Karyopharm Therapeutics Inc.
Q2 2015 Earnings Call Transcript

Published: 10 Aug 2015

[Operator:]

Good morning. My name is Sabrina and I will be your conference operator today. At this time, I would like to welcome everyone to the Karyopharm Therapeutics Second Quarter 2015 Financial Results Conference Call. Mr. Justin Renz, Executive Vice President, Chief Financial Officer and Treasurer of Karyopharm Therapeutics, please begin your conference.

[Justin Renz:]

Thank you and good morning. Welcome to the second quarter 2015 earnings call. This is Justin Renz and I am joined today by Dr. Michael Kauffman, the Chief Executive Officer of Karyopharm who will provide a brief overview of the second quarter; Dr. Sharon Shacham, our Founder, President and Chief Scientific Officer who will provide an update on selinexor’s clinical and regulatory progress and development plans, and Christ Primiano, our Vice President of Corporate Development, General Counsel and Secretary. Earlier today, we issued a press release detailing Karyopharm's results for the second quarter ended June 30, 2015. The release is available on our website at karyopharm.com. Various remarks we make constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments, and regulatory timelines, the potential success of our product candidates, financial projections, and our plans and prospects. Actual results may differ materially from those indicated by these statements as a result of various important factors including those discussed in the "Risk Factors" section of our quarterly report on Form 10-Q for the second quarter of 2015 which is on file with the SEC as of this morning and in any other filings we may make with the SEC. Any forward-looking statements represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. We are happy to take a few questions following our prepared comments. I will turn the call over to Dr. Michael Kauffman.

[Michael Kauffman:]

Thank you, Justin and good morning. This is Michael Kauffman, the Chief Executive Officer of Karyopharm. Before I turn the call over to Sharon, I would like to make a few introductory comments. First, I'm delighted with the progress we're making with selinexor, since it first entered the clinic three years ago. We and a growing number of enthusiastic physicians are learning a great deal about selinexor’s activity across a wide variety of difficult to treat cancers. In addition, we and the investigators are learning ways to optimize the dose schedule and side effects of selinexor across this broad array of tumors which have permitted some patients to remain on selinexor for over a year, the longest now for more than two years. The breadth and durability of selinexor’s anticancer activity support the broad ability of nuclear export inhibition for the treatment of neoplastic diseases. We presented data describing the clinical benefit of selinexor across multiple solid and hematologic malignancies at some of the most significant medical conferences in the field of oncology this quarter, including the American Society of Clinical Oncology or ASCO Annual Meeting, the Annual Meeting of the European Hematology Association or EHA and the International Conference on Malignant Lymphoma or ICML. Sharon will go through the content and importance of these data in more detail as well as provide an update on our clinical progress as we continue to execute our selinexor development plan. We selected four hematological malignancies with high unmet medical need for further study based on response rates and durability observed in our Phase 1 studies. We have recently initiated enrollment in the fourth of these trials called STORM, a Phase 2 study in patients with quad-refractory multiple myeloma and we’re making steady progress in enrolling patients in the three other trials, including SOPRA in acute myeloid leukemia or AML, SADAL in diffuse large B cell lymphoma, or DLBCL and SIRRT in Richter's transformation. In the fourth quarter of 2016 we look forward to reporting preliminary topline data from SOPRA, SADAL and SIRRT with interim data on STORM in mid-2016. We continue to observe good clinical activity in these indications and we're making important adjustments to some of our early and later phase trials based upon our continued learning on how to optimize selinexor dosing across different tumor types. Sharon will provide additional detail in a moment but we are now adjusting the selinexor dosing in our SOPRA study, a phase 2b randomized clinical trial of single agent oral selinexor versus physicians’ choice in older patients with relapsed or refractory AML where overall survival is the primary endpoint. In particular we are reducing the dose in SOPRA by approximately 35% from 55 mgs per meter squared previously now to a fixed dose of 60 mg which corresponds to approximately 35 mgs per meter squared. Dosing will remain twice-weekly and the topline data are now expected in Q4 of 2016 with interim data in mid-2016. Sharon will also be providing details of our plans to move forward with a phase 2/3 study in patients with liposarcoma. We remain the only clinical stage XPO1 inhibitor and we're gaining a growing understanding of how to optimize the activity of oral selinexor across a variety of cancer indications. I also want to highlight that we’re making progress with our pipeline beyond selinexor. We have been granted a US patent for KPT-350, an oral SINE compound being developed for the treatment of inflammatory and autoimmune diseases. This patent which will expire in 2032 covers the composition of matter for KPT-350 as well as certain other compositions and related methods. We have also been granted a US patent for certain SINE compounds, including selinexor and KPT-335 which is also known as Verdinexor. This patent which will expire in 2032 includes methods for treating viral infections, inflammatory disorders as well as cancer. I will now turn the call over to Dr. Sharon Shacham to provide an update on our clinical development plans for selinexor and our other SINE compounds. Sharon?

