ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Title of each class) |
Trading Symbol(s) |
(Name of each exchange on which listed) | ||
Large accelerated filer |
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☒ | ||||
Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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Item 1B. |
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Item 1. |
Business |
Best Responses 1 in Evaluable SPd Patients as of 1-Oct-2019 2 |
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Prior Therapy Status |
N 3 |
ORR |
VGPR 4 |
PR |
Median PFS |
||||||||||||||||
Pomalyst-naïve and Revlimid refractory or relapsed |
32 |
18 (56%) |
6 (19%) |
12 (38%) |
12.2 months |
||||||||||||||||
Pomalyst Treated and Revlimid refractory |
14 |
5 (36%) |
1 (7%) |
4 (29%) |
5.6 months |
1 |
Responses were adjudicated according to the International Myeloma Working Group criteria |
2 |
Based on interim unaudited data |
3 |
Five patients not evaluable for response: one death unrelated to myeloma, one non-compliance with study procedures, one withdrawal of consent before disease follow up, one death related to progressive disease, or PD; one PD before completing one cycle of therapy |
4 |
One unconfirmed VGPR |
Best Responses 1 in Evaluable SKd Patients as of 1-Oct-2019 2 |
|||||||||||||||||||||
Category |
N |
ORR |
CR |
VGPR |
PR |
||||||||||||||||
All (Kyprolis-naïve) |
14 |
10 (71%) |
3 (21%) |
7 (50%) |
— |
1 |
Responses were adjudicated according to the International Myeloma Working Group criteria |
2 |
Based on interim unaudited data |
Best Responses 1 in Evaluable SRd Patients as of 1-Oct-2019 2 |
|||||||||||||||||||||
Category |
N 3 |
ORR |
CR |
VGPR 4 |
PR |
||||||||||||||||
All |
7 |
6 (86%) |
1 (14%) |
4 (57%) |
1 (14 |
%) |
1 |
Responses were adjudicated according to the International Myeloma Working Group criteria |
2 |
Based on interim unaudited data |
3 |
One patient was not evaluable for response due to withdrawn consent prior to disease follow-up |
4 |
One VGPR was confirmed on Oct 10, 2019 (after data cut); two VGPR are unconfirmed |
Best Responses 1 in Evaluable SDd Patients as of 1-May-2019 2 |
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Category |
N 3 |
ORR |
VGPR |
PR 4 |
|||||||||||||
Darzalex naïve |
30 |
22 (73%) |
11 (37%) |
11 (37%) |
|||||||||||||
All |
32 |
22 (69%) |
11 (34%) |
11 (34%) |
1 |
Responses were adjudicated according to the International Myeloma Working Group criteria |
2 |
Based on interim unaudited data |
3 |
Two patients were not evaluable for response as they withdrew consent prior to disease follow up |
4 |
Two unconfirmed PRs |
• | Maximize the Commercial Value of XPOVIO and Our Other Drug Candidates. |
unique physicians and healthcare accounts. In 2020, we plan to further penetrate the U.S. commercial market and further educate the medical community about the clinical data that supported the accelerated approval of XPOVIO. Outside of the United States, we will either work with existing and potential partners to establish such commercial infrastructure or may consider establishing this infrastructure ourselves on a case by base basis. To date, we have entered into several strategic arrangements. KPT-9274, each for the diagnosis, treatment and/or prevention of all human oncology indications, as well as verdinexor for the diagnosis, treatment and/or prevention of certain human non-oncology indications. We licensed the development and commercial rights to Antengene for selinexor and eltanexor in the oncology field in mainland China and Macau and licensed the development and commercial rights to Antengene for KPT-9274 in the oncology field and verdinexor in the non-oncology field in mainland China, Taiwan, Hong Kong, Macau, South Korea, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. We currently hold development, marketing, and commercialization rights for selinexor in all other countries and are developing selinexor and seeking regulatory approval for its use in oncology indications without a collaborator in North America and Europe. |
• | Continue to Develop and Seek Regulatory Approvals of Selinexor, Our Lead Novel Drug Candidate, in North America and Europe. |
• | Maintain Our Competitive Advantage and Scientific Expertise in the Field of Nuclear Transport. non-clinical studies are anticipated to provide support for new clinical investigations. One such example includes the recently initiated combination study of selinexor with Venclexta® (venetoclax), an oral inhibitor of the oncoprotein bcl-2. Pre-clinical studies have suggested that the combination may be synergistic in killing cancer cells and a new investigator-sponsored study at Vanderbilt University was initiated to evaluate the clinical potential of this combination. Beyond oncology, we have taken this approach in the past with KPT-350, an oral SINE compound for which we developed a preclinical data package supporting potential efficacy in a number of neuro-inflammatory conditions, which Biogen acquired from us in early 2018. KPT-350 was renamed BIIB100 and is currently in clinical evaluation to treat ALS. We believe that investing in the recruitment of exceptional advisors, employees, and management is critical to our continued leadership in the nuclear transport field. We are collaborating with leading patient advocacy groups to provide education on the science behind our SINE compounds and to support the development and execution of clinical trials. We have advanced the understanding and potential application of SINE compounds in cancer treatment through a broad range of collaborations with leading institutions engaged in evaluating SINE compounds in clinical trials in the United States, Canada, many European countries, Australia, India, Israel, Singapore and elsewhere. |
• | Continue Developing our Pipeline of Novel Drug Candidates. |
PAK4/NAMPT inhibitor, KPT-9274. A fifth program, KPT-350 for ALS and other neuro-inflammatory conditions, was sold to Biogen in January 2018. We may also identify or in-license novel drug candidates for development in oncology in the future. |
• | Maximize the Value of Our Other SINE Compounds in Non-Oncology Indications through Collaborations. non-oncology indications. For example, in May 2018, we licensed the development and commercial rights to Antengene for verdinexor in the non-oncology field in mainland China, Taiwan, Hong Kong, Macau, South Korea, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. As described above, in January 2018, we entered into an asset purchase agreement with Biogen pursuant to which Biogen acquired KPT-350 as well as certain related assets with an initial focus in ALS. |
• | Selinexor (KPT-330) non-provisional applications, including one directed to polymorphs of selinexor and one pending U.S. provisional patent application. Any patents that may issue in the United States as part of our selinexor patent portfolio, with the exception of a patent directed to the polymorphs of selinexor, will expire in 2032, absent any terminal disclaimer, patent term adjustment due to administrative delays by the United States Patent and Trademark Office, or USPTO, or patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act. Any patents that may issue in foreign jurisdictions will likewise expire in 2032. Any patents that may issue in the United States directed to the polymorphs of selinexor will expire in 2035, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patent issued in foreign jurisdictions will likewise expire in 2035. If a non-provisional patent application claiming the benefit of the pending U.S. provisional patent application referenced above is filed in 2020, any patents that may issue from such applications will expire no earlier than 2040. |
• | Selinexor (Wound Healing) |
• | Verdinexor (KPT-335) |
methods of use of verdinexor, as well as methods of making verdinexor. There are four issued U.S. Patents that cover verdinexor. One patent is specific to verdinexor, two patents cover both verdinexor and selinexor (also referenced above with respect to selinexor) and the other covers veterinary uses of verdinexor. |
