10-K
the Ono License Agreement may be terminated earlier by (i) either party for breach of the Ono License Agreement by the other party or in the event of the insolvency or bankruptcy of the other party, (ii) Ono on a product-by-product basis for certain safety reasons or on a product-by-product, country-by-country basis for any reason with 180 days' prior notice or (iii) us in the event Ono challenges or assists with a challenge to certain of our patent rights.9843094false2019FY --12-31Karyopharm Therapeutics Inc.0001503802P3DP6MP3Y2018-08-12Represents capitalization of operating lease right-of-use assets, offset by reclassification of deferred rent and tenant incentives to operating lease right-of-use assets.Represents reclassification of deferred rent and tenant incentives to operating lease right-of-use assets.Represents recognition of operating lease liabilities. 0001503802 2019-01-01 2019-12-31 0001503802 2019-12-31 0001503802 2018-12-31 0001503802 2018-01-01 2018-12-31 0001503802 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Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM
10-K
 
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended:
December 31, 2019
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 No.)
85 Wells Avenue, 2
nd
Floor
,
Newton
,
Massachusetts
02459
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (
617
)
 
658-0600
Securities registered pursuant to Section 12(b) of the Act:
(Title of each class)
 
Trading Symbol(s)
 
(Name of each exchange on which listed)
Common Stock
, $0.0001 par value
 
KPTI
 
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  
 
 
 
No
  
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  
    
No
 
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  
The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold on June 30, 2019 was
approximately $343,517,677. Shares of common
stock held by each executive officer and director and by each holder of 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
Number of shares outstanding of the registrant’s Common Stock as of February 
1
4
, 2020:
65,548,095.
Documents incorporated by reference:
Portions of our definitive proxy statement to be filed with the Securities and Exchange Commission no later than April 29, 2020 in connection with our 2020 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.
 
 

Table of Contents
TABLE OF CONTENTS
 
 
Page No.
 
 
 
3
 
Item 1.
 
 
 
3
 
Item 1A.
 
 
 
60
 
Item 1B.
 
 
 
111
 
Item 2.
 
 
 
111
 
Item 3.
 
 
 
111
 
Item 4.
 
 
 
112
 
 
 
113
 
Item 5.
 
 
 
113
 
Item 6.
 
 
 
113
 
Item 7.
 
 
 
114
 
Item 7A.
 
 
 
127
 
Item 8.
 
 
 
127
 
Item 9A.
 
 
 
127
 
Item 9B.
 
 
 
130
 
 
 
131
 
Item 10.
 
 
 
131
 
Item 11.
 
 
 
131
 
Item 12.
 
 
 
131
 
Item 13.
 
 
 
131
 
Item 14.
 
 
 
131
 
 
 
132
 
Item 15.
 
 
 
132
 
Item 16.
 
 
 
132
 
 
 
178
 
2

Table of Contents
Forward-Looking Information
This Annual Report on Form
 10-K
contains forward-looking statements regarding the expectations of Karyopharm Therapeutics Inc., herein referred to as “Karyopharm,” the “Company,” “we,” or “our,” with respect to the possible achievement of discovery and development milestones, our future discovery and development efforts, our commercialization efforts, our partnerships with third parties, our future operating results and financial position, our business strategy, and other objectives for future operations. We often use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and other words and terms of similar meaning to help identify forward-looking statements, although not all forward-looking statements contain these identifying words. You also can identify these forward-looking statements by the fact that they do not relate strictly to historical or current facts. There are a number of important risks and uncertainties that could cause actual results or events to differ materially from those indicated by forward-looking statements. These risks and uncertainties include those inherent in pharmaceutical research and development, such as our ability to successfully commercialize XPOVIO
®
(selinexor), adverse results in our drug discovery and clinical development activities, decisions made by the U.S. Food and Drug Administration and other regulatory authorities with respect to the development and commercialization of our drug candidates, our ability to raise additional capital to support our clinical development program and other operations, our ability to develop products of commercial value and to identify, discover and obtain rights to additional potential product candidates, our ability to obtain, maintain and enforce intellectual property rights for our drug candidates, dependence on any collaborators, competition, our ability to obtain any necessary financing to conduct our planned activities, and other risk factors. Please refer to the section entitled “Risk Factors” in Part I of this report for a description of these risks and uncertainties. Unless required by law, we do not undertake any obligation to update any forward-looking statements.
PART I
Item 1.
Business
 
 
 
BUSINESS
Overview
We are an innovation-driven pharmaceutical company focused on the discovery, development and commercialization of novel,
first-in-class
drugs directed against nuclear transport and related targets for the treatment of cancer and other major diseases. Our scientific expertise is based upon an understanding of the regulation of intracellular communication between the nucleus and the cytoplasm. We have discovered and are developing and commercializing novel, small molecule
S
elective
I
nhibitor of
N
uclear
E
xport
(
SINE
) compounds that inhibit the nuclear export protein exportin 1, or XPO1. These SINE compounds represent a new class of drug candidates with a novel mechanism of action that have the potential to treat a variety of high unmet medical need diseases. Our SINE compounds were the first oral XPO1 inhibitors in clinical development. Our lead asset, XPOVIO
®
(selinexor) tablets, was the first SINE compound to receive marketing approval by the U.S. Food and Drug Administration, or FDA, on July 3, 2019 and is currently indicated for use in adult patients with relapsed or refractory multiple myeloma who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, or PIs, at least two immunomodulatory agents, or IMiDs, and an anti-CD38 monoclonal antibody. We refer to myeloma that is refractory to these five agents as penta-refractory myeloma. This indication is approved under accelerated approval based on response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial. The ongoing, randomized Phase 3 BOSTON (
Bo
rtezomib,
S
elinexor and Dexame
t
has
on
e) study evaluating selinexor in combination with Velcade
®
(bortezomib) and
low-dose
dexamethasone in patients with myeloma treatment with between one and three prior therapies is expected to serve as the confirmatory trial.
3

Our focus is on marketing XPOVIO in its currently approved indication as well as seeking the regulatory approval and potential commercialization of selinexor as an oral agent in additional cancer indications with significant unmet medical need. We plan to conduct additional clinical trials and seek additional approvals for the use of selinexor in combination with other oncology therapies to expand the patient populations that are eligible for selinexor. Thus, we are currently advancing the clinical development of selinexor in multiple hematological malignancies and solid tumor indications. Studies that support submitted applications for regulatory approval include STORM (
S
elinexor
T
reatment of
R
efractory
M
yeloma) and SADAL (
S
elinexor
A
gainst
D
iffuse
A
ggressive
L
ymphoma). Ongoing clinical trials evaluating selinexor include the pivotal, randomized Phase 3 BOSTON study in multiple myeloma, the Phase 1b/2 STOMP (
S
elinexor and Backbone
T
reatments
o
f
M
ultiple Myeloma
P
atients) study in combination with standard therapies in multiple myeloma, the Phase 2/3 SEAL (
Se
linexor in
A
dvanced
L
iposarcoma) study in liposarcoma, and the Phase 3 SIENDO (
S
elinexor/Placebo After Combination Chemotherapy
I
n Patients with Advanced or Recurrent
ENDO
metrial Cancer) study evaluating selinexor as maintenance therapy in endometrial cancer. During 2019, final data from the Phase 2b STORM study were published in the
New England Journal of Medicine
(Chari, A.
et al
. August 2019). In addition, we reported updated, positive data from the SADAL study as well as updated interim data for the STOMP study at various medical conferences. As a result of the positive results from STORM, in addition to the FDA approval of our first New Drug Application, or NDA, we also filed a Marketing Authorization Application, or MAA, with the European Medicines Agency, or EMA, in January 2019 and expect to receive a decision on our application in the middle of 2020.
Based on the positive results of the SADAL study, we submitted a Supplemental New Drug Application, or sNDA, to the FDA in December 2019, with a request for accelerated approval for selinexor as a new treatment for adult patients with relapsed and/or refractory diffuse large
B-cell
lymphoma, or DLBCL, not otherwise specified, who have received at least two prior therapies. The FDA accepted the application for filing on February 18, 2020 and granted Priority Review with a target decision date of June 23, 2020 under the Prescription Drug User Fee Act, or PDUFA. Selinexor has received both Orphan Drug and Fast Track designations from the FDA for this same indication. Provided that marketing approval is granted by the FDA, we expect to be prepared to commercialize selinexor in the United States as a treatment for patients with relapsed and/or refractory DLBCL as early as the middle of 2020. We also plan to submit a MAA to the EMA in 2020 with a request for conditional approval.
In addition to selinexor, we are also advancing a pipeline of novel drug candidates including our other oral SINE compounds eltanexor
(KPT-8602)
and verdinexor
(KPT-335),
as well as our oral dual PAK4/NAMPT inhibitor,
KPT-9274.
We began clinical testing of eltanexor, a second-generation SINE compound, in late 2015. Our clinical development program for eltanexor includes myelodysplastic syndrome, or MDS, colorectal cancer, or CRC, and metastatic castration-resistant prostate cancer, or CRPC. Based on clinical results to date and resource prioritization, we plan to focus on the development of eltanexor in MDS in 2020. We began clinical testing of
KPT-9274
in patients with hematologic or solid tumors during 2016 and we plan to study its combination with an
anti-PD1
monoclonal antibody in a phase 1 clinical study in the near future. Finally, verdinexor is our lead compound that is being evaluated as a potential therapy for viral, rare disease and autoimmune indications in humans and by a collaborator as a potential therapy for cancers in companion animals.
FDA Accelerated Approval of XPOVIO
Following the positive outcome from the expanded cohort of the STORM study, on August 6, 2018, we announced the completion of the rolling submission of an NDA to the FDA with a request for accelerated approval for selinexor as a new treatment for patients with heavily pretreated, relapsed or refractory multiple myeloma. On October 5, 2018, the FDA accepted for filing our NDA and also granted our request for priority review of the NDA and assigned an action date of April 6, 2019 under the PDUFA. On February 26, 2019, the Oncologic Drugs Advisory Committee, or ODAC, of the FDA met to review data supporting our NDA requesting accelerated approval for selinexor. The FDA specifically asked the ODAC to vote on whether the
4

committee believed the approval of selinexor should be delayed until the results from the ongoing, randomized Phase 3 BOSTON study are available. In a vote of eight “Yes” and five “No,” the ODAC recommended that the approval decision for selinexor should be delayed until the results of the BOSTON study are available.
Following the ODAC meeting, and at the FDA’s request, we submitted additional, existing clinical information that included preliminary data from the BOSTON study as an amendment to the NDA, which allowed the FDA to extend the PDUFA action date by three months to July 6, 2019. On July 3, 2019, the FDA approved oral XPOVIO, our
first-in-class,
nuclear export inhibitor. XPOVIO was approved in combination with dexamethasone for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least four prior therapies and whose disease is refractory to at least two PIs, at least two IMiDs, and an anti-CD38 monoclonal antibody. XPOVIO is the first SINE compound and is the first ever nuclear export inhibitor approved for human use. The first indication is approved under accelerated approval based on response rate. As with all accelerated approvals, continued approval for the treatment of myeloma may be contingent upon verification and description of clinical benefit in a confirmatory trial. The ongoing Phase 3 BOSTON study is expected to serve as the confirmatory trial for the accelerated approval of XPOVIO. The FDA noted in its press release announcing the approval of XPOVIO that the efficacy evaluation was supported by additional information from the BOSTON study.
Commercialization of XPOVIO in the U.S.
In July 2019, XPOVIO became commercially available to patients in the U.S. The commercial launch of XPOVIO is being supported by approximately 70 Karyopharm sales representatives and nurse liaisons as well as KaryForward
TM
, an extensive patient and healthcare provider support program. Our commercial efforts are also being supplemented by patient support initiatives coordinated by our dedicated network of participating specialty pharmacy providers.
As of December 31, 2019, approximately 1,400 XPOVIO prescriptions had been fulfilled, driven by strong demand from both academic and community-based oncologists, and XPOVIO had been prescribed by more than 550 unique physicians and healthcare accounts. Net product sales for XPOVIO were $30.5 million through December 31, 2019. XPOVIO sales have been driven by a combination of new patient starts, prescription refills, and initial channel inventory to our distribution partners. Patient demand for XPOVIO continued to increase during 2019 following its accelerated approval by the FDA. Prompt insurance coverage for XPOVIO has been a key contributor to its early commercial success, with XPOVIO being added to numerous national commercial and Medicare formularies and coverage policies.
In 2020, we expect to build upon XPOVIO’s early commercial success in the late-line relapsed refractory multiple myeloma market by educating physicians, healthcare providers and patients about XPOVIO’s clinical profile and unique mechanism of action. Additionally, if results from the pivotal BOSTON trial, which are expected in early 2020, are positive, our commercial team will begin to prepare for XPOVIO’s potential expansion into the second line relapsed refractory multiple myeloma market, subject to the FDA’s review and approval of our expected sNDA. Finally, pending FDA approval of XPOVIO in DLBCL, we expect to begin selling XPOVIO in this indication to hematologists and oncologists in the U.S with our existing field sales force.
European Marketing Authorization Application
In January 2019, we submitted a MAA to the EMA requesting conditional approval for selinexor in combination with dexamethasone as a new treatment for patients with triple class refractory multiple myeloma, meaning patients who have received at least three prior therapies and whose disease is refractory to at least one PI, one IMiD, and one anti-CD38 monoclonal antibody. This submission was based on the positive results from the Phase 2b STORM study. We received feedback from EMA’s Committee for Medicinal Products for Human Use, or CHMP, including the integrated inspection report, based on site audits and a sponsor inspection. In January 2020, we were granted a three-month extension from CHMP to provide additional time to respond to the
5

CHMP’s outstanding questions related to the application. We are currently working with CHMP to address the outstanding questions and expect to receive a decision on the application in
mid-2020.
To commercialize selinexor following any regulatory approval outside of the U.S., we will either work with existing and potential future partners to establish the appropriate commercial infrastructure outside the U.S., or we may, in certain geographies, elect to establish the commercial infrastructure ourselves.
Randomized Confirmatory BOSTON Study in Multiple Myeloma
We are currently conducting the pivotal, randomized Phase 3 BOSTON study evaluating once-weekly selinexor in combination with once-weekly Velcade and dexamethasone (SVd) for the treatment of patients with multiple myeloma who have had one to three prior lines of therapy. Enrollment in the BOSTON study was completed in January 2019 and
top-line
data are expected in early 2020, contingent upon the occurrence of progression-free survival, or PFS, events, the primary endpoint of the study. Data from the BOSTON study, if positive, are expected to be used to support regulatory submissions to the FDA, the EMA and other regulatory agencies requesting the use of selinexor in combination with Velcade and dexamethasone in patients with multiple myeloma who have received at least one prior line of therapy. If approved, this combination of selinexor with Velcade and dexamethasone will be the first approved therapy using once weekly (rather than the standard twice weekly) dosing of Velcade. Given that Velcade must be given in a healthcare setting, we believe that this once-weekly dosing regimen could be substantially more attractive to patients by potentially eliminating a significant percentage of office visits.
Summary of Karyopharm’s Pipeline and Core Clinical Trials
Key clinical trials of selinexor are summarized in the chart below. In addition to these studies, there are several ongoing investigator-sponsored clinical trials in a variety of hematological and solid tumor malignancies.
 
 
Oral selinexor is being evaluated in multiple later-phase clinical trials in patients with hematological and solid tumor malignancies, often in the relapsed and/or refractory setting. In general, relapsed disease refers to disease that progresses following the expiration of a specified period of time after discontinuation of therapy and
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refractory disease refers to disease that progresses while the patient is on therapy or within a specified period of time after discontinuation of therapy.
Hematological Malignancies
Multiple Myeloma
Multiple myeloma is a hematological malignancy characterized by the accumulation of monoclonal plasma cells in the bone marrow, the presence of monoclonal immunoglobulin, also known as M protein, in the serum or urine, bone disease, kidney disease and immunodeficiency. It is more common in elderly patients, with a median age at diagnosis of 69 years. According to the National Cancer Institute, or NCI, multiple myeloma is the second most common cancer of the blood in the U.S. with more than 32,000 new cases each year and over 130,000 patients living with the disease. Despite recent therapeutic advances, there is currently no cure and most patients’ disease will typically progress following treatment with currently available therapies.
The treatment of multiple myeloma has improved in the last 20 years due to the use of high-dose chemotherapy and autologous stem cell transplantation, which is restricted to healthier, often younger patients, and the subsequent introduction of IMiDs, such as Revlimid and Pomalyst, and the PIs Velcade, Kyprolis
®
, and Ninlaro
®
(ixazomib). Two monoclonal antibodies, Darzalex and Empliciti
(elotuzumab), have also been approved, as has the histone deacetylase inhibitor Farydak
®
(panobinostat). The introduction of
non-chemotherapeutic
agents has led to a significant increase in the survival of patients with multiple myeloma. Although a wide variety of newly approved or experimental therapies are being used in relapsed and/or refractory patients, including new proteasome inhibitors (oprozomib and marizomib), monoclonal antibodies (with or without toxin conjugates; belantamab mafodotin, an anti-BCMA antibody-drug conjugate; isatuximab, an
anti-CD38
monoclonal antibody) and cellular therapies like chimeric antigen receptor
T-cell,
or
CAR-T,
therapy, nearly all patients will eventually relapse and succumb to their disease. With about 13,000 deaths from multiple myeloma in the United States alone expected to occur in 2020 according to the American Cancer Society, we believe that there remains a need for therapies for patients whose disease has relapsed after, or is refractory to, available therapy. The approval of XPOVIO in patients with penta-refractory myeloma after four prior therapies further supports this perspective.
According to EvaluatePharma (January 2020), the worldwide market for prescription drugs used to treat patients with multiple myeloma exceeded $16 billion in 2018 and is projected to reach over $20 billion by 2024.
The Phase 2b STORM Study
The Phase 2b STORM study was a
single-arm
clinical trial evaluating oral selinexor in combination with standard,
low-dose
dexamethasone in patients with heavily pretreated, relapsed or refractory myeloma. Based on the results of the clinical data set for Part 1 of the STORM study, which we reported in 2016, we expanded the STORM study, designated Part 2, which enrolled 122 heavily pretreated patients with triple-class refractory myeloma, of which 83 patients had penta-refractory myeloma.
The results from the STORM study served as the basis for our NDA filing and subsequent accelerated approval from the FDA. The final data from the 122 patients treated on STORM Part 2 were published in the
New England Journal of Medicine
on August 22, 2019. These heavily pretreated patients had a median of seven prior therapeutic regimens, including a median of 10 unique anti-myeloma agents. Specifically, the myeloma patients who were eligible for the study had prior treatment with the two PIs, Velcade and Kyprolis, the two IMiDs, Revlimid and Pomalyst, and the anti-CD38 monoclonal antibody Darzalex, as well as alkylating agents, and their disease was refractory to glucocorticoids, at least one PI, at least one IMiD, Darzalex, and their most recent therapy. In all patients, this myeloma was considered “triple-class refractory.” In a subset of 83 patients, their disease was documented to be refractory to all five major agents and is designated penta-refractory myeloma. In addition to multiple-refractory disease, patients in the STORM study had rapidly progressing myeloma, with a median 22% increase in disease burden in the 12 days from screening to initial therapy.
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Given the rapid progression of triple-class refractory myeloma, the window of opportunity to prevent further illness and death is small. Therefore, the regimen that was used in the STORM study began with a high dose of selinexor to achieve rapid disease control. Each patient began treatment with 80mg oral selinexor twice weekly in combination with
low-dose
dexamethasone (20mg twice weekly). This initial dose was chosen to optimize the potential to halt disease progression and reduce tumor load. Because most patients involved in the study had limited
end-organ
reserve and were at increased risk for adverse events, dose modifications were anticipated and were specified along with supportive care in the study protocol.
For the STORM study’s primary endpoint, oral selinexor achieved an ORR of 26%, including two (2%) stringent complete responses, or sCRs, six (5%) very good partial responses, or VGPRs, and 24 (20%) partial responses, or PRs, and the trial therefore met its primary endpoint. Both patients who had relapsed after
CAR-T
therapy achieved PRs. Minimal response per International Myeloma Working Group, or IMWG, criteria was observed in 16 (13%) patients and 48 patients (39%) had stable disease. Median time to PR or better was 4.1 weeks. The clinical benefit rate, meaning a minimal response or better, was 39%. All responses were adjudicated by an Independent Review Committee consisting of 4 independent experts in the treatment of multiple myeloma.
Median duration of response, or DOR, was 4.4 months. PFS was 3.7 months and overall survival, or OS, was 8.6 months. In the 39% of patients who achieved a minimal response or better, median OS was 15.6 months, compared to a median OS of 1.7 months in patients whose disease progressed or where response was not evaluable.
The adverse events that were observed in the study appeared to be a function of dose, schedule, and baseline clinical characteristics, including, for example, preexisting cytopenias. The most common treatment-emergent adverse events, or AEs, were thrombocytopenia (73%), fatigue (73%), nausea (72%) and anemia (67%). AEs are classified by severity and graded on a scale of one to five with one being the least severe and five resulting in death. The most common Grade 3/4 treatment-emergent AEs were thrombocytopenia (59%), anemia (44%), hyponatremia (22%) and neutropenia (21%). Importantly, most
non-hematologic
AEs were limited in severity to Grades 1 or 2, with only 10% experiencing Grade 3 nausea and 3% experiencing Grade 3 vomiting. In all, 18% of patients discontinued study treatment because of an AE considered by the investigator related to the study drug. AEs leading to dose modification or holds occurred in 80% of patients, with the majority occurring in the first two months of treatment. The most common AEs leading to dose reduction or interruption were thrombocytopenia (43%), fatigue (16%), and neutropenia (11%). Supportive care, including granulocyte colony stimulating factors, thrombopoietin receptor agonists, optimization of fluid and caloric intake, appetite stimulants, psychostimulants and/or additional anti-nausea agents usually reduced the intensity and/or duration of AEs. Side effects were reversible without evidence of toxic effects in major organs (treatment-related cardiac, pulmonary, hepatic, or renal dysfunction of Grade 3 or higher) or cumulative toxic effects, with irreversible acute kidney injury reported in one patient (1%). Serious AEs occurred in 63% of patients, with pneumonia (11%) and sepsis (9%) being the most common. Twenty-eight patients died during the study: 16 from disease progression and 12 from an AE. Of these 12 patients, two were assessed by the investigator as related to treatment (one patient having pneumonia with concurrent disease progression and the other having sepsis).
The complete results of this study were published in the
New England Journal of Medicine.
However, the FDA’s accelerated approval of XPOVIO was based upon the efficacy and safety in a
pre-specified
sub-group
analysis of the 83 patients in the STORM study with documented penta-refractory myeloma, as the benefit-risk ratio appeared to be greater in this more heavily
pre-treated
population than in the overall trial population. The overall response rate in this patient population was 25.3%.
Additional data and analysis from the STORM study were also presented at key medical conferences in 2019 including the European Hematology Association, or EHA, the International Myeloma Working Group, or IMWG, and the American Society of Hematology, or ASH, annual meetings.
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The Phase 1b/2 STOMP Study
The STOMP study, a
multi-arm
clinical trial in patients with multiple myeloma, is evaluating selinexor and
low-dose
dexamethasone plus standard therapies, such as Velcade, Kyprolis, Revlimid, Pomalyst or Darzalex. An additional arm of the study evaluating selinexor in combination with Revlimid in patients with previously untreated myeloma was opened in June 2018. We presented updated clinical data from the STOMP study at both the EHA 2019 annual meeting in June 2019 as well as at the ASH 2019 annual meeting in December 2019 demonstrating that selinexor and
low-dose
dexamethasone plus standard anti-myeloma therapies exhibit encouraging response rates when combined with these approved therapies.
Selinexor plus Pomalyst and
Low-dose
Dexamethasone (SPd) Presented at the ASH 2019 Annual Meeting
In this all oral arm of the Phase 1b/2 STOMP study, oral selinexor
(60-100mg
weekly or
40-80mg
twice weekly) is being evaluated in combination with Pomalyst (3 or 4mg orally, once daily) and low dose dexamethasone (orally, 40mg once weekly or 20mg twice weekly) in patients with relapsed or refractory multiple myeloma who received at least three prior lines of therapy, including a PI and an IMiD, or patients with myeloma refractory to both a PI and an IMiD. The following table is a summary of the interim efficacy data:
                                         
