Please ensure Javascript is enabled for purposes of website accessibility

Why Karyopharm Therapeutics Stock Is Falling Today

By Brian Feroldi – Sep 6, 2016 at 4:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares dropped after the biotech reported news from an important phase 2 clinical trial.

Image source: Getty Images.

What happened

After reporting results from a midstage clinical trial, shares of Karyopharm Therapeutics (KPTI 0.85%) fell 14% as of 2:50 p.m. ET.

So what

Karyopharm Therapeutics is a clinical-stage biotech primarily focused on creating products that treat cancer. The company released results today from its phase 2b STORM study, which was testing its lead compound selinexor as a potential treatment for the blood cancer multiple myeloma. 

Results from the 78-patient study showed that selinexor achieved an overall response rate of 20.5% among patients who had previously received either four or five drugs to treat their disease. Based on this data, Karyopharm will be expanding the study and enrolling an additional 120 patients that had previously taken five prior therapies. If that 20% response rate holds up in the expanded study, the company plans on seeking accelerated approved from the Food and Drug Administration. Data from the expanded study is expected in early 2018.

Karyopharm also stated its intentions to move forward a randomized phase 3 trial, called BOSTON, which will investigate selinexor's use in combination with Takeda Pharmaceutical's Velcade and low-dose dexamethasone in patients who had one to three prior lines of therapy. That trial is expected to begin in early 2017.

It's tough to say what data in this report caused the market's negative reaction, so perhaps today's share price action is just being caused by profit-taking on the stock's big gain last week. 

Now what

It's great to see that Karyopharm is moving forward with its phase 3 study and also expanding the phase 2b study, but those moves are likely to cause the company's expenses to balloon from here. Last quarter, the company lost more than $30 million, though it did end the period with $166 million in cash. Management believes that should be enough to fund continued clinical development into the middle of 2018.  

There will be plenty of data readouts between now and then that will capture investors' attention, but with revenue from product sales still a few years away, Karyopharm Therapeutics' stock is likely to remain highly volatile. That means that only risk-loving investors who like to swing for the fences should consider buying based on today's dip.

Brian Feroldi has no position in any stocks mentioned. Like this article? Follow him on Twitter where he goes by the handle @Longtermmindset or connect with him on LinkedIn to see more articles like this.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Karyopharm Therapeutics  Stock Quote
Karyopharm Therapeutics
$5.93 (0.85%) $0.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.