• | Eltanexor KPT-8602) non-provisional U.S. patent application, nine issued foreign patents, 20 pending foreign patent applications and one pending PCT application. The PCT application provides the opportunity for seeking protection in all PCT member states. Any patents that may issue in the United States as part of our eltanexor patent portfolio, with the exception of a patent based on the pending PCT application, will expire in 2034, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents issued in foreign jurisdictions will likewise expire in 2034. Any patents that may issue in the United States based on the pending PCT application will expire in 2039, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents issued in foreign jurisdictions will likewise expire in 2039. |
• | PAK4/NAMPT Inhibitors KPT-9274, and consists of five patent families with nine issued U.S. patents, five issued foreign patents, two pending U.S. non-provisional patent applications, and 28 pending foreign patent applications in total. Any patents that may issue in the United States based on the pending U.S. non-provisional applications will expire in 2034 for the earliest filed application and 2036 for the remaining application, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents that may issue based on the pending foreign patent applications will likewise expire in 2034 or 2036. Foreign patent applications covering the composition of matter and methods of use of KPT-9274 have been filed in 21 countries/regions. |
• | completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations; |
• | submission to the FDA of an IND, which must take effect before human clinical trials may begin; |
• | approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; |
• | performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each indication; |
• | preparation and submission to the FDA of an NDA; |
• | review of the product by an FDA advisory committee, where appropriate or if applicable; |
• | satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; |
• | satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data; |
• | payment of user fees and securing FDA approval of the NDA; and |
• | compliance with any post-approval requirements, including Risk Evaluation and Mitigation Strategies, or REMS, and post-approval studies required by the FDA. |
Phase 1: | The drug is initially introduced into a small number of healthy human subjects or patients with the target disease (e.g. cancer) or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage. |
Phase 2: | The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. |
Phase 3: | The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. These clinical trials are commonly referred to as “pivotal” studies, which denotes a study that presents the data that the FDA or other relevant regulatory agency will use to determine whether or not to approve a drug. |
Phase 4: | Post-approval studies may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication. |
• | restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; |
• | fines, warning letters or holds on post-approval clinical trials; |
• | refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; |
• | product seizure or detention, or refusal to permit the import or export of products; or |
• | injunctions or the imposition of civil or criminal penalties. |
• | the required patent information has not been filed; |
• | the listed patent has expired; |
• | the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or |
• | the listed patent is invalid, unenforceable or will not be infringed by the new product. |
Safety: | The design and review of the safety study and the study protocol are completed prior to initiation of the study to help assure that the data generated will meet FDA requirements. These studies are conducted under rigorous quality control, including GLP, to assure integrity of the data. They are designed to clearly define a safety margin, identify any potential safety concerns, and establish a safe dose for the product. This dose and effectiveness is then evaluated in the pivotal field efficacy study where the product is studied in the animal patient population in which the product is intended to be used. |
Efficacy: | Early pilot studies may be done in laboratory cats or dogs to establish effectiveness and the dose range for each product. When an effective dose is established, a study protocol to test the product in real world conditions is developed prior to beginning the study. The pivotal field efficacy study protocol is submitted for review and concurrence prior to study initiation, to help assure that the data generated will meet requirements. This study must be conducted with the formulation of the product that is intended to be commercialized, and is a multi-site, randomized, controlled study, generally with a placebo control. |
CMC: | To assure that the new animal drug product can be manufactured consistently, FDA will require applicants to provide documentation of the process by which the active ingredient is made and the controls applicable to that process that assure the active ingredient and the formulation of the final commercial product meet certain criteria, including purity and stability. After a product is approved, applicants will be required to communicate with FDA before any changes are made to these procedures or at the manufacturing site. Both the active ingredient and commercial formulations are required to be manufactured at facilities that practice cGMP. |
• | the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; |
• | the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; |
• | the federal civil monetary penalty and false statement laws and regulations relating to pricing and submission of pricing information for government programs, including penalties for knowingly and intentionally overcharging 340B eligible entities and the submission of false or fraudulent pricing information to government entities; |
• | the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willingly executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; |
• | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, which also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; |
• | the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the U.S. Department of Health and Human Services, information related to payments and other transfers of value to clinicians and teaching hospitals (and beginning in 2022, additional non-physician clinicians including physician assistants and nurse practitioners) and clinician ownership and investment interests; and |
• | analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers. |
• | an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications; |
• | expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; |
• | expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans; |
• | addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; |
• | expanded the types of entities eligible for the 340B drug discount program; |
• | established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D; |
• | a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; |
• | the Independent Payment Advisory Board, or IPAB, which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs. However, the IPAB implementation has been not been clearly defined. The ACA provided that under certain circumstances, IPAB recommendations will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings; and |
• | established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. Funding has been allocated to support the mission of the Center for Medicare and Medicaid Innovation from 2011 to 2019. |
Name |
Age |
Position | ||||
Michael G. Kauffman, M.D., Ph.D. |
56 |
Chief Executive Officer and Director | ||||
Sharon Shacham, Ph.D., M.B.A. |
49 |
President and Chief Scientific Officer | ||||
Christopher B. Primiano, J.D., M.B.A. |
39 |
Executive Vice President, Chief Business Officer, General Counsel and Secretary | ||||
Ran Frenkel, RPh. |
51 |
Chief Development Operations Officer | ||||
Jatin Shah, M.D.. |
45 |
