Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

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

The following discussion and analysis of our financial condition and results of operations is meant to provide material information relevant to an assessment of the financial condition and results of operations of our company, including an evaluation of the amounts and uncertainties of cash flows from operations and from outside resources, so as to allow investors to better view our company from management's perspective. 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, 2024, as filed with the Securities and Exchange Commission ("SEC") on February 19, 2025 ("Annual Report"). Unless otherwise indicated, in this Quarterly Report on Form 10-Q, all share amounts and per share amounts have been adjusted to reflect a 1-for-15 reverse split of our common stock (the "Reverse Stock Split").

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, 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 ability to continue as a going concern, 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 II, Item 1A - Risk Factors of this Quarterly Report on Form 10-Q. 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 in certain countries or territories outside of the U.S.

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. 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 represent 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. Our lead asset, XPOVIO® (selinexor), was the first oral XPO1 inhibitor to receive marketing approval, receiving its initial U.S. approval from the U.S. Food and Drug Administration in July 2019, and is currently approved and marketed in the U.S. for the following indications:

The commercialization of XPOVIO in the U.S. 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®(selinexor) (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. XPOVIO/NEXPOVIO has received regulatory approval in various indications in 50 countries outside of the U.S. and is commercially available in a growing number of countries as our partners continue to secure reimbursement approvals.

Our primary focus is on marketing XPOVIO in its currently approved indications as well as developing and seeking the regulatory approval of selinexor as an oral agent targeting multiple high unmet need cancer indications, including our lead clinical programs in myelofibrosis and our other late-stage clinical programs in endometrial cancer and multiple myeloma. We plan to continue to conduct clinical trials and to seek additional approvals for the use of selinexor as a single agent or in combination with other oncology therapies to expand the patient populations that are eligible for treatment with selinexor. As announced in January 2024, further clinical development of our eltanexor program continues to remain on hold in an effort to focus our resources on our prioritized late-stage programs.

As of June 30, 2025, we had an accumulated deficit of $1.6 billion. We had net losses of $60.7 million and $13.6 million for the six months ended June 30, 2025 and 2024, respectively. Based on our current business plan and current capital resources, given the uncertainty regarding the availability of additional funding or other strategic alternatives, and considering our debt service obligations, including our 3.00% convertible senior notes maturing on October 15, 2025 (the "2025 Notes") with an aggregate principal amount of $24.5 million and a requirement of our Credit Agreement, as defined below, and the indenture governing our 6.00% convertible senior notes due 2029 (the "2029 Notes") to maintain cash, cash equivalents and investments of at least $25.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the accompanying condensed consolidated financial statements are issued. See "Liquidity and Capital Resources" below for a further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern.

In May 2024, we entered into a series of transactions (the "Refinancing Transactions") to limit our aggregate indebtedness, extend the maturity of certain of our indebtedness and provide us with additional working capital. Pursuant to these transactions, we borrowed $100.0 million from existing lenders and certain entities managed by HealthCare Royalty Management, LLC ("HCRx"), which was subsequently assigned by HCRx to KKR & Co. Inc. ("KKR") in connection with its acquisition of a majority ownership stake in HCRx in July 2025, under a new, senior secured term loan facility and used a portion of the proceeds of that loan to repay obligations under our existing financing arrangement with HCRx pursuant to an amendment that made other changes to our existing financing arrangement with HCRx. We also exchanged, pursuant to privately negotiated agreements, an aggregate principal amount of $148.0 million of our existing 2025 Notes for (i) $111.0 million aggregate principal amount of our 2029 Notes and (ii) warrants to purchase up to 3.1 million shares of our common stock. In addition, HCRx purchased $5.0 million aggregate principal amount of our 2029 Notes through satisfaction of $5.0 million of our existing obligations to KKR (as successor in interest to HCRx). Please refer to Note 10 "Long-Term Obligations", to the condensed consolidated financial statements contained within Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details of the Refinancing Transactions.

