What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-08-04 compared with 2020-05-05 · 195 added, 180 removed, 113 unchanged (77% of the section changed)

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

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this quarterly report and the audited financial information and the notes thereto included in our Annual Report on Form 10-K

for the year ended December 31, 2019, or Annual Report.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q,

including the following discussion, contains forward-looking statements that involve substantial risks and uncertainties.

All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q,

including statements regarding possible achievement of discovery and development milestones, including regulatory submissions and approvals, our future discovery and development efforts, our commercialization efforts, our collaborations and partnering agreements with third parties, our strategy, our future operations, financial position and revenues, projected costs, prospects, plans and objectives of management, are forward looking statements.

This Quarterly Report on Form 10-Q, including the following discussion, contains forward-looking statements that involve substantial risks and uncertainties.

All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding possible achievement of discovery and development milestones, including regulatory submissions and approvals, our future discovery and development efforts, our commercialization efforts, our collaborations and partnering agreements with third parties, our strategy, our future operations, financial position and revenues, projected costs, prospects, plans and objectives of management, are forward looking statements.

The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are not guarantees of future performance and our actual results could differ materially from the plans, intentions, expectations or results discussed in the forward-looking statements.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, our ability to successfully commercialize XPOVIO ®

(selinexor) tablets;

the impact of the ongoing COVID-19

pandemic on our business, including by reducing sales of XPOVIO, interrupting or delaying research and development efforts, impacting the ability to procure sufficient supply for the development and commercialization of selinexor or other product candidates, delaying ongoing or planned clinical trials, impeding the execution of business plans, planned regulatory milestones and timelines, or inconveniencing patients;

Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, our ability to successfully commercialize XPOVIO ® (selinexor) tablets;

the impact of the ongoing COVID-19 pandemic on our business, including decreased sales of XPOVIO, interrupting or delaying research and development efforts, impacting the ability to procure sufficient supply for the development and commercialization of selinexor or other product candidates, delaying ongoing or planned clinical trials, impeding the execution of business plans, planned regulatory milestones and timelines, or inconveniencing patients;

the adoption of XPOVIO in the commercial marketplace;

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the effect of current and future legislation and regulation and regulatory actions;

as well as other risks described in this Quarterly Report on Form 10-Q,

our Annual Report, as filed with the Securities and Exchange Commission, or SEC, on February 26, 2020, and other filings with the SEC.

as well as other risks described in this Quarterly Report on Form 10-Q, our Annual Report, as filed with the Securities and Exchange Commission, or SEC, on February 26, 2020, and other filings with the SEC.

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.

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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.

We are an innovation-driven pharmaceutical company focused on the discovery, development and commercialization of novel, first-in-class

drugs directed against nuclear transport and related targets for the treatment of cancer and other major diseases.

We are a commercial-stage pharmaceutical company pioneering novel cancer therapies and dedicated to the discovery, development and commercialization of novel, first-in-class drugs directed against nuclear transport and related targets for the treatment of cancer and other major 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 S

nhibitor of N

) compounds that inhibit the nuclear export protein exportin 1, or XPO1.

We have discovered and are developing and commercializing novel, small molecule S elective I nhibitor of N uclear E xport ( SINE ) compounds that inhibit the nuclear export protein exportin 1, or XPO1.

These SINE compounds represent a new class of drug candidates with a novel mechanism of action that have the potential to treat a variety of high unmet medical need diseases.

Our SINE compounds were the first oral XPO1 inhibitors in clinical development.

Our lead asset, XPOVIO, was the first SINE compound to receive marketing approval by the FDA in July 2019 and is currently indicated for use in 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, or PIs, at least two immunomodulatory agents, or IMiDs, and an anti-CD38 monoclonal antibody.

Our SINE compounds were the first oral XPO1 inhibitors in clinical development and to receive marketing approval in the U.S.

In July 2019, our lead asset, XPOVIO, received marketing approval by the FDA in combination with dexamethasone to treat 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, or PIs, at least two immunomodulatory agents, or IMiDs, and an anti-CD38 monoclonal antibody.

We refer to myeloma that is refractory to these five agents as penta-refractory myeloma.

This indication was approved under accelerated approval based on response rate.

This indication was approved under the FDA’s Accelerated Approval Program based on response rate.

Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

The randomized Phase 3 BOSTON ( Bo

elinexor and Dexame t

e) study evaluating selinexor in combination with Velcade ®

(bortezomib) and low-dose

dexamethasone in patients with myeloma treatment with between one and three prior therapies is expected to serve as the confirmatory trial based on positive topline data announced in March 2020.

Our focus is on marketing XPOVIO in its currently approved indication as well as seeking the regulatory approval and potential commercialization of selinexor as an oral agent in additional cancer indications with significant unmet medical needs.

We plan to conduct additional clinical trials and seek additional approvals for the use of selinexor in combination with other oncology therapies to expand the patient populations that are eligible for selinexor.

The FDA has agreed that the randomized Phase 3 BOSTON ( Bo rtezomib, S elinexor and Dexame t has on e) study evaluating selinexor in combination with Velcade ® (bortezomib) and low-dose dexamethasone in patients with multiple myeloma after at least one prior line of therapy could serve as the confirmatory trial based on the positive topline data announced in March 2020.

In July 2020, the FDA accepted our supplemental new drug application, or sNDA, for XPOVIO, based on the BOSTON study, to treat patients with multiple myeloma after at least one prior line of therapy.

The FDA has assigned an action date of March 19, 2021 under the Prescription Drug User-Fee Act.

In June 2020, XPOVIO was approved by the FDA for a second indication to treat adult patients with relapsed or refractory diffuse large B-cell lymphoma , or DLBCL, not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy .

We began commercialization of this indication in June 2020 .

