KPTI US Equity☆

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. Some of the information contained in this discussion and analysis and set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the section titled “Risk Factors” in Part I—Item 1A of this report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a commercial-stage pharmaceutical company pioneering novel cancer therapies and dedicated to the discovery, development and commercialization of first-in-class drugs directed against nuclear export for the treatment of cancer and other diseases. Our scientific expertise is based upon an understanding of the regulation of intracellular communication between the nucleus and the cytoplasm. We have discovered and are developing and commercializing novel, small molecule Selective Inhibitor of Nuclear Export (“SINE”) compounds that inhibit the nuclear export protein exportin 1 (“XPO1”). These SINE compounds, representing a new class of drug candidates with a novel mechanism of action that have the potential to treat a variety of diseases with high unmet medical need, were the first oral XPO1 inhibitors to receive marketing approval. Our lead asset, XPOVIO® (selinexor), received its initial U.S. approval from the U.S. Food and Drug Administration (“FDA”) in July 2019 and is currently approved and marketed in the U.S. for the following indications:

•

In combination with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have received at least one prior therapy. Approval in this indication was supported by data from the BOSTON (Bortezomib, Selinexor and Dexamethasone) study;

•

In combination with dexamethasone for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, at least two immunomodulatory agents, and an anti-CD38 monoclonal antibody. Approval in this indication was supported by data from the STORM (Selinexor Treatment of Refractory Myeloma) study; and

•

For the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”), not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy. This indication was approved under accelerated approval based on response rate and was supported by data from the SADAL (Selinexor Against Diffuse Aggressive Lymphoma) study. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trial(s).

Our primary focus is on marketing XPOVIO in its currently approved indications as well as developing and seeking the regulatory approval of selinexor and eltanexor as oral agents in multiple myeloma, endometrial cancer, myelofibrosis, myelodysplastic syndromes, and in additional cancer indications with significant unmet medical need. We plan to continue to conduct clinical trials and to seek additional approvals for the use of selinexor and eltanexor as single agents or in combination with other oncology therapies to expand the patient populations that are eligible for treatment with selinexor or eltanexor.

On February 8, 2022, we announced top-line results from our Phase 3 SIENDO study evaluating the efficacy and safety of selinexor for front-line maintenance therapy in patients with advanced or recurrent endometrial cancer (the “SIENDO Study”). On February 25, 2022, we attended a pre-supplemental New Drug Application (“sNDA”) submission meeting with the FDA during which we received feedback, including that the top-line results from the SIENDO Study are unlikely to support an sNDA approval. Considering the FDA’s feedback, we intend to initiate a new placebo-controlled randomized clinical study of selinexor in patients with p53 wild-type with advanced or recurrent endometrial cancer this year.

In December 2021, we entered into a license agreement (the “Menarini Agreement”) with Berlin-Chemie AG, an affiliate of the Menarini Group (“Menarini”), pursuant to which we granted Menarini a non-exclusive license to develop, and an exclusive license to commercialize, products containing selinexor for all human oncology indications (the “Product”) in Europe and other key global territories. We received an upfront cash payment of $75.0 million in December 2021 and are entitled to receive up to $202.5 million in milestone payments from Menarini if certain development and sales performance milestones are achieved. We are further eligible to receive tiered royalties ranging from the mid-teens to mid-twenties based on future net sales of the Product in the Menarini territory. The payments owed by Menarini to us are subject to reduction in specified circumstances. Menarini will reimburse us for 25% of all documented expenses we incur for the global development of the Product during 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year.

97

Table of Contents

In June 2021, we amended our Revenue Interest Agreement (the “Amended Revenue Interest Agreement”) with entities managed by HealthCare Royalty Management, LLC (“HCR”) and received $60.0 million in connection with such amendment. For additional information on the Amended Revenue Interest Agreement, see Note 16, “Long-Term Obligations”, to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K.

In April 2021, the European Medicines Agency (“EMA”) validated our Type II variation to the marketing authorization application (“MAA”) based on the data from the Phase 3 BOSTON Study, which evaluated once-weekly administration of selinexor in combination with once-weekly administration of Velcade® (bortezomib) and low-dose dexamethasone compared to standard twice-weekly administration of Velcade® plus low-dose dexamethasone in patients with multiple myeloma who have received one to three prior lines of therapy. In January 2022, as part of the MAA approval process, the EMA conducted a preapproval good clinical practices (“GCP”) inspection at our corporate headquarters, which was also attended by the FDA. In addition, an inspection of one clinical site that participated in the BOSTON Study took place in late 2021. In February 2022, the EMA issued its initial GCP inspection reports, which included certain questions and findings. We have promptly addressed the questions and findings including in the inspection reports, however, there can be no assurances that our proposals will be acceptable to the EMA. We expect that the review of the Type II variation will be completed in the first half of 2022.

As of December 31, 2021, we had an accumulated deficit of $1.2 billion. We had net losses of $124.1 million, $196.3 million and $199.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. We recognized total revenue of $209.8 million in 2021, including $98.4 million of XPOVIO net product revenue and $111.4 million of license revenue. License revenue included $75.0 million in revenue recognized from the Menarini Agreement and $29.3 million recognized in development/regulatory milestone revenue from Antengene Therapeutics Limited (“Antengene”). As of December 31, 2021, we had $235.6 million in cash, cash equivalents, restricted cash and investments.

Uncertainty Relating to the COVID-19 Pandemic

The COVID-19 pandemic has and will continue to affect economies, healthcare systems, and businesses around the world. We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including the impact on our employees, patients and business operations. We have experienced and may continue to experience in the future, disruptions that could impact our results of operations, including product revenue and our financial condition. Although we do not currently expect that the ongoing COVID-19 pandemic will have a material impact on our business plans or results of operations, we are unable to predict the full extent of the impact that the COVID-19 pandemic will have on our operating results and financial condition due to numerous uncertainties. These uncertainties include the availability, administration rates and effectiveness of vaccines and therapeutics against any variants as new strains of the virus evolve, the continued duration and severity of the pandemic, governmental, business or other actions, changes to our operations and how quickly and to what extent normal economic and operation conditions can resume, among others. In addition, in October 2021, we began to require that all of our employees be fully vaccinated, subject to limited medical and religious exemptions. It is uncertain to what extent compliance with the vaccine mandate may result in workforce attrition or difficulty securing future labor needs. We will continue to monitor the COVID-19 situation closely and intend to follow health and safety guidelines as they evolve. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, as well as other unanticipated consequences, remain unknown. The situation surrounding the COVID-19 pandemic remains fluid and we are actively managing our response and assessing potential impacts to our operating results and financial condition, as well as adverse developments in our business. For further information regarding the impact of the COVID-19 pandemic on us, see Item 1A-Risk Factors included in this Annual Report on Form 10-K.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. We believe that the estimates and assumptions involved in the accounting policies described below may have the greatest potential impact on our consolidated financial statements and, therefore, consider these to be our critical accounting estimates. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions and conditions. See Note 2 “Summary of Significant Accounting Policies” to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K for information about our significant accounting policies.

98

Table of Contents

Product Revenue Reserves

We recognize product revenues, net of variable consideration related to certain allowances and accruals, when the customer takes control of the product, which is typically upon delivery to the customer. Revenue from product sales is recorded at the net sales price, which includes estimates of variable consideration for which reserves are reported. These reserves are based on the amounts earned, or to be claimed on the related sales, and are generally classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). On a quarterly basis, we update our estimates and record any needed adjustments in the period we identify the adjustments.

The estimates for our product revenue allowances and accruals are most significantly affected by chargebacks, which are contractual commitments to provide products to qualified healthcare entities at prices lower than the list prices charged to our customers who purchase XPOVIO directly from us, and rebates that represent discount obligations under government programs, including Medicaid, Medicare, the Department of Veterans Affairs, the Department of Defense, and others.

Certain of the amounts noted are known at the time of sale based on contractual terms and, therefore, are recorded pursuant to the most likely amount method under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). Other amounts are estimated and take into consideration a range of possible outcomes, which are probability-weighted and recorded in accordance with the expected value method in ASC 606 for relevant factors, such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the respective underlying contracts.

