Form 10-K Karyopharm Therapeutics For: Dec 31

March 1, 2022 9:53 PM EST

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10-K
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Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2021

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36167

 

KARYOPHARM THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware

26-3931704

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

85 Wells Avenue, 2nd Floor, Newton, Massachusetts 02459

(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: (617) 658-0600

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which listed

 

Common Stock, $0.0001 par value

KPTI

Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act). Yes No ☒

The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold on June 30, 2021 was approximately $738.5 million. Shares of common stock held by each executive officer and director and by each holder of 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

Number of shares outstanding of the registrant’s Common Stock as of February 22, 2022: 79,160,016.

Documents incorporated by reference:

Portions of the registrant’s Proxy Statement for its 2022 Annual Meeting of Stockholders, which the registrant intends to file with the Securities and Exchange Commission no later than 120 days after the registrant’s fiscal year end of December 31, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K.

 

 


Table of Contents

TABLE OF CONTENTS

 

 

 

 

 

 

Page No.

PART I

6

Item 1.

Business

6

Item 1A.

Risk Factors

51

Item 1B.

Unresolved Staff Comments

94

Item 2.

Properties

94

Item 3.

Legal Proceedings

94

Item 4.

Mine Safety Disclosures

94

PART II

95

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

95

Item 6.

[Reserved]

96

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

97

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

106

Item 8.

Financial Statements and Supplementary Data

106

Item 9A.

Controls and Procedures

106

Item 9B.

Other Information

109

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

109

PART III

110

Item 10.

Directors, Executive Officers and Corporate Governance

110

Item 11.

Executive Compensation

110

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

110

Item 13.

Certain Relationships and Related Transactions, and Director Independence

110

Item 14.

Principal Accountant Fees and Services

110

PART IV

111

Item 15.

Exhibits and Financial Statement Schedules

111

Item 16.

Form 10-K Summary

111

SIGNATURES

150

 

2


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Forward-Looking Information

This Annual Report on Form 10-K contains forward-looking statements regarding the expectations of Karyopharm Therapeutics Inc., herein referred to as “Karyopharm,” the “Company,” “we,” or “our,” with respect to the possible achievement of discovery and development milestones, our future discovery and development efforts, including regulatory submissions and approvals, our commercialization efforts, our partnerships and collaborations with third parties, our future operating results and financial position, our business strategy, and other objectives for future operations. We often use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and other words and terms of similar meaning to help identify forward-looking statements, although not all forward-looking statements contain these identifying words. You also can identify these forward-looking statements by the fact that they do not relate strictly to historical or current facts. There are a number of important risks and uncertainties that could cause actual results or events to differ materially from those indicated by forward-looking statements. These risks and uncertainties include, but are not limited to, those described in “Part I—Item 1A. Risk Factors” of this Annual Report on Form 10-K and under the heading “Summary of Risk Factors” below. As a result of these and other factors, we may not actually achieve the plans, intentions, expectations or results disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

References to XPOVIO® (selinexor) also refer to NEXPOVIO® (selinexor) when discussing its approval and commercialization outside of the U.S.

 

3


Table of Contents

Summary of Risk Factors

 

Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock.

 

Risks Related to Commercialization and Product Development

 

If we are unable to successfully commercialize XPOVIO or our other products or product candidates in and outside of the U.S., including achieving widespread market acceptance by physicians, patients, and third-party payors, our business, financial condition and future profitability will be materially harmed.
XPOVIO faces substantial competition.
If our clinical trials fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs, experience delays or be unable to complete the development of such product candidates.
Serious adverse or unacceptable side effects related to XPOVIO or future products or product candidates may delay or prevent their regulatory approval, cause us to suspend or discontinue clinical trials, or limit the commercial value of our approved indications.
The COVID-19 pandemic has adversely disrupted, and is expected to continue to adversely disrupt, our operations.
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.
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.
We may not be able to maintain or expand our sales, marketing and distribution capabilities in order to successfully commercialize XPOVIO or any of our products or product candidates, if approved.
Our approved products may not receive coverage or may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives.
Product liability lawsuits against us could divert our resources, result in substantial liabilities and limit commercialization of XPOVIO or any of our other products.
Any business that we conduct outside of the U.S. may be adversely affected by international risks and uncertainties.

 

Risks Related to Regulatory Matters

 

We or our collaborators may not receive regulatory approvals for the commercialization of some or all of our or their product candidates in a timely manner, or at all.
We may not be able to utilize accelerated development pathways to obtain regulatory approval, orphan drug exclusivity or certain other designations for our product candidates, which may result in delays receiving necessary marketing approvals, if approval is received at all.
Our ability to commercialize our products may be limited by the terms of their respective regulatory approvals and ongoing regulation of our products.
We and/or our collaborators may not obtain marketing approval in foreign jurisdictions.
Current and future legislation may negatively impact (i) our and/or our collaborators’ ability to obtain marketing approval, commercialize our products and obtain reimbursement for our products; (ii) the prices we or they obtain; and (iii) the costs for our products.
Our failure to comply with any (i) post-approval development and regulatory requirements; (ii) reporting and payment obligations under governmental drug pricing programs; (iii) applicable anti-kickback, fraud and abuse and other healthcare laws and regulations; (iv) global privacy and data security requirements; or (v) environmental, health and safety laws and regulations may have a material adverse effect on our business, financial condition or results of operations.
Our employees, independent contractors, consultants, collaborators and vendors may engage in misconduct or other improper activities, which could cause significant liability for us.
Laws and regulations governing any international operations we may have in the future may preclude us from developing, manufacturing and selling certain product candidates outside of the U.S. and require us to develop and implement costly compliance programs.
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

4


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ANDAs and 505(b)(2) applications.
We are subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we are not in compliance with applicable laws.

 

Risks Related to Our Financial Position and Capital Requirements

 

We may never achieve or maintain profitability and will need additional funding to achieve our business objectives, which may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates.
We may not be able to satisfy our indebtedness, on a timely basis or at all, and we may be negatively impacted by various covenants and accounting methods related to our debt.
Our business, financial condition and stock price may be impacted by unstable market and economic conditions.

 

Risks Related to Our Dependence on Third Parties

 

Our dependence on third parties for certain aspects of our business, such as clinical development, manufacturing, marketing, distribution and/or commercialization of XPOVIO and/or our product candidates, could negatively impact our development and commercialization plans.

 

Risks Related to Our Intellectual Property

 

If we are unable to obtain and maintain patent protection for our product candidates and other discoveries, or the scope of the patent protection obtained is not sufficiently broad, our ability to successfully commercialize our product candidates may be adversely affected.
We may become involved in lawsuits to protect or enforce our intellectual property rights, or third parties may initiate legal proceedings against us alleging our infringement of their intellectual property rights.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

 

Risks Related to Employee Matters and Managing Growth

 

We may not be able to retain key members of our management team and to attract, retain and motivate qualified personnel.
We have expanded and expect to continue to expand our development, regulatory and sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
Information technology system failures or security breaches may materially adversely affect our business and operations.

 

Risks Related to Our Common Stock

 

Provisions in our charter and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management.
The price of our common stock has been and may continue to be volatile.
Securities or other litigation could result in substantial costs and may divert management’s time and attention from our business.
We have broad discretion in the use of our cash, cash equivalents and investments and may not use them effectively.
If we identify a material weakness in our internal controls 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.
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 ability to use our net operating loss carryforwards and tax credit carryforwards to offset future taxable income may be subject to certain limitations, and changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition.

5


Table of Contents

PART I

Item 1. Business

Overview

We are a commercial-stage pharmaceutical company pioneering novel cancer therapies and dedicated to the discovery, development and commercialization of first-in-class drugs directed against nuclear export for the treatment of cancer and other diseases. Our scientific expertise is based upon an understanding of the regulation of intracellular communication between the nucleus and the cytoplasm. We have discovered and are developing and commercializing novel, small molecule Selective Inhibitor of Nuclear Export (“SINE”) compounds that inhibit the nuclear export protein exportin 1 (“XPO1”). These SINE compounds, representing a new class of drug candidates with a novel mechanism of action that have the potential to treat a variety of diseases with high unmet medical need, were the first oral XPO1 inhibitors to receive marketing approval. Our lead asset, XPOVIO® (selinexor), received its initial U.S. approval from the U.S. Food and Drug Administration (“FDA”) in July 2019 and is currently approved and marketed in the U.S. for the following indications:

In combination with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have received at least one prior therapy. Approval in this indication was supported by data from the BOSTON (Bortezomib, Selinexor and Dexamethasone) study (the “BOSTON Study”);
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 (“PIs”), at least two immunomodulatory agents (“IMiDs”), and an anti-CD38 monoclonal antibody (“mAb”). We refer to myeloma that is refractory to these five agents as penta-refractory. Approval in this indication was supported by data from the STORM (Selinexor Treatment of Refractory Myeloma) study (the “STORM Study”); and
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 two lines of systemic therapy. This indication was approved under accelerated approval based on response rate and was supported by data from the SADAL (Selinexor Against Diffuse Aggressive Lymphoma) study (the “SADAL Study”). Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trial(s).

In April 2021, we added three new tablets of varying strength, 40 mg, 50 mg and 60 mg, for XPOVIO following FDA approval, in addition to the original 20 mg strength tablets.

The commercialization of XPOVIO in the U.S., for both the multiple myeloma and DLBCL indications, is currently supported by sales representatives, nurse liaisons and a market access team, as well as KaryForward™, an extensive patient and healthcare provider support program. Our commercial efforts are also supplemented by patient support initiatives coordinated by our dedicated network of participating specialty pharmacy providers. We plan to continue to educate physicians, other healthcare providers and patients about XPOVIO’s clinical profile and unique mechanism of action as we continue to expand XPOVIO use.

The commercialization of XPOVIO and NEXPOVIO (the brand name for selinexor in Europe and the United Kingdom) outside of the U.S. is managed by our partners in their respective territories, as described under “Collaborations” below. We have received the following regulatory approval for NEXPOVIO outside of the U.S.:

European Union: Conditional approval received in March 2021 from the European Commission (“EC”) for NEXPOVIO in combination with dexamethasone for the treatment of adult patients with penta-refractory multiple myeloma in 27 European Union (“EU”) member countries as well as the European Economic Area countries of Iceland, Liechtenstein and Norway. As discussed below, in December 2021, we entered into a license agreement (the “Menarini Agreement”) with Berlin-Chemie AG, an affiliate of the Menarini Group (“Menarini”), pursuant to which we granted Menarini a non-exclusive license to develop, and an exclusive license to commercialize, products containing selinexor for all human oncology indications in Europe and other key global territories.
United Kingdom: Conditional approval received in May 2021 from the United Kingdom’s Medicines & Healthcare Products Regulatory Agency for NEXPOVIO in combination with dexamethasone for the treatment of adult patients with penta-refractory multiple myeloma. Under the terms of the Menarini Agreement, Menarini obtained the exclusive rights to commercialize NEXPOVIO in the United Kingdom.

Our partners have received the following regulatory approvals for XPOVIO outside of the U.S.:

Singapore: Approval received in March 2022 for XPOVIO (a) in combination with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have received at least one prior therapy; (b) in combination

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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 PIs, at least two IMiDs, and an anti‐CD38 mAb; and (c) for the treatment of adult patients with relapsed or refractory DLBCL, not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of therapy who are not eligible for haematopoietic cell transplant.
Mainland China: Conditional approval received in December 2021 from the China National Medical Products Administration for XPOVIO in combination with dexamethasone in patients with relapsed or refractory multiple myeloma who have received prior therapies and whose disease is refractory to at least a PI, an IMiD, and an anti-CD38 mAb.
South Korea: Approval received in July 2021 for XPOVIO (a) in combination with dexamethasone for the treatment of adult patients with penta-refractory multiple myeloma; and (b) as a monotherapy for the treatment of adult patients with relapsed or refractory DLBCL who have received at least two prior lines of treatment.
Israel: Approval received in February 2021 for XPOVIO (a) in combination with dexamethasone for the treatment of adult patients with relapsed refractory multiple myeloma who have received at least three prior therapies and whose disease is refractory to at least one PI, at least one IMiD, and an anti-CD38 mAb, and (b) for the treatment of adult patients with relapsed or refractory DLBCL, not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy. In January 2022, approval was also received for XPOVIO in combination with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have received at least one prior therapy.

In addition, in April 2021, the European Medicines Agency (“EMA”) validated our Type II variation to the marketing authorization application (“MAA”) based on the data from the Phase 3 BOSTON Study, which evaluated once-weekly administration of selinexor in combination with once-weekly administration of Velcade® (bortezomib) and low-dose dexamethasone compared to standard twice-weekly administration of Velcade® plus low-dose dexamethasone in patients with multiple myeloma who have received one to three prior lines of therapy. In January 2022, as part of the MAA approval process, the EMA conducted a preapproval good clinical practices (“GCP”) inspection at our corporate headquarters, which was also attended by the FDA. In addition, an inspection of one of the clinical trial sites that participated in the BOSTON Study took place in late 2021. In February 2022, the EMA issued its initial GCP inspection reports, which included certain questions and findings. We have promptly addressed the questions and findings included in the inspection reports, however, there can be no assurances that our proposals will be acceptable to the EMA. We expect that the review of the Type II variation will be completed in the first half of 2022.

Our primary focus is on marketing XPOVIO in its currently approved indications as well as developing and seeking the regulatory approval of selinexor and eltanexor as oral agents in multiple myeloma, endometrial cancer, myelofibrosis (“MF”), myelodysplastic syndromes (“MDS”) and in additional cancer indications with significant unmet medical need. We plan to continue to conduct clinical trials and to seek additional approvals for the use of selinexor and eltanexor as single agents or in combination with other oncology therapies to expand the patient populations that are eligible for treatment with selinexor or eltanexor. In addition to selinexor and eltanexor, we continue to advance our pipeline of novel drug candidates, including verdinexor, our other oral SINE compound, KPT-9274 and a proprietary recombinant human interleukin 12 (“IL-12”).

On February 8, 2022, we announced top-line results from our Phase 3 SIENDO study evaluating the efficacy and safety of selinexor for front-line maintenance therapy in patients with advanced or recurrent endometrial cancer (the “SIENDO Study”). On February 25, 2022, we attended a pre-supplemental New Drug Application (“sNDA”) submission meeting with the FDA during which we received feedback, including that the top-line results from the SIENDO Study are unlikely to support an sNDA approval. Considering the FDA’s feedback, we intend to initiate a new placebo-controlled randomized clinical study of selinexor in patients with p53 wild-type with advanced or recurrent endometrial cancer this year.

In December 2021, the National Comprehensive Cancer Network (“NCCN”) added a selinexor combination regimen with carfilzomib and dexamethasone to its Clinical Procedure Guidelines in Oncology for Previously Treated Myeloma (the “NCCN Guidelines”). This is in addition to three selinexor combination regimens that were added to the guidelines in December 2020, including (i) selinexor/bortezomib/dexamethasone (once-weekly), which also received a Category 1 recommendation, which represents the highest designation assigned by NCCN, indicating the recommendation is based upon high-level evidence and that there is uniform NCCN consensus that the intervention is appropriate; (ii) selinexor/daratumumab/dexamethasone; and (iii) selinexor/pomalidomide/dexamethasone, which is an all-oral treatment regimen. The NCCN Guidelines are a comprehensive set of guidelines detailing the sequential management decisions and interventions that currently apply to 97% of cancers affecting patients in the U.S. and are intended to ensure that all patients receive preventive, diagnostic, treatment and supportive services that will most likely lead to optimal outcomes.

 

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Our Strategy

At Karyopharm we are passionate about our mission to positively impact patient lives and defeat cancer. With our first-in-class SINE technology, our foundation is in our science. Our vision is to be a leading innovator that develops and commercializes transformative medicines for patients and society. There are five key pillars that we believe will drive our underlying value and provide significant market opportunities for us.

Maximize the Commercial Value of XPOVIO in Multiple Myeloma. We are building upon our existing U.S. multiple myeloma foundation as we continue to expand the breadth and depth of XPOVIO’s use with earlier line patients. We expect to focus on growing sales in our approved U.S. indications by establishing XPOVIO as a new effective modality that can become a standard of care in the second to fourth-line treatment setting following treatment with anti-CD38 therapy. With our global partners, we plan to maximize the global opportunity to bring XPOVIO to patients worldwide.
Bring Selinexor to Patients with p53 Wild-type with Endometrial Cancer. We are focused on the potential to bring selinexor to patients with p53 wild-type with endometrial cancer, as there are no approved treatments for maintenance therapy following chemotherapy in any line of treatment.
Focus on our Prioritized Clinical Pipeline. Our science enables us to make a big difference in the lives of patients and we are focused on four priority clinical programs: multiple myeloma, endometrial cancer, MF, and MDS. Our clinical pipeline has been consciously and strategically focused to target cancers with high unmet need and a high probability of success based on the potential to provide meaningful clinical benefit to patients, potential regulatory approval, and supportive data. We will also continue to expand our understanding of the role nuclear transport plays in the underlying biology of cancer through focused signal seeking activities to identify future opportunities in other oncology indications for our SINE technology that may provide support for additional clinical investigation.
Provide Strong Leadership. We believe we have the right people in place and a strong leadership team with the ability to help position us to achieve scientific, clinical and commercial goals and to execute on our key corporate objectives. We strive to be a top-talent destination for those who desire to make a difference in patients’ lives.
Maintain a Well-capitalized Business to Execute our Core Objectives. We are focused on maintaining a well-capitalized business that will enable the advancement of our clinical development opportunities.

 

Our Programs to Treat Cancer

Overview

Cancer is a disease characterized by unregulated cell growth. Cancer cells develop when DNA inside the nucleus of normal cells accumulates damage in genes that regulate cell growth and survival. In healthy cells, proteins called tumor suppressor proteins located in the cell nucleus help prevent the accumulation of DNA damage (mutations, chromosomal translocations and other abnormalities) by monitoring DNA for damage, and if damage is detected, the tumor suppressor proteins will direct the cell to attempt to repair it, or if the DNA damage is too severe, the tumor suppressor proteins will direct the cell to die in a process called apoptosis. Accumulation of tumor suppressor proteins in the nucleus of cancer cells allows them to perform their normal role of detecting DNA damage, thereby inhibiting a cancer cell’s ability to divide, and promoting apoptosis.

Many tumor suppressor proteins can only function properly when they are located inside of a cell’s nucleus. Proteins, however, are not made inside the nucleus but rather are made outside of the nucleus in an area called the cytoplasm. A membrane, called the nuclear membrane, separates the nucleus from the cytoplasm. Larger nuclear proteins, including tumor suppressor proteins, must be transported from the cytoplasm where they are brought into the nucleus to perform their functions in keeping a cell healthy. Similarly, when they have completed their normal functions, these proteins are typically exported back into the cytoplasm. Proteins move between the nucleus from the cytoplasm through a protein complex embedded in the nuclear membrane called the nuclear pore. The nuclear pore works like a gate through which large molecules, including many other proteins and ribonucleic acids (“RNAs”), enter and exit the nucleus. When molecules enter the nucleus from the cytoplasm, the process is called import, and when molecules exit from the nucleus to the cytoplasm, the process is called export. The import and export of most proteins and other large molecules between the nucleus and cytoplasm require specific carrier proteins to chaperone their cargo molecules through the nuclear pore complex. Carrier proteins, which mediate the import of macromolecules into the nucleus, are called importins, and those which mediate the export of macromolecules out of the nucleus are called exportins. Therefore, the processes of import and export are carried out separately and are typically regulated independently.

One way that cancers evade detection from the body’s own defense mechanisms is by removing tumor suppressor proteins from within the cell nucleus via an overproduction of a specific chaperone protein called XPO1. XPO1 is one of eight exportins that have been identified in human cells, and it exports over 220 proteins referred to as its “cargo proteins.” In particular, XPO1 appears to be the sole exporter for most of the tumor suppressor proteins including p53, p73, p21, p27, APC, FOXO, pRB and survivin. In addition

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to exporting tumor suppressor proteins out of the nucleus, XPO1 mediates the nuclear export of a protein called eukaryotic initiation factor 4E, which itself binds to the mRNAs that code for these proteins (“eIF4E” and also called the “mRNA cap binding protein”). eIF4E binds to the mRNAs for many growth-regulating proteins, including c-myc, bcl-2, bcl-6 and cyclin D, and depends on XPO1 to help carry these growth-promoting mRNAs from the nucleus into the cytoplasm where the mRNAs are efficiently translated into proteins. XPO1 also exports the anti-inflammatory (and anti-tumor) protein IκB, which inhibits a protein called NF-κB. NF-κB is found in the nucleus of most cancer cells and plays a role in cancer metastasis and chemotherapy resistance, as well as in many inflammatory and autoimmune diseases.

