U.S. Markets closed

Edited Transcript of KPTI earnings conference call or presentation 4-Nov-19 1:30pm GMT

Q3 2019 Karyopharm Therapeutics Inc Earnings Call

Natick Nov 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Karyopharm Therapeutics Inc earnings conference call or presentation Monday, November 4, 2019 at 1:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Christopher Brett Primiano

Karyopharm Therapeutics Inc. - Executive VP, Chief Business Officer, General Counsel & Secretary

* Ian Karp

Karyopharm Therapeutics Inc. - VP of Investor & Public Relations

* Michael G. Kauffman

Karyopharm Therapeutics Inc. - Co-Founder, CEO & Director

* Michael P. Mason

Karyopharm Therapeutics Inc. - Senior VP, CFO & Treasurer

* Perry Monaco

Karyopharm Therapeutics Inc. - SVP of Sales

================================================================================

Conference Call Participants

================================================================================

* Brian Corey Abrahams

RBC Capital Markets, Research Division - Senior Biotechnology Analyst

* Catherine Clare Novack

Canaccord Genuity Corp., Research Division - Associate

* Edward Patrick White

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Eric William Joseph

JP Morgan Chase & Co, Research Division - VP & Senior Analyst

* Maurice Thomas Raycroft

Jefferies LLC, Research Division - Equity Analyst

* Michael Eric Ulz

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Wei Ji Chang

SVB Leerink LLC, Research Division - MD of Emerging Oncology & Senior Research Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Karyopharm Therapeutics Third Quarter 2019 Financial Results Conference Call. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the company's request.

I would now like to turn the call over to Mr. Ian Karp, Karyopharm's Vice President, Investor and Public Relations.

--------------------------------------------------------------------------------

Ian Karp, Karyopharm Therapeutics Inc. - VP of Investor & Public Relations [2]

--------------------------------------------------------------------------------

Thank you, Chris, and thank you all for joining us on today's conference call to discuss Karyopharm's third quarter 2019 financial results and business update. This is Ian Karp, and I'm joined today by Dr. Michael Kauffman, our Chief Executive Officer; Dr. Sharon Shacham, President and Chief Scientific Officer; Mr. Mike Mason, Chief Financial Officer; Mr. Chris Primiano, Chief Business Officer and General Counsel; Mr. Perry Monaco, Senior Vice President of Sales; and Dr. Jatin Shah, Chief Medical Officer.

On the call today, Mr. Kauffman will provide an overview of key recent corporate developments, Perry will give an update on the initial commercial launch of XPOVIO, and Mike will highlight the third quarter 2019 financial results. We'll conclude with a Q&A portion of the call.

Earlier this morning, we issued a press release detailing Karyopharm's results for the third quarter 2019. This release as well as an accompanying slide presentation are available on our website at karyopharm.com.

Before we begin our formal comments, for those following along in the slide presentation, please turn to Slide 3, and I'll 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 future expectations, clinical developments and regulatory matters and time lines, the potential success of our products and product candidates, including our expectations relating to the commercialization of XPOVIO, 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 most recently quarterly report on Form 10-Q, which is on file with the SEC, and in other filings that we may make with the SEC in the future. Any forward-looking statements represent our views as of today only. 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.

In addition, please note that any references we make to clinical trial data during today's discussion refer to interim unaudited site data, unless otherwise specified. We'll also be providing on this call non-GAAP outlook for operating expense for 2019, which can only be provided on a non-GAAP basis without unreasonable efforts.

I'll now turn the call over to Dr. Mike Kauffman, Chief Executive Officer, and please now turn to Slide #4.

--------------------------------------------------------------------------------

Michael G. Kauffman, Karyopharm Therapeutics Inc. - Co-Founder, CEO & Director [3]

--------------------------------------------------------------------------------

Thank you, Ian, and good morning, everyone. Before I provide details of our third quarter performance, I think it's important to set a bit of context in terms of where we are on our journey towards becoming a leading oncology-focused pharmaceutical company. Karyopharm's mission is clear, to help improve the lives of patients with cancer and other serious diseases.

Our ability to effectively fulfill this mission is predicated on 3 fundamental principles. First, our company was founded on, and remains intensely committed to, advancing innovative science and pursuing the discovery, development and commercialization of medicines with novel mechanisms of action. Our core area of scientific focus, nuclear export dysregulation, is increasingly recognized as playing a fundamental role in oncogenesis, along with other conditions. And XPOVIO is now the first and only approved drug targeting the inhibition of XPO1 protein, which plays a critical role in many cancers. This novel approach was recognized specifically in myeloma, with the recent publication of the STORM results in the New England Journal of Medicine.

