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, 2024
☐ 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, 2nd 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of 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, 2024 was
approximately $107.6 million. 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 14, 2025: 126,240,054.
Documents incorporated by reference:
Portions of the registrant’s Proxy Statement for its 2025 Annual Meeting of Stockholders, which the registrant intends to file with the Securities and Exchange
Commission no later than 120 days after the registrant’s fiscal year end of December 31, 2024, are incorporated by reference into Part III of this Annual Report on Form
10-K.
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TABLE OF CONTENTS
Page No.
PART I ........................................................................................................................................................................................
6
Item 1.
Business............................................................................................................................................
6
Item 1A.
Risk Factors......................................................................................................................................
53
Item 1B.
Unresolved Staff Comments ............................................................................................................
103
Item 1C.
Cybersecurity....................................................................................................................................
103
Item 2.
Properties..........................................................................................................................................
105
Item 3.
Legal Proceedings ............................................................................................................................
105
Item 4.
Mine Safety Disclosures...................................................................................................................
105
PART II.......................................................................................................................................................................................
106
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities...............................................................................................................................
106
Item 6.
[Reserved] ........................................................................................................................................
106
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations .........
107
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk ..........................................................
115
Item 8.
Financial Statements and Supplementary Data................................................................................
115
Item 9A.
Controls and Procedures...................................................................................................................
115
Item 9B.
Other Information.............................................................................................................................
118
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .............................................
118
PART III .....................................................................................................................................................................................
119
Item 10.
Directors, Executive Officers and Corporate Governance...............................................................
119
Item 11.
Executive Compensation..................................................................................................................
119
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters..............................................................................................................................................
119
Item 13.
Certain Relationships and Related Transactions, and Director Independence.................................
119
Item 14.
Principal Accountant Fees and Services ..........................................................................................
119
PART IV .....................................................................................................................................................................................
120
Item 15.
Exhibits and Financial Statement Schedules....................................................................................
120
Item 16.
Form 10-K Summary........................................................................................................................
120
SIGNATURES............................................................................................................................................................................
162
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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, including regulatory submissions and approvals,
our commercialization efforts, our partnerships and collaborations with third parties, our future operating results and financial
position, our ability to continue as a going concern, 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, but are not limited to, those described in “Part I—Item 1A. Risk Factors” of this Annual Report on
Form 10-K and under the heading “Summary of Risk Factors” below. As a result of these and other factors, we may not actually
achieve the plans, intentions, expectations or results disclosed in our forward-looking statements, and you should not place undue
reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments we may make. We do not assume any obligation to update any
forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
References to XPOVIO® (selinexor) also refer to NEXPOVIO® (selinexor) when discussing its approval and commercialization
in certain countries or territories outside of the U.S.
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Summary of Risk Factors
Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary
does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other
risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other
information in this Annual Report on Form 10-K and our other filings with the SEC, before making an investment decision regarding
our common stock.
•
If we or our collaborators are unable to successfully commercialize current and future indications of XPOVIO or other
products or product candidates, our business, financial condition and future profitability will be materially harmed.
•
XPOVIO faces substantial competition.
•
If our clinical trials fail to demonstrate safety and effectiveness to the satisfaction of regulatory authorities or do not
otherwise produce positive results, we may incur additional costs, experience delays or be unable to complete the
development of such product candidates.
•
We may be unable to successfully enroll patients in our ongoing and planned clinical trials in a reasonable timeframe, or
at all.
•
Serious adverse or unacceptable side effects related to XPOVIO, our product candidates or future products may delay or
prevent their regulatory approval, cause us to suspend or discontinue clinical trials, or limit the commercial value of our
approved indications.
•
The results of previous clinical trials may not be predictive of future trial results and interim or top-line data may be
subject to change or qualification.
•
We may not be successful in our efforts to identify or discover additional potential product candidates, or our decisions to
prioritize the development of certain product candidates over others may later prove wrong.
•
We may not be able to maintain or expand our sales, marketing and distribution capabilities in order to successfully
commercialize XPOVIO or any of our products or product candidates, if approved.
•
Any business that we or our collaborators conduct outside of the U.S. may be adversely affected by international risks and
uncertainties.
•
We or our collaborators may not receive regulatory approvals for the commercialization of some or all of our or their
product candidates, including necessary companion diagnostic devices, in a timely manner, or at all.
•
We or our collaborators may not be able to utilize accelerated development pathways to obtain regulatory approval,
orphan drug exclusivity or certain other designations for our or their product candidates, which may result in delays
receiving necessary marketing approvals.
•
Our or our collaborators’ ability to commercialize our or their products may be limited by the terms of their respective
regulatory approvals and ongoing regulation of our products.
•
Our failure to comply with post-approval development and regulatory requirements, pricing regulations, reporting and
payment obligations under governmental drug pricing programs, applicable healthcare, privacy and data security laws and
environmental, health and safety laws and regulations may have a material adverse effect on our business, financial
condition or results of operations.
•
Changes in U.S. and international trade policies, particularly with respect to China, may adversely impact our business.
•
We may not be able to continue as a going concern.
•
We may never achieve or maintain profitability and will need additional funding to achieve our business objectives.
•
We may not be able to satisfy our indebtedness, on a timely basis or at all.
•
Our business, financial condition and stock price may be impacted by unstable market and economic conditions.
•
Our dependence on third parties for certain aspects of our business, such as clinical development, manufacturing,
marketing, distribution and/or commercialization of XPOVIO and/or our product candidates, could negatively impact our
development and commercialization plans.
•
If we are unable to obtain and maintain patent protection for our products and product candidates and other discoveries, or
the scope of the patent protection obtained is not sufficiently broad, our ability to successfully commercialize our products
or product candidates may be adversely affected.
5
•
We may become involved in lawsuits to protect or enforce our intellectual property rights, or third parties may initiate
legal proceedings against us alleging our infringement of their intellectual property rights.
•
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
•
Information technology system failures or security breaches may materially adversely affect our business and operations.
•
The price of our common stock has been and may continue to be volatile and if we fail to maintain compliance with
Nasdaq our common stock could be delisted.
•
Securities or other litigation could result in substantial costs and may divert management’s time and attention from our
business.
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PART I
Item 1. Business
Overview
We are a commercial-stage pharmaceutical company pioneering novel cancer therapies and dedicated to the discovery,
development and commercialization of first-in-class drugs directed against nuclear export for the treatment of cancer. 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 Selective Inhibitor of Nuclear Export (“SINE”)
compounds that inhibit the nuclear export protein exportin 1 (“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 diseases with high unmet medical need. Our
lead asset, XPOVIO® (selinexor), was the first oral XPO1 inhibitor to receive marketing approval, receiving its initial U.S. approval
from the U.S. Food and Drug Administration (“FDA”) in July 2019, and is currently approved and marketed in the U.S. for the
following indications:
•
In combination with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have
received at least one prior therapy. Approval in this indication was based on the results from the BOSTON (Bortezomib,
Selinexor and Dexamethasone) trial (the “BOSTON Trial”);
•
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 proteasome inhibitors (“PIs”), at
least two immunomodulatory agents (“IMiDs”), and an anti-CD38 monoclonal antibody (“mAb”). We refer to myeloma
that is refractory to these five agents as penta-refractory. Approval in this indication was based on the results from the
STORM (Selinexor Treatment of Refractory Myeloma) trial (the “STORM Trial”); and
•
For the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”), not otherwise
specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy. This indication
was approved under accelerated approval based on response rate and was based on the results from the SADAL (Selinexor
Against Diffuse Aggressive Lymphoma) trial (the “SADAL Trial”). Continued approval for this indication may be
contingent upon verification and description of clinical benefit in a confirmatory trial.
The commercialization of XPOVIO in the U.S. is currently supported by sales representatives, nurse liaisons, and a market
access team, as well as KaryForward®, an extensive patient and healthcare provider support program. Our commercial efforts are also
supplemented by patient support initiatives coordinated by our dedicated network of participating specialty pharmacy providers. We
plan to continue to educate physicians, other healthcare providers and patients about XPOVIO’s clinical profile and unique
mechanism of action as we continue to expand XPOVIO use.
The commercialization of XPOVIO and NEXPOVIO® (selinexor) (the brand name for selinexor in Europe and the United
Kingdom (“UK”)) outside of the U.S. is managed by our partners in their respective territories, as described under “Collaborations”
below. XPOVIO/NEXPOVIO has received regulatory approval in various indications in over 45 countries outside the U.S. and is
commercially available in a growing number of countries as our partners continue to secure reimbursement approvals.
Our primary focus is on marketing XPOVIO in its currently approved indications as well as developing and seeking the
regulatory approval of selinexor as an oral agent targeting multiple high unmet need cancer indications, including our lead clinical
programs in myelofibrosis and our other late-stage clinical programs in endometrial cancer and multiple myeloma. We plan to
continue to conduct clinical trials and to seek additional approvals for the use of selinexor as a single agent or in combination with
other oncology therapies to expand the patient populations that are eligible for treatment with selinexor. As announced in January
2024, further clinical development of our eltanexor program continues to remain on hold in an effort to focus our resources on our
prioritized late-stage programs.
In May 2024, we entered into a series of transactions (the “Refinancing Transactions”) to limit our aggregate indebtedness,
extend the maturity of certain of our indebtedness and provide us with additional working capital. Pursuant to these transactions, we
borrowed $100.0 million from existing lenders and certain entities managed by HealthCare Royalty Management, LLC (“HCRx”)
under a new, senior secured term loan facility and used a portion of the proceeds of that loan to repay obligations under our existing
financing arrangement with HCRx pursuant to an amendment that made other changes to our existing financing arrangement with
HCRx. We also exchanged, pursuant to privately negotiated agreements, an aggregate principal amount of $148.0 million of our
existing 3.00% unsecured convertible senior notes for (i) $111.0 million aggregate principal amount of new 6.00% secured convertible
senior notes and (ii) warrants to purchase up to 45.8 million shares of our common stock. In addition, HCRx purchased $5.0 million
aggregate principal amount of new 6.00% secured convertible senior notes through satisfaction of $5.0 million of our existing
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obligations to HCRx. Please refer to Note 10, “Long-Term Obligations”, to the consolidated financial statements included under Part
II, Item 8 of this Annual Report on Form 10-K for additional details of the Refinancing Transactions.
As of December 31, 2024, we had an accumulated deficit of $1.6 billion. We had net losses of $76.4 million and $143.1 million
for the years ended December 31, 2024 and 2023, respectively. We recognized total revenue of $145.2 million in 2024, including
$112.8 million of XPOVIO net product revenue and $32.4 million of license revenue. As of December 31, 2024, we had $108.7
million in cash, cash equivalents and investments. Based on our current business plan and current capital resources, combined with the
uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain
cash, cash equivalents and investments of at least $25.0 million at all times, we have concluded that there is substantial doubt
regarding our ability to continue as a going concern within one year after the date the accompanying consolidated financial statements
are issued. See “Liquidity, Capital Resources, and Going Concern” in Part II, “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations”, below for a further discussion of our liquidity and the conditions that raise substantial
doubt regarding our ability to continue as a going concern.
Our Strategy
At Karyopharm we are passionate about our mission to positively impact patient lives and defeat cancer. With our first-in-class
SINE technology, our foundation is in our science. Our vision is to be a leading innovator that develops and commercializes
transformative medicines for patients and society. There are four key pillars that we believe will drive our underlying value and
provide significant market opportunities for us.
•
Maximize the Commercial Value of XPOVIO in Multiple Myeloma. We are building upon our existing U.S. multiple
myeloma foundation as we continue to expand the breadth and depth of XPOVIO’s use across lines of therapy in the
relapsed/refractory setting, focusing on growing sales in our approved U.S. indications by establishing XPOVIO as a
novel effective modality. With our partners, we plan to maximize the global opportunity to bring XPOVIO to patients
worldwide.
•
Focus on our Prioritized Clinical Pipeline. Our science enables us to potentially make a big difference in the lives of
patients. We are focused on advancing our lead clinical programs in myelofibrosis and our other late-stage clinical
programs in endometrial cancer and multiple myeloma. Our clinical pipeline has been consciously and strategically
focused to target cancers with high unmet need based on the potential to provide meaningful clinical benefit to patients
and compelling supportive data. We will also continue to expand our understanding of the role nuclear transport plays in
the underlying biology of cancer through focused signal seeking activities, which primarily include preclinical activities,
to identify future opportunities in other oncology indications for our SINE technology that may provide support for future
clinical investigation.
•
Provide Strong Leadership. We believe we have the right people in place and a strong leadership team with the ability to
help position us to achieve scientific, clinical and commercial goals and to execute on our key corporate objectives. We
strive to be a top-talent destination for those who desire to make a difference in patients’ lives.
•
Maintain a Well-capitalized Business to Execute our Core Objectives. We are focused on maintaining a well-capitalized
business that will enable the advancement of our clinical development opportunities.
Our Programs to Treat Cancer
Overview
Cancer cells develop when there is dysregulation of genes and proteins that regulate critical cellular behaviors, such as cell
growth and survival. This dysregulation of cellular function is most often due to damage to DNA. Proteins called tumor suppressor
proteins can monitor genes encoded in DNA/gene mutations for damage, and if damage is detected, the tumor suppressor proteins will
direct the cell to attempt to repair it, or if the DNA damage is too severe, the tumor suppressor proteins will direct the cell to die in a
process called apoptosis. In this way tumor suppressor proteins can prevent healthy cells that acquire DNA damage from turning into
cancer cells, and thus cancer cells need to functionally inactivate tumor suppressor proteins in order to survive.
Cells contain different compartments that organize their components. The nucleus contains DNA, and is separated from the area
outside of the nucleus, called the cytoplasm, by the nuclear membrane. Since many tumor suppressor proteins physically need to
interact with DNA, they can only function properly when they are located inside of a cell’s nucleus. Proteins, however, are not made
inside the nucleus but rather in the cytoplasm. Larger nuclear proteins, including many tumor suppressor proteins, must be transported
from the cytoplasm into the nucleus to perform their functions in keeping a cell healthy. Similarly, these proteins can also be exported
back into the cytoplasm. Proteins move from the nucleus to 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 (also called “macromolecules”),
8
including many proteins and ribonucleic acids, 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.
One way that cancers functionally inactivate tumor suppressor proteins is via overproduction of a specific transport protein
called XPO1. XPO1 is one of eight exportins that have been identified in human cells, and it exports hundreds of proteins referred to
as its “cargo proteins.” In particular, XPO1 appears to be the sole exporter for many critical tumor suppressor proteins that function in
the cell nucleus, 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, which itself binds to the
messenger ribonucleic acids (“mRNAs”) that encode many growth-regulating proteins (also called “oncoproteins”), including c-myc,
bcl-2, bcl-6 and cyclin D. XPO1 carries these oncoprotein encoding mRNAs from the nucleus into the cytoplasm where they are
translated into proteins that promote cancer cell growth, invasion and survival. XPO1 also exports the anti-inflammatory (and anti-
tumor) protein IκB, which inhibits a protein called NF-κB. NF-κB 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.
Mechanism of Action of Our SINE Compounds - Inhibition of XPO1
Selinexor and eltanexor are novel therapies that are oral SINE compounds specifically designed to force nuclear accumulation
of multiple tumor suppressor proteins that function in the nucleus. Selinexor and eltanexor also force nuclear accumulation of growth
promoting mRNAs by similarly preventing their export, which prevents the translation of these mRNAs into proteins and thereby
lowers expression of the oncogenic proteins that these mRNAs encode. Additionally, blocking XPO1 leads to increased glucocorticoid
receptor transcriptional activity in the nucleus, thus amplifying corticosteroid effects in sensitive tumor cells. The forced nuclear
retention of these proteins can counteract a multitude of the cancer-promoting pathways that allow cancer cells with gene
dysregulation to continue to grow, divide and invade tissues in an unrestrained fashion. Because normal cells have little or no DNA
damage to cause gene dysregulation, accumulation of tumor suppressor proteins in their nucleus generally does not lead to apoptosis.
The figure below depicts the process by which our SINE compounds inhibit the XPO1-mediated nuclear export of tumor suppressor
proteins, oncoprotein mRNAs and the glucocorticoid receptor.
9
We believe that the unique mechanism of action, oral administration and low levels of major organ toxicities observed to date in
patients treated with our SINE compounds, along with encouraging efficacy data, support the potential for their broad use across many
cancer types, including both hematological and solid tumor malignancies. 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 access a cell’s DNA, our SINE compounds may provide therapeutic benefits across a broad range of cancer
types and can potentially benefit a wider range of patients. Additionally, and as supported by their unique mechanism of action, and
preclinical, clinical and post-approval data, we believe that our SINE compounds have shown additive or synergistic benefit with
approved and experimental therapies in treating cancer patients and, therefore, have the potential to serve as a backbone therapy across
multiple hematological and solid tumor malignancies as part of a variety of combination therapies.
Our Pipeline and Key Clinical Trials
Oral selinexor is being evaluated in multiple clinical trials in patients with hematological and solid tumor malignancies, the
majority of which are in mid to late-stage. In general, relapsed disease is cancer that returns after a period of remission and refractory
disease refers to cancer that does not respond to standard treatments.
Our key selinexor clinical trials and certain early-stage pipeline programs, which are currently paused to prioritize our late-stage
programs, are summarized in the chart below. In addition to these studies, there are multiple ongoing investigator-sponsored clinical
trials being conducted in a variety of hematological and solid tumor malignancies as well as clinical trials pursuant to post-marketing
requirements.
OUR SELINEXOR PROGRAM
We are currently evaluating selinexor in certain hematological and solid tumor malignancies, including myelofibrosis,
endometrial cancer, multiple myeloma, and DLBCL.
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Myelofibrosis
Overview
Myelofibrosis is a rare blood cancer which results in excessive scar tissue (fibrosis) in the bone marrow and impairs its ability to
produce normal blood cells, leading to severe anemia, low platelet counts, and abnormal white blood cell production. In addition,
blood cell production commonly moves to the spleen (causing spleen enlargement) or to other areas of the body. It is estimated that
there are approximately 5,000 new cases of myelofibrosis each year in the U.S. and approximately 20,000 patients in the U.S. living
with myelofibrosis. Although myelofibrosis can occur at any age, it is more common in older patients, with a median age at diagnosis
of approximately 65 years. During the course of the disease, myelofibrosis patients can experience abdominal discomfort from
increasing spleen and liver size, itching, night sweats, abnormal bleeding, fever, bone or joint pain and involuntary weight loss. The
underlying causes of primary myelofibrosis are not clear; however, myelofibrosis is associated with specific well-described DNA
changes (mutations) in certain genes.
There is currently no drug therapy that can cure myelofibrosis. Allogeneic hematopoietic stem cell transplantation (“HSCT”) is
currently the only treatment for myelofibrosis that can provide a clinical cure; patients who are not good candidates for HSCT are
treated with a JAK2 inhibitor (“JAKi”), such as ruxolitinib, fedratinib, pacritinib or momelotinib to reduce spleen volume and improve
symptoms. Not all patients respond adequately to a JAKi. Some patients cannot tolerate treatment or develop rapid progression on this
treatment, and nearly all patients will eventually have disease progression even after a response to a JAKi. We believe there is a high
unmet need for alternative treatments for myelofibrosis, such as selinexor, with a different mechanism of action, as a monotherapy and
in combination with JAKi to overcome resistance to JAKi and to provide improvement in primary disease management.
In May 2022, the FDA granted selinexor Orphan Drug Designation for the treatment of myelofibrosis, and in October 2022, the
European Commission granted Orphan Medicinal Product Designation for selinexor for the treatment of myelofibrosis. In addition,
in July 2023, we received Fast Track Designation from the FDA for selinexor for the treatment of patients with myelofibrosis,
including primary myelofibrosis, post-essential thrombocythemia myelofibrosis, and post-polycythemia vera myelofibrosis.
The SENTRY Trial
In mid-2023, we initiated the pivotal Phase 3 part of our Phase 1/3 clinical trial to evaluate the efficacy and safety of once-
weekly selinexor in combination with once or twice-daily ruxolitinib versus placebo plus ruxolitinib in JAKi-naive myelofibrosis
patients (the “SENTRY Trial”; NCT04562389). The Phase 3 part of the SENTRY Trial (the “Phase 3 SENTRY Trial”) is a
randomized, double-blind, placebo-controlled trial, which is currently expected to enroll 350 JAKi-naive patients with intermediate or
high-risk myelofibrosis. Patients are randomized 2:1 to 60 mg of selinexor plus ruxolitinib or placebo plus ruxolitinib. The ruxolitinib
dose is determined by the investigators based on the patients’ baseline platelet count per the drug’s prescribing information. Following
alignment with the FDA in late 2024, one of the co-primary endpoints in the Phase 3 SENTRY Trial was changed from total symptom
score reduction of ≥50% (“TSS50”) at week 24 to the absolute mean change in total symptom score (“Abs-TSS”) over 24 weeks
relative to baseline. The other co-primary endpoint of spleen volume response (“SVR”) rate ≥ 35% (“SVR35”) at week 24 was
unchanged. These two co-primary endpoints will be tested sequentially beginning with SVR35 and followed by Abs-TSS. Abs-TSS
measures the average improvement in patient symptom scores over 24 weeks relative to the patient’s baseline symptom score and is
viewed by certain key opinion leaders and patient advocacy organizations as a more accurate assessment of symptom improvement in
head-to-head combination clinical trials, such as the Phase 3 SENTRY Trial, relative to TSS50. In addition, in connection with the
change in co-primary endpoint, we increased the total sample size from 306 patients to 350 patients in order to analyze the new co-
primary endpoint, Abs-TSS, in a sufficient number of patients. We expect to complete enrollment of the SENTRY Trial in the first
half of 2025 and report top-line data in the second half of 2025.
Our evaluation of selinexor to treat patients with myelofibrosis is supported by the Phase 1 part of the SENTRY Trial, an open-
label, multi-center trial of selinexor to evaluate the safety, effectiveness and recommended dose for selinexor in combination with
ruxolitinib in JAKi-naïve patients with myelofibrosis (the “Phase 1 SENTRY Trial”). Enrollment in the Phase 1 SENTRY Trial was
completed in August 2022. In the dose escalation portion of the Phase 1 SENTRY Trial, we evaluated selinexor at both the 40 mg and
60 mg doses in combination with ruxolitinib in JAKi-naïve patients with myelofibrosis.
Data from the Phase 1 SENTRY Trial were presented in December 2023 at the 65th American Society of Hematology 2023
Annual Meeting and Exposition. The data presented were based on results as of August 1, 2023 from 24 patients who had been
assigned to either a 40 mg or 60 mg once weekly dose of selinexor, in combination with ruxolitinib 15/20 mg twice daily. At week 24,
92% of efficacy evaluable patients (11 out of 12) demonstrated SVR35 and 78% of the evaluable patients for symptom response (7 out
of 9) achieved TSS50. At week 24, 79% of intent to treat (“ITT”) patients (11 out of 14) achieved SVR35 and 58% of the ITT patients
(7 out of 12) achieved TSS50. Patients receiving a 60 mg dose of selinexor in the Phase 1 SENTRY Trial (14 out of 24) and who
achieved SVR35 and TSS50 at week 24 continued to remain in radiographic response as of the August 1, 2023 data cut-off date,
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representing a median duration of 32 weeks and 51 weeks for SVR35 and TSS50 durability, respectively. The safety data as of the
August 1, 2023 data-cutoff was consistent with prior data from the Phase 1 SENTRY Trial. The most common treatment-emergent
adverse events (“TEAEs”) for patients who received the 60 mg dose of selinexor were nausea (79%), anemia (64%),
thrombocytopenia (64%) and fatigue (57%), the majority of which were grades 1-2. The most common reported grade 3-4 TEAEs for
patients who received the 60 mg dose of selinexor were anemia (43%) and thrombocytopenia (29%). There were two treatment-related
discontinuations, one due to thrombocytopenia and one due to peripheral neuropathy.
The SENTRY-2 Trial
In mid-2024, we initiated a Phase 2 clinical trial to evaluate the safety and efficacy of selinexor as a monotherapy in patients
with JAKi-naïve myelofibrosis with moderate thrombocytopenia (the “SENTRY-2 Trial”; NCT05980806). The SENTRY-2 Trial is
currently enrolling approximately 29 patients who will receive 60 mg of selinexor as a monotherapy (the “60 mg cohort”) and will be
followed by an additional 29 patients who will receive 40 mg of selinexor as a monotherapy (the “40 mg cohort”). The primary
endpoint in the SENTRY-2 Trial is SVR35 at week 24 with a secondary endpoint of TSS50 at week 24. For patients whose SVR does
not meet key benchmarks at weeks 12 and 24 compared to baseline, an option to add treatment with a JAKi including ruxolitinib,
momelotinib and pacritinib, in addition to selinexor, may be initiated.
The ESSENTIAL Trial
Our evaluation of selinexor to treat myelofibrosis is also supported by data from the ongoing Phase 2 ESSENTIAL trial, an
investigator-sponsored open-label, prospective trial evaluating single-agent selinexor at a dose of 80 mg, 60 mg or 40 mg once weekly
in adult patients with primary or secondary myelofibrosis with resistance or intolerance to JAKi therapy (the “ESSENTIAL Trial”;
NCT03627403). The primary endpoint of the ESSENTIAL Trial is to assess the efficacy of selinexor on SVR. As of August 2024, the
data cut-off date, selinexor was administered to 17 patients. Median duration of prior JAKi therapy was 22 months (range 0.5 to 96
months) and 92% (11 of 12) of patients had myelofibrosis refractory to ruxolitinib. The median duration of treatment was 11 months
(range 2.8 to 28.8 months). Of the 11 patients who were on treatment for at least 24 weeks, three (27%) patients achieved SVR35 and
five (45%) patients achieved SVR of ≥25%. Selinexor treatment led to a reduction in plasma levels of proinflammatory cytokines,
especially cytokines regulated by NF-κB activity, consistent with selinexor’s proposed mechanism of action. One patient who was
initially transfusion dependent became transfusion independent while on study and maintained independence for more than one year.
Reduction in marrow reticulin fibrosis from myelofibrosis grade 3 to myelofibrosis grade 1 was observed in a patient who had an
assessment at week 72 demonstrating disease modification potential with longer treatment. Median overall survival (“OS”) was 35
months (range 2.8 to 54.8 months). This compares favorably with a historical survival of 13 to 14 months in this population. The most
common grade ≥3 TEAEs were anemia (24%) and fatigue (24%). These were manageable with treatment interruption and dose
reduction, except in one patient who discontinued treatment.
Endometrial Cancer
Overview
Endometrial cancer occurs when cells in the endometrium, which is the inner lining of uterus, begin to grow out of control and
invade surrounding tissues. In the U.S., endometrial cancer is the most common gynecological cancer with both incidence and
mortality rates continuing to rise. The American Cancer Society (the “ACS”) estimates that there will be approximately 62,000 new
cases of endometrial cancer diagnosed in 2025 in the U.S. Approximately 16,000 women are expected to be diagnosed with advanced
or recurrent endometrial cancer each year in the U.S. with approximately 50% of those patients having TP53 wild-type endometrial
cancer. Endometrial cancer affects mainly post-menopausal women and the average age of women diagnosed with endometrial cancer
is 60 years. Endometrial cancer is often detected at an early stage because it frequently produces abnormal vaginal bleeding. Standard
of care treatments for patients with endometrial cancer are based on the stage of the disease at diagnosis and the grade of the tumor,
and include surgery, radiation therapy, chemotherapy, hormone therapy and targeted therapy. Surgery is the first treatment for almost
all women with endometrial cancer, followed by chemotherapy and/or adjuvant radiation therapy for cases of advanced or high grade
endometrial cancer. For many patients who respond to adjuvant therapies, the National Comprehensive Cancer Network Clinical
Practice Guidelines (the “NCCN Guidelines”) recommend a “watch and wait” approach until the disease relapses. Maintenance
therapies are designed to prolong the response period and prevent relapse. There are currently no specific targeted FDA approved
therapies post-chemotherapy specifically indicated for patients with TP53 wild-type endometrial cancer. Recently, there has been an
increased focus on using molecular classification of endometrial cancers to select the most appropriate therapies for patients. TP53
wild-type status could represent a potentially unique but fundamental biomarker in endometrial cancer. TP53 wild-type endometrial
cancer co-occurs with both proficient mismatch repair (“pMMR”) and deficient mismatch repair (“dMMR”) subsets. In 2023 and
2024, dostarlimab-gxly, a new treatment option in combination with chemotherapy, and durvalumab, respectively, were approved by
the FDA for patients with dMMR advanced or recurrent endometrial cancer, which represents approximately 20% of the total
advanced or recurrent endometrial cancer patient population, and advanced the treatment options for this subgroup. In 2024, both
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pembrolizumab and dostarlimab-gxly were approved by the FDA for all patients with advanced or recurrent endometrial cancer
irrespective of the MMR status. However, the benefit of such therapies in the pMMR population is not as great compared to the
dMMR population, and thus we believe selinexor maintenance therapy can further improve outcomes for patients with pMMR and
TP53 wild-type endometrial cancer, which represent between approximately 40% to 55% of advanced and recurrent endometrial
cancer patients.
Clinical correlative and non-clinical mechanism of action studies have shown that inhibition of XPO1 by selinexor leads to the
nuclear accumulation and activation of p53, a well-established tumor suppressor protein encoded by the TP53 gene, resulting in tumor
cell senescence and stimulation of the apoptotic pathway leading to cell death.
The EC-042 Trial
In the fourth quarter of 2022, following alignment with the FDA, we initiated a global, Phase 3, randomized, double-blind trial
evaluating selinexor as a maintenance-only therapy following systemic therapy in patients with TP53 wild-type advanced or recurrent
endometrial cancer (the “EC-042 Trial”; NCT05611931). Based upon the mechanism of selinexor and the preliminary subgroup data
from the SIENDO Trial, discussed below, we believe benefit with selinexor can be observed in all TP53 wild-type endometrial
tumors. The EC-042 Trial was designed to enroll approximately 220 patients whose tumors are TP53 wild-type and who will be
randomized in a 1:1 manner to receive either a 60 mg, once-weekly, administration of oral selinexor or placebo until disease
progression, unacceptable toxicity, or withdrawal of consent. The primary endpoint of the EC-042 Trial is progression-free survival
(“PFS”) as assessed by an investigator and OS as the key secondary endpoint. Further, in connection with the EC-042 Trial, we
entered into a global collaboration with Foundation Medicine, Inc. to develop FoundationOne®CDx, a tissue-based next generation
sequencing test to identify and enroll patients whose tumors are TP53 wild-type.
In December 2024, we announced that we were engaged in discussions with the FDA regarding the evolving treatment
landscape in advanced or recurrent endometrial cancer, particularly the approval of checkpoint inhibitors (e.g., pembrolizumab,
dostarlimab-gxly and durvalumab). The FDA indicated that the EC-042 Trial, which includes a placebo control arm, was not
adequately designed to support a marketing application for the proposed indication because it did not account for the current U.S.
standard of care, which now includes checkpoint inhibitors in combination with chemotherapy followed by checkpoint inhibitor
continuation as maintenance for all patients with advanced or recurrent endometrial cancer, including those with either dMMR tumors
(cells that have mutations in certain genes that are involved in correcting mistakes made when DNA is copied in a cell) or pMMR
tumors (cells that lack such mutations). Notably, the FDA acknowledged that the magnitude of benefit achieved from checkpoint
inhibitors is less for patients with pMMR tumors compared to patients with dMMR tumors. The FDA recommended that we modify
the EC-042 Trial to only enroll patients with TP53 wild-type and pMMR tumors, and redesign the trial to account for the current U.S.
treatment landscape. We intend to submit an amendment to the EC-042 Trial protocol to the FDA and other relevant global regulatory
authorities incorporating modifications, which we believe are responsive to certain of the FDA’s concerns while limiting the length of
potential delays and further increased costs that would have been incurred if changes beyond what is described below would have
been made.
Specifically, we are modifying the design of the EC-042 Trial to include the following two patient populations for which the
primary endpoint of PFS, tested sequentially, and key secondary endpoint of OS will be evaluated: (i) a modified intent to treat
population (“mITT”) that will include patients whose tumors are TP53 wild-type and pMMR and also patients whose tumors are TP53
wild-type and dMMR, but are medically ineligible to receive a checkpoint inhibitor; and (ii) the trial’s original intent to treat
population (“ITT”), which will include all patients whose tumors are TP53 wild-type, regardless of MMR status. The mITT
population has been defined to take into account certain of the FDA’s feedback regarding the evolving treatment options, including
checkpoint inhibitors, which show greater efficacy in patients with dMMR tumors compared to pMMR tumors. We are also increasing
the trial sample size from 220 patients to approximately 276 patients, to ensure that the mITT population includes approximately 220
patients in order to maintain sufficient power for the primary endpoint of PFS if the FDA chooses to only evaluate PFS in the mITT
population. We are continuing to enroll patients in the EC-042 Trial and, depending on the strength of the data, we intend to pursue
regulatory approval. However, the FDA may not agree that some, or all, of our proposed modifications to the EC-042 Trial adequately
address their concerns. As a result of these proposed modifications, top-line data is expected in mid-2026.
The SIENDO Trial
Our evaluation of selinexor to treat patients with TP53 wild-type advanced or recurrent endometrial cancer is supported by data
from an exploratory subgroup analysis from our SIENDO trial, a multi-center, randomized, double-blinded Phase 3 trial evaluating the
efficacy and safety of oral selinexor versus placebo as a front-line maintenance therapy in patients with advanced or recurrent
endometrial cancer following at least one prior platinum-based combination chemotherapy treatment (the “SIENDO Trial”;
NCT03555422). Participants in the SIENDO Trial with advanced or recurrent disease who had a partial response (“PR”) or complete
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response (“CR”) after at least 12 weeks of standard of care taxane-platinum combination chemotherapy were randomized in a 2:1
manner to receive either maintenance therapy of 80 mg of selinexor or placebo taken once per week, until disease progression. The
primary endpoint in the SIENDO Trial was PFS from time of randomization until death or disease progression as assessed by an
investigator.
In the first quarter of 2022, we presented top-line data from the SIENDO Trial, including exploratory subgroup analyses.
Selinexor-treated patients had a median PFS of 5.7 months compared to 3.8 months for patients on placebo, representing an
improvement of 50%, (eCRF hazard ratio (“HR”) 0.70 (Confidence Interval (“CI”): 0.4993-0.9957), p=0.0486; IRT HR 0.76 (CI:
0.5428-1.0759), p=0.1266) in the full trial population, while patients with TP53 wild-type advanced or recurrent endometrial cancer
treated with selinexor had a median PFS of 13.7 months compared to 3.7 months for patients on placebo. No new safety signals were
observed, and there was a discontinuation rate of 10.5% due to adverse events (“AEs”). The most common TEAEs in the SIENDO
Trial of any grade were nausea (84%), vomiting (52%), constipation (37%) and thrombocytopenia (37%). The most common grade 3
TEAEs were nausea (10%), neutropenia (9%), thrombocytopenia (7%) and asthenia (6%).
In June 2024, we presented updated long-term safety and efficacy data from the pre-specified exploratory subgroup analysis
from our SIENDO Trial in patients with advanced or recurrent TP53 wild-type endometrial cancer at the American Society of Clinical
Oncology Annual Meeting. In the exploratory subgroup analysis, 113 patients with TP53 wild-type advanced or recurrent endometrial
cancer were randomized to receive selinexor (n=77) or placebo (n=36) as maintenance therapy after first-line platinum-based
chemotherapy. As of the April 1, 2024 data cut-off date, and a median duration of follow-up of 36.8 months, selinexor-treated patients
had a median PFS of 28.4 months compared to 5.2 months for patients receiving placebo (HR 0.44; 95% CI 0.27–0.73). In the
selinexor-treated patients with TP53 wild-type and pMMR and TP53 wild-type and dMMR endometrial cancer, median PFS was 39.5
months and 13.1 months, respectively, compared to 4.9 months and 3.7 months, respectively. The updated analyses also highlighted
findings from a quality-adjusted time without symptoms or toxicity analysis (“Q-TWiST”) used to assess quality and toxicity-adjusted
PFS. The findings showed the restricted mean Q-TWiST for selinexor to be 26 months compared to 15 months for placebo, resulting
in a difference of nearly 11 months. No new safety signals were identified as of the April 1, 2024 data cut-off date. The most common
TEAEs in selinexor treated TP53 wild-type patients were nausea (90%), vomiting (60%), and diarrhea (45%), the majority of which
were grades 1-2. The most common reported grade 3-4 TEAEs included neutropenia (20%), nausea (13%), and thrombocytopenia
(10%). TEAEs leading to discontinuations in the selinexor group were reported in 17% of patients.
Multiple Myeloma
Overview
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 destruction, kidney
disease and immunodeficiency. Multiple myeloma is the second most common blood cancer in the world and there is currently no
cure. The ACS estimates that nearly 36,000 new cases of multiple myeloma will be diagnosed in the U.S. in 2025. Myeloma occurs
most commonly in people over age 65 and the risk of developing multiple myeloma increases with age.
The treatment of multiple myeloma has improved over the last 20 years due to the use of high-dose chemotherapy and
autologous stem cell transplantation, which is often restricted to healthier, often younger patients. Treatment decisions are based on
physician and patient choice rather than clear treatment guidelines, with the current standard of care being to switch drug classes once
a regimen stops working. In addition to our XPO1 inhibitor, a number of non-chemotherapy drugs such as PIs, IMiDs, mAbs,
bispecific antibodies, and chimeric antigen receptor T-cell (“CAR-T”) therapy, have also emerged as treatment options within the last
two decades. The introduction of these non-chemotherapeutic novel agents has led to a significant increase in the survival of patients
with multiple myeloma. However, despite the wide variety of newly approved or experimental therapies that are being used to treat
patients with relapsed or refractory multiple myeloma either alone or in combination, nearly all patients will eventually succumb to
their disease. With approximately 12,500 deaths from multiple myeloma in the U.S. alone estimated for 2025 according to the ACS,
we believe that there remains a need for therapies for patients whose disease has relapsed after, or is refractory to, available therapy or
for whom current therapy is not suitable.
XPOVIO is currently approved to treat multiple myeloma in adult patients who have received at least one prior therapy based on
data from the BOSTON Trial and in adult patients with penta-refractory multiple myeloma based on data from the STORM Trial.
The BOSTON Trial
The December 2020 FDA approval of XPOVIO in combination with bortezomib and dexamethasone for the treatment of adult
patients with multiple myeloma who have received at least one prior therapy was based on the results of the BOSTON Trial, a multi-
center, Phase 3, randomized trial conducted at over 150 clinical sites internationally. The BOSTON Trial evaluated 402 adult patients
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with relapsed or refractory multiple myeloma who had received one to three prior lines of therapy. The trial was designed to compare
the efficacy and safety of once-weekly oral selinexor in combination with once-weekly administration of Velcade® (bortezomib) plus
low-dose dexamethasone (the “XVd Arm”) versus twice-weekly administration of Velcade® plus dexamethasone (the “Vd Arm”). The
primary endpoint of the BOSTON Trial was PFS and key secondary endpoints included overall response rate (“ORR”) and the rate of
peripheral neuropathy, among others. Additionally, the BOSTON Trial allowed for patients on the Vd Arm to crossover to the XVd
Arm following objective (quantitative) progression of disease verified by an Independent Review Committee.
Despite the trial having a high proportion of patients with high-risk cytogenetics (approximately 50%), the median PFS in the
XVd Arm was 13.9 months compared to 9.5 months in the Vd Arm, representing a 4.4 month (47%) increase in median PFS (HR of
0.70; p=0.0075). The XVd Arm also demonstrated a significantly greater ORR compared to the Vd Arm (76.4% vs. 62.3%,
p=0.0012).
Further, XVd therapy demonstrated a significantly higher rate of deep responses, defined as ≥ very good partial response
compared to Vd therapy (44.6% vs. 32.4%) as well as a longer median duration of response (“DOR”) (20.3 months vs. 12.9 months).
Additionally, 17% of patients on the XVd arm achieved a CR or a stringent CR as compared to 10% of patients receiving Vd therapy.
All responses were confirmed by an Independent Review Committee. Rates of peripheral neuropathy were significantly lower for
patients receiving XVd therapy compared to those receiving Vd therapy (32% vs. 47%). In addition, peripheral neuropathy rates ≥
grade 2 were also significantly lower in the XVd Arm compared to the Vd Arm (21% vs. 34%).
The most common adverse reactions (≥20%) in patients who received XVd were fatigue (59%), nausea (50%), decreased
appetite (35%), diarrhea (32%), peripheral neuropathy (32%), upper respiratory tract infection (29%), decreased weight (26%),
cataract (22%) and vomiting (21%). Grade 3-4 laboratory abnormalities (≥10%) were thrombocytopenia, lymphopenia,
hypophosphatemia, anemia, hyponatremia and neutropenia. In the BOSTON Trial, fatal adverse reactions occurred in 6% of patients
within 30 days of last treatment. Serious adverse reactions occurred in 52% of patients who received XVd. Treatment discontinuation
rate due to adverse reactions was 19%.
In June 2023, we presented data from an unplanned subgroup analysis of BOSTON patients without prior PI exposure (XVd: n
= 47; Vd: n= 48) at the 2023 European Hematology Association Hybrid Congress, which analysis demonstrated an approximate
tripling of median PFS for XVd compared to Vd at 29.5 vs 9.7 months; HR for PFS favored XVd at 0.29 (95% CI 0.14 - 0.63, nominal
p=<0.001). This data was published in the European Journal of Hematology in August 2024.
The STORM Trial
The July 2019 FDA approval of XPOVIO 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 mAb was based on the results of the STORM Trial. This indication was approved under
accelerated approval. As the BOSTON Trial served as the confirmatory trial for the accelerated approval of XPOVIO based on the
STORM Trial, the BOSTON supplemental New Drug Application approval in December 2020 fulfilled the requirement of an
accelerated approval.
The STORM Trial was a global, multi-center, single-arm Phase 2b clinical trial evaluating oral selinexor in combination with
standard, low-dose dexamethasone (“Xd”) in patients with heavily pretreated relapsed or refractory multiple myeloma. 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 trial had prior treatment with the two PIs, Velcade® and Kyprolis®
(carfilzomib), the two IMiDs, Revlimid® (lenalidomide) and Pomalyst®(pomalidomide), and the anti-CD38 mAb Darzalex®
(daratumumab), 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.”
The FDA’s accelerated approval of XPOVIO was based upon the efficacy and safety in a pre-specified subgroup analysis of the
83 patients in the STORM Trial 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. In addition to multiple-refractory disease, patients in the
STORM Trial had rapidly progressing myeloma, with a median 22% increase in disease burden in the 12 days from screening to initial
therapy. The ORR in this patient population was 25.3%.
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For the STORM Trial’s primary endpoint, selinexor achieved an ORR of 26%, including two (2%) stringent CRs, six (5%) very
good partial responses, and 24 (20%) 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 criteria was observed in 16 (13%) patients and
48 (39%) patients 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 four independent
experts in the treatment of multiple myeloma.
Median DOR was 4.4 months. PFS was 3.7 months and 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 most common adverse reactions (≥20%) in patients who received Xd were thrombocytopenia (74%), fatigue (73%), nausea
(72%), anemia (59%), decreased appetite (53%), decreased weight (47%), diarrhea (44%), vomiting (41%), hyponatremia (39%),
neutropenia (34%), leukopenia (28%), constipation (25%), dyspnea (24%) and upper respiratory tract infection (21%). In the STORM
Trial, fatal adverse reactions occurred in 9% of patients. Serious adverse reactions occurred in 58% of patients. Treatment
discontinuation rate due to adverse reactions was 27%.
The XPORT-MM-031/EMN29 Trial
The EMN29 trial is an ongoing randomized global Phase 3 trial sponsored by the European Myeloma Network evaluating
selinexor in combination with pomalidomide and dexamethasone (“SPd”) versus elotuzumab, pomalidomide, and dexamethasone
(“EloPd”) in patients with relapsed or refractory multiple myeloma (the “EMN29 Trial”; NCT05028348). The EMN29 Trial is
designed to evaluate a 40 mg once weekly dose of selinexor compared to standard dosing of elotuzumab in combination with
pomalidomide and dexamethasone in relapsed or refractory multiple myeloma as the immediate next line of therapy after treatment
with anti-CD38 antibodies. Patients enrolled in the EMN29 Trial received one to four prior lines of therapy, including a PI and
lenalidomide, and had an anti-CD38 mAb in their most recent prior line of therapy. The primary endpoint of the EMN29 Trial is PFS,
with ORR, OS and DOR, among others, as secondary endpoints.
The determination to initiate the EMN29 Trial was based on data from an all-oral arm of the Phase 1b/2 STOMP Trial (the
“STOMP Trial”; NCT02343042) and the Phase 2 Trial XPORT-MM-028 (the “MM-028 Trial”; NCT04414475) in which selinexor
was evaluated in combination with pomalidomide and low-dose dexamethasone in patients with relapsed or refractory multiple
myeloma who received at least two prior lines of therapy, including a PI and an IMiD.
During the second half of 2024, we amended certain aspects of the design for the EMN29 Trial, including a reduction in the
number of patients that are targeted for enrollment from 222 patients to approximately 120 patients and revisions to the trial’s
statistical plan and powering assumptions. These changes were made as a result of slower than expected patient enrollment due to the
intense competitive environment and based on updated clinical data on the SPd regimen from the STOMP and MM-028 Trials, which
showed a median PFS of 18.4 months for SPd 40 mg, as published in the Frontiers of Oncology Journal in May 2024. We believe that,
depending on the strength of the data, the EMN29 Trial may still serve as the basis for a registration; however, there is increased risk
to approvability given that the reduction in the number of enrolled patients.
The STOMP Trial: Arm 12 (selinexor in combination with mezigdomide and dexamethasone)
In October 2023, we entered into a clinical trial collaboration and supply agreement with Bristol-Myers Squibb Company
(“BMS”) to evaluate mezigdomide, BMS’ proprietary investigational cereblon E3 ligase modulator (CELMoD™) agent, in
combination with selinexor in patients with relapsed or refractory multiple myeloma progressing after T-cell immunotherapies. This
additional arm of the STOMP Phase 1b/2 trial is evaluating mezigdomide in combination with selinexor doses of either 40 mg or 60
mg once weekly plus dexamethasone in patients who have prior exposure to IMiDs, PIs, and anti-CD38 mAb treatment. All patients
must have received at least two prior lines of therapy, and either have progressed after or are not eligible to receive CAR-T or
bispecific antibody treatment. The primary endpoints of this trial are to assess the ORR and the clinical benefit rate. Key secondary
endpoints include PFS, OS and DOR. In addition, the trial will evaluate dynamic changes in T-cell populations and activity as patients
undergo treatment. Under the terms of the agreement with BMS, we are sponsoring the trial as a new arm of the STOMP Trial and
BMS will supply the trial’s clinical drug mezigdomide. The trial is currently enrolling patients in the Phase 1b portion.
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Diffuse Large B-Cell Lymphoma
Overview
DLBCL is the most common type of Non-Hodgkin’s lymphoma, 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. According to the Lymphoma Research Foundation, over 18,000 people are diagnosed with DLBCL
annually in the U.S. Although DLBCL can occur at any age, the median age at diagnosis is approximately 66 years of age.
Approximately two-thirds of all newly diagnosed patients are cured using front-line chemotherapy (typically “R-CHOP”). Poor
outcomes for patients who failed a R-CHOP regimen prompted efforts to discover new treatment approaches for DLBCL, both up-
front and at the time of relapse. Despite the availability of CAR-T therapy, many patients with relapsed or refractory DLBCL are not
medically stable enough to undergo this type of treatment. In addition, various other targets have been studied in the treatment of
DLBCL but may also not be well tolerated in heavily pretreated patients.
The SADAL Trial
In June 2020, the FDA approved XPOVIO under accelerated approval as a single-agent oral treatment of adult patients with
relapsed or refractory DLBCL, not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of
systemic therapy. This approval was based on the results of the SADAL Trial, an open-label Phase 2b clinical trial evaluating single-
agent oral selinexor (60 mg, twice weekly) in patients that had relapsed or refractory DLBCL after at least two prior multi-agent
therapies and who were ineligible for transplantation, including high dose chemotherapy with stem cell rescue. In this population,
selinexor demonstrated an ORR of 29%, including a CR rate of 13%. Responses were seen in all subgroups evaluated regardless of
age, gender, prior therapy, DLBCL subtype or prior stem cell transplant therapy. Patient responses were durable with a median DOR
of 9.3 months (23.0 months for patients who achieved a CR). Importantly, responses were associated with longer survival,
underscoring the potential of oral XPO1 inhibition as an oral, non-chemotherapeutic option for patients with relapsed or refractory
DLBCL. Part 2 of the SADAL Trial (the “KCP-330-009 Trial”; NCT02227251) is ongoing to evaluate alternate dosing (40 mg, twice
weekly; 60 mg twice weekly for cycles 1 and 2; and 60 mg weekly for subsequent cycles).
The most common adverse reactions (≥20%) in patients who received selinexor were fatigue (63%), nausea (57%), diarrhea
(37%), decreased appetite (37%), decreased weight (30%), constipation (29%), vomiting (28%), and pyrexia (22%). Grade 3-4
laboratory abnormalities (≥15%) were thrombocytopenia, lymphopenia, neutropenia, anemia, and hyponatremia. In the SADAL Trial,
fatal adverse reactions occurred in 3.7% of patients within 30 days of last treatment. Serious adverse reactions occurred in 46% of
patients who received selinexor. Treatment discontinuation rate due to adverse reactions was 17%.
The XPORT-DLBCL-030 Trial
The XPORT-DLBCL-030 trial, which is intended to serve as the confirmatory trial to the accelerated approval of XPOVIO in
DLBCL granted by the FDA in June 2020, is a Phase 2/3 multi-center, randomized trial evaluating the combination of selinexor and
rituximab, gemcitabine and dexamethasone (“R-GDP”) in patients with relapsed or refractory DLBCL (the “XPORT-DLBCL-030
Trial”; NCT04442022). The Phase 2 portion of the trial is evaluating efficacy, safety and tolerability of R-GDP plus either selinexor
40 mg or 60 mg. The Phase 3 portion of the trial is currently designed to evaluate the selected dose (as identified in the Phase 2 trial)
of selinexor or matching placebo given with the standard combination immunochemotherapy R-GDP to patients with at least one prior
therapy and who are not intended for stem cell transplant and CAR-T cell therapy. The primary endpoint of the Phase 3 portion of the
XPORT-DLBCL-030 Trial would be PFS. The XPORT-DLBCL-030 Trial is currently in the Phase 2 portion of the evaluation and is
recruiting.
OUR ELTANEXOR PROGRAM
Myelodysplastic Neoplasms
Overview
Myelodysplastic neoplasms (“MDS”) are a group of hematologic malignancies whereby the bone marrow does not make enough
healthy blood cells (white blood cells, red blood cells, and platelets). Hypomethylating agents (“HMAs”) are the current standard of
care for patients newly diagnosed with high-risk MDS. There is currently no other class of therapy approved for relapsed or refractory
MDS patients; the current standard of care is participation in a clinical trial or best supportive care, such as transfusions and
symptomatic treatment for cytopenias. Our product candidate, eltanexor, is a novel, oral SINE compound that, like selinexor,
selectively blocks the nuclear export protein XPO1. Based on the data described below, we have observed single-agent clinical
activity of eltanexor to treat patients with HMA-refractory MDS.
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In January 2022, the FDA granted Orphan Drug Designation for eltanexor for the treatment of MDS. In addition, in July 2022,
the FDA granted Fast Track designation for eltanexor as monotherapy for the treatment of patients with relapsed or refractory
intermediate, high-, or very high-risk MDS and the European Commission adopted the Committee for Orphan Medicinal Products
opinion to designate eltanexor as an orphan medicinal product for the treatment of MDS in the European Union (“EU”).
The KCP-8602-801 Trial
In September 2021, we initiated a Phase 2 expansion trial of an ongoing open-label Phase 1/2 trial investigating eltanexor as a
single-agent or in combination with approved and investigational agents in patients with several types of hematologic and solid tumor
cancers (the “KCP-8602-801 Trial”; NCT02649790). The KCP-8602-801 Trial is designed to evaluate eltanexor monotherapy in 83
patients with HMA-refractory, intermediate or high-risk MDS. The primary endpoint for this Phase 2 expansion trial is ORR with PFS
and OS, among others, as secondary endpoints. In May 2023, we announced interim data from the Phase 2 portion of the KCP-8602-
801 Trial at the 17th International Congress of Myelodysplastic Syndromes. As of the February 8, 2023 data cut-off date, 30 patients
had been treated with 10 mg of oral eltanexor on Days 1-5 of each week. Eltanexor demonstrated a 27% ORR in the ITT population
and a 31% ORR in the efficacy evaluable population, with ORR consisting of marrow CR and hematologic improvement only. No
PRs or CRs were observed. Median OS was 8.7 months in both populations. Transfusion independence rate for red blood cells and/or
platelets was 29%. Eltanexor was generally well-tolerated and manageable. The most common AEs were asthenia (47%), diarrhea
(43%), and nausea (33%), the majority of which were grades 1-2. The most common grade ≥3 TEAEs were neutropenia (30%),
thrombocytopenia (26.7%), and asthenia (16.7%).
As announced in January 2024, further clinical development of our eltanexor program continues to remain on hold in an effort
to focus our resources on our prioritized late-stage programs.
OTHER PIPELINE PROGRAMS
In addition to selinexor, we also may advance other novel drug candidates, such as KPT-9274. KPT-9274 is our first-in-class
dual inhibitor of p21-activated kinase 4 (“PAK4”) and nicotinamide phosphoribosyltransferase (“NAMPT”). Co-inhibition of PAK4
and NAMPT may lead 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 that have become dependent on both PAK4
and NAMPT pathways may be susceptible to single-agent cytotoxicity 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, oral KPT-9274 has shown evidence of anti-cancer
activity and tolerability. To our knowledge, we are the only company with an allosteric PAK4 modulator and/or NAMPT specific
inhibitor currently in clinical development. We are evaluating development opportunities for KPT-9274.
Collaboration, License and Other Strategic Agreements
We have formed, and intend to continue to form, strategic alliances to develop and commercialize our products and product
candidates. We enter into collaborations when there is a strategic advantage to us and we believe the financial terms of the
collaboration are favorable for meeting our short- and long-term strategic objectives. Currently, we maintain complete development
and commercial rights to our products and product candidates in the U.S. and Japan and have entered into the following key
agreements:
Menarini
In December 2021, we entered into a license agreement with the Menarini Group (“Menarini”), an Italian pharmaceutical
company (the “Original Menarini Agreement”). Pursuant to the Original Menarini Agreement, we granted Menarini a non-exclusive
license to develop, and an exclusive license to commercialize, products containing selinexor (the “Product”) for all human oncology
indications in the European Economic Area, UK, Switzerland, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova,
Russia, Tajikistan, Turkmenistan, Uzbekistan, Ukraine, Turkey, Mexico, all Central America countries and all South America
countries (collectively, the “Menarini Territory”). In March 2023, the Original Menarini Agreement was amended (the “Amended
Menarini Agreement”) to expand the Menarini Territory to include all countries in the continent of Africa and Saudi Arabia, United
Arab Emirates, Kuwait, Oman, Qatar, Bahrain, Lebanon, Jordan, Iraq and Yemen (together with the Menarini Territory, the
“Expanded Menarini Territory”). In addition, we granted to Menarini a non-exclusive license to package and label the Product in or
outside of the Expanded Menarini Territory for all human oncology indications solely to enable Menarini to commercialize the
Product within the Expanded Menarini Territory.
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We received an upfront cash payment of $75.0 million in December 2021 and $3.5 million in April 2023 upon execution of the
Original Menarini Agreement and the Amended Menarini Agreement, respectively. In addition, we are entitled to receive additional
milestone payments from Menarini if certain development and sales performance milestones are achieved in the future. We are also
eligible to receive tiered royalties ranging from the mid-teens to mid-twenties based on future net sales of the Product in the Expanded
Menarini Territory. The payments owed by Menarini to us are subject to reduction in specified circumstances. Menarini will
reimburse us for 25% of all expenses we incur for the development of the Product during 2022 through 2025, provided that such
reimbursements shall not exceed $15.0 million per calendar year.
Antengene
In May 2020, we entered into an amendment of our May 2018 license agreement with Antengene Therapeutics Limited
(“Antengene”) (the “Original Antengene Agreement”, and, as amended, the “Amended Antengene Agreement”). Antengene is a
corporation organized and existing under the laws of Hong Kong, and a subsidiary of Antengene Corporation Co. Ltd., a corporation
organized and existing under the laws of the People’s Republic of China. Under the terms of the Amended Antengene Agreement,
Antengene has the exclusive rights to develop and commercialize, at its own cost, selinexor, eltanexor, KPT-9274, each for the
diagnosis, treatment and/or prevention of all human oncology indications, and 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, Vietnam, Australia and New Zealand (the
“Antengene Territory”). In August 2023, Antengene entered into an exclusive arrangement with a Hong Kong pharmaceutical
company for the commercialization of selinexor in mainland China.
Under the terms of the Original Antengene Agreement, we received an upfront cash payment of $11.7 million in 2018. In June
2020, we received an additional $11.7 million upfront payment upon execution of the Amended Antengene Agreement. In addition,
we are entitled to receive additional milestone payments from Antengene if certain other regulatory and commercialization goals are
achieved in the future. We are also eligible to receive tiered double-digit royalties based on future net sales of selinexor and eltanexor,
and tiered single- to double-digit royalties based on future net sales of verdinexor and KPT-9274 in the Antengene Territory.
FORUS
In December 2020, we entered into an exclusive distribution agreement for the commercialization of XPOVIO in Canada with
FORUS Therapeutics Inc. (“FORUS”), a Canadian biopharmaceutical company. Under the terms of the agreement, we received an
upfront payment of $5.0 million in December 2020 and are eligible to receive additional payments if certain prespecified regulatory
and commercial milestones are achieved by FORUS. We are also eligible to receive double-digit royalties on future net sales of
XPOVIO in Canada. FORUS received the exclusive rights to commercialize XPOVIO in Canada and is responsible for all regulatory
filings and obligations required for registering XPOVIO. We have retained the exclusive production rights and will supply finished
product to FORUS for commercial use in Canada.
Promedico
In February 2020, we entered into an exclusive distribution agreement with Promedico Ltd. (“Promedico”) for the
commercialization of XPOVIO in Israel, the West Bank, Gaza Strip and the territories under control of the Palestinian Authority (the
“Promedico Territory”). We will receive certain prespecified payments and are eligible to receive additional payments if certain
regulatory and commercial milestones are achieved by Promedico. We are also eligible to receive double-digit royalties on future net
sales in the Promedico Territory. Promedico received the exclusive rights to commercialize XPOVIO in the Promedico Territory and
is responsible for all regulatory filings and obligations required for registering XPOVIO. We have retained exclusive production rights
and will supply finished product for commercial use in the Promedico Territory.
Other
In addition to the above agreements, we have other collaborations related to the development or commercialization of our
products and product candidates, such as the Cooperative Research and Development Agreement with the National Cancer Institute’s
Cancer Therapy Evaluation Program and a clinical trial collaboration and supply agreement with BMS, as discussed above, to
collaborate with us on studies to investigate the safety and efficacy of selinexor in various oncology indications; the European
Myeloma Network, with which we have a collaboration, as discussed above; and arrangements with academic and private non-
academic institutions, which conduct investigator-sponsored clinical trials in a variety of hematological and solid tumor malignancies.
In July 2021, we entered into a license agreement with Libo Pharma Corp. (“Libo”) under which we granted to Libo an
exclusive license to manufacture, develop and commercialize Interleukin 12 products in certain countries in Asia, Africa and Oceania.
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In December 2023, we amended the license agreement to include global development and commercialization rights for all indications
except for acute radiation syndrome. We received from Libo an upfront payment and a milestone payment upon completion of
technology transfer and are entitled to receive development and regulatory milestones and single-digit royalties on future net sales of
KPT-1200.