In nearly all cancer cells, XPO1 levels are reported to be elevated when compared to their healthy cell counterparts. Therefore, these elevated levels of XPO1 in cancer cells mediate the rapid export of tumor suppressor proteins as well as IκB and eIF4E out of the nucleus and can lead to reduced monitoring for DNA damage, the normal triggering of apoptosis and increased NF-κB activity. Higher levels of XPO1 expression in cancer cells is also generally correlated with resistance to chemotherapy and poor prognosis in patients.

Mechanism of Action of Our SINE Compounds - Inhibition of XPO1

Selinexor and eltanexor are novel therapies that are first-in-class, oral SINE compounds specifically designed to force nuclear accumulation in the levels of multiple tumor suppressor and growth regulatory proteins. One of the ways a cell regulates the function of a particular protein is by controlling that protein’s location within the cell since certain functions may only occur within a particular location in the cell. As described above, the nuclear pore is a complex gate between the nucleus and cytoplasm, regulating the import and export of most large molecules, called macromolecules, including many proteins, into and out of the nucleus. In healthy cells, nuclear transport, both into and out of the nucleus, is a normal and regular occurrence that is tightly regulated and requires the presence of specific carrier proteins. XPO1 mediates the transport of the majority of tumor suppressor proteins and appears to be the only mediator of nuclear export for these proteins.

XPO1 inhibitors, such as selinexor and eltanexor, block the nuclear export of tumor suppressor, growth-regulating, and anti-inflammatory proteins, leading to accumulation of these proteins in the nucleus and enhancing their anti-cancer activity in the cell. The forced nuclear retention of these proteins can counteract a multitude of the oncogenic pathways that allow cancer cells with severe DNA damage to continue to grow and divide in an unrestrained fashion. Because normal cells have little or no DNA damage, accumulation of tumor suppressor proteins in their nucleus generally does not lead to apoptosis. The figure below depicts the process by which our SINE compounds inhibit the XPO1-mediated nuclear export of tumor suppressor proteins and oncoprotein mRNAs.

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We believe that the novel mechanism of action, oral administration and low levels of major organ toxicities observed to date in patients treated with our SINE compounds, along with encouraging efficacy data, support the potential for their broad use across many cancer types, including both hematological and solid tumor malignancies. Unlike many other targeted therapeutic approaches that only work for a specific set of cancers or in a specific subgroup of patients, we believe that by restoring tumor suppressor proteins to the nucleus where they can assess a cell’s DNA, our SINE compounds may provide therapeutic benefits across a broad range of both hematological and solid tumor malignancies and can potentially benefit a wider range of patients. Additionally, and as supported by its mechanism of action, and preclinical, clinical and post-approval data, we believe that our SINE compounds have shown additive or synergistic benefit with approved and experimental therapies in treating cancer patients and, therefore, have the potential to serve as a backbone therapy across multiple hematological and solid tumor malignancies as part of a variety of combination therapies.

 

Our Pipeline and Key Clinical Trials

Oral selinexor and eltanexor are being evaluated in multiple mid to late-stage clinical trials in patients with hematological and solid tumor malignancies, often in the relapsed and/or refractory setting. In general, relapsed disease refers to disease that progresses following the expiration of a specified period of time after discontinuation of therapy and refractory disease refers to disease that progresses while the patient is on therapy or within a specified period of time after discontinuation of therapy. Key clinical trials of selinexor and eltanexor are summarized in the chart below. In addition to these studies, there are several ongoing investigator-sponsored clinical trials being conducted in a variety of hematological and solid tumor malignancies and there are additional ongoing or planned signal seeking studies to further expand our development program in the future.

 

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OUR SELINEXOR PROGRAM

We are currently evaluating selinexor in certain hematological and solid tumor malignancies, including multiple myeloma, endometrial cancer, MF and DLBCL.

 

Multiple Myeloma

 

Overview

Multiple myeloma is a hematological malignancy characterized by the accumulation of monoclonal plasma cells in the bone marrow, the presence of monoclonal immunoglobulin, also known as M protein, in the serum or urine, bone destruction, kidney disease and immunodeficiency. Multiple myeloma is the second most common blood cancer in the world and there is currently no cure. We estimate that approximately 46,000 new cases of multiple myeloma in the second line or later were diagnosed in the U.S. in 2021. Myeloma occurs most commonly in people over age 60 with the average age at diagnosis of 70 years.

The treatment of multiple myeloma has improved over the last 20 years due to the use of high-dose chemotherapy and autologous stem cell transplantation, which is restricted to healthier, often younger patients. In addition to our SINE compounds, a number of non-chemotherapy drugs such as PIs, IMiDs, mAbs, and CAR-T therapy, have also emerged as treatment options within

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the last decade. The introduction of these non-chemotherapeutic novel agents has led to a significant increase in the survival of patients with multiple myeloma. However, despite the wide variety of newly approved or experimental therapies that are being used to treat patients with relapsed and/or refractory disease either alone or in combination, nearly all patients will eventually succumb to their disease. With nearly 12,500 deaths from multiple myeloma in the U.S. alone estimated for 2021 according to the American Cancer Society (“ACS”), we believe that there remains a need for therapies for patients whose disease has relapsed after, or is refractory to, available therapy.

XPOVIO is currently approved to treat multiple myeloma in adult patients who have received at least one prior therapy based on data from the BOSTON Study and in adult patients with penta-refractory multiple myeloma based on data from the STORM Study.

 

Supporting Studies

 

The BOSTON Study

The December 2020 FDA approval of XPOVIO to treat patients with multiple myeloma after at least one prior therapy was supported by the results of the BOSTON Study, a multi-center, Phase 3, randomized study conducted at over 150 clinical sites internationally. The BOSTON Study evaluated 402 adult patients with relapsed or refractory multiple myeloma who had received one to three prior lines of therapy. The study was designed to compare the efficacy, safety and certain health-related quality of life parameters of once-weekly oral selinexor in combination with once-weekly administration of Velcade® plus low-dose dexamethasone (the “XVd Arm”) versus twice-weekly administration of Velcade® plus dexamethasone (the “Vd Arm”). The primary endpoint of the study was progression-free survival (“PFS”) and key secondary endpoints included overall response rate (“ORR”) and the rate of peripheral neuropathy (“PN”), among others. Additionally, the BOSTON Study allowed for patients on the Vd Arm to crossover to the XVd Arm following objective (quantitative) progression of disease verified by an Independent Review Committee (“IRC”).

Despite the study having a high proportion of patients with high-risk cytogenetics (~50%), the median PFS in the XVd Arm was 13.9 months compared to 9.5 months in the Vd Arm, representing a 4.4 month (47%) increase in median PFS (hazard ratio (“HR”) of 0.70; p=0.0075). The XVd Arm also demonstrated a significantly greater ORR compared to the Vd Arm (76.4% vs. 62.3%, p=0.0012).

Further, XVd therapy demonstrated a significantly higher rate of deep responses, defined as ≥ Very Good Partial Response (“VGPRs”) compared to Vd therapy (44.6% vs. 32.4%) as well as a longer median duration of response (“DOR”) (20.3 months vs. 12.9 months). Additionally, 17% of patients on the XVd arm achieved a Complete Response (“CR”) or a Stringent Complete Response (“sCR”) as compared to 10% of patients receiving Vd therapy. All responses were confirmed by an IRC. Rates of PN were significantly lower for patients receiving XVd therapy compared to those receiving Vd therapy (32% vs. 47%). In addition, PN rates ≥ Grade 2 were also significantly lower in the XVd Arm compared to the Vd Arm (21% vs. 34%).

The most common adverse reactions (≥20%) in patients who received XVd were fatigue (59%), nausea (50%), decreased appetite (35%), diarrhea (32%), peripheral neuropathy (32%), upper respiratory tract infection (29%), decreased weight (26%), cataract (22%) and vomiting (21%). Grade 3-4 laboratory abnormalities (≥10%) were thrombocytopenia, lymphopenia, hypophosphatemia, anemia, hyponatremia and neutropenia. In the BOSTON Study, fatal adverse reactions occurred in 6% of patients within 30 days of last treatment. Serious adverse reactions occurred in 52% of patients who received XVd. Treatment discontinuation rate due to adverse reactions was 19%.

 

The STORM Study

The July 2019 FDA approval of XPOVIO to treat patients with penta-refractory multiple myeloma was supported by the results of the STORM Study. This indication was approved under accelerated approval based on response rate. As the BOSTON Study served as the confirmatory trial for accelerated approval for the STORM Study, the BOSTON sNDA approval in December 2020 fulfilled the requirement of an accelerated approval.

The STORM Study was a global, multi-center, single-arm Phase 2b clinical trial evaluating oral selinexor in combination with standard, low-dose dexamethasone (“Xd”) in patients with heavily pretreated, relapsed or refractory multiple myeloma. These heavily pretreated patients had a median of seven prior therapeutic regimens, including a median of 10 unique anti-myeloma agents. Specifically, the myeloma patients who were eligible for the study had prior treatment with the two PIs, Velcade® and Kyprolis® (carfilzomib), the two IMiDs, Revlimid® (lenalidomide) and Pomalyst® (pomalidomide), and the anti-CD38 mAb Darzalex® (daratumumab), as well as alkylating agents, and their disease was refractory to glucocorticoids, at least one PI, at least one IMiD, Darzalex®, and their most recent therapy. In all patients, this myeloma was considered “triple-class refractory.”

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The FDA’s accelerated approval of XPOVIO was based upon the efficacy and safety in a pre-specified subgroup analysis of the 83 patients in the STORM Study with documented penta-refractory myeloma, as the benefit-risk ratio appeared to be greater in this more heavily pre-treated population than in the overall trial population. In addition to multiple-refractory disease, patients in the STORM Study had rapidly progressing myeloma, with a median 22% increase in disease burden in the 12 days from screening to initial therapy. The ORR in this patient population was 25.3%.

For the STORM Study’s primary endpoint, selinexor achieved an ORR of 26%, including two (2%) sCRs, six (5%) VGPRs, and 24 (20%) partial responses (“PRs”) and the trial therefore met its primary endpoint. Both patients who had relapsed after CAR-T therapy achieved PRs. Minimal response per International Myeloma Working Group criteria was observed in 16 (13%) patients and 48 (39%) patients had stable disease. Median time to PR or better was 4.1 weeks. The clinical benefit rate, meaning a minimal response or better, was 39%. All responses were adjudicated by an IRC consisting of four independent experts in the treatment of multiple myeloma.

Median DOR was 4.4 months. PFS was 3.7 months and overall survival (“OS”) was 8.6 months. In the 39% of patients who achieved a minimal response or better, median OS was 15.6 months, compared to a median OS of 1.7 months in patients whose disease progressed or where response was not evaluable.

The most common adverse reactions (≥20%) in patients who received Xd were thrombocytopenia (74%), fatigue (73%), nausea (72%), anemia (59%), decreased appetite (53%), decreased weight (47%), diarrhea (44%), vomiting (41%), hyponatremia (39%), neutropenia (34%), leukopenia (28%), constipation (25%), dyspnea (24%) and upper respiratory tract infection (21%). In the STORM Study, fatal adverse reactions occurred in 9% of patients. Serious adverse reactions occurred in 58% of patients. Treatment discontinuation rate due to adverse reactions was 27%.

 

XPORT-MM-031

In the first quarter of 2022, we expect the first patient to be enrolled in a randomized global Phase 3 study evaluating selinexor in combination with pomalidomide and dexamethasone (“SPd”) versus elotuzumab, pomalidomide, and dexamethasone (“EloPd”) in patients with relapsed or refractory multiple myeloma (NCT05028348//EMN29). Patients in this Phase 3 study will have received one to four prior lines of therapy, including a PI, lenalidomide and an anti-CD38 mAb. Forty patients will be randomized to SPd with selinexor administered at two different doses, followed by randomization to SPd (at the identified optimal dose from the 40-patient study) versus EloPd in a 1:1 fashion. This global study is sponsored by the European Myeloma Network and is expected to recruit up to 300 patients. The primary endpoint of this study is PFS and secondary endpoints include ORR, OS and DOR.

The determination to initiate the Phase 3 SPd Study was based on data from an all-oral arm of the Phase 1b/2 STOMP Study (NCT02343042) and the Phase 2 Study XPORT-MM-028 (NCT04414475) in which selinexor was evaluated in combination with Pomalyst® and low-dose dexamethasone in patients with relapsed or refractory multiple myeloma who received at least two prior lines of therapy, including a PI and an IMiD. At the recommended dose of 60 mg of oral selinexor once weekly, four mg of Pomalyst® once daily and 40 mg once weekly of dexamethasone (“SPd-60”), the ORR was 65% and the median PFS was 10.9 months. Six patients had received prior therapy with daratumumab and all responded to therapy with SPd. A lower dose of selinexor, 40 mg (“SPd-40”), was also evaluated and the ORR was 48%, with the median PFS not yet evaluable. Sixteen patients in this cohort had received prior therapy with daratumumab and the ORR was 50%.

Among the patients evaluated for safety, the most common treatment-emergent adverse events (“AEs”) were cytopenias, along with gastrointestinal and constitutional symptoms; most were manageable with dose modifications and/or standard supportive care. The most common non-hematologic treatment-emergent AEs were nausea (SPd-60: 70%, SPd-40: 26%), fatigue (SPd-60: 75%, SPd-40: 41%), decreased appetite (SPd-60: 30%, SPd-40: 11%), weight loss (SPd-60: 25%, SPd-40: 11%) and diarrhea (SPd-60: 35%, SPd-40: 19%), and were primarily grade 1 and 2 events. The most common treatment-emergent Grade 3 and 4 AEs were neutropenia (SPd-60: 60%, SPd-40: 52%), anemia (SPd-60: 25%, SPd-40: 7%), and thrombocytopenia (SPd-60: 25%, SPd-40: 11%).

 

Endometrial Cancer

 

Overview

Endometrial cancer, also called uterine cancer, occurs when cells in the endometrium, which is the inner lining of uterus, begin to grow out of control. In the U.S., endometrial cancer is the most common gynecological cancer. The ACS estimates that there will be approximately 60,000 new cases of endometrial cancer diagnosed in 2022 in the U.S., with approximately 14,000 women expected to be diagnosed with advanced or metastatic disease. Endometrial cancer affects mainly post-menopausal women and the average age of women diagnosed with endometrial cancer is 60 years. Endometrial cancer is often detected at an early stage because it frequently produces abnormal vaginal bleeding. There are currently five different types of standard treatment for patients with endometrial cancer

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based on the stage of the disease at diagnosis and the grade of the tumor; surgery, radiation therapy, chemotherapy, hormone therapy and targeted therapy. Surgery is the first treatment for almost all women with endometrial cancer. The current first-line treatment for advanced or recurrent disease is chemotherapy where response rates have been shown to range from approximately 50% to 67%. Following chemotherapy, NCCN Guidelines recommend a “watch and wait” approach until the disease relapses. There are currently no FDA approved therapies post-chemotherapy in the maintenance setting.

 

Supporting Studies

 

The SIENDO Study

We recently announced top-line data results from the SIENDO Study, a multicenter, randomized, double-blinded Phase 3 study evaluating the efficacy and safety of oral selinexor versus placebo as a front-line maintenance therapy in patients with advanced or recurrent endometrial cancer following at least one prior platinum-based combination chemotherapy treatment (NCT03555422). Participants in this study with advanced or recurrent disease who had a PR or CR after at least 12 weeks of standard of care taxane-platinum combination chemotherapy were randomized in a 2:1 manner to receive either maintenance therapy of 80 mg of selinexor or placebo taken once per week, until disease progression. The primary endpoint in the study was PFS from time of randomization until death or disease progression as assessed by an investigator, with the goal of the study demonstrating a HR of 0.6.

On February 25, 2022, we attended a pre-sNDA submission meeting with the FDA, during which we received feedback that the SIENDO Study top-line results are unlikely to support an sNDA approval. In addition, we and the FDA discussed the application of the SIENDO Study statistical analysis with respect to the statistical significance of the study data and the overall clinical benefit for the whole population. Specifically, at randomization, SIENDO study investigators entered incorrect CR/PR stratification data for seven patients (2.7%) into the study’s Interactive Response Technology (“IRT”) system, and subsequently, and prior to data lock and unblinding, corrected the CR/PR stratification data in the study’s electronic case report form (“eCRF”). Therefore, the corrected CR/PR stratification data in the eCRF formed the basis for our reported top-line results. Notably, stratification data cannot be changed or corrected in the IRT once it is entered; all data changes and corrections must be entered into the eCRF by the clinical sites and monitored by us prior to database lock according to our standard operating procedures and the trial statistical analysis plan. The key factor that caused the discrepancy between the IRT-based analysis and the eCRF-based analysis is an important and correctable mistake in the classification of CR versus PR disease burden at baseline stratification by the clinical sites for seven patients in the IRT. All other demographic parameters of these patients remained balanced when using the eCRF, and all data points were monitored, cleaned, and locked in accordance with the trial database lock standard operating procedure before unblinding. Because CR/PR status (disease burden at baseline following chemotherapy) is the strongest prognostic determinant of PFS, these errors had a substantial effect on the study’s top-line data.

Collection and analysis of IRT data and corrected eCRF data when there are errors in stratification is a standard component of trial statistical plans and has been used in scientific presentations and publications as well as regulatory reviews and product labels. The analysis utilizing the corrected (eCRF) data was validated by the ENGOT/Belgium and Luxembourg Gynaecological Oncology Group trial statistician, and presented to the Principal Investigator, the SIENDO Independent Data Monitoring Committee, and the SIENDO Steering Committee, each of which agreed with using the eCRF analysis as the primary analysis for the SIENDO study.

The top-line data from the SIENDO study indicated that selinexor-treated patients had a median PFS of 5.7 months compared to 3.8 months for patients on placebo, representing an improvement of 50%, (eCRF HR of 0.70 (CI: 0.4993-0.9957), p=0.0486; IRT HR of 0.76 (CI: 0.5428-1.0759), p=0.1266). We believe that selinexor was well tolerated in this study with no new safety signals identified, and a discontinuation rate of 10.5% due to adverse events.

The SIENDO Study data also identified a pre-specified subgroup (patients with wild-type p53). In this pre-specified subgroup, selinexor-treated patients had a median PFS of 13.7 months compared to 3.7 months for patients on placebo (eCRF HR of 0.38 (CI: 0.210-0.670), p=0.0006; un-stratified HR 0.43 (CI: 0.240-0.756), p=0.0028). Performance of selinexor in this pre-specified subgroup was exploratory and not a primary or secondary endpoint for the SIENDO Study and no alpha was allocated to this pre-specified subgroup. Clinical and non-clinical mechanism of action studies have shown that inhibition of XPO1 by selinexor leads to the nuclear accumulation of p53, a well-established tumor suppressor protein, which we believe allows p53 to carry out its tumor suppressor function. We will continue to collect and analyze the SIENDO Study data and work with the FDA to explore all regulatory pathways for the development of selinexor for patients with p53 wild-type with endometrial cancer. Considering the FDA’s feedback, we intend to initiate a new placebo-controlled randomized clinical study of selinexor in patients with p53 wild-type with endometrial cancer this year.

The SIGN Study

The SIENDO Study was supported by data from a Phase 2, open-label study to assess efficacy and safety of oral selinexor in patients with heavily pre-treated, progressive gynecological cancers (the “SIGN Study”). Of the 23 patients with endometrial cancer in this study, eight (35%) had disease control (“DCR”) (three PRs and five with SD for at least 12 weeks). The median duration of DCR

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was 6.36 months and the median OS was seven months. Across all arms, the most common AEs were nausea, fatigue, decreased appetite, vomiting, weight loss, anemia, and thrombocytopenia, which were managed with supportive care and dose modifications.

 

Myelofibrosis

 

Overview

MF is a rare blood cancer in which excessive scar tissue (fibrosis) forms in the bone marrow and impairs its ability to produce normal blood cells and can cause scarring in bone marrow, leading to severe anemia, low platelet counts, and abnormal white blood cell production. In addition, blood cell production may move to the spleen (causing spleen enlargement) or to other areas of the body. It is estimated that there are approximately 5,000 cases of MF each year in the U.S. Although MF can occur at any age, it is more common in older patients, with a median age at diagnosis of approximately 65 years. During the course of the disease, MF patients could experience abdominal discomfort from increasing spleen and liver size, itching, night sweats, abnormal bleeding, fever, bone or joint pain and involuntary weight loss. The underlying cause of primary MF has not yet been determined; however, it is associated with DNA changes in certain genes.