Secondly, we aim to meaningfully and urgently impact the treatment of patients with relapsed or refractory multiple myeloma. We were extremely pleased with the FDA's accelerated approval decision in July, and you'll hear more about XPOVIO's early commercial success in a few minutes from Perry. Additionally, we aim to expand XPOVIO's role in multiple myeloma treatment and eagerly await the top line results from the Phase III BOSTON study in early 2020.

Finally, we believe XPOVIO and our follow-on investigational medicines has the potential to impact patients with high unmet medical need cancers beyond multiple myeloma. To that end, in the near term, we expect to submit an NDA requesting accelerated approval in DLBCL before the end of this year. And we remain highly encouraged about the potential solid tumor indications for XPOVIO, the first in liposarcoma, with Phase III SEAL data expected mid-next year.

We remain truly excited about what the future has in store for Karyopharm and the patients we are serving. With this as a backdrop, let's now turn to the progress we've made, specifically in third quarter, which is highlighted on Slide 5.

The past few months have been a remarkable period for Karyopharm following the accelerated approval on July 3 from the FDA with the first shipments of XPOVIO taking place on July 9. XPOVIO launch is off to a very strong start, and we are pleased to report $12.8 million in net product sales for the third quarter. The demand for XPOVIO has been driven by a broad base of health care providers, with over 300 unique positions or accounts having prescribed XPOVIO and over 500 prescriptions fulfilled in less than 3 full months on the market.

We also continue to make additional important clinical and regulatory progress in the quarter. Most notably, the results from Phase IIb STORM study evaluating XPOVIO and patients with triple class refractory multiple myeloma were published in the New England Journal of Medicine in August. And additional support of clinical data highlighting the activity of XPOVIO with dexamethasone and with other anti-myeloma agents were presented at the 17th International Myeloma Workshop in September.

As we look out to some important milestones over the coming months, we remain on track to submit an NDA in DLBCL by the end of 2019. And importantly, we expect top line data from the Phase III BOSTON study to be reported in early 2020, with specific timing contingent on the occurrence of progression of [its] -- the primary endpoint of this study. Additionally, we continue to anticipate a decision from EMA on our Marketing Authorization Application for selinexor in patients with heavily pre-treated multiple myeloma in early 2020.

Finally, on the financial front, in the third quarter, we secured additional capital to support the ongoing commercialization and development of XPOVIO, along with our other products, specifically entering into royalty agreement with Healthcare Royalty Partners for up to $150 million in capital. This additional capital contributed to Karyopharm ending the quarter with approximately $270 million in cash, cash equivalents and investments and extended our expect -- extending our expected cash runway to fund planned operations into the middle of 2021.

Now turning to Slide 6. I'll take a moment to review the XPOVIO product profile and approved indications. XPOVIO is approved in combination with dexamethasone for the treatment of adult patients with relapsed or refractory multiple myeloma whose disease is refractory to at least 2 proteasome inhibitors, at least 2 [immune] -- immunomodulatory agents and an anti-CD38 monoclonal antibody. XPOVIO is the first and only prescription medicine approved in the U.S. for this indication, which encompasses a group of patients with a particularly poor prognosis and constituting an acute unmet medical need. Therefore, we believe that the approval of XPOVIO truly represents an advancement in the treatment paradigm for patients battling highly refractory multiple myeloma.

There's also important safety information included in the XPOVIO product label, as shown on Slide 7. This information includes important warnings and precautions related to the treatment with XPOVIO, highlighted in the first bullet on this slide. Notably, there are no black box warnings or contraindications in the label, and the patient medication guide has been included to educate patients on the expected side-effects profile for XPOVIO.

While Perry will provide some more detailed commentary about the early feedback we're hearing from physicians, I will note that the instruction in XPOVIO's label, including the recommended supportive care guidelines and dosage modification criteria, appears to be easy for health care providers and patients to follow. These recommendations are supported both by our field-based medical science liaison force as well as several commercial programs, which will be discussed shortly.

Based on our early experience to date, we remain highly confident physicians and other health care providers are well positioned and capable of effectively supporting patients while on XPOVIO therapy. Complete details and guidelines, along with the complete prescribing information, can be found at www.xpovio.com.

And with that, I'll now turn the call over to Perry, who will begin on Slide 9.