On July 11, 2025, we announced that our Board is evaluating potential financing transactions, along with strategic alternatives, which may include a potential merger or sale of the Company; in or out of court restructurings; repurchases, redemptions, exchanges or other refinancings of our existing debt; among other potential alternatives. We, with the assistance of our advisors, are exploring potential financing and strategic alternatives to enhance liquidity and maximize value. However, there is no assurance that such additional funding, financing transactions, or strategic alternatives will be available on terms acceptable to us, or at all.

In August 2025, we announced that we expect to close new patient screening in our Phase 3 myelofibrosis trial in August 2025 and expect to report top-line data from this trial in March 2026.

CRITICAL ACCOUNTING ESTIMATES

We believe that several accounting policies are important to understanding our historical and future performance. 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 have been no changes to the critical accounting estimates we identified in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report.

RESULTS OF OPERATIONS

The following table summarizes our results of operations (in thousands, except for percentages):

Product Revenue, net (in thousands, except for percentages)

To date, our only source of product revenue has been from the U.S. sales of XPOVIO. Net product revenue for the three months ended June 30, 2025 increased by $1.6 million as compared to the three months ended June 30, 2024, due to gross-to-net favorability mainly driven by lower 340B discounts, which are discounts provided under the federal 340B Drug Pricing Program for eligible safety-net providers, in the second quarter of 2025.

Net product revenue for the six months ended June 30, 2025 decreased by $3.3 million as compared to the six months ended June 30, 2024, primarily due to an increase in the gross-to-net provision largely due to the increase in the product return reserve, partially offset by gross-to-net favorability driven by lower 340B discounts in the six months ended June 30, 2025. The product return reserve increased as a result of atypical returns in the first quarter of 2025, primarily driven by expired units returned from clinics and hospitals that had purchased these units following the 2020 approval of XPOVIO®.

We expect net product revenue to increase in the second half of 2025 as compared to the first half of 2025 due to gross-to-net favorability, driven by lower product returns and lower 340B discounts than the first half of the year, coupled with increased demand.

License and Other Revenue (in thousands, except for percentages)

License and other revenue for the three and six months ended June 30, 2025 decreased as compared to the three and six months ended June 30, 2024 by $6.5 million and $4.7 million, respectively, primarily due to $6.0 million of non-recurring license-related revenue recognized during the three months ended June 30, 2024.

We expect license and other revenue to decrease in the second half of 2025 as compared to the first half of 2025 primarily because the reimbursement of development-related expenses from Menarini is limited to $1.5 million for the second half of 2025.

Operating Expenses (in thousands, except for percentages)

Cost of Sales

Cost of sales for the three and six months ended June 30, 2025 and 2024 were relatively consistent. We expect cost of sales to remain relatively consistent in the second half of 2025 as compared to the first half of 2025.

Research and Development Expenses (in thousands, except for percentages)

At any one time, we have a number of ongoing clinical development programs that we are conducting independently or in collaboration with third parties. We track our external clinical trial and related costs on a program-by-program basis. Our major programs include our lead clinical programs in myelofibrosis and our other late-stage clinical programs in endometrial cancer and multiple myeloma. To the extent that external clinical trial and related costs are not attributable to a major program, they are included in "Other programs" and to the extent external clinical trial and related costs cannot be allocated to a specific program, they are included in "Non-program specific clinical trial and related costs." We also have unallocated research and development costs, which we do not track on a program-by-program basis. These costs represent expenses incurred across multiple programs or to support our general research and development operations.

Research and development expenses for the three months ended June 30, 2025 decreased by $5.6 million as compared to the three months ended June 30, 2024, primarily due to the $1.7 million decrease in clinical trial and related costs for selinexor in multiple myeloma, which was primarily due to the reduced scope of our Phase 3 multiple myeloma trial, and the $2.1 million decrease in personnel and stock-based compensation costs, which was primarily due to a reduction in headcount and contractors for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 due to the realization of previously implemented cost reduction initiatives.