   
Best Responses
1
in Evaluable SPd Patients as of
1-Oct-2019
2
 
                               
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
 
Key: ORR=Overall Response Rate (VGPR+PR); VGPR=Very Good Partial Response; PR=Partial Response
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
Among the patients evaluated for safety as of the data cutoff date, the most common treatment-related AEs were cytopenias, along with gastrointestinal and constitutional symptoms; most were manageable with dose modifications and/or supportive care. The most common
non-hematologic
treatment-related AEs were nausea (52%), fatigue (52%) and weight loss (39%). As expected, the most common treatment-related Grade 3 and 4 AEs were neutropenia (58%), thrombocytopenia (27%) and anemia (27%).
Selinexor plus Kyprolis and
Low-dose
Dexamethasone (SKd) Presented at the ASH 2019 Annual Meeting
In this arm of the Phase 1b/2 STOMP study, oral selinexor (80 or 100mg once-weekly) is being evaluated in combination with Kyprolis (56mg/m
2
or 70mg/m
2
once weekly) and low dose dexamethasone (orally, 40mg once weekly or 20mg twice weekly) in patients with relapsed refractory multiple myeloma who have received at least two prior therapies, which can include previous treatment with a PI, one or more IMiDs or Darzalex. The median number of prior treatments was four (with a range of two to eight). The following table is a summary of the interim efficacy data:
                                         
   
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%)
     
—  
 
Key: ORR=Overall Response Rate (CR+VGPR+PR); CR=Complete Response; VGPR=Very Good Partial Response; PR=Partial Response
1
Responses were adjudicated according to the International Myeloma Working Group criteria
2
Based on interim unaudited data
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All patients had reductions in myeloma protein, or
M-protein,
from baseline, with 71% of patients experiencing a reduction of 90% or more. As of the data cutoff date, median PFS had not yet been reached.
Among the patients evaluated for safety, the most common treatment-related AEs were cytopenias, along with gastrointestinal and constitutional symptoms; most were manageable with dose modifications and/or supportive care. The most common
non-hematologic
treatment-related AEs were nausea (71%), fatigue (43%), anorexia (36%), vomiting (36%) and weight loss (36%) and were mostly Grade 1 and 2 events. As expected, the most common treatment-related Grade
3 AEs were hematologic AEs and included thrombocytopenia (64%), anemia (14%) and leukopenia (14%). The recommended Phase 2 dose, or RP2D, was identified as selinexor 80mg and Kyprolis 56mg/m
2
and enrollment continues using this regimen.
Selinexor plus Revlimid and
Low-dose
Dexamethasone (SPd) in Newly Diagnosed Patients with Multiple Myeloma Presented at the ASH 2019 Annual Meeting
In this all oral arm of the Phase 1b/2 STOMP study in patients with newly diagnosed multiple myeloma, selinexor (60mg orally once-weekly) is being combined with Revlimid (25mg orally, once daily) and low dose dexamethasone (orally, 40mg once weekly or 20mg twice weekly). The following table is a summary of the interim efficacy 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
%)
Key: ORR=Overall Response Rate (CR+VGPR+PR)
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
The data are early and the median PFS was not reached. Among the patients evaluable for safety, the most common treatment-related AEs were cytopenias, along with gastrointestinal and constitutional symptoms; most were manageable with dose modifications and/or supportive care. The most common
non-hematologic
treatment-related AEs were diarrhea (63%), weight loss (63%), nausea (50%), constipation (38%), fatigue (38%), hypokalemia (38%) and insomnia (38%) and were mostly Grades 1 or 2. The most common Grade
3 AEs were neutropenia (75%), anemia (50%) and thrombocytopenia (25%). Among the five patients evaluable for dose limiting toxicities, or DLTs, as of the data cutoff date, there were no DLTs observed.
Selinexor plus Darzalex and
Low-dose
Dexamethasone (SDd) Presented at the EHA 2019 Annual Meeting
In this arm of the Phase 1b/2 STOMP study, oral selinexor (dose escalated using either 100mg once weekly or 60mg twice weekly) is being evaluated in combination with Darzalex (16mg/kg intravenously once weekly) and low dose dexamethasone (orally, 40mg once weekly or 20mg twice weekly) in patients with relapsed or refractory multiple myeloma who received at least three prior lines of therapy, including a PI and an IMiD, or patients with multiple myeloma refractory to both a PI and an IMiD. The following table is a summary of the updated interim efficacy data:
                                 
   
Best Responses
1
in Evaluable SDd Patients as of
1-May-2019
2
 
                         
Category
 
N
3
 
 
ORR
 
 
VGPR
 
 
PR
4
 
 
  Darzalex naïve
   
30
     
22 (73%)
     
11 (37%)
     
11 (37%)
 
                                 
  All
   
32
     
22 (69%)
     
11 (34%)
     
11 (34%)
 
Key: ORR=Overall Response Rate (VGPR+PR); PR= Partial Response
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
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Despite the heavily pretreated nature of the patients in the study, with 100% of the patients having disease refractory to both a PI and an IMiD, only one patient (3%) did not have at least a minimal response. As of the data cutoff date, median PFS had not been reached. Among patients with at least a PR, the median time on treatment was 7.7 months, while the median time on study for all evaluable patients was 4.8 months. Median time to response was 1.0 month. Based on published data, the expected ORR for Darzalex therapy without selinexor in the
PI-
and IMiD-refractory,
Darzalex-naïve
population is approximately 29%, and the anticipated response rate with selinexor-dexamethasone in this population is
30% based on the STORM and previous studies. Thus, the ORR of 73% continues to provide a basis for further evaluation of the SDd combination. Among the 31 patients evaluated for safety, the most common treatment-related AEs were cytopenias, along with gastrointestinal and constitutional symptoms; most were manageable with dose modifications and/or supportive care. The most common
non-hematologic
treatment-related AEs were nausea (68%), fatigue (58%), anorexia (32%), insomnia (32%), diarrhea (32%), hyponatremia (32%), and vomiting (26%) and were mostly Grade 1 and 2 events. As expected, the most common Grade 3 and 4 treatment-related AEs were hematologic AEs and included thrombocytopenia (42%), anemia (29%), leukopenia (26%) and neutropenia (23%). Based on these tolerability and efficacy data, the recommended RP2D of SDd is selinexor (100mg orally, once weekly), Darzalex (16mg/kg, once weekly) and dexamethasone (40mg orally, once weekly).
Selinexor plus Velcade and
Low-dose
Dexamethasone (SVd) Published in Blood
2018
In this arm of the Phase 1b/2 STOMP study, oral selinexor was studied in 42 patients who received selinexor (60, 80, or 100mg orally, once or twice weekly) plus Velcade (1.3mg/m
2
subcutaneously) and dexamethasone (20mg orally) once or twice weekly in
21-
or
35-day
cycles. In the dose-escalation phase, patients were randomized to one of two treatment cohorts to receive selinexor once weekly or twice weekly in
21-
or
35-day
cycles, depending on the bortezomib dosing schedule. Based on long-term tolerability and efficacy, the recommended RP2D of SVd was established at 100 mg selinexor once weekly plus 40 mg dexamethasone once weekly and 1.3 mg/m
2
bortezomib once weekly in
35-day
cycles.
Patients had a median of three prior lines of therapy (with a range of one to 11), and 50% were refractory to a PI. Treatment-related Grade 3 or 4 AEs reported in
10% of patients were thrombocytopenia (45%), neutropenia (24%), fatigue (14%), and anemia (12%). The incidence and severity of peripheral neuropathy were low, with four (10%) patients experiencing this AE at a grade limited to two or below. The ORR for the entire population was 63% with an 84% ORR for patients with disease that was not refractory to a PI and 43% in patients with disease refractory to a PI. The median PFS for all patients was 9.0 months; 17.8 months for
PI-nonrefractory,
and 6.1 months for
PI-refractory.
The results from the SVd arm of the STOMP study were published in the journal
Blood
(2018 Dec 13; 132(24): 2546–2554). The SVd arm of the STOMP study served as the basis for the design of the Phase 3 BOSTON study evaluating once-weekly selinexor, once-weekly Velcade and dexamethasone in patients who have had one to three lines of prior multiple myeloma therapy.
Non-Hodgkin’s
Lymphoma
Non-Hodgkin’s
lymphoma, or NHL, is a cancer that starts in cells called lymphocytes, which are part of the body’s immune system. Lymphocytes are found in the lymph nodes and other lymphoid tissues, such as the spleen and bone marrow, as well as in the blood. NHL is one of the most common cancers in the United States, accounting for about 4% of all cancers. In 2020, the American Cancer Society, or ACS, estimates that more than 77,000 patients will be diagnosed with NHL and nearly 20,000 deaths will result from the disease. DLBCL is the most common and the most aggressive of the different forms of NHL, making up approximately 18,000 of the new cases diagnosed annually in the United States. Approximately 50% of newly diagnosed patients are currently cured with front-line (typically
“R-CHOP”
chemotherapy) and another approximately 10% of patients are cured with second line intensive chemotherapy followed by autologous stem cell transplantation. The remaining patients generally succumb to the disease, with the median OS of patients with relapsed or refractory
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DLBCL after two prior regimens less than one year, and often less than six months. Despite the recent approval of
CAR-T
therapy, many patients with relapsed/refractory DLBCL are not medically stable enough to undergo
CAR-T
therapy. The FDA recently granted accelerated approval to the triplet therapy polatuzumab vedotin, bendamustine, rituximab, known as PBR, for the treatment of adult patients with relapsed or refractory diffuse large
B-cell
lymphoma, not otherwise specified after at least two prior therapies.
The Phase 2b SADAL Study
The SADAL study is an open-label Phase 2b clinical trial evaluating single-agent oral selinexor (60mg, twice weekly) in patients that have relapsed or refractory DLBCL after at least two prior multi-agent therapies and who are ineligible for transplantation, including high dose chemotherapy with stem cell rescue. At the ASH 2018 annual meeting, we presented
top-line
clinical data from the SADAL study demonstrating that selinexor, when administered as a single-agent, is clinically active and capable of producing durable responses associated with prolonged overall survival. Updated data were presented at the 2019 International Conference on Malignant Lymphoma, or ICML, meeting on June 19, 2019. The results presented at the ICML meeting remain consistent with those reported at the ASH 2018 annual meeting and include efficacy results from the final 12 patients who had not reached their first response assessment in time to be included in the previously released
top-line
efficacy analyses. Among the 127 patients (median of two prior treatment regimens with a range one to six) who were evaluable for response, as adjudicated by an Independent Central Radiological Review, or ICRR, committee, 36 patients responded (13 CRs and 23 PRs) for an ORR of 28.3%. An additional 11 patients experienced stable disease, or SD, for a disease control rate, or DCR, of 37.0%. Selinexor also demonstrated responses in patients with either GCB or
non-GCB
subtypes of DLBCL: the ORR in the 59 patients with the
GCB-subtype
was 33.9% and the ORR in the 63 patients with the
non-GCB
subtype was 20.6%. In addition, there were five patients enrolled whose subtype was unclassified and one of these patients achieved a CR while two of these patients achieved a PR.
The median DOR across responding patients was 9.2 months and responses tended to occur rapidly, with most documented at the first post-baseline radiological evaluation (weeks
8-9).
Median OS for the entire patient population was 9.0 months while median OS has not yet been reached in patients who achieved either a CR or PR. Patients whose disease progressed or had no response to selinexor had a median OS of 4.1 months, which is consistent with the expected poor prognosis (OS <six months) for patients who have relapsed or refractory DLBCL and have been previously treated with two or more lines of therapy.
All 127 patients were included in the safety analyses. The most common treatment-related AEs were cytopenias along with gastrointestinal and constitutional symptoms and were generally reversible and most were manageable with dose modifications and/or supportive care. The most common
non-hematologic
AEs were nausea (52.8%), fatigue (37.8%), and anorexia (34.6%) and were mostly Grade 1 and 2 events. As expected, the most common Grade 3 and 4 AEs were thrombocytopenia (39.4%), neutropenia (20.5%) and anemia (13.4%) and were generally not associated with clinical sequelae.
In November 2018, the FDA granted Fast Track designation to selinexor for the treatment of patients that have relapsed and/or refractory DLBCL after at least two prior multi-agent therapies and who are ineligible for transplantation, including high dose chemotherapy with stem cell rescue. Selinexor has also been granted Orphan Drug designation by the FDA in DLBCL. Based on the positive results of the SADAL study, we submitted an sNDA to the FDA on December 23, 2019, with a request for accelerated approval for selinexor as a new treatment for adult patients with relapsed or refractory DLBCL, not otherwise specified, who have received at least two prior therapies. The FDA filed the application on February 18, 2020 and granted Priority Review with a target decision date of June 23, 2020 under PDUFA. We also plan to submit a MAA to the EMA in 2020 with a request for conditional approval.
We plan to initiate two studies in DLBCL during 2020.
XPORT-DLBCL-030,
which is expected to serve as a confirmatory study for the accelerated approval requested in DLBCL based on the SADAL study, is a Phase 3 trial of selinexor or matching placebo given with the standard combination immunochemotherapy
R-GDP
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(rituximab, gemcitabine, dexamethasone, cisplatin) to patients with at least one prior therapy and who are ineligible for high dose chemotherapy and stem cell transplantation (or
CAR-T).
The primary endpoint of the study is PFS, and this study is expected to initiate in
mid-2020.
XPORT-DLBCL-025
is a
multi-arm
study of selinexor in combination with commonly used and approved agents for the treatment of DLBCL; this study is expected to begin in the second half of 2020. This study will inform the use of selinexor with a variety of additional agents for the treatment of DLBCL.
Advanced or Metastatic Solid Tumors
Solid tumors represent the vast majority of cancer incidences. Given the large patient population with solid tumors and the mechanistic activity of selinexor that makes it potentially suitable for treating any type of cancer, we are developing selinexor to potentially play a meaningful role across multiple solid tumor indications, either alone or in combination as a backbone therapy. We have seen encouraging single-agent data for selinexor in a variety of solid tumors including PRs and durable SD with disease control greater than three months. Our Phase 1b study in patients with liposarcoma and other sarcomas demonstrated durable SD with single agent selinexor, and our Phase 2 studies of selinexor in gynecological malignancies and glioblastoma multiforme, or GBM, also demonstrated anti-cancer activity, including bona fide PRs as well as prolonged SD. Given the promising single-agent activity in
difficult-to-treat
indications and the potential to enhance activity in combination with existing therapies, we are currently developing selinexor in unmet needs like liposarcoma and endometrial cancer with plans to expand development in GBM, and to advance combination therapy development with both standard of care and emerging therapies like immune checkpoint inhibitors.
Liposarcoma
Liposarcoma represents an area of high unmet need, with currently approved treatments for aggressive disease limited to parenteral chemotherapies. Liposarcoma arises from fat cells or their precursors and represents up to 18% of all soft tissue sarcoma, or approximately 2,500 new cases per year in the United Sates. Liposarcoma most commonly occurs in the thigh, behind the knee, the groin, the gluteal area or behind the abdominal cavity. Dedifferentiated liposarcoma is an aggressive form of soft tissue sarcoma that is resistant to both standard chemotherapy and radiation. Liposarcoma has a particularly high rate of recurrence following surgery, especially in cases involving the abdomen. Except for cases that are cured with surgery, most patients with metastatic liposarcoma will succumb to this disease, and novel therapies are needed.
The Phase 2/3 SEAL Study in Liposarcoma
In our Phase 1b trial to evaluate the effects of food and formulation on selinexor pharmacokinetics in patients with soft tissue or bone sarcoma, 31 of 54 sarcoma patients (57%) experienced SD with single agent selinexor treatment. Fifteen of the 54 patients had dedifferentiated liposarcoma. Of these 15 patients with dedifferentiated liposarcoma, 13 (87%) experienced SD and seven (47%) experienced SD of four months or longer.
In light of the Phase 1b data, we are conducting the SEAL (
Se
linexor
in
A
dvanced
L
iposarcoma) study, a multi-center, randomized, double-blind, placebo-controlled Phase 2/3 clinical trial evaluating single-agent oral selinexor in patients with advanced unresectable dedifferentiated liposarcoma who received at least one line of prior systemic therapy. Patients are randomized to receive either 60mg of selinexor or placebo, respectively, each given twice weekly until progression or intolerability. Patients on placebo with confirmed progressive disease are permitted to cross over to the selinexor treatment arm. In June 2018, we reported a successful outcome from the Phase 2 portion of the SEAL study of 56 patients with previously treated, advanced unresectable dedifferentiated liposarcoma. The median number of prior treatment regimens was two (range of two to 10 prior treatment regimens). For the study’s primary endpoint, patients treated with selinexor achieved PFS of 5.5 months, compared to 2.7 months for placebo-treated patients with a hazard ratio of 0.67, representing a 33% reduction in
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the risk of progression or death. PFS was assessed by an ICRR committee based on RECIST v1.1. In this randomized, blinded Phase 2 portion of the study, selinexor demonstrated a safety and tolerability profile consistent with prior studies with AEs, primarily consisting of nausea, fatigue, anorexia and weight loss, and low levels of Grade 3/4 cytopenias, and no new or unexpected safety signals were identified. The majority of treatment-related AEs were low grade and reversible with dose modifications and/or supportive care. The data from the Phase 2 portion of the SEAL study, which is complete, demonstrate that treatment with selinexor improves PFS (based on the RECIST v1.1 criteria) and supports the currently ongoing Phase 3 portion of the study using RECIST v1.1 response criteria, and for which
top-line
data are anticipated in 2020.
The Phase 3 portion of the SEAL study is being conducted in North America and Europe. In this blinded, placebo-controlled Phase 3 study, patients are randomized 2:1 to receive either oral selinexor (60mg twice weekly) until disease progression or intolerability, or placebo. Patients whose disease progresses on placebo will be permitted to cross over to the selinexor arm. The primary endpoint of the Phase 3 portion of the study is PFS as assessed by the ICRR committee based on RECIST v1.1. The Phase 3 study design and primary endpoint of PFS were agreed to by the FDA.
Top-line
data from the Phase 3 portion of the SEAL study are anticipated in 2020. Assuming a positive outcome, these data are intended to support regulatory submissions requesting approval for oral selinexor as a new treatment for patients with advanced unresectable dedifferentiated liposarcoma. Selinexor received Orphan Drug designation by the FDA for the patient population being evaluated in the SEAL study.
Endometrial Cancer
Endometrial cancer, also called endometrial carcinoma, occurs when cells in the endometrium, which is the inner lining of uterus, begin to grow out of control. In the United States, endometrial cancer is the most common cancer of the female reproductive organs. The NCI estimates that approximately 62,000 new cases of endometrial cancer will be diagnosed in 2020, with approximately 12,000 deaths. Endometrial cancer affects mainly post-menopausal women and the average age of a women diagnosed with endometrial cancer is 60.
The Phase 2/3 SIENDO Study in Endometrial Cancer
SIENDO is a randomized, blinded Phase 2/3 trial evaluating selinexor versus placebo as a maintenance therapy in patients with advanced or recurrent endometrial cancer following at least one prior platinum-based combination chemotherapy treatment. During the first quarter of 2019 an Investigational New Drug, or IND, application was submitted by us and accepted by the FDA, resulting in the transition of this study from investigator-sponsored to company-sponsored. The overall objective of SIENDO is to obtain conclusive evidence of efficacy for maintenance selinexor in patients with advanced or recurrent endometrial cancer. This is a multi-national, multi-center trial and is expected to enroll approximately 192 patients. We currently expect to report topline data from the SIENDO study in 2021.
This trial was designed based on the data from our SIGN study, a Phase 2, open-label study of efficacy and safety of oral selinexor in patients with heavily
pre-treated,
progressive gynecological cancers. In December 2019, the full results from the SIGN study in patients with recurrent gynecological malignancies were published in
 Gynecologic Oncology
 (I.B. Vergot et.al., Gynecologic Oncology. December 2019). According to the published data, the SIGN study showed selinexor’s promising anti-tumor activity and disease control in gynecological malignancies. Of the 66 patients with ovarian cancer, 20 patients (30%) had disease control, meaning PR or SD for at least 12 weeks, including 7 patients (11%) with a PR. The median duration of response for patients that achieved a PR was 7.4 months. Median PFS for all patients with ovarian cancer was 2.6 months and median OS was 7.3 months. Of the 23 patients with endometrial cancer, eight (35%) had disease control (three PRs and five with SD for at least 12 weeks). Median PFS for the endometrial cancer arm was 2.8 months and median OS was 7.0 months. Across all arms, the most common AEs were nausea (71%), fatigue (68%), decreased appetite (57%), vomiting (53%), weight loss (48%), anemia (36%), and thrombocytopenia (34%), which were managed with supportive care and dose modifications. Notably, fewer Grade 3 and 4 AEs occurred in patients receiving once weekly compared to twice weekly selinexor, with equivalent efficacy.
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Glioblastoma
Glioblastoma multiforme, or GBM, is an area of high unmet need, with existing treatments having very limited success in increasing overall surviving rates. GBM is the most common and aggressive malignant primary brain tumor in humans, accounting for 60% of brain tumors in adults. Patients facing GBM face significant morbidity and mortality rates, with over 13,000 deaths per year in the United States. Additionally, GBM patients endure poor prognosis rates, with a
1-year
survival rate of 37.2%, a
5-year
survival rate of 5.1%, and a median survival rate of roughly 10 months. The current standard of care for GBM patients includes surgery, radiation therapy, and chemotherapy. Approved drug treatments for GBM include temozolomide and Avastin
®
(bevacizumab). Despite these treatment options, most patients diagnosed with GBM will quickly succumb to the disease and novel therapies are needed.
The Phase 2 KING Study in Glioblastoma Multiforme
The KING study is a Phase 2 study evaluating the efficacy and safety of oral selinexor in patients with recurrent GBM. In June 2016, we presented data at the American Society of Clinical Oncology, or ASCO, annual meeting where we showed that single-agent oral selinexor demonstrated anti-tumor activity in patients with glioblastoma that recurred after temozolomide and radiation therapy, including selinexor brain penetration at clinically relevant levels, leading to durable anti-cancer activity and disease control of up to 6 months. Specifically, data as of May 23, 2016 from 33 surgically ineligible patients with GBM that progressed after treatment with temozolomide and radiation showed that selinexor dosed twice weekly at 50mg/m
2
(or approximately 80mg flat dosing) demonstrated anti-tumor activity with a 12% ORR (PR or better) and a 33% DCR (SD or better) with durability of up to six months in two patients. The most common AEs were thrombocytopenia, fatigue, anorexia, and nausea, consistent with the selinexor adverse event profile.
In July 2019, updated data were presented at the ASCO 2019 annual meeting based on 76 total patients enrolled in the study as of May 2019. While multiple doses of selinexor were tested in this study (50mg twice weekly, 60 mg twice weekly and 80mg once weekly), the dose of 80mg once per week was determined to be the recommended dose for further evaluation. In the study, there were 30 patients treated with selinexor 80 mg once per week. In this cohort, the rate of patients who were still alive and did not have their disease progress after six
28-day
cycles on therapy (called the
six-cycle
PFS rate) was 30%, the rate of patients who were still alive and did not have their disease progress after six month on therapy (called the
six-month
PFS rate) was 19%, and the ORR was 10%. Additionally, the median OS in this arm of the trial was 9.4 months. The most common AEs in this arm of the trial were nausea, fatigue, anorexia, leukopenia, and neutropenia and were predominately Grade 1 and 2 adverse events. No Grade 4 treatment-related AEs were reported in
10% of patients and no fatal (Grade 5) treatment-related AEs were reported.
The Phase 1/2
XPORT-GBM-029
Study in GBM
Based on these positive findings from the KING study, during the second half of 2020, we plan to initiate
XPORT-GBM-029,
a new Phase 1/2 multi-center, open-label study to evaluate selinexor in combination with standard of care therapies. The Phase 1 portion of the study is expected to evaluate selinexor in combination with radiation with or without temozolomide in newly diagnosed GBM and selinexor in combination with lomustine chemotherapy in recurrent GBM. The Phase 2 portion of the study is designed to be a randomized study to compare the combinations evaluated in the Phase 1 portion against standard of care therapies alone in patients with recurrent or newly diagnosed GBM.
Our Other Pipeline Programs
Eltanexor
(KPT-8602)
Eltanexor is a second-generation SINE compound that, like selinexor, selectively blocks the nuclear export protein XPO1. The mechanism of action for the biological (anti-cancer) activity of eltanexor is believed to be the same as selinexor.
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Eltanexor differs from selinexor primarily because it was designed and confirmed to have much lower penetration into the brain in preclinical species compared with selinexor. Following oral administration, animals treated with eltanexor show lower percentage of body weight loss and improved food consumption, as well as less “fatigue behavior,” in comparison to animals similarly treated with selinexor. This allows more frequent dosing of eltanexor, enabling a longer period of exposure at higher levels than is possible with selinexor, which allows for greater indication diversification among our SINE compounds.
In many preclinical model systems, the more intensive dosing regimen leads to superior efficacy in comparison to selinexor treatment.
Therefore, eltanexor may cause fewer side effects which are believed to be mediated through the central nervous system such as nausea, fatigue and anorexia in humans.
As a result, we believe that eltanexor represents a second-generation SINE compound and are evaluating safety, tolerability and efficacy in humans.
We initiated our
first-in-humans
Phase 1/2 clinical trial for eltanexor in patients with relapsed/refractory multiple myeloma in January 2016. At the ASH 2017 annual meeting, we reported positive data from the ongoing Phase 1/2 study demonstrating good tolerability and promising activity in multiple myeloma. The median time on treatment for the overall study population was greater than 130 days, with a range of 10 days to over two years. The ORR across all 34 patients was 21% including one patient with VGPR. No CRs were observed. Among the 14 patients who received a starting dose of eltanexor in combination with dexamethasone, the ORR was 35.7%.
Among the 39 patients evaluable for safety, the most common Grade 1/2 AEs in the multiple myeloma patient population were nausea (54%), fatigue (46%), anemia (38%), diarrhea (38%), dysgeusia (33%), weight loss (33%) and neutropenia (31%). As expected in this patient population, the most common Grade 3/4 AEs were thrombocytopenia (56%), neutropenia (26%), anemia (15%), leukopenia (15%) and hyponatremia (10%). Importantly, nausea, fatigue, diarrhea and vomiting were nearly all Grade 1, generally manageable and transient, and bleeding was uncommon. The maximum tolerated dose was not reached; however, dose escalation was halted as responses were achieved. Based on these data, the RP2D in this patient population has been established as 20mg eltanexor dosed five times per week with 20mg dexamethasone dosed twice weekly.
This Phase 1/2 study has been expanded to include patients with high risk MDS, metastatic CRC or metastatic CRPC to determine the safety, preliminary efficacy, and RP2D of eltanexor in patients with these advanced cancers. These are indications where selinexor and XPO1 inhibition has shown clear activity, but where side effects such as fatigue and anorexia were problematic for patients due to the underlying malignancies.
At the ASH 2019 annual meeting, positive data was presented from the Phase 1/2 study evaluating the safety, tolerability and anti-tumor activity of single-agent oral eltanexor (10mg or 20mg once-daily for five days per week) in elderly patients with higher-risk MDS with disease refractory to hypomethylating agents. Of the 20 patients evaluable for efficacy, seven patients had a complete response without marrow recovery, or mCR, indicating an ORR of 35%. An additional five patients (25%) achieved SD as their best response. Median OS was 10.6 months. The most common treatment-related AEs were hematologic, gastrointestinal and constitutional. The most common
non-hematologic
treatment-related AEs were nausea (45%), decreased appetite (40%), fatigue (35%), diarrhea (35%) and dysgeusia (25%); the vast majority were Grade 1 or 2. The most common Grade
3 AEs were anemia (30%), neutropenia (25%), thrombocytopenia (20%) and leukopenia (15%). AEs were dose-dependent and generally managed with supportive care and dose modification. This Phase 1/2 study remains ongoing. Based on these data, we plan to either amend the existing Phase 1/2 study protocol or implement a new protocol to evaluate eltanexor in combination with cedazuridine-decitabine (ASTX727) in patients with newly diagnosed MDS. The dose finding portion of the study evaluating this novel combination is expected to begin during the second half of 2020. Once the RP2D of this combination is established, the study is expected to expand into a Phase 2/3 study to explore the efficacy of this combination in newly diagnosed MDS.
KPT-9274
KPT-9274
is a
first-in-class
orally bioavailable small molecule that is a
non-competitive
dual modulator of
p21-activated
kinase 4, or PAK4, and nicotinamide phosphoribosyltransferase, or NAMPT, which is also known
16