This indication was approved under the FDA’s A ccelerated A pproval Program based on response rate and c ontinued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

T he FDA has agreed that the XPORT-DLBCL-030 study could serve as the confirmatory trial for evaluating selinexor in DLBCL.

This trial will assess the effect of selinexor or placebo added to a standard backbone immunochemotherapy of rituximab-gemcitabine-dexamethasone-platinum , or R-GDP , in patients with one to three prior treatments for DLBCL.

Selinexor has received o rphan d rug designation from the FDA for the DLBCL indication .

We expect that the XPORT-DLBCL-030 study will begin by the end of 2020.

We are continuing to evaluate the optimal regulatory and access strategy for lymphoma and plan to submit a Marketing Authorization Application, or MAA , to the European Medicines Agency, or EMA , for the DLBCL indication as a Type II variation following the potential approval of XPOVIO in multiple myeloma at the appropriate time in the future .

Our focus is on marketing XPOVIO in its currently approved indications as well as seeking the regulatory approval and potential commercialization of selinexor as an oral agent in additional cancer indications with significant unmet medical needs.

Thus, we are currently advancing the clinical development of selinexor in multiple hematological malignancies and solid tumor indications.

Studies that support submitted applications for regulatory approval include STORM ( S

reatment of R

yeloma) and SADAL ( S

Studies that support our approved indications include STORM ( S elinexor T reatment of R efractory M yeloma) and SADAL ( S elinexor A gainst D iffuse A ggressive L ymphoma).

On March 2, 2020, we announced positive topline data from the pivotal, randomized Phase 3 BOSTON study in multiple myeloma.

Ongoing clinical trials evaluating selinexor include the Phase 1b/2 STOMP ( S

elinexor and Backbone T

ultiple Myeloma P

atients) study in combination with standard therapies in multiple myeloma, the Phase 2/3 SEAL ( Se

iposarcoma) study in liposarcoma, and the Phase 3 SIENDO ( S

elinexor/Placebo After Combination Chemotherapy I

n Patients with Advanced or Recurrent ENDO

metrial Cancer) study evaluating selinexor as maintenance therapy in endometrial cancer.

During 2019, final data from the Phase 2b STORM study were published in the New England Journal of Medicine

August 2019).

In addition, we reported updated, positive data from the SADAL study as well as updated interim data for the STOMP study at various medical conferences.

As a result of the positive results from STORM, in addition to the FDA approval of our first New Drug Application, or NDA, we also filed a Marketing Authorization Application, or MAA, with the European Medicines Agency, or EMA, in January 2019 and currently expect to receive a decision on our application by late 2020.

Based on the positive results of the SADAL study, we submitted a Supplemental New Drug Application, or sNDA, to the FDA in December 2019, with a request for accelerated approval for selinexor as a new treatment for adult patients with relapsed and/or refractory diffuse large B-cell

lymphoma, or DLBCL, not otherwise specified, who have received at least two prior therapies.

The FDA accepted the application for filing on February 18, 2020 and granted Priority Review with a target decision date of June 23, 2020 under the Prescription Drug User Fee Act, or PDUFA.

Selinexor has received both Orphan Drug and Fast Track designations from the FDA for this same indication.

Provided that marketing approval is granted by the FDA on or about the PDUFA goal date, we expect to be ready to commercialize selinexor in the U.S.

as a treatment for patients with relapsed and/or refractory DLBCL upon approval.

Although we currently believe that the timing for this review remains on track, due to the COVID-19

pandemic, we cannot be certain that a decision by the FDA will be reached by the PDUFA goal date.

We also plan to submit an MAA to the EMA in 2021 with a request for conditional approval of selinexor in DLBCL.

Ongoing clinical trials evaluating selinexor include the Phase 1b/2 STOMP ( S elinexor and Backbone T reatments o f M ultiple Myeloma P atients) study in combination with standard therapies in multiple myeloma, the Phase 2/3 SEAL ( Se linexor in A dvanced L iposarcoma) study evaluating single agent selinexor versus placebo in patients with previously treated, advanced unresectable dedifferentiated liposarcoma, and the Phase 3 SIENDO ( S elinexor/Placebo After Combination Chemotherapy I n Patients with Advanced or Recurrent ENDO metrial Cancer) study evaluating selinexor as maintenance therapy in endometrial cancer.

We have recently completed enrollment in the Phase 3 portion of the SEAL study and currently anticipate topline data in the second half of 2020.

As a result of the positive results from STORM, in addition to the FDA approval of our first New Drug Application, or NDA, we also filed an MAA with the EMA in January 2019, as discussed in more detail below.

In April 2020, we initiated a global randomized Phase 2 clinical trial for low dose oral selinexor in hospitalized patients with severe COVID-19.

This study, known as XPORT-CoV-1001,

is expected to enroll approximately 230 patients at clinical sites in the U.S., Europe and Israel and will assess the activity and safety of 20mg of selinexor given orally three times a week for two weeks.

Patients tolerating therapy well and experiencing clinical benefit may continue treatment for an additional two weeks at the discretion of the treating physician.

The primary endpoint of the study is time to clinical improvement based on improvement in the Ordinal Scale, consistent with the COVID-19

trial recommendations by the World Health Organization and the FDA.

In addition to its role in cancer, XPO1 has also been shown to facilitate the transport of several viral proteins from the nucleus of the host cell to the cytoplasm, and it amplifies the activities of pro-inflammatory

transcription factors.

SINE compounds have shown potential to interfere with key host protein interactions with influenza, respiratory syncytial virus and other viruses, including SARS-CoV-2,

the virus that causes COVID-19.

On April 20, 2020, we announced that the first patient in our COVID-19

study has been dosed.