A 10% increase or decrease in these estimates would impact net sales by a corresponding increase or decrease of less than $2.0 million.

License and Asset Purchase Agreements

We generate revenue from license or similar agreements with pharmaceutical companies for the development and commercialization of certain of our products and product candidates. For elements of collaboration arrangements that are accounted for pursuant to ASC 606, we identify the performance obligations and allocate the total consideration we expect to receive on a relative standalone selling price basis to each performance obligation. We utilize judgment to determine the transaction price. In connection therewith, we evaluate contingent milestones at contract inception to estimate the amount which is not probable of a material reversal to include in the transaction price using the most likely amount method. Milestone payments that are not within our control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore the variable consideration is constrained. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, we re-evaluate the probability of achieving development milestone payments that may not be subject to a material reversal and, if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license and other revenue, as well as earnings, in the period of adjustment.

Accrued Research and Development Costs

We estimate our accrued research and development costs. This process involves reviewing quotes and contracts, identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our accrued research and development costs at each balance sheet date in our financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development costs include fees paid to contract research organizations (“CROs”), and contract manufacturing organizations (“CMOs”), in connection with research and development activities for which we have not yet been invoiced. To date, our estimates have not been materially different than amounts actually incurred.

99

Table of Contents

Results of Operations

The following table summarizes our results of operations (in thousands):

Years Ended December 31,

Operating expenses:

Product Revenue, net (in thousands, except for percentages)

Net product revenue from U.S. commercial sales of XPOVIO for the year ended December 31, 2021 increased 29% as compared to the year ended December 31, 2020 following the December 2020 FDA approval of the expanded indication for XPOVIO in the U.S., which allowed us to penetrate earlier lines of therapy in multiple myeloma.

We expect net product revenue to increase in 2022 as compared to 2021 due to an increasing number of patients shifting into earlier lines of therapy and increasing utilization of XPOVIO by physicians.

License and Other Revenue (in thousands, except for percentages)

License and other revenue for the year ended December 31, 2021 increased $79.5 million as compared to the year ended December 31, 2020 primarily due to the $75.0 million upfront payment we recognized in connection with the execution of our license agreement with Menarini in the fourth quarter of 2021. In addition, we recognized $29.3 million of development/regulatory milestone revenue from Antengene following the South Korean approval, and subsequent commercial launch, of selinexor in two indications during the year ended December 31, 2021. We also recognized $0.3 million into revenue from deferred revenue during the year ended December 31, 2021, which was related to the 2020 upfront payment received upon execution of the amendment to our May 2018 license agreement with Antengene.

We expect license and other revenue to decrease in 2022 due to the one-time $75.0 million upfront payment we recognized in the fourth quarter of 2021 from Menarini. In 2022, we expect to receive certain payments related to reimbursable research and development activities.

100

Table of Contents

Operating Costs and Expenses (in thousands, except for percentages)

Cost of Sales

Cost of sales includes the cost of producing and distributing inventories that are related to U.S. XPOVIO product revenue during the respective period, including salary-related and stock-based compensation expenses for employees involved with XPOVIO production and distribution, freight, and indirect overhead costs, as well as third-party royalties payable on our net product revenue for XPOVIO. In addition, shipping and handling costs for product shipments are recorded in cost of sales as incurred. Finally, cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.

We began capitalizing XPOVIO inventory costs during the third quarter of 2019 subsequent to FDA approval as it is our expectation that such costs will be recoverable through the commercialization of XPOVIO. Prior to the capitalization of XPOVIO inventory costs, such costs were recorded as research and development expenses in the period incurred. Therefore, cost of sales recorded during the years ended December 31, 2021, 2020 and 2019 only reflect a portion of the costs related to the manufacturing of XPOVIO and related materials, since, prior to FDA approval, these costs were expensed. The manufacturing costs of XPOVIO on-hand upon approval were approximately $2.8 million. At December 31, 2021, we had $2.1 million of this previously expensed XPOVIO and related material on-hand. We expect to utilize zero cost inventory with respect to XPOVIO for an extended period of time.

We expect cost of sales to increase in 2022 as a result of an expected increase in net product sales.

Research and Development Expense (in thousands, except for percentages)

In-process research and development 7,355 — — 7,355 100 % — — %

Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:

•

expenses incurred under agreements with third parties, including CROs, CMOs and consultants that help conduct clinical trials and preclinical studies;

•

the cost of acquiring, developing and manufacturing clinical trial materials, including comparator products;

•

costs associated with preclinical activities and regulatory operations;

•

employee-related expenses, including salaries, benefits, travel and stock-based compensation expense; and

•

facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other operating costs.

101

Table of Contents

Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, and information provided to us by our vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected as prepaid expenses or accrued research and development expenses.

Since our research and development has been focused primarily on using our drug discovery and optimization platform to identify product candidates, we have not historically tracked research and development costs by project. In addition, we use our employee and infrastructure resources across multiple research and development projects. The majority of our research and development expenses to date have been related to selinexor.

Research and development expense for the year ended December 31, 2021 increased by approximately $10.0 million as compared to the year ended December 31, 2020 primarily due to:

•

$7.4 million in costs incurred in connection with the acquisition of certain assets from Neumedicines Inc. (“Neumedicines”) in the third quarter of 2021; and

•

an increase of $4.9 million in personnel costs, primarily related to an increase in headcount; partially offset by

•

a decrease of $2.8 million in clinical trial costs.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to decrease in 2022 as compared with 2021 due to our prioritization of our core clinical development programs, including anticipated costs associated with a new SIENDO study to evaluate selinexor in the p53 wild-type patient population. We do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control could impact our clinical development programs and plans.

Selling, General and Administrative Expense (in thousands, except for percentages)

Selling, general and administrative expenses consist primarily of salaries, benefits, travel, and other related costs, including stock-based compensation, for personnel in executive, finance, commercial and administrative functions. Other significant costs include facility costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters and fees for accounting and consulting services.

Selling, general and administrative expense for the year ended December 31, 2021 increased by approximately $17.4 million as compared to the year ended December 31, 2020 primarily related to:

•

an increase of $7.9 million in personnel costs, primarily related to an increase in headcount;

•

an increase of $3.7 million in stock-based compensation costs, primarily related to an increase in headcount;

•

an increase of $3.2 million in travel, consulting and professional costs as certain COVID-19 restrictions were lifted; and

•

an increase of $2.5 million in commercial-related activities, including costs to support our BOSTON launch.

102

Table of Contents

We expect our selling, general and administrative expenses to increase in 2022 as compared to 2021 to support our expanding operating and commercial activities related to sales and marketing of XPOVIO.

Other Expense, net(in thousands, except for percentages)

Other income (expense):

Other expense, net for the year ended December 31, 2021 increased by $1.4 million as compared to the year ended December 31, 2020 primarily due to a decrease in interest income of $2.2 million combined with a decrease in interest expense of $1.1 million. The $1.1 million decrease in interest expense primarily related to a $7.3 million decrease in non-cash interest expense from our 3.00% convertible senior notes due 2025 (the “Notes”), partially offset by a $6.2 million increase in interest expense related to the deferred royalty obligation associated with the June 2021 Amended Revenue Interest Agreement. The $7.3 million decrease related to the Notes was a result of our January 1, 2021 adoption of ASU No. 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity’s Own Equity. As a result of the adoption of this accounting standard, our non-cash interest expense was significantly reduced.

We expect interest expense to increase in 2022 due to the imputed interest on our Amended Revenue Interest Agreement.

Results of Operations—Years Ended December 31, 2020 and 2019

Discussion and analysis of the year ended December 31, 2020 compared to the year ended December 31, 2019 is included under the heading “Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on February 24, 2021 (“2020 Form 10-K”).