as PBEF or visfatin.
Co-inhibition
of these targets leads to synergistic anti-tumor effects through energy depletion, inhibition of DNA repair, cell cycle arrest, inhibition of proliferation, and ultimately apoptosis. Normal cells are more resistant to inhibition by
KPT-9274
due in part to their relative genomic stability and lower metabolic rates. Hematologic and solid tumor cells become dependent on both PAK4 and NAMPT pathways and are therefore susceptible to single-agent cytotoxic effect of
KPT-9274.
KPT-9274
has shown broad evidence of anti-cancer activity against hematological and solid tumor malignant cells while showing minimal toxicity to normal cells in vitro. In mouse xenograft studies,
KPT-9274
given orally has shown evidence of anti-cancer activity and tolerability. To our knowledge, we are the only company with an allosteric, PAK4 and/or NAMPT specific inhibitor currently in clinical development.
We initiated a
first-in-humans
Phase 1 open-label clinical trial evaluating the safety, tolerability, and efficacy of
KPT-9274
in patients with advanced solid malignancies or
non-Hodgkin’s
lymphoma.
Top-line
results from this Phase 1 study were presented in September 2017 at the European Society of Medical Oncology, or ESMO, annual meeting. Among the 18 patients evaluable for preliminary efficacy, there were six (33%) with SD, the longest for 7.3 months. Tumor reductions were observed in three out of three patients with NAPRT1 deficient tumors. Among the 21 patients evaluated for safety, the most common Grade 2 AEs across dose levels were arthralgia (43%), anemia (24%) and fatigue (24%). The most common drug-related Grade 3 or higher AEs across dose levels include anemia (38%) and fatigue (5%). Gastrointestinal-related AEs were infrequent and low grade. In addition, it was determined that niacin can be safely administered with
KPT-9274
and may improve tolerability, particularly with respect to anemia. Dose escalation remains ongoing and further evaluation of effects in NAPRT1 deficient tumors is planned. Enrollment is planned to continue based on the patients’ NAPRT1 status in a 2:1 ratio with twice as many patients with negative NAPRT1 enrolled versus those patients with positive NAPRT1. These study findings indicate that in patients whose disease has progressed despite most available therapies,
KPT-9274
can induce tumor shrinkage and disease stabilization.
In addition, we plan to evaluate the combination of
KPT-9274
with an
anti-PD1
monoclonal antibody in a phase 1 clinical study in the near future.
Verdinexor (KPT-335):
Oral SINE Compound for Lymphoma in Companion Canines
We have used spontaneously occurring canine cancers as a surrogate model for human malignancies. It is widely known that canine lymphomas display a comparable genetic profile and respond to chemotherapy in a fashion similar to their human counterparts (human NHL, most closely DLBCL). Lymphomas are one of the most common tumors in pet dogs. Lymphoma in dogs is very aggressive and, without treatment, the tumors are often fatal within weeks. The majority of dog lymphomas are DLBCL and most of the others are
T-cell
lymphomas. Given the similarities of dog and human lymphomas, prior to initiating clinical trials of selinexor in humans, we investigated verdinexor
(KPT-335),
a closely related, orally available SINE compound in pet dogs with lymphomas. Verdinexor received a Minor Use / Minor Species, or MUMS, designation from the FDA’s Center for Veterinary Medicine, or CVM, for the treatment of newly-diagnosed or first relapse after chemotherapy lymphomas in pet dogs.
Several different dog tumor cell lines, including those derived from lymphomas, exhibited growth inhibition and apoptosis in vitro upon exposure to nanomolar concentrations of verdinexor. Data from a Phase 1 clinical trial of verdinexor as well as dose expansion study involving pet dogs with cancer, primarily with lymphoma, show efficacy of verdinexor to treat dogs with lymphoma. Side effects included anorexia, weight loss, vomiting and diarrhea and were manageable with dose modulation and supportive care. We conducted an owner observation-based survey and the data indicated that the overall quality of life did not change significantly in dogs treated with verdinexor. Based on these findings, a Phase 2b clinical trial, intended to support regulatory approval under the MUMS designation in the United States, was performed in 58 pet dogs with either newly-diagnosed or first relapse after chemotherapy lymphomas. Verdinexor was administered initially at doses ranging from 25mg/m
2
to 30mg/m
2
two or three days per week. Minimal or no supportive care was given. The results of
17

this Phase 2b clinical trial were published in
BMC Veterinary Research
(Sadowski, A.R., et.al., August 2018). According to the published data, the ORR among the 58 dogs was 37%. The most common AEs related to verdinexor included anorexia, weight loss, vomiting, lethargy and diarrhea. Most events (95%) were considered grade 1 or 2. We submitted the safety and effectiveness sections of a New Animal Drug Application for verdinexor to the CVM in December 2013.
In May 2017, we entered into an exclusive licensing agreement with Anivive Lifesciences, Inc., or Anivive, a privately-held biotech company focused on innovations in the veterinary drug and bioinformatics space, pursuant to which Anivive received worldwide rights to research, develop and commercialize verdinexor for the treatment of cancer in companion animals. In exchange, we received an upfront payment and are eligible to receive future milestone payments and royalties. If approved, we believe that verdinexor would represent the first
non-chemotherapy-based
approval for the treatment of dog lymphoma.
The Potential of XPO1 in Settings Beyond Oncology
In addition to its role in cancer, XPO1 is known to play a role in neurological, inflammatory, viral, wound healing and other diseases. In the hands of academic collaborators, SINE compounds have shown activity in a variety of
non-oncology
models consistent with the biology of XPO1. In January 2018, we entered into an Asset Purchase Agreement with Biogen MA Inc., a subsidiary of Biogen Inc., or Biogen, pursuant to which Biogen acquired
KPT-350,
an investigational new drug application-ready, oral SINE compound with a preclinical data package supporting potential efficacy in a number of neuro-inflammatory conditions, as well as certain related assets with an initial focus in amyotrophic lateral sclerosis, or ALS. According to publicly available information, an IND application for
KPT-350
(now BIIB100) was filed in December 2018 and the first patient was dosed in a Phase 1 study of sporadic ALS in June 2019.
SINE compounds have also demonstrated activity in animal models of viral diseases, certain rare diseases and other indications, and we are continuing to develop programs in these areas largely through academic collaborations and
non-dilutive
funding opportunities with the intent to
out-license
these programs for clinical development and future commercialization.
Our
Non-Oncology
Drug Candidates
Verdinexor (KPT-335):
Oral SINE Compound for Viral, Rare Disease and Autoimmune Indications
Verdinexor
(KPT-335)
is an oral SINE compound and our lead compound that is being evaluated as a potential therapy for viral, inflammatory, and autoimmune indications, in addition to the canine lymphoma program described above. Several autoimmune indications are driven by aberrant
pro-inflammatory
responses, particularly uncontrolled
pro-inflammatory
cytokine expression and
NF-kB
activation. These include systemic lupus erythematosus, or SLE, a primary focus of our work with verdinexor. Funded by a grant under the Small Business Innovation Research program, the work to complete
pre-clinical
evaluation of verdinexor as a treatment for SLE is expected to finish in early 2020. At such time, we expect to be in position to file an IND application with the FDA. In addition to SLE, we are initiating preclinical research in spinal cord injuries. In September 2019, we and our collaborator were awarded $2.1 million in grant funding from the U.S. Department of Defense to cover all preclinical work required to reach
IND-readiness
in the field of spinal cord injuries.
In addition, several viruses exclusively utilize XPO1 to shuttle cargos necessary for viral replication, such as viral and host proteins from the nucleus to the cytoplasm. Due to the stability of host gene targets compared to viruses which rapidly adapt for best fitness in hosts, targeting host genes may offer an approach to limit drug resistance. We intend to extend preclinical research in viruses that may be relevant to patients with compromised immune systems, such as cytomegalovirus, or CMV. As such, we are conducting
pre-clinical
animal studies of verdinexor in
CMV-infected
mice with the National Institutes of Health. We also intend to investigate verdinexor to treat inflammation in virally-suppressed antiretroviral therapy-receiving individuals.
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In 2015, we conducted a randomized, double-blind, placebo-controlled, dose-escalating Phase 1 clinical trial of verdinexor in healthy human volunteers in Australia. This study was designed to evaluate the safety and tolerability of verdinexor in healthy adult subjects. Mild to moderate AEs of similar grade and in an equivalent percentage of patients as placebo were reported, and no serious or severe AEs were observed. We plan to continue to explore strategies to pursue the clinical development of verdinexor as a treatment for viral, inflammatory, and autoimmune indications, including potentially partnering with a collaborator or through government-funded grant or contract opportunities.
As part of the exclusive license agreement we entered into with Antengene Therapeutics Limited, or Antengene, in May 2018, we granted Antengene exclusive rights to develop and commercialize verdinexor for the diagnosis, treatment and/or prevention of certain human
 non-oncology
 indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
Summary of Mechanism of Action: Transient XPO1 Inhibition by SINE Compounds
Certain functions may only occur within a particular location in the cell, so one of the ways a cell regulates the function of a particular protein is by controlling that protein’s location within the cell. The nuclear pore is a complex gate between the nucleus and cytoplasm, regulating the import and export of most large molecules, called macromolecules, including many proteins, into and out of the nucleus. In healthy cells, nuclear transport, both into and out of the nucleus, is a normal and regular occurrence that is tightly regulated and requires the presence of specific carrier proteins. XPO1 mediates the export of over 220 mammalian cargo proteins and some growth-promoting mRNAs. Particularly, XPO1 mediates the transport of the majority of tumor suppressor proteins and appears to be the only mediator of nuclear export for these proteins. Cancer cells have increased levels of XPO1, causing the increased export of these tumor suppressor proteins from the nucleus. Since the tumor suppressor proteins must be located in the nucleus to survey for DNA damage and initiate programmed cell death, or apoptosis, XPO1 overexpression in cancer cells neutralizes their tumor suppressing function by removing them from the nucleus. By blocking XPO1, our SINE compounds inhibit the export of tumor suppressor proteins, leading to their accumulation and functional reactivation in the nucleus. The accumulation of tumor suppressor proteins in the nucleus amplifies their natural apoptotic function in cancer cells. Because normal cells have little or no DNA damage, accumulation of tumor suppressor proteins in their nucleus generally does not lead to apoptosis. Further, SINE compounds reduce the translation of certain growth-promoting and anti-apoptosis proteins—often called oncoproteins—by inhibiting the XPO1-mediated nuclear to cytoplasmic transport of a protein called eIF4E (eukaryotic protein translation initiation factor 4E), which itself binds to the
19

mRNAs that code for these proteins. The figure below depicts the process by which our SINE compounds inhibit the XPO1-mediated nuclear export of tumor suppressor proteins and oncoprotein mRNAs.
 
We believe that the XPO1-inhibiting SINE compounds that we have discovered and developed to date, including selinexor, have the potential to provide novel, oral, targeted therapies that enable tumor suppressor proteins to remain in the nucleus and promote the apoptosis of potentially any type of cancer cell. In multiple cancer types, patient tumor biopsies have confirmed that selinexor treatment induces nuclear localization of tumor suppressor proteins and, subsequently, cancer cell death, or apoptosis. We believe that XPOVIO is the only currently approved cancer treatment selectively targeting the restoration and increase in the levels of multiple tumor suppressor proteins in the nucleus. We believe that selinexor’s novel mechanism of action and oral administration and low levels of major organ toxicities observed to date in patients treated with selinexor in clinical trials, along with encouraging efficacy data, support the potential for selinexor’s broad use across many cancer types, including both hematological and solid tumor malignancies. Our SINE compounds were the first oral XPO1 inhibitors in clinical development. We own all intellectual property rights related to the compounds that we are developing, including composition of matter and method of use patents covering selinexor issued by the U.S. Patent and Trademark Office in 2015 and which provide patent protection through at least 2032, prior to any adjustments or extensions.
Our Strategy
The critical components of our business strategy are to:
 
Maximize the Commercial Value of XPOVIO and Our Other Drug Candidates.
We are also executing on our U.S. commercial capabilities and supporting the ongoing launch of XPOVIO in the United States. In 2019 we launched XPOVIO in the U.S. market. As of December 31, 2019, approximately 1,400 XPOVIO prescriptions had been fulfilled, driven by strong demand from both academic and community-based oncologists, and XPOVIO had been prescribed by more than 550
 
 
20

  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.
In October 2017, we entered into an exclusive license agreement with Ono Pharmaceutical Co., Ltd. for the development and commercialization of selinexor and eltanexor for all human oncology indications in Japan, South Korea, Taiwan, Hong Kong, and the ASEAN countries. In May 2018, we entered into an exclusive license agreement with Antengene under which we granted Antengene exclusive rights to develop and commercialize selinexor, eltanexor and
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.
We plan to seek regulatory approvals of selinexor in North America and Europe for each indication in which we receive favorable results in a trial with a survival endpoint that is registration-enabling. As we did with XPOVIO based on results of the STORM study, we may also seek regulatory approvals where a clinical trial demonstrates significant data in a surrogate endpoint, such as overall response rate, that could allow for accelerated or conditional approval. We or our current or future partners may seek marketing approvals in other geographies as well.
 
 
 
 
Maintain Our Competitive Advantage and Scientific Expertise in the Field of Nuclear Transport.
To further our understanding of the role nuclear transport plays in the underlying biology of cancer, as well other major diseases, we plan to continue research in the field of nuclear transport and related areas, primarily by fostering relationships with scientific advisors and physicians. We continue to explore a variety of standard and novel combinations of other anti-cancer agents with our SINE inhibitors, and these
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.
To date, we have identified several drug candidates: our oral SINE compounds selinexor, eltanexor and verdinexor and our oral dual
 
 
 
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  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.
We may seek to enter into global or regional development, marketing, and commercialization collaboration arrangements for our other SINE compounds in
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.
 
