Good day, ladies and gentlemen, and welcome to the Karyopharm Therapeutics first quarter 2017 earnings conference call. [Operator Instructions] As a reminder, this conference is being recorded. I would like to introduce your host for today's conference, Mr.

Chris Primiano, Senior Vice President, Operation, Business Development, General Counsel, and Secretary of Karyopharm Therapeutics. Sir, please go ahead..

Thank you. Good morning and welcome to the first quarter 2017 earnings call. This is Chris Primiano and I'm joined today by Dr. Michael Kauffman, our chief executive officer; Dr. Sharon Shacham, our founder, President, and Chief Scientific Officer; and Michael Todisco, our Vice President, Finance.

On the call today, Michael Kauffman will make some introductory comments and provide a short update on the clinical development programs and plans. Then Mike Todisco will provide an overview of the first quarter 2017 financial results.

Michael Kauffman will then discuss our key upcoming milestones and provide some summary remarks and we will open the call up for your questions, for which Sharon and I will also be available. Earlier this morning we issued a press release detailing Karyopharm's results for the first quarter of 2017.

The release is available on our website at Karyopharm.com. Before we begin our formal comments, I will remind you that various remarks we will make today constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

These include statements about our future expectations, clinical development, and regulatory matters and timelines, the potential success of our product candidates, financial projections, and our plans and prospects.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factors section of our annual report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC on March 16, and any other filings we may make with the SEC, including our quarterly report on Form 10-Q for the first quarter of 2017, which we expect to file later today.

Any forward-looking statements represent our views as of today only and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.

Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. I will now turn the call over to Dr. Michael Kauffman, Chief Executive Officer of Karyopharm..

Thank you, Chris, and good morning, everyone. Thank you for joining us on our call today. 2017 has been a highly-active year to date for the Company with the most notable accomplishments being the establishment of a planned development path for selinexor in diffuse large B-cell lymphoma, our second lead indication after multiple myeloma.

In April, at the American Association for Cancer Research in 2017 annual meeting we reported a 28.6% overall response rate observed in the ongoing Phase 2b SADAL study, evaluating 60 milligrams and 100 milligrams of single-agent oral selinexor in patients with relapsed or refractory DLBCL.

We shared the clinical data from the first 63 patients with the US Food and Drug Administration, and given the robust response rate seen across both doses, but the better tolerability and durability observed in the 60 milligram dose cohort, we obtained the FDA's agreement to amend the SADAL study to continue enrollment on the 60 milligram twice-weekly treatment cohort going forward.

The study has also been amended to allow patients who achieve at least a partial response on their most recent therapy to reduce the treatment-free period from 14 weeks down to eight weeks.

Patients whose disease is refractory to their last therapy or who did not achieve at least a partial response on that therapy will continue with the 14-week treatment-free period.

The FDA agreed with the change in a single-arm study was reasonable and that, quote, although the post-trial design and indication appear appropriate at this time, the indication sought for accelerated approval will depend on the trial results and available therapy at the time of regulatory action, end quote.

We plan to enroll up to 90 more patients into this 60 milligram single-arm cohort and expect to report top-line results from the SADAL study in 2018.

Assuming we continue to see response rates that we have observed to date, we plan to use the data from SADAL study to support a submission in 2018 with a request for accelerated approval in the US for selinexor as a new treatment for relapsed or refractory DLBCL.

On the myeloma front, our lead selinexor indication, we continue to make strong progress advancing the ongoing Phase 2b STORM study and the Phase 1b/2 STOMP study. Our STORM study in patients with heavily-pretreated refractory myeloma continues to accrue well and we are on track to release top-line response data in early 2018.

Assuming we continue to observe robust responses and durability in this study consistent with the data we announced at the American Society of Hematology 2016 meeting, we intend to submit a new drug application with the full STORM data in 2018 with a request for accelerated approval for oral selinexor as a new treatment for patients with heavily-pretreated refractory multiple myeloma.