Research and development expenses for the six months ended June 30, 2025 decreased by $6.4 million as compared to the six months ended June 30, 2024. The $3.8 million decrease in clinical trial and related costs for selinexor in multiple myeloma was primarily due to the reduced scope of our Phase 3 multiple myeloma trial. The $3.9 million decrease in personnel and stock-based compensation costs was primarily due to a reduction in headcount and contractors for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 due to the realization of previously implemented cost reduction initiatives. The $4.1 million increase in clinical trial and related costs for selinexor in myelofibrosis was primarily due to increased purchases of comparator drugs during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

We expect our research and development expenses to be relatively consistent in the second half of 2025 as compared to the first half of 2025 as we continue to invest in our myelofibrosis and endometrial cancer Phase 3 clinical trials.

Selling, General and Administrative Expenses (in thousands, except for percentages)

Selling, general and administrative expenses for the three and six months ended June 30, 2025 decreased as compared to the three and six months ended June 30, 2024 by $2.6 million and $4.8 million, respectively, primarily due to a reduction in headcount and contractors resulting from previously implemented cost reduction initiatives.

Consulting, professional and other costs decreased $0.4 million for the three and six months ended June 30, 2025 as compared to three and six months ended June 30, 2024 due to a decrease in spend from cost reduction initiatives that was partially offset by an increase in legal expenses incurred in the three and six months ended June 30, 2025 in connection our recent evaluation of potential financings and other strategic transactions.

We expect our selling, general and administrative expenses to remain relatively consistent in the second half of 2025 as compared to the first half of 2025 due to our ongoing cost reduction initiatives, offset by fees to be incurred in connection with pursuit of strategic alternatives, such as efforts to extend our cash runway.

Other Income (Expense), net (in thousands, except for percentages)

Other income (expense), net for the three and six months ended June 30, 2025 decreased as compared to the three and six months ended June 30, 2024 by $64.8 million and $51.4 million, respectively, primarily due to a $44.7 million gain on extinguishment of debt from the Refinancing Transactions and a $14.3 million gain from the remeasurement of embedded derivatives and liability classified common stock warrants recognized during the three months ended June 30, 2024, both of which are non-cash items. There was also an increase in interest expense related to the senior secured term loan facility and 2029 Notes, both of which were issued in May 2024 and a decrease in interest income resulting from lower investment balances during the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024.

We expect other income (expense), net to remain relatively consistent in the second half of 2025 as compared to the first half of 2025, however the future impact from remeasurements of the embedded derivatives and liability classified common stock warrants will depend on a variety of factors, including movements in our stock price.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

We have historically financed our operations primarily through a combination of proceeds from (i) product revenue sales, (ii) public and private placements of equity securities, (iii) the issuance of convertible debt, (iv) a term loan, (v) our deferred royalty obligation, (vi) at the market offerings and (vii) business development activities. As of June 30, 2025, our principal source of liquidity was $51.7 million of cash, cash equivalents and investments. We have had recurring losses since inception and incurred a loss of $60.7 million for the six months ended June 30, 2025.

We anticipate that we will continue to incur significant operating losses in the foreseeable future. Based on our current business plan and current capital resources, given the uncertainty regarding the availability of additional funding or other strategic alternatives and considering our debt service obligations, including the October 15, 2025 maturity date of our 2025 Notes, with an aggregate principal amount of $24.5 million and a requirement of our Credit Agreement, as defined below, and the indenture governing our 6.00% convertible senior notes due 2029 (the "2029 Notes") to maintain cash, cash equivalents and investments of at least $25.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the accompanying condensed consolidated financial statements are issued. We currently expect that cash, cash equivalents and investments as of June 30, 2025 as well as cash flow from net product revenue and license and other revenue, will fund our current operating plans and debt obligation requirements into October 2025 given the $24.5 million aggregate principal amount of the 2025 Notes and $25.0 million minimum liquidity covenant. Excluding repayment of the 2025 Notes and minimum liquidity covenant, we expect that our cash runway would be sufficient to fund planned operations into January 2026. See "Liquidity and Capital Resources - Funding Requirements" below and Note 1 "Nature of Business, Basis of Presentation and Segment Information" to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q for a further discussion of our liquidity and the conditions that raise substantial doubt regarding our ability to continue as a going concern.