 
 
Our Focus: Nuclear Transport
Cancer is a disease characterized by unregulated cell growth. Cancer cells develop when DNA inside the nucleus of normal cells accumulates damage in genes that regulate cell growth and survival. In healthy cells, proteins called tumor suppressor proteins located in the cell nucleus help prevent accumulation of DNA damage (mutations, chromosomal translocations and other abnormalities) by monitoring DNA for damage, and if damage is detected, the tumor suppressor proteins direct the cell to attempt to repair it. However, if the DNA damage is too severe, the tumor suppressor proteins direct the cell to die in a process called apoptosis.
Proteins, however, are not made inside the nucleus but rather made outside of the nucleus in an area called the cytoplasm. A membrane, called the nuclear membrane, separates the nucleus from the cytoplasm. Larger nuclear proteins, including tumor suppressor proteins, must be transported from the cytoplasm where they are made into the nucleus to perform their functions in keeping a cell healthy. Similarly, when they have completed their normal functions, these proteins are typically exported back into the cytoplasm. Proteins move between the nucleus from the cytoplasm through a protein complex embedded in the nuclear membrane called the nuclear pore. The nuclear pore works like a gate through which large molecules, including many other proteins and RNAs, enter and exit the nucleus. When molecules enter the nucleus from the cytoplasm, the process is called import, and when molecules exit from the nucleus to the cytoplasm, the process is called export. The import and export of most proteins and other large molecules between the nucleus and cytoplasm require specific carrier proteins to chaperone their cargo molecules through the nuclear pore complex. Carrier proteins which mediate the import of macromolecules into the nucleus are called importins, and those which mediate the export of macromolecules out of the nucleus are called exportins. Therefore, the processes of import and export are carried out separately and are typically regulated independently.
Eight exportins have been identified in human cells. One such export carrier protein was discovered in 1999 and is called exportin 1, or XPO1 or CRM1. XPO1 exports over 220 proteins referred to as its “cargo proteins.” In particular, XPO1 appears to be the sole exporter for most of the tumor suppressor proteins including p53, p73, p21, p27, APC, FOXO, pRB and survivin. In addition to exporting tumor suppressor proteins out of the nucleus, XPO1 mediates the nuclear export of a protein called eukaryotic initiation factor 4E, or eIF4E, also called the “mRNA cap binding protein.” eIF4E binds to the mRNAs for many growth-regulating proteins, including
c-myc,
bcl-2,
bcl-6
and cyclin D. eIF4E depends on XPO1 to help carry these growth-promoting mRNAs from the nucleus into the cytoplasm where the mRNAs are efficiently translated into proteins. XPO1 also exports the anti-inflammatory (and anti-tumor) protein I
k
B, which inhibits a protein called NF-
k
B. NF-
k
B is found in the nucleus of most cancer cells and plays a role in cancer metastasis and chemotherapy resistance, as well as in many inflammatory and autoimmune diseases. By exporting I
k
B out of the nucleus, XPO1 augments NF-
k
B activity.
XPO1 levels are reported to be elevated in nearly all cancer cells when compared to their healthy cell counterparts. Therefore, these elevated levels of XPO1 in cancer cells mediate the rapid export of tumor
22

suppressor proteins as well as I
k
B and eIF4E out of the nucleus. When compared to healthy cells, the increased export of tumor suppressor proteins in cancer cells may lead to reduced monitoring for DNA damage, the normal triggering of apoptosis and increased NF-
k
B activity. Higher levels of XPO1 expression in cancer cells is also generally correlated with resistance to chemotherapy and poor prognosis of patients.
Inhibiting XPO1 leads to accumulation of tumor suppressor proteins as well as eIF4E and I
k
B in the cell nucleus, which has been confirmed in a variety of preclinical models as well as in tumor biopsy tissues from patients treated with selinexor. Nuclear retention of tumor suppressor proteins increases their efficiency in detecting DNA damage and subsequently triggering apoptosis in cancer cells. In addition, blocking XPO1 can cause accumulation of eIF4E-bound growth-promoting mRNAs, which may cause a reduction in the levels of growth-promoting proteins in cancer cells; this has also been confirmed in preclinical models and in patients’ tumor biopsy tissues. Accumulation of I
k
B in the nucleus inhibits NF-
k
B, which may be beneficial in overcoming chemotherapy resistance and in treating autoimmune, inflammatory, and neuro-inflammatory disease; this too has been detected in both preclinical models and in human cancer tissues from treated patients. For these reasons, we believe blocking XPO1 is a good strategy for treating cancer as well as autoimmune, inflammatory and neuro-inflammatory diseases. The figure below depicts the process by which XPO1 mediates the nuclear transport process.
XPO1 Mediation of Nuclear Transport
Our Approach: Targeting Nuclear Export with SINE Compounds
 
XPOVIO, our approved XPO1 inhibitor, and our drug candidates are
first-in-class,
oral,
SINE
compounds. SINE compounds inhibit XPO1-mediated nuclear export by strongly, yet reversibly, binding to the XPO1 cargo binding site, effectively blocking the XPO1-cargo protein interaction. The transient XPO1 inhibition period that we have observed to date with our SINE compounds appears to be sufficient for elevation of tumor suppressor protein levels and I
k
B in the nucleus. Accumulation of tumor suppressor proteins in the nucleus of cancer cells allows them to perform their normal role of detecting DNA damage, thereby inhibiting a cancer cell’s ability to divide and promoting apoptosis.
Healthy cells also accumulate tumor suppressor proteins in the presence of a
23

SINE compound, but they do not undergo apoptosis after transient XPO1 inhibition because they have minimal or no DNA damage. The figure below depicts the process by which SINE compounds inhibit the XPO1-mediated nuclear export of tumor suppressor proteins.
Transient XPO1 Inhibition by SINE Compounds
 
In addition to cancer, our SINE compounds have demonstrated the potential to provide therapeutic benefit in a number of other indications. Specifically, SINE compounds have shown evidence of activity in preclinical models of viral infections, neurological disorders, inflammation and autoimmune diseases.
Our Initial Indication: Cancer
According to the World Health Organization, cancer is the second leading cause of death globally and responsible for an estimated 9.6 million deaths in 2018. Globally, about 1 in 6 deaths is due to cancer. Additionally, cancer is one of the most important health issues facing patients in the United States. The American Cancer Society estimates that in the United States, more than 16.9 million Americans with a history of cancer were alive on January 1, 2019 and more than 1.8 million new cancer cases are expected to be diagnosed in 2020. Approximately 600,000 Americans are expected to die of cancer in 2020.
The most common methods for treating patients with cancer are a combination of surgery, radiation, and drug therapy. Locoregional therapies, such as surgery and radiation therapy, are particularly effective with localized disease. However, in situations where the cancer has spread beyond the primary site or cannot otherwise be treated through locoregional therapies, physicians generally use systemic drug therapies. In many cases, drug therapy includes combinations of several different drugs. An early approach to cancer treatment was through cytotoxic drugs that kill rapidly proliferating cancer cells by nonspecific mechanisms, such as disrupting cell metabolism or causing damage to cellular components required for survival and rapid growth. While these
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drugs have been effective in the treatment of some cancers, they act in an indiscriminate manner, killing healthy cells as well as cancer cells. Due to their mechanism of action, many cytotoxic drugs have a narrow dose range above which the toxicity causes unacceptable or even fatal levels of damage and below which the drugs are not effective in promoting cancer cell death. A different approach to pharmacological cancer treatment has been to develop drugs referred to as targeted therapeutics, which target specific biological molecules in the human body that play a role in the rapid cell growth and spread of cancer. Targeted therapeutics are designed specifically to exploit vulnerabilities in cancer cells to improve efficacy and to minimize side effects. The drugs are designed to either attack a target that causes uncontrolled growth of cancer cells because of a genetic alteration more often found in cancer cells than in healthy cells or attack a target that cancer cells are more dependent on for their growth than are healthy cells.
Our SINE compounds are novel therapies specifically designed to force nuclear accumulation in the levels of multiple tumor suppressor and growth regulatory proteins. When tumor suppressor proteins are located in the cell nucleus, they assess the integrity of a cell’s DNA. In cells with heavily damaged DNA, such as cancer cells, these tumor suppressor proteins induce cell death, or apoptosis.
Unlike many other targeted therapeutic approaches that only work for a specific set of cancers or in a specific subgroup of patients, we believe that by restoring tumor suppressor proteins to the nucleus where they can assess a cell’s DNA, our SINE compounds have the potential to provide therapeutic benefits across a broad range of both hematological and solid tumor malignancies and benefit a wider range of patients.
Additionally, and as supported by its mechanism of action and preclinical and clinical data, we believe that selinexor has the potential for additive or synergistic benefit with approved and experimental therapies in treating cancer patients.
As a result, we believe that selinexor has the potential to serve as a backbone therapy across multiple hematological and solid tumor malignancies as part of a variety of combination therapies.
Since our founding by Dr. Sharon Shacham in 2008, our goal has been to establish a leading, independent oncology business. We are led by Dr. Shacham, our President and Chief Scientific Officer, and Dr. Michael Kauffman, our Chief Executive Officer. Dr. Kauffman played a leadership role in the development and approval of Velcade at Millennium Pharmaceuticals and of Kyprolis while serving as Chief Medical Officer at Proteolix and then Onyx Pharmaceuticals. Both prior to her founding of Karyopharm and while at Karyopharm, Dr. Shacham has played a leadership role in the discovery and development of many novel drug candidates, which have been or are being tested in human clinical trials.
Since our inception, we have devoted most of our efforts to research and development. Beginning in July 2019, we have generated revenue from the commercial sale of XPOVIO
®
(selinexor). Net product sales for the year ended December 31, 2019 was $30.5 million. As of December 31, 2019, we had an accumulated deficit of $873.3 million. We had net losses of $199.6 million, $178.4 million and $129.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.
Our Strategic Relationships
On May 23, 2018, we entered into a license agreement with Antengene Therapeutics Limited, a corporation organized and existing under the laws of Hong Kong, or Antengene, and a subsidiary of Antengene Corporation Co. Ltd., a corporation organized and existing under the laws of the People’s Republic of China, pursuant to which we granted Antengene exclusive rights to develop and commercialize, at its own cost, selinexor, eltanexor and
 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, as well as verdinexor in the
 non-oncology
 field in mainland China, Taiwan, Hong Kong, Macau, South Korea, and the ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam). Under the terms of the Antengene Agreement, we received an upfront cash payment of $11.7 million and are entitled to receive up to $105.0 million in milestone payments
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from Antengene if certain development goals are achieved and up to $45.0 million in milestone payments from Antengene if certain sales milestones are achieved. We are further eligible to receive tiered double-digit royalties based on future net sales of selinexor and eltanexor in China and Macau, and tiered single- to double-digit royalties based on future net sales of
 KPT-9274
 and verdinexor in the licensed territories. Antengene’s obligations under the license agreement have been guaranteed by Antengene Corporation Co. Ltd.
According to publicly available information, Antengene filed Clinical Trial Applications, or CTAs, in China with the National Medical Products Administration, or NMPA, for selinexor in multiple myeloma and DLBCL in 2019. The multiple myeloma CTA, known as MARCH, supports a clinical study of selinexor plus dexamethasone in patients whose disease is refractory to lenalidomide and bortezomib. The first patient in this study was enrolled in September 2019. The DLBCL CTA, known as SEARCH, supports a clinical study of selinexor both as single agent and in combination with
ATG-008,
for the treatment of relapsed/refractory DLBCL. Also, Antengene announced on January 3, 2020 that the Food and Drug Administration, Ministry of Health and Welfare, Taiwan has recently approved the commencement of a phase I open-label clinical trial for the PAK4/NAMPT dual target oral inhibitor
KPT-9274
in patients with advanced solid tumors or NHL which have progressed despite standard therapy, for whom no standard therapy exists, or who have refused standard therapy.
On January 24, 2018, we entered into an asset purchase agreement with Biogen pursuant to which Biogen acquired our oral SINE compound
KPT-350
and certain related assets. XPO1 mediates the nuclear export of multiple proteins that impact neurological and inflammatory processes. Consequently, inhibition of XPO1 by
KPT-350
results in a reduction in inflammation and an increase in anti-inflammatory and neuroprotective responses.
KPT-350
penetrates the blood brain barrier to a greater degree than other SINE compounds. Preclinical data generated largely by external collaborators show efficacy of
KPT-350
and related SINE compounds in animal models of amyotrophic lateral sclerosis, multiple sclerosis, traumatic brain injury, epilepsy, and other neuro-inflammatory indications. We received a
one-time
upfront payment of $10.0 million from Biogen and are eligible to receive additional payments of up to $207 million based on the achievement by Biogen of future specified development and commercial milestones. We are also eligible to receive tiered royalty payments that reach low double digits based on future net sales until the later of the tenth anniversary of the first commercial sale of the applicable product or the expiration of specified patent protection for the applicable product, determined on a
county-by-country
basis. According to publicly available information, an IND application for
KPT-350
was filed in December 2018 and the first patient was dosed in a Phase 1 study of sporadic ALS in June 2019.
Effective October 11, 2017, we entered into an exclusive license agreement with Ono Pharmaceutical Co., Ltd., or Ono, whereby Ono received rights to develop and commercialize selinexor and eltanexor at its own cost and expense, for the diagnosis, treatment and/or prevention of all human oncology indications in Japan, South Korea, Taiwan, Hong Kong, and the ASEAN countries, which we refer to as the Ono Territory. In exchange, we received a
one-time
upfront payment of ¥2.5 billion (approximately US$21.9 million) from Ono and retain all rights to selinexor and eltanexor outside the Ono Territory. We are eligible to receive up to an additional ¥19.15 billion (approximately US$176.2 million at the exchange rate on December 31, 2019) if specified future development and commercial milestones are achieved by Ono. We are also eligible to receive low double-digit royalties based on future net sales of selinexor and eltanexor in the Ono Territory. Ono will have the ability to participate in any global clinical study of selinexor and eltanexor and will bear the cost and expense for patients enrolled in clinical studies in the Ono Territory.
In May 2017, we entered into an exclusive licensing agreement with Anivive Life Sciences, Inc., or Anivive, pursuant to which Anivive received worldwide rights to research, develop and commercialize verdinexor for the treatment of cancer in companion animals. In exchange, we received an upfront payment of $1.0 million and a subsequent milestone of $250,000 and are eligible to receive up to $43.25 million in future regulatory, clinical and commercial milestone payments, assuming approval in both the United States and the European Union. In addition, Anivive agreed to pay us up to low double-digit royalty payments based on future
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net sales of verdinexor. If approved, we believe that verdinexor would represent the first
non-chemotherapy-
based approval for the treatment of dog lymphoma.
Intellectual Property
Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection for our drug candidates, our core technologies, and other
know-how,
to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary or intellectual property rights. Our policy is to seek to protect our proprietary and intellectual property position by, among other methods, filing patent applications in the United States and in foreign jurisdictions related to our proprietary technology and drug candidates. We also rely on trade secrets,
know-how
and continuing technological innovation to develop and maintain our proprietary and intellectual property position.
We file patent applications directed to the composition of matter and methods of use and manufacture for our drug candidates. As of February 10, 2020, we were the sole owner of 20 patents in the United States and we had 10 pending patent applications in the United States, two pending international applications filed under the Patent Cooperation Treaty, or PCT, 59 granted patents and 96 pending patent applications in foreign jurisdictions. The PCT is an international patent law treaty that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the member states. Although a PCT application is not itself examined and cannot issue as a patent, it allows the applicant to seek protection in any of the member states through national-phase applications. The technology underlying such pending patent applications has been developed by us and was not acquired from any
in-licensing
agreement.
The intellectual property portfolios for our key drug candidates as of February 10, 2020 are summarized below.
 
Selinexor (KPT-330)
: Our selinexor patent portfolio covers the composition of matter and methods of use of selinexor, as well as methods of making selinexor, and consists of five issued U.S. patents (two patents are specific to selinexor, two other patents cover both selinexor and verdinexor and the fifth patent covers polymorphs of selinexor), 23 issued foreign patents, 43 pending foreign patent applications, two pending U.S.
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)
: Our patent portfolio covering selinexor for wound healing, including acute and chronic wounds, covers methods of using selinexor or verdinexor for wound healing, including systemic and topical uses, and consists of one issued U.S. patent and one granted European patent. The U.S. patent will expire in 2034, absent any terminal disclaimer, patent term adjustment due to administrative delay by the USPTO or patent term extension under the Hatch-Waxman Act. The European patent will likewise expire in 2034.
 
