamethasone was sort of more consistent with the supportive care versus any cancer activity, could you give us a sense as to how much cushion you have there in term of what dose would be shown to have an anti-cancer activity in DLBCL?

[Michael G. Kauffman:]

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

[Yigal D. Nochomovitz:]

Okay go it. And on the solid tumor registration front, can you provide anymore color there in terms of which tumors maybe more interesting I mean at least from my perspective the sarcoma data looked very good, especially very competitive on PFS versus Votrient and [indiscernible] also competitive on safety versus Votrient in particular. So I just wondered if you could say anything on that front.

[Sharon Shacham:]

Based on our Phase II program, we are following to as looking at prostate cancer and which is represented at the ASCO the data are encouraging, similarly we see encouraging data in the different gynecological indication including ovarian, cervical and endometrial. And the data in sarcoma were encouraging as well.

[Yigal D. Nochomovitz:]

Okay good and just one final question on myeloma, I guess I'm just trying to get a better understanding of the 50% response rate that you showed at EHA. In the patients with high lines of therapy in myeloma that you know dexamethasone usually only gives you about 10% to 15% and what we saw on monotherapy for Selinexor was 6% response rate. So it seems like there is some under appreciated synergy there potentially driving the 50% response rate, but if you could give some comments on what's going on mechanistically that will be great?

[Sharon Shacham:]

Yes. We believe there is synergy there pre-clinically, we already presented in the last meeting in Europe at the EHA meeting that we see synergy with dexamethasone, we have to remember that the glucocorticoid receptor is a cargo of XPO1, the potent that we are targeting and that might have to be with the synergy that we see and we might be re-sensitizing myeloma cells to dexamethasone as well as having the Selinexor activity on these cell.

[Yigal D. Nochomovitz:]

Well that interesting and then any other preclinical data that would suggest the synergy with some of the other targeted therapies where you are pursing IST such as ibrutinib and kyprolis?

[Sharon Shacham:]

We have present the data with different Topo II inhibitor like doxorubicin and etoposide, one of the mechanism of resistance Topo II is nuclear localization and we can – nuclear exclusion and we restore the nuclear allocation of Topo II and therefore resensitize the cell to doxorubicin and for other Topo II inhibitors and we will purse this combination with Topo II inhibitor in different lymphoma and AML and Myeloma. In addition, we see similar alter synergy with Topo I inhibitors and this will also be pursued in clinical setting in the solid tumor indication especially with [indiscernible]. And we also see synergy and we presented that with other DNA damaging agent and it was chemotherapies and this will also be pursued in clinical setting especially in the solid tumors.

[Yigal D. Nochomovitz:]

And just one final one can you give us preview of what we might see as now?

[Michael G. Kauffman:]

We can’t, we can’t discuss what's available, its not sound publically available yet.

[Yigal D. Nochomovitz:]

Okay. All right. Thank you very much for the questions.

[Operator:]

(Operator Instructions) Our next question is from Michael Schmidt with Leerink. Your line is open.

[Michael W. Schmidt:]

Thanks, good afternoon. Thanks for taking my questions. With regard to the DLBCL study, I was wondering if you could comment on following your meeting with FDA what the bar for provability is based on the study?

[Michael G. Kauffman:]

Yes. FDA didn’t give us any guidance as to approvability and what an ORR would be and what DOR would be? Obviously all of us are aware of what's been approved in the recent past and the distant past so in mantle cell lymphoma obviously ibrutinib had some impressive response rates. Prior to that Revlimid was recently approved in mantle cell with a 26% response rate and the Velcade of course was approved in mantle cell with a 31% response rate. Single agents those represent some of the data available in the aggressive lymphomas. As you’re aware there are no approvals of any single agents in particular for DLBCL. So, this would represent real novel therapy in a huge unmet medical need, particularly across multiple subtypes. We think it’s some of the precedence in the past that we’re looking at.

[Michael W. Schmidt:]

Yes, okay. And then, I guess on the multiple myeloma study presented EAJ with regards to the side effect profile in combination with dexamethasone, there was a pretty strong reduction and side effects for the combination. And, I was wondering if you have already generated – if you already have an experience and adding the sort of 8 mgs to 12 mgs DECS in other indications as part of the Phase I for example and whether you have seen a similar profound fact on the side effect profile of the drugs.