In parallel, another key milestone that we are diligently working toward is initiation of the upcoming pivotal, randomized Phase 3 BOSTON study.

Based on the strong combination previously reported from the STOMP study, this unique Phase 3 study will evaluate once-weekly selinexor in combination with once-weekly Velcade, also known as bortezomib, and low-dose dexamethasone in patients with multiple myeloma who have had one to three prior lines of therapy.

The BOSTON study incorporates two important novel innovations into Velcade-based myeloma regimens. First, to the best of our knowledge, this is the first study to evaluate once-weekly subcutaneous Velcade in the experimental arm.

Once-weekly Velcade is a regimen often preferred over the standard twice-weekly regimen by many physicians because it carries a significantly reduced risk of peripheral neuropathy and only requires once-weekly office visits.

Second, the trial design permits patients on the control arm who receive standard twice-weekly Velcade to cross over to the sel/Vel/dex arm once progression has been confirmed. We believe that these innovative designs make the trial attractive for both caregivers and patients.

The planned dosing regimen is 100 milligrams of oral selinexor once weekly, 1.3 mgs per meter squared of Velcade subcutaneously, also dosed once weekly for every four out of five weeks, and 40 milligrams of dexamethasone weekly, which is the standard low-dose dexamethasone commonly used in the treatment of myeloma.

The primary endpoint is the difference in progression-free survival between the arms and overall response rate will also be compared between the two arms. We expect BOSTON study to enroll approximately 360 patients and we look forward to announcing commencement of the BOSTON study this month. Accrual is projected to complete in 2018.

Assuming a positive outcome in BOSTON, we will be well-positioned to support a request for full approval for selinexor for patients with at least one prior therapy for their myeloma. Turning now to our selinexor program in solid tumors.

In March, we completed enrollment in the Phase 2 portion of the randomized Phase 2/3 SEAL study evaluating selinexor versus placebo in patients with advanced liposarcoma after at least one prior therapy.

We view this program as our third lead program after myeloma and DLBCL and we look forward to reporting top-line data from the Phase 2 portion of this study in mid-2017. Assuming a positive outcome from the Phase 2 portion, we expect to initiate Phase 3 expansion during the second quarter of 2017.

As a result, the primary endpoint of the SEAL study is progression-free survival and both the trial design and study endpoints have been agreed to by both the United States FDA and the European Medicines Agency as potentially acceptable to support full approval.

And, finally, glioblastoma is another solid tumor indication where we believe selinexor also has potential application. On May 6 at the World Federation of Neuro-Oncology Society's quadrennial meeting, Dr.

Andrew Lassman of Columbia University Medical Center will give an oral presentation of updated interim analysis from a Phase 2 study evaluating selinexor in patients with recurrent glioblastoma, the so-called KING [ph] study.

In this study selinexor achieved responses in prolonged disease control with sufficient intratumoral penetration with a reasonable and manageable tolerability profile with standard supportive care. Accrual in this study is continuing with a focus on selinexor once-weekly at a dose of 80 milligrams.

I would also like to mention that during late March and early April all three oncology divisions at the FDA lifted their partial clinical holds on our selinexor clinical trials.

Patient enrollment and dosing of new patients in all of Karyopharm's clinical trials across both hematological and solid tumor malignancies has since resumed in earnest in the United States, with no significant delays in our programs anticipated. Enrollment outside of the United States was not impacted at all by the partial clinical hold.

Before I turn the call over to Mike Todisco to provide an overview of our first quarter financial highlights, I would like to highlight a new outlicensing transaction we just announced yesterday for the rights to verdinexor, an oral SINE compound that is closely related to selinexor.

To date, verdinexor has been internally developed at Karyopharm with target indications being viral infections in humans and lymphomas in pet dogs.

We announced yesterday our entry into a licensing agreement with privately-held Anivive Lifesciences, transferring to them exclusive worldwide rights to research, develop, and commercialize verdinexor in the treatment of cancer in companion animals.

