Karyopharm Faces Default as Cash Reserves Dwindle to Four-Week Runway

Karyopharm Therapeutics (KPTI) is racing to secure financing or a lender waiver before a $15.8mn loan payment falls due on September 10, after a deepening second-quarter loss left the company with just $65.4mn in cash and a runway extending only into next month.

The Massachusetts biopharma reported a net loss of $67mn for the three months ended June 30, more than double the $27mn loss recorded in the first quarter and sharply wider than the $37mn loss a year earlier. The per-share loss of $2.32 significantly missed analyst expectations of $1.31.

The company warned that making the September debt payment without additional financing or a waiver from its lenders would push its liquidity below a $10mn minimum covenant threshold, triggering a default.

Chief executive Richard Paulson said the company had been engaged in "good, productive conversations" with lenders who have been "consistently supportive" and are "working on the right solution as we move forward." He added that resolving the situation rapidly was a primary focus. Karyopharm said it is also evaluating a "range of financing opportunities and strategic alternatives" to maximize shareholder value.

The company continues to generate revenue from Xpovio, its nuclear transport modulator approved in 2019 for multiple myeloma, with sales edging up to $30.8mn in the second quarter from $29.7mn a year earlier. However, annual revenues have been largely stagnant for four consecutive years, ranging between $112mn and $120mn, leaving the company unable to offset its cash burn.

Karyopharm has responded to the pressure with successive rounds of cost-cutting. Headcount reductions of 20 per cent in both 2023 and 2024 have left the company with 228 employees, down from 442 at the start of 2022.

One potential avenue for growth is a label expansion for Xpovio in myelofibrosis, where Karyopharm is planning to file for accelerated approval of a combination regimen pairing the drug with Incyte's Jakafi. Chief commercial officer Sohanya Cheng said the structure of the myelofibrosis market was well-suited to the company's existing commercial infrastructure, with the majority of patients concentrated within a manageable number of treatment centers. The company believes uptake could proceed rapidly given Xpovio's established presence.

Whether that opportunity materializes in time to alter Karyopharm's financial trajectory remains an open question.