This study, known as XPORT-CoV-1001, was expected to enroll approximately 230 patients at clinical sites in the U.S., Europe and Israel to assess the activity and safety of 20mg of selinexor given orally three times a week for two weeks.

Patients tolerating therapy well and experiencing clinical benefit could continue treatment for an additional two weeks at the discretion of the treating physician.

The primary endpoint of the study was time to clinical improvement based on improvement in the Ordinal Scale, consistent with the COVID-19 trial recommendations by the World Health Organization and the FDA.

SINE compounds have shown potential to interfere with key host protein interactions with influenza, respiratory syncytial virus and other viruses, including SARS-CoV-2, the virus that causes COVID-19.

In May 2020, the protocol was amended to allow enrollment of patients with more severe disease.

Following a planned interim analysis (115 patients included in the efficacy analysis and 113 patients included in the safety analysis), the Data Safety Monitoring Board, or DSMB, for the study recommended that we discontinue the trial as it is unlikely to demonstrate a statistically significant efficacy benefit across the entire heterogenous patient population studied.

However, the DSMB concluded that the trial was likely to show a benefit in a subpopulation of patients <75 years old who have a COVID-GRAM non-high-risk score (a clinical risk score for disease severity), which represented approximately 75% of these 115 patients.

Preliminary results from unaudited site data indicate that in the specific subpopulation, a two-point improvement in Ordinal Score at Day 14 (the primary endpoint for the entire study) reached statistical significance, as did the two-point improvement in Ordinal Score by Day 28 and the rate of hospital discharge by Day 14 (all p≤0.05).

Fatalities were similar across the two arms in this subpopulation (4/49 on selinexor and 2/37 on placebo).

There was also a significant improvement in conversion to SARS-CoV2 PCR negative status on the selinexor arm as compared with the placebo arm across the entire population (p≤0.05).

In patients ≥75 years old or with a COVID-GRAM high risk score, there was no improvement in clinical outcomes;

fatalities were higher in the selinexor arm (6/15) than the placebo arm (1/12).

While the rate of fatalities in the study was imbalanced in the patients ≥75 years old or with a COVID-GRAM high risk score, after a detailed review, the DSMB considered that the fatalities on study were due to severe COVID-19 disease and/or underlying comorbidities without a clear contribution of selinexor.

After reviewing the safety and efficacy data that was shared with the DSMB, the FDA’s opinion was that the benefit-risk ratio was not favorable in the heterogenous patient population evaluated under the latest protocol for XPORT-CoV-1001, which included the patients with more severe disease, as described above.

We will continue to analyze the data to further characterize the specific subpopulation that will likely benefit from selinexor and will work with the FDA to identify a path forward for future clinical development.

We plan to seek potential partners and external funding to advance future clinical studies.

In June 2020, the first patient was dosed in a Phase 1/2 clinical study evaluating oral selinexor in combination with standard of care therapy in patients with newly diagnosed or recurrent glioblastoma, or GBM.

This global study is expected to enroll approximately 400 patients at clinical sites in the U.S., Europe, and Israel.

The randomized, multi-center, Phase 1/2 study is expected to be conducted in two phases:

a Phase 1 dose finding study followed by a Phase 2 randomized efficacy exploration study, designed to independently evaluate three different combination regimens in three treatment arms in patients with newly diagnosed GBM (Arms A and B) or with recurrent GBM (Arm C).

Arms A and B will investigate selinexor in combination with radiation therapy with or without the addition of temozolomide, while Arm C will evaluate the combination of selinexor and lomustine.

The primary endpoints in the study are progression-free survival in patients with newly diagnosed GBM and overall survival in patients with recurrent GBM.

In addition to selinexor, we are also advancing a pipeline of novel drug candidates including our other oral SINE compounds eltanexor and verdinexor, as well as our oral dual PAK4/NAMPT inhibitor, KPT-9274.

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Our clinical development program for eltanexor includes myelodysplastic syndrome, or MDS, colorectal cancer and metastatic castration-resistant prostate cancer.

Based on clinical results to date and resource prioritization, we plan to focus on the development of eltanexor in MDS in 2020.

We began clinical testing of KPT-9274

in patients with hematologic or solid tumors during 2016 and we plan to study its combination with an anti-PD1

monoclonal antibody in a phase 1 clinical study in mid-2020.

Based on clinical results to date and resource prioritization, we are continuing to focus on the development of eltanexor in MDS.

In August 2020, safety and efficacy results from a Phase 2 study of selinexor in patients with MDS or oligoblastic acute myeloid leukaemia refractory to hypomethylating agents were published in The Lancet Haematology.

Currently, no standard therapy for such patients exists.

In the 23 evaluable patients, the overall response rate was 26% (95% CI 10 - 48) in six patients with marrow complete remission, with an additional 12 patients (52%, 95% CI 31 - 73) achieving stable disease.

The most common grade 3 or 4 adverse events were thrombocytopenia (eight, or 32%, of 25 patients) and hyponatraemia (five, or 20%, of 25 patients).

There were no drug-related serious adverse events and no treatment-related deaths.

In addition, we began clinical testing of KPT-9274 in patients with hematologic or solid tumors during 2016 and in July 2020, dosed the first patient in a Phase 1/2 clinical study of KPT-9274 in combination with an anti-PD1 monoclonal antibody.

Finally, verdinexor is our lead compound that is being evaluated as a potential therapy for viral, rare disease and autoimmune indications in humans and by a collaborator as a potential therapy for cancers in companion animals.

In May 2020, we agreed with Antengene Corporation, or Antengene, to an expansion of their development and commercial rights to our compounds in parts of Asia, Australian and New Zealand by entering into an amendment to the May 2018 license agreement between us and Antengene.

