10-Q
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Table of Contents
 
 
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, 2019
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 29, 2019, there were 62,790,043 shares of Common Stock, $0.0001 par value per share, outstanding.
 
 
 

Table of Contents
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
Item 1.
 
 
 
3
 
 
 
 
3
 
 
 
 
4
 
 
 
 
5
 
 
 
 
6
 
 
 
 
7
 
 
 
 
8
 
Item 2.
 
 
 
29
 
Item 3.
 
 
 
36
 
Item 4.
 
 
 
36
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 1.
 
 
 
37
 
Item 1.A.
 
 
 
37
 
Item 6.
 
 
 
78
 
 
 
 
79
 
 
 
2
 

Table of Contents
PART I—FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Financial Statements (Unaudited).
 
Karyopharm Therapeutics Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share amounts)
                                                 
 
September 30,
2019
   
December 31,
2018
 
Assets
 
 
    
 
 
 
 
 
 
    
 
 
 
    
 
 
 
 
 
 
    
 
Current assets:
   
     
     
     
     
     
 
Cash and cash equivalents
   
    $
168,004
     
     
    $
118,021
     
 
Short-term investments
   
     
99,525
     
     
     
210,178
     
 
Accounts receivable
   
     
7,928
     
     
     
—  
     
 
Inventory
   
     
100
     
     
     
—  
     
 
Prepaid expenses and other current assets
   
     
5,310
     
     
     
6,413
     
 
                                                 
Total current assets
   
     
280,867
     
     
     
334,612
     
 
Property and equipment, net
   
     
3,240
     
     
     
3,863
     
 
Operating lease
right-of-use
assets
   
     
10,904
     
     
     
—  
     
 
Long-term investments
   
     
2,022
     
     
     
2,001
     
 
Restricted cash
   
     
712
     
     
     
716
     
 
                                                 
Total assets
   
    $
297,745
     
     
    $
341,192
     
 
                                                 
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
   
     
     
     
     
     
 
Accounts payable
   
    $
3,068
     
     
    $
4,332
     
 
Accrued expenses
   
     
32,421
     
     
     
32,493
     
 
Deferred revenue
   
     
1,053
     
     
     
9,362
     
 
Operating lease liabilities
   
     
1,583
     
     
     
—  
     
 
Deferred rent
   
     
—  
     
     
     
390
     
 
Other current liabilities
   
     
1,077
     
     
     
327
     
 
                                                 
Total current liabilities
   
     
39,202
     
     
     
46,904
     
 
Convertible senior notes
   
     
107,962
     
     
     
102,664
     
 
Deferred royalty obligation
   
     
73,589
     
     
     
—  
     
 
Operating lease liabilities, net of current portion
   
     
13,643
     
     
     
—  
     
 
Deferred revenue, net of current portion
   
     
3,479
     
     
     
4,532
     
 
Deferred rent, net of current portion
   
     
—  
     
     
     
3,922
     
 
                                                 
Total liabilities
   
     
237,875
     
     
     
158,022
     
 
Stockholders’ equity:
   
     
     
     
     
     
 
Preferred stock, $0.0001 par value; 5,000,000 shares authorized;
none
issued and outstanding
   
     
—  
     
     
     
—  
     
 
Common stock, $0.0001 par value; 200,000,000 shares authorized; 62,705,481 shares issued and outstanding at September 30, 2019; 100,000,000 shares authorized; 60,829,308 shares issued and outstanding at December 31, 2018
   
     
6
     
     
     
6
     
 
Additional
paid-in
capital
   
     
884,585
     
     
     
857,156
     
 
Accumulated other comprehensive loss
   
     
(30
)    
     
     
(244
)    
 
Accumulated deficit
   
     
(824,691
)    
     
     
(673,748
)    
 
                                                 
Total stockholders’ equity
   
     
59,870
     
     
     
183,170
     
 
                                                 
Total liabilities and stockholders’ equity
   
    $
297,745
     
     
    $
341,192
     
 
                                                 
 
 
 
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
3
 

Table of Contents
Karyopharm Therapeutics Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share amounts)
                                                                 