Verdinexor (KPT-335)
: Our selinexor patent portfolio described above, with the exception of the applications directed to polymorphs of selinexor, also covers both the composition of matter and
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  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)
: Our eltanexor patent portfolio covers both the composition of matter and methods of use of eltanexor, and consists of two issued U.S. patents, one pending
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
: Our PAK4/NAMPT inhibitors patent portfolio covers both the composition of matter and methods of use of the PAK4/NAMPT inhibitors described therein, such as
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.
In addition to the patent portfolios covering our key drug candidates, as of February 10, 2020, our patent portfolio also includes five patents (U.S. Patent Nos. 8,513,230, 9,303,000, 9,428,490, 9,550,757 and 10,526,295) and 17 granted foreign patents and pending patent applications in the U.S. and foreign jurisdictions relating to other XPO1 inhibitors and their use in targeted therapeutics and combination therapies and biomarkers for XPO1 inhibitors. In the United States, we have trademark registrations for our name and logo, and a combination of the two, XPOVIO, and PORE for our online portal. We also have pending applications to register two additional possible drug names (examination is currently suspended), and KARYFORWARD and a KARYFORWARD logo for our financial aid and charitable services. Outside the United States, XPOVIO is registered or pending in thirty additional jurisdictions, and is registered or pending in Katakana in Japan, Hangul in South Korea, and Chinese characters in Taiwan. We also have registrations or applications for eight additional possible drug names in numerous foreign jurisdictions. The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the United States, the patent term is 20 years from the earliest filing date of a
non-provisional
patent application. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent. The term of a patent that covers a drug may also be eligible for patent term extension when FDA approval is granted, provided statutory and regulatory requirements are met. See “—Government Regulation—Patent Term Restoration and Extension” below for additional information on such extensions. In the future, if and when our drug candidates receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term extensions on issued patents covering those drugs, depending upon the length of the clinical trials for each drug candidate and other factors. There can be no assurance that any of our pending patent applications will issue or that we will benefit from any patent term extension or favorable adjustment to the term of any of our patents.
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As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position for our drug candidates and technologies will depend on our success in obtaining effective patent claims and enforcing those claims if granted. However, patent applications that we may file or license from third parties may not result in the issuance of patents. We also cannot predict the breadth of claims that may be allowed or enforced in our patents. Our issued patents and any issued patents that we may receive in the future may be challenged, invalidated or circumvented. For example, we cannot be certain of the priority of inventions covered by pending third-party patent applications. If third parties prepare and file patent applications that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings to determine priority of invention, which could result in substantial costs to us, even if the eventual outcome is favorable to us. In addition, because of the extensive time required for clinical development and regulatory review of a drug candidate we may develop, it is possible that, before any of our drug candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.
In addition to patents, we rely upon unpatented trade secrets and
know-how
and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our collaborators, scientific advisors, employees and consultants, and invention assignment agreements with our employees. We also have agreements with selected consultants, scientific advisors and collaborators requiring assignment of inventions. The confidentiality agreements are designed to protect our proprietary information and, in the case of agreements or clauses requiring invention assignment, to grant us ownership of technologies that are developed through our relationship with a third party.
With respect to our proprietary drug discovery and optimization platform, we consider trade secrets and
know-how
to be our primary intellectual property. Trade secrets and
know-how
can be difficult to protect. We anticipate that with respect to this technology platform, these trade secrets and
know-how
may over time be disseminated within the industry through independent development, the publication of journal articles describing the methodology, and the movement of personnel skilled in the art from academic to industry scientific positions.
Competition
The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. While we believe that our technology, knowledge, experience and scientific resources provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions. Any drug candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
There are several companies developing or marketing treatments for cancer and the other indications on which we currently plan to focus, including many major pharmaceutical and biotechnology companies. To our knowledge, only one other company with an XPO1 inhibitor has enrolled patients in clinical trials at the present time. Stemline Therapeutics, Inc. announced in January 2015 that it had exclusively licensed the rights to develop and commercialize
SL-801
(felezonexor), an oral XPO1 inhibitor, from CanBas Co., Ltd. In December 2015, Stemline announced the opening of its IND and planned initiation of a clinical development program in multiple cancer types. Stemline currently has a Phase 1 trial that is open and enrolling patients with advanced solid tumors. Updates were provided at the ESMO 2019 annual meeting indicating one patient had realized a partial response and some other patients had experienced stable disease.
Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even
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more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
The key competitive factors affecting the success of any approved oncology drug product, including our drug candidates, if approved, are likely to be their efficacy, safety, convenience and price, the availability of alternative cancer therapies and the availability of reimbursement from government and other third-party payors.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize drugs, or commercialize existing drugs in new indications, and those drugs are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any drugs that we may develop. Our competitors also may obtain FDA or other regulatory approval for their drugs more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic drugs. Generic drugs for the treatment of cancer and the other indications on which we currently plan to initially focus are currently on the market, and additional drugs are expected to become available on a generic basis over the coming years. As we have seen with XPOVIO, and in multiple myeloma, if we obtain marketing approval for our other drug candidates or for selinexor in other indications, we expect that they will be priced at a significant premium over generic versions of older chemotherapy agents and other cancer therapies.
The most common methods of treating patients with cancer are surgery, radiation and drug therapy. There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While our drug candidates may compete with many existing drugs and other therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our drug candidates will be complimentary with them. Some of the currently approved drug therapies are branded and subject to patent protection, and others are available on a generic basis. Many of these approved drugs are well-established therapies and are widely accepted by physicians, patients and third-party payors.
In addition to currently marketed therapies, there are also a number of drugs in late stage clinical development to treat cancer and the other indications on which we plan to initially focus. These drugs in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies. As a result, they may provide significant competition for any of our drug candidates for which we obtain marketing approval.
XPOVIO and, if approved, our other lead drug candidates may compete with the investigational therapies and currently marketed drugs discussed below.
Multiple Myeloma
Over the past 15 years, ten agents have been approved in the United States for the treatment of patients with multiple myeloma: bortezomib (Velcade
®
, Takeda), lenalidomide (Revlimid
®
, Celgene), thalidomide (Thalomid
®
, Celgene), liposomal doxorubicin (Doxil
®
, Janssen), carfilzomib (Kyprolis
®
, Amgen), pomalidomide (Pomalyst
®
, Celgene), panobinostat (Farydak
®
, Novartis), daratumumab (Darzalex
®
, Janssen), elotuzumab (Empliciti
®
, BMS), and ixazomib (Ninlaro
®
, Takeda). Approved indications range from the treatment of newly diagnosed patients to those with relapsed and/or refractory multiple myeloma.
Several other anti-cancer agents are in late-stage development for the treatment of patients with multiple myeloma, including
anti-B
cell maturation antigen (BCMA), based
CAR-T
therapies such as bb2121 and
CC-93269
(Bluebird Bio/Celgene/BMS), JCHARHI25 (Juno Therapeutics/Celgene),
P-BCMA-101
(Johnson &
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Johnson/Poseida Therapeutics),
JNJ-4528
(LCAR-B38M, Johnson & Johnson/Legend BioTech) and
CAR-T-BCMA
(Novartis); monocolonal antibodies such as isatuximab (Sanofi),
TAK-079
(Takeda); antibody-drug conjugates such as belantamab mafodotin (GSK2857916, GlaxoSmithKline);
bi-specific
antibodies such as AMG420 (Amgen), REGN5458 (Regeneron) and
PF-06863135
(Pfizer); and other novel agents such as ibrutinib (Imbruvica
®
, Abbvie/Roche), venetoclax (Venclexta
®
, Abbvie), plitidepsin (PharMar), masitinib (AB Sciences), filanesib (Array Biopharma), oprozomib (Amgen), ricolinostat (Celgene) and melflufen (Oncopeptides).
Non-Hodgkin’s
Lymphoma (NHL)
The initial therapy for DLBCL typically consists of multi-agent cytotoxic drugs in combination with the monoclonal antibody rituximab (Rituxan
®
, Roche). In patients with DLBCL who are not elderly and who have good organ function, high dose chemotherapy with stem cell transplantation is often used. Over the past two years, three therapeutic interventions have been approved in the United States for the treatment of patients with relapsed refractory DLBCL, or RR DLBCL, who have received at least two prior therapies: tisagenlecleucel (Kymriah
®
, Novartis) and axicabtagene ciloleucel (Yescarta
®
, Kite/Gilead), both
CAR-T
therapies, and polatuzumab vedotin (Policy
®
, Genentech/Roche). On December 30, 2019, MorphoSys announced its submission of a biologics license application (BLA) to the FDA for tafasitamab in RR DLBCL. Newer targeted agents such as the BTK inhibitor ibrutinib (Imbruvica
®
, Pharmacyclics) and the immunomodulatory drug lenalidomide (Revlimid
®
, Celgene) have also shown activity in DLBCL. There are also a number of other widely used anti-cancer agents that have broad labels which include NHL, and some of these are being evaluated alone or in combination for the treatment of patients with DLBCL that have relapsed after treatment with chemotherapy. Other anti-cancer agents are also being evaluated in the treatment of DLBCL, including but not limited to, tafasitamab
(MOR-208,
MorphoSys), polatuzumab vedotin (Polivy
, Roche), magrolimab
(Hu5F9-G4,
Forty Seven, Inc.), umbralisib/ublituximab (TG Therapeutics), mosunetuzumab (Roche),
ADCT-402
(ADC Therapeutics), zanubrutinib (Brukinsa
, Beigene), everolimus (Afinitor
®
, Novartis), venetoclax (Venclexta
®
, Abbvie), acalabrutinib (Calquence
®
, Acerta Pharma), blinatumomab (Blincyto
®
, Amgen), durvalumab (Imfinzi
®
, AstraZeneca), nivolumab (Opdivo
®
, BMS), pembrolizumab (Keytruda
®
, Merck), avelumab (Bavencio
®
, Pfizer/EMD Serono) and brentuximab vendotin (Adcetris
®
, Seattle Genetics). In addition, other
CAR-T
therapies are currently in clinical development.
Dedifferentiated Liposarcoma (DDLS)
Sarcomas are a group of cancers which arise from connective tissue and bone, of which more than 50 subtypes exist. Liposarcoma is one of the more common types of soft tissue sarcoma. The initial treatment for liposarcoma is surgery with or without radiotherapy when possible. When liposarcoma is not amenable to surgery (i.e., unresectable), various systemic treatments, including multiagent and sometimes single agent chemotherapy are used. Agents used in combination therapies include: doxorubicin, ifosfamide, epirubicin, gemcitabine, dacarbazine, docetaxel and vinorelbine. There are a number of anti-cancer agents that have board soft tissue sarcoma labels and are typically used as single agents after initial systemic therapy, which include liposomal doxorubicin, temozolomide, vinorelbine, pazopanib (Votrient
®
Novartis), larotrectinib (for neurotrophic tyrosine receptor kinase, or NTRK, gene fusion-positive sarcomas—Vitrakvi
®
, Bayer) and entrectinib (for NTRK gene fusion-positive sarcomas—Rozlytrek
®
, Genentech/Roche).
Selinexor in being evaluated in patients with advanced, unresectable, dedifferentiated relapsed or refractory liposarcoma who have received at least two prior therapies. Two agents have been approved in the United States for the management of unresectable or metastatic liposarcoma who have received a prior anthracycline-containing regimen: eribulin (Halaven
®
, Eisai Inc. 2017) and trabectedin (Yondelis
®
, Janseen 2019). Other anti-cancer agents are also being evaluated in the treatment of dedifferentiated liposarcoma, including but not limited to HDM201 and LEE011 (Novartis), cabazitaxel (Jevtana
®
, Sanofi), abemaciclib (Verzenio
®
, Lilly), plitidepsin (PharmaMar), Ipilimumab/Nivolumab (BMS), and Pembrolizumab (Keytruda
®
, Merck). The effectiveness of existing treatments for unresectable or metastatic liposarcoma remains limited and few trials have specifically evaluated dedifferentiated liposarcoma at an advanced stage.
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Competition with XPO1 Inhibitors
Drug compounds currently in preclinical studies, if developed and approved, could also be competitive with our drug candidates, if approved. In January 2015, Stemline Therapeutics, Inc. announced that it had exclusively licensed the rights to develop and commercialize
SL-801,
an XPO1 inhibitor, from CanBas Co., Ltd. Stemline currently has a Phase 1 trial that is open and enrolling patients with advanced solid tumors and updates were provided at the 2019 ESMO annual meeting indicating one patient had realized a partial response and some other patients had experienced stable disease. Additionally, Kosan Biosciences Inc. (acquired by Bristol-Myers Squibb Company) had evaluated compounds derived from leptomycin B in preclinical studies. To our knowledge, the Kosan compounds are not currently being developed and have never entered human studies.
With respect to indications other than cancer, there are many currently marketed therapies and drugs in late-stage clinical development to treat
non-oncology
indications which we may develop of our XPO1 inhibitors. However, to our knowledge, there are no other XPO1 inhibitors in clinical development for the treatment of any diseases other than cancer, including indications such as autoimmune and inflammatory diseases or wound healing. There is no published information on the use of the preclinical compounds that have been developed by Kosan Biosciences or CanBas Co./Stemline in models other than cancer.
Competition with PAK4/NAMPT Dual Inhibitors
Our
first-in-class
PAK4/NAMPT dual inhibitor
KPT-9274,
if developed and approved, would compete with currently marketed therapies and drugs in clinical development to treat cancer. However, there are currently no marketed therapies that target PAK4 and/or NAMPT. We are not aware of any company focusing on the development of a PAK4/NAMPT dual inhibitor.
 KPT-9274
is orally bioavailable and has demonstrated in
pre-clinical
studies consistent pharmacokinetics properties, minimal brain penetration, and minimal inhibition of cytochrome P450
(CYP-450)
enzymes. In early animal models,
KPT-9274
has not shown the retinal and cardiac effects observed with certain NAMPT inhibitors. 
Pfizer Inc. developed
PF-03758309,
a
non-selective
PAK inhibitor, meaning that this compound inhibited several of the PAK family members, and not solely PAK4, through Phase 1 clinical development, but that compound had poor oral bioavailability in both animals and humans and, to our knowledge, development has been discontinued. We are aware that PAK4 biology is being evaluated preclinically by AstraZeneca plc and Genentech, Inc. (acquired by Roche Holding AG). We are aware of a possible first in human clinical trial by Arcus Bioscience for its PAK inhibitor in 2020. We are not aware of any other PAK4 inhibitors that are in clinical development at the present time.
In addition to
KPT-9274,
we are aware of three NAMPT inhibitors that have entered phase 1/2 human clinical trials in patients with solid tumors or lymphomas. These compounds include GMX1778 (also known as
CHS-828,
Teva), GMX1777 (water-soluble derivative of GMX1778, Teva), and APO866 (also known as FK866 and WK175). APO866 and GMX1777 was delivered as parenteral infusions, while GMX1778 was evaluated by oral dosing. The safety and preliminary efficacy of these inhibitors as reported in the literature appeared to show unfavorable pharmacokinetics properties (limited/no oral bioavailability, poor plasma stability, high inter- and intra-patient variability, and drug-drug interactions). To our knowledge, development of these inhibitors were discontinued. We are also aware that
OT-82
(OncoTartis) has advanced to first in human clinical development stage. We are aware that NAMPT biology is being evaluated by Genentech, Inc., Eli Lilly & Company, Millennium/Takeda Pharmaceutical Company Ltd., OncoTartis, Inc., Arcus Bioscience, Aurigene Discovery Technologies Limited, and at some academic institutions. We are not aware of any other NAMPT inhibitors in clinical development.
Manufacturing
We do not have any manufacturing facilities or personnel. We currently utilize and expect to continue to utilize third parties for the manufacture and testing of our preclinical, clinical, and commercial drug products. We
32

have engaged one third-party manufacturer to obtain the active pharmaceutical ingredient for selinexor for clinical and commercial testing. We have engaged a separate third-party manufacturer for
 fill-and-finish
 (tableting) services and have entered into a three-year supply agreement for the manufacture of selinexor 20 mg tablets with this manufacturer. We obtain all other selinexor supplies or materials on a purchase order basis and do not have a long-term supply arrangement in place at this time. We currently maintain sufficient inventories to exceed our
two-year
forecasts for selinexor and do not have arrangements in place for a redundant supply. For all of our drug candidates, we intend to identify and qualify additional manufacturers to provide the active pharmaceutical ingredient and
 fill-and-finish
 services as part of our long-term commercial supply plans.
All of our drug products/candidates are small molecules and are manufactured in reliable and reproducible synthetic processes from readily available starting materials. The chemistry and formulation processes of selinexor has been developed to meet our large-scale manufacturing needs and do not require unusual equipment in the manufacturing process. We expect to continue to develop drug candidates that can be produced cost-effectively at contract manufacturing facilities.
Government Regulation
Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union, or EU, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
Review and Approval of Drugs in the United States
In the United States, the FDA regulates drug products under the Federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations. The failure to comply with applicable requirements under the FDCA and other applicable laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or other governmental entities.
An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:
  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;
 
 
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  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.
 
 
Preclinical Studies
Preclinical studies include laboratory evaluation of the purity and stability of the manufactured drug substance or active pharmaceutical ingredient and the formulated drug or drug product, as well as
in vitro
and animal studies to assess the safety and activity of the drug for initial testing in humans and to establish a rationale for therapeutic use. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations. The results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND. Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after the IND is submitted. In addition, companies usually must also develop additional information about the chemistry and physical characteristics of the investigational product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the candidate product and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the candidate product does not undergo unacceptable deterioration over its shelf life.
The IND and IRB Processes
An IND is an exemption from the FDCA that allows an unapproved drug to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer an investigational drug to humans. Such authorization must be secured prior to interstate shipment and administration of any new drug that is not the subject of an approved NDA. In support of a request for an IND, applicants must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND. The FDA requires a
30-day
waiting period after the filing of each IND before clinical trials may begin. This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to unreasonable health risks. At any time during this
30-day
period, the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND and impose a clinical hold. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin.
Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial. A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND. For example, a specific protocol or part of a protocol is not allowed to proceed, while other protocols may do so. No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold.
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Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the sponsor that the investigation may proceed. The FDA will base that determination on information provided by the sponsor correcting the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed.
A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived. When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with FDA certain regulatory requirements in order to use the study as support for an IND or application for marketing approval. Specifically, on April 28, 2008, the FDA amended its regulations governing the acceptance of foreign clinical studies not conducted under an investigational new drug application as support for an IND or an NDA. The final rule provides that such studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee and informed consent from subjects. The GCP requirements in the final rule encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in
non-IND
foreign clinical studies, as well as the quality and integrity of the resulting data. They further help ensure that
non-IND
foreign studies are conducted in a manner comparable to that required for IND studies.
In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct a continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.
Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee or DSMB. This group provides authorization for whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the study. Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk. Other reasons for suspension or termination may be made by us based on evolving business objectives and/or competitive climate.
Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on its ClinicalTrials.gov website. Similar requirements for posting clinical trial information are present in the European Union (EudraCT) website: https://eudract.ema.europa.eu/ and other countries, as well.
Expanded Access to an Investigational Drug for Treatment Use
Expanded access, sometimes called “compassionate use,” is the use of investigational new drug products outside of clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. The rules and regulations related to expanded access are intended to improve access to investigational drugs for patients who may benefit from investigational therapies. FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a
case-by-case
basis for: individual patients (single-patient IND applications for treatment in emergency settings and
non-emergency
settings);
intermediate-size
patient populations; and larger populations for use of the drug under a treatment protocol or Treatment IND Application.
When considering an IND application for expanded access to an investigational product with the purpose of treating a patient or a group of patients, the sponsor and treating physicians or investigators will determine
35

suitability when all of the following criteria apply: patient(s) have a serious or immediately life-threatening disease or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition; the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context or condition to be treated; and the expanded use of the investigational drug for the requested treatment will not interfere with the initiation, conduct, or completion of clinical investigations that could support marketing approval of the product or otherwise compromise the potential development of the product.
On December 13, 2016, the 21st Century Cures Act established (and the 2017 Food and Drug Administration Reauthorization Act later amended) a requirement that sponsors of one or more investigational drugs for the treatment of a serious disease(s) or condition(s) make publicly available their policy for evaluating and responding to requests for expanded access for individual patients. Although these requirements were rolled out over time, they have now come into full effect. This provision requires drug and biologic companies to make publicly available their policies for expanded access for individual patient access to products intended for serious diseases. Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study; or 15 days after the drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.
In addition, on May 30, 2018, the Right to Try Act was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase I clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act, but the manufacturer must develop an internal policy and respond to patient requests according to that policy.
Human Clinical Trials in Support of an NDA
Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written study protocols detailing, among other things, the inclusion and exclusion criteria, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.
Human clinical trials are typically conducted in four sequential phases, which may overlap or be combined:
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.
 
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Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or
in vitro
testing that suggest a significant risk in humans exposed to the drug; and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.
Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, must develop methods for testing the identity, strength, quality, purity, and potency of the final drug. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.
Submission of an NDA to the FDA
Assuming successful completion of required clinical testing and other requirements, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the drug product for one or more indications. Under federal law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 2020 is $2,942,965 for an application requiring clinical data. The sponsor of an approved NDA is also subject to a program fee for fiscal year 2020 of $325,424. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for drugs with orphan designation and a waiver for certain small businesses.
The FDA conducts a preliminary review of an NDA within 60 days of its receipt and strives to inform the sponsor by the 74th day after the FDA’s receipt of the submission to determine whether the application is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an
in-depth
substantive review. The FDA has agreed to certain performance goals in the review process of NDAs. Most such applications are meant to be reviewed within ten months from the date of filing, and most applications for “priority review” products are meant to be reviewed within six months of filing. The review process may be extended by the FDA for three additional months to consider new information or clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.
Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These
pre-approval
inspections may cover all facilities associated with an NDA submission, including drug component manufacturing (such as active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. The FDA must implement a protocol to expedite review of responses to inspection reports pertaining to certain drug
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applications, including applications for drugs in a shortage or drugs for which approval is dependent on remediation of conditions identified in the inspection report.
In addition, as a condition of approval, the FDA may require an applicant to develop a REMS. REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential adverse events, and whether the product is a new molecular entity. REMS can include medication guides, physician communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU may include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The FDA may require a REMS before approval or post-approval if it becomes aware of a serious risk associated with use of the product. The requirement for a REMS can materially affect the potential market and profitability of a product.
The FDA may refer an application for a novel drug to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Fast Track, Breakthrough Therapy, Priority Review and Regenerative Advanced Therapy Designations
The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are referred to as fast track designation, breakthrough therapy designation, priority review designation and regenerative advanced therapy designation.
Specifically, the FDA may designate a product for fast track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For fast track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a fast track product’s application before the application is complete. This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, the FDA’s time period goal for reviewing a fast track application does not begin until the last section of the application is submitted. In addition, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.
Second, a product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.
Third, the FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines, on a
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case-by-case
basis, whether the proposed product represents a significant improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months.
Finally, with passage of the 21st Century Cures Act, or Cures Act, in December 2016, Congress authorized the FDA to accelerate review and approval of products designated as regenerative advanced therapies. A product is eligible for this designation if it is a regenerative medicine therapy (as defined in the Cures Act) that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such disease or condition. The benefits of a regenerative advanced therapy designation include early interactions with FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.
Accelerated Approval Pathway
The FDA may grant accelerated approval to a drug for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.
For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.
The accelerated approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit.
The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. As a result, a drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.
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The FDA’s Decision on an NDA
On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
If the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess the drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.
Post-Approval Requirements
Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.
In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:
  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;
 
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  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 FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market. This regulation includes, among other things, standards and regulations for
direct-to-consumer
advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the Internet and social media. Promotional claims about a drug’s safety or effectiveness are prohibited before the drug is approved. After approval, a drug product generally may not be promoted for uses that are not approved by the FDA, as reflected in the product’s prescribing information. In the United States, healthcare professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling, known as
off-label
uses, because the FDA does not regulate the practice of medicine. However, FDA regulations impose rigorous restrictions on manufacturers’ communications, prohibiting the promotion of
off-label
uses. It may be permissible, under very specific, narrow conditions, for a manufacturer to engage in nonpromotional,
non-misleading
communication regarding
off-label
information, such as distributing scientific or medical journal information. If a company is found to have promoted
off-label
uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion, and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, and its implementation regulations, as well as the Drug Supply Chain Security Act, or DSCSA, which regulates the distribution of and tracing of prescription drugs and prescription drug samples at the federal level, and sets minimum standards for the regulation of drug distributors by the states. The PDMA, its implementing regulations and state laws limit the distribution of prescription pharmaceutical product samples, and the DSCSA imposes requirements to ensure accountability in distribution and to identify and remove counterfeit and other illegitimate products from the market.
Section 505(b)(2) NDAs
NDAs for most new drug products are based on two full clinical studies which must contain substantial evidence of the safety and efficacy of the proposed new product. These applications are submitted under Section 505(b)(1) of the FDCA. The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA. This type of application allows the applicant to rely, in part, on the FDA’s previous findings of safety and efficacy for a similar product, or published literature. Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the applicant for approval of the application “were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.”
Thus, Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and effectiveness data that were not developed by the applicant. NDAs filed under Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously approved products. If the Section 505(b)(2) applicant can establish that reliance on the FDA’s previous approval is scientifically appropriate, the applicant may eliminate the need to conduct certain preclinical
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or clinical studies of the new product. The FDA may also require companies to perform additional studies or measurements to support the change from the approved product. The FDA may then approve the new drug candidate for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.
Abbreviated New Drug Applications for Generic Drugs
In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress authorized the FDA to approve generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute. To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application, or ANDA, to the agency. In support of such applications, a generic manufacturer may rely on the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug, or RLD.
Specifically, in order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, and the strength of the drug. At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug. Under the statute, a generic drug is bioequivalent to a RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug...”
Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book. Clinicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD. In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing clinicians or patient.
Under the Hatch-Waxman Amendments, the FDA may not approve an ANDA until any applicable period of
non-patent
exclusivity for the RLD has expired. The FDCA provides a period of five years of
non-patent
data exclusivity for a new drug containing a new chemical entity. For the purposes of this provision, a new chemical entity, or NCE, is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA. An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance. In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.
The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of the application. This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication. Three-year exclusivity would be available for a drug product that contains a previously approved active moiety, provided the statutory requirement for a new clinical investigation is satisfied. Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from accepting ANDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product. The FDA typically makes decisions about awards of data exclusivity shortly before a product is approved.
The FDA must establish a priority review track for certain generic drugs, requiring the FDA to review a drug application within eight months for a drug that has three or fewer approved drugs listed in the Orange Book and is no longer protected by any patent or regulatory exclusivities, or is on the FDA’s drug shortage list. The new legislation also authorizes FDA to expedite review of competitor generic therapies or drugs with inadequate generic competition, including holding meetings with or providing advice to the drug sponsor prior to submission of the application.
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Hatch-Waxman Patent Certification and the
30-Month
Stay
Upon approval of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product. Each of the patents listed by the NDA sponsor is published in the Orange Book. When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval. To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.
Specifically, the applicant must certify with respect to each patent that:
  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.
 
A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification. If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the ANDA applicant is not seeking approval).
If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.
To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would. As a result, approval of a Section 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any
non-patent
exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.
Pediatric Studies and Exclusivity
Under the Pediatric Research Equity Act of 2003, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. With enactment of the Food and Drug Administration Safety and Innovation Act, or FDASIA, in 2012, sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation. The
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applicant, the FDA, and the FDA’s internal review committee must then review the information submitted, consult with each other, and agree upon a final plan. The FDA or the applicant may request an amendment to the plan at any time. For drugs intended to treat a serious or life-threatening disease or condition, the FDA must, upon the request of an applicant, meet to discuss preparation of the initial pediatric study plan or to discuss deferral or waiver of pediatric assessments. In addition, FDA will meet early in the development process to discuss pediatric study plans with drug sponsors. The legislation requires FDA to meet with drug sponsors by no later than the
end-of-phase
1 meeting for serious or life-threatening diseases and by no later than ninety days after FDA’s receipt of the study plan.
The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in FDASIA. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.
Pediatric exclusivity is another type of
non-patent
marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the
non-patent
and orphan exclusivity. This
six-month
exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application. With regard to patents, the
six-month
pediatric exclusivity period will not attach to any patents for which a generic (ANDA or 505(b)(2) NDA) applicant submitted a paragraph IV patent certification, unless the NDA sponsor or patent owner first obtains a court determination that the patent is valid and infringed by a proposed generic product.
Orphan Drug Designation and Exclusivity
Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product). A company must request orphan product designation before submitting an NDA. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
If a product with orphan status receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product generally will be receiving orphan product exclusivity. Orphan product exclusivity means that the FDA may not approve any other applications for the same product for the same indication for seven years, except in certain limited circumstances. Competitors may receive approval of different products for the indication for which the orphan product has exclusivity and may obtain approval for the same product but for a different indication. If a drug or drug product designated as an orphan product ultimately receives marketing approval for an indication broader than what was designated in its orphan product application, it may not be entitled to exclusivity.
Orphan drug exclusivity will not bar approval of another orphan drug under certain circumstances, including if a subsequent product with the same drug for the same indication is shown to be clinically superior to the
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approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand. Legislation reverses prior precedent holding that the Orphan Drug Act unambiguously required the FDA to recognize orphan exclusivity regardless of a showing of clinical superiority.
Patent Term Restoration and Extension
A patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review. The restoration period granted is typically
one-half
the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the ultimate approval date. Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date. Only one patent applicable to an approved drug product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple drugs for which approval is sought can only be extended in connection with one of the approvals. The U.S. Patent and Trademark Office reviews and approves the application for any patent term extension or restoration in consultation with the FDA. We cannot provide any assurance that any patent term extension with respect to any U.S. patent will be obtained and, if obtained, the duration of such extension, in connection with any of our product candidates.
Review and Approval of Animal Drugs in the United States
In addition to pursuing approval of our drug candidates for use in human beings, we may also seek approval of certain drug candidates for veterinary applications. As with new drug products for human beings, new animal drugs may not be marketed in the United States until they have been approved by the FDA as safe and effective. The requirements and phases governing approval of a new animal drug are analogous to those for new human drugs. Specifically, the Center for Veterinary Medicine or CVM at FDA is responsible for determining whether a new veterinary product should be approved on the basis of a NADA filed by the applicant. A NADA must contain substantial evidence of the safety and effectiveness of the animal drug, as well as data and controls demonstrating that the product will be manufactured and studied in compliance with, among other things, applicable cGMP and GLP practices.
To begin this process, an applicant must file an Investigational New Animal Drug application, or INAD, with the CVM. The applicant will hold a
pre-development
meeting with the CVM to reach general agreement on the plans for providing the data necessary to fulfill requirements for a NADA. In this context, an applicant must submit pivotal protocols to the CVM for review and concurrence prior to conducting the required studies. The applicant will gather and submit data on safety, efficacy and chemistry, manufacturing and controls or CMC to the CVM for review, as below:
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.
 