In May 2020, we agreed with Antengene Therapeutics Limited, or Antengene, to an expansion of their development and commercial rights to our compounds in parts of Asia, Australia and New Zealand by entering into an amendment to the May 2018 license agreement between us and Antengene, or the Original Antengene Agreement, and as amended, the Amended Antengene Agreement.

We granted Antengene, our existing partner in China and other regions in Asia, the exclusive right to develop and commercialize selinexor and eltanexor in all human oncology indications in the following geographies comprising the Antengene Territory:

Australia, New Zealand, South Korea, Taiwan, Hong Kong and the ASEAN countries, which are

currently comprised of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The amended agreement also includes the development and commercialization of KPT-9274

in all human oncology indications and verdinexor in human non-oncology

indications in Australia and New Zealand.

Under the terms of the agreement, we will receive a one-time

upfront payment of $12.0 million from Antengene.

We are also eligible to receive additional payments if certain future prespecified regulatory and commercial milestones are achieved by Antengene.

In addition, we are also 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.

Certain countries in the expanded territory with Antengene became available due to the reacquisition of exclusive development and commercial rights from Ono Pharmaceutical Co., Ltd.

Australia, New Zealand, South Korea, Taiwan, Hong Kong and the Association of Southeast Asian Nations, or ASEAN countries, which are currently comprised of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The Amended Antengene Agreement also includes the development and commercialization of KPT-9274 in all human oncology indications and verdinexor in human non-oncology indications in Australia and New Zealand.

Under the terms of the Amended Antengene Agreement, we received a one-time upfront payment of $11.7 million from Antengene in June 2020.

We are also eligible to receive additional payments if certain future prespecified development, regulatory and commercialization milestones are achieved by Antengene.

Certain countries in the Antengene Territory became available due to the reacquisition of exclusive development and commercial rights from Ono Pharmaceutical Co., Ltd.

in April 2020.

We have chosen to retain the rights to selinexor and eltanexor in Japan.

As of March 31, 2020, we had an accumulated deficit of $926.3 million.

We had net losses of $52.9 million and $66.2 million for the three months ended March 31, 2020 and 2019, respectively.

As of March 31, 2020, we have generated $46.6 million in net sales from XPOVIO, which first became commercially available in the U.S.

As of June 30, 2020, we had an accumulated deficit of $972.7 million.

We had net losses of $99.4 million and $109.6 million for the six months ended June 30, 2020 and 2019, respectively.

As of June 30, 2020, we have generated $65.2 million to date in net product sales from XPOVIO, which first became commercially available in the U.S.

in July 2019.

Commercialization of XPOVIO in the United States

In July 2019, XPOVIO became commercially available to patients in the U.S.

The commercial launch of XPOVIO is being supported by approximately 70 Karyopharm sales representatives and nurse liaisons as well as KaryForward TM

, an extensive patient and healthcare provider support program.

XPOVIO became commercially available to patients in the U.S.

beginning in July 2019 and was approved for a second indication in June 2020.

The commercialization of XPOVIO is being supported by approximately 70 Karyopharm sales representatives and nurse liaisons as well as KaryForward TM , an extensive patient and healthcare provider support program.

Our commercial efforts are also being supplemented by patient support initiatives coordinated by our dedicated network of participating specialty pharmacy providers.

As of March 31, 2020, approximately 2,200 XPOVIO prescriptions have been

filled, driven by strong demand from both academic and community-based oncologists.

Net product sales for XPOVIO were $16.1 million for the three months ended March 31, 2020.

As of June 30, 2020, nearly 3,200 XPOVIO prescriptions have been filled since launch, driven by strong demand from both academic and community-based physicians.

Net product sales for XPOVIO were $34.7 million for the six months ended June 30, 2020.

XPOVIO sales have been driven by a combination of new patient starts and prescription refills.

In 2020, we expect to build upon XPOVIO’s early commercial success in the late-line relapsed refractory multiple myeloma market by educating physicians, healthcare providers and patients about XPOVIO’s clinical profile and unique mechanism of action.

Based on the positive results from the BOSTON trial, which we announced in early March 2020, our commercial team is preparing for XPOVIO’s potential expansion into the second line relapsed refractory multiple myeloma market, subject to the FDA’s review and approval of our expected sNDA submission based on the data from the BOSTON trial.

We expect to submit this sNDA by the end of May 2020.

Finally, pending FDA approval of XPOVIO to treat patients with DLBCL, we expect to sell XPOVIO in this indication to hematologists and oncologists in the U.S.

W e plan to continue to build upon XPOVIO’s early commercial success in the late-line relapsed or refractory multiple myeloma market by educating physicians, healthcare providers and patients about XPOVIO’s clinical profile and unique mechanism of action.

Based on the positive results from the BOSTON trial, which we announced in early March 2020, our commercial team is preparing for XPOVIO’s potential expansion into the second line relapsed or refractory multiple myeloma market, subject to the FDA’s review and approval of our sNDA based on the data from the BOSTON trial , which was accepted by the FDA in July 2020 .

Finally, following the FDA approval of XPOVIO to treat patients with DLBCL, in June 2020 we began to sell XPOVIO in this indication to hematologists and oncologists in the U.S.

with our existing field sales force.

Commercialization Outside of the United States

In January 2019, we submitted a MAA to the EMA requesting conditional approval for selinexor in combination with dexamethasone as a new treatment for patients with triple class refractory multiple myeloma, meaning patients who have received at least three prior therapies and whose disease is refractory to at least one PI, one IMiD, and one anti-CD38 monoclonal antibody.

This submission was based on the positive results from the Phase 2b STORM study.