103

Table of Contents

Liquidity and Capital Resources

Cash flows

To date, we have financed our operations through a combination of product revenue sales and through private placements of our preferred stock, proceeds from our initial public offering and follow-on offerings of common stock, proceeds from the issuance of convertible debt, proceeds pursuant to the deferred royalty obligation, proceeds from sales of common stock under our Open Market Sale Agreement (as defined below), and cash generated from our business development activities. We have had recurring annual losses since inception and incurred a loss of $124.1 million for the year ended December 31, 2021. As of December 31, 2021, our cash, cash equivalents and investments balances were $228.6 million.

The following table provides information regarding our cash flows (in thousands):

Years Ended December 31,

Effect of exchange rate (48 ) 268 19

Net Cash Used in Operating Activities

Net cash used in operating activities in each of the years ended December 31, 2021 and 2020 primarily reflects our net losses adjusted for non-cash charges and changes in the components of working capital. The decrease in cash used in operating activities during the year ended December 31, 2021 as compared to the year ended December 31, 2020 was driven by a $72.2 million decrease in our net loss due primarily to increased revenues year over year offset by an increase of $5.5 million in non-cash charges and a $24.5 million decrease in the change in operating assets and liabilities.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities changed by approximately $195.5 million during the year ended December 31, 2021 as compared to the year ended December 31, 2020 primarily related to a $229.3 million increase in the purchases of investments offset by $28.3 million decrease in proceeds from sales and maturities of investments. We also used $5.5 million to acquire in-process research and development as a result of our acquisition of assets from Neumedicines in the third quarter of 2021.

Net Cash Provided by Financing Activities

Net cash provided by financing activities decreased by $98.4 million during the year ended December 31, 2021 as compared to the year ended December 31, 2020 primarily related to a decrease of $151.9 million in proceeds from the sale of shares of our common stock year over year, offset by $60.0 million in proceeds received from the Amended Revenue Interest Agreement in 2021.

A discussion of changes in our cash flow from the year ended December 31, 2019 to the year ended December 31, 2020 can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2020 Form 10-K.

Sources of Liquidity

On June 23, 2021, we and certain of our subsidiaries entered into an amendment to the Revenue Interest Agreement with HCR. Pursuant to the Revenue Interest Agreement, HCR paid us $75.0 million, less certain transaction expenses, on September 27, 2019 and pursuant to the Amended Revenue Interest Agreement, HCR paid us $60.0 million on June 23, 2021. For additional information on the Amended Revenue Interest Agreement, see Note 16, “Long-Term Obligations”, to the Consolidated Financial Statements included under Part II, Item 8 of this Annual Report on Form 10-K.

On May 5, 2020, we entered into Amendment No. 1 to the Open Market Sale Agreement, dated August 17, 2018 (the “Open Market Sale Agreement”), with Jefferies LLC, as agent (“Jefferies”), pursuant to which we increased the maximum aggregate offering price of shares of our common stock that we may issue and sell from time to time through Jefferies, by $100.0 million from $75.0 million to up to $175.0 million. As of December 31, 2021, we have sold an aggregate of 4,350,700 shares under the Open Market Sale Agreement, for net proceeds of approximately $56.2 million. As of December 31, 2021, $100.0 million of shares of our common stock may be issued and sold under the Open Market Sale Agreement.

104

Table of Contents

On March 6, 2020, we completed a follow-on offering under our shelf registration statement on Form S-3 pursuant to which we issued an aggregate of 7,187,500 shares of common stock, which included the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $24.00 per share. We received aggregate net proceeds of approximately $161.8 million from the offering after deducting the underwriting discounts and commissions and other offering expenses.

During the year ended December 31, 2021 and 2020, we received $75.0 million and $17.2 million, respectively, in upfront payments under our license and distribution arrangements pursuant to which we are also entitled to receive milestone payments, if certain development goals and sales milestones are achieved, as well as royalties on future net sales of the licensed and sold products in the territories under such arrangements. In addition, under our license agreement with Menarini, Menarini will reimburse us for 25% of all documented expenses we incur for the global development of selinexor during 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year.

Funding Requirements

We expect our expenses, excluding stock-based compensation, to remain consistent. We expect to continue to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution of any of our products, to the extent that these functions are not the responsibility of our collaborators, or costs related to launch preparation for any of our product candidates that may receive regulatory approval in the near future. However, we expect our research and development expenses to decrease due to our prioritization of our core clinical development programs.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete. In addition, our product candidates for which we receive marketing approval may not achieve commercial success. Our ability to become and remain profitable depends on our ability to generate revenue. There can be no assurance as to the amount or timing of any such revenue, and we may not achieve profitability for several years, if at all, as described more fully in the risk factor entitled “We have incurred significant losses since inception, expect to continue to incur significant losses, and may never achieve or maintain profitability,” under the heading “Risk Factors” in this Annual Report on Form 10-K. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. We may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or commercialization efforts.

We currently expect that cash, cash equivalents and short- and long-term investments at December 31, 2021 will be sufficient to fund our current operating plans and capital expenditure requirements for at least twelve months from the date of issuance of the financial statements contained in this Annual Report on Form 10-K while we continue to commercialize XPOVIO in the U.S. and continue the clinical trials of our product candidates. Our future long-term capital requirements will depend on many factors, as described more fully in the risk factor entitled “We will need additional funding to achieve our business objectives. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs and/or commercialization efforts,” under the heading “Risk Factors” in this Annual Report on Form 10-K.

In addition to the expenses required to fund our operations described above, our funding requirements also include the following:

•

Lease costs for our headquarters in Newton, Massachusetts with a term through September 30, 2025, which totaled $2.8 million in 2021 and increase annually; we expect total future lease costs to be approximately $13.9 million over the next four years;

•

Increased cash operating expenditures over our 2021 totals of $107.1 million;

•

Future long-term debt obligations related to the Notes of $169.3 million over the next four years; and

•

Future royalty obligations to HCR under our Revenue Interest Financing Agreement of approximately $233.4 million.

Recently Issued Accounting Pronouncements

Recent accounting pronouncements which may be applicable to us are described in Note 2 “Summary of Significant Accounting Policies” to our Consolidated Financial Statements included under Part II, Item 8 of this Annual Report on Form 10-K.

105

Table of Contents

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents, and investments of $228.6 million as of December 31, 2021. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are short-term securities. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point shift in interest rates would not have a material effect on the fair market value of our investment portfolio.

We do not believe our cash, cash equivalents and investments have significant risk of default or illiquidity. While we believe our cash, cash equivalents and investments do not contain excessive risk, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes in securities at one or more financial institutions that are in excess of federally insured limits. Given the potential instability of financial institutions, we cannot provide assurance that we will not experience losses on these deposits and investments.

We are also exposed to market risk related to changes in foreign currency exchange rates. We contract with contract research organizations and contract manufacturing organizations that are located in Canada and Europe, which are denominated in foreign currencies. We also contract with a number of clinical trial sites outside of the U.S., and our budgets for those studies are frequently denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these agreements. We do not currently hedge our foreign currency exchange rate risk.

Item 8. Financial Statements and Supplementary Data

Our consolidated financial statements, together with the report of our independent registered public accounting firm, appears on pages 111 through 118 of this Annual Report on Form 10-K.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms prescribed by the Securities and Exchange Commission and is accumulated and communicated to management, including the principal executive officer (our Chief Executive Officer) and principal financial officer (our Executive Vice President, Chief Financial Officer and Treasurer), to allow timely decisions regarding required disclosure.

Our management, under the supervision and with the participation of our Chief Executive Officer and Executive Vice President, Chief Financial Officer and Treasurer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on such evaluation, our Chief Executive Officer and Executive Vice President, Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2021.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules13a-15(f) and15d-15(f) of the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Our internal control over financial reporting is a process designed under the supervision of our principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under that framework, management concluded that our internal control over financial reporting was effective as of December 31, 2021.

