Analysts Slash KaryoPharm Price Targets By Over 50% After Adcom Setback

Karyopharm Therapeutics Inc KPTI shares are poised to extend their losses to the fifth straight session, with the most recent trigger being the adcom meeting on its multiple myeloma drug.

The Analysts

Wedbush analyst David Nierengarten maintained an Outperform rating on KaryoPharm shares and lowered the price target from $14 to $6.

Bank of America Merrill Lynch analyst Ying Huang downgraded KaryoPharm from Neutral to Underperform and reduced the price target from $15 to $5.

Wedbush: Stock Fairly Valuing Selinexor's Commercial Opportunity 

The FDA panel's 8-5 vote in favor of delaying selinexor approval until the results of the Phase 3 BOSTON trial are out suggests that the key concerns around safety, dose reduction and study design underlined in the briefing documents prevail, Wedbush's Nierengarten said in a Wednesday note.

The vote also indicates receptiveness — especially among physicians — for this novel drug for an indication with limited treatment options, the analyst said. 

The readout from the BOSTON study is due by the end of 2019 or into 2020, Nierengarten said, adding that Wedbush adjusted its valuation and model to reflect this.

Wedbush sees an outlier chance of selinexor being approved by the April 6 PDUFA date, given the split panel vote and the company's prior FDA feedback suggesting that positive Phase 2b STORM data was sufficient for accelerated approval in the first place.

KaryoPharm is due to report earnings before the open Thursday, and the company is likely to share details of the adcom meeting proceedings and the potential implications for the lead asset's development plan, Nierengarten said. 

"We expect selinexor to find use in patients who are ineligible for cell therapy, but believe share price is fairly valuing the commercial opportunity." 

BofA: Cautious On Safety, Tolerability Profile

The likely one-year-plus delay suggested by the FDA panel vote; ongoing safety concerns; and now higher efficacy bar vs. the Velcade-dexamethasone combination are all bearish factors for KaryoPharm, Huang said in a Wednesday note. 

"We believe selinexor has demonstrated encouraging efficacy for relapsed/refractory patients with limited treatment options," the analyst said. "However, we are cautious on the safety/tolerability profile."

The Price Action

KaryoPharm shares have lost about 48 percent from the release of the briefing document Friday through Tuesday. 

The stock was down 7.79 percent at $4.50 at the time of publication Wednesday. 

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