In January 2019, we submitted an MAA to the EMA requesting conditional approval for selinexor in combination with dexamethasone as a treatment for patients with triple class refractory multiple myeloma, meaning patients who have received at least three prior therapies and whose disease is refractory to at least one PI, one IMiD, and one anti-CD38 monoclonal antibody.

This submission was based on the results of the Phase 2b STORM study.

We received feedback from EMA’s Committee for Medicinal Products for Human Use, or CHMP, including the integrated inspection report, based on site audits and a sponsor inspection.

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We are currently working with CHMP to address the outstanding questions;

however, due to reduced access to clinical trial sites as a result of the COVID-19

pandemic, we have not yet been able to complete certain re-monitoring

activities and, therefore, have requested, and the EMA has granted us, additional time to submit our response.

As a result, we currently expect to receive a decision on the application during late 2020.

however, due to reduced access to clinical trial sites as a result of the COVID-19 pandemic, we had not yet been able to complete certain re-monitoring activities and, therefore, requested, and the EMA has granted us, additional time to submit our response.

We expect to submit the requested re-monitoring data in the third quarter of 2020, and we expect to receive an opinion from CHMP with respect to our MAA before the end of 2020.

In addition, we expect to submit an MAA based on data from our BOSTON study before the end of 2020.

To commercialize selinexor following any regulatory approval outside of the U.S., we will work with existing and potential future partners to establish the appropriate commercial infrastructure outside of the U.S., or we may, in certain geographies, elect to establish the commercial infrastructure ourselves.

We maintain complete commercial rights to selinexor in all territories outside of the Antengene Territory and Israel, including the U.S., Canada, Europe, Japan, and Latin America.

Uncertainty Relating to the COVID-19

pandemic has and will continue to affect economies and businesses around the world.

We are closely monitoring the impact of COVID-19

on all aspects of our business, including how it will impact our employees, patients and business operations.

Uncertainty Relating to the COVID-19 Pandemic

The COVID-19 pandemic has and will continue to affect economies and businesses around the world.

We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact our employees, patients and business operations.

We have and may continue to experience disruptions in the future that could impact our results of operations and financial condition.

We are unable to predict the impact that COVID-19

will have on our operating results and financial condition due to numerous uncertainties.

These uncertainties include the geographic spread of the pandemic, the severity of the virus, the duration of the

outbreak, governmental, business or other actions, travel restrictions and social distancing, business closures or business disruptions, or changes to our operations, among others.

We will continue to monitor the COVID-19

situation closely and intend to follow health and safety guidelines as they evolve.

We are unable to predict the impact that the COVID-19 pandemic will have on our operating results and financial condition due to numerous uncertainties.

These uncertainties include the geographic spread of the pandemic, the severity of the virus, the duration of the outbreak, governmental, business or other actions, travel restrictions and social distancing, business closures or business disruptions, or changes to our operations, among others.

We will continue to monitor the COVID-19 situation closely and intend to follow health and safety guidelines as they evolve.

Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, as well as other unanticipated consequences remain unknown.

The situation surrounding the COVID-19

pandemic remains fluid and continues to rapidly involve, and we are actively managing our response and assessing potential impacts to our operating results and financial condition, as well as adverse developments in our business.

For further information regarding the impact of COVID-19

on us, see Item 1A - Risk Factors included in this Quarterly Report on Form 10-Q.

The situation surrounding the COVID-19 pandemic remains fluid and continues to rapidly evolve, and we are actively managing our response and assessing potential impacts to our operating results and financial condition, as well as adverse developments in our business.

For further information regarding the impact of the COVID-19 pandemic on us, see Item 1A - Risk Factors included in this Quarterly Report on Form 10-Q.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

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We refer to these policies as “critical” because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates - which also would have been reasonable - could have been used, which would have resulted in different financial results.

There were no changes to the critical accounting policies we identified in the Annual Report.

It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies disclosed in the Annual Report.

There were no changes to the critical accounting policies we identified in our Annual Report.

It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies disclosed in our Annual Report.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2020 and March 30, 2019

Three Months Ended

Comparison of the Three Months Ended June 30, 2020 and June 30, 2019

For the Three Months

Ended June 30,

(in thousands)

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Product revenue, net.

We recognized $16.1 million of product revenue, net in the three months ended March 31, 2020 from commercial sales of XPOVIO in the U.S.

following its FDA approval and commercial launch in July 2019.

We expect XPOVIO net product sales to be slightly higher in the second quarter of 2020 as compared to the first quarter of 2020.

We recognized $18.6 million of net product revenue in the three months ended June 30, 2020 from U.S.

commercial sales of XPOVIO.

XPOVIO was initially approved by the FDA in July 2019, and therefore we did not have any net product revenue in the three months ended June 30, 2019.

License and other revenue .

License and other revenue for the three months ended March 31, 2020 was $2.1 million compared to $0.2 million for the three months ended March 31, 2019.

During the three months ended March 31, 2020, we recognized $1.1 million pursuant to our license agreement with Antengene, $0.5 million pursuant to a license agreement with a distributor, and $0.5 million related to clinical supply provided to various partners, as well as grant revenue pursuant to a government grant arrangement.

We recognized revenue in the three months ended March 31, 2019 related to clinical supply provided to various partners as well as grant revenue pursuant to a government grant arrangement.

We expect license and other revenue to increase in the second quarter of 2020 due to the portion of the $12.0 million upfront milestone payment from Antengene that we expect to recognize under the terms of the amended license agreement with Antengene.

License and other revenue for the three months ended June 30, 2020 was $14.9 million compared to $9.5 million for the three months ended June 30, 2019.

During the three months ended June 30, 2020, we recognized $12.7 million pursuant to the Amended Antengene Agreement, and $2.2 million upon reacquisition of the exclusive development and commercial rights from Ono Pharmaceutical Co., Ltd., or Ono.