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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.
 
Once all data have been submitted and reviewed for each technical section—safety, efficacy and CMC—the CVM will issue a technical section complete letter as each section review is completed. When the three letters have been issued, the applicant will compile a draft of the Freedom of Information Summary, the proposed labeling, and all other relevant information, and submit these as an administrative NADA for CVM review. Generally, if there are no deficiencies in the submission, the NADA will be issued within four to six months after submission of the administrative NADA. This review will be conducted according to timelines specified in the Animal Drug User Fee Act. The FDA’s basis for approving a NADA is documented in a Freedom of Information Summary. Post-approval monitoring of products is required by law, with reports being provided to the CVM’s Surveillance and Compliance group. Reports of product quality defects, AEs or unexpected results must also be produced in accordance with the relevant regulatory requirements.
Review and Approval of Drug Products in the European Union
In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products. Whether or not it obtains FDA approval for a product, the company would need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. The approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.
Procedures Governing Approval of Drug Products in the European Union
Pursuant to the European Clinical Trials Directive, a system for the approval of clinical trials in the EU has been implemented through national legislation of the member states. Under this system, an applicant must obtain approval from the competent national authority of a EU member state in which the clinical trial is to be conducted. Furthermore, the applicant may only start a clinical trial after a competent ethics committee has issued a favorable opinion. Clinical trial application must be accompanied by an investigational medicinal product dossier with supporting information prescribed by the European Clinical Trials Directive and corresponding national laws of the member states and further detailed in applicable guidance documents.
To obtain marketing approval of a product under EU regulatory systems, an applicant must submit a marketing authorization application, or MAA, either under a centralized or decentralized procedure. The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU member states. The centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products and products with a new active substance indicated for the treatment of certain diseases. For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional.
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Under the centralized procedure, the Committee for Medicinal Products for Human Use, or the CHMP, established at the European Medicines Agency, or EMA, is responsible for conducting the initial assessment of a product. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days.
The decentralized procedure is available to applicants who wish to market a product in various EU member states where such product has not received marketing approval in any EU member states before. The decentralized procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state designated by the applicant, known as the reference member state. Under this procedure, an applicant submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states. The reference member state prepares a draft assessment report and drafts of the related materials within 210 days after receipt of a valid application. Within 90 days of receiving the reference member state’s assessment report and related materials, each concerned member state must decide whether to approve the assessment report and related materials.
If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, whose decision is binding on all member states.
Within this framework, manufacturers may seek approval of hybrid medicinal products under Article 10(3) of Directive 2001/83/EC. Hybrid applications rely, in part, on information and data from a reference product and new data from appropriate
pre-clinical
tests and clinical trials. Such applications are necessary when the proposed product does not meet the strict definition of a generic medicinal product, or bioavailability studies cannot be used to demonstrate bioequivalence, or there are changes in the active substance(s), therapeutic indications, strength, pharmaceutical form or route of administration of the generic product compared to the reference medicinal product. In such cases the results of tests and trials must be consistent with the data content standards required in the Annex to the Directive 2001/83/EC, as amended by Directive 2003/63/EC.
Hybrid medicinal product applications have automatic access to the centralized procedure when the reference product was authorized for marketing via that procedure. Where the reference product was authorized via the decentralized procedure, a hybrid application may be accepted for consideration under the centralized procedure if the applicant shows that the medicinal product constitutes a significant therapeutic, scientific or technical innovation, or the granting of a community authorization for the medicinal product is in the interest of patients at the community level.
Clinical Trial Approval in the European Union
Requirements for the conduct of clinical trials in the EU including Good Clinical Practice, or GCP, are set forth in the Clinical Trials Directive 2001/20/EC and the GCP Directive 2005/28/EC. Pursuant to Directive 2001/20/EC and Directive 2005/28/EC, as amended, a system for the approval of clinical trials in the EU has been implemented through national legislation of the EU member states. Under this system, approval must be obtained from the competent national authority of each EU member state in which a study is planned to be conducted. To this end, a CTA is submitted, which must be supported by an investigational medicinal product dossier, or IMPD, and further supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and other applicable guidance documents. Furthermore, a clinical trial may only be started after a competent ethics committee has issued a favorable opinion on the clinical trial application in that country.
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In April 2014, the EU passed the new Clinical Trials Regulation, (EU) No 536/2014, which will replace the current Clinical Trials Directive 2001/20/EC. To ensure that the rules for clinical trials are identical throughout the EU, the new EU clinical trials legislation was passed as a regulation that is directly applicable in all EU member states. All clinical trials performed in the EU are required to be conducted in accordance with the Clinical Trials Directive 2001/20/EC until the new Clinical Trials Regulation (EU) No 536/2014 becomes applicable.. The Clinical Trials Directive 2001/20/EC will, however, still apply three years from the date of entry into application of the Clinical Trials Regulation to (i) clinical trials applications submitted before the entry into application and (ii) clinical trials applications submitted within one year after the entry into application if the sponsor opts for old system. As of January 1, 2020, the website of the European Commission reported that the implementation of the Clinical Trials Regulation was dependent on the development of a fully functional clinical trials portal and database, which would be confirmed by an independent audit, and that the new legislation would come into effect six months after the European Commission publishes a notice of this confirmation. The website indicated that the audit was expected to commence in December 2020.
The new Clinical Trials Regulation aims to simplify and streamline the approval of clinical trial in the EU. The main characteristics of the regulation include: a streamlined application procedure via a single entry point, the EU portal; a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures that will spare sponsors from submitting broadly identical information separately to various bodies and different member states; a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts (Part I is assessed jointly by all member states concerned, and Part II is assessed separately by each member state concerned); strictly defined deadlines for the assessment of clinical trial applications; and the involvement of the ethics committees in the assessment procedure in accordance with the national law of the member state concerned but within the overall timelines defined by the Clinical Trials Regulation.
PRIME Designation in the EU
In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist. The PRIority MEdicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure. Products from small- and
medium-sized
enterprises, or SMEs, may qualify for earlier entry into the PRIME scheme than larger companies. Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted. Importantly, a dedicated Agency contact and rapporteur from the CHMP or Committee for Advanced Therapies, or CAT, are appointed early in PRIME scheme facilitating increased understanding of the product at EMA’s Committee level. A
kick-off
meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.
Periods of Authorization and Renewals
Marketing authorization is valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a
re-evaluation
of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state. To this end, the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any authorization which is not followed by
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the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid (the
so-called
sunset clause).
Data and Market Exclusivity in the European Union
In the EU, new chemical entities qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity. This data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic (abbreviated) application for eight years, after which generic marketing authorization can be submitted, and the innovator’s data may be referenced, but not approved for two years. The overall
ten-year
period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new chemical entity and the sponsor is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company can complete a full MAA with a complete database of pharmaceutical test, preclinical tests and clinical trials and obtain marketing approval of its product.
Orphan Drug Designation and Exclusivity
Regulation 141/2000 provides that a drug shall be designated as an orphan drug if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Community when the application is made, or that the product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the European Community and that without incentives it is unlikely that the marketing of the drug in the European Community would generate sufficient return to justify the necessary investment. For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the European Community or, if such method exists, the drug will be of significant benefit to those affected by that condition.
Regulation 847/2000 sets out criteria and procedures governing designation of orphan drugs in the EU. Specifically, an application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. Marketing authorization for an orphan drug leads to a
ten-year
period of market exclusivity. This period may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation, for example because the product is sufficiently profitable not to justify market exclusivity. Market exclusivity can be revoked only in very selected cases, such as consent from the marketing authorization holder, inability to supply sufficient quantities of the product, demonstration of “clinically relevant superiority” by a similar medicinal product, or, after a review by the Committee for Orphan Medicinal Products, requested by a member state in the fifth year of the marketing exclusivity period (if the designation criteria are believed to no longer apply). Medicinal products designated as orphan drugs pursuant to Regulation 141/2000 shall be eligible for incentives made available by the European Community and by the member states to support research into, and the development and availability of, orphan drugs.
Regulatory Requirements after Marketing Authorization
As in the United States, both marketing authorization holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA and the competent authorities of the individual EU Member States both before and after grant of the manufacturing and marketing authorizations. The holder of an EU marketing authorization for a medicinal product must, for example, comply with EU pharmacovigilance legislation and its related regulations and guidelines which entail many requirements for conducting
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pharmacovigilance, or the assessment and monitoring of the safety of medicinal products. The manufacturing process for medicinal products in the EU is also highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations. Manufacturing requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, including compliance with EU cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients.
In the EU, the advertising and promotion of approved products are subject to EU Member States’ laws governing promotion of medicinal products, interactions with clinicians, misleading and comparative advertising and unfair commercial practices. In addition, other legislation adopted by individual EU Member States may apply to the advertising and promotion of medicinal products. These laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, as approved by the competent authorities. Promotion of a medicinal product that does not comply with the SmPC is considered to constitute
off-label
promotion, which is prohibited in the EU.
General Data Protection Regulation
The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the EU General Data Protection Regulation, or GDPR, which became effective on May 25, 2018. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors. The GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to
20 million or 4% of annual global revenues, whichever is greater. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Compliance with the GDPR will be a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance.
Brexit and the Regulatory Framework in the United Kingdom
On June 23, 2016, the electorate in the United Kingdom, or UK, voted in favor of leaving the EU, commonly referred to as Brexit. Following protracted negotiations, the UK left the EU on January 31, 2020. Under the withdrawal agreement, there is a transitional period until December 31, 2020 (extendable up to two years). Under the withdrawal agreement, there is a transitional period until December 31, 2020 (extendable up to two years). Discussions between the UK and the UK have so far mainly focused on finalizing withdrawal issues and transition agreements but have been extremely difficult to date. To date, only an outline of a trade agreement has been reached. Much remains open but the Prime Minister has indicated that the UK will not seek to extend the transitional period beyond the end of 2020. If no trade agreement has been reached before the end of the transitional period, there may be significant market and economic disruption. The Prime Minister has also indicated that the UK will not accept high regulatory alignment with the EU.
Since the regulatory framework for pharmaceutical products in the UK covering quality, safety, and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit could materially impact the future regulatory regime that applies to products and the approval of product candidates in the UK. It remains to be seen how, if at all, Brexit will impact regulatory requirements for product candidates and products in the United Kingdom.
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Pricing Decisions for Approved Products
In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or
so-called
health technology assessments, in order to obtain reimbursement or pricing approval. For example, EU Member States have the option to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU Member States may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EU Member States allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the EU have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage health care expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the EU. The downward pressure on health care costs in general, particularly prescription products, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EU Member States, and parallel trade, i.e., arbitrage between
low-priced
and high-priced EU Member States, can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries.
Pharmaceutical Coverage, Pricing and Reimbursement
Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities. Sales of products will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage, and establish adequate reimbursement levels for, such products. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication.
In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable regulatory approvals. Nonetheless, product candidates may not be considered medically necessary or cost effective. Additionally, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product. Third-party reimbursement may not be sufficient to maintain price levels high enough to realize an appropriate return on investment in product development.
The containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus in this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party
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reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
In the United States, we participate in, and have certain price reporting obligations to, the Medicaid Drug Rebate program, several state Medicaid supplemental rebate programs, and other governmental pricing programs. We also have obligations to report the average sales price for certain of our drugs to the Medicare program. Under the Medicaid Drug Rebate program, we are required to pay a rebate to each state Medicaid program for our covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds being made available to the states for our drugs under Medicaid.
Medicaid is a joint federal and state program that is administered by the states for low income and disabled beneficiaries. Medicaid rebates are based on pricing data reported by us on a monthly and quarterly basis to the Centers for Medicare & Medicaid Services (“CMS”), the federal agency that administers the Medicaid and Medicare programs. These data include the average manufacturer price and, in the case of innovator products, the best price for each drug which, in general, represents the lowest price available from the manufacturer to any entity in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions. The amount of the rebate is adjusted upward if average manufacture price increases more than inflation (measured by reference to the Consumer Price Index - Urban). If we become aware that our reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, we are obligated to resubmit the corrected data for up to three years after those data originally were due, which revisions could affect our rebate liability for prior quarters.
Medicare is a federal program that is administered by the federal government that covers individuals age 65 and over or that are disabled as well as those with certain health conditions. Manufacturer-submitted information is used by CMS to calculate Medicare payment rates. Civil monetary penalties can be applied if we are found to have knowingly submitted any false pricing or other information to the government, if we are found to have made a misrepresentation in the reporting of our average sales price, or if we fail to submit the required data on a timely basis. Such conduct also could be grounds for CMS to terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid for our covered outpatient drugs.
Federal law requires that any company that participates in the Medicaid Drug Rebate program also participate in the Public Health Service’s 340B drug pricing program (the “340B program”) in order for federal funds to be available for the manufacturer’s drugs under Medicaid. The 340B program, which is administered by the Health Resources and Services Administration, or HRSA, requires participating manufacturers to agree to charge statutorily defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs. Covered entities include hospitals that serve a disproportionate share of financially needy patients, community health clinics, and other entities that receive certain types of grants under the Public Health Service Act. The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and Medicaid rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate program. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. HRSA requires the federal ceiling price to be reported quarterly.
HRSA issued a final regulation regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities, which became effective on January 1, 2019. It is currently unclear how HRSA will apply its enforcement authority under the new regulation. Any charge by HRSA that we have violated the requirements of the regulation could result in civil monetary penalties. HRSA also implemented a new price reporting system during the first quarter of 2019, under which manufacturers are now required to report their 340B ceiling prices to HRSA on a quarterly basis. In addition, legislation may be introduced that, if passed, would further expand the 340B program to additional covered entities or would require participating manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting.
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Outside the United States, ensuring adequate coverage and payment for our product candidates will face challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries. Pricing negotiations with governmental authorities can extend well beyond the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost effectiveness of our product candidates or products to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts.
In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that drug products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular drug candidate to currently available therapies. For example, the EU provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU member states may approve a specific price for a drug product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the drug product on the market. Other member states allow companies to fix their own prices for drug products, but monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription drugs, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from
low-priced
markets exert competitive pressure that may reduce pricing within a country. Any country that has price controls or reimbursement limitations for drug products may not allow favorable reimbursement and pricing arrangements.
Healthcare Law and Regulation
Healthcare providers and third-party payors play a primary role in the recommendation and prescription of drug products that are granted regulatory approval. Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain our business and/or financial arrangements. Such restrictions under applicable federal and state healthcare laws and regulations, include the following:
  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;
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  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.
Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to clinicians and other healthcare providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Healthcare Reform
A primary trend in the United States healthcare industry and elsewhere is cost containment. There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and other medical products, government control and other changes to the healthcare system in the United States.
By way of example, the United States and state governments continue to propose and pass legislation designed to reduce the cost of healthcare. In March 2010, Congress enacted the Patient Protection and Affordable Care Act, or ACA, which, among other things, includes changes to the coverage and payment for products under government health care programs. Among the provisions of the ACA of importance to our potential drug candidates are:
  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;
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  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.
Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect through 2029 unless additional Congressional action is taken. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
Since enactment of the ACA, there have been and continue to be numerous legal challenges and Congressional actions to repeal and replace provisions of the law. For example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, will become effective in 2019. Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the
ACA-mandated
“Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax. Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA, effective January 1, 2019, to increase from 50 percent to 70 percent the
point-of-sale
discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. The Congress will likely consider other legislation to replace elements of the ACA during the next Congressional session.
In addition, on December 14, 2018, a U.S. District Court judge in the Northern District of Texas ruled that the individual mandate portion of the ACA is an essential and inseverable feature of the ACA, and therefore because the mandate was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well. The Trump administration and CMS have both stated that the ruling will have no immediate effect, and on December 30, 2018 the same judge issued an order staying the judgment pending appeal. The Trump Administration recently represented to the Court of Appeals considering this judgment that it does not oppose the lower court’s ruling. On July 10, 2019, the Court of Appeals for the Fifth Circuit heard oral argument in this case. On December 18, 2019, that court affirmed the lower court’s ruling that the individual mandate portion of the ACA is unconstitutional and it remanded the case to the district court for reconsideration of the severability question and additional analysis of the provisions of the ACA. On January 21, 2020, the U.S. Supreme Court declined to review this decision on an expedited basis. Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.
The Trump Administration has also taken executive actions to undermine or delay implementation of the ACA. Since January 2017, President Trump has signed two Executive Orders designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. One Executive Order directs federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any
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provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. The second Executive Order terminates the cost-sharing subsidies that reimburse insurers under the ACA. Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017. In addition, CMS has recently proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. Further, on June 14, 2018, U.S. Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay more than $12 billion in ACA risk corridor payments to third-party payors who argued were owed to them. This decision is under review by the U.S. Supreme Court during its current term. The full effects of this gap in reimbursement on third-party payors, the viability of the ACA marketplace, providers, and potentially our business, are not yet known.
Further, there have been several recent U.S. congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. For example, there have been several recent U.S. congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. At the federal level, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.
For example, on May 11, 2018, the Trump Administration issued a plan to lower drug prices. Under this blueprint for action, the Trump Administration indicated that the Department of Health and Human Services, or HHS, will: take steps to end the gaming of regulatory and patent processes by drug makers to unfairly protect monopolies; advance biosimilars and generics to boost price competition; evaluate the inclusion of prices in drug makers’ ads to enhance price competition; speed access to and lower the cost of new drugs by clarifying policies for sharing information between insurers and drug makers; avoid excessive pricing by relying more on value-based pricing by expanding outcome-based payments in Medicare and Medicaid; work to give Part D plan sponsors more negotiation power with drug makers; examine which Medicare Part B drugs could be negotiated for a lower price by Part D plans, and improving the design of the Part B Competitive Acquisition Program; update Medicare’s drug-pricing dashboard to increase transparency; prohibit Part D contracts that include “gag rules” that prevent pharmacists from informing patients when they could pay less
out-of-pocket
by not using insurance; and require that Part D plan members be provided with an annual statement of plan payments,
out-of-pocket
spending, and drug price increases. In addition, on December 23, 2019, the Trump Administration published a proposed rulemaking that, if finalized, would allow states or certain other
non-federal
government entities to submit importation program proposals to FDA for review and approval. Applicants would be required to demonstrate their importation plans pose no additional risk to public health and safety and will result in significant cost savings for consumers. At the same time, FDA issued draft guidance that would allow manufacturers to import their own
FDA-approved
drugs that are authorized for sale in other countries (multi-market approved products).
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
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Employees
As of February 14, 2020, we had 347 full-time employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced work stoppages. We believe that relations with our employees are good.
Information about our Executive Officers
The following table lists the positions, names and ages of our current executive officers:
             
