Earnings Call Transcript - KPTI Q2 2022

Operator, Operator

Good morning, and welcome to the Karyopharm Therapeutics Q2 '22 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Ms. Elhan Webb, Senior Vice President, Investor Relations. Please go ahead.

Elhan Webb, Senior Vice President, Investor Relations

Thank you, operator, and thank you all for joining us on today's conference call to discuss the Karyopharm second quarter 2022 financial results and recent company progress. Today, I'm joined by Richard Paulson, President and Chief Executive Officer; Sohanya Cheng, Chief Commercial Officer; Dr. Reshma Rangwala, Chief Medical Officer; and Mr. Mike Mason, Chief Financial Officer. Earlier this morning, we issued a press release detailing Karyopharm's financial results for the second quarter 2022. This release, along with the slide presentation that we will reference during today's call, are available under the Events & Presentation section of our website. Before we begin our formal comments, I'll remind you that various remarks we will make today constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. Therefore you should not rely on these forward-looking statements as representing our views as of any day, subsequent to today. In addition, we will also be providing on this call outlook for non-GAAP R&D and SG&A expenses for 2022. We are not providing reconciliations of these forward-looking non-GAAP measures because projections of stock compensation expense, which is required for such reconciliations are not available without unreasonable efforts. I will now turn the call over to Richard. Please turn to Slide 4.

Richard Paulson, President and CEO

Thank you, Elhan and good morning to everyone joining us on the call and webcast today. This morning, I'm excited to provide an update on our plan as we continue to execute on our growth strategy through our focused pipeline, targeting life-threatening cancers. In Q2, we saw a significant increase in total revenues compared to Q2 of '21 of approximately $40 million, which includes the benefit of licensing and milestone revenue as we continue to receive new or expanded regulatory approvals globally. With growing patient access for selinexor across the world, we expect revenues in ex-U.S. territories to have an increasing contribution to total selinexor revenues in the future. Moreover, we are pleased to have delivered 44% net product revenue growth year-over-year, despite an increasingly competitive multiple myeloma market and some continuation of COVID-19 related challenges. I am pleased with our team's ongoing commitment to successfully execute against key priorities. As a global leader in the inhibition of nuclear export, everything we do is driven by our mission to positively impact patient lives and defeat cancer. On Slide 5, we have an overview of the key pillars that drive our underlying value and provide opportunity for what we believe will be substantial future growth. First, we continue to successfully build upon our existing multiple myeloma franchise. Second, we continue to advance our focused clinical pipeline comprised of mid and late-stage clinical development programs being purposely built and strategically focused on targeting cancers with high unmet need, where our science enables us to make the biggest difference in the lives of patients and where we believe we'll have the highest probability of success. To that end, based on compelling data signals, we are pursuing opportunities in endometrial cancer, myelofibrosis, and myelodysplastic syndromes. Collectively, we believe we have the potential to achieve multiple product approvals over the next two to four years. Our third pillar is our people. We strengthened the leadership team during the second quarter, including the appointment of Dr. Reshma Rangwala as the company's Chief Medical Officer and the promotion of Stuart Poulton to Executive Vice President and Chief Development Officer. Stuart has more than 25 years of experience in the global biotech and pharmaceutical space, including both clinical operations and portfolio leadership roles at AbbVie, Amgen, and Eli Lilly. With Stuart's promotion, we consolidated the leadership structure of our R&D organization, driving increased accountability and focus. We believe we have the right people in place who have exceptional abilities to achieve both scientific and commercial excellence, while executing our key corporate objectives. Fourth and finally, we believe we are well funded into early 2024. Mike will highlight our reduced expense guidance, as we initiated cost reduction initiatives in line with the evolution of our focus pipeline. With these pillars in place, we believe we have a solid foundation allowing us to execute this year and beyond. Let's now turn to the second quarter of 2022, which was marked by several meaningful achievements, as outlined on Slide 6, including continued healthy commercial performance and significant progress across our pipeline. First, we grew total revenues to $39.7 million. As outlined in our press release this morning, we introduced guidance for total revenues of $155 million to $165 million reflecting our growing global footprint and increased visibility into license and other revenues, which is becoming an increasingly important financial driver for us. Second, XPOVIO delivered strong year-over-year growth in the U.S. during the second quarter achieving $29 million in net product revenue compared to $20.2 million in the second quarter of 2021. We achieved these results through continued increasing uptake in second through fourth-line settings, despite the ongoing impacts from the pandemic and intensified competition in late-line settings. However, driven by these challenges in the first half of the year, we are updating our XPOVIO net revenue guidance to $120 million to $130 million representing 27% year-over-year growth at the midpoint. Next, Karyopharm and our European partner Menarini were recently granted full approval for XPOVIO in combination with bortezomib and dexamethasone for the treatment of adults who have received one prior therapy. This new approval dramatically expands NEXPOVIO potential use in Europe. Selinexor is now approved in 39 countries, including the recent launches in Mainland China, Australia, and South Korea through our partner Antengene and in Canada through our partner FORUS. Finally, we continue to advance our clinical pipeline in core indications in the second quarter. For the treatment of myelofibrosis, the FDA granted orphan drug designation for Selinexor in May. In addition, we presented encouraging initial data observed in our Phase I/II frontline study of Selinexor in combination with ruxolitinib at ASCO '22, and expect to provide further myelofibrosis data in the second half of this year. And for MDS, Eltanexor was recently granted fast track designation by the FDA as a monotherapy to treat patients with relapse or refractory, intermediate, high, or very high-risk MDS. In addition, the European Commission granted orphan medicinal product designation to Eltanexor to treat patients with MDS in the EU. Finally, we completed enrollment for the interim analysis of our relapse refractory Phase II study in MDS with the data expected to be shared in the second half of this year. As shown on Slide 7, as the global leader in the innovation and nuclear export, our drive, vision, and innovation, along with the scope and range of data generated to date have led us to focus on our four core programs: Multiple myeloma; endometrial cancer; myelofibrosis, and myelodysplastic syndromes. In addition to all of these being areas of high unmet need for patients, each has a significant addressable market. As we turn now to Slide 8, I would like to turn the call over to Sohanya for her review of the commercial performance for the quarter. Sohanya?

