Specializing in biotech stocks, Small Caps, managing optimized portfolios
Contributor Since 2009
Finding tomorrow's big winners in the lucrative biotech sector, The Biotech Forum focuses on proprietary, breaking research on promising biotech and biopharma stocks with significant potential for outsized alpha. It is the fourth most subscribed to investment service offered through the Marketplace on SeekingAlpha.com. Our service offers a model-20 stock portfolio as well as the most active Live Chat on the Marketplace. This is where scores of seasoned biotech investors trade news and investment ideas back and forth throughout the trading day.
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Specializing in profiling high beta sectors, Bret Jensen founded and also manages The Biotech Forum, The Insiders Forum, and the Busted IPO Forum model portfolios. Finding “gems” in the biotech and small-cap stock sectors, these highly volatile spaces proven hugely successful have empowered Bret Jensen's own investing portfolio.
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Unquestionably, there is progress. The average American now pays twice as much in taxes as he formerly got in wages." - H.L. Mencken
Today, we revisit a promising 'Busted IPO' we have not discussed in a couple of months. We revisit this name and talk about some recent events and upcoming potential catalysts in the paragraphs below.
Karyopharm Therapeutics (KPTI) is a Massachusetts based clinical stage or 'Tier 4' pharmaceutical company. The firm is focused on creating novel, first-in-class drugs directed against nuclear transport and related targets for the treatment of cancer and other diseases. KPTI currently has a market capitalization of approximately $520 million and trades just for around $8.50 a share.
The company's primary asset and most advanced drug candidate is Selinexor which is an oral, first-in-class, reversible, potent, selective inhibitor of nuclear export (SINE) that specifically blocks XPO1. This compound has been granted Orphan Drug Designation in both the United States and the European Union in multiple myeloma and fast track designation by the FDA for the treatment of patients with multiple myeloma who have received at least three prior lines of therapy
Recent Events & Upcoming Catalysts:
In early December, the company presented updated data from a Phase 1/2 study for selinexor to treat multiple myeloma at the big American Society of Hematology (ASH) conference in San Diego. This trial evaluating selinexor in combination with dexamethasone, combined with standard-of-care treatment with Pomalyst or Darzalex produced an overall response response rate of 26.2% (n=32/122), including two complete responders.
In early January, the company submitted a marketing application to the European Medicines Agency seeking conditional approval to use selinexor to treat patients with relapsed/refractory multiple myeloma who have received at least three prior lines of therapy. Selinexor has accelerated assessment status in Europe which means a decision should be rendered at the end of the first half of this year. Selinexor has priority review status in the United States with a scheduled PDUFA date of April 6th.
Finally, a few days after its market application was submitted to Europe, Karyopharm presented at the huge JP Morgan Healthcare Conference out in San Francisco. The company went over recent trial results and also outlined its high level goals for the next two years to investors (above).
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Analysts are largely sanguine around Karyopharm's prospects. The median analyst price target currently is north of $20.00. In recent commentary, Merrill Lynch upgraded KPTI to a Neutral rating and $15 price target on January 3rd and expects Selinexor to be granted FDA approval in April. H.C. Wainwright was a bit more generous on January 9th when it maintained its Buy rating and $24 price target.
The company ended the third quarter with just over $210 million in cash on hand. It raised just north of $165 million via convertible debt offering on October 26th. Management has guided funding is now in place through the first half of 2020.
Despite solid progress over the past few months, the shares of Karyopharm are down over the past six months, although they do seem to be trying to form a bottom in recent months.
The Myeloma market is large one with multiple players and an annual spend north of $17 billion annually. The niche Karyopharm is targeting is already significant and projected to grow rapidly in the coming years. With potential upcoming approvals in both the U.S. and Europe, the risk/reward profile of Karyopharm continues to appear attractive at current trading levels.
Happiness is the china shop; love is the bull." - H.L. Mencken
Thank You & Happy Hunting,
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Disclosure: I am/we are long KPTI.