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
Michael G. Kauffman, M.D., Ph.D
. Dr. Kauffman has served as Karyopharm’s Chief Executive Officer since January 2011 and has been one of our directors since 2008. Dr. Kauffman
co-founded
Karyopharm with Dr. Sharon Shacham in 2008 and served as our President from January 2011 to December 2013 and as Chief Medical Officer from December 2012 to December 2013. Prior to joining Karyopharm, he was Chief Medical Officer of Onyx Pharmaceuticals Inc., a biopharmaceutical company, from November 2009 to December 2010. From November 2008 to November 2009, Dr. Kauffman was Chief Medical Officer of Proteolix Inc., which was acquired by Onyx Pharmaceuticals. At Proteolix, he led the development of Kyprolis
®
(carfilzomib), a novel proteasome inhibitor approved in refractory myeloma by the Food and Drug Administration in July 2012. Dr. Kauffman was an operating partner at Bessemer Venture Partners from 2006 to 2008, where he led investments in biotechnology companies. From 2006 to 2008, he was President and Chief Executive Officer of Epix Pharmaceuticals, Inc., a biopharmaceutical company that underwent liquidation proceedings through an assignment for the benefit of creditors under Massachusetts law in 2009. Dr. Kauffman was President and Chief Executive Officer of Predix Pharmaceuticals, Inc., a private biopharmaceutical company focused on G protein-coupled receptors (GPCR), from 2002 until its merger into Epix Pharmaceuticals in 2006. In that role, he led the merger of Predix Pharmaceuticals and Epix Pharmaceuticals, oversaw the discovery and development of four new clinical candidates and led collaboration transactions with Amgen and GlaxoSmithKline. From March 2000 to September 2002, Dr. Kauffman was Vice President, Clinical at Millennium Pharmaceuticals, Inc., a biopharmaceutical company, where he led the Velcade
®
development program. From September 1997 to March 2000, Dr. Kauffman held a number of senior positions at Millennium Predictive Medicine, Inc., a biopharmaceutical company and a subsidiary of Millennium Pharmaceuticals, where he led the discovery and development of novel molecular diagnostics for major cancers, including melanoma and led transactions with Becton-Dickenson and Bristol Myers Squibb. From August 1995 to September 1997, Dr. Kauffman held a number of senior positions at Biogen Idec, Inc., a biopharmaceutical company, where he led the clinical development of anti-CD40L antibodies in autoimmune and inflammatory diseases, and acted as the main medical advisor to the Biogen business development group. Dr. Kauffman currently serves on the board of directors, nominating and governance committee and research and development committee of Infinity Pharmaceuticals, Inc., a public biopharmaceutical company, on the board of directors and audit committee and as chairman of the compensation committee of Kezar Life Sciences, Inc., also a public biopharmaceutical company, and is the lead director and serves on the board of directors and compensation committee of Verastem Inc., also a public biopharmaceutical company. Dr. Kauffman previously served on the board of directors and compensation and audit committees of Zalicus Inc., a biotechnology company. Dr. Kauffman received his B.A. in Biochemistry
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from Amherst College and his M.D. and Ph.D. from Johns Hopkins Medical School, and he trained in internal medicine and rheumatology at Beth Israel Hospital (now Beth Israel Deaconess Medical Center) and Massachusetts General Hospital. He is board certified in internal medicine.
Sharon Shacham, Ph.D., M.B.A.
Dr. Shacham founded Karyopharm in 2008 and has served as our President since December 2013, and as our Chief Scientific Officer since October 2010. Dr. Shacham served as our President of Research and Development from December 2012 to December 2013, as our Head of Research and Development from October 2010 to December 2012 and as our President and Chief Executive Officer from October 2010 to January 2011. Dr. Shacham established the company to focus on the discovery and development of small molecule inhibitors of nuclear export and has led our scientific progress since inception. Her computational drug discovery algorithms formed a critical part of the technological basis for our drug discovery and optimization expertise, which was used for the discovery of selinexor, our lead drug candidate. Dr. Shacham
co-chairs
our Scientific Advisory Board. Prior to founding Karyopharm, from 2006 to April 2009, she was Senior Vice President of Drug Development at Epix Pharmaceuticals, Inc., a biopharmaceutical company that underwent liquidation proceedings through an assignment for the benefit of creditors under Massachusetts law in 2009. She was Director, Algorithm and Software Development at Predix Pharmaceuticals Inc. from July 2000 until Predix’s merger into Epix Pharmaceuticals in 2006, where she led the company’s efforts in GPCR modeling, computational chemistry, lead optimization and development of clinical trials. Dr. Shacham received her B.Sc. in Chemistry, Ph.D. and M.B.A. from Tel Aviv University.
Christopher B. Primiano, J.D., M.B.A.
Mr. Primiano joined Karyopharm in March 2014 as Vice President, Corporate Development, General Counsel and Secretary, and was appointed Senior Vice President, Corporate Development, General Counsel and Secretary in September 2015; Senior Vice President, Operations, Business Development, General Counsel and Secretary in November 2016 and Executive Vice President, Chief Business Officer, General Counsel and Secretary in January 2018. Prior to joining Karyopharm, Mr. Primiano was a Counsel at Wilmer Cutler Pickering Hale and Dorr LLP, where he had practiced law since October 2012. From August 2010 to August 2012, he served as Vice President, Corporate Development, General Counsel and Secretary of GlassHouse Technologies, Inc., an information technology consulting company, where he led global legal operations and managed asset and subsidiary acquisition and sale activity. Mr. Primiano began his career at Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP, where he practiced law from August 2006 to July 2010. Mr. Primiano received a B.A. in Political Economy and English from Georgetown University, an M.B.A. from the Boston College Carroll School of Management and a J.D. from Boston College Law School.
Ran Frenkel, RPh.
Mr. Frenkel was appointed Executive Vice President, Worldwide Development Operations of Karyopharm in October 2014 and was appointed Chief Development Operations Officer in January 2015. Prior to joining Karyopharm, Mr. Frenkel held a number of senior management roles in Europe, Israel and the United States, most recently as Managing Director EMEA from January 2013 to October 2014 for Clinipace Worldwide, an international clinical research organization, where he had responsibility for the overall management of the organization in Europe, the Middle East and Africa. Prior to becoming Managing Director EMEA, Mr. Frenkel was VP International Business Development at Clinipace Worldwide from July 2011 to January 2013. Prior to joining Clinipace Worldwide, from January 2007 to August 2011, Mr. Frenkel established and managed the Israeli office of PFC Pharma Focus AG, which was acquired by Clinipace Worldwide in 2011, and from 2004 to 2007, he held the position of Managing Director at Actelion Pharmaceuticals with responsibility for all science and business affairs of the company in Israel. Mr. Frenkel received a BPharm from Hebrew University.
Jatin Shah, M.D.
Dr. Shah joined Karyopharm in May 2017 as Vice President, Clinical Strategy, and was appointed Senior Vice President, Clinical Development in April 2018 and Executive Vice President, Chief Medical Officer in July 2019. Prior to joining Karyopharm, Dr. Shah held numerous roles at The University of Texas MD Anderson Cancer Center. From September 2007 to August 2016, Dr. Shah served as an Assistant Professor, Associate Professor, and Associate Program Director of the Malignant Hematology Fellowship, as well as Director of Myeloma Clinical and Translational Research in the Department of Lymphoma/Myeloma, Division of Cancer Medicine. Dr. Shah received his M.D. from The Ohio State University College of Medicine, Columbus, Ohio and holds a degree in Mechanical Engineering from The Ohio State University. Dr. Shah
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completed his residency in internal medicine at the Cleveland Clinic Foundation, Cleveland, Ohio, and a fellowship in hematology/oncology at the University of Alabama at Birmingham. Dr. Shah holds board certification in hematology and oncology from the American Board of Internal Medicine.
Tanya Lewis, M.S.
Ms. Lewis joined Karyopharm in October 2018 as Senior Vice President, Regulatory and Quality Affairs and was appointed Executive Vice President, Chief Regulatory Officer and Quality Officer in November 2019. Prior to joining Karyopharm, Ms. Lewis held several leadership roles across the biopharmaceutical industry where she was instrumental in the successful negotiations for registration trial designs, approval, and/or commercialization of VELCADE
®
, VARUBI
®
, INTEGRILIN
®
 and ZEJULA
®
. Most recently Ms. Lewis served as Vice President, Regulatory and Quality Affairs for Syros Pharmaceuticals, a pharmaceutical company, from January 2017 to July 2018. Prior to joining Syros Pharmaceuticals, Inc., Ms. Lewis served as Vice President, Regulatory Affairs and Quality Assurance for Idera Pharmaceuticals, Inc., a pharmaceutical company, from October 2015 to December 2016. Prior to joining Idera Pharmaceuticals, Ms. Lewis served as Vice President, Regulatory Affairs for Tesaro, Inc., a pharmaceutical company, from October 2011 to June 2015. Ms. Lewis holds a B.S. in Biology from Northeastern University and a M.S. in Regulatory Affairs and Public Health from Massachusetts College of Pharmacy and Allied Health Science.
Michael Mason, C.P.A., M.B.A.
Mr. Mason has served as our Senior Vice President, Chief Financial Officer and Treasurer since February 2019. Mr. Mason served as Vice President of Finance and Treasurer of Alnylam Pharmaceuticals, Inc., a public biopharmaceutical company, from February 2011 until February 2019, as its Principal Accounting Officer from February 2011 to October 2018, and as its Principal Financial Officer from February 2011 to June 2016 and from January 2017 to May 2017. From December 2005 to February 2011, Mr. Mason served as Alynylam’s Corporate Controller. From May 2000 through November 2005, Mr. Mason served in several finance and commercial roles at Praecis Pharmaceuticals Incorporated, a public biotechnology company, most recently as Corporate Controller. Prior to Praecis, Mr. Mason worked in the audit practice at KPMG LLP, a national audit, tax and advisory services firm. Mr. Mason received a B.A. in Business Administration from Stetson University and an M.B.A. from Babson College and is a certified public accountant.
Our Corporate Information
Karyopharm was incorporated under the laws of the state of Delaware on December 22, 2008 under the name Karyopharm Therapeutics Inc. Our principal executive offices are located at 85 Wells Avenue, 2
nd
Floor, Newton, Massachusetts 02459. Our telephone number is (617)
 658-0600,
and our website is located at www.karyopharm.com. References to our website are inactive textual references only and the content of our website should not be deemed incorporated by reference into this Annual Report on Form
 10-K.
Available Information
Our Internet website is http://www.karyopharm.com. We make available free of charge through our website our annual report on Form
 10-K,
quarterly reports on Form
 10-Q,
current reports on Form
 8-K
and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We make these reports available through our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the U.S. Securities and Exchange Commission, or SEC. In addition, we regularly use our website to post information regarding our business, development programs and governance, and we encourage investors to use our website, particularly the information in the section entitled “Investors” as a source of information about us.
Our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of the Audit, Compensation, Nominating and Corporate Governance and Compliance Committees of our board of directors are all available on our website at http://www.karyopharm.com at the “Investors” section under “Corporate Governance”. Stockholders may request a free copy of any of these documents by writing to Investor Relations, Karyopharm Therapeutics Inc., 85 Wells Avenue, 2
nd
floor, Newton, Massachusetts 02459, U.S.A.
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ITEM 1A.
RISK FACTORS
Careful consideration should be given to the following risk factors, in addition to the other information set forth in this Annual Report on Form
10-K
and in other documents that we file with the SEC, in evaluating us and our business. Investing in our common stock involves a high degree of risk. If any of the following risks and uncertainties actually occurs, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks described below are not intended to be exhaustive and are not the only risks facing us. New risk factors can emerge from time to time, and it is not possible to predict the impact that any factor or combination of factors may have on our business, prospects, financial condition and results of operations.
Risks Related to the Discovery, Development and Commercialization of Our Drugs and Drug Candidates
We depend heavily on the success of XPOVIO
®
(selinexor). If we are unable to successfully commercialize XPOVIO or successfully develop selinexor for additional indications, or if we experience significant delays in doing so, our business will be materially harmed.
We have invested a significant portion of our efforts and financial resources in the research and development of our lead drug candidate, selinexor. Our ability to generate revenues from the sale of drugs that treat cancer and other diseases in humans will depend heavily on the successful development, regulatory approval and commercialization of selinexor. On July 3, 2019, the U.S. Food and Drug Administration, or FDA, granted accelerated approval for XPOVIO in combination with dexamethasone for the treatment of adult patients with relapsed or refractory multiple myeloma, or RRMM, who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, at least two immunomodulatory agents, and an anti-CD38 monoclonal antibody. Our ability to generate product revenues will depend on our successful commercialization of XPOVIO and our obtaining additional marketing approvals for, and successfully commercializing, selinexor for additional indications.
The commercial success of XPOVIO and the successful clinical development of selinexor and our other drug candidates will depend on several factors, including the following:
  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;
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  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.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize XPOVIO or our drug candidates, which would materially harm our business.
The results of previous clinical trials may not be predictive of future results, and the results of our current and planned clinical trials may not satisfy the requirements of the FDA or
non-U.S.
regulatory authorities.
Clinical failure can occur at any stage of clinical development. Clinical trials may produce negative or inconclusive results, and we or any collaborators may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies. We will be required to demonstrate with substantial evidence through well-controlled clinical trials that our drug candidates are safe and effective for use in a diverse population before we can seek regulatory approvals for their commercial sale. Success in early-stage clinical trials does not mean that future larger registration clinical trials will be successful because drug candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and
non-U.S.
regulatory authorities despite having progressed through early-stage clinical trials. Drug candidates that have shown promising results in early-stage clinical trials may still suffer significant setbacks in subsequent registration clinical trials. Additionally, the outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later-stage clinical trials, and interim results of a clinical trial are not necessarily indicative of final results.
In addition, the design of a clinical trial can determine whether its results will support approval of a drug, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. We may be unable to design and conduct a clinical trial to support regulatory approval. Further, if our drug candidates are found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for them and our business would be harmed. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials.
In some instances, there can be significant variability in safety and/or efficacy results between different trials of the same drug candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. We do not know whether any Phase 2, Phase 3 or other clinical trials we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain regulatory approval to market our drug candidates.
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Further, our drug candidates may not be approved even if they achieve their primary endpoints in Phase 3 clinical trials or other registration trials. The FDA or
non-U.S.
regulatory authorities may disagree with our trial design and our interpretation of data from preclinical studies and clinical trials. In addition, any of these regulatory authorities may change requirements for the approval of a drug candidate even after providing a positive opinion on, or otherwise reviewing and providing comments or advice on, a protocol for a clinical trial that has the potential to result in approval by the FDA or another regulatory authority. In addition, any of these regulatory authorities may also approve a drug candidate for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials. Furthermore, the FDA or
non-U.S.
regulatory authorities may not approve the labeling claims that we believe would be necessary or desirable for the successful commercialization of our drug candidates.
To date, we have had several discussions with the FDA and
non-U.S.
regulatory authorities regarding the design of our later phase clinical trials for selinexor, including the BOSTON, STORM, SADAL and SEAL studies. In July 2019, the FDA approved, under accelerated approval based on response rate from the STORM study, XPOVIO in combination with dexamethasone for the treatment of adult patients with RRMM who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, at least two immunomodulatory agents, and an anti-CD38 monoclonal antibody. We plan to seek additional regulatory approvals of selinexor in North America and Europe in each indication with respect to which such later phase clinical trial is being conducted and with respect to which we receive positive results that may support full or accelerated approval, as the case may be. We or our current or future partners may also seek such approvals in other geographies. We cannot be certain that we will commence additional later phase trials or complete ongoing later phase trials as anticipated. Before obtaining regulatory approvals for the commercial sale of any drug candidate for a target indication, we must demonstrate with substantial evidence gathered in preclinical studies and well-controlled clinical studies, and, with respect to approval in the United States, to the satisfaction of the FDA, that the drug candidate is safe and effective for use for that target indication. There is no assurance that the FDA or
non-U.S.
regulatory authorities would consider our current and planned later phase clinical trials to be sufficient to serve as the basis for filing for approval or to gain approval of selinexor for any indication. The FDA and
non-U.S.
regulatory authorities retain broad discretion in evaluating the results of our clinical trials and in determining whether the results demonstrate that selinexor is safe and effective. If we are required to conduct additional clinical trials of selinexor prior to approval, including additional earlier phase clinical trials that may be required prior to commencing any later phase clinical trials, or additional clinical trials following completion of our current and planned later phase clinical trials, we will need substantial additional funds, and there is no assurance that the results of any such additional clinical trials will be sufficient for approval.
The results to date in preclinical and early clinical studies conducted by us or our academic collaborators and in Phase 1 and Phase 2 clinical trials that we are currently conducting include the response of tumors to selinexor. We expect that in any later phase clinical trial where patients are randomized to receive either selinexor on the one hand, or standard of care, supportive care or placebo on the other hand, the primary endpoint will be either progression free survival, meaning the length of time on treatment until objective tumor progression, or overall survival, while the primary endpoint in any later phase clinical trial that is not similarly randomized may be different. For example, the primary endpoint of our Phase 2/3 SEAL study, the clinical trial of selinexor in patients with dedifferentiated liposarcoma, and of our Phase 3 BOSTON study, the clinical trial of selinexor in combination with Velcade (bortezomib) and dexamethasone in patients with multiple myeloma, is progression free survival. In some instances, the FDA and other regulatory bodies have accepted overall response rate as a surrogate for a clinical benefit and have granted regulatory approvals based on this or other surrogate endpoints. Overall response rate is defined as the portion of patients with tumor size reduction of a predefined amount for a minimum time period. For some types of cancer, we may use overall response rate as a primary endpoint, as we did in our SADAL study and our STORM study. These clinical trials will not be randomized against control arms and the primary endpoints of these trials are overall response rate. If selinexor does not demonstrate sufficient overall response rates in these indications, or any other indication for which a clinical trial has overall response rate as a primary endpoint, or if the FDA or
non-U.S.
regulatory authorities do not deem overall response rate a sufficient endpoint, or deem a positive overall response rate to be insufficient, it will
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likely not be approved for that indication based on the applicable study. With respect to the STORM and SADAL studies, the FDA has reiterated to us that it recommends, in general, a randomized trial with a progression-free survival endpoint as an initial registration approach.
Finally, independent review committees are typically implemented to adjudicate efficacy outcomes in clinical studies that are intended to support requests for marketing authorization. For example, in our STORM study, the primary endpoint of overall response rate was determined based on efficacy adjudications by an independent review committee, or IRC, comprised of physicians who are expert in treating and evaluating patients with multiple myeloma. While the FDA agreed with the assessments of the IRC for the STORM study in conducting its review of those data, we cannot be certain that other regulatory authorities will agree with the assessments of the IRC for STORM or any other study for which we may submit data to support a request for marketing authorization.
We may not be successful in our efforts to identify or discover additional potential drug candidates.
Part of our strategy involves identifying and developing drug candidates to build a pipeline of novel drug candidates. Our drug discovery efforts may not be successful in identifying compounds that are useful in treating cancer or other diseases. Our research programs may initially show promise in identifying potential drug candidates, yet fail to yield drug candidates for clinical development for a number of reasons, including:
  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.
Research programs to identify new drug candidates require substantial technical, financial and human resources. We may choose to focus our efforts and resources on a potential drug candidate that ultimately proves to be unsuccessful.
If we are unable to identify suitable compounds for preclinical and clinical development, we will not be able to obtain revenues from sale of drugs in future periods, which likely would result in significant harm to our financial position and adversely impact our stock price.
Clinical drug development is a lengthy and expensive process, with an uncertain outcome. If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of such drug candidates.
Before obtaining marketing approval from regulatory authorities for the sale of our drug candidates, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later stage clinical trials, and interim results of a clinical trial do not necessarily predict final results. For example, certain data from our Phase 1 and Phase 2 clinical trials of selinexor to date are based on unaudited data provided by our clinical trial investigators. An audit of this data may change the conclusions drawn from this unaudited data provided by our clinical trial investigators indicating less promising results than we currently anticipate. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their drug candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their drug candidates. Furthermore, the
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failure of any drug candidates to demonstrate safety and efficacy in any clinical trial could negatively impact the perception of our other drug candidates and/or cause the FDA or other regulatory authorities to require additional testing before any of our drug candidates are approved.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our drug candidates, including:
  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.
If we are required to conduct additional clinical trials or other testing of our drug candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our drug candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:
  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;
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  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.
Our drug development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our drug candidates, allow our competitors to bring drugs to market before we do or impair our ability to successfully commercialize our drug candidates, which would harm our business and results of operations. In addition, many of the factors that cause, or lead to, clinical trial delays may ultimately lead to the denial of regulatory approval of our drug candidates.
If we experience delays or difficulties in the enrollment of patients in clinical trials, or we are otherwise delayed in our ability to conduct clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
We may not be able to initiate or continue clinical trials for our drug candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside of the United States. In addition, some of our competitors may have ongoing clinical trials for drug candidates that treat the same indications as our drug candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ drug candidates.
Patient enrollment is affected by other factors, including:
  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.
In addition, patient enrollment may be affected by future regulatory actions, such as Form 483 observations or the partial clinical hold we were subject to previously. In February 2017, following the conclusion of a joint inspection conducted by the FDA and Danish Medicines Agency at our corporate headquarters, the FDA issued a Form 483 noting certain deficiencies in procedures and documentation that were identified in our selinexor development program. We implemented corrective actions, preventative actions and other initiatives directed at resolving the deficiencies identified in the Form 483 observations and provided the FDA with our responses to the Form 483 observations in February 2017.
In addition, in March 2017, the FDA notified us that it had placed the clinical trials under our IND for selinexor on partial clinical hold, which is an order by the FDA to delay or suspend part of a sponsor’s clinical
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work requested under its IND as well as investigator-sponsored trials. The partial clinical hold was due to incomplete information in the existing version of the investigator’s brochure, including an incomplete list of serious adverse events, or SAEs, associated with selinexor, and not as a result of any new information regarding the safety profile of selinexor. The partial clinical holds on the clinical trials of selinexor were lifted by the FDA Division of Hematology Products (effective March 30, 2017), Division of Oncology Products 1 (effective April 5, 2017) and Division of Oncology Products 2 (effective March 31, 2017). However, if in the future we are delayed in addressing, or unable to address, any concerns of the FDA or other regulators, we could be delayed or prevented from enrolling patients in our clinical trials.
Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays, could require us to abandon one or more clinical trials altogether and could delay or prevent our receipt of necessary regulatory approvals. Enrollment delays in our clinical trials may result in increased development costs for our drug candidates, which would cause the value of our company to decline and limit our ability to obtain additional financing.
If serious adverse or unacceptable side effects are identified or we observe limited efficacy of our drug candidates, we may need to abandon or limit the development or commercialization of one or more of our drug candidates, and such findings may delay or prevent regulatory approval, limit commercial viability, or result in significant negative consequences following any marketing approval.
Four of our drug candidates are in clinical development for treatment of human diseases. Their risk of failure is high. If XPOVIO or any of our drug candidates are associated with undesirable side effects or have characteristics that are unexpected in clinical trials or following approval and/or commercialization, we may need to abandon their development or limit development or marketing to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Adverse events, or AEs, in our clinical trials to date have been generally predictable and manageable, although some patients have experienced more serious AEs. The most common drug-related AEs were gastrointestinal, such as nausea, anorexia, diarrhea and vomiting, and fatigue. These side effects were generally mild or moderate in severity. The most common AEs that were Grade 3 or Grade 4, meaning they were more than mild or moderate in severity, were thrombocytopenia, or low count of platelets in the blood, and neutropenia, or low neutrophil counts. To date, the most common AEs have been managed with supportive care and dose modifications. However, a number of patients have withdrawn from our clinical trials as a result of AEs. For example, amongst the 202 patients enrolled in Parts 1 and 2 of the STORM study who were treated with selinexor in combination with dexamethasone, the most common AEs (incidence
20%) were thrombocytopenia, fatigue, nausea, anemia, decreased appetite, decreased weight, diarrhea, vomiting, hyponatremia, neutropenia, leukopenia, constipation, dyspnea, and upper respiratory tract infections. The treatment discontinuation rate due to AEs was 27%; 53% of patients had a reduction in the selinexor dose, and 65.3% had the dose of selinexor interrupted. In this group of patients, the most frequent AEs requiring permanent discontinuation in 4% or greater of patients who received selinexor included fatigue, nausea, and thrombocytopenia. Similarly, in the SADAL study, as of April 3, 2019, among the 127 patients included in the safety analysis, the most common AEs (incidence
20%) were thrombocytopenia, nausea, fatigue, anemia, anorexia, diarrhea, constipation, weight loss, neutropenia, vomiting, pyrexia and asthenia. Some patients across our clinical trials have experienced SAEs deemed by us and the clinical investigator to be related to selinexor. SAEs generally refer to AEs that result in death, are life threatening, require hospitalization or prolonging of hospitalization, or cause a significant and permanent disruption of normal life functions, congenital anomalies or birth defects, or require intervention to prevent such an outcome.
These AEs and the resulting dose modification and/or treatment discontinuation rates or safety or toxicity issues that we may experience in our clinical trials in the future could result in a more restrictive label for any drug candidates approved for marketing or could result in the delay or denial of approval to market any drug candidates by the FDA or comparable foreign regulatory authorities, which could prevent us from ever generating revenue from the sale of drugs or achieving profitability. Results of our trials could reveal an
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unacceptably high severity and prevalence of side effects. In such an event, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our drug candidates for any or all targeted indications. Many compounds that initially showed promise in early-stage trials for treating cancer or other diseases have later been found to cause side effects that prevented further development of the compound. If such an event occurs after any of our drug candidates are approved and/or commercialized, a number of potentially significant negative consequences may result, including:
  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.
Any of these events could prevent us from achieving or maintaining market acceptance of the affected drug candidate, if approved, or could substantially increase commercialization costs and expenses, which could delay or prevent us from generating revenues from the sale of our drugs and harm our business and results of operations.
The FDA or
non-U.S.
regulatory authorities may disagree with our and/or our clinical trial investigators’ interpretation of data from clinical trials in determining if serious adverse or unacceptable side effects are drug-related.
We, and our clinical trial investigators, currently determine if serious adverse or unacceptable side effects are drug-related. The FDA or
non-U.S.
regulatory authorities may disagree with our or our clinical trial investigators’ interpretation of data from clinical trials and the conclusion by us or our clinical trial investigators that a serious adverse effect or unacceptable side effect was not drug-related. The FDA or
non-U.S.
regulatory authorities may require more information, including additional preclinical or clinical data to support approval, which may cause us to incur additional expenses, delay or prevent the approval of one of our drug candidates, and/or delay or cause us to change our commercialization plans, or we may decide to abandon the development or commercialization of the drug candidate altogether.
We may expend our limited resources to pursue a particular drug candidate or indication and fail to capitalize on drug candidates or indications that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and managerial resources, we focus on research programs and drug candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other drug candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities. Our spending on current and future research and development programs and drug candidates for specific indications may not yield any commercially-viable drugs. If we do not accurately evaluate the commercial potential or target market for a particular drug candidate, we may relinquish valuable rights to that drug candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such drug candidate.
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XPOVIO or any of our drug candidates that receives marketing approval may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
XPOVIO or any of our drug candidates that receive marketing approval may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. Efforts to educate the medical community and third-party payors on the benefits of our drug candidates will require significant resources and may not be successful. For example, current cancer treatments like chemotherapy and radiation therapy are well-established in the medical community, and doctors may continue to rely on these treatments. If XPOVIO or our drug candidates do not achieve an adequate level of acceptance, we may not generate significant revenues from sales of drugs and we may not become profitable. The degree of market acceptance of XPOVIO and our drug candidates, if approved for commercial sale, will depend on a number of factors, including:
  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 estimates of the potential market opportunities for XPOVIO and our drug candidates include several key assumptions based on our industry knowledge, industry publications, third-party research and other surveys, which may be based on a small sample size and fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain and the reasonableness of these assumptions has not been assessed by an independent source. If any of our assumptions or estimates, or these publications, research, surveys or studies prove to be inaccurate, then the actual market for XPOVIO, selinexor or any other drug candidates may be smaller than we expect, and as a result our product revenue may be limited and it may be more difficult for us to achieve or maintain profitability.
If we are unable to establish and maintain sales, marketing and distribution capabilities or maintain current agreements or enter into additional sales, marketing and distribution agreements with third parties, we may not be successful in commercializing XPOVIO or any of our drug candidates that we may develop if and when they are approved.
We are in the process of continuing to build and maintain a sales and marketing infrastructure for XPOVIO, our first product, and our company does not have any prior experience in the sales, marketing or distribution of pharmaceutical drugs. To achieve commercial success for any approved drug for which sales and marketing is not the responsibility of any strategic collaborator that we have or may have in the future, we must either develop a sales, marketing and distribution organization or outsource these functions to other third parties. In the future,
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we may choose to build a sales, marketing and distribution infrastructure to market or
co-promote
one or more of our drug candidates, if and when they are approved, or enter into additional collaborations with respect to the sale, marketing and distribution of our drug candidates. We intend to work with existing and potential partners to establish the commercial infrastructure to support a potential launch of selinexor outside the United States.
There are risks involved with both establishing and maintaining our own sales, marketing and distribution capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force is expensive and time-consuming and could delay any commercial launch of a drug candidate. Further, we may underestimate the size of the sales force required for a successful product launch and may need to expand our sales force earlier and at a higher cost than we anticipated. If the commercial launch of any of our drug candidates for which we establish a commercial infrastructure is delayed or does not occur for any reason, including if we do not receive marketing approval on the timeframe we expect, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
Factors that may inhibit our efforts to commercialize XPOVIO or any drug candidates for which we receive marketing approval on our own include:
  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.
Entering into arrangements with third parties to perform sales and marketing services may result in lower revenues from the sale of drug or the profitability of these revenues to us than if we were to market and sell any drugs that we develop ourselves. In addition, we may not be successful in maintaining current arrangements or entering into additional arrangements with third parties to sell, market and distribute XPOVIO or any of our drug candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our drugs effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing XPOVIO or any of our drug candidates for which we obtain marketing approval.
We have a limited number of engagements with specialty pharmacies and specialty distributors. The specialty pharmacies sell XPOVIO directly to patients. The specialty distributors sell XPOVIO to healthcare entities who then resell XPOVIO to patients. While we have entered into agreements with each of these pharmacies and distributors to distribute XPOVIO in the United States, they may not perform as agreed or they may terminate their agreements with us. Also, we may need to enter into agreements with additional pharmacies or distributors, and there is no guarantee that we will be able to do so on commercially reasonable terms or at all. If we are unable to maintain and, if needed, expand, our network of specialty pharmacies and specialty distributors, we would be exposed to substantial distribution risk.
We may not receive royalty or milestone revenue under our partnership agreements for several years, or at all.
Certain of our partnership agreements provide for payments on achievement of development and/or commercialization milestones and for royalties on product sales. However, because drug development entails a
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high risk of failure, we may never realize any material portion of the milestone revenue provided in our partnership agreements and we do not expect to receive any royalty revenue for several years, if at all.
We face substantial competition, which may result in others discovering, developing or commercializing drugs before or more successfully than we do.
The discovery, development and commercialization of new drugs is highly competitive. We face competition with respect to XPOVIO and our drug candidates and will face competition with respect to any drug candidates that we may seek to discover and develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of major pharmaceutical, specialty pharmaceutical and biotechnology companies that currently market and sell drugs or are pursuing the development of drugs for the treatment of cancer and the other disease indications for which we are developing our drug candidates, although we believe that to date, none of these competitive drugs and therapies currently in development are based on scientific approaches that are the same as our approach. Potential competitors also include academic institutions and governmental agencies and public and private research institutions.
We are initially focused on developing our current drug candidates for the treatment of cancer. There are a variety of available therapies marketed for cancer. In many cases, cancer drugs are administered in combination to enhance efficacy. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis. Many of these approved drugs are well-established therapies and are widely accepted by physicians, patients and third-party payors. Insurers and other third-party payors may also encourage the use of generic drugs. We expect that any of our drug candidates that are approved will be priced at a significant premium over competitive generic drugs. This may make it difficult for us to achieve our business strategy of using our drug candidates in combination with existing therapies or replacing existing therapies with our drug candidates.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize drugs that are more effective, safer, more convenient or less costly than any that we are developing or that would render our drug candidates obsolete or
non-competitive.
Our competitors may also obtain marketing approval from the FDA or other regulatory authorities for their drugs more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market or preventing us from entering into a particular indication at all.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical studies, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or that may be necessary for, our programs.
Even if we are able to effectively commercialize XPOVIO or any drug candidate that we may develop, the drugs may not receive coverage or may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, all of which would harm our business.
The legislation and regulations that govern marketing approvals, pricing and reimbursement for new drug products vary widely from country to country. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or drug licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing
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governmental control even after initial approval is granted. In the United States, approval and reimbursement decisions are not linked directly, but there is increasing scrutiny from the Congress and regulatory authorities of the pricing of pharmaceutical products. As a result, we might obtain marketing approval for a drug in a particular country, but then be subject to price regulations that delay our commercial launch of the drug, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the drug in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more drug candidates, even if our drug candidates obtain marketing approval.
Our ability to effectively commercialize XPOVIO or any of our product candidates that we may develop successfully will depend, in part, on the extent to which reimbursement for these drugs and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. Obtaining and maintaining adequate reimbursement for XPOVIO and any of our product candidates, if approved, may be difficult. Moreover, the process for determining whether a third-party payor will provide coverage for a product may be separate from the process for setting the price of a product or for establishing the reimbursement rate that such a payor will pay for the product. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for our products by third-party payors.
A primary trend in the healthcare industry in the United States and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Third-party payors may also seek, with respect to an approved product, additional clinical evidence that goes beyond the data required to obtain marketing approval. They may require such evidence to demonstrate clinical benefits and value in specific patient populations or they may call for costly pharmaceutical studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies before covering our products. Accordingly, we cannot be sure that reimbursement will be available for XPOVIO and any drug candidate that we commercialize and, if reimbursement is available, we cannot be sure as to the level of reimbursement and whether it will be adequate. Coverage and reimbursement may impact the demand for, or the price of, XPOVIO or any drug candidate for which we obtain marketing approval. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize XPOVIO or any drug candidate for which we obtain marketing approval.
There may be significant delays in obtaining reimbursement for newly-approved drugs, and coverage may be more limited than the indications for which the drug is approved by the FDA or comparable regulatory authorities outside of the United States. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for any approved drugs that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize drugs and our overall financial condition.
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Product liability lawsuits against us could divert our resources, cause us to incur substantial liabilities and to limit commercialization of XPOVIO and any other drugs that we may develop.
We face an inherent risk of product liability exposure related to the testing of our drug candidates in human clinical trials. We face an even greater risk as we commercialize XPOVIO or any other drugs that we may develop. For example, we may be sued if any drug we develop allegedly causes injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against claims that our drug candidates or drugs caused injuries, we will incur substantial liabilities or be required to limit commercialization of our drug candidates. Regardless of merit or eventual outcome, liability claims may result in:
  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.
 