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

Operating activities.The $24.5 million decrease in net cash used in operating activities for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily driven by changes in working capital resulting primarily from decreased spend year-over-year as a result of the realization of previously implemented cost reduction initiatives.

Investing activities. The $39.6 million decrease in net cash provided by investing activities for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was driven by a $76.3 million decrease in proceeds from the maturities of investments, partially offset by a $36.5 million decrease in purchases of investments.

Financing activities. The $40.6 million decrease in net cash provided by financing activities for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was driven primarily by the Refinancing Transactions which occurred during the six months ended June 30, 2024 and consisted of $83.3 million of proceeds from the term loan, partially offset by a $40.5 million payment of our deferred royalty obligation and a $2.6 million payment of debt issuance costs.

Sources of Liquidity

On September 14, 2019, we and certain of our subsidiaries entered into the Revenue Interest Financing Agreement with certain entities managed by HCRx, which was subsequently amended on June 23, 2021, August 1, 2023 and May 8, 2024, and which was subsequently assigned by HCRx to KKR in connection with its acquisition of a majority ownership stake in HCRx in July 2025 (the "Revenue Interest Agreement" and, as amended, the "Amended Revenue Interest Agreement"), pursuant to which, HCRx paid us a total of $135.0 million, less certain transaction expenses. For additional information on the Amended Revenue Interest Agreement, see Note 10, "Long-Term Obligations", to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q.

On May 8, 2024, we entered into a credit and guaranty agreement (the "Credit Agreement") with certain existing lenders and HCRx, which was subsequently assigned by HCRx to KKR in connection with its acquisition of a majority ownership stake in HCRx in July 2025, which provides for a senior secured term loan facility of $100.0 million. For additional information, see Note 10, "Long-Term Obligations", to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q.

On February 17, 2023, we entered into an Open Market Sale Agreement (the "2023 Open Market Sale Agreement") with Jefferies LLC, as agent ("Jefferies"). Under the 2023 Open Market Sale Agreement, we may issue and sell shares of our common stock having an aggregate offering price of up to $100.0 million (the "Shares") from time to time through Jefferies. We did not sell any Shares under the 2023 Open Market Sales Agreement during the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, $100.0 million of Shares was available for issuance and sale under the 2023 Open Market Sale Agreement.

Under the license agreement we entered into with Menarini in December 2021 (the "Menarini Agreement"), Menarini is required to reimburse us for 25% of all documented expenses we incur for the global development of selinexor from 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year. We received $7.0 million of reimbursements under the Menarini Agreement during the six months ended June 30, 2025.

Commitments, Contingencies and Contractual Obligations

Operating Leases

We are party to an operating lease of office and research space in Newton, Massachusetts, which was amended in November 2024 and under which we currently lease a total of 98,502 square feet of research and office space through September 30, 2025, which will be reduced to 52,224 square feet of solely office space from October 1, 2025 through September 30, 2030. As of June 30, 2025, we expect to incur total lease costs of $10.8 million from June 30, 2025 to September 30, 2030.