106

Table of Contents

Our independent registered public accounting firm that audited the financial statements included in this Annual Report on Form 10-K has issued an attestation report on our internal control over financial reporting, which is included below.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

107

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Karyopharm Therapeutics Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Karyopharm Therapeutics Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, Karyopharm Therapeutics Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2021 consolidated financial statements of the Company and our report dated March 1, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Boston, Massachusetts

March 1, 2022

108

Table of Contents

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

109

Table of Contents

PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K and is incorporated by reference from our definitive proxy statement relating to our 2022 annual meeting of stockholders, pursuant to Regulation 14A of the Exchange Act, which we refer to as our 2022 Proxy Statement. We expect to file our 2022 Proxy Statement with the SEC within 120 days of December 31, 2021.

Item 10. Directors, Executive Officers and Corporate Governance

Information regarding our directors, including the audit committee and audit committee financial experts, and compliance with Section 16(a) of the Exchange Act, if applicable, will be included in our 2022 Proxy Statement and is incorporated herein by reference. Information regarding our executive officers is set forth in “Business—Information about Our Executive Officers” in Part I, Item 1 of this Annual Report on Form 10-K.

We have adopted a Code of Business Conduct and Ethics for all of our directors, officers and employees as required by Nasdaq governance rules and as defined by applicable SEC rules. Stockholders may locate a copy of our Code of Business Conduct and Ethics on our website at www.karyopharm.com or request a copy without charge from:

Karyopharm Therapeutics Inc.

Attention: Investor Relations

85 Wells Avenue, 2nd Floor

Newton, MA 02459

We will post to our website any amendments to the Code of Business Conduct and Ethics and any waivers that are required to be disclosed by the rules of either the SEC or Nasdaq.

Item 11. Executive Compensation

The information required by this Item 11 of Form 10-K regarding executive compensation will be included in our 2022 Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 of Form 10-K regarding security ownership of certain beneficial owners and management and securities authorized for issuance under equity compensation plans will be included in our 2022 Proxy Statement and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 of Form 10-K regarding certain relationships and related transactions and director independence will be included in our 2022 Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information required by this Item 14 of Form 10-K regarding principal accountant fees and services will be included in our 2022 Proxy Statement and is incorporated herein by reference.

110

Table of Contents

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

The financial statements listed below are filed as a part of this Annual Report on Form 10-K.

Pagenumber

Report of Independent Registered Public Accounting Firm (PCAOB ID 42) 112

Notes to Consolidated Financial Statements 119

(a)(2) Financial Statement Schedules

All financial schedules have been omitted because the required information is either presented in the consolidated financial statements or the notes thereto or is not applicable or required.

(a)(3) Exhibits

The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Annual Report on Form 10-K are listed in the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K and are incorporated herein.

Item 16. Form 10-K Summary

None.

111

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and

the Board of Directors of Karyopharm Therapeutics Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Karyopharm Therapeutics Inc. (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 1, 2022 expressed an unqualified opinion thereon.

Adoption of ASU No. 2020-06

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for convertible senior notes in 2021 due to the adoption of Accounting Standards Update No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

112

Table of Contents

Accrued Research and Development Costs

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2014.

Boston, Massachusetts

March 1, 2022

113

Table of Contents

Karyopharm Therapeutics Inc.

Consolidated Balance Sheets

(in thousands, except per share amounts)

December 31,

Assets

Current assets:

Prepaid expenses and other current assets 14,039 9,285

Operating lease right-of-use assets 7,915 9,363

Long-term investments — 24,215

Liabilities and stockholders’ (deficit) equity

Current liabilities:

Deferred revenue — 297

Other current liabilities 678 609

Operating lease liabilities, net of current portion 8,969 11,285

Stockholders’ (deficit) equity:

Accumulated other comprehensive income 191 518

Total stockholders’ (deficit) equity (79,673 ) 50,546

Total liabilities and stockholders’ (deficit) equity $ 305,305 $ 313,050

The accompanying notes are an integral part of these consolidated financial statements.

114

Table of Contents

Karyopharm Therapeutics Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

For the Years Ended December 31,

Revenues:

Operating expenses:

Other income (expense):

Other (expense) income, net (85 ) 206 (50 )

Net loss per share—basic and diluted $ (1.65 ) $ (2.72 ) $ (3.22 )

The accompanying notes are an integral part of these consolidated financial statements.

115

Table of Contents

Karyopharm Therapeutics Inc.

Consolidated Statements of Comprehensive Loss

(in thousands)

For the Years Ended December 31,

Comprehensive income (loss):

Unrealized (loss) gain on investments (286 ) 288 207

Foreign currency translation adjustments (41 ) 267 —

The accompanying notes are an integral part of these consolidated financial statements.

116

Table of Contents

Karyopharm Therapeutics Inc.

Consolidated Statements of Stockholders’ (Deficit) Equity

(in thousands)

Common Shares

Vesting of restricted stock 18 — — — — —

Stock-based compensation expense — — 15,291 — — 15,291

Unrealized gain on investments — — — 207 — 207

Vesting of restricted stock 204 — — — — —

Stock-based compensation expense — — 24,407 — — 24,407

Unrealized gain on investments — — — 288 — 288

Foreign currency translation adjustment — — — 267 — 267

Vesting of restricted stock 480 — — — — —

Stock-based compensation expense — — 29,783 — — 29,783

Issuance of common stock for asset purchase 150 — 1,355 — — 1,355

Issuance of common stock, net of issuance costs 638 1 9,902 — — 9,903

Unrealized loss on investments — — — (286 ) — (286 )

Foreign currency cumulative translation adjustment — — — (41 ) — (41 )

The accompanying notes are an integral part of these consolidated financial statements.

117

Table of Contents

Karyopharm Therapeutics Inc.

Consolidated Statements of Cash Flows

(in thousands)

For the Years Ended December 31,

Operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

Acquired in-process research and development 7,355 — —

Net amortization of premiums and discounts on investments 1,560 1,419 (1,382 )

Amortization of debt discount and issuance costs 780 8,071 7,193

Realized and unrealized gains on marketable equity securities (16 ) (15 ) —

Inventory obsolescence charge — 329 —

Change in fair value of embedded derivative liability (90 ) (500 ) —

Changes in operating assets and liabilities:

Prepaid expenses and other current assets (5,254 ) (1,996 ) (868 )

Other assets (19,505 ) — —

Investing activities

Purchases of property and equipment (212 ) (145 ) (206 )

Acquired in-process research and development (5,500 ) — —

Financing activities

Proceeds from Revenue Interest Agreements 60,000 — 73,609

Supplemental disclosures:

Cash paid for interest on convertible debt $ 5,175 $ 5,175 $ 5,175

Cash paid for interest on deferred royalty obligation $ 10,361 $ 6,014 $ —

The accompanying notes are an integral part of these consolidated financial statements.

118

Table of Contents

Karyopharm Therapeutics Inc.

Notes to Consolidated Financial Statements

1. Organization and Operations

The Company

We are a commercial-stage pharmaceutical company pioneering novel cancer therapies and dedicated to the discovery, development and commercialization of first-in-class drugs directed against nuclear export for the treatment of cancer and other diseases. Our scientific expertise is based upon an understanding of the regulation of intracellular communication between the nucleus and the cytoplasm. We have discovered and are developing and commercializing novel, small molecule Selective Inhibitor of Nuclear Export compounds that inhibit the nuclear export protein exportin 1. Our primary focus is on marketing XPOVIO® (selinexor) in its currently approved indications as well as developing and seeking the regulatory approval of selinexor and eltanexor as oral agents in multiple myeloma, endometrial cancer, myelofibrosis, myelodysplastic syndromes, and in additional cancer indications with significant unmet medical need. We were incorporated in Delaware on December 22, 2008 and have a principal place of business in Newton, Massachusetts.

Our lead asset, XPOVIO, received its initial U.S. approval from the U.S. Food and Drug Administration (the “FDA”) in July 2019 and is currently approved and marketed for the following indications: (i) in combination with bortezomib and dexamethasone for the treatment of adult patients with multiple myeloma who have received at least one prior therapy; (ii) in combination with dexamethasone for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, at least two immunomodulatory agents, and an anti-CD38 monoclonal antibody; and (iii) for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”), not otherwise specified, including DLBCL arising from follicular lymphoma, after at least two lines of systemic therapy. In addition, in March 2021 and May 2021, the European Commission and the United Kingdom's Medicines & Healthcare Products Regulatory Agency granted conditional approval, respectively, of NEXPOVIO® (selinexor), the brand name for selinexor in Europe and the United Kingdom, in combination with dexamethasone, to treat adult patients with multiple myeloma who have received at least four prior therapies and whose disease is refractory to at least two proteasome inhibitors, two immunomodulatory agents, and an anti-CD38 monoclonal antibody, and who have demonstrated disease progression on the last therapy. XPOVIO has also received regulatory approval in Singapore, China, South Korea and Israel.