 
Three Months Ended,
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
    
   
   
    
 
    
   
   
    
 
    
   
   
    
 
    
   
   
    
Product revenue, net
 
  $
12,821
   
 
  $
—  
   
 
  $
12,821
   
 
  $
—  
   
License and other revenue
 
   
328
   
 
   
239
   
 
   
9,976
   
 
   
30,130
   
                                                                 
Total revenues
 
   
13,149
   
 
   
239
   
 
   
22,797
   
 
   
30,130
   
Operating expenses:
 
   
   
 
   
   
 
   
   
 
   
   
Cost of sales
 
   
1,013
   
 
   
—  
   
 
   
1,013
   
 
   
—  
   
Research and development
 
   
26,270
   
 
   
36,427
   
 
   
90,761
   
 
   
122,482
   
Selling, general and administrative
 
   
25,267
   
 
   
12,966
   
 
   
77,032
   
 
   
30,076
   
                                                                 
Total operating expenses
 
   
52,550
   
 
   
49,393
   
 
   
168,806
   
 
   
152,558
   
                                                                 
Loss from operations
 
   
(39,401
)  
 
   
(49,154
)  
 
   
(146,009
)  
 
   
(122,428
)  
Other income (expense):
 
   
   
 
   
   
 
   
   
 
   
   
Interest income
 
   
1,137
   
 
   
1,098
   
 
   
4,320
   
 
   
2,260
   
Interest expense
 
   
(3,093
)  
 
   
—  
   
 
   
(9,180
)  
 
   
—  
   
Other income (expense)
 
   
10
   
 
   
(13
)  
 
   
(36
)  
 
   
(20
)  
                                                                 
Total other (expense) income, net
 
   
(1,946
)  
 
   
1,085
   
 
   
(4,896
)  
 
   
2,240
   
                                                                 
Loss before income taxes
 
   
(41,347
)  
 
   
(48,069
)  
 
   
(150,905
)  
 
   
(120,188
)  
Income tax provision
 
   
(20
)  
 
   
(14
)  
 
   
(38
)  
 
   
(9
)  
                                                                 
Net loss
 
  $
(41,367
)  
 
  $
(48,083
)  
 
  $
(150,943
)  
 
  $
(120,197
)  
                                                                 
Net loss per share—basic and diluted
 
  $
(0.67
)  
 
  $
(0.79
)  
 
  $
(2.46
)  
 
  $
(2.17
)  
                                                                 
Weighted-average number of common shares outstanding used in net loss per share—basic and diluted
 
   
62,092,841
   
 
   
60,586,511
   
 
   
61,297,249
   
 
   
55,465,261
   
                                                                 
 
 
 
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
4
 

Table of Contents
Karyopharm Therapeutics Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(in thousands)
                                                                 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Net loss
 
    
  $
(41,367
)  
    
 
    
  $
(48,083
)  
    
 
    
  $
 
(150,943
)  
    
 
    
  $
(120,197
)  
    
                                                                 
Comprehensive income (loss)
 
   
   
 
   
   
 
   
   
 
   
   
Unrealized (loss) gain on investments
 
   
(59
)  
 
   
110
   
 
   
250
   
 
   
105
   
Foreign currency translation adjustments
 
   
(32
)  
 
   
(3
)  
 
   
(36
)  
 
   
(41
)  
                                                                 
Comprehensive loss
 
  $
(41,458
)  
 
  $
(47,976
)  
 
  $
(150,729
)  
 
  $
 
(120,133
)  
                                                                 
 
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
5
 

Table of Contents
Karyopharm Therapeutics Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
                                 
 
Nine Months Ended
September 30,
 
2019
 
2018
Operating activities
 
 
 
 
 
 
 
 
 
 
Net loss
 
    
  $
(150,943
)  
    
 
    
  $
(120,197
)  
    
Adjustments to reconcile net loss to net cash used in operating activities:
 
   
   
 
   
   
Depreciation and amortization
 
   
730
   
 
   
541
   
Net amortization of premiums and discounts on investments
 
   
(1,242
)  
 
   
280
   
Amortization of debt discount and issuance costs
 
   
5,298
   
 
   