There is currently no drug therapy that can cure MF. Allogeneic hematopoietic stem cell transplantation (“HSCT”) is currently the only treatment for MF that can provide a clinical cure; patients who are not good candidates for HSCT are treated with a JAK2 inhibitor (“JAKi”), such as ruxolitinib or fedratinib, to reduce spleen volume and improve symptoms. Therefore, the preferred first-line treatment for patients with newly diagnosed MF is ruxolitinib. Not all patients respond adequately to a JAKi, and some patients cannot tolerate treatment or develop rapid progression on this treatment. As there is currently no effective treatment for patients who are resistant to JAKi, we believe there is a high unmet need for a treatments with a different mechanism of action to overcome resistance and provide improvement in primary disease management.

 

Supporting Studies

 

The ESSENTIAL Study

Our evaluation of selinexor to treat MF is supported by data from the ongoing Phase 2 ESSENTIAL Study, an investigator-sponsored open-label, prospective study evaluating single-agent selinexor in adult patients with primary or secondary MF with resistance or intolerance to JAKi therapy (NCT03627403). The primary endpoint of the ESSENTIAL Study is to assess the efficacy of selinexor on spleen volume reduction (“SVR”). Selinexor was administered orally at a dose of 80 mg or 60 mg once weekly to 12 patients. Median duration of prior JAKi therapy was 22 months (range 0.5 to 96 months), and 92% (11 of 12) patients had MF refractory to ruxolitinib. As of the data cutoff, the median duration of treatment was 11 months (range 2.8 to 28.8 months). Of the ten patients who were on treatment for at least 24 weeks, four (40%) patients achieved SVR of ≥35% and six (60%) patients achieved SVR of ≥25%. Of the five patients who were transfusion dependent at screening, two (40%) achieved transfusion independence. Of the three patients with hemoglobin <10g/dL at screening, improvement in hemoglobin level of >2g/dl was observed in two (67%) patients. Reduction in marrow reticulin fibrosis from MF grade 3 to MF grade 1 was observed in a patient who had an assessment at week 72 demonstrating disease modification potential with longer treatment. While median OS was not yet reached, the two-year survival probability was assessed to be 91.7%. This compares favorably with a historical survival of 13 to 14 months in this population. The most common grade ≥3 treatment emergent AEs were anemia (33%) and fatigue (33%). These were manageable with treatment interruption and dose reduction, except in one patient who discontinued treatment.

 

The XPORT-MF-035 Study

In December 2021, we enrolled the first patient in a new Phase 2 study evaluating single-agent selinexor versus physician’s choice in patients with previously treated MF (XPORT-MF-035; NCT04562870) (the “MF-035 Study”). This Phase 2, randomized, open-label, multicenter study is designed to evaluate the safety and efficacy of single agent selinexor versus treatment of physician’s choice in patients with MF previously treated for at least six months with a JAK 1/2 inhibitor. The MF-035 Study is expected to enroll up to 112 patients who will be randomized 1:1 to receive either low dose, once-weekly administration of oral selinexor or physician’s standard treatment choice (per clinical practice). The primary endpoint of the study is the percentage of patients with SVR of ≥35% from baseline as assessed by an IRC. Secondary endpoints include the percentage of patients with SVR of ≥25% from baseline, percentage of patients who achieve total symptom score reduction of ≥50%, OS and anemia response, among several others.

 

The XPORT-MF-034 Study

In July 2021, we initiated a Phase 1/2 open-label, multicenter study of selinexor to evaluate the safety and efficacy of selinexor in combination with ruxolitinib in treatment naïve patients with MF (XPORT-MF-034; NCT04562389). This study is expected to enroll approximately 237 patients with treatment naïve MF and will be conducted in two phases: Phase 1a/1b and Phase 2. The Phase

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1a dose escalation portion of the study will determine the maximum tolerated dose and the recommended Phase 2 dose (“RP2D”) and will evaluate safety and preliminary efficacy. The Phase 1b dose expansion portion of the study will be conducted at the determined RP2D and will further assess the safety and preliminary efficacy at this dose level. In the Phase 2 portion of the study, patients will be randomized 1:1 to receive either once weekly selinexor plus ruxolitinib (15 mg or 20 mg twice daily) or ruxolitinib (15 mg or 20 mg twice daily) monotherapy. The primary endpoint for the Phase 2 portion of the study is the percentage of patients who achieve SVR of at least 35% from baseline. Secondary endpoints for the Phase 2 portion of the study include safety, percentage of patients who achieve total symptom score reduction of ≥50%, OS, anemia response and ORR, among several others.

 

Diffuse Large B-Cell Lymphoma

 

Overview

DLBCL is the most common type of Non-Hodgkin’s lymphoma, a cancer that starts in cells called lymphocytes, which are part of the body’s immune system. Lymphocytes are found in the lymph nodes and other lymphoid tissues, such as the spleen and bone marrow, as well as in the blood. According to the Lymphoma Research Foundation, over 18,000 people are diagnosed with DLBCL annually in the U.S. Although DLBCL can occur at any age, most patients are over 60 years of age at diagnosis. Up to two-thirds of all newly diagnosed patients are cured using front-line chemotherapy (typically “R-CHOP”). Poor outcomes for patients who failed a R-CHOP regimen prompted efforts to discover new treatment approaches for DLBCL, both up-front and at the time of relapse. Despite the recent approval of CAR-T therapy, many patients with relapsed or refractory DLBCL are not medically stable enough to undergo this type of treatment. In addition, various other targets have been studied in the treatment of DLBCL but may also not be well tolerated in heavily pretreated patients.

Supporting Studies

 

The SADAL Study

In June 2020, the FDA approved XPOVIO under accelerated approval as the only single-agent oral treatment of adult patients with relapsed or refractory DLBCL, not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy. This approval was supported by the results of the SADAL Study, an open-label Phase 2b clinical trial evaluating single-agent oral selinexor (60 mg, twice weekly) in patients that had relapsed or refractory DLBCL after at least two prior multi-agent therapies and who were ineligible for transplantation, including high dose chemotherapy with stem cell rescue. In this population, selinexor demonstrated an ORR of 29%, including a CR rate of 13%. Responses were seen in all subgroups evaluated regardless of age, gender, prior therapy, DLBCL subtype or prior stem cell transplant therapy. Patient responses were durable with a median DOR of 9.3 months (23.0 months for patients who achieved a CR). Importantly, responses were associated with longer survival, underscoring the potential of oral XPO1 inhibition as an oral, non-chemotherapeutic option for patients with relapsed or refractory DLBCL.

The most common adverse reactions (≥20%) in patients who received selinexor were fatigue (63%), nausea (57%), diarrhea (37%), decreased appetite (37%), decreased weight (30%), constipation (29%), vomiting (28%), and pyrexia (22%). Grade 3-4 laboratory abnormalities (≥15%) are thrombocytopenia, lymphopenia, neutropenia, anemia, and hyponatremia. In the SADAL Study, fatal adverse reactions occurred in 3.7% of patients within 30 days of last treatment. Serious adverse reactions occurred in 46% of patients who received selinexor. Treatment discontinuation rate due to adverse reactions was 17%.

 

The XPORT-DLBCL-030 Study

The XPORT-DLBCL-030 Study, which will serve as a confirmatory study for the June 2020 FDA accelerated approval of XPOVIO to treat DLBCL based on the SADAL Study, is a Phase 2/3 multi-center, randomized study evaluating the combination of selinexor and rituximab, gemcitabine and dexamethasone (“R-GDP”) in patients with relapsed or refractory DLBCL. The Phase 3 portion of the study will evaluate the selected dose (as identified in the Phase 2 study) of selinexor or matching placebo given with the standard combination immunochemotherapy R-GDP to patients with at least one prior therapy and who are ineligible for high dose chemotherapy and cell-based intervention such as CAR-T. The primary endpoint of the Phase 3 portion of the XPORT-DLBCL-030 Study is PFS. The first patient in this study was dosed in February 2021.

 

OUR ELTANEXOR PROGRAM

 

Myelodysplastic Syndromes

 

Overview

MDS are a group of hematologic malignancies whereby the bone marrow does not make enough healthy blood cells (white blood cells, red blood cells, and platelets). In addition, the contents of the blood and bone marrow may be abnormal and often lead to

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the development of acute myeloid leukemia. The median age of diagnosis for patients with MDS is between 71 to 76 years, with approximately 15,000 intermediate to high-risk patients diagnosed in the U.S. annually. General symptoms associated with MDS include fatigue, dizziness, weakness, easy bruising or bleeding, frequent infections, and headaches, all of which are related to the abnormal and low levels of blood cells. Hypomethylating agents (“HMAs”) are the current standard of care for patients newly diagnosed with high-risk MDS. Despite the use of HMAs, only 50% of patients respond to treatment, with responses frequently lasting less than two years. The prognosis in HMA-refractory disease is poor with an expected survival rate of four to six months. There is currently no other class of therapy approved for relapsed or refractory MDS patients; the current standard of care is participation in a clinical trial or best supportive care. Therefore, we believe there is an unmet need for the treatment of HMA-refractory MDS patients due to the few currently available treatment options.

We are currently evaluating eltanexor, a novel, oral SINE compound that, like selinexor, selectively blocks the nuclear export protein XPO1. The mechanism of action for the biological (anti-cancer) activity of eltanexor is similar to selinexor. However, eltanexor differs from selinexor primarily related to its minimal central nervous system penetration allowing for more frequent dosing of eltanexor, which allows for a longer exposure to SINE inhibition. Based on the data described below, we have observed single-agent clinical activity of eltanexor to treat patients with HMA-refractory MDS and we believe there is a strong rationale to explore the use of eltanexor in other solid tumors and hematologic cancers.

In January 2022, the FDA granted orphan drug designation for eltanexor for the treatment of MDS.

 

Supporting Studies

In September 2021, we initiated a Phase 2 expansion study of an ongoing open-label Phase 1/2 study investigating eltanexor as a single-agent or in combination with approved and investigational agents in patients with several types of hematologic and solid tumor cancers (KCP-8602-801; NCT02649790). The Phase 2 expansion study is designed to evaluate eltanexor monotherapy in 83 patients with HMA-refractory, intermediate or high-risk MDS. The primary endpoint for this Phase 2 expansion study is ORR with PFS and OS, among others, as secondary endpoints.

The initiation of the Phase 2 expansion study was supported by encouraging results from the Phase 1 portion of the study where single-agent eltanexor showed activity in patients with high-risk, relapsed MDS that was primary refractory to HMAs. In that study (Sangmin, et al. EHA 2021), eltanexor demonstrated a 53% ORR and a median OS of 9.9 months, comparing favorably to historical controls. At the recommended Phase 2 dose of 10 mg, eltanexor monotherapy was well tolerated with low incidence and grade of gastrointestinal events.

 

OUR OTHER PIPELINE PROGRAMS

In addition to selinexor and eltanexor, we are also advancing a pipeline of novel drug candidates including our other oral SINE compound verdinexor, KPT-9274 and IL-12.

 

Verdinexor (KPT-335)

It is widely known that canine lymphomas are similar in many ways to the non-Hodgkin’s lymphomas in humans, display a comparable genetic profile and respond to chemotherapy in a fashion similar to their human counterparts. Lymphomas are one of the most common tumors in dogs and are very aggressive where, without treatment, the tumors are often fatal within weeks. The majority of canine lymphomas are DLBCL and most of the others are T-cell lymphomas. Given the similarities of dog and human lymphomas, prior to initiating clinical trials of selinexor in humans, we investigated verdinexor, a closely related, orally available SINE compound, in dogs with lymphomas.

In May 2017, we entered into an exclusive licensing agreement with Anivive Lifesciences Inc. (“Anivive”), a privately-held biotech company focused on innovations in the veterinary drug and bioinformatics space, pursuant to which Anivive received worldwide rights to research, develop and commercialize verdinexor for the treatment of cancer in companion animals. In January 2021, Anivive received conditional FDA approval of LAVERDIA™-CA1 (verdinexor), an oral treatment for dogs with lymphoma.

 

KPT-9274

KPT-9274 is our first-in-class dual inhibitor of p21-activated kinase 4 ("PAK4") and nicotinamide phosphoribosyltransferase ("NAMPT"). Co-inhibition of PAK4 and NAMPT may lead to synergistic anti-tumor effects through energy depletion, inhibition of DNA repair, cell cycle arrest, inhibition of proliferation, and ultimately apoptosis. Normal cells are more resistant to inhibition by

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KPT-9274 due in part to their relative genomic stability and lower metabolic rates. Hematologic and solid tumor cells that have become dependent on both PAK4 and NAMPT pathways may be susceptible to single-agent cytotoxicity of KPT-9274.

KPT-9274 has shown broad evidence of anti-cancer activity against hematological and solid tumor malignant cells while showing minimal toxicity to normal cells in vitro. In mouse xenograft studies, oral KPT-9274 has shown evidence of anti-cancer activity and tolerability. To our knowledge, we are the only company with an allosteric PAK4 modulator and/or NAMPT specific inhibitor currently in clinical development.

 

IL-12

In November 2020, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Neumedicines Inc. (“Neumedicines”), which was closed in July 2021. Pursuant to the Asset Purchase Agreement, we agreed to acquire certain assets from Neumedicines, including an IL-12 asset.

IL-12 is produced very early in immune responses, playing a vital role in regulating the innate response and determining the type of adaptive immune response to infections, developing tumors or other causes of tissue damage. The pro-inflammatory responses to IL-12 are mediated through the activation of T and natural killer lymphocytes to produce IFNγ. In addition, IL-12 also stimulates hematopoietic precursor cells leading to the proliferation of all major types of peripheral blood cells.

Early trials have demonstrated that IL-12 has potential in the treatment of cutaneous T-cell lymphoma, non-Hodgkin lymphoma and surgical wounds. Further studies are being planned to test the efficacy of IL-12 in combination with check point inhibitors for the treatment of several different types of solid tumors.

 

Collaboration, License and Other Strategic Agreements

We have formed, and intend to continue to form, strategic alliances to develop and commercialize our products and product candidates. We enter into collaborations when there is a strategic advantage to us and when we believe the financial terms of the collaboration are favorable for meeting our short- and long-term strategic objectives. Currently, we maintain complete commercial rights to our products in the U.S. and Japan and have entered into the following key agreements:

 

Menarini

On December 17, 2021, we entered into the Menarini Agreement with Menarini, pursuant to which we granted Menarini a non-exclusive license to develop, and an exclusive license to commercialize, products containing selinexor (the “Product”) for all human oncology indications in the European Economic Area, United Kingdom, Switzerland, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan, Ukraine, Turkey, Mexico, all Central America countries and all South America countries (collectively, the “Menarini Territory”). In addition, we granted to Menarini a non-exclusive license to package and label the Product in or outside of the Menarini Territory for all human oncology indications solely to enable Menarini to commercialize the Product within the Menarini Territory.

We received an upfront cash payment of $75.0 million in December 2021 and are entitled to receive up to $202.5 million in milestone payments from Menarini if certain development and sales performance milestones are achieved. We are further eligible to receive tiered royalties ranging from the mid-teens to mid-twenties based on future net sales of the Product in the Menarini Territory. The payments owed by Menarini to us are subject to reduction in specified circumstances. Menarini will reimburse us for 25% of all documented expenses we incur for the global development of the Product during 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year.

 

Antengene

In May 2020, we entered into an amendment of our May 2018 license agreement with Antengene Therapeutics Limited (“Antengene”) (the “Original Antengene Agreement”, and, as amended, the “Amended Antengene Agreement”). Antengene is a corporation organized and existing under the laws of Hong Kong, and a subsidiary of Antengene Corporation Co. Ltd., a corporation organized and existing under the laws of the People’s Republic of China. Under the terms of the Amended Antengene Agreement, Antengene has the exclusive rights to develop and commercialize, at its own cost, selinexor, eltanexor, KPT-9274, each for the diagnosis, treatment and/or prevention of all human oncology indications, and verdinexor for the diagnosis, treatment and/or prevention of certain human non-oncology indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, Australia and New Zealand (the “Antengene Territory”).

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Under the terms of the Original Antengene Agreement, we received an upfront cash payment in 2018 of $11.7 million. In June 2020, we received an additional $11.7 million upfront payment upon execution of the Amended Antengene Agreement. In addition, we recognized approximately $29.3 million and $9.8 million of development/regulatory milestone revenue from Antengene in 2021 and 2020, respectively. We are further entitled to receive additional milestone payments from Antengene if certain other regulatory and commercialization goals are achieved in the future. Finally, we are eligible to receive tiered double-digit royalties based on future net sales of selinexor and eltanexor, and tiered single- to double-digit royalties based on future net sales of verdinexor and KPT-9274 in the Antengene Territory.

Antengene continues to advance its development, regulatory and commercialization plans and has submitted New Drug Applications (“NDA”) for selinexor in mainland China, Hong Kong, Taiwan, South Korea, Australia and Singapore. In 2022, the Health Science Authority in Singapore approved XPOVIO for relapsed or refractory multiple myeloma and DLBCL. In 2021, the South Korean Ministry of Food and Drug Safety approved Antengene’s NDA for selinexor for relapsed or refractory multiple myeloma and DLBCL followed by its commercial launch in both indications. In addition, Antengene also received conditional approval for marketing by the China National Medical Products Administration for selinexor for relapsed or refractory multiple myeloma. Antengene also has a number of ongoing clinical trials for selinexor, including certain registrational trials in China.

 

FORUS

In December 2020, we entered into an exclusive distribution agreement for the commercialization of XPOVIO in Canada with FORUS Therapeutics Inc. ("FORUS"), a Canadian biopharmaceutical company. Under the terms of the agreement, we received an upfront payment of $5.0 million in December 2020 and are eligible to receive additional payments if certain prespecified regulatory and commercial milestones are achieved by FORUS. We are also eligible to receive double-digit royalties on future net sales of XPOVIO in Canada. FORUS received the exclusive rights to commercialize XPOVIO in Canada and is responsible for all regulatory filings and obligations required for registering XPOVIO. We have retained the exclusive production rights and will supply finished product to FORUS for commercial use in Canada.

 

Promedico

In February 2020, we entered into an exclusive distribution agreement with Promedico Ltd. (“Promedico”) for the commercialization of XPOVIO in Israel, the West Bank, Gaza Strip and the territories under control of the Palestinian Authority (the “Promedico Territory”). We will receive certain prespecified payments and are eligible to receive additional payments if certain regulatory and commercial milestones are achieved by Promedico. We are also eligible to receive double-digit royalties on future net sales in the Promedico Territory. Promedico received the exclusive rights to commercialize XPOVIO in the Promedico Territory and is responsible for all regulatory filings and obligations required for registering XPOVIO. We have retained exclusive production rights and will supply finished product for commercial use in the Promedico Territory.

 

Biogen

In January 2018, we entered into an asset purchase agreement with Biogen pursuant to which Biogen acquired our oral SINE compound KPT-350, which has been renamed by Biogen as BIIB100, and certain related assets. We received a one-time upfront payment of $10.0 million in 2018 from Biogen and are eligible to receive additional payments of up to $207.0 million based on the achievement by Biogen of future specified development and commercial milestones. We are also eligible to receive tiered royalty payments that reach low double digits based on future net sales until the later of the tenth anniversary of the first commercial sale of the applicable product or the expiration of specified patent protection for the applicable product, determined on a county-by-country basis.

 

Anivive

In May 2017, we entered into an exclusive licensing agreement with Anivive pursuant to which Anivive received worldwide rights to research, develop and commercialize verdinexor for the treatment of cancer in companion animals. In 2017, we received an upfront payment of $1.0 million and a subsequent milestone payment of $250,000 and are eligible to receive up to $43.25 million in future regulatory, clinical and commercial milestone payments, assuming regulatory approval of verdinexor in both the U.S. and the EU. In addition, Anivive agreed to pay us up to low double-digit royalty payments based on future net sales of verdinexor. Verdinexor received conditional approval from the FDA in January 2021 as the first oral treatment for canine lymphoma. This approval triggered an additional milestone obligation to us of $500,000 in January 2021.

In addition to the above agreements, we have other collaborations related to the development or commercialization of our products and product candidates, such as the Cooperative Research and Development Agreement with the National Cancer Institute's

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Cancer Therapy Evaluation Program to collaborate with us on studies to investigate the safety and efficacy of selinexor in various oncology indications as well as agreements with partners outside of the U.S. to establish paid named patient programs to provide opportunities to reach additional patients and generate revenue from selinexor indications that have been approved in the U.S. as a bridge to approval in certain geographies.