To date, we have financed our operations through a combination of product revenue sales and through private placements of our preferred stock, proceeds from our initial public offering and follow-on offerings of common stock, proceeds from the issuance of convertible debt, proceeds pursuant to a revenue interest financing agreement and subsequent amendment (deferred royalty obligation), proceeds from our Open Market Sale Agreement (as defined below) and cash generated from our business development activities. As of December 31, 2021, we had an accumulated deficit of $1.2 billion. We expect that our cash, cash equivalents and investments at December 31, 2021 will be sufficient to fund our current operating plans and capital expenditure requirements for at least twelve months from the date of issuance of these financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, in deciding how to allocate resources and in assessing performance. We view our operations and manage our business in one operating segment, which is the business of discovering, developing and commercializing drugs to treat cancer and certain other diseases. All of our revenue to date has been derived in the U.S. and all of our material long-lived assets reside in the U.S.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

119

Table of Contents

On an ongoing basis, we evaluate our estimates, including estimates related to our net product revenue, license revenue, clinical trial accruals, stock-based compensation expense, interest expense on our deferred royalty obligation, valuation allowances, migration of intellectual property to the United States, and other reported amounts of expenses during the reported period. We base our estimates on historical experience and other market-specific or relevant assumptions that we believe to be reasonable under the circumstances. Although we regularly assess these estimates, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.

Principles of Consolidation

The consolidated financial statements at December 31, 2021 include the accounts of (i) Karyopharm Therapeutics Inc., (ii) Karyopharm Securities Corp. (“KPSC”), our wholly-owned Massachusetts corporation incorporated in December 2013), (iii) Karyopharm Europe GmbH (our wholly-owned German limited liability company, incorporated in September 2014), (iv) Karyopharm Therapeutics (Bermuda) Ltd. (our limited liability company, registered in Bermuda in March 2015), and (v) Karyopharm Israel Ltd. (our wholly-owned Israeli subsidiary formed in June 2018). All intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of demand deposit accounts and deposits in short-term money market funds. Cash equivalents are stated at cost, which approximates fair value. We consider all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. We do not hold any money market funds with significant liquidity restrictions that would be required to be excluded from cash equivalents.

Investments

We determine the appropriate classification of our investments in debt securities at the time of purchase. All of our securities are classified as available-for-sale and are reported as short-term investments or long-term investments based on maturity dates and whether such assets are reasonably expected to be realized in cash or sold or consumed during the normal cycle of business. Available-for-sale investments are recorded at fair value. Short-term and long-term investments are composed of corporate debt securities, commercial paper and U.S. government and agency securities. We review investments whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. We evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for a credit loss is recorded on our consolidated balance sheet, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that is not related to a credit loss is recognized in other comprehensive loss. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when we believe the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Financial instruments which potentially subject us to credit risk consist primarily of cash, cash equivalents and investments. We hold these investments in highly rated financial institutions, and, by policy, limit the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. We have not experienced any credit losses in such accounts and do not believe we are exposed to any significant credit risk on these funds. We have no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

Fair Value Measurements

Financial instruments, including cash, restricted cash, prepaid expenses and other current assets, other assets, accounts payable and accrued expenses, are presented at amounts that approximate fair value at December 31, 2021 and 2020.

We are required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of

120

Table of Contents

those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs:

Level 1 inputs: Quoted prices in active markets for identical assets or liabilities

Level 2 inputs: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 inputs: Unobservable inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability

Our cash equivalents are comprised of money market funds, U.S. government and agency securities, commercial paper and corporate debt securities as presented in the tables below. We measure these investments at fair value. The fair value of cash equivalents is determined based on “Level 1” or “Level 2” inputs.

Items classified as Level 2 within the valuation hierarchy consist of commercial paper, corporate debt securities, and U.S. government and agency securities. We estimate the fair values of these marketable securities by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. We validate the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

In certain cases where there is limited activity or less transparency around inputs to valuation, the related assets or liabilities are classified as Level 3. The embedded derivative liability associated with our deferred royalty obligation is measured at fair value using an option pricing Monte Carlo simulation model and is included as a component of the deferred royalty obligation. The embedded derivative liability is subject to remeasurement at the end of each reporting period, with changes in fair value recognized as a component of other (expense) income, net. The assumptions used in the option pricing Monte Carlo simulation model include: (i) our estimates of the probability and timing of related events; (ii) the probability-weighted net sales of XPOVIO and any of our other future products, including worldwide net product sales and upfront payments, milestone payments and royalties; (iii) our risk-adjusted discount rate that includes a company specific risk premium; (iv) our cost of debt; (v) volatility; and (vi) the probability of a change in control occurring during the term of the instrument. Our embedded derivative liability, as well as the estimated fair value of the deferred royalty obligation, is described in Note 16, “Long-Term obligations.”

The following tables present information about our financial assets and liability that have been measured at fair value and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands):

Financial assets

Cash equivalents:

U.S. government and agency securities 12,000 12,000 — —

Investments:

Short-term:

U.S. government and agency securities 892 — 892 —

Financial liability

Embedded derivative liability $ 3,080 $ — $ 3,080

121

Table of Contents

Financial assets

Cash equivalents:

Money market funds $ 3,586 $ 3,586 $ — $ —

U.S. government and agency securities 16,000 16,000 — —

Corporate debt securities 2,755 — 2,755 —

Investments:

Short-term:

U.S. government and agency securities 3,002 — 3,002 —

Long-term:

Corporate debt securities (one to two-year maturity) 23,309 — 23,309 —

U.S. government and agency securities (one to two-year maturity) 906 — 906 —

Financial liability

Embedded derivative liability $ 1,800 $ — $ 1,800

The following table sets forth a summary of the changes in the estimated fair value of our embedded derivative liability (in thousands):

EmbeddedDerivativeLiability

Change in fair value of derivative (500 )

Change in fair value of derivative (90 )

Addition of value as a result of Amended Revenue Interest Agreement 1,370

Property and Equipment, Net

Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, generally three to five years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful economic lives of the related assets. Expenditures for maintenance and repairs are charged to expense while the costs of significant improvements are capitalized. Upon retirement or sale, the costs of the assets disposed of and the related accumulated depreciation or amortization is eliminated from the balance sheets and any related gains or losses are reflected in the consolidated statements of operations.

Leases

We account for leases in accordance with Accounting Standards Update (“ASU”), 2016-02, Lease Topic 842. At the inception of an arrangement, we determine if an arrangement is, or contains, a lease based on the unique facts and circumstances present in that arrangement. Lease classification, recognition, and measurement are then determined at the lease commencement date. For arrangements that contain a lease we (i) identify lease and non-lease components, (ii) determine the consideration in the contract, (iii) determine whether the lease is an operating or financing lease; and (iv) recognize lease right-of-use assets and liabilities. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable and as such, we use our incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. Most leases include options to renew and/or terminate the lease, which can impact the lease term. The exercise

122

Table of Contents

of these options is at our discretion and we do not include any of these options within the expected lease term as we are not reasonably certain we will exercise these options.

Fixed, or in substance fixed, lease payments on our operating lease are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed, or in substance fixed, are recognized as incurred. Fixed and variable lease expense on our operating lease is recognized within operating expenses within our consolidated statements of operations.

Long-Lived Assets

We review the carrying values of our long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Any long-lived assets held for disposal are reported at the lower of their carrying amounts or fair values less costs to sell. We have not recorded an impairment in any period since inception.

