Karyopharm Therapeutics is confronting a critical financial deadline, with a debt payment due in four weeks and cash reserves barely sufficient to survive into September.
The Massachusetts-based biopharma reported its second quarter earnings on Thursday, revealing the full extent of its precarious financial position to investors and lenders.
Karyopharm posted a Q2 loss of $67 million, a dramatic deterioration compared to a $37 million loss in the same period a year ago and a $27 million loss in Q1 of this year.
The Q2 loss translates to $2.32 per share, significantly worse than the $1.31 per share figure that analysts had been expecting.
The company currently holds cash reserves of $65.4 million, with a loan payment of $15.8 million falling due on 10 September, leaving it dangerously close to a covenant breach.
If the payment is made without additional financing or a waiver from lenders, Karyopharm warned it “would fall below its $10.0 million minimum liquidity covenant,” which would trigger a default.
CEO Richard Paulson sought to strike a measured tone on a conference call, saying lenders “have been consistently supportive with us” throughout ongoing negotiations.
Paulson described “[g]ood, productive conversations” with lenders, who have been “working on the right solution as we move forward,” adding that “obviously that’s something that we’re very focused on and are working to achieve rapidly.”
Alongside the debt crisis, Karyopharm confirmed it is evaluating a “range of financing opportunities and strategic alternatives” to maximise value for shareholders going forward.
The company said it remains on track to submit for accelerated approval of a label expansion for its multiple myeloma drug Xpovio, targeting the myelofibrosis market in combination with Incyte’s Jakafi.
Chief commercial officer and business development chief Sohanya Cheng argued that the myelofibrosis opportunity is well-suited to the company’s existing commercial infrastructure and salesforce footprint.
“The majority of patients are concentrated within a manageable group of treatment centers,” Cheng said, adding the setup allows the company “to deploy our existing organization efficiently.”
Xpovio sales showed a modest uptick in Q2, rising from $29.7 million a year ago to $30.8 million for the most recent quarter, offering some limited revenue comfort.
Despite this, annual Xpovio sales have been largely stagnant for four consecutive years, fluctuating between $112 million and $120 million without meaningful growth momentum.
The company has aggressively cut costs in response, conducting two separate rounds of layoffs in 2023 and 2024, each reducing headcount by 20%, leaving Karyopharm with just 228 employees compared to 442 at the start of 2022.