 

IL-12

In November 2020, we entered into the Asset Purchase Agreement with Neumedicines. Pursuant to the Asset Purchase Agreement, in July 2021, we acquired certain assets from Neumedicines, including a proprietary recombinant human IL-12 having a total value of approximately $7.4 million. We paid $0.5 million in cash during the year ended December 31, 2020, and at the time of closing, paid $5.5 million in cash and issued 150,000 shares of our common stock to Neumedicines. Further, we will owe Neumedicines up to $65.0 million in royalty payments on net product sales of IL-12 products and an additional 75,000 shares of our common stock as well as other contingent cash payments upon the satisfaction of certain development milestones. Contemporaneously with the closing, we entered into a license agreement with Libo Pharma Corp. (“Libo”) under which we granted to Libo an exclusive license to manufacture, develop and commercialize IL-12 products in certain countries in Asia, Africa and Oceania.

 

Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection for our products and product candidates, our core technologies, and other know-how, to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary or intellectual property rights. Our policy is to seek to protect our proprietary and intellectual property position by, among other methods, filing patent applications in the U.S. and in foreign jurisdictions related to our proprietary technology and products and product candidates. We also rely on trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary and intellectual property position.

We file patent applications directed to the composition of matter and methods of use and manufacture for our products and product candidates. As of February 22, 2022, we were the sole owner of 32 patents in the U.S. and we had 16 pending patent applications in the U.S., six pending international applications filed under the Patent Cooperation Treaty (“PCT”), 98 granted patents and 99 pending patent applications in foreign jurisdictions. The PCT is an international patent law treaty that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the member states. Although a PCT application is not itself examined and cannot issue as a patent, it allows the applicant to seek protection in any of the member states through national-phase applications.

The intellectual property portfolios for our key products and product candidates as of February 22, 2022 are summarized below.

Selinexor (KPT-330): Our selinexor patent portfolio covers the composition of matter and methods of use of selinexor and verdinexor, as well as methods of making both, and consists of nine issued U.S. patents (three patents are specific to selinexor, two patents are specific to verdinexor, two patents cover both selinexor and verdinexor and the remaining patents cover polymorphs of selinexor and methods of making the polymorphs), 40 issued foreign patents, 53 pending foreign patent applications, three pending U.S. non-provisional applications, two pending PCT applications and one pending U.S. provisional patent application. The PCT application provides the opportunity to seek protection in all PCT member states. Any patents that may issue in the U.S. as part of our selinexor patent portfolio will expire no earlier than 2032, not including any terminal disclaimer, patent term adjustment due to administrative delays by the U.S. Patent and Trademark Office (“USPTO”) or patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act. Any patents that may issue in foreign jurisdictions will likewise expire no earlier than 2032. Any patents that may issue in the U.S. directed to the polymorphs of selinexor or methods of making the polymorphs will expire in 2035, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents issued in foreign jurisdictions will likewise expire in 2035. Any patents that may issue in the U.S. based on the pending PCT applications will expire in 2041, not including any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents issued in foreign jurisdictions will likewise expire in 2041. If non-provisional patent applications claiming the benefit of the pending U.S. provisional patent application referenced above are filed in 2022, any patents that may issue from such applications will expire no earlier than 2042, not including any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act.
Supplementary Protection Certificates: We have filed applications for Supplementary Protection Certificates ("SPCs") based on European Patent No. 2,736,887 directed to the composition of matter and use of selinexor. Some applications have granted and others are pending.

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Selinexor (Wound Healing): Our patent portfolio covering selinexor for wound healing, including acute and chronic wounds, covers methods of using selinexor or verdinexor for wound healing, including systemic and topical uses, and consists of one issued U.S. patent and one granted European patent. The U.S. patent will expire in 2034, absent any terminal disclaimer, patent term adjustment due to administrative delay by the USPTO or patent term extension under the Hatch-Waxman Act. The European patent will likewise expire in 2034.
Verdinexor (KPT-335): Our selinexor patent portfolio described above, with the exception of the applications directed specifically to selinexor (e.g., applications directed to polymorphs of selinexor, the two pending PCT applications and the non-provisional U.S. patent and foreign counterparts directed toward a method of making selinexor), also covers both the composition of matter and methods of use of verdinexor, as well as methods of making verdinexor. There are four issued U.S. patents that cover verdinexor. One patent is specific to verdinexor, two patents cover both verdinexor and selinexor (also referenced above with respect to selinexor) and the other covers veterinary uses of verdinexor.
Eltanexor (KPT-8602): Our eltanexor patent portfolio covers both the composition of matter and methods of making and using eltanexor, and consists of three issued U.S. patents, two pending non-provisional U.S. patent applications, 18 issued foreign patents, 12 pending foreign patent applications and one pending U.S. provisional patent application. Any patents that may issue in the U.S. as part of our eltanexor patent portfolio will expire no earlier than 2034, not including any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents issued in foreign jurisdictions will likewise expire no earlier than 2034.
PAK4/NAMPT Inhibitors: Our PAK4/NAMPT inhibitors patent portfolio covers both the composition of matter and methods of use of the PAK4/NAMPT inhibitors described therein, such as KPT-9274, and consists of five patent families with seven issued U.S. patents, 18 issued foreign patents, one pending U.S. non-provisional patent application, and 9 pending foreign patent applications in total. Any patents that may issue in the U.S. based on the pending U.S. non-provisional application will expire in 2034, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents that may issue based on the pending foreign patent applications will likewise expire in 2034. Foreign patent applications covering the composition of matter and methods of use of KPT-9274 have been filed in 22 countries/regions.
Biomarkers for XPO1 Inhibitors: Our patent portfolio also covers biomarkers related to treatment with XPO1 inhibitors, such as selinexor and eltanexor, and consists of one pending non-provisional U.S. patent application, four pending U.S. provisional patent applications and four pending PCT applications. The PCT applications provide the opportunity for seeking protection in all PCT member states. Any patents that may issue in the U.S. based on the pending U.S. non-provisional application will expire in 2040, absent any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents that may issue in the U.S. based on the pending PCT Applications will expire no earlier than 2041, not including any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents issued in foreign jurisdictions will likewise expire no earlier than 2041. If non-provisional patent applications claiming the benefit of the pending U.S. provisional applications referenced above are filed in 2022, any patents that may issue from such applications will expire no earlier than 2042.
IL-12: Our IL-12 patent portfolio covers method of using IL-12 and pharmaceutical compositions comprising IL-12 and excipients, and consists of seven issued U.S. patents, two pending non-provisional U.S. patent applications, 4 issued foreign patents and 17 pending foreign patent applications. Any patents that may issue in the U.S. as part of our IL-12 patent portfolio will expire no earlier than 2029, not including any terminal disclaimer, patent term adjustment due to administrative delays by the USPTO or patent term extension under the Hatch-Waxman Act. Any patents issued in foreign jurisdictions will likewise expire no earlier than 2029. We also exclusively license from the University of Southern California six issued U.S. patents and 4 issued foreign patents covering the use of IL-12 in targeted therapeutics.

In addition to the patent portfolios covering our key products and product candidates, as of February 22, 2022, our patent portfolio also includes five patents (U.S. Patent Nos. 8,513,230, 9,428,490, 9,550,757, 10,526,295 and 10,709,606) and 17 granted foreign patents and pending patent applications in the U.S. and foreign jurisdictions relating to other XPO1 inhibitors and their use in targeted therapeutics and combination therapies for XPO1 inhibitors.

In the U.S., we have trademark registrations for our name, our logo in color, and a combination of the two, XPOVIO, PORE for our online portal, and KARYFORWARD and our KARYFORWARD logo for our financial aid and charitable services. We also have pending applications in the U.S. to register KARYOPHARM alone, and our logo in greyscale, for pharmaceuticals. Outside of the U.S., XPOVIO is registered or pending in forty-six 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

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logo, and the KARYFORWARD logo are each registered or pending in four jurisdictions outside of the U.S. We also have registrations or applications for eight additional possible product names in numerous foreign jurisdictions.

The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application. In the U.S., a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent. The term of a patent that covers a drug may also be eligible for patent term extension when FDA approval is granted, provided statutory and regulatory requirements are met. See “Government Regulation—Patent Term Restoration and Extension” below for additional information on such extensions. We have filed applications for patent term extension in both the U.S. and Korea based on the U.S. and Korean patents directed to the composition of matter of selinexor. We are awaiting determinations from the relevant authorities in the U.S. and Korea, but there is no assurance that we will benefit from any patent term extension. In the future, if and when our product candidates receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term extensions on issued patents covering those drugs, depending upon the length of the clinical trials for each product candidate and other factors. There can be no assurance that any of our pending patent applications will issue or that we will benefit from any patent term extension or favorable adjustment to the term of any of our patents.

As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position for our products and product candidates and technologies will depend on our success in obtaining effective patent claims and enforcing those claims if granted. However, patent applications that we may file or license from third parties may not result in the issuance of patents. We also cannot predict the breadth of claims that may be allowed or enforced in our patents. Our issued patents and any issued patents that we may receive in the future may be challenged, invalidated or circumvented. For example, we cannot be certain of the priority of inventions covered by pending third-party patent applications. If third parties prepare and file patent applications that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings to determine priority of invention, which could result in substantial costs to us, even if the eventual outcome is favorable to us. In addition, because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.

In addition to patents, we rely upon unpatented trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our collaborators, scientific advisors, employees and consultants, and invention assignment agreements with our employees. We also have agreements with selected consultants, scientific advisors and collaborators requiring assignment of inventions. The confidentiality agreements are designed to protect our proprietary information and, in the case of agreements or clauses requiring invention assignment, to grant us ownership of technologies that are developed through our relationship with a third party.

With respect to our proprietary drug discovery and optimization platform, we consider trade secrets and know-how to be our primary intellectual property. Trade secrets and know-how can be difficult to protect. We anticipate that with respect to this technology platform, these trade secrets and know-how may over time be disseminated within the industry through independent development, the publication of journal articles describing the methodology, and the movement of personnel skilled in the art from academic to industry scientific positions.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. While we believe that our technology, knowledge, experience and scientific resources provide us with certain competitive advantages, we face competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions. Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

There are numerous companies developing or marketing treatments for cancer and the other indications on which we currently plan to focus, including many major pharmaceutical and biotechnology companies. We are aware of several other XPO1 inhibitors in clinical development world-wide. For example, in June 2020, Menarini acquired Stemline Therapeutics, Inc., including its oral XPO1 inhibitor, felezonexor. Menarini has completed a Phase 1 dose-escalation trial to evaluate felezonexor in patients with advanced solid tumors.

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Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, marketing approved products and achieving ex-U.S. positive coverage/reimbursement decisions than we do. 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 or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific, commercial and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

The key competitive factors affecting the success of any approved oncology drug product, including our products and product candidates, if approved, are likely to be their efficacy, safety, tolerability, convenience and price, the availability of alternative cancer therapies and the availability of reimbursement from government and other third-party payors. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products, or commercialize existing products in new indications, and those products are or are perceived to be safer, more effective, more convenient, less expensive or more tolerable than any products that we have or may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic drugs. Generic drugs for the treatment of cancer and the other indications in which we currently plan to focus are on the market and additional products are expected to become available on a generic basis over the coming years. If we obtain marketing approval for our product candidates or for XPOVIO in other indications, we expect that they will be priced at a significant premium over generic versions of older chemotherapy agents and other cancer therapies.

The most common methods of treating patients with cancer are surgery, radiation and drug therapy. There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While our products and product candidates may compete with many existing drugs and other therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our product candidates will be complimentary with them. Some of the currently approved drug therapies are branded and subject to patent protection, and others are available on a generic basis. Many of these approved products are well-established therapies and are widely accepted by physicians, patients and third-party payors.

In addition to currently marketed therapies, there are also a number of products in late-stage clinical development to treat cancer and the other indications in which we plan to focus. These products in development may provide efficacy, safety, tolerability, convenience and other benefits that are not provided by currently marketed therapies. As a result, they may represent significant competition for any of our products or product candidates for which we obtain marketing approval.

XPOVIO competes with and, if approved, our core product candidates may compete with, currently marketed products and/or investigational therapies as discussed below.

 

Multiple Myeloma

Many therapies are approved for use in patients with multiple myeloma. Although XPOVIO is the only XPO1 inhibitor that has received marketing approval, we compete with multiple other treatment types in this indication. Our primary competitors in multiple myeloma include those that currently treat patients ranging from newly diagnosed patients to those with relapsed and/or refractory multiple myeloma and are indicated for use either as single agent and/or as combination therapies as follows:

IMiDs: Revlimid®, Pomalyst® (pomalidomide) and Thalomid® (thalidomide), all marketed by Celgene Corporation (“Celgene”)/Bristol-Myers Squibb Company (“BMS”);
PIs: Velcade® (bortezomib) marketed by Takeda Pharmaceutical Company Limited (“Takeda”) in the U.S. and Janssen Pharmaceutical K.K. (“Janssen”) outside of the U.S., Ninlaro® (ixazomib) marketed by Takeda and Kyprolis® marketed by Amgen Inc. (“Amgen”);
Monoclonal antibodies: Darzalex® marketed by Janssen, Empliciti® (elotuzumab) marketed by BMS and Sarclisa® (isatuximab-irfc) marketed by Sanofi S.A.; and
B-cell maturation antigens (“BCMA”): BLENREP (belantamab mafodotin-blmf) marketed by GlaxoSmithKline plc (“GSK”), ABECMA (idecabtagene vicleucel) marketed by bluebird bio, Inc. (“bluebird bio”)/BMS, and ciltacabtagene autoleucel (cilta-cel, previously known as JNJ-68284528/ JNJ-4528) from Janssen and Legend Biotech Corporation.

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Several other anti-cancer agents are in mid to late-stage development for the treatment of patients with multiple myeloma, including:

Anti-BCMA directed CAR-T therapies: orvacabtagene Autoleucel (orva-cel, previously known as JCARH125) from Juno Therapeutics, Inc./Celgene/BMS and P-BCMA-101 from Janssen/Poseida Therapeutics, Inc.;
Immunomodulator: Iberdomide (previously known as CC-220, cereblon E3 ligase modulator) from Celgene/BMS and Opdivo® (nivolumab) from BMS;
BCL-2 inhibitor: Venclexta® (venetoclax) from AbbVie Inc. (“AbbVie”)/Genentech USA (“Genentech”);
Anti-CD38 Monocolonal antibodies: mezagitamab (previously known as TAK-079) from Takeda;
Bi-specific antibodies: teclistamab (previously known as JNJ-64007957) from Johnson & Johnson/Janssen, CC-93269 from bluebird bio/Celgene/BMS, AMG420 from Amgen, REGN5458 from Regeneron Pharmaceuticals, Inc. (“Regeneron”) and PF-06863135 from Pfizer Inc. (“Pfizer”); and
Other molecules: Imbruvica® (ibrutinib) from Pharmacyclics LLC (“Pharmacyclics”)/AbbVie/Janssen, nirogacestat (previously known as PF 3084014) from Springworks Therapeutics, Inc./Janssen, plitidepsin from Pharma Mar S.A., masitinib from AB Science Group, filanesib from Array Biopharma Inc. and ricolinostat from Celgene.

 

Endometrial Cancer

The initial treatment for endometrial cancer is surgery, radiotherapy and, where applicable, taxane/platinum-based chemotherapy. Upon disease progression, various chemotherapy agents and targeted drugs are commonly used. Selinexor, if approved for the treatment of endometrial cancer, will compete with Keytruda® (pembrolizumab) (“Keytruda”) from Merck & Co., which is approved in the U.S. and Europe as a single agent or in combination with Lenvima® (lenvatinib, marketed by Esai) in a subgroup of patients with recurrent disease. Both Keytruda® and Lenvima® are also being evaluated in other endometrial cancer lines of therapy.

Other anti-cancer agents are in late-stage development for the treatment of patients with endometrial cancer, specifically for the use of “maintenance” therapy following initial treatment, as in the SIENDO Study and/or in recurrent disease, including:

Immune checkpoints inhibitors: dostarlimab from GSK/Tesaro, Inc. (“Tesaro”), Tecentriq® (atezolizumab) from Genentech/Roche AG (“Roche”), Imfinzi® (durvalumab) from AstraZeneca plc (“AstraZeneca”);
Kinase inhibitor: OFEV® (nintedanib) from Boehringer Ingelheim; and
PARP inhibitor: Lynparza® (olaparib) from AstraZeneca, Zejula® (niraparib) from GSK/Tesaro and Rubraca® (rucaparib) from Clovis Oncology.

 

Myelofibrosis

Selinexor, if approved to treat MF, could face competition from the following currently approved JAKi therapies: JAKAFI® (ruxolitinib) from Incyte Corporation (“Incyte”) and INREBIC® (fedratinib) from BMS, which are both approved in the U.S. and Europe.

In addition, there are a number of product candidates in late-stage development either as JAKi therapy, non-JAKi therapy or a combination of JAKi and drug treatment, such as momelotinib from Sierra Oncology, Inc., pacritinib from CTI BioPharma Corp., pelabresib from Constellation Pharmaceuticals, Inc.; navitoclax from AbbVie, imetelstat from Geron Corporation and parsaclisib from Incyte.

 

MDS

If approved for the treatment of HMA refractory, intermediate or high-risk MDS, eltanexor will compete with the following currently marketed HMAs or HMA combinations: azacytidine, decitabine, and INQOVI® (decitabine and cedazuridine), a cytidine deaminase inhibitor. In addition, there are a number of product candidates that plan to file for approval in the next few years in combination with an HMA, primarily azacytidine, in frontline MDS, such as magrolimab, an anti-CD47-mAb from Gilead, Evorpacept (ALX18), an anti-CD47 fusion protein from ALX Oncology, lemzoparlimab, another anti-CD47 mAb from Abbvie, venetoclax, a BCL2 inhibitor from Abbvie, ivosidenib, an IDH1 inhibitor from Servier Pharmaceuticals LLC, Tamibarotene, a RARA agonist from Syros Pharmaceuticals, Inc., as well as sabatolimab, an anti-TIM-mAb from Novartis AG (“Novartis”). Magrolimab and ivosidenib are also in development as monotherapy in the recurrent/refractory setting.

 

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DLBCL

The initial therapy for DLBCL typically consists of multi-agent cytotoxic drugs in combination with the mAb rituximab (or a rituximab biosimilar). In patients with DLBCL who are not elderly and who have good organ function, high dose chemotherapy with stem cell transplantation is often used at first relapse. Over the past five years, a number of therapeutic interventions have been approved in the U.S. and/or Europe and/or other parts of the world for the treatment of patients with relapsed or refractory DLBCL who have received at least two prior therapies and/or are not eligible for ASCT/HSCT. The following approved therapeutic interventions are also being evaluated in late-stage development in earlier lines of therapy for the treatment of patients with DLBCL:

CD19-directed CAR-T therapies: Kymriah® (tisagenlecleucel) marketed by Novartis, Yescarta® (axicabtagene ciloleucel) marketed by Kite Pharma, Inc., a Gilead Company, and Breyanzi® (lisocabtagene maraleucel; liso-cel) marketed by BMS;
CD79b-directed antibody-drug conjugate: Polivy® (polatuzumab vedotin-piiq) marketed by Genentech F. Hoffmann-La/Roche; and
CD19-directed cytolytic antibody: Monjuvi® (tafasitamab-cxix, previously known as MOR208 in combination with lenalidomide) marketed by MorphoSys AG/Incyte.

Other agents are listed in the NCCN Guidelines and/or the European Society for Medical Oncology guidelines for use after one to two prior therapies, although they have not been formally approved by the FDA including: Revlimid®, Imbruvica® (ibrutinib) from Pharmacyclics/Abbvie, and generic multiagent chemotherapy including gemcitabine, oxaliplatin, and bendamustine.

In addition, a number of anti-cancer agents are in mid to late-stage development for the treatment of patients with DLBCL, including:

Immune modulator: Keytruda® and Imfinzi® (durvalumab) from AstraZeneca;
Bi-specific antibodies: mosunetuzumab from Genentech/Roche, epcoritamab (previously known as GEN3013) from AbbVie/Genmab A/S, glofitamab (previously known as RG6026) from Genentech/Roche, odronextomab (previously known as REGN1979) from Regeneron, plamotamab (previously known as XmAb13676) from Xencor Inc. and magrolimab from Gilead Sciences, Inc.;
Antibody drug conjugates: loncastuximab tesirine (previously known as ADCT-402) from ADC therapeutics, Adcetris® (brentuximab vedotin in CD30+ DLBCL) from Seagen Inc./Takeda and naratuximab emtansine (previously known as Debio1562) from DebioPharm;
Small molecules: enzastaurin from Denovo Biopharma LLC, Calquence® (acalabrutinib) from Acerta Pharma, LLC/AstraZeneca, Venclexta® (venetoclax) from AbbVie/Genentech and Brukinsa(zanubrutinib) from Beigene, Ltd; and
Monoclonal antibodies: umbralisib/ublituximab from TG Therapeutics Inc.

