With its reserves depleted, a debt payment due in four weeks and its cash runway stretching only into next month, the question for Karyopharm Therapeutics is what’s next and how soon can it happen?
The Massachusetts biopharma laid out its situation on Thursday in reporting its second quarter earnings. While the company is still generating significant revenue from its multiple myeloma treatment Xpovio, it also is hemorrhaging cash.
In the second quarter, Karyopharm reported a loss of $67 million, compared to a $37 million figure a year ago and a $27 million loss in the first quarter of this year. The Q2 loss tallies up to $2.32 per share, compared to a $1.31 figure expected by analysts.
Karyopharm also revealed that it has cash reserves of $65.4 million and a loan payment of $15.8 million due on Sept. 10. If the payment is made without additional financing or a waiver from its lenders, Karyopharm said in its release that it expects it “would fall below its $10.0 million minimum liquidity covenant,” resulting in default.
In a conference call, Karyopharm CEO Richard Paulson said that the company has been in negotiations with its lenders “who have been consistently supportive with us.”
Paulson described “[g]ood, productive conversations” with lenders, who have been “working on the right solution as we move forward,” per the CEO. “Obviously that’s something that we’re very focused on and are working to achieve rapidly.”
Karyopharm added that it is evaluating a “range of financing opportunities and strategic alternatives” to maximize value for shareholders.
Meanwhile, the company said it is on track to submit for accelerated approval of a label expansion for Xpovio as part of a combo treatment for myelofibrosis. The company is planning to wed another oral therapy in Incyte's Jakafi with Xpovio, which is a nuclear transport modulator.
Karyopharm believes myelofibrosis presents a large opportunity as uptake in that population could proceed rapidly given the company’s existing infrastructure with Xpovio, which was originally approved in 2019.
“The structure of the myelofibrosis market is also well-aligned with our existing footprint,” Sohanya Cheng, Karyopharm’s chief commercial officer and business development chief, said during the call. “The majority of patients are concentrated within a manageable group of treatment centers. This concentration allows us to focus our resources on the physicians caring for the majority of patients and to deploy our existing organization efficiently.”
Karyopharm noted a slight uptick in Xpovio sales in Q2, from $29.7 million a year ago to $30.8 million for the most recent period.
In each of the last four years, annual sales for the drug have been stagnant, toggling between $112 million and $120 million. In 2023, the company executed a round of layoffs, reducing its headcount by 20%. Last year came another 20% reduction. Karyopharm opened this year with 228 employees, down from 442 at the start of 2022.