We recognized $9.4 million in revenue during the three months ended June 30, 2019 pursuant to the Original Antengene Agreement and $0.1 million related to clinical supply provided to various partners, as well as grant revenue pursuant to a government grant arrangement.

We expect license and other revenue to decrease in the third quarter of 2020 due to the non-recurring revenue recognized in the second quarter of 2020 pursuant to the terms of the Amended Antengene Agreement and the termination of the license agreement with Ono.

Cost of sales.

Cost of sales includes the cost of producing and distributing inventories that are related to XPOVIO product revenue in the U.S.

during the respective period (including salary-related expenses for employees involved with XPOVIO production and distribution) and third-party royalties payable on our net product revenue for XPOVIO.

We began capitalizing XPOVIO inventory costs during the third quarter of 2019 subsequent to FDA approval, as our expectation is that such costs will be recoverable through commercialization of XPOVIO.

Prior to the capitalization of XPOVIO inventory costs, such costs were recorded as research and

development expenses in the period incurred.

During the three months ended March 31, 2020, we recorded $0.8 million of cost of sales, including $0.7 million related to royalties.

The cost of sales during the three months ended March 31, 2020 only reflects a portion of the costs related to the manufacturing of XPOVIO and related materials, since, prior to FDA approval, these costs were expensed.

The manufacturing costs of XPOVIO on-hand

upon FDA approval were approximately $2.8 million.

At March 31, 2020, we have $2.7 million of this previously expensed XPOVIO and related material on-hand.

Cost of sales includes the cost of producing and distributing inventories that are related to U.S.

XPOVIO product revenue during the respective period (including salary-related and stock-based compensation expenses for employees involved with XPOVIO production and distribution) and third-party royalties payable on our net product revenue for XPOVIO.

We began capitalizing XPOVIO inventory costs during the third quarter of 2019 subsequent to FDA approval, as our expectation was that such costs will be recoverable through commercialization of XPOVIO.

Prior to the capitalization of XPOVIO inventory costs, such costs were recorded as research and development expenses in the period incurred.

During the three months ended June 30, 2020, we recorded $0.4 million of cost of sales, including $0.1 million related to royalties.

The cost of sales during the three months ended June 30, 2020 only reflects a portion of the costs related to the manufacturing of XPOVIO and related materials, since, prior to FDA approval, these costs were expensed.

The manufacturing costs of XPOVIO on-hand upon FDA approval were approximately $2.8 million.

At June 30, 2020, we had $2.7 million of this previously expensed XPOVIO and related material on-hand.

We expect cost of sales to remain relatively consistent quarter over quarter for the remainder of the year.

Research and development expense.

Research and development expense decreased approximately $4.0 million to $34.0 million for the three months ended March 31, 2020 from approximately $38.0 million for the three months ended March 31, 2019.

The decrease was primarily related to:

a decrease of $3.9 million in clinical trial costs, primarily related to the selinexor program;

a decrease of $2.1 million in consulting and professional costs;

an increase of $2.0 million in personnel costs.

We expect our research and development expense to remain relatively consistent quarter over quarter for the remainder of the year, with possible fluctuation over the quarters due to disruptions to our clinical trial enrollment, timing and completion, in part due to COVID-19.

Research and development expense increased approximately $16.1 million to $42.6 million for the three months ended June 30, 2020 from approximately $26.5 million for the three months ended June 30, 2019.

The increase was primarily related to:

an increase of $9.6 million in clinical trial costs, primarily related to COVID-19 trial activity as well as continued activity in our ongoing clinical trials;

an increase of $4.1 million in personnel costs, primarily related to an increase in headcount;

an increase of $1.4 million in facility and IT infrastructure costs;

an increase of $1.0 million in travel, consulting and professional costs.

We expect our research and development expense to remain relatively consistent quarter over quarter for the remainder of the year, with possible fluctuation over the quarters due to timing of clinical trial study starts and related clinical trial enrollment.

Selling, general and administrative expense.

eneral and administrative expense increased approximately $3.6 million to $30.7 million for the three months ended March 31, 2020 from approximately $27.1 million for the three months ended March 31, 2019.

The increase is primarily related to:

Selling, g eneral and administrative expense increased approximately $6.2 million to $30.8 million for the three months ended June 30, 2020 from approximately $24.6 million for three months ended June 30, 2019.

The increase was primarily related to:

an increase of $4.1 million in commercial-related activities;

an increase of $3.0 million in personnel costs, primarily related to an increase in headcount;

an increase of $0.2 million in facility and IT infrastructure costs;

partially offset by

a decrease of $1.1 million in travel, consulting and professional costs.

We expect our selling, general and administrative expenses to remain relatively consistent quarter over quarter for the remainder of the year as a result of decreased travel and corporate events due to COVID-19 impacts, offset by costs expected to be incurred for the preparations in anticipation of the BOSTON launch, if approved.

Other expense, net.

Other expense, net increased from $1.7 million for the three months ended June 30, 2019 to $6.0 million for the three months ended June 30, 2020.

The net increase of approximately $4.3 million was primarily due to an increase in interest expense of $3.7 million, coupled with a decrease in interest income of $0.6 million.

Of the $3.7 million increase in interest expense, $3.5 million was related to our Revenue Interest Financing Agreement, or deferred royalty obligation, and $0.2 million was related to our 3.00% senior convertible notes due 2025, or Notes.

We expect interest expense to increase in the third quarter of 2020 and beyond, related to the imputed interest on our deferred royalty obligation.

Comparison of the six months ended June 30, 2020 and June 30, 2019

Six Months Ended

(in thousands)

Product revenue, net

License and other revenue

Operating expenses:

Cost of sales

Research and development

Selling, general and administrative

Loss from operations

Other expense, net

Loss before income taxes

Income tax provision

Product revenue, net.

