Why Karyopharm Therapeutics, Inc. Shares Vaulted Higher

Karyopharm shares continue their march higher after presenting data on two studies at the 2014 Gastrointestinal Cancers Symposium.

Jan 22, 2014 at 4:13PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Karyopharm Therapeutics (NASDAQ:KPTI), a clinical-stage biopharmaceutical company developing drugs targeted at nuclear transport targets for the treatment of cancer and other broad disease types, vaulted higher by as much as 18% after presenting data on a phase 1 study of its lead drug candidate, as well as initial findings from a preclinical study, at the American Society of Clinical Oncology's 2014 Gastrointestinal Cancers Symposium.

So what: According to Karyopharm's press release, it reported phase 1 data on selinexor (also known as KPT-330) as a treatment for metastatic colorectal cancer. The data showed that selinexor achieved a partial RECIST response in one of 35 patients, while another 11 patients exhibited stable disease (SD), with 10 of those patients demonstrating SD for at least eight weeks. Selinexor was also considered well tolerated in its initial study.

Karyopharm also reported on a novel, oral p21-activitaed kinase 4 (PAK4) inhibitor as a potential therapy for pancreatic cancer. In preclinical studies, its PAK4 inhibitor demonstrated "anti-proliferative activity and tolerability." While no timetable was given, it's my belief this data would likely not have been presented had Karyopharm not considered filing for an investigational new drug application at some point in the near future.

Now what: Like most biotechnology companies, Karyopharm has been on fire since it IPO'd just a few months ago. However, like most clinical-stage companies that have recently debuted, Karyopharm is also extremely wet around the ears. Karyopharm currently has but five ongoing trials, and all are in the early stages of either dose escalation of enrollment prior to dose escalation. Its remaining pipeline is entirely preclinical in nature. In other words, while the technology behind its therapeutic approach is novel and exciting, it could be years before we see tangible results in a larger scale study that we can truly evaluate. This makes Karyopharm's nearly $950 million valuation as of this writing perhaps a bit frothy for my taste.

Karyopharm may have doubled since its IPO, but it may have trouble keeping up with this top stock in 2014
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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