In addition, in February 2024 we reacquired KPT-350 and other assets, which we had sold to Biogen Inc. (“Biogen”) in January
2018 under an asset purchase agreement that was subsequently terminated by Biogen in June 2022. KPT-350 is a clinical stage SINE
compound under evaluation for neurological indications, including amyotrophic lateral sclerosis. We intend to evaluate KPT-350 for
development internally or through a third-party collaborator or licensor.
Intellectual Property
Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection for
our products and product 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 U.S. and in foreign
jurisdictions related to our proprietary technology and products and product 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 products and
product candidates. As of February 14, 2025, we were the sole owner of 48 patents in the U.S. and we had 13 pending patent
applications in the U.S., two pending international applications filed under the Patent Cooperation Treaty (“PCT”), 178 granted
patents and 92 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 intellectual property portfolios for our key products and product candidates as of February 14, 2025 are summarized below.
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Selinexor (KPT-330): Our selinexor patent portfolio covers: the composition of matter of selinexor; various polymorphic
forms of selinexor, including the polymorph used in selinexor’s commercial drug substance; various methods of use of
selinexor; as well as methods of making selinexor. There are two U.S. patents covering selinexor’s composition of
matter. One of the patents will expire in July 2032 and the other will expire in July 2033 in view of Patent Term Extension
awarded by the U.S. Patent and Trademark Office (“USPTO”). The U.S. patents covering the polymorph used in
selinexor’s commercial drug substance will expire in August 2035. Any other patents that may issue in the U.S. as part of
our selinexor patent portfolio will expire no earlier than July 2032. Any patents that may issue in foreign jurisdictions will
likewise expire no earlier than 2032.
•
Supplementary Protection Certificates: We have filed applications for Supplementary Protection Certificates (“SPCs”)
based on European Patent No. 2,736,887 directed to the composition of matter and use of selinexor. Some applications
have granted and others are pending.
•
Eltanexor (KPT-8602): Our eltanexor patent portfolio covers both the composition of matter and methods of making and
using eltanexor, and consists of four issued U.S. patents, three pending non-provisional U.S. patent applications, 29 issued
foreign patents and 16 pending foreign patent applications. Any patents that may issue in the U.S. as part of our eltanexor
patent portfolio will expire no earlier than 2034, not including 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 no earlier than 2034.
•
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 seven issued U.S. patents, 25 issued foreign patents, one pending U.S. non-provisional patent application, and three
pending foreign patent applications in total. Any patents that may issue in the U.S. based on the pending U.S. non-
provisional 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 that may issue based on the
pending foreign patent applications will likewise expire in 2034. Foreign patent applications covering the composition of
matter and methods of use of KPT-9274 have been filed in 22 countries/regions.
•
Biomarkers for XPO1 Inhibitors: Our patent portfolio also covers biomarkers related to treatment with XPO1
inhibitors, such as selinexor, and consists of one pending non-provisional U.S. patent application, one pending PCT
application and six pending foreign patent applications. Any patents that may issue in the U.S. based on the pending U.S.
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non-provisional application will expire in 2040, 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 2040. Any patents that may issue in the U.S. or foreign jurisdictions based on the
pending PCT application will expire no earlier than 2044, not including 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 2044.
In addition to the patent portfolios covering our key products and product candidates, as of February 14, 2025, our patent
portfolio also includes 5 patents in the U.S. and 16 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 for XPO1 inhibitors.
In the U.S., we have trademark registrations for KARYOPHARM, KARYOPHARM THERAPEUTICS, our color logo, our
logo in greyscale, KARYOPHARM THERAPEUTICS with the color logo, XPOVIO, PORE for our online research portal, and
KARYFORWARD and our KARYFORWARD logo for our financial aid and charitable services. Outside of the U.S., XPOVIO is
registered or pending in 46 additional jurisdictions, and is registered in Katakana in Japan, Hangul in South Korea, and Chinese
characters in Taiwan. KARYOPHARM, the greyscale logo, KARYOPHARM THERAPEUTICS with the color logo, and the
KARYFORWARD logo are each registered in four jurisdictions outside of the U.S. We also have registrations or applications for
eight additional possible product 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 U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application. In the
U.S., 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. We have filed applications for patent term extension in the U.S., Korea, Taiwan, Australia and China
based on the granted patent in each jurisdiction directed to the composition of matter of selinexor. In the U.S., Korea and Taiwan we
have been awarded 342 days, 150 days and 5 years, respectively, of patent term extension. In Australia, the term of the patent has been
extended from July 26, 2032 to March 8, 2037 and in China we are awaiting a determination from the relevant authority. There is no
assurance that we will benefit from any patent term extension. In the future, if and when our product 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 product 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.
As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual
property position for our products and product 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 product candidate we
may develop, it is possible that, before any of our product 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.
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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 certain competitive advantages, we face 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 product candidates that we successfully develop and commercialize will compete with existing therapies
and new therapies that may become available in the future.
There are numerous companies developing or marketing treatments for cancer, including many major pharmaceutical and
biotechnology companies. We are aware of several other XPO1 inhibitors in clinical development world-wide. For example, in June
2020, Menarini acquired Stemline Therapeutics, Inc., including its oral XPO1 inhibitor, felezonexor. Felezonexor, currently in Phase
1b, is in clinical trials as a potential treatment for patients with advanced solid tumors. Additionally, in August 2022, Shanghai Junshi
Biosciences Co., Ltd announced FDA approval of its investigational new drug application (“IND”) for JS110, an XPO1 inhibitor in
development in various blood and solid tumors.
Many of the companies against which we or our collaborators currently compete or which we may compete with in the future
have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing,
conducting clinical trials, obtaining regulatory approvals, marketing approved products and achieving ex-U.S. positive
coverage/reimbursement decisions than we or our collaborators 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 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 or our collaborators in recruiting and retaining qualified scientific, commercial
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 products and product
candidates, if approved, are likely to be their actual or perceived efficacy, safety, tolerability, 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 products, or commercialize existing
products in new indications, and those products are or are perceived to be safer, more effective, more convenient, less expensive or
more tolerable than any products that we have or may develop. Our competitors also may obtain FDA or other regulatory approval for
their products 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 are on the market and additional products are expected to become
available on a generic basis over the coming years. If we obtain marketing approval for our product candidates or for XPOVIO 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 numerous
available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While
our products and product 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 product 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 products 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 products in late-stage clinical development to treat
cancer. These products in development may provide efficacy, safety, tolerability, convenience and other benefits that are not provided
by currently marketed therapies. As a result, they may represent significant competition for any of our products or product candidates
for which we obtain marketing approval.
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XPOVIO competes with and, if approved, our product candidates may compete with, currently marketed products and/or
investigational therapies as discussed below.
Myelofibrosis
The current standard of care for patients with myelofibrosis who are not candidates for allogeneic HSCT, which is currently the
only treatment for myelofibrosis that can provide a clinical cure, is to treat the patients with JAKi’s, the only currently approved drug
therapy for treatment for myelofibrosis to reduce spleen volume and improve symptoms. There are only four JAKi’s currently
approved, including ruxolitinib, fedratinib, pacritinib and momelotinib.
In addition, there are a number of product candidates in late-stage development, some of which could receive approval earlier
than selinexor (e.g., pelabresib). Ongoing clinical trials, such as those involving imetelstat, bomedemstat, navtemadlin, siremadlin, and
zilurgisertib are studying the treatment of myelofibrosis either with JAKi therapy, non-JAKi therapy or a combination of JAKi and
drug treatment.
Endometrial Cancer
The treatment landscape for endometrial cancer has undergone considerable change since 2023. Surgery continues to be the first
treatment for almost all women with endometrial cancer. For cases of advanced or high-grade endometrial cancer, or upon disease
progression, several combination therapies have become available. These therapies include the use of checkpoint inhibitors (e.g.,
pembrolizumab, dostarlimab-gxly and durvalumab) in combination with chemotherapy followed by checkpoint inhibitor maintenance
therapy as well as checkpoint inhibitor (pembrolizumab) in combination with a tyrosine kinase inhibitor (lenvatinib).
Multiple Myeloma
Many therapies are approved for use in patients with multiple myeloma in the U.S., Europe and other parts of the world.
Although XPOVIO is the only XPO1 inhibitor that has received marketing approval, we compete with multiple other treatment types
in our approved indications. The primary competitors of XPOVIO in multiple myeloma include those that currently treat patients
ranging from newly diagnosed patients to those with relapsed or refractory multiple myeloma and are indicated for use either as single
agent and/or as combination therapies. The current standard of care for the treatment of relapsed or refractory multiple myeloma
includes IMiDs (e.g., thalidomide, lenalidomide, pomalidomide), PIs (e.g., bortezomib, carfilzomib, ixazomib), monoclonal antibodies
(e.g., daratumamab, isatuximab, elotuzumab), B-cell maturation antigens, including CAR-Ts (e.g., idecabtagene vicleucel,
ciltacabtagene autoleucel) and bispecific antibodies. New classes/types of therapies are being introduced to the market each year. For
example, TECVAYLI® (teclistamab-cqyv), the first bispecific T-Cell engager, was approved by the FDA in October 2022, followed
by approvals of two more bispecifics, ELREXFIO™ (elranatamab-bcmm) and TALVEY® (talquetamab-tgvs) in August 2023. Other
T-cell engaging therapies, bispecifics with different targets, and immunomodulators are in clinical development and may be
introduced into the multiple myeloma market in 2025 and beyond. CARVYKTI® (ciltacabtagene autoleucel; cilta-cel) and
Abecma® (idecabtagene vicleucel; ide-cel) were approved in April 2024 for the treatment of multiple myeloma in earlier lines. In
addition, new competitors and label expansions into earlier lines of existing therapies could also be approved in the future (e.g.
belantamab mafodotin and linvoseltamab).
DLBCL
The initial therapy for DLBCL typically consists of multi-agent cytotoxic drugs in combination with the mAb rituximab (or a
rituximab biosimilar). In patients with DLBCL who are not elderly and who have good organ function, high dose chemotherapy with
stem cell transplantation is often used at first relapse. Over the past five years, a number of therapeutic interventions have been
approved in the U.S., Europe and other parts of the world for the treatment of patients with relapsed or refractory DLBCL who have
received at least two prior therapies and/or are not eligible for ASCT/HSCT. In addition, certain currently approved therapeutic
interventions are also being evaluated in late-stage development in earlier lines of therapy for the treatment of patients with DLBCL,
such as CD19-directed CAR-T therapies (e.g., axicabtagene ciloleucel), CD79b-directed antibody-drug conjugates (e.g., polatuzumab
vedotin-piiq) and CD19-directed cytolytic antibody (e.g., tafasitamab-cxix and loncastuximab ), and anti-CD20/CD3 bispecifics (e.g.,
glofitamab, and epcoritamab, odronextomab).
Other agents are listed in the NCCN Guidelines and/or the European Society for Medical Oncology guidelines for use after one
to two prior therapies, although they have not been formally approved by the FDA for treatment of DLBCL, including: lenalidomide,
ibrutinib, and generic multiagent chemotherapy, including gemcitabine, oxaliplatin, and bendamustine.
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In addition, a number of anti-cancer agents are in mid to late-stage development for the treatment of patients with DLBCL,
including bispecific antibodies (e.g., mosunetuzumab), antibody drug conjugates (e.g., brentuximab vedotin), small molecules (e.g.,
enzastaurin, acalabrutinib, and zanubrutinib) and monoclonal antibodies (e.g., zilovertamab).
Sales and Marketing
Following the July 2019 U.S. commercial launch of XPOVIO in multiple myeloma and subsequent FDA approvals in 2020 in
both earlier stage multiple myeloma and DLBCL, our commercial team has focused its efforts on educating health care providers on
the efficacy and safety profile of XPOVIO with the goal of enabling cancer patients access to this important treatment. We are
commercializing XPOVIO in the U.S. with our own focused, customer-facing teams, including sales specialists, reimbursement and
access support specialists, and nurse liaisons, each typically with years of experience in hematology/oncology. We have
approximately 60 field-based employees in the U.S. who call on academic and community-based healthcare professionals who treat
multiple myeloma and DLBCL, as well as our reimbursement team. We believe that the current size of our sales force is appropriate at
this time to effectively reach our target audience in the specialty markets in which we currently operate. Continued growth of our
current marketed products and the launch of any future products may require further expansion of our field force and support
organization within and outside of the U.S. For the foreseeable future, we intend to develop and commercialize XPOVIO and our
product candidates alone in the U.S. and expect to rely on partners to develop and commercialize our products in territories outside of
the U.S. In executing our strategy, our goal is to retain oversight over the global development and commercialization of our products
by playing an active role in their commercialization or finding partners who share our vision, values, and culture.
Our sales force is supported by an experienced sales leadership team and professionals in marketing, reimbursement and market
access, market research and analytics, commercial operations, finance and human resources. Our sales and marketing organization
uses a variety of pharmaceutical marketing strategies to promote XPOVIO, including sales calls, peer-to-peer education, non-personal
promotional, and digital content. We employ third-party vendors, such as advertising agencies, market research firms and suppliers of
marketing and other sales support-related services, to assist with our commercial activities.
Our patient support program, KaryForward®, is dedicated to providing assistance and resources to our patients with multiple
myeloma and DLBCL and their caregivers throughout their XPOVIO treatment. KaryForward® offers support in navigating insurance
coverage issues and processes and enabling continuation of our patients’ ability to access XPOVIO in the case of delays or
interruptions in the insurance process. We also offer a copay card, which offers eligible commercial patients who have insurance to
receive their prescription for as little as $5.00 per prescription. Further, the KaryForward® program assists eligible patients who do not
have insurance or lack coverage to be able to access XPOVIO treatment through our Patient Assistance Program. Under our
KaryForward® program, patients are assigned a dedicated nurse case manager, who serves as a point of contact to help patients and
their caregivers navigate the treatment process, including by explaining prescription instructions, providing psychosocial support and
additional nonclinical education regarding XPOVIO, highlighting expectations when taking XPOVIO and providing referrals for
additional third-party support, such as transportation assistance.
Manufacturing
We do not own or operate, and have no plans to establish, any manufacturing facilities for our products or product candidates.
We currently rely, and expect to continue to rely, on third-party contract manufacturers to manufacture our products and product
candidates for our commercial and clinical use.
The clinical and commercial supplies of the drug product for XPOVIO are currently manufactured pursuant to a combination of
long-term supply agreements and as-needed purchase order agreements with our third-party manufacturers.
Selinexor is a small molecule drug and is manufactured in reliable and reproducible synthetic processes from readily available
starting materials. The chemistry and formulation processes of selinexor have been developed to meet our large-scale manufacturing
needs and do not require unusual equipment in the manufacturing process. We generally maintain sufficient inventory levels
throughout our supply chain to exceed our two-year forecasts for XPOVIO in order to minimize the risks of supply disruption.
To support the commercialization and development of our products and product candidates, we have developed a fully
integrated manufacturing support system, including scientific oversight, quality assurance, quality control, regulatory affairs and
inventory control policies and procedures. These support systems are intended to enable us to maintain high standards of quality for
our products. We intend to continue to outsource the manufacture and distribution of our products for the foreseeable future, and we
believe this manufacturing strategy will enable us to direct more of our financial resources to the commercialization and development
of our products and product candidates.
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Government Regulation
Government authorities in the U.S., at the federal, state and local level, and in other countries and jurisdictions, including the
EU, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging,
storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, pricing, reimbursement, sales, post-approval
monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the
U.S. 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. The regulatory requirements applicable to
drug product development, approval and marketing are subject to change, and regulations and administrative guidance often are
revised or reinterpreted by the agencies in ways that may have a significant impact on our business.
Review and Approval of Drugs in the U.S.
In the U.S., the FDA regulates drug products under the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and implementing
regulations. A company, institution, or organization which takes responsibility for the initiation and management of a clinical
development program for such products, and for their regulatory approval, is typically referred to as a sponsor. The failure of a
sponsor 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 a 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.
The FDA must approve our product candidates for therapeutic indications before they may be marketed in the U.S. A sponsor
seeking approval to market and distribute a new drug in the U.S. generally must satisfactorily complete each of the following steps
before the product candidate will be approved by the FDA:
•
completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good
laboratory practice (“GLP”) regulations, as applicable;
•
design of a clinical protocol and submission to the FDA of an IND, which must take effect before human clinical trials
may begin;
•
approval by an independent institutional review board (“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 (“GCP”) to
establish the safety and effectiveness of the proposed drug product for each indication;
•
preparation and submission to the FDA of a new drug application (“NDA”) requesting marketing approval for one or
more proposed indications, including submission of detailed information on the manufacture and composition of the
product in clinical development and proposed labelling;
•
review and evaluation of the data on the product candidate by an FDA advisory committee, where appropriate or if
applicable;
•
satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or
components thereof, are produced to assess compliance with current good manufacturing practices (“cGMP”)
requirements and to assure that the chemistry, manufacturing and controls (“CMC”) 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 pursuant to the Prescription Drug User Fee Act (“PDUFA”);
•
approval of an NDA for the new drug product authorizing marketing for particular indications in the U.S.; and
•
compliance with any post-approval requirements, including Risk Evaluation and Mitigation Strategies (“REMS”) and
post-approval studies required by the FDA.
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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 the preclinical tests and
formulation of the compounds for testing must comply with federal regulations and requirements, including GLP regulations and
standards and the U.S. Department of Agriculture’s Animal Welfare Act, if applicable. 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 AEs and carcinogenicity, may be required to be
included in a marketing application. With passage of the FDA’s Modernization Act 2.0 in December 2022, Congress eliminated
provisions in both the FDCA and the Public Health Service Act (“PHSA”) that required animal testing in support of an NDA or a
biologics license application (“BLA”). While animal testing may still be conducted, the FDA was authorized to rely on alternative
non-clinical tests, including cell-based assays, microphysiological systems, or bioprinted or computer models.
In addition, sponsors 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 product candidate to be shipped in interstate commerce for
use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. An
IND must be secured prior to interstate shipment and administration of any product candidate that is not the subject of an approved
NDA or BLA. In support of a request for an IND, a sponsor must submit a protocol for each clinical trial and any subsequent protocol
amendments must be submitted to the FDA as part of the IND. Beyond reviewing an IND to assure the safety and rights of patients,
the FDA’s review also focuses on the quality of the investigation and whether it will be adequate to permit an evaluation of the drug’s
effectiveness and safety and of the biological product’s safety, purity and potency. An initial IND automatically becomes effective 30
days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical
trials and places the trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns
before the clinical trial may proceed. As a result, submission of an IND may not result in the FDA allowing clinical trials to
commence.
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 trial 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
partial clinical hold might state that a specific protocol or part of a protocol may not proceed, while other parts of a protocol or other
protocols may do so. No more than 30 days after the imposition of a clinical hold or partial clinical hold, the FDA will provide the
sponsor with a written explanation of the basis for the hold. Following the issuance of a clinical hold or partial clinical hold, a clinical
trial may only resume once 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 or recommence. Occasionally, clinical holds are imposed due to manufacturing issues that may present
safety issues for the clinical trial subjects.
Once an IND application takes effect, the sponsor of the IND may amend the application as needed to ensure that the clinical
trials are conducted according to protocols included in the IND. The FDA has indicated that sponsors are expected to submit
amendments for new protocols or changes to existing protocols before implementation of the respective changes. New studies may
begin, however, when the sponsor has submitted the change to the FDA for its review and the new protocol or changes to the existing
protocol have been approved by the IRB with the responsibility for review and approval of the 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 trial at least
annually. The IRB must review and approve, among other things, the trial protocol and informed consent information to be provided
to trial 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.
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Additionally, some trials are overseen by a Data Monitoring Committee, an independent group of qualified experts organized by
the trial sponsor. 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 trial. 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.
Clinical Studies Outside the U.S. in Support of FDA Approval
In connection with our clinical development program, we may have trial sites outside the U.S. When a foreign clinical trial site
operates as part of a global clinical trial that is under an IND, all IND requirements must be met unless waived for that foreign clinical
trial site. When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the trial complies with certain
regulatory requirements of the FDA in order to use the trial as support for an IND or application for marketing approval. Specifically,
the studies must be conducted in accordance with GCP, including undergoing review and receiving approval by an independent ethics
committee and seeking and receiving informed consent from subjects. GCP requirements 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.
The acceptance by the FDA of trial data from clinical trials conducted outside the U.S. in support of U.S. approval may be
subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the
sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone
unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical
investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need
for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data
through an on-site inspection or other appropriate means.
In addition, even where the foreign trial data are not intended to serve as the sole basis for approval, the FDA will not accept the
data as support for an application for marketing approval unless the trial is well-designed and well-conducted in accordance with GCP
requirements and the FDA is able to validate the data from the trial through an onsite inspection if deemed necessary. Many foreign
regulatory authorities have similar approval requirements. In addition, such foreign trials are subject to the applicable local laws of the
foreign jurisdictions where the trials are conducted.
Reporting Clinical Trial Results
Under the PHSA, sponsors of clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are
required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S.
National Institutes of Health (the “NIH”). In particular, information related to the product, patient population, phase of investigation,
trial sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Although
sponsors are also obligated to disclose the results of their clinical trials after completion, disclosure of the results can be delayed in
some cases for up to two years after the date of completion of the trial. The NIH’s Final Rule on registration and reporting
requirements for clinical trials became effective in 2017.
The PHSA grants the Secretary of Health and Human Services the authority to issue a notice of noncompliance to a responsible
party for failure to submit clinical trial information as required. The responsible party, however, is allowed 30 days to correct the
noncompliance and submit the required information. As of December 19, 2024, the FDA has issued six notices of non-compliance,
thereby signaling the government’s willingness to begin enforcing these requirements against non-compliant clinical trial sponsors.
While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to
clinicaltrials.gov is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for
each day the violation continues. Violations may also result in injunctions and/or criminal prosecution or disqualification from federal
grants.
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Expanded Access to an Investigational Drug for Treatment Use
Expanded access, sometimes called “compassionate use,” is the use of IND 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.
There is no obligation for a sponsor to make its investigational products available for expanded access; however, as required by
amendments to the FDCA included in the 21st Century Cures Act (the “Cures Act”), passed in 2016, if a sponsor has a policy
regarding how it responds to expanded access requests with respect to product candidates in development to treat serious diseases or
conditions, it must make that policy publicly available. Sponsors are required to make such policies publicly available upon the earlier
of initiation of a Phase 2 or Phase 3 trial for a covered investigational product; or 15 days after the investigational product receives
designation from the FDA as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.
In addition, in May 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 IND 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 trial
protocols detailing, among other things, the inclusion and exclusion criteria, the objectives of the trial, the parameters to be used in
monitoring safety and the effectiveness criteria to be evaluated. Each protocol, and any subsequent material amendment to the
protocol, must be submitted to the FDA as part of the IND, and progress reports detailing the status of the clinical trials must be
submitted to the FDA annually.
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 trial 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.
A clinical trial may combine the elements of more than one phase and the FDA often requires more than one Phase 3 trial to
support marketing approval of a product candidate. A company’s designation of a clinical trial as being of a particular phase is not
necessarily indicative that the trial will be sufficient to satisfy the FDA requirements of that phase because this determination cannot
be made until the protocol and data have been submitted to and reviewed by the FDA. Moreover, as noted above, a pivotal trial is a
clinical trial that is believed to satisfy FDA requirements for the evaluation of a product candidate’s safety and effectiveness such that
it can be used, alone or with other pivotal or non-pivotal trials, to support regulatory approval. Generally, pivotal trials are Phase 3
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trials, but they may be Phase 2 trials if they are adequate and well-controlled studies to establish the evidence needed for regulatory
approval.
In March 2022, the FDA released final guidance entitled “Expansion Cohorts: Use in First-In-Human Clinical Trials to Expedite
Development of Oncology Drugs and Biologics,” which outlines how developers can utilize an adaptive trial design commonly
referred to as a seamless trial design in early stages of oncology biological product development (e.g., the first-in-human clinical trial)
to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial. Information to support the
design of individual expansion cohorts are included in IND applications and assessed by the FDA. Expansion cohort trials can
potentially bring efficiency to biological product development and reduce developmental costs and time.
In December 2022, with the passage of the Food and Drug Omnibus Reform Act (“FDORA”), Congress required sponsors to
develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal trial” of a new drug or biological
product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-
regulated products. Specifically, action plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals,
and an explanation of how the sponsor intends to meet them. In addition to these requirements, the legislation directs the FDA to issue
new guidance on diversity action plans. In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general
requirements for diversity action plans (“DAPs”). Unlike most guidance documents issued by the FDA, the DAP guidance when
finalized will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are
specified in FDA guidance.
In June 2023, the FDA issued draft guidance with updated recommendations for GCPs aimed at modernizing the design and
conduct of clinical trials. The updates are intended to help pave the way for more efficient clinical trials to facilitate the development
of medical products. The draft guidance was adopted from the International Council for Harmonisation’s recently updated E6(R3)
draft guideline that was developed to enable the incorporation of rapidly developing technological and methodological innovations
into the clinical trial enterprise. In addition, the FDA issued draft guidance outlining recommendations for the implementation of
decentralized clinical trials.
Interactions with FDA During the Clinical Development Program
Following the clearance of an initial IND and the commencement of clinical trials, the sponsor will continue to have interactions
with the FDA. Progress reports detailing the results of clinical trials must be submitted annually within 60 days of the anniversary
dates that the IND went into effect and more frequently if serious adverse events occur. These reports must include a development
safety update report. 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 product; and any clinically important increase in the occurrence 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. The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the
clinical data submitted.
In addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program.
Specifically, sponsors may meet with the FDA prior to the submission of an IND (Pre-IND meeting), at the end of Phase 1 clinical
trial (EOP1 meeting), at the end of Phase 2 clinical trial (EOP2 meeting) and before an NDA or BLA is submitted (Pre-NDA or Pre-
BLA meeting). Meetings at other times may also be requested. There are five types of meetings that occur between sponsors and the
FDA. Type A meetings are those that are necessary for an otherwise stalled product development program to proceed or to address an
important safety issue. Type B meetings include pre-IND and pre-NDA/pre-BLA meetings, as well as end of phase meetings such as
EOP2 meetings. A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a
product, including, for example, meetings to facilitate early consultations on the use of a biomarker as a new surrogate endpoint that
has never been previously used as the primary basis for product approval in the proposed context of use. A Type D meeting is focused
on a narrow set of issues and is limited to no more than two focused topics and should not require input from more than three
disciplines or divisions. Finally, INTERACT meetings are intended for novel products and development programs that present unique
challenges in the early development of an investigational product.
These meetings provide an opportunity for the sponsor to share information about the data gathered to date with the FDA and
for the FDA to provide advice on the next phase of development. For example, at an EOP2 meeting, a sponsor may discuss its Phase 2
clinical results and present its plans for the pivotal Phase 3 clinical trial(s) that it believes will support the approval of the new product.
Such meetings may be conducted in person, via teleconference/videoconference or written response only with minutes reflecting the
questions that the sponsor posed to the FDA and the agency’s responses. The FDA has indicated that its responses, as conveyed in
meeting minutes and advice letters, only constitute mere recommendations and/or advice made to a sponsor and, as such, sponsors are
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not bound by such recommendations and/or advice. Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s
recommendations for design of a clinical program may put the program at significant risk of failure. In September 2023, the FDA
issued draft guidance outlining the terms of such meetings in more detail.
FDA approval of companion diagnostics
In August 2014, the FDA issued final guidance clarifying the requirements that apply to the approval of therapeutic products
and in vitro companion diagnostics. According to the guidance, for novel drugs, a companion diagnostic device and its corresponding
therapeutic should be approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product’s labeling.
Approval or clearance of the companion diagnostic device will ensure that the device has been adequately evaluated and has adequate
performance characteristics in the intended population. In July 2016, the FDA issued a draft guidance intended to assist sponsors of
the drug therapeutic and in vitro companion diagnostic device on issues related to co-development of the products.
The 2014 guidance also explains that a companion diagnostic device used to make treatment decisions in clinical trials of a
biologic product candidate generally will be considered an investigational device, unless it is employed for an intended use for which
the device is already approved or cleared. If used to make critical treatment decisions, such as patient selection, the diagnostic device
generally will be considered a significant risk device under the FDA’s Investigational Device Exemption (“IDE”) regulations. Thus,
the sponsor of the diagnostic device will be required to comply with the IDE regulations. According to the guidance, if a diagnostic
device and a product are to be studied together to support their respective approvals, both products can be studied in the same
investigational trial, if the trial meets both the requirements of the IDE regulations and the IND regulations. The guidance provides
that depending on the details of the trial plan and subjects, a sponsor may seek to submit an IND alone, or both an IND and an IDE.
In April 2020, the FDA issued additional final guidance that describes considerations for the development and labeling of
companion diagnostic devices to support the indicated uses of multiple drug or biological oncology products, when appropriate. This
guidance builds upon existing policy regarding the labeling of companion diagnostics. In its 2014 guidance, the FDA stated that if
evidence is sufficient to conclude that the companion diagnostic is appropriate for use with a specific group of therapeutic products,
the companion diagnostic’s intended use or indications for use should name the specific group of therapeutic products, rather than
specific products. The 2020 guidance expands on the policy statement in the 2014 guidance by recommending that companion
diagnostic developers consider a number of factors when determining whether their test could be developed, or the labeling for
approved companion diagnostics could be revised through a supplement, to support a broader labeling claim such as use with a
specific group of oncology therapeutic products (rather than listing an individual therapeutic product(s)). Subsequently, in June 2023,
the FDA issued another final guidance to describe the FDA’s voluntary pilot program for certain oncology drug products used with
certain in vitro diagnostic tests.
Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices. In the U.S., the
FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical
device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing,
manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import and post-market surveillance.
Unless an exemption applies, diagnostic tests require pre-notification marketing clearance or approval from the FDA prior to
commercial distribution.
The FDA previously has required in vitro companion diagnostics intended to select the patients who will respond to the product
candidate to obtain pre-market approval (“PMA”) simultaneously with approval of the therapeutic product candidate. The PMA
process, including the gathering of clinical and preclinical data and the submission to and review by the FDA, can take several years
or longer. It involves a rigorous premarket review during which the sponsor must prepare and provide the FDA with reasonable
assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things,
device design, manufacturing and labeling. PMA applications are subject to an application fee. For federal fiscal year 2025, the
standard fee is $540,783 and the small business fee is $135,196.
After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be
marketed only for the uses and indications for which they are cleared or approved. Device manufacturers must also establish
registration and device listings with the FDA. A medical device manufacturer’s manufacturing processes and those of its suppliers are
required to comply with the applicable portions of the Quality System Regulation, which covers the methods and documentation of the
design, testing, production, processes, controls, quality assurance, labeling, packaging, and shipping of medical devices. Domestic
facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. The FDA also may inspect
foreign facilities that export products to the U.S.
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Manufacturing and Other Regulatory Requirements
Concurrently with clinical trials, sponsors usually complete additional animal safety studies, develop additional information
about the chemistry and physical characteristics of the product candidate and finalize a process for manufacturing commercial
quantities of the product candidate in accordance with cGMP requirements. Specifically, the FDA’s regulations require that
pharmaceutical products be manufactured in approved facilities and in accordance with cGMPs. The cGMP regulations include
requirements relating to organization of personnel, buildings and facilities, equipment, control of components and product containers
and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records
and reports and returned or salvaged products. Manufacturers and other entities involved in the manufacture and distribution of
approved pharmaceuticals are required to register their establishments with the FDA and some state agencies, and they are subject to
periodic unannounced inspections by the FDA for compliance with cGMPs and other requirements. Both domestic and foreign
manufacturing establishments must register and provide additional information to the FDA upon their initial participation in the
manufacturing process. Any product manufactured by or imported from a facility that has not registered, whether foreign or domestic,
is deemed misbranded under the FDCA.
Inspections must follow a “risk-based schedule” that may result in certain establishments being inspected more frequently.
Manufacturers may also have to provide, on request, electronic or physical records regarding their establishments. Delaying, denying,
limiting, or refusing inspection by the FDA may lead to a product being deemed to be adulterated. Changes to the manufacturing
process, specifications or container closure system for an approved product are strictly regulated and often require prior FDA approval
before being implemented. The FDA’s regulations also require, among other things, the investigation and correction of any deviations
from cGMP and the imposition of reporting and documentation requirements upon the sponsor and any third-party manufacturers
involved in producing the approved product. The PREVENT Pandemics Act, which was enacted in December 2022, clarifies that
foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug undergoes further
manufacture, preparation, propagation, compounding, or processing at a separate establishment outside the U.S. prior to being
imported or offered for import into the U.S.
Pediatric Studies
Under the Pediatric Research Equity Act (the “PREA”) applications and certain types of supplements to applications must
contain data that are adequate to assess the safety and effectiveness of the 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.
The sponsor must submit an initial Pediatric Study Plan (“PSP”) within 60 days of an EOP2 meeting or as may be agreed between the
sponsor and the FDA. Those plans must contain an outline of the proposed pediatric study or studies the sponsor plans to conduct,
including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such
detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide
data from pediatric studies along with supporting information. The sponsor and the FDA must reach agreement on a final plan. A
sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based
on data collected from nonclinical studies, early phase clinical trials, and/or other clinical development programs. The statute also
directs the FDA, in consultation with the National Cancer Institute, members of the internal committee established under section 505C
of the FDCA and the Pediatric Subcommittee of the Oncologic Drugs Advisory Committee, to establish, publish, and regularly update
a list of molecular targets considered, on the basis of data the FDA determines to be adequate, to be substantially relevant to the
growth or progression of a pediatric cancer, and that may trigger PREA requirements.
The FDA may, on its own initiative or at the request of the sponsor, 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. A deferral may be
granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval for use in adults before
pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin. The
FDA is required to send a PREA Non-Compliance letter to sponsors who have failed to submit their pediatric assessments required
under the PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required
pediatric formulation.
Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation
intended for a non-cancer indication, although the FDA has recently taken steps to limit what it considers abuse of this statutory
exemption in PREA by announcing that it does not intend to grant any additional Orphan Drug Designations for rare pediatric
subpopulations of what is otherwise a common disease. Further, Section 505B of the FDCA, as amended by FDARA, requires that
any original NDA or BLA submitted on or after August 18, 2020, for a new active ingredient, must contain reports on the molecularly
targeted pediatric cancer investigation, unless the requirement is waived or deferred, if the drug that is the subject of the application is:
(i) intended for the treatment of an adult cancer, and (ii) directed at a molecular target that the Secretary of HHS determines to be
substantially relevant to the growth or progression of a pediatric cancer in accordance with FDA guidance. The FDA maintains a list
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of diseases that are exempt from PREA requirements due to low prevalence of disease in the pediatric population. In May 2023, the
FDA issued draft guidance that further describes the pediatric study requirements under PREA.
Fast Track, Breakthrough Therapy, Priority Review and Regenerative Advanced Therapy Designations
The FDA is authorized to designate certain products for expedited development and 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. None
of these expedited programs change the standards for approval but they may help expedite the development or approval process of
product candidates.
Specifically, the FDA may grant a product Fast Track designation 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 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 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 (“IMM”) and that is reasonably likely to predict an effect on IMM 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.
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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, an additional
post-approval confirmatory study(ies) to verify and describe the drug’s clinical benefit or, in certain cases where the clinical endpoint
takes longer to mature, the completion of the study. 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.
In December 2022, Congress modified certain provisions governing accelerated approval of drug products. Specifically, the new
legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is
awarded and to submit progress reports on its post-approval studies to the FDA every six months until the study is completed.
Moreover, FDORA established expedited procedures authorizing the FDA to withdraw an accelerated approval if certain conditions
are met, including where a required confirmatory study fails to verify and describe the predicted clinical benefit or where evidence
demonstrates the product is not shown to be safe or effective under the conditions of use. The FDA may also use such procedures to
withdraw an accelerated approval if a sponsor fails to conduct any required post-approval trial of the product with due diligence,
including with respect to “conditions specified by the Secretary.” The new procedures include the provision of due notice and an
explanation for a proposed withdrawal, and opportunities for a meeting with the Commissioner or the Commissioner’s designee and a
written appeal, among other things.
In March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval. The
agency indicated that the accelerated approval pathway is commonly used for approval of oncology drugs due to the serious and life-
threatening nature of cancer. Although single-arm trials have been commonly used to support accelerated approval, a randomized
controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for direct comparisons
to an available therapy. To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended
to support accelerated approvals of oncology therapeutics. While this guidance is currently only in draft form and will ultimately not
be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational
products qualify for accelerated approval. Subsequently, in December 2024, the FDA issued additional draft guidance relating to
accelerated approval. These guidances describe the FDA’s latest thinking on what it means to conduct a confirmatory trial with due
diligence and how the FDA plans to interpret whether such a study needs to be underway at the time of approval. While these
guidances are currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe
the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval.
Filing and Review of NDAs
Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along
with information relating to the product’s chemistry, manufacturing, controls, safety updates, patent information, abuse information
and proposed labeling, are submitted to the FDA as part of an application requesting approval to market the product candidate for one
or more indications. Data may come from company-sponsored clinical trials intended to test the safety and effectiveness of a product’s
use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data
submitted must be sufficient in quality and quantity to establish the safety and effectiveness of a drug product.
The fee required for the submission and review of an application under the Prescription Drug User Fee Act (the “PDUFA”), is
substantial (for example, for federal fiscal year 2025 this application fee is $4,310,002) and the sponsor of an approved application is
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also subject to an annual program fee, currently set at $403,889 per eligible prescription product. These fees are typically adjusted
annually, and exemptions and waivers may be available under certain circumstances, such as where a waiver is necessary to protect
the public health, where the fee would present a significant barrier to innovation, or where the sponsor is a small business submitting
its first human therapeutic application for review. The standard review time for an initial NDA or BLA is 12 months and it is ten
months for a supplemental application.
Specifically, the FDA conducts a preliminary review of all applications within 60 days of receipt and must inform the sponsor at
that time or before whether an application is sufficiently complete to permit substantive review. In pertinent part, the FDA’s
regulations state that an application “shall not be considered as filed until all pertinent information and data have been received” by
the FDA. In the event that FDA determines that an application does not satisfy this standard, it will issue a Refuse to File (“RTF”)
determination to the sponsor. Typically, a RTF will be based on administrative incompleteness, such as clear omission of information
or sections of required information; scientific incompleteness, such as omission of critical data, information or analyses needed to
evaluate safety and effectiveness or provide adequate directions for use; or inadequate content, presentation, or organization of
information such that substantive and meaningful review is precluded. The FDA may request additional information rather than accept
an application 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.
After the submission is accepted for filing, the FDA begins an in-depth substantive review of the application. The FDA reviews
the application to determine, among other things, whether the proposed product is safe and effective for its intended use, whether it
has an acceptable purity profile and whether the product is being manufactured in accordance with cGMP. Under the goals and
policies agreed to by the FDA under PDUFA, the FDA has ten months from the filing date in which to complete its initial review of a
standard application that is a new molecular entity, and six months from the filing date for an application with “priority review.” The
review process may be extended by the FDA for three additional months to consider new information or in the case of a clarification
provided by the sponsor to address an outstanding deficiency identified by the FDA following the original submission. Despite these
review goals, it is not uncommon for FDA review of an application to extend beyond the PDUFA goal date.
In connection with its review of an application, the FDA will typically submit information requests to the sponsor and set
deadlines for responses thereto. The FDA will also conduct a pre-approval inspection of the manufacturing facilities for the new
product to determine whether the manufacturing processes and facilities comply with cGMPs. The FDA will not approve the product
unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to
assure consistent production of the product within required specifications. The FDA also may inspect the sponsor and one or more
clinical trial sites to assure compliance with IND and GCP requirements and the integrity of the clinical data submitted to the FDA. To
ensure cGMP and GCP compliance by its employees and third-party contractors, a sponsor may incur significant expenditure of time,
money and effort in the areas of training, record keeping, production and quality control.
Moreover, the FDA will review a sponsor’s financial relationship with the principal investigators who conducted the clinical
trials in support of the NDA. That is because, under certain circumstances, principal investigators at a clinical trial site may also serve
as scientific advisors or consultants to a sponsor and receive compensation in connection with such services. Depending on the level
of that compensation and any other financial interest a principal investigator may have in a sponsor, the sponsor may be required to
report these relationships to the FDA. The FDA will then evaluate that financial relationship and determine whether it creates a
conflict of interest or otherwise affects the interpretation of the trial or the integrity of the data generated at the principal investigator’s
clinical trial site. If so, the FDA may exclude data from the clinical trial site in connection with its determination of safety and efficacy
of the investigational product.
Additionally, the FDA may refer an application, including applications for novel product candidates which present difficult
questions of safety or efficacy, to an advisory committee for review, evaluation and recommendation as to whether the application
should be approved and under what conditions. 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 recommendation of an advisory committee, but it considers such
recommendations when making final decisions on approval. Data from clinical trials are not always conclusive, and the FDA or its
advisory committee may interpret data differently than the sponsor interprets the same data. The FDA may also re-analyze the clinical
trial data, which could result in extensive discussions between the FDA and the sponsor during the review process.
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The FDA also may require submission of a REMS if it determines that a REMS is necessary to ensure that the benefits of the
product outweigh its risks and to assure the safe use of the product. The REMS could include medication guides, physician
communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or
other risk minimization tools. The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-
by-case basis. If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed REMS and the FDA
will not approve the application without a REMS.
Decisions on NDAs
The FDA reviews a sponsor's NDA to determine, among other things, whether the product is safe and whether it is effective for
its intended use(s), with the latter determination being made on the basis of substantial evidence. The term “substantial evidence” is
defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical investigations, by
experts qualified by scientific training and experience to evaluate the effectiveness of the product involved, on the basis of which it
could fairly and responsibly be concluded by such experts that the product will have the effect it purports or is represented to have
under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.”
The FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical trials to establish
effectiveness of a new product. Under certain circumstances, however, the FDA has indicated that a single trial with certain
characteristics and additional information may satisfy this standard. This approach was subsequently endorsed by Congress in 1998
with legislation providing, in pertinent part, that “If [FDA] determines, based on relevant science, that data from one adequate and
well-controlled clinical trial and confirmatory evidence (obtained prior to or after such investigation) are sufficient to establish
effectiveness, the FDA may consider such data and evidence to constitute substantial evidence.” This modification to the law
recognized the potential for the FDA to find that one adequate and well-controlled clinical trial with confirmatory evidence, including
supportive data outside of a controlled trial, is sufficient to establish effectiveness. In December 2019, the FDA issued draft guidance
further explaining the studies that are needed to establish substantial evidence of effectiveness. Although the FDA has not yet finalized
that guidance, it did issue additional draft guidance in September 2023 that outlines considerations for relying on confirmatory
evidence in lieu of a second clinical trial.
After evaluating the application and all related information, including the advisory committee recommendations, if any, and
inspection reports of manufacturing facilities and clinical trial sites, the FDA will issue either a Complete Response Letter (“CRL”) or
an approval letter. To reach this determination, the FDA must determine that the drug is effective and that its expected benefits
outweigh its potential risks to patients. This “benefit-risk” assessment is informed by the extensive body of evidence about the
product’s safety and effectiveness in the NDA. This assessment is also informed by other factors, including: the severity of the
underlying condition and how well patients’ medical needs are addressed by currently available therapies; uncertainty about how the
premarket clinical trial evidence will extrapolate to real-world use of the product in the post-market setting; and whether risk
management tools are necessary to manage specific risks. In connection with this assessment, the FDA review team will assemble all
individual reviews and other documents into an “action package,” which becomes the record for FDA review. The review team then
issues a recommendation, and a senior FDA official makes a decision.
A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present
form. A CRL generally outlines the deficiencies in the submission and may require substantial additional testing or information in
order for the FDA to reconsider the application. The CRL may require additional clinical or other data, additional pivotal Phase 3
clinical trial(s) and/or other significant and time- consuming requirements related to clinical trials, preclinical studies or
manufacturing. If a CRL is issued, the sponsor will have one year to respond to the deficiencies identified by the FDA, at which time
the FDA can deem the application withdrawn or, in its discretion, grant the sponsor an additional six-month extension to respond. The
FDA has committed to reviewing resubmissions in response to an issued CRL in either two or six months depending on the type of
information included. Even with the submission of this additional information, however, the FDA ultimately may decide that the
application does not satisfy the regulatory criteria for approval. The FDA has taken the position that a CRL is not final agency action
making the determination subject to judicial review. The FDA has indicated that sponsors may request a formal hearing on the CRL or
they may file a request for reconsideration or a request for a formal dispute resolution.
An approval letter, on the other hand, authorizes commercial marketing of the product with specific prescribing information for
specific indications. That is, the approval will be limited to the conditions of use (e.g., patient population, indication) described in the
FDA-approved labeling. Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications,
warnings or precautions be included in the product labeling, require that post-approval trials, including Phase 4 clinical trials, be
conducted to further assess a product’s safety after approval, require testing and surveillance programs to monitor the product after
commercialization or impose other conditions, including distribution and use restrictions or other risk management mechanisms under
a REMS which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further
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marketing of a product based on the results of post-marketing trials or surveillance programs. After approval, some 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.
Under the Ensuring Innovation Act, which was signed into law in April 2021, the FDA must publish action packages
summarizing its decisions to approve new drugs within 30 days of approval of such products. To date, CRLs are not publicly available
documents.
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 AEs 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;
•
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 September 2021, the FDA published final regulations which describe the types of evidence that the agency will
consider in determining the intended use of a drug or biologic.
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. Moreover, with passage
of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been approved may proactively
communicate to payors certain information about products in development to help expedite patient access upon product approval.
Previously, such communications were permitted under FDA guidance but the new legislation explicitly provides protection to
sponsors who convey certain information about products in development to payors, including unapproved uses of approved products.
In addition, in October 2023, the FDA published draft guidance outlining the agency’s non-binding policies governing the distribution
of scientific information on unapproved uses to healthcare providers. This draft guidance calls for such communications to be truthful,
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non-misleading, factual, and unbiased and include all information necessary for healthcare providers to interpret the strengths and
weaknesses and validity and utility of the information about the unapproved use. This guidance was finalized by the FDA on January
6, 2025.
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 (“HHS”), 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 a variety of federal and state laws. The
Prescription Drug Marketing Act (the “PDMA”) was the first federal law to set minimum standards for the registration and regulation
of drug distributors by the states and to regulate the distribution of drug samples. Both the PDMA and state laws limit the distribution
of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution. In November 2013,
the federal Drug Supply Chain Security Act (the “DSCSA”) became effective in the U.S., mandating an industry-wide, electronic,
interoperable system to trace prescription drugs through the pharmaceutical distribution supply chain with a ten-year phase-in process.
Manufacturers were required by November 2023 to have such systems and processes. So as not to disrupt supply chains, the FDA has
granted certain exemptions from enhanced drug distribution security requirements for eligible trading partners for particular periods of
time.
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
sponsor to rely, in part, on the FDA’s previous findings of safety and effectiveness 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 sponsor for approval of the application “were not conducted by or for the sponsor
and for which the sponsor has not obtained a right of reference or use from the person by or for whom the investigations were
conducted.”
Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and efficacy data that were not developed by the
sponsor. 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) sponsor can establish that
reliance on the FDA’s previous approval is scientifically appropriate, the sponsor may eliminate the need to conduct certain preclinical
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) sponsor.
Generic Drugs and Regulatory Exclusivity
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, a sponsor must submit an abbreviated new drug application (“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 (“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...”
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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 Act, the FDA may not approve an ANDA or 505(b)(2) application until any applicable period of
regulatory exclusivity for the RLD has expired. The FDCA provides a period of five years of regulatory exclusivity for a new drug
containing a new chemical entity (“NCE”). For the purposes of this provision, the FDA has consistently taken the position that an
NCE is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA. This interpretation was
confirmed with the enactment of the Ensuring Innovation Act in April 2021. 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, a generic or
follow-on drug application 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 sponsor 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 trials,
other than bioavailability or bioequivalence studies, that were conducted by or for the sponsor 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 trial 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 the 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.
Hatch-Waxman Patent Certification and the 30-Month Stay
As part of the submission of an NDA or certain supplemental applications, NDA sponsors are required to list with the FDA each
patent with claims that cover the sponsor’s product or an approved method of using the product. Upon approval of a new drug, each of
the patents listed in the application for the drug is then published in the Orange Book. The FDA’s regulations governing patent listings
were largely codified into law with the enactment of the Orange Book Modernization Act in January 2021. When an ANDA sponsor
files its application with the FDA, the sponsor 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 sponsor is not seeking approval. To the extent
that the Section 505(b)(2) sponsor is relying on studies conducted for an already approved product, the sponsor 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 sponsor would.
Specifically, the sponsor must certify with respect to each patent that:
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the required patent information has not been filed;
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the listed patent has expired;
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the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or
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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 sponsor 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 sponsor is not seeking
approval).
If the ANDA sponsor has provided a Paragraph IV certification to the FDA, the sponsor 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
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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 sponsor.
To the extent that the Section 505(b)(2) sponsor is relying on studies conducted for an already approved product, the sponsor 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 sponsor 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 an NCE, 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) sponsor.
Orphan Drug Designation and Exclusivity
Orphan Drug Designation in the U.S. is designed to encourage sponsors to develop products intended for treatment of rare
diseases or conditions. In the U.S., a rare disease or condition is statutorily defined as a condition that affects fewer than 200,000
individuals in the U.S. or that affects more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that
the cost of developing and making available the product for the disease or condition will be recovered from sales of the product in the
U.S.
Orphan Drug Designation qualifies a company for tax credits and potentially market exclusivity for seven years following the
date of the product’s approval if granted by the FDA. 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. A product becomes an orphan when it receives Orphan Drug
Designation from the Office of Orphan Products Development at the FDA based on acceptable confidential requests. The product
must then go through the review and approval process like any other product.
A sponsor may request Orphan Drug Designation of a previously unapproved product or new orphan indication for an already
marketed product. In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek
and obtain Orphan Drug Designation for the subsequent product for the same rare disease or condition if it can present a plausible
hypothesis that its product may be clinically superior to the first approved product. More than one sponsor may receive Orphan Drug
Designation for the same product for the same rare disease or condition, but each sponsor seeking Orphan Drug Designation must file
a complete request for designation.
If a product with orphan designation 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
receive orphan drug exclusivity. Orphan drug exclusivity means that the FDA may not approve another sponsor’s marketing
application for the same product for the same disease or condition for seven years, except in certain limited circumstances. If a product
designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan
drug application, it may not be entitled to exclusivity.
The period of market exclusivity begins on the date that the marketing application is approved by the FDA and applies only to
the disease or condition for which the product has been designated. Orphan drug exclusivity will not bar approval of another product
under certain circumstances, including if the company with orphan drug exclusivity is not able to meet market demand or the
subsequent product is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a
major contribution to patient care. This is the case despite an earlier court opinion holding that the Orphan Drug Act unambiguously
required the FDA to recognize orphan drug exclusivity regardless of a showing of clinical superiority. Under Omnibus legislation
signed by President Trump in December 2020, the requirement for a product to show clinical superiority applies to drug products that
received Orphan Drug Designation before enactment of amendments to the FDCA in 2017 but have not yet been approved by FDA.
In September 2021, the Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of market
exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be
interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire
designated disease or condition rather than the “indication or use.” On January 23, 2023, the FDA announced that, in matters beyond
the scope of that court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or
indications for which the orphan drug was approved.
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Pediatric Exclusivity
Pediatric exclusivity is a type of non-patent marketing exclusivity in the U.S. and, if granted, provides for the attachment of an
additional six months of exclusivity. For drug products, the six-month exclusivity may be attached to the term of any existing patent or
regulatory exclusivity, including the orphan exclusivity and regulatory exclusivities available under the Hatch-Waxman provisions of
the FDCA. For biologic products, the six-month period may be attached to any existing regulatory exclusivities but not to any patent
terms. The conditions for pediatric exclusivity include the FDA’s determination that information relating to the use of a new product
in the pediatric population may produce health benefits in that population, the FDA making a written request for pediatric clinical
trials, and the sponsor agreeing to perform, and reporting on, the requested clinical trials within the statutory timeframe. 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
patents that cover the product are extended by six months. Although this is not a patent term extension, it effectively extends the
regulatory period during which the FDA cannot approve another application.
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 USPTO reviews and approves the application for any patent term extension or restoration in consultation with the
FDA.
Healthcare Compliance
In the U.S., biopharmaceutical manufacturers and their products are subject to extensive regulation at the federal and state level,
such as laws intended to prevent fraud and abuse in the healthcare industry. Healthcare providers and third-party payors play a
primary role in the recommendation and prescription of pharmaceutical products that are granted marketing approval. Arrangements
with providers, consultants, third-party payors, and customers are subject to broadly applicable fraud and abuse, anti-kickback, false
claims laws, reporting of payments to healthcare providers and patient privacy laws and regulations and other healthcare laws and
regulations that may constrain our business and/or financial arrangements. Restrictions under applicable federal and state healthcare
laws and regulations, including certain laws and regulations applicable only if we have marketed products, include the following:
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federal false claims, false statements and civil monetary penalties laws prohibiting, among other things, any person from
knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or
causing to be made, a false statement to get a false claim paid;
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federal healthcare program anti-kickback law, which prohibits, among other things, persons from offering, soliciting,
receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for, or the
purchasing or ordering of, a good or service for which payment may be made under federal healthcare programs such as
Medicare and Medicaid;
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the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which, in addition to privacy
protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare
benefit program or making false statements relating to healthcare matters;
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federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or
provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement
under government healthcare programs;
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federal Open Payments (or federal “sunshine” law), which requires pharmaceutical and medical device companies to
monitor and report certain financial interactions with certain healthcare providers to the Center for Medicare & Medicaid
Services (the “CMS”), within the HHS for re-disclosure to the public, as well as ownership and investment interests held
by physicians and their immediate family members;
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federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that
potentially harm consumers;
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analogous state laws and regulations, including: state anti-kickback and false claims laws; state laws requiring
pharmaceutical companies to comply with specific compliance standards, restrict financial interactions between
pharmaceutical companies and healthcare providers or require pharmaceutical companies to report information related to
payments to health care providers or marketing expenditures; and state laws governing privacy, security and breaches of
health information in certain circumstances, many of which differ from each other in significant ways and often are not
preempted by HIPAA, thus complicating compliance efforts; and
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laws and regulations prohibiting bribery and corruption such as the FCPA, which, among other things, prohibits U.S.
companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly,
corrupt or improper payments or anything else of value to foreign government officials, employees of public international
organizations or foreign government-owned or affiliated entities, candidates for foreign public office, and foreign political
parties or officials thereof.
Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, exclusion from
participation in federal and state health care programs, such as Medicare and Medicaid. Ensuring compliance is time consuming and
costly. Similar healthcare laws and regulations exist in the EU and other jurisdictions, including reporting requirements detailing
interactions with and payments to healthcare providers and laws governing the privacy and security of personal information.
Healthcare Reform
A primary trend in the U.S. 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 drug and biologic products, limiting coverage and reimbursement for
medical products and other changes to the healthcare system in the U.S.
In March 2010, the U.S. Congress enacted the Patient Protection and Affordable Care Act, as amended by the Health Care and
Education Reconciliation Act of 2010 (collectively, the “PPACA”), which, among other things, includes changes to the coverage and
payment for pharmaceutical products under government healthcare programs. Other legislative changes have been proposed and
adopted since the PPACA 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. These changes included aggregate reductions to Medicare
payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031.
Under current legislation, the actual reductions in Medicare payments may vary up to 4%. The Consolidated Appropriations
Act, which was signed into law by President Biden in December 2022, made several changes to sequestration of the Medicare
program. Section 1001 of the Consolidated Appropriations Act delays the 4% Statutory Pay-As-You-Go Act of 2010 sequester for two
years, through the end of calendar year 2024. Triggered by enactment of the American Rescue Plan Act of 2021, the 4% cut to the
Medicare program would have taken effect in January 2023. The Consolidated Appropriations Act’s health care offset title includes
Section 4163, which extends the 2% Budget Control Act of 2011 Medicare sequester for six months into fiscal year 2032 and lowers
the payment reduction percentages in fiscal years 2030 and 2031.
Since enactment of the PPACA, there have been, and continue to be, numerous legal challenges and Congressional actions to
repeal and replace provisions of the law. For example, with the enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), which
was signed by President Trump in December 2017, Congress repealed the “individual mandate.” The repeal of this provision, which
requires most Americans to carry a minimal level of health insurance, became effective in 2019. In June 2021, the U.S. Supreme Court
dismissed the most recent judicial challenge to the PPACA after finding that the plaintiffs did not have standing to challenge the
constitutionality of the PPACA. Litigation and legislation over the PPACA are likely to continue, with unpredictable and uncertain
results.
Pharmaceutical Prices
The prices of prescription pharmaceuticals have also been the subject of considerable discussion in the U.S. There have been
several recent U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other
things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient
programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid. In 2020, President Trump issued several executive
orders intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into
regulations. These regulations include an interim final rule implementing a most favored nation model for prices that would tie
Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced
countries, effective January 1, 2021. That rule, however, has been subject to a nationwide preliminary injunction and, in December
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2021, CMS issued a final rule to rescind it. With issuance of this rule, CMS stated that it will explore all options to incorporate value
into payments for Medicare Part B pharmaceuticals and improve beneficiaries’ access to evidence-based care.
In addition, the HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation
Program to import certain prescription drugs from Canada into the U.S. That regulation was challenged in a lawsuit by the
Pharmaceutical Research and Manufacturers of America (“PhRMA”) but the case was dismissed by a federal district court in February
2023 after the court found that PhRMA did not have standing to sue the HHS. Seven states (Colorado, Florida, Maine, New
Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the importation of products from Canada. North
Dakota and Virginia have passed legislation establishing workgroups to examine the impact of a state importation program. As of
May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) had submitted Section 804 Importation Program
proposals to the FDA. On January 5, 2023, the FDA approved Florida’s plan for Canadian product importation. That state now has
authority to import certain products from Canada for a period of two years once certain conditions are met. Florida will first need to
submit a pre-import request for each product selected for importation, which must be approved by the FDA. The state will also need to
relabel the products and perform quality testing of the products to meet FDA standards.
Further, the HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers
to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The
final rule would also eliminate the current safe harbor for Medicare drug rebates and create new safe harbors for beneficiary point-of-
sale discounts and pharmacy benefit manager service fees. It originally was set to go into effect on January 1, 2022, but with passage
of the Inflation Reduction Act of 2022 (the “IRA”) has been delayed by Congress to January 1, 2032.
In August 2022, the IRA was signed into law by President Biden. The new legislation has implications for Medicare Part D,
which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option
of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires manufacturers of
certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;
imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation; and replaces the Part D
coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of the HHS to
implement many of these provisions through guidance, as opposed to regulation, for the initial years.
Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-
source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and
Part D. CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in
2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. This provision applies to drug products
that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and
biologics that have been approved for a single rare disease or condition. Further, the legislation subjects drug manufacturers to civil
monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less
than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation. The legislation also
requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation. The law also caps
Medicare out-of-pocket drug costs at $2,000 a year beginning in 2025.
The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023. On August
15, 2024, the HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of
conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis. The prices of these ten drugs will become effective
January 1, 2026. On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of
negotiations by February 1, 2025. While there had been some questions about the Trump Administration’s position on this program,
CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new
administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program. The
second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of
drugs will be effective starting January 1, 2027.
In June 2023, Merck filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price
Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.
Subsequently, a number of other parties, including the U.S. Chamber of Commerce, BMS, PhRMA, Astellas, Novo Nordisk, Janssen
Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional
claims against the HHS and CMS. The HHS has generally won the substantive disputes in these cases, and various federal district
court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.
Certain of these cases are now on appeal and, on October 30, 2024, the Court of Appeals for the Third Circuit heard oral argument in
three of these cases. Litigation involving these and other provisions of the IRA will continue with unpredictable and uncertain results.
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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. A number of states, for example, require drug manufacturers and other entities
in the drug supply chain, including health carriers, pharmacy benefit managers, wholesale distributors, to disclose information about
pricing of pharmaceuticals. In addition, regional healthcare organizations and individual hospitals are increasingly using bidding
procedures to determine what pharmaceutical products and which suppliers will be included in their prescription pharmaceutical and
other healthcare 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.
