Shares of Karyopharm Therapeutics (NASDAQ:KPTI) were soaring 16.8% higher as of 11:26 a.m. EDT on Friday after jumping as much as 27.5% earlier. The biotech announced that the U.S. Food and Drug Administration (FDA) has extended the Prescription Drug User Fee Act (PDUFA) action date for the New Drug Application (NDA) for selinexor in treating relapsed refractory multiple myeloma. The FDA previously expected to complete its review by April 6, 2019, but now anticipates making an approval decision by July 6, 2019.
In most cases, a delay in potentially receiving FDA approval for a drug isn't a good thing. But for Karyopharm, investors are viewing the FDA's three-month extension as a positive sign.
In February, Karyopharm stock was hammered after briefing documents were released before an FDA advisory committee meeting scheduled to review selinexor. The documents identified issues that led many to predict that the advisory committee would vote against recommending approval of Karyopharm's drug.
Those predictions proved to be right. The FDA advisory committee did vote 8 to 5 against recommending approval for selinexor. However, it wasn't all bad news. The committee recommended that the FDA wait for the results from Karyopharm's phase 3 Boston study evaluating selinexor before making a final approval decision.
The FDA's extension of the PDUFA date by three months indicates that the agency doesn't intend to wait for the Boston study results, which won't be available until late 2019 at the earliest. However, Karyopharm provided additional clinical information to the FDA after the advisory committee recommendation.
It's good news for Karyopharm that the FDA is taking time to review this additional clinical information. Had the FDA chosen to move forward with the original April 6 deadline, the likelihood was that selinexor would have received a thumbs-down.
Check out the latest earnings call transcript for Karyopharm Therapeutics.
Karyopharm Therapeutics and its investors now simply must wait for the FDA to hand down its decision. It's hard to say which way that decision will go.
In the meantime, the biopharmaceutical company should be in solid shape financially. Karyopharm reported cash, cash equivalents, and investments of $330.9 million as of the end of 2018. That should be enough to fund operations into the second half of 2020.