—  
   
Stock-based compensation expense
 
   
11,742
   
 
   
13,378
   
Changes in operating assets and liabilities:
 
   
   
 
   
   
Accounts
r
eceivable
 
   
(7,928
)  
 
   
—  
   
Inventory
 
   
(100
)  
 
   
—  
   
Prepaid expenses and other current assets
 
   
1,108
   
 
   
(3,039
)  
Operating lease
right-of-use
assets
 
   
807
   
 
   
—  
   
Accounts payable
 
   
(1,215
)  
 
   
(3,425
)  
Accrued expenses and other liabilities
 
   
569
   
 
   
8,139
   
Operating lease liabilities
 
   
(797
)  
 
   
—  
   
Deferred revenue
 
   
(9,362
)  
 
   
(8,027
)  
Deferred rent
 
   
—  
   
 
   
1,405
   
                                 
Net cash used in operating activities
 
   
(151,333
)  
 
   
(110,945
)  
Investing activities
 
 
 
 
 
 
 
 
 
 
Purchases of property and equipment
 
   
(156
)  
 
   
(1,270
)  
Proceeds from maturities of investments
 
   
202,454
   
 
   
94,378
   
Purchases of investments
 
   
(90,329
)  
 
   
(97,662
)  
                                 
Net cash provided by (used in) investing activities
 
   
111,969
   
 
   
(4,554
)  
Financing activities
 
 
 
 
 
 
 
 
 
 
Proceeds from the issuance of common stock, net of issuance costs
 
   
14,563
   
 
   
145,706
   
Proceeds from the exercise of stock options and shares issued under employee stock purchase plan
 
   
1,124
   
 
   
2,627
   
Proceeds from deferred royalty obligation, net
 
   
73,682
   
 
   
—  
   
                                 
Net cash provided by financing activities
 
   
89,369
   
 
   
148,333
   
Effect of exchange rate on cash, cash equivalents and restricted cash
 
   
(26
)  
 
   
(9
)  
                                 
Net increase in cash, cash equivalents and restricted cash
 
   
49,979
   
 
   
32,825
   
Cash, cash equivalents and restricted cash at beginning of period
 
   
118,737
   
 
   
69,487
   
                                 
Cash, cash equivalents and restricted cash at end of period
 
  $
168,716
   
 
  $
102,312
   
                                 
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
  $
168,004
   
 
  $
101,600
   
Long-term restricted cash
 
   
712
   
 
   
712
   
                                 
Total cash, cash equivalents and restricted cash
 
  $
168,716
   
 
  $
102,312
   
                                 
Supplemental disclosures:
 
   
   
 
   
   
Deferred financing costs in
a
ccrued expenses at period end
 
  $
93
   
 
  $
—  
   
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
 
  $
2,096
   
 
  $
—  
   
 
 
 
 
 
See accompanying notes to condensed consolidated financial statements.
 
6
 

Table of Contents
Karyopharm Therapeutics Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(in thousands, except share amounts)
 
Common Shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income
(Loss)
 
Accumulated
Deficit
 
Total
Stockholders’
Equity
Balance at June 30, 2019
 
    
   
60,965,505
   
    
 
    
  $
6
   
    
 
    
  $
865,726
   
    
 
    
  $
61
   
    
 
  
 
 
 
 
  $
(783,324
)  
 
 
    
 
    
  $
82,469
   
    
Vesting of restricted stock
 
   
5,000
   
 
   
—  
   
 
   
—  
   
 
   
—  
   
 
   
—  
   
 
   
—  
   
Exercise of stock options and shares issued under the employee stock purchase plan
 
   
100,525
   
 
   
—  
   
 
   
577
   
 
   
—  
   
 
   
—  
   
 
   
577
   
Issuance of common stock, net of issuance costs of $0.3 million
 
   
1,634,451
   
 
   
—  
   
 
   
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
 
   
62,705,481
   
 
  $
6
   
 
  $
884,585
   
 
  $
(30
)  
 
  $
(824,691
)  
 
  $
59,870
   
                                                                                                 
Balance at June 30, 2018
 
   
60,501,260