We currently hold clinical trial and general product liability insurance coverage, but that coverage may not be adequate to cover any and all liabilities that we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
The business that we conduct outside the United States may be adversely affected by international risk and uncertainties.
Although our operations are based in the United States, we conduct business outside the United States and expect to continue to do so in the future. For instance, many of the sites at which our clinical trials are being conducted are located outside the United States. In addition, we plan to seek approvals to sell our products in foreign countries. Any business that we conduct outside the United States will be subject to additional risks that may materially adversely affect our ability to conduct business in international markets, including:
  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;
 
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  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.
 
Risks Related to Our Financial Position, Convertible Senior Notes, Revenue Interest Financing Agreement and Need for Additional Capital
We have incurred significant losses since inception. We expect to continue to incur losses in the future and may never achieve or maintain profitability.
Since inception, we have incurred significant operating losses. Our net losses were $199.6 million, $178.4 million, and $129.0 million for the years ended December 31, 2019, December 31, 2018 and December 31, 2017, respectively. As of December 31, 2019 and December 31, 2018, we had an accumulated deficit of $873.3 million and $673.7 million, respectively. As we only recently launched our first
FDA-approved
product, XPOVIO, in July 2019, we have had limited revenues to date from product sales and have financed our operations to date principally through private placements of our preferred stock, proceeds from our initial public offering and
follow-on
offerings of common stock, issuance of convertible debt, proceeds from a revenue interest financing and cash generated from our business development activities. We have devoted substantially all of our efforts to research and development, including preclinical studies and clinical trials, pursuing regulatory approvals and engaging in activities to commercially launch XPOVIO for the treatment of adult patients with RRMM who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, at least two immunomodulatory agents, and an anti-CD38 monoclonal antibody. Other than the FDA’s accelerated approval of XPOVIO, our lead drug candidate, oral selinexor (for indications not yet approved), as well as eltanexor, verdinexor, and
KPT-9274,
are in clinical development. Although we expect to continue to generate revenue from sales of XPOVIO, there can be no assurance as to the amount or timing of any such revenue, and we expect to continue to incur significant expenses and operating losses. The net losses we incur may fluctuate significantly from quarter to quarter.
We anticipate that our expenses will continue to increase substantially as compared to prior periods as we continue to commercialize XPOVIO in the United States and engage in activities to prepare for the potential commercialization of additional indications for selinexor and the potential approval of our other drug candidates, including due to the impact of increased headcount, to support our clinical and commercialization activities, expanded infrastructure and increased insurance premiums.
We anticipate that our expenses will increase substantially if and as we:
  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;
 
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  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.
 
Our ability to become and remain profitable depends on our ability to commercialize a drug or drugs with significant market potential, either on our own or with a collaborator. While we began to generate revenue from the sales of XPOVIO in July 2019, there can be no assurance as to the amount or timing of any such revenue, and we may not achieve profitability for several years, if at all. This will require us to be successful in a range of challenging activities, including:
  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.
 
Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. Our expenses could increase if we are required by the FDA or other regulatory authorities to perform clinical trials and
non-clinical
studies in addition to those that have been conducted or are currently expected, or if there are any delays in the development of any of our drug candidates or the manufacture of any of our drug candidates.
XPOVIO is our only product that has been approved for sale and it has only been approved in the United States for the treatment of adult patients with RRMM who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, at least two immunomodulatory agents, and an anti-CD38 monoclonal antibody. Our ability to become and remain profitable will depend, in part, on the timing and success of commercial sales of XPOVIO, which we commercially launched in the United States in July 2019. However, the successful commercialization of XPOVIO in the United States is subject to many risks. We are currently undertaking our first commercial launch with XPOVIO, and we may not be able to do so successfully. There are numerous examples of unsuccessful product launches and failures to meet expectations of market
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potential, including by pharmaceutical companies with more experience and resources than us. We do not anticipate our revenue from sales of XPOVIO alone, in the currently approved indication, will be sufficient for us to become profitable for several years, if at all.
We may never succeed in these activities and may never generate revenues that are significant or large enough to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business and/or continue our operations. A decline in the value of our company could also cause our stockholders to lose all or part of their investment.
The nature and length of our operating history may make it difficult for stockholders to evaluate the success of our business to date and to assess our future viability.
We were incorporated in 2008 and commenced operations in 2009. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, developing our platform, identifying potential drug candidates, conducting preclinical studies and early-phase and later-phase clinical trials of our drug candidates and establishing a commercial infrastructure to launch XPOVIO. We only recently launched XPOVIO and are still in the process of executing our commercial launch plan and, to date, have not generated significant revenue from the sale of XPOVIO. Consequently, any predictions stockholders make about our future success or viability may not be as accurate as they could be if we had a longer operating history.
In addition, as a business with a short operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from a company with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.
As we continue to build our business, we expect our financial condition and operating results may fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, stockholders should not rely upon the results of any particular quarterly or annual periods as indications of future operating performance.
We will need substantial additional funding. If we are unable to raise capital when needed, we would be forced to delay, reduce or eliminate our research and drug development programs or commercialization efforts.
We expect our expenses to increase in connection with our ongoing activities, particularly as we commercialize XPOVIO (selinexor) and continue the clinical trials of, and seek marketing approval and prepare for commercialization of, selinexor in additional indications and our other drug candidates. Our expenses have increased as we have begun commercializing XPOVIO, including costs associated with our sales force and increased marketing and distribution capabilities. If we obtain marketing approval for any drug candidates that we develop, we expect to incur significant additional commercialization expenses for such drug candidate to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of any collaborator that we may have at such time for any such drug candidate. Furthermore, we will continue to incur additional costs associated with operating as a public company, hiring additional personnel and expanding our facilities. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and drug development programs or any current or future commercialization efforts.
We expect that our existing cash, cash equivalents and investments will enable us to fund our current operating and capital expenditure plans for at least twelve months from the date of issuance of the financial
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statements contained in this Annual Report on Form
 10-K.
Our future capital requirements will depend on many factors, including:
  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.
Identifying potential drug candidates, conducting preclinical studies and clinical trials, seeking marketing approvals and commercializing products are time-consuming, expensive and uncertain processes that take years to complete. Although we commercially launched XPOVIO in July 2019, we do not anticipate that our revenue from product sales of XPOVIO will be sufficient for us to become profitable for several years, if at all. In addition, we may never generate the necessary data or results required to obtain marketing approval of our drug candidates. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. Adequate additional financing may not be available to us on acceptable terms, or at all. If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate development activities for one or more of our drug candidates or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize XPOVIO or our drug candidates for which we obtain marketing approval.
Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
Global credit and financial markets have experienced extreme disruptions over some of the past several years. Such disruptions have resulted, and could in the future result, in diminished liquidity and credit
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availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that any deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be compromised by economic downturns, a volatile business environment and unpredictable and unstable market conditions. If the equity and credit markets deteriorate, it may make any necessary equity or debt financing more difficult to secure, more costly or more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could harm our growth strategy, financial performance and stock price and could require us to delay or abandon plans with respect to our business, including clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers or other third parties with which we conduct business may not survive difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget.
Our indebtedness could limit cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the Convertible Senior Notes due 2025, or Notes.
We incurred $172.5 million of indebtedness as a result of the sale of the Notes and $75.0 million as a result of the initial closing pursuant to the Revenue Interest Financing Agreement, or Revenue Interest Agreement, that we entered into with HealthCare Royalty Partners III, L.P. and HealthCare Royalty Partners IV, L.P., or HCR, on September 14, 2019. We may also incur additional indebtedness to meet future financing needs. Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:
  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.
Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the Notes, and our cash needs may increase in the future.
Servicing the Notes will require a significant amount of cash, and we may not have sufficient cash flow from our business to make payments on our indebtedness.
Our ability to pay the principal of or interest and additional interest, if any, on the Notes or to make cash payments in connection with any conversion of the Notes depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service the Notes or other future indebtedness and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring indebtedness or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive. Our ability to refinance the Notes or other future indebtedness will depend on the capital markets, our financial condition at such time and our obligations under any other existing indebtedness in effect at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations, including the Notes.
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We may not have the ability to raise the funds necessary to settle conversions of the Notes in cash, to repurchase the Notes for cash upon a fundamental change, to pay the redemption price for any Notes we redeem or to refinance the Notes, and any future debt we incur may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes.
Holders may require us to repurchase their Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest and additional interest, if any. In addition, upon conversion, unless we elect to deliver solely shares of our common stock to settle conversions (other than paying cash in lieu of delivering any fractional share), we must satisfy the conversion in cash. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the Notes, pay cash amounts due upon conversion or redemption of the Notes or refinance the Notes. In addition, our ability to repurchase the Notes, to pay cash upon conversion or redemption of the Notes or to refinance the Notes may be limited by law, regulatory authority or agreements governing any future indebtedness that we may incur. Our failure to repurchase notes at a time when the repurchase is required by the indenture governing the Notes or to pay cash upon conversion of the Notes as required by the indenture would constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness, if any. Moreover, the occurrence of a fundamental change under the indenture could constitute an event of default under any such agreements. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or to pay cash upon conversion of the Notes.
The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
In the event the conditional conversion feature of the Notes is triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option. If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal amount of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
The accounting method for convertible debt securities that may be settled in cash, such as the Notes, could have a material effect on our reported financial results.
In May 2008, the Financial Accounting Standards Board, or FASB, issued FASB Staff Position No. APB
14-1,
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), which has subsequently been codified as Accounting Standards Codification
470-20,
Debt with Conversion and Other Options, or ASC
 470-20.
Under ASC
 470-20,
an entity must separately account for the liability and equity components of the convertible debt instruments (such as the Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC
 470-20
on the accounting for the Notes is that the equity component is required to be included in the additional
paid-in
capital section of stockholders’ equity at the issuance date, and the value of the equity component would be treated as debt discount for purposes of accounting for the debt component of the Notes. As a result, we will be required to record a greater amount of
non-cash
interest expense as a result of the amortization of the discounted carrying value of the Notes to their face amount over the term of the Notes. We will report a larger net loss in our financial results because ASC
 470-20
will require interest to include both the amortization of the value of the debt discount and the instrument’s coupon interest rate, which could adversely affect our future financial results, the market price of our common stock and the trading price of the Notes.
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In addition, under certain circumstances, convertible debt instruments (such as the Notes) that may be settled entirely or partly in cash are currently eligible to be accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of the Notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Notes exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. We cannot be sure that the accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of the Notes, then our diluted earnings per share would be adversely affected.
Furthermore, if any of the conditions to the convertibility of the Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the Notes as a current, rather than a long-term, liability. This reclassification could be required even if no holders convert their Notes and could materially reduce our reported working capital.
Our Revenue Interest Agreement with HCR contains various covenants and other provisions, which, if violated, could result in the acceleration of payments due under such agreement.
On September 14, 2019, we entered into the Revenue Interest Agreement with HCR. Pursuant to the Revenue Interest Agreement, we are required to comply with various covenants relating to the conduct of our business and the commercialization of XPOVIO, including obligations to use commercially reasonable efforts to commercialize our products and limits on our ability to incur or prepay indebtedness, create or incur liens, pay dividends on or repurchase outstanding shares of our capital stock or dispose of assets. In addition, the Revenue Interest Agreement includes customary events of default upon the occurrence of enumerated events, including
non-payment
of revenue interests, failure to perform certain covenants and the occurrence of insolvency proceedings, specified judgments, specified cross-defaults or specified revocations, withdrawals or cancellations of regulatory approval for XPOVIO. Upon the occurrence of an event of default and in the event of a change of control, HCR may accelerate payments due under the Revenue Interest Agreement up to $138.8 million, less the aggregate of all of the payments previously paid to HCR. Upon the occurrence of specified material adverse events or the material breach of specified representations and warranties, which will not be considered events of default, HCR may elect to terminate the Revenue Interest Agreement and require us to make payments necessary for HCR to receive $75 million, less the aggregate of all of the payments made to date, plus a specified annual rate of return. In the event that we are unable to make such payment, then HCR may be able to foreclose on the collateral that was pledged to HCR, which consists of all of our present and future assets relating to XPOVIO. Any such foreclosure remedy would significantly and adversely affect us and could result in us losing our interest in such assets.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our drug candidates.
Until such time, if ever, as we can generate substantial revenues from the sale of drugs, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. For example, during the term of the Revenue Interest Agreement, we cannot make any voluntary or optional cash payment or prepayment on our existing convertible debt and cannot enter into any new debt without the consent of HCR.
If we raise funds through further collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams, research programs or drug candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds
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through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our research and drug development or current or future commercialization efforts or grant rights to develop and market drug candidates that we would otherwise prefer to develop and market ourselves.
Risks Related to Our Dependence on Third Parties
We depend on third parties for certain aspects of the development, marketing and/or commercialization of our drug candidates and plan to enter into additional collaborations. If those collaborations are not successful, we may not be able to capitalize on the market potential of these drug candidates.
We intend to maintain our existing collaborations and will continue to seek additional third-party collaborators for certain aspects of the development, marketing and/or commercialization of our drug candidates. For example, we have entered into license arrangements with Ono Pharmaceutical Co., Ltd. and Antengene Therapeutics Limited, and plan to continue to seek to enter into additional license relationships, for marketing and commercialization of selinexor for other geographies outside the United States. In addition, we intend to seek one or more collaborators to aid in the further development, marketing and/or commercialization of our other SINE compounds for indications outside of oncology. Our likely collaborators for any collaboration arrangements include large and
mid-size
pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. In connection with any such arrangements with third parties, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development, marketing and/or commercialization of our drug candidates. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.
Collaborations involving our drug candidates pose the following risks to us: