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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number: 001-36167

 

Karyopharm Therapeutics Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

26-3931704

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

 

 

85 Wells Avenue, 2nd Floor

Newton, MA

 

02459

(Address of principal executive offices)

 

(Zip Code)

 

(617) 658-0600

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.0001 par value

 

KPTI

 

Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes     No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes       No  

As of October 28, 2020, there were 73,600,777 shares of Common Stock, $0.0001 par value per share, outstanding.

 

 

 


TABLE OF CONTENTS

 

 

 

PART I - FINANCIAL INFORMATION

 

3

 

 

 

 

 

Item 1.

 

Condensed Consolidated Financial Statements (Unaudited)

 

3

 

 

Condensed Consolidated Balance Sheets

 

3

 

 

Condensed Consolidated Statements of Operations

 

4

 

 

Condensed Consolidated Statements of Comprehensive Loss

 

5

 

 

Condensed Consolidated Statements of Cash Flows

 

6

 

 

Condensed Consolidated Statements of Stockholders’ Equity

 

7

 

 

Notes to Condensed Consolidated Financial Statements

 

8

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

27

Item 4.

 

Controls and Procedures

 

28

 

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

29

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

29

Item 1A.

 

Risk Factors

 

29

Item 6.

 

Exhibits

 

71

 

 

Signatures

 

72

 

2


PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited).

KARYOPHARM THERAPEUTICS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except per share amounts)

 

 

 

September 30,

2020

 

 

December 31,

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

82,301

 

 

$

128,858

 

Short-term investments

 

 

180,743

 

 

 

133,098

 

Accounts receivable

 

 

11,062

 

 

 

7,862

 

Inventory

 

 

2,011

 

 

 

346

 

Prepaid expenses and other current assets

 

 

8,242

 

 

 

7,289

 

Restricted cash

 

 

1,088

 

 

 

1,117

 

Total current assets

 

 

285,447

 

 

 

278,570

 

Property and equipment, net

 

 

2,357

 

 

 

3,046

 

Operating lease right-of-use assets

 

 

9,694

 

 

 

10,617

 

Long-term investments

 

 

39,371

 

 

 

2,016

 

Restricted cash

 

 

718

 

 

 

714

 

Total assets

 

$

337,587

 

 

$

294,963

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,422

 

 

$

985

 

Accrued expenses

 

 

46,591

 

 

 

40,878

 

Deferred revenue

 

 

297

 

 

 

2,341

 

Operating lease liabilities

 

 

1,847

 

 

 

1,646

 

Other current liabilities

 

 

1,473

 

 

 

500

 

Total current liabilities

 

 

52,630

 

 

 

46,350

 

Convertible senior notes

 

 

115,802

 

 

 

109,857

 

Deferred royalty obligation

 

 

73,588

 

 

 

73,588

 

Operating lease liabilities, net of current portion

 

 

11,797

 

 

 

13,202

 

Deferred revenue, net of current portion

 

 

 

 

 

2,192

 

Total liabilities

 

 

253,817

 

 

 

245,189

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 5,000 shares authorized; none issued and

   outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 200,000 shares authorized; 73,528 and 65,370

   shares issued and outstanding at September 30, 2020 and December 31, 2019,

   respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

1,109,350

 

 

 

923,142

 

Accumulated other comprehensive income (loss)

 

 

603

 

 

 

(37

)

Accumulated deficit

 

 

(1,026,190

)

 

 

(873,338

)

Total stockholders’ equity

 

 

83,770

 

 

 

49,774

 

Total liabilities and stockholders’ equity

 

$

337,587

 

 

$

294,963

 

 

See accompanying notes to condensed consolidated financial statements.

3


KARYOPHARM THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue, net

 

$

21,330

 

 

$

12,821

 

 

$

55,992

 

 

$

12,821

 

License and other revenue

 

 

3

 

 

 

328

 

 

 

16,993

 

 

 

9,976

 

Total revenues

 

 

21,333

 

 

 

13,149

 

 

 

72,985

 

 

 

22,797

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

438

 

 

 

1,013

 

 

 

1,653

 

 

 

1,013

 

Research and development

 

 

37,037

 

 

 

26,270

 

 

 

113,628

 

 

 

90,761

 

Selling, general and administrative

 

 

30,967

 

 

 

25,267

 

 

 

92,488

 

 

 

77,032

 

Total operating expenses

 

 

68,442

 

 

 

52,550

 

 

 

207,769

 

 

 

168,806

 

Loss from operations

 

 

(47,109

)

 

 

(39,401

)

 

 

(134,784

)

 

 

(146,009

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

600

 

 

 

1,137

 

 

 

2,424

 

 

 

4,320

 

Interest expense

 

 

(6,801

)

 

 

(3,093

)

 

 

(20,068

)

 

 

(9,180

)

Other (expense) income, net

 

 

(141

)

 

 

10

 

 

 

(177

)

 

 

(36

)

Total other expense, net

 

 

(6,342

)

 

 

(1,946

)

 

 

(17,821

)

 

 

(4,896

)

Loss before income taxes

 

 

(53,451

)

 

 

(41,347

)

 

 

(152,605

)

 

 

(150,905

)

Income tax provision

 

 

(44

)

 

 

(20

)

 

 

(247

)

 

 

(38

)

Net loss

 

$

(53,495

)

 

$

(41,367

)

 

$

(152,852

)

 

$

(150,943

)

Net loss per share—basic and diluted

 

$

(0.73

)

 

$

(0.67

)

 

$

(2.14

)

 

$

(2.46

)

Weighted-average number of common shares outstanding used in

    net loss per share—basic and diluted

 

 

73,466

 

 

 

62,093

 

 

 

71,479

 

 

 

61,297

 

 

See accompanying notes to condensed consolidated financial statements.

4


KARYOPHARM THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(in thousands)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(53,495

)

 

$

(41,367

)

 

$

(152,852

)

 

$

(150,943

)

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on investments

 

 

(319

)

 

 

(59

)

 

 

640

 

 

 

250

 

Foreign currency translation adjustment

 

 

31

 

 

 

(32

)

 

 

 

 

 

(36

)

Comprehensive loss

 

$

(53,783

)

 

$

(41,458

)

 

$

(152,212

)

 

$

(150,729

)

 

See accompanying notes to condensed consolidated financial statements.

5


 

KARYOPHARM THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(152,852

)

 

$

(150,943

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

715

 

 

 

730

 

Net amortization of premiums and discounts on investments

 

 

710

 

 

 

(1,242

)

Amortization of debt discount and issuance costs

 

 

5,945

 

 

 

5,298

 

Stock-based compensation expense

 

 

18,093

 

 

 

11,742

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(3,200

)

 

 

(7,928

)

Inventory

 

 

(1,665

)

 

 

(100

)

Prepaid expenses and other current assets

 

 

(953

)

 

 

1,108

 

Operating lease right-of-use assets

 

 

924

 

 

 

807

 

Accounts payable

 

 

1,437

 

 

 

(1,215

)

Accrued expenses and other liabilities

 

 

6,686

 

 

 

569

 

Deferred revenue

 

 

(4,236

)

 

 

(9,362

)

Operating lease liabilities

 

 

(1,204

)

 

 

(797

)

Net cash used in operating activities

 

 

(129,600

)

 

 

(151,333

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(26

)

 

 

(156

)

Proceeds from maturities of investments

 

 

162,855

 

 

 

202,454

 

Purchases of investments

 

 

(247,911

)

 

 

(90,329

)

Net cash (used in) provided by investing activities

 

 

(85,082

)

 

 

111,969

 

Financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock, net of issuance costs

 

 

161,802

 

 

 

14,563

 

Proceeds from the exercise of stock options and shares issued under employee

   stock purchase plan

 

 

6,313

 

 

 

1,124

 

Proceeds from deferred royalty obligation, net

 

 

 

 

 

73,682

 

Net cash provided by financing activities

 

 

168,115

 

 

 

89,369

 

Effect of exchange rate on cash, cash equivalents and restricted cash

 

 

(15

)

 

 

(26

)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(46,582

)

 

 

49,979

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

130,689

 

 

 

118,737

 

Cash, cash equivalents and restricted cash at end of period

 

$

84,107

 

 

$

168,716

 

Reconciliation of cash, cash equivalents and restricted cash reported within the

   condensed consolidated balance sheets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

82,301

 

 

$

168,004

 

Short-term restricted cash

 

 

1,088

 

 

 

 

Long-term restricted cash

 

 

718

 

 

 

712

 

Total cash, cash equivalents and restricted cash

 

$

84,107

 

 

$

168,716

 

Supplemental disclosures:

 

 

 

 

 

 

 

 

Operating lease right-of-use assets obtained in exchange for operating lease

   liabilities

 

$

 

 

$

11,711

 

Cash paid for amounts included in the measurement of operating lease liabilities

 

$

2,388

 

 

$

2,096

 

Cash paid for interest on deferred royalty obligation

 

$

4,521

 

 

$

 

 

See accompanying notes to condensed consolidated financial statements.

6


KARYOPHARM THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Accumulated

Deficit

 

 

Total

Stockholders’

Equity

 

Balance at June 30, 2020

 

 

73,366

 

 

$

7

 

 

$

1,101,596

 

 

$

891

 

 

$

(972,695

)

 

$

129,799

 

Vesting of restricted stock

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options and shares issued

   under the employee stock purchase plan

 

 

152

 

 

 

 

 

 

1,241

 

 

 

 

 

 

 

 

 

1,241

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

6,513

 

 

 

 

 

 

 

 

 

6,513

 

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

(319

)

 

 

 

 

 

(319

)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

31

 

 

 

 

 

 

31

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(53,495

)

 

 

(53,495

)

Balance at September 30, 2020

 

 

73,528

 

 

$

7

 

 

$

1,109,350

 

 

$

603

 

 

$

(1,026,190

)

 

$

83,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2019

 

 

60,965

 

 

$

6

 

 

$

865,726

 

 

$

61

 

 

$

(783,324

)

 

$

82,469

 

Vesting of restricted stock

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options and shares issued

   under the employee stock purchase plan

 

 

101

 

 

 

 

 

 

577

 

 

 

 

 

 

 

 

 

577

 

Issuance of common stock, net of issuance costs

 

 

1,634

 

 

 

 

 

 

14,563

 

 

 

 

 

 

 

 

 

14,563

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

3,719

 

 

 

 

 

 

 

 

 

3,719

 

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

(59

)

 

 

 

 

 

(59

)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(32

)

 

 

 

 

 

(32

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41,367

)

 

 

(41,367

)

Balance at September 30, 2019

 

 

62,705

 

 

$

6

 

 

$

884,585

 

 

$

(30

)

 

$

(824,691

)

 

$

59,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2019

 

 

65,370

 

 

$

7

 

 

$

923,142

 

 

$

(37

)

 

$

(873,338

)

 

$

49,774

 

Vesting of restricted stock

 

 

199

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options and shares issued

   under the employee stock purchase plan

 

 

771

 

 

 

 

 

 

6,313

 

 

 

 

 

 

 

 

 

6,313

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

18,093

 

 

 

 

 

 

 

 

 

18,093

 

Issuance of common stock, net of issuance costs

 

 

7,188

 

 

 

 

 

 

161,802

 

 

 

 

 

 

 

 

 

161,802

 

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

640

 

 

 

 

 

 

640

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(152,852

)

 

 

(152,852

)

Balance at September 30, 2020

 

 

73,528

 

 

$

7

 

 

$

1,109,350

 

 

$

603

 

 

$

(1,026,190

)

 

$

83,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

 

60,829

 

 

$

6

 

 

$

857,156

 

 

$

(244

)

 

$

(673,748

)

 

$

183,170

 

Vesting of restricted stock

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options and shares issued

   under the employee stock purchase plan

 

 

232

 

 

 

 

 

 

1,124

 

 

 

 

 

 

 

 

 

1,124

 

Issuance of common stock, net of issuance costs

 

 

1,634

 

 

 

 

 

 

14,563

 

 

 

 

 

 

 

 

 

14,563

 

Stock-based compensation expense