Federal and State Data Privacy Laws
There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information. In
particular, regulations promulgated pursuant to HIPAA establish privacy and security standards that limit the use and disclosure of
individually identifiable health information, or protected health information, and require the implementation of administrative,
physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity
and availability of electronic protected health information. Determining whether protected health information has been handled in
compliance with applicable privacy standards and our contractual obligations can be complex and may be subject to changing
interpretation. If a sponsor fails to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, it
could face civil and criminal penalties. HHS enforcement activity can result in financial liability and reputational harm, and responses
to such enforcement activity can consume significant internal resources. In addition, state attorneys general are authorized to bring
civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents.
In addition to potential enforcement by the HHS, a sponsor is also potentially subject to privacy enforcement from the Federal
Trade Commission (the “FTC”). The FTC has been particularly focused on the unpermitted processing of health and genetic data
through its recent enforcement actions and is expanding the types of privacy violations that it interprets to be “unfair” under Section 5
of the FTC Act, as well as the types of activities it views to trigger the Health Breach Notification Rule (which the FTC also has the
authority to enforce). The agency is also in the process of developing rules related to commercial surveillance and data security.
Sponsors will need to account for the FTC’s evolving rules and guidance for proper privacy and data security practices in order to
mitigate risk for a potential enforcement action, which may be costly.
States are also active in creating specific rules relating to the processing of personal information. In 2018, California passed into
law the California Consumer Privacy Act (the “CCPA”), which took effect on January 1, 2020 and imposed many requirements on
businesses that process the personal information of California residents. Many of the CCPA’s requirements are similar to those found
in the General Data Protection Regulation (the “GDPR”), which is further described below, including requiring businesses to provide
notice to data subjects regarding the information collected about them and how such information is used and shared, and providing
data subjects the right to request access to such personal information and, in certain cases, request the erasure of such personal
information. The CCPA also affords California residents the right to opt-out of “sales” of their personal information. The CCPA
contains significant penalties for companies that violate its requirements.
In November 2020, California voters passed a ballot initiative for the California Privacy Rights Act (the “CPRA”), which went
into effect on January 1, 2023 and significantly expanded the CCPA to incorporate additional GDPR-like provisions including
requiring that the use, retention and sharing of personal information of California residents be reasonably necessary and proportionate
to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater
disclosures related to notice to residents regarding retention of information. The CPRA also created a new enforcement agency – the
California Privacy Protection Agency – the sole responsibility of which is to enforce the CPRA and other California privacy laws,
which will further increase compliance risk.
In addition to California, at least eighteen other states have passed comprehensive privacy laws similar to the CCPA and CPRA.
These laws are either in effect or will go into effect sometime before the end of 2026. Like the CCPA and CPRA, these laws create
obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data,
which includes health data in some cases. Some of the provisions of these laws may apply to our business activities. There are also
states that are strongly considering or have already passed comprehensive privacy laws during the 2024 legislative sessions that will
go into effect in 2025 and beyond. Other states will be considering similar laws in the future, and Congress has also been debating
passing a federal privacy law. There are also states that are specifically regulating health information that may affect our business. For
example, the State of Washington passed the My Health My Data Act in 2023 which specifically regulated health information that is
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not otherwise regulated by the HIPAA rules, and the law also has a private right of action, which further increases the relevant
compliance risk. Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are
considering such legislation in 2024. These laws may impact our business activities, including our identification of research subjects,
relationships with business partners and ultimately the marketing and distribution of our products.
Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against
companies for their data-related practices. In particular, there have been a significant number of cases filed against companies for their
use of pixels and other web trackers. These cases often allege violations of the California Invasion of Privacy Act and other state laws
regulating wiretapping, as well as the federal Video Privacy Protection Act.
Review and Approval of Drug Products in the European Union
In order to market any product outside of the U.S., a company must also comply with numerous and varying regulatory
requirements of other countries and jurisdictions regarding quality, safety and effectiveness and governing, among other things,
clinical trials, marketing authorization, commercial sales and distribution of drug products. Whether or not a company obtains FDA
approval for a product candidate, it must obtain approval by the comparable regulatory authorities of foreign countries or economic
areas, such as the 27-member EU, before it may commence clinical trials or market products in those countries or areas. As in the
U.S., medicinal products can be marketed only if a marketing authorization from the competent regulatory agencies has been obtained.
Similar to the U.S., the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls.
The EU/European Economic Area (“EEA”) applies harmonized regulatory rules for medicinal products, for the approval process
and requirements governing the conduct of clinical trials, and for the regulatory approval of medicinal products. However, pricing and
reimbursement for medicinal products varies greatly between countries and jurisdictions and can involve additional testing for health
technology assessments 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.
Preclinical Studies
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances.
Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of GLP as set forth in EU
Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products – e.g., radio-pharmaceutical precursors for
radio-labeling purposes). In particular, non-clinical studies, both in vitro and in vivo, must be planned, performed, monitored,
recorded, reported and archived in accordance with the GLP principles, which define a set of rules and criteria for a quality system for
the organizational process and the conditions for non-clinical studies. These GLP standards reflect the Organization for Economic Co-
operation and Development requirements.
Clinical Trial Approval
On January 31, 2022, the new Clinical Trials Regulation (EU) No 536/2014 (“CTR”) became effective in the EU and replaced
the prior Clinical Trials Directive 2001/20/EC (“CTD”). The new regulation aims at simplifying and streamlining the authorization,
conduct and transparency of clinical trials in the EU. Under the new coordinated procedure for the approval of clinical trials, the
sponsor of a clinical trial to be conducted in more than one Member State of the EU (“EU Member State”) will only be required to
submit a single application for approval. The submission has to be made through the Clinical Trials Information System (“CTIS”), a
new clinical trials portal overseen by the European Medicines Agency (“EMA”) and available to clinical trial sponsors, competent
authorities of the EU Member States and the public.
The main characteristics of the regulation include: a streamlined application procedure via a single entry point, the “EU Portal
and Database”; a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures
for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two
parts. Part I is assessed by the appointed reporting Member State, whose assessment report is submitted for review by the sponsor and
all other competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted,
or concerned member states. Part II is assessed separately by each concerned member state. Strict deadlines have been established for
the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure will continue to be
governed by the national law of the concerned member state. However, overall related timelines will be defined by the CTR.
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The new regulation did not change the preexisting requirement that a sponsor must obtain prior approval from the competent
national authority of the EU Member State in which the clinical trial is to be conducted. If the clinical trial is conducted in different
EU Member States, the competent authorities in each of these EU Member States must provide their approval for the conduct of the
clinical trial. Furthermore, the sponsor may only start a clinical trial at a specific clinical site after the applicable ethics committee has
issued a favorable opinion.
The CTR included a three-year transition period. The extent to which ongoing and new clinical trials will be governed by the
CTR varies. Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the CTD, or (ii) between
January 31, 2022 and January 31, 2023 and for which the sponsor has opted for the application of the CTD remain governed by said
Directive until January 31, 2025. After this date, all clinical trials (including those which are ongoing) will become subject to the
provisions of the CTR. As of January 31, 2025, all of our clinical trials with European sites were in compliance with this new policy.
Parties conducting certain clinical trials must, as in the U.S., post clinical trial information in the EU at the EudraCT website:
https://eudract.ema.europa.eu.
Marketing Authorization
To obtain marketing authorization of a product under EU regulatory systems, a sponsor must submit a marketing authorization
application (“MAA”) either under a centralized or decentralized procedure/mutual recognition procedure (“MRP”). The centralized
procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU member
states. Pursuant to Regulation (EC) No. 726/2004, 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. The centralized procedure provides for the grant of a single
marketing authorization by the European Commission that is valid for all EU Member States. Manufacturers must demonstrate the
quality, safety, and efficacy of their products to the EMA, which provides an opinion regarding the MAA. The European Commission
grants or refuses marketing authorization in light of the opinion delivered by the EMA.
Under the centralized procedure, the EMA’s Committee for Medicinal Products for Human Use (“CHMP”) established at the
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 sponsor in response to questions of the CHMP.
The decentralized procedure or MRP is available to sponsors 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 sponsor, known as the reference member state (“RMS”). Under this procedure, a sponsor 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 RMS
and concerned member states. The RMS 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 RMS’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
preclinical 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.
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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 sponsor shows that the medicinal product
constitutes a significant therapeutic, scientific or technical innovation, or the granting of a single marketing authorization for the
medicinal product is in the interest of patients in the EU.
Conditional Marketing Authorization
In particular circumstances, EU legislation (Article 14–a Regulation (EC) No 726/2004 (as amended by Regulation (EU) 2019/5
and Regulation (EC) No 507/2006 on Conditional Marketing Authorizations for Medicinal Products for Human Use) enables sponsors
to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application for a full
marketing authorization. Such conditional approvals may be granted for product candidates (including medicines designated as orphan
medicinal products) if (1) the product candidate is intended for the treatment, prevention, or medical diagnosis of seriously debilitating
or life-threatening diseases; (2) the product candidate is intended to meet unmet medical needs of patients; (3) the benefit of the
immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are
still required; (4) the risk-benefit balance of the product candidate is positive, and (5) it is likely that the sponsor will be in a position
to provide the required comprehensive clinical trial data.
A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder,
including obligations with respect to the completion of ongoing or new clinical studies and with respect to the collection of
pharmacovigilance data. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit
balance remains positive, and after an assessment of the need for additional or modified conditions or specific obligations. The
timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a
conditional marketing authorization, but sponsors can also request the EMA to conduct an accelerated assessment, for instance in
cases of unmet medical needs.
Exceptional Circumstances
An MA may also be granted “under exceptional circumstances” under Article 14(8) of Regulation (EC) No 726/2004 when the
applicant can show that it is unable to provide comprehensive data on the efficacy and safety under normal conditions of use even
after the product has been authorized and subject to specific procedures being introduced. This may arise in particular when the
intended indications are very rare and, in the present state of scientific knowledge, it is not possible to provide comprehensive
information, or when generating data may be contrary to generally accepted ethical principles. This MA is close to the conditional MA
as it is reserved to medicinal products to be approved for severe diseases or unmet medical needs and the applicant does not hold the
complete data set legally required for the grant of a MA. However, unlike the conditional MA, the applicant does not have to provide
the missing data and will never have to. Although the MA “under exceptional circumstances” is granted definitively, the risk-benefit
balance of the medicinal product is reviewed annually and the MA is withdrawn in case the risk-benefit ratio is no longer favorable.
Under these procedures, before granting the MA, the EMA or the competent authorities of the member states make an assessment of
the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety, and efficacy.
PRIME Designation
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 (“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 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 MAA assessment once a dossier has been submitted. Importantly, a dedicated EMA contact and rapporteur
from the CHMP or Committee for Advanced Therapies 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.
Pediatric Studies
Prior to obtaining a marketing authorization in the European Union, sponsors have to demonstrate compliance with all measures
included in an EMA-approved Pediatric Investigation Plan (“PIP”) covering all subsets of the pediatric population, unless the EMA
has granted a product-specific waiver, a class waiver or a deferral for one or more of the measures included in the PIP. The respective
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requirements for all marketing authorization procedures are set forth in Regulation (EC) No 1901/2006, which is referred to as the
Pediatric Regulation. This requirement also applies when a company wants to add a new indication, pharmaceutical form or route of
administration for a medicine that is already authorized. The Pediatric Committee of the EMA (the “PDCO”) may grant deferrals for
some medicines, allowing a company to delay development of the medicine in children until there is enough information to
demonstrate its effectiveness and safety in adults. The PDCO may also grant waivers when development of a medicine in children is
not needed or is not appropriate because (a) the product is likely to be ineffective or unsafe in part or all of the pediatric population;
(b) the disease or condition occurs only in the adult population; or (c) the product does not represent a significant therapeutic benefit
over existing treatments for the pediatric population. Before a MAA can be filed, or an existing marketing authorization can be
amended, the EMA determines that companies actually comply with the agreed studies and measures listed in each relevant PIP.
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
with respect to quality, safety and effectiveness, 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 the actual placing of
the medicinal product on the EU market (in case of centralized procedure) or on the market of the authorizing member state within
three years after authorization, or if initially placed on the market, is no longer actually present on the market for three consecutive
years, ceases to be valid (the so-called sunset clause).
Regulatory Requirements after Marketing Authorization
As in the U.S., 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 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 the promotion
of medicinal products, interactions with clinicians, misleading and comparative advertising and unfair commercial practices. Direct-
to-consumer advertising of prescription medicines is prohibited across the EU. 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 (“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.
Regulatory Data Protection in the EU
In the EU, innovative medicinal products approved on the basis of a complete independent data package qualify for eight years
of data exclusivity upon marketing authorization and an additional two years of market exclusivity. Data exclusivity prevents sponsors
for authorization of generics of these innovative products from referencing the innovator’s data to assess a generic (abridged)
application for a period of eight years. During an additional two-year period of market exclusivity, a generic marketing authorization
application can be submitted and authorized, and the innovator’s data may be referenced, but no generic medicinal product can be
placed on the EU market until the expiration of the market exclusivity. 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 innovator
gains 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 independent data package of pharmaceutical test, preclinical tests and clinical
trials.
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In this context, it should be noted that the EU pharmaceutical legislation is currently undergoing a complete review process, in
the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020. The
European Commission’s proposal for revision of several legislative instruments related to medicinal products was published in April
2023 and includes, among other things, provisions that would potentially reduce the duration of regulatory data protection. The
European Parliament requested several amendments in April 2024. At this time, the proposed revisions remain to be agreed and
adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption,
which is not anticipated before early 2026. The revisions may, however, have a significant impact on the pharmaceutical industry in
the long term, if and when adopted.
Orphan Drug Designation and Exclusivity
The criteria for designating an orphan medicinal product in the EU are similar in principle to those in the U.S. Under Article 3
of Regulation (EC) 141/2000, a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or
treatment of a life- threatening or chronically debilitating condition, (2) either (a) such condition affects no more than five in 10,000
persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not
generate sufficient return in the EU to justify investment and (3) there exists no satisfactory method of diagnosis, prevention or
treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to
those affected by the condition. The term ‘significant benefit’ is defined in Regulation (EC) 847/2000 to mean a clinically relevant
advantage or a major contribution to patient care.
Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a
marketing authorization, entitled to ten years of market exclusivity for the approved therapeutic indication. During this ten-year
market exclusivity period, the EMA or the competent authorities of the Member States of the EEA, cannot accept an application for a
marketing authorization for a similar medicinal product for the same indication. A similar medicinal product is defined as a medicinal
product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is
intended for the same therapeutic indication. The ten-year market exclusivity in the EU may 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 designation, for example, if the product is
sufficiently profitable not to justify maintenance of market exclusivity. Additionally, marketing authorization may be granted to a
similar product for the same indication at any time if: (1) the second sponsor can establish that its product, although similar, is safer,
more effective or otherwise clinically superior; (2) the sponsor consents to a second orphan medicinal product application; or (3) the
sponsor cannot supply enough orphan medicinal product.
The application for orphan designation must be submitted before the application for marketing authorization. The sponsor will
receive a fee reduction for the MAA if the orphan designation has been granted, but not if the designation is still pending at the time
the marketing authorization is submitted. Orphan designation does not convey any advantage in, or shorten the duration of, the
regulatory review and approval process.
Pediatric Exclusivity
If a sponsor obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized
procedure by the European Commission, and the study results for the pediatric population are included in the product information,
even when negative, the medicine is then eligible for an additional six-month period of qualifying patent protection through extension
of the term of an SPC, or alternatively a one year extension of the regulatory market exclusivity from ten to eleven years, as selected
by the marketing authorization holder.
Patent Term Extensions
The EU also provides for patent term extension through SPCs. The rules and requirements for obtaining a SPC are set out in
Regulation (EC) 469/2009 and are similar to those in the U.S. An SPC may extend a patent right for up to five years after its originally
scheduled expiration date and can provide up to a maximum of fifteen years of marketing exclusivity for a drug. In certain
circumstances, these periods may be extended for six additional months if pediatric exclusivity is obtained. Although SPCs are
available throughout the EU, sponsors must apply on a country-by-country basis, and SPCs are valid on a country-by-country basis.
Similar patent term extension rights exist in certain other foreign jurisdictions outside the EU.
Reimbursement and 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
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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.
Approval of companion diagnostic devices
In the EU, medical devices such as companion diagnostics must comply with the General Safety and Performance Requirements
(“SPRs”) detailed in Annex I of the EU Medical Devices Regulation (Regulation (EU) 2017/745) (“MDR”), which came into force in
May 2021 and replaced the previously applicable EU Medical Devices Directive (Council Directive 93/42/EEC). Compliance with
SPRs and additional requirements applicable to companion medical devices is a prerequisite to be able to affix the Conformitè
Europëenne mark of conformity (“CE certificate”) to medical devices, without which they cannot be marketed or sold. To demonstrate
compliance with the SPRs, a manufacturer must undergo a conformity assessment procedure, which varies according to the type of
medical device and its classification. The MDR is meant to establish a uniform, transparent, predictable, and sustainable regulatory
framework across the EU for medical devices.
Separately, the EU also adopted a new In Vitro Diagnostic Regulation (Regulation (EU) 2017/746) (“IVDR”) for In vitro
diagnostic medical devices (“IVDs”). The new regulation replaces the In Vitro Diagnostic Directive (“IVDD”) 98/79/EC. The IVDR,
among other things:
•
strengthens the rules on placing devices on the market and reinforces surveillance once they are available;
•
establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety
of devices placed on the market;
•
improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique
identification number;
•
establishes a central database to provide patients, healthcare professionals and the public with comprehensive information
on products available in the EU (“EUDAMED”); and
•
strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an
additional check by experts before they are placed on the market.
Under the IVDR, companion diagnostic devices are classified at least as a class C IVD and thus require involvement of the
notified body in the regulatory approval process under the IVDR. The IVDR became effective in May 2022. However, it became clear
in 2021 that that EU Member States, health institutions and economic operators were not ready to apply the IVDR as from that date.
The EU thus enacted provisions on a progressive or staggered roll-out of certain rules of the IVDR in 2021 and 2024 (Regulation
2022/112 and Regulation 2023/607). Most CE certificates issued under the previous IVVD remain valid for certain transition periods,
which currently range from December 31, 2027 (for IVD medical devices for which a certificate has been issued by a notified body
under the IVVD and class D devices) to December 31, 2028 (for class C IVDs) and December 31, 2029 (for class B and class A sterile
IVDs) These transition periods only apply to so called “legacy devices”, meaning devices covered by a certificate or declaration of
conformity issued under the previous legal framework (notably the IVDD). These legacy devices, benefit from the extended transition
periods if they fulfil certain conditions, notably (i) that they continue to comply with the rules in force when they were placed on the
market for the first time; (ii) that there are no significant changes in the design or intended purpose of the devices; (iii) that the devices
do not present an unacceptable risk to the health or safety of patients, users or other persons, or to other aspects of the protection of
public health and (iv) that no later than May 26, 2025, the manufacturer puts in place a quality management system compliant with the
IVDR. For devices requiring an assessment by a notified body, the manufacturer must submit an application to the notified body under
the IVDR to transfer the device to the IVDR by May 26, 2025 (class D devices), May 26, 2026 (class C devices) or 2027 (class B and
A sterile IVDs) and execute a written contract of the notified body within four months after expiry of these application deadlines. In
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addition, even for IVDs for which the transition periods apply, manufacturers have to comply with the requirements of the IVDR on
post-market surveillance (PMS), market surveillance, vigilance, and registration of devices in EUDAMED.
EU General Data Protection Regulation
The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EEA, including
personal health data, is subject to the GDPR, which became effective on May 25, 2018. In the United Kingdom (the “UK”), the GDPR
is retained in domestic law as the UK GDPR and sits alongside an amended version of the UK Data Protection Act 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 U.S., 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 of the respective group of companies, 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 is 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
The UK’s withdrawal from the EU, commonly referred to as Brexit, took place on January 31, 2020. The EU and the UK
reached an agreement on their new partnership in the Trade and Cooperation Agreement, which entered into force on May 1, 2021. As
of January 1, 2021, the Medicines and Healthcare Products Regulatory Agency (the “MHRA”) became responsible for supervising
medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas Northern
Ireland continues to be subject to EU rules under the Northern Ireland Protocol, as amended by the so called Windsor Framework
agreed in February 2023. As of January 1, 2025, the changes introduced by the Windsor Framework resulted in the MHRA being
responsible for approving all medicinal products destined for the United Kingdom market (Great Britain and Northern Ireland), and
the EMA will no longer have any role in approving medicinal products destined for Northern Ireland. The MHRA relies on the Human
Medicines Regulations 2012 (SI 2012/1916) (as amended) (the “HMR”) as the basis for regulating medicines. The HMR has
incorporated into the domestic law the body of EU law instruments governing medicinal products that pre-existed prior to the UK’s
withdrawal from the EU.
As of January 1, 2024 on, a new international recognition procedure (“IRP”) applies which intends to facilitate approval of
pharmaceutical products in the UK. The IRP is open to applicants that have already received an authorization for the same product
from one of the MHRA’s specified Reference Regulators (“RRs”). The RRs notably include EMA and regulators in the EEA member
states for approvals in the EU centralized procedure and mutual recognition procedure as well as the FDA (for product approvals
granted in the U.S.). The RR assessment must have undergone a full and standalone review. RR assessments based on reliance or
recognition cannot be used to support an IRP application. A CHMP positive opinion or an MRDC positive end of procedure outcome
is an RR authorisation for the purposes of IRP.
Human Capital
We believe that the success of our business is fundamentally due to our greatest asset, our employees. To that end, we have
invested significant resources toward the attraction, retention and development of our people and the promotion of inclusion in our
workforce. To support these goals, our human resources programs and initiatives underscore our core values (Innovation, Courage,
Alignment and Accountability, Resiliency and Energy) and are designed to prioritize employees’ well-being, support their career
development, offer competitive wages and benefits, and enhance our culture through efforts geared toward making the workplace
more enriching, engaging, and inclusive.
To attract, retain and reward our employees, we provide competitive total rewards aimed at supporting the financial, physical
and emotional health of our employees and their families. We currently offer all new employees equity in our company and as
incentive to all our employees in connection with our annual performance reviews. Our equity and cash incentive plans are designed
to increase stockholder value and the success of our company by motivating our employees to perform to the best of their abilities and
achieve our collective objectives. In addition, many of our employees are stockholders of our company through participation in our
Employee Stock Purchase Plan, which aligns the interests of our employees with our stockholders by providing stock ownership on a
tax-deferred basis. We also provide up to a 4% match of components of employee compensation to our Section 401(k) retirement
savings plan.
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We strive to provide our employees with a safe and healthy work environment and believe that the overall health, safety and
wellness of our employees is critical to our long-term success and our growth as a business. As such, we provide our employees and
their families with access to a variety of innovative, flexible and convenient health and wellness programs, including benefits that
provide protection and security so they can have peace of mind concerning events that may require time away from work or that
impact their financial well-being. In alignment with our KaryoFlex philosophy, we offer flexible time off to our employees, which is
designed to provide greater flexibility and better support our employees' work-life balance. Our full-time employees are all eligible to
participate in our health, vision, dental, life, and long-term disability insurance plans. To encourage employees to keep up with routine
medical care and participate in our wellness program, we fund a Health Reimbursement Account for participating employees that
partially covers employee deductibles and to help our employees cover medical expenses pre-tax, we also offer employees a Flexible
Spending Account in addition to providing a monthly wellness fund designed to support broad well-being activities. To support our
diverse populations’ needs, we also offer a High Deductible Health Plan coupled with a Health Savings Account. We provide initial
funding into the account and employees can also contribute to this tax-advantaged savings account that can be used to pay for medical,
dental, vision, and other qualified expenses now or later in life. Along with the option to participate in a Limited Purpose Flexible
Spending Account to pay for qualified dental and vision expenses throughout the year, all employees have access to complimentary
virtual fitness programs, mental and emotional health support services, as well as support programs to assist working parents with
childcare and tutoring. This benefit also extends to eldercare, pet care, and other needs facing our diverse global team.
We encourage and support the growth and development of our employees and, wherever possible, seek to fill positions
internally, through lateral and promotional advancements and by leveraging our employee referral process. Continual learning and
career development is encouraged through ongoing performance and development conversations with employees, a formal mentorship
program, tuition assistance, employee and leadership training programs targeting both technical and soft skills, and customized
corporate training engagements and seminars where employees are encouraged to attend in connection with current and future roles.
Employees at all levels have an opportunity to develop and hone their skillsets, which provides a critically important growth path and
continuity for our top performers.
Further, we strongly believe in fostering a culture of inclusiveness and employee well-being, which is key to our culture and
overall success. We strive to bring together employees with a wide variety of backgrounds, skills and culture and encourage all our
employees to maintain a work environment in which our differences are respected. We have put into place relationships with many
local affinity groups including the biotech industry’s largest LGBTQ professional group, and women and Latinos in biotech
organizations to extend our reach, build relationships and foster greater cohesion among our employees.
We have created a women’s Employee Resource Group (“ERG”) where women and allies can connect, share experiences, and
inspire one another. The ERG is a safe space for open dialogue, mentorship, and collaboration that all employees can benefit from. We
have also established key working relationships with local universities where we hire many of our interns in our annual program.
As of February 14, 2025, we had 279 employees, all of whom were 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.
Corporate Responsibility
We are highly committed to policies and practices focused on environmental, social, and governance (“ESG”), positively
impacting our social community and maintaining and cultivating good corporate governance. By focusing on ESG policies and
practices, we believe we can affect a meaningful and positive change in our community and continue to cultivate our open and
inclusive collaborative culture.
Some of our 2024 initiatives included continuing support for the scientific, medical, patient, and local communities in which we
operate, including patient education, public health, quality of healthcare, and disease awareness. We also enable our employees to
participate in various charity events, including walks, races, and other events that impact change in the communities of the patients we
serve. We offer an employee volunteer time off program to support volunteer activities that enhance the communities in which we live
and work while providing our employees the paid time to help those around them. This allows our employees to support causes that
are meaningful to them and their families and aligns with our mission, goals, and vision.
Our ESG Report, which describes our approach to ESG programs, is available on our website at
https://investors.karyopharm.com/corporate-sustainability. Information in our ESG Report is not incorporated by reference into this
Form 10-K. We look forward to continuing our commitment to giving back to our local communities in 2025 and beyond.
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Information about our Executive Officers
The following table lists the names, ages and positions of our executive officers as of February 14, 2025:
Name
Age
Position
Richard Paulson, M.B.A
57
President and Chief Executive Officer
Sohanya Cheng, M.B.A.
42
Executive Vice President, Chief Commercial Officer
Lori Macomber, C.P.A.
54
Executive Vice President, Chief Financial Officer and
Treasurer
Michael Mano, J.D.
48
Senior Vice President, General Counsel and Secretary
Stuart Poulton
52
Executive Vice President, Chief Development Officer
Reshma Rangwala, M.D., Ph.D
47
Executive Vice President, Chief Medical Officer
Richard Paulson, M.B.A. Mr. Paulson has served as our President and Chief Executive Officer since May 2021 and as a member
of our Board since February 2020. Prior to joining Karyopharm, Mr. Paulson was the Executive Vice President and Chief Executive
Officer of Ipsen North America, a biopharmaceutical company, from 2018 to May 2021. Mr. Paulson was Vice President and General
Manager, U.S. Oncology Business Unit at Amgen Inc. (“Amgen”), a public biotechnology company, from 2015 to 2018 and prior to
that was Vice President, Marketing for Amgen’s U.S. Oncology Business, General Manager, Amgen Germany and General Manager
of Amgen Central & Eastern Europe. Prior to Amgen, Mr. Paulson held a number of global leadership positions at Pfizer Inc.
(“Pfizer”), including serving as General Manager of Pfizer South Africa and Pfizer Czech Republic. Mr. Paulson also previously held
a variety of sales, marketing, and market access roles with increasing seniority at GlaxoWellcome plc in Canada. Mr. Paulson has
served as a member of the board of directors of bluebird bio, Inc., a public biotechnology company, since April 2023. Mr. Paulson has
an M.B.A. from the University of Toronto, Canada and an undergraduate degree in commerce from the University of Saskatchewan,
Canada.
Sohanya Cheng, M.B.A. Ms. Cheng joined Karyopharm as Senior Vice President, Sales and Commercial Operations in June
2021 and has served as our Executive Vice President, Chief Commercial Officer since December 2021. Prior to joining Karyopharm,
Ms. Cheng served as Vice President, Head of Marketing, at Arrowhead Pharmaceuticals, Inc., a public pharmaceutical company, from
August 2020 to December 2020. Prior to this role, Ms. Cheng spent eleven years at Amgen, a public biotechnology company, where
she held a variety of sales and marketing leadership roles supporting the commercialization of key oncology brands, including as
Executive Director, Head of National Sales Force & Oncology Contracting Strategy from 2019 to August 2020, Executive Director,
Head of Marketing & Sales for their multiple myeloma business from 2018 to 2019; and Chief of Staff to General Manager and
Strategy & Operations Director for their oncology business from 2017 to 2018. Ms. Cheng has served as a member of the board of
directors of Carisma Therapeutics Inc., a public biopharmaceutical company, since October 2024. Ms. Cheng holds an M.B.A. from
the MIT Sloan School of Management and a BSc and MA in Biochemistry from the University of Cambridge, United Kingdom.
Lori Macomber, C.P.A. Ms. Macomber joined Karyopharm as Executive Vice President, Chief Financial Officer and Treasurer
on January 3, 2025. Prior to joining Karyopharm, Ms. Macomber served in various positions at Legend Biotech Corporation, a public
biotechnology company, including as Chief Financial Officer from May 2022 to January 2025, as Vice President, Finance from March
2021 to May 2022 and as Vice President of Supply Chain Finance and Controller from 2019 to March 2021. Prior to Legend Biotech
Corporation, Ms. Macomber served as Business Unit Controller at Ametek PDS, a leading supplier of components and systems for the
aerospace and defense industries, from 2018 to 2019 and as U.S. Chief Financial Officer and Controller of Cello Health from 2017
until 2018. Prior to 2018, Ms. Macomber held various financial positions of increasing responsibilities within the pharmaceutical
industry at Eli Lily and Company and Pfizer Inc. (formerly Pharmacia Corporation). Ms. Macomber holds a B.S. in Accounting from
Pennsylvania State University and is a certified public accountant.
Michael Mano, J.D. Mr. Mano joined Karyopharm as Senior Vice President, General Counsel and Secretary in December 2020
with over 15 years of legal experience. Prior to joining Karyopharm, Mr. Mano served as Counsel, Business Development for Biogen,
a public biotechnology company, from January 2018 to December 2020, where he supported Biogen’s global business development
platform. Prior to that he was Senior Counsel at Proskauer Rose LLP, an international law firm, from 2013 to 2018 where he
represented clients in a broad range of corporate matters. Prior to Proskauer Rose LLP, Mr. Mano was in private legal practice where
he represented clients in the life sciences industry in a broad range of corporate matters. Mr. Mano received a B.A. in Political Science
and Sociology from Saint Michael’s College and a Juris Doctor from Washington University School of Law.
Stuart Poulton. Mr. Poulton joined Karyopharm as Senior Vice President, Strategy and Portfolio Management in February 2022
and has served as our Executive Vice President, Chief Development Officer since August 2022. Mr. Poulton served as Vice President,
Clinical Development Operations at AbbVie Inc., a public biopharmaceutical company, from 2019 to January 2022 and as Vice
President, Portfolio Program Management from 2016 to 2019. Prior to that, Mr. Poulton served in several roles at Amgen, including as
52
Executive Director, Global Program Management from 2013 to 2016; as Director, Global Program Management, Asia Regional
Management Team, from 2012 to 2013; as Director, Global Program Management, from 2007 to 2012 and as Senior Manager,
Clinical Study Planning from 2006 to 2007. Mr. Poulton started his career at Eli Lilly and Company in clinical operations. Mr.
Poulton received his B.Sc. in Pharmacology and Chemistry from the University of Sydney, Australia and a M.Com. in Marketing from
the University of New South Wales, Australia.
Reshma Rangwala, M.D., Ph.D. Dr. Rangwala joined Karyopharm in April 2022 as Executive Vice President, Chief Medical
Officer, with more than a decade of experience in oncology and drug development. Dr. Rangwala served as Chief Medical Officer of
Aravive, Inc., a public oncology company, from September 2020 to April 2022. Prior to that, Dr. Rangwala served as Vice President,
Medical, at Genmab Inc., an international biotechnology company, from 2017 to July 2020. Prior to that, Dr. Rangwala served as
Executive Clinical Director at Merck & Co., a biopharmaceutical company, from 2012 to 2017. Dr. Rangwala received her B.S. in
Biology from Duke University and her M.D./Ph.D. from the University of Cincinnati College of Medicine. She completed her internal
medicine residency at Barnes Jewish Hospital in St. Louis, Missouri and her medical oncology fellowship at the Hospital of the
University of Pennsylvania.
Information about our Directors
The following table lists the names, ages and positions of our current directors:
Name
Age
Position
Richard Paulson, M.B.A.
57
President and Chief Executive Officer of Karyopharm
Barry E. Greene
61
Chief Executive Officer of Sage Therapeutics, Inc., a
biopharmaceutical company
Garen G. Bohlin
77
Former Executive Vice President of Constellation
Pharmaceuticals, Inc., a biopharmaceutical company
Mansoor Raza Mirza, M.D.
63
Chief Oncologist at the Department of Oncology, Rigshopitalet
– the Copenhagen University Hospital, Denmark and Medical
Director of the Nordic Society of Gynaecological Oncology
Christy J. Oliger
55
Former Senior Vice President of the Oncology Business Unit
at Genentech, Inc., a biotechnology company
Deepa R. Pakianathan, Ph.D.
60
Managing Member at Delphi Ventures, a venture capital firm
focused on biotechnology and medical device investments
Chen Schor
52
President, Chief Executive Officer and Director of Adicet Bio,
Inc., a biotechnology company
Zhen Su, M.D., M.B.A.
48
Chief Executive Officer and Director of Marengo
Therapeutics, Inc., a biotechnology company
Available Information
Our Internet website is https://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. 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. 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. 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.
Our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of the Audit, Compensation,
Nominating, Corporate Governance & Compliance and Commercialization and Portfolio Committees of our Board of Directors are all
available on our website at https://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, 2nd
floor, Newton, Massachusetts 02459, U.S.A.
53
Item 1A. Risk Factors.
Careful consideration should be given to the following material 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 U.S. Securities and Exchange Commission (“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 we face. 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.
References to XPOVIO® (selinexor) also refer to NEXPOVIO® (selinexor) when discussing its approval and commercialization
in certain countries or territories outside of the U.S.
Risks Related to Commercialization and Product Development
Our business is substantially dependent on the commercial success of XPOVIO. If we, either alone or with our collaborators, are
unable to successfully commercialize current and future indications of XPOVIO or other products or product candidates on a
timely basis, including achieving widespread market acceptance by physicians, patients, third-party payors and others in the
medical community, our business, financial condition and future profitability will be materially harmed.
Our business and our ability to generate product revenue from the sales of drugs that treat cancer depend heavily on our and our
collaborators’ ability to successfully commercialize our lead drug, XPOVIO® (selinexor), on a global basis in currently approved and
future indications, and the level of market adoption for, and the continued use of, our products and product candidates, if approved.
XPOVIO is currently approved and marketed in the U.S. in multiple hematologic malignancy indications, including in combination
with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have received at least one prior
therapy; 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 proteasome inhibitors, at least two
immunomodulatory agents, and an anti-CD38 monoclonal antibody; and under accelerated approval as a monotherapy for the
treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”), not otherwise specified, including
DLBCL arising from follicular lymphoma, after at least 2 lines of systemic therapy. Efforts to drive adoption within the medical
community and third-party payors based on the benefits of our products and product candidates require significant resources and may
not be successful. The success of XPOVIO and any current or future product candidates, whether alone or in collaboration with third
parties, including achieving and maintaining an adequate level of market adoption, depends on several factors, including:
•
our ability to achieve broad adoption of XPOVIO in earlier lines of therapy or to successfully launch and achieve broad
adoption of any future XPOVIO indications or any product candidates for which we obtain marketing approval;
•
the competitive landscape for our products, including the timing of new competing products entering the market and the
level and speed at which these products achieve market acceptance;
•
actual or perceived advantages or disadvantages of our products or product candidates as compared to alternative
treatments, including their respective safety, tolerability and efficacy profiles, the potential convenience and ease of
administration, access or cost effectiveness;
•
the effectiveness of our sales, marketing, manufacturing and distribution strategies and operations;
•
the consistency of any new data we collect and analyses we conduct with prior results, whether they support a favorable
benefit-risk profile of XPOVIO and any potential impact on our U.S. Food and Drug Administration (“FDA”) approvals
and/or FDA package insert for XPOVIO and comparable foreign regulatory approvals and package inserts;
•
our ability to comply with the FDA’s and comparable foreign regulatory authorities’ post-marketing requirements and
commitments, including through successfully conducting, on a timely basis, additional studies that confirm clinical
efficacy, effectiveness and safety of XPOVIO and acceptance of the same by the FDA or similar foreign regulatory
bodies;
•
acceptance of current indications of XPOVIO and future indications of XPOVIO and other product candidates, if
approved, by patients, the medical community and third-party payors;
•
obtaining and maintaining coverage, adequate pricing and reimbursement by third-party payors, including government
payors, for XPOVIO and our product candidates, if approved;
54
•
the willingness of patients to pay out-of-pocket in the absence of third-party coverage or as co-pay amounts under third-
party coverage; for example, multiple myeloma foundation closures during 2023 resulted in significantly increased use of
our Patient Assistance Program (“PAP”), which adversely impacted our 2023 revenues;
•
our ability to enforce intellectual property rights in and to our products to prohibit a third-party from marketing a
competing product and our ability to avoid third-party patent interference or intellectual property infringement claims;
•
current and future restrictions or limitations on our approved or future indications and patient populations or other adverse
regulatory actions;
•
the performance of our manufacturers, license partners, distributors, providers and other business partners, over which we
have limited control;
•
any significant misestimations of the size of the market and market potential for any of our products or product
candidates;
•
establishing and maintaining commercial manufacturing capabilities or making arrangements with third-party
manufacturers;
•
the willingness of the target patient population to try new therapies or new treatment paradigms such as bridging therapies
and of physicians to prescribe these therapies, based, in part, on their perception of our clinical trial data and/or the actual
or perceived safety, tolerability and effectiveness profile;
•
maintaining an acceptable safety and tolerability profile of our approved products, including the prevalence and severity
of any side effects;
•
the ability to offer our products for sale at competitive prices;
•
adverse publicity about our products or favorable publicity about competitive products; and
•
our ability to maintain compliance with existing and new health care laws and regulations, including government pricing,
price reporting and other disclosure requirements related to such laws and regulations, and the potential impact of such
laws and regulations on physician prescribing practices and payor coverage.
If we do not achieve one or more of these factors in a timely manner, or at all, either on our own or with our collaborators, we
could experience significant delays or an inability to successfully commercialize XPOVIO or our product candidates, if approved,
which would materially harm our business.
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, particularly in the cancer field. We and
our collaborators face competition with respect to XPOVIO and will face competition with respect to any product candidates that we
may seek to discover and develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical
companies, biotechnology companies, academic institutions and governmental agencies as well as public and private research
institutions worldwide, many of which have significantly greater financial resources and expertise in research and development,
manufacturing, preclinical studies, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we
do. There are a number of major pharmaceutical, specialty pharmaceutical and biotechnology companies that currently market and sell
drugs and/or are pursuing the development of drugs for the treatment of cancer and the other disease indications for which we, and our
collaborators, are developing our product candidates. Several new novel therapeutics have recently entered, and are expected to
continue to enter, the multiple myeloma treatment landscape. For example, TECVAYLI™ (teclistamab-cqyv), the first bispecific T-
Cell engager, was approved by the FDA in October 2022, followed by approvals of two more bispecifics, ELREXFIO™
(elranatamab-bcmm) and TALVEY™ (talquetamab-tgvs) in August 2023. Other T-cell engaging therapies, bispecifics with different
targets, and immunomodulators are in clinical development and may be introduced into the multiple myeloma market in 2025 and
beyond. CARVYKTI® (ciltacabtagene autoleucel; cilta-cel) and Abecma® (idecabtagene vicleucel; ide-cel) were approved in April
2024 for the treatment of multiple myeloma in earlier lines. In addition, new competitors and label expansions into earlier lines of
existing therapies could also be approved in the future (e.g. belantamab mafodotin and linvoseltamab), which could negatively impact
our product revenues. The approval of these anti-cancer agents, or any others which may receive regulatory approval, have had a
significant impact and may continue to have a significant impact on the therapeutic landscape and our product revenues. See Item 1
under the heading Business - Competition in this Annual Report on Form 10-K for more information on competition.
We are currently focused on developing and commercializing our products and product candidates for the treatment of cancer
and there are a variety of available therapies marketed for cancer. In many cases, cancer drugs are administered in combination to
55
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. Our products are priced at a significant premium over
competitive generic drugs, which may make it difficult for us to achieve our business strategy of using our products in combination
with existing therapies or replacing existing therapies with our products.
Further, our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize drugs that
are or are perceived to be more effective, safer, more tolerable, more convenient and/or less costly than any of our currently approved
products or product candidates or that would render our products obsolete or non-competitive. Our competitors may also obtain
marketing approval from the FDA or other regulatory authorities for their products more rapidly than we, or our collaborators, may
obtain approval for ours, which could result in our competitors establishing a stronger market position before we, or our collaborators,
are able to enter the market or preventing us, or our collaborators, from entering into a particular indication at all.
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.
If we are not able to compete effectively against current or potential competitors, our business will not grow and our financial
condition and operations will suffer.
Clinical development is a lengthy and expensive process, with uncertain timelines and outcomes. We or our collaborators may be
unable to successfully enroll patients in our ongoing and planned clinical trials in a reasonable timeframe, or at all. In addition, if
clinical trials of our product candidates fail to demonstrate safety and effectiveness to the satisfaction of regulatory authorities or
do not otherwise produce positive results, we, or our collaborators, may incur additional costs, fail to secure regulatory approvals,
or be unable to commercialize such product candidates.
Our long-term success depends in a large part on our ability to continue to successfully develop new indications of selinexor,
our product candidates, or any new product candidates we may develop or acquire. Clinical testing is expensive, time consuming,
difficult to design, implement and enroll, inherently uncertain as to outcome, and can fail at any stage of testing. Furthermore, the
failure of any product candidates to demonstrate safety and effectiveness in any clinical trial could negatively impact the perception of
selinexor or our other product candidates and/or cause the FDA or other regulatory authorities to require additional testing before any
of our product candidates are approved.
Numerous unforeseen events during, or as a result of, clinical trials could delay or prevent our or our collaborators’ ability to
complete such clinical trials or receive marketing approval of our product candidates, including, but not limited to, the following:
•
delays or failure to reach agreement with regulatory authorities on a trial design or the receipt of feedback requiring us to
modify the design of our clinical trials, perform additional or unanticipated clinical trials to obtain approval or alter our
regulatory strategy, as is the case in connection with the feedback we received from the FDA in February 2022 on our
SIENDO trial and the feedback from the FDA that we announced in December 2024 regarding the appropriateness of our
global, Phase 3 trial evaluating selinexor as a maintenance therapy following systemic therapy in patients with TP53 wild-
type advanced or recurrent endometrial cancer (the “EC-042 Trial”) given the evolving treatment landscape for patients
with advanced or recurrent endometrial cancer;
•
clinical trials of our product candidates may produce negative or inconclusive results or other patient safety concerns,
including undesirable side effects or other unexpected characteristics, and we may decide, or regulatory authorities may
require us, to conduct additional clinical trials, suspend ongoing clinical trials or abandon drug development programs,
including as a result of a finding that the participants are being exposed to unacceptable health risks;
•
enrollment in our clinical trials may be slower than we anticipate, including as a result of competition with other ongoing
clinical trials or recently approved agents, which could decrease the overall supply of patients, or decreasing interest from
selected clinical trial sites, delays in site activation, higher than expected screen failure rates, newly approved competitive
products for the same indications as our product candidates or new or amended regulations; for example, in August 2024,
we announced expected delays in our top-line data readout for our EC-042 Trial due primarily to higher than expected
screen failure rates, which has required us to screen a larger number of patients than originally planned;
•
changes in the treatment landscape on which a clinical development plan was based, such as the approval of new therapies
during the course of a clinical trial, can change the potential approvability of a drug even if the results of a pivotal, Phase
56
3 clinical trial are considered clinically meaningful and the primary endpoints achieve statistical significance since global
regulatory agencies, including the FDA, often consider approvability in light of the current treatment landscape at the time
of approval, and not at the time when a clinical trial is first designed; for example, in recent years three new novel agents
(dostarlimab-gxly, pembrolizumab and durvalumab) have been approved for treatment in patients with endometrial
cancer, which has evolved the treatment landscape;
•
modifications of clinical trial protocols impacting the patient population under study, including any modifications to the
eligibility criteria or the total number of patients targeted for enrollment;
•
strategic revisions to clinical trial designs, including a change in primary endpoints or a reduction in the total number of
patients targeted for enrollment, which could negatively impact our ability to submit and/or receive regulatory approval
for the indication sought; for example, we recently decreased the number of total patients to be enrolled in the ongoing
Phase 3 trial evaluating selinexor in combination with pomalidomide and dexamethasone versus elotuzumab,
pomalidomide, and dexamethasone in patients with relapsed or refractory multiple myeloma;
•
regulators may revise the requirements for approving our product candidates, even after providing a positive opinion on or
otherwise reviewing and providing comments to a clinical trial protocol, and/or such requirements may not be as we
anticipate;
•
delays or failure in obtaining the necessary authorization from regulatory authorities or ethics committees, including
institutional review boards, to permit us, our collaborators or our investigators to commence a clinical trial, conduct a
clinical trial at a prospective trial site, or the suspension or termination of a clinical trial once commenced;
•
delays or failure to reach agreement on acceptable terms with prospective clinical trial sites or contract research
organizations (“CROs”);
•
the number of patients required for clinical trials of our product candidates may be larger than we anticipate or
participants may drop out of these clinical trials at a higher rate than we anticipate, which can increase the cost of our
trials, extend clinical trial timelines and provide competitors with additional time to seek regulatory approval for their
products prior to the finalization of our trials;
•
our third-party contractors, including manufacturers or CROs, may fail to comply with regulatory requirements, perform
effectively, or meet their contractual obligations to us in a timely manner, or at all;
•
we or our investigators might be found to be non-compliant with regulatory requirements;
•
the cost of clinical trials of our product candidates may be greater than we anticipate;
•
the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or
inadequate;
•
for any biomarker driven clinical trial, the potential regulatory requirement to develop one or more companion
diagnostics; for example, the required development of companion diagnostics for our ongoing clinical trial evaluating
selinexor in patients with TP53 wild-type advanced or recurrent endometrial cancer;
•
any partners or collaborators that help us 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; and
•
negative impacts resulting from a pandemic or other public health emergency, including impacts to healthcare systems
and our trial sites’ ability to conduct trial.
If we, or our collaborators, are required to conduct additional clinical trials or other testing of our product candidates or a
companion diagnostic beyond those that we currently contemplate or are unable to successfully complete clinical trials of our product
candidates or other testing, on a timely basis or at all, if changes to the external landscape impact our planned patient population or
current clinical trial protocols, and/or if the results of these trials or tests are not positive or are only modestly positive or if there are
safety concerns, we, or our collaborators, may:
•
need to delay, limit or terminate ongoing or planned clinical trials;
•
be delayed in obtaining, or not obtain at all, marketing approval for the indication or product candidate;
•
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;
57
•
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;
•
not receive royalty or milestone revenue under our collaboration agreements for several years, or at all; or
•
have the product removed from the market after obtaining marketing approval.
Further, 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. In addition, if we are slow or unable to adapt to changes in existing requirements or the adoption of new
requirements or policies governing clinical trials, our development plans may be impacted. For example, in December 2022, with the
passage of Food and Drug Omnibus Reform Act (“FDORA”), Congress required sponsors to develop and submit a Diversity Action
Plan (“DAP”) for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to
encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. In June 2024, as
mandated by FDORA, the FDA issued draft guidance outlining the general requirements for DAPs. Unlike most guidance documents
issued by the FDA, the DAP guidance when finalized will have the force of law because FDORA specifically dictates that the form
and manner for submission of DAPs are specified in FDA guidance. On January 27, 2025, in response to an Executive Order issued by
President Trump on January 21, 2025, on Diversity, Equity and Inclusion programs, the FDA removed this draft guidance from its
website. This action raises questions about the applicability of statutory obligations to submit DAPs and the agency’s current thinking
on best practices for clinical development.
Similarly, the regulatory landscape related to clinical trials in the EU recently evolved. The CTR, which was adopted in April
2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. While the Clinical Trials Directive
required a separate clinical trial application to be submitted in each member state, to both the competent national health authority and
an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application to
all member states concerned.
Any of these events could prevent us or our collaborators from achieving or maintaining market acceptance of the affected
product candidate, if approved, or could substantially increase costs and expenses of development or commercialization, which could
delay or prevent us from generating sufficient revenue from the sale of our products and harm our business and results of operations.
Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our
products, allow our competitors to bring products to market before we do or impair our ability to successfully commercialize our
products, 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 product candidates.
Serious adverse or unacceptable side effects related to XPOVIO, our product candidates or future products may delay or prevent
their regulatory approval, cause us or our collaborators to suspend or discontinue clinical trials, limit the commercial value of
approved indications or result in significant negative financial consequences following any marketing approval.
We are currently developing selinexor for the treatment of multiple types of cancer. Its risk of failure is high. If our current or
future indications of XPOVIO, any of our product candidates or future products 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 or limit
their development or limit 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 (“AEs”) in our clinical trials for selinexor to date have been generally predictable and typically manageable,
including through prophylactic care or dose reductions, although some patients have experienced more serious AEs. The most
common drug-related AEs in our clinical trials for selinexor include fatigue, nausea, anorexia, diarrhea, peripheral neuropathy, upper
respiratory tract infection, vomiting, cytopenias, hyponatremia, weight loss, decreased appetite, cataract, dizziness, syncope, depressed
level of consciousness, and mental status changes. These side effects were generally mild or moderate in severity. The most common
AEs that are Grade 3 or Grade 4, meaning they are more than mild or moderate in severity, include thrombocytopenia, lymphopenia,
hypophosphatemia, anemia, hyponatremia and neutropenia. To date, the most common AEs in the multiple myeloma patient
population 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 and some patients across our clinical trials have experienced serious AEs deemed by us and the
clinical investigator to be related to selinexor. Serious AEs 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.
58
The occurrence of AEs in either our clinical trials or following regulatory approval could result in a more restrictive label for
any product candidates approved for marketing or could result in the delay or denial of approval to market any product candidates by
the FDA or comparable foreign regulatory authorities, which could prevent us from generating sufficient revenue from product sales
or ultimately achieving profitability. Treatment-related side effects could also affect patient recruitment or the ability of enrolled
patients to complete the trial, result in potential product liability claims or cause patients and/or healthcare providers to elect
alternative courses of treatment. In addition, these side effects may not be appropriately recognized or managed by the treating
medical staff. Inadequate training or education of healthcare professionals to recognize or manage the potential side effects of
XPOVIO or our product candidates, if approved, could result in increased treatment-related side effects and cause patients to
discontinue treatment. Any of these occurrences may harm our business, financial condition and prospects significantly.
Results of our trials could reveal an unacceptably high severity and prevalence of side effects. In such an event, our trials could
be suspended or terminated by us or the FDA or comparable foreign regulatory authorities could order us or our collaborators to cease
further development of or deny approval of our product 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 or our collaborators’ product 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, require additional warnings on the label or impose
distribution or use restrictions and/or require one or more post-marketing studies;
•
patients and/or healthcare providers may elect to utilize other treatment options that have or are perceived to have more
tolerable side effects;
•
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.
Further, we, our collaborators and our clinical trial investigators, currently determine if serious adverse or unacceptable side
effects are drug-related. The FDA or foreign regulatory authorities may disagree with our, our collaborators’ or our clinical trial
investigators’ interpretation of data from clinical trials and the conclusion by us, our collaborators or our clinical trial investigators that
a serious adverse effect or unacceptable side effect was not drug-related. The FDA or foreign regulatory authorities may require more
information related to the safety of our products or product candidates, 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 product candidates, and/or
delay or cause us to change our commercialization plans, or we may decide to abandon the development of the product candidate
altogether.
The results of previous clinical trials may not be predictive of future trial results, and interim or top-line data may be subject to
change or qualification based on the complete analyses of data and, therefore, may not be predictive of the final results of a trial.
Clinical failure can occur at any stage of the clinical development process and, therefore, the outcome of preclinical studies and
early-stage clinical trials may not be predictive of the success of later stage clinical trials. Finalization and cleaning of data from our
clinical trials may change the conclusions drawn from uncleaned data provided by our clinical trial investigators. Further, there can be
significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors,
including changes in trial protocols, differences in size and type of the patient populations, starting dose, adherence to the dosing
regimen and other trial protocols and the dropout rate 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 data sufficient to obtain regulatory
approval to market our product candidates, if approved. Moreover, preclinical and clinical data are often susceptible to varying
interpretations and analyses, and many companies have suffered significant setbacks in late-stage clinical trials after achieving
positive results in earlier development, and we could face similar setbacks.
We may publicly disclose preliminary, interim or top-line data from our clinical trials. These interim updates are based on a
preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change as further patient
data become available and following a more comprehensive review of the data related to the particular study or trial. For any trial for
which we report preliminary, interim or top-line data, we make assumptions, estimations, calculations and conclusions as part of our
analyses of data. We may not have received or had the opportunity to fully and carefully evaluate all data or perform all analyses or
our conclusions may differ from those of the FDA or other regulatory authorities. Consequently, the interpretation of preliminary,
interim or top-line data results that we report may differ from future interpretations of the same studies once additional data have been
received and fully evaluated or based on differing views from regulatory agencies. Preliminary, interim or top-line data also remain
subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we
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previously published. As a result, these early data points should be viewed with caution until the final data are available. Adverse
differences between previous preliminary or interim data and future interim or final data could significantly harm our business.
In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is typically selected from
a more extensive amount of available information. Furthermore, we may report interim analyses of only certain endpoints rather than
all endpoints. Investors may not agree with what we determine is the material or otherwise appropriate information to include in our
disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions,
conclusions, views, activities or otherwise regarding a particular product, product candidate or our business.
If the interim or top-line data that we report differ from future or more comprehensive data, or if others, including regulatory
authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our product candidates, our
business, operating results, prospects, or financial condition may be harmed.
We may not be successful in our efforts to identify or discover additional potential product candidates, or our decisions to prioritize
the development of certain product candidates over others may later prove wrong.
Part of our strategy involves identifying and developing product candidates to build a pipeline of product 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 product candidates, yet fail to yield product candidates for clinical
development for a number of reasons, including:
•
the research methodology used may not be successful in identifying potential product candidates;
•
potential product 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 product candidates may not be effective in treating their targeted diseases.
We are currently advancing multiple clinical development studies of selinexor, which may create a strain on our limited human
and financial resources. As a result, we may not be able to provide sufficient resources to any single product candidate to permit the
successful development and commercialization of such product candidate, which could result in material harm to our business.
Further, because we have limited financial and managerial resources, we focus on research programs and product candidates that we
identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other
indications that later prove to have greater commercial potential. For example, as announced in January 2024, further clinical
development of our eltanexor program continues to remain on hold in an effort to focus our resources on our prioritized late-stage
programs. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market
opportunities. Our spending on current and future research and development programs and product candidates for specific indications
may not yield any additional commercially-viable products. If we do not accurately evaluate the commercial potential or target market
for a particular product candidate, we may relinquish valuable rights to that product 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 product candidate.
If we are unable to maintain or expand our sales, marketing and distribution capabilities, we may not be successful in
commercializing XPOVIO or any of our products or product candidates, if approved, that we may acquire or develop.
We have built a commercial infrastructure in the U.S. for XPOVIO, our first commercial product, in hematological
malignancies and our company did not previously have any prior experience in the sales, marketing or distribution of pharmaceutical
drugs. If XPOVIO or any of our product candidates is approved for additional indications beyond hematological malignancies, such as
solid tumors, we may need to evolve our sales, marketing and distribution capabilities and we may not be able to do so successfully or
on a timely basis. In the future, we may choose to expand our sales, marketing and distribution infrastructure to market or co-promote
one or more of our product candidates, if and when they are approved, or enter into additional collaborations with respect to the sale,
marketing and distribution of our product candidates. We are working with existing and potential partners to establish the commercial
infrastructure to support the sale of selinexor outside of the U.S. For example, we entered into a license agreement with the Menarini
Group (“Menarini”) in December 2021, and as amended in March 2023, to, among other things, develop and commercialize
NEXPOVIO for all human oncology indications in Europe (including the United Kingdom (“UK”)), Latin America, certain Middle
East and Africa regions and other key countries. For additional risks associated with commercializing our products outside of the U.S.,
please see the risk factor entitled “We depend on collaborations with third parties for certain aspects of the development, marketing
and/or commercialization of XPOVIO and/or our product candidates. If those collaborations are not successful, or if we are not able
to maintain our existing collaborations or establish additional collaborations, we may have to alter our development and
commercialization plans and may not be able to capitalize on the market potential of XPOVIO or our product candidates” below.
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There are risks involved with establishing and maintaining our own sales, marketing and distribution capabilities. For example,
recruiting and training a sales force is expensive and time consuming and could delay any commercial launch of a product candidate
or negatively impact ongoing commercialization efforts for our approved products. Further, we may underestimate the size of the sales
force required for a successful product launch and we may need to expand our sales force earlier and at a higher cost than we
anticipated. If the commercial launch of any of our product candidates is delayed or does not occur for any reason, including if we do
not receive marketing approval in the timeframe we expect, we may have prematurely or unnecessarily incurred 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 successfully commercialize XPOVIO or any product candidates, if approved, on our own
include:
•
existing or new competitors taking share from XPOVIO or any other future product or preventing XPOVIO or any other
future product from gaining share in its approved indications;
•
our inability to recruit, train and retain adequate numbers of effective sales, market access, market analytics, operations
and marketing personnel;
•
the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe
current or future products;
•
the lack of complementary drugs, 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;
•
our inability to obtain sufficient coverage and reimbursement from third-party payors and governmental agencies; and
•
our ability to supply sufficient inventory of our products for commercial sale.
Even if we, or our collaborators, are able to effectively commercialize XPOVIO or any approved products that we may develop or
acquire, the products 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. As a result, we or our collaborators might obtain marketing approval for a drug in a particular country, but
then be subject to price regulations that delay the commercial launch of the product, possibly for lengthy time periods, and negatively
impact the revenues we, or our collaborators, are able to generate from product sales in that country. In the U.S., approval and
reimbursement decisions are not linked directly, but there is increasing scrutiny from the Congress, regulatory authorities, payers,
patients and pathway organizations of the pricing of pharmaceutical products. Adverse pricing limitations may also hinder our ability
to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.
Our, and our collaborators’, ability to successfully commercialize XPOVIO and any other products that we may develop or
acquire will depend, in part, on the extent to which reimbursement for these products is 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. Even with payer coverage, patients may be unwilling or unable to pay the copay required and may
choose not to take XPOVIO.
A primary trend in the healthcare industry in the U.S. 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 or will continue to be available for XPOVIO and any product that we, or our collaborators, commercialize
and, if reimbursement is available, we cannot be sure as to the level of reimbursement and whether it will be adequate. Coverage and
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reimbursement may impact the demand for or the price of XPOVIO or any product candidate for which we, or our collaborators,
obtain marketing approval. If reimbursement is not available or is available only at limited levels, we, or our collaborators, may not be
able to successfully commercialize XPOVIO or any other approved products.
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 foreign regulatory authorities. 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 U.S. 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 our products and our overall financial condition.
Product liability lawsuits against us could divert our resources, cause us to incur substantial liabilities and limit commercialization
of XPOVIO or any other products that we may develop or acquire.
