Full Press Release Details
Karyopharm Announces Significant Refinancing Transactions and Amended Royalty Agreement Extending Vast
Majority of Its Debt Maturities into 2028 and 2029
$148.0 Million (86%) of Existing Convertible Notes due in 2025 to be
Exchanged for $111.0 Million of New Convertible Notes due in 2029 and Warrants
Issues New $100.0 Million Senior
Secured Term Loan due in 2028
Repays Principal Portion and Amends Royalty Agreement with HealthCare Royalty
NEWTON, Mass. May 8, 2024 Karyopharm Therapeutics Inc. (Nasdaq: KPTI), a commercial-stage pharmaceutical company pioneering novel
cancer therapies, announced today that it has entered into a series of financing transactions that will extend the Company s debt maturities into 2028 and 2029, well beyond the Company s planned Phase 3 data readouts in 2025.
We are extremely pleased to have accomplished several important objectives for Karyopharm and our shareholders with this refinancing. We successfully
strengthened our balance sheet by extending the maturity of the vast majority of our debt obligations well beyond the planned readouts and potential approvals of our three ongoing Phase 3 programs, said Richard Paulson, President and Chief
Executive Officer of Karyopharm. With the demonstrated strong commitment from HealthCare Royalty and our top convertible note holders, we have enhanced our ability to unlock the potential of selinexor.
Convertible Notes Exchange
As part of these refinancing
transactions, on May 8, 2024, the Company entered into privately negotiated agreements with certain funds managed by each of Braidwell LP, Highbridge Capital Management, LLC, Davidson Kempner Capital Management LP and Context Capital
Management, the top four holders of the Company s outstanding 3.0% Convertible Notes due 2025 (the 2025 Convertible Notes) to exchange approximately $148.0 million aggregate principal amount out of the $172.5 million aggregate
principal amount of the 2025 Convertible Notes then outstanding for approximately $111.0 million aggregate principal amount of the Company s newly issued 6.0% Convertible Notes due 2029 (the 2029 Convertible Notes), plus warrants to
purchase up to approximately 46.0 million shares of the Company s common stock, at an exercise price of $1.10 per share. Exchanging holders will receive 2029 Convertible Notes having a principal amount equal to 75% of the principal amount
of 2025 Convertible Notes exchanged by them (i.e., $750 in principal amount of 2029 Convertible Notes for each $1,000 in principal amount of 2025 Convertible Notes surrendered in exchange). The 2029 Convertible Notes will be secured on a second-lien
basis by the same collateral that secures the Secured Term Loan.
The exchange transactions are anticipated to close on or around May 13, 2024,
subject to customary closing conditions.
In addition, certain entities managed by HealthCare Royalty Management, LLC (HCRx) will purchase
$5.0 million of the 2029 Convertible Notes in satisfaction of $5.0 million of the Company s existing obligations to HCRx. The 2029 Convertible Notes will be convertible into shares of the Company s common stock at the option of
holders of the 2029 Convertible Notes at an initial conversion rate of 444.4444 shares of the Company s common stock per $1,000 principal amount of the 2029 Convertible Notes (which is equivalent to an initial conversion price of $2.25 per
share, a premium of approximately 105% above the closing price of the Company s common stock on May 7, 2024).
New $100.0 Million Senior Secured Term Loan
On May 8, 2024 (the Term Loan Closing Date), the Company also entered into a new $100.0 million first lien senior secured term loan
facility (the Secured Term Loan). The lenders under the Secured Term Loan include certain holders of the 2025 Convertible Notes and HCRx, with existing holders of the 2025 Convertible Notes funding $85.0 million and HCRx funding
$15.0 million through satisfaction of approximately $15.0 million of the Company s existing obligations to HCRx. The Secured Term Loan matures in May 2028 and accrues interest at a rate of Secured Overnight Financing
Rate (SOFR) plus 9.25%. Amortization payments will commence 24 months after closing.
Karyopharm intends to use $49.5 million of the proceeds from
the Secured Term Loan to repay royalty payment obligations owed to HCRx under its existing Revenue Interest Financing Agreement (the Financing Agreement), as described below, which, together with the satisfaction of HCRx obligations through the
delivery of $5.0 million in 2029 Convertible Notes and $15.0 million of the Secured Term Loan to HCRx, will reduce the maximum amount owed to HCRx thereunder to $128.3 million. The remainder of the proceeds of
approximately $30.0 million from the Secured Term Loan are intended to be used to pay transaction expenses and for general corporate purposes, including to support the Company s ongoing and planned clinical trial activities.
Amended HealthCare Royalty Agreement
Term Loan Closing Date, the Company entered into an amendment to the Financing Agreement with HCRx pursuant to which the Company (i) made a $49.5 million cash payment to HCRx; (ii) agreed to deliver a
$15.0 million Secured Term Loan note to HCRx in a cashless exchange of existing obligations under the Financing Agreement with HCRx; and (iii) agreed to deliver $5.0 million of 2029 Convertible Notes to HCRx.
Further, the royalty rate on Karyopharm s worldwide net revenue of selinexor and any other future products was reduced from a tiered schedule resulting in a rate of 12.5% just prior to the Term Loan Closing Date to a flat 7.0%. The Financing
Agreement with HCRx will be secured on a second-lien basis.
