Shares of Karyopharm Therapeutics (KPTI 5.04%), a biopharmaceutical company developing new cancer drugs, are tanking Tuesday as investors respond to an unexpected leadership change.
The stock was trading 30.5% lower as of 11:52 a.m. ET.
On Feb. 8, shares of Karyopharm slipped after the company posted lackluster clinical trial results for its lead drug, Xpovio, as a potential treatment for endometrial cancer. The drug is already approved to treat multiple myeloma patients whose conditions worsen despite previous lines of treatment.
However, the stock price recovered and climbed last week because the company canceled an investor conference presentation at the last minute. Large pharmaceutical companies have been known to ask smaller biopharmaceuticals like Karyopharm to cancel such events when they are in the midst of negotiating buyouts.
Karyopharm stock is tanking Tuesday because investors found out there isn't any acquisition offer in the works. Instead, the company revealed that its chief medical officer was leaving. That isn't something you usually see when the compounds in a company's clinical development pipeline are progressing as planned.
Xpovio launched in 2019, and for the last three months of 2021, its sales reached an annualized run rate of nearly $120 million. Results of the Siendo study show it reduced endometrial cancer patients' risk of the disease worsening by 30% compared to a placebo.
While that is technically a successful result, median progression-free survival for endometrial cancer patients given Xpovio was just 5.7 months. While there's a chance the FDA will grant a label expansion for the treatment based on progression-free survival, sales to patients in this population won't take off until and unless Karyopharm can show that Xpovio offers an overall survival benefit. It's probably best to watch this risky biotech stock from a distance until the company delivers more encouraging clinical trial results.