Under the terms of the agreement, Anivive will pay to Karyopharm a one-time, upfront payment of $1 million. Karyopharm is also eligible to receive up to an additional $43.5 million in certain regulatory, clinical, and commercial milestones, assuming approval in both the United States and European Union.

In addition, Anivive agreed to pay Karyopharm a low double-digit royalty on future net sales.

We believe Anivive is the ideal partner to maximize verdinexor's value in the animal health space because they have the expertise and resources to advance cutting-edge drug candidates, like verdinexor, towards becoming a potential new treatment for companion animals.

The animal health marketplace has seen tremendous growth recently and Anivive has the passion and dedication to innovation needed to discover and develop new veterinary medicines.

In addition, the Anivive transaction enables us to monetize our non-core assets as we continue to focus on advancing the development of selinexor in our lead indications of myeloma, DLBCL, and liposarcoma. With that, I would now like to turn the call over to Mike..

Thank you, Michael. Since we issued a press release earlier today outlining our first quarter 2017 financial results, I will just review the highlights and then speak to our cash balance and financial guidance.

Cash, cash equivalents, and investments as of March 31, 2017, including restricted cash, totaled $150.6 million compared to $175.5 million as of December 31, 2016.

In April, subsequent to the close of the first quarter, we closed an underwritten public offering of approximately 3.9 million shares of our common stock at a price to the public of $10.25 per share, resulting in net proceeds of approximately $37.8 million after deducting the underwriting discounts and commissions and estimated operating expenses payable by us.

We have granted the underwriter an option, exercisable for 30 days, to purchase up to 585,365 additional shares from the same offering price, less underwriting discounts and commissions. We also sold approximately 1.3 million shares under our ATM facility for net proceeds of approximately $14.5 million.

The total net proceeds raised in equity financings in April was $52.2 million. For the first quarter of 2017, research and development expense was $24.1 million compared to $21.8 million for the same prior-year period.

For the first quarter of 2017, general and administrative expense was $6.2 million compared to $5.6 million for the same prior-year period. Karyopharm reported a net loss of $29.9 million, or $0.71 per share, for the first quarter of 2017, compared to a net loss of $27.1 million, or $0.75 per share, for the same prior-year period.

Net loss includes stock-based compensation expense of $5.9 million and $5.2 million for the first quarters of 2017 and 2016, respectively. As for financial guidance, we expect our 2017 operating cash burn, including research and development and general and administrative expense, to be in the range of $85 million to $90 million.

Based on our current operating plans, we expect that our existing cash, cash equivalents, including the cash we raised in April, will fund our research and development programs and operations into 2019, including the continued clinical development of selinexor in our lead indications with a focus on filing for accelerated approvals for both myeloma and DLBCL during 2018 and preparing to establish a commercial infrastructure for the potential launch of selinexor in North America and Western Europe.

I will now turn the call back over to Michael Kauffman for concluding remarks..

Thank you, Mike. Before we open the call for questions, I would just like to take a moment to recap the upcoming milestones that we are expecting for 2017 and 2018.

First, this month we plan to initiate the pivotal randomized Phase 3 BOSTON study evaluating selinexor in combination with bortezomib and dexamethasone in patients whose myeloma was previously treated with one to three prior therapies, moving selinexor into much earlier lines of treatment.

Second, we expect to report top-line data from the Phase 2 portion of the randomized Phase 2/3 SEAL study in patients with liposarcoma, our most advanced solid tumor indication in mid-2017. Third, we are executing on our plan to expand both the STORM and SADAL studies in relapsed or refractory myeloma and DLBCL, respectively.

For STORM, top-line data in Penta-refractory myeloma are expected to be reported in early 2018 followed by an NDA submission and request for accelerated approval also in 2018. For SADAL, top-line data are expected in mid-2018, followed by an NDA submission and request for accelerated approval.

