Good morning. My name is Ayala, and I will be your conference operator today. At this time, I would like to welcome everyone to the Karyopharm Therapeutics first quarter 2018 financial results conference call. There will be a question and answer session to follow. Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to Mr. Christopher Primiano, Chief Business Officer of Karyopharm Therapeutics.
Thank you, Ayala, and thank you all for joining us on today's conference call to discuss Karyopharm's first quarter 2018 financial results. This is Chris Primiano, and I'm joined today by Dr. Michael Kauffman, Chief Executive Officer, Mr. Michael Falvey, Chief Financial Officer, Dr. Sharon Shacham, our Founder, President, and Chief Scientific Officer, and Dr. Jatin Shah, Senior Vice President of Clinical Development. On the call today, Michael Kauffman will make some introductory comments, then Mike Falvey will provide an overview of the first quarter of 2018 financial results. Dr. Kauffman will then discuss our key upcoming milestones and provide some summary remarks. We will then open the call up for questions for which Sharon, Jatin, and I will also be available. Earlier this morning, we issued a press release detailing Karyopharm's results for the first quarter of 2018. This release is available on our website at karyopharm.com.
Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments and regulatory matters and timelines, the potential success of our product candidates, financial projections, and our plans and prospects. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our annual report on Form 10-K for the year ended December 31st, 2017, which was filed with the SEC on March 15th, 2018, and any other filings we may make with the SEC, including our quarterly report on Form 10-Q for the quarter ended March 31st, 2018, which we expect to file later today.
Any forward-looking statements represent our views as of today only and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. In addition, please note that any references we make to clinical trial data during today's discussion refer to interim unaudited site data unless otherwise specified. I'll now turn the call over to Dr. Michael Kauffman, Chief Executive Officer of Karyopharm.
Thank you, Chris, and good morning, everyone. Thank you for joining us on today's call. Last week, we reported exciting top-line results from Part 2 of the phase II-B STORM study evaluating selinexor in 122 patients with heavily pretreated penta-refractory myeloma. For the STORM study's primary objective, oral selinexor achieved a 25.4% overall response rate assessed by the Independent Review Committee. This included two stringent complete responses and 29 partial or very good partial responses. One of the stringent complete responses was negative for minimal residual disease, or MRD, which is particularly significant in this penta-refractory population. The median duration of response, a key secondary objective, was 4.4 months. Responding patients had a significantly prolonged overall survival as compared with non-responders.
To our knowledge, this was the first large study in patients with penta-refractory myeloma. These results are an important advance for myeloma patients, their families, and for their physicians and caregivers who provide treatment for this difficult disease. Oral selinexor demonstrated a predictable and manageable safety tolerability profile consistent with that previously reported from Part 1 of the STORM study and from other selinexor studies. No new safety signals were identified. When occurring, adverse effects were often reversible, transient, and manageable with dose modification and/or standard supportive care. We look forward to submitting the detailed STORM study results for presentation at an upcoming medical oncology meeting. As you may know, selinexor was recently granted Fast Track designation by the FDA for the penta-refractory population evaluated in the STORM study.
We believe this is an acknowledgment from the FDA that the patient population in STORM represents a true unmet medical need where new therapies remain critical. As a reminder, patients on STORM with penta-refractory myeloma have disease that progressed after receiving some of the best anti-cancer agents available in all of oncology, including REVLIMID, POMALYST, KYPROLIS, Velcade, alkylating agents, as well as DARZALEX. Moreover, we required that all patients entering this study have myeloma that is refractory to their last immunomodulatory drug, their last proteasome inhibitor, and to DARZALEX, as well as progressing on their most recent therapy, indicating that their disease is unlikely to benefit from retreatment with these classes of anti-myeloma drugs.
Looking ahead, we plan to submit a new drug application to the FDA during the second half of 2018 with a request for accelerated approval for oral selinexor as a new treatment for patients with penta-refractory multiple myeloma. We also plan to submit a Marketing Authorisation Application to the European Medicines Agency in early 2019 with a request for conditional approval for selinexor in the same indication. On the commercial front, we are actively designing and building our infrastructure and preparing our first potential selinexor product launch in the United States. In parallel, we are exploring strategic commercial collaborations with potential partners in Europe and other key markets.