We recognized $34.7 million of net product revenue in the six months ended June 30, 2020 from U.S.

commercial sales of XPOVIO.

XPOVIO was initially approved by the FDA in July 2019, and therefore we did not have any net product revenue in the six months ended June 30, 2019.

License and other revenue.

License and other revenue for the six months ended June 30, 2020 was $17.0 million compared to $9.6 million for the six months ended June 30, 2019.

During the six months ended June 30, 2020, we recognized $13.8 million pursuant to the Antengene Agreement, $2.2 million upon reacquisition of the exclusive development and commercial rights from Ono, and $1.0 million related to clinical supply provided to various partners, as well as grant revenue pursuant to a government grant arrangement.

During the six months ended June 30, 2019, we recognized $9.4 million in revenue pursuant to the Original Antengene Agreement and $0.2 million in revenue for clinical supply provided to various partners, as well as grant revenue pursuant to a government grant arrangement.

Cost of sales.

During the six months ended June 30, 2020 , we recorded $ 1.2 million of cost of sales, including $ 0.9 million related to royalties.

We began capitalizing XPOVIO inventory costs during the third quarter of 2019 subsequent to FDA approval of XPOVIO , and therefore we did not have cost of sales for the six months ended June 30, 2019 .

Research and development expense.

Research and development expense increased approximately $12.1 million to $76.6 million for the six months ended June 30, 2020 from approximately $64.5 million for the six months ended June 30, 2019.

The increase was primarily related to:

an increase of $6.1 million in personnel costs and consulting and professional expense;

an increase of $5.7 million in clinical trial costs;

an increase of $1.7 million in facility and IT infrastructure costs;

partially offset by

a decrease of $1.4 million in travel, consulting and professional costs.

Selling, general and administrative expense.

Selling, general and administrative expense increased approximately $9.8 million to $61.5 million for the six months ended June 30, 2020 from approximately $51.7 million for the six months ended June 30, 2019.

The increase was primarily related to:

an increase of $6.7 million in commercial-related activities;

an increase of $4.3 million in personnel costs;

an increase of $0.2 million in facility costs and information technology infrastructure costs;

an increase of $0.4 million in facility and IT infrastructure costs;

partially offset by

a decrease of $1.6 million in travel, consulting and professional costs.

We expect our selling, general and administrative expenses to remain relatively consistent quarter over quarter for the remainder of the year due to decreased travel and corporate events due to COVID-19

impacts, offset by costs expected to be incurred for the launch preparations of SADAL and BOSTON.

Other expense, net.

Other expense, net increased from $1.2 million for the three months ended March 31, 2019 to $5.5 million for the three months ended March 31, 2020.

The net increase of approximately $4.3 million was primarily due to an increase in interest expense of $3.5 million related to our 3.00% senior convertible notes due 2025, or Notes, and our Revenue Interest Financing Agreement, or deferred royalty obligation, coupled with a decrease in interest income of $0.8 million.

We expect interest expense to increase in the second quarter of 2020 and beyond, related to the imputed interest on our deferred royalty obligation.

Other expense, net increased from $3.0 million for the six months ended June 30, 2019 to $11.5 million for the six months ended June 30, 2020.

The increase of approximately $8.5 million was primarily due to an increase in interest expense of $7.2 million, coupled with a decrease in interest income of $1.3 million.

$6.8 million of the increase in interest expense was related to our deferred royalty obligation and $0.4 million of the increase was attributable to our Notes.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity

During the third quarter of 2019, we began generating revenues from drug sales, as XPOVIO first became commercially available in the U.S.

During the third quarter of 2019, we began generating revenues from product sales, as XPOVIO first became commercially available in the U.S.

in July 2019.

offerings of common stock, proceeds from the issuance of convertible debt, proceeds pursuant to the deferred royalty obligation, and cash generated from our business development activities.

Although we do not currently expect that the ongoing COVID-19

pandemic will have a material impact on our business plans or results of operations, we are continually monitoring our liquidity and capital requirements in light of the evolving situation.

At March 31, 2020, our principal source of liquidity was $383.5 million of cash, cash equivalents and investments.

We have had recurring losses and incurred a loss of $52.9 million for the three months ended March 31, 2020.

Net cash used in operations for the three months ended March 31, 2020 was $45.0 million.

We expect that cash, cash equivalents and investments at March 31, 2020 will be sufficient to fund our current operating plans and capital expenditure requirements for at least twelve months from the date of issuance of the financial statements contained in this Quarterly Report on Form 10-Q.

On March 6, 2020, we completed a follow-on

offering under our shelf registration statement on Form S-3

pursuant to which we issued an aggregate of 7,187,500 shares of common stock, which included the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $24.00 per share.

We have had limited revenues to date from product sales and have financed our operations principally through private placements of our preferred stock, proceeds from our initial public offering and follow-on offerings of common stock, proceeds from the issuance of convertible debt, proceeds pursuant to the deferred royalty obligation, and cash generated from our business development activities.

Although we do not currently expect that the ongoing COVID-19 pandemic will have a material impact on our business plans or results of operations, we are continually monitoring our liquidity and capital requirements in light of the evolving situation.

At June 30, 2020, our principal source of liquidity was $345.6 million of cash, cash equivalents and investments.

We have had recurring losses and incurred a loss of $99.4 million for the six months ended June 30, 2020.

Net cash used in operations for the six months ended June 30, 2020 was $85.3 million.

We expect that cash, cash equivalents and investments at June 30, 2020 will be sufficient to fund our current operating plans and capital expenditure requirements for at least twelve months from the date of issuance of the financial statements contained in this Quarterly Report on Form 10-Q.