And, fourth, we expect to report top-line Phase 1 safety and tolerability data for KPT-9274, also in mid-2017. In closing, I would just like to highlight that we are very pleased with the emerging profile of oral selinexor in patients with both relapsed/refractory as well as less heavily pretreated malignancies.

With two potential accelerated approval submissions planned for 2018 or 2019, we believe that we have several exciting catalysts on the near horizon. Selinexor represents a truly novel and unique approach to the treatment of a diverse variety of cancers.

We have strengthened our balance sheet as we pursue several potential paths to accelerated and full approval of selinexor and have sufficient funds now into 2019. Thank you for listening today and we look forward to keeping you updated on our progress. With that, I would like to open the call up now to questions.

Operator?.

[Operator Instructions] Our first question comes from the line of Maury Raycroft with Jefferies. Your line is open, please go ahead..

Hi, thanks for taking my questions and congrats on the progress. For DLBCL I was wondering; if you plan to run a Phase 3 confirmatory trial, when that could start and what the trial could look like.

And also for the washout change from 14 weeks to eight weeks, will that impact how the results are evaluated or interpreted?.

I'll take the first part and Sharon will take the second part. We are exploring three different potential randomized trials as confirmatory studies in DLBCL with the plan that following FDA discussions on the final SADAL data, we would pick one or more of those for confirmation.

One of them would be a maintenance study in patients after front-line treatment who have high-risk disease, where we know that their relapse rate is much higher than the average patients getting R-CHOP. That would be one possibility. The other two involve combinations with chemotherapy. For transplant-eligible patients it would be chemo with RICE.

We have an ongoing Phase 1/2 in that combination to determine the dose. And the second would be in patients who are unfit for transplant; would be an R-GemOx combination or a similar kind of combination with lighter chemotherapy. Again, we have a Phase 1/2 ongoing with that combo. So we have several potential confirmatory studies.

Sharon?.

We do believe that the change in the washout period from the 14 weeks to the eight weeks in patients that achieved response in this should make the enrollment to the study easier and shouldn't -- this and will help us meet the timeline that we projected..

Okay.

Then for the BOSTON study enrollment, do you have an idea of what proportion of patients will have been already exposed to Velcade, Kyprolis, or both?.

As a standard in these Velcade-based randomized studies, we do allow patients who have had a prior response to a proteasome inhibitor to enter the study, provided that their last dose of a proteasome inhibitor was at least six months away. This is pretty standard language in these kind of randomized trials.

We should just add to that, that one of the exciting parts of the data from the STOMP data that we presented at ASH was that even in patients with recently Velcade refractory disease or Kyprolis refractory disease, we saw response rates in the 60% range when selinexor was added.

So selinexor plus Velcade or selinexor plus Kyprolis in patients that had PI-refractory myeloma could induce substantial responses, even in patients with proteasome inhibitor refractory disease. It's one of the very interesting scientific synergies that we see..

Then for liposarcoma, I believe the Phase 2 portion that is fully enrolled at 50 patients and on clinicaltrials.gov I'm seeing that enrollment for the Phase 3 could be up to 245 patients. I'm just wondering if proceeding to the Phase 3 portion is pretty close to a sure thing and will enrolling into the Phase 3 be relatively seamless..

So based on the protocol design, once enrollment is completed for Phase 2, enrollment to the Phase 3 can be initiated. And we are planning to initiate that in the next few weeks..

Okay, great. Thank you very much..

Thank you. And our next question comes from the line of Mike King with JMP Securities. Your line is open, please go ahead..

Hi, thanks for taking my questions. Sorry for the background noise. Just a quick question, Michael.

When you powered BOSTON, how much did you weight the possibility that the once-weekly Velcade could have an effect on the expected PFS, given that it should be much better tolerated? Did you consider that in your powering? And if so, can you say anything qualitatively about that?.