 

Sales and Marketing

Following the July 2019 U.S. commercial launch of XPOVIO in multiple myeloma and subsequent FDA approvals in 2020 in both earlier stage multiple myeloma and DLBCL, our commercial team has focused its efforts on educating health care providers on the efficacy and safety profile of XPOVIO with the goal of enabling cancer patients access to this important treatment. We are commercializing XPOVIO in the U.S. with our own focused, customer-facing teams, including sales specialists, reimbursement and access support specialists, and nurse liaisons, each typically with years of experience in hematology/oncology. We have approximately 70 field-based employees in the U.S. who call on academic and community-based healthcare professionals who treat multiple myeloma and DLBCL, as well as our reimbursement team. We believe that the current size of our sales force is appropriate at this time to effectively reach our target audience in the specialty markets in which we currently operate. Continued growth of our current marketed products and the launch of any future products may require further expansion of our field force and support organization within and outside of the U.S. For the foreseeable future, we intend to develop and commercialize XPOVIO and our product candidates alone in the U.S. and expect to rely on partners to develop and commercialize our products in territories outside of the U.S. In executing our strategy, our goal is to retain oversight over the global development and commercialization of our products by playing an active role in their commercialization or finding partners who share our vision, values, and culture.

Our sales force is supported by an experienced sales leadership team and professionals in marketing, reimbursement and market access, market research and analytics, commercial operations, finance and human resources. Our sales and marketing organization uses a variety of pharmaceutical marketing strategies to promote XPOVIO, including sales calls, peer-to-peer education, non-personal

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promotional, and digital content. We employ third-party vendors, such as advertising agencies, market research firms and suppliers of marketing and other sales support-related services, to assist with our commercial activities.

Our patient support program, KaryForward®, is dedicated to providing assistance and resources to our patients with multiple myeloma and DLBCL and their caregivers throughout their XPOVIO treatment. KaryForward® offers support in navigating insurance coverage issues and processes and enabling continuation of our patients’ ability to access XPOVIO in the case of delays or interruptions in the insurance process. We also offer a copay card, which offers eligible commercial patients who have insurance to receive their prescription for as little as $5.00 per prescription. Further, the KaryForward® program assists eligible patients who do not have insurance or lack coverage to be able to access XPOVIO treatment through our Patient Assistance Program. Under our KaryForward® program, patients are assigned a dedicated nurse case manager, who serves as a point of contact to help patients and their caregivers navigate the treatment process, including by explaining prescription instructions, providing psychosocial support and additional nonclinical education regarding XPOVIO, highlighting expectations when taking XPOVIO and providing referrals for additional third-party support, such as transportation assistance.

 

Manufacturing

We do not own or operate, and 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.

We have long-term supply agreements with third-party contract manufacturers to manufacture clinical and commercial supplies of the drug product for selinexor and obtain all other supplies or materials for our other compounds on a purchase order basis. At this time, we rely on a single source supplier for our active pharmaceutical ingredient and drug product manufacturing requirements.

Selinexor and eltanexor are small molecules and are manufactured in reliable and reproducible synthetic processes from readily available starting materials. The chemistry and formulation processes of selinexor and eltanexor have been developed to meet our large-scale manufacturing needs and do not require unusual equipment in the manufacturing process. We maintain sufficient inventory levels throughout our supply chain to exceed our two-year forecasts for XPOVIO in order to minimize the risks of supply disruption.

To support the commercialization and development of our products and product candidates, we have developed a fully integrated manufacturing support system, including scientific oversight, quality assurance, quality control, regulatory affairs and inventory control policies and procedures. These support systems are intended to enable us to maintain high standards of quality for our products. We intend to continue to outsource the manufacture and distribution of our products for the foreseeable future, and we believe this manufacturing strategy will enable us to direct more of our financial resources to the commercialization and development of our products and product candidates.

Government Regulation

Government authorities in the U.S., at the federal, state and local level, and in other countries and jurisdictions, including the EU, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the U.S. and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources. The regulatory requirements applicable to drug product development, approval and marketing are subject to change, and regulations and administrative guidance often are revised or reinterpreted by the agencies in ways that may have a significant impact on our business.

Review and Approval of Drugs in the U.S.

In the U.S., the FDA regulates drug products under the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and implementing regulations. The failure to comply with applicable requirements under the FDCA and other applicable laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial

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suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or other governmental entities.

The FDA must approve our product candidates for therapeutic indications before they may be marketed in the U.S. An applicant seeking approval to market and distribute a new drug product in the U.S. must typically undertake the following:

completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (“GLP”) regulations;
design of a clinical protocol and submission to the FDA of an IND, which must take effect before human clinical trials may begin;
approval by an independent institutional review board (“IRB”) representing each clinical site before each clinical trial may be initiated;
performance of adequate and well-controlled human clinical trials in accordance with GCP to establish the safety and efficacy of the proposed drug product for each indication;
preparation and submission to the FDA of an NDA;
review of the product by an FDA advisory committee, where appropriate or if applicable;
satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices (“cGMP”) requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;
payment of user fees and securing FDA approval of the NDA; and
compliance with any post-approval requirements, including Risk Evaluation and Mitigation Strategies (“REMS”) and post-approval studies required by the FDA.

Preclinical Studies

Preclinical studies include laboratory evaluation of the purity and stability of the manufactured drug substance or active pharmaceutical ingredient and the formulated drug or drug product, as well as in vitro and animal studies to assess the safety and activity of the drug for initial testing in humans and to establish a rationale for therapeutic use. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including GLP regulations and standards and the U.S. Department of Agriculture’s Animal Welfare Act, if applicable. The results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND. Some long-term preclinical testing, such as animal tests of reproductive AEs and carcinogenicity, may continue after the IND is submitted.

In addition, companies usually must also develop additional information about the chemistry and physical characteristics of the investigational product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the candidate product and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the candidate product does not undergo unacceptable deterioration over its shelf life.

The IND and IRB Processes

An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. An IND must be secured prior to interstate shipment and administration of any product candidate that is not the subject of an approved NDA or biologics license application (“BLA”). In support of a request for an IND, applicants must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any

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outstanding concerns before the clinical trial may proceed. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial. A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND. For example, a partial clinical hold might state that a specific protocol or part of a protocol may not proceed, while other parts of a protocol or other protocols may do so. No more than 30 days after the imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold. Following the issuance of a clinical hold or partial clinical hold, a clinical investigation may only resume once the FDA has notified the sponsor that the investigation may proceed. The FDA will base that determination on information provided by the sponsor correcting the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed or recommence. Occasionally, clinical holds are imposed due to manufacturing issues that may present safety issues for the clinical study subjects.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived. When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain FDA regulatory requirements in order to use the study as support for an IND or application for marketing approval. Specifically, on April 28, 2008, the FDA amended its regulations governing the acceptance of foreign clinical studies not conducted under an IND application as support for an IND or an NDA. The final rule provides that such studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee and informed consent from subjects. The GCP requirements in the final rule encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data. They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct a continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

Additionally, some trials are overseen by a Data and Safety Monitoring Board, an independent group of qualified experts organized by the trial sponsor. This group provides authorization for whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the study. Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk. Other reasons for suspension or termination may be made by us based on evolving business objectives and/or competitive climate.

 

Reporting Clinical Trial Results

Under the Public Health Service Act (the “PHSA”), sponsors of clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S. National Institutes of Health (the “NIH”). In particular, information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Although sponsors are also obligated to disclose the results of their clinical trials after completion, disclosure of the results can be delayed in some cases for up to two years after the date of completion of the trial. The NIH’s Final Rule on registration and reporting requirements for clinical trials became effective in 2017, and both the NIH and the FDA have recently signaled the government’s willingness to begin enforcing those requirements against non-compliant clinical trial sponsors.

Specifically, the PHSA grants the Secretary of Health and Human Services the authority to issue a notice of noncompliance to a responsible party for failure to submit clinical trial information as required. The responsible party, however, is allowed 30 days to correct the noncompliance and submit the required information. The failure to submit clinical trial information to clinicaltrials.gov, as required, is also a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues. In addition to civil monetary penalties, violations may also result in other regulatory action, such as injunction and/or criminal prosecution or disqualification from federal grants. Although the FDA has historically not enforced these reporting requirements due to the Department of Health and Human Services’ (the “HHS”) long delay in issuing final implementing

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regulations, those regulations have now been issued and the FDA did issue its first Notice of Noncompliance to a manufacturer in April 2021.

Expanded Access to an Investigational Drug for Treatment Use

Expanded access, sometimes called “compassionate use,” is the use of IND products outside of clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. The rules and regulations related to expanded access are intended to improve access to investigational drugs for patients who may benefit from investigational therapies. FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case basis for: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the drug under a treatment protocol or treatment IND Application.

When considering an IND application for expanded access to an investigational product for the purpose of treating a patient or a group of patients, the sponsor and treating physicians or investigators will determine suitability when all of the following criteria apply: patient(s) have a serious or immediately life-threatening disease or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition; the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context or condition to be treated; and the expanded use of the investigational drug for the requested treatment will not interfere with the initiation, conduct, or completion of clinical investigations that could support marketing approval of the product or otherwise compromise the potential development of the product.

There is no obligation for a sponsor to make its investigational products available for expanded access; however, as required by amendments to the FDCA included in the 21st Century Cures Act (the “Cures Act”), passed in 2016, if a sponsor has a policy regarding how it responds to expanded access requests with respect to product candidates in development to treat serious diseases or conditions, it must make that policy publicly available. Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study for a covered investigational product; or 15 days after the investigational product receives designation from the FDA as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.

In addition, on May 30, 2018, the Right to Try Act was signed into law. The law, among other things, provides a federal framework for certain patients to access certain IND products that have completed a Phase I clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act, but the manufacturer must develop an internal policy and respond to patient requests according to that policy.

Human Clinical Trials in Support of an NDA

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written study protocols detailing, among other things, the inclusion and exclusion criteria, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. Each protocol, and any subsequent material amendment to the protocol, must be submitted to the FDA as part of the IND, and progress reports detailing the status of the clinical trials must be submitted to the FDA annually.

Human clinical trials are typically conducted in four sequential phases, which may overlap or be combined:

Phase 1: The drug is initially introduced into a small number of healthy human subjects or patients with the target disease (e.g., cancer) or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. These clinical trials are commonly referred to as “pivotal” studies, which denotes a study that presents the data that the FDA or other relevant regulatory agency will use to determine whether or not to approve a drug.

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Phase 4: Post-approval studies may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication.

 

A clinical trial may combine the elements of more than one phase and the FDA often requires more than one Phase 3 trial to support marketing approval of a product candidate. A company’s designation of a clinical trial as being of a particular phase is not necessarily indicative that the study will be sufficient to satisfy the FDA requirements of that phase because this determination cannot be made until the protocol and data have been submitted to and reviewed by the FDA. Moreover, as noted above, a pivotal trial is a clinical trial that is believed to satisfy FDA requirements for the evaluation of a product candidate’s safety and efficacy such that it can be used, alone or with other pivotal or non-pivotal trials, to support regulatory approval. Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.

In response to the COVID-19 pandemic, the FDA issued guidance on March 18, 2020, and has updated it periodically since that time to address the conduct of clinical trials during the pandemic. The guidance sets out a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include in the clinical study report (or as a separate document) contingency measures implemented to manage the study, and any disruption of the study as a result of COVID-19; a list of all study participants affected by COVID-19-related study disruptions by a unique subject identifier and by investigational site, and a description of how the individual’s participation was altered; and analyses and corresponding discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product and/or study, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported for the study, among other things. The FDA has indicated that it will continue to provide any necessary guidance to sponsors, clinical investigators, and research institutions as the public health emergency evolves.

 

Interactions with FDA During the Clinical Development Program

Following the clearance of an IND and the commencement of clinical trials, the sponsor will continue to have interactions with the FDA. Progress reports detailing the results of clinical trials must be submitted at least annually to the FDA and more frequently if serious AEs occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the product; and any clinically important increase in the occurrence of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

In addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program. Specifically, sponsors may meet with the FDA prior to the submission of an IND (Pre-IND meeting), at the end of Phase 2 clinical trial (EOP2 meeting) and before an NDA or BLA is submitted (Pre-NDA or Pre-BLA meeting). Meetings at other times may also be requested. There are four types of meetings that occur between sponsors and the FDA. Type A meetings are those that are necessary for an otherwise stalled product development program to proceed or to address an important safety issue. Type B meetings include pre-IND and pre-NDA/pre-BLA meetings, as well as end of phase meetings such as EOP2 meetings. A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a product, including, for example, meetings to facilitate early consultations on the use of a biomarker as a new surrogate endpoint that has never been previously used as the primary basis for product approval in the proposed context of use.

These meetings provide an opportunity for the sponsor to share information about the data gathered to date with the FDA and for the FDA to provide advice on the next phase of development. For example, at an EOP2, a sponsor may discuss its Phase 2 clinical results and present its plans for the pivotal Phase 3 clinical trial(s) that it believes will support the approval of the new product. Such meetings may be conducted in person, via teleconference/videoconference or written response only with minutes reflecting the questions that the sponsor posed to the FDA and the agency’s responses. The FDA has indicated that its responses, as conveyed in meeting minutes and advice letters, only constitute mere recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations and/or advice. Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s recommendations for design of a clinical program may put the program at significant risk of failure.

 

Manufacturing and Other Regulatory Requirements

Concurrently with clinical trials, sponsors usually complete additional animal safety studies, develop additional information about the chemistry and physical characteristics of the product candidate and finalize a process for manufacturing commercial quantities of the product candidate in accordance with cGMP requirements. The manufacturing process must be capable of

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consistently producing quality batches of the product candidate and, among other criteria, the sponsor must develop methods for testing the identity, strength, quality, and purity of the finished product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

Specifically, the FDA’s regulations require that pharmaceutical products be manufactured in specific approved facilities and in accordance with cGMPs. The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products. Manufacturers and other entities involved in the manufacture and distribution of approved pharmaceuticals are required to register their establishments with the FDA and some state agencies, and they are subject to periodic unannounced inspections by the FDA for compliance with cGMPs and other requirements. Inspections must follow a “risk-based schedule” that may result in certain establishments being inspected more frequently. Manufacturers may also have to provide, on request, electronic or physical records regarding their establishments. Delaying, denying, limiting, or refusing inspection by the FDA may lead to a product being deemed to be adulterated. Changes to the manufacturing process, specifications or container closure system for an approved product are strictly regulated and often require prior FDA approval before being implemented. The FDA’s regulations also require, among other things, the investigation and correction of any deviations from cGMP and the imposition of reporting and documentation requirements upon the sponsor and any third-party manufacturers involved in producing the approved product.

 

Pediatric Studies

Under the Pediatric Research Equity Act (the “PREA”) applications and certain types of supplements to applications must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The sponsor must submit an initial Pediatric Study Plan (“PSP”) within 60 days of an end-of-phase 2 meeting or as may be agreed between the sponsor and the FDA. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information. The sponsor and the FDA must reach agreement on a final plan. A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from nonclinical studies, early phase clinical trials, and/or other clinical development programs.

For investigational products intended to treat a serious or life-threatening disease or condition, the FDA must, upon the request of an applicant, meet to discuss preparation of the initial pediatric study plan or to discuss deferral or waiver of pediatric assessments. In addition, the FDA will meet early in the development process to discuss pediatric study plans with sponsors, and the FDA must meet with sponsors by no later than the end-of-phase 1 meeting for serious or life-threatening diseases and by no later than ninety days after the FDA’s receipt of the study plan.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. 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. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has recently taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease. The FDA also maintains a list of diseases that are exempt from PREA requirements due to low prevalence of disease in the pediatric population.

Fast Track, Breakthrough Therapy, Priority Review and Regenerative Advanced Therapy Designations

The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are referred to as fast-track designation, breakthrough therapy designation, priority review designation and regenerative advanced therapy designation. None of these expedited programs change the standards for approval but they may help expedite the development or approval process of product candidates.

Specifically, the FDA may 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

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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. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, the FDA’s time period goal for reviewing a fast-track application does not begin until the last section of the application is submitted. In addition, the fast-track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Second, a product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or 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. The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.

Third, the FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines, on a case-by-case basis, whether the proposed product represents a significant improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months.

Finally, with passage of the Cures Act in December 2016, Congress authorized the FDA to accelerate review and approval of products designated as regenerative advanced therapies. A product is eligible for this designation if it is a regenerative medicine therapy (as defined in the Cures Act) that is intended to treat, modify, reverse or cure a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such disease or condition. The benefits of a regenerative advanced therapy designation include early interactions with FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a drug for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality (“IMM”) and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

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. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.

The accelerated approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. As a result, a drug candidate approved on this

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basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.

 

Acceptance and Review of NDAs

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with information relating to the product’s chemistry, manufacturing, controls, safety updates, patent information, abuse information and proposed labeling, are submitted to the FDA as part of an application requesting approval to market the product candidate for one or more indications. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of a drug product. The fee required for the submission and review of an application under the Prescription Drug User Fee Act (the “PDUFA”), is substantial (for example, for fiscal year 2022 this application fee is approximately $3.1 million), and the sponsor of an approved application is also subject to an annual program fee, currently more than $369,000 per eligible prescription product. These fees are typically adjusted annually, and exemptions and waivers may be available under certain circumstances, such as where a waiver is necessary to protect the public health, where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human therapeutic application for review.

The FDA conducts a preliminary review of all applications within 60 days of receipt and must inform the sponsor at that time or before whether an application is sufficiently complete to permit substantive review. In pertinent part, the FDA’s regulations state that an application “shall not be considered as filed until all pertinent information and data have been received” by the FDA. In the event that FDA determines that an application does not satisfy this standard, it will issue a Refuse to File (“RTF”) determination to the applicant. Typically, an RTF will be based on administrative incompleteness, such as clear omission of information or sections of required information; scientific incompleteness, such as omission of critical data, information or analyses needed to evaluate safety and efficacy or provide adequate directions for use; or inadequate content, presentation, or organization of information such that substantive and meaningful review is precluded. The FDA may request additional information rather than accept an application for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing.

After the submission is accepted for filing, the FDA begins an in-depth substantive review of the application. The FDA reviews the application to determine, among other things, whether the proposed product is safe and effective for its intended use, whether it has an acceptable purity profile and whether the product is being manufactured in accordance with cGMP. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has ten months from the filing date in which to complete its initial review of a standard application that is a new molecular entity, and six months from the filing date for an application with “priority review.” The review process may be extended by the FDA for three additional months to consider new information or in the case of a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission. Despite these review goals, it is not uncommon for FDA review of an application to extend beyond the PDUFA goal date.

In connection with its review of an application, the FDA will typically submit information requests to the applicant and set deadlines for responses thereto. The FDA will also conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether the manufacturing processes and facilities comply with cGMPs. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications. The FDA also may inspect the sponsor and one or more clinical trial sites to assure compliance with IND and GCP requirements and the integrity of the clinical data submitted to the FDA. To ensure cGMP and GCP compliance by its employees and third-party contractors, an applicant may incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control.

Additionally, the FDA may refer an application, including applications for novel product candidates which present difficult questions of safety or efficacy, to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations when making final decisions on approval. Data from clinical trials are not always conclusive, and the FDA or its advisory committee may interpret data differently than the sponsor interprets the same data. The FDA may also re-analyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.

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The FDA also may require submission of a REMS if it determines that a REMS is necessary to ensure that the benefits of the product outweigh its risks and to assure the safe use of the product. The REMS could include medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools. The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis. If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed REMS and the FDA will not approve the application without a REMS.

 

Decisions on NDAs

The FDA reviews an applicant to determine, among other things, whether the product is safe and whether it is effective for its intended use(s), with the latter determination being made on the basis of substantial evidence. The term “substantial evidence” is defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the product involved, on the basis of which it could fairly and responsibly be concluded by such experts that the product will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.”

The FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical investigations to establish effectiveness of a new product. Under certain circumstances, however, the FDA has indicated that a single trial with certain characteristics and additional information may satisfy this standard. This approach was subsequently endorsed by Congress in 1998 with legislation providing, in pertinent part, that “If [FDA] determines, based on relevant science, that data from one adequate and well-controlled clinical investigation and confirmatory evidence (obtained prior to or after such investigation) are sufficient to establish effectiveness, the FDA may consider such data and evidence to constitute substantial evidence.” This modification to the law recognized the potential for the FDA to find that one adequate and well controlled clinical investigation with confirmatory evidence, including supportive data outside of a controlled trial, is sufficient to establish effectiveness. In December 2019, the FDA issued draft guidance further explaining the studies that are needed to establish substantial evidence of effectiveness. It has not yet finalized that guidance.