Contractual Obligations

We have contractual obligations under our (i) 2025 Notes; (ii) Credit Agreement, (iii) 2029 Notes, and (iv) Amended Revenue Interest Agreement as disclosed in Note 10, "Long-Term Obligations", to the condensed consolidated financial statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

Funding Requirements

We expect to continue to incur costs related to our clinical development programs as we continue to advance our lead clinical programs in myelofibrosis and our other late-stage clinical programs in endometrial cancer and multiple myeloma, as well as commercialization expenses related to sales, marketing, manufacturing and distribution of our approved products, to the extent that these functions are not the responsibility of our collaborators.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete. In addition, our product candidates for which we receive marketing approval may not achieve commercial success. Our ability to become and remain profitable depends on our ability to generate revenue. There can be no assurance as to the amount or timing of any such revenue, and we may not achieve profitability for several years, if at all, as described more fully in the risk factor entitled "We have incurred significant losses since inception, expect to continue to incur significant losses,

and may never achieve or maintain profitability," under the heading "Risk Factors" in this Quarterly Report on Form 10-Q. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. 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. If we are unable to raise capital or enter into strategic alternatives sufficient to meet our needs or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or commercialization efforts.

Based on our current business plan and current capital resources, given the uncertainty regarding the availability of additional funding or other strategic alternatives and considering our debt service obligations, including the October 15, 2025 maturity date of the 2025 Notes with an aggregate principal amount of $24.5 million and a requirement under our Credit Agreement and the indenture governing the 2029 Notes to maintain cash, cash equivalents and investments of at least $25.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date the accompanying consolidated financial statements are issued. See Note 1 "Nature of Business, Basis of Presentation and Segment Information" to the condensed consolidated financial statements included under Part I, Item I of this Quarterly Report on Form 10-Q for a further discussion of the conditions that raise substantial doubt regarding our ability to continue as a going concern. We currently expect that cash, cash equivalents and investments as of June 30, 2025 as well as cash flow from net product revenue and license and other revenue, will fund our current operating plans and debt obligation requirements into October 2025 given the $24.5 million aggregate principal amount of the 2025 Notes and $25.0 million minimum liquidity covenant. Excluding repayment of the 2025 Notes and minimum liquidity covenant, we expect that our cash runway would be sufficient to fund planned operations into January 2026. Our future long-term capital requirements will depend on many factors, as described more fully in the risk factor entitled "We will need additional funding or to enter into strategic alternatives to achieve our business objectives. If we are unable to raise sufficient capital or to enter into strategic alternatives on acceptable terms to meet our needs, we may be forced to delay, reduce or eliminate our research and development programs and/or commercialization efforts," under the heading "Risk Factors" in this Quarterly Report on Form 10-Q.

In addition to the expenses required to fund our operations described above, our funding requirements as of June 30, 2025 also include the following:

On July 11, 2025, we announced that our Board is considering potential financing transactions along with strategic alternatives to maximize near and long-term stockholder value, including, but not limited to, a merger or sale of the Company, in or out of court restructurings, repurchases, redemptions, exchanges or other refinancings of our existing debt, and financing transactions, among other potential alternatives. Our ability to successfully execute on a strategic alternative is dependent on a number of factors and we may not be able to execute upon a transaction or other strategic alternative having favorable terms within an advantageous time frame and/or recognize significant value for our assets, if at all. Further, our indebtedness, as discussed under the risk factor titled "Our indebtedness could limit cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the Term Loan, the 2029 Notes, the 2025 Notes or the Amended Revenue Interest Agreement," may be unattractive to potential sources of funding and strategic partners and may decrease our ability to consummate a financing transaction or enter into a strategic alternative. Additionally, the negotiation and consummation of a financing transaction or strategic alternative may be costly and time-consuming.

If we are not able to successfully consummate a successful financing transaction or strategic alternative, our Board may decide to pursue a dissolution and liquidation of our company. In such an event, we would be required under Delaware corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our stockholders. As a result of this requirement, a portion of our assets may need to be reserved pending the resolution of such obligations. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation of our company. If our Board determined to pursue a dissolution and liquidation, our Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Depending on these factors, the amount available for distribution to our common stockholders in such an event could be as low as zero and result in a total loss of investment to our stockholders.