[Sharon Shacham:]

Thank you, Michael. I will now provide you with a detailed update of our clinical development plans for selinexor. To date over 1000 patients across various hematologic and solid tumor Karyopharm and investigator sponsored studies have been treated with oral selinexor. As Michael mentioned, several patients have remained on single agent selinexor for over 12 months and the longest for over two years. We continue to observe broad and durable antitumor activity of selinexor in both hematologic and solid tumor cancers, consistent with selinexor’s known mechanism of actions with the novel inhibitor of Exportin 1, also called XPO1. Selinexor’s breadth of activity and novel mechanism of action provides multiple paths to late stage development potential commercialization. Between company and investigator sponsored trials, there are currently 43 clinical studies listed on ClinicalTrials.gov related to selinexor. We presented highlights from some of these studies with selinexor both the single-agent and in combination in several medical conferences during the quarter and we have submitted abstracts for other during the remainder of the year, including the American Society for Hematology or ASH 2015 Annual Meeting in December. I will now provide an update on selinexor development activities in three respect

[Justin Renz:]

Thank you Sharon. Since we issued a press release earlier today outlining our second quarter ended June 30, 2015 financial results, I'll just review the highlights and then speak to our cash balance and our financial guidance. Karyopharm reported a net loss of $32.7 million or $0.92 per share for the quarter ended June 30, 2015 that compares with a net loss of $16.4 million or $0.56 per share for the same period in 2014. We recognized stock-based compensation expense of $4.5 million and $3.9 million for the quarters ended June 30, 2015 and 2014 respectively. Our second quarter net cash burn from operating activities was approximately $28.2 million. Research and development expense was $27 million in the second quarter of 2015, compared to $13.2 million for the same period in the previous year while general and administrative expenses were $6.2 million in the second quarter of 2015, compared to $3.3 million in the second quarter of last year. This increase in expenses is primarily related to the significantly expanded clinical development activities for our lead drug candidate Selinexor which Sharon just highlighted and the increase in general and administrative expenses resulting primarily from an increase in personnel costs, including headcount and stock-based compensation expenses along with the additional cost of operating as a public company. Cash, cash equivalents and investments as of June 30 totaled $256 million, compared to $285.3 million as of March 31. Based on our current operating plans, we expect our cash will fund our R&D programs and operations into 2018, including moving our later phase clinical studies to their next data inflection points. We expect to end 2015 with a cash balance greater than $200 million. I'll turn the call back over to Michael to provide a brief summary before we take some questions.

[Michael Kauffman:]

Thank you, Justin. In summary, we continue to make strong progress evaluating the vast potential of XPO-1 inhibition as our aggressive selinexor development program continues in 2015 and beyond. After demonstrating the single agent activity of selinexor in solid tumors at ASCO in June, we’ve submitted a number of abstracts for consideration to the American Society of Hematology which is holding its annual meeting in Orlando, Florida later this year. There we look forward to sharing with you the breadth, depth and combinability of selinexor in difficult to treat hematological indications. With that, operator, we are ready to take questions. Operator?

[Operator:]

[Operator Instructions] And our first question comes from the line of Mike King of JMP Securities.

[Mike King:]

I had a few, so I will try to just keep it to the most pertinent. I would love a little bit more elaboration if you could on AML, just as far as the level of neutropenia seen upon enrollment in these patients, is it comparable to the other levels of neutropenia in your other hematologic malignancy trials or does it have anything to do with prior therapy et cetera? Any clues that you might help us with to understand where the increased incidence of sepsis coming in this population versus any of your other patient populations?

[Sharon Shacham:]

Patients with AML, especially the elderly AML has significant higher number of sepsis. They are very sensitive to both sepsis and febrile neutropenia as we mentioned, as well as other infections. We analyze all the data and based on our data from SOPRA study, the level of other infection as well as febrile neutropenia is similar between selinexor and the physician’s choice arm. However as we mentioned in the study, the rate of incidence of sepsis was higher on the selinexor arm versus physician choice. And this was selective to sepsis and not to other types of infections. When we analyze the doses, based on the Phase 1 data it seems that this occurs only at doses – only at high dosage around 100 mg or 55 mg per meter square.

[Mike King:]

Right, I got that but is this because – if those higher doses are creating a greater levels of neutropenia or what is the punitive trigger for that?