We face an inherent risk of product liability exposure related to our commercialization of XPOVIO and the testing of our
product candidates in human clinical trials as the administration of our products to humans may expose us to liability claims, whether
or not our products are actually at fault for causing any harm or injury. As XPOVIO is used over longer periods of time by a wider
group of patients taking numerous other medicines or by patients with additional underlying conditions, the likelihood of adverse drug
reactions or unintended side effects, including death, may increase. 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 products or product candidates caused injuries, we will incur substantial
liabilities or be required to limit commercialization of our products. Regardless of merit or eventual outcome, liability claims may
result in:
•
decreased demand for XPOVIO and any other products that we may develop or acquire;
•
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 products that we may develop or acquire.
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.
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The business that we or our collaborators conduct outside of the U.S. may be adversely affected by international risks and
uncertainties.
Although our operations are primarily based in the U.S., we and our collaborators conduct business outside of the U.S. 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 of the U.S. In addition, we and our collaborators are seeking and continue to plan to seek approvals to sell our and their
products in foreign countries. Any business that we, or our collaborators, conduct outside of the U.S. is subject to additional risks that
may materially adversely affect our or their ability to conduct business in international markets, including:
•
potentially reduced protection of our 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 or regulatory requirements;
•
economic weakness, including the uncertainty associated with worldwide economic conditions as a result of inflation,
sustained high interest rates, natural disasters and military conflicts, including the conflict between Russia and Ukraine,
the war between Israel and Hamas, the Palestinian group that controls the Gaza Strip, volatility in currency exchange
rates, pandemics or other public health emergencies, or political instability in particular foreign economies and markets;
•
workforce uncertainty in countries where labor unrest is more common than in the U.S.;
•
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, such as the ongoing conflict
between Russia and Ukraine, the war between Israel and Hamas, pandemics or other public health emergencies, climate
change 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
(“FCPA”).
Risks Related to Regulatory Matters
Even if we, or our collaborators, complete the necessary preclinical studies and clinical trials for our product candidates, the
regulatory approval process is expensive, time consuming and uncertain and we or they may not receive approvals for the
commercialization of some or all of our or their product candidates in a timely manner, or at all.
Our long-term success and ability to sustain and grow revenue depends on our and our collaborators’ ability to continue to
successfully develop our product candidates and obtain regulatory approval to market our or their products both in and outside of the
U.S. In order to market and sell our products in the EU and many other jurisdictions, we and our collaborators must obtain separate
marketing approvals and comply with numerous and varying regulatory requirements. The FDA and comparable foreign regulatory
authorities, whose laws and regulations may differ from country to country, impose substantial requirements on the development of
product candidates to become eligible for marketing approval and have substantial discretion in the process and may refuse to accept
any application or may decide that the data are insufficient for approval and require additional preclinical studies, clinical trials or
other studies and testing. The time required to obtain approval outside of the U.S. may differ substantially from that required to obtain
FDA approval. For example, in many countries outside of the U.S., it is required that the drug be approved for reimbursement before
the drug can be approved for sale in that country. Approval by the FDA does not ensure approval by regulatory authorities in other
countries or jurisdictions, and approval by one regulatory authority outside of the U.S. does not ensure approval by regulatory
authorities in other countries or jurisdictions or by the FDA. However, a failure or delay in obtaining regulatory approval in one
country may have a negative effect on the regulatory process in other countries. For additional risks related to conducting business
outside of the U.S., please see the risk factor above entitled “The business that we or our collaborators conduct outside of the U.S.
may be adversely affected by international risks and uncertainties.”
In addition, the FDA and foreign regulatory authorities retain broad discretion in evaluating the results of our clinical trials and
in determining whether the results demonstrate that selinexor or any other product candidate is safe and effective. If we are required to
conduct additional clinical trials of selinexor or other product candidates prior to approval of additional indications, in earlier lines of
therapy or in combination with other drugs, 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
may need substantial additional funds, and there is no assurance that the results of any such additional clinical trials will be sufficient
for approval.
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The process of obtaining marketing approvals, both in the U.S. and abroad, is lengthy, expensive and uncertain. It may take
many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity
and novelty of the product candidates involved. Securing marketing approval requires the submission of extensive preclinical and
clinical data and supporting information, including manufacturing information, to regulatory authorities for each therapeutic indication
to establish the product candidate’s safety and effectiveness. Changes in marketing approval policies during the development period,
changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product
application, may cause delays in the approval or rejection of an application.
The FDA or other regulatory authorities may determine that (i) our product candidates do not have an overall positive benefit-
risk profile; (ii) the dose used in a clinical trial has not been optimized and require us to conduct additional dose optimization studies;
or (iii) the comparator arm and/or endpoint in a trial is no longer the appropriate comparator or endpoint due to the evolution of the
competitive landscape or subsequent data of the comparator product, even if the FDA or other regulatory authority had previously
approved the trial design, and we may be required to amend the trial or we may not receive approval of the indication. For example, in
December 2024, we announced that we were engaged in discussions with the FDA regarding the evolving treatment landscape in
advanced or recurrent endometrial cancer, particularly the approval of checkpoint inhibitors (e.g., pembrolizumab, dostarlimab-gxly
and durvalumab). We intend to submit to the FDA and other relevant global regulatory authorities an amendment to the EC-042 Trial
protocol incorporating modifications, which we believe are responsive to certain of the FDA’s concerns. However, the FDA may not
agree that some or all of our proposed modifications to the EC-042 Trial adequately address their concerns, which may ultimately
impact approvability. In addition, the FDA’s Oncology Center of Excellence has a number of projects to advance the development and
regulation of medical products for patients with cancer, such as Project Optimus to reform the dose optimization and dose selection
paradigm in oncology drug development to emphasize selection of an optimal dose. These projects exemplify the emphasis the FDA is
placing on various elements in the drug development process and therefore may require sponsors to spend additional time and
resources either pre- or post-approval, and our ability to complete existing trials or initiate new trials may be delayed.
Moreover, clinical investigators for our clinical trials may serve as scientific advisors or consultants to us and receive
compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships
to the FDA or comparable foreign regulatory authorities. The FDA or a comparable foreign regulatory authority may conclude that a
financial relationship between us and a clinical investigator has created a conflict of interest or otherwise affected interpretation of the
trial. The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable
clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of
our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the
denial of marketing approval of one or more of our product candidates.
Further, under the Pediatric Research Equity Act (“PREA”), an NDA or supplement to an NDA for certain drugs must contain
data to assess the safety and effectiveness of the drug in all relevant pediatric subpopulations and to support dosing and administration
for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the
FDA. A deferral may be granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval
for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the
pediatric trials begin. The law requires the FDA to send a PREA Non-Compliance letter to sponsors who have failed to submit their
pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request
approval for a required pediatric formulation. It further requires the FDA to publicly post the PREA Non-Compliance letter and
sponsor’s response. The applicable legislation in the EU also requires sponsors to either conduct clinical trials in a pediatric population
in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the European Medicines Agency (“EMA”)
or to obtain a waiver or deferral from the conduct of these studies by this Committee. For any of our product candidates for which we
or our collaborators are seeking regulatory approval in the U.S. or the EU, we cannot guarantee that we will be able to obtain a waiver
or alternatively complete any required studies and other requirements in a timely manner, or at all, which could result in an issuance
and publication of a PREA Non-Compliance letter and associated reputational harm, our product candidate being considered
misbranded and subject to relevant enforcement action, invalidation of the marketing application, and/or financial penalties. Our
collaborators are also subject to similar requirements outside of the U.S. and the EU and thus the attendant risks and uncertainties.
In addition, we could be adversely affected by several significant administrative law cases decided by the U.S. Supreme Court in
2024. In Loper Bright Enterprises v. Raimondo, for example, the court overruled Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc., which for 40 years required federal courts to defer to permissible agency interpretations of statutes that are silent or
ambiguous on a particular topic. The U.S. Supreme Court stripped federal agencies of this presumptive deference and held that courts
must exercise their independent judgment when deciding whether an agency such as the FDA acted within its statutory authority under
the Administrative Procedure Act (the “APA”). Additionally, in Corner Post, Inc. v. Board of Governors of the Federal Reserve
System, the court held that actions to challenge a federal regulation under the APA can be initiated within six years of the date of
injury to the plaintiff, rather than the date the rule is finalized. The decision appears to give prospective plaintiffs a personal statute of
limitations to challenge longstanding agency regulations. Another decision, Securities and Exchange Commission v. Jarkesy,
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overturned regulatory agencies’ ability to impose civil penalties in administrative proceedings. These decisions could introduce
additional uncertainty into the regulatory process and may result in additional legal challenges to actions taken by federal regulatory
agencies, including the FDA and the Centers for Medicare & Medicaid Services (“CMS”), that we rely on. In addition to potential
changes to regulations as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays and
other impacts, any of which could adversely impact our business and operations.
Our ability to develop and market new drug products may also be impacted by litigation challenging the FDA’s approval of
another company’s drug product. In April 2023, the U.S. District Court for the Northern District of Texas invalidated the approval by
the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various
measures adopted under a REMS. The Court of Appeals for the Fifth Circuit declined to order the removal of mifepristone from the
market but did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone,
which the FDA authorized in 2016 and 2021, were arbitrary and capricious. In June 2024, the Supreme Court reversed that decision
after unanimously finding that the plaintiffs (anti-abortion doctors and organizations) did not have standing to bring this legal action
against the FDA. On October 11, 2024, the Attorneys General of three states (Missouri, Idaho and Kansas) filed an amended
complaint in the district court in Texas challenging FDA’s actions. On January 16, 2025, the District Court agreed to allow these states
to file an amended complaint and continue to pursue this challenge. Depending on the outcome of this litigation, our ability to develop
new drug product candidates and to maintain approval of existing drug products could be delayed, undermined or subject to protracted
litigation.
Finally, with the change in presidential administrations in 2025, there is substantial uncertainty as to how, if at all, the new
administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction
over our product candidates. The impending uncertainty could present new challenges or potential opportunities as we navigate the
clinical development and approval process for our product candidates.
The approval of our and our collaborators’ current or future product candidates for commercial sale could be delayed, limited or
denied or we or they may be required to conduct additional studies for a number of reasons, including, but not limited to, the
following:
•
regulatory authorities may determine that our or our collaborators’ product candidates do not demonstrate safety and
effectiveness in accordance with regulatory agency standards based on a number of considerations, including AEs that are
reported during clinical trials;
•
regulatory authorities could analyze and/or interpret data from clinical trials and preclinical testing in different ways than
we, or our collaborators, interpret them and determine that our data is insufficient for approval;
•
regulatory authorities may require more information, including additional preclinical or clinical data or trials, to support
approval, as in the case of our initiation of the EC-042 Study for patients with TP53 wild-type advanced or recurrent
endometrial cancer following discussions with the FDA in early 2022 on our SIENDO trial;
•
regulatory authorities could determine that our manufacturing processes are not properly designed, are not conducted in
accordance with federal or other laws or otherwise not properly managed, and we may be unable to obtain regulatory
approval for a commercially viable manufacturing process for our product candidates in a timely manner, or at all;
•
the supply or quality of our or our collaborators’ product candidates for our clinical trials may be insufficient, inadequate
or delayed;
•
the size of the patient population required to establish the effectiveness of our or our collaborators’ product candidates to
the satisfaction of regulatory agencies may be larger than we or they anticipated;
•
our failure or the failure of clinical investigational sites and the records kept at the respective locations, including clinical
trial data, to be in compliance with the FDA’s current good clinical practices regulations (“GCP”) or comparable
regulations outside of the U.S., including the failure to pass inspections of our corporate site or our clinical trial sites;
•
regulatory authorities may change their approval policies or adopt new regulations;
•
regulatory authorities may not be able to undertake reviews, applicable inspections or approval processes in a timely
manner;
•
the results of our earlier clinical trials may not be representative of our future, larger trials;
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•
regulatory authorities may not agree with our or our collaborators’ regulatory approval strategies or components of our or
their regulatory filings, such as the design or implementation of the relevant clinical trials; for example, the FDA
identified multiple risks related to our decision to decrease the total number of patients to be enrolled in our ongoing
Phase 3 multiple myeloma trial, including the ability to adequately assess benefit-risk with a limited number of patients;
or
•
a product may not be approved for the indications that we, or our collaborators, request or may be limited or subject to
restrictions or post-approval commitments that render the approved drug not commercially viable.
As of January 1, 2025, a new international recognition procedure (“IRP”) will apply, which intends to facilitate approval of
pharmaceutical products in the UK. The IRP is open to applicants that have already received an authorization for the same product
from one of the MHRA’s specified Reference Regulators (“RRs”). The RRs notably include EMA and regulators in the EU/European
Economic Area (“EEA”) member states for approvals in the EU centralized procedure and mutual recognition procedure as well as the
FDA (for product approvals granted in the U.S.). However, the concrete functioning of the IRP is currently unclear. Any delay in
obtaining, or an inability to obtain, any marketing approvals, may force us or our collaborators to restrict or delay efforts to seek
regulatory approval in the UK for our product candidates, which could significantly and materially harm our business.
We, or our collaborators, may not be able to file for marketing approvals and may not receive necessary approvals to
commercialize our or their products in any market. Any failure, delay or setback in obtaining regulatory approval for our or our
collaborators’ product candidates could materially adversely affect our or our collaborators’ ability to generate revenue from a
particular product candidate, which could result in significant harm to our financial position and adversely impact our stock price.
We, or our collaborators, may seek approval from the FDA or comparable foreign regulatory authorities to use accelerated
development pathways for our product candidates. If we, or our collaborators, are not able to use such pathways, we, or they, may
be required to conduct additional clinical trials beyond those that are contemplated, which would increase the expense of
obtaining, and delay the receipt of, necessary marketing approvals, if we, or they, receive them at all. In addition, even if an
accelerated approval pathway is available to us, or our collaborators, it may not lead to expedited approval of our product
candidates, or approval at all.
Under the Federal Food, Drug and Cosmetic Act (“FDCA”) and implementing regulations, the FDA may grant accelerated
approval to a product candidate to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over
available therapies, upon a determination that the product has an effect on a surrogate endpoint or intermediate clinical endpoint that is
reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically
meaningful in the context of a given disease, such as irreversible morbidity or mortality. 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. An intermediate clinical endpoint is a clinical endpoint that can
be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible
morbidity or mortality or other clinical benefit measurement of a therapeutic effect that is considered reasonably likely to predict the
clinical benefit of a drug. The accelerated approval pathway may be used in cases in which the advantage of a new drug over available
therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health
perspective. Similar risks to those described above are also applicable to any application that we, or our collaborators, have submitted
or may submit in other jurisdictions outside of the U.S. Prior to seeking such accelerated approval, we, or our collaborators, will
continue to seek feedback from the FDA or comparable foreign regulatory agencies and otherwise evaluate our, or their, ability to seek
and receive such accelerated approval.
There can be no assurance that the FDA or foreign regulatory agencies will agree with our, or our collaborators’, surrogate
endpoints or intermediate clinical endpoints in any of our, or their, clinical trials, or that we, or our collaborators, will decide to pursue
or submit any additional New Drug Applications (“NDA”) for accelerated approval or any other form of expedited development,
review or approval. Similarly, there can be no assurance that, after feedback from the FDA or comparable foreign regulatory agencies,
we, or our collaborators, will continue to pursue or apply for accelerated approval or any other form of expedited development, review
or approval. Furthermore, for any submission of an application for accelerated approval or application under another expedited
regulatory designation, there can be no assurance that such submission or application will be accepted for filing or that any expedited
development, review or approval will be granted on a timely basis, or at all.
Finally, there can be no assurance that we will satisfy all FDA requirements, including new provisions, that govern accelerated
approval. For example, with passage of the FDORA in December 2022, Congress modified certain provisions governing accelerated
approval of drug and biologic products. Specifically, the new legislation authorized the FDA to require a sponsor to have its
confirmatory clinical trial underway before accelerated approval is awarded and to submit progress reports on its post-approval studies
to FDA every six months until the study is completed. Moreover, FDORA established expedited procedures authorizing FDA to
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withdraw an accelerated approval if certain conditions are met, including where a required confirmatory study fails to verify and
describe the predicted clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the
conditions of use. The FDA may also use such procedures to withdraw an accelerated approval if a sponsor fails to conduct any
required post-approval study of the product with due diligence, including with respect to “conditions specified by the Secretary.” The
new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting
with the Commissioner or the Commissioner’s designee and a written appeal, among other things. We will need to fully comply with
these and other requirements in connection with the development and approval of any product candidate that qualifies for accelerated
approval.
In March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval. The FDA
indicated that the accelerated approval pathway is commonly used for approval of oncology drugs due to the serious and life-
threatening nature of cancer. Although single-arm trials have been commonly used to support accelerated approval, a randomized
controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for direct comparisons
to an available therapy. To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended
to support accelerated approvals of oncology therapeutics. Subsequently, in December 2024, the FDA issued additional draft guidance
relating to accelerated approval. These guidances describe FDA’s latest thinking on what it means to conduct a confirmatory trial with
due diligence and how the FDA plans to interpret whether such a study needs to be underway at the time of approval. While these
guidances are currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe
the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval.
Accordingly, a failure to obtain and maintain accelerated approval or any other form of expedited development, review or
approval for our product candidates, or withdrawal of a product candidate, would result in a longer time period until
commercialization of such product candidate, could increase the cost of development of such product candidate and could harm our
competitive position in the marketplace.
XPOVIO and any of our product candidates for which we, or our collaborators, obtain marketing approval in the future are
subject to post-marketing regulatory requirements, including following accelerated or conditional approvals of our product
candidates, and could be subject to post-marketing restrictions or withdrawal from the market, and we, and our collaborators, may
be subject to substantial penalties if we, or they, fail to comply with regulatory requirements or if we, or they, experience
unanticipated problems with our products following approval.
Once marketing approval has been granted, an approved product and its manufacturer and marketer are subject to ongoing
review and extensive regulation. XPOVIO and any of our product candidates for which we, or our collaborators, obtain marketing
approval in the future, as well as the manufacturing processes, post-approval studies and measures, labeling, advertising and
promotional activities for such drug, among other things, will be subject to continual requirements of and review by the FDA and
other U.S. and foreign regulatory authorities. These requirements include submissions of safety and other post-marketing information
and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and
corresponding maintenance of records and documents, and requirements regarding the distribution of samples to physicians and record
keeping. For example, as a condition of the XPOVIO accelerated approvals by the FDA for the multiple myeloma and DLBCL
indications, we are required to complete certain post-marketing commitments. There is no assurance that we will be able to timely
complete such obligations. Failure to comply with such requirements may have an adverse impact on the accelerated approval status
of selinexor in DLBCL. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on
the indicated uses for which the drug may be marketed or to the conditions of approval, including the requirement to implement a
REMS, which could include requirements for a restricted distribution system.
The FDA also imposes requirements for costly post-marketing studies or clinical trials to maintain approval of any products that
received accelerated or conditional approval. For drugs approved under the FDA’s Accelerated Approval Program, the FDA typically
requires post-marketing confirmatory trials to evaluate the anticipated effect on irreversible morbidity or mortality or other clinical
benefit. These confirmatory trials must be completed with due diligence. For example, in June 2020, the FDA approved XPOVIO to
treat DLBCL under the FDA’s accelerated approval regulations and as a condition of the accelerated approval for this indication we
are required to comply with a number of post-approval requirements. We may not be able to successfully and timely complete these
post-approval requirements, obtain an extension, if needed, or complete any other post-marketing confirmatory study as required to
maintain approval or achieve full approval of our products. If required post-approval studies fail to verify the clinical benefits of our
products or confirm that the surrogate marker used for accelerated approval of our products showed an adequate correlation with
clinical outcomes, if a sufficient number of participants cannot be enrolled, or if we fail to perform the required post-approval studies
with due diligence or on a timely basis, the FDA has the authority to withdraw approval of the drug following a hearing conducted
under the FDA’s regulations, which could have a material adverse impact on our business. We cannot be certain of the results of the
confirmatory clinical studies for the DLBCL indication or any other future conditional approval we receive or what action the FDA
may take if the results of those studies are not as expected based on clinical data that FDA has already reviewed.
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Similar risks to those described above are also applicable to any application that we, or our collaborators, have submitted or may
submit in other jurisdictions outside of the U.S., including applications submitted to the EMA to support approval of selinexor to treat
patients with multiple myeloma or any other cancer indication. For medicinal products where the benefit of immediate availability
outweighs the risk of less comprehensive data than normally required, based on the scope and criteria defined in legislation and
guidelines, it is possible to obtain a conditional marketing authorization for a new drug in the EU with a 12-month validity period and
annual renewal pursuant to Regulation No 507/2006. These are granted only if the EMA’s Committee for Medicinal Products for
Human Use (“CHMP”) finds that all four of the following requirements are met: (i) the benefit-risk balance of the product is positive;
(ii) it is likely that the sponsor will be able to provide comprehensive data; (iii) unmet medical needs will be fulfilled; and (iv) the
benefit to public health of the medicinal product’s immediate availability on the market outweighs the risks due to the need for further
data.
Once a conditional marketing authorization has been granted, the marketing authorization holder must fulfill specific obligations
within defined timelines. These obligations could include completing ongoing or new studies or collecting additional data to confirm
the medicine’s benefit-risk balance remains positive. For example, the July 2022 marketing authorization from the European
Commission (“EC”) for NEXPOVIO to treat adult patients with multiple myeloma after at least one prior therapy satisfied the
conditional approval obligation for NEXPOVIO for patients with multiple myeloma who have received at least four prior therapies
and whose disease is refractory to at least two proteasome inhibitors, two immunomodulatory agents, and an anti-CD38 monoclonal
antibody, and who have demonstrated disease progression on the last therapy. Conditional marketing authorization is valid for a period
of one year and can be renewed/prolonged if the conditions set out in the conditional marketing authorization are met. Further, as
discussed above, under FDORA, modifications to regulations governing accelerated approval require a sponsor to have the
confirmatory clinical trial underway before accelerated approval is awarded as well as other requirements following accelerated
approval. If we, or our collaborators, are not able to fulfill the specific obligations set out in any conditional marketing authorization
requirements, the conditional marketing authorization may not be prolonged and we, or our collaborators, will no longer be able to
market the product for the indication receiving conditional approval.
The FDA and comparable foreign regulatory authorities may also impose requirements for costly surveillance to monitor the
safety or efficacy of an approved drug. The FDA and other U.S. or foreign agencies, including the DOJ, closely regulate and monitor
the post-approval marketing and promotion of drugs to ensure that they are manufactured, marketed and distributed only for the
approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on
manufacturers’ communications regarding off-label use, and if we, or our collaborators communicate about any of our product
candidates for which we, or they, receive marketing approval in a way that regulators assert goes beyond their approved indications,
we, or they, may be subject to warnings or enforcement action for off-label marketing. Alleged violations of the FDCA or other
statutes, including the False Claims Act (the “FCA”), relating to the promotion and advertising of prescription drugs may lead to
investigations or allegations of violations of federal and state health care fraud and abuse laws and state consumer protection laws.
We will need to carefully navigate the FDA’s various regulations, guidance and policies, along with recently enacted legislation,
to ensure compliance with restrictions governing promotion of our products. In September 2021, the FDA published final regulations
which describe the types of evidence that the agency will consider in determining the intended use of a drug or biologic. Moreover,
with passage of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been approved
may proactively communicate to payors certain information about products in development to help expedite patient access upon
product approval. In addition, in October 2023, the FDA published draft guidance outlining the agency’s non-binding policies
governing the distribution of scientific information on unapproved uses to healthcare providers. This draft guidance calls for such
communications to be truthful, non-misleading, factual, and unbiased and include all information necessary for healthcare providers to
interpret the strengths and weaknesses and validity and utility of the information about the unapproved use. This guidance was
finalized in January 2025.
In addition, manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive
requirements by the FDA and comparable foreign regulatory authorities, including ensuring that quality control and manufacturing
procedures conform to current Good Manufacturing Practice (“cGMP”), which include requirements relating to quality control and
quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We, our
contract manufacturers, our collaborators and their contract manufacturers could be subject to periodic unannounced inspections by
the FDA or foreign regulatory authorities to monitor and ensure compliance with cGMPs or other regulations.
Post-approval discovery of previously unknown problems with our products, including AEs of unanticipated severity or
frequency, or relating to our manufacturing processes, data integrity issues with regulatory filings, or failure to comply with regulatory
requirements, may yield various results, including:
•
litigation involving patients taking our drug;
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•
restrictions on our manufacturers or manufacturing processes;
•
restrictions on the labeling or marketing of our products;
•
restrictions on the distribution or use of our products;
•
requirements to conduct post-marketing studies or clinical trials;
•
warning letters or untitled letters;
•
withdrawal, recall or seizure of our products from the market;
•
refusal to approve pending applications or supplements to approved applications that we submit;
•
fines, restitution or disgorgement of profits or revenues;
•
suspension or withdrawal of marketing approvals;
•
damage to relationships with our current or potential collaborators;
•
unfavorable press coverage and damage to our reputation;
•
refusal to permit the import or export of our products; or
•
injunctions or the imposition of civil or criminal penalties.
Similar restrictions apply to the approval of our products in the EU. The holder of the marketing authorization is required to
comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products. These
include:
•
compliance with the EU’s stringent pharmacovigilance or safety reporting rules, which can impose post-authorization
studies and additional monitoring obligations;
•
the manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory, must also
be conducted in strict compliance with the applicable EU laws, regulations and guidance, including Directive 2001/83/EC,
Directive 2003/94/EC, Regulation (EC) No 726/2004 and the EC Guidelines for Good Manufacturing Practice. These
requirements include compliance with EU cGMP standards when manufacturing medicinal products and active
pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU with the
intention to import the active pharmaceutical ingredients into the EU; and
•
the marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and
advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the EU notably
under Directive 2001/83/EC, as amended, and are also subject to EU Member State laws. Direct-to-consumer advertising
of prescription medicines is prohibited across the EU.
Finally, we or our collaborators are also subject to other regulations in various jurisdictions, including the
Drug Supply Chain Security Act (the “DSCSA”) in the U.S., the Falsified Medicines Directive in the EU and similar laws and
regulations in other countries that require us or them to develop electronic systems to serialize, track, trace and authenticate units of
our products through the supply chain and distribution system. Compliance with these regulations may result in increased expenses for
us or our collaborators or impose greater administrative burdens on our or their organizations, and any failure on our or our
collaborators’ part to meet these requirements could result in fines or other penalties or reputational harm.
Accordingly, in connection with our currently approved products and assuming we, or our collaborators, receive marketing
approval for one or more of our product candidates, we, and our collaborators, and our and their contract manufacturers will continue
to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and
quality control. If we, and our collaborators, are not able to comply with post-approval regulatory requirements, our or our
collaborators’ ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain
profitability. Further, the cost of compliance with post-approval regulations may have a negative effect on our operating results and
financial condition.
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If we, or our collaborators, are required by the FDA, EMA or comparable regulatory authority to obtain clearance or approval of
one or more companion diagnostic tests in connection with approval of any of our product candidates or a group of therapeutic
products, and we or they do not obtain or there are delays in obtaining clearance or approval of a diagnostic test, we may not be
able to commercialize the product candidate and our ability to generate revenue may be materially impaired.
In connection with our ongoing development of selinexor in patients whose endometrial cancer is TP53 wild-type, we are
utilizing a companion diagnostic to identify patients whose tumors are TP53 wild-type. We may be required to develop a second
companion diagnostic pending the ultimate patient population included in the potential label for our endometrial indication. To be
successful in developing and commercializing product candidates in combination with companion diagnostics, we or our collaborators
will need to address a number of scientific, technical, regulatory and logistical challenges. According to FDA guidance, if the FDA
determines that a companion diagnostic device is essential to ensuring the safety and effectiveness of a novel therapeutic product or
new indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion
diagnostic is not also approved or cleared. In certain circumstances (for example, when a therapeutic product is intended to treat a
serious or life-threatening condition for which no satisfactory available therapy exists or when the labelling of an approved product
needs to be revised to address a serious safety issue), however, the FDA may approve a therapeutic product without the prior or
contemporaneous marketing authorization of a companion diagnostic. In this case, approval of a companion diagnostic may be a post-
marketing requirement or commitment.
If the FDA requires clearance or approval of a companion diagnostic for any of our product candidates, whether before,
concurrently with approval, or post-approval of the product candidate, we, and/or our collaborators, may encounter difficulties in
developing and obtaining clearance or approval for these companion diagnostics. The process of obtaining or creating such diagnostic
is time consuming and costly. The FDA previously has required in vitro companion diagnostics intended to select the patients who
will respond to a product candidate to obtain pre-market approval (“PMA”), simultaneously with approval of the therapeutic
candidate.
The PMA process, including the gathering of clinical data and the submission and review by the FDA, can take several years or
longer. It involves a rigorous pre-market review during which the sponsor must prepare and provide the FDA with reasonable
assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things,
device design, manufacturing, and labeling. After a device is placed on the market, it remains subject to significant regulatory
requirements, including requirements, such as the Quality Management System Regulation as part of 21 CFR 820, which governs
development, testing, manufacturing, distribution, marketing, promotion, labeling, import, export, record-keeping, and adverse event
reporting. Similar risks to those described above are also applicable to any companion diagnostic that we, or our collaborators, utilize
in our clinical trials in connection with approval of a product candidate outside of the U.S. For example, in the EU, until May 25,
2022, in vitro diagnostic medical devices were regulated by Directive 98/79/EC (the “IVDD”), which has been repealed and replaced
by Regulation (EU) No 2017/746 (the “IVDR”). The regulation of companion diagnostics is now subject to further requirements set
forth in the IVDR. Companion diagnostics will have to undergo a conformity assessment by a notified body. Before it can issue an EU
certificate, the notified body must seek a scientific opinion from the EMA on the suitability of the companion diagnostic to the
medicinal product concerned if the medicinal product falls exclusively within the scope of the centralized procedure for the
authorization of medicines, or the medicinal product is already authorized through the centralized procedure, or a marketing
authorization application for the medicinal product has been submitted through the centralized procedure. As part of the process to
obtain a CE-mark for the FMI FoundationOne®CDx for the purpose of determining TP53 wild-type status for use of selinexor in the
maintenance treatment of TP53 wild-type endometrial cancer patients, a performance study is required which leverages our EC-042
Trial (e.g., using the unapproved FoundationOne®CDx IVD to screen for TP53 wild-type patients in the EC-042 Trial and using the
data generated to validate the CDx itself). As the regulations are relatively new, the industry is gaining experience in the compilation
of these submissions while the national Competent Authorities and the respective Ethics Committees are also gaining expertise in
assessing these applications. As a result, the assessment deadlines of these performance study submissions and amendments are often
not met. These new regulations have and could continue to negatively impact the pace of enrollment in our clinical trials. For example,
in 2023, site activation for our Phase 3 clinical trial in endometrial cancer was delayed in the EU due to the new IVDR regulations.
Consequently, the ability to use the FoundationOne®CDx in vitro diagnostic medical devices to screen patients for TP53 status in the
EC-042 Trial has been delayed in various countries in the EU.
We may rely on third parties for the design, development and manufacture of companion diagnostic tests for our product
candidates, such as in the case of our ongoing Phase 3 trial evaluating selinexor in patients with TP53 wild-type advanced or recurrent
endometrial cancer. If we enter into such collaborative agreements, we will be dependent on the sustained cooperation and effort of
our future collaborators in developing and obtaining clearance or approval for these companion diagnostics. It may be necessary to
resolve issues such as selectivity/specificity, analytical validation, reproducibility, or clinical validation of companion diagnostics
during the development and regulatory clearance or approval processes. Moreover, even if data from preclinical studies and early
clinical trials appear to support development of a companion diagnostic for a product candidate, data generated in later clinical trials
may fail to support the analytical and clinical validation of the companion diagnostic. We and our future collaborators may encounter
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difficulties in developing, obtaining regulatory clearance or approval for, manufacturing and commercializing companion diagnostics
similar to those we face with respect to our product candidates themselves, including issues with achieving regulatory clearance or
approval, production of sufficient quantities at commercial scale and with appropriate quality standards, and in gaining market
acceptance.
If we are unable to successfully develop companion diagnostics for our product candidates, or experience delays in doing so, the
development of our product candidates may be adversely affected, our product candidates may not obtain marketing approval, and we
may not realize the full commercial potential of any of our product candidates that obtain marketing approval. As a result, our
business, results of operations and financial condition could be materially harmed. In addition, a diagnostic company with whom we
contract may decide to discontinue selling or manufacturing the companion diagnostic test that we anticipate using in connection with
development and commercialization of product candidates or our relationship with such diagnostic company may otherwise terminate.
We may not be able to enter into arrangements with another diagnostic company to obtain supplies of an alternative diagnostic test for
use in connection with the development and commercialization of our product candidates or do so on commercially reasonable terms,
which could adversely affect and/or delay the co-development or commercialization of our companion diagnostic and therapeutic
product candidates.
We or our collaborators may seek certain designations for our product candidates in or outside of the U.S., including
Breakthrough Therapy, Fast Track and Priority Review designations, and PRIME Designation in the EU, but we, or they, might
not receive such designations, and even if we, or they, do, such designations may not lead to a faster development or regulatory
review or approval process.
We may seek certain designations for one or more of our product candidates that could expedite review and approval by the
FDA. A Breakthrough Therapy product is defined as a product that is intended, alone or in combination with one or more other
products, to treat a serious 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. For products that have been designated as breakthrough therapies, interaction and communication
between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing
the number of patients placed in ineffective control regimens.
The FDA may also 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.
We may also seek a Priority Review designation for one or more of our product candidates. If the FDA determines that a
product candidate would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate
for priority review. A Priority Review designation means that the goal for the FDA to review an application is six months, rather than
the standard review period of ten months.
These designations are within the discretion of the FDA. Accordingly, even if we believe that one of our product candidates
meets the criteria for these designations, the FDA may disagree and instead determine not to make such designation. Further, even if
we receive a designation, such as the receipt of Fast Track designation for selinexor to treat myelofibrosis, the receipt of such
designation for a product candidate may not result in a faster development or regulatory review or approval process compared to
products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition,
even if one or more of our product candidates qualifies for these designations, the FDA may later decide that the product candidates
no longer meet the conditions for qualification and rescind the designation or decide that the time period for FDA review or approval
will not be shortened.
In the EU, we or our collaborators may seek PRIME designation for some of our product candidates in the future. PRIME is a
voluntary program aimed at enhancing the EMA’s role to reinforce scientific and regulatory support in order to optimize development
and enable accelerated assessment of new medicines that are of major public health interest with the potential to address unmet
medical needs. The program focuses on medicines that target conditions for which there exists no satisfactory method of treatment in
the EU or even if such a method exists, it may offer a major therapeutic advantage over existing treatments. PRIME is limited to
medicines under development and not authorized in the EU and the sponsor intends to apply for an initial MAA through the
centralized procedure. To be accepted for PRIME, a product candidate must meet the eligibility criteria with respect to its major public
health interest and therapeutic innovation based on information that is capable of substantiating the claims. The benefits of a PRIME
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designation include the appointment of a CHMP rapporteur to provide continued support and help to build knowledge ahead of a
MAA, early dialogue and scientific advice at key development milestones, and the potential to qualify products for accelerated review,
meaning reduction in the review time for an opinion on approvability to be issued earlier in the application process. PRIME enables a
sponsor to request parallel EMA scientific advice and health technology assessment advice to facilitate timely market access. Even if
we or our collaborators receive PRIME designation for any of our product candidates, the designation may not result in a materially
faster development process, review or approval compared to conventional EMA procedures. Further, obtaining PRIME designation
does not assure or increase the likelihood of the EMA’s grant of a marketing authorization.
We, or our collaborators, may not be able to obtain orphan drug exclusivity for any product candidates we, or they, may develop,
and even if we do, that exclusivity may not prevent the FDA or the EMA from approving other competing products.
Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug or biologic intended to treat a
rare disease or condition. A similar regulatory scheme governs approval of orphan products by the EMA in the EU. Generally, if a
product candidate with an Orphan Drug Designation subsequently receives the first marketing approval for the indication for which it
has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA, as applicable,
from approving another marketing application for the same product for the same therapeutic indication for that time period. The
applicable period is seven years in the U.S. and ten years in the EU. The exclusivity period in the EU can be reduced to six years if a
product no longer meets the criteria for Orphan Drug Designation, in particular if the product is sufficiently profitable so that market
exclusivity is no longer justified.
In order for the FDA to grant orphan drug exclusivity to one of our products, the agency must find that the product is indicated
for the treatment of a condition or disease with a patient population of fewer than 200,000 individuals annually in the U.S. The FDA
may conclude that the condition or disease for which we seek orphan drug exclusivity does not meet this standard. Even if we obtain
orphan drug exclusivity for a product, such as the recent receipt of orphan drug exclusivity for selinexor for the treatment of
myelofibrosis, that exclusivity may not effectively protect the product from competition because different products can be approved
for the same condition. In addition, even after an orphan drug is approved, the FDA and comparable foreign regulatory authorities,
such as the EMA, can subsequently approve the same product for the same condition if the FDA or such other authorities conclude
that the later product is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.
Orphan drug exclusivity may also be lost if the FDA or EMA determines that the request for designation was materially defective or if
the manufacturer is unable to assure sufficient quantity of the product to meet the needs of the patients with the rare disease or
condition.
In 2017, the Congress passed the FDA Reauthorization Act of 2017 (the “FDARA”). The FDARA, among other things, codified
the FDA’s pre-existing regulatory interpretation, to require that a drug sponsor demonstrate the clinical superiority of an orphan drug
that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity. Under
omnibus legislation signed by former President Trump in December 2020, the requirement for a product to show clinical superiority
applies to drugs and biologics that received Orphan Drug Designation before the enactment of the FDARA in 2017, but have not yet
been approved or licensed by the FDA.
The FDA and Congress may further reevaluate the Orphan Drug Act and its regulations and policies. This may be particularly
true in light of a decision from the Court of Appeals for the 11th Circuit in September 2021 finding that, for the purpose of
determining the scope of exclusivity, the term “same disease or condition” means the designated “rare disease or condition” and could
not be interpreted by the FDA to mean the “indication or use.” Although there have been legislative proposals to overrule this
decision, they have not been enacted into law. On January 23, 2023, the FDA announced that, in matters beyond the scope of that
court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which
the orphan drug was approved.
We do not know if, when, or how the FDA may change the orphan drug regulations and policies in the future or whether
Congress will take legislative action, and it is uncertain how any changes might affect our business. Depending on what changes the
FDA or Congress may make to orphan drug regulations and policies, our business could be adversely impacted.
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Inadequate funding for the FDA, the SEC and other government agencies, including from government shut downs, or other
disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent
new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from
performing normal business functions on which the operation of our business may rely, which could negatively impact our
business.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget
and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy
changes. Average review times at the agency have fluctuated in recent years as a result. Disruptions at the FDA and other agencies
may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies,
which would adversely affect our business. In addition, government funding of the SEC and other government agencies on which our
operations may rely, including those that fund research and development activities, is subject to the political process, which is
inherently fluid and unpredictable.
In addition, disruptions may result from events similar to the COVID-19 pandemic. During the COVID-19 pandemic, a number
of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their
applications. In the event of a similar public health emergency in the future, the FDA may not be able to continue its current pace and
review timelines could be extended. Regulatory authorities outside the U.S. facing similar circumstances may adopt similar
restrictions or other policy measures in response to a similar public health emergency and may also experience delays in their
regulatory activities.
Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or
approved by necessary government agencies, which would adversely affect our business. For example, over the last several years the
U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough
critical employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of
the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to
properly capitalize and continue our operations.
Current and future legislation may increase the difficulty and cost for us, or any collaborators, to obtain marketing approval and
commercialize our or their product candidates, if approved, and affect the prices we, or they, may obtain.
In the U.S. and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes
regarding the healthcare system that could, among other things, prevent or delay marketing approval of our or our collaborators’
product candidates, restrict or regulate post-approval activities and affect our ability, or the ability of any collaborators, to profitably
sell or commercialize XPOVIO or any product candidate for which we, or they, obtain marketing approval. We expect that current
laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and
in additional downward pressure on the price that we, or any collaborators, may receive for any approved products. If reimbursement
of our products is unavailable or limited in scope, our business could be materially harmed.
In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health
Care and Education Affordability Reconciliation Act (collectively the “PPACA”). In addition, other legislative changes have been
proposed and adopted since the PPACA 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. These changes included aggregate reductions to Medicare
payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031. The
American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute
of limitations period for the government to recover overpayments to providers from three to five years. Further, with the passage of
the Inflation Reduction Act (the “IRA”) in August 2022, Congress extended the expansion of PPACA premium tax credits through
2025.
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These and other laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the
prices we may obtain for any of our products or product candidates for which we may obtain regulatory approval or the frequency
with which any such product is prescribed or used. For example, the Consolidated Appropriations Act, which was signed into law by
President Biden in December 2022, made several changes to sequestration of the Medicare program. Section 1001 of the Act delays
the 4% Statutory Pay-As-You-Go Act of 2010 sequester for two years, through the end of calendar year 2024. Triggered by enactment
of the American Rescue Plan Act of 2021, the 4% cut to the Medicare program would have taken effect in January 2023. The Act’s
health care offset title includes Section 4163, which extends the 2% Budget Control Act of 2011 Medicare sequester for six months
into fiscal year 2032 and lowers the payment reduction percentages in fiscal years 2030 and 2031.
Since enactment of the PPACA, there have been, and continue to be, numerous legal challenges and Congressional actions to
repeal and replace provisions of the law. For example, with the enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”),
Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of
health insurance, became effective in 2019. Further, in December 2018, a U.S. District Court judge in the Northern District of Texas
ruled that the individual mandate portion of the PPACA is an essential and inseverable feature of the PPACA, and therefore because
the mandate was repealed as part of the TCJA, the remaining provisions of the PPACA are invalid as well. In June 2021, the U.S.
Supreme Court dismissed this action after finding that the plaintiffs do not have standing to challenge the constitutionality of the
PPACA. Litigation and legislation over the PPACA are likely to continue, with unpredictable and uncertain results.
In the EU, on December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment (“HTA”), amending Directive
2011/24/EU, was adopted. While the Regulation entered into force in January 2022, it begins to apply from January 2025 onwards.
The Regulation will have a phased implementation depending on the concerned products. The Regulation intends to boost cooperation
among EU member states in assessing health technologies, including new medicinal products as well as certain high-risk medical
devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas. It will permit EU member
states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint
clinical assessment of the innovative health technologies with the highest potential impact for patients, joint scientific consultations
whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising
technologies early, and continuing voluntary cooperation in other areas. Individual EU member states will continue to be responsible
for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and
reimbursement.
We expect that these healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may
result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria and new payment
methodologies that govern XPOVIO or any other approved product and/or the level of reimbursement physicians receive for
administering XPOVIO or any other approved product we, or our collaborators, might bring to market. Reductions in reimbursement
levels may negatively impact the prices we receive or the frequency with which our products are prescribed or administered. Any
reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private
payors. Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from XPOVIO or from product
candidates for which we may obtain marketing approval and may affect our overall financial condition and ability to develop or
commercialize product candidates.
The prices of prescription pharmaceuticals in the U.S. and foreign jurisdictions are subject to considerable legislative and
executive actions and could impact the prices we obtain for our products, if and when licensed.
The prices of prescription pharmaceuticals have also been the subject of considerable discussion in the U.S. There have been
several recent U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other
things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient
programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid. In 2020, former President Trump issued several
executive orders intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into
regulations. These regulations include an interim final rule implementing a most favored nation model for prices that would tie
Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced
countries, effective January 1, 2021. That rule, however, has been subject to a nationwide preliminary injunction and, on December
29, 2021, CMS issued a final rule to rescind it. With issuance of this rule, CMS stated that it will explore all options to incorporate
value into payments for Medicare Part B pharmaceuticals and improve beneficiaries’ access to evidence-based care.
In addition, in October 2020, the Department of Health and Human Services (the “HHS”) and the FDA published a final rule
allowing states and other entities to develop a Section 804 Importation Program to import certain prescription drugs from Canada into
the U.S. That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America (“PhRMA”) but
the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue the
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HHS. Seven states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the
importation of drugs from Canada. North Dakota and Virginia have passed legislation establishing workgroups to examine the impact
of a state importation program. As of October 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) had
submitted Section 804 Importation Program proposals to the FDA. Vermont has submitted a concept letter to the HHS. On January 5,
2024, the FDA approved Florida’s plan for Canadian drug importation. That state now has authority to import certain drugs from
Canada for a period of two years once certain conditions are met. Florida will first need to submit a pre-import request for each drug
selected for importation, which must be approved by the FDA. The state will also need to relabel the drugs and perform quality testing
of the products to meet FDA standards.
Further, in November 2020, the HHS finalized a regulation removing safe harbor protection for price reductions from
pharmaceutical manufacturers. The final rule would also eliminate the current safe harbor for Medicare drug rebates and create new
safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager service fees. It originally was set to go into effect
on January 1, 2022, but with passage of the IRA has been delayed by Congress to January 1, 2032.
On August 16, 2022, the IRA was signed into law by President Biden. The new legislation has implications for Medicare Part D,
which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option
of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires manufacturers of
certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;
imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and
replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the
Secretary of the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Further,
the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the
legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price
increases that exceed inflation. The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price
increases exceed inflation. The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and,
thereafter beginning in 2025, at $2,000 a year.
Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-
source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and
Part D. CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in
2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. This provision applies to drug products
that have been approved for at least nine years and biologics that have been licensed for 13 years, but it does not apply to drugs and
biologics that have been approved for a single rare disease or condition. The first cycle of negotiations for the Medicare Drug Price
Negotiation Program commenced in the summer of 2023. On August 15, 2024, the HHS published the results of the first Medicare
drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and
rheumatoid arthritis. The prices of these ten drugs will become effective January 1, 2026. On October 2, 2024, in final guidance, CMS
indicated that it would announce the selection of up to 15 additional drugs covered by Part D for the second cycle of negotiations by
February 1, 2025. That announcement was made on January 17, 2025. This second cycle of negotiations with participating drug
companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.
On June 6, 2023, Merck & Co. filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug
Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.
Subsequently, a number of other parties, including the U.S. Chamber of Commerce (the “Chamber”), Bristol Myers Squibb Company,
the PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits
in various courts with similar constitutional claims against the HHS and CMS. There have been various decisions by the courts
considering these cases since they were filed. The HHS has generally won the substantive disputes in these cases, and various federal
district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical
industry. Certain of these cases are now on appeal and, on October 30, 2024, the Court of Appeals for the Third Circuit heard oral
argument in three of these cases.
Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any
federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our
activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations
and financial condition.
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
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importation from other countries and bulk purchasing. In addition, regional healthcare organizations 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 healthcare 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.
Finally, outside of the U.S., in some nations, including those of the EU, the pricing of prescription pharmaceuticals is subject to
governmental control and access. In these countries, pricing negotiations with governmental authorities can take considerable time
after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we, or our
collaborators, may be required to conduct a clinical trial that compares the cost-effectiveness of our product to other available
therapies.
These measures, as well as others adopted in the future, may result in additional downward pressure on the price that we receive
for XPOVIO or any other approved product we or our collaborators might bring to market. Accordingly, such reforms, if enacted,
could have an adverse effect on anticipated revenue from XPOVIO or from product candidates that we, or our collaborators, may
successfully develop and for which we, or they, may obtain marketing approval and may affect our overall financial condition and
ability to develop or commercialize product candidates.
Our relationships with healthcare providers, physicians and third-party payers will be subject to applicable anti-kickback, fraud
and abuse, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual
damages, reputational harm and diminished profits and future earnings.
Healthcare professionals, including but not limited to physicians, nurses, medical directors, hospitals, pharmacies, pharmacy
benefit managers, group purchasing organizations, wholesalers, insurers, and all individuals employed by such entities (collectively,
“HCPs”), may influence the recommendation and prescription of our approved products. Our arrangements with HCPs and others who
have the ability to influence the recommendation and prescription of our products may expose us to broadly applicable fraud and
abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through
which we market, sell and distribute our medicines for which we obtain marketing approval. Restrictions under applicable federal and
state healthcare laws and regulations include the following:
•
the federal healthcare anti-kickback statute prohibits, among other things, persons 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 under federal and state healthcare programs such as Medicare and Medicaid;
•
the FCA imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or
entities for knowingly presenting or causing to be presented, to the federal government, claims for payment or approval
from Medicare, Medicaid or other government payers that are false or fraudulent or making a false statement to avoid,
decrease or conceal an obligation to pay money to the federal government, with potential liability including mandatory
treble damages and significant per-claim penalties;
•
the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as further amended by the Health
Information Technology for Economic and Clinical Health Act, which imposes certain requirements, including mandatory
contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health
information without appropriate authorization by entities subject to the rule, such as health plans, healthcare
clearinghouses and healthcare providers;
•
the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a
material fact or making any materially false statement in connection with the delivery of or payment for healthcare
benefits, items or services;
•
the federal transparency requirements under the federal Physician Payment Sunshine Act, which requires manufacturers of
drugs, devices, biologics and medical supplies to report to the HHS, information related to payments and other transfers of
value to physicians, other healthcare providers and teaching hospitals and ownership and investment interests held by
physicians and their immediate family members and applicable group purchasing organizations; and
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•
analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or
marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party
payers, including private insurers, and certain state laws that 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 physicians
and other healthcare providers or marketing expenditures.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that
some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in
violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties,
including civil and criminal penalties, damages, fines, exclusion from participation in government healthcare programs, such as
Medicare and Medicaid, imprisonment and the curtailment or restructuring of our operations, any of which could adversely affect our
business, financial condition, results of operations and prospects.
Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations
will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply
with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If
our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be
subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare
programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other
providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject
to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. Liabilities they incur
pursuant to these laws could result in significant costs or an interruption in operations, which could have a material adverse effect on
our business, financial condition, results of operations and prospects.
Our reporting and payment obligations under the Medicaid Drug Rebate Program and other governmental drug pricing programs
are complex and may involve subjective decisions. Any failure to comply with those obligations could subject us to penalties and
sanctions.
As a condition of reimbursement by various federal and state health insurance programs, we are required to calculate and report
certain pricing information to federal and state agencies. The regulations governing the calculations, price reporting and payment
obligations are complex and subject to interpretation by various government and regulatory agencies, as well as the courts. Reasonable
assumptions have been made where there is lack of regulations or clear guidance and such assumptions involve subjective decisions
and estimates. We are required to report any revisions to our calculation, price reporting and payment obligations previously reported
or paid. Such revisions could affect our liability to federal and state payers and also adversely impact our reported financial results of
operations in the period of such restatement. Further, a number of states have either implemented or are considering implementation of
drug price transparency legislation that may prevent or limit our ability to take price increases at certain rates or frequencies.
Requirements under such laws include advance notice of planned price increases, reporting price increase amounts and factors
considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies,
and new product notice and reporting. Such legislation could limit the price or payment for certain drugs, and a number of states are
authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers for the untimely,
inaccurate, or incomplete reporting of drug pricing information or for otherwise failing to comply with drug price transparency
requirements. If we are found to have violated state law requirements, we may become subject to significant penalties or other
enforcement mechanisms, which could have a material adverse effect on our business.
Uncertainty exists as new laws, regulations, judicial decisions, or new interpretations of existing laws, or regulations related to
our calculations, price reporting or payments obligations increases the chances of a legal challenge, restatement or investigation. If we
become subject to investigations, restatements, or other inquiries concerning our compliance with price reporting laws and regulations,
we could be required to pay or be subject to additional reimbursements, penalties, sanctions or fines, which could have a material
adverse effect on our business, financial condition and results of operations. In addition, it is possible that future healthcare reform
measures could be adopted, which could result in increased pressure on pricing and reimbursement of our products and thus have an
adverse impact on our financial position or business operations.
Further, state Medicaid programs may be slow to invoice pharmaceutical companies for calculated rebates resulting in a lag
between the time a sale is recorded and the time the rebate is paid. This results in us having to carry a liability on our consolidated
balance sheets for the estimate of rebate claims expected for Medicaid patients. If actual claims are higher than current estimates, our
financial position and results of operations could be adversely affected.
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In addition to retroactive rebates and the potential for 340B Program refunds, if we are found to have knowingly submitted any
false price information related to the Medicaid Drug Rebate Program to CMS, we may be liable for civil monetary penalties. Such
failure could also be grounds for CMS to terminate our Medicaid drug rebate agreement, pursuant to which we participate in the
Medicaid program. In the event that CMS terminates our rebate agreement, federal payments may not be available under government
programs, including Medicaid or Medicare Part B, for our covered outpatient drugs.
Additionally, if we overcharge the government in connection with the Federal Supply Schedule pricing program or Tricare
Retail Pharmacy Program, whether due to a misstated Federal Ceiling Price or otherwise, we are required to refund the difference to
the government. Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us
under the FCA and other laws and regulations. Unexpected refunds to the government, and responding to a government investigation
or enforcement action, would be expensive and time consuming, and could have a material adverse effect on our business, financial
condition, results of operations and growth prospects.
Our collaborators are also subject to similar requirements outside of the U.S. and thus the attendant risks and uncertainties. If
our collaborators suffer material and adverse effects from such risks and uncertainties, our rights and benefits for our licensed products
could be negatively impacted, which could have a material and adverse impact on our revenues.
We are subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to data
privacy and security and changes in such laws, regulations, policies and contractual obligations, and failure to comply with such
requirements could subject us to significant fines and penalties and other consequences, which may have a material adverse effect
on our business, financial condition or results of operations.
We are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of
personally-identifying information, which among other things, impose certain requirements relating to the privacy, security and
transmission of personal information, including comprehensive regulatory systems in the U.S., EU, UK and other countries in which
we may conduct business. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions
worldwide, and there has been an increasing focus on privacy and data protection issues with the potential to affect our business.
Failure to comply with any of these laws and regulations could result in enforcement action against us, including fines, imprisonment
of company officials and public censure, claims for damages by affected individuals, damage to our reputation and loss of goodwill,
any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.
There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information. In
particular, regulations promulgated pursuant to HIPAA establish privacy and security standards that limit the use and disclosure of
individually identifiable health information, or protected health information, and require the implementation of administrative,
physical and technological safeguards to protect the privacy of protected health information and ensure the confidentiality, integrity
and availability of electronic protected health information. Determining whether protected health information has been handled in
compliance with applicable privacy standards and our contractual obligations can be complex and may be subject to changing
interpretation.
If we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we could face
civil and criminal penalties. HHS enforcement activity can result in financial liability and reputational harm, and responses to such
enforcement activity can consume significant internal resources. In recent months, the Officer of Civil Rights (“OCR”) has been
especially active in enforcing the HIPAA rules. In addition, state attorneys general are authorized to bring civil actions seeking either
injunctions or damages in response to violations that threaten the privacy of state residents. We cannot be sure how these regulations
will be interpreted, enforced or applied to our operations. In addition to the risks associated with enforcement activities and potential
contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly
and require ongoing modifications to our policies, procedures and systems. Additionally, OCR is looking to amend the HIPAA
Security Rule, which (if and when finalized) could create additional compliance obligations and risk for our business.
In addition to potential enforcement by the HHS, we could also be potentially subject to privacy enforcement from the Federal
Trade Commission (the “FTC”). The FTC has been particularly focused on the unpermitted processing of health and genetic data
through its recent enforcement actions and is expanding the types of privacy violations that it interprets to be “unfair” under Section 5
of the FTC Act, as well as the types of activities it views to trigger the Health Breach Notification Rule (which the FTC also has the
authority to enforce). The agency is also in the process of developing rules related to commercial surveillance and data security. We
will need to account for the FTC’s evolving rules and guidance for proper privacy and data security practices in order to mitigate risk
for a potential enforcement action, which may be costly. Finally, both the FTC and HHS’s enforcement priorities (as well as those of
other federal regulators) may be impacted by the change in administration and new leadership. These shifts in enforcement priorities
may also impact our business.
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There are also increased restrictions at the federal level relating to transferring sensitive data outside of the U.S. to certain
foreign countries. For example, in 2024, Congress passed H.B. 815, which included the Protecting Americans’ Data from Foreign
Adversaries Act of 2024. This law creates certain restrictions for entities that disclose sensitive data (including potential health data) to
countries such as China. Failure to comply with these rules can lead to a potential FTC enforcement action. Additionally, the
Department of Justice recently finalized a rule implementing Executive Order 14117, which creates similar restrictions related to the
transfer of sensitive US data to countries such as China. These data transfer restrictions (and others that may pass in the future) may
create operational challenges and legal risks for our business.
States are also active in creating specific rules relating to the processing of personal information. In 2018, California passed into
law the California Consumer Privacy Act (the “CCPA”), which took effect on January 1, 2020 and imposed many requirements on
businesses that process the personal information of California residents. Many of the CCPA’s requirements are similar to those found
in the European General Data Protection Regulation (the “GDPR”), which is further described below, including requiring businesses
to provide notice to data subjects regarding the information collected about them and how such information is used and shared, and
providing data subjects the right to request access to such personal information and, in certain cases, request the erasure of such
personal information. The CCPA also affords California residents the right to opt-out of “sales” of their personal information. The
CCPA contains significant penalties for companies that violate its requirements.
In November 2020, California voters passed a ballot initiative for the California Privacy Rights Act (the “CPRA”), which went
into effect on January 1, 2023 and significantly expanded the CCPA to incorporate additional GDPR-like provisions including
requiring that the use, retention and sharing of personal information of California residents be reasonably necessary and proportionate
to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater
disclosures related to notice to residents regarding retention of information. The CPRA also created a new enforcement agency – the
California Privacy Protection Agency – the sole responsibility of which is to enforce the CPRA and other California privacy laws,
which will further increase compliance risk. The provisions in the CPRA may apply to some of our business activities.
In addition to California, at least eighteen other states have passed comprehensive privacy laws similar to the CCPA and CPRA.
These laws are either in effect or will go into effect over the next few years. Like the CCPA and CPRA, these laws create obligations
related to the processing of personal information, as well as special obligations for the processing of “sensitive” data, which includes
health data in some cases. Some of the provisions of these laws may apply to our business activities. There are also states that are
strongly considering or have already passed comprehensive privacy laws during the 2024 legislative sessions that will go into effect in
2025 and beyond, including New Hampshire and New Jersey. Other states will be considering these laws in the future, and Congress
has also been debating passing a federal privacy law. There are also states that are specifically regulating health information that may
affect our business. For example, Washington state passed a health privacy law in 2023 that regulates the collection and sharing of
health information, and the law also has a private right of action, which further increases the relevant compliance risk. Connecticut
and Nevada have also passed similar laws regulating consumer health data, and more states are considering such legislation in 2025.
These laws may impact our business activities, including our identification of research subjects, relationships with business partners
and ultimately the marketing and distribution of our products.
Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against
companies for their data-related practices. In particular, there have been a significant number of cases filed against companies for their
use of pixels and other web trackers. These cases often allege violations of the California Invasion of Privacy Act and other state laws
regulating wiretapping, as well as the federal Video Privacy Protection Act. The rise in these types of lawsuits creates potential risk
for our business.
Similar to the laws in the U.S., there are significant privacy and data security laws that apply in Europe and other countries. The
collection, use, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals who are
located in the European Economic Area (“EEA”), and the processing of personal data that takes place in the EEA, is regulated by the
GDPR, which went into effect in May 2018 and which imposes obligations on companies that operate in our industry with respect to
the processing of personal data and the cross-border transfer of such data. The GDPR imposes onerous accountability obligations
requiring data controllers and processors to maintain a record of their data processing and policies. If our or our partners’ or service
providers’ privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory
investigations, enforcement notices requiring us to change the way we use personal data and/or fines of up to 20 million Euros or up to
4% of the total worldwide annual turnover of the group of companies of the preceding financial year, whichever is higher, as well as
compensation claims by affected individuals, negative publicity, reputational harm and a potential loss of business and goodwill.
The GDPR places restrictions on the cross-border transfer of personal data from the EU to countries that have not been found by
the EC to offer adequate data protection legislation. There are ongoing concerns about the ability of companies to transfer personal
data from the EU to other countries. In July 2020, the Court of Justice of the EU (the “CJEU”) invalidated the EU-U.S. Privacy Shield,
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one of the mechanisms used to legitimize the transfer of personal data from the EEA to the U.S. The CJEU decision also drew into
question the long-term viability of an alternative means of data transfer, the standard contractual clauses, for international transfers of
personal data from the EEA. This CJEU decision resulted in increased scrutiny on data transfers and increased our costs of compliance
with data privacy legislation as well as our costs of negotiating appropriate privacy and security agreements with our vendors and
business partners.
In October 2022, President Biden signed an executive order to implement the EU-U.S. Data Privacy Framework, which serves
as a replacement to the EU-U.S. Privacy Shield. The EC adopted the adequacy decision on July 10, 2023. The adequacy decision
permits U.S. companies who self-certify to the EU-U.S. Data Privacy Framework to rely on it as a valid data transfer mechanism for
data transfers from the EU to the U.S. However, some privacy advocacy groups have already suggested that they will be challenging
the EU-U.S. Data Privacy Framework. If these challenges are successful, they may not only impact the EU-U.S. Data Privacy
Framework, but also further limit the viability of the standard contractual clauses and other data transfer mechanisms. The uncertainty
around this issue has the potential to impact our business. Following the withdrawal of the UK from the EU, the UK Data Protection
Act 2018 applies to the processing of personal data that takes place in the UK and includes parallel obligations to those set forth by
GDPR. In relation to data transfers, both the UK and the EU have determined, through separate “adequacy” decisions, that data
transfers between the two jurisdictions are in compliance with the UK Data Protection Act and the GDPR, respectively. The UK and
the U.S. have also agreed to a U.S.-UK “Data Bridge”, which functions similarly to the EU-U.S. Data Privacy Framework and
provides an additional legal mechanism for companies to transfer data from the UK to the U.S.
Switzerland has also approved an adequacy decision in relation to the Swiss-U.S. Data Privacy Framework (which functions
similarly to the EU-U.S. Data Privacy Framework and the U.S.-UK Data Bridge in relation to data transfers from Switzerland to the
U.S.). Any changes or updates to these developments have the potential to impact our business.
Beyond GDPR, there are privacy and data security laws in a growing number of countries around the world. While many
loosely follow GDPR as a model, other laws contain different or conflicting provisions. These laws will impact our ability to conduct
our business activities, including both our clinical trials and the sale and distribution of commercial products, through increased
compliance costs, costs associated with contracting and potential enforcement actions.
While we continue to address the implications of the recent changes to data privacy regulations, data privacy remains an
evolving landscape at both the domestic and international level, with new regulations coming into effect and continued legal
challenges, and our efforts to comply with the evolving data protection rules may be unsuccessful. It is possible that these laws may be
interpreted and applied in a manner that is inconsistent with our practices. We must devote significant resources to understanding and
complying with this changing landscape. Failure to comply with laws regarding data protection would expose us to risk of
enforcement actions taken by data protection authorities in the EEA and elsewhere and carries with it the potential for significant
penalties if we are found to be non-compliant. Similarly, failure to comply with federal and state laws in the U.S. regarding privacy
and security of personal information could expose us to penalties under such laws. Any such failure to comply with data protection
and privacy laws could result in government-imposed fines or orders requiring that we change our practices, claims for damages or
other liabilities, regulatory investigations and enforcement action, litigation and significant costs for remediation, any of which could
adversely affect our business. Even if we are not determined to have violated these laws, government investigations into these issues
typically require the expenditure of significant resources and generate negative publicity, which could harm our business, financial
condition, results of operations or prospects.
Our employees, independent contractors, consultants, collaborators and vendors may engage in misconduct or other improper
activities, including non-compliance with regulatory standards and/or requirements and insider trading, which could cause
significant liability for us and harm our reputation.
We are exposed to the risk of fraud or other misconduct by our employees, independent contractors, consultants, collaborators
and vendors. Misconduct by these partners could include intentional, reckless and/or negligent conduct or unauthorized activities that
violate FDA regulations or similar regulations of comparable foreign regulatory authorities; provide inaccurate information to the
FDA or comparable foreign regulatory authorities; fail to comply with manufacturing standards, federal and state healthcare fraud and
abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities;
fail to comply with state drug pricing transparency filing requirements; fail to report financial information or data accurately; or fail to
disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the course
of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. This could include violations of
HIPAA, other U.S. federal and state laws, and requirements of foreign jurisdictions, including the GDPR. We are also exposed to risks
in connection with any insider trading violations by employees or others affiliated with us. It is not always possible to identify and
deter employee or third-party misconduct, and the precautions we take to detect and prevent these activities may not be effective in
controlling unknown or unmanaged risks or losses or in protecting us from significant penalties, governmental investigations or other
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actions or lawsuits stemming from a failure to be in compliance with such laws, standards, regulations, guidance or codes of conduct.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions
could have a significant impact on our business and results of operations, including the imposition of significant fines or other
sanctions.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or
incur costs that could have a material adverse effect on our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory
procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of
hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations and the operations
of our third-party vendors also produce hazardous waste products. We generally contract with third parties for the disposal of these
materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or
injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed
our resources. We also could incur significant costs associated with civil or criminal fines and penalties.
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our
employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential
liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection
with our storage or disposal of biological, hazardous or radioactive materials.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and
regulations. These current or future laws and regulations may impair our research, development or commercialization efforts. Failure
to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
Laws and regulations governing international operations we may have in the future may preclude us from developing,
manufacturing and selling certain products outside of the U.S. and require us to develop and implement costly compliance
programs.
We are subject to numerous laws and regulations in each jurisdiction outside of the U.S. in which we operate. The creation,
implementation and maintenance of international business practices compliance programs is costly and such programs are difficult to
enforce, particularly where reliance on third parties is required.
The FCPA prohibits any U.S. individual or business from paying, offering, authorizing payment or offering of anything of
value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the
foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies
whose securities are listed in the U.S. to comply with certain accounting provisions requiring us to maintain books and records that
accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an
adequate system of internal accounting controls. The FCPA is enforced by the DOJ and the SEC.
Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In
addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals, clinics,
universities and similar institutions are operated by the government, and doctors and other healthcare professionals are considered
foreign officials. Certain payments to healthcare professionals in connection with clinical trials, regulatory approvals, sales and
marketing, and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement
actions. Because the FCPA applies to indirect payments, the use of third parties and other collaborators can increase potential FCPA
risk, as we could be held liable for the acts of third parties that do not comply with the FCPA’s requirements.
The failure to comply with laws governing international business practices may result in substantial penalties, including
suspension or debarment from government contracting. Violation of the FCPA can result in significant civil and criminal penalties.
Indictment alone under the FCPA can lead to suspension of the right to do business with the U.S. government until the pending claims
are resolved. Conviction of a violation of the FCPA can result in long-term disqualification as a government contractor. The
termination of a government contract or relationship as a result of our failure to satisfy any of our obligations under laws governing
international business practices would have a negative impact on our operations and harm our reputation and ability to procure
government contracts. The SEC also may suspend or bar issuers from trading securities on U.S. exchanges for violations of the
FCPA’s accounting provisions.
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Like the FCPA, the UK Bribery Act and other anti-corruption laws throughout the world similarly prohibit offers and payments
made to obtain improper business advantages, including offers or payments to healthcare professionals and other government and non-
government officials. These other anti-corruption laws also can result in substantial financial penalties and other collateral
consequences.
Various laws, regulations and executive orders also restrict the use and dissemination outside of the U.S., or the sharing with
certain non-U.S. nationals, of information classified for national security purposes, as well as certain products and technical data
relating to those products. Our expansion outside of the U.S., has required, and will continue to require, us to dedicate additional
resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain drugs and
product candidates outside of the U.S., which could limit our growth potential and increase our development costs.
With the passage of the CREATES Act, we are exposed to possible litigation and damages by competitors who may claim that we
are not providing sufficient quantities of our approved products on commercially reasonable, market-based terms for testing in
support of their ANDAs and 505(b)(2) applications.
In December 2019, former President Trump signed legislation intended to facilitate the development of generic and biosimilar
products. The bill, previously known as the CREATES Act, authorizes sponsors of abbreviated new drug applications (“ANDAs”) and
505(b)(2) applications to file lawsuits against companies holding NDAs that decline to provide sufficient quantities of an approved
reference drug on commercially reasonable, market-based terms. Drug products on the FDA’s drug shortage list are exempt from these
new provisions unless the product has been on the list for more than six continuous months or the FDA determines that the supply of
the product will help alleviate or prevent a shortage.
To bring an action under the statute, an ANDA or 505(b)(2) sponsor must take certain steps to request the reference product,
which, in the case of products covered by a REMS with elements to assure safe use, include obtaining authorization from the FDA for
the acquisition of the reference product. If the sponsor does bring an action for failure to provide a reference product, there are certain
affirmative defenses available to the NDA holder, which must be shown by a preponderance of evidence. If the sponsor prevails in
litigation, it is entitled to a court order directing the NDA holder to provide, without delay, sufficient quantities of the applicable
product on commercially reasonable, market-based terms, plus reasonable attorney fees and costs.
Additionally, the new statutory provisions authorize a federal court to award the product developer an amount “sufficient to
deter” the NDA holder from refusing to provide sufficient product quantities on commercially reasonable, market-based terms if the
court finds, by a preponderance of the evidence, that the NDA holder did not have a legitimate business justification to delay
providing the product or failed to comply with the court’s order. For the purposes of the statute, the term “commercially reasonable,
market-based terms” is defined as (1) the nondiscriminatory price at or below the most recent wholesale acquisition cost for the
product, (2) a delivery schedule that meets the statutorily defined timetable, and (3) no additional conditions on the sale.
Although we intend to comply fully with the terms of these statutory provisions, we are still exposed to potential litigation and
damages by competitors who may claim that we are not providing sufficient quantities of our approved products on commercially
reasonable, market-based terms for testing in support of ANDAs and 505(b)(2) applications. Such litigation would subject us to
additional litigation costs, damages and reputational harm, which could lead to lower revenues. The CREATES Act may enable
generic competition with XPOVIO and any of our product candidates, if approved, which could impact our ability to maximize
product revenue. In September 2022, the FDA issued draft guidance outlining certain of the provisions under this statute.
We are subject to governmental export and import controls that could impair our or our collaborators’ ability to compete in
international markets due to licensing requirements and subject us or them to liability if we or they are not in compliance with
applicable laws.
Our products are subject to export control and import laws and regulations, including the U.S. Export Administration
Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury
Department’s Office of Foreign Assets Controls. Exports of our products outside of the U.S. must be made in compliance with these
laws and regulations. If we or our collaborators fail to comply with these laws and regulations, we or they and certain of our or their
employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines,
which may be imposed on us or our collaborators and the respective responsible employees or managers; and, in extreme cases, the
incarceration of responsible employees or managers.
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In addition, changes in our products or changes in applicable export or import laws and regulations may create delays in the
introduction, provision, or sale of our products in international markets, prevent customers from using our products or, in some cases,
prevent the export or import of our products to certain countries, governments or persons altogether. Any limitation on our ability to
export, provide, or sell our products could adversely affect our business, financial condition and results of operations.
Changes in U.S. and international trade policies, particularly with respect to China, may adversely impact our business and
operating results.
The U.S. government has recently made statements and taken certain actions that may lead to potential changes to U.S. and
international trade policies, including imposing several rounds of tariffs and export control restrictions affecting certain products
manufactured in China. In March 2018, the Trump administration announced the imposition of tariffs on steel and aluminum entering
the U.S. and in June 2018, the Trump administration announced further tariffs targeting goods imported from China. Recently both
China and the U.S. have each imposed tariffs indicating the potential for further trade barriers, including the U.S. Commerce
Department adding numerous Chinese entities to its “unverified list,” which requires U.S. exporters to go through more procedures
before exporting goods to such entities. It is unknown whether and to what extent new tariffs, export controls, or other new laws or
regulations will be adopted, or the effect that any such actions would have on us or our industry.
Further, some of our raw material manufacturers and suppliers are located in China. Trade tensions and conflicts between the
U.S. and China have been escalating in recent years and, as such, we are exposed to the possibility of product supply disruption and
increased costs and expenses in the event of changes to the laws, rules, regulations and policies of the governments of the U.S. or
China, or due to geopolitical unrest and unstable economic conditions. Certain Chinese biotechnology companies may become subject
to trade restrictions, sanctions, other regulatory requirements or proposed legislation by the U.S. government, which could restrict or
even prohibit our ability to work with such entities, thereby potentially disrupting their supply of material to us. For example, in
February 2024, U.S. lawmakers called for investigations into and the imposition of possible economic sanctions against Chinese
biotechnology companies WuXi AppTec and WuXi Biologics (collectively “WuXi”) over alleged ties to the Chinese military. In
addition, the recently proposed BIOSECURE Act introduced in the House of Representatives, as well as a substantially similar bill in
the Senate, targets certain Chinese biotechnology companies. If these bills become law, or similar laws are passed, they would have
the potential to severely restrict the ability of companies to contract with certain Chinese biotechnology companies of concern without
losing the ability to contract with, or otherwise received funding from, the U.S. government. Such disruptions could have adverse
effects on the development of our products or product candidates and our business operations.
Any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, may increase the
cost of manufacturing our product candidates and platform materials, affect the demand for our drug products (if and once approved),
the competitive position of our product candidates, and import or export of raw materials and finished product candidate used in our
and our collaborators’ preclinical studies and clinical trials, particularly with respect to any product candidates and materials that we
import from China. If any new tariffs, export controls, legislation and/or regulations are implemented, or if existing trade agreements
are renegotiated or, in particular, if either the U.S. or Chinese government takes retaliatory trade actions due to the recent trade
tension, such changes could have an adverse effect on our business, financial condition and results of operations.
Risks Related to Our Financial Position and Capital Requirements
Our financial condition raises substantial doubt as to our ability to continue as a going concern.
We will require substantial funds to maintain our research and development programs, including as we continue to develop and
seek regulatory approval of selinexor for multiple cancer indications, and to support our continued operations. We have incurred
significant operating losses since our inception. As of December 31, 2024, we had approximately $108.7 million in cash, cash
equivalents and investments and an accumulated deficit of $1.6 billion. We anticipate that we will continue to incur significant
operating losses as we continue to develop and seek regulatory approval of selinexor for multiple cancer indications. As a result, our
continued operations are dependent on our ability to raise additional funding and marketing XPOVIO in its currently approved
indications.
We plan to address the conditions that raise substantial doubt regarding our ability to continue as a going concern by, among
other things, obtaining additional funding through equity offerings, debt financings and refinancings, collaborations, strategic alliances
and/or licensing arrangements. However, there is no assurance that such additional funding will be available on terms acceptable to us
or at all. We may also be required to reduce our current spending requirements where possible.
If we utilize our capital resources more quickly than anticipated or are unable to obtain additional funding, we may have to
significantly curtail, delay, reduce or eliminate one or more of our research and development programs or any current or future
commercialization efforts for one or more of our products or product candidates, which could materially adversely affect our business,
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financial condition, and results of operations. If we are unable to continue as a going concern, we may have to liquidate our assets and
may receive less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all
or part of their investment. If we seek additional financing to fund our business activities in the future and there remains substantial
doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide funding to us
on commercially reasonable terms, if at all.
We have incurred significant losses since inception, expect to continue to incur significant losses, and may never achieve or
maintain profitability.
Since inception, we have incurred significant operating losses. Our net loss was $76.4 million for the year ended December 31,
2024. As of December 31, 2024, we had an accumulated deficit of $1.6 billion. As described above in “Our financial condition raises
substantial doubt as to our ability to continue as a going concern,” our financial condition raises substantial doubt about our ability to
continue as a going concern. Although we received our first FDA-approval for XPOVIO in July 2019, we may never attain
profitability or positive cash flows from operations. We have historically financed our operations primarily through a combination of
proceeds from (i) product revenue sales, (ii) public and private placements of equity securities, (iii) the issuance of convertible debt,
(iv) a term loan, (v) our deferred royalty obligation, (vi) at the market offerings and (vii) business development activities. Substantially
all of our operating losses have resulted from costs incurred in connection with our research and development programs, the pursuit of
regulatory approvals within and outside of the U.S., and the commercialization of XPOVIO. We expect to continue to incur significant
expenses and operating losses as we continue to commercialize XPOVIO in the U.S. and engage in activities to prepare for the
potential approval and commercialization of additional indications for selinexor as well as any other product candidates we develop or
acquire. The net losses we incur may fluctuate significantly from quarter to quarter.
While we began to generate revenue from the sales of XPOVIO in July 2019 and have received revenue from our license
arrangements, such as the partnership we have with Antengene Therapeutics Limited (“Antengene”) for our programs across most of
the Asia-Pacific region, and with Menarini for our programs in Europe, Latin America, certain Middle East and Africa regions and
other key countries, there can be no assurance as to the amount or timing of future product or license and other revenues, and we may
not achieve profitability for several years, if at all. Our ability to become and remain profitable depends significantly on our success in
many areas, including:
•
effectively commercializing XPOVIO or any future products either on our own or with a collaborator, including by
maintaining a full commercial organization required to market, sell and distribute our products, and achieving an adequate
level of market acceptance;
•
the impact of current or future competing products on product sales of XPOVIO or any of our future products;
•
obtaining sufficient pricing, coverage and reimbursement, including government pricing and reimbursement policies or a
change in the mix of our business effecting rebates related to 340B Programs, Medicare and Medicaid, for XPOVIO and
any of our other approved products from private and government payers and the impact of any pricing changes, any of
which can impact our gross-to-net provisions related to product sales;
•
initiating and successfully completing clinical trials required to file for, obtain and maintain marketing approval for our
product candidates;
•
obtaining and maintaining regulatory approvals, either by us or our collaborators, and the timing of such approvals;
•
manufacturing at commercial scale;
•
establishing and managing any collaborations for the development, marketing and/or commercialization of our products
and product candidates, including the level of success of our collaborators’ efforts and the timing and amount of any
milestone or royalty payments we may receive;
•
obtaining, maintaining and protecting our intellectual property rights;
•
the willingness of patients to pay out-of-pocket in the absence of third-party coverage or as co-pay amounts under third-
party coverage; for example, multiple myeloma foundation closures during 2023 resulted in significantly increased use of
our PAP, which adversely impacted our 2023 revenues; and
•
navigating the negative impacts to healthcare systems, the ability of our clinical trial sites to conduct current or future
trials and the regulatory review process as the result of pandemics or other public health emergencies.
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We anticipate that our operating expenses will continue to be significant and increase as we continue to:
•
commercialize XPOVIO in the U.S., including maintaining our commercial infrastructure, and engage in activities to
prepare for the potential approval and commercialization of additional indications for selinexor;
•
obtain and/or maintain regulatory approval for XPOVIO and our product candidates, including completing any required
post-marketing requirements to the satisfaction of the FDA or other regulatory agencies;
•
expand our research and development programs, identify additional product candidates and initiate and conduct clinical
trials, including clinical trials required by the FDA or other regulatory agencies in addition to those that have been or are
currently expected to be conducted;
•
maintain, expand and protect our intellectual property portfolio;
•
manufacture XPOVIO and our product candidates; and
•
acquire or in-license other products, product candidates or technologies.
Because of the numerous risks and uncertainties associated with pharmaceutical product development and commercialization,
we are unable to accurately predict the timing or amount of our revenue and expenses or when, or if, we will be able to achieve
profitability. We cannot be certain that our revenue from sales of XPOVIO alone, in the currently approved indications, will be
sufficient for us to become profitable for several years, if at all. We 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 and commercialization 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.
We will need additional funding to achieve our business objectives. If we are unable to raise capital when needed or on acceptable
terms, we would be forced to delay, reduce or eliminate our research and development programs and/or commercialization
efforts.
Discovering, developing and commercializing products involve time-consuming, expensive and uncertain processes that take
years to complete. We have used substantial funds to develop XPOVIO and expect our operating expenses to continue to increase as
we continue to commercialize XPOVIO or any future approved product, conduct further research and development of our product
candidates, seek marketing approval and prepare for commercialization of selinexor in additional indications or for our other product
candidates, if approved, to the extent that such functions are not the responsibility of a collaborator. Furthermore, we will continue to
incur additional costs associated with operating as a public company, hiring additional personnel and expanding our geographical
reach. Although currently XPOVIO is commercially available in three indications, we do not anticipate that our revenue from product
sales of XPOVIO or any funds we may receive from our collaborators will be sufficient for us to become profitable for several years,
if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.
As of December 31, 2024, we believe that our existing cash, cash equivalents and investments will enable us to fund our current
operating plans and debt obligation requirements into the fourth quarter of 2025. The amount and timing of our future capital
requirements will depend on many factors, including, but not limited to:
•
the scope, progress, results, timing and costs of our current and planned development efforts and regulatory review of our
product candidates;
•
the amount and timing of revenues from sales of XPOVIO, or any product candidate that we develop or acquire;
•
the cost of, and our ability to expand and maintain, the commercial infrastructure required to support the
commercialization of XPOVIO and any other product for which we receive marketing approval, including medical affairs,
manufacturing, marketing and distribution functions;
•
our ability to establish and maintain collaboration, partnership, licensing, marketing, distribution or other arrangements on
favorable terms and the level and timing of success of these arrangements, and our ability to use proceeds of those
arrangements in our business as opposed to being required to pay those proceeds to the lenders of our $100.0 million
senior secured term loan facility (the “Term Loan”) and/or holders of the Convertible Senior Notes due 2025 (the “2025
Notes”) and the secured Convertible Senior Notes due 2029 (the “2029 Notes”);
•
the extent to which we acquire or in-license other products, product candidates and technologies, and our ability to enter
into such acquisitions and in-licenses pursuant to the restrictions under the Term Loan and the 2029 Notes;
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•
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual
property rights and defending intellectual property-related claims; and
•
our ability to continue as a going concern.
In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders. If we raise additional
funds by issuing equity securities, dilution to our existing stockholders will result. In addition, as a condition to providing additional
funding to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Moreover, in
addition to the restrictions on our operations under the Term Loan and the 2029 Notes, the restrictions contained in the Amended
Revenue Interest Agreement (defined below) and the repayment requirements in respect of obligations from proceeds of the
transactions under each of the foregoing agreements, any future debt financing, if available and permitted, may involve further
restrictive covenants that could limit our flexibility in conducting future business activities and using transaction proceeds in our
business and, in the event of insolvency, the Term Loan, the 2029 Notes, the 2025 Notes, the Amended Revenue Interest Agreement
obligations, and any further indebtedness, if available and permitted, would be paid before holders of equity securities received any
distribution of corporate assets. Our ability to satisfy and meet our current and any future debt service obligations will depend upon
our future performance, which will be subject to financial, business and other factors affecting our operations, many of which are
beyond our control.
Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to
favorable market conditions or strategic considerations. Any future fundraising efforts could divert management’s attention away from
their day-to-day activities. Further, adequate additional financing may not be available to us on acceptable terms, or at all. In addition,
raising funds in the current economic environment may present additional challenges. For example, any sustained disruption in the
capital markets from adverse macroeconomic conditions, such as the disruption and uncertainty caused by inflation, sustained high
interest rates and slower economic growth or recession, could negatively impact our ability to raise capital and we cannot predict the
extent or duration of such macro-economic disruptions. Moreover, there has been turmoil in the global banking system, which could
result in loss of or access to our deposits, and an inability to obtain financing from other sources. If adequate funds are not available to
us on a timely basis or on attractive terms, we may be required to delay, reduce or eliminate our research and development programs
or any current or future commercialization efforts for one or more of our products or product candidates, any of which could have a
material adverse effect on our business, operating results and prospects.
Our Amended Revenue Interest Agreement with HCRx contains various covenants and other provisions, which, if violated, could,
subject to the Intercreditor Agreement, result in the acceleration of payments due under such agreement or the foreclosure on the
pledged collateral, including all of our present and future assets relating to selinexor.
In September 2019, we entered into the Revenue Interest Financing Agreement with HealthCare Royalty Partners III, L.P. and
HealthCare Royalty Partners IV, L.P. (collectively, “HCRx”), which was amended in June 2021, August 2023 and May 2024 (the
“Amended Revenue Interest Agreement”). Pursuant to the Amended 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. In addition, the Amended Revenue Interest Agreement limits 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. The Amended Revenue Interest Agreement also 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 and specified revocations, withdrawals, suspensions or cancellations of
regulatory approval for XPOVIO. Upon the occurrence of an event of default and in the event of a change of control, HCRx may
accelerate payments due under the Amended Revenue Interest Agreement up to $128.3 million, less the aggregate amount of all of the
payments paid to HCRx after the date of the May 2024 amendment. Our obligations to HCRx are secured by a second-priority security
interest in certain assets of ours related to selinexor, which shares such second priority with the 2029 Notes and which is subordinated
to the first-priority security interest securing the Term Loan. Subject to an intercreditor agreement with HCRx, the Term Loan lenders
and the holders of the 2029 Notes (the “Intercreditor Agreement”), in the event that an uncured default by us under the Amended
Revenue Interest Agreement results in an acceleration of obligations by HCRx which we are unable to pay, HCRx will have the right
to foreclose on the collateral that was pledged to HCRx. Any such foreclosure remedy would significantly and adversely affect us and
could result in us losing our interest in such assets, which would have a material adverse impact on our business.
Our Credit Agreement and indenture governing the 2029 Notes contain various covenants and other provisions, which will limit
the manner in which we may operate, and, if violated, could, subject to the Intercreditor Agreement, result in the acceleration of
payments due under such agreements or the foreclosure on the pledged collateral, including all of our present and future assets.
The May 2024 credit and guaranty agreement (the “Credit Agreement”) and the indenture governing the 2029 Notes contain,
and any future indebtedness that we incur may contain, various negative covenants that restrict, among other things, our indebtedness,
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liens, fundamental changes, asset sales, investments and other matters. In addition, the Credit Agreement and the indenture governing
the 2029 Notes each have a financial covenant requiring us to maintain liquidity of at least $25.0 million at all times. As a result, we
are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities. The
Credit Agreement and the indenture governing the 2029 Notes also contain certain events of default, after which the Term Loan or the
2029 Notes may be due and payable immediately, including, without limitation, withdrawal of approval for selinexor with respect to
its current approved indication for use with bortezomib and dexamethasone, payment defaults, material inaccuracy of representations
and warranties, covenant defaults, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, judgments
against us and our subsidiaries, change in control and lien priority. Our obligations under the Credit Agreement and the indenture
governing the 2029 Notes are secured by substantially all of our assets. Subject to the Intercreditor Agreement, in the event that an
uncured default by us under the Credit Agreement or the indenture governing the 2029 Notes results in an acceleration of obligations
thereunder, the Term Loan lenders and the holders of the 2029 Notes will have the right to foreclose on the collateral that was pledged
to each such party. Any such foreclosure remedy would significantly and adversely affect us and could result in us losing our interest
in such assets, which would have a material adverse impact on our business.
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 Term Loan, the 2029 Notes,
the 2025 Notes or the Amended Revenue Interest Agreement.
We have incurred (i) $172.5 million of indebtedness as a result of the sale of the 2025 Notes, of which approximately $24.5
million remained outstanding following completion of the May 2024 exchange of certain of our 2025 Notes for 2029 Notes (the
“Exchange Transactions”); (ii) $263.3 million of indebtedness under the Amended Revenue Interest Agreement, of which $135.0
million was repaid after giving effect to the May 2024 amendment to the Amended Revenue Interest Agreement, resulting in a
remaining maximum aggregate repayment amount to HCRx of $128.3 million, (iii) $100.0 million of indebtedness under the Term
Loan, and (iv) approximately $111.0 million of indebtedness as a result of the issuance of the 2029 Notes pursuant to the Exchange
Transactions. We may also incur additional indebtedness to meet future financing needs, to the extent such indebtedness is available
and permitted. 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
would 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
2029 Notes or the 2025 Notes; and
•
placing us at a possible competitive disadvantage with competitors that are less leveraged than we are or have better
access to capital.
Our ability to pay the principal of or interest or other obligations on our present and any future indebtedness, including our
remaining obligations to HCRx and under the Credit Agreement, the 2029 Notes and the 2025 Notes, or to make cash payments in
connection with any conversion of the 2029 Notes or the 2025 Notes, depends on our future performance, which is subject, in part, 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 Term Loan, the Amended Revenue Interest Agreement, the 2029 Notes, the 2025 Notes or any other
future indebtedness and make necessary capital expenditures.
We may not have the ability to raise the funds necessary to settle any conversions of or other obligations in respect of the 2029
Notes or the 2025 Notes required to be settled in cash, to repurchase the 2029 Notes or the 2025 Notes for cash upon a
fundamental change, to pay the redemption price for any 2029 Notes or 2025 Notes we redeem or to refinance the 2029 Notes or
the 2025 Notes, and any future debt we incur may contain limitations on our ability to pay cash upon conversion or repurchase of
the 2029 Notes or the 2025 Notes.
Holders may require us to repurchase their 2029 Notes or 2025 Notes following a fundamental change at a cash repurchase price
generally equal to the principal amount of the 2029 Notes or the 2025 Notes to be repurchased, plus accrued and unpaid interest. As
discussed in more detail below under the risk factor entitled “If we fail to maintain compliance with the continued listing requirements
of Nasdaq, our common stock could be delisted from trading, which would adversely affect the liquidity of our common stock and our
ability to raise additional capital. The transfer of our common stock to the Nasdaq Capital Market would result in a fundamental
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change under the indenture governing the 2025 Notes, which could negatively impact our financial condition”, the transfer of the
listing of our common stock to the Nasdaq Capital Market as a result of our failure to regain compliance with the Bid Price Rule by
the Compliance Date (each as defined below) would constitute a fundamental change under the indenture governing the 2025 Notes,
which could negatively impact our financial condition. In addition, with respect to the 2025 Notes, 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
any conversion in cash. If we do not have enough available cash at the time we are required to repurchase the 2029 Notes or the 2025
Notes, pay cash amounts due upon conversion or redemption of or otherwise required to be paid in respect of the 2029 Notes or the
2025 Notes or refinance the 2029 Notes or the 2025 Notes, 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 2029 Notes or the 2025 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 on desirable terms, or at all, which could result in a default on our debt obligations, including the
2029 Notes and the 2025 Notes. In addition, our ability to repurchase the 2029 Notes or the 2025 Notes, to pay cash upon conversion
or redemption of the 2029 Notes or the 2025 Notes or to refinance the 2029 Notes or the 2025 Notes may be limited by law, regulatory
authority or agreements governing any future indebtedness that we may incur. Our failure to repurchase the 2029 Notes or the 2025
Notes at a time when the repurchase is required by the applicable indenture governing such notes or to pay cash upon conversion of or
in respect of other obligations under the 2029 Notes or the 2025 Notes as required by the applicable indenture governing such notes
would constitute a default under such indenture. A default under the indenture governing the 2029 Notes or the 2025 Notes or the
fundamental change itself could also lead to a default under the Credit Agreement, the Amended Revenue Interest Agreement or
agreements governing our future indebtedness, if any. Moreover, the occurrence of a fundamental change under the indenture
governing the 2029 Notes or the 2025 Notes 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 2029 Notes or the 2025 Notes or to pay cash upon conversion of the 2029 Notes or the 2025 Notes.
The conditional conversion feature of the 2025 Notes, if triggered, may adversely affect our financial condition and operating
results.
In the event the conditional conversion feature of the 2025 Notes is triggered, holders of the 2025 Notes will be entitled to
convert the 2025 Notes at any time during specified periods at their option. If one or more holders elects to convert their 2025 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 2025 Notes, we could be required under
applicable accounting rules to reclassify all or a portion of the outstanding principal amount of the 2025 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 such as the 2025 Notes and the 2029 Notes could have a material effect on
our reported financial results.
Conversions of the 2025 Notes may be settled in cash or shares, or a combination of cash and shares. Conversions of the 2029
Notes may only be settled in shares (subject to, and in accordance with, the settlement provisions of the indenture governing the 2029
Notes), plus cash in lieu of any fractional shares. Under the if-converted method, the maximum potential dilutive impact of the
conversion of the 2025 Notes or the 2029 Notes is assumed when calculating diluted earnings per share during periods of net income.
This could result in a material impact to diluted earnings per share. Diluted earnings per share is not impacted by the 2025 Notes or
the 2029 Notes during periods of net loss.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our
product candidates.
Until such time, if ever, as we can generate substantial revenues from the sale of our products, we expect to finance our cash
needs through a combination of equity offerings, debt financings and refinancings, 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. In addition, our ability to raise
additional capital through the sale of equity or convertible debt securities may be limited by the extent of our then remaining
authorized and available shares of common stock. Debt financing, if available and permitted, 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 terms of the Amended Revenue Interest Agreement, the Credit Agreement and the
indenture governing the 2029 Notes, we cannot make any voluntary or optional cash payment or prepayment on our existing
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convertible debt and cannot enter into any new debt without the consent of HCRx, the required lenders or the required holders,
respectively, subject to the exceptions and other provisions under the applicable governing document.
If we raise additional 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 product candidates or to grant licenses on
terms that may not be favorable to us. If we are unable to raise additional funds 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 product candidates that we would otherwise prefer to develop and market ourselves.
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 the past several years. Such disruptions have
resulted, and could in the future result, in diminished liquidity and credit availability, declines in consumer confidence, declines in
economic growth, increases in unemployment rates and uncertainty about economic stability. Our general business strategy may be
compromised by economic downturns, a volatile business environment and unpredictable and unstable market conditions, such as the
current global situation resulting, in part, from the ongoing conflict between Russia and Ukraine, the war between Israel and Hamas,
inflation, failures and instability in U.S. and international banking systems, sustained high interest rates and slower economic growth
or recession. 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. Further, developments in the banking industry could adversely affect our business. If the
financial institutions with which we do business enter receivership or become insolvent in the future, there is no guarantee that the
Department of the Treasury, the Federal Reserve and the FDIC will intercede to provide us and other depositors with access to
balances in excess of the $250,000 FDIC insurance limit, that we would be able to access our existing cash, cash equivalents and
investments, that we would be able to maintain any required letters of credit or other credit support arrangements, or that we would be
able to adequately fund our business for a prolonged period of time or at all, any of which could have a material adverse effect on our
business, financial condition and results of operations. We cannot predict the impact that the high market volatility and instability of
the banking sector more broadly could have on economic activity and our business in particular. 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, including the current global situation resulting, in part, from the ongoing conflict between Russia and Ukraine, the
war between Israel and Hamas, the instability of the banking sector, and the uncertainty associated with current worldwide economic
conditions, which could directly affect our ability to attain our operating goals on schedule and on budget.
Risks Related to Our Dependence on Third Parties
We depend on collaborations with third parties for certain aspects of the development, marketing and/or commercialization of
XPOVIO and/or our product candidates. If those collaborations are not successful, or if we are not able to maintain our existing
collaborations or establish additional collaborations, we may have to alter our development and commercialization plans and may
not be able to capitalize on the market potential of XPOVIO or our product candidates, if approved.
Our drug development programs and the commercialization of our products and product candidates, if approved, require local
expertise and substantial additional cash to fund expenses. We expect to maintain our existing collaborations and collaborate with
additional pharmaceutical and biotechnology companies for certain aspects of the development, marketing and/or commercialization
of our products and product candidates. For example, we are party to license arrangements with Antengene and Menarini and
distribution agreements with Promedico Ltd. and FORUS Therapeutics Inc. for the development, marketing and/or commercialization
of selinexor in certain geographies outside of the U.S., and we expect to rely on additional partners to develop and commercialize our
products outside of the U.S. In addition, we intend to seek one or more collaborators to aid in the further development, marketing
and/or commercialization of selinexor and our other compounds for indications both within and outside of oncology. All of the risks
relating to product development, regulatory approval and commercialization described in this Annual Report on Form 10-K also apply
to the activities, including activities in any country or territory outside of the U.S. and EU, as applicable, of our collaborators.
Potential collaborators include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies
and biotechnology companies and we face significant competition in seeking appropriate collaborators, including as a result of a
significant number of recent business combinations among large pharmaceutical companies that have reduced the number of potential
collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon the assessment of
the potential collaborator’s expertise, its current and expected resources and competing priorities, the terms and conditions of the
proposed collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include the design or
results of clinical trials, the likelihood of approval by the FDA or foreign regulatory authorities, the potential market for the product or
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product candidate, the costs and complexities of manufacturing and delivering such product or product candidate to patients, the
potential of competing products, the existence of uncertainty with respect to our ownership of intellectual property, which can exist if
there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. A
potential collaborator may also consider alternative product candidates or technologies for similar indications that may be available to
collaborate on and whether such a collaboration could be more attractive than the one with us.
Collaborations are complex and time consuming to negotiate, document and manage. We may not be able to negotiate
collaborations on a timely basis, on acceptable terms, or at all, or we may be restricted under then-existing collaboration agreements
from entering into future agreements on certain terms with potential collaborators. If we are unable to maintain our current
collaboration agreements or enter into new collaboration agreements, we may have to curtail, reduce or delay the development or
commercialization programs for our products or product candidates, or increase our expenditures and undertake development or
commercialization activities at our own expense. If we elect to increase our expenditures to fund and undertake development or
commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be
available to us on acceptable terms, or at all. If we do not have sufficient funds or expertise to undertake the necessary development
and commercialization activities, we may not be able to further develop our product candidates or bring them to market and generate
product revenue.
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, and our collaboration agreements may not lead to the development or
commercialization of our products or product candidates in the most efficient manner, or at all, and may result in lower product
revenues or profitability to us than if we were to market and sell these products ourselves. 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 products or product candidates. Further, if our collaborations do not result in
the successful development and commercialization of our products or product candidates or if any one of our collaborators terminates
its agreement with us, we may not receive any future milestone or royalty payments under the collaboration. If we do not receive the
funding we expect under these agreements, the development and commercialization of our products or product candidates could be
delayed and we may need additional resources to develop product candidates.
Collaborations involving our products and product candidates pose the following risks to us:
•
collaborators have significant discretion in determining the efforts and resources that they will apply to these
collaborations;
•
collaborators may not perform their obligations as expected or in compliance with applicable local and national laws and
regulatory requirements;
•
collaborators may not pursue development, marketing and/or commercialization of our products or product candidates or
may elect not to continue or renew development, marketing or commercialization programs based on clinical trial results,
changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts
resources or creates competing priorities;
•
collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or
abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for
clinical testing;
•
collaborators may pursue a clinical and/or regulatory strategy for registration outside of the U.S. that would require our
assistance and we may not have the resources to meet their or the regulators’ timelines and/or expectations, which could
delay or limit the development, commercialization or approval of our products outside the U.S.;
•
collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with
our products or product candidates if the collaborators believe that competitive products are more likely to be successfully
developed or can be commercialized under terms that are more economically attractive than ours;
•
a collaborator with marketing and distribution rights to one or more products or product candidates may not commit
sufficient resources to the marketing and distribution of our products or product candidates;
•
disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred
course of development or commercialization, might cause delays or termination of the research, development or
commercialization of products or product candidates, might lead to additional responsibilities for us with respect to our
products or product candidates, or might result in litigation or arbitration, any of which would be time consuming and
expensive;
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•
collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information
in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information
or expose us to potential litigation;
•
collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential
liability;
•
we may lose certain valuable rights under circumstances identified in any collaboration arrangement that we enter into,
such as if we undergo a change of control;
•
collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further
development, marketing and/or commercialization of the applicable products or product candidates or to enter into new
collaboration agreements;
•
collaborators may learn about our discoveries and use this knowledge to compete with us in the future; and
•
the number and type of our collaborations could adversely affect our attractiveness to other collaborators or acquirers.
If any of these events occurs, the market potential of our products and product candidates, if approved, could be reduced, and
our business could be materially harmed.
If we are unable to establish and maintain our agreements with third parties to distribute XPOVIO to patients, our results of
operations and business could be adversely affected.
We rely on third parties to commercially distribute XPOVIO to patients. For example, we have contracted with a limited
number of specialty pharmacies, which sell XPOVIO directly to patients, and specialty distributors, which 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 U.S., they may not perform as agreed or they may terminate their agreements with us. We may also need to
enter into agreements with additional pharmacies or distributors, and there is no guarantee that we will be able to do so on a timely
basis, at 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.
The use of specialty pharmacies and specialty distributors involves certain risks, including, but not limited to, risks that these
organizations will:
•
not provide us accurate or timely information regarding their inventories, the number of patients who are using XPOVIO
or serious adverse reactions, events and/or product complaints regarding XPOVIO;
•
not effectively sell or support XPOVIO or communicate publicly concerning XPOVIO in a manner that is contrary to
FDA rules and regulations;
•
reduce their efforts or discontinue to sell or support, or otherwise not effectively sell or support, XPOVIO;
•
not devote the resources necessary to sell XPOVIO in the volumes and within the timeframes that we expect;
•
be unable to satisfy financial obligations to us or others; or
•
cease operations.
Any such events may result in decreased product sales, which would harm our results of operations and business.
We rely on third parties as we conduct our clinical trials and some aspects of our research and preclinical studies, and those third
parties may not perform satisfactorily, including not meeting local regulatory submission requirements or failing to meet deadlines
for the completion of such trials, research or testing.
We rely on third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators,
as we conduct our clinical trials. We currently rely and expect to continue to rely on third parties to conduct some aspects of our
research and preclinical studies. Any of these third parties may terminate their engagements with us at any time. If we need to enter
into alternative arrangements, it would delay our drug development activities.
Our reliance on these third parties for research and development activities reduces our control over these activities but does not
relieve us of our responsibilities. For example, we remain responsible for ensuring that each of our clinical trials is conducted in
accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with GCP
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standards when conducting, recording and reporting the results of clinical trials to ensure that data and reported results are credible
and accurate and that the rights, integrity and confidentiality of trial participants are protected. The EMA also requires us to comply
with comparable standards. Regulatory authorities ensure compliance with these requirements through periodic inspections of trial
sponsors, principal investigators and trial sites. If we or any of the third parties that we rely on in connection with our clinical trials fail
to comply with applicable requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, EMA
or other comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing
applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that
any of our clinical trials comply with such requirements. We also are required to register ongoing clinical trials and post the results of
completed clinical trials on a government-sponsored database, such as clinicaltrials.gov, within certain timeframes. Failure to do so
can result in fines, adverse publicity and civil and criminal sanctions.
Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these
third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance
with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing
approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our
products. In such an event, our financial results and the commercial prospects for our products or product candidates, if approved,
could be harmed, our costs could increase and our ability to generate revenues could be delayed, impaired or foreclosed.
We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure
on the part of such third parties could delay clinical development or marketing approval of our product candidates or
commercialization of our products, producing additional losses and depriving us of potential product revenue.
We rely on third parties to conduct investigator-sponsored clinical trials of selinexor and our other product candidates. Any failure
by a third party to meet its obligations with respect to the clinical development of our product candidates may delay or impair our
ability to obtain regulatory approval for selinexor and our other product candidates.
We rely on academic and private non-academic institutions to conduct and sponsor clinical trials relating to selinexor and our
other product candidates, such as the European Myeloma Network, which is the sponsor of our ongoing randomized global Phase 3
trial evaluating selinexor in combination with pomalidomide and dexamethasone versus elotuzumab, pomalidomide, and
dexamethasone in patients with relapsed or refractory multiple myeloma. We do not solely control the design or conduct of the
investigator-sponsored trials, and it is possible that the FDA or foreign regulatory authorities will not view these investigator-
sponsored trials as providing adequate support for future clinical trials, whether controlled by us or third parties, for any one or more
reasons, including elements of the design, execution of the trials, safety concerns or other trial results.
Such arrangements will provide us certain information rights with respect to the investigator-sponsored trials, such as access to
and the ability to use and reference the data, including for our own regulatory filings, resulting from the investigator-sponsored trials.
However, we do not have control over the timing and reporting of the data from investigator-sponsored trials, nor do we own the data
from the investigator-sponsored trials. If we are unable to confirm or replicate the results from the investigator-sponsored trials or if
negative results are obtained, we would likely be further delayed or prevented from advancing clinical development of our product
candidates. Further, if investigators or institutions breach their obligations with respect to the clinical development of our product
candidates, or if the data proves to be inadequate compared to the first-hand knowledge we might have gained had the investigator-
sponsored trials been sponsored and conducted by us, then our ability to design and conduct any future clinical trials ourselves may be
adversely affected.
Additionally, the FDA or foreign regulatory authorities may disagree with the sufficiency of our right to reference the
preclinical, manufacturing or clinical data generated by these investigator-sponsored trials, or our interpretation of preclinical,
manufacturing or clinical data from these investigator-sponsored trials. If so, the FDA or foreign regulatory authorities may require us
to obtain and submit additional preclinical, manufacturing, or clinical data before we may initiate our planned trials and/or may not
accept such additional data as adequate to initiate our planned trials.
We are completely dependent on third parties for the manufacture of our products and product candidates and any difficulties,
disruptions, delays or unexpected costs, or the need to find alternative sources, could adversely affect our results of operations,
profitability and future business prospects.
We do not own or operate, and currently have no plans to establish, any manufacturing facilities for our products or product
candidates. We currently rely, and expect to continue to rely, on third-party contract manufacturers to manufacture our products and
product candidates for our commercial and clinical use.
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Facilities used by our third-party manufacturers may be inspected by the FDA after we submit a marketing application and
before potential approval of the product candidate and are also subject to ongoing periodic unannounced inspections by the FDA for
compliance with cGMP and other regulatory requirements following approval. Similar regulations apply to manufacturers of our
product candidates for use or sale in foreign countries. We do not control the manufacturing processes of, and are completely
dependent on, our third-party manufacturers for compliance with the applicable regulatory requirements for the manufacture of our
products and product candidates. Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory
requirements outside of the U.S. If our manufacturers cannot successfully manufacture material that conforms to our specifications
and the strict regulatory requirements of the FDA and any applicable foreign regulatory authority, they will not be able to secure
and/or maintain regulatory approval for their manufacturing facilities. If these facilities are not approved for commercial manufacture
or are not able to maintain approval, we may need to find alternative manufacturing facilities, which could significantly impact our
ability to develop, obtain regulatory approval for or market our products or product candidates as alternative qualified manufacturing
facilities may not be available on a timely or cost-efficient basis, or at all. Failure by any of our manufacturers to comply with
applicable cGMP regulations or other regulatory requirements could result in sanctions being imposed on us or the contract
manufacturer, including fines, injunctions, civil penalties, delays, suspensions or withdrawals of approvals, operating restrictions,
interruptions in supply and criminal prosecutions, any of which could significantly and adversely affect supplies of our products or
product candidates and have a material adverse impact on our business, financial condition and results of operations.
The clinical and commercial supplies of the drug product for XPOVIO are currently manufactured pursuant to a combination of
long-term supply agreements and as-needed purchase order agreements with our third-party manufacturers. Our ability to have our
products manufactured in sufficient quantities and at acceptable costs to meet our commercial demand and clinical development needs
is dependent on the uninterrupted and efficient operation of our third-party contract manufacturers’ facilities. Further, through our
third-party contract manufacturers and data service providers, we provide serialized commercial products as required to comply with
the DSCSA and its foreign equivalents where applicable. If our third-party contract manufacturers or data service providers fail to
support our efforts to continue to serialize, track, trace and authenticate units of our products in compliance with these requirements
and their and their foreign equivalents, as well as any future requirements, we may face legal penalties or be restricted from selling our
products.
Reliance on third-party manufacturers entails other risks, including:
•
reliance on the third party for regulatory compliance and quality assurance;
•
the possible breach, termination or nonrenewal of a manufacturing agreement by the third party, including at a time that is
costly or inconvenient to us;
•
the possible failure of the third party to manufacture our products or product candidates according to our schedule, or at
all, including if the third-party manufacturer gives greater priority to the supply of other products over our products and
product candidates, or otherwise does not satisfactorily perform according to the terms of the manufacturing agreement;
•
equipment malfunctions, power outages or other general disruptions experienced by our third-party manufacturers to their
respective operations and other general problems with a multi-step manufacturing process; and
•
the possible misappropriation or disclosure by the third party or others of our proprietary information, including our trade
secrets and know-how.
We currently rely on a single source supplier for our active pharmaceutical ingredient and our drug product manufacturing
requirements. Any performance failure on the part of our existing or future manufacturers could delay clinical development, marketing
approval or commercialization of our products or product candidates. If our suppliers or contract manufacturers are so affected, our
supply chain could be disrupted, our product shipments could be delayed, our costs could be increased and our business could be
adversely affected. If our current contract manufacturers cannot perform as agreed, we may be required to replace those
manufacturers. Although we believe that there are several potential alternative manufacturers who could manufacture our products and
product candidates, we could incur added costs and delays in identifying and qualifying any such replacement. Consequently, we may
not be able to reach agreement with third-party manufacturers on satisfactory terms, which could negatively impact our XPOVIO
revenues or delay commercialization of any product candidates that are subsequently approved.
If, because of the factors discussed above, we are unable to have our products manufactured on a timely or sufficient basis, we
may not be able to meet clinical development needs or commercial demand for our products or product candidates or we may not be
able to manufacture our products in a cost-effective manner. As a result, we may lose sales, fail to generate projected revenues or
suffer development or regulatory setbacks, any of which could have an adverse impact on our profitability and future business
prospects.
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Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent protection for our products or product candidates and other discoveries, or if the
scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize drugs and other
discoveries similar or identical to ours, and our ability to successfully commercialize our products or product candidates and other
discoveries may be adversely affected.
Our success depends in large part on our ability to obtain and maintain patent protection in the U.S. and other countries with
respect to our proprietary products and product candidates and other discoveries. We seek to protect our proprietary position by filing
patent applications related to our novel products and product candidates and other discoveries that are important to our business. As of
February 14, 2025, 182 patents were in force that relate to exportin 1 inhibitors, including composition of matter patents for selinexor,
verdinexor and eltanexor in the U.S., and their use in targeted therapeutics. In addition, 32 patents were in force that relate to our
PAK4/NAMPT inhibitors, including three composition of matter patents for KPT-9274 in the U.S. and its use in targeted therapeutics.
With respect to our KPT-1200 program, as of February 14, 2025, 12 patents were in force that relate to IL-12 compositions and uses
of IL-12 in targeted therapeutics. We cannot be certain that any other patents will issue with claims that cover any of our key products,
product candidates or other discoveries.
The patent prosecution process is expensive and time consuming, and we may not be able to file and prosecute all necessary or
desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable
aspects of our research and development output before it is too late to obtain patent protection.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and
factual questions and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability
and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents
being issued which protect our product candidates or other discoveries, or which effectively prevent others from commercializing
competitive drugs and discoveries. Changes in either the patent laws or interpretation of the patent laws in the U.S. and other countries
may diminish the value of our patents or narrow the scope of our patent protection.
The laws of foreign countries may not protect our rights to the same extent as the laws of the U.S. For example, in some foreign
jurisdictions, our ability to secure patents based on our filings in the U.S. may depend, in part, on our ability to timely obtain
assignment of rights to the invention from the employees and consultants who invented the technology. Publications of discoveries in
the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically
not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make
the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such
inventions.
Assuming the other requirements for patentability are met, prior to March 2013, in the U.S., the first to invent the claimed
invention was entitled to the patent, while outside of the U.S., the first to file a patent application is entitled to the patent. In March
2013, the U.S. transitioned to a first-inventor-to-file system in which, assuming the other requirements for patentability are met, the
first inventor to file a patent application is entitled to the patent. We may be subject to a third-party preissuance submission of prior art
to the U.S. Patent and Trademark Office (“USPTO”) or become involved in opposition, derivation, revocation, reexamination, or post-
grant or inter partes review or interference proceedings challenging our patent rights or the patent rights of others. An adverse
determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third
parties to commercialize our discoveries or drugs and compete directly with us, without payment to us, or result in our inability to
manufacture or commercialize drugs without infringing third-party patent rights.
Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful
protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors
may be able to circumvent our patents by developing similar or alternative discoveries or drugs in a non-infringing manner.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be
challenged in the courts or patent offices in the U.S. and abroad. Such challenges may result in loss of exclusivity or in patent claims
being narrowed, invalidated or held unenforceable, which could limit our ability to stop others from using or commercializing similar
or identical discoveries and drugs, or limit the duration of the patent protection of our products, product candidates and discoveries.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting
such candidates might expire before or shortly after such candidates are commercialized. As a result, our patent portfolio may not
provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.
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We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be
expensive, time consuming and unsuccessful.
Competitors or commercial supply companies or others may infringe our patents and other intellectual property rights. For
example, we are aware of third parties selling a version of our lead product candidate for research purposes, which may infringe our
intellectual property rights. To counter such infringement, we may advise such companies of our intellectual property rights,
including, in some cases, intellectual property rights that provide protection for our lead product candidates, and demand that they stop
infringing those rights. Such demand may provide such companies the opportunity to challenge the validity of certain of our
intellectual property rights, or the opportunity to seek a finding that their activities do not infringe our intellectual property rights. We
may also be required to file infringement actions, which can be expensive and time consuming. In an infringement proceeding, a
defendant may assert and a court may agree with a defendant that a patent of ours is invalid or unenforceable, or may refuse to stop the
other party from using the intellectual property at issue. An adverse result in any litigation could put one or more of our patents at risk
of being invalidated or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with
intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during
this type of litigation.
Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which
would be uncertain and could have a material adverse effect on the success of our business.
Our commercial success depends upon our ability and the ability of any current and future collaborators to develop,
manufacture, market and sell XPOVIO and our product candidates and use our proprietary technologies without infringing the
proprietary rights of third parties. We may become party to, or threatened with, future adversarial proceedings or litigation regarding
intellectual property rights with respect to our products or product candidates and technology, including interference proceedings
before the USPTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in
the future. No litigation asserting such infringement claims is currently pending against us, and we have not been found by a court of
competent jurisdiction to have infringed a third party’s intellectual property rights. If we are found to infringe or think there is a risk
we may be found to infringe, a third party’s intellectual property rights, we could be required or choose to obtain a license from such
third party to continue developing, marketing and selling our products, product candidates and technology. However, we may not be
able to obtain any required license on commercially reasonable terms, or at all. Even if we were able to obtain a license, it could be
non-exclusive, thereby giving our competitors access to the same intellectual property licensed to us. We could be forced, including by
court order, to cease commercializing the infringing intellectual property or product or to cease using the infringing technology. In
addition, we could be found liable for monetary damages. A finding of infringement could prevent us from commercializing our
products or product candidates or force us to cease some of our business operations, which could materially harm our business. Claims
that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our
business.
We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies,
including our competitors or potential competitors. Although we try to ensure that our employees do not use the proprietary
information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or
disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer.
Although we have no knowledge of any such claims being alleged to date, if such claims were to arise, litigation may be necessary to
defend against any such claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose
valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in
substantial costs and be a distraction to management.
Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal
responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur
significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there
could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities
analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development
activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to adequately
conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings
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more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation
of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and
other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-
compliance with these requirements.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be
due to the USPTO and various foreign patent offices at various points over the lifetime of the patents and/or applications. We have
systems in place to remind us to pay these fees, and we rely on our outside counsel to pay these fees when due. Additionally, the
USPTO and various foreign patent offices require compliance with a number of procedural, documentary, fee payment and other
similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply
with such provisions, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance
with rules applicable to the particular jurisdiction. However, there are situations in which non-compliance can result in abandonment
or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If such an
event were to occur, it could have a material adverse effect on our business.
If our product candidates or any of our future product candidates obtain regulatory approval, additional competitors could enter
the market with generic versions of such products, which may result in a material decline in sales of our competing products.
Under the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Amendments”) to the FDCA,
a company may file an ANDA, seeking approval of a generic version of an approved innovator product. Under the Hatch-Waxman
Amendments, a company may also submit an NDA under section 505(b)(2) of the FDCA that references the FDA’s prior approval of
the innovator product or preclinical studies and/or clinical trials that were not conducted by, or for, the sponsor and for which the
sponsor has not obtained a right of reference. A 505(b)(2) NDA product may be for a new or improved version of the original
innovator product. The Hatch-Waxman Amendments also provide for certain periods of regulatory exclusivity, which preclude FDA
approval (or in some circumstances, FDA filing and review) of an ANDA or 505(b)(2) NDA.
In certain circumstances, third parties may file an ANDA or NDA under Section 505(b)(2) as early as the so-called “NCE-1”
date that is one year before the expiry of the five-year period of New Chemical Entity exclusivity or more generally four years after
NDA approval. The third parties are allowed to rely on the safety and effectiveness data of the innovator’s product, may not need to
conduct clinical trials and can market a competing version of a product after the expiration or loss of patent exclusivity or the
expiration or loss of regulatory exclusivity and often charge significantly lower prices. Upon the expiration or loss of patent protection
or the expiration or loss of regulatory exclusivity for a product, the major portion of revenues for that product may be dramatically
reduced in a very short period of time. If we are not successful in defending our patents and regulatory exclusivities, we will not
derive the expected benefit from them. For example, the NCE-1 date for selinexor was July 3, 2023 after which a third party could be
positioned to market an ANDA or Section 505(b)(2) product that competes with selinexor prior to the expiry of our patents if the third
party successfully challenged the validity of our patents protecting the product.
In addition to the benefits of regulatory exclusivity, an innovator NDA holder may have patents claiming the active ingredient,
product formulation or an approved use of the drug, which would be listed with the product in the FDA publication “Approved Drug
Products with Therapeutic Equivalence Evaluations,” known as the Orange Book. If there are patents listed in the Orange Book for the
applicable, approved innovator product, a generic or 505(b)(2) sponsor that seeks to market its product before expiration of the patents
must include in their applications what is known as a “Paragraph IV” certification, challenging the validity or enforceability, or
claiming non-infringement, of the listed patent or patents. Notice of the certification must be given to the patent owner and NDA
holder and if, within 45 days of receiving notice, either the patent owner or NDA holder sues for patent infringement, approval of the
ANDA or 505(b)(2) NDA is stayed for up to 30 months.
Accordingly, if any of our product candidates that are regulated as drugs are approved, competitors could file ANDAs for
generic versions of these products or 505(b)(2) NDAs that reference our products. If there are patents listed for such drug products in
the Orange Book, those ANDAs and 505(b)(2) NDAs would be required to include a certification as to each listed patent indicating
whether the ANDA sponsor does or does not intend to challenge the patent. We cannot predict which, if any, patents in our current
portfolio or patents we may obtain in the future will be eligible for listing in the Orange Book, how any generic competitor would
address such patents, whether we would sue on any such patents or the outcome of any such suit.
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If we do not successfully extend the term of patents covering our product candidates under the Hatch-Waxman Amendments and
similar foreign legislation, our business may be materially harmed.
Depending upon the timing, duration and conditions of FDA marketing approval, if any, of our products or product candidates,
one or more of our U.S. patents may be eligible for patent term extension under the Hatch-Waxman Amendments. The Hatch-
Waxman Amendments permit a patent term extension of up to five years for one patent covering an approved product as
compensation for effective patent term lost during product development and the FDA regulatory review process. However, we may
not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise
fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. The total patent term,
including the extension period, may not exceed 14 years following FDA approval. Accordingly, the length of the extension, or the
ability to even obtain an extension, depends on many factors.
In the U.S., only a single patent can be extended for each qualifying FDA approval, and any patent can be extended only once
and only for a single product. Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws
governing the ability to obtain multiple patents from a single patent family. Because both selinexor and verdinexor are protected by a
single family of patents and applications, we may not be able to secure patent term extensions for both of these product candidates in
all jurisdictions where these product candidates are approved.
If we are unable to obtain a patent term extension for a product or product candidate or the term of any such extension is less
than we request, the period during which we can enforce our patent rights for that product or product candidate, if any, in that
jurisdiction will be shortened and our competitors may obtain approval to market competing products sooner. As a result, our revenue
could be materially reduced.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition to seeking patents for our products, product candidates and other discoveries, we also rely on trade secrets, including
unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect these
trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our
employees, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties. We also enter
into confidentiality and invention or patent assignment agreements with our employees and consultants. Despite these efforts, any of
these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able
to obtain adequate remedies for such breaches. To the extent that we are unable to timely enter into confidentiality and invention or
patent assignment agreements with our employees and consultants, our ability to protect our business through trade secrets and patents
may be harmed. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time
consuming, and the outcome is unpredictable. In addition, some courts inside and outside of the U.S. are less willing or unwilling to
protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would
have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be
disclosed to or independently developed by a competitor, our competitive position would be harmed. To the extent inventions are
made by a third party under an agreement that does not grant us an assignment of their rights in inventions, we may choose or be
required to obtain a license.
Not all of our trademarks are registered. Failure to secure those registrations could adversely affect our business.
As of February 14, 2025, we have trademark registrations in the U.S. for KARYOPHARM, KARYOPHARM
THERAPEUTICS, our color logo, our logo in grayscale, KARYOPHARM THERAPEUTICS with the color logo, XPOVIO, PORE
for our online research portal, and KARYFORWARD and our KARYFORWARD logo for our financial aid and charitable services.
Outside of the U.S., XPOVIO is registered or pending in 46 additional jurisdictions, and is registered in Katakana in Japan, Hangul in
South Korea, and Chinese characters in Taiwan. KARYOPHARM, the greyscale logo, KARYOPHARM THERAPEUTICS with the
color logo, and the KARYFORWARD logo are each registered in four jurisdictions outside of the U.S. We also have registrations or
applications for eight additional possible drug names in numerous foreign jurisdictions. If we do not secure registrations for our
trademarks, we may encounter more difficulty in enforcing them against third parties than we otherwise would, which could adversely
affect our business. During trademark registration proceedings in the U.S. and foreign jurisdictions, we may receive rejections. We are
given an opportunity to respond to those rejections, but we may not be able to overcome such rejections. In addition, in the USPTO
and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark
applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks,
and our trademarks may not survive such proceedings.
In addition, any proprietary name we propose to use with our key product candidates in the U.S. must be approved by the FDA,
regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed
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drug names, including an evaluation of potential for confusion with other drug names. If the FDA objects to any of our proposed
proprietary drug names for any of our product candidates, if approved, we may be required to expend significant additional resources
in an effort to identify a suitable proprietary drug name that would qualify under applicable trademark laws, not infringe the existing
rights of third parties and be acceptable to the FDA.
Risks Related to Our Operations and Employee Matters
Our future success depends on our ability to retain key members of our management team and to attract, retain and motivate
qualified personnel.
We are highly dependent on the management, technical and scientific expertise of principal members of our management and
scientific teams, including our President and Chief Executive Officer. Although we have entered into formal employment agreements
with our executive officers, these agreements do not prevent them from terminating their employment with us at any time. We do not
maintain “key person” insurance for any of our executives or other employees. The loss of the services of any of our key employees
could impede the achievement of our research, development, commercialization and other business objectives.
Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel is critical to our success.
We may not be able to attract and retain these personnel on acceptable terms given the competition among numerous pharmaceutical
and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel
from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors,
to assist us in formulating our research and development and commercialization strategies. Our consultants and advisors may be
employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may
limit their availability to us.
Our business and operations may be materially adversely affected in the event of information technology system failures or
security breaches, and the costs and consequences of implementing data protection measures could be significant.
Despite the implementation of security measures, our internal computer systems, and those of our CROs and other third parties
on which we rely, are vulnerable to damage or other impacts from cyber-attacks, computer viruses, unauthorized access, sabotage,
natural disasters, fire, terrorism, war and telecommunication and electrical failures. Such systems are also vulnerable to service
interruptions or to security breaches from inadvertent or intentional actions by our employees, third-party vendors and/or business
partners, or from cyber incidents initiated by malicious third parties. Cyber incidents continue to increase in their frequency,
sophistication and intensity, and have become increasingly difficult to detect, respond to and recover from. Cyber incidents could
include the deployment of harmful malware, ransomware, denial-of-service attacks, unauthorized access to or deletion of files, social
engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information.
Cyber incidents also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an
unintended recipient. We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or
accidental release or loss of information maintained in the information systems and networks of our company, including personal data
of our employees. In addition, outside parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our
employees or employees of our vendors to disclose sensitive information to gain access to our data. Like other companies, we may
experience threats to our data and systems, including malicious codes and viruses, and other cyber-attacks. In addition, we face other
kinds of risks related to our commercial and personal data, including lost or stolen devices or other systems (including paper records)
that collect and store our personal and commercial information. Furthermore, our manufacturing vendors could also be subject to a
cyber-attack that could negatively impact the manufacturing process of our products and/or product candidates, which could, in turn,
harm our patients, result in a product recall, or provide uncertain medical or trial results.
We are aware of certain vendors who have been impacted by cyber-attacks, inclusive of but not limited to ransomware,
phishing, and spam. While such events have not directly impacted us, similar events in the future could have a material impact on us.
If a cyber-attack or other security incident were to occur and cause interruptions in our operations, it could result in a material
disruption of our development and commercialization programs and our business operations, whether due to a loss of our trade secrets
or other proprietary information or other similar disruptions, in addition to possibly requiring substantial expenditures of resources to
remedy. For example, the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in our
regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or
security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or
proprietary information, we could incur liability, our reputation or competitive position could be damaged, and the further
development and commercialization of our products or product candidates could be delayed or halted. We may not have adequate
insurance coverage to provide compensation for any losses associated with such events. In addition, we may in certain instances be
required to provide notification to individuals or others in connection with the loss of their personal or commercial information.
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Additionally, global tensions continue to raise the possibility of nation state attacks on critical infrastructure like power,
telecommunications, and water in the U.S. and around the world. Attacks on telecommunications infrastructure in particular could
impact our business operations globally, and would likely be outside our ability to detect or respond to, beyond noting that
telecommunications services had been impacted.
If a material breach of our security or that of our vendors occurs, our financial or other confidential information could be
compromised, the market perception of the effectiveness of our security measures could be harmed, we could lose business, our
reputation and credibility could be damaged and we could be subject to legal proceedings. In addition, the cost and operational
consequences of implementing further data protection measures could be significant. We could be required to expend significant
amounts of money and other resources to repair or replace information systems or networks. The development and maintenance of
these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to
overcome security measures become more sophisticated. Moreover, despite our efforts, the possibility of these events occurring
cannot be eliminated entirely.
Risks Related to Our Common Stock
If we fail to maintain compliance with the continued listing requirements of Nasdaq, our common stock could be delisted from
trading, which would adversely affect the liquidity of our common stock and our ability to raise additional capital. The transfer of
our common stock to the Nasdaq Capital Market would result in a fundamental change under the indenture governing the 2025
Notes, which could negatively impact our financial condition.
On September 16, 2024, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq
Stock Market (“Nasdaq”) notifying us that, for the last 32 consecutive business days, the bid price of our common stock had closed
below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Global Select Market pursuant to Nasdaq
Listing Rule 5450(a)(1) (the “Bid Price Rule”). The deficiency letter does not result in the immediate delisting of our common stock
from the Nasdaq Global Select Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided an initial
period of 180 calendar days, or until March 17, 2025 (the “Compliance Date”), to regain compliance with the Bid Price Rule. If, at any
time before the Compliance Date, the bid price for our common stock closes at $1.00 per share or more for a minimum of 10
consecutive business days, as required by the Compliance Period Rule, the Staff will provide written notification to us that we comply
with the Bid Price Rule, unless the Staff exercises its discretion to extend this 10-day period pursuant to Nasdaq Listing Rule
5810(c)(3)(H).
If we do not regain compliance with the Bid Price Rule by the Compliance Date, we may be eligible for an additional 180
calendar day compliance period. To qualify, we would be required to transfer the listing of our common stock to the Nasdaq Capital
Market, provided that we meet the continued listing requirements for the market value of publicly held shares and all other initial
listing standards of the Nasdaq Capital Market, with the exception of its bid requirement. To effect such a transfer, among other
things, we would also need to pay an application fee to Nasdaq and provide written notice to the Staff of our intention to cure the
deficiency during the additional compliance period by effecting a reverse stock split, if necessary. However, as discussed above under
the risk factor entitled “We may not have the ability to raise the funds necessary to settle any conversions of or other obligations in
respect of the 2029 Notes or the 2025 Notes required to be settled in cash, to repurchase the 2029 Notes or the 2025 Notes for cash
upon a fundamental change, to pay the redemption price for any 2029 Notes or 2025 Notes we redeem or to refinance the 2029 Notes
or the 2025 Notes, and any future debt we incur may contain limitations on our ability to pay cash upon conversion or repurchase of
the 2029 Notes or the 2025 Notes”, the indenture governing the 2025 Notes treats a transfer of listing to the Nasdaq Capital Market as
a “fundamental change” that gives the holders of the 2025 Convertible Notes a right to require us to repurchase the 2025 Convertible
Notes for cash, which may severely limit our ability to effect such a transfer and utilize the additional 180 day compliance period.
If we do not regain compliance with the Bid Price Rule by the Compliance Date and it appears to the Staff that we will not be
able to regain compliance with the Bid Price Rule during the additional compliance period, or that due to limitations in the indenture
governing the 2025 Notes or for other reasons, we are otherwise not eligible for an additional compliance period at that time, the Staff
will provide written notification to us that our common stock will be subject to delisting. At that time, we may appeal the Staff’s
delisting determination to a Nasdaq Listing Qualifications Panel (the “Panel”). We expect that our common stock would remain listed
pending the Panel’s decision. However, there can be no assurance that, if we do appeal the delisting determination by the Staff to the
Panel, that such appeal would be successful.
We intend to monitor the closing bid price of our common stock and may, if appropriate, consider available options to regain
compliance with the Bid Price Rule, which could include seeking to effect a reverse stock split. On January 30, 2025, our stockholders
approved, among other things, an amendment to our Restated Certificate of Incorporation to effect a reverse stock split of our issued
shares of common stock at a ratio within the range of not less than 1-for-5 and not greater than 1-for-15, and a proportionate reduction
in the number of authorized shares of common stock, with the exact ratio within such range and the implementation and timing of
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such reverse stock split to be determined at the sole discretion of our Board of Directors, without further approval or authorization of
our stockholders. However, there can be no assurances that we will be able to regain compliance with the Bid Price Rule.
There are many factors that may adversely affect our minimum bid price, including those described throughout this “Risk
Factors” section. Many of these factors are outside of our control. As a result, we may not be able to sustain compliance with the Bid
Price Rule in the long term. Any potential delisting of our common stock from the Nasdaq Global Select Market would likely result in
decreased liquidity and increased volatility for our common stock and would adversely affect our ability to raise additional capital or
to enter into strategic transactions. Any potential delisting of our common stock from the Nasdaq Global Select Market would make it
more difficult for our stockholders to sell our common stock in the public market. Further, the transfer of the listing of our common
stock to another nationally recognized stock exchange other than the New York Stock Exchange, Nasdaq Global Select Market or
Nasdaq Global Market could also negatively impact our financial condition as it would constitute a fundamental change under the
indenture governing the 2025 Notes, giving the holders thereof the right to require us to repurchase the Notes for cash. For additional
risks associated with a fundamental change under the indenture governing the 2025 Notes, please see the risk factor entitled “We may
not have the ability to raise the funds necessary to settle any conversions of or other obligations in respect of the 2029 Notes or the
2025 Notes required to be settled in cash, to repurchase the 2029 Notes or the 2025 Notes for cash upon a fundamental change, to pay
the redemption price for any 2029 Notes or 2025 Notes we redeem or to refinance the 2029 Notes or the 2025 Notes, and any future
debt we incur may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Notes or the 2025 Notes”.
Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial
to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in
control of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a
premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of
our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is
responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our
stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our
board of directors. Among other things, these provisions:
•
establish a classified board of directors such that not all members of the board are elected at one time;
•
allow the authorized number of our directors to be changed only by resolution of our board of directors;
•
limit the manner in which stockholders can remove directors from the board;
•
establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and
nominations to our board of directors;
•
require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our
stockholders by written consent;
•
limit who may call stockholder meetings;
•
authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a
“poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing
acquisitions that have not been approved by our board of directors; and
•
require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend
or repeal certain provisions of our charter or bylaws.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General
Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining
with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding
voting stock, unless the merger or combination is approved in a prescribed manner.
The price of our common stock has been and may continue to be volatile and your investment in our stock could decline in value
or fluctuate significantly, including as a result of analysts’ activities.
Our stock price has been, and may continue to be, volatile and your investment in our stock could decline or fluctuate
significantly. Our common stock price has ranged from $0.59 to $1.58 in the 52-week period ended February 14, 2025. On February
14, 2025, the closing sale price of our common stock on the Nasdaq Global Select Market was $0.62 per share. The stock market in
general and the market for pharmaceutical and biotechnology companies in particular have experienced extreme volatility that has
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often been unrelated to the operating performance of particular companies, such as the response to world-wide economic disruptions
related to the COVID-19 pandemic, the conflict between Russia and Ukraine, the war between Israel and Hamas, inflation and
sustained high interest rates. The market price for our common stock may be influenced by many factors, including:
•
our failure or perceived failure to successfully execute on our commercialization strategy for XPOVIO or our product
candidates, if approved;
•
the level of success of competitive products or technologies;
•
results, delays in, or the halting of our clinical trials or those of our competitors, including reports of AEs related to the
use of our products;
•
announcements by us or our competitors of new products or data, significant mergers, acquisitions, licenses or joint
ventures;
•
commencement or termination of collaborations for our development programs and the commercialization of our
products;
•
adverse regulatory or legal developments in the U.S. and other countries;
•
developments or disputes concerning patent applications, issued patents or other proprietary rights;
•
additions or departures of key personnel;
•
the level of expenses related to the commercialization of XPOVIO and clinical development programs for any of our
product candidates;
•
the results of our efforts to discover, develop, acquire or in-license additional products or product candidates;
•
actual or anticipated changes in estimates of financial results or guidance, clinical development timelines or
recommendations by securities analysts;
•
actual or anticipated fluctuations in our quarterly or annual financial results;
•
changes in healthcare laws affecting pricing, reimbursement or access;
•
market conditions in the pharmaceutical and biotechnology sectors, including as the result of uncertainties due to or
impacts from pandemics or other public health emergencies;
•
general economic, industry and market conditions, such as those caused by the ongoing conflict between Russia and
Ukraine, the war between Israel and Hamas, inflation and fluctuations in interest rates;
•
our ability to raise additional capital and/or refinance our debt and the terms on which we can raise capital and/or
refinance debt;
•
sales of large blocks of our common stock, including by our executive officers, directors and significant stockholders, or
substantial changes in short interest in our common stock; and
•
the other risks and uncertainties described in this “Risk Factors” section.
The COVID-19 pandemic caused significant disruptions in the financial markets and also impacted the volatility of our stock
price and trading in our stock. In addition, U.S. and global markets are experiencing volatility and disruption following the escalation
of geopolitical tensions and the ongoing conflict between Russia and Ukraine, the war between Israel and Hamas, inflation and
sustained high interest rates. A continuation or worsening of the levels of market disruption and volatility could have an adverse effect
on the market price of our common stock. Furthermore, the trading market for our common stock relies, in part, on the research and
reports that industry or financial analysts publish about us or our business. Our stock price could decline significantly if we fail to
meet or exceed analysts’ forecasts and expectations or if one or more of the analysts covering our business downgrade their
evaluations of our stock. Further, if one or more of these analysts cease to cover our stock, we could lose visibility in the market for
our stock, which in turn could cause our stock price to decline.
Securities or other litigation could result in substantial costs and may divert management’s time and attention from our business.
Securities class action litigation is often brought against a company following a decline or periods of volatility in the market
price of its securities. This risk is especially relevant for us because pharmaceutical companies have experienced significant stock
price volatility in recent years, including as a result of the COVID-19 pandemic, and we are therefore a target of this type of litigation.
For example, we were subject to a class action lawsuit and a shareholder derivative lawsuit alleging federal securities laws violations,
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both of which have been dismissed. We may face additional securities class action litigation or other litigation in the future, including
if we fail to successfully commercialize XPOVIO, or if we cannot obtain regulatory approvals for, or if we otherwise fail to
successfully commercialize and launch, our product candidates.
The outcome of litigation is necessarily uncertain, and we could be forced to expend significant resources in the defense of such
suits, and we may not prevail. Monitoring and defending against legal actions is time consuming for our management and detracts
from our ability to fully focus our internal resources on our business activities. In addition, we may incur substantial legal fees and
costs in connection with any such litigation. We have not established any reserves for any potential liability relating to any such
potential lawsuits. It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages.
We currently maintain insurance coverage for some of these potential liabilities. Other potential liabilities may not be covered by
insurance, insurers may dispute coverage or the amount of insurance may not be enough to cover damages awarded. In addition,
certain types of damages may not be covered by insurance, and insurance coverage for all or certain forms of liability may become
unavailable or prohibitively expensive in the future. A decision adverse to our interests on one or more legal matters or litigation could
result in the payment of substantial damages, or possibly fines, and could have a material adverse effect on our reputation, financial
condition and results of operations.
We have broad discretion in the use of our cash, cash equivalents and investments and may not use them effectively.
Our management has broad discretion to use our cash, cash equivalents and investments to fund our operations and could spend
these funds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our
management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business,
cause the price of our common stock to decline and delay the development of our product candidates. Pending their use to fund our
operations, we may invest our cash and cash equivalents in a manner that does not produce income or that loses value.
We are a “smaller reporting company”, and the reduced disclosure requirements applicable to smaller reporting companies may
make our common stock less attractive to investors.
We are a “smaller reporting company,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. We
would cease to be a smaller reporting company if (i) we have a public float of $250 million or more and have annual revenues in
excess of $100 million or (ii) if we have a public float of $700 million or more, determined on an annual basis.
As a smaller reporting company, we are permitted and intend to rely on exemptions from certain disclosure requirements that
are applicable to other public companies that are not smaller reporting companies. These exemptions include:
•
reduced disclosure obligations regarding executive compensation;
•
being permitted to provide only two years of audited financial statements in our annual report on Form 10-K, with
corresponding reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
disclosure; and
•
not being required to furnish a stock performance graph in our annual report.
We cannot predict whether investors will find our common stock less attractive as a result of any reliance by us on these
exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our
common stock and our stock price may be more volatile.
If we identify a material weakness in our internal control over financial reporting, it could have an adverse effect on our business
and financial results and our ability to meet our reporting obligations could be negatively affected, each of which could negatively
affect the trading price of our common stock.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected
on a timely basis. Accordingly, a material weakness increases the risk that the financial information we report contains material errors.
We regularly review and update our internal controls, disclosure controls and procedures, and corporate governance policies. In
addition, we are required under the Sarbanes-Oxley Act of 2002 to report annually on our internal control over financial reporting.
Any system of internal controls, however well designed and operated, is based in part on certain assumptions and can provide only
reasonable, not absolute, assurances that the objectives of the system are met. If we, or our independent registered public accounting
firm, determine that our internal control over our financial reporting is not effective, or we discover areas that need improvement in
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the future, or we experience high turnover of our personnel in our financial reporting functions, these shortcomings could have an
adverse effect on our business and financial results, and the price of our common stock could be negatively affected.
If we cannot conclude that we have effective internal control over our financial reporting, or if our independent registered public
accounting firm is unable to provide an unqualified opinion regarding the effectiveness of our internal control over financial reporting,
investors could lose confidence in the reliability of our financial statements, which could lead to a decline in our stock price. Failure to
comply with reporting requirements could also subject us to sanctions and/or investigations by the SEC, the Nasdaq Stock Market or
other regulatory authorities.
If the estimates we make, or the assumptions on which we rely, in preparing our consolidated financial statements, our projected
guidance and/or our projected market opportunities prove inaccurate, our actual results may vary from those reflected in our
projections and accruals.
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”). The preparation of these consolidated financial statements requires us to make estimates and
judgments that affect the reported amounts of our assets, liabilities, revenues and expenses, the amounts of charges accrued by us and
related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances.
We cannot assure you, however, that our estimates, or the assumptions underlying them, will be correct. Further, from time to
time we issue guidance on our expected financial performance for future periods, such as our expectations regarding our revenue, non-
GAAP research and development and selling, general and administrative expenses, and cash, cash equivalents and investments
available for operations, which guidance is based on estimates and the judgment of management. If, for any reason, our actual results
differ materially from our guidance, we may have to adjust our publicly announced financial guidance. If we fail to meet, or if we are
required to change or update any element of, our publicly disclosed financial guidance or other expectations about our business, our
stock price could decline.
Further our estimates of the potential market opportunities for XPOVIO and our product 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 or any other products or product
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 profitability.
Our ability to use our net operating loss carryforwards and tax credit carryforwards to offset future taxable income may be subject
to certain limitations.
Under the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), our net operating loss and tax credit
carryforwards are subject to review and possible adjustment by the Internal Revenue Service (and state tax authorities under relevant
state tax rules). In addition, as described below in “Changes in tax laws or in their implementation or interpretation may adversely
affect our business and financial condition,” the TCJA, as amended by the Coronavirus Aid, Relief and Economic Security Act (the
“CARES Act”), includes changes to U.S. federal tax rates and the rules governing net operating loss carryforwards that may
significantly impact our ability to utilize our net operating losses to offset taxable income in the future. Furthermore, the use of net
operating loss and tax credit carryforwards may become subject to an annual limitation under Sections 382 and 383 of the Code,
respectively, and similar state provisions in the event of certain cumulative changes in the ownership interest of significant
stockholders in excess of 50 percent over a three-year period. This could limit the amount of tax attributes that can be utilized annually
to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of a company
immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. Our
company has completed several financings since its inception which resulted in an ownership change under Sections 382 and 383 of
the Code. In addition, future changes in our stock ownership, some of which are outside of our control, could result in ownership
changes in the future. For these reasons, we may not be able to use some or all of our net operating loss and tax credit carryforwards,
even if we attain profitability.
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Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition.
Changes in tax law may adversely affect our business or financial condition. For example, the TCJA, as amended by the
CARES Act, significantly revised the Code. The TCJA, as amended by the CARES Act, among other things, contained significant
changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21% and,
for taxable years beginning after December 31, 2020, limitation of the deduction for net operating losses to 80% of current year
taxable income for losses arising in taxable years beginning after December 31, 2017 (though any such net operating losses may be
carried forward indefinitely). In addition, beginning in 2022, the TCJA eliminated the option to deduct research and development
expenditures currently and requires corporations to capitalize and amortize them over five years or 15 years for expenditures
attributable to foreign research.
In addition to the CARES Act, as part of Congress’ response to the COVID-19 pandemic, economic relief legislation was
enacted in 2020 and 2021 containing tax provisions. Further, as of August 2022, the IRA introduced new tax provisions, including a
one percent excise tax imposed on certain stock repurchases by publicly traded companies. The one percent excise tax generally
applies to any acquisition of stock by the publicly traded company (or certain of its affiliates) from a stockholder of the company in
exchange for money or other property (other than stock of the company itself), subject to a de minimis exception. Thus, the excise tax
could apply to certain transactions that are not traditional stock repurchases. Regulatory guidance under the TCJA and such additional
legislation is and continues to be forthcoming, and such guidance could ultimately increase or lessen their impact on our business and
financial condition. In addition, it is uncertain if and to what extent various states will conform to the TCJA and additional tax
legislation.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
As is the case for most companies, we are regularly subject to cyberattacks and other cyber incidents, and, therefore,
cybersecurity is an important element of our ongoing information technology operations. We devote significant resources to protecting
and enhancing the security of our computer systems, business information, software, networks and other technology assets, by
applying our cybersecurity risk management processes, which consider physical, procedural and technical safeguards. We have a
multi-faceted program for assessing, identifying and managing cybersecurity risks, that is designed to help protect our information
assets and operations from internal and external cyber threats by:
•
organizing our cybersecurity efforts based on the National Institute of Standards and Technology (“NIST”) Cybersecurity
Framework by applying the framework’s rubric of Govern, Identify, Protect, Detect, Respond, and Recover;
•
seeking to understand, manage and mitigate risk while ensuring business resiliency and protecting business, employee and
patient information from unauthorized access or attack;
•
identifying critical business information, the lifecycles of that information, and the systems where this information is
stored, distributed, processed, and eventually destroyed. For example, by managing important external parties and their
operations, analyzing their cybersecurity risk to our business operations, and reviewing the residual risk with business
leaders to accept and manage each external party appropriately;
•
protecting and securing our systems from attack with secure configuration standards and protective cybersecurity tools;
•
detecting potential attacks through appropriate tools, including cybersecurity-related data collection and analysis to help
identify potential attacks;
•
responding to alerts from those tools with processes to verify whether there is a real incident and the severity of that
incident using appropriate resources and team members, including establishing and exercising a Cybersecurity Incident
Response Plan (“IRP”) based on recognized industry practices, including NIST guidance; and
•
establishing and exercising processes and procedures to recover from cybersecurity incidents.
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Our IRP contains tools and guidance related to cybersecurity events and is designed to help coordinate our response to, and
recovery from, cybersecurity incidents, and includes processes to triage, assess the severity of, escalate, contain, investigate, and
remediate incidents as well as comply with applicable legal obligations. In addition, as part of our overall risk mitigation strategy, we
also maintain cyber insurance coverage; however, such insurance may not be sufficient in type or amount to cover us against claims
related to security breaches, cyber-attacks and other related breaches.
We regularly engage external parties, inclusive of but not limited to, service vendors, consultants, independent privacy
assessors, peer companies, industry groups, and governance experts to enhance our understanding and application of oversight of the
cybersecurity landscape. For example, we provide an annual assessment of our cybersecurity program, completed by our third-party
Chief Information Security Officer (“CISO”), to our Audit Committee for review and feedback. These external parties provide an
industry perspective on appropriate risk management and investment in our cybersecurity efforts that is reviewed and approved by
company management and the Board of Directors.
Based on an assessment using the previously described cybersecurity risk management process, we do not believe that there are
any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or
are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition. See
“Our business and operations may be materially adversely affected in the event of information technology system failures or security
breaches, and the costs and consequences of implementing data protection measures could be significant.” in Part I, Item 1A. “Risk
Factors” for additional information.
Cybersecurity Governance and Oversight
The Audit Committee of our Board of Directors provides direct oversight over cybersecurity risk. The Audit Committee
receives and provides feedback on quarterly updates from management regarding cybersecurity and is notified between such updates
regarding significant new cybersecurity threats or incidents, if any. As part of these quarterly updates to the Audit Committee, our
Vice President of Information Technology presents any developments, emerging risks or key topics to the Audit Committee,
including, among other things, the external threat environment, risk profile changes, training initiatives, the status of projects to
strengthen cybersecurity, emerging global policies and regulations, cybersecurity technologies and industry practices, cyber readiness,
results of third-party assessments, mitigation efforts and response plans. The full Board of Directors receives regular reports from the
Chair of the Audit Committee, as well as periodic updates highlighting recent incidents throughout the industry and the emerging
threat landscape.
Our Vice President of Information Technology leads an IT Security Team and has overall responsibility for the security
program. The IT Security Team is responsible for leading company-wide cybersecurity strategy, policy, standards and processes. The
IT Security Team works across the enterprise to assess and prepare our employees and third parties to manage cybersecurity risks and
detect, investigate and respond to cybersecurity incidents. Our Vice President of Information Technology has over 25 years of
information technology experience, including 23 years of leadership responsibility, and has substantial operational experience with
cybersecurity policy, protection, incident response, and governance. We also utilize a third-party cybersecurity advisor to act as our
CISO, supporting the Vice President of Information Technology. This fractional executive has extensive experience as a CISO and
cybersecurity executive with over 25 years of expertise in designing, building, and operating transformational information security
programs, is a Certified Information Systems Security Professional, and holds a Master of Science in Strategic Intelligence.
Further, our IRP establishes a corporate incident response team, which is responsible for providing oversight, direction, and
governance of incident response policies and processes and is composed of certain company stakeholders, including our Chief
Financial Officer, General Counsel, Vice President of Information Technology and our third-party CISO.
In an effort to deter and detect cyber threats, we provide a monthly cybersecurity awareness newsletter to all employees,
including part-time and temporary contractors, which covers a range of timely and relevant topics. Past topics have included social
engineering, phishing, password protection, confidential data protection, asset use and mobile security. The cybersecurity training and
awareness programs function to remind employees of the importance of reporting all incidents quickly. We run frequent phishing tests
to raise awareness of spam emails, the primary attack vectors for cyber threats and to further raise awareness of cyber threats. We
provide annual training on employee responsibilities for protecting company information and data along with our overall compliance
responsibility. Each October during cybersecurity awareness month in the U.S., we provide weekly updates on cybersecurity
awareness and host a company-wide lunch and learn discussion of our cybersecurity program and the impact of cybersecurity on
individuals as well as the company, with a data protection, cybersecurity and incident response and prevention training and
compliance program.
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Item 2. Properties
Our headquarters are located in Newton, Massachusetts, where we currently lease a total of 98,502 square feet of office and
research space through September 30, 2025, which will be reduced to 52,224 square feet of solely office space from October 1, 2025
through September 30, 2030.
We also lease approximately 3,681 square feet of office space in Munich, Germany.
Item 3. Legal Proceedings
The information required by this Item is provided under “Litigation” in Note 12, “Commitments and Contingencies”, of the
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock, $0.0001 par value per share, began trading on the Nasdaq Global Select Market on November 6, 2013,
where its prices are quoted under the symbol “KPTI.”
Holders
As of February 14, 2025, there were nine holders of record of our common stock.
Dividends
We have never paid cash dividends on our common stock, and we do not expect to pay any cash dividends in the foreseeable
future.
Recent Sales of Unregistered Securities
During the period covered by this Annual Report on Form 10-K, we did not issue any unregistered equity securities other than
pursuant to transactions previously disclosed in our Current Reports on Form 8-K.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our
consolidated financial statements and related notes included elsewhere in this report. Some of the information contained in this
discussion and analysis and set forth elsewhere in this report, including information with respect to our plans and strategy for our
business, includes forward-looking statements that involve risks and uncertainties. You should review the section entitled “Risk
Factors” in Part I - Item 1A of this report for a discussion of important factors that could cause actual results to differ materially from
the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a commercial-stage pharmaceutical company pioneering novel cancer therapies and dedicated to the discovery,
development and commercialization of first-in-class drugs directed against nuclear export for the treatment of cancer. 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 Selective Inhibitor of Nuclear Export (“SINE”)
compounds that inhibit the nuclear export protein exportin 1 (“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 diseases with high unmet medical need. Our
lead asset, XPOVIO® (selinexor), was the first oral XPO1 inhibitor to receive marketing approval, receiving its initial U.S. approval
from the U.S. Food and Drug Administration (“FDA”) in July 2019, and is currently approved and marketed in the U.S. for the
following indications:
•
In combination with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have
received at least one prior therapy. Approval in this indication was based on the results from the BOSTON (Bortezomib,
Selinexor and Dexamethasone) trial;
•
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 proteasome inhibitors, at least
two immunomodulatory agents, and an anti-CD38 monoclonal antibody. Approval in this indication was based on the
results from the STORM (Selinexor Treatment of Refractory Myeloma) trial; and
•
For the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”), not otherwise
specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy. This indication
was approved under accelerated approval based on response rate and was based on the results from the SADAL (Selinexor
Against Diffuse Aggressive Lymphoma) trial. Continued approval for this indication may be contingent upon verification
and description of clinical benefit in a confirmatory trial.
The commercialization of XPOVIO in the U.S. is currently supported by sales representatives, nurse liaisons, and a market
access team, as well as KaryForward®, an extensive patient and healthcare provider support program. Our commercial efforts are also
supplemented by patient support initiatives coordinated by our dedicated network of participating specialty pharmacy providers. We
plan to continue to educate physicians, other healthcare providers and patients about XPOVIO’s clinical profile and unique
mechanism of action as we continue to expand XPOVIO use.
The commercialization of XPOVIO and NEXPOVIO® (selinexor) (the brand name for selinexor in Europe and the United
Kingdom) outside of the U.S. is managed by our partners in their respective territories. XPOVIO/NEXPOVIO has received regulatory
approval in various indications in over 45 countries outside the U.S. and is commercially available in a growing number of countries
as our partners continue to secure reimbursement approvals.
Our primary focus is on marketing XPOVIO in its currently approved indications as well as developing and seeking the
regulatory approval of selinexor as an oral agent targeting multiple high unmet need cancer indications, including our lead clinical
programs in myelofibrosis and our other late-stage clinical programs in endometrial cancer and multiple myeloma. We plan to
continue to conduct clinical trials and to seek additional approvals for the use of selinexor as a single agent or in combination with
other oncology therapies to expand the patient populations that are eligible for treatment with selinexor. As announced in January
2024, further clinical development of our eltanexor program continues to remain on hold in an effort to focus our resources on our
prioritized late-stage programs.
In May 2024, we entered into a series of transactions (the “Refinancing Transactions”) to limit our aggregate indebtedness,
extend the maturity of certain of our indebtedness and provide us with additional working capital. Pursuant to these transactions, we
borrowed $100.0 million from existing lenders and certain entities managed by HealthCare Royalty Management, LLC (“HCRx”)
under a $100.0 million senior secured term loan facility (the “Term Loan”) and used a portion of the proceeds of the Term Loan to
repay obligations under our existing financing arrangement with HCRx pursuant to an amendment that made other changes to our
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existing financing arrangement with HCRx. We also exchanged, pursuant to privately negotiated agreements, an aggregate principal
amount of $148.0 million of our existing 3.00% unsecured convertible senior notes due 2025 (the “2025 Notes”) for (i) $111.0 million
aggregate principal amount of new 6.00% secured convertible senior notes due 2029 (the “2029 Notes”) and (ii) warrants to purchase
up to 45.8 million shares of our common stock. In addition, HCRx purchased $5.0 million aggregate principal amount of the 2029
Notes through satisfaction of $5.0 million of our existing obligations to HCRx. Please refer to Note 10 “Long-Term Obligations”, to
the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K for additional details of the
Refinancing Transactions.
As of December 31, 2024, we had an accumulated deficit of $1.6 billion. We had net losses of $76.4 million, $143.1 million,
and $165.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. We recognized total revenue of $145.2
million in 2024, including $112.8 million of XPOVIO net product revenue and $32.4 million of license revenue. License revenue
included $15.0 million of revenue for the reimbursement of development related expenses from the Menarini Group (“Menarini”). As
of December 31, 2024, we had $108.7 million in cash, cash equivalents and investments. Based on our current business plan and
current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our debt
obligations, including a requirement to maintain cash, cash equivalents and investments of at least $25.0 million at all times, we have
concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the
accompanying consolidated financial statements are issued. See “Liquidity, Capital Resources, and Going Concern” below for a
further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial
statements, which we have prepared in accordance with U.S. generally accepted accounting principles. The preparation of these
consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts
of revenues and expenses during the reporting periods. We believe that the estimates and assumptions involved in the accounting
policies described below may have the greatest potential impact on our consolidated financial statements and, therefore, consider these
to be our critical accounting estimates. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from
these estimates under different assumptions and conditions. See Note 2, “Summary of Significant Accounting Policies”, to the
consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K for information about our
significant accounting policies.
Product Revenue Reserves
We recognize product revenue, net of variable consideration related to certain allowances and accruals, when the customer takes
control of the product, which is upon delivery to the customer. Revenue from product sales is recorded at the net sales price, which
includes estimates of variable consideration for which reserves are reported. These reserves are based on the amounts earned, or to be
claimed on the related sales, and are generally classified as reductions of accounts receivable (if the amount is payable to the
customer) or a current liability (if the amount is payable to a party other than a customer). Certain amounts are known at the time of
sale based on contractual terms and are recorded pursuant to the most likely amount method, which is the single most likely amount in
a range of possible considerations. Other amounts are estimated pursuant to the expected value method, which is the sum of
probability-weighted amounts in a range of possible consideration amounts. Relevant factors used in the expected value method
include: current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted
customer buying and payment patterns. These reserves reflect our best estimates of the variable consideration based on the terms of
the respective underlying contracts.
The estimates for our product revenue allowances and accruals are most significantly affected by chargebacks, which are
contractual commitments to provide products to qualified healthcare entities at prices lower than the list prices charged to our
customers who purchase XPOVIO directly from us, and rebates that represent discount obligations under government programs,
including Medicaid, Medicare, the Department of Veterans Affairs, the Department of Defense, and others.
A 10% increase or decrease in these estimates would impact net product revenue by a corresponding increase or decrease of
approximately $4.0 million.
License Agreements
We generate revenue from license or similar agreements with pharmaceutical companies for the development and
commercialization of certain of our products and product candidates.
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At contract inception, we evaluate all goods or services in the agreement to determine if they are distinct. If they are not distinct,
they are combined with other promised goods or services to create a bundle of promised goods or services that are distinct. Distinct
goods or services and distinct bundles of goods or services are considered performance obligations. Optional future services where
any additional consideration paid to us reflects their standalone selling prices do not provide the customer with a material right and,
therefore, are not considered performance obligations. Optional future services that are priced in a manner which provides the
customer with a significant or incremental discount are considered performance obligations because they provide the customer with a
material right.
We utilize judgment to estimate the transaction price at contract inception. We evaluate contingent milestones to determine if
they should be included in the transaction price using the most likely amount method. Milestone payments that are not within our
control, such as regulatory approvals, are not considered likely of being achieved until those approvals are received and are excluded
from the transaction price using the most likely amount method. The transaction price is then allocated to each performance obligation
on a relative standalone selling price basis, for which we recognize revenue as or when the performance obligations are satisfied. At
the end of each reporting period, we re-evaluate our estimate of the transaction price including the probability of achieving milestone
payments that may not be subject to a material reversal and adjust the transaction price if necessary. Any such adjustments are
recorded on a cumulative catch-up basis, which would affect license and other revenue in the period of adjustment.
Accrued Research and Development Costs
We estimate our accrued research and development costs by reviewing quotes and contracts, identifying services that have been
performed on our behalf, and estimating the associated cost incurred for services performed when we have not yet been invoiced or
otherwise notified of the actual cost. Most of our service providers invoice us monthly in arrears for services performed or when
contractual milestones are met. We make estimates of our accrued research and development costs at each balance sheet date in our
financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates
with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development costs
include fees to be paid to contract research organizations (“CROs”) and contract manufacturing organizations (“CMOs”) in connection
with research and development activities, as well as fees to be paid to investigative sites in connection with clinical studies, for which
we have not yet been invoiced.
We base our expenses related to CROs and CMOs on our estimates of the services performed and efforts expended pursuant to
quotes and contracts with CROs and CMOs that conduct research and development activities on our behalf. The payment terms of
these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be
instances in which payments made to our service providers will exceed the level of services performed and result in a prepayment. In
accruing service fees, we estimate the time period over which the services will be performed and the level of effort to be expended in
each period. If the actual timing of the performance of services or the level of effort varies from our estimates, we adjust the accrual or
prepayment accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, if our
estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result
in us reporting amounts that are too high or too low in any particular period. To date, our estimates have not been materially different
than amounts actually incurred.
Refinancing Transactions
Our estimated value of the gain on extinguishment of debt, the embedded derivatives in the 2029 Notes (as defined above) and
the liability-classified common stock warrants related to the Refinancing Transactions, were valued using methodologies that
incorporate certain unobservable inputs including (i) the volatility of our common stock price, (ii) our estimated credit spread and (iii)
an estimate of when the warrants will be exercised based on an option pricing model. See Note 6, “Fair Value Measurements”, and
Note 10, “Long-Term Obligations”, to the consolidated financial statements included under Part II, Item 8 of this Annual Report on
Form 10-K for additional information.
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Results of Operations
The following table summarizes our results of operations (in thousands, except for percentages):
For the Years Ended December 31,
2024
2023
$ Change
% Change
Product revenue, net
$
112,806
$
112,011
$
795
1%
License and other revenue
32,431
34,022
(1,591)
(5)%
Total revenue
145,237
146,033
(796)
(1)%
Operating expenses:
Cost of sales
6,007
4,942
1,065
22%
Research and development
143,232
138,750
4,482
3%
Selling, general and administrative
115,441
131,881
(16,440)
(12)%
Loss from operations
(119,443)
(129,540)
10,097
(8)%
Other income (expense), net
43,078
(13,236)
56,314
(>100)%
Loss before income taxes
(76,365)
(142,776)
66,411
(47)%
Income tax provision
(57)
(323)
266
(82)%
Net loss
$
(76,422)
$
(143,099)
$
66,677
(47)%
Product Revenue, net (in thousands, except for percentages)
For the Years Ended December 31,
2024
2023
$ Change
% Change
Product revenue, net
$
112,806
$
112,011
$
795
1%
Net product revenue from U.S. commercial sales of XPOVIO for the year ended December 31, 2024 was relatively consistent as
compared to the year ended December 31, 2023. XPOVIO net product revenue was adversely impacted year-over-year by higher
gross-to-net adjustments in 2024, driven primarily by 340B discounts and Medicare rebates. We expect net product revenue to
increase in 2025 as compared to 2024 due to demand growth.
License and Other Revenue (in thousands, except for percentages)
For the Years Ended December 31,
2024
2023
$ Change
% Change
Menarini
$
28,014
$
24,360
$
3,654
15%
Antengene
1,680
2,713
(1,033)
(38)%
Other
2,737
6,949
(4,212)
(61)%
Total license and other revenue
$
32,431
$
34,022
$
(1,591)
(5)%
License and other revenue for the year ended December 31, 2024 decreased by $1.6 million as compared to the year ended
December 31, 2023 primarily due to a decrease in milestone-related revenue from our other license agreements, offset by an increase
in milestone-related and royalty revenue from Menarini. The license agreements with Menarini and Antengene Therapeutics Limited
(“Antengene”) are each defined and described in Note 5, “License Agreements”, to the consolidated financial statements included
under Part II, Item 8 of this Annual Report on Form 10-K.
We expect license and other revenue to slightly decrease in 2025 as compared to 2024 primarily due to a decrease in milestone-
related revenue from our partners.
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Operating Expenses (in thousands, except for percentages)
For the Years Ended December 31,
2024
2023
$ Change
% Change
Cost of sales
$
6,007
$
4,942
$
1,065
22%
Research and development
143,232
138,750
4,482
3%
Selling, general and administrative
115,441
131,881
(16,440)
(12)%
Total operating expenses
$
264,680
$
275,573
$
(10,893)
(4)%
Cost of Sales
Cost of sales for the year ended December 31, 2024 was relatively consistent with the year ended December 31, 2023. We
expect cost of sales to remain relatively consistent in 2025 as compared to 2024.
Research and Development Expenses (in thousands, except for percentages)
For the Years Ended December 31,
2024
2023
$ Change
% Change
Clinical trial and related costs:
Selinexor in myelofibrosis
$
32,093
$
13,319
$
18,774
>100%
Selinexor in multiple myeloma
17,320
15,287
2,033
13%
Selinexor in endometrial cancer
15,444
14,271
1,173
8%
Other programs
3,102
12,877
(9,775)
(76)%
Non-program specific clinical trial and related costs
7,522
9,939
(2,417)
(24)%
Total clinical trial and related costs
75,481
65,693
9,788
15%
Unallocated costs:
Personnel costs
44,252
49,907
(5,655)
(11)%
Consulting, professional and other
18,658
16,621
2,037
12%
Stock-based compensation
4,841
6,529
(1,688)
(26)%
Total unallocated costs
67,751
73,057
(5,306)
(7)%
Total research and development expenses
$
143,232
$
138,750
$
4,482
3%
At any one time, we have a number of ongoing clinical development programs that we are conducting independently or in
collaboration with third parties. We track our external clinical trial and related costs on a program-by-program basis. Our major
programs include our lead clinical programs in myelofibrosis and our other late-stage clinical programs in endometrial cancer and
multiple myeloma. To the extent that external clinical trial and related costs are not attributable to a major program, they are included
in “Other programs” and to the extent external clinical trial and related costs cannot be allocated to a specific program, they are
included in “Non-program specific clinical trial and related costs.” We also have unallocated research and development costs, which
we do not track on a program-by-program basis. These costs represent expenses incurred across multiple programs or to support our
general research and development operations.
Research and development expenses for the year ended December 31, 2024 increased by $4.5 million as compared to the year
ended December 31, 2023. The $9.8 million increase in clinical trial and related costs was primarily due to increased activity in each
of our ongoing Phase 3 trials, including increased purchases of comparator drugs. These increases were partially offset by a $9.8
million decrease in clinical trial and related costs in other programs. The decrease in personnel costs of $5.7 million was primarily due
to a reduction in headcount and contractors for the year ended December 31, 2024 as compared to the year ended December 31, 2023
due to the realization of previously implemented cost reduction initiatives.
We expect our research and development expenses to decrease in 2025 as compared to 2024 due primarily to full enrollment in
mid-2024 of our Phase 3 multiple myeloma study and decreased headcount costs, partially offset by an increase in expenses in
connection with our ongoing Phase 3 trials in myelofibrosis and endometrial cancer.
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Selling, General and Administrative Expenses (in thousands, except for percentages)
For the Years Ended December 31,
2024
2023
$ Change
% Change
Personnel costs
$
57,711
$
66,465
$
(8,754)
(13)%
Consulting, professional and other costs
44,371
50,606
(6,235)
(12)%
Stock-based compensation
13,359
14,810
(1,451)
(10)%
Total selling, general and administrative expenses
$
115,441
$
131,881
$
(16,440)
(12)%
Selling, general and administrative expenses for the year ended December 31, 2024 decreased by $16.4 million as compared to
the year ended December 31, 2023. The decrease in personnel costs of $8.8 million and the decrease in stock-based compensation of
$1.5 million were primarily due to a reduction in headcount and contractors for the year ended December 31, 2024 as compared to the
year ended December 31, 2023 due to our ongoing cost reduction initiatives. The decrease in consulting, professional and other costs
of $6.2 million was primarily due to lower commercial-related activities in connection with cost optimization efforts during 2024.
We expect our selling, general and administrative expenses to slightly decrease in 2025 as compared to 2024 due to continued
realization of previously implemented cost reduction initiatives.
Other Income (Expense), net (in thousands, except for percentages)
For the Years Ended December 31,
2024
2023
$ Change
% Change
Interest expense
$
(37,422)
$
(23,823)
$
(13,599)
57%
Interest income
7,400
10,943
(3,543)
(32)%
Gain on extinguishment of debt
44,702
—
44,702
100%
Other income (expense), net
28,398
(356)
28,754
(>100)%
Total other income (expense), net
$
43,078
$
(13,236)
$
56,314
(>100)%
Other income (expense), net for the year ended December 31, 2024 increased by $56.3 million as compared to the year ended
December 31, 2023, primarily due to a $44.7 million gain on extinguishment of debt from the Refinancing Transactions and a $28.7
million gain from the remeasurement of embedded derivatives and liability-classified common stock warrants, both of which are non-
cash items. These gains were partially offset by an increase in interest expense related to the Term Loan and the 2029 Notes and a
decrease in interest income resulting from lower investment balances in 2024 as compared to 2023.
We expect other income (expense), net to decrease in 2025 as compared to 2024 due to the $44.7 million gain on
extinguishment of debt being a one-time, non-recurring item. We also expect increased interest expense in 2025 as compared to 2024
on the Term Loan and the 2029 Notes, as both of these instruments were issued in May 2024, and 2025 will include a full year of
interest expense on these instruments. The future impact from remeasurements of the embedded derivatives and liability-classified
common stock warrants will depend on a variety of factors, including movements in our stock price, and cannot be forecasted.
Results of Operations - Years Ended December 31, 2023 and 2022
Discussion and analysis of the results of operations for the year ended December 31, 2023 as compared to the results of
operations for the year ended December 31, 2022 is included under the heading “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed
with the SEC on February 29, 2024 (“2023 Form 10-K”).
Liquidity, Capital Resources and Going Concern
Cash flows
We have historically financed our operations primarily through a combination of proceeds from (i) product revenue sales, (ii)
public and private placements of equity securities, (iii) the issuance of convertible debt, (iv) a term loan, (v) our deferred royalty
obligation, (vi) at the market offerings and (vii) business development activities. As of December 31, 2024, our principal source of
liquidity was $108.7 million of cash, cash equivalents and investments. We have had recurring losses since inception and incurred a
loss of $76.4 million for the year ended December 31, 2024.
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We anticipate that we will continue to incur significant operating losses in the foreseeable future. Based on our current business
plan and current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our
debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $25.0 million at all times, we
have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the
accompanying consolidated financial statements are issued. We expect that our cash, cash equivalents and investments as of
December 31, 2024 will be sufficient to fund our current operating plans and debt obligation requirements into the fourth quarter of
2025. See “Liquidity, Capital Resources and Going Concern – Funding Requirements” below and Note 1 “Organization and
Operations” to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K for a further
discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern.
The following table provides information regarding our cash flows (in thousands):
For the Years Ended December 31,
2024
2023
$ Change
% Change
Net cash used in operating activities
$
(127,486)
$
(92,723)
$
(34,763)
37%
Net cash provided by investing activities
95,473
7,940
87,533
>100%
Net cash provided by financing activities
41,646
1,124
40,522
>100%
Effect of exchange rates on cash, cash equivalents and
restricted cash
(11)
(34)
23
(68)%
Net increase (decrease) in cash, cash equivalents and
restricted cash
$
9,622
$
(83,693)
$
93,315
(>100)%
Net Cash Used in Operating Activities
The $34.8 million increase in net cash used in operating activities during the year ended December 31, 2024 as compared to the
year ended December 31, 2023 was primarily driven by working capital changes, including the collection of $27.3 million of
milestone payments from Antengene in 2023.
Net Cash Provided by Investing Activities
Net cash provided by investing activities increased by $87.5 million during the year ended December 31, 2024 as compared to
the year ended December 31,2023. Proceeds from the maturities of investments decreased by $12.7 million in 2024, which was
significantly offset by a decrease of $100.3 million in purchases of investments in 2024, due to liquidity needs to fund our operations.
Net Cash Provided by Financing Activities
The $40.5 million increase in net cash provided by financing activities during the year ended December 31, 2024 as compared to
the year ended December 31, 2023 was primarily driven by $83.3 million of proceeds from the Term Loan, partially offset by a $40.5
million payment of our deferred royalty obligation to HCRx and a $2.6 million payment of debt issuance costs related to the
Refinancing Transactions.
A discussion of changes in our financial condition for the year ended December 31, 2023 as compared to the year ended
December 31, 2022 is included under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations” in the 2023 Form 10-K.
Sources of Liquidity
On September 14, 2019, we and certain of our subsidiaries entered into the Revenue Interest Financing Agreement with HCRx,
which was subsequently amended on June 23, 2021, August 1, 2023 and May 8, 2024 (the “Revenue Interest Agreement” and, as
amended, the “Amended Revenue Interest Agreement”), pursuant to which, HCRx paid us a total of $135.0 million, less certain
transaction expenses. For additional information on the Amended Revenue Interest Agreement, see Note 10, “Long-Term
Obligations”, to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K.
On May 8, 2024, we entered into a credit and guaranty agreement (the “Credit Agreement”) with certain existing lenders and
HCRx, which provides for a senior secured term loan facility of $100.0 million. For additional information, see Note 10, “Long-Term
Obligations”, to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K.
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On February 17, 2023, we entered into an Open Market Sale Agreement (the “2023 Open Market Sale Agreement”) with
Jefferies LLC, as agent (“Jefferies”). Under the 2023 Open Market Sale Agreement, we may issue and sell shares of our common
stock having an aggregate offering price of up to $100.0 million (the “Shares”) from time to time through Jefferies. We did not sell
any Shares under the 2023 Open Market Sales Agreement during the year ended December 31, 2024. As of December 31, 2024,
$100.0 million of Shares was available for issuance and sale under the 2023 Open Market Sale Agreement.
During the year ended December 31, 2024, we received $19.6 million in milestone and upfront payments under our license and
distribution arrangements pursuant to which we are entitled to receive additional milestone payments, if certain development goals and
sales milestones are achieved, as well as royalties on future net sales of the licensed and sold products in the territories under such
arrangements. In addition, under the Menarini Agreement, Menarini will reimburse us for 25% of all development related expenses we
incur for selinexor from 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year. We
received $15.0 million of reimbursements for development related expenses under the Menarini Agreement during the year ended
December 31, 2024.
Commitments, Contingencies and Contractual Obligations
Operating Leases
We are party to an operating lease of office and research space in Newton, Massachusetts, which was amended in November
2024 and under which we currently lease a total of 98,502 square feet of research and office space through September 30, 2025, which
will be reduced to 52,224 square feet of solely office space from October 1, 2025 through September 30, 2030. We expect to incur
total lease costs of $10.9 million from January 1, 2025 to September 30, 2030.
Contractual Obligations
We have contractual obligations under our (i) 2025 Notes; (ii) Credit Agreement, (iii) 2029 Notes, and (iv) Amended Revenue
Interest Agreement as disclosed in Note 10, “Long-Term Obligations”, to the consolidated financial statements included under Part II,
Item 8 of this Annual Report on Form 10-K.
Funding Requirements
We expect to continue to incur costs related to our clinical development programs as we continue to advance our lead clinical
programs in myelofibrosis and our other late-stage clinical programs in endometrial cancer and multiple myeloma, as well as
commercialization expenses related to sales, marketing, manufacturing and distribution of our approved products, to the extent that
these functions are not the responsibility of our collaborators.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and
uncertain process that takes years to complete. In addition, our product candidates for which we receive marketing approval may not
achieve commercial success. Our ability to become and remain profitable depends on our ability to generate revenue. 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, as described
more fully in the risk factor entitled “We have incurred significant losses since inception, expect to continue to incur significant losses,
and may never achieve or maintain profitability,” under the heading “Risk Factors” in this Annual Report on Form 10-K.
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. 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. 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 development
programs or commercialization efforts.
Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of
additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of
at least $25.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going
concern within one year after the date the accompanying consolidated financial statements are issued. See Note 1, “Organization and
Operations”, to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K for a further
discussion of the conditions that raise substantial doubt regarding our ability to continue as a going concern. We currently expect that
cash, cash equivalents and investments as of December 31, 2024 will be sufficient to fund our current operating plans and debt
obligation requirements into the fourth quarter of 2025 while we continue to commercialize XPOVIO in the U.S. and continue the
clinical trials of our product candidates. Our future long-term capital requirements will depend on many factors, as described more
fully in the risk factor entitled “We will need additional funding to achieve our business objectives. If we are unable to raise capital
115
when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs
and/or commercialization efforts,” under the heading “Risk Factors” in this Annual Report on Form 10-K.
In addition to the expenses required to fund our operations described above, our funding requirements as of December 31, 2024
also include the following:
•
Lease costs for our headquarters in Newton, Massachusetts of $10.9 million through September 30, 2030;
•
Future obligations related to the 2025 Notes of $25.2 million through October 2025;
•
Future obligations related to the 2029 Notes of $146.4 million through May 2029;
•
Future obligations related to the Credit Agreement of $142.7 million through May 2028 in addition to our requirement to
maintain cash, cash equivalents and investments of at least $25.0 million at all times; and
•
Future royalty obligations to HCRx under the Amended Revenue Interest Agreement of $119.9 million by October 1,
2031.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents and investments of $108.7
million as of December 31, 2024. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the
general level of U.S. interest rates. Due to the short-term duration of our investment portfolio and the low risk profile of our
investments, an immediate 100 basis point shift in interest rates would not have a material effect on the fair market value of our
investment portfolio.
We do not believe our cash, cash equivalents and investments have significant risk of default or illiquidity. While we believe our
cash, cash equivalents and investments do not contain excessive risk, we cannot provide absolute assurance that in the future our
investments will not be subject to adverse changes in securities at one or more financial institutions that are in excess of federally
insured limits. Given the potential instability of financial institutions, we cannot provide assurance that we will not experience losses
on these deposits and investments.
We are also exposed to market risk related to changes in foreign currency exchange rates. We contract with contract research
organizations and contract manufacturing organizations that are located in Canada, the United Kingdom and Europe, which are
denominated in foreign currencies. We also contract with a number of clinical trial sites outside of the U.S., and our budgets for those
studies are frequently denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with
these agreements. We do not currently hedge our foreign currency exchange rate risk.
Item 8. Financial Statements and Supplementary Data
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K and are
incorporated herein by reference. An index of those financial statements is found in Item 15 of Part IV of this Annual Report on Form
10-K.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established disclosure controls and procedures designed to ensure that information required to be disclosed in the
reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the rules and forms prescribed by the Securities and Exchange Commission and is accumulated and communicated to
management, including the principal executive officer (our President and Chief Executive Officer) and principal financial officer (our
Executive Vice President, Chief Financial Officer and Treasurer), to allow timely decisions regarding required disclosure.
116
Our management, under the supervision and with the participation of our President and Chief Executive Officer and Executive
Vice President, Chief Financial Officer and Treasurer, has evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form
10-K. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving their objectives. Our disclosure controls and procedures have been designed to provide
reasonable assurance of achieving their objectives. Based on such evaluation, our President and Chief Executive Officer and
Executive Vice President, Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures were effective
at the reasonable assurance level as of December 31, 2024.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term
is defined in Rules13a-15(f) and15d-15(f) of the Exchange Act. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or
procedures may deteriorate. Our internal control over financial reporting is a process designed under the supervision of our principal
executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of our financial statements for external reporting purposes in accordance with U.S. generally accepted accounting
principles.
Under the supervision and with the participation of management, including our principal executive officer and principal
financial officer we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013
framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on our evaluation under that framework, management concluded that our internal control over financial reporting
was effective as of December 31, 2024.
Our independent registered public accounting firm that audited the financial statements included in this Annual Report on Form
10-K has issued an attestation report on our internal control over financial reporting, which is included below.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by
Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Karyopharm Therapeutics Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Karyopharm Therapeutics Inc.’s internal control over financial reporting as of December 31, 2024, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework), (the COSO criteria). In our opinion, Karyopharm Therapeutics Inc. (the Company) maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the 2024 consolidated financial statements of the Company and our report dated February 19, 2025 expressed an
unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 19, 2025
118
Item 9B. Other Information
Director and Officer Trading Arrangements
A portion of the compensation of our directors and officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) is in the form of equity awards and, from time to time, directors and officers engage in open-
market transactions with respect to the securities acquired pursuant to such equity awards or other securities of our company,
including to satisfy tax withholding obligations when equity awards vest or are exercised, and for diversification or other personal
reasons.
Transactions in our securities by directors and officers are required to be made in accordance with our Insider Trading Policy,
which requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in
possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables
directors and officers to prearrange transactions in our securities in a manner that avoids concerns about initiating transactions while in
possession of material nonpublic information.
During the fourth quarter of 2024, none of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or
a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
119
PART III
Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated by reference from
our definitive proxy statement relating to our 2025 annual meeting of stockholders, pursuant to Regulation 14A of the Exchange Act,
which we refer to as our 2025 Proxy Statement. We expect to file our 2025 Proxy Statement with the SEC within 120 days of
December 31, 2024.
Item 10. Directors, Executive Officers and Corporate Governance
Information regarding our directors, including the audit committee and audit committee financial experts, insider trading
policies and procedures and compliance with Section 16(a) of the Exchange Act, if applicable, will be included in our 2025 Proxy
Statement and is incorporated herein by reference. Information regarding our executive officers is set forth in “Business - Information
about our Executive Officers” in Part I, Item 1 of this Annual Report on Form 10-K.
We have adopted a Code of Business Conduct and Ethics for all of our directors, officers and employees as required by Nasdaq
governance rules and as defined by applicable SEC rules. Stockholders may locate a copy of our Code of Business Conduct and Ethics
on our website at www.karyopharm.com or request a copy without charge from:
Karyopharm Therapeutics Inc.
Attention: Investor Relations
85 Wells Avenue, 2nd Floor
Newton, MA 02459
We will post to our website any amendments to the Code of Business Conduct and Ethics and any waivers that are required to
be disclosed by the rules of either the SEC or Nasdaq.
Item 11. Executive Compensation
The information required by this Item 11 of Form 10-K regarding executive compensation will be included in our 2025 Proxy
Statement and, other than the information required by Item 402(v) of Regulation S-K, is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 of Form 10-K regarding security ownership of certain beneficial owners and
management and securities authorized for issuance under equity compensation plans will be included in our 2025 Proxy Statement and
is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 of Form 10-K regarding certain relationships and related transactions and director
independence will be included in our 2025 Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this Item 14 of Form 10-K regarding principal accountant fees and services will be included in our
2025 Proxy Statement and is incorporated herein by reference.
120
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)(1) Financial Statements
The financial statements listed below are filed as a part of this Annual Report on Form 10-K.
Page
number
Report of Independent Registered Public Accounting Firm (PCAOB ID 42) .............................................................................
121
Consolidated Balance Sheets as of December 31, 2024 and 2023...............................................................................................
123
Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022..............................................
124
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2024, 2023 and 2022..............................
125
Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2024, 2023 and 2022 .............................
126
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022.............................................
127
Notes to Consolidated Financial Statements ................................................................................................................................
128
(a)(2) Financial Statement Schedules
All financial schedules have been omitted because the required information is either presented in the consolidated financial
statements or the notes thereto or is not applicable or required.
(a)(3) Exhibits
The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Annual Report on Form 10-K are listed in the
Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K and are incorporated herein.
Item 16. Form 10-K Summary
None.
121
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Karyopharm Therapeutics Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Karyopharm Therapeutics Inc. (the Company) as of
December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ deficit and cash
flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the
“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework), and our report dated February 19, 2025 expressed an unqualified opinion thereon.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the financial statements, the Company has incurred significant operating losses since inception,
expects to incur significant operating losses for the foreseeable future, and has stated that substantial doubt exists about the
Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans
regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication
of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are
not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or
disclosures to which it relates.
122
Accrued Research and Development Costs
Description of the
Matter
The Company’s accrued research and development costs totaled $26.7 million at December 31, 2024. As
discussed in Note 2 to the consolidated financial statements, the Company’s accrued research and development
costs are recognized based on reviewing quotes and contracts, identifying services that have been performed on
the Company’s behalf and estimating the associated costs incurred for services performed when invoices have
not yet been received. Payments for these activities are based on the terms of individual arrangements, which
vary from contract to contract, and may differ from the pattern of costs incurred and are reflected on the
consolidated balance sheet as accrued expenses when expenses incurred exceed payments to date.
Auditing the Company’s accrued research and development costs is especially challenging due to the significant
volume of information received from service providers that conduct research and development activities on the
Company’s behalf. While the Company’s estimates of accrued research and development costs are primarily
based on information received related to each study or ongoing work order from its service providers, the
Company may need to make an estimate for additional costs incurred. Finally, due to the duration of certain of
the Company’s ongoing research and development activities and the timing of invoicing received from service
providers, the actual amounts incurred are not typically known by the report date.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls over
the Company’s process for recording accrued research and development costs. These procedures included
controls over management’s review of inputs used, as well as the completeness and accuracy of the underlying
data, in calculating the accrual.
To test accrued research and development costs, our audit procedures included, among others, testing the
accuracy and completeness of the underlying data used to calculate accrued research and development costs, as
well as evaluating the assumptions used by management. To assess the nature and extent of services incurred,
we corroborated the progress of clinical trials with the Company’s research and development personnel that
oversee the clinical trials and obtained information from service providers regarding costs incurred to date. We
also tested subsequent invoices received and inspected the Company’s contracts with service providers and any
pending change orders to assess the effect on the accrual.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2014.
Boston, Massachusetts
February 19, 2025
123
Karyopharm Therapeutics Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)
December 31,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
62,476
$
52,231
Investments
46,236
139,212
Accounts receivable, net
30,766
26,962
Inventory
4,739
3,043
Prepaid expenses and other current assets
12,245
11,813
Restricted cash
30
660
Total current assets
156,492
233,921
Property and equipment, net
400
606
Operating lease right-of-use assets
5,884
4,276
Restricted cash
308
301
Other assets
1,334
1,334
Total assets
$
164,418
$
240,438
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable
$
5,107
$
3,123
Accrued expenses
60,652
61,394
Convertible senior notes due 2025
24,426
—
Operating lease liabilities
438
3,308
Other current liabilities
1,641
1,654
Total current liabilities
92,264
69,479
Convertible senior notes due 2025
—
170,919
Convertible senior notes due 2029
68,345
—
Senior secured term loan
94,603
—
Deferred royalty obligation
73,499
132,479
Common stock warrants
12,582
—
Operating lease liabilities, net of current portion
6,712
2,789
Other liabilities
2,430
978
Total liabilities
350,435
376,644
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 5,000 shares authorized; none issued and
outstanding
—
—
Common stock, $0.0001 par value; 400,000 shares authorized; 126,201 and 114,915
shares issued and outstanding as of December 31, 2024 and December 31, 2023,
respectively
13
12
Additional paid-in capital
1,377,786
1,350,981
Accumulated other comprehensive loss
(356)
(161)
Accumulated deficit
(1,563,460)
(1,487,038)
Total stockholders’ deficit
(186,017)
(136,206)
Total liabilities and stockholders’ deficit
$
164,418
$
240,438
The accompanying notes are an integral part of these consolidated financial statements.
124
Karyopharm Therapeutics Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
For the Years Ended December 31,
2024
2023
2022
Revenues:
Product revenue, net
$
112,806
$
112,011
$
120,445
License and other revenue
32,431
34,022
36,629
Total revenue
145,237
146,033
157,074
Operating expenses:
Cost of sales
6,007
4,942
5,213
Research and development
143,232
138,750
148,662
Selling, general and administrative
115,441
131,881
145,401
Total operating expenses
264,680
275,573
299,276
Loss from operations
(119,443)
(129,540)
(142,202)
Other income (expense):
Interest income
7,400
10,943
2,359
Interest expense
(37,422)
(23,823)
(24,996)
Gain on extinguishment of debt
44,702
—
—
Other income (expense), net
28,398
(356)
(83)
Total other income (expense), net
43,078
(13,236)
(22,720)
Loss before income taxes
(76,365)
(142,776)
(164,922)
Income tax provision
(57)
(323)
(369)
Net loss
$
(76,422)
$
(143,099)
$
(165,291)
Basic net loss per share (Note 2)
$
(0.63)
$
(1.25)
$
(2.02)
Diluted net loss per share (Note 2)
$
(0.93)
$
(1.25)
$
(2.02)
Weighted-average number of common shares outstanding used to
compute basic net loss per share
121,863
114,221
81,871
Weighted-average number of common shares outstanding used to
compute diluted net loss per share
126,809
114,221
81,871
The accompanying notes are an integral part of these consolidated financial statements.
125
Karyopharm Therapeutics Inc.
Consolidated Statements of Comprehensive Loss
(in thousands)
For the Years Ended December 31,
2024
2023
2022
Net loss
$
(76,422)
$
(143,099)
$
(165,291)
Other comprehensive income (loss)
Unrealized gain (loss) on investments
133
278
(341)
Foreign currency translation adjustment
(328)
199
(488)
Comprehensive loss
$
(76,617)
$
(142,622)
$
(166,120)
The accompanying notes are an integral part of these consolidated financial statements.
Karyopharm Therapeutics Inc.
Consolidated Statements of Stockholders’ Deficit
(in thousands)
Common Shares
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity (Deficit)
Shares
Amount
Balance as of December 31, 2021
75,746
$
8
$
1,098,776
$
191
$
(1,178,648)
$
(79,673)
Vesting of restricted stock
957
—
—
—
—
—
Exercise of stock options and shares issued under the employee
stock purchase plan
726
—
3,977
—
—
3,977
Stock-based compensation expense
—
—
35,399
—
—
35,399
Issuance of common stock, net of issuance costs
35,784
4
189,757
—
—
189,761
Unrealized loss on investments
—
—
—
(341)
—
(341)
Foreign currency cumulative translation adjustment
—
—
—
(488)
—
(488)
Net loss
—
—
—
—
(165,291)
(165,291)
Balance as of December 31, 2022
113,213
12
1,327,909
(638)
(1,343,939)
(16,656)
Vesting of restricted stock
1,054
—
—
—
—
—
Exercise of stock options and shares issued under the employee
stock purchase plan
648
—
1,124
—
—
1,124
Stock-based compensation expense
—
—
21,709
—
—
21,709
Issuance of common stock warrants
—
—
239
—
—
239
Unrealized gain on investments
—
—
—
278
—
278
Foreign currency cumulative translation adjustment
—
—
—
199
—
199
Net loss
—
—
—
—
(143,099)
(143,099)
Balance as of December 31, 2023
114,915
12
1,350,981
(161)
(1,487,038)
(136,206)
Vesting of restricted stock
2,436
—
—
—
—
—
Shares issued under the employee stock purchase plan
1,978
—
1,452
—
—
1,452
Issuance of common stock for financial advisory fee
6,872
1
6,927
—
—
6,928
Stock-based compensation expense
—
—
18,426
—
—
18,426
Unrealized gain on investments
—
—
—
133
—
133
Foreign currency cumulative translation adjustment
—
—
—
(328)
—
(328)
Net loss
—
—
—
—
(76,422)
(76,422)
Balance as of December 31, 2024
126,201
$
13
$
1,377,786
$
(356)
$
(1,563,460)
$
(186,017)
The accompanying notes are an integral part of these consolidated financial statements.
12
127
Karyopharm Therapeutics Inc.
Consolidated Statements of Cash Flows
(in thousands)
For the Years Ended December 31,
2024
2023
2022
Operating activities
Net loss
$
(76,422 )
$
(143,099 )
$
(165,291 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense
18,426
21,709
35,399
Depreciation and amortization
340
530
621
Amortization of debt issuance costs and discounts
6,369
814
812
Net amortization of premiums and discounts on investments
(2,504 )
(4,098 )
(825 )
Gain on extinguishment of debt
(44,702 )
—
—
Change in fair value of embedded derivatives and common stock warrants
(28,691 )
—
(281 )
Changes in operating assets and liabilities:
Accounts receivable, net
(3,804 )
20,124
(5,084 )
Inventory
(1,696 )
1,181
(118 )
Prepaid expenses and other assets
(432 )
6,674
(5,782 )
Operating lease right-of-use assets
(1,608 )
1,962
1,677
Accounts payable
1,984
350
1,170
Accrued expenses and other liabilities
4,201
4,002
(9,536 )
Operating lease liabilities
1,053
(2,872 )
(2,316 )
Net cash used in operating activities
(127,486 )
(92,723 )
(149,554 )
Investing activities
Proceeds from maturities of investments
154,437
167,091
121,878
Purchases of investments
(58,822 )
(159,151 )
(226,016 )
Purchases of property and equipment
(142 )
—
(118 )
Net cash provided by (used in) investing activities
95,473
7,940
(104,256 )
Financing activities
Proceeds from issuance of senior secured term loan
83,300
—
—
Proceeds from issuance of common stock, net of issuance costs
—
—
189,761
Proceeds from the exercise of stock options and shares issued under the employee stock
purchase plan
1,452
1,124
3,977
Payment of debt issuance costs
(2,588 )
—
—
Payment of deferred royalty obligation
(40,518 )
—
—
Net cash provided by financing activities
41,646
1,124
193,738
Effect of exchange rates on cash, cash equivalents and restricted cash
(11 )
(34 )
(488 )
Net increase (decrease) in cash, cash equivalents and restricted cash
9,622
(83,693 )
(60,560 )
Cash, cash equivalents and restricted cash at beginning of period
53,192
136,885
197,445
Cash, cash equivalents and restricted cash at end of period
$
62,814
$
53,192
$
136,885
Reconciliation of cash, cash equivalents and restricted cash reported within the
consolidated balance sheets
Cash and cash equivalents
$
62,476
$
52,231
$
135,188
Short-term restricted cash
30
660
1,064
Long-term restricted cash
308
301
633
Total cash, cash equivalents and restricted cash
$
62,814
$
53,192
$
136,885
Supplemental disclosures:
Cash paid for interest on deferred royalty obligation
$
21,475
$
16,053
$
29,273
Cash paid for interest on convertible debt and term loan
$
17,120
$
5,175
$
5,175
Cash paid for amounts included in the measurement of operating lease liabilities
$
3,493
$
3,718
$
3,447
Lease liabilities arising from obtaining right-of-use assets
$
3,602
$
—
$
—
Convertible senior notes due 2029 issued with warrants to purchase 45,776 shares of
common stock in exchange for a $148.0 million reduction of convertible senior notes due
2025
$
111,000
$
—
$
—
Senior secured term loan issued in exchange for a $14.7 million reduction of deferred
royalty obligation
$
15,000
$
—
$
—
Issuance of common stock used to settle a financial advisory fee related to financing
activities
$
7,697
$
—
$
—
Convertible senior notes due 2029 issued in exchange for a $5.0 million reduction of
deferred royalty obligation
$
5,000
$
—
$
—
The accompanying notes are an integral part of these consolidated financial statements.
128
Karyopharm Therapeutics Inc.
Notes to Consolidated Financial Statements
1. Organization and Operations
We are a commercial-stage pharmaceutical company pioneering novel cancer therapies and dedicated to the discovery,
development and commercialization of first-in-class drugs directed against nuclear export for the treatment of cancer. 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 Selective Inhibitor of Nuclear Export compounds that
inhibit the nuclear export protein exportin 1. Our primary focus is on marketing XPOVIO® (selinexor) in its currently approved
indications, as well as developing and seeking the regulatory approval of selinexor as an oral agent targeting multiple high unmet
cancer indications, including our lead clinical programs in myelofibrosis and our other late-stage clinical programs in endometrial
cancer and multiple myeloma. We were incorporated in Delaware on December 22, 2008 and have a principal place of business in
Newton, Massachusetts.
Our lead asset, XPOVIO, received its initial U.S. approval from the U.S. Food and Drug Administration (the “FDA”) in July
2019 and is currently approved and marketed for the following indications: (i) in combination with bortezomib and dexamethasone for
the treatment of adult patients with multiple myeloma who have received at least one prior therapy; (ii) 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 proteasome inhibitors, at least two immunomodulatory agents, and an anti-
CD38 monoclonal antibody; and (iii) for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma
(“DLBCL”), not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy.
The commercialization of XPOVIO and NEXPOVIO® (selinexor)(the brand name for selinexor in Europe and the United Kingdom)
outside of the U.S. is managed by our partners in their respective territories. XPOVIO/NEXPOVIO has received regulatory approval
in various indications in over 45 countries outside the U.S. and is commercially available in a growing number of countries as our
partners continue to secure reimbursement approvals.
We have historically financed our operations primarily through a combination of proceeds from (i) product revenue sales, (ii)
public and private placements of equity securities, (iii) the issuance of convertible debt, (iv) a term loan, (v) our deferred royalty
obligation, (vi) at the market offerings and (vii) business development activities. As of December 31, 2024, we had an accumulated
deficit of $1.6 billion. We have incurred significant operating losses since our inception and we anticipate that we will continue to
incur significant operating losses to maintain our research and development programs, including as we continue to develop and seek
regulatory approval of selinexor for multiple cancer indications, and to support our continued operations. As a result, our continued
operations are dependent on our ability to raise additional funding and marketing XPOVIO in its currently approved indications.
Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of
additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of
at least $25.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going
concern within one year after the date these consolidated financial statements are issued. We plan to address the conditions that raise
substantial doubt regarding our ability to continue as a going concern by, among other things, obtaining additional funding through
equity offerings, debt financings and refinancings, collaborations, strategic alliances and/or licensing arrangements. However, there is
no assurance that such additional funding will be available on terms acceptable to us, or at all. We may also be required to reduce our
current spending requirements where possible.
If we utilize our capital resources more quickly than anticipated or are unable to obtain additional funding, we may have to
significantly curtail, delay, reduce or eliminate one or more of our research and development programs or any current or future
commercialization efforts for one or more of our products or product candidates, which could materially adversely affect our business,
financial condition, and results of operations. If we are unable to continue as a going concern, we may have to liquidate our assets and
may receive less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all
or part of their investment. If we seek additional financing to fund our business activities in the future, investors or other financing
sources may be unwilling to provide funding to us on commercially reasonable terms, if at all. The accompanying consolidated
financial statements do not include any adjustments to the carrying amounts and classification of assets and liabilities that may be
necessary if we were unable to continue as a going concern.
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2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) and include the accounts of (i) Karyopharm Therapeutics Inc., (ii)
Karyopharm Securities Corp. (“KSC”), our wholly-owned Massachusetts corporation incorporated in December 2013 and dissolved in
October 2024, (iii) Karyopharm Europe GmbH, our wholly-owned German limited liability company, incorporated in September
2014, and (iv) Karyopharm Israel Ltd., our wholly-owned Israeli subsidiary formed in June 2018. All intercompany balances and
transactions have been eliminated in consolidation.
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Improvements to
Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliation as
well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis,
with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024. We are
currently evaluating the disclosure requirements related to this new standard.
Segment Information
Operating segments are defined as components of an enterprise whose operating results are regularly reviewed by the Chief
Operating Decision Maker ("CODM") to allocate resources and assess performance. We view our operations and manage our business
as a single operating segment, which is the business of discovering, developing and commercializing drugs to treat cancer. All our
revenue and all our long-lived assets are attributable to the United States and to our single operating segment.
Our CODM is our Chief Executive Officer who uses net loss as reported on the consolidated statements of operations to monitor
budget versus actual results and to ensure we have sufficient capital resources to develop and seek regulatory approval of our product
candidates. The following table presents the significant revenue and expense categories in our single operating segment:
For the Years Ended December 31,
2024
2023
2022
Revenue from external customers
$
145,237
$
146,033
$
157,074
Cost of sales (1)
(5,780)
(4,572)
(4,987)
Research and development expenses (2)
(144,756)
(138,135)
(142,046)
Commercial expenses (2)
(50,875)
(60,640)
(65,401)
General and administrative expenses (2)
(44,843)
(50,517)
(51,443)
Other segment income (expenses) (3)
24,595
(35,268)
(58,488)
Net loss of our single operating segment
$
(76,422)
$
(143,099)
$
(165,291)
(1) Excludes stock-based compensation expense
(2) Excludes stock-based compensation expense and the effects of certain allocations of certain expenses
(3) Includes total other income (expense), net on the consolidated statements of operations, income tax provision, and stock-based
compensation expense
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period.
On an ongoing basis, we evaluate our estimates, including estimates related to our net product revenue, license and other
revenue, clinical trial accruals, stock-based compensation expense, interest expense on our deferred royalty obligation, embedded
derivative liabilities, liability-classified common stock warrants, valuation allowances, and other reported amounts of expenses during
the reported period. We base our estimates on historical experience and other market-specific or relevant assumptions that we believe
to be reasonable under the circumstances. Although we regularly assess these estimates, actual results could differ from those
estimates. Changes in estimates are recorded in the period in which they become known.
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Concentrations of Credit Risk and Off-Balance Sheet Risk
Financial instruments which potentially subject us to credit risk consist primarily of cash, cash equivalents and investments. We
hold these investments in highly rated financial institutions, and, by policy, limit the amounts of credit exposure to any one financial
institution. These amounts at times may exceed federally insured limits. We have not experienced any credit losses in such accounts
and do not believe we are exposed to any significant credit risk on these funds. We have no off-balance sheet concentrations of credit
risk.
The following table summarizes customers that represent 10% or greater of our consolidated total revenue:
For the Years Ended December 31,
2024
2023
2022
Customer A
24%
35%
32%
Customer B
25%
23%
24%
Customer C
23%
13%
13%
Menarini
19%
17%
10%
The following table summarizes customers with amounts due that represent 10% or greater of our consolidated accounts
receivable, net balance:
As of December 31,
2024
2023
Customer A
25%
31%
Customer B
33%
22%
Customer C
19%
11%
Customer D
14%
<10%
Menarini
<10%
17%
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. We disclose information on all assets and liabilities reported at fair value that enables an
assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the
observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair
value and is not a measure of credit quality. The hierarchy defines three levels of valuation inputs:
Level 1 inputs: Quoted prices in active markets for identical assets or liabilities
Level 2 inputs: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
Level 3 inputs: Unobservable inputs that reflect our own assumptions about the assumptions market participants would use in
pricing the asset or liability.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of demand deposit accounts and deposits in short-term money market funds. Cash
equivalents are stated at cost, which approximates fair value. We consider all highly liquid investments with maturities of three
months or less from the date of purchase to be cash equivalents. We do not hold any money market funds with significant liquidity
restrictions that would be required to be excluded from cash equivalents.
Investments
We determine the appropriate classification of our investments at the time of purchase. All of our investments are reported as
short-term as they are available for use during the normal cycle of business. We review any investment when its fair value is less than
its amortized cost and when evidence indicates that the investment’s carrying amount is not recoverable within a reasonable period.
We evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider
the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse
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conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists and if the
present value of cash flows expected to be collected is less than the amortized cost basis, an allowance is recorded on our consolidated
balance sheet, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that is not related to a
credit loss is recognized in other comprehensive income (loss).
Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged
against the allowance when we believe the uncollectability of an investment is confirmed or when either of the criteria regarding intent
or requirement to sell is met.
Accounts Receivable
Amounts are recorded as accounts receivable when our right to consideration is unconditional other than the passage of time.
Accounts receivable consists of amounts due from customers, net of customer allowances for cash discounts and chargebacks. Our
contracts with customers have standard payment terms that generally require payment within 31 to 68 days. We analyze accounts for
collectability and periodically evaluate the creditworthiness of our customers. We determined an allowance for credit losses was not
material as of December 31, 2024 and 2023 as we have had no bad debt write-offs to date and we do not currently have credit issues
with any customers.
Accrued Research and Development Costs
We estimate our accrued research and development costs by reviewing quotes and contracts, identifying services that have been
performed on our behalf, and estimating the associated cost incurred for services performed when we have not yet been invoiced or
otherwise notified of the actual cost. Most of our service providers invoice us monthly in arrears for services performed or when
contractual milestones are met. We make estimates of our accrued research and development costs at each balance sheet date in our
financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates
with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development costs
include fees to be paid to contract research organizations (“CROs”), and contract manufacturing organizations (“CMOs”) in
connection with research and development activities as well as fees to be paid to investigative sites in connection with clinical studies,
for which we have not yet been invoiced.
We base our expenses related to CROs and CMOs on our estimates of the services performed and efforts expended pursuant to
quotes and contracts with CROs and CMOs that conduct research and development activities on our behalf. The payment terms of
these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be
instances in which payments made to our service providers will exceed the level of services performed and result in a prepayment. In
accruing service fees, we estimate the time period over which the services will be performed and the level of effort to be expended in
each period. If the actual timing of the performance of services or the level of effort varies from our estimates, we adjust the accrual or
prepayment accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, if our
estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result
in us reporting amounts that are too high or too low in any particular period. To date, our estimates have not been materially different
than amounts actually incurred.
Deferred Royalty Obligation
We treat the debt obligation to HealthCare Royalty Partners III, L.P. and HealthCare Royalty Partners IV, L.P. (“HCRx”), as
discussed further in Note 10, “Long-Term Obligations”, as a deferred royalty obligation, amortized using the effective interest rate
method over the estimated life of the revenue streams. We recognize interest expense thereon using the effective rate, which is based
on our current estimates of future revenues over the life of the arrangement. We periodically assess our expected revenues using
internal projections, impute interest on the carrying value of the deferred royalty obligation, and record interest expense using the
imputed effective interest rate. To the extent our estimates of future revenues are greater or less than previous estimates or the
estimated timing of such payments is materially different than previous estimates, we will account for any such changes by adjusting
the effective interest rate on a prospective basis, which will adjust future interest expense with a corresponding impact to the
classification of our deferred royalty obligation. The assumptions used in determining the expected repayment term of the deferred
royalty obligation and amortization period of the issuance costs requires that we make estimates that could impact the short-term and
long-term classification of such costs, as well as the period over which such costs will be amortized.
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Embedded Derivatives
Embedded derivatives that require bifurcation are separated from the host debt instrument and are measured at fair value at the
end of each reporting period. See Note 6, “Fair Value Measurements”, for additional detail on the valuation methodology. Changes in
fair value are recognized as a component of other income (expense), net on our consolidated statements of operations. Embedded
derivatives are reported in the same line as the host debt instrument on the consolidated balance sheets.
Common Stock Warrants
We classify our common stock warrants in stockholder’s equity if they allow for settlement only in shares of our common stock,
are indexed to our common stock, and meet the criteria for equity classification. Common stock warrants that do not meet the criteria
for equity classification are classified as liabilities and are measured at fair value at the end of each reporting period. See Note 6, “Fair
Value Measurements”, for additional detail on the valuation methodology.
Revenue Recognition
To determine revenue recognition, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify
the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance
obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. At contract inception, we
assess whether the goods or services promised within a contract with a customer are distinct and, therefore, represent a separate
performance obligation. Goods or services that are determined not to be distinct are combined with other promised goods and services
until a distinct bundle is identified. We then determine the transaction price, which is the total amount of consideration we expect to
receive from a customer in exchange for the promised goods or services and includes an estimate of any variable consideration in the
contract. We then allocate the transaction price to each performance obligation and recognize the associated revenue when (or as) our
customer obtains control of the goods or services within the performance obligation.
Incremental costs of obtaining a contract with a customer are capitalized and amortized consistent with the pattern of
transferring the goods or services to which the cost relates when the expected amortization period of the asset is greater than one year.
Incremental costs are expensed as incurred if the expected amortization period of the asset that we would have recognized is one year
or less.
Product Revenue Recognition
We ship XPOVIO in the U.S. to specialty pharmacies and specialty distributors, collectively referred to as our customers, under
a limited number of distribution arrangements with such third parties. Our specialty pharmacy customers resell XPOVIO directly to
patients, while our specialty distributor customers resell XPOVIO to healthcare entities, who then resell XPOVIO to patients. We also
enter into certain arrangements with group purchasing organizations and/or other payors that provide for government mandated and/or
privately negotiated rebates, chargebacks, and discounts with respect to the purchase of our products.
Each unit of XPOVIO that is ordered by our customers represents a distinct performance obligation that is completed when
control of the product is transferred to the customer. Accordingly, we recognize product revenue when the customer obtains control of
our product, which occurs at a point in time, upon delivery pursuant to our agreements with our customers. If taxes are collected from
customers relating to product sales and remitted to governmental authorities, they are excluded from revenue.
Revenue from product sales is recorded at the net sales price, which includes estimates of variable consideration for which
reserves are reported. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are
generally classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount
is payable to a party other than a customer). Certain amounts are known at the time of sale based on contractual terms and are
recorded pursuant to the most likely amount method, which is the single most likely amount in a range of possible considerations.
Other amounts are estimated pursuant to the expected value method, which is the sum of probability-weighted amounts in a range of
possible consideration amounts. Relevant factors used in the expected value method include: current contractual and statutory
requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. These
reserves reflect our best estimates of the variable consideration based on the terms of the respective underlying contracts.
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The following are the components of variable consideration related to product revenue:
Cash discounts and distributor fees: We provide customary discounts on XPOVIO sales to our customers for prompt payment,
the terms of which are explicitly stated in our contracts with such customers. We also pay fees to our customers for sales order
management, data, and distribution services, the terms of which are also explicitly stated in our contracts with such customers. Such
fees are not for a distinct good or service and, accordingly, are recorded as a reduction of revenue, as well as a reduction to accounts
receivable (cash discounts) or as a component of accrued expenses (distributor fees).
Product returns: Consistent with industry practice, we offer our customers and other indirect purchasers a limited right of return
for purchased units of XPOVIO for damage, defect, recall, and/or product expiry (beginning three months prior to the product’s
expiration date and ending six to twelve months after the product’s expiration date). We estimate the amount of product sales that will
be returned using quantitative and qualitative considerations, such as visibility into the inventory remaining in the distribution channel
and historical returns data. Reserves for estimated returns are recorded as a reduction of revenue in the period that the related revenue
is recognized, as well as a component of accrued expenses. We update our estimated return liability each reporting period based on
actual shipments of XPOVIO subject to contractual return rights, changes in expectations about the amount of estimated and/or actual
returns, and other qualitative considerations.
Chargebacks: Chargebacks for fees and discounts represent the estimated obligations resulting from our contractual
commitments to provide products to qualified healthcare entities at prices lower than the list prices charged to our customers who
purchase XPOVIO directly from us. Our customers charge us for the discount provided to the healthcare entities. Chargebacks are
generally determined at the time of resale to the qualified healthcare provider by our customers. Accordingly, reserves for chargebacks
consist of credits that we expect to issue for units that remain in the distribution channel inventory at the end of the reporting period
that we expect will be sold to qualified healthcare entities, as well as chargebacks that customers have claimed, but for which we have
not yet issued a credit. We record reserves for chargebacks based on contractual terms in the same period that the related revenue is
recognized, resulting in a reduction of product revenue and accounts receivable. We generally issue credits to the customer for such
amounts within a few weeks after the customer notifies us of the resale to a discount-eligible healthcare entity.
Government rebates: We are subject to discount obligations under state Medicaid programs, Medicare, the Department of
Veterans Affairs, the Department of Defense, and others. These reserves are recorded in the same period the related revenue is
recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component
of accrued expenses. For Medicare, we estimate the number of patients in the prescription drug coverage gap for whom we will owe
an additional liability under Medicare Part D. Our liability for these rebates consists of invoices received for claims from prior and
current quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter,
and estimated future claims that will be made for product that has been recognized as revenue, but which remains in distribution
channel inventories at the end of the reporting period.
Other incentives: Other incentives offered by us include co-payment assistance, which we provide as financial assistance to
patients with commercial insurance that requires prescription drug co-payments by the patient. We calculate the accrual for co-
payment assistance based on estimates of claims and the average co-payment assistance amounts per claim that we expect to receive
associated with sales of XPOVIO that have been recognized as revenue but remain in distribution channel inventories at the end of the
reporting period. Such estimates are based on industry experience with similar products, as well as actual amounts from our product
sales to date. Any adjustments to such estimated liabilities on units in the distribution channel at period end, as well as actual amounts
incurred on units sold through the distribution channel during the period, are recorded in the same period that the related revenue is
recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component
of accrued expenses.
Product revenue reserves and allowances: As noted above, cash discounts and chargebacks are recorded as reductions of
accounts receivable and product returns, distributor fees, government rebates, and other incentives are recorded as a component of
accrued expenses. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future
vary from our estimates, we will adjust these estimates, which would affect product revenue, net and earnings in the period in which
such variances become known.
License Agreements
We generate revenue from license or similar agreements with pharmaceutical companies for the development and
commercialization of certain of our products and product candidates. Such agreements may include the transfer of intellectual property
rights in the form of licenses, transfer of technological know-how, delivery of drug substances, research and development services,
and participation on certain committees with the counterparty. Payments made by the customer may include non-refundable upfront
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fees, payments upon the exercise of options, payments based upon the achievement of defined milestones, and royalties on sales of
products and product candidates if they are approved and commercialized. Our license agreements are detailed in Note 5, “License
Agreements”.
At contract inception, we evaluate all goods or services in the agreement to determine if they are distinct. If they are not distinct,
they are combined with other promised goods or services to create a bundle of promised goods or services that are distinct. Distinct
goods or services and distinct bundles of goods or services are considered performance obligations. Optional future services where
any additional consideration paid to us reflects their standalone selling prices do not provide the customer with a material right and,
therefore, are not considered performance obligations. Optional future services that are priced in a manner which provides the
customer with a significant or incremental discount are considered performance obligations because they provide the customer with a
material right.
We utilize judgment to estimate the transaction price at contract inception. We evaluate contingent milestones to determine if
they should be included in the transaction price using the most likely amount method. Milestone payments that are not within our
control, such as regulatory approvals, are not considered likely of being achieved until those approvals are received and are excluded
from the transaction price using the most likely amount method. The transaction price is then allocated to each performance obligation
on a relative standalone selling price basis, for which we recognize revenue as or when the performance obligations are satisfied. At
the end of each reporting period, we re-evaluate our estimate of the transaction price, including the probability of achieving milestone
payments that may not be subject to a material reversal, and adjust the transaction price if necessary. Any such adjustments are
recorded on a cumulative catch-up basis, which would affect license and other revenue in the period of adjustment.
We then determine whether the performance obligations are satisfied over time or at a point in time and, if over time, the
appropriate method of measuring progress for purposes of recognizing revenue. We evaluate the measure of progress, as applicable,
for each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.
When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or
services to the customer under the terms of a contract, a contract liability is recorded within deferred revenue. Contract liabilities
within deferred revenue are recognized as revenue after control of the goods or services is transferred to the customer and all revenue
recognition criteria have been met.
For arrangements that include a license of intellectual property and sales-based royalties, including sales-based milestone
payments, we recognize revenue when the related sales occur because the license of intellectual property is deemed to be the
predominant item to which the royalties relate.
Research and Development Expenses
Research and development costs are charged to expense as incurred and include, but are not limited to:
•
employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;
•
expenses incurred under agreements with CROs, CMOs and consultants that help conduct clinical trials and preclinical
studies;
•
the cost of acquiring, developing and manufacturing clinical trial materials, including comparator products;
•
facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of
facilities, insurance and other supplies; and
•
costs associated with preclinical activities and regulatory operations.
Costs for certain research and development activities, such as clinical trials, are recognized based on various inputs, including an
evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, and other
information provided to us by our vendors based on their actual costs incurred. Payments for these activities are based on the terms of
the individual arrangements, which may differ from the pattern of costs incurred, and are accordingly reflected in our financial
statements as prepaid or accrued research and development costs.
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Selling, General and Administrative Expenses
Selling, general and administrative costs are charged to expense as incurred and consist primarily of salaries, benefits, travel,
and other related costs, including stock-based compensation, for personnel in executive, finance, commercial and administrative
functions. Other significant costs include facility costs not otherwise included in research and development expenses, legal fees
relating to patent and corporate matters and fees for accounting and consulting services.
Accounting for Stock-Based Compensation
We grant stock-based awards to employees and non-employees, including stock options, restricted stock units (“RSUs”),
performance-based restricted stock units (“PSUs”) and shares issued under our employee stock purchase plan (“ESPP”). We account
for all stock-based awards at their fair value as of the grant date and recognize compensation expense on the consolidated statements
of operations on a straight-line basis over the vesting period of the award. We use the Black-Scholes option pricing model to
determine the fair value of stock options as of the grant date. The fair value of RSUs is the quoted closing market price per share of
our common stock on the Nasdaq Global Select Market on the grant date. Forfeitures are recognized as they occur.
PSUs are awards which will vest if certain performance goals are achieved over a certain performance period. Certain portions
of certain PSU awards vest based on continuous service to the Company throughout the performance period even if the performance
goal is not achieved. Stock-based compensation expense for PSUs is determined using the grant date fair value, which is the quoted
closing market price per share of our common stock on the Nasdaq Global Select Market on the grant date. The grant date fair value of
PSUs with a market condition also includes a discount that represents the likelihood that the related performance goals will not be
achieved. Stock-based compensation expense for PSUs with a market condition is recognized on a straight-line basis over the service
period. Market conditions include goals related to the performance of our common stock. Stock-based compensation expense for
PSUs without a market condition is not recognized until the achievement of the performance goal is deemed probable (the “Probable
Date”). At the Probable Date, we record a cumulative catch-up expense for the portion of the grant date fair value attributable to the
period from the grant date to the Probable Date. The remaining expense is recognized over the remaining service period on a straight-
line basis.
Foreign Currency Transactions
The functional currency of our subsidiaries in Germany and Israel are the Euro and Shekel, respectively. Foreign currency
transaction gains and losses are recorded on the consolidated statements of operations and were immaterial for the years ended
December 31, 2024, 2023 and 2022.
Income Taxes
We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined
based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the
enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. We provide a valuation
allowance against deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets
will be realized. We have evaluated available evidence and concluded that we may not realize the benefit of our deferred tax assets;
therefore, a valuation allowance has been established for the full amount of the net deferred tax assets. We recognize interest and/or
penalties related to income tax matters in income tax expense. Our state tax provision pertains to income generated by our KSC entity.
Our foreign tax provision pertains to foreign income taxes due by our German and Israel subsidiaries, both of which operate on a cost-
plus profit margin basis.
Net Loss Per Share
Basic net loss per common share is calculated using the two-class method by dividing the net loss allocated to common shares
by the weighted-average number of common shares outstanding for the period. Diluted net loss per common share is calculated by
adjusting net loss to remove the effects from potential dilutive common shares and dividing this adjusted amount by the weighted
average number of common shares and potential dilutive common shares outstanding for the period. Potential dilutive common shares
are not included if their effect is anti-dilutive.
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As discussed further in Note 10, “Long-Term Obligations”, we have the option to settle the conversion obligation for our 3.00%
unsecured convertible senior notes due 2025 (the “2025 Notes”) in cash, shares or any combination of the two. There was no impact of
the 2025 Notes on the calculation of dilutive loss per common share during the years ended December 31, 2023 and 2022 because
they were anti-dilutive in these periods. The table below describes the impact of the 2025 Notes on the calculation of dilutive loss per
common share during the year ended December 31, 2024.
As discussed further in Note 10, “Long-Term Obligations”, we have the option to settle the conversion obligation for our 6.00%
secured convertible senior notes due 2029 (the “2029 Notes”) in cash, shares or any combination of the two. The 2029 Notes were
issued in May 2024 and did not impact the calculation of dilutive loss per common share during the year ended December 31, 2024
because they were anti-dilutive in this period.
As discussed further in Note 11, “Common Share Warrants”, warrants to purchase up to 55,563,775 shares of our common
stock were outstanding as of December 31, 2024. These warrants are not included in the calculation of basic net loss per share because
the warrant holders do not have an obligation to share in our losses. There was no impact of these warrants on the calculation of
dilutive loss per common share during the years ended December 31, 2024, 2023 and 2022 because they were anti-dilutive in these
periods.
The following is a reconciliation of the numerator and denominator used to calculate diluted net loss per common share for the
year ended December 31, 2024 (in thousands except per share amounts):
For the Year Ended December
31, 2024
Net loss
$
(76,422)
Add back interest expense on the 2025 Notes
2,736
Add back gain on extinguishment of debt
(44,702)
Numerator for diluted net loss per common share (A)
$
(118,388)
Weighted-average number of common shares outstanding
121,863
Dilutive effect of 2025 Notes calculated using the if-converted method
4,946
Denominator for diluted net loss per common share (B)
126,809
Diluted net loss per common share (= A / B)
$
(0.93)
The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-
dilutive effect under the treasury method (in thousands):
As of December 31,
2024
2023
2022
Outstanding common share warrants
55,564
9,788
9,538
Outstanding stock options
6,383
8,621
13,026
Unvested RSUs and PSUs
12,768
7,666
3,403
Comprehensive Loss
Comprehensive loss consists of net loss and certain changes in stockholders' deficit that are excluded from net loss, which
currently consists of unrealized gains and losses on investments and foreign currency translation adjustments.
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3. Product Revenue
To date, our only source of product revenue has been from the U.S. sales of XPOVIO. The following table summarizes activity
in each of the product revenue allowance and reserve categories (in thousands):
Discounts and
Chargebacks
Fees, Rebates,
and Other
Incentives
Returns
Total
Beginning balance as of January 1, 2022
$
1,911
$
2,306
$
344
$
4,561
Provision related to sales in the current year
17,920
9,979
219
28,118
Credits or payments made
(16,966)
(8,551)
(21)
(25,538)
Ending balance as of December 31, 2022
2,865
3,734
542
7,141
Provision related to sales in the current year
21,106
11,025
—
32,131
Credits or payments made
(21,455)
(10,089)
(224)
(31,768)
Ending balance as of December 31, 2023
2,516
4,670
318
7,504
Provision related to sales in the current year
29,346
18,021
3,172
50,539
Credits or payments made
(27,632)
(8,848)
(1,635)
(38,115)
Ending balance as of December 31, 2024
$
4,230
$
13,843
$
1,855
$
19,928
Discounts and chargebacks are recorded as reductions of accounts receivable, and returns, fees, rebates, and other incentives are
recorded as a component of accrued expenses and other liabilities.
As of December 31, 2024 and 2023, net product revenue of $27.8 million and $17.8 million, respectively, was included in
accounts receivable, net.
4. Inventory
Prior to regulatory approval, we expense costs relating to the production of inventory as research and development expenses in
the period incurred. We capitalize the costs incurred to manufacture our products after regulatory approval when, based on our
judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. We value our
inventories at the lower of cost or estimated net realizable value. We determine the cost of our inventories, which includes amounts
related to materials and manufacturing overhead, on a first-in, first-out basis. Raw materials and work in process includes all inventory
costs prior to packaging and labelling, including raw materials, active pharmaceutical ingredient, and drug product. Finished goods
include packaged and labelled products.
Raw materials and work in process that may be used for either research and development or commercial sale are classified as
inventory until the material is consumed or otherwise allocated for research and development. If the material is intended to be used for
research and development, it is expensed as research and development once that determination is made.
We assess the recoverability of our inventory each reporting period and write-down any inventory that has become obsolete, that
has a cost basis in excess of its estimated realizable value, or that is not expected to be sold or otherwise consumed before expiry.
Inventory write-downs are recorded as cost of sales in the period the impairment is identified.
Cost of sales includes the cost of producing and distributing inventories related to sales of XPOVIO in the U.S. and sales of
selinexor to our partners who commercialize our products outside of the U.S. Cost of sales is recognized in the period the related sales
occur and includes compensation expense for employees involved with production and distribution, freight, and indirect overhead
costs, as well as third-party royalties payable on net product revenue. Cost of sales may also include excess or obsolete inventory
adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.
The following table presents our inventory (in thousands), all of which was related to XPOVIO:
As of December 31,
2024
2023
Raw materials
$
720
$
553
Work in process
3,542
1,732
Finished goods
477
758
Total inventory
$
4,739
$
3,043
138
5. License Agreements
The following license agreements affected the consolidated financial statements during the years ended December 31, 2024,
2023 and 2022:
Antengene License Agreement
In May 2020, we entered into an amendment to our May 2018 license agreement (the “Original Antengene Agreement” and, as
amended, the “Amended Antengene Agreement”) with Antengene Therapeutics Limited, a corporation organized and existing under
the laws of Hong Kong (“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 expanded the territory licensed to Antengene in the Original
Antengene Agreement for the exclusive development and commercialization rights of 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 (“Antengene Licensed Compounds”).
Under the terms of the Amended Antengene Agreement, Antengene has the exclusive development and commercialization
rights for the Antengene Licensed Compounds in mainland China, Taiwan, Hong Kong, Macau, South Korea, Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, Australia and New Zealand (the “Antengene
Territory”). Under the terms of the Original Antengene Agreement, we received an upfront cash payment of $11.7 million in 2018 and
in June 2020 we received a one-time upfront cash payment of $11.7 million in connection with the Amended Antengene Agreement.
We are also entitled to future milestone payments from Antengene if certain development, regulatory and commercialization goals are
achieved. Finally, we are also eligible to receive tiered double-digit royalties based on future net sales of selinexor and eltanexor, and
tiered single- to double-digit royalties based on future net sales of verdinexor and KPT-9274 in the Antengene Territory. In addition,
upon completion of the manufacturing technology transfer plan, we will grant to Antengene non-exclusive rights to manufacture the
Antengene Licensed Compounds solely for their development and commercialization in the Antengene Territory.
As part of the Amended Antengene Agreement, Antengene also has the right to participate in global clinical studies of the
Antengene Licensed Compounds and will bear the cost and expense for patients enrolled in such global clinical studies in the
Antengene Territory. Antengene is responsible for seeking regulatory and marketing approvals for the Antengene Licensed
Compounds in the Antengene Territory, as well as any development of the products necessary to obtain such approvals. Antengene is
also responsible for the commercialization of the Antengene Licensed Compounds in the Antengene Territory at its own cost and
expense. Until Antengene manufactures its own drug supply, we will furnish clinical and commercial supplies to Antengene pursuant
to supply agreements between us and Antengene, the costs of which will be borne by Antengene.
The Amended Antengene Agreement will continue in effect on a product-by-product, country-by-country basis until the later of
the tenth anniversary of the first commercial sale of the applicable product in such country or the expiration of specified patent
protection and regulatory exclusivity periods for the applicable product in such country. However, the Amended Antengene
Agreement may be terminated earlier by (i) either party for breach of the Amended Antengene Agreement by the other party or in the
event of the insolvency or bankruptcy of the other party, (ii) Antengene 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 Antengene challenges
or assists with a challenge to certain of our patent rights.
We identified the following performance obligations in the Amended Antengene Agreement: exclusive licenses, initial data
transfers, and a stand-ready obligation to provide initial clinical supply for each of the Antengene Licensed Compounds. We also
identified as performance obligations the following customer options for each of the Antengene Licensed Compounds that were
offered at a significant and incremental discount and represent material rights: (i) the material right for additional data transfers; (ii)
the material right for additional clinical supply and related substance supply; (iii) the material right for manufacturing technology
transfers and licenses; and (iv) the material right for the option for a backup compound, which represents Antengene’s option to select
a replacement compound in the event it elects to discontinue the development of the Antengene Licensed Compounds. All of the
performance obligations that received an allocation of the initial transaction price of $11.7 million were fully satisfied as of December
31, 2021.
All development and regulatory milestones, which represent variable consideration, will be evaluated each reporting period and
included in the transaction price if the milestone is considered likely of achievement and if it is probable that a significant revenue
reversal will not occur in future periods. Milestones included in the transaction price will be fully recognized in revenue in the same
reporting period because all performance obligations that received an allocation of the transaction price were fully satisfied as
December 31, 2021.
139
Any consideration related to sales-based milestones, as well as royalties on net sales upon commercialization of XPOVIO by
Antengene, are recognized when the related sales occur, as they were determined to relate predominantly to the intellectual property
licenses granted to Antengene.
Menarini License Agreement
In December 2021, we entered into a license agreement (the “Original Menarini Agreement”) with Berlin-Chemie AG, an
affiliate of the Menarini Group (“Menarini”), pursuant to which we granted Menarini a non-exclusive license to develop, and an
exclusive license to commercialize, products containing selinexor (the “Product”), for all human oncology indications in the European
Economic Area, United Kingdom, Switzerland, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan,
Turkmenistan, Uzbekistan, Ukraine, Turkey, Mexico, all Central America countries and all South America countries (collectively, the
“Menarini Territory”). In March 2023, the Original Menarini Agreement was amended (the “Amended Menarini Agreement”) to
expand the Menarini Territory to include all countries in the continent of Africa and Saudi Arabia, United Arab Emirates, Kuwait,
Oman, Qatar, Bahrain, Lebanon, Jordan, Iraq, and Yemen (together with the Menarini Territory, the “Expanded Menarini Territory”).
In addition, we granted to Menarini a non-exclusive license to package and label the Product in or outside of the Expanded Menarini
Territory for all human oncology indications solely to enable Menarini to commercialize the Product within the Expanded Menarini
Territory.
Under the terms of the Amended Menarini Agreement, we will use commercially reasonable efforts to develop the Product,
transfer any marketing approval or authorization with respect to the Product in the Expanded Menarini Territory to Menarini and to
complete any post-marketing approval or authorization studies required by a regulatory authority as a condition of maintaining the
approval in any country in the Expanded Menarini Territory. Menarini is obligated to use commercially reasonable efforts to apply for
and obtain marketing approval or authorization of the Product, and to obtain price or reimbursement approval for the Product after
approval of the relevant marketing approval or authorization, in each country of the Expanded Menarini Territory in each indication
for which we have conducted a registrational clinical trial. Menarini is also obligated to use commercially reasonable efforts at its sole
cost and expense to launch and commercialize the Product in each country of the Expanded Menarini Territory in each indication for
which we have conducted a registrational clinical trial.
We received an upfront cash payment of $75.0 million in December 2021 under the Original Menarini Agreement and $3.5
million in April 2023 upon execution of the Amended Menarini Agreement. In addition, we are entitled to receive additional
milestone payments from Menarini if certain development and sales performance milestones are achieved. We are further eligible to
receive tiered royalties ranging from the mid-teens to mid-twenties based on future net sales of the Product in the Expanded Menarini
Territory. The payments owed by Menarini to us are subject to reduction in specified circumstances. Menarini will reimburse us for
25% of all expenses we incur for the development of the Product during 2022 through 2025, provided that such reimbursements shall
not exceed $15.0 million per calendar year. These amounts represent variable consideration and will be recognized as earned.
The Amended Menarini Agreement will continue in effect on a country-by-country basis until the last to occur among: (i) the
fifteenth anniversary of the first commercial sale of the Product in the applicable country, (ii) the expiration of the last-to-expire of the
licensed patent rights in the applicable country or (iii) the expiration of any regulatory exclusivity protection covering the Product in
such country. However, the Amended Menarini Agreement may be terminated earlier by either party for (i) an uncured material
breach of the Amended Menarini Agreement by the other party (A) on a country-by-country basis with respect to the country to which
the breach does not affect the Amended Menarini Agreement as a whole or (B) in its entirety if the breach affects the Amended
Menarini Agreement as a whole, or (ii) in the event of the insolvency or bankruptcy of the other party. We may also terminate the
Amended Menarini Agreement for certain patent challenges by Menarini.
We assessed this arrangement and concluded that the contract counterparty, Menarini, is a customer. We identified the following
material promises in the arrangement: the granting of a non-exclusive license to develop, and an exclusive license to commercialize
the Product, as well as the initial transfer of know-how and information to Menarini. The Amended Menarini Agreement provides that
we will supply to Menarini, and Menarini will purchase from us, all required quantities of Product for the Expanded Menarini
Territory in accordance with a supply agreement separately entered into by and between us and Menarini in 2022 (the “Supply
Agreement”). We determined that the promise of the Supply Agreement was not a performance obligation at the outset of the
arrangement as the rate charged for the Product was not at a significant and incremental discount and therefore did not represent a
material right. We then determined that the granting of the license and the initial transfer of know-how were not distinct from one
another and must be combined as a performance obligation (the “Combined Performance Obligation”). Based on these determinations,
we identified one distinct performance obligation at the inception of the contract: the Combined Performance Obligation. We further
determined that the up-front payment of $75.0 million constituted the entirety of the consideration included in the transaction price at
contract inception, which was allocated to the Combined Performance Obligation. The Combined Performance Obligation was fully
satisfied as of December 31, 2021.
140
All development and regulatory milestones, which represent variable consideration, will be evaluated each reporting period and
included in the transaction price if the milestone is considered likely of achievement and if it is probable that a significant revenue
reversal will not occur in future periods. Milestones included in the transaction price will be fully recognized in revenue in the same
reporting period because the Combined Performance Obligation was fully satisfied as of December 31, 2021.
Any consideration related to sales-based milestones, as well as royalties on net sales upon commercialization by Menarini, are
recognized when the related sales occur, as they were determined to relate predominantly to the intellectual property licenses granted
to Menarini.
Summary of License and Other Revenue
The following table presents information about our license and other revenue (in thousands):
For the Years
Ended December 31,
2024
2023
2022
Menarini
$
28,014
$
24,360
$
15,672
Antengene
1,680
2,713
13,353
Other
2,737
6,949
7,604
Total license and other revenue
$
32,431
$
34,022
$
36,629
During the year ended December 31, 2024, we recognized (i) $15.0 million of revenue for the reimbursement of development-
related expenses, $10.0 million of milestone revenue, $2.2 million of royalty revenue, and $0.8 million of other reimbursement
revenue from Menarini; (ii) $1.7 million of royalty revenue from Antengene; and (iii) $2.0 million of milestone-related revenue, $0.4
million of royalty revenue, and $0.3 million of other reimbursement revenue from our other partners.
During the year ended December 31, 2023, we recognized (i) $15.0 million of revenue for the reimbursement of development
related expenses, $4.0 million of milestone-related revenue, $3.5 million of license-related revenue, $1.1 million of royalty revenue,
and $0.8 million of other reimbursement revenue from Menarini; (ii) $1.5 million of royalty revenue, and $1.2 million of other
reimbursement revenue from Antengene; and (iii) $3.4 million of license-related revenue, $2.5 million of milestone-related revenue,
$0.5 million of royalty revenue, and $0.5 million of other reimbursement revenue from our other partners.
During the year ended December 31, 2022, we recognized (i) $15.0 million of revenue for the reimbursement of development
related expenses, $0.3 million of royalty revenue, and $0.4 million of other reimbursement revenue from Menarini; (ii) $7.8 million of
milestone-related revenue, $3.8 million of royalty revenue, and $1.8 million of other reimbursement revenue from Antengene; and (iii)
$5.2 million of royalty revenue and $2.3 million of milestone-related revenue from our other partners.
License and other revenue of $2.9 million and $9.1 million were included in accounts receivable, net as of December 31, 2024
and 2023, respectively. No license and other revenue was included in other current assets as of December 31, 2024. License and other
revenue of $1.0 million was included in other current assets as of December 31, 2023.
6. Fair Value Measurements
Financial instruments, including cash, cash equivalents, accounts receivable, net, other current assets, other assets, restricted
cash, accounts payable, and accrued expenses, are presented at amounts that approximate fair value as of December 31, 2024 and
2023.
Items classified as Level 2 consist of corporate debt securities, commercial paper, and U.S. government and agency securities.
We estimate the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing
sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for
which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing
based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs.
We validate the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from
other pricing sources and analyzing pricing data in certain instances.
141
The following tables present information about our financial assets that have been measured at fair value and indicate the fair
value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):
As of
December 31,
2024
Quoted
Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
Money market funds
$
46,990
$
46,990
$
—
$
—
Commercial paper
5,072
—
5,072
—
Investments:
Corporate debt securities
39,091
—
39,091
—
Commercial paper
3,166
—
3,166
—
U.S. government and agency securities
3,979
—
3,979
—
$
98,298
$
46,990
$
51,308
$
—
As of December
31, 2023
Quoted
Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Cash equivalents:
Money market funds
$
27,963
$
27,963
$
—
$
—
U.S. government and agency securities
1,998
—
1,998
—
Investments:
Corporate debt securities
77,961
—
77,961
—
Commercial paper
13,744
—
13,744
—
U.S. government and agency securities
47,507
—
47,507
—
$
169,173
$
27,963
$
141,210
$
—
In certain cases where there is limited activity or less transparency around inputs to valuation, the related assets or liabilities are
classified as Level 3. The following liabilities are measured at fair value at the end of each reporting period, with changes in fair value
recognized as a component of other income (expense), net on our consolidated statements of operations. See Note 10, “Long-Term
Obligations”, to our consolidated financial statements for further discussion of the following Level 3 liabilities:
(1)
The embedded derivative liability (the “HCRx Derivative”) associated with a Revenue Interest Financing Agreement (the
“Revenue Interest Agreement”) we entered into with HCRx in September 2019 and as amended in June 2021, August
2023 and May 2024 (as amended, the “Amended Revenue Interest Agreement”) is included as a component of the
deferred royalty obligation on our consolidated balance sheets. The valuation method for the HCRx Derivative
incorporates certain unobservable Level 3 key inputs including: (i) the probability-weighted net sales of XPOVIO and any
of our other future products, including worldwide net product sales, upfront payments, milestones and royalties; (ii) our
risk-adjusted discount rate; and (iii) the probability of a change in control occurring during the term of the instrument. The
HCRx Derivative was deemed to have a de-minimus value as of December 31, 2024 primarily due to a $56.2 million
decrease in the deferred royalty obligation during the year ended December 31, 2024.
(2)
The embedded derivative liabilities (the “2029 Notes Derivatives”) associated with the 2029 Notes are included as a
component of the 2029 Notes on our consolidated balance sheets. The valuation method for the 2029 Notes Derivatives
incorporates certain unobservable Level 3 key inputs including: (i) the volatility of our common stock price and (ii) our
estimated credit spread.
(3)
The warrants to purchase up to 45.8 million shares of our common stock issued in May 2024 (the “May 2024 Warrants”)
are classified as a long-term liability on our consolidated balance sheets. The valuation method for the May 2024
Warrants incorporates certain unobservable Level 3 key inputs including: (i) the volatility of our common stock price and
(ii) an estimate of when the May 2024 Warrants will be exercised based on an option pricing model.
142
The following table sets forth a summary of the changes in the estimated fair value of the liabilities described above, which are
all classified as Level 3 (in thousands):
HCRx Derivative
2029 Notes
Derivatives
May 2024 Warrants
Balance as of December 31, 2022
$
2,800
$
—
$
—
Balance as of December 31, 2023
$
2,800
$
—
$
—
Initial recognition
—
28,877
23,284
Change in fair value
(2,800)
(15,189)
(10,702)
Balance as of December 31, 2024
$
—
$
13,688
$
12,582
See Note 10, “Long-Term Obligations”, to our consolidated financial statements for further discussion on the fair value of our
debt instruments.
7. Investments
The following tables summarize our investments in debt securities, classified as available-for-sale (in thousands):
As of December 31, 2024
Amortized
Cost
Total
Unrealized
Gains
Total
Unrealized
Losses
Aggregate
Fair Value
Corporate debt securities
$
39,027
$
66
$
(2)
$
39,091
Commercial paper
3,165
1
—
3,166
U.S. government and agency securities
3,978
1
—
3,979
Total
$
46,170
$
68
$
(2)
$
46,236
As of December 31, 2023
Amortized
Cost
Total
Unrealized
Gains
Total
Unrealized
Losses
Aggregate
Fair Value
Corporate debt securities
$
78,004
$
79
$
(122)
$
77,961
Commercial paper
13,734
13
(3)
13,744
U.S. government and agency securities
47,543
4
(40)
47,507
Total
$
139,281
$
96
$
(165)
$
139,212
As of December 31, 2024 and 2023, we held 5 and 41 debt securities, respectively, that were in an unrealized loss position. The
unrealized losses as of December 31, 2024 and 2023 were attributable to changes in interest rates and do not represent credit losses.
We do not intend to sell the investments before recovery of their amortized cost bases, which may be at maturity. All our investments
mature within two years from December 31, 2024. The following tables summarize our debt securities in an unrealized loss position
for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous
unrealized loss position (in thousands):
As of December 31, 2024
Less than 12 Months
12 Months or Longer
Total
Aggregate
Related
Fair Value
Unrealized
Losses
Aggregate
Related
Fair Value
Unrealized
Losses
Aggregate
Related
Fair Value
Unrealized
Losses
Corporate debt securities
$
4,456
$
(2)
$
—
$
—
$
4,456
$
(2)
Commercial paper
1,175
—
—
—
1,175
—
Total
$
5,631
$
(2)
$
—
$
—
$
5,631
$
(2)
143
As of December 31, 2023
Less than 12 Months
12 Months or Longer
Total
Aggregate
Related
Fair Value
Unrealized
Losses
Aggregate
Related
Fair Value
Unrealized
Losses
Aggregate
Related
Fair Value
Unrealized
Losses
Corporate debt securities
$
50,322
$
(112)
$
4,279
$
(10)
$
54,601
$
(122)
Commercial paper
6,952
(3)
—
—
6,952
(3)
U.S. government and agency securities
27,191
(37)
1,997
(3)
29,188
(40)
Total
$
84,465
$
(152)
$
6,276
$
(13)
$
90,741
$
(165)
8. Stockholders’ Equity
Authorized Common Shares
On May 24, 2023, our stockholders approved an amendment to our Restated Certificate of Incorporation, as amended, to
increase the number of authorized shares of our common stock from 200,000,000 shares to 400,000,000 shares.
On January 30, 2025, our stockholders approved an amendment to our Restated Certificate of Incorporation, as amended, to
increase the number of authorized shares of our capital stock from 405,000,000 to 805,000,000 and the number of authorized shares of
our common stock from 400,000,000 shares to 800,000,000 shares. In addition, on January 30, 2025, our stockholders approved an
amendment to our Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued shares of common
stock at a ratio within the range of not less than 1-for-5 and not greater than 1-for-15, and a proportionate reduction in the number of
authorized shares of common stock, with the exact ratio within such range and the implementation and timing of such reverse stock
split to be determined at the sole discretion of our Board of Directors, without further approval or authorization of our stockholders.
Private Placement Offering
On December 5, 2022, we entered into a securities purchase agreement with certain institutional investors pursuant to which we
issued and sold, in a private placement offering of securities, an aggregate of 31,791,908 shares of common stock. We received
aggregate net proceeds of approximately $154.7 million.
Open Market Sale Agreement
On February 17, 2023, we entered into an Open Market Sale Agreement (the “2023 Open Market Sale Agreement”) with
Jefferies LLC, as agent (“Jefferies”). Under the 2023 Open Market Sale Agreement, we may issue and sell shares of our common
stock having an aggregate offering price of up to $100.0 million (the “Shares”) from time to time through Jefferies (the “2023 Open
Market Offering”). Upon entry into the 2023 Open Market Sale Agreement, we terminated our previous Open Market Sale Agreement
with Jefferies, as agent, which we had entered into in August 2018 (the “2018 Open Market Sale Agreement”), pursuant to which we
could issue and sell shares of our common stock having an aggregate offering price of up to $175.0 million (the “Open Market
Shares”).
Under the 2023 Open Market Sale Agreement, Jefferies may sell the Shares by methods deemed to be an “at the market
offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). We may sell
the Shares in amounts and at times to be determined by us from time to time subject to the terms and conditions of the 2023 Open
Market Sale Agreement, but we have no obligation to sell any of the Shares in the 2023 Open Market Offering.
We or Jefferies may suspend or terminate the offering of Shares upon notice to the other party and subject to other conditions.
We have agreed to pay Jefferies commissions for its services in acting as agent in the sale of the Shares in the amount of up to 3.0% of
gross proceeds from the sale of the Shares pursuant to the 2023 Open Market Sale Agreement. We have also agreed to provide
Jefferies with customary indemnification and contribution rights.
During the year ended December 31, 2022, we sold an aggregate of 3,991,652 Open Market Shares under the 2018 Open Market
Sale Agreement, for net proceeds of $35.1 million. We did not sell any Open Market Shares under the 2018 Open Market Sale
Agreement nor any Shares under the 2023 Open Market Sale Agreement during the years ended December 31, 2024 and 2023. As of
December 30, 2024, $100.0 million of Shares was available for issuance and sale under the 2023 Open Market Sale Agreement.
144
9. Stock-based Compensation
On May 19, 2022, our stockholders approved the 2022 Equity Incentive Plan (the “2022 Plan”), succeeding our 2013 Stock
Incentive Plan (the “2013 Plan”), which has expired and under which no further grants may be made. The 2022 Plan provides for the
grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, RSU awards and other
stock-based awards. On May 24, 2023 and May 29, 2024, our stockholders approved an amendment to the 2022 Plan to increase the
number of shares of our common stock available for issuance under the 2022 Plan by 5,000,000 and 6,000,000 shares, respectively. As
of December 31, 2024, there were 8,070,510 shares available for future grants under the 2022 Plan.
Under the terms of the 2022 Plan and the 2013 Plan, we granted stock options, RSUs, and PSUs to our employees, officers,
directors, consultants and advisors. Stock options have a ten-year term and an exercise price equal to the fair market value of a share
of our common stock on the grant date. Stock options and RSUs vest over a period of one to four years. PSUs will vest if certain
performance goals are achieved over a certain performance period. Certain portions of certain PSU awards vest based on continuous
service to the Company throughout the performance period even if the performance goal is not achieved.
During 2024, 2023, and 2022, we also granted stock options and RSUs through inducement grants outside of our stockholder
approved equity compensation plans as permitted under the Nasdaq Stock Market listing rules to certain employees to induce them to
accept employment with us (collectively, “Inducement Awards”). In February 2022, our Board approved the 2022 Inducement Stock
Incentive Plan (the “2022 Inducement Plan”) under which 850,000 shares of common stock were initially reserved for issuance for
inducement awards to be granted to newly hired full-time employees. In 2022, 2023, and 2024, the Board increased the number of
shares reserved for issuance under the 2022 Inducement Plan by 850,000, 1,200,000, and 1,000,000, respectively. We assessed the
terms of these Inducement Awards and determined there was no possibility that we would have to settle these awards in cash and
therefore, equity accounting was applied. As of December 31, 2024, there were 1,523,535 shares available for future grants under the
2022 Inducement Plan.
As of December 31, 2024, we had 28,745,131 shares reserved for issuance, which includes shares available for future grants and
outstanding stock options, RSUs and PSUs under the 2013 Plan, 2022 Plan, and Inducement Awards (including the Inducement
Awards granted under the 2022 Inducement Plan).
Stock-based Compensation Expense
Total stock-based compensation expense recognized was as follows (in thousands):
For the Years Ended December 31,
2024
2023
2022
Cost of sales
$
227
$
370
$
226
Research and development
4,841
6,529
14,351
Selling, general and administrative
13,358
14,810
20,822
Total
$
18,426
$
21,709
$
35,399
The total stock-based compensation expense recognized by award type was as follows (in thousands):
For the Years Ended December 31,
2024
2023
2022
Options
$
4,807
$
8,862
$
21,513
RSUs
10,961
10,662
12,587
PSUs
1,197
1,222
—
ESPP
691
963
1,299
Other
770
—
—
Total
$
18,426
$
21,709
$
35,399
We agreed with our financial advisor to settle our fee for services provided in connection with the May 2024 refinancing
transactions described in Note 10, “Long-Term Obligations”, through the private placement of 6,872,027 shares of our common stock,
resulting in $6.9 million being capitalized to our consolidated balance sheet as a debt issuance cost and $0.8 million being expensed to
selling, general and administrative expense as stock-based compensation expense on our consolidated statements of operations during
the year ended December 31, 2024.
145
During the year ended December 31, 2022, we accelerated the vesting and extended the exercise date of certain stock-based
awards granted to our former Chief Executive Officer and former Chief Scientific Officer in connection with their departure from the
Company in May 2022. These modifications resulted in the recognition of incremental stock-based compensation expense of $7.4
million for the year ended December 31, 2022.
Stock Options
The following table summarizes stock option activity related to the 2013 Plan, 2022 Plan, and Inducement Awards (including
the stock option Inducement Awards granted under the 2022 Inducement Plan):
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic
Value
(in
thousands)
Options outstanding as of December 31, 2023
8,620,810
$
10.79
5.3
$
—
Granted
515,902
$
0.91
Forfeited
(2,671,431)
$
11.47
Expired
(82,000)
$
38.13
Options outstanding as of December 31, 2024
6,383,281
$
9.33
4.4
$
—
Options exercisable as of December 31, 2024
5,362,973
$
10.31
3.6
$
—
There were no stock options exercised for the year ended December 31, 2024. The total intrinsic value of stock options
exercised for the years ended December 31, 2023 and 2022 was less than $0.1 million and $0.3 million, respectively.
The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model. The
following table summarizes the assumptions used in calculating the fair value of the stock option awards:
For the Years Ended December 31,
2024
2023
2022
Volatility
80%
80%
79%-81%
Expected term (in years)
5.5-6.1
5.5-5.9
5.5-6.1
Risk-free interest rate
4.43%-4.63%
3.75%-4.21%
1.69%-4.23%
Dividend
—%
—%
—%
We use the simplified method to calculate the expected term as our historical exercise data does not provide a reasonable basis
upon which to estimate the expected term. The expected term is applied to the stock option grant group as a whole, as we do not
expect substantially different exercise or post-vesting termination behavior among our employee population. Our expected stock price
volatility assumption is based on the historical volatility of our publicly traded stock. The risk-free interest rate is based on a treasury
instrument whose term is consistent with the expected term of the stock options. We account for forfeitures as they occur.
Using the Black-Scholes option-pricing model, the weighted-average grant date fair values of options granted during the years
ended December 31, 2024, 2023 and 2022 was $0.64, $1.54 and $5.83 per share, respectively.
As of December 31, 2024, there was $2.6 million of unrecognized compensation expense related to unvested stock option
awards, which is expected to be recognized over a weighted-average period of 1.1 years.
146
Restricted Stock Units and Performance-Based Restricted Stock Units
The following is a summary of RSU and PSU activity for the 2013 Plan, 2022 Plan, and Inducement Awards (including RSU
Inducement Awards granted under the 2022 Inducement Plan):
Number of
Shares
Underlying
RSUs and PSUs
Weighted
-Average
Grant Date
Fair Value
Unvested as of December 31, 2023
7,666,426
$
4.40
Granted
8,889,717
$
1.42
Forfeited
(1,351,473)
$
2.52
Vested
(2,436,865)
$
5.04
Unvested as of December 31, 2024
12,767,805
$
2.41
The total fair value of RSUs and PSUs that vested during the years ended December 31, 2024, 2023 and 2022 was $2.8 million,
$2.9 million, and $8.3 million, respectively. As of December 31, 2024, there was $19.0 million of unrecognized compensation
expense related to unvested RSUs and PSUs, which is expected to be recognized over a weighted-average period of 1.8 years.
Employee Stock Purchase Plan
We have an ESPP that permits eligible employees to enroll in six-month offering periods. Participants may purchase shares of
our common stock, through payroll deductions, at a price equal to 85% of the fair market value of the common stock on the first or
last day of the applicable offering period, whichever is lower. Purchase dates under the ESPP occur on or about May 1 and November
1 each year. In 2013, our stockholders approved an annual increase in the number of shares of common stock authorized for issuance
pursuant to the ESPP to be added on the first day of each fiscal year, commencing on January 1, 2015 and ending on December 31,
2023, equal to the lesser of 484,848 shares of our common stock, 1% of the number of outstanding shares on such date, or an amount
determined by the Board (the “Evergreen Provision”). On May 24, 2023, our stockholders approved an amendment and restatement of
our ESPP (the “Amended & Restated ESPP”), which (i) eliminated the Evergreen Provision and (ii) increased the number of shares of
common stock authorized for issuance under the ESPP by 1,500,000 shares. On May 29, 2024, our stockholders approved an
amendment to the Amended & Restated ESPP to increase the number of shares of our common stock available for issuance under the
Amended & Restated ESPP by 5,000,000 shares. As of December 31, 2024, 4,655,260 shares of our common stock remained
available for issuance under the Amended & Restated ESPP.
During the years ended December 31, 2024, 2023 and 2022, $1.5 million, $1.1 million and $2.3 million, respectively, was
withheld from employees, on an after-tax basis, in order to purchase 1,977,558, 638,182 and 508,391 shares of our common stock,
respectively. As of December 31, 2024, there was $0.2 million of total unrecognized stock-based compensation expense related to the
Amended & Restated ESPP. The expense is expected to be recognized over a period of four months.
The fair value of the option component of the shares purchased under the Amended & Restated ESPP was estimated using the
Black-Scholes option-pricing model with the following weighted-average assumptions:
For the Years Ended December 31,
2024
2023
2022
Volatility
77% - 80%
77% - 92%
68% - 131%
Expected term (in years)
0.4-0.5
0.5
0.5
Risk-free interest rate
4.42% - 5.51%
4.58% - 5.51%
0.06% - 4.58%
Dividend
—%
—%
—%
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10. Long-Term Obligations
2025 Notes
In October 2018, we issued $172.5 million aggregate principal amount of the 2025 Notes in a private offering to qualified
institutional buyers in reliance on Rule 144A under the Securities Act. In connection with the issuance of the 2025 Notes, we incurred
$5.6 million of debt issuance costs, which was being amortized to interest expense using the effective interest method over seven
years. In May 2024, we exchanged $148.0 million aggregate principal amount of our 2025 Notes for (i) $111.0 million aggregate
principal amount of our 2029 Notes and (ii) the May 2024 Warrants to purchase up to 45.8 million shares of our common stock. The
2029 Notes and the May 2024 Warrants are described in more detail below. $24.5 million in aggregate principal amount of the 2025
Notes remained outstanding following completion of the May 2024 exchange transactions (the “Remaining 2025 Notes”) and as of
December 31, 2024.
The Remaining 2025 Notes are senior unsecured obligations and bear interest at a rate of 3.00% per year payable semiannually
in arrears on April 15 and October 15 of each year. Upon conversion, the Remaining 2025 Notes will be converted into cash, shares of
our common stock, or a combination of cash and shares of our common stock, at our election. The Remaining 2025 Notes are subject
to redemption at our option, in whole or in part, if the conditions described below are satisfied. Holders may require us to repurchase
their Remaining 2025 Notes following a fundamental change (as defined within the indenture governing the 2025 Notes) at a cash
repurchase price generally equal to the principal amount of the Remaining 2025 Notes to be repurchased, plus accrued and unpaid
interest. The Remaining 2025 Notes will mature on October 15, 2025, unless earlier converted, redeemed or repurchased in
accordance with their terms. Subject to satisfaction of certain conditions and during the periods described below, the Remaining 2025
Notes may be converted at an initial conversion rate of 63.0731 shares of common stock per $1,000 principal amount of the
Remaining 2025 Notes (equivalent to an initial conversion price of approximately $15.85 per share of common stock).
Holders of the Remaining 2025 Notes may convert all or any portion of their Remaining 2025 Notes, in multiples of $1,000
principal amount, at their option at any time prior to the close of business on the business day immediately preceding June 15, 2025
only under the following circumstances:
(1)
during any calendar quarter, if the last reported sale price of our common stock for at least 20 trading days (whether or not
consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the
immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Remaining 2025
Notes on each applicable trading day;
(2)
during the five-business day period immediately after any five consecutive trading day period (the “Measurement Period”)
in which the trading price per $1,000 principal amount of Remaining 2025 Notes for each trading day of the Measurement
Period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on
each such trading day;
(3)
if we call the Remaining 2025 Notes for redemption, until the close of business on the business day immediately
preceding the redemption date; or
(4)
upon the occurrence of specified corporate events as described within the indenture governing the 2025 Notes.
As of December 31, 2024, none of the above circumstances had occurred and as such, the Remaining 2025 Notes could not have
been converted.
We may redeem for cash all or part of the Remaining 2025 Notes at our option if the last reported sale price of our common
stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during
any 30 consecutive trading day period ending within five trading days prior to the date on which we send any notice of redemption.
The redemption price will be 100% of the principal amount of the Remaining 2025 Notes to be redeemed, plus accrued and unpaid
interest, if any. In addition, calling any convertible note for redemption will constitute a make-whole fundamental change with respect
to that convertible note, in which case the conversion rate applicable to the conversion of that convertible note, if it is converted in
connection with the redemption, will be increased in certain circumstances. We did not redeem any of the Remaining 2025 Notes as of
December 31, 2024.
148
The outstanding balances of the 2025 Notes consisted of the following (in thousands):
As of December 31,
2024
2023
Principal
$
24,500
$
172,500
Less: unamortized debt issuance costs
(74)
(1,581)
2025 Notes
$
24,426
$
170,919
We determined the expected life of the 2025 Notes was equal to its seven-year term and the effective interest rate was 3.53%.
As of December 31, 2024, the “if-converted value” did not exceed the remaining principal amount of the 2025 Notes. The fair value of
the 2025 Notes is influenced by market interest rates, our stock price and stock price volatility, and has been classified as Level 2
within the fair value hierarchy as it uses quoted prices in active markets. The estimated fair value of the 2025 Notes as of
December 31, 2024 and 2023 was $19.1 million and $87.9 million, respectively.
The following table sets forth total interest expense recognized related to the 2025 Notes (in thousands):
For the Years
Ended December 31,
2024
2023
2022
Contractual interest expense
$
2,354
$
5,175
$
5,175
Amortization of debt issuance costs
382
814
812
Total interest expense
$
2,736
$
5,989
$
5,987
Future minimum payments on the Remaining 2025 Notes were as follows (in thousands):
Years ended December 31,
Future Minimum
Payments
Minimum payments due in 2025
$
25,236
Less: interest expense and unamortized debt issuance costs
(810)
2025 Notes
$
24,426
Senior Secured Term Loan
On May 8, 2024, we entered into a credit and guaranty agreement (the “Credit Agreement”) with certain existing holders of the
2025 Notes and HCRx, which provides for a senior secured term loan facility of $100.0 million (the “Term Loan”). The Term Loan
matures in May 2028 and bears interest at a variable rate equal to the applicable secured overnight financing rate plus 9.25%, subject
to a floor of 3.00%. Principal payments under the Term Loan will begin in June 2026, and consist of quarterly cash payments in the
amount of 6.25% of the aggregate principal amount of the Term Loan, with the remaining principal due when the Term Loan matures
in May 2028.
We can prepay the Term Loan at any time. All repayments, including prepayments, are subject to a redemption fee of 3.00% of
the principal paid. Prepayments made before May 8, 2027 are subject to a prepayment premium ranging from 3.00% to 5.00% of the
principal prepaid. The prepayment premium for prepayments made before May 8, 2025 also includes the unpaid interest that would
have accrued on the amount being prepaid through May 8, 2025. In addition, we are required to repay the Term Loan with proceeds
from certain asset sales and condemnation events, subject, in some cases, to reinvestment rights.
All obligations under the Credit Agreement are secured on a first priority basis, subject to certain exceptions, by substantially all
of our assets. The Credit Agreement contains customary covenants, including a requirement to maintain cash, cash equivalents and
investments of at least $25.0 million at all times, and restrictions on indebtedness, liens, investments, fundamental changes, asset
sales, licensing transactions, dividends, modifications to material agreements, payment of subordinated indebtedness, and other
matters customarily restricted in such agreements. Specifically, we are prohibited from exclusively licensing, selling or otherwise
disposing of U.S. rights to oncology indications of selinexor. As of December 31, 2024, we were in compliance with these covenants.
If certain events of default occur, the Term Loan may be due and payable immediately. These events include the withdrawal of
approval of certain indications of selinexor, payment defaults, covenant defaults, bankruptcy, cross-defaults to certain other
agreements, change in control and lien priority.
149
The outstanding balance of the Term Loan consisted of the following (in thousands):
As of December 31, 2024
Principal
$
100,000
Less: unamortized debt issuance costs
(5,397)
Term Loan
$
94,603
We determined the expected life of the Term Loan was equal to its four-year term and the effective interest rate is
approximately 17%. The principal value of the Term Loan approximates its fair value due to the variable interest rate. In connection
with the issuance of the Term Loan, we incurred $6.8 million of debt issuance costs, which are being amortized to interest expense
using the effective interest method over four years. We recognized $10.8 million of interest expense related to the Term Loan during
the year ended December 31, 2024, which consisted of $9.4 million of contractual interest expense and $1.4 million of debt issuance
cost amortization.
Future minimum payments on the Term Loan as of December 31, 2024 were as follows (in thousands):
Years ended December 31,
Future Minimum
Payments
2025
$
13,854
2026
32,517
2027
35,707
2028
60,607
Total minimum payments
142,685
Less: interest expense and unamortized debt issuance costs
(48,082)
Term Loan
$
94,603
2029 Notes
On May 13, 2024, pursuant to privately-negotiated agreements with certain holders of the 2025 Notes, we exchanged $148.0
million aggregate principal amount of 2025 Notes for (i) $111.0 million aggregate principal amount of the 2029 Notes and (ii) May
2024 Warrants to purchase up to 45.8 million shares of our common stock.
On May 13, 2024, we also issued $5.0 million aggregate principal amount of the 2029 Notes to HCRx in exchange for a $5.0
million reduction in our deferred royalty obligation. The 2029 Notes are second-lien secured obligations of the Company and bear
interest at a rate of 6.00% per year payable quarterly in arrears beginning on June 30, 2024. The 2029 Notes will mature on May 13,
2029, unless earlier converted, redeemed or repurchased in accordance with their terms.
The 2029 Notes will be convertible into shares of our common stock at an initial conversion rate of 444.4444 shares per $1,000
principal amount (the “Conversion Option”), which is equivalent to a conversion price of $2.25 per share of common stock and
subject to adjustment upon the occurrence of certain events and customary anti-dilution adjustments. Upon conversion of the 2029
Notes, we will deliver shares of our common stock plus cash in lieu of any fractional shares to the holders of the 2029 Notes. Holders
of the 2029 Notes may convert their 2029 Notes at any time prior to the close of business on May 13, 2029.
On or after May 13, 2026, we may redeem for cash all or a portion of the 2029 Notes if the last reported sale price of our
common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive
trading day period (the “Redemption Option”). The redemption price will be equal to the principal amount of the 2029 Notes to be
redeemed, plus any accrued and unpaid interest as of the redemption date. The redemption price will also include an amount equal to
the aggregate value of all remaining interest payments on the 2029 Notes to be redeemed from the redemption date through maturity,
which is payable in cash or, under certain circumstances and if we so elect, in shares of our common stock or a combination of cash
and our common stock. Any shares of our common stock used to pay this amount will be valued based on their market price at the
time of the redemption. In some cases, we will be required to make an offer to repurchase the 2029 Notes at a 101% premium with
proceeds from certain asset sales, subject, in some cases, to reinvestment rights.
If certain corporate events occur prior to the maturity date, a holder that elects to convert their 2029 Notes may be entitled to
receive a payment from us, in cash or, under certain circumstances and if we so elect, in shares of our common stock, or a combination
of cash and our common stock, based on an increase in the conversion rate in connection with such corporate event. In addition, if we
undergo certain fundamental changes, holders may require us to repurchase for cash all or any portion of their 2029 Notes at a price
equal to the principal amount of the 2029 Notes to be repurchased, plus any accrued and unpaid interest as of the repurchase date.
150
No holder will be entitled to receive shares of our common stock in connection with the 2029 Notes if such receipt would cause
the holder (together with its affiliates) to own more than 4.99% (subject to increase or decrease at the election of the holder, but in no
event to exceed 19.99%) of the number of shares of the common stock outstanding immediately after giving effect to such event. In
addition, a holder may elect to receive pre-funded warrants with respect to any shares of common stock that would otherwise be
issuable in connection with the 2029 Notes but for the foregoing ownership limitations. These pre-funded warrants will have an
exercise price of $0.0001 per share and will not expire. As of December 31, 2024, no pre-funded warrants have been issued.
All obligations under the 2029 Notes are secured on a second priority basis by the same collateral that secures the obligations
under the Term Loan. The 2029 Notes contain covenants and events of default that are generally consistent with the Term Loan. As of
December 31, 2024, we were in compliance with these covenants.
We accounted for the exchange of the 2025 Notes for the 2029 Notes and May 2024 Warrants as a debt extinguishment because
the terms of the 2029 Notes are substantially different from the terms of the 2025 Notes. We recognized a $44.7 million gain on
extinguishment of debt during the year ended December 31, 2024, the components of which are shown in the following table (in
thousands):
Consolidated Balance Sheet Line
Transaction
Amount
Convertible senior notes due 2025
Extinguishment of 2025 Notes - principal
$
148,000
Convertible senior notes due 2025
Extinguishment of 2025 Notes - debt issuance costs
(1,125)
Convertible senior notes due 2029
Issuance of 2029 Notes recorded at fair value
(78,889)
Common stock warrants
Issuance of May 2024 Warrants recorded at fair value
(23,284)
Gain on extinguishment of debt
$
44,702
As required by extinguishment accounting, the 2029 Notes received by the holders of the 2025 Notes were recorded at their
initial fair value of $78.9 million as of May 8, 2024, which was estimated using a risk-neutral convertible bond model implemented
using a binomial lattice which incorporates certain unobservable Level 3 key inputs including: (i) the volatility of our common stock
price and (ii) our estimated credit spread. The $32.1 million difference between the initial fair value of $78.9 million and the principal
amount of $111.0 million will be amortized to interest expense over the five-year term of the 2029 Notes using the effective interest
method over five years.
In connection with the issuance of the 2029 Notes, we incurred $5.0 million of debt issuance costs, which are being amortized to
interest expense using the effective interest method over five years.
We have determined that the Conversion Option and Redemption Option are embedded derivatives that require bifurcation from
the debt instrument and fair value recognition. These derivatives are referred to as the 2029 Notes Derivatives in Note 6, “Fair Value
Measurements”, to our consolidated financial statements. The 2029 Notes Derivatives were bifurcated at their initial fair value of
$28.9 million.
The following is a summary of the debt issuance costs and discounts being amortized to interest expense over the term of the
2029 Notes using the effective interest method, resulting in an effective interest rate of approximately 27% (in thousands):
Amount
Initial fair value adjustment
$
32,111
Debt issuance costs
4,981
Bifurcation of embedded derivatives
28,877
Debt issuance costs and discounts related to the 2029 Notes
$
65,969
The outstanding balance of the 2029 Notes consisted of the following (in thousands):
As of December 31, 2024
Principal
$
116,000
Less: unamortized debt issuance costs and discounts
(61,343)
Plus: fair value of bifurcated derivative
13,688
2029 Notes
$
68,345
We determined the expected life of the 2029 Notes was equal to its five-year term. As of December 31, 2024, the “if-converted
value” did not exceed the remaining principal amount of the 2029 Notes. The fair value of the 2029 Notes is influenced by market
151
interest rates, our stock price and stock price volatility, and has been classified as Level 3 within the fair value hierarchy as it uses
unobservable inputs. The estimated fair value of the 2029 Notes as of December 31, 2024 was approximately $81.7 million.
We recognized $9.0 million of interest expense related to the 2029 Notes during the year ended December 31, 2024, which
consisted of $4.6 million of amortization and $4.4 million of contractual interest expense.
Future minimum payments on the 2029 Notes as of December 31, 2024 were as follows (in thousands):
Years ended December 31,
Future Minimum
Payments
2025
$
6,960
2026
6,960
2027
6,960
2028
6,960
2029
118,552
Total minimum payments
146,392
Less: interest expense and unamortized debt issuance costs and discounts
(91,735)
Plus: fair value of bifurcated derivative
13,688
2029 Notes
$
68,345
Deferred Royalty Obligation
In September 2019, we entered into the Revenue Interest Agreement with HCRx, which was subsequently amended in June
2021, August 2023, and May 2024, under which we have received a total of $135.0 million, less certain transaction expenses. In
exchange for this amount, HCRx receives payments from us at a percentage of net revenues of selinexor and any of our other future
products, including worldwide net product sales and upfront payments, milestones, and royalties. Total payments to HCRx are capped
at $263.3 million (the “Payment Cap”).
In May 2024, we entered into an amendment (the “HCRx Amendment”) to the Amended Revenue Interest Agreement with
HCRx, pursuant to which we:
(1)
made a cash payment to HCRx in the amount of $49.5 million;
(2)
delivered to HCRx a Term Loan note with a principal amount of $15.0 million; and
(3)
delivered to HCRx 2029 Notes with a principal amount of $5.0 million.
As the repayment of the funded amount is contingent upon worldwide net product sales and upfront payments, milestones, and
royalties, the repayment term may be shortened or extended depending on actual worldwide net product sales and upfront payments,
milestones, and royalties. The repayment period expires on the earlier of (i) the date in which HCRx has received cash payments
totaling $263.3 million or (ii) the legal maturity date of October 1, 2031. If HCRx has not received total payments equal to $263.3
million by October 1, 2031, we will be required to pay an amount equal to $135.0 million plus a specific annual rate of return less
payments previously paid to HCRx.
In the event of a change of control, an event of default, including, among others, our failure to pay any amounts due to HCRx,
insolvency, our failure to pay indebtedness when due, the revocation of regulatory approval of XPOVIO in the U.S. or our breach of
any covenant contained in the Amended Revenue Interest Agreement and our failure to cure the breach within the prescribed
timeframe, we are obligated to pay HCRx an amount equal to $263.3 million less payments previously paid to HCRx.
After giving effect to the above, as of May 2024, we had made aggregate payments under the Amended Revenue Interest
Agreement totaling $135.0 million and the maximum remaining amount we owed to HCRx was $128.3 million. After May 2024, we
are obligated to make quarterly payments in the amount of a fixed percentage of our net product revenues, upfront payments,
milestones, and royalties earned in the applicable quarter, subject to the provisions in the Amended Revenue Interest Agreement
described earlier in this footnote.
The HCRx Amendment also subordinates the indebtedness and liens under the Amended Revenue Interest Agreement to the
indebtedness and liens under the Term Loan, and, subject to certain exceptions, makes the indebtedness and liens under the Amended
Revenue Interest Agreement pari passu with the indebtedness and liens under the 2029 Notes.
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We have evaluated the terms of the Amended Revenue Interest Agreement and concluded that its features are similar to those of
a debt instrument. Accordingly, we have accounted for the transaction as long-term debt and presented it as a deferred royalty
obligation on our consolidated balance sheets.
We have also determined that the repayment of $263.3 million, less all payments made to date, upon a change of control is an
embedded derivative that requires bifurcation from the debt instrument and fair value recognition as further described in Note 6, “Fair
Value Measurements”.
As of December 31, 2024, we have made $143.4 million in payments to HCRx. The effective interest rate as of December 31,
2024 was approximately 16%. We have incurred debt issuance costs totaling $1.7 million, which have been netted against the debt and
are being amortized over the estimated term of the debt using the effective interest method, adjusted on a prospective basis for changes
in the underlying assumptions and inputs.
The carrying value of the deferred royalty obligation as of December 31, 2024 and 2023 was $73.5 million and $129.7 million,
respectively, which included the carrying amount of the debt, the fair value of the bifurcated embedded derivative liability, and
unamortized debt issuance costs. The carrying value of the deferred royalty obligation approximated fair value as of December 31,
2024 and 2023 and was based on our estimates of future payments to HCRx over the life of the arrangement, which are considered
Level 3 inputs.
11. Common Share Warrants
Equity Classified Common Share Warrants
On December 5, 2022, we issued to certain institutional investors, in a private placement offering of securities, warrants to
purchase up to 9,537,563 shares of common stock at an exercise price of $6.36 per share. The warrants are exercisable through
December 7, 2027. As of December 31, 2024, all of these warrants were outstanding.
On August 1, 2023, we issued warrants to HCRx to purchase up to 250,000 shares of common stock at an exercise price of
$2.25 per share. In May 2024, the exercise price was reduced to $1.10 per share in connection with the HCRx Amendment. The
warrants are exercisable through August 1, 2030. As of December 31, 2024, all of these warrants were outstanding.
Liability-Classified Common Share Warrants
In connection with the exchange of the 2025 Notes for the 2029 Notes described in further detail in Note 10, “Long-Term
Obligations”, we issued the May 2024 Warrants to certain 2025 Note holders to purchase up to 45,776,213 shares of our common
stock at an exercise price of $1.10 per share, subject to customary antidilution adjustments. The May 2024 Warrants are exercisable
through May 13, 2029. If the closing price of our common stock exceeds two times the then current exercise price of the warrants,
which is currently equal to $2.20, for 20 trading days during any 30 consecutive trading day period, we can require the holder to
exercise the May 2024 Warrants. As of December 31, 2024, the May 2024 Warrants to purchase 45,776,212 shares of our common
stock were outstanding. Under the terms of the May 2024 Warrants, a holder cannot receive shares of our common stock if such
receipt would cause the holder (together with its affiliates) to own more than 4.99% (subject to increase or decrease at the election of
the holder, but in no event to exceed 19.99%) of our common stock outstanding on the date of receipt. In addition, a holder may elect
to receive pre-funded warrants with respect to any common stock that would otherwise be issuable but for the foregoing ownership
limitations. These pre-funded warrants will have an exercise price of $0.0001 per share and will not expire. As of December 31, 2024,
no pre-funded warrants have been issued.
The May 2024 Warrants were classified as a long-term liability in our consolidated balance sheet because they did not meet the
criteria for equity classification and are measured at fair value at the end of each reporting period as further described in Note 6, “Fair
Value Measurements.”
12. Commitments and Contingencies
Operating Leases
We determine if an arrangement contains a lease at contract inception based on the facts and circumstances in the arrangement.
Lease classification, recognition, and measurement are then determined at the lease commencement date. For arrangements that
contain a lease we (i) identify lease and non-lease components, (ii) determine the consideration in the contract, (iii) determine whether
the lease is an operating or financing lease; and (iv) recognize lease right-of-use assets and liabilities. Lease liabilities and their
153
corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. We have
elected not to separate lease components and non-lease components for leases of office or other space.
The interest rate implicit in lease contracts is typically not readily determinable and as such, we use our incremental borrowing
rate based on the information available at the lease commencement date, which represents an internally developed rate that would be
incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic
environment. In determining the incremental borrowing rate, we consider (i) our estimated public credit rating, (ii) our observable debt
yields, as well as other bonds in the market issued by other companies with similar credit ratings as us, and (iii) adjustments necessary
for collateral, lease term, and inflation or foreign currency.
Most leases include options to renew and/or terminate the lease, which can impact the lease term. The exercise of these options
is at our discretion and we do not include any of these options within the expected lease term as we are not reasonably certain we will
exercise these options. Leases that have a lease term of 12 months or less at commencement date are excluded from this treatment and
are recognized on a straight-line basis over the term of the lease.
Fixed, or in substance fixed, lease payments on our operating lease are recognized over the expected term of the lease on a
straight-line basis. Variable lease expenses that are not considered fixed, or in substance fixed, are recognized as incurred. Fixed and
variable lease expense on our operating lease is recognized within operating expenses on our consolidated statements of operations.
We are party to an operating lease where we currently lease a total of 98,502 square feet of office and research space in Newton,
Massachusetts. In November 2024, we amended this lease (as amended, the “Newton, MA Lease”) which reduced the leased premises
to 52,224 square feet of solely office space as of October 1, 2025 and extended the term of the Newton MA Lease for an additional
five years, from October 1, 2025 to September 30, 2030. The lease contains a renewal option for an additional five years which was
not included in the lease term as its exercise is not reasonably certain. Pursuant to the Newton, MA Lease, we have provided a security
deposit in the form of a cash-collateralized letter of credit in the amount of $0.3 million, which is classified within long-term restricted
cash on the consolidated balance sheets.
The Newton, MA Lease provides for increases in future minimum annual rental payments, as defined in the lease agreement.
The operating lease expense for each of the years ended December 31, 2024, 2023 and 2022 was $2.8 million. Variable lease costs
pertain to reimbursement of certain landlord expenses and were immaterial for each of the years ended December 31, 2024, 2023 and
2022.
In addition, we are party to certain short-term leases having a term of twelve months or less at the commencement date. We
recognize short-term lease expense on a straight-line basis and do not record a related right-of use asset or lease liability for such
leases. These costs were immaterial for the years ended December 31, 2024, 2023 and 2022.
We review the carrying values of our lease assets for possible impairment whenever events or changes in circumstances indicate
that the carrying amounts of the assets may not be recoverable. We have not recorded an impairment in any period since inception.
Lease Commitments
As of December 31, 2024, future minimum lease payments under non-cancellable operating lease agreements for which we have
recognized operating lease right-of-use assets and liabilities are as follows (in thousands):
Years ending December 31,
Future
Minimum
Payments
2025
$
1,490
2026
1,880
2027
1,932
2028
1,985
2029
2,037
2030
1,557
Total minimum lease payments
10,881
Less: present value adjustment
(3,731)
Operating lease liabilities
$
7,150
154
As of December 31, 2024, the remaining lease term on the Newton, MA Lease was 5.8 years and the discount rate used to
calculate the operating lease liability was 14.5%.
Litigation
From time to time we may face legal claims or actions in the normal course of business. There are no outstanding legal claims or
material actions as of December 31, 2024.
13. Accrued Expenses
Accrued expenses consisted of the following (in thousands):
As of December 31,
2024
2023
Research and development costs
$
26,711
$
19,601
Compensation and employee-related costs
13,915
16,510
Interest
1,857
13,454
Product rebates, discounts, reserves, and royalties
13,397
4,706
Other
4,772
7,123
Total accrued expenses
$
60,652
$
61,394
14. Property and Equipment, Net
Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization
expense is recorded using the straight-line method over the estimated useful lives of the respective assets, generally three to five years.
Leasehold improvements are amortized over the shorter of the lease term or the estimated useful economic lives of the related assets.
Expenditures for maintenance and repairs are charged to expense while the costs of significant improvements are capitalized. Upon
retirement or sale, the costs of the assets disposed of and the related accumulated depreciation or amortization is removed from the
consolidated balance sheets and any related gains or losses are reflected on the consolidated statements of operations. Property and
equipment, net consisted of the following (in thousands):
As of December 31,
Estimated Useful Life
(In Years)
2024
2023
Laboratory equipment
4
$
972
$
830
Furniture and fixtures
5
654
654
Office and computer equipment
3
587
809
Leasehold improvements
Lesser of useful life or lease term
4,878
4,878
Total property and equipment
7,091
7,171
Less accumulated depreciation and amortization
(6,691)
(6,565)
Total property and equipment, net
$
400
$
606
15. 401(k) Plan
We have a 401(k) retirement and profit-sharing plan (the “401(k) Plan”) covering all qualified employees. The 401(k) Plan
allows each participant to contribute a portion of their base wages up to an amount not to exceed an annual statutory maximum.
Effective January 1, 2011, we adopted a Safe Harbor Plan that provides a Company match up to 4% of components of employee
compensation. We contributed a match of $2.5 million, $3.7 million, and $3.1 million to the 401(k) Plan for the years ended
December 31, 2024, 2023 and 2022, respectively.
16. Income Taxes
We recorded an income tax provision of $0.1 million, $0.3 million, and $0.4 million for the years ended December 31, 2024,
2023 and 2022, respectively. Our current income tax provision consists of state income tax due from our KSC entity through its
dissolution in October 2024, as well as foreign income taxes due from our German and Israel subsidiaries, both of which operate on a
cost-plus profit margin. We did not have a deferred income tax provision for the years ended December 31, 2024, 2023 and 2022.
155
The components of loss before income taxes were as follows (in thousands):
For the Years Ended December 31,
2024
2023
2022
Foreign
$
80
$
247
$
892
U.S.
(76,445)
(143,023)
(165,814)
Total
$
(76,365)
$
(142,776)
$
(164,922)
Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and
income tax purposes. The significant components of our deferred tax assets are comprised of the following (in thousands):
As of December 31,
2024
2023
Deferred tax assets:
U.S. and state net operating loss carryforwards
$
189,335
$
198,158
Research and development credits
117,607
108,682
Fixed assets and intangible assets
23,657
25,028
Stock-based compensation
5,365
8,500
Accruals and other temporary differences
8,592
6,380
Interest Expense - Sec 163(j)
7,234
6,894
Lease liability
1,752
1,461
Deferred royalty obligation
18,439
8,310
Capitalized research and development
64,919
47,986
Deferred royalty embedded derivative
6,437
671
Debt restructuring
3,522
—
Unicap - Sec 263A
1,227
800
Valuation allowance
(446,646)
(411,838)
Total deferred tax assets
1,440
1,032
Deferred tax liabilities:
Convertible debt amortization
—
(7)
Right-of-use asset
(1,440)
(1,025)
Total deferred tax liabilities
(1,440)
(1,032)
Net deferred tax assets
$
—
$
—
The Tax Cuts and Jobs Act of 2017 (“TCJA”) requires taxpayers to capitalize and amortize research and development
expenditures, resulting in capitalized research and development costs of $120.7 million and $135.9 million as of December 31, 2024
and 2023, respectively. We will amortize these costs for tax purposes over five years for research and development performed in the
U.S. and over 15 years for research and development performed outside the U.S.
On May 13, 2024, we exchanged $148.0 million aggregate principal amount of the 2025 Notes for (i) $111.0 million aggregate
principal amount of the 2029 Notes and (ii) May 2024 Warrants to purchase up to 45.8 million shares of our common stock, as
described in further detail in Note 10, “Long-Term Obligations”. This created $93.2 million of taxable income related to the
cancellation of debt, which was fully offset by our net operating loss carryforwards.
We have evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets. Based on our
history of operating losses, we have concluded that it is more likely than not that the benefit of our deferred tax assets will not be
realized. Accordingly, we have provided a full valuation allowance for deferred tax assets as of December 31, 2024 and 2023. The
valuation allowance increased by approximately $34.8 million during the year ended December 31, 2024 primarily due to increased
capitalization of research and development expenditures as required by changes to the tax laws from the TCJA as described above.
156
A reconciliation of income tax expense computed at the statutory federal income tax rate to income taxes as reflected in the
financial statements is as follows:
For the Years Ended December 31,
2024
2023
2022
Federal income tax expense at statutory rate
21.0%
21.0%
21.0%
State income tax, net of federal benefit
3.9%
4.0%
4.0%
Permanent differences
(4.6)%
(1.0)%
(3.3)%
Research and development credit
10.5%
7.3%
6.3%
Change in valuation allowance
(45.6)%
(22.9)%
(29.3)%
Stock-based compensation and 162(m) adjustment
(5.3)%
(5.0)%
(2.0)%
Provision to return adjustments
0.2%
(2.8)%
—%
Embedded derivative and warrant liabilities
16.6%
—%
—%
Other
3.0%
(0.8)%
3.1%
Effective income tax rate
(0.3)%
(0.2)%
(0.2)%
As of December 31, 2024, 2023 and 2022, we had U.S. federal net operating loss carryforwards of approximately $728.1
million, $768.5 million and $737.4 million, respectively, which may be able to offset future income tax liabilities. Of the $728.1
million carryforward as of December 31, 2024, $476.4 million of the carryforward has an indefinite life and $251.7 million will expire
at various dates through 2037. As of December 31, 2024, 2023 and 2022, we had U.S. state net operating loss carryforwards of
approximately $645.2 million, $655.7 million and $616.4 million, respectively, which may be available to offset future state income
tax liabilities and expire at various dates through 2044. As of December 31, 2024, 2023 and 2022, we did not have any foreign net
operating loss carryforwards to offset future foreign income tax liabilities.
As of December 31, 2024, 2023 and 2022, we had federal research and development and orphan drug tax credit carryforwards
of approximately $107.3 million, $99.3 million and $90.9 million, respectively, available to reduce future tax liabilities, which expire
at various dates through 2044. As of December 31, 2024, 2023 and 2022, we had state research and development tax credit
carryforwards of approximately $13.1 million, $11.9 million and $12.0 million, respectively, available to reduce future tax liabilities,
which expire at various dates through 2039. We completed a study of research and development tax credits through December 31,
2022 and adjusted our deferred tax asset for the results of that study. For the years ended December 31, 2024 and 2023, we generated
research credits but have not conducted a study to document the qualified activities. This study may result in an adjustment to our
research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are
being presented as an uncertain tax position. A full valuation allowance has been provided against our research and development
credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the
research and development credit carryforwards and the valuation allowance.
Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and
possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may
become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders
over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as
well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable
income or tax liabilities. The amount of the annual limitation is determined based on the value of us immediately prior to the
ownership change. Subsequent ownership changes may further affect the limitation in future years. Previously, we have completed
several financings since our inception, which have resulted in changes in control as defined by Sections 382 and 383 of the Internal
Revenue Code. We reduced our deferred tax assets for tax attributes we believe will expire unused. In the future, we may complete
financings that could result in a change in control, which will reduce our deferred tax assets for tax attributes we believe will expire
unused due to the change in control limitations.
We will recognize interest and penalties related to uncertain tax positions in the income tax provision. As of December 31,
2024, 2023 and 2022, we had no accrued interest or penalties related to uncertain tax positions and no such amounts have been
recognized.
We or one of our subsidiaries file income tax returns in the U.S. and various state and foreign jurisdictions. Our federal, state
and foreign income tax returns are generally subject to tax examinations for the tax years ended December 31, 2021 through
December 31, 2024. To the extent we have tax attribute carryforwards, the tax years in which the attribute was generated may still be
adjusted upon examination by the Internal Revenue Service, state or foreign tax authorities to the extent utilized in a future period.
157
EXHIBIT INDEX
Exhibit
Number
Description of Exhibit
3.1
Restated Certificate of Incorporation of the Registrant, as amended
3.2
Third Amended and Restated By-Laws of the Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant’s Current Report on Form 8-K (File No. 001-36167) filed with the Commission on December 2, 2022)
4.1
Indenture (including form of Note) with respect to the Registrant’s 3.00% convertible senior notes due 2025,
dated as of October 16, 2018, between the Registrant and Wilmington Trust, National Association, as trustee
(incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36167)
filed with the Commission on October 16, 2018)
4.2
Description of Securities Registered under Section 12 of the Exchange Act
4.3
Form of Warrant to Purchase Common Stock to be issued pursuant to the Securities Purchase Agreement
(incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36167)
filed with the Commission on December 5, 2022)
4.4
Common Stock Purchase Warrant, dated August 1, 2023, issued to Healthcare Royalty Partners III, L.P.
(incorporated by reference to Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-36167)
filed with the Commission on August 2, 2023)
4.5
Indenture (including form of Note) with respect to the Registrant’s 6.00% Convertible Senior Notes due 2029,
dated as of May 13, 2024, between the Registrant, the guarantors party thereto and Wilmington Savings Fund
Society, FSB, as trustee and collateral agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Current
Report on Form 8-K (File No. 001-36167) filed with the Commission on May 14, 2024)
4.6
Form of Warrant to Purchase Common Stock (incorporated by reference to Exhibit 4.2 to the Registrant’s Current
Report on Form 8-K (File No. 001-36167) filed with the Commission on May 14, 2024)
10.1*
2013 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Amendment No. 1 to
Registration Statement on Form S-1 (File No. 333-191584) filed with the Commission on October 28, 2013)
10.2*
Form of Nonstatutory Stock Option Agreement under 2013 Stock Incentive Plan (incorporated by reference to
Exhibit 10.5 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-191584)
filed with the Commission on October 28, 2013)
10.3*
Form of Incentive Stock Option Agreement under 2013 Stock Incentive Plan adopted August 25, 2020
(incorporated by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-
36167) filed with the Commission on November 2, 2020)
10.4*
Form of Nonstatutory Stock Option Agreement under 2013 Stock Incentive Plan adopted August 25, 2020
(incorporated by reference to Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-
36167) filed with the Commission on November 2, 2020)
10.5*
Form of Restricted Stock Unit Agreement under 2013 Stock Incentive Plan adopted August 25, 2020
(incorporated by reference to Exhibit 10.11 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-
36167) filed with the Commission on November 2, 2020)
10.6*
Form of Restricted Stock Unit Agreement under 2013 Stock Incentive Plan adopted January 24, 2022
(incorporated by reference to Exhibit 10.11 to the Registrant's Annual Report on Form 10-K (File No. 001-36167)
filed with the Commission on March 1, 2022)
10.7*
2022 Equity Incentive Plan (incorporated by reference to Appendix A to the Registrant's Definitive Proxy
Statement on Schedule 14A (File No. 001-36167) filed with the Commission on April 8, 2022)
10.8*
Amendment No. 1 to the 2022 Equity Incentive Plan (incorporated by reference to Appendix A to the Registrant’s
Definitive Proxy Statement on Schedule 14A (File No. 001-36167) filed with the Commission on April 11, 2023)
10.9*
Amendment No. 2 to the 2022 Equity Incentive Plan (incorporated by reference to Appendix A to the Registrant’s
Definitive Proxy Statement on Schedule 14A (File No. 001-36167) filed with the Commission on April 19, 2024)
10.10*
Form of Stock Option Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.2
to the Registrant's Quarterly Report on Form 10-Q (File No. 001-36167) filed with the Commission on August 4,
2022)
158
10.11*
Form of Restricted Stock Unit Agreement under the 2022 Equity Incentive Plan (incorporated by reference to
Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-36167) filed with the Commission
on August 4, 2022)
10.12*
Form of Restricted Stock Unit Agreement (Time Vested) under the 2022 Equity Incentive Plan adopted February
9, 2023 (incorporated by reference to Exhibit 10.14 to the Registrant's Annual Report on Form 10-K (File No.
001-36167) filed with the Commission on February 17, 2023)
10.13*
Form of Restricted Stock Unit Agreement (Performance Vested) under the 2022 Equity Incentive Plan adopted
February 9, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File
No. 001-36167) filed with the Commission on February 15, 2023)
10.14*
Form of Nonstatutory Stock Option Agreement for Inducement Grants adopted August 25, 2020 (incorporated by
reference to Exhibit 10.12 to the Registrant’s Quarterly Report on Form 10-Q (File No.001-36167) filed with the
Commission on November 2, 2020)
10.15*
2022 Inducement Stock Incentive Plan (incorporated by reference to Exhibit 10.17 to the Registrant's Annual
Report on Form 10-K (File No. 001-36167) filed with the Commission on March 1, 2022)
10.16*
Amendment No. 1 to the 2022 Inducement Stock Incentive Plan (incorporated by reference to Exhibit 99.3 to
Registrant's Registration Statement on Form S-8 (File No. 333-265386) filed with the Commission on June 3,
2022)
10.17*
Amendment No. 2 to the 2022 Inducement Stock Incentive Plan (incorporated by reference to Exhibit 10.20 to the
Registrant's Annual Report on Form 10-K (File No. 001-36167) filed with the Commission on February 17, 2023)
10.18*
Amendment No. 3 to the 2022 Inducement Stock Incentive Plan (incorporated by reference to Exhibit 99.4 to the
Registrant's Registration Statement on Form S-8 (File No. 333-282994) filed with the Commission on November
5, 2024)
10.19*
Form of Stock Option Agreement under 2022 Inducement Stock Incentive Plan (incorporated by reference to
Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K (File No. 001-36167) filed with the Commission
on March 1, 2022)
10.20*
Form of Restricted Stock Unit Agreement under 2022 Inducement Stock Incentive Plan (incorporated by
reference to Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K (File No. 001-36167) filed with the
Commission on March 1, 2022)
10.21*
Form of Restricted Stock Unit Agreement (Time Vested) under the 2022 Inducement Stock Incentive Plan
adopted February 9, 2023 (incorporated by reference to Exhibit 10.23 to the Registrant's Annual Report on Form
10-K (File No. 001-36167) filed with the Commission on February 17, 2023)
10.22*
Amended & Restated 2013 Employee Stock Purchase Plan (incorporated by reference to Appendix B to the
Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-36167) filed with the Commission on
April 11, 2023)
10.23*
Amendment No. 1 to the Amended & Restated 2013 Employee Stock Purchase Plan (incorporated by reference to
Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-36167) filed with the
Commission on April 19, 2024)
10.24*
Karyopharm Therapeutics Inc. Annual Bonus Plan (incorporated by reference to Exhibit 10.28 to the Registrant’s
Annual Report on Form 10-K (File No. 001-36167) filed with the Commission on February 29, 2024)
10.25*
Form of Indemnification Agreement between the Registrant and each of its Directors (incorporated by reference
to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1 (File No. 333-191584) filed with the
Commission on October 4, 2013)
10.26*
Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 10.1 to the Registrant’s
Quarterly Report on Form 10-Q (File No. 001-36167) filed with the Commission on May 8, 2024)
10.27*
Promotion Letter, dated as of August 5, 2022, between the Registrant and Stuart Poulton (incorporated by
reference to Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-36167) filed with the
Commission on May 4, 2023)
10.28*
Offer Letter, dated as of January 13, 2022, between the Registrant and Stuart Poulton (incorporated by reference
to Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-36167) filed with the
Commission on May 4, 2023)
159
10.29*
Promotion Letter, dated as of December 31, 2021, between the Registrant and Sohanya Cheng (incorporated by
reference to Exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-36167) filed with the
Commission on May 4, 2023)
10.30*
Offer Letter, dated as of June 1, 2021, between the Registrant and Sohanya Cheng (incorporated by reference to
Exhibit 10.8 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-36167) filed with the Commission
on May 4, 2023)
10.31*
Offer Letter, dated as of April 28, 2021, between the Registrant and Richard Paulson (incorporated by reference
to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-36167) filed with the Commission
on May 3, 2021)
10.32*
Offer Letter, dated February 3, 2019, between the Registrant and Michael Mason (incorporated by reference to
Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36167) filed with the Commission on
February 25, 2019)
10.33*
Letter Agreement, dated as of August 31, 2020, between the Registrant and Michael Mason (incorporated by
reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 001-36167) filed with the
Commission on August 31, 2020)
10.34*
Offer Letter, dated as of April 4, 2022, between the Registrant and Reshma Rangwala (incorporated by reference
to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36167) filed with the
Commission on May 8, 2024)
10.35*
Offer Letter, dated as of December 19, 2024, between the Registrant and Lori Macomber (incorporated by
reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36167) filed with the
Commission on January 2, 2025)
10.36*
Transition Agreement, dated as of August 29, 2024, between the Registrant and Michael Mason (incorporated by
reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36167) filed with the
Commission on August 29, 2024)
10.37*
Consulting Agreement, dated as of August 29, 2024, between the Registrant and Michael Mason (incorporated by
reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36167) filed with the
Commission on August 29, 2024)
10.38*
Nonstatutory Stock Option Agreement, dated February 25, 2019, between the Registrant and Michael Mason
(incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36167)
filed with the Commission on February 25, 2019)
10.39
Office Lease Agreement between NS Wells Acquisition LLC and the Registrant, dated March 27, 2014
(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36167)
filed with the Commission on April 1, 2014)
10.40
First Amendment to Lease, dated December 31, 2014, by and between the Registrant and NS Wells Acquisition
LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-
36167) filed with the Commission on January 5, 2015)
10.41
Second Amendment to Lease, dated October 22, 2015, by and between the Registrant and NS Wells Acquisition
LLC (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-
36167) filed with the Commission on November 9, 2015)
10.42
Third Amendment to Lease, dated February 28, 2018, by and between the Registrant and AG-JCM Wells Avenue
Property Owner, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form
10-Q (File No. 001-36167) filed with the Commission on May 10, 2018)
10.43
Fourth Amendment to Lease, dated June 6, 2018, by and between the Registrant and AG-JCM Wells Avenue
Property Owner, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form
10-Q (File No. 001-36167) filed with the Commission on August 7, 2018)
10.44
Fifth Amendment to Lease, dated as of August 13, 2020, by and between the Registrant and AG-JCM Wells
Avenue Property Owner, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on
Form 10-Q (File No. 001-36167) filed with the Commission on November 2, 2020)
10.45
Sixth Amendment to Lease, dated as of November 5, 2024 by and between the Registrant and TCD 234 MA
WELLS PROPERTY LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K (File No. 001-36167) filed with the Commission on November 8, 2024)
160
10.46
Open Market Sale AgreementSM, dated as of February 17, 2023, by and between the Registrant and Jefferies LLC
(incorporated by reference to Exhibit 1.2 to the Registrant’s Registration Statement on Form S-3 (File No. 333-
269846) filed with the Commission on February 17, 2023)
10.47†
License Agreement, dated May 23, 2018, by and between the Registrant and Antengene Therapeutics Limited
(incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-
36167) filed with the Commission on August 7, 2018)
10.48**
Amendment to License Agreement, dated May 1, 2020, by and between Antengene Therapeutics Limited and the
Registrant (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No.
001-36167) filed with the Commission on August 4, 2020)
10.49
Parent Company Guarantee, dated May 23, 2018, by and between the Registrant and Antengene Therapeutics
Limited (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No.
001-36167) filed with the Commission on August 7, 2018)
10.50**
License Agreement, dated as of December 17, 2021, between the Registrant and Berlin-Chemie AG (Menarini
Group) (incorporated by reference to Exhibit 10.41 to the Registrant's Annual Report on Form 10-K (file No.
001-36167) filed with the Commission on March 1, 2022)
10.51
Amendment No. 1 to License Agreement, dated May 19, 2022, by and between the Registrant and Berlin-Chemie
AG (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-
36167) filed with the Commission on May 4, 2023)
10.52
Amendment No. 2 to License Agreement, dated March 14, 2023, by and between the Registrant and Berlin-
Chemie AG (incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q (File
No. 001-36167) filed with the Commission on May 4, 2023)
10.53**
Revenue Interest Financing Agreement, dated September 14, 2019, between the Registrant and HealthCare
Royalty Partners III, L.P. and HealthCare Royalty Partners IV, L.P. (incorporated by reference to Exhibit 10.2 to
the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36167) filed with the Commission on November 4,
2019)
10.54
Second Amendment to Revenue Interest Financing Agreement, dated as of August 1, 2023, by and among the
Registrant, Karyopharm Europe GmbH, HealthCare Royalty Partners III, L.P., HealthCare Royalty Partners IV,
L.P., HCRP Overflow Fund, L.P., HCR Stafford Fund, L.P., HCR Canary Fund, L.P., HCR Potomac Fund, L.P.,
HCR Molag Fund, L.P., HealthCare Royalty Management, LLC and HCR Collateral Management, LLC
(incorporated by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-
36167) filed with the Commission on August 2, 2023)
10.55**
Omnibus Amendment to Transaction Documents, dated as of June 23, 2021, by and among the Registrant,
Karyopharm Europe GmbH, Karyopharm Therapeutics (Bermuda) Ltd., HealthCare Royalty Partners III, L.P.,
HealthCare Royalty Partners IV, L.P., HCRP Overflow Fund, L.P., HCR Stafford Fund, L.P., HCR Canary Fund,
L.P., HCR Potomac Fund, L.P., HCR Molag Fund, L.P., HealthCare Royalty Management, LLC and HCR
Collateral Management, LLC (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report
on Form 8-K (File No. 001-36167) filed with the Commission on June 24, 2021)
10.56
Second Omnibus Amendment to Transaction Documents, dated May 8, 2024, between the Registrant, the
investors party thereto, HealthCare Royalty Management, LLC, HCR Collateral Management LLC, and HCR
Karyopharm SPV, LLC (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-
K (File No. 001-36167) filed with the Commission on May 14, 2024)
10.57
Securities Purchase Agreement, dated December 5, 2022 by and among the Registrant and the other parties
thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-
36167) filed with the Commission on December 5, 2022)
10.58
Registration Rights Agreement, dated December 5, 2022 by and among the Registrant and the other parties
thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-
36167) filed with the Commission on December 5, 2022)
10.59
Credit Agreement, dated as of May 8, 2024, between the Registrant, the guarantors party thereto, the lenders party
thereto, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent (incorporated by
reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36167) filed with the
Commission on May 14, 2024)
161
10.60
Form of Exchange Agreement, dated May 8, 2024, by and among the Registrant and the other parties thereto
(incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36167)
filed with the Commission on May 14, 2024)
10.61
Form of Registration Rights Agreement, dated May 13, 2024, by and among the Registrant and the other parties
thereto (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-
36167) filed with the Commission on May 14, 2024)
19.1
Insider Trading Policy
21.1
Subsidiaries of the Registrant
23.1
Consent of Ernst & Young LLP (Independent registered public accounting firm for the Registrant)
31.1
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act
of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Executive Vice President, Chief Financial Officer and Treasurer pursuant to Rules 13a-14(a) or
15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
32.1
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act
of 2002, by Richard Paulson, President and Chief Executive Officer of the Registrant, and Lori Macomber,
Executive Vice President, Chief Financial Officer and Treasurer of the Registrant
97*
Dodd-Frank Compensation Recovery Policy (incorporated by reference to Exhibit 97 to the Registrant’s Annual
Report on Form 10-K (File No. 001-36167) filed with the Commission on February 29, 2024)
101.INS
The instance document does not appear in the interactive data file because its XBRL tags are embedded within
the inline XBRL document.
101.SCH
Inline XBRL taxonomy Extension Schema with embedded Linkbases document
104
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information
contained in Exhibits 101)
†
Confidential treatment has been granted as to portions of the exhibit.
*
Indicates a management contract or compensatory plan or arrangement.
**
Certain portions of this exhibit (indicated by “***” or “**”) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-
K.
162
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 19, 2025
KARYOPHARM THERAPEUTICS INC.
By:
/s/ Richard Paulson
Richard Paulson
President and Chief Executive Officer and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Richard Paulson
President and Chief Executive Officer and Director
February 19, 2025
Richard Paulson
(Principal Executive Officer)
Executive Vice President, Chief Financial Officer and Treasurer
February 19, 2025
/s/ Lori Macomber
Lori Macomber
(Principal Financial Officer)
/s/ Kristin Abate
Vice President, Chief Accounting Officer and Assistant Treasurer February 19, 2025
Kristin Abate
(Principal Accounting Officer)
/s/ Garen G. Bohlin
Director
February 19, 2025
Garen G. Bohlin
/s/ Barry E. Greene
Director
February 19, 2025
Barry E. Greene
/s/ Mansoor Raza Mirza
Director
February 19, 2025
Mansoor Raza Mirza, M.D.
/s/ Christy J. Oliger
Director
February 19, 2025
Christy J. Oliger
/s/ Deepika R. Pakianathan
Director
February 19, 2025
Deepika R. Pakianathan, Ph.D.
/s/ Chen Schor
Director
February 19, 2025
Chen Schor
/s/ Zhen Su
Director
February 19, 2025
Zhen Su, M.D.
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BR48576U-0425-10K