4. Karyopharm Therapeutics Inc. (NASDAQ:KPTI)
Number of Hedge Fund Investors: 19
As a commercial-stage pharmaceutical company, Karyopharm Therapeutics Inc. (NASDAQ:KPTI) discovers, develops, and distributes medications targeted to prevent nuclear export for the treatment of cancer and other diseases. The company’s conviction in cancer patients’ tremendous fortitude and courage drives its efforts. Since its inception, Karyopharm has been an industry pioneer in oral medicines that treat nuclear export dysregulation, a key mechanism of oncogenesis. Karyopharm’s main drug and first-in-class oral exportin 1 (XPO1) inhibitor, XPOVIO (selinexor), is approved in the United States and sold by the company for three cancer applications. Additionally, it has obtained regulatory approvals for a variety of indications in an increasing number of former US territories and nations, such as China, Europe, the UK (under the brand name NEXPOVIO), and the United States. Karyopharm’s pipeline is narrowly targeted, with indications for certain high unmet-need cancers, such as multiple myeloma, endometrial cancer, myelofibrosis, and diffuse large B-cell lymphoma (DLBCL).
The company has faced high cash burns over the years. It decreased by over 43% since 2019, with slow annual revenue growth over the years, resulting in its shares declining. With a high quarterly (Q1 2024) cash burn rate of 42.97% and liquid assets expected to last only four to five quarters, Karyopharm is facing significant financial issues. The company’s Q1 2024 financials show a $37.4 million net loss in terms of revenue as well as a $38.7 million drop in sales from the same quarter previous year to $33.1 million, with U.S. XPOVIO’s net product revenue forecast to be between $100.0 million and $120.0 million by 2024. Sales of selinexor have been hampered by competition in the multiple myeloma market, and revenue has been further stretched by an increase in rebates and discounts. Significant risks are associated with the impending Phase 3 studies, and mistrust is raised by earlier selinexor failures. Karyopharm is a high-risk venture because of the lengthy wait for trial results, budgetary restrictions, and the lack of early, overwhelming trial effectiveness.
Despite these obstacles, Karyopharm Therapeutics Inc. (NASDAQ: KPTI) is making great progress with its nuclear exportin 1 inhibitor, selinexor, which is being presented in seven different ways at the ASCO meeting. The company is exploring the possibility of selinexor, its key product in treating endometrial cancer and myelofibrosis, through key trials that, if successful, may revolutionize the field. The SIENDO trial accomplished its primary aim, with patients receiving Xpovio showing a statistically significant increase in median progression-free survival compared to placebo. Karyopharm has enough liquid assets ($192.4 million) to cover its operations through the end of 2025. Significant debt restructuring was announced by Karyopharm, delaying most repayments until 2028-2029 and resulting in $30 million in liquidity on the balance sheet and a reduced selinexor royalty rate. Considering that the company has three key Phase 3 studies and many shots on target, its valuation of little over $100 million seems low (undervalued). The myelofibrosis studies and the endometrial cancer research, which focuses on TP53 wild-type patients in particular, have the potential to grow selinexor’s market beyond its present usage in multiple myeloma.
Furthermore, Karyopharm Therapeutics Inc. (NASDAQ:KPTI) has received an average price target of $4.60, reflecting analysts’ bullish outlook on the stock. The price target reflects a potential upside of over 424.64% from the current stock price of $0.88. Meanwhile, 5 analysts have given the stock a “Buy” rating.
Karyopharm Therapeutics Inc. (NASDAQ:KPTI) was owned by 19 of the 920 hedge funds that Insider Monkey examined in the first quarter of this year. Jonathan Berger’s Birch Grove Capital held the largest stake in the company, with 6,000,00 shares worth $3.21 million.