Importantly, the activity in the STORM patient population further support the ongoing pivotal randomized phase III BOSTON study, where selinexor is being evaluated in earlier lines of therapy. The BOSTON study evaluates the oral seldex regimen in combination with once-weekly Velcade compared to standard twice-weekly Veldex alone in patients with myeloma who have had 1 to 3 prior lines of therapy. We expect to complete enrollment in BOSTON this year and report top-line data in 2019. Assuming a positive outcome, we believe the data from the BOSTON study will support a full approval for seldex in combination with Velcade as a second-line treatment for myeloma. In addition, the STORM data support the variety of selinexor combinations being evaluated in the ongoing STOMP study in patients with relapsed or newly diagnosed myeloma.
I also want to mention that we are on track to report top-line results in another important unmet medical need population by the end of this year, patients with relapsed refractory diffuse large B-cell lymphoma who are currently being evaluated in our ongoing SADAL study. If the final results of the SADAL study are consistent with the interim data presented last year at the European Hematology Association annual meeting, we plan to file a request for accelerated approval in the first half of 2019 for this indication. Following the STORM data announcement last week, we successfully completed an underwritten public offering, which secured approximately $155 million in gross proceeds to Karyopharm. We are grateful for the continued support of our existing holders and would also like to extend a sincere thank you and welcome to our newest shareholders. With that, I'll turn the call over to Michael.
Thank you, Michael. Since we issued a press release earlier today outlining our full financial results, I'll just review our first quarter 2018 financial highlights. As of March 31, 2018, cash equivalents, and investments, including restricted cash, totaled $141.5 million compared to $176.4 million as of December 31, 2017. As Michael mentioned, on May 7, 2018, Karyopharm completed an underwritten public offering of just over 10.5 million shares of its common stock at a price to the public of $14.75 per share. The gross proceeds to Karyopharm from the offering were $155.3 million, and after deducting the underwriting discounts and commissions and other estimated offering expenses, our net proceeds were $145.6 million. For the quarter ended March 31, 2018, Karyopharm recognized $10 million in revenue compared to $0.1 million for the three months ended March 31, 2017.
The increase in revenue was the result of the upfront payment received from the asset sale of KPT-350 to Biogen in January 2018. For the first quarter of 2018, research and development expense was $41.3 million compared to $24.1 million for the same period in 2017. General and administrative expenses for the first quarter of 2018 were $7.6 million compared to $6.3 million for the same period in 2017. Comparing the first quarter of 2018 to the prior quarter, the fourth quarter of 2017, R&D expense increased by $6.5 million, reflecting increased spending on our late-stage clinical trials. For the first quarter of 2018, we reported a net loss of $38.5 million or $0.78 per share, compared to a net loss of $29.9 million or $0.71 per share for the first quarter of 2017.
Net loss includes stock-based compensation expense of $4.2 million and $5.9 million for the first quarters of 2018 and 2017, respectively. Karyopharm expects its operating cash burn, including research and development and general and administrative expenses for the year ended December 31st, 2018, to be in the range of $175 million-$185 million. Based on our current operating plans, we expect that our existing cash equivalents, and investments will be sufficient to fund our operations into the third quarter of 2019. Importantly, this runway takes us through the planned launch of selinexor in the first half of next year. These plans include the continued clinical development of selinexor in our lead indications, submitting an NDA during the second half of 2018, and preparing the commercial infrastructure, including hiring a sales force to support the potential launch of selinexor in the U.S.
I'll now turn the call back over to Michael Kauffman for concluding remarks. Michael?
Thank you, Mike. We are very excited about the team's recent achievements. We continue to believe that 2018 will be a transformational year for Karyopharm. We have several upcoming milestones that I'd like to highlight. During the second half of the year, we plan to submit an NDA for oral selinexor as a new treatment for patients with penta-refractory myeloma. Following that, we plan to submit to the EMA for conditional approval on the same indication. For our SADAL study in DLBCL, we expect to report top-line data by the end of this year, which could support a regulatory filing in 2019. For the pivotal phase III BOSTON study, we expect to complete enrollment this year, with top-line data expected in 2019 and regulatory filings in 2020.
For the STOMP study combination in myeloma, we will continue to update at appropriate medical meetings. We look forward to initiating a new arm of STOMP evaluating the all-oral regimen of selinexor plus Rev/Dex in patients with newly diagnosed myeloma. Beyond hematologic malignancies, the ongoing SEAL and SIENDO phase III trials in liposarcoma and endometrial cancer, respectively, continue to advance. In closing, I'd just like to reiterate on behalf of the entire Karyopharm team that we are extremely enthusiastic about the data reported last week from the STORM study. We believe these data are great news for all of our stakeholders, including the patients battling myeloma, their families, physicians and caregivers, the foundations that have supported and believed in us from the beginning, as well as the many new investors that recently purchased shares.
We have evolved from an entrepreneur and an idea into a well-integrated team of close to 200 people, all working passionately to prepare the regulatory submissions for selinexor in our first potential indication, to refractory multiple myeloma. At Karyopharm, our mission since inception has been to advance the treatment of cancer through the discovery and development of novel oral therapies, beginning with selinexor. We are very proud to be developing the first-in-class nuclear export inhibitor with the potential for activity across a number of hematologic and solid tumor malignancies. As we look ahead, we will continue to foster innovation, courage, urgency, resilience, and energy, our ICARE culture, and we are actively working to recruit and hire talented professionals who embody our ideals and lay the important groundwork for our future growth and commercial success. I will now turn the call over to the operator for questions. Operator?
Thank you. Ladies and gentlemen, if you have a question at this time, please press star then one on your touchtone telephone. If at any time your question has been answered or you wish to remove yourself from the queue, please press the pound key. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question is from Brian Abrahams with RBC Capital Markets. Your line is now open.
Hi, good morning. This is Rick on for Brian, who's on a flight at the moment. Thanks for taking our questions. First off, could you please walk us through what preparations for commercialization are currently underway, and maybe speak to what you hope to accomplish in the coming months?
Sure. We announced on our last earnings call that we had hired three very seasoned VPs into our commercial organization, VP of sales, a VP of marketing, and a VP of market access. What you'll see over the course of the rest of the year is that those three leaders, together with Bill Hatfield, our head of commercial, will be building out and blocking out our launch plans and starting to fill in the rest of the senior positions in our commercial organization. Also begin to do the work towards preparing for the launch. This includes preparing our marketing materials for the launch, which as you know, need to be submitted with our NDA. We'll start to build out our distribution channels. We'll hire an agency to help with our marketing campaigns.
As we get into the fourth quarter, you'll see us taking steps like purchasing data to understand the markets deeper, building our CRM systems, and really laying all of the foundation that we'll need to do a full-fledged launch in the United States. The one thing that we'll be missing to support that launch would be the hiring of the sales force, which we plan to pull the trigger on probably about three months before the launch of selinexor in the middle of next year.
All right, great. That's very helpful. Next, I wanted to just maybe get your most recent thoughts on partnering, and have you thought about it at all since you received the positive STORM data last week?
Yeah. Hey, this is Chris. Give you a couple of the highlights on how we're thinking about partnering. I think it would be somewhat arbitrary to give a timing expectation around partnering, but I think it's probably more instructive to think about what does that collaboration look like, and what kind of a partner are we looking for. As you know, we recently, towards the end of last year, established a collaboration with Ono Pharmaceutical over some of the Asian territories, and I think that's probably a good guideline for how you might see a collaboration come together for some of the ex-U.S., ex-Ono territories. You could expect to see something of a multiple of what you would see in that particular arrangement in terms of the upfront, the milestones, the cost-sharing around clinical development expenses and those types of things.
I think even more important than that is the kind of partner that we'd be looking for. Obviously one of the key territories that we're discussing around an ex-U.S., ex-Ono territory partner is experience in hemonc and solid tumors broadly. In particular, with respect to the reimbursement landscape and the commercial landscape across Europe, which is an increasingly complicated area in which to launch a new product. In addition to that, we're looking for someone who's really philosophically aligned with us in the way that we view selinexor and the long-term development plan for selinexor. This is not, as we've talked about many times, simply a drug in myeloma and lymphoma, but actually has a much longer and broader development plan behind it, and we'd want someone who's philosophically aligned with us on that perspective as well. That's how we're thinking about partnering.
One more question, if I can. How long do you expect the overall survival data and the STORM study to take to mature? Could we expect these data to be included into maybe a rolling NDA submission? Will we see these data at a medical meeting maybe later this year? Thank you. I'll hop back in the queue.
Yeah. It's a little hard to tell when the data will mature. Part One is already published, as you're aware, and importantly showed that the response rate, which we saw there was a little bit lower, was associated with an improved survival compared to the non-responders, which is a really key point as you evaluate the overall activity of the drug. We mentioned on our call as well as today that in Part Two, we're seeing the same kind of, actually statistically significant differences that the patients who respond with any response to selinexor have a clinically and statistically significant improved survival over the patients who do not respond, indicating that response is associated with longer survival and also that there really isn't a good rescue therapy available for those who do not respond.
Given the Fast Track designation, we are in ongoing discussions with FDA about planning our submission. We are strongly considering the use of the Fast Track rolling submission guidelines in order to facilitate the review of selinexor. We'll keep you posted.
Our next question is from Maury Raycroft with Jefferies. Your line is now open.
Hi. Good morning, and thanks for taking my questions. To start, for ASCO, it seems like you're going to have the phase II liposarcoma SEAL data there. I was wondering what we should expect as far as the details go, and if there's any possibility for the HR to change, or should we expect that that will hold up in the update?
The data at the ASCO for phase II, as we have seen in the abstract of the current results, and that includes the vast majority of the patients reaching their event of PFS. No significant changes are expected based on this. As you know, we have moved into the phase III, and the phase III is enrolling. This was based on the results of the phase II, as you can see them in the ASCO abstract.
Got it. Can you comment on whether that'll be a presentation or a poster?
If it's in the-.
Public domain, I don't think we can comment. No, it's not in the public domain, Maury.
He doesn't see your name.
Call ASCO.
Next was just based on the recent approval of DARZALEX in frontline. I'm just wondering if you could provide thoughts or perspectives on how this could influence the current treatment paradigm and if you have any expectations to fold a newly diagnosed sel plus dara combo arm into the STOMP study.
Yeah, I will take it, then I'll turn it to Jatin. We're thrilled to see DARZALEX moving up to frontline. We also thought this would happen. We also know that the DARZALEX Rev/Dex combination is being evaluated in frontline, and we anticipate that will also be successful. It was part of the strategy here with the BOSTON study that we're doing, that frontline would consist of a Dara regimen along with REVLIMID. That we would come in as a VELCADE-based regimen. SelValDex is one of potentially the most convenient regimen if this is successful with once-a-week dosing, a low rate of neuropathy if the phase I/II data hold up, and really a nice regimen for patients who, unfortunately, after they progress from frontline, need a second-line therapy.
I'll turn it over to Jatin in a minute, but the other point about Dara moving to frontline is that it really opens up the penta-refractory population. This means that patients with 2 or 3 lines of therapy could very well meet criteria for penta-refractory disease as they get Dara in earlier and earlier lines. In fact, people are even using Dara with REVLIMID and VELCADE in frontline. You can imagine that second-line could be a Carfil/Pom regimen , then third-line could be a penta-refractory situation. We think that this is going to continue to push the penta-refractory population earlier and open up the number of patients with penta-refractory disease. I'll turn it to Jatin to add and then talk about the frontline strategy on our side.
Thanks, Michael. I fully agree. I think that that's a good thing for patients getting access to DARZALEX earlier. It really positions us well as patients get DARZALEX in combination either with the VMP with the approved indication now or in the future with lenalidomide dex. I think it positions the combination from the BOSTON study well in that second-line therapy as well as for the current potential indication of the penta-refractory setting. I think that we're well-positioned with DARZALEX moving up in the frontline setting. I think regarding your second question regarding newly diagnosed myeloma, in our current STOMP study, we'll be looking at selinexor in newly diagnosed myeloma in combination with lenalidomide. Understand that there's still an appetite for an all-oral combination in newly diagnosed myeloma. We'll be exploring that combination in the current STOMP study.
Our next question is from Jonathan Chang with Leerink Partners. Your line is now open.
Thanks for taking my questions. Maybe first, just for the SADAL study , can you talk about how you view the bar for approval in third line plus DLBCL?
I'm sorry, can you repeat that?
Yeah, the bar for potential approval in FATAL. Please remember that there are still currently no drugs that are actually approved for the treatment of DLBCL since rituximab was approved for frontline combination with CHOP back in 2006. Other than CAR T, which is approved as a cell therapy for very specific patients who are transplant eligible, there's nothing available now for patients in third line. There's no approved second line. There's pretty standard of care for transplant eligible and ineligible patients. We believe the bar is a response rate in the 20%, 25% or better, and that the duration of response, again, should be above four to five months, much the way it is in last line myeloma. We think that the FDA is, and physicians and patients are interested in drugs that are also somewhat agnostic to the subtype.
We've made sure that our SADAL study includes both GCB and ABC types of DLBCL. The interim data, I'll remind you, that we presented last year at EHA, showed a response rate of 33% and a duration of response of greater than seven months. We think those easily meet the bar, we think this could provide a really convenient oral option for patients who have refractory DLBCL and really no approved therapies.
Thanks. Just one more question. How do you see CAR T impacting the DLBCL landscape and the positioning of selinexor in this indication? Thank you.
Thanks.
Great question. This is Jatin. Regarding CAR T-cell, as Michael mentioned, CAR T-cells is really limited to a small subset of patients who are transplant eligible. We know those trials are highly selective. As you move into the commercial space, approved now for the last, since fall of 2017, it's really limited for those patients who are transplant eligible. Younger patients is also at the major academic medical centers that can support a CAR T-cell, which is limited. It's really limited to these special centers and not really applicable for two things. One, for older patients, which is the vast majority of large cell lymphoma, and number two, for the vast majority of patients out in the community, even if they are younger patients. I think that's where selinexor is well-positioned being an oral therapy that can be given widely.
Our next question is from Eric Joseph with JPMorgan. Your line is now open.
Hey, guys. Congrats on all the progress and thanks for taking the question. Just looking for more help in framing expectations for EHA, whether you can provide us with an update around abstract submissions, specifically the late breaker for STORM, as well as any follow-up presentations related to the STOMP combinations.
Sure. We've assembled the data. We're hopeful that we can have a late breaker at EHA, and it'll really depend on what's there. If we don't make it there, we'll certainly make it at the next meeting. We're excited about the data. You've heard the top line, and the details will come out when they can.
Okay.
Sure.
I guess with abstracts being released next week, we shouldn't expect abstracts from the STOMP combinations, correct?
That's right. Yeah. There are several STOMP abstracts that were submitted to EHA. We'll hear about those soon.
Our next question is from Michael King with JMP Securities. Your line is now open.
Hey, good morning, guys. Thanks for taking my question. I'm asking on behalf of a couple friends of mine. I just wanted to maybe follow up on the Rev/Dex selinexor frontline indication. I'm just wondering if, Michael, do you think about it, or Jatin, do you think about this as far as transplant eligible versus ineligible, or is that definition not as clear cut anymore? I'm thinking that maybe you could still go frontline with selinexor Rev/Dex, but without DARZALEX, just because there may be a population that doesn't want to or can't tolerate the IV infusion of DARZALEX.
Yeah. To be clear, right now we're looking at the combination of selinexor Rev/Dex in newly diagnosed myeloma. I think it's quite controversial when you look across globally in terms of when folks are using transplant. You can clearly go in the transplant ineligible patient population or even the delayed transplant. Those patients who are still transplant eligible, some centers still want a delayed approach as opposed to induction therapy. I think that this can be for both situations. It doesn't have to be limited to the ineligible because there's clearly patients who are transplant eligible, they can get it, get their cells collected and do a delayed transplant. I think that line is blurring a bit now as we think about newly diagnosed myeloma and how centers approach it.
Okay. Then just on enrollment in both BOSTON and SEAL, have you guys achieved full enrollment in SEAL yet?
All we've said, Mike, is that we'll have top-line data by the end of the year. We're comfortable with that.
Our next question is from Ying Huang with Bank of America. Your line is now open.
Hey, guys. It's Jenny. Thank you for taking our questions. In terms of your commercial preparations, have you guys thought about the academic versus community settings and how you would differently approach each of those? Also, beyond SVd, for the other STOMP indications, would you bring any into a pivotal trial or just use STOMP for an sBLA after you're approved in penta-refractory? Thank you.
Yeah, thanks. I'll start. For the approach in the academic versus the community setting, one of the great unique things about selinexor is it clearly has applicability in both settings. Obviously, the vast majority of the STORM patients came from the academic setting. They were treated in academic centers, the fact that these centers are seeing this level of activity in patients who've exhausted available therapies really sets us up nicely. On the other hand, selinexor is a very convenient, twice-a-week oral therapy, which makes it really uniquely suited for treatment in the community as well.
We're very much looking forward to a two-pronged approach where we focus on selinexor's activity in the heavily pre-treated patients with no real options in the academic center, and for the ease-of-use situation in patients with penta-refractory myeloma out in the community, who are perhaps less heavily pre-treated but still meet the criteria for penta-refractory disease. We think it's a great and a unique opportunity in this setting. On the question about whether we move any of our other STOMP combinations, those data will continue to mature. We're certainly excited about a lot of those combinations, the DARZALEX combo, the POMALYST combo. In particular, we'll be studying KYPROLIS as well coming up. Obviously, Velcade has already started, and the REVLIMID combo is moving into frontline. Lots of good stuff happening. We will likely pick one or more of these to move towards a phase III.
We may do that with a consortium, we'll have to think about it as the data emerge. We really have a unique situation there where essentially every combination has shown some level of additivity or frank synergy going forward.
Got it. Great. Thanks, guys.
I'm showing no further questions. I would now like to turn the call back to Michael Kauffman, CEO, for any further remarks.
Just take one more time and thank everybody for your great questions, and we look forward to speaking with many of you in the coming weeks and to keeping you updated on our continued progress. Thank you.
Ladies and gentlemen, thank you for participating in today's conference. You may now disconnect.