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [4]

--------------------------------------------------------------------------------

Thank you, Michael. And as you indicated earlier, I am pleased to report that the XPOVIO launch is off to a terrific start. As a reminder, to help support commercial launch, we have deployed more than 70 sales representatives and nurse liaisons to educate the health care professional community about XPOVIO, each with extensive pharmaceutical, hematologic oncology and/or multiple myeloma experience. These commercial efforts are also being supported by an experienced account management team that interacts with payers and our distribution partners as well as our comprehensive, fully integrated KaryForward support program for patients, caregivers and health care providers.

Based on analysis of Symphony claims data, we estimate that about 1,300 accounts generate roughly 80% of all multiple myeloma prescriptions in the U.S. And as you might expect, we are placing an emphasis in these early days on the 400 highest volume accounts, which are generating roughly half of all myeloma prescriptions.

Turning now to Slide 10. There are several components of our overarching commercial launch strategy, which we believe had been an integral -- have been integral to our early success. They include: establishing clear export inhibition as a novel fundamental approach in the treatment of multiple myeloma; positioning XPOVIO as the oral, agent of choice with a clinically meaningful efficacy profile in its approved indication; educating health care providers and patients on XPOVIO side-effect profile and related management strategies; and finally, minimizing access barriers to help appropriate patients start and stay on therapy. These core tenets are the foundation of the ongoing rollout and what we believe have led to such a strong start for XPOVIO in the first few months on the market.

On Slide 11, I will highlight some key metrics that provide a bit more detail on our early commercial achievements. As of September 30, 2019, there were over 300 unique XPOVIO prescribers and prescribing accounts, including over 100 prescribers who have already begun XPOVIO treatment in multiple patients. In total, we saw over 500 XPOVIO prescriptions generated and fulfilled by the end of September.

I am also excited to report that XPOVIO prescriptions and patient demand increased each month following approval, from July to August and then from August to September. Sales were driven by a combination of new patient starts, prescription refills and initial inventory to Karyopharm's distribution partners. Of course, as excited as we are of this early rapid adoption, it is still too early in the launch cycle to say with much certainty if sales were positively impacted by an initial bolus of patients in these first few months.

While we do believe there were many patients eagerly awaiting XPOVIO's approval, we will still need to track additional months of prescription data to have a better sense of the expected future sales trajectory. In addition, despite the availability of a number of excellent drugs for patients with multiple myeloma, essentially all patients will develop disease that is refractory to the previously approved agents, and thus, many will become candidates for XPOVIO. We look forward to continuing to educate the health care community on XPOVIO as a potential treatment option for patients with heavily pre-treated multiple myeloma.

Let me now also highlight a few sales force metrics that we're particularly proud of, and that we believe played a role in our successful first few months. First, as of September 30, 97% of the top 200 myeloma prescribing physician accounts have been seen by a Karyopharm representative. We think this is a testament to both our focused selling strategy as well as the high level of interest from the myeloma community in learning about XPOVIO and its novel mechanism of action.

Next, XPOVIO was ranked #2 in IQVIA's BrandImpact survey for July and August, which tracks the share of pharmaceutical sales calls to oncologists for a multiple myeloma drug, second only to DARZALEX. This is a tremendous accomplishment for a brand-new commercial player in the cancer space and, again, reinforces our belief that we have the right people in place and the right resources dedicated to effectively promoting XPOVIO.

Turning now to Slide 12. We also believe that a key contributor to our early success has been driven by our ability to quickly secure reimbursement coverage for XPOVIO. Our team has made tremendous progress during the first 90 days of the launch, resulting in XPOVIO being added to a number of key national pharmacy benefit manager formularies and national insurers' coverage policies.

Based on prescription fulfillment data through the specialty pharmacy channel, we estimate that approximately 60% of XPOVIO prescriptions have been dispensed to patients with Medicare coverage, 35% to patients with commercial insurance and the remaining 5% of patients having either Medicaid or another form of prescription coverage. To date, we have fortunately experienced few reimbursement challenges, and we believe insurers understand that patients with heavily pre-treated multiple myeloma have a very high level of unmet medical need.

The recent addition of XPOVIO to the National Comprehensive Cancer Network, or NCCN, multiple myeloma guidelines; and the publication of the STORM study result in the New England Journal of Medicine, have also been well received by payers and contributed to the positive discussions with the payer community.

Let me also provide some final commentary on the early feedback we are hearing from prescribing physicians, which you can see on Slide 13. Most physicians with whom we have interacted with indicate that the clinical efficacy reported in the STORM study is highly compelling, and the patient responses reported in the post-approval setting are consistent with the clinical experience seen in STORM.