On May 5, 2020, we entered into Amendment No.

1 to the Open Market Sale Agreement, dated August 17, 2018, or the Open Market Sale Agreement , with Jefferies LLC, as agent, or Jefferies, pursuant to which we increased the maximum aggregate offering price of shares of our common stock that we may issue and sell from time to time through Jefferies, by $100.0 million from $75.0 million to up to $175.0 million.

We did not sell any shares under the Open Market Sale Agreement during the second quarter of 2020.

As of July 31, 2020, we have sold an aggregate of 3,712,359 shares under the Open Market Sale Agreement, for net proceeds of approximately $46.2 million, all of which were sold in 2019.

On March 6, 2020, we completed a follow-on offering under our shelf registration statement on Form S-3 pursuant to which we issued an aggregate of 7,187,500 shares of common stock, which included the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $24.00 per share.

We received aggregate net proceeds of approximately $161.8 million from the offering after deducting the underwriting discounts and commissions and other offering expenses.

On September 14, 2019, we entered into a Revenue Interest Financing Agreement, with HealthCare Royalty Partners III, L.P.

On September 14, 2019, we entered into a deferred royalty obligation , with HealthCare Royalty Partners III, L.P.

and HealthCare Royalty Partners IV, L.P, or HCR.

Pursuant to the Revenue Interest Financing Agreement, HCR paid us $75.0 million, or First Investment Amount, less certain transaction expenses, at the initial closing, which occurred on September 27, 2019, as disclosed in Note 11 to the Condensed Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Pursuant to the deferred royalty obligation , HCR paid us $75.0 million, less certain transaction expenses, at the initial closing, which occurred on September 27, 2019, as disclosed in Note 11 to the Condensed Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

On October 16, 2018, we completed an offering of $150.0 million aggregate principal amount of the Notes.

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The net proceeds from the sale of the Notes was $166.9 million, after deducting the initial purchasers’ discounts and commissions and actual offering expenses payable by us.

In August 2018, we entered into an open market sale agreement with Jefferies LLC, as agent, relating to an “at the market offering”, or Open Market Sale Agreement, pursuant to which we may issue and sell shares of our common stock, having an aggregate offering price of up to $75.0 million.

As of April 30, 2020, we had sold an aggregate of 3,712,359 shares under the Open Market Sale Agreement, for net proceeds of approximately $46.2 million, all of which were sold in 2019.

On May 7, 2018, we completed a follow-on

offering under our shelf registration statement on Form S-3

pursuant to which we issued an aggregate of 10,525,424 shares of common stock, which included the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $14.75 per share.

On May 7, 2018, we completed a follow-on offering under our shelf registration statement on Form S-3 pursuant to which we issued an aggregate of 10,525,424 shares of common stock, which included the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $14.75 per share.

We received aggregate net proceeds of approximately $145.7 million from the offering after deducting the underwriting discounts and commissions and other offering expenses.

The following table provides information regarding our cash flows (in thousands):

Three Months Ended

Six Months Ended

Net cash used in operating activities

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Effect of exchange rate changes

Net increase (decrease) in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and

restricted cash

Operating activities.

The net cash used in operating activities in both periods resulted primarily from our net losses adjusted for non-cash

charges and changes in the components of working capital.

The decrease in cash used in operating activities during the three months ended March 31, 2020, compared to the three months ended March 31, 2019, was primarily driven by our decreased loss from operations during that period.

The net cash used in operating activities in both periods resulted primarily from our net losses adjusted for non-cash charges and changes in the components of working capital.

The decrease in cash used in operating activities during the six months ended June 30, 2020, compared to the six months ended June 30, 2019, was primarily driven by our decreased loss from operations during that period.

Investing activities.

The net cash (used in) provided by investing activities during the three months ended March 31, 2020, compared to the three months ended March 31, 2019, primarily reflects a decrease in the maturities of investments of $12.6 million coupled with an increase in the purchases of investments of $65.9 million.

The net cash (used in) provided by investing activities during the six months ended June 30, 2020, compared to the six months ended June 30, 2019, primarily reflects a $159.1 million increase in the purchases of investments, coupled with a $19.2 million decrease in proceeds from the maturities of investments.

Financing activities.

The net cash provided by financing activities for the three months ended March 31, 2020, compared to the three months ended March 31, 2019, reflects an increase of $164.7 million.

The increase quarter over quarter is primarily related to the net cash proceeds of $162.1 million from the sale of shares of our common stock from the follow-on

offering under our shelf registration statement on Form S-3

during the first quarter of 2020, coupled with a $2.6 million increase in proceeds from the exercise of stock options in the first quarter of 2020 compared to the first quarter of 2019.

The net cash provided by financing activities for the six months ended June 30, 2020, compared to the six months ended June 30, 2019, reflects an increase of $166.3 million.

The increase was primarily related to the net cash proceeds of $161.8 million from the sale of shares of our common stock from the follow-on offering under our shelf registration statement on Form S-3 during the first quarter of 2020, coupled with a $4.5 million increase in proceeds from the exercise of stock options and shares issued under our Employee Stock Purchase Program in the first half of 2020 compared to the first half of 2019.

Funding Requirements

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the success of any collaborations that we may enter into with third parties;

the extent to which we acquire or in-license

other drugs and technologies;

the extent to which we acquire or in-license other drugs and technologies;

the costs associated with legal activities, including litigation, arising in the course of business activities and our ability to prevail in any such legal disputes;

7 unchanged sentences

We may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

SHEET ARRANGEMENTS

We did not have during the periods presented, and we do not currently have, any off-balance

sheet arrangements, as defined under SEC rules.

OFF-BALANCE SHEET ARRANGEMENTS

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis