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华盛顿特区20549
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根据该法第12(B)条登记的证券：
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截至2024年10月31日，已有
表 内容
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2 |
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第1项。 |
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2 |
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2 |
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3 |
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4 |
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5 |
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6 |
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7 |
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第二项。 |
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20 |
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第三项。 |
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28 |
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第四项。 |
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28 |
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29 |
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第1A项。 |
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29 |
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第五项。 |
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77 |
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第六项。 |
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78 |
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79 |
1
第一部分--融资AL信息
项目1.凝聚康固已修订的财务报表（未经审计）。
KaryophARm THERAPEUTICS Inc.
浓缩合并ED资产负债表
(未经审计)
(以千为单位，每股除外)
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9月30日， |
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十二月三十一日， |
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资产 |
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流动资产： |
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现金及现金等价物 |
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$ |
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$ |
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投资 |
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应收账款净额 |
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库存 |
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预付费用和其他流动资产 |
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受限现金 |
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流动资产总额 |
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财产和设备，净额 |
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经营性租赁使用权资产 |
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受限现金 |
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其他资产 |
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总资产 |
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$ |
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$ |
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负债和股东赤字 |
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流动负债： |
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应付帐款 |
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$ |
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$ |
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应计费用 |
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经营租赁负债 |
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其他流动负债 |
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流动负债总额 |
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2025年到期的可转换优先票据 |
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2029年到期的可转换优先票据 |
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高级担保定期贷款 |
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延期使用费义务 |
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普通股认股权证 |
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经营租赁负债，扣除当期部分 |
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其他负债 |
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总负债 |
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股东赤字： |
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优先股，$ |
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普通股，$ |
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额外实收资本 |
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累计其他综合损失 |
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累计赤字 |
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( |
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股东总亏损额 |
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( |
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( |
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总负债和股东赤字 |
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$ |
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$ |
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见简明合并财务报表附注。
2
KaryophARm THERAPEUTICS Inc.
浓缩合并S操作的状态
(未经审计)
(以千为单位，每股除外)
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截至9月30日的三个月， |
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在截至9月30日的9个月内， |
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2024 |
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2023 |
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2024 |
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2023 |
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收入： |
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产品收入，净额 |
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$ |
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$ |
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$ |
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$ |
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许可证和其他收入 |
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总收入 |
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运营费用： |
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销售成本 |
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研发 |
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销售、一般和行政 |
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总运营支出 |
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运营亏损 |
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( |
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( |
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( |
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其他收入(支出)： |
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利息收入 |
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利息开支 |
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( |
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债务清偿收益 |
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其他收入(费用)，净额 |
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( |
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其他收入(费用)合计，净额 |
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( |
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( |
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( |
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所得税前亏损 |
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( |
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( |
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( |
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( |
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所得税拨备 |
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( |
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( |
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( |
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( |
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净亏损 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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每股基本净亏损（注7） |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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稀释每股净亏损（注7） |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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加权平均已发行普通股数 |
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加权平均已发行普通股数 |
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见简明合并财务报表附注。
3
KaryophARm THERAPEUTICS Inc.
凝结巩固状态综合收入（损失）
(未经审计)
(单位：千)
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截至9月30日的三个月， |
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在截至9月30日的9个月内， |
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2024 |
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2023 |
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2024 |
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2023 |
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净亏损 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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其他全面收益(亏损) |
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投资未实现收益(亏损) |
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( |
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外币折算调整 |
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( |
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( |
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( |
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综合损失 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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见简明合并财务报表附注。
4
KaryophARm THERAPEUTICS Inc.
凝结合并ST现金流的参与者
（未经审计）
(in数千）
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截至9月30日的九个月内， |
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2024 |
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2023 |
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经营活动 |
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净亏损 |
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$ |
( |
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$ |
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将净亏损与经营活动中使用的净现金进行调节的调整： |
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基于股票的补偿费用 |
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折旧及摊销 |
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债务发行成本和折扣摊销 |
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投资溢价和折扣净摊销 |
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消除债务的收益 |
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( |
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嵌入式衍生品和普通股证的公允价值变化 |
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( |
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经营资产和负债变化： |
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应收帐款，净额 |
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( |
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库存 |
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( |
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预付费用和其他资产 |
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( |
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经营租赁使用权资产 |
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应付帐款 |
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( |
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应计费用和其他负债 |
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( |
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( |
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经营租赁负债 |
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( |
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( |
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经营活动所用现金净额 |
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( |
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( |
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投资活动 |
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投资到期收益 |
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购买投资 |
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( |
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( |
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购买财产和设备 |
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( |
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投资活动提供（用于）的净现金 |
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( |
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融资活动 |
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发放高级担保定期贷款的收益 |
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行使股票期权和根据员工股票购买计划发行的股票的收益 |
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支付债务发行成本 |
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( |
) |
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支付延期特许权使用费义务 |
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( |
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融资活动提供的净现金 |
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价位对现金、现金等值物和受限制现金的影响 |
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( |
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现金、现金等值物和限制性现金净增加（减少） |
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( |
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年初现金、现金等值物和限制性现金 |
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期末现金、现金等值物和限制性现金 |
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$ |
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$ |
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简明综合资产负债表内报告的现金、现金等值物和限制性现金的对帐 |
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现金及现金等价物 |
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$ |
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$ |
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短期限制现金 |
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长期限制现金 |
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现金、现金等值物和限制现金总额 |
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$ |
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$ |
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补充披露： |
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为递延特许权使用费义务利息支付的现金 |
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$ |
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$ |
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可转换债务和定期贷款利息支付的现金 |
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$ |
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$ |
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为经营租赁负债计量中包含的金额支付的现金 |
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$ |
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$ |
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2029年到期的可转换优先票据，并附有购买凭证 |
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$ |
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$ |
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发放高级有担保定期贷款以换取美金 |
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$ |
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$ |
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发行普通股用于结算与融资活动相关的财务咨询费 |
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$ |
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$ |
— |
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2029年到期的可转换优先票据以换取美金 |
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$ |
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$ |
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见简明合并财务报表附注。
5
KaryophARm THERAPEUTICS Inc.
浓缩合并声明股东赤字净值
(未经审计)
(单位：千)
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普通股 |
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其他内容 |
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累计 |
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累计 |
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总 |
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股份 |
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量 |
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截至2024年6月30日余额 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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限制性股票的归属 |
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— |
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— |
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— |
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— |
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— |
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基于股票的薪酬 |
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— |
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— |
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— |
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— |
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投资未实现收益 |
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— |
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— |
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— |
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— |
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外币累计换算调整 |
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— |
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— |
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— |
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— |
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净亏损 |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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截至2024年9月30日余额 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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截至2023年6月30日的余额 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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限制性股票的归属 |
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— |
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— |
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— |
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— |
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— |
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基于股票的薪酬 |
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— |
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— |
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— |
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— |
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发行普通股认股权证 |
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— |
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— |
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— |
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— |
|
|
|
|
||
投资未实现收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
外币累计换算调整 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
净亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
截至2023年9月30日的余额 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
截至2023年12月31日的余额 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
限制性股票的归属 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
根据员工股票购买计划发行的股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
发行普通股用于财务顾问费 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
基于股票的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
投资未实现收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
外币累计换算调整 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
净亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
截至2024年9月30日余额 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
截至2022年12月31日的余额 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
限制性股票的归属 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
行使根据员工股票购买计划发行的股票期权和股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
基于股票的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
发行普通股认股权证 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
投资未实现亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
外币累计换算调整 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
净亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
截至2023年9月30日的余额 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
见简明合并财务报表附注。
6
KaryophARm THERAPEUTICS Inc.
关于凝聚词的注记OLIDATED财务报表
1.业务性质及呈报依据
业务性质
卡里奥帕姆治疗公司是特拉华州的一家公司(与其子公司统称为“公司”、“我们”、“我们”或“我们的”)，是一家商业阶段的制药公司，开创了新的癌症疗法，致力于发现、开发和商业化针对治疗癌症和其他疾病的核出口的一流药物。我们于2008年12月22日在特拉华州注册成立，主要营业地点在马萨诸塞州牛顿市。
我们的科学专长是基于对细胞核和细胞质之间的细胞内通讯调节的理解。我们已经发现并正在开发新型的小分子选择性核出口化合物抑制剂，这些化合物可以抑制核出口蛋白Exportin 1。我们的主要重点是营销XPOVIO®(Selinexor)在其目前批准的适应症中，以及开发和寻求监管机构批准Selinexor作为针对多种高度未满足的癌症适应症的口服药物，包括我们治疗子宫内膜癌、多发性骨髓瘤和骨髓纤维化的核心计划。
我们的主要资产XPOVIO于2019年7月获得美国食品和药物管理局(FDA)的初步批准，目前批准并上市的适应症如下：(I)与Bortezomib和地塞米松联合用于治疗既往至少接受过一种治疗的多发性骨髓瘤成人患者；(Ii)与地塞米松联合用于治疗已接受至少四种治疗且其疾病对至少两种蛋白酶体抑制剂、至少两种免疫调节剂和抗CD38单抗无效的成人多发性骨髓瘤患者；以及(Iii)用于治疗复发或难治性弥漫性大b细胞淋巴瘤(“DLBCL”)的成人患者，包括滤泡性淋巴瘤引起的DLBCL，在至少两条系统治疗后。XPOVIO和NEXPOVIO(Selinexor在欧洲和英国的品牌名称)在美国以外的商业化由我们在各自地区的合作伙伴管理。XPOVIO/NEXPOVIO已在美国以外的45个国家/地区获得监管批准，并在越来越多的国家/地区投入商业使用，因为我们的合作伙伴继续确保获得报销批准。
流动性、资本资源和持续经营
截至2024年9月30日，我们有$
如果我们利用资本资源的速度快于预期，或无法获得额外资金，我们可能不得不大幅削减、推迟、减少或取消我们的一个或多个研发计划，或我们一个或多个产品或候选产品的任何当前或未来的商业化努力，这可能会对我们的业务、财务状况和运营结果产生实质性的不利影响。如果我们无法继续经营下去，我们可能不得不清算我们的资产，并可能获得低于这些资产在我们财务报表上的价值，投资者很可能会失去他们的全部或部分投资。如果我们寻求额外的融资来资助我们未来的商业活动，而我们作为一家持续经营的企业的能力仍然存在很大的疑问，投资者或其他融资来源可能不愿以商业合理的条款向我们提供资金，如果有的话。随附的简明综合财务报表并不包括对账面金额及资产及负债分类的任何调整，如我们无法继续经营下去，该等调整可能是必需的。
7
陈述的基础
本公司所附未经审核简明综合财务报表乃根据美国中期财务报告公认会计原则(“公认会计原则”)及S-X法规第10-01条的规定编制。因此，它们不包括公认会计准则要求的完整财务报表所需的所有信息和脚注。我们认为，所有被认为是公平列报中期财务信息所必需的调整(包括正常和经常性的调整)都已包括在内。在根据公认会计原则编制财务报表时，我们必须做出影响财务报表日期资产、负债、收入、费用和相关披露报告金额的估计和假设。实际结果可能与这些估计不同。此外，截至2024年9月30日的三个月和九个月的经营业绩不一定代表任何其他中期或截至2024年12月31日的财政年度的预期结果。欲了解更多信息，请参阅我们于2024年2月29日提交给美国证券交易委员会(SEC)的截至2023年12月31日的Form 10-k年度报告(“年度报告”)中包含的财务报表和脚注。
巩固的基础
截至2024年9月30日的简明综合财务报表包括卡里奥帕姆治疗公司及其全资子公司的账目。所有公司间余额和交易均已在合并中冲销。
编制本表格10-Q中的这些简明合并财务报表所使用的重要会计政策与附注2中讨论的政策一致。重要会计政策摘要在我们的年度报告中。
2.产品收入
迄今为止，我们唯一的产品收入来源是XPOVIO在美国的销售。产品净收入（包括主要由分销费和现金折扣组成的拨备，以及退款、回扣和退货准备金）如下（以千计）：
|
|
这三个月 |
|
|
在九个月里 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
生产总值收入 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
产品收入拨备 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
产品总收入，净额 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
截至2024年9月30日和2023年12月31日，产品净收入为美元
3.库存
下表列出了我们的库存（以千计），所有库存均与XPOVIO相关：
|
|
截至2024年9月30日 |
|
|
截至2023年12月31日 |
|
||
原料 |
|
$ |
|
|
$ |
|
||
Oracle Work in Process |
|
|
|
|
|
|
||
成品 |
|
|
|
|
|
|
||
总库存 |
|
$ |
|
|
$ |
|
||
4.许可协议
在前期，我们与Berlin-Chemie AG（美纳里尼集团（“美纳里尼”）的附属公司）和Glasgene Therapeutics Limited（“Glasgene”）签订了许可协议，这两家公司均计入会计准则法典606的范围内， 与客户签订合同的收入.有关这些合同条款和会计处理考虑的更多详细信息，请参阅注5，”许可证和资产购买协议，”至年度报告第8项所载的合并财务报表。
8
下表列出了有关我们的许可证和其他收入（以千计）的信息：
|
|
这三个月 |
|
|
在九个月里 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Menarini |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
蚯蚓基因 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
许可证和其他收入总额 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
截至2024年9月30日的三个月内，我们承认了$
截至2023年9月30日的三个月内，我们确认了美元
截至2024年9月30日的九个月内，我们承认了$
截至2023年9月30日的九个月内，我们确认了美元
截至2024年9月30日，许可证及其他收入为美元
5.公允价值计量
金融工具，包括现金、现金等价物、应收账款、净额、其他流动资产、其他资产、限制性现金、应付账款和应计费用，以截至2024年9月30日和2023年12月31日的近似公允价值列报。
公允价值是指在计量日在市场参与者之间的有序交易中出售一项资产所收到的价格或转移一项负债所支付的价格。我们披露按公允价值报告的所有资产和负债的信息，以便评估用于确定报告公允价值的投入。公允价值层次结构根据这些投入的可观察性质确定这些投入的优先顺序。公允价值分级只适用于确定报告公允价值时使用的估值投入，而不是信用质量的衡量标准。该层次结构定义了三个评估输入级别：
第1级-相同资产或负债在活跃市场的报价
第2级-第1级中的报价以外的直接或间接可观察到的资产或负债的投入
第3级-反映市场参与者在为资产或负债定价时使用的假设的不可观察的输入
被归类为2级的项目包括公司债务证券、商业票据以及美国政府和机构证券。我们通过考虑从第三方定价来源获得的估值来估计这些有价证券的公允价值。这些定价来源使用行业标准估值模型，包括收入和基于市场的方法，对于这些模型，所有重要的投入都可以直接或间接地观察到，以估计公允价值。这些输入包括基于相同或类似证券的实时交易数据的市场定价、发行人信用利差、基准收益率和其他可观察的输入。我们通过了解使用的模型、从其他定价来源获取市场价值以及在某些情况下分析定价数据来验证我们的第三方定价来源提供的价格。
9
下表列出了有关我们按公允价值计量的金融资产的信息，并表明用于确定该公允价值的估值输入数据的公允价值等级（以千计）：
|
|
截至2024年9月30日 |
|
|
引用 |
|
|
意义重大 |
|
|
意义重大 |
|
||||
现金等价物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
货币市场基金 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
商业票据 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
投资： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
公司债务证券 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
商业票据 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
美国政府和机构证券 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
|
|
截至2023年12月31日 |
|
|
引用 |
|
|
意义重大 |
|
|
意义重大 |
|
||||
现金等价物： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
货币市场基金 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
美国政府和机构证券 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
投资： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
公司债务证券 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
商业票据 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
美国政府和机构证券 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
在估值投入活动有限或透明度较低的某些情况下，相关资产或负债被归类为第三级。以下负债在每个报告期结束时按公允价值计量，公允价值变动确认为其他收入(费用)的组成部分，在我们的简明综合经营报表中净额。见附注10，“长期债务“到我们的简明综合财务报表，进一步讨论这些负债：
10
下表列出了这些负债的估计公允价值变化摘要，这些负债均被归类为第三级（以千计）：
|
|
HCRx衍生物 |
|
|
2029年票据衍生品 |
|
|
2024年5月令 |
|
|||
截至2023年12月31日的余额 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
初始识别 |
|
|
— |
|
|
|
|
|
|
|
||
公允价值变动 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
截至2024年9月30日余额 |
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
6.投资
下表总结了我们的投资，这些投资被归类为可供出售并按公允价值（以千计）记录：
|
|
截至2024年9月30日 |
|
|||||||||||||
|
|
摊销 |
|
|
总 |
|
|
总 |
|
|
合计公允价值 |
|
||||
公司债务证券 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
商业票据 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
美国政府和机构证券 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
总 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
截至2023年12月31日 |
|
|||||||||||||
|
|
摊销 |
|
|
总 |
|
|
总 |
|
|
合计公允价值 |
|
||||
公司债务证券 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
商业票据 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
美国政府和机构证券 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
总 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
我们在购买时确定我们的投资的适当分类。我们所有的投资都报告为短期投资，因为它们可以在正常的商业周期中使用。当任何投资的公允价值低于其摊销成本，并且有证据表明该投资的账面价值在合理期间内无法收回时，我们就会对其进行审查。我们评估公允价值的下降是否是信用损失或其他因素造成的。在作出这项评估时，吾等会考虑公允价值低于摊销成本的程度、评级机构对证券评级的任何改变，以及与证券特别有关的不利条件等因素。如果这项评估表明存在信贷损失，则将预期从投资中收取的现金流量现值与其摊销成本基础进行比较。如果预期收取的现金流量现值低于摊余成本基础，则存在信贷损失，并在我们的简明综合资产负债表上计入信贷损失准备，但受公允价值低于摊余成本基础的金额限制。任何与信贷损失无关的减值都在其他全面收益(亏损)中确认。
信贷损失准备的变化被记录为信贷损失费用的准备金(或冲销)。当我们认为一项投资的无法收回的情况得到确认，或者当有关出售意向或要求的任何一项标准得到满足时，损失就被计入备抵。我们举行了
我们不打算在收回其摊销成本基础之前出售该等投资，该等成本基础可能已到期。我们所有的投资都在2024年9月30日起两年内到期.
11
|
|
截至2024年9月30日 |
|
|||||||||||||||||||||
|
|
少于12个月 |
|
|
12个月或更长时间 |
|
|
总 |
|
|||||||||||||||
|
|
总相关公允价值 |
|
|
未实现 |
|
|
总相关公允价值 |
|
|
未实现 |
|
|
总相关公允价值 |
|
|
未实现 |
|
||||||
公司债务证券 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||||
商业票据 |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
||
美国政府和机构证券 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
总 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||||
|
|
截至2023年12月31日 |
|
|||||||||||||||||||||
|
|
少于12个月 |
|
|
12个月或更长时间 |
|
|
总 |
|
|||||||||||||||
|
|
总相关公允价值 |
|
|
未实现 |
|
|
总相关公允价值 |
|
|
未实现 |
|
|
总相关公允价值 |
|
|
未实现 |
|
||||||
公司债务证券 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
商业票据 |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
||
美国政府和机构证券 |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
总 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|||
7.每股净亏损
每股普通股的基本净亏损是用两类法计算的，即分配给普通股的净亏损除以当期已发行普通股的加权平均数量。每股摊薄净亏损的计算方法是调整净亏损以剔除潜在稀释性普通股的影响，并将调整后的金额除以当期已发行普通股和潜在稀释性普通股的加权平均数。如果潜在稀释性普通股的影响是反稀释性的，则不包括在内。
如附注10中进一步讨论的，“长期债务“，我们有权为我们的
如附注10中进一步讨论的，“长期债务“，我们有权选择以现金、股票或两者的任何组合来结算我们2029年票据的转换义务。在截至2024年9月30日的三个月和九个月期间，2029年债券对每股普通股摊薄亏损的计算没有影响，因为它们在这两个时期是反摊薄的。
如附注11中进一步讨论的，“普通股认股权证“，认股权证最多可购买
以下是用于计算稀释后每股普通股净亏损的分子和分母的对账截至2024年9月30日的9个月(除每股金额外，以千计)：
|
|
截至2024年9月30日的9个月 |
|
|
|
净亏损 |
|
$ |
( |
) |
|
加回2025年期票据的利息支出 |
|
|
|
|
|
加上消除债务的回报 |
|
|
( |
) |
|
每股普通股稀释净亏损的分子（A） |
|
$ |
( |
) |
|
加权平均已发行普通股数量 |
|
|
|
|
|
使用如果转换法计算的2025年票据的稀释效应 |
|
|
|
|
|
每股普通股稀释净亏损的分母（B） |
|
|
|
|
|
每股普通股稀释净亏损（= A / B） |
|
$ |
( |
) |
|
12
以下潜在稀释性证券因其在财政法下的反稀释效应而被排除在每股普通股稀释净亏损的计算之外（单位：千）：
|
|
截至9月30日， |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
未偿普通股认购证 |
|
|
|
|
|
|
||
未偿还股票期权 |
|
|
|
|
|
|
||
未归属的限制性股票单位 |
|
|
|
|
|
|
||
8.基于股票的补偿费用
下表总结了包含在运营费用中的股票薪酬费用（单位：千）：
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
销售成本 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
研发 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
销售、一般和行政 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
总 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
我国修订后的2022年股权激励计划(《2022年计划》)规定授予激励性股票期权、非法定股票期权、股票增值权、限制性股票奖励、限制性股票单位奖励和其他基于股票的奖励。2024年5月29日，我们的股东批准了对2022年计划的修正案，将2022年计划下可供发行的普通股数量增加到
2024年5月29日，我们的股东还批准了一项修订后的2013年员工股票购买计划(ESPP)的修正案，将根据ESPP可供发行的普通股数量增加
我们与我们的财务顾问达成协议，就与附注10所述的2024年5月再融资交易相关的服务支付我们的费用。长期债务”通过私募
9.股东权益
于2023年2月17日，我们与作为代理的Jefferies LLC(“Jefferies”)签订了公开市场销售协议(“2023年公开市场销售协议”)。根据2023年公开市场销售协议，我们可以发行和出售我们的普通股，总发行价最高可达$
根据《2023年公开市场销售协议》，杰富瑞可以按照修订后的《1933年证券法》(下称《证券法》)颁布的第415(A)(4)条的规定，以“按市场发售”的方式出售股票。根据《2023年公开市场销售协议》的条款和条件，吾等可按吾等不时厘定的金额及时间出售股份，但吾等并无义务出售2023年公开市场发售的任何股份。
吾等或杰富瑞在通知另一方并受其他条件限制后，可暂停或终止股份发售。我们已同意向杰富瑞支付其代理出售股份的佣金，金额最高可达
我们做到了
13
10.长期债务s
2025年笔记
2018年10月，我们发行了美元
余下的2025年债券为优先无抵押债券，息率为
剩余2025年债券的持有人可转换其剩余2025年债券的全部或任何部分，以以下倍数计算 $
截至2024年9月30日，上述情况均未发生，因此，剩余的2025年债券无法转换。
如果我们普通股的最后报告销售价格等于或超过，我们可以选择赎回全部或部分剩余的2025年票据
2025年票据的未偿余额包括以下内容（以千计）：
|
|
截至2024年9月30日 |
|
|
截至2023年12月31日 |
|
||
本金 |
|
$ |
|
|
$ |
|
||
减去：未摊销债务发行成本 |
|
|
( |
) |
|
|
( |
) |
2025年笔记 |
|
$ |
|
|
$ |
|
||
14
我们确定2025年票据的预期寿命等于其
下表列出了与2025年票据相关的已确认的利息支出总额（单位：千）：
|
|
这三个月 |
|
|
在九个月里 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
合同利息支出 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
债务发行成本摊销 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
利息支出总额 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
截至2025年票据的未来最低付款额 2024年9月30日如下（以千计）：
截至十二月三十一日止的年度， |
|
未来最低 |
|
|
2024 |
|
$ |
|
|
2025 |
|
|
|
|
最低付款总额 |
|
|
|
|
减去：利息支出和未摊销债务发行成本 |
|
|
( |
) |
2025年笔记 |
|
$ |
|
|
优先担保定期贷款
2024年5月8日，我们与2025年票据和HCRx的若干现有持有人订立了信贷及担保协议(“信贷协议”)，其中规定优先担保定期贷款安排为#美元。
我们可以随时预付定期贷款。所有还款，包括提前还款，都要缴纳以下赎回费
除某些例外情况外，信贷协议项下的所有债务均以我们的几乎所有资产作优先抵押。《信贷协定》载有惯例契约，包括要求维持现金、现金等价物和投资。至少$
定期贷款的未偿还余额包括以下各项(以千计)：
|
|
截至2024年9月30日 |
|
|
本金 |
|
$ |
|
|
减去：未摊销债务发行成本 |
|
|
( |
) |
定期贷款 |
|
$ |
|
|
15
我们确定定期贷款的预期寿命等于其
我们认出了$
截止日期的定期贷款未来最低还款额 2024年9月30日如下（以千计）：
截至十二月三十一日止的年度， |
|
未来最低 |
|
|
2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
最低付款总额 |
|
|
|
|
减去：利息支出和未摊销债务发行成本 |
|
|
( |
) |
定期贷款 |
|
$ |
|
|
2029年笔记
2024年5月13日，根据与某些2025年票据持有人私下谈判达成的协议，我们交换了美元
2024年5月13日，我们还发行了美元
2029年发行的票据将可转换为普通股，初始转换率为
在2026年5月13日或之后，如果我们普通股的最后报告销售价格等于或超过，我们可以现金赎回全部或部分2029年债券
如果某些公司事件在到期日之前发生，选择转换其2029年票据的持有人可能有权根据与该公司事件相关的转换率的增加，以现金或在某些情况下，如果我们这样选择，以我们的普通股股票或现金和我们的普通股的组合的方式从我们获得付款。此外，如果我们经历某些根本性的变化，持有人可能要求我们以现金方式回购其2029年债券的全部或任何部分，回购价格相当于将回购的2029年债券的本金金额，外加回购日期的任何应计和未偿还利息。
16
任何持有人将无权获得与2029年票据相关的普通股股份，如果这样的收据会导致持有人(连同其关联公司)拥有超过
2029年票据下的所有债务都以担保定期贷款下的债务的相同抵押品作为第二优先基础。2029年的票据包含与定期贷款大体一致的违约契诺和违约事件。截至2024年9月30日，我们遵守了这些公约。
我们负责2025年债券与2029年债券和2024年5月认股权证的交换作为债务清偿，因为2029年债券的条款与2025年债券的条款有很大不同。
简明合并资产负债表行 |
|
交易记录 |
|
量 |
|
|
2025年到期的可转换优先票据 |
|
2025年到期票据-本金 |
|
$ |
|
|
2025年到期的可转换优先票据 |
|
2025年票据的清偿--债务发行成本 |
|
|
( |
) |
2029年到期的可转换优先票据 |
|
发行按公允价值记录的2029年票据 |
|
|
( |
) |
普通股认股权证 |
|
2024年5月发行的权证按公允价值记录 |
|
|
( |
) |
|
|
债务清偿收益 |
|
$ |
|
|
根据清偿会计的要求，2025年票据持有人收到的2029年票据按其初始公允价值#美元入账。
关于发行2029年债券，我们产生了$
我们已经确定，转换期权和赎回期权是嵌入的衍生品，需要从债务工具和公允价值确认中分离出来。这些衍生品在附注5中称为2029年票据衍生品。公允价值计量“到我们的简明合并财务报表。2029年债券衍生工具的初始公允价值为#美元。
以下为采用实际利率法于2029年期内按利息开支摊销的债务发行成本及折价的摘要，实际利率为
|
|
量 |
|
|
初始公允价值调整 |
|
$ |
|
|
发债成本 |
|
|
|
|
嵌入衍生物的分歧 |
|
|
|
|
与2029年票据相关的债务发行成本和折扣 |
|
$ |
|
|
2029年票据的未偿余额包括以下内容（以千计）：
|
|
截至2024年9月30日 |
|
|
本金 |
|
$ |
|
|
减去：未摊销债务发行成本和贴现 |
|
|
( |
) |
加：分叉衍生品的公允价值 |
|
|
|
|
2029年笔记 |
|
$ |
|
|
我们确定2029年票据的预期寿命等于其五年期限。截至2024年9月30日，“如果转换价值”并未超过2029年票据的剩余本金金额。2029年票据的公允价值受市场影响
17
利率、我们的股价和股价波动性，由于其使用不可观察的输入数据，因此已被分类为公允价值等级内的第3级。截至2024年9月30日，2029年票据的估计公允价值约为 $
我们认出了$
截至2029年票据的未来最低付款额 2024年9月30日如下（以千计）：
截至十二月三十一日止的年度， |
|
未来最低 |
|
|
2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
最低付款总额 |
|
|
|
|
减：利息费用和未摊销债务发行成本和折扣 |
|
|
( |
) |
加：分叉衍生品的公允价值 |
|
|
|
|
2029年笔记 |
|
$ |
|
|
递延版税义务
2019年9月，我们与HCRx签订了收入利息协议，该协议随后于2021年6月、2023年8月和2024年5月进行了修订，根据该协议，我们总共收到了$
2024年5月，我们与HCRx签订了经修订的《HCRx修正案》，根据该修正案，我们：
由于资金金额的偿还取决于全球产品净销售额和预付款、里程碑和版税，因此偿还
在实施上述规定后，截至2024年5月，我们已根据经修订的收入利息协议支付总额为$
这个HCRx修订案还将经修订的收入利息协议项下的债务和保留权置于定期贷款项下的债务和保留权之上，并且，除某些例外情况外，将经修订的收入利息协议项下的债务和保留权置于
18
收入 利息协议与2029年票据项下的债项及留置权相同。此外，《HCRx修正案》还降低了
我们评估了经修订的收入利息协议的条款，并得出结论，其特点类似于债务工具的特征。因此，我们已将这笔交易作为长期债务入账，并在我们的压缩综合资产负债表上作为递延特许权使用费债务列报。
我们还决定偿还#美元。
截至2024年9月30日，我们已赚得
截至2024年9月30日和2023年12月31日，递延特许权使用费债务的账面价值为$
11.普通股认股权证
股权分类普通股认股权证
2022年12月5日，我们以私募方式向某些机构投资者发行了认股权证，以购买最多
2023年8月1日，关于截至2023年8月1日的收入利息协议第二修正案，我们向HCRx发行了认股权证，以购买最多
责任分类普通股认股权证
关于2025年纸币与2029年纸币的交换，详情见附注10，“长期债务，我们发行了2024年5月的认股权证，以购买最多
2024年5月的配股在我们的简明综合资产负债表中被归类为长期负债，因为它们不符合股权分类的标准，并且在每个报告期末按公允价值计量，详情请参阅附注5，”公允价值衡量。”
19
项目2.管理层的讨论和分析财务状况及经营业绩。
以下对我们的财务状况和经营业绩的讨论和分析旨在提供与评估我们公司的财务状况和经营业绩相关的重要信息，包括评估来自运营和外部资源的现金流量的金额和不确定性，以便投资者更好地从管理层的角度看待我们的公司。您应该阅读以下对我们财务状况和运营业绩的讨论和分析，以及本季度报告中其他地方出现的财务报表和相关注释，以及我们截至2023年12月31日年度10-k表格年度报告中包含的已审计财务信息及其注释，于2024年2月29日向美国证券交易委员会（“SEC”）提交（“年度报告”).
前瞻性陈述
这份Form 10-Q季度报告包含前瞻性陈述，涉及Karyopamm治疗公司(在本文中称为“Karyopharm”、“公司”、“我们”或“我们”)对发现和开发里程碑的可能实现的期望、我们未来的发现和开发努力，包括监管提交和批准、我们的商业化努力、我们与第三方的伙伴关系和合作、我们未来的经营业绩和财务状况、我们继续经营下去的能力、我们的商业战略以及未来运营的其他目标。我们经常使用“预期”、“相信”、“估计”、“预期”、“打算”、“可能”、“计划”、“预测”、“项目”、“目标”、“潜在”、“将会”、“可能”、“应该”、“继续”等类似含义的词汇和术语来帮助识别前瞻性表述，尽管并不是所有的前瞻性表述都包含这些可识别的词汇。你还可以通过它们与历史或当前事实没有严格相关的事实来识别这些前瞻性陈述。有许多重要的风险和不确定因素可能导致实际结果或事件与前瞻性陈述所表明的结果或事件大相径庭。这些风险和不确定性包括但不限于本10-Q季度报告第II部分第1A项--风险因素中描述的风险和不确定因素。由于这些和其他因素，我们可能无法实际实现我们的前瞻性陈述中披露的计划、意图、预期或结果，您不应过度依赖我们的前瞻性陈述。我们的前瞻性陈述并不反映我们未来可能进行的任何收购、合并、处置、合资企业或投资的潜在影响。我们不承担任何义务更新任何前瞻性陈述，无论是由于新信息、未来事件或其他原因，除非法律要求。
对XPOVIO的引用® （selindexor）也指NEXPOVIO® （selinexor）在讨论其在美国以外的某些国家或地区的批准和商业化时
概述
我们是一家商业阶段的制药公司，开创了新型癌症疗法的先河，致力于发现、开发和商业化针对核出口的一流药物，用于治疗癌症和其他疾病。我们的科学专长是基于对细胞核和细胞质之间的细胞内通讯调节的理解。我们已经发现并正在开发新的小分子，并将其商业化S选修课I抑制者NUClearE抑制核出口蛋白Exportin 1(“XPO1”)的化合物。这些正弦化合物代表了一类新的候选药物，具有新的作用机制，有可能治疗具有高度未满足医疗需求的各种疾病。我们的主要资产XPOVIO® (Selinexor)是第一个获得上市批准的口服XPO1抑制剂，于2019年7月获得美国食品和药物管理局(FDA)的初步批准，目前在美国获得批准并在美国上市，适应症如下：
20
XPOVIO在美国的商业化目前得到了销售代表、护士联络员和市场准入团队以及KaryForward™（一项广泛的患者和医疗保健提供者支持计划）的支持。我们的商业努力还得到了由我们参与的专业药房提供商专门网络协调的患者支持计划的补充。随着我们继续扩大XPOVIO的使用，我们计划继续向医生、其他医疗保健提供者和患者宣传XPOVIO的临床概况和独特的作用机制。
XPOVIO和NEXPOVIO的商业化® （selindexor）（selindexor在欧洲和英国的品牌名称）在美国境外由我们的合作伙伴在各自地区管理。XPOVIO/NEXPOVIO已在美国以外的45个国家/地区获得了各种适应症的监管批准，并且随着我们的合作伙伴不断获得报销批准，该产品已在越来越多的国家/地区上市。
我们的主要重点是营销XPOVIO目前批准的适应症，以及开发和寻求监管部门批准Selinexor作为一种针对多种高度未满足需求的癌症适应症的口服药物，包括我们在子宫内膜癌、多发性骨髓瘤和骨髓纤维化方面的核心项目。我们计划继续进行临床试验，并寻求额外批准将selinexor作为单一药物或与其他肿瘤疗法联合使用，以扩大有资格接受selinexor治疗的患者人群。2024年1月，我们宣布eltanexor项目的进一步临床开发被暂停，以将我们的资源集中在优先考虑的后期项目上。
截至2024年9月30日，我们的累计赤字为15亿美元。截至2024年9月30日和2023年9月30日的九个月内，我们的净亏损分别为4560万美元和10130万美元。根据我们当前的业务计划和当前的资本资源，结合额外资金可用性的不确定性，我们得出的结论是，我们在简明综合财务报表发布之日后一年内继续持续经营的能力存在重大疑问。请参阅下文“流动性和资本资源”，以进一步讨论我们的流动性以及对我们继续作为持续经营企业的能力提出重大怀疑的条件。
2024年5月，我们签订了一系列交易(“再融资交易”)，以限制我们的总债务，延长某些债务的到期日，并为我们提供额外的营运资金。根据该等交易，吾等根据一项新的优先担保定期贷款安排，向现有贷款人及由Healthcare Royalty Management，LLC(“HCRx”)管理的若干实体借入10000美元万，并根据对吾等与HCRx的现有融资安排作出其他修订的修订，将该贷款所得款项的一部分用于偿还吾等与HCRx的现有融资安排下的债务。我们还根据私下协商的协议，将我们现有的3.00%无抵押可转换优先票据的本金总额14800万交换为(I)我们新的6.00%有担保可转换优先票据的本金总额11100美元和(Ii)认股权证，以购买最多4580股我们普通股的万股票。此外，HCRx通过偿还我们对HCRx的500万现有债务，购买了我们新的6.00%担保可转换优先票据的本金总额500万。请参阅附注10“长期债务“，请参阅本季度报告表格10-Q第I部分第1项内所载的简明综合财务报表，以了解再融资交易的其他详情。
关键会计估计
我们相信，几项会计政策对于了解我们的历史和未来业绩非常重要。我们将这些政策称为“关键”政策，因为这些特定领域通常要求我们在做出估计时对不确定的事项做出判断和估计，并且可以使用不同的估计（这也是合理的），这将导致不同的财务结果。
我们在第7项中确定的关键会计估计没有发生任何变化。管理层在我们的年度报告中对财务状况和经营业绩的讨论和分析，但我们对债务消除收益（2029年票据中的嵌入衍生品）的估计价值除外（定义见下文）以及与再融资交易相关的负债分类普通股期权，其估值采用纳入某些不可观察输入的方法，包括（i）我们普通股价格的波动性，（ii）我们的估计信用利差和（iii）根据期权定价模型对何时行使认购权的估计。
21
行动的结果
下表总结了我们的运营结果（以千计，百分比除外）：
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||||||
产品收入，净额 |
|
$ |
29,516 |
|
|
$ |
30,207 |
|
|
$ |
(691 |
) |
|
|
(2 |
)% |
|
$ |
83,554 |
|
|
$ |
86,955 |
|
|
$ |
(3,401 |
) |
|
|
(4 |
)% |
许可证和其他收入 |
|
|
9,267 |
|
|
|
5,802 |
|
|
|
3,465 |
|
|
|
60 |
% |
|
|
31,141 |
|
|
|
25,331 |
|
|
|
5,810 |
|
|
|
23 |
% |
总收入 |
|
|
38,783 |
|
|
|
36,009 |
|
|
|
2,774 |
|
|
|
8 |
% |
|
|
114,695 |
|
|
|
112,286 |
|
|
|
2,409 |
|
|
|
2 |
% |
运营费用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
销售成本 |
|
|
1,300 |
|
|
|
911 |
|
|
|
389 |
|
|
|
43 |
% |
|
|
4,676 |
|
|
|
3,456 |
|
|
|
1,220 |
|
|
|
35 |
% |
研发 |
|
|
36,134 |
|
|
|
35,553 |
|
|
|
581 |
|
|
|
2 |
% |
|
|
109,930 |
|
|
|
99,369 |
|
|
|
10,561 |
|
|
|
11 |
% |
销售、一般和行政 |
|
|
27,632 |
|
|
|
30,805 |
|
|
|
(3,173 |
) |
|
|
(10 |
)% |
|
|
88,251 |
|
|
|
101,193 |
|
|
|
(12,942 |
) |
|
|
(13 |
)% |
运营亏损 |
|
|
(26,283 |
) |
|
|
(31,260 |
) |
|
|
4,977 |
|
|
|
(16 |
)% |
|
|
(88,162 |
) |
|
|
(91,732 |
) |
|
|
3,570 |
|
|
|
(4 |
)% |
其他收入(费用)，净额 |
|
|
(5,761 |
) |
|
|
(3,234 |
) |
|
|
(2,527 |
) |
|
|
78 |
% |
|
|
42,686 |
|
|
|
(9,337 |
) |
|
|
52,023 |
|
|
（>100）% |
|
|
所得税前亏损 |
|
|
(32,044 |
) |
|
|
(34,494 |
) |
|
|
2,450 |
|
|
|
(7 |
)% |
|
|
(45,476 |
) |
|
|
(101,069 |
) |
|
|
55,593 |
|
|
|
(55 |
)% |
所得税拨备 |
|
|
(28 |
) |
|
|
(12 |
) |
|
|
(16 |
) |
|
>100% |
|
|
|
(166 |
) |
|
|
(193 |
) |
|
|
27 |
|
|
|
(14 |
)% |
|
净亏损 |
|
$ |
(32,072 |
) |
|
$ |
(34,506 |
) |
|
$ |
2,434 |
|
|
|
(7 |
)% |
|
$ |
(45,642 |
) |
|
$ |
(101,262 |
) |
|
$ |
55,620 |
|
|
|
(55 |
)% |
产品收入，净收入（单位：千，百分比除外）
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||||||
产品收入，净额 |
|
$ |
29,516 |
|
|
$ |
30,207 |
|
|
$ |
(691 |
) |
|
|
(2 |
)% |
|
$ |
83,554 |
|
|
$ |
86,955 |
|
|
$ |
(3,401 |
) |
|
|
(4 |
)% |
迄今为止，我们唯一的产品收入来源是XPOVIO在美国的销售。截至2024年9月30日止三个月的产品净收入与截至2023年9月30日止三个月相比有所下降，主要是由于医疗保险回扣增加和3400亿折扣导致毛额与净折扣增加。
截至2024年9月30日止九个月的产品净收入与截至2023年9月30日止九个月相比有所下降，主要是由于竞争加剧以及医疗保险回扣和3400亿折扣增加推动的毛净折扣增加，导致需求下降。
我们预计2024年第四季度的净产品收入与2024年第三季度相比将保持相对稳定。
许可证和其他收入（单位：千，百分比除外）
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||||||
美纳里尼集团（“美纳里尼”） |
|
$ |
8,753 |
|
|
$ |
5,564 |
|
|
$ |
3,189 |
|
|
|
57 |
% |
|
$ |
27,232 |
|
|
$ |
19,912 |
|
|
$ |
7,320 |
|
|
|
37 |
% |
Glugene Therapeutics Limited（“Glugene”） |
|
|
273 |
|
|
|
80 |
|
|
|
193 |
|
|
>100% |
|
|
|
1,272 |
|
|
|
1,952 |
|
|
|
(680 |
) |
|
|
(35 |
)% |
|
其他 |
|
|
241 |
|
|
|
158 |
|
|
|
83 |
|
|
|
53 |
% |
|
|
2,637 |
|
|
|
3,467 |
|
|
|
(830 |
) |
|
|
(24 |
)% |
许可证和其他收入总额 |
|
$ |
9,267 |
|
|
$ |
5,802 |
|
|
$ |
3,465 |
|
|
|
60 |
% |
|
$ |
31,141 |
|
|
$ |
25,331 |
|
|
$ |
5,810 |
|
|
|
23 |
% |
截至2024年9月30日止三个月的许可证和其他收入比截至2023年9月30日止三个月增加了350万美元，主要是由于截至2024年9月30日止三个月从Menarini确认了600万美元里程碑收入，由于我们收到报销的时间，美纳里尼的发展相关费用报销收入减少了330万美元，部分抵消了这一数字，每个日历年的限额为1500万美元。
22
截至2024年9月30日止九个月的许可和其他收入与截至2023年9月30日止九个月相比增加了580万美元，主要是由于截至2024年9月30日止九个月内从Menarini确认了1000万美元的里程碑收入，部分被Menarini许可相关收入减少350万美元所抵消。
我们预计2024年第四季度的许可证和其他收入将与2024年第三季度相比有所下降，原因是美纳里尼的最高报销收入已经得到确认，加上预计2024年第四季度的里程碑收入将低于2024年第三季度。
运营费用（单位：千，百分比除外）
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||||||
销售成本 |
|
$ |
1,300 |
|
|
$ |
911 |
|
|
$ |
389 |
|
|
|
43 |
% |
|
$ |
4,676 |
|
|
$ |
3,456 |
|
|
$ |
1,220 |
|
|
|
35 |
% |
研发 |
|
|
36,134 |
|
|
|
35,553 |
|
|
|
581 |
|
|
|
2 |
% |
|
|
109,930 |
|
|
|
99,369 |
|
|
|
10,561 |
|
|
|
11 |
% |
销售、一般和行政 |
|
|
27,632 |
|
|
|
30,805 |
|
|
|
(3,173 |
) |
|
|
(10 |
)% |
|
|
88,251 |
|
|
|
101,193 |
|
|
|
(12,942 |
) |
|
|
(13 |
)% |
总运营支出 |
|
$ |
65,066 |
|
|
$ |
67,269 |
|
|
$ |
(2,203 |
) |
|
|
(3 |
)% |
|
$ |
202,857 |
|
|
$ |
204,018 |
|
|
$ |
(1,161 |
) |
|
|
(1 |
)% |
销售成本
截至2024年9月30日和2023年9月30日的三个月和九个月，销售成本总额保持一致。我们预计与2024年第三季度相比，2024年第四季度的销售成本将保持相对稳定。
研究与开发费用（单位：千，百分比除外）
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||||||
临床试验及相关费用： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selinexor在骨髓纤维化中的作用 |
|
$ |
6,757 |
|
|
$ |
2,118 |
|
|
$ |
4,639 |
|
|
>100% |
|
|
$ |
22,225 |
|
|
$ |
4,540 |
|
|
$ |
17,685 |
|
|
>100% |
|
||
Selinexor治疗多发性骨髓瘤 |
|
|
6,357 |
|
|
|
5,567 |
|
|
|
790 |
|
|
|
14 |
% |
|
|
15,354 |
|
|
|
9,816 |
|
|
|
5,538 |
|
|
|
56 |
% |
Selinexor治疗子宫内膜癌 |
|
|
3,344 |
|
|
|
3,555 |
|
|
|
(211 |
) |
|
|
(6 |
)% |
|
|
11,511 |
|
|
|
10,797 |
|
|
|
714 |
|
|
|
7 |
% |
其他计划 |
|
|
1,135 |
|
|
|
4,642 |
|
|
|
(3,507 |
) |
|
|
(76 |
)% |
|
|
2,403 |
|
|
|
10,661 |
|
|
|
(8,258 |
) |
|
|
(77 |
)% |
非项目特定临床试验及相关费用 |
|
|
1,819 |
|
|
|
2,369 |
|
|
|
(550 |
) |
|
|
(23 |
)% |
|
|
5,701 |
|
|
|
7,529 |
|
|
|
(1,828 |
) |
|
|
(24 |
)% |
临床试验及相关费用总额 |
|
|
19,412 |
|
|
|
18,251 |
|
|
|
1,161 |
|
|
|
6 |
% |
|
|
57,194 |
|
|
|
43,343 |
|
|
|
13,851 |
|
|
|
32 |
% |
未分配成本： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
人员 |
|
|
11,039 |
|
|
|
12,220 |
|
|
|
(1,181 |
) |
|
|
(10 |
)% |
|
|
34,492 |
|
|
|
39,247 |
|
|
|
(4,755 |
) |
|
|
(12 |
)% |
咨询、专业和其他 |
|
|
4,621 |
|
|
|
3,784 |
|
|
|
837 |
|
|
|
22 |
% |
|
|
14,469 |
|
|
|
11,641 |
|
|
|
2,828 |
|
|
|
24 |
% |
基于股票的薪酬 |
|
|
1,062 |
|
|
|
1,298 |
|
|
|
(236 |
) |
|
|
(18 |
)% |
|
|
3,775 |
|
|
|
5,138 |
|
|
|
(1,363 |
) |
|
|
(27 |
)% |
未分配成本总额 |
|
|
16,722 |
|
|
|
17,302 |
|
|
|
(580 |
) |
|
|
(3 |
)% |
|
|
52,736 |
|
|
|
56,026 |
|
|
|
(3,290 |
) |
|
|
(6 |
)% |
研发费用总额 |
|
$ |
36,134 |
|
|
$ |
35,553 |
|
|
$ |
581 |
|
|
|
2 |
% |
|
$ |
109,930 |
|
|
$ |
99,369 |
|
|
$ |
10,561 |
|
|
|
11 |
% |
在任何时候，我们都有许多正在进行的临床开发项目，我们正在独立或与第三方合作进行这些项目。我们逐个项目跟踪外部临床试验和相关成本。我们的主要项目包括骨髓纤维化、子宫内膜癌和多发性骨髓瘤的三个核心临床开发项目。如果外部临床试验和相关费用不归因于主要项目，则将其包含在“其他计划“如果外部临床试验和相关费用无法分配给特定计划，则将其纳入”非项目特定临床试验及相关费用.”我们还有未分配的研发成本，我们不会逐个项目跟踪这些成本。这些成本代表多个项目或支持我们一般研发运营而产生的成本。
23
与截至2023年9月30日的三个月相比，截至2024年9月30日的三个月的研发费用增加了60万美元，主要是由于我们正在进行的骨髓纤维化关键三期试验活动增加，但部分被临床试验和其他项目相关成本的减少所抵消。
截至2024年9月30日的九个月的研发费用与截至2023年9月30日的九个月相比增加了1060万美元。临床试验和相关费用增加1390万美元，主要是由于我们正在进行的三项关键3期试验的活动增加，包括增加对照药物的购买。这些增加被其他项目临床试验和相关成本的减少部分抵消。人员成本减少480万美元，主要是由于截至2024年9月30日的九个月与截至2023年9月30日的九个月相比，人员人数和承包商减少，这主要是由于我们正在进行的成本削减计划。
我们预计与2024年第三季度相比，2024年第四季度的研发费用将略有下降，主要是由于多发性骨髓瘤三期试验的范围缩小，以及由于我们正在进行的成本削减计划导致人员数量减少，部分抵消了与我们的骨髓纤维化三期试验相关的费用预计增加。
销售、一般和行政费用（单位：千，百分比除外）
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||||||
人员成本 |
|
$ |
14,121 |
|
|
$ |
16,568 |
|
|
$ |
(2,447 |
) |
|
|
(15 |
)% |
|
$ |
44,619 |
|
|
$ |
52,593 |
|
|
$ |
(7,974 |
) |
|
|
(15 |
)% |
咨询、专业和其他费用 |
|
|
10,452 |
|
|
|
10,553 |
|
|
|
(101 |
) |
|
|
(1 |
)% |
|
|
33,022 |
|
|
|
37,492 |
|
|
|
(4,470 |
) |
|
|
(12 |
)% |
基于股票的薪酬 |
|
|
3,059 |
|
|
|
3,684 |
|
|
|
(625 |
) |
|
|
(17 |
)% |
|
|
10,610 |
|
|
|
11,108 |
|
|
|
(498 |
) |
|
|
(4 |
)% |
销售、一般和行政费用合计 |
|
$ |
27,632 |
|
|
$ |
30,805 |
|
|
$ |
(3,173 |
) |
|
|
(10 |
)% |
|
$ |
88,251 |
|
|
$ |
101,193 |
|
|
$ |
(12,942 |
) |
|
|
(13 |
)% |
截至2024年9月30日止三个月的销售、一般和行政费用与截至2023年9月30日止三个月相比减少了320万美元。人员成本减少240万美元，主要是由于人员和承包商减少。
截至2024年9月30日止九个月的销售、一般和行政费用与截至2023年9月30日止九个月相比减少了1290万美元。人员成本减少800万美元主要是由于人员和承包商减少。咨询、专业和其他成本减少450万美元主要是由于我们正在进行的成本削减计划。
我们预计与2024年第三季度相比，2024年第四季度的销售、一般和行政费用将保持相对稳定。
其他收入（NPS），净（单位：千，百分比除外）
|
|
截至9月30日的三个月， |
|
|
在截至9月30日的9个月内， |
|
||||||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||||||
利息开支 |
|
$ |
(11,385 |
) |
|
$ |
(6,073 |
) |
|
$ |
(5,312 |
) |
|
|
87 |
% |
|
$ |
(26,218 |
) |
|
$ |
(17,615 |
) |
|
$ |
(8,603 |
) |
|
|
49 |
% |
利息收入 |
|
|
1,832 |
|
|
|
2,750 |
|
|
|
(918 |
) |
|
|
(33 |
)% |
|
|
5,918 |
|
|
|
8,423 |
|
|
|
(2,505 |
) |
|
|
(30 |
)% |
债务清偿收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44,702 |
|
|
|
— |
|
|
|
44,702 |
|
|
|
100 |
% |
其他收入(费用) |
|
|
3,792 |
|
|
|
89 |
|
|
|
3,703 |
|
|
>100% |
|
|
|
18,284 |
|
|
|
(145 |
) |
|
|
18,429 |
|
|
（>100）% |
|
||
其他收入(费用)合计，净额 |
|
$ |
(5,761 |
) |
|
$ |
(3,234 |
) |
|
$ |
(2,527 |
) |
|
|
78 |
% |
|
$ |
42,686 |
|
|
$ |
(9,337 |
) |
|
$ |
52,023 |
|
|
（>100）% |
|
|
截至2024年9月30日止三个月的其他净收入（费用）与截至2023年9月30日止三个月相比减少了250万美元，主要是由于与新定期贷款和新有担保可转换优先票据相关的利息费用增加了530万美元，部分被截至2024年9月30日的三个月内重新计量嵌入式衍生品和负债分类普通股期权（两者均为非现金项目）确认的400万美元收益所抵消。
24
截至2024年9月30日止九个月的其他净收入（费用）与截至2023年9月30日止九个月相比增加了5200万美元，主要是由于再融资交易中债务消除的收益4470万美元以及重新计量嵌入式衍生品和负债分类普通股证的收益1830万美元，两者都是非现金物品。这些收益被与新定期贷款和新有担保可转换优先票据相关的利息支出增加部分抵消。
我们预计，与2024年第三季度相比，2024年第四季度的其他净收入（费用）将保持相对稳定，但嵌入式衍生品和负债分类普通股期权的重新测量对未来的影响将取决于多种因素，包括我们的股价变动。
流动资金和资本资源
现金流
历史上，我们主要通过以下收益组合为我们的运营提供资金：（i）产品收入销售，（ii）公开和私募股权证券，（iii）发行可转换债务，（iv）定期贷款，（v）我们的递延特许权使用费义务，（vi）市场发售和（VII）业务开发活动。截至2024年9月30日，我们的主要流动性来源是13350万美元的现金、现金等值物和投资。自成立以来，我们一直出现经常性亏损，截至2024年9月30日的九个月内出现了4560万美元的亏损。
我们预计，在可预见的未来，我们将继续遭受重大的运营亏损。根据我们目前的业务计划和现有资本资源，再加上能否获得额外资金的不确定性，我们得出的结论是，在随附的简明综合财务报表发布之日起一年内，我们作为一家持续经营企业继续经营的能力存在很大疑问。我们预计，截至2024年9月30日，我们的现金、现金等价物和投资将足以为我们目前的运营计划和2025年第四季度的债务要求提供资金。见下文“流动资金和资本资源--资金要求”和注1业务性质“请参阅本季度报告第I部分第I项表格10-Q项下的简明综合财务报表，以进一步讨论我们的流动资金和使人对我们作为持续经营企业的能力产生重大怀疑的条件。
下表提供了有关我们现金流（以千计）的信息：
|
|
在截至9月30日的9个月内， |
|
|||||||||||||
|
|
2024 |
|
|
2023 |
|
|
$Change |
|
|
更改百分比 |
|
||||
用于经营活动的现金净额 |
|
$ |
(101,676 |
) |
|
$ |
(74,138 |
) |
|
$ |
(27,538 |
) |
|
|
37 |
% |
投资活动提供(用于)的现金净额 |
|
|
80,676 |
|
|
|
(18,903 |
) |
|
|
99,579 |
|
|
（>100）% |
|
|
融资活动提供的现金净额 |
|
|
40,966 |
|
|
|
860 |
|
|
|
40,106 |
|
|
>100% |
|
|
外汇汇率的影响 |
|
|
9 |
|
|
|
(123 |
) |
|
|
132 |
|
|
（>100）% |
|
|
现金、现金等价物和限制性现金净增(减) |
|
$ |
19,975 |
|
|
$ |
(92,304 |
) |
|
$ |
112,279 |
|
|
（>100）% |
|
|
经营活动。 与截至2023年9月30日的九个月相比，截至2024年9月30日的九个月，经营活动中使用的净现金增加了2750万美元，主要是由流动资金变化推动的，包括2023年第一季度从Thomgene收取2240万美元里程碑付款。
投资活动。与截至2023年9月30日的九个月相比，截至2024年9月30日的九个月，投资活动提供的净现金增加了9960万美元，这是由于投资购买减少了8530万美元和投资到期收益增加了1450万美元。
融资活动。与截至2023年9月30日的九个月相比，截至2024年9月30日的九个月融资活动提供的净现金增加了4010万美元，这是由我们新定期贷款的8330万美元收益推动的。部分被4050万美元的延期特许权使用费义务付款和260万美元的与再融资交易相关的债务发行成本付款所抵消。
流动资金来源
2019年9月14日，我们和我们的某些子公司与HealthCare Royalty Partners III，LP和HealthCare Royalty Partners IV，LP（“HCRx”）签订了收入利息融资协议，该协议随后于2021年6月23日、2023年8月1日和2024年5月8日进行了修订（“收入利息协议”和经修订的“经修订的收入利息协议”），根据该协议，HCRx向我们支付了总计13500万美元，减去某些交易费用。有关其他信息
25
关于修订后的收入利息协议，见注释10，”长期债务”，本季度报告第一部分第一项包含在10-Q表格中的简明合并财务报表。
2024年5月8日，我们与某些现有贷方和HCRx签订了信贷和担保协议（“信贷协议”），提供10000万美元的高级有担保定期贷款融资。有关更多信息，请参阅注释10，“长期债务”，本季度报告第一部分第一项包含在10-Q表格中的简明合并财务报表。
2023年2月17日，我们与杰富瑞有限责任公司（“杰富瑞”）签订了公开市场销售协议（“2023年公开市场销售协议”）。根据2023年公开市场销售协议，我们可以通过杰富瑞不时发行和出售总发行价高达10000万美元的普通股股份（“股份”）。截至2024年9月30日和2023年9月30日的三个月和九个月内，我们没有根据2023年公开市场销售协议出售任何股份。截至2024年9月30日，根据2023年公开市场销售协议，有10000万美元的股票可供发行和出售。
截至2024年9月30日的九个月内，我们根据许可证和分销协议收到了1770万美元的里程碑付款，根据该协议，如果实现某些开发目标和销售里程碑，我们有权收到额外的里程碑付款以及许可和销售产品在此类安排下的地区的未来净销售额的特许权使用费。此外，根据我们于2021年12月与Menarini签订的许可协议（“Menarini协议”），Menarini将向我们报销2022年至2025年期间我们因selinexor全球开发而发生的所有记录费用的25%，前提是此类报销每日历年不得超过1500万美元。截至2024年9月30日的九个月内，我们根据《梅纳里尼协议》收到了1300万美元的报销。
承诺、或有事项和合同义务
经营租约
我们是马萨诸塞州牛顿市98，502平方英尺办公和研究空间的经营租赁的一方，租期至2025年9月30日（“马萨诸塞州牛顿租赁”）。根据马萨诸塞州牛顿租赁，我们已以现金抵押信用证形式提供了金额为30万美元的保证金，该保证金在我们的简明综合资产负债表上被归类为长期限制现金。截至2024年9月30日，我们预计2024年9月30日至2025年9月30日期间将产生总租赁成本390万美元。
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 insignificant for both the nine months ended September 30, 2024 and 2023.
Contractual Obligations
We have contractual obligations under (i) our 3.00% Convertible Senior Notes due 2025 (the “2025 Notes”); (ii) our Credit Agreement, (iii) our 6.00% Convertible Senior Notes due 2029 (the “2029 Notes”), and (iv) our Amended Revenue Interest Agreement as disclosed in Note 10, “Long-Term Obligations”, to the condensed consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.
Funding Requirements
We expect to continue to incur costs related to our clinical development programs as we rapidly advance three pivotal Phase 3 trials, 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 Quarterly Report on Form 10-Q. 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.
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Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the condensed consolidated financial statements are issued. See Note 1 “Nature of Business” to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q 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 September 30, 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 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 Quarterly Report on Form 10-Q.
In addition to the expenses required to fund our operations described above, our funding requirements as of September 30, 2024 also include the following:
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Item 3. 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 $133.5 million as of September 30, 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 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our President and Chief Executive Officer (principal executive officer) and Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer), evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies our judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our President and Chief Executive Officer and our Executive Vice President, Chief Financial Officer and Treasurer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
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 fiscal quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
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 Quarterly Report on Form 10-Q 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 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 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:
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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 2024 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, future label expansions into earlier lines of existing therapies are anticipated in 2025 and beyond. 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 our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on February 29, 2024 for more information on competition.
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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 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:
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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, 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:
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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.
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. If we are not able to fulfill these new requirements, our ability to conduct clinical trials may be delayed or halted.
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.
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.
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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:
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 example, on February 8, 2022, we announced positive top-line data results for our SIENDO trial. On February 25, 2022, we discussed these data with the FDA in a pre-sNDA meeting. We and the FDA meeting participants had differing views on the statistical significance of the study and the overall clinical benefit for the whole study population. For this study or any other study 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, such as in our SIENDO trial. 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 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
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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:
我们目前正在推进Selinexor的多项临床开发研究，这可能会给我们有限的人力和财力带来压力。因此，我们可能无法向任何单一候选产品提供足够的资源，以允许该候选产品的成功开发和商业化，这可能会对我们的业务造成实质性损害。此外，由于我们的财务和管理资源有限，我们将重点放在我们确定的特定适应症的研究项目和产品上。因此，我们可能会放弃或推迟寻找其他候选产品或后来被证明具有更大商业潜力的其他迹象的机会。例如，2024年1月，我们宣布暂停我们eltanexor计划的进一步临床开发，以努力将我们的资源集中在我们优先考虑的晚期计划上。我们的资源分配决策可能会导致我们无法利用可行的商业产品或有利可图的市场机会。我们在当前和未来的研发计划和特定适应症候选产品上的支出可能不会产生任何额外的商业可行产品。如果我们没有准确评估特定候选产品的商业潜力或目标市场，我们可能会通过合作、许可或其他版税安排放弃对该候选产品有价值的权利，而在这种情况下，保留该候选产品的独家开发权和商业化权利对我们更有利。
如果我们无法维持或扩大我们的销售、营销和分销能力，我们可能无法成功将XPOVIO或我们可能收购或开发的任何产品或候选产品（如果获得批准）商业化。
我们已经在美国为XPOVIO建立了商业基础设施，XPOVIO是我们的第一个商业产品，用于血液恶性肿瘤，而我们的公司以前没有任何销售、营销或分销药物的经验。如果XPOVIO或我们的任何候选产品被批准用于血液恶性肿瘤以外的其他适应症，如实体肿瘤，我们可能需要发展我们的销售、营销和分销能力，而我们可能无法成功或及时地做到这一点。未来，如果我们的一个或多个候选产品获得批准，我们可能会选择将我们的销售、营销和分销基础设施扩展到市场或共同推广，或者就我们候选产品的销售、营销和分销进行更多的合作。我们正在与现有和潜在的合作伙伴合作，建立商业基础设施，以支持Selinexor在美国以外的销售。例如，我们于2021年12月与Menarini Group(以下简称Menarini)签订了许可协议，并于2023年3月进行了修订，其中包括开发NEXPOVIO并将其商业化®欧洲(包括英国)、拉丁美洲、某些中东和非洲地区以及其他主要国家的所有人类肿瘤学适应症(Selinexor)。有关在美国以外地区将我们的产品商业化的其他风险，请参阅标题为在XPOVIO和/或我们的候选产品的开发、营销和/或商业化的某些方面，我们依赖于与第三方的合作。如果这些协作不成功，或者如果我们无法维持现有协作或建立其他协作，我们可能不得不更改我们的开发和商业化计划，并且可能无法利用XPOVIO或我们的候选产品的市场潜力“下面。
建立和维护我们自己的销售、营销和分销能力存在风险。例如，招募和培训销售人员成本高昂且耗时，并且可能会推迟候选产品的任何商业发布，或者对我们已批准产品的持续商业化努力产生负面影响。此外，我们可能会低估销售规模
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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:
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 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.
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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:
We currently hold clinical trial and general product liability insurance coverage, but that coverage may not be adequate to cover any and all liabilities that we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
The business that we 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:
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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.
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 are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining
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marketing approval or prevent or limit commercial use; (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 in a trial is no longer the appropriate comparator 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, 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 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.
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, 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.
Finally, our ability to develop and market new drug products may 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. 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.
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:
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Finally, we or our collaborators could face heightened risks with respect to seeking marketing approval in the UK as a result of the withdrawal of the UK from the EU, commonly referred to as Brexit. The UK is no longer part of the European Single Market and EU Customs Union. As of January 1, 2021, the MHRA became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas Northern Ireland will continue to be subject to EU rules under the Northern Ireland Protocol. The MHRA will rely on the Human Medicines Regulations 2012 (SI 2012/1916) (as amended) (“HMR”) as the basis for regulating medicines. The HMR has incorporated into the domestic law of the body of EU law instruments governing medicinal products that pre-existed prior to the UK’s withdrawal from the EU. Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, may force us or our collaborators to restrict or delay efforts to seek regulatory approval in the UK for our or their product candidates, which could significantly and materially harm our business.
Since a significant proportion of the regulatory framework for pharmaceutical products in the UK covering the quality, safety, and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit may have a material impact upon the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of our product candidates in the UK. For example, the UK is no longer covered by the centralized procedures for obtaining EU-wide marketing authorization from the EMA, and a separate marketing authorization will be required to market our product candidates in the UK. From January 1, 2025 on, 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
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marketing approvals, as a result of Brexit or otherwise, 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 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
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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, we will need to observe the FDA’s guidance closely to ensure that our 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 recordkeeping. For example, as a condition of the XPOVIO approval by the FDA for the multiple myeloma and DLBCL indications, we are required to complete certain post-marketing commitments. 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 or 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.
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 heavily pretreated multiple myeloma, relapsed or refractory DLBCL, 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 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
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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.
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:
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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:
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.
If we, or our collaborators, are required by the FDA, EMA or comparable regulatory authority to obtain clearance or approval of a companion diagnostic test 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 a registration-enabling study of selinexor in patients whose endometrial cancer is TP53 wild-type, we are utilizing a companion diagnostic. 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.
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The PMA process, including the gathering of preclinical and 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 governing 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 Study (e.g., using the unapproved FoundationOne®CDx IVD to screen for TP53 wild-type patients in the EC-042 Study 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 Study 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 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
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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 offers major advances in treatment or provides a treatment where no adequate therapy exists, 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 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
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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.
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.
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
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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.
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.
The Trump Administration also took executive actions to undermine or delay implementation of the PPACA, including directing federal agencies with authorities and responsibilities under the PPACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the PPACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. In January 2021, however, President Biden issued a new Executive Order which directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care, and consider actions that will protect and strengthen that access. Under this Executive Order, federal agencies are directed to re-examine: policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19; demonstrations and waivers under Medicaid and the PPACA that may reduce coverage or undermine the programs, including work requirements; policies that undermine the health insurance marketplace or other markets for health insurance; policies that make it more difficult to enroll in Medicaid and the PPACA; and policies that reduce affordability of coverage or financial assistance, including for dependents.
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
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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 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.
In July 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals. The Order directs the HHS to create a plan within 45 days to combat “excessive pricing of prescription pharmaceuticals and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such pharmaceuticals, and to address the recurrent problem of price gouging.” In September 2021, the HHS released its plan to reduce pharmaceutical prices. The key features of that plan are to: (a) make pharmaceutical prices more affordable and equitable for all consumers and throughout the health care system by supporting pharmaceutical price negotiations with manufacturers; (b) improve and promote competition throughout the prescription pharmaceutical industry by supporting market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase transparency; and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments.
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. The second cycle of price negotiations under this program will commence in the fall of 2024.
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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, with oral arguments scheduled in October 2024. We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results. 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 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:
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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
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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.
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, 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 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.
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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.
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 (such as Vermont) 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. 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, 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
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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. In addition to the UK, Switzerland is also in the process of approving an adequacy decision in relation to the Swiss-U.S. Data Privacy Framework (which would function 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 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
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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.
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.
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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.
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.
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.
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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 September 30, 2024, we had approximately $133.5 million in cash, cash equivalents and investments and an accumulated deficit of $1.5 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, 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 $45.6 million for the nine months ended September 30, 2024. As of September 30, 2024, we had an accumulated deficit of $1.5 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:
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We anticipate that our operating expenses will continue to be significant and increase as we continue to:
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 September 30, 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:
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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
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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 new 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, 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:
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.
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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 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.
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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 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
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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 Quarterly Report on Form 10-Q 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 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:
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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:
Any such events may result in decreased product sales, which would harm our results of operations and business.
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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 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 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. 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.
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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.
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:
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.
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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.
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 October 31, 2024, 179 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 October 31, 2024, 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
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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.
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.
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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 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 October 31, 2024, we have trademark registrations in the U.S. 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 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 are increasing 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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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. 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
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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:
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 $0.62 to $1.95 in the 52-week period ended October 31, 2024. On October 31, 2024, the closing sale price of our common stock on the Nasdaq Global Select Market was $0.99 per share. The stock market in general and the market for pharmaceutical and biotechnology companies in particular have experienced extreme volatility that has 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:
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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, 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
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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.
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 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,
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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.
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. The TCJA, as amended by the CARES Act, significantly revises the Code. The TCJA, among other things, contains 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 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 and the elimination of the carryback of such losses (though any such net operating losses may be carried forward indefinitely). In addition, beginning in 2022, the TCJA eliminates the option to deduct research and development expenditures currently and requires corporations to capitalize and amortize them over five years.
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.
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Item 5. Other Information.
(c) 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 third quarter of 2024, none of our directors or officers
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Item 6. Exhibits.
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10.1* |
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10.2* |
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31.1 |
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31.2 |
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32.1 |
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32.2 |
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101.INS |
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Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document. |
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104 |
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Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
* Indicates a management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements 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.
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KARYOPHARM THERAPEUTICS INC. |
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Date: November 5, 2024 |
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By: |
/s/ Richard Paulson |
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Richard Paulson |
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President and Chief Executive Officer |
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(Principal executive officer) |
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Date: November 5, 2024 |
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By: |
/s/ Michael Mason |
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Michael Mason |
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Executive Vice President, Chief Financial Officer and Treasurer |
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(Principal financial and accounting officer) |
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