The transactions described in this press release are further described in a Current Report on
Form 8-K to be filed today with the U.S. Securities and Exchange Commission.
J. Wood Capital Advisors LLC acted as financial advisor to Karyopharm and
Wilmer Cutler Pickering Hale and Dorr LLP acted as legal counsel to Karyopharm in connection with these transactions.
This press release does not
constitute an offer to sell or the solicitation of an offer to buy the 2029 Convertible Notes or any other securities, nor shall there be any offer, solicitation or sale of the 2029 Convertible Notes or any other securities (including the shares of
Karyopharm s common stock issuable upon conversion of the 2025 Convertible Notes, if any) in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful.
Conference Call Information
Karyopharm will host a conference call on May 8, 2024, at 8:00 a.m. Eastern Time, to discuss the first quarter 2024 financial results, the transactions
described herein and other company updates. To access the conference call, please dial (800) 836-8184 (local) or (646) 357-8785 (international) at least 10 minutes prior to the start time and ask to be joined into the Karyopharm Therapeutics call. A
live audio webcast of the call, along with accompanying slides, will be available under Events & Presentations in the Investor section of the Company s website,
http://investors.karyopharm.com/events-presentations. An archived webcast will be available on the Company s website approximately two hours after the event.
About Karyopharm Therapeutics
Karyopharm Therapeutics
Inc. (Nasdaq: KPTI) is a commercial-stage pharmaceutical company whose dedication to pioneering novel cancer therapies is fueled by a belief in the extraordinary strength and courage of patients with cancer. Since its founding, Karyopharm has been
an industry leader in oral compounds that address nuclear export dysregulation, a fundamental mechanism of oncogenesis. Karyopharm s lead compound and
first-in-class, oral exportin 1 (XPO1) inhibitor, XPOVIO (selinexor), is approved in the U.S. and marketed by
the Company in three oncology indications. It has also received regulatory approvals in various indications in a growing number of ex-U.S. territories and countries, including Europe and the United Kingdom (as
NEXPOVIO ) and China. Karyopharm has a focused pipeline targeting indications in multiple high unmet need cancers, including in multiple myeloma, endometrial cancer, myelofibrosis, and diffuse
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those regarding the anticipated benefits of and activities under the refinancing transactions,
expectations for our use of proceeds from the Secured Term Loan and our expected cash runway; the expected closing date for the exchange transactions and the Company s ability to complete the exchange transactions; expectations with respect to
commercialization efforts; the ability of selinexor to treat patients with multiple myeloma, endometrial cancer, myelofibrosis, diffuse large B-cell lymphoma, and other diseases; and expectations with
respect to the clinical development plans and potential regulatory submissions of selinexor. Such statements are subject to numerous important factors, risks and uncertainties, many of which are beyond Karyopharm s control, that may cause
actual events or results to differ materially from Karyopharm s current expectations. For example, there can be no guarantee that Karyopharm will successfully commercialize XPOVIO or that any of Karyopharm s drug candidates, including
selinexor and eltanexor, will successfully complete necessary clinical development phases or that development of any of Karyopharm s drug candidates will continue. Further, there can be no guarantee that any positive developments in the
development or commercialization of Karyopharm s drug candidate portfolio will result in stock price appreciation. Management s expectations and, therefore, any forward-looking statements in this press release could also be affected by
risks and uncertainties relating to a number of other factors, including the following: the adoption of XPOVIO in the commercial marketplace, the timing and costs involved in commercializing XPOVIO or any of Karyopharm s drug candidates that
receive regulatory approval; the ability to obtain and retain regulatory approval of XPOVIO or any of Karyopharm s drug candidates that receive regulatory approval;
Karyopharm s results of clinical trials and preclinical trials, including subsequent analysis of existing data and new data received from ongoing and future trials; the content and timing of
decisions made by the U.S. Food and Drug Administration and other regulatory authorities, investigational review boards at clinical trial sites and publication review bodies, including with respect to the need for additional clinical trials; the
ability of Karyopharm or its third party collaborators or successors in interest to fully perform their respective obligations under the applicable agreement and the potential future financial implications of such agreement; Karyopharm s
ability to enroll patients in its clinical trials; unplanned cash requirements and expenditures; development or regulatory approval of drug candidates by Karyopharm s competitors for products or product candidates in which Karyopharm is
currently commercializing or developing; the direct or indirect impact of the COVID-19 pandemic or any future pandemic on Karyopharm s business, results of operations and financial condition; and
Karyopharm s ability to obtain, maintain and enforce patent and other intellectual property protection for any of its products or product candidates. These and other risks are described under the caption Risk Factors in
Karyopharm s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (SEC) on February 29, 2024, and in other filings that
Karyopharm may make with the SEC in the future. Any forward-looking statements contained in this press release speak only as of the date hereof, and, except as required by law, Karyopharm expressly disclaims any obligation to update any
forward-looking statements, whether as a result of new information, future events or otherwise.
Senior Vice President, Investor Relations
Head of Corporate Communications