[Michael Kauffman:]

Yes, just to clarify, I mean patients with AML unlike the patients on our other studies come in with grade 3 or 4 neutropenia, many of them have almost no normal neutrophils, they have blasts which are not effective against infection. So essentially everyone coming into any AML study has almost no functioning normal neutrophils. So they start off with neutropenia. As you noted the febrile neutropenia rates on both arms were the same, selinexor is fairly selective for leukemic blasts over normal neutrophils but if you have no normal neutrophils it’s not going to matter.

[Mike King:]

And these are patients that are normally prophylaxis as well [indiscernible] –

[Sharon Shacham:]

Yes and for example in the cell study as we reported at the last EHA – and these are in-patients with relapsed or refractory AML, when we treated selinexor even with high dose chemotherapy we did not see an increase in sepsis based on the small number of patients on this study.

[Mike King:]

Switching very quickly to sarcoma, Sharon, you said in the formal remarks that the end point is going to be PFS. Can you say anything about – I assume these are patients that are going to come in previously untreated or whether they have had some prior docs or some other active agent and maybe tell us about the size of the study if you can and what expected PFS might be?

[Sharon Shacham:]

So the population of the study will be patients with liposarcoma with one prior therapy, or more. In terms of the PFS, we expect about three months improvement in PFS in patients treated with selinexor versus placebo.

[Mike King:]

And the placebo PFS would be expected to be what roughly?

[Sharon Shacham:]

Around two months. Two to three months, the cycle in this study will be six weeks, so it will happen around every six weeks.

[Mike King:]

And then the number of patients you expect to enroll?

[Sharon Shacham:]

It’s about 200, randomization will be two to one on selinexor versus placebo and we will allow cross over from placebo to selinexor after –

[Mike King:]

You will allow crossover?

[Sharon Shacham:]

Yes.

[Operator:]

Thank you and our next question comes from the line of Michael Schmidt of Leerink Partners.

[Jonathan Chang:]

Hi, it’s Jonathan Chang stepping in for Michael Schmidt. Thanks for taking my questions. I am curious – could you talk about your confidence in the 60 mg fixed dosing in AML and also about your experience with the 60 mg fixed dose across the indications?

[Sharon Shacham:]

Sure. Actually now we have evaluated 60 mg and it is the dose that we are using in the majority of our studies. We evaluated the level of the other side effects such as anorexia, fatigue, and those at 60 mg and responded to be a very tolerated dose while maintaining efficacy rate when we look at the accumulating data in both solid tumors and hematological malignancies. Specifically in AML, both in the patients, the small number of patients in the SOPRA study that we have seen 60 mg as well as data from the Phase 1 study, we didn’t see an increase in sepsis rate in this dose.

[Jonathan Chang:]

And I think you mentioned it before but I might have missed it. But can you remind me was there any sepsis observed in the AML combination study presented at EHA and what the dosing regimen was there?

[Sharon Shacham:]

At the cell study which is the only study in combination that we published so far, we used selinexor in combination with seven and three, the dose of selinexor there was 40 mg per meter square and there was no – it’s a small dose, small number of patients that we published, at the EHA, this was an interim analysis but in this small number of patients, we didn’t see an increase in sepsis rate. Just as a reminder, these are in-patients, all are treated prophylactic with antibiotic, anti-fungal and other.

[Jonathan Chang:]

And maybe just last one, I am curious to know when the sepsis occurred during the course of treatment?

[Sharon Shacham:]

So it’s a very good question, Michael. When we look at the data it can happen very early as expected in elderly patients with relapsed AML, or it can happen in cycle two, cycle three and so on. So there wasn’t specific timing of the sepsis.

[Operator:]

Thank you and our final question comes from the line of Arlinda Lee of MLV.

[Arlinda Lee:]

Actually on the ASH data that you guys presented abstract or has submitted abstracts for, can you maybe comment on what kinds of durability response data you have and tolerability particularly for AML and if you will have additional information on the abstract signal that you guys are seeing there?

[Sharon Shacham:]

Arlinda, I guess, you will have to wait a month or two until the abstracts with the ASH will be available in two or three months, we can’t disclose this at this point as the abstracts were either accepted – we don’t know if they were accepted or not. And they are not available.

[Arlinda Lee:]

Would we be seeing information, additional information on the sepsis signal –

[Sharon Shacham:]

At the upcoming ASH, there is no update on SOPRA study specifically. There will be updates of other ISDs and they will include both safety and tolerability. End of Q&A

[Operator:]

Thank you. I am showing no further questions at this time.

[Michael Kauffman:]

Thank you very much, operator. With that, we will close the call. This concludes our second quarter 2015 conference call and thank you all for participating and we will speak with you soon.

[Operator:]

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