Sohanya Cheng, Chief Commercial Officer

Thank you, Richard, and good morning, everyone. Since our launch, we continue to focus on expanding the potential of XPOVIO and its benefit to patients in earlier lines. Turning now to Slide 9 on our commercial highlights for the second quarter of 2022, we grew net product revenue by 44% versus the same period last year and continued to make progress across key indicators since our second-line plus launch at the beginning of 2021. This growth was achieved despite two key challenges namely, the COVID impact on new starts in January and February of 2022, which resulted in a decline in refills in the second quarter and an intensifying competitive landscape in the later lines. Our team executed with strength to access and educate our physician community, improving in-person engagements with healthcare providers from 60% last quarter to 75% in the second quarter, resulting in a recovery of new patient starts. We continue to make progress with our primary growth driver and what we believe is most important to patients, which is a continued shift of XPOVIO into early lines and the community setting with over half of our patients in the second to fourth line. As we track duration of therapy, which takes time to mature, we expect to see the benefit of this earlier line shift and continued education to improve tolerability resulting in more patients staying on therapy longer as we approach the end of the year. Although, we have seen increasing competition in the late line setting at academic centers with new approvals and ongoing trials, our focus remains on expanding the use of XPOVIO in the community setting where the majority of early lined patients are treated. We drove growth in the community setting and increased our penetration from 64% to 67% versus the prior quarter in the top 20% of myeloma accounts, which represents about 80% of myeloma patient volume in the U.S. We continue to see a positive shift in perception of XPOVIO in the second to fourth line per the intent to prescribe data due to the growing confidence among our physicians in using the lower dose once weekly exposure-based triplet regimen, with over 90% of patients now starting on a hundred milligrams weekly dose or less. The evolution from higher to lower dose and from late to earlier line use is one that we have seen with many myeloma therapies over several years since the original launches and XPOVIO continues to make steady progress along this same journey. As we look to the future potential of XPOVIO within a rapidly evolving multiple myeloma landscape, it is clear there continues to be a high unmet need, both in the near and long-term. Over the next several years, while new therapies may emerge in the fifth line plus setting, and while the anti-CD38 class shifts to the front line, there remains a white space in that middle section of the treatment journey, where no standard-of-care is established. Setting up patients for success in that middle section of the treatment plan may allow them to access subsequent therapies in later lines, as we see improved patient outcomes with multiple classes and lines of therapy over an ever-increasing number of years. As a new class of therapy, XPOVIO is a convenient oral regimen that is manageable and easily combinable for second to fourth line patients. In the long-term, as the treatment paradigm evolves, we continue to build a body of evidence to further demonstrate the value of XPOVIO and further entrench our positioning in the second to fourth line, and Reshma will discuss this in further detail. For the second half of this year, my team and I remain laser-focused on continuing to drive the shift into earlier lines and expanding our growth in the community with an unwavering passion to improve the lives of these patients. With that, please advance to Slide 10 and I'll turn the call over to Reshma to review our clinical pipeline progress.

Reshma Rangwala, Chief Medical Officer

Thank you, Sohanya. We have strategically partnered selinexor in key ex-U.S. territories and as we look to the future on Slide 11, one of our top priorities is to expand our footprint in multiple myeloma across the globe. As touched on by Richard, Karyopharm and our partners Menarini just recently obtained approval in Europe for NEXPOVIO in combination with bortezomib and dexamethasone in patients with multiple myeloma, following at least one prior therapy. The approval follows a positive opinion granted in May 2022 by the CHMP based upon results from the Phase III BOSTON study. In addition, selinexor was recently launched in Mainland China, Hong Kong, and in Canada through our strategic partners. Turning now to Slide 12, I will be reviewing our focus in developmental pipeline, which has the potential to deliver a consistent and steady stream of new approvals over the next two to four years. As you turn to Slide 13, the unmet need remains strong for new modalities like selinexor to treat multiple myeloma because physician's ability to class switch with multiple combinations has driven significantly better patient outcomes. The majority of patients treated in the first to second line are given an anti-CD38 based treatment regimen. Unfortunately, multiple myeloma is still considered an incurable disease due to inevitable relapse acquired drug resistance, and therefore many of these patients' disease will become refractory to or relapsed from an anti-CD38, PI, and IMiD treatment. Our clinical data support the use of selinexor in the post anti-CD38 setting. We believe this is the setting in which selinexor has the strongest fit. Selinexor has an increasingly understood and manageable safety profile, and while we only promote FDA approved regimens, physicians have the option to combine with several different backbones for the NCCN guidelines. Additionally, with the emergence of new multiple myeloma treatments, including T-cell engaging therapies, immunotherapies, and cellular therapies, we are actively investigating the role XPO1 inhibition plays in preserving and maintaining T-cell fitness, which is needed for optimal stem cell collection for patients considering cellular therapies and a robust immune environment. We believe these data will underscore the role of XPO1 inhibition in this evolving landscape and further anchor Selinexor as an earlier line treatment. If you would now turn to slide 14, I would like to highlight our rapidly advancing myelofibrosis program and the current treatment landscape. Ruxolitinib is the current standard of care for newly diagnosed myelofibrosis, with only approximately 40% of patients achieving a spleen volume reduction of 35% as a frontline treatment. No other drug classes, other than JAK inhibitors, have been approved in the last 10 years. Our frontline myelofibrosis study outlined on this slide is a Phase I/II study evaluating the combination of selinexor and ruxolitinib in patients with treatment naive myelofibrosis. Our goals for this study are to evaluate the efficacy and safety of selinexor and ruxolitinib in this first-line myelofibrosis patient population, building on the single-agent activity of both compounds. Given the potential synergism between these two drugs, we believe that the combination of selinexor plus ruxolitinib has the potential to improve upon multiple efficacy parameters, including maintaining or improving symptom burden. Turning to Slide 15, the study, which began in mid-2021 has shown encouraging results thus far with preliminary Phase I data recently presented at ASCO 2022 and the European Hematology Association 2022 Congress. These results included favorable tolerability with no dose-limiting toxicities and 75% of evaluable patients demonstrating a greater or equal to 35% spleen volume reduction at week 12. The 50% of transfusion-independent patients who had at least eight weeks of treatment maintained stable hemoglobin or improved hemoglobin levels at last follow-up. In addition, all of the evaluable seven patients who had been on treatment for at least 12 weeks and had complete data experienced rapid reductions in their symptom scores with three of seven patients having a greater or equal to 50% reduction at week 12. Turning to slide 16, you can see that the combination of selinexor and ruxolitinib was generally well tolerated and manageable. In the Phase 1A portion of the study, no dose-limiting toxicities were reported at either dose level of selinexor, with the most common reported grade 3 to 4 adverse events being thrombocytopenia, anemia, and neutropenia. The hematologic adverse events were reversible with dose interruptions and reductions that occurred with both ruxolitinib and selinexor. On slide 17, you can see detailed SVR35 and TSS50 scores of all evaluable patients in the study. Currently, patients are being enrolled in the Phase 1b portion of the study with the last patient expected to be dosed this month. We expect to present updated clinical data from the study in the second half of 2022. Additionally, we continue to enroll in our previously treated myelofibrosis 035 study, and we look forward to reporting our top-line results in the second half of 2023, as we deliver a robust development program in myelofibrosis with this novel mechanism of action. Now, as we turn to slide 18, I would like to discuss the unmet need in endometrial cancer and why we find our upcoming opportunity so exciting for patients. First, endometrial cancer is the most common form of gynecologic cancer in the United States with approximately 50% of tumors classified as p53 wild-type. Next, the current treatment landscape for advanced or recurrent endometrial cancer consists of first-line chemotherapy. Upon completion of chemotherapy, the NCCN guidelines recommend a watch and wait approach until disease progression. This approach clearly needs improvement, given that the five-year survival rate in this patient population is only 17%. Selinexor is administered orally and maintenance therapy is well established with physicians that treat multiple types of solid tumors, including breast and ovarian cancer. We believe selinexor has the potential to offer a maintenance option that could sustain the response from chemotherapy and improve the overall clinical benefit for these patients. Presented at ASCO 2022, for the subgroup analysis and molecular classification data from the SIENDO study, a preliminary analysis of exploratory subgroups of the SIENDO study assessed four distinct molecular subtypes in endometrial cancer using the Cancer Genome Atlas, one of the accepted gynecologic oncology algorithms that is used to calculate prognostic risk scores. As previously disclosed, this analysis indicated that patients whose tumors were p53 wild-types treated with selinexor demonstrated a median progression-free survival of 13.7 months compared to 3.7 months for patients treated with placebo. In contrast, patients whose tumors were either p53 mutant or advanced and treated with selinexor demonstrated a median progression-free survival of 3.7 months compared to 5.6 months for patients treated with placebo. These data suggest that p53 wild-type has the potential to be a robust biomarker and selinexor may provide meaningful benefits to patients with p53 wild-type endometrial cancer. Based upon productive dialogue we have had with the FDA, we have selected a companion diagnostic partner and are in the process of finalizing an agreement with them. We are excited with the ongoing close collaboration with both GOG and ENGOT and remain on track to initiate the Phase 3 registration enabling trial in the fourth quarter of this year. With that, I'll now advance to Slide 19 and turn the call over to Mike to review the second quarter financial highlights.

Mike Mason, Chief Financial Officer

Thank you, Reshma. Since we issued a press release earlier today with the full financial results, I will just focus on the highlights, which begin on Slide 20. Total revenue for the second quarter of 2022 was $39.7 million compared to $22.6 million for the second quarter of 2021. With increasing approvals and commercial launches for selinexor globally, we expect milestone and royalty payments from our partners to deliver a larger contribution to our total revenues in the future. Net product revenue from U.S. commercial of XPOVIO for the second quarter of 2022 was $29 million compared to $20.2 million for the second quarter of 2021, representing a 44% increase year-over-year. The growth-to-net discount for XPOVIO in the second quarter was 17%. We expect growth-to-net discount to be in the 15% to 20% range for the full year 2022. We recognized $10.7 million of license and milestone revenue in the second quarter of 2022, which includes $6.5 million earned in reimbursement of development expenses from the Menarini Group and $1.5 million related to milestones earned from our partner FORUS Therapeutics. R&D expenses for the second quarter of 2022 were $44.3 million compared to $34 million for the second quarter of 2021. Our results this quarter included a one-time $3.8 million severance related to stock compensation charge. We expect our 2022 non-GAAP R&D expense to decrease by approximately 10% compared to 2021, with the majority of the decrease expected in the second half of 2022. SG&A expenses for the second quarter of 2022 were $37.3 million compared to $36.5 million for the second quarter of 2021. The increase in SG&A expenses was due to a one-time $3.5 million severance related stock compensation charge in the second quarter. Cash, cash equivalents, restricted cash, and investments as of June 30, 2022, totaled $172.6 million compared to $235.6 million as of December 31, 2021. Based on our current operating plans, Karyopharm's guidance for full year 2022 is as follows: Total revenue in the range of $155 million to $165 million; XPOVIO net product revenue of $120 million to $130 million, reflecting a decrease of approximately $15 million versus our prior guidance; and non-GAAP R&D and SG&A expenses, which exclude stock-based compensation expenses, to be in the range of $250 million to $265 million, including approximately $5 million of severance related expenses, reflecting a decrease of approximately $15 million versus our prior guidance. We initiated cost reduction initiatives in the second quarter that will accelerate in the second half of 2022, including stopping certain signal-seeking programs such as our lung and colorectal cancer studies. In addition, we are optimizing our R&D and G&A infrastructure by eliminating roles, as we continue to align the organization with our prioritized programs. These efforts will reduce overall compensation costs by approximately 10% in the second half of 2022 compared to the first half of the year. Through these enhanced efforts, we expect these savings will build through 2023, sustaining our cash runway. We project that our existing cash, cash equivalent, and investments, as well as the revenue we expect to generate from XPOVIO product sales and license revenues, including a $20 million cash payment from Antengene that we expect to receive near the end of the year related to a milestone that we previously recognized, will be sufficient to fund our planned operations into early 2024. Let's move to Slide 21 and turn the call back to Richard for some final thoughts.

Richard Paulson, President and CEO

Thanks, Mike. As you've heard from the team, we continue to maintain momentum with a number of key near-term catalysts and corporate milestones for us to deliver on, as outlined on Slide 22, as we continue to strive each day for patients with high unmet needs. In closing, I would like to thank all of our teams at Karyopharm and our investigators as we work every day to positively impact the lives of patients with cancer. With that, I would now like to ask the operator to open the call up to the question-and-answer portion of today's call.

Operator, Operator

Thank you. First question is from the line of Maury Raycroft with Jefferies.

Kevin Strang, Analyst

Hi, this is Kevin Strang on for Maury. Thanks for taking my questions. First question for myeloma. Can you say what percentage of second quarter new patient starts were earlier lines? And then should we think of this number as shifting higher from the roughly 50% split with increased academic competition? Thanks.

Richard Paulson, President and CEO

Yes. Thanks, Kevin, for the question. I'll turn to Sohanya for that. Sohanya?

Sohanya Cheng, Chief Commercial Officer

Yes. Hi, Kevin, thanks for the question. So yes, we've seen an improvement in that shift into earlier lines. And we're now well over 50% of our patients are now in the second to fourth line. As for the community, as we know, a majority of these patients are treated, the earlier lines patients are treated in the community and we see that over 65% of our business comes from the community and we continue to increase our breadth and depth in the community.

Kevin Strang, Analyst

Great. Thank you. And then just one on, sorry.

Richard Paulson, President and CEO

Go ahead, Kevin.

Kevin Strang, Analyst

Just one on myelofibrosis. So could you just talk more about what we can expect from the totality of data in the second half of next year in terms of the number of patients or follow up for both monotherapy and combo-therapy, and then how are you thinking about how that's going your path forward in myelofibrosis? Thanks.

Richard Paulson, President and CEO

I will turn to Reshma, who will talk to that. Reshma?

Reshma Rangwala, Chief Medical Officer

Hi, Kevin. Thanks for the question. We're very excited to present some updated myelofibrosis data in the second half of 2022. We will be focusing on the 034 study, which involves treatment-naive patients and evaluates the efficacy and safety of selinexor in combination with Jakafi or ruxolitinib. This study is a Phase I, followed by a randomized Phase II, and we anticipate providing updated efficacy and safety results from the Phase I portion of the trial. This will include patients enrolled in the dose escalation as well as those in the expansion phase. We expect to include approximately 21 patients in this cohort, along with additional follow-up compared to what we presented at EHA and ASCO 2022. Overall, the data sets we will provide will be similar to what we shared at ASCO 2022, focusing on SVR, TSS50, anemia data, and updated safety and tolerability information.

Operator, Operator

Next question comes from the line of Peter Lawson with Barclays.

Peter Lawson, Analyst

Great. Thanks for the update. With changing guidance, just wondering if you could walk through any changes in how you're thinking about particular growth drivers for this year and next year, Richard?

Richard Paulson, President and CEO

Yeah, sure, Peter. I'll just kick it off and then I'll turn it to Sohanya. Because I think as Sohanya mentioned, we did face some headwinds in Q2. We are confident in our revised guidance moving forward as we do believe there's a very strong opportunity for growth, especially in that second to fourth line in the community setting. Sohanya maybe talk to some of the growth drivers you see moving forward.

Sohanya Cheng, Chief Commercial Officer

Thanks, Peter. In the first half of the year, we recognize that we faced headwinds, driven by two things. One was the refills were down in the second quarter due to the COVID impact on reducing new patient starts in January and February. And secondly, the intensified competition in the academic centers in the later lines due to new approvals as well as clinical trials ramping up post-COVID and our revised guidance reflects these headwinds. As we think about looking ahead, the midpoint of the updated guidance range is $125 million, which represents 27% growth year-over-year for 2022. We believe there continues to be significant opportunity for long-term growth. As we think about the second half of this year and beyond, our team is laser-focused in two areas. Number one, accelerating growth in the second to fourth lines to offset erosion in late lines from late line competition, and secondly, to expand further into the community where a majority of the earlier line patients are treated, and these community physicians prefer a convenient oral regimen that's manageable and easily combinable after an anti-CD-38. As we think about growth drivers for the second half of the year, there are several, and we see continued positive momentum in these areas. Number one, new patient starts recovery in the second quarter of the year as oncology patient visits are normalizing post-COVID. Secondly, as I mentioned, we are seeing this continued positive shift in the use of XPOVIO in the second to fourth line over half of our patients are in this setting. We're seeing higher growth in the community. This is a key area of focus for us, increased penetration in the top 20% of the myeloma accounts, a majority of which are community accounts. We're seeing the continued improvement in the perception and building up confidence in the community. And most importantly, as we think about the tailwind for the second half of this year with COVID access restrictions coming down, our live engagements of our field-based representatives with healthcare providers is increasing significantly. So we've moved to over 75% of our interactions being live. This is critical for us in a competitive space to drive education at this early stage of the launch. For these reasons, we feel confident about our growth trajectory for the second half of this year and beyond.

Peter Lawson, Analyst

And then what percentage of revenues is coming from the academic settings?

Sohanya Cheng, Chief Commercial Officer

Yeah, so about 65% of our business is coming from the community and the remainder is coming from the academic setting, and our focus remains on expanding further into the community.

Peter Lawson, Analyst

And then, I guess a question just for Mike just thinking about costs for the second half, what you said percent reduction in costs in the second half. How does that change as we think about ‘23 as well?

Mike Mason, Chief Financial Officer

Yeah. So thanks, Peter. We do expect the cost reduction initiatives that we introduced in the second quarter to accelerate in the second half of '22. The cost savings from certain signal-seeking programs, such as their studies in lung and colorectal cancer that we terminated, in addition to personnel-related reductions to optimize our R&D and G&A infrastructure. By eliminating certain roles, we look to align the organization with our core program. This overall will reduce compensation costs by approximately 10% in the second half of '22. We are not necessarily providing guidance for next year, but our cost reduction initiatives and our focused pipeline lead us to expect that our cost savings will increase not only in the second half of the year but will build into 2023, sustaining our cash runway into early 2024.

Operator, Operator

Thank you. Next question comes from the line of Mike Ulz with Morgan Stanley. Please go ahead.

Mike Ulz, Analyst

Hey, guys. Thanks for taking the question. For XPOVIO, in terms of physician perception, can you maybe talk about how that's evolved over the past year or two? Just curious, trying to get a sense of the progress you've made there so far and then looking forward, what's the opportunity to continue to improve that? Thanks.

Richard Paulson, President and CEO

Thanks, Mike. I'll turn this to Sohanya to talk to that.

Sohanya Cheng, Chief Commercial Officer

Thanks, Mike. Perception evolves with the product's evolution, and our product has been through an incredible evolution in the past 18 months from late lines to early lines, high-dose to almost half the dose plus with the right supportive care. Hence, we have seen perception shift in a positive direction over time in the intent to prescribe data as well as anecdotal feedback that we get from physicians on a daily basis, particularly in the community setting. We are seeing an increase in their likelihood to prescribe in the second to fourth line as well as a positive perception of the product, both in efficacy and safety. Our data is also showing that more than 90% of our patients are being started on a 100 milligrams or less. This is great progress as we've seen the evolution of our dosing. As we think about moving forward and improving our perception, the key is to continue to educate our physicians, our nurses, our support staff on the importance of the right dose, dose reductions and supportive care, and live engagements are critical both between the field representatives and the healthcare providers, as well as physician-to-physician, peer-to-peer education. As I mentioned earlier, as COVID restrictions are coming down and our live engagements are increasing, this education will be key to continuing to drive an improvement in our perception moving forward.

Operator, Operator

Next question comes from the line of Colleen Kusy with Baird. Please go ahead.

Colleen Kusy, Analyst

Thanks. Good morning, and thanks for taking our questions. So should we be thinking about that the COVID-19 impact from 1Q has now fully cycled through, or should we be expecting some pressures on the second half of this year? And in Europe, can you just talk about how soon you think that could be a meaningful contributor to your top-line and remind us what your economic cycles are please?

Richard Paulson, President and CEO

Sure, Colleen. Thanks for the question. Maybe for the first part, I'll turn to Sohanya to talk about the COVID-19 impact from Q1, and how that evolves? Because it does evolve over time and becomes reduced as we move forward. And then for the second part, I will turn to Mike to talk kind of about the economics in Europe. So Sohanya maybe kick off the first part.

Sohanya Cheng, Chief Commercial Officer

Yes. So the COVID impact, we break down into two fronts. One is oncology patient visits, and the impact that has on our new patient starts and refills. We felt that we went through the peak of it in January and February with Omicron, where we saw patient visits come down by up to 10%, which impacted our new starts and internal refills. So we feel that is reflected in our lowering of our guidance. I think the second impact of COVID is access to physicians. What we're seeing is a trend to returning to normal. We're not at 100% of live access, but we are around 70%, 75% or so. And so as we think about moving forward, the signs we see are continued improving. We obviously don't have a crystal ball to predict any changes in COVID fluctuations over the course of the year, but the trends we're seeing on our oncology patient visit side, as well as the access to our physicians are both improving.

Richard Paulson, President and CEO

And Mike, do you want to take the second part? Talk about the European launch kind of as it evolves over the next 10, 12 to 24 months.

Mike Mason, Chief Financial Officer

Sure, thanks. Just to refresh everyone’s memory, we announced back in December of 2021, includes about $200 million in future milestone plus tiered double-digit royalties on net sales. Menarini expects the first commercial launch in Germany in the second half of this year. And as Richard mentioned, this launch will evolve over the next 12 months as pricing and reimbursement discussions evolve with each country.

Colleen Kusy, Analyst

Great. Thank you. And if I can ask a follow-up on myelofibrosis, we saw some increasing early data, I believe at 12 weeks at ASCO. The update in the second half, will that include 24-week data? And can you talk about how you expect that data to mature from 12 to 24 weeks for both SVR35 and TSS50?

Richard Paulson, President and CEO

Yes. Maybe I'll turn to Reshma to talk about that. And again, as you remember, looking even from our earlier data on deepening over time, I think is an important perspective to look at, Reshma.

Reshma Rangwala, Chief Medical Officer

Yes, absolutely. Hi, Colleen, thanks for the question. So yes, we absolutely will provide 24-week data. So the data that we anticipate providing in the second half of 2022 is going to include more patients, so more patients that were enrolled as part of the Phase 1b in addition to the data already presented from the Phase 1a but also more mature data. We'll see the 12-week as well as 24-week in a subgroup of those patients. As Richard just alluded, we keep going back to the essential data. The essential data is an investigator-initiated trial that was evaluating selinexor as a monotherapy, primarily in our relapsed or pretreated patient population. What we saw in that data was quite intriguing in that patients who stayed on therapy over time, we saw that their responses deepened over time. We do anticipate a similar phenomenon as we evaluate selinexor in combination with ruxolitinib now in a first-line population specifically that their SVR potentially could deepen over time. So yes, we're looking forward to presenting those data soon.

Operator, Operator

Next question comes from the line of Brian Abrahams at RBC Capital Market.

Unidentified Analyst, Analyst

This is Steve on for Brian. Can you share any thoughts on how increasing competition in myelofibrosis, including new studies, might affect trial recruitment moving forward and any thinking on how that might affect your timeline assumptions for enrolling the studies?

Richard Paulson, President and CEO

I’ll turn to Reshma as we've everything talking to, we do see our overall recruitment moving forward well. Reshma, you want to talk to that?

Reshma Rangwala, Chief Medical Officer

There is significant interest stemming from ASCO and particularly EHA. The data set from the 034 study was limited. As you know, we will have the chance to present updated data in the second half of this year, but the initial data were quite promising, especially with some strong responses regarding SVR, along with interesting data on TSS50 and anemia. This has created a positive momentum. I should also mention that, given the competitive nature of this space, especially with the rarity of the myelofibrosis patient population, there is considerable interest in participating in these clinical trials. Consequently, we expect enrollment to keep progressing, and we do not foresee any changes in our data availability regarding read-outs.

Operator, Operator

Next question comes from the line of Eric Joseph at JP Morgan.

Eric Joseph, Analyst

I would like to ask about the commercial progress of XPOVIO. Are you experiencing any challenges with the increased use of anti-CD38 therapies in earlier treatment lines? The recent results from J&J showed strong growth for DARZALEX, excluding the Q formulation. Are you noticing any competitive dynamics as a result? Additionally, do you have information on the uptake of XPOVIO among patients who have previously received anti-CD38 therapies, and do you think the current expansion could lead to significant benefits in the coming years? Furthermore, regarding the adoption of XPOVIO across different lines of therapy, can you provide insights on its usage in the second to fourth line settings, particularly if it's more prevalent in the fourth line compared to the second line?

Richard Paulson, President and CEO

I will break the question into a couple of parts. First, I'll ask Sohanya to discuss the increasing use of anti-CD38 in earlier treatment lines with DARZALEX. She can also address how we've seen our evolution in therapy lines from the second to the fourth, where we are experiencing the most growth. Then, I'll turn to Reshma to discuss some of our data following anti-CD38 and how the introduction of a new class is beneficial for patients who have gone through anti-CD38. Sohanya, please take the first part, and then Reshma can follow.

Sohanya Cheng, Chief Commercial Officer

Thanks, Eric. So, yes, we're seeing a continued increase in the use of anti-CD38 in the front line, which in turn continues to leave that unmet need open in that middle section of the treatment journey between second to fourth line, where there is no clear standard-of-care, and XPOVIO has proven data post anti-CD38. We only promote to approved regimen, which is a combination with Bortezomib, but NCCN guidelines also has other triplet regimens of XPOVIO in combination with pomalidomide, carfilzomib as well as daratumumab. To answer your second question of what about prior therapies that don't include an anti-CD38 backbone, well, if it included a PI or an IMiD backbone, there is optionality to combine with a different backbone and XPOVIO per the NCCN guidelines. Overall, as we take a step back, the continued white space in that second to fourth line is critical for a couple of different reasons. There is no clear standard-of-care, but also it sets up patients for potentially successful outcomes and accessibility to potential late line therapies as they emerge.

Reshma Rangwala, Chief Medical Officer

I just want to piggyback on what Sohanya said too. From the R&D perspective, there is growing data to suggest from a clinical perspective that treating patients post anti-CD38 increases their efficacy. The sequence really is an important phenomenon. We also have growing pre-clinical data that also suggests that treating patients post anti-CD38 with selinexor may improve efficacy as well. So this again, treating with selinexor post anti-CD38 really is very efficacious for these patients.

Eric Joseph, Analyst

Thanks. I have a follow-up here on the OpEx guidance. Inclusive of both the lower guidance this year and as you look at 2023 and really just your runway guidance into early 2024, I guess how should we think about any impact to the pace of enrollment of the randomized studies, the Phase III in either endometrial cancer or myeloma? Is there any prioritization of enrollment that will need to take place there in order to stay within the runway guidance? Thanks.

Richard Paulson, President and CEO

No. We of course take assumptions in all our trials of what enrollment will be. So you can see lumpiness in quarters for sure, it has a higher amount of fluctuation, but what's in our forecast and our base planners are prioritized programs driving it forward. We’re just coming off at the top of the hour, I think a few more questions.

Operator, Operator

Thank you. Next question comes from the line of Ed White with H.C. Wainwright.

Ed White, Analyst

Good morning. Thanks for taking my questions. I'm just wondering if you have any visibility into the mix of the current regimens being used. In particular, the Pomalyst combo, while it's not approved, it has the NCCN guidelines. So I'm just wondering what's the percentage of the oral regimen is right now and how important the combination trial is to the company, if you are already penetrating that market? And then the second question is just on eltanexor. Can you give us an update there? I know the Phase II ongoing, you are expecting data in the first half of 2023, but if there's anything you can tell us about enrollment or any other updates you can give us? Thank you.

Richard Paulson, President and CEO

For the first part of that question, I'll turn to Sohanya. And the second part we're going to turn it to Reshma because we have moved up that a little bit. Sohanya?

Sohanya Cheng, Chief Commercial Officer

Thank you for the question, Ed. Based on the data we have, which is not complete, we are observing an increase in the use of triplet therapies over time. Approximately half of our total use pertains to XPOVIO-based triplets. These triplets consist of various regimens, primarily including XVD, our approved indication, along with a few other regimens. This includes combinations with pomalidomide and KYPROLIS, as noted in the NCCN guidelines.

Reshma Rangwala, Chief Medical Officer

So as I mentioned, it's about half of our use is triplets of which the split is with a majority of those three regimens up there in the triplets. In terms of Eltanexor, we're currently evaluating Eltanexor in patients with myelodysplastic syndrome, MDS syndrome. We have two cohorts; one is a relapse refractory patient population, and the other is a first line in which we are combining Eltanexor with HMA inhibitors, which, as you know, are standard-of-care in this patient population. We're very excited to be presenting data in the second half of 2022 from the relapsed refractory Phase 2 patient population, and this is from a pre-planned interim analysis that is fully enrolled at this point.

Richard Paulson, President and CEO

We’ll just take one more question, Operator. We’re at the top of the hour.

Operator, Operator

Next question comes from the line of Jonathan Chang with SVB Securities.

Faisal Khurshid, Analyst

This is Faisal Khurshid on for Jonathan Chang. Just want to ask, what could the registrational strategy in myelofibrosis look like? And how you’re thinking about pursuing the frontline versus the relapse opportunity, like is it just an either/or or could you pursue both?

Richard Paulson, President and CEO

Thanks for the question. I mean, overall, I think, and I'll touch on it overall, but then I want to turn to Reshma to talk to it. Overall, approaching both is really important for us; I think those opportunities really build a nice franchise in the myelofibrosis area in terms of those relapse patients or in combination in the frontline. Reshma, maybe you can talk and expand on that.

Reshma Rangwala, Chief Medical Officer

Yes, absolutely. I mean, we've got a robust clinical development program in myelofibrosis covering both the first line as well as the relapsed refractory patient population. In the first line setting, we are evaluating selinexor in combination with Jakafi, and we anticipate that combination versus RUX alone, again, in that first-line patient population. In the relapsed setting, there really is no standard-of-care. In that relapsed setting, we are likely going to evaluate selinexor versus physician's choice chemotherapy. Both trials are currently enrolling, and we likely anticipate that the relapsed refractory patient population would read out first, but again, both trials are on track.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Richard Paulson for any closing comments.

Richard Paulson, President and CEO

Thank you, operator, and thank you to everyone for joining us on the call today. We're excited to continue moving forward and focusing on our key priorities and continuing to focus on delivering for patients over the rest of this year. That concludes our call.

Operator, Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.