Executive Vice President, Chief Medical Officer | ||||
Tanya Lewis, M.S. |
49 |
Executive Vice President, Chief Regulatory Officer and Quality Officer | ||||
Michael Mason |
45 |
Senior Vice President, Chief Financial Officer and Treasurer |
ITEM 1A. |
RISK FACTORS |
• | successful commercialization of XPOVIO in the United States, including establishing and maintaining sales, marketing and distribution capabilities for XPOVIO; |
• | the consistency of any new data we collect and analyses we conduct with prior results, whether they support a favorable safety, efficacy and effectiveness profile of XPOVIO and any potential impact on our FDA accelerated approval and/or FDA package insert for XPOVIO; |
• | our ability to comply with FDA post-marketing requirements and commitments, including through successfully conducting additional studies that confirm clinical efficacy, effectiveness and safety of XPOVIO and acceptance of the same by the FDA and medical community since continued approval for this indication may be contingent upon verification of a clinical benefit in confirmatory trials; |
• | acceptance of XPOVIO and, if and when approved, our other drug candidates, by patients, the medical community and third-party payors; |
• | obtaining and maintaining coverage, adequate pricing and adequate reimbursement by third-party payors, including government payors, for XPOVIO and our drug candidates; |
• | successful completion of preclinical studies; |
• | acceptance by the FDA of investigational new drug applications, or INDs, for our drug candidates prior to commencing clinical studies; |
• | successful enrollment in, and completion of, clinical trials, including demonstration of a favorable risk-benefit ratio; |
• | receipt of marketing approvals from applicable regulatory authorities; |
• | establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; |
• | obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our drug candidates; |
• | establishing sales, marketing, manufacturing and distribution capabilities to commercialize any drug candidates for which we may obtain marketing approval, whether alone or in collaboration with others; |
• | launching commercial sales of any drug candidates for which we obtain marketing approval, whether alone or in collaboration with others; |
• | effectively competing with other therapies; |
• | maintaining an acceptable safety profile of the drugs following approval; |
• | compliance with existing and new health care laws and regulations currently being considered or implemented in the United States, including price reporting and other disclosure requirements of such laws and regulations and the potential impact of such requirements on physician prescribing practices and payor coverage; |
• | enforcing and defending intellectual property rights and claims; and |
• | maintaining and growing an organization of scientists and business people, including collaborators, who can develop and commercialize our drug candidates. |
• | the research methodology used may not be successful in identifying potential drug candidates; |
• | potential drug candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be drugs that will receive marketing approval and/or achieve market acceptance; or |
• | potential drug candidates may not be effective in treating their targeted diseases. |
• | regulatory authorities or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | feedback from regulatory authorities that requires us to modify the design of our clinical trials; |
• | we may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites or contract research organizations; |
• | clinical trials of our drug candidates may produce negative or inconclusive results, and we may decide, or regulatory authorities may require us, to conduct additional clinical trials, suspend ongoing clinical trials or abandon drug development programs; |
• | the number of patients required for clinical trials of our drug candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; |
• | our third-party contractors, including those manufacturing our drug candidates or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; |
• | we or our investigators might have to suspend or terminate clinical trials of our drug candidates for various reasons, including non-compliance with regulatory requirements, a finding that our drug candidates have undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks; |
• | regulators may recommend or require us to perform additional or unanticipated clinical trials to obtain approval; |
• | regulators may revise the requirements for approving our drug candidates, or such requirements may not be as we anticipate; |
• | the cost of clinical trials of our drug candidates may be greater than we anticipate; |
• | the supply or quality of our drug candidates or other materials necessary to conduct clinical trials of our drug candidates may be insufficient or inadequate; |
• | regulators may revise the requirements for approving our drug candidates, or such requirements may not be as we anticipate; and |
• | any partners and collaborators that help conduct clinical trials may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us. |
• | be delayed in obtaining marketing approval for our drug candidates; |
• | not obtain marketing approval at all; |
• | obtain marketing approval in some countries and not in others; |
• | obtain approval for indications or patient populations that are not as broad as intended or desired; |
• | obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings; |
• | be subject to additional post-marketing testing requirements; or |
• | have the drug removed from the market after obtaining marketing approval. |
• | severity of the disease under investigation; |
• | availability and efficacy of approved drugs for the disease under investigation; |
• | patient eligibility criteria for the study in question; |
• | competing drugs in clinical development; |
• | perceived risks and benefits of the drug candidate under study; |
• | restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; |
• | efforts to facilitate timely enrollment in clinical trials; |
• | patient referral practices of physicians; |
• | the ability to monitor patients adequately during and after treatment; and |
• | proximity and availability of clinical trial sites for prospective patients. |
• | regulatory authorities may withdraw the approval of such drug; |
• | regulatory authorities may require additional warnings on the label or impose distribution or use restrictions; |
• | regulatory authorities may require one or more post-marketing studies; |
• | we may be required to create a medication guide outlining the risks of such side effects for distribution to patients; |
• | we could be sued and held liable for harm caused to patients; and |
• | our reputation may suffer. |
• | efficacy and potential advantages compared to alternative treatments; |
• | the ability to offer our drugs for sale at competitive prices; |
• | convenience and ease of administration compared to alternative treatments; |
• | the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; |
• | the strength of marketing and distribution support; |
• | the timing of market introduction of competitive products; |
• | sufficient third-party coverage or reimbursement; |
• | effectiveness of our sales and marketing efforts; |
• | adverse publicity about our drugs or favorable publicity about competitive products; |
• | the prevalence and severity of any side effects; |
• | any restrictions on the use of our drugs together with other medications; and |
• | inability of certain types of patients to take our drugs. |
• | our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; |
• | the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future drugs; |
• | the lack of complementary drugs to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive drug lines; |
• | unforeseen costs and expenses associated with creating an independent sales, marketing and distribution organization; and |
• | inability to obtain sufficient coverage and reimbursement from third-party payors and governmental agencies. |
• | decreased demand for XPOVIO and any other drugs that we may develop; |
• | injury to our reputation and significant negative media attention; |
• | withdrawal of clinical trial participants; |
• | initiation of investigations by regulators; |
• | product recalls, withdrawals or labeling, marketing or promotional restrictions; |
• | significant costs to defend the related litigation; |
• | substantial monetary awards to trial participants or patients; |
• | loss of revenue; |
• | reduced resources of our management to pursue our business strategy; and |
• | the inability to successfully commercialize XPOVIO and any other drugs that we may develop. |
• | potentially reduced protection for intellectual property rights; |
• | the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market (with low or lower prices) rather than buying them locally; |
• | unexpected changes in tariffs, trade barriers and regulatory requirements; |
• | economic weakness, including inflation, volatility in currency exchange rates or political instability in particular foreign economies and markets; |
• | workforce uncertainty in countries where labor unrest is more common than in the United States; |
• | production shortages resulting from any events affecting a product candidate and/or finished drug product supply or manufacturing capabilities abroad; |
• | business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters, including earthquakes, hurricanes, typhoons, floods and fires; and |
• | failure to comply with Office of Foreign Asset Control rules and regulations and the Foreign Corrupt Practices Act, or FCPA. |
• | continue to commercialize XPOVIO in the United States and seek regulatory approval for XPOVIO outside of the United States; |
• | continue to grow our sales, marketing and distribution infrastructure during the commercialization of XPOVIO and any drug candidates for which we may obtain marketing approval, prior to or upon receiving marketing approval in the United States or outside the United States; |
• | continue our research and preclinical and clinical development of our drug candidates; |
• | initiate additional clinical trials for our drug candidates; |
• | seek marketing approvals for any of our drug candidates that successfully complete clinical trials; |
• | maintain, expand and protect our intellectual property portfolio; |
• | manufacture our drug candidates; |
• | hire additional clinical, quality control, scientific, commercial and management personnel; |
• | identify additional drug candidates; |
• | acquire or in-license other drugs and technologies; |
• | add operational, financial and management information systems and personnel, including personnel to support our drug development, any commercialization efforts and our other operations as a public company; and |
• | increase our product liability insurance coverage as we initiate and expand our commercialization efforts. |
• | successful launching of XPOVIO, including by further developing our sales force, marketing and distribution capabilities; |
• | achieving an adequate level of market acceptance and obtaining and maintaining coverage and adequate reimbursement from third-party payors for XPOVIO and any other drugs we commercialize; |
• | completing preclinical studies and clinical trials of our drug candidates; |
• | obtaining marketing approval for these drug candidates; |
• | manufacturing at commercial scale, marketing, selling and distributing XPOVIO or any drug candidates for which we may obtain marketing approval; |
• | maintaining regulatory and marketing approvals for XPOVIO and for any drug candidates for which we obtain marketing approval; |
• | establishing and managing any collaborations for the development, marketing and/or commercialization of our drug candidates; |
• | hiring and building a full commercial organization required for the marketing, selling and distribution for those drugs for which we obtain marketing approval; and |
• | obtaining, maintaining and protecting our intellectual property rights. |
• | our ability to successfully commercialize and sell XPOVIO in the United States; |
• | the cost of, and our ability to expand and maintain, the commercial infrastructure required to support the commercialization of XPOVIO and any other drug for which we receive marketing approval, including product sales, medical affairs, marketing and distribution; |
• | the progress and results of our current and planned clinical trials of selinexor; |
• | the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our other drug candidates; |
• | the costs, timing and outcome of regulatory review of our drug candidates, including whether any additional clinical trials or other activities are required for approval or label expansion; |
• | our ability to establish and maintain collaborations on favorable terms; |
• | the success of any collaborations that we have entered into and may enter into with third parties; |
• | the extent to which we acquire or in-license other drugs and technologies; |
• | the costs of commercialization activities, including drug sales, marketing, manufacturing and distribution, for any of our drug candidates for which we receive marketing approval, and pre-commercialization costs for our drug candidates incurred prior to receiving any such marketing approval, including the costs and timing of establishing product sales, marketing, manufacturing and distribution capabilities that are not the responsibility of any collaborator that we may have at such time; |
• | the amount of revenue, if any, received from commercial sales of our drug candidates, assuming receipt of marketing approval; |
• | the terms and timing of any future collaborations, partnerships, licensing, marketing, distribution or other arrangements that we may establish; and |
• | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims. |
• | increasing our vulnerability to adverse economic and industry conditions; |
• | limiting our ability to obtain additional financing; |
• | requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; |
• | limiting our flexibility to plan for, or react to, changes in our business; |
• | diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes; and |
• | placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital. |
• | collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; |
• | collaborators may not perform their obligations as expected or in compliance with applicable regulatory requirements; |
• | collaborators may not pursue development, marketing and/or commercialization of our drug candidates or may elect not to continue or renew development, marketing or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; |
• | collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing; |
• | collaborators could independently develop, or develop with third parties, drugs that compete directly or indirectly with our drugs or drug candidates if the collaborators believe that competitive drugs are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; |
• | a collaborator with marketing and distribution rights to one or more drugs may not commit sufficient resources to the marketing and distribution of such drug or drugs; |
• | disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of drug candidates, might lead to additional responsibilities for us with respect to drug candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; |
• | collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; |
• | collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; |
• | disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our drugs or drug candidates or that result in costly litigation or arbitration that diverts management’s attention and resources of our company; |
• | we may lose certain valuable rights under circumstances identified in any collaboration arrangement that we enter into, such as if we undergo a change of control; |
• | collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development, marketing and/or commercialization of the applicable drug candidates; |
• | collaborators may learn about our discoveries and use this knowledge to compete with us in the future; and |
• | the number and type of our collaborations could adversely affect our attractiveness to collaborators or acquirers. |
• | not provide us accurate or timely information regarding their inventories, the number of patients who are using XPOVIO or serious adverse reactions, events and/or product complaints regarding XPOVIO; |
• | not effectively sell or support XPOVIO or communicate publicly concerning XPOVIO in a manner that is contrary to FDA rules and regulations; |
• | reduce their efforts or discontinue to sell or support or otherwise not effectively sell or support XPOVIO; |
• | not devote the resources necessary to sell XPOVIO in the volumes and within the time frames that we expect; |
• | be unable to satisfy financial obligations to us or others; or |
• | cease operations. |
• | reliance on the third party for regulatory compliance and quality assurance; |
• | the possible breach of the manufacturing agreement by the third party; |
• | the possible failure of the third party to manufacture our drugs or drug candidates according to our schedule, or at all, including if the third-party manufacturer gives greater priority to the supply of other drugs over our drugs and drug candidates, or otherwise does not satisfactorily perform according to the terms of the manufacturing agreement; |
• | equipment malfunctions, power outages or other general disruptions experienced by our third-party manufacturers to their respective operations and other general problems with a multi-step manufacturing process; |
• | the possible misappropriation or disclosure by the third party or others of our proprietary information, including our trade secrets and know-how; and |
• | the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. |
• | litigation involving patients taking our drug; |
• | restrictions on such drugs, manufacturers or manufacturing processes; |
• | restrictions on the labeling or marketing of a drug; |
• | restrictions on drug distribution or use; |
• | requirements to conduct post-marketing studies or clinical trials; |
• | warning letters or untitled letters; |
• | withdrawal of the drugs from the market; |
• | refusal to approve pending applications or supplements to approved applications that we submit; |
• | recall of drugs; |
• | fines, restitution or disgorgement of profits or revenues; |
• | suspension or withdrawal of marketing approvals; |
• | damage to relationships with any potential collaborators; |
• | unfavorable press coverage and damage to our reputation; |
• | refusal to permit the import or export of drugs; |
• | drug seizure; or |
• | injunctions or the imposition of civil or criminal penalties. |
• | an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; |
• | an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; |
• | expansion of healthcare fraud and abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance; |
• | a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (and 70% starting January 1, 2019) point-of-sale discounts off negotiated prices to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D; |
• | extension of manufacturers’ Medicaid rebate liability; |
• | expansion of eligibility criteria for Medicaid programs; |
• | expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; |
• | new requirements to report certain financial arrangements with physicians and teaching hospitals; |
• | a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and |
• | a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. |
• | Anti-Kickback Statute |
• | False Claims Act per-claim penalties, currently set at a minimum of $11,181 and a maximum of $22,363 per false claim; ; |
• | HIPAA |
• | Transparency Requirements |
• | Analogous State and Foreign Laws |
• | establish a classified board of directors such that not all members of the board are elected at one time; |
• | allow the authorized number of our directors to be changed only by resolution of our board of directors; |
• | limit the manner in which stockholders can remove directors from the board; |
• | establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; |
• | require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; |
• | limit who may call stockholder meetings; |
• | authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and |
• | require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws. |
• | our success in launching and commercializing XPOVIO; |
• | the success of competitive drugs or technologies; |
• | results of clinical trials of our drug candidates or those of our competitors; |
• | our success in commercializing our drug candidates, if and when approved; |
• | regulatory or legal developments in the United States and other countries; |
• | developments or disputes concerning patent applications, issued patents or other proprietary rights; |
• | the recruitment or departure of key personnel; |
• | the level of expenses related to the commercial launch of XPOVIO and clinical development programs for any of our drug candidates; |
• | the results of our efforts to discover, develop, acquire or in-license additional drug candidates or drugs; |
• | actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; |
• | variations in our financial results or those of companies that are perceived to be similar to us; |
• | changes in the structure of healthcare payment systems; |
• | market conditions in the pharmaceutical and biotechnology sectors; |
• | general economic, industry and market conditions; and |
• | the other factors described in this “Risk Factors” section. |
Item 1B. |
Unresolved Staff Comments |
Item 2. |
Properties |
Item 3. |
Legal Proceedings |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Item 6. |
Selected Financial Data |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | continue to commercialize XPOVIO in the United States and seek regulatory approval for XPOVIO outside of the United States; |
• | continue to grow our sales, marketing and distribution infrastructure during the commercialization of XPOVIO and any drug candidates for which we may obtain marketing approval, prior to or upon receiving marketing approval in the United States or outside the United States; |
• | continue our research and preclinical and clinical development of our drug candidates; |
• | initiate additional clinical trials for our drug candidates; |
• | seek marketing approvals for any of our drug candidates that successfully complete clinical trials; |
• | maintain, expand and protect our intellectual property portfolio; |
• | manufacture our drug candidates; |
• | hire additional clinical, quality control, scientific, commercial and management personnel; |
• | identify additional drug candidates; |
• | acquire or in-license other drugs and technologies; |
• | add operational, financial and management information systems and personnel, including personnel to support our drug development, any commercialization efforts and our other operations as a public company; and |
• | increase our product liability insurance coverage as we initiate and expand our commercialization efforts. |
• | employee-related expenses, including salaries, benefits, travel and stock-based compensation expense; |
• | expenses incurred under agreements with third parties, including contract research organizations, contract manufacturing organizations and consultants that help conduct clinical trials and preclinical studies; |
• | the cost of acquiring, developing and manufacturing clinical trial materials, including comparator drugs; |
• | facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other operating costs; and |
• | costs associated with preclinical activities and regulatory operations. |
• | establishing an appropriate safety profile with Investigational New Drug-enabling toxicology studies, and ongoing clinical trials; |
• | successful enrollment in, and completion of, clinical trials; |
• | receipt of marketing approvals from applicable regulatory authorities; |
• | establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers; |
• | obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our drug candidates; |
• | establishing commercial sales and marketing capabilities and launching commercial sales of the drugs, if and when approved, whether alone or in collaboration with others; and |
• | maintaining a continued acceptable safety profile of the drugs following approval. |
Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
(in thousands) |
||||||||||||
Revenues: |
||||||||||||
Product revenue, net |
$ | 30,540 |
$ | — |
$ | — |
||||||
License and other revenue |
10,353 |
30,336 |
1,605 |
|||||||||
Operating expenses: |
||||||||||||
Cost of sales |
2,407 |
— |
— |
|||||||||
Research and development |
122,340 |
161,372 |
107,273 |
|||||||||
Selling, general and administrative |
105,421 |
48,847 |
24,870 |
|||||||||
Loss from operations |
(189,275 |
) | (179,883 |
) | (130,538 |
) | ||||||
Other (expense) income, net |
(10,275 |
) | 1,502 |
1,617 |
||||||||
Loss before income taxes |
(199,550 |
) | (178,381 |
) | (128,921 |
) | ||||||
Income tax provision |
(40 |
) | (26 |
) | (63 |
) | ||||||
Net loss |
$ | (199,590 |
) | $ | (178,407 |
) | $ | (128,984 |
) | |||
• | a decrease of $17.5 million in clinical trial costs, primarily related to the selinexor program; |
• | a decrease of $11.7 million in consulting and professional costs; |
• | a decrease of $9.6 million in personnel costs; and |
• | a decrease of $0.9 million in travel costs; offset by |
• | an increase of $0.6 million in facility costs and information technology infrastructure costs. |
• | an increase of $35.9 million in personnel costs, primarily due to increased headcount and related onboarding costs associated with building our commercial team in preparation for and in connection with the U.S. commercial launch of XPOVIO; |
• | an increase of $9.4 million in commercial related activities; |
• | an increase of $7.3 million in costs related to corporate training, travel and corporate events; and |
• | an increase of $4.3 million in facility costs and information technology infrastructure costs. |
Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
(in thousands) |
||||||||||||
Net cash used in operating activities |
$ | (190,822 |
) | $ | (159,117 |
) | $ | (73,717 |
) | |||
Net cash provided by (used in) investing activities |
78,450 |
(107,664 |
) | 17,108 |
||||||||
Net cash provided by financing activities |
124,305 |
316,109 |
75,743 |
|||||||||
Effect of exchange rate changes |
19 |
(78 |
) | 211 |
||||||||
Net increase in cash, cash equivalents and restricted cash |
$ | 11,952 |
$ | 49,250 |
$ | 19,345 |
||||||
• | revenue generated from commercial sales of XPOVIO; |
• | costs related to the sales and marketing of XPOVIO; |
• | the costs, timing and outcome of regulatory review of our drug candidates; |
• | the costs of future commercialization activities, including drug sales, marketing, manufacturing and distribution, for any of our drug candidates for which we receive marketing approval, to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of any collaborator that we may have at such time; |
• | the amount of revenue received from commercial sales of our drug candidates for which we receive marketing approval; |
• | the progress and results of our current and planned clinical trials of selinexor; |
• | the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our other drug candidates; |
• | our ability to establish and maintain collaborations on favorable terms, if at all; |
• | the success of any collaborations that we may enter into with third parties; |
• | the extent to which we acquire or in-license other drugs and technologies; |
• | the costs associated with legal activities, including litigation, arising in the course of business activities and our ability to prevail in any such legal disputes; and |
• | the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims. |
Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 8. |
Financial Statements and Supplementary Data |
Item 10. |
Directors, Executive Officers and Corporate Governance |
Item 11. |
Executive Compensation |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
Item 14. |
Principal Accountant Fees and Services |
Item 15. |
Exhibits and Financial Statement Schedules |
Page number |
||||
133 |
||||
134 |
||||
135 |
||||
136 |
||||
137 |
||||
138 |
||||
139 |
Item 16. |
Form 10-K Summary |
December 31, 2019 |
December 31, 2018 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | |
$ | |
||||
Short-term investments |
|
|
||||||
Accounts receivable |
|
— |
||||||
Inventory |
|
— |
||||||
Prepaid expenses and other current assets |
|
|
||||||
Restricted cash |
|
— |
||||||
Total current assets |
|
|
||||||
Property and equipment, net |
|
|
||||||
Operating lease right-of-use assets |
|
— |
||||||
Long-term investments |
|
|
||||||
Restricted cash |
|
|
||||||
Total assets |
$ | |
$ | |
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | |
$ | |
||||
Accrued expenses |
|
|
||||||
Deferred revenue |
|
|
||||||
Operating lease liabilities |
|
— |
||||||
Deferred rent |
— |
|
||||||
Other current liabilities |
|
|
||||||
Total current liabilities |
|
|
||||||
Convertible senior notes |
|
|
||||||
Deferred royalty obligation |
|
— |
||||||
Operating lease liabilities, net of current portion |
|
— |
||||||
Deferred revenue, net of current portion |
|
|
||||||
Deferred rent, net of current portion |
— |
|
||||||
Total liabilities |
|
|
||||||
Commitments and contingencies (Note 9 ) |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ |
|
|
||||||
Common stock, $ |
|
|
||||||
Additional paid-in capital |
|
|
||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total stockholders’ equity |
|
|
||||||
Total liabilities and stockholders’ equity |
$ | |
$ | |
||||
For the Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Revenues: |
||||||||||||
Product revenue, net |
$ | |
$ | — |
$ | — |
||||||
License and other revenue |
|
|
|
|||||||||
Total revenues |
||||||||||||
Operating expenses: |
||||||||||||
Cost of sales |
|
— |
— |
|||||||||
Research and development |
|
|
|
|||||||||
Selling, general and administrative |
|
|
|
|||||||||
Total operating expenses |
|
|
|
|||||||||
Loss from operations |
( |
) |
( |
) | ( |
) | ||||||
Other income (expense): |
||||||||||||
Interest income |
|
|
|
|||||||||
Interest expense |
( |
) | ( |
) | — |
|||||||
Other expense |
( |
) | ( |
) | ( |
) | ||||||
Total other (expense) income, net |
( |
) | |
|
||||||||
Loss before income taxes |
( |
) | ( |
) | ( |
) | ||||||
Income tax provision |
( |
) | ( |
) | ( |
) | ||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Net loss per share—basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Weighted-average number of common shares outstanding used in net loss per share—basic and diluted |
|
|
|
|||||||||
For the Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Other comprehensive income (loss): |
||||||||||||
Unrealized gain (loss) on investments |
|
|
( |
) | ||||||||
Foreign currency translation adjustment |
— |
( |
) | |
||||||||
Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Common Shares |
||||||||||||||||||||||||
Shares |
Amount |
Additional Paid-In Capital |
Accumulated Other Comprehensive Loss |
Accumulated Deficit |
Total Stockholders’ Equity |
|||||||||||||||||||
Balance at December 31, 2016 |
|
|
|
( |
) | ( |
) | |
||||||||||||||||
Cumulative effect adjustment for adoption of new accounting guidance |
— |
— |
|
— |
( |
) | — |
|||||||||||||||||
Vesting of restricted stock |
|
— |
— |
— |
— |
— |
||||||||||||||||||
Exercise of stock options and shares issued under the employee stock purchase plan |
|
— |
|
— |
— |
|
||||||||||||||||||
Stock-based compensation expense |
— |
— |
|
— |
— |
|
||||||||||||||||||
Issuance of common stock, net of issuance costs of $ million |
|
|
|
|
— |
— |
|
|||||||||||||||||
Unrealized loss on investments |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
|
— |
|
||||||||||||||||||
Net loss |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
Balance at December 31, 2017 |
|
|
|
( |
) | ( |
) | |
||||||||||||||||
Vesting of restricted stock |
|
— |
— |
— |
— |
— |
||||||||||||||||||
Exercise of stock options and shares issued under the employee stock purchase plan |
|
— |
|
— |
— |
|
||||||||||||||||||
Stock-based compensation expense |
— |
— |
|
— |
— |
|
||||||||||||||||||
Issuance of common stock, net of issuance costs of $ million |
|
|
|
— |
— |
|
||||||||||||||||||
Equity component of 2025 Notes |
— |
— |
|
— |
— |
|
||||||||||||||||||
Equity component of deferred financing costs for 2025 notes |
— |
— |
( |
) | — |
— |
( |
) | ||||||||||||||||
Unrealized gain on investments |
— |
— |
— |
|
— |
|
||||||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
Net loss |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
Balance at December 31, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
Vesting of restricted stock |
17,500 |
— |
— |
— |
— |
— |
||||||||||||||||||
Exercise of stock options and shares issued under the employee stock purchase plan |
|
— |
|
— |
— |
|
||||||||||||||||||
Stock-based compensation expense |
— |
— |
|
— |
— |
|
||||||||||||||||||
Issuance of common stock, net of issuance costs of $ million |
|
|
|
— |
— |
|
||||||||||||||||||
Unrealized gain on investments |
— |
— |
— |
|
— |
|
||||||||||||||||||
Foreign currency translation adjustment |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Net loss |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
Balance at December 31, 2019 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
For the Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Operating activities |
||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
Depreciation and amortization |
|
|
|
|||||||||
Net amortization of premiums and discounts on investments |
( |
) |
|
|
||||||||
Stock-based compensation expense |
|
|
|
|||||||||
Amortization of the value of debt discount and issuance costs |
|
|
— |
|||||||||
Change in operating assets and liabilities: |
||||||||||||
Accounts receivable |
( |
) |
— |
— |
||||||||
Inventory |
( |
) |
— |
— |
||||||||
Prepaid expenses and other current assets |
( |
) |
( |
) |
|
|||||||
Operating lease right-of-use assets |
|
— |
— |
|||||||||
Accounts payable |
( |
) |
( |
) |
|
|||||||
Accrued expenses and other liabilities |
|
|
|
|||||||||
Operating lease liabilities |
( |
) |
— |
— |
||||||||
Deferred revenue |
( |
) |
( |
) |
|
|||||||
Deferred rent |
— |
|
( |
) | ||||||||
Net cash used in operating activities |
( |
) |
( |
) |
( |
) | ||||||
Investing activities |
||||||||||||
Purchases of property and equipment |
( |
) |
( |
) |
( |
) | ||||||
Proceeds from maturities of investments |
|
|
|
|||||||||
Purchases of investments |
( |
) |
( |
) |
( |
) | ||||||
Net cash provided by (used in) investing activities |
|
( |
) |
|
||||||||
Financing activities |
||||||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs |
— |
|
— |
|||||||||
Proceeds from issuance of common stock, net of issuance costs |
|
|
|
|||||||||
Proceeds from the exercise of stock options and shares issued under employee stock purchase plan |
|
|
|
|||||||||
Proceeds from deferred royalty obligation, net |
|
— |
— |
|||||||||
Net cash provided by financing activities |
|
|
|
|||||||||
Effect of exchange rate on cash, cash equivalents and restricted cash |
|
( |
) |
|
||||||||
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at beginning of period |
|
|
|
|||||||||
Cash, cash equivalents and restricted cash end of period |
$ |
|
$ |
|
$ |
|
||||||
Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets |
||||||||||||
Cash and cash equivalents |
$ |
|
$ |
|
$ |
|
||||||
Short-term restricted cash |
|
— |
|
|||||||||
Long-term restricted cash |
|
|
|
|||||||||
Total cash, cash equivalents and restricted cash |
$ |
|
$ |
|
$ |
|
||||||
Supplemental disclosures: |
||||||||||||
Cash paid for interest on convertible debt |
$ |
|
$ |
— |
$ |
— |
||||||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities |
$ |
|
$ |
— |
$ |
— |
||||||
Cash paid for amounts included in the measurement of operating lease liabilities |
$ |
|
$ |
— |
$ |
— |
Level 1 inputs |
Quoted prices in active markets for identical assets or liabilities | |
Level 2 inputs |
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly | |
Level 3 inputs |
Unobservable inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability |
Description |
Total |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Financial assets |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | |
$ | |
$ | — |
$ | — |
||||||||
Investments: |
||||||||||||||||
Short-term: |
||||||||||||||||
Corporate debt securities |
|
— |
|
— |
||||||||||||
Commercial paper |
|
— |
|
— |
||||||||||||
U.S. government and agency securities |
|
— |
|
— |
||||||||||||
Long-term: |
||||||||||||||||
Corporate debt securities (one to two year maturity) |
|
— |
|
— |
||||||||||||
$ | |
$ | |
$ | |
$ | — |
|||||||||
Financial liability |
||||||||||||||||
Embedded derivative liability |
$ | |
$ | — |
$ | — |
$ | |
Description |
Total |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Financial assets |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | |
$ | |
$ | — |
$ | — |
||||||||
Investments: |
||||||||||||||||
Short-term: |
||||||||||||||||
Corporate debt securities |
|
— |
|
— |
||||||||||||
Commercial paper |
|
— |
|
— |
||||||||||||
U.S. government and agency securities |
|
— |
|
— |
||||||||||||
Certificate of deposit |
|
— |
|
— |
||||||||||||
Long-term: |
||||||||||||||||
Corporate debt securities (one to two year maturity) |
|
— |
|
— |
||||||||||||
$ | |
$ | |
$ | |
$ | — |
|||||||||
Embedded Derivative Liability |
||||
Balance as of December 31, 2018 |
$ | |
||
Addition of derivative related to deferred royalty obligation . |
|
|||
Change in fair value of derivative since issuanc e |
|
|
| |
Balance as of December 31, 2019 |
$ | |
• | employee-related expenses, including salaries, benefits, travel and stock-based compensation expense; |
• | expenses incurred under agreements with contract research organizations, contract manufacturing organizations and consultants that help conduct clinical trials and preclinical studies; |
• | the cost of acquiring, developing and manufacturing clinical trial materials, including comparator drugs; |
• | facility, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies; and |
• | costs associated with preclinical activities and regulatory operations. |
December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Outstanding stock options |
|
|
|
|||||||||
Unvested restricted stock units |
|
|
|
January 1, 2019 Prior to ASC 842 Adoption |
ASC 842 Adjustment |
January 1, 2019 as Adjusted |
||||||||||
Consolidated balance sheet data (in thousands): |
||||||||||||
Operating lease and right-of-use assets(1) |
$ |
— |
$ |
|
$ |
|
||||||
Deferred rent(2) |
$ |
|
$ |
( |
) |
$ |
— |
|||||
Deferred rent non-current(2) |
$ |
|
$ |
( |
) |
$ |
— |
|||||
Operating lease liabilities(3) |
$ |
— |
$ |
|
$ |
|
||||||
Non-current operating leaseliabilities(3) |
$ |
— |
$ |
|
$ |
|
(1) | Represents capitalization of operating lease right-of-use assets, offset by reclassification of deferred rent and tenant incentives to operating lease right-of-use assets. |
(2) | Represents reclassification of deferred rent and tenant incentives to operating lease right-of-use assets. |
(3) | Represents recognition of operating lease liabilities. |
December 31, |
||||||||||||
Estimated Useful Life Years |
2019 |
2018 |
||||||||||
Laboratory equipment |
$ | $ | ||||||||||
Furniture and fixtures |
||||||||||||
Office and computer equipment |
||||||||||||
Leasehold improvements |
||||||||||||
Less accumulated depreciation and amortization |
( |
) | ( |
) | ||||||||
$ | $ | |||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Loss |
Fair Value |
|||||||||||||
Short-term: |
||||||||||||||||
Corporate debt securities |
$ | $ | $ | ( |
) | $ | ||||||||||
Commercial paper |
— |
|||||||||||||||
U.S. government and agency securities |
— |
|||||||||||||||
Long-term: |
||||||||||||||||
Corporate debt securities (one to two year maturity) |
— |
( |
) | |||||||||||||
$ | $ | $ | ( |
) | $ | |||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Loss |
Fair Value |
|||||||||||||
Short-term: |
||||||||||||||||
Corporate debt securities |