Accrued Research and Development Costs

We estimate our accrued research and development costs by reviewing quotes and contracts, identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. Most of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We make estimates of our accrued research and development costs at each balance sheet date in our financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development costs include fees paid to contract research organizations (“CROs”), and contract manufacturing organizations (“CMOs”) in connection with research and development activities as well as fees paid to investigative sites in connection with clinical studies, for which we have not yet been invoiced.

We base our expenses related to CROs and CMOs on our estimates of the services received and efforts expended pursuant to quotes and contracts with CROs and CMOs that conduct research and development activities on our behalf. The payment terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our service providers will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimates, we adjust the accrual or prepayment accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular period. To date, our estimates have not been materially different than amounts actually incurred.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), which applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements, and financial instruments. Under ASC 606, we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Product Revenue Recognition

We ship XPOVIO in the U.S. to specialty pharmacies and specialty distributors, collectively referred to as our customers, under a limited number of distribution arrangements with such third parties. Our specialty pharmacy customers resell XPOVIO directly to patients, while our specialty distributor customers resell XPOVIO to healthcare entities, who then resell to patients.

123

Table of Contents

In connection with negotiating and executing contracts with our customers, our policy is to expense incremental costs of obtaining a contract when incurred, if the expected amortization period of the asset that we would have recognized is one year or less. However, no such costs have been incurred to date. In addition to distribution agreements with our customers, we enter into certain arrangements with group purchasing organizations and/or other payors that provide for government mandated and/or privately negotiated rebates, chargebacks, and discounts with respect to the purchase of our products.

In the context of ASC 606, each unit of XPOVIO that is ordered by our customers represents a distinct performance obligation that is completed when control of the product is transferred to the customer. Accordingly, we recognize product revenue when the customer obtains control of our product, which occurs at a point in time, generally upon delivery pursuant to our agreements with our customers. If taxes are collected from customers relating to product sales and remitted to governmental authorities, they are excluded from revenue.

Revenue from product sales is recorded at the net sales price, which includes estimates of variable consideration for which reserves are reported. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are generally classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). Certain of the amounts noted are known at the time of sale based on contractual terms and, therefore, are recorded pursuant to the most likely amount method under ASC 606. Other amounts are estimated and take into consideration a range of possible outcomes, which are probability-weighted and recorded in accordance with the expected value method in ASC 606 for relevant factors, such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the respective underlying contracts. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contracts with our customers will not occur in a future period.

The following are the components of variable consideration related to product revenue:

Cash discounts and distributor fees: We provide customary discounts on XPOVIO sales to our customers for prompt payment, the terms of which are explicitly stated in our contracts with such customers. We also pay fees for distribution services to our customers for sales order management, data, and distribution services, the terms of which are also explicitly stated in our contracts with such customers. Such fees are not for a distinct good or service and, accordingly, are recorded as a reduction of revenue, as well as a reduction to accounts receivable (cash discounts) or as a component of accrued expenses (distributor fees).

Product returns: Consistent with industry practice, we offer our customers and other indirect purchasers a limited right of return for purchased units of XPOVIO for damage, defect, recall, and/or product expiry (beginning three months prior to the product’s expiration date and ending twelve months after the product’s expiration date). We estimate the amount of product sales that will be returned using quantitative and qualitative considerations, such as visibility into the inventory remaining in the distribution channel. Reserves for estimated returns are recorded as a reduction of revenue in the period that the related revenue is recognized, as well as a component of accrued expenses.

Based on the distribution model for XPOVIO, contractual inventory limits with our customers, the price of XPOVIO, and limited contractual return rights, we currently believe there will be minimal XPOVIO returns. However, we will update our estimated return liability each reporting period based on actual shipments of XPOVIO subject to contractual return rights, changes in expectations about the amount of estimated and/or actual returns, and other qualitative considerations.

Chargebacks: Chargebacks for fees and discounts represent the estimated obligations resulting from our contractual commitments to provide products to qualified healthcare entities at prices lower than the list prices charged to our customers who purchase XPOVIO directly from us. Our customers charge us for the discount provided to the healthcare entities. Chargebacks are generally determined at the time of resale to the qualified healthcare provider by our customers. Accordingly, reserves for chargebacks consist of credits that we expect to issue for units that remain in the distribution channel inventory at the end of the reporting period that we expect will be sold to qualified healthcare entities, as well as chargebacks that customers have claimed, but for which we have not yet issued a credit. We record reserves for chargebacks based on contractual terms in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. We generally issue credits to the customer for such amounts within a few weeks after the customer notifies us of the resale to a discount-eligible healthcare entity.

Government rebates: We are subject to discount obligations under state Medicaid programs, Medicare, the Department of Veterans Affairs, the Department of Defense, and others. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component

124

Table of Contents

of accrued expenses. For Medicare, we estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability under Medicare Part D. Our liability for these rebates consists of invoices received for claims from prior and current quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but which remains in distribution channel inventories at the end of the reporting period.

Other incentives: Other incentives offered by us include co-payment assistance, which we provide as financial assistance to patients with commercial insurance that requires prescription drug co-payments by the patient. We calculate the accrual for co-payment assistance based on estimates of claims and the average co-payment assistance amounts per claim that we expect to receive associated with sales of XPOVIO that have been recognized as revenue but remain in distribution channel inventories at the end of the reporting period. Such estimates are based on industry experience with similar products, as well as actual amounts from our product sales to date. Any adjustments to such estimated liabilities on units in the distribution channel at period end, as well as actual amounts incurred on units sold through the distribution channel during the period, are recorded in the same period that the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component of accrued expenses.

Product revenue reserves and allowances: As noted above, cash discounts and chargebacks are recorded as reductions of accounts receivable and product returns, distributor fees, government rebates, and other incentives are recorded as a component of accrued expenses. To date, we have determined a material reversal of revenue would not occur in a future period, for the estimates detailed above, as of December 31, 2021 and, therefore, the transaction price was not reduced further during the year ended December 31, 2021. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect product revenue, net and earnings in the period in which such variances become known.

License and Asset Purchase Agreements

We generate revenue from license or similar agreements with pharmaceutical companies for the development and commercialization of certain of our products and product candidates. Such agreements may include the transfer of intellectual property rights in the form of licenses, transfer of technological know-how, delivery of drug substances, research and development services, and participation on certain committees with the counterparty. Payments made by the customers may include non-refundable upfront fees, payments upon the exercise of customer options, payments based upon the achievement of defined milestones, and royalties on sales of products and product candidates if they are approved and commercialized.

If a license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize the transaction price allocated to the license as revenue upon transfer of control of the license. We evaluate all other promised goods or services in the agreement to determine if they are distinct. If they are not distinct, they are combined with other promised goods or services to create a bundle of promised goods or services that is distinct. Optional future services where any additional consideration paid to us reflects their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations. If optional future services are priced in a manner which provides the customer with a significant or incremental discount, they are material rights, and are accounted for as performance obligations.

We utilize judgment to determine the transaction price. In connection therewith, we evaluate contingent milestones at contract inception to estimate the amount which is not probable of a material reversal to include in the transaction price using the most likely amount method. Milestone payments that are not within our control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore the variable consideration is constrained. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, we re-evaluate the probability of achieving development milestone payments that may not be subject to a material reversal and, if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license and other revenue, as well as earnings, in the period of adjustment.

We then determine whether the performance obligations or combined performance obligations are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. We evaluate the measure of progress, as applicable, for each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded within deferred revenue. Contract liabilities

125

Table of Contents

within deferred revenue are recognized as revenue after control of the goods or services is transferred to the customer and all revenue recognition criteria have been met.

For arrangements that include sales-based royalties, including sales-based milestone payments, and a license of intellectual property that is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of when the related sales occur or when the performance obligation to which some or all of the royalties have been allocated has been satisfied (or partially satisfied).

Asset Acquisitions

We account for asset acquisitions under the accounting standards for business combinations and research and development, as applicable. In-process research and development acquired in an asset acquisition is expensed immediately unless there is an alternative future use. Subsequent payments made for the achievement of milestones are evaluated to determine whether they have an alternative future use or should be expensed.