After evaluating the application and all related information, including the advisory committee recommendations, if any, and inspection reports of manufacturing facilities and clinical trial sites, the FDA will issue either a Complete Response Letter (“CRL”) or an approval letter. To reach this determination, the FDA must determine that the drug is effective and that its expected benefits outweigh its potential risks to patients. This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the NDA. This assessment is also informed by other factors, including: the severity of the underlying condition and how well patients’ medical needs are addressed by currently available therapies; uncertainty about how the premarket clinical trial evidence will extrapolate to real-world use of the product in the post-market setting; and whether risk management tools are necessary to manage specific risks. In connection with this assessment, the FDA review team will assemble all individual reviews and other documents into an “action package,” which becomes the record for FDA review. The review team then issues a recommendation, and a senior FDA official makes a decision.

A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form. A CRL generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. The CRL may require additional clinical or other data, additional pivotal Phase 3 clinical trial(s) and/or other significant and time- consuming requirements related to clinical trials, preclinical studies or manufacturing. If a CRL is issued, the applicant will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the applicant an additional six-month extension to respond. The FDA has committed to reviewing resubmissions in response to an issued CRL in either two or six months depending on the type of information included. Even with the submission of this additional information, however, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. The FDA has taken the position that a CRL is not final agency action making the determination subject to judicial review.

An approval letter, on the other hand, authorizes commercial marketing of the product with specific prescribing information for specific indications. That is, the approval will be limited to the conditions of use (e.g., patient population, indication) described in the FDA-approved labeling. Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings or precautions be included in the product labeling, require that post-approval trials, including Phase 4 clinical trials, be conducted to further assess a product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing trials or surveillance programs. After approval, some types of changes to

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the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Under the Ensuring Innovation Act, which was signed into law in April 2021, the FDA must publish action packages summarizing its decisions to approve new drugs within 30 days of approval of such products. To date, CRLs are not publicly available documents.

 

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
fines, warning letters or holds on post-approval clinical trials;
refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;
product seizure or detention, or refusal to permit the import or export of products; or
injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market. This regulation includes, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the Internet and social media. Promotional claims about a drug’s safety or effectiveness are prohibited before the drug is approved. After approval, a drug product generally may not be promoted for uses that are not approved by the FDA, as reflected in the product’s prescribing information.

In the U.S., healthcare professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling, known as off-label uses, because the FDA does not regulate the practice of medicine. However, FDA regulations impose rigorous restrictions on manufacturers’ communications, prohibiting the promotion of off-label uses. 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. It may be permissible, under very specific, narrow conditions, for a manufacturer to engage in nonpromotional, non-misleading communication regarding off-label information, such as distributing scientific or medical journal information. If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or

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distributes drug products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion, and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

In addition, the distribution of prescription pharmaceutical products is subject to a variety of federal and state laws, the most recent of which is still in the process of being phased into the U.S. supply chain and regulatory framework. The Prescription Drug Marketing Act (the “PDMA”) was the first federal law to set minimum standards for the registration and regulation of drug distributors by the states and to regulate the distribution of drug samples. Today, both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution. Congress more recently enacted the Drug Supply Chain Security Act (the “DSCSA”), which made significant amendments to the FDCA, including by replacing certain provisions from the PDMA pertaining to wholesale distribution of prescription drugs with a more comprehensive statutory scheme. The DSCSA now requires uniform national standards for wholesale distribution and, for the first time, for third-party logistics providers; it also provides for preemption of certain state laws in the areas of licensure and prescription drug traceability.

Section 505(b)(2) NDAs

NDAs for most new drug products are based on two full clinical studies which must contain substantial evidence of the safety and efficacy of the proposed new product. These applications are submitted under Section 505(b)(1) of the FDCA. The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA. This type of application allows the applicant to rely, in part, on the FDA’s previous findings of safety and efficacy for a similar product, or published literature. Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the applicant for approval of the application “were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.”

Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and effectiveness data that were not developed by the applicant. NDAs filed under Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously approved products. If the Section 505(b)(2) applicant can establish that reliance on the FDA’s previous approval is scientifically appropriate, the applicant may eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require companies to perform additional studies or measurements to support the change from the approved product. The FDA may then approve the new drug candidate for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.

Generic Drugs and Regulatory Exclusivity

In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress authorized the FDA to approve generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute. To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application (“ANDA”) to the agency. In support of such applications, a generic manufacturer may rely on the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug (“RLD”).

Specifically, in order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, and the strength of the drug. At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug. Under the statute, a generic drug is bioequivalent to a RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug...”

Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book. Clinicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD. In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing clinicians or patient.

Under the Hatch-Waxman Act, the FDA may not approve an ANDA or 505(b)(2) application until any applicable period of non-patent exclusivity for the RLD has expired. The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity (“NCE”). For the purposes of this provision, the FDA has consistently taken the position that an

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NCE is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA. This interpretation was confirmed with enactment of the Ensuring Innovation Act in April 2021. An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance. In cases where such NCE exclusivity has been granted, a generic or follow-on drug application may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of the application. This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication. Three-year exclusivity would be available for a drug product that contains a previously approved active moiety, provided the statutory requirement for a new clinical investigation is satisfied. Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from accepting ANDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product. The FDA typically makes decisions about awards of data exclusivity shortly before a product is approved.

The FDA must establish a priority review track for certain generic drugs, requiring the FDA to review a drug application within eight months for a drug that has three or fewer approved drugs listed in the Orange Book and is no longer protected by any patent or regulatory exclusivities, or is on the FDA’s drug shortage list. The new legislation also authorizes the FDA to expedite review of competitor generic therapies or drugs with inadequate generic competition, including holding meetings with or providing advice to the drug sponsor prior to submission of the application.

Hatch-Waxman Patent Certification and the 30-Month Stay

As part of the submission of an NDA or certain supplemental applications, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product. Upon approval of a new drug, each of the patents listed in the application for the drug is then published in the Orange Book. The FDA’s regulations governing patient listings were largely codified into law with enactment of the Orange Book Modernization Act in January 2021. When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval. To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.

Specifically, the applicant must certify with respect to each patent that:

the required patent information has not been filed;
the listed patent has expired;
the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or
the listed patent is invalid, unenforceable or will not be infringed by the new product.

A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification. If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the ANDA applicant is not seeking approval).

If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.

To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would. As a result, approval of a Section 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of an NCE, listed in the

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Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.

 

Orphan Drug Designation and Exclusivity

Orphan drug designation in the U.S. is designed to encourage sponsors to develop products intended for treatment of rare diseases or conditions. In the U.S., a rare disease or condition is statutorily defined as a condition that affects fewer than 200,000 individuals in the U.S. or that affects more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available the product for the disease or condition will be recovered from sales of the product in the U.S.

Orphan drug designation qualifies a company for tax credits and potentially market exclusivity for seven years following the date of the product’s approval if granted by the FDA. An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. A product becomes an orphan when it receives orphan drug designation from the Office of Orphan Products Development at the FDA based on acceptable confidential requests. The product must then go through the review and approval process like any other product.

A sponsor may request orphan drug designation of a previously unapproved product or new orphan indication for an already marketed product. In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain orphan drug designation for the subsequent product for the same rare disease or condition if it can present a plausible hypothesis that its product may be clinically superior to the first approved product. More than one sponsor may receive orphan drug designation for the same product for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation.

If a product with orphan designation receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product generally will receive orphan drug exclusivity. Orphan drug exclusivity means that the FDA may not approve another sponsor’s marketing application for the same product for the same disease or condition for seven years, except in certain limited circumstances. If a product designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

The period of market exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the disease or condition for which the product has been designated. Orphan drug exclusivity will not bar approval of another product under certain circumstances, including if the company with orphan drug exclusivity is not able to meet market demand or the subsequent product is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care. This is the case despite an earlier court opinion holding that the Orphan Drug Act unambiguously required the FDA to recognize orphan drug exclusivity regardless of a showing of clinical superiority. Under Omnibus legislation signed by former President Trump on December 27, 2020, the requirement for a product to show clinical superiority applies to drug products that received orphan drug designation before enactment of amendments to the FDCA in 2017 but have not yet been approved by FDA.

In September 2021, the Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of market exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use.” It is unclear how this court decision will be implemented by the FDA.

 

Pediatric Exclusivity

Pediatric exclusivity is a type of non-patent marketing exclusivity in the U.S. and, if granted, provides for the attachment of an additional six months of exclusivity. For drug products, the six-month exclusivity may be attached to the term of any existing patent or regulatory exclusivity, including the orphan exclusivity and regulatory exclusivities available under the Hatch-Waxman provisions of the FDCA. For biologic products, the six-month period may be attached to any existing regulatory exclusivities but not to any patent terms. The conditions for pediatric exclusivity include the FDA’s determination that information relating to the use of a new product in the pediatric population may produce health benefits in that population, the FDA making a written request for pediatric clinical trials, and the applicant agreeing to perform, and reporting on, the requested clinical trials within the statutory timeframe. This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for

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such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patents that cover the product are extended by six months. Although this is not a patent term extension, it effectively extends the regulatory period during which the FDA cannot approve another application.

 

Patent Term Restoration and Extension

A patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review. The restoration period granted is typically one-half the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the ultimate approval date. Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date. Only one patent applicable to an approved drug product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple drugs for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the application for any patent term extension or restoration in consultation with the FDA. We cannot provide any assurance that any patent term extension with respect to any U.S. patent will be obtained and, if obtained, the duration of such extension, in connection with any of our product candidates.

 

Healthcare Compliance

In the U.S., biopharmaceutical manufacturers and their products are subject to extensive regulation at the federal and state level, such as laws intended to prevent fraud and abuse in the healthcare industry. Healthcare providers and third-party payors play a primary role in the recommendation and prescription of pharmaceutical products that are granted marketing approval. Arrangements with providers, consultants, third-party payors, and customers are subject to broadly applicable fraud and abuse, anti-kickback, false claims laws, reporting of payments to healthcare providers and patient privacy laws and regulations and other healthcare laws and regulations that may constrain our business and/or financial arrangements. Restrictions under applicable federal and state healthcare laws and regulations, including certain laws and regulations applicable only if we have marketed products, include the following:

federal false claims, false statements and civil monetary penalties laws prohibiting, among other things, any person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing to be made, a false statement to get a false claim paid;
federal healthcare program anti-kickback law, which prohibits, among other things, persons from offering, soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for, or the purchasing or ordering of, a good or service for which payment may be made under federal healthcare programs such as Medicare and Medicaid;
the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;
federal Open Payments (or federal “sunshine” law), which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with certain healthcare providers to the Center for Medicare & Medicaid Services (the “CMS”), within the U.S. Department of Health and Human Services for re-disclosure to the public, as well as ownership and investment interests held by certain healthcare providers and their immediate family members;
federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
analogous state laws and regulations, including: state anti-kickback and false claims laws; state laws requiring pharmaceutical companies to comply with specific compliance standards, restrict financial interactions between pharmaceutical companies and healthcare providers or require pharmaceutical companies to report information related to payments to health care providers or marketing expenditures; and state laws governing privacy, security and breaches of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and

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laws and regulations prohibiting bribery and corruption such as the FCPA, which, among other things, prohibits U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations or foreign government-owned or affiliated entities, candidates for foreign public office, and foreign political parties or officials thereof.

Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, exclusion from participation in federal and state health care programs, such as Medicare and Medicaid. Ensuring compliance is time consuming and costly. Similar healthcare laws and regulations exist in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and laws governing the privacy and security of personal information.

 

Healthcare Reform

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. There have been a number of federal and state proposals during the last few years regarding the pricing of drug and biologic products, limiting coverage and reimbursement for medical products and other changes to the healthcare system in the U.S.

In March 2010, the U.S. Congress enacted the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “PPACA”), which, among other things, includes changes to the coverage and payment for pharmaceutical products under government healthcare programs. Other legislative changes have been 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. Pursuant to the Coronavirus Aid, Relief and Economic Security Act and subsequent legislation, these Medicare sequester reductions have been suspended through the end of March 2022. From April 2022 through June 2022 a 1% sequester cut will be in effect, with the full 2% cut resuming thereafter.

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 enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), which was signed by former President Trump on December 22, 2017, 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. On December 14, 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. The U.S. Supreme Court heard this case on November 10, 2020 and, on June 17, 2021, dismissed this action after finding that the plaintiffs did 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. On January 28, 2021, however, President Biden rescinded those orders and issued a new executive order that directs federal agencies to reconsider rules and other policies that limit access to healthcare, and consider actions that will protect and strengthen that access. Under this 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 under the PPACA; and policies that reduce affordability of coverage or financial assistance, including for dependents.

 

Pharmaceutical Prices

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

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regulations. These regulations include an interim final rule implementing a most favored nation model for prices that would tie 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, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program (“SIP”) to import certain prescription drugs from Canada into the U.S. The final rule is currently the subject of ongoing litigation, but at least six states (Vermont, Colorado, Florida, Maine, New Mexico, and New Hampshire) have passed laws allowing for the importation of drugs from Canada with the intent of developing SIPs for review and approval by the FDA. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed by the Biden administration until January 1, 2023.

On July 9, 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.” On September 9, 2021, 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.

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. A number of states, for example, require drug manufacturers and other entities in the drug supply chain, including health carriers, pharmacy benefit managers, wholesale distributors, to disclose information about pricing of pharmaceuticals. 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 pharmaceutical 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.

 

Federal and State Data Privacy Laws

Under HIPAA, the HHS has issued regulations to protect the privacy and security of protected health information, used or disclosed by covered entities including certain healthcare providers, health plans and healthcare clearinghouses. HIPAA also regulates standardization of data content, codes and formats used in healthcare transactions and standardization of identifiers for health plans and providers. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and their regulations, including the omnibus final rule published on January 25, 2013, also imposes certain obligations on the business associates of covered entities that obtain protected health information in providing services to or on behalf of covered entities. In addition to federal privacy regulations, there are a number of state laws governing confidentiality and security of health information that are applicable to our business. In addition to possible federal civil and criminal penalties for HIPAA violations, state attorneys general are authorized to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions. Accordingly, state attorneys general (along with private plaintiffs) have brought civil actions seeking injunctions and damages resulting from alleged violations of HIPAA’s privacy and security rules. New laws and regulations governing privacy and security may be adopted in the future as well.

Additionally, California recently enacted legislation that has been dubbed the first “GDPR-like” law in the U.S. Known as the California Consumer Privacy Act (the “CCPA”), it creates new individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or

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households. The CCPA went into effect on January 1, 2020 and requires covered companies to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches. Additionally, effective starting on January 1, 2023, the California Privacy Rights Act (the “CPRA”) will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information. The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA. The CCPA and CPRA could impact our business activities depending on how it is interpreted and exemplifies the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data and protected health information.

Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available under such laws, it is possible that some of our current or future business activities, including certain clinical research, sales and marketing practices and the provision of certain items and services to our customers, could be subject to challenge under one or more of such privacy and data security laws. The heightening compliance environment and the need to build and maintain robust and secure systems to comply with different privacy compliance and/or reporting requirements in multiple jurisdictions could increase the possibility that a healthcare company may fail to comply fully with one or more of these requirements. If our operations are found to be in violation of any of the privacy or data security laws or regulations described above that are applicable to us, or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal, civil and administrative penalties, damages, fines, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a consent decree or similar agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any product candidates we may develop, once approved, are sold in a foreign country, we may be subject to similar foreign laws.

Review and Approval of Animal Drugs in the U.S.

In addition to pursuing approval of our product candidates for use in human beings, we may also seek approval of certain product candidates for veterinary applications. As with new drug products for human beings, new animal drugs may not be marketed in the U.S. until they have been approved by the FDA as safe and effective. The requirements and phases governing approval of a new animal drug are analogous to those for new human drugs. Specifically, the Center for Veterinary Medicine (the “CVM”) at FDA is responsible for determining whether a new veterinary product should be approved on the basis of a New Animal Drug Application (“NADA”) filed by the applicant. A NADA must contain substantial evidence of the safety and effectiveness of the animal drug, as well as data and controls demonstrating that the product will be manufactured and studied in compliance with, among other things, applicable cGMP and GLP practices.

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To begin this process, an applicant must file an Investigational New Animal Drug application with the CVM. The applicant will hold a pre-development meeting with the CVM to reach general agreement on the plans for providing the data necessary to fulfill requirements for a NADA. In this context, an applicant must submit pivotal protocols to the CVM for review and concurrence prior to conducting the required studies. The applicant will gather and submit data on safety, efficacy and chemistry, manufacturing and controls (“CMC”) to the CVM for review, as below:

 

Safety:

The design and review of the safety study and the study protocol are completed prior to initiation of the study to help assure that the data generated will meet FDA requirements. These studies are conducted under rigorous quality control, including GLP, to assure integrity of the data. They are designed to clearly define a safety margin, identify any potential safety concerns, and establish a safe dose for the product. This dose and its effectiveness are then evaluated in the pivotal field efficacy study where the product is studied in the animal patient population in which the product is intended to be used.

Efficacy:

Early pilot studies may be done in laboratory cats or dogs to establish effectiveness and the dose range for each product. When an effective dose is established, a study protocol to test the product in real world conditions is developed prior to beginning the study. The pivotal field efficacy study protocol is submitted for review and concurrence prior to study initiation, to help assure that the data generated will meet requirements. This study must be conducted with the formulation of the product that is intended to be commercialized, and is a multi-site, randomized, controlled study, generally with a placebo control.

CMC:

To assure that the new animal drug product can be manufactured consistently, FDA will require applicants to provide documentation of the process by which the active ingredient is made and the controls applicable to that process that assure the active ingredient and the formulation of the final commercial product meet certain criteria, including purity and stability. After a product is approved, applicants will be required to communicate with the FDA before any changes are made to these procedures or at the manufacturing site. Both the active ingredient and commercial formulations are required to be manufactured at facilities that practice cGMP.

 

Once all data have been submitted and reviewed for each technical section—safety, efficacy and CMC—the CVM will issue a technical section complete letter as each section review is completed. When the three letters have been issued, the applicant will compile a draft of the Freedom of Information Summary, the proposed labeling, and all other relevant information, and submit these as an administrative NADA for CVM review. Generally, if there are no deficiencies in the submission, the NADA will be issued within four to six months after submission of the administrative NADA. This review will be conducted according to timelines specified in the Animal Drug User Fee Act. The FDA’s basis for approving a NADA is documented in a Freedom of Information Summary. Post-approval monitoring of products is required by law, with reports being provided to the CVM’s Surveillance and Compliance group. Reports of product quality defects, AEs or unexpected results must also be produced in accordance with the relevant regulatory requirements.

 

Review and Approval of Drug Products in the European Union

 

In addition to regulations in the U.S., we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products outside of the U.S. Whether or not we obtain FDA approval for a product candidate, we must obtain approval by the comparable regulatory authorities of foreign countries or economic areas, such as the 27-member EU, before we may commence clinical trials or market products in those countries or areas. In the EU, our product candidates also may be subject to extensive regulatory requirements. As in the U.S., medicinal products can be marketed only if a marketing authorization from the competent regulatory agencies has been obtained. Similar to the U.S., the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls.

 

With the exception of the EU/European Economic Area (“EEA”) applying the harmonized regulatory rules for medicinal products, the approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly between countries and jurisdictions and can involve additional testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

 

Clinical Trial Approval

 

The Clinical Trials Directive 2001/20/EC, the Directive 2005/28/EC on GCP and the related national implementing provisions of the individual EU Member States govern the system for the approval of clinical trials in the EU. Under this system, an applicant must obtain prior approval from the competent national authority of the EU Member States in which the clinical trial is to be

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conducted. Furthermore, the applicant may only start a clinical trial at a specific study site after the competent ethics committee has issued a favorable opinion. The clinical trial application must be accompanied by, among other documents, an IMPD (the Common Technical Document) with supporting information prescribed by Directive 2001/20/EC, Directive 2005/28/EC, and where relevant the implementing national provisions of the individual EU Member States and further detailed in applicable guidance documents. All suspected unexpected serious adverse reactions to the investigational drug product that occur during the clinical trial have to be reported to the competent national authority and the Ethics Committee of the Member State where they occurred.

 

In April 2014, the new Clinical Trials Regulation, (EU) No 536/2014 (“Clinical Trials Regulation”) was adopted. The Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the EU. The main characteristics of the regulation include: a streamlined application procedure via a single entry point, the “EU portal”; a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts. Part I is assessed by the competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted (Member States concerned). Part II is assessed separately by each Member State concerned. Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned EU Member State. However, overall related timelines will be defined by the Clinical Trials Regulation.

 

The new Regulation is scheduled to come into application on January 31, 2022, following confirmation of full functionality of the Clinical Trials Information System through an independent audit by the European Commission in mid-2020. The Clinical Trials Regulation will come into application in all the EU Member States, repealing the current Clinical Trials Directive 2001/20/EC. The conduct of all clinical trials performed in the EU will continue to be bound by currently applicable provisions until the new Clinical Trials Regulation becomes applicable at the end of January 2022. According to the transitional provisions, if a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable, the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

Parties conducting certain clinical trials must, as in the U.S., post clinical trial information in the EU at the EudraCT website: https://eudract.ema.europa.eu.

Procedures Governing Approval of Drug Products

Pursuant to the European Clinical Trials Directive, a system for the approval of clinical trials in the EU has been implemented through national legislation of the member states. Under this system, an applicant must obtain approval from the competent national authority of an EU member state in which the clinical trial is to be conducted. Furthermore, the applicant may only start a clinical trial after a competent ethics committee has issued a favorable opinion. Clinical trial application must be accompanied by an investigational medicinal product dossier (“IMPD”) with supporting information prescribed by the European Clinical Trials Directive and corresponding national laws of the member states and further detailed in applicable guidance documents.

To obtain marketing approval of a product under EU regulatory systems, an applicant must submit an MAA either under a centralized or decentralized procedure. The centralized procedure provides for the grant of a single marketing authorization by the EC that is valid for all EU member states. The centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products and products with a new active substance indicated for the treatment of certain diseases. For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional.

Under the centralized procedure, the EMA's Committee for Medicinal Products for Human Use ("CHMP") established at the EMA is responsible for conducting the initial assessment of a product. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days.

 

The decentralized procedure is available to applicants who wish to market a product in various EU member states where such product has not received marketing approval in any EU member states before. The decentralized procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state designated by the applicant, known as the reference member state. Under this procedure, an applicant submits an application based on identical dossiers

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and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states. The reference member state prepares a draft assessment report and drafts of the related materials within 210 days after receipt of a valid application. Within 90 days of receiving the reference member state’s assessment report and related materials, each concerned member state must decide whether to approve the assessment report and related materials.

If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the EC, whose decision is binding on all member states.

Within this framework, manufacturers may seek approval of hybrid medicinal products under Article 10(3) of Directive 2001/83/EC. Hybrid applications rely, in part, on information and data from a reference product and new data from appropriate preclinical tests and clinical trials. Such applications are necessary when the proposed product does not meet the strict definition of a generic medicinal product, or bioavailability studies cannot be used to demonstrate bioequivalence, or there are changes in the active substance(s), therapeutic indications, strength, pharmaceutical form or route of administration of the generic product compared to the reference medicinal product. In such cases the results of tests and trials must be consistent with the data content standards required in the Annex to the Directive 2001/83/EC, as amended by Directive 2003/63/EC.

Hybrid medicinal product applications have automatic access to the centralized procedure when the reference product was authorized for marketing via that procedure. Where the reference product was authorized via the decentralized procedure, a hybrid application may be accepted for consideration under the centralized procedure if the applicant shows that the medicinal product constitutes a significant therapeutic, scientific or technical innovation, or the granting of a community authorization for the medicinal product is in the interest of patients at the community level.

 

Pediatric Studies

Prior to obtaining a marketing authorization in the EU, applicants have to demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan (“PIP”) covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver or a deferral for one or more of the measures included in the PIP. The respective requirements for all marketing authorization procedures are set forth in Regulation (EC) No 1901/2006, which is referred to as the Pediatric Regulation. This requirement also applies when a company wants to add a new indication, pharmaceutical form or route of administration for a medicine that is already authorized. The Pediatric Committee of the EMA (the “PDCO”) may grant deferrals for some medicines, allowing a company to delay development of the medicine in children until there is enough information to demonstrate its effectiveness and safety in adults. The PDCO may also grant waivers when development of a medicine in children is not needed or is not appropriate because (a) the product is likely to be ineffective or unsafe in part or all of the pediatric population; (b) the disease or condition occurs only in adult population; or (c) the product does not represent a significant therapeutic benefit over existing treatments for pediatric population. Before a MAA can be filed, or an existing marketing authorization can be amended, the EMA determines that companies actually comply with the agreed studies and measures listed in each relevant PIP.

PRIME Designation

In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist. The PRIority Medicines (“PRIME”) scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure. Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies. Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted. Importantly, a dedicated Agency contact and rapporteur from the CHMP or Committee for Advanced Therapies are appointed early in PRIME scheme facilitating increased understanding of the product at EMA’s Committee level. A kick-off meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.

Periods of Authorization and Renewals

Marketing authorization is valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state. To this end, the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of the file with respect to quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. Once renewed, the marketing authorization is valid for an unlimited

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period, unless the EC or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid (the so-called sunset clause).

Regulatory Requirements after Marketing Authorization

As in the U.S., both marketing authorization holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA and the competent authorities of the individual EU Member States both before and after grant of the manufacturing and marketing authorizations. The holder of an EU marketing authorization for a medicinal product must, for example, comply with EU pharmacovigilance legislation and its related regulations and guidelines which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of medicinal products. The manufacturing process for medicinal products in the EU is also highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations. Manufacturing requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, including compliance with EU cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients.

 

In the EU, the advertising and promotion of approved products are subject to EU Member States’ laws governing promotion of medicinal products, interactions with clinicians, misleading and comparative advertising and unfair commercial practices. In addition, other legislation adopted by individual EU Member States may apply to the advertising and promotion of medicinal products. These laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”) as approved by the competent authorities. Promotion of a medicinal product that does not comply with the SmPC is considered to constitute off-label promotion, which is prohibited in the EU.

 

Data and Market Exclusivity

 

In the EU, NCEs qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity. This data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic (abbreviated) application for eight years, after which generic marketing authorizations can be submitted, and the innovator’s data may be referenced, but not approved for two years. The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new chemical entity and the sponsor is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company can complete a full MAA with a complete database of pharmaceutical test, preclinical tests and clinical trials and obtain marketing approval of its product.

 

Orphan Drug Designation and Exclusivity

 

The criteria for designating an orphan medicinal product in the EU are similar in principle to those in the U.S. Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life- threatening or chronically debilitating condition, (2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by the condition. The term ‘significant benefit’ is defined in Regulation (EC) 847/2000 to mean a clinically relevant advantage or a major contribution to patient care.

 

Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a marketing authorization, entitled to ten years of market exclusivity for the approved therapeutic indication. During this ten-year market exclusivity period, the EMA or the competent authorities of the Member States of the EEA, cannot accept an application for a marketing authorization for a similar medicinal product for the same indication. A similar medicinal product is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. The application for orphan designation must be submitted before the application for marketing authorization. The applicant will receive a fee reduction for the MAA if the orphan designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted. Orphan designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

 

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The ten-year market exclusivity in the EU may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity. Additionally, marketing authorization may be granted to a similar product for the same indication at any time if: (1) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; (2) the applicant consents to a second orphan medicinal product application; or (3) the applicant cannot supply enough orphan medicinal product.

 

Pediatric Exclusivity

 

If an applicant obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the European Commission, and the study results for the pediatric population are included in the product information, even when negative, the medicine is then eligible for an additional six-month period of qualifying patent protection through extension of the term of the SPC, or alternatively a one year extension of the regulatory market exclusivity from ten to eleven years, as selected by the marketing authorization holder.

 

Patent Term Extensions

 

The EU also provides for patent term extension through SPCs. The rules and requirements for obtaining a SPC are similar to those in the U.S. An SPC may extend the term of a patent for up to five years after its originally scheduled expiration date and can provide up to a maximum of fifteen years of marketing exclusivity for a drug. In certain circumstances, these periods may be extended for six additional months if pediatric exclusivity is obtained. Although SPCs are available throughout the EU, sponsors must apply on a country‑by‑country basis. Similar patent term extension rights exist in certain other foreign jurisdictions outside the EU.

 

Reimbursement and Pricing Decisions for Approved Products

 

In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval. For example, EU Member States have the option to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU Member States may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EU Member States allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the EU have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage health care expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the EU. The downward pressure on health care costs in general, particularly prescription products, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EU Member States, and parallel trade, i.e., arbitrage between low-priced and high-priced EU Member States, can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries.

 

General Data Protection Regulation

 

Many countries outside of the U.S. maintain rigorous laws governing the privacy and security of personal information. The collection, use, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals who are located in the EEA, and the processing of personal data that takes place in the EEA, is subject to the GDPR, which became effective on May 25, 2018. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, and it imposes heightened requirements on companies that process health and other sensitive data, such as requiring in many situations that a company obtain the consent of the individuals to whom the sensitive personal data relate before processing such data. Examples of obligations imposed by the GDPR on companies processing personal data that fall within the scope of the GDPR include providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, appointing a data protection officer, providing notification of data breaches and taking certain measures when engaging third-party processors.

 

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The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the U.S., and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Compliance with the GDPR is a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance. In July 2020, the Court of Justice of the EU (the “CJEU”) invalidated the EU-U.S. Privacy Shield framework, 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 question the long-term viability of an alternative means of data transfer, the standard contractual clauses, for transfers of personal data from the EEA to the U.S. Following the withdrawal of the U.K. from the EU, the U.K. Data Protection Act 2018 applies to the processing of personal data that takes place in the U.K. and includes parallel obligations to those set forth by GDPR.

 

Brexit and the Regulatory Framework in the United Kingdom

 

The United Kingdom’s withdrawal from the EU took place on January 31, 2020. The EU and the U.K. reached an agreement on their new partnership in the Trade and Cooperation Agreement (the “Agreement”), which was applied provisionally beginning on January 1, 2021 and which entered into force on May 1, 2021. The Agreement focuses primarily on free trade by ensuring no tariffs or quotas on trade in goods, including healthcare products such as medicinal products. Thereafter, the EU and the U.K. will form two separate markets governed by two distinct regulatory and legal regimes. As such, the Agreement seeks to minimize barriers to trade in goods while accepting that border checks will become inevitable as a consequence that the U.K. is no longer part of the single market. As of January 1, 2021, the Medicines and Healthcare products Regulatory Agency (the “MHRA”), became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law whereas Northern Ireland continues 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) (the “HMR”), as the basis for regulating medicines. The HMR has incorporated into the domestic law the body of EU law instruments governing medicinal products that pre-existed prior to the U.K.’s withdrawal from the EU.

 

Human Capital

 

We believe that the success of our business is fundamentally due to our greatest asset, our employees. To that end, we have invested significant resources towards the attraction, retention and development of personnel and the promotion and maintenance of diversity in our workforce. To support these objectives, our human resources programs reflect our commitment to our core values (Innovation, Courage, Urgency, Resiliency and Energy) and are designed to prioritize our employees’ well-being, support their career goals, offer competitive wages and benefits, and enhance our culture through efforts aimed at making the workplace more satisfying, engaging and inclusive.

 

In order to attract, retain and reward our employees, we provide competitive compensation and benefits programs aimed at supporting the financial, physical and emotional health of our employees and their families. We currently offer all new employees equity in our company and as incentive awards to all our employees in connection with our annual performance reviews and regular ongoing recognition awards. Our equity and cash incentive plans are aimed to increase stockholder value and the success of our company by motivating our employees to perform to the best of their abilities and achieve our and their objectives. In addition, many of our employees are stockholders of our company through participation in our Employee Stock Purchase Plan, which aligns the interests of our employees with our stockholders by providing stock ownership on a tax-deferred basis. We also provide up to a 4% match on employee contributions (up to 5% of base salary) to our Section 401(k) retirement savings plan.

 

We strive to provide our employees with a safe and healthy work environment and believe that the overall health, safety and wellness of our employees is critical to our long-term success and our growth as a business. As such, we provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events that may require time away from work or that impact their financial well-being. Our full-time employees are all eligible to participate in our health, vision, dental, life, and long-term disability insurance plans. To encourage employees to keep up with routine medical care and participate in our wellness program, we fund a Health Reimbursement Account for participating employees and to help our employees cover medical expenses pre-tax, we also offer employees a Flexible Spending Account. Our employees outside of the U.S. receive competitive compensation and benefits that are regularly benchmarked to ensure market norms and reflect our standards. All employees globally have access to complimentary virtual fitness programs, mental and emotional health support services, as well as support programs to assist working parents with childcare and tutoring. This benefit also extends to eldercare, pet care, and other needs facing our diverse global team.

 

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Importantly, since the beginning of the COVID-19 pandemic, we implemented, and continue to improve, appropriate safety measures in all our facilities and locations, including social distancing protocols, encouraging employees to work from home, suspending non-essential work travel, frequently disinfecting our workspaces and providing appropriate personal protective equipment to employees who are physically present at our facilities. In October 2021, we began to require that all of our employees be fully vaccinated, subject to limited medical and religious exemptions. We expect to continue to implement appropriate safety measures until the COVID-19 pandemic is contained, and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, partners and suppliers.

 

We encourage and support the growth and development of our employees and, wherever possible, seek to fill positions by promotion, transfer from within the organization and through our employee referral process. Continual learning and career development is advanced through ongoing performance and development conversations with employees, training programs, customized corporate training engagements and seminars and other training events employees are encouraged to attend in connection with their job duties. Employees at all levels, including “emerging leaders,” current managers, and executive level employees, have an opportunity to participate in a formal learning and development program, which provides a critically important growth path and continuity for our top performers.

Further, we strongly believe that diversity is a key driver of success. We strive to bring together employees with a wide variety of backgrounds, skills and culture and encourage all of our employees to maintain a work environment in which our differences are respected. We have implemented company-wide diversity initiatives in order to support greater awareness and understanding of the behaviors we expect from our employees, such as our Dialogue on Diversity program, which provides a sense of belonging, psychological safety and a stronger sense of community to our employees. We have partnered with local and national organizations supporting access to a more diverse workforce in the biotech industry, and we have established key working relationships with local universities where the majority of the student population have been identified as belonging to a minority group as we expand our successful, annual internship program.

As of February 22, 2022, we had 442 employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced work stoppages. We believe that relations with our employees are good.

Corporate Responsibility

We are highly committed to policies and practices focused on environmental, social and corporate governance (“ESG”), positively impacting our social community and maintaining and cultivating good corporate governance. By focusing on such ESG policies and practices, we believe we can affect a meaningful and positive change in our community and maintain our open, collaborative corporate culture. Some of the initiatives that we were most proud of in 2021 included continuing support for local and national schools, charitable organizations, and patient advocacy groups by way of donation of critical personal protective equipment. This included masks, gloves, sanitizer, and more to populations that were unable to remain remote due to a number of work and societal factors. Given the ongoing COVID-19 pandemic, we were able to transition our once-local internship program to a national, virtual program that includes students from underserved communities and schools with diverse populations, and to partner with charitable organizations to identify rising stars among first-generation college students. We also enable our employees to impact change through charity events such as walks, races, and other events geared towards both individuals and families. This allows our employees to support causes important to them both where they work and live and also aligns with our mission, goals, and vision.

Our ESG Report, which describes our approach to ESG programs, is available on our website at https://investors.karyopharm.com/corporate-sustainability. Information in our ESG Report is not incorporated by reference into this Form 10-K. We look forward to continuing our commitment to giving back to our local communities in 2022 and beyond.

Information about our Executive Officers

The following table lists the names, ages and positions of our executive officers as of February 22, 2022:

 

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Name

 

Age

 

Position

Richard Paulson, M.B.A

 

54

 

President and Chief Executive Officer

Sohanya Cheng, M.B.A.

 

39

 

Executive Vice President, Chief Commercial Officer

Ran Frenkel, RPh.

 

53

 

Executive Vice President, Chief Development Officer

Michael Mano, J.D.

 

45

 

Senior Vice President, General Counsel and Secretary

Michael Mason, C.P.A., M.B.A.

 

47

 

Executive Vice President, Chief Financial Officer and Treasurer

Stephen Mitchener, Pharm. D.

 

43

 

Senior Vice President, Chief Business Officer

Sharon Shacham. Ph.D., M.B.A.

 

51

 

Chief Scientific Officer

 

Richard Paulson, M.B.A. Mr. Paulson has served as our President and Chief Executive Officer since May 2021 and as a member of our Board since February 2020. Prior to joining Karyopharm, Mr. Paulson was the Executive Vice President and Chief Executive Officer of Ipsen North America, a biopharmaceutical company, from February 2018 to May 2021. Mr. Paulson was Vice President and General Manager, U.S. Oncology Business Unit at Amgen, a public biotechnology company, from 2015 to February 2018 and prior to that was Vice President, Marketing for Amgen’s U.S. Oncology Business, General Manager, Amgen Germany and General Manager of Amgen Central & Eastern. Prior to Amgen, Mr. Paulson held a number of global leadership positions at Pfizer, including serving as General Manager of Pfizer South Africa and Pfizer Czech Republic. Mr. Paulson also previously held a variety of sales, marketing, and market access roles with increasing seniority at GlaxoWellcome plc in Canada. Mr. Paulson has an M.B.A. from the University of Toronto, Canada and an undergraduate degree in commerce from the University of Saskatchewan, Canada.

Sohanya Cheng, M.B.A. Ms. Cheng joined Karyopharm as Vice President, Sales and Commercial in June 2021 and has served as our Executive Vice President, Chief Commercial Officer since December 2021. Prior to joining Karyopharm, Ms. Cheng served as Vice President, Head of Marketing and Corporate Affairs, at Arrowhead Pharmaceuticals, a public pharmaceutical company, from August 2020 to January 2021. Prior to this role, Ms. Cheng spent ten years at Amgen, a public biotechnology company, where she held a variety of sales and marketing leadership roles supporting the commercialization of key oncology brands, including as Executive Director, Head of Marketing & Sales for their multiple myeloma business and as Head of Oncology National Sales. Ms. Cheng holds an M.B.A. from the MIT Sloan School of Management and a BSc and MA in Biochemistry from the University of Cambridge, United Kingdom.

Ran Frenkel, RPh. Mr. Frenkel joined Karyopharm as Executive Vice President, Worldwide Development Operations of Karyopharm in 2014, served as Executive Vice President, Chief Development Operations Officer from 2015 to August 2020 and has served as our Executive Vice President, Chief Development Officer since August 2020. Prior to joining Karyopharm, Mr. Frenkel held a number of senior management roles in Europe, Israel and the U.S., most recently as Managing Director EMEA from 2013 to 2014 for Clinipace Worldwide, an international clinical research organization. Prior to becoming Managing Director EMEA, Mr. Frenkel was Vice President of International Business Development at Clinipace Worldwide from 2011 to 2013. Prior to joining Clinipace Worldwide, from 2007 to 2011, Mr. Frenkel established and managed the Israeli office of PFC Pharma Focus AG, which was acquired by Clinipace Worldwide in 2011, and from 2004 to 2007, he held the position of Managing Director at Actelion Pharmaceuticals with responsibility for all science and business affairs of the company in Israel. Mr. Frenkel received a BPharm from Hebrew University.

Michael Mano, J.D. Mr. Mano joined Karyopharm as Senior Vice President, General Counsel and Secretary in December 2020 with over 15 years of legal experience. Prior to joining Karyopharm, Mr. Mano served as Counsel, Business Development for Biogen Inc., a public biotechnology company, from January 2018 to December 2020, where he supported Biogen’s global business development platform. Prior to that he was Senior Counsel at Proskauer Rose LLP, an international law firm, from 2013 to January 2018 where he represented clients in a broad range of corporate matters. Prior to Proskauer Rose LLP, Mr. Mano was in private legal practice where he represented clients in the life sciences industry in a broad range of corporate matters. Mr. Mano received a B.A. in Political Science and Sociology from Saint Michael’s College and a Juris Doctor from Washington University School of Law.

Michael Mason, C.P.A., M.B.A. Mr. Mason joined Karyopharm in February 2019 as our Senior Vice President, Chief Financial Officer and Treasurer and was appointed Executive Vice President, Chief Financial Officer and Treasurer in June 2021. Mr. Mason served as Vice President of Finance and Treasurer of Alnylam Pharmaceuticals, Inc.(“Alnylam”), a public biopharmaceutical company, from 2011 until February 2019, as its Principal Accounting Officer from 2011 to October 2018, and as its Principal Financial Officer from 2011 to 2016 and from January 2017 to May 2017. From 2005 to 2011, Mr. Mason served as Alnylam’s Corporate Controller. From 2000 through 2005, Mr. Mason served in several finance and commercial roles at Praecis Pharmaceuticals Incorporated (“Praecis”), a public biotechnology company, including as Corporate Controller. Prior to Praecis, Mr. Mason worked in the audit practice at KPMG LLP, a national audit, tax and advisory services firm. Mr. Mason received a B.A. in Business Administration from Stetson University and an M.B.A. from Babson College and is a certified public accountant.