[Sharon Shacham:]

Dexamethasone does help with the side effects of dead viruses especially with the nausea, anorexia and fatigue we now have much more data on this cohort and we are quantifying it. We see some reductions and represented in the next upcoming meetings.

[Michael W. Schmidt:]

Okay. And have you use DECS in other indications as well so far as supportive care?

[Sharon Shacham:]

Yes, we are using the Dexamethasone at usually doses of two to 12 and many of other studies and other indications.

[Michael W. Schmidt:]

Okay, got it. And then, one more on the multiple myeloma data from it I was just wondering in terms of the background of the eight patients described in that poster. What percentage of those were truly refractory to both classes of approved drugs produce some inhibitors and image.

[Sharon Shacham:]

So, the 100% of them have received both in – well refractory to both image and XPO1 inhibitors and several of them also received couples in pomalidomide.

[Michael W. Schmidt:]

Okay, great, thanks. And then, you might mention of potentially evolving plans to registration in multiple myeloma, I don’t know if understood they are correctly, but I think you’re mentioning a potential triple combination, could you just set of refractory comments and with regards to the plan forward to multiple myeloma?

[Sharon Shacham:]

In multiple myeloma our plans are based on the data that will come up on the ongoing Phase I study, we’ll be to potentially run – a study of Selinexor plastic dexamethasone. In some of the triple combination just Selinexor was a low dose dexamethasone in multiple myeloma following accelerated approval. Following that will have to follow registration study that potentially be a combination study.

[Michael W. Schmidt:]

The combination with [indiscernible].

[Sharon Shacham:]

We started a Phase I study looking at the combination of Selinexor was coupled Chicago based on this result, we might consider this combination, but we are looking at other combination as well as the image doxorubicin and with Velcade separately, so based on all of these results, we’ll decide on divide combinations take for the registration study.

[Michael W. Schmidt:]

Okay, got it. Great, thanks a lot.

[Operator:]

Thank you. And I am not showing any further questions at this time.

[Michael G. Kauffman:]

Great. We’ll thank everybody for joining us and we will look forward to speaking with you in the future.

[Operator:]

I apologize. We did have one more question queue. Steve Byrne on the line with Bank of America.

[Michael G. Kauffman:]

Okay.

[Steve Byrne:]

Thank you very much for squeezing me, and then, Michael, of that common study in multiple myeloma that you are presented back in June. Out of those eight original patients they were five, they were still on drug back in June. Can you come on and whether those five are still on drug.

[Sharon Shacham:]

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

[Steve Byrne:]

Okay, and then, this DLBCL study you don’t have a competitor arm in that – was that not suggested by the FDA in your discussion?

[Sharon Shacham:]

They uptake we will design of having two arms one with low dose Selinexor and one with high dose Selinexor. As a potential for an accelerated approval past depending on the data from that study with no control arm

[Steve Byrne:]

Okay. And, Sharon you were talking about the mechanism of action where the Selinexor can block the export of the cohort coagulate receptor is it not possible of that in these steroid refractory patients that adding the 8 mgs to 12 mgs of DECS might have some therapeutic benefit beyond just prophylaxes.

[Sharon Shacham:]

It is possible, it is possible.

[Steve Byrne:]

And, if so what it be worse pushing that dose to 20 mgs.

[Sharon Shacham:]

Not at this point. We are most interested in benefiting from the support of the steroid to our side effects then in terms of the efficacy. As Michael mentioned, these patients have received steroids in many form – several forms before they enter of the study.

[Steve Byrne:]

Okay. And then, several of the new company sponsored studies that you are – I mentioned here are essentially monotherapy studies and you’re do seems to have some compelling data that supports the combination approach, is that – do the studies that are monotherapy today reflect your view longer-term that perhaps better approach, is in combination and did you consider putting in a combination arm into both studies.

[Sharon Shacham:]

Yes and yes, we are looking to collet wise the single agent activity of Selinexor and other indications as – you can see by the studies with are available on clinical trials same that we are also looking into same indication to explore the activity of Selinexor and combination with other therapies.

[Steve Byrne:]

Okay, all right. Thank you.

[Michael G. Kauffman:]

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

[Operator:]

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