So the powering was done based on the results from the STOMP and based on the time for follow-up that we had in that study. And the vast majority of patients on STOMP all received once-weekly Velcade. That's three of them that were actually dosed used the once-weekly Velcade.

So based on the results we had at that point, we powered the study for the PFS as we expect on the SPD arm with once-weekly Velcade. We are closely monitoring as STOMP is progressing in time to follow up, we have more information about that. We still feel very comfortable with our projections..

Great, thank you..

Thank you. And our next question comes from the line of Chris Raymond with Raymond James. Your line is open, please go ahead..

Hello, this is Katherine Doll on the line for Chris Raymond. So we have the SEAL data coming up here in mid-2017. I was just wondering if you guys could provide us any type of benchmark to be looking for to determine that it was a successful trial. And then quickly follow-on.

I'm not sure if I heard correctly, but once SEAL is finished enrolling, you were saying you are going to start enrolling into the Phase 3? Correct me if I'm wrong there. Thanks..

The study is a blinded study, so we, obviously, cannot speak on the results. In terms of the way we powered it for the Phase 2, a success will be considered a hazard ratio that is better than 0.67.

And as I mentioned before, per the protocol, we can move into the Phase 3 portion of the study while we wait for the Phase 2 results, as long as we completed enrollment into the Phase 2 study. So that should happen pretty soon..

Okay, great. Thank you..

Thank you. And our next question comes from the line of Arlinda Lee with Canaccord. Your line is open, please go ahead..

Hi guys, thanks for taking my question. Maybe I wanted to follow up on the SEAL trial. What was your expectation for the standard of care arm? And then on the glioblastoma program that's going to have data readouts, are you guys planning anything yourselves in glioblastoma? Thanks..

Let's start with the glioblastoma. The results are exciting with the primary endpoint of the study was six months PFS and what the results that we are seeing on the 80 mg arms are very encouraging in that. The six-month PFS is the standard primary endpoint for approval in GBM in the relapsed/refractory setting.

So we really used a high bar and we are satisfied with the results that we got for single-agent selinexor. Saying that, we are not planning at this point to initiate any future studies. We are focused on executing our plan for lymphoma, myeloma, and liposarcoma.

However, there are several suggestions for ISP studies that we are evaluating and we will go forward on that in the future.

And there was one more question?.

Sorry, on the liposarcoma, what are your expectations for PFS in the --?.

On the control arm? On the placebo?.

Yes..

If you look at the results of -- in soft-tissue sarcoma, the placebo was around six weeks. However, in this case, since we are only looking at end -- and that was soft-tissue sarcoma not including liposarcoma.

Since we are focusing on this liposarcoma we used a more conservative PFS for the placebo based on consults taken with many of our experts and decided on a PFS of three months for the placebo..

Okay, great. And then maybe on your DLBCL plans; you mentioned combinations with RICE, GemOx, and I think you are planning an R-CHOP combination study in the next month. What are we -- the RICE and the GemOx ones are dose-finding ones.

Is it possible to roll those into registrational trials? Or would you get the dose from that and then start a confirmatory and/or registrational trial on those? Thanks..

The study with RICE is currently a single-site study at Cornell University. We will plan to use this study; they are doing a wonderful job to identify the recommended Phase 2 dose from that study. And then based on this, we will initiate a company-sponsored Phase 2b study using the -- based on the results that they will deliver.

The study that is done for combination with DHAP or GemOx is done through the French lymphoma network. There the study started just recently last year, so it's in earlier stages. And we will work with the French lymphoma network based on the results they see and decide on future steps..

And then the R-CHOP combination?.

The R-CHOP combination is still in design stages. Again, it will be a small number of sites done here in the US, and based on these results, we will probably do a company-sponsored study. We will use the Phase 1 to identify the recommended Phase 2 dose of the combination..

Thank you..

Thank you. And our next question comes from the line of Whitney Ijem with JP Morgan. Your line is open, please go ahead..