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Stephen Mitchener, Pharm.D. Dr. Mitchener has served as our Chief Business Officer since December 2020. Prior to joining Karyopharm, Dr. Mitchener served as Chief Business Officer and Head, Strategic Finance from August 2019 to December 2020 and as Senior Vice President, Chief Business Officer from September 2018 to August 2019 at Axcella Health Inc. (“Axcella”), a public biotechnology company. Before joining Axcella, Dr. Mitchener spent 15 years at Novartis, a public pharmaceutical company, in positions of increasing responsibility, in both U.S. and international roles within its Oncology Business. He served as Head of Strategy, Partnering and Operations from 2016 to August 2018 and as Oncology Franchise Head for Australia and New Zealand from 2013 to 2016. During his tenure at Novartis, he also held various commercial, medical and business development roles, including Business Franchise Head, Oncology, Global Pharma Strategy Director, and Global New Product Director. Dr. Mitchener received a PharmD from the University of North Carolina at Chapel Hill.

Sharon Shacham, Ph.D., M.B.A. Dr. Shacham founded Karyopharm in 2008 and has served as our Chief Scientific Officer since 2010. Dr. Shacham served as our President from 2013 to May 2021, as President of Research and Development from 2012 to 2013, as our Head of Research and Development from 2010 to 2012 and as our President and Chief Executive Officer from 2010 to 2011. Dr. Shacham co-chairs our Scientific Advisory Board. From 2006 to 2009, she was Senior Vice President of Drug Development at Epix, a biopharmaceutical company that underwent liquidation proceedings in 2009. She was Director, Algorithm and Software Development at Predix from 2000 until Predix’s merger into Epix in 2006. Dr. Shacham received her B.Sc. in Chemistry, Ph.D. and M.B.A. from Tel Aviv University.

Information about our Directors

 

The following table lists the names, ages and positions of our current directors:

 

Name

 

Age

 

Position

Richard Paulson, M.B.A.

 

54

 

President and Chief Executive Officer of Karyopharm

Barry E. Greene

 

58

 

Chief Executive Officer of Sage Therapeutics, Inc., a biopharmaceutical company

Garen G. Bohlin

 

74

 

Former Executive Vice President of Constellation Pharmaceuticals, Inc., a biopharmaceutical company

Peter Honig, M.D., MPH

 

65

 

Former Senior Vice President and Head of Global Regulatory Affairs of Pfizer Inc., a pharmaceutical company

Michael G. Kauffman, M.D., Ph.D.

 

58

 

Senior Clinical Advisor of Karyopharm and former Chief Executive Officer of Karyopharm

Mansoor Raza Mirza, M.D.

 

60

 

Chief Oncologist at the Department of Oncology, Rigshopitalet – the Copenhagen University Hospital, Denmark and Medical Director of the Nordic Society of Gynaecological Oncology

Christy J. Oliger

 

52

 

Former Senior Vice President of the Oncology Business Unit at Genentech, Inc., a biotechnology company

Deepa R. Pakianathan, Ph.D.

 

57

 

Managing Member at Delphi Ventures, a venture capital firm focused on biotechnology and medical device investments

Chen Schor

 

49

 

President, Chief Executive Officer and Director of Adicet Bio, Inc., a biotechnology company

 

Available Information

Our Internet website is http://www.karyopharm.com. We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. We make these reports available through our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the U.S. Securities and Exchange Commission. In addition, we regularly use our website to post information regarding our business, development programs and governance, and we encourage investors to use our website, particularly the information in the section entitled “Investors” as a source of information about us. References to our website are inactive textual references only and the content of our website should not be deemed incorporated by reference into this Annual Report on Form 10-K.

Our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of the Audit, Compensation, Nominating, Corporate Governance & Compliance and Commercialization and Portfolio Committees of our Board of Directors are all available on our website at http://www.karyopharm.com at the “Investors” section under “Corporate Governance.” Stockholders may request a free copy of any of these documents by writing to Investor Relations, Karyopharm Therapeutics Inc., 85 Wells Avenue, 2nd floor, Newton, Massachusetts 02459, U.S.A.

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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 Annual Report on Form 10-K 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 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 and other diseases in humans 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 Velcade® (bortezomib) and dexamethasone for the treatment of patients with multiple myeloma after at least one prior therapy, in combination with dexamethasone for the treatment of patients with heavily pretreated multiple myeloma and as a monotherapy for the treatment of patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”). 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:

our ability to successfully launch and achieve broad adoption of our approved products in earlier lines of therapy following the approval of the expanded XPOVIO indication based on the results from our Phase 3 BOSTON study or based on any future indications for which XPOVIO may be approved, or any product candidates for which we obtain marketing approval;
actual or perceived advantages or disadvantages of our products or product candidates as compared to alternative treatments, including their respective safety, tolerability and efficacy profiles, the potential convenience and ease of administration, access or cost effectiveness;
the effectiveness of our sales, marketing, manufacturing and distribution strategies and operations;
the competitive landscape for our products, including the timing of new competing products entering the market and the level and speed at which these products achieve market acceptance;
the consistency of any new data we collect and analyses we conduct with prior results, whether they support a favorable safety, efficacy and effectiveness profile of XPOVIO and any potential impact on our U.S. Food and Drug Administration (“FDA”) approvals and/or FDA package insert for XPOVIO and comparable foreign regulatory approvals and package inserts;
our ability to comply with the FDA's and comparable foreign regulatory authorities' post-marketing requirements and commitments, including through successfully conducting, on a timely basis, additional studies that confirm clinical efficacy, effectiveness and safety of XPOVIO and acceptance of the same by the FDA, such as requirements in connection with the FDA’s June 2020 approval of XPOVIO based on the results of the SADAL study to treat patients with DLBCL, which was approved under the FDA’s Accelerated Approval Program;
acceptance of current and future indications of XPOVIO and, if approved, our product candidates, by patients, the medical community and third-party payors;
obtaining and maintaining coverage, adequate pricing and reimbursement by third-party payors, including government payors, for XPOVIO and our product candidates, if approved;

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the willingness of patients to pay out-of-pocket in the absence of third-party coverage or as co-pay amounts under third-party coverage;
our ability to enforce intellectual property rights in and to our products to prohibit a third-party from marketing a competing product and our ability to avoid third-party patent interference or intellectual property infringement claims;
current and future restrictions or limitations on our approved or future indications and patient populations or other adverse regulatory actions;
the performance of our manufacturers, license partners, distributors, providers and other business partners, over which we have limited control;
any significant misestimations of the size of the market and market potential for any of our products or product candidates;
establishing and maintaining commercial manufacturing capabilities or making arrangements with third-party manufacturers;
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies, based, in part, on their perception of our clinical trial data and/or the actual or perceived safety, tolerability and effectiveness profile;
maintaining an acceptable safety and tolerability profile of our approved products, including the prevalence and severity of any side effects;
the ability to offer our products for sale at competitive prices;
adverse publicity about our products or favorable publicity about competitive products;
our ability to maintain compliance with existing and new health care laws and regulations, including government pricing, price reporting and other disclosure requirements related to such laws and regulations and the potential impact of such requirements on physician prescribing practices and payor coverage; and
the impact of the novel coronavirus disease (“COVID-19”) pandemic on the above factors, including the limitation of our sales professionals to meet in person with healthcare professionals as the result of travel restrictions or limitations on access for non-patients.

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. For example, BLENREP (belantamab mafodotin), ABECMA® (idecabtagene vicleucel) and ciltacabtagene autoleucel (cilta-cel) were approved for the treatment of multiple myeloma by the FDA in 2020, 2021, and 2022, respectively. In addition, several new mechanism of actions are in clinical development and may be introduced into the multiple myeloma market, such as teclistamab from Johnson & Johnson/Janssen. The approval of these anti-cancer agents, or any others which may receive regulatory approval, may have a significant impact on the therapeutic landscape and our product revenues. See Item 1 under the heading Business—Competition in this Annual Report on Form 10-K for more information on competition.

We are initially focused on developing and commercializing our current 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.

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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. If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we, or our collaborators, may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of 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, including eltanexor, or any new product candidates we may develop or acquire. Clinical testing is expensive, time consuming, difficult to design and implement, inherently uncertain as to outcome and can fail at any stage of testing. Furthermore, the failure of any product candidates to demonstrate safety and efficacy in any clinical trial could negatively impact the perception of selinexor, eltanexor or our product candidates and/or cause the FDA or other regulatory authorities to require additional testing before any of our product candidates are approved.

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our or our collaborators’ ability to receive marketing approval of our product candidates, including, but not limited to, the following:

delays or failure to reach agreement with regulatory authorities on a trial design or the receipt of feedback requiring us to modify the design of our clinical trials, perform additional or unanticipated clinical trials to obtain approval or alter our regulatory strategy, as is the case in connection with the recent feedback we received from the FDA on our SIENDO Study;
clinical trials of our product candidates may produce negative or inconclusive results or other patient safety concerns, including undesirable side effects or other unexpected characteristics, and we may decide, or regulatory authorities may require us, to conduct additional clinical trials, suspend ongoing clinical trials or abandon drug development programs, including as a result of a finding that the participants are being exposed to unacceptable health risks;
enrollment in our clinical trials may be slower than we anticipate, including as a result of competition with other ongoing clinical trials for the same indications as our product candidates;
regulators may revise the requirements for approving our product candidates, even after providing a positive opinion on or otherwise reviewing and providing comments to a clinical trial protocol, or such requirements may not be as we anticipate;
delays or failure in obtaining the necessary authorization from regulatory authorities or institutional review boards to permit us or our investigators to commence a clinical trial, conduct a clinical trial at a prospective trial site, or the suspension or termination of a clinical trial once commenced;
delays or failure to reach agreement on acceptable terms with prospective clinical trial sites or contract research organizations (“CROs”);
the number of patients required for clinical trials of our product candidates may be larger than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;

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our third-party contractors, including manufacturers or CROs, may fail to comply with regulatory requirements, perform effectively, or meet their contractual obligations to us in a timely manner, or at all;
we or our investigators might be found to be non-compliant with regulatory requirements;
the cost of clinical trials of our product candidates may be greater than we anticipate;
the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate;
any partners or collaborators that help us conduct clinical trials may face any of the above issues, and may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us; and
negative impacts resulting from the ongoing COVID-19 pandemic, including impacts to healthcare systems and our trial sites’ ability to conduct trials.

The COVID-19 pandemic has had and may continue to have an impact on our clinical trials. For more information, please see the risk factor entitled, “The COVID-19 pandemic has adversely disrupted, and is expected to continue to adversely disrupt, our operations, including our clinical trial activities and commercial operations, which could have an adverse effect on our business and financial results. At this time, however, we cannot fully forecast the scope of the impact that the COVID-19 pandemic may continue to have on our ability to, among other things, initiate and oversee trial sites, enroll and assess patients, supply study drug and report trial results. In addition, we have and may continue to experience delays in the regulatory process as a result of the COVID-19 pandemic, which may impact our approval timelines. For example, inspections conducted by the European Medicines Agency (“EMA”) in connection with regulatory reviews have currently been subject to scheduling delays due to certain COVID-19 related restrictions and impacts.

Further, in response to the COVID-19 pandemic, the FDA issued guidance on March 18, 2020, and updated it on July 2, 2020, January 27, 2021 and August 30, 2021, to address the conduct of clinical trials during the pandemic. The guidance sets out a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include in the clinical study report (or as a separate document) contingency measures implemented to manage the study, and any disruption of the study as a result of COVID-19; a list of all study participants affected by COVID-19-related study disruptions by a unique subject identifier and by investigational site, and a description of how the individual’s participation was altered; and analyses and corresponding discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product and/or study, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported for the study. In its most recent update to this guidance, the FDA addresses questions received during the past year from clinical practitioners who are adapting their operations in a pandemic environment. These questions focused on, among other things, when to suspend, continue or initiate a trial and how to submit changes to protocols for investigational new drug applications and handle remote site monitoring visits.

If we, or our collaborators, are required to conduct additional clinical trials or other testing of our product candidates 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:

be delayed in obtaining, or not obtain at all, marketing approval for the indication or product candidate;
obtain marketing approval in some countries and not in others;
obtain approval for indications or patient populations that are not as broad as intended or desired;
obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings;
be subject to additional post-marketing testing requirements;
not receive royalty or milestone revenue under our collaboration agreements for several years, or at all; or
have the product removed from the market after obtaining marketing approval.

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, particularly as a result of the COVID-19 pandemic. 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

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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 or future products or product candidates 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 currently have four product candidates in clinical development for the treatment of human diseases: selinexor, eltanexor, verdinexor and KPT-9274. Their risk of failure is high. If our current or future indications of XPOVIO or any of our product candidates 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 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 XPOVIO were 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 were Grade 3 or Grade 4, meaning they were more than mild or moderate in severity, included 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.

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 and 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:

regulatory authorities may withdraw the approval of such drug;
regulatory authorities may require additional warnings on the label or impose distribution or use restrictions;
patients and/or healthcare providers may elect to utilize other treatment options that have or are perceived to have more tolerable side effects;
regulatory authorities may require one or more post-marketing studies;
we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;
we could be sued and held liable for harm caused to patients; and
our reputation may suffer.

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

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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.

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.

The COVID-19 pandemic has adversely disrupted, and is expected to continue to adversely disrupt, our operations, including our clinical trial activities and commercial operations, which could have an adverse effect on our business and financial results.

As a result of the COVID-19 pandemic that has affected many segments of the global economy, we have experienced, and we expect to continue to experience, disruptions that could adversely impact our business, clinical trial activities and commercial operations, including:

negative impact to revenue for XPOVIO, which may continue as the COVID-19 pandemic persists, including as a result of decreased new patient starts due to the decreased ability of our sales force and our patients to meet with healthcare professionals in person;
delays or difficulties in enrolling patients in our clinical trials;
delays or difficulties in initiating new clinical studies, including clinical site initiation and oversight as well as difficulties in recruiting clinical site investigators and clinical site staff;
reduction or diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by government officials or entities, employers and others or interruption of clinical trial patient visits and study procedures (particularly any procedures that may be deemed non-essential), which may impact the integrity of clinical trial data and clinical study endpoints;
interruption or delays in the operations of the FDA and comparable foreign regulatory agencies, including the EMA, which has and may impact regulatory review and approval timelines, such as the EMA review of our Marketing Authorization Application (“MAA”) for selinexor in multiple myeloma based on the results of the BOSTON study or any future MAA;
negative impacts on any or all aspects of our operations due to business disruptions related to COVID-19 at our third-party vendors who we rely upon in the conduct of our business. including supply chain disruptions; and
limitations on employee resources that would otherwise be focused on the conduct of our business, including because of sickness of employees or their families, the desire of employees to avoid contact with large groups of people, and an increased reliance on working from home.

The full extent of the impact of the disruptions to our business, including commercial sales and clinical trials, as a result of the pandemic will depend on the availability, administration rates and effectiveness of vaccines and their effectiveness against the Omicron variant or any other variants as new strains of the virus evolve, and therapeutics and future developments, all of which are highly uncertain and cannot be predicted with confidence, such as the duration and severity of the pandemic, and the effectiveness of actions taken in the U.S. and other countries to contain and treat the disease. In addition, in October 2021, we began to require that all of our employees be fully vaccinated, subject to limited medical and religious exemptions. We cannot currently predict the impact on our operations of the vaccine mandate on our business or on third parties with whom we conduct business. Our business may be negatively impacted in the event that large numbers of employees or key employees do not comply with the mandate and we may experience workforce attrition or difficulties securing future employees as a result of our vaccine mandate policy. Due to the ongoing uncertainty regarding the severity and duration of the COVID-19 pandemic, including the emergence of new variants of COVID-19, such as the Omicron variant, we cannot predict whether our response to date or the actions we may take in the future will be effective in mitigating the effects of the COVID-19 pandemic on our business, results of operations or financial condition. Accordingly, we are unable at this time to predict the future impact of the COVID-19 pandemic on our operations, liquidity, and financial results.

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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.

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. For example, certain data from our Phase 1 and Phase 2 clinical trials of selinexor are based on unaudited data provided by our clinical trial investigators. Finalization and cleaning of this data may change the conclusions drawn from this unaudited data provided by our clinical trial investigators indicating less promising results than we currently anticipate. 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, 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 Phase 3 SIENDO study. 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 that 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 our conclusions may differ from those of the FDA or other regulatory authorities. Consequently, the preliminary, interim or top-line data results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated or based on differing views from regulatory agencies, such as in the SIENDO Study. 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.

We expect that in any later phase clinical trial where patients are randomized to receive either selinexor on the one hand, or standard of care, supportive care or placebo on the other hand, the primary endpoint will be either overall response rate or progression-free survival, meaning the length of time on treatment until objective tumor progression, or overall survival, while the primary endpoint in any later phase clinical trial that is not similarly randomized may be different. In some instances, the FDA and other regulatory bodies have accepted overall response rate as a surrogate for a clinical benefit and have granted regulatory approvals based on this or other surrogate endpoints, such as in our SADAL study and our STORM study. These clinical trials were not randomized against control arms and the primary endpoints of these trials were overall response rate. If selinexor does not demonstrate sufficient overall response rates for any other indication for which a clinical trial has overall response rate as a primary endpoint, or if the FDA or foreign regulatory authorities do not deem overall response rate a sufficient endpoint, or deem a positive overall response rate to be insufficient, selinexor will likely not be approved for that indication based on the applicable study. Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.

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 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.

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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:

the research methodology used may not be successful in identifying potential product candidates;
potential product candidates may, on further study, be shown to have harmful side effects or other characteristics that indicate that they are unlikely to be drugs that will receive marketing approval and/or achieve market acceptance; or
potential product candidates may not be effective in treating their targeted diseases.

We are currently advancing multiple clinical development studies of selinexor, eltanexor and other product candidates, which may create a strain on our limited human and financial resources. As a result, we may not be able to provide sufficient resources to any single product candidate to permit the successful development and commercialization of such product candidate, which could result in material harm to our business. Further, because we have limited financial and managerial resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any additional commercially-viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

If we are unable to maintain or expand our sales, marketing and distribution capabilities, we may not be successful in commercializing XPOVIO or any of our products or product candidates, if approved, that we may acquire or develop.

We have built a commercial infrastructure in the U.S. for XPOVIO, our first commercial product, in hematological malignancies and our company did not previously have any prior experience in the sales, marketing or distribution of pharmaceutical drugs. If XPOVIO or any of our product candidates is approved for additional indications beyond hematological malignancies, such as solid tumors, we may need to evolve our sales, marketing and distribution capabilities and we may not be able to do so successfully or on a timely basis. In the future, we may choose to expand our sales, marketing and distribution infrastructure to market or co-promote one or more of our product candidates, if and when they are approved, or enter into additional collaborations with respect to the sale, marketing and distribution of our product candidates. We are working with existing and potential partners to establish the commercial infrastructure to support a potential launch of selinexor outside of the U.S. For example, in December 2021, we entered into a license agreement with the Menarini Group (“Menarini”) to, among other things, develop and commercialize NEXPOVIO® (selinexor) for all human oncology indications in Europe (including the United Kingdom (“UK”)), Latin America and other key countries. For additional risks associated with commercializing our products outside of the U.S., please see the risk factor entitled “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” below.

There are risks involved with establishing and maintaining our own sales, marketing and distribution capabilities. For example, recruiting and training a sales force is expensive and time-consuming and could delay any commercial launch of a product candidate. Further, we may underestimate the size of the sales 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:

our inability to recruit, train and retain adequate numbers of effective sales, market access, market analytics, operations and marketing personnel;

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the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe current or future products;
the lack of complementary drugs, which may put us at a competitive disadvantage relative to companies with more extensive drug lines;
unforeseen costs and expenses associated with creating an independent sales, marketing and distribution organization;
our inability to obtain sufficient coverage and reimbursement from third-party payors and governmental agencies;
our ability to supply sufficient inventory of our products for commercial sale; and
existing or new competitors taking share from XPOVIO or any other future product or preventing XPOVIO or any other future product from gaining share in its approved indications.

Even if we, or our collaborators, are able to effectively commercialize XPOVIO or any approved product candidate 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 or any of our product candidates 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 by third-party payors. 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.

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

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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:

decreased demand for XPOVIO and any other products that we may develop or acquire;
injury to our reputation and significant negative media attention;
withdrawal of clinical trial participants;
initiation of investigations by regulators;
product recalls, withdrawals or labeling, marketing or promotional restrictions;
significant costs to defend the related litigation;