Further, while the data is still early, patient prescription refills have been steadily increasing each month since launch, with some patients already receiving a third monthly prescription of XPOVIO, which is quite encouraging. With respect to tolerability, proactive education about prevention and management of potential side effects is being well received by both physicians and nursing staffs.

Importantly, a low rate of patient discontinuations due to side effects has been observed to date. Finally, the 160-milligram dose, which is taken as 80 milligrams twice per week, is the most frequently prescribed dose for both new patients and prescription refills, further validating our belief that most physicians are able to support their patients and help mitigate or manage side effects of XPOVIO at the recommended starting dose.

In summary, while it is still early days, and we have a lot of work in front of us, we are extremely proud of the commercial launch thus far. We are pleased with the overall feedback and insights coming from early prescribers, and we believe there is still significant untapped opportunity for greater utilization. In the upcoming months -- orders ahead, we anticipate seeing a greater number of high-volume myeloma accounts writing their first prescription, a greater number of repeat prescriptions coming from those already prescribing and increased penetration and utilization from mid-volume myeloma prescribing accounts.

I'll now turn the call over to Mike Mason to review the financials.

--------------------------------------------------------------------------------

Michael P. Mason, Karyopharm Therapeutics Inc. - Senior VP, CFO & Treasurer [5]

--------------------------------------------------------------------------------

Thank you, Perry. Since we issued a press release earlier today with the full financial results, I will just focus on the highlights. As shown on Slide 15, for the third quarter of 2019, net product sales were $12.8 million, which reflects the first quarter of recorded sales for XPOVIO.

As previously mentioned, these sales were driven by a combination of patient demand as well as initial channel inventories sold to our distribution partners. We estimate that of the $12.8 million in quarterly sales, approximately $10 million was driven by patient demand, with the remaining approximately $3 million driven by channel inventory.

The estimated gross-to-net discount for XPOVIO in the third quarter was approximately 15%, which is on the lower end of our annual expectation of 15% to 20%. We still project a steady-state range of 15% to 20%, however, we do expect some variability from quarter-to-quarter. Cost of sales in the third quarter of 2019 were -- was $1 million, which reflects the cost of XPOVIO units sold and third-party royalties on our net product revenue.

For the third quarter of 2019, R&D expense was $26.3 million compared to $36.4 million for the third quarter of 2018. This reduction in costs is reflective of our financial discipline and commitment to focusing on our most critical and promising R&D activities. We expect R&D expense to be relatively consistent for the final quarter of 2019 compared to the third quarter of 2018 -- I'm sorry, of '19.

SG&A expense for the third quarter of 2019 was $25.3 million compared to $13 million for the third quarter of 2018. The increase in SG&A expenses compared to the prior year period was due primarily to related commercial launch activities supporting the U.S. commercial launch of XPOVIO. We expect SG&A expenses for the fourth quarter of 2019 to be relatively consistent with Q3 '19.

For the third quarter of 2019, we reported a net loss of $41.4 million or $0.67 per share compared to a net loss of $48.1 million or $0.79 per share for the third quarter of 2018. Net loss includes stock-based compensation expense of $3.7 million and $4.8 million for the third quarters of 2019 and '18, respectively.

Turning now to Slide 16. I will highlight the improvements we have made on our balance sheet and some guidance for the future. On September 2019, Karyopharm executed a royalty agreement with Healthcare Royalty Partners for up to $150 million to support the ongoing development and commercialization of XPOVIO. Under the terms of the agreement, we received $75 million in September 2019 and are eligible to receive an additional $75 million, with the agreement of both parties and upon the achievement of future regulatory and commercial milestones. In exchange for the first $75 million, HCR will receive a tiered royalty in the mid-single digits based on worldwide net revenues of XPOVIO and any other future products, beginning in October 2019.

As of September 30, 2019, cash, cash equivalents and investments, including restricted cash, totaled $270.3 million compared to $330.9 million as of December 31, 2018. Finally, based on our current operating plan, we expect our full year 2019 non-GAAP operating expenses, which excludes stock-based compensation, to be between $200 million and $210 million as compared to our previous guidance of $200 million to $215 million. We now expect that our existing cash, cash equivalents and investments, based on our current operating plan, will be sufficient to fund planned operations into the middle of 2021.

I'll now turn the call back over to Michael for some concluding remarks. Michael?

--------------------------------------------------------------------------------

Michael G. Kauffman, Karyopharm Therapeutics Inc. - Co-Founder, CEO & Director [6]

--------------------------------------------------------------------------------

Thank you, Mike. Before moving to the Q&A, let me reiterate that our overarching goal remains to develop novel medicines for patients with cancer and other serious diseases, and we see the successful STORM study and accelerated approval of XPOVIO as a giant leap forward towards that goal, but it is the first in what we hope to be many future successful trials and approvals across many indications.

Now I'll provide a quick review of our key upcoming milestones, found on Slide '17. First, we will continue to execute on our commercial launch initiatives for XPOVIO in the U.S. and look forward to providing you future updates on our progress. For the pivotal Phase III BOSTON study, top line data are expected in early 2020, depending on the occurrence of progression events in the trial. If positive, these data could support regulatory submissions in 2020 in second-line myeloma. For our next potential indication in relapsed or refractory DLBCL, we expect to submit an NDA to the FDA with a request for accelerated approval based on the SADAL trial results by the end of 2019 and MAA in Europe in 2020.

Next, we continue to work closely with the EMA in support of our MAA, requesting a conditional approval for selinexor, and we expect to receive a decision in early 2020. And finally, we expect to progress our late-stage solid tumor programs and look forward to potential additional regulatory filings and commercial launches in the future.

In summary, the XPOVIO commercial launch is off to a very strong start, and we are highly encouraged by the early commercial uptake and positive feedback from the prescribing physicians. As we look ahead to the next few months and into 2020, we have a number of value-creating milestones on the horizon, all of which have the potential to be transformative, both for Karyopharm and for patients battling multiple myeloma, DLBCL and potentially other cancers in the near future.

I'll now turn the call over to the operator for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) And our first question comes from the line of Brian Abrahams with RBC Capital Markets.

--------------------------------------------------------------------------------

Brian Corey Abrahams, RBC Capital Markets, Research Division - Senior Biotechnology Analyst [2]

--------------------------------------------------------------------------------

Congrats on the strong start to the launch. A few for me. I guess, first off, you described some of the refill rates that you're seeing. And I'm curious what your sense is on how that might -- those might translate to overall compliance rates long term and then overall duration of use. And how you think duration is going to evolve in this population?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [3]

--------------------------------------------------------------------------------

Yes. While it's still too early to know with accuracy what the refill rate has been as many patients are still early in their initial treatment, we do know that for a significant percentage of our sales, which were ordered by cancer clinics through specialty distributors, such as [Carroll] and McKesson, we don't have access to that patient-level data, and we only see total prescriptions with no delineation between a new patient and a refill. So in some sense, it's hard to gauge actually where we are with the refills.

But what we do know is that the patients that were first prescribed with XPOVIO in that first month post-approval, we've already seen some patients receive their third monthly prescription. And what I can tell you, in general, we're not hearing from customers or seeing data from our specialty pharmacy providers that a high number of patients are discontinuing therapy due to side effects. In fact, we're hearing from a number of physicians, especially those who use proactive supportive care, which is outlined in our full prescribing information for XPOVIO and a big part of our commercial education efforts, that these physicians are seeing fewer-than-expected discontinuations due to side effects.

So as this continues, we would anticipate, a, if they have a better experience that we're going to get more refills, it's also going to -- they'll probably look to add more patients on therapy because of the good success that they are having. So we would anticipate that those refill rates will continue.

--------------------------------------------------------------------------------

Brian Corey Abrahams, RBC Capital Markets, Research Division - Senior Biotechnology Analyst [4]

--------------------------------------------------------------------------------

Got it. And then you talked about month-over-month growth within the third quarter. I'm curious if you could give us any more color around that. And I guess what metrics you might be looking for within those particular monthly trends that might help guide the degree of pent-up demand that influence those early launch? And then I have one more quick follow-up on BOSTON.

--------------------------------------------------------------------------------

Ian Karp, Karyopharm Therapeutics Inc. - VP of Investor & Public Relations [5]

--------------------------------------------------------------------------------

Yes, this is Ian. I'm not sure -- again, as Perry mentioned, the data is certainly in the early days. And so I think, at this stage, there's not more detail that we can provide about those refill rates and those trends, other than we continue to be very pleased with the trajectory of that launch (inaudible).

--------------------------------------------------------------------------------

Brian Corey Abrahams, RBC Capital Markets, Research Division - Senior Biotechnology Analyst [6]

--------------------------------------------------------------------------------

Understood. I realize it's very early days. And then, lastly, it looks like you've refined the time line for when you might expect to see the BOSTON readout. Just wondering anything that sort of influenced the narrowing of that time lines there. And maybe how quickly we might think about when we would see a sales inflection post-BOSTON if the data are positive? I guess I'm curious in terms of how quickly a filing could be turned over with the FDA. How quickly there could be an NCCN submission? Any sense you're getting from payers as to how quickly they might provide reimbursement for [earlier line] population?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [7]

--------------------------------------------------------------------------------

Yes. Well, first on the easy part, which is that this trial is event-driven, so we're waiting on events. And as you all know that towards the tail end of any myeloma trials, driven by primarily patients who have complete responses and very good partials, and so we're really waiting for relapses in mainly those patients. So it's -- the refinement and the time line is simply reflective of where we are in the number of events, and where we believe we need to be for the trial to read out.

We are not going to comment today on what would happen subsequently. You can rest assured, however, that the company is really singularly focused on turning around BOSTON as expeditiously as possible, with quality data that have all been IRC-reviewed, DSMB-reviewed and so on, and communicating with FDA early because we recognize the urgent medical need for these patients with myeloma. So we're moving as quickly as we can, Brian.

--------------------------------------------------------------------------------

Brian Corey Abrahams, RBC Capital Markets, Research Division - Senior Biotechnology Analyst [8]

--------------------------------------------------------------------------------

Got it. Congrats on the launch.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

And our next question comes from the line of Eric Joseph with JPMorgan.

--------------------------------------------------------------------------------

Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [10]

--------------------------------------------------------------------------------

Let me also have my congrats on the early launch progress. I guess as it relates to insurance coverage at this point, can you just comment on the extent of any outstanding -- there were ongoing reviews that might -- it's still kind of presented as a barrier to reimbursement at this point. And to the extent there has been any pushback amongst payers, can you just provide some color around that point?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [11]

--------------------------------------------------------------------------------

Yes. So I appreciate the question. So far, the response from the payers has been generally positive. We're not encountering significant roadblocks there. And it's still early in the launch cycle, but we do get the sense that the payers understand the urgency with which these patients need additional therapies.

We're seeing prescriptions generated and subsequently approved from both large commercial payers and Medicare Part D plans.

In terms of the time it's taking, our goal is, of course, to get this as short as possible, and we've seen progress with that every single month since launch. The approval time for the payers has been progressing, and we want to get that down to less than a week and sometimes that's already happening.

So we continue to work hard with the payer community so that the new time line is short. And honestly, we're not seeing any significant roadblocks. And we've had actually no denials within our approved indications to date.

--------------------------------------------------------------------------------

Eric William Joseph, JP Morgan Chase & Co, Research Division - VP & Senior Analyst [12]

--------------------------------------------------------------------------------

Great. And maybe just a follow-up point on -- as it relates to AE-related discontinuations. Can you just point sort of quantify what low means? And whether there's any, I guess, any common trends driving patient discontinuation?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [13]

--------------------------------------------------------------------------------

Yes. So when we look at discontinuations, a lot of it's feedback from physicians and what we see from our specialty pharmacy network. And when we talk about it being low, it's within the range of what we saw in the STORM trial and lower than what we actually would have anticipated based upon the results of that trial. And our team is definitely working hard with the accounts on the proper supportive care protocols. And what we've seen is those accounts that put the right supportive care programs in place are having very few discontinuations due to adverse events.

--------------------------------------------------------------------------------

Michael G. Kauffman, Karyopharm Therapeutics Inc. - Co-Founder, CEO & Director [14]

--------------------------------------------------------------------------------

Yes. And we can't really quantitate, just to add on to Perry, but through our pharmacovigilance, post-marketing pharmacovigilance, we see largely the same kinds of side effects. What appear to be at lower rates than what we reported in STORM, part of that is because post-marketing, things tend to be reported lower. But stopping the drug due to side effect seems to be lower than what was in the clinical trial.

--------------------------------------------------------------------------------

Operator [15]

--------------------------------------------------------------------------------

And our next question comes from the line of Jonathan Chang with SVB Leerink.

--------------------------------------------------------------------------------

Wei Ji Chang, SVB Leerink LLC, Research Division - MD of Emerging Oncology & Senior Research Analyst [16]

--------------------------------------------------------------------------------

Congrats on the strong launch. First question, in the past, you've spoken about your view that demand for XPOVIO could be strong in the community setting. Any color on the dynamic between the academic and community settings? And any difference in physician feedback there? I guess, specifically, what has the early feedback been with regards to the management of adverse events?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [17]

--------------------------------------------------------------------------------

Yes. So we've seen a very good mix of demand coming from both commercial and academic. I know that there was some talk about the drug in the community-based setting, and we received very positive feedback from the community-based setting. And they seemed to be putting patients on at the appropriate dose and the patients have been able to stay on that dose.

--------------------------------------------------------------------------------

Wei Ji Chang, SVB Leerink LLC, Research Division - MD of Emerging Oncology & Senior Research Analyst [18]

--------------------------------------------------------------------------------

Got it. And one other question for me. Has the second interim for the BOSTON study occurred? And if the second interim pass, is this something you guys would disclose?

--------------------------------------------------------------------------------

Michael G. Kauffman, Karyopharm Therapeutics Inc. - Co-Founder, CEO & Director [19]

--------------------------------------------------------------------------------

Yes, thanks. We're not prepared to discuss any of that, just simply to say that we anticipate top line data in the first quarter next year, and we'll disclose what we can at that time and then at a future medical meeting.

--------------------------------------------------------------------------------

Operator [20]

--------------------------------------------------------------------------------

And our next question comes from the line of Maury Raycroft with Jefferies.

--------------------------------------------------------------------------------

Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [21]

--------------------------------------------------------------------------------

First question is just if you can comment on whether the patients treated so far [like] the label? Or are you getting some earlier line use from centers or doctors that are familiar with the drug? And if there's any use that's not specifically in the label, can you talk about how the reimbursement process has been for those patients?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [22]

--------------------------------------------------------------------------------

Yes. So our commercial team, of course, can and will only promote XPOVIO based on its FDA-approved indication. Some physicians may choose to combine XPOVIO with other anti-myeloma drugs, which is generally how myeloma patients are treated. But we do not systematically have access to these kinds of metrics. Our medical affairs team does get unsolicited requests for clinical information about combination studies with XPOVIO and other standard anti-myeloma drugs. With regards to the payer community, I can't comment on really what they're doing with regards to any off-label utilization.

--------------------------------------------------------------------------------

Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [23]

--------------------------------------------------------------------------------

Got it. That's helpful. And just as a follow-up, just wondering if you can provide any additional perspective on the supportive care strategies that keep patients on therapy. I guess how useful have the doctor management strategy has been versus KaryForward support? And how are those 2 working together? And then what other variables can you tweak to help keep patients on therapy?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [24]

--------------------------------------------------------------------------------

Yes. So we kind of take a 3-pronged approach to this. We work with our specialty pharmacy providers and KaryForward to work with the patients to ensure that they have the proper supportive care medications on board when they start therapy. And then our team of sales representatives, and specifically our Karyopharm nursing liaison team, work with the accounts to talk with the prescribers about the proper supportive care profile and the supportive care measures that are necessary to ensure patient success.

Also, our dose and dose modification guide within our package insert really spells things out appropriately for prescribers. So we're able to kind of wrap that patient in the office with the right care that they need to ensure patient success.

--------------------------------------------------------------------------------

Operator [25]

--------------------------------------------------------------------------------

And our next question comes from the line of Arlinda Lee with Canaccord.

--------------------------------------------------------------------------------

Catherine Clare Novack, Canaccord Genuity Corp., Research Division - Associate [26]

--------------------------------------------------------------------------------

This is Catherine on for Arlinda. Congrats on the launch process -- progress. Just a few questions this morning. First, can you give some insight into how filling the initial channel inventory affected revenue this quarter? And how should this influence how we look at revenue trends going forward?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [27]

--------------------------------------------------------------------------------

Yes. So the $12.8 million of net revenue for the quarter, about $10 million of it was demand revenue to patients, about $2.8 million was for channel inventory. And I think it's too early to comment on revenue trend going forward. But that -- certainly, the channel, what we try to -- we manage it with our -- with the rest of our specialty pharmacies and specialty distributors, for which they keep around 3 to 4 weeks of inventory on hand.

--------------------------------------------------------------------------------

Catherine Clare Novack, Canaccord Genuity Corp., Research Division - Associate [28]

--------------------------------------------------------------------------------

Okay. And my second question is with regards to the SADAL results. So the NDA is for third-line CAR-T and stem cell transplant eligible. Can you speak to the response rate, PFS and DoR in this specific subset of patients from the trial?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [29]

--------------------------------------------------------------------------------

Sure. The data, yes, we're -- basically, what was presented at the ICML oral presentation this past year, the response rate was in the 28% range. These are all, by the way, independently adjudicated radiological responses. And the duration of response was 9.3 months for the group.

And I should also point out that amongst the responders, the 28%, approximately 11% had complete remissions. PFS was -- is not a variable that FDA recognizes in this setting of accelerated approval because this is a single-arm trial.

--------------------------------------------------------------------------------

Catherine Clare Novack, Canaccord Genuity Corp., Research Division - Associate [30]

--------------------------------------------------------------------------------

Okay. Could you also comment on what FDA has seen in the BOSTON trial when you got the accelerated approval?

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [31]

--------------------------------------------------------------------------------

Sure. FDA chose to give a little more structure to what they have looked at, as BOSTON is part of the STORM study. And they had seen all of the safety data, which, of course, we are privy to, including the number of deaths on each arm of the study. And as we've said, there is absolutely no imbalance of death against XPOVIO on the BOSTON study, and that continues to today.

They also saw efficacy data, which we are not privy to, including response rate and early progression events. This was the first interim analysis that was reviewed by the DSMB. And we should also point out that, that did not result in any change in the trial. So presumably, what was seen was on target for the design of the study, which was to show a hazard ratio of 0.7 or better.

--------------------------------------------------------------------------------

Operator [32]

--------------------------------------------------------------------------------

And our next question comes from the line of Mike Ulz with Baird.

--------------------------------------------------------------------------------

Michael Eric Ulz, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [33]

--------------------------------------------------------------------------------

Congratulations as well on the strong launch here. Just now you're a few months into the XPOVIO launch in the U.S., are you still comfortable with the size of your sales force, which I think is around 70 sales reps? And then, secondly, assuming the BOSTON study is positive here, how are you thinking about the size of the sales force next year? And then I have a quick follow-up.

--------------------------------------------------------------------------------

Perry Monaco, Karyopharm Therapeutics Inc. - SVP of Sales [34]

--------------------------------------------------------------------------------

So with regards to the size of the team currently, absolutely, we're very comfortable with the size of the team that we have. And I think that's been validated by some of the research that we've seen. I mentioned before IQVIA BrandImpact survey, which we were #2 in myeloma. And then, even with the BOSTON approval, ultimately, that does not change the size of your customer base. And we have great reach to our customers right now, so we're quite comfortable with where we stand with BOSTON as well.

--------------------------------------------------------------------------------

Michael Eric Ulz, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [35]

--------------------------------------------------------------------------------

Got it. And then maybe if you can just comment on any updates related to your filing of XPOVIO in Europe? It looks like in the Q, there are a couple of updates there?

--------------------------------------------------------------------------------

Michael G. Kauffman, Karyopharm Therapeutics Inc. - Co-Founder, CEO & Director [36]

--------------------------------------------------------------------------------

I think all we say is that the timing of the expected decision is in the early part of 2020. And this is based on normal interactions between us and the EMA (inaudible) and the other regulators.

--------------------------------------------------------------------------------

Operator [37]

--------------------------------------------------------------------------------

And our last question comes from the line of Ed White with H.C. Wainwright.

--------------------------------------------------------------------------------

Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [38]

--------------------------------------------------------------------------------

Congratulations on the revenue number. So just to follow up on that last question. For Europe, maybe you could discuss your strategy. Or when you will be able to discuss the strategy with us for a European launch?

--------------------------------------------------------------------------------

Christopher Brett Primiano, Karyopharm Therapeutics Inc. - Executive VP, Chief Business Officer, General Counsel & Secretary [39]

--------------------------------------------------------------------------------

Yes, sure. This is Chris. So we continue to assess numerous options for potential commercialization in Europe. The keys for us are maximizing access to patients and value for Karyopharm.

So to that end, one option could include a partnership. In this scenario, we looked for a partner that is in a partnership that's usually beneficial for both parties to maximize the potential of selinexor in the European market. Importantly, we'd be looking for a partner who aligns with our philosophy regarding long-term development and commercialization plans for selinexor and has expertise and the infrastructure in marketing hematologic -- both malignancy drugs in EU.

A second option on the other end of the spectrum could be to potentially launch selinexor on our own in select European countries where reimbursement negotiations and decisions typically occur more quickly and at acceptable levels.

So from our perspective, we believe the value of selinexor will [fill us] over time, particularly as we progress through the regulatory process in multi-myeloma, and as we submit our NDA and MAA in DLBCL based on the results of the SADAL study and await BOSTON data early next year.

--------------------------------------------------------------------------------

Operator [40]

--------------------------------------------------------------------------------

Thank you. And this concludes today's question-and-answer session. I would now like to turn the call back to Michael Kauffman, CEO, for any closing remarks.

--------------------------------------------------------------------------------

Michael G. Kauffman, Karyopharm Therapeutics Inc. - Co-Founder, CEO & Director [41]

--------------------------------------------------------------------------------

Thank you, everybody, for joining us today. Exciting times, and have a great day. Talk to you soon.

--------------------------------------------------------------------------------

Operator [42]

--------------------------------------------------------------------------------

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.