Hi guys, thanks for taking the questions. And I apologize; I hopped on a little late, so just stop me if some of this has already been covered, but I wanted to just circle back to the SEAL powering. I think I heard you say that your assumptions was for a hazard ratio better than 0.67.

So is that how we should be thinking about the threshold for accelerated filing on the basis of Phase 2 versus waiting for Phase 3?.

I think there is a little bit of misunderstanding. We are not planning on an accelerated filing based on the Phase 2.

We are planning on discussing the Phase 2 results with the FDA, especially the size of the study based on these results, but before we get all the PFS events for the Phase 2 study we will move into study enrollment on the Phase 3 study. And that will be -- at the end of the Phase 3 study there will be -- we will submit an NDA for full approval.

So the reason -- accelerated approval in the past it's for this study..

Got it. Okay, that's helpful. Then just one quick one on DLBCL to follow-up on the combo studies you just discussed.

Understand that those are ISTs, but should we -- do you have a sense of whether we could see data from this study sometime later this year?.

Maybe. These studies are ongoing. They are done by, as I mentioned, Dr. Martin [ph] at Cornell, the RICE study; and they have to evaluate their results and they will decide when and where they want to publish it.

For the study that is done by -- headed by Professor Siliete [ph] in France, I don't expect to see results since this study just began recently..

Got it, thanks..

Thank you. And our next question comes from the line of Michael Schmidt with Leerink Partners. Your line is open, please go ahead..

Hi, this is Varun Kumar on behalf of Michael Schmidt. Thanks for taking my questions. My first question is for multiple myeloma. There have been several updates this year at ASCO from the CAR-T therapy space.

Do you know how this is going to affect the positioning of selinexor in multiple myeloma due to the CAR-T therapy?.

I think the general comment is that for the patients that are eligible for CAR-T therapy, which are generally similar to the patients who are eligible for transplant, they should have -- the patients and the physicians have a discussion and make a decision on that recommendation.

Every study to date in myeloma that I am aware of has shown at least a PFS, and many of them have shown an overall survival advantage, of transplant, of a standard autologous transplant.

So most patients who are eligible, which is about 35% of the myeloma population, generally do undergo transplant because there does appear to be a consistent survival benefit and certainly a PFS benefit. So this really has to be evaluated against transplant, the CAR-T situation. Our drug is very different. Our drug can be given to essentially anyone.

We have very few restrictions, inclusion and exclusion criteria. We are very minimal organ function requirements for this drug. And like many of the drugs used in myeloma, can be used both before and after a transplant would be given.

So I think it's a little bit of an apples and oranges and really the way to think about CAR-T, both in myeloma and DLBCL is to think about it as an adjunct or in place of the current transplants that are ongoing..

Okay, good. Thank you. My next question and the last one is on the STORM trial.

Now specifically for the two expanded arms of Velcade and Darzalex, can you provide some more color on the key differences in prior therapies in these two cohorts? And just specifically for the Darzalex arm, will the patient have prior therapy with Darzalex, or will they be Darzalex naive? Thank you..

So for the Darzalex arm, it's currently following -- the clinical guide is following the inclusion criteria for Darzalex single-agent, which means that the patient needs to have a disease that is a [indiscernible] and a single immuno-modulator, either pomalidomide or Revlimid and either carfilzomib or bortezomib.

So these are the Darzalex population data. The inclusion criteria for the SVd arm are much more open. We are -- and we allow both bortezomib refractory and bortezomib naive patients; bortezomib [ph] naive and they are very loose in terms of who can go into this arm. So they are very different patients..

Okay, thanks. That will be all from me, thank you..

Thank you and I'm showing over the questions. I would like to turn the conference back over to Dr. Michael Kauffman for any closing remarks..

Thank you. Thank you all again for your interest in Karyopharm and for participating on our call today. We look forward to seeing many of you at medical and investor conferences throughout the rest of this year and into next. Have a great day, everybody..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day..