$ | $ | $ | ( |
) | $ | ||||||||||
Commercial paper |
— |
( |
) | |||||||||||||
U.S. government and agency securities |
( |
) | ||||||||||||||
Certificates of deposit |
— |
( |
) | |||||||||||||
Long-term: |
||||||||||||||||
Corporate debt securities (one to two year maturity) |
— |
( |
) | |||||||||||||
$ | $ | $ | ( |
) | $ | |||||||||||
December 31, 2019 |
December 31, 2018 |
|||||||
Raw materials and work in process |
$ | $ | ||||||
Finished goods |
||||||||
Total inventory |
$ | $ | — |
|||||
December 31, |
||||||||
2019 |
2018 |
|||||||
Research and development costs |
$ | $ | ||||||
Payroll and employee-related costs |
||||||||
Professional fees |
||||||||
I nterest |
— | |||||||
Other |
||||||||
$ | $ | |||||||
Years ending December 31, |
Future Minimum Payments |
|||
2020 |
$ | |
||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 and thereafter |
|
|||
Total minimum lease payments |
$ | |
||
Less: present value adjustment |
( |
) | ||
Present value of minimum lease payments |
$ | |
||
Discounts and Chargebacks |
Fees, Rebates, and Other Incentives |
Returns |
Total |
|||||||||||||
Short-term: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance at July 3 , 2019 |
$ | |
$ | — |
$ | — |
$ |
— |
||||||||
Provision related to sales in the current year |
|
|
|
|
||||||||||||
Credit and payments made |
( |
) | ( |
) | — |
( |
) | |||||||||
|
||||||||||||||||
Ending balance at December 31, 2019 |
$ | |
$ | |
$ | |
$ | |
||||||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Research and development |
$ | |
$ | |
$ | |
||||||
Selling, general and administrative |
|
|
|
|||||||||
Total |
$ | |
$ | |
$ | |
||||||
Options |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Term (year) |
Aggregate Intrinsic Value (in thousands) |
|||||||||||||
Options outstanding at December 31, 2018 |
|
$ | |
|
$ | |
||||||||||
Granted |
|
|
|
|
||||||||||||
Exercised |
( |
) |
||||||||||||||
Forfeited |
( |
) | |
|
|
|||||||||||
Options outstanding at December 31, 2019 |
|
$ | |
|
$ | |
||||||||||
Options exercisable at December 31, 2019 |
|
$ | |
|
$ | |
||||||||||
Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Volatility |
|
|
|
|||||||||
Expected term (in years) |
|
|
|
|||||||||
Risk-free interest rate |
|
|
|
|||||||||
Dividend |
|
|
|
Number of Shares Underlying RSUs |
Weighted-Average Grant Date Fair Value |
|||||||
Unvested at December 31, 2018 |
|
$ | |
|||||
Granted |
|
|
||||||
Forfeited |
( |
) | |
|||||
Vested |
( |
) | |
|||||
Unvested at December 31, 2019 |
|
$ | |
|||||
Years Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Volatility |
% - |
|
|
|||||||||
Expected term (in years) |
|
|
|
|||||||||
Risk-free interest rate |
% - |
|
|
|||||||||
Dividend |
|
|
|
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Foreign |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
U.S. |
( |
) | ( |
) | ( |
) | ||||||
Totals |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Year Ended December 31, |
||||||||
2019 |
2018 |
|||||||
Deferred tax assets: |
||||||||
U.S. and state net operating loss carryforwards |
$ | $ | ||||||
Stock-based compensation |
||||||||
Accruals and other temporary differences |
||||||||
Research and development credits |
||||||||
Capitalized research and development |
||||||||
Fixed assets and intangibles |
||||||||
Deferred revenue |
||||||||
Foreign net operating loss carryforwards |
||||||||
Lease liability |
— |
|||||||
Deferred royalty embedded derivative |
— |
|||||||
Valuation allowance |
( |
) | ( |
) | ||||
Total deferred tax assets |
||||||||
Deferred tax liabilities: |
||||||||
Convertible debt amortization |
( |
) | ( |
) | ||||
Right-of-use asset |
( |
) |
— |
|||||
Deferred royalty obligation |
( |
) |
— |
|||||
Total deferred tax liabilities |
( |
) | ( |
) | ||||
Net deferred tax assets |
$ | $ | ||||||
Year Ended December 31, |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Federal income tax expense at statutory rate |
% | % | % | |||||||||
State income tax, net of federal benefit |
% | % | % | |||||||||
Permanent differences |
( |
)% | % | ( |
)% | |||||||
Research and development credit |
% | % | % | |||||||||
Foreign rate differential |
( |
)% | ( |
)% | ( |
)% | ||||||
Change in valuation allowance |
( |
)% | ( |
)% | ( |
)% | ||||||
Provision to return adjustments |
% | % | % | |||||||||
Other |
( |
)% | ( |
)% | ( |
)% | ||||||
Federal rate change |
% | % | ( |
)% | ||||||||
Effective income tax rate |
% | % | % | |||||||||
(1) | during any calendar quarter commencing after the calendar quarter ending on December 31, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least |
(2) |
(3) | if we call the Notes for redemption, until the close of business on the business day immediately preceding the redemption date; or |
(4) | upon the occurrence of specified corporate events as described within the indenture governing the Notes. |
Liability component: |
||||
Principal |
$ | |
||
Less: debt discount and issuance costs, net |
( |
) | ||
Net carrying amount |
$ | |
||
Equity component: |
$ | |
||
Year Ended December 31, 2019 |
||||
Contractual interest expense |
$ | |
||
Amortization of debt discount |
|
|||
Amortization of debt issuance costs |
|
|||
Total interest expense |
$ | |
||
Years ended December 31, |
Future Minimum Payments |
|||
2020 |
$ | |
||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 and thereafter |
|
|||
Total minimum payments |
$ | |
||
Less: interest |
( |
) | ||
Less: unamortized discount |
( |
) | ||
Less: current portion |
|
|||
Convertible senior notes |
$ | |
||
Exhibit Number |
Description of Exhibit | |||
3.1 |
||||
3.2 |
||||
4.1 |
||||
4.2 |
||||
4.3 |
||||
4.4** |
||||
10.1* |
||||
10.2* |
||||
10.3* |
||||
10.4* |
||||
10.5* |
||||
10.6* |
||||
10.7* |
||||
10.8* |
Exhibit Number |
Description of Exhibit | |||
10.9* |
||||
10.10* |
||||
10.11* |
||||
10.12* |
||||
10.13* |
||||
10.14* |
||||
10.15* |
||||
10.16* |
||||
10.17* |
||||
10.18* |
||||
10.19* |
||||
10.20* |
||||
10.21* |
Exhibit Number |
Description of Exhibit | |||
10.22* |
||||
10.23* |
||||
10.24 |
||||
10.25 |
||||
10.26 |
||||
10.27 |
||||
10.28 |
||||
10.29† |
||||
10.30 |
||||
10.31† |
||||
10.32† |
||||
10.33† |
Exhibit Number |
Description of Exhibit | |||
10.34 |
||||
10.35* |
||||
10.36* |
||||
10.37* |
||||
10.38*** |
||||
21.1** |
||||
23.1** |
||||
31.1** |
||||
31.2** |
||||
32.1** |
||||
101.INS |
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||
101.SCH |
Inline XBRL Schema Document | |||
101.CAL |
Inline XBRL Calculation Linkbase Document | |||
101.LAB |
Inline XBRL Labels Linkbase Document | |||
101.PRE |
Inline XBRL Presentation Linkbase Document | |||
101.DEF |
Inline XBRL Definition Linkbase Document | |||
104 |
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
† |
Confidential treatment has been granted as to portions of the exhibit. |
* |
Indicates a management contract or compensatory plan or arrangement. |
** |
Filed with this Annual Report on Form 10-K. |
*** |
Certain portions of this exhibit (indicated by “***”) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. |
KARYOPHARM THERAPEUTICS INC. | ||||||
Date: February 26, 2020 |
By: |
/s/ Michael G. Kauffman | ||||
Michael G. Kauffman, M.D., Ph.D. Chief Executive Officer and Director (Principal Executive Officer) |
Signature |
Title |
Date | ||
/s/ Michael G. Kauffman |
Chief Executive Officer and Director |
February 26, 2020 | ||
Michael G. Kauffman, M.D., Ph.D. |
(Principal Executive Officer) |
|||
/s/ Michael Mason Michael Mason |
Senior Vice President, Chief Financial Officer and Treasurer |
February 26, 2020 | ||
(Principal Financial and Accounting Officer) |
||||
/s/ Garen G. Bohlin |
Director |
February 26, 2020 | ||
Garen G. Bohlin |
||||
/s/ Mikael Dolsten |
Director |
February 26, 2020 | ||
Mikael Dolsten, M.D., Ph.D. |
||||
/s/ J. Scott Garland |
Director |
February 26, 2020 | ||
J. Scott Garland |
||||
/s/ Barry E. Greene |
Director |
February 26, 2020 | ||
Barry E. Greene |
||||
/s/ Deepika R. Pakianathan |
Director |
February 26, 2020 | ||
Deepika R. Pakianathan, Ph.D. |
||||
/s/ Mansoor Raza Mirza |
Director |
February 26, 2020 | ||
Mansoor Raza Mirza, M.D. |