Accounts Receivable

In general, accounts receivable consists of amounts due from customers, net of customer allowances for cash discounts and chargebacks. Our contracts with customers have standard payment terms that generally require payment within 30 days for specialty pharmacy customers and 65 days for specialty distributor customers. We analyze accounts for collectability and periodically evaluate the creditworthiness of our customers.

Inventory

Prior to regulatory approval, we expense costs relating to the production of inventory as research and development expense in the period incurred. We capitalize the costs incurred to manufacture our products after regulatory approval when, based on our judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Such costs are generally recorded as costs of sales upon shipment. In connection therewith, we value our inventories at the lower of cost or estimated net realizable value. We determine the cost of our inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. Raw materials and work in process includes all inventory costs prior to packaging and labelling, including raw materials, active pharmaceutical ingredient, and drug product. Finished goods include packaged and labelled products. Raw materials and work in process that may be used for either research and development or commercial sale are classified as inventory until the material is consumed or otherwise allocated for research and development. If the material is intended to be used for research and development, it is expensed as research and development once that determination is made.

Prior to FDA approval of XPOVIO, all costs related to the manufacturing of selinexor that could potentially be available to support its commercial launch were charged to research and development expense in the period incurred, as there was no alternative future use. We analyze our inventory levels for recoverability each reporting period. In the period in which there is an impairment identified, we write down inventory that has become obsolete, that has a cost basis in excess of its estimated realizable value, and that is in excess of expected sales requirements as cost of sales. The determination of whether inventory costs will be realizable is based on our estimates. If actual market conditions are less favorable than we project, additional write-downs of inventory may be required, which would be recorded as cost of sales.

Cost of Sales

Cost of sales includes the cost of producing and distributing inventories that are related to U.S. XPOVIO product revenue during the respective period, including salary related and stock-based compensation expense for employees involved with XPOVIO production and distribution, freight, and indirect overhead costs, as well as third-party royalties payable on net product revenue for XPOVIO. In addition, shipping and handling costs for product shipments are recorded in cost of sales as incurred. Finally, cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.

Deferred Royalty Obligation

We treat the debt obligation to HealthCare Royalty Partners III, L.P. and HealthCare Royalty Partners IV, L.P. (“HCR”), as discussed further in Note 16, “Long-term obligations”, as a deferred royalty obligation, amortized using the effective interest rate method over the estimated life of the revenue streams. We recognize interest expense thereon using the effective rate, which is based on our current estimates of future revenues over the life of the arrangement. In connection therewith, we periodically assess our

126

Table of Contents

expected revenues using internal projections, impute interest on the carrying value of the deferred royalty obligation, and record interest expense using the imputed effective interest rate. To the extent our estimates of future revenues are greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, we will account for any such changes by adjusting the effective interest rate on a prospective basis, with a corresponding impact to the reclassification of our deferred royalty obligation. The assumptions used in determining the expected repayment term of the deferred royalty obligation and amortization period of the issuance costs requires that we make estimates that could impact the short-term and long-term classification of such costs, as well as the period over which such costs will be amortized.

Research and Development Expenses

Research and development costs are charged to expense as incurred and include, but are not limited to:

•

employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;

•

expenses incurred under agreements with CROs, CMOs and consultants that help conduct clinical trials and preclinical studies;

•

the cost of acquiring, developing and manufacturing clinical trial materials, including comparator products;

•

facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies; and

•

costs associated with preclinical activities and regulatory operations.

Costs for certain research and development activities, such as clinical trials, are recognized based on various inputs, including an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, and other information provided to us by our vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are accordingly reflected in our financial statements as prepaid or accrued research and development costs.

Comprehensive Loss

Comprehensive loss consists of net loss and certain changes in equity during a period from transactions and currently consists of net loss, unrealized gains and losses on investments and foreign currency translation adjustments.

Foreign Currency Transactions

The functional currency of our subsidiaries in Germany and Israel are the Euro and Shekel, respectively. Foreign currency transaction gains and losses are recorded in the consolidated statements of operations and were immaterial for the years ended December 31, 2021, 2020 and 2019, respectively.

Income Taxes

We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. We provide a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. We have evaluated available evidence and concluded that we may not realize the benefit of our deferred tax assets; therefore, a valuation allowance has been established for the full amount of the deferred tax assets. We recognize interest and/or penalties related to income tax matters in income tax expense. Our state tax provision pertains to income generated by our KPSC entity. Our foreign tax provision pertains to foreign income taxes due by our German and Israel subsidiaries, both of which operate on a cost-plus profit margin basis.

Accounting for Stock-Based Compensation

We account for our stock-based compensation awards in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees and non-employees, including grants of employee stock options, restricted stock and restricted stock units, as well as modifications to existing stock options and shares issued under our employee stock purchase plan (“ESPP”), to be recognized in the consolidated

127

Table of Contents

statements of operations based on their fair values. We use the Black-Scholes option pricing model to determine the fair value of options granted.

Compensation expense related to awards to employees and non-employees with service based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the requisite service period of the award, which is generally the vesting term. Forfeitures are recognized as they occur.

Net Loss Per Share

Basic and diluted net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding for the years ended December 31, 2021, 2020 and 2019. Diluted net loss per share is computed by dividing the diluted net loss by the weighted average number of common shares, including potential dilutive common shares assuming the dilutive effect of outstanding stock options and unvested restricted common stock. For periods in which the Company has reported net losses, diluted net loss per common share is the same as basic net loss per share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect (in thousands):

As of December 31,

We have the option to settle the conversion obligation for our 3.00% convertible senior notes due 2025 (the “Notes”) in cash, shares or any combination of the two. Based on our net loss position, there was no impact on the calculation of dilutive loss per share during the year ended December 31, 2021.

Recently Adopted Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options(Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 reduces complexity of accounting for convertible debt and other equity-linked instruments. The new standard is effective for fiscal years beginning after December 15, 2021 and interim periods within that year.

We early adopted the standard on January 1, 2021 using the modified retrospective basis. Upon adoption of ASC 2020-06, the carrying value of our convertible debt increased by approximately $50.6 million with a corresponding decrease to additional paid-in capital of $65.6 million and accumulated deficit of $15.0 million. Our deferred tax liability also decreased by approximately $11.8 million with a corresponding increase in the income tax valuation allowance. While the adoption did not have a material impact on our consolidated statements of operations or consolidated statements of cash flows, non-cash interest expense associated with the amortization of the debt discount was significantly reduced in periods subsequent to adoption.

3. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

December 31,

Estimated Useful Life (In Years) 2021 2020

Office and computer equipment 3 772 702

Leasehold improvements Lesser of useful lifeor lease term 5,451 5,441

Less accumulated depreciation and amortization (6,057 ) (5,188 )

128

Table of Contents

Depreciation and amortization expense recorded for the year ended December 31, 2021 was $0.8 million. Depreciation and amortization expense for each of the years ended December 31, 2020 and December 31, 2019 was $1.0 million.

4. Investments

The following table summarizes our investments in debt securities, classified as available-for-sale (in thousands):

Amortized Cost Gross UnrealizedGains Gross UnrealizedLoss Fair Value

Short-term:

U.S. government and agency securities 891 1 — 892

AmortizedCost GrossUnrealizedGains GrossUnrealizedLoss FairValue

Short-term:

U.S. government and agency securities 3,002 — — 3,002

Long-term:

Corporate debt securities (one to two-year maturity) 23,195 126 (12 ) 23,309

U.S. government and agency securities (one to two-year maturity) 897 9 — 906

At December 31, 2021 and 2020, we held 10 and 37 debt securities, respectively, that were in an unrealized loss position. The unrealized losses at December 31, 2021 and 2020 were attributable to changes in interest rates and the unrealized losses do not represent credit losses. We do not intend to sell these securities and it is not more likely than not that we will be required to sell them before recovery of their amortized cost basis. The following tables summarize our debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

Less than 12 Months 12 Months or Longer Total

Corporate debt securities $ 16,655 $ (6 ) $ — $ — $ 16,655 $ (6 )

Less than 12 Months 12 Months or Longer Total

129

Table of Contents

5. Inventory

The following table presents our inventory of XPOVIO (in thousands):

December 31,

At December 31, 2021 and 2020, all of our inventory was related to XPOVIO, which was approved by the FDA in July 2019, at which time we began to capitalize costs to manufacture XPOVIO. Prior to FDA approval of XPOVIO, all costs related to the manufacturing of XPOVIO and related material were charged to research and development expense in the period incurred.

6. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

December 31,

7. Related Party Transactions

We paid consulting expenses of $0.2 million, $0.3 million and $0.2 million for the years ended December 31, 2021, 2020 and 2019, respectively, for consulting services with certain related parties, including a family member of management and a board member. At both December 31, 2021 and 2020, there was less than $0.1 million included in accounts payable and accrued expenses due to related parties.

8. Stockholders’ Equity

Underwritten Offering

On March 6, 2020, we completed a follow-on offering under our shelf registration statement on Form S-3 pursuant to which we issued an aggregate of 7,187,500 shares of common stock, which included the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $24.00 per share. We received aggregate net proceeds of approximately $161.8 million from the offering after deducting the underwriting discounts and commissions and other offering expenses.

Open Market Sale Agreement

On August 17, 2018, we entered into an Open Market Sale Agreement (the “Open Market Sale Agreement”) with Jefferies LLC, as agent (“Jefferies”), pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $75.0 million from time to time through Jefferies (the “Open Market Offering”). On May 5, 2020, we entered into Amendment No. 1 to the Open Market Sale Agreement, pursuant to which we increased the maximum aggregate offering price of shares of our common stock that we may issue and sell from time to time through Jefferies, by $100.0 million, from $75.0 million to up to $175.0 million (the “Open Market Shares”).

Under the Open Market Sale Agreement, Jefferies may sell the Open Market Shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). We may sell the Open Market Shares in amounts and at times to be determined by us from time to time subject to the terms and conditions of the Open Market Sale Agreement, but we have no obligation to sell any of the Open Market Shares in an Open Market Offering.

130

Table of Contents

We or Jefferies may suspend or terminate the offering of Open Market Shares upon notice to the other party and subject to other conditions. We have agreed to pay Jefferies commissions for its services in acting as agent in the sale of the Open Market Shares in the amount of up to 3.0% of gross proceeds from the sale of the Open Market Shares pursuant to the Open Market Sale Agreement. We have also agreed to provide Jefferies with customary indemnification and contribution rights.

During the year ended December 31, 2021, we sold an aggregate of 638,341 Open Market Shares under the Open Market Sale Agreement, for net proceeds of approximately $9.9 million. During the year ended December 31, 2020, we did not sell any shares under the Open Market Sale Agreement. During the year ended December 31, 2019, we sold an aggregate of 3,712,359 Open Market Shares under the Open Market Sale Agreement, for net proceeds of approximately $46.2 million. As of December 31, 2021, $100.0 million of Open Market Shares may be issued and sold under the Open Market Sale Agreement.

9. Commitments and Contingencies

Operating Leases

We are party to an operating lease of 98,502 square feet of office and research space in Newton, Massachusetts with a term through September 30, 2025 (the “Newton, MA Lease”). Pursuant to the Newton, MA Lease, we have provided a security deposit in the form of a cash-collateralized letter of credit in the amount of $0.6 million. The amount is classified within long-term restricted cash.

The Newton, MA Lease provides for increases in future minimum annual rental payments, as defined in the lease agreement. The Newton, MA Lease also includes real estate taxes and common area maintenance (“CAM”) charges in the annual rental payments. The operating lease costs for the Newton, MA Lease for each of the years ended December 31, 2021, 2020 and 2019 were $2.8 million, of which approximately $0.9 million, $1.0 million and $0.9 million, respectively, were charges for CAM.

In addition, we are party to certain short-term leases having a term of twelve months or less at the commencement date. We recognize short-term lease expense on a straight-line basis and do not record a related right-of use asset or lease liability for such leases. These costs were insignificant for the years ended December 31, 2021, 2020 and 2019.

Lease Commitments

As of December 31, 2021, future minimum lease payments under non-cancellable operating lease agreements for which we have recognized operating lease right-of-use assets and liabilities are as follows (in thousands):

Years ending December 31, FutureMinimumPayments

Total minimum lease payments $ 13,900

Less: present value adjustment (2,615 )

Present value of minimum lease payments $ 11,285

As of December 31, 2021, the remaining lease term on the Newton, MA Lease was 3.8 years. The lease has a renewal option for an additional five years, although there is no economic penalty for failure to exercise the option.

As a discount rate was not directly observable for our Newton, MA Lease, the discount rate used to calculate the net present value of future payments was our incremental borrowing rate calculated at transition based on the remaining lease term. Through December 31, 2021, the discount rate used to calculate the operating lease liability was 11%. The incremental borrowing rate is the rate of interest that we would expect to pay to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. In determining the incremental borrowing rate, we considered (i) our estimated public credit rating, (ii) our observable debt yields, as well as other bonds in the market issued by other companies with similar credit ratings as us, and (iii) adjustments necessary for collateral, lease term, and inflation or foreign currency.

131

Table of Contents

Litigation

From time to time we may face legal claims or actions in the normal course of business. We were named as a defendant in a securities class action litigation filed on July 23, 2019 in the U.S. District Court for the District of Massachusetts. The complaint was filed by the Allegheny County Employees’ Retirement System, against us and certain of our current and former executive officers and directors as well as the underwriters of our public offerings of common stock conducted in April 2017 and May 2018. This complaint was voluntarily dismissed on March 12, 2020. A second complaint was filed by Heather Mehdi on September 17, 2019, in the same court and against the same defendants with the exception of the underwriters. In April 2020, the court appointed a lead plaintiff, Myo Thant (“Plaintiff”), who filed an amended complaint on June 29, 2020. The amended complaint alleges violations of federal securities laws based on our disclosures related to the results from the Phase 2 SOPRA study and Part 2 of the Phase 2b STORM study, and seeks unspecified compensatory damages, including interest; reasonable costs and expenses, including attorneys’ and expert fees; and such equitable/injunctive relief or other relief as the court may deem just and proper. We have reviewed the allegations and believe they are without merit. We moved to dismiss the complaint on July 31, 2020 and concluded related briefing in September 2020. Before the court ruled on this motion to dismiss, Plaintiff filed a second amended complaint. We moved to dismiss the second amended complaint on November 2, 2020 and completed related briefing on December 3, 2020. On July 21, 2021, the court issued a decision dismissing the securities class action complaint, and an order of dismissal was issued on the same date. On August 20, 2021, Plaintiff filed a Notice of Appeal. Appellate briefing before the First Circuit was completed on December 30, 2021, and oral argument took place on February 8, 2022. While we cannot predict the outcome of the appeal, we believe the appeal is without merit and intend to defend vigorously against this litigation.

On December 14, 2020, we were named as a defendant in a shareholder derivative suit based on allegations substantially similar to those in the class action litigation. The suit was filed in the U.S. District Court for the District of Massachusetts, by Plaintiff Vladimir Gusinsky Revocable Trust, against us and certain of our current and former executive officers and directors. On January 12, 2021, the shareholder derivative suit was stayed pending the outcome of further proceedings in the securities class action and currently remains stayed.

10. Product Revenue

To date, our only source of product revenue has been from the U.S. sales of XPOVIO. The following table summarizes activity in each of the product revenue allowance and reserve categories (in thousands):

Discounts andChargebacks Fees, Rebates,and OtherIncentives Returns Total

Beginning balance at July 3, 2019 $ — $ — $ — $ —

Discounts and chargebacks are recorded as reductions of accounts receivable, and returns, fees, rebates, and other incentives are recorded as a component of accrued expenses.

As of December 31, 2021 and 2020, net product revenue of $20.0 million and $12.9 million, respectively, was included in accounts receivable. To date, we have had no bad debt write-offs and we do not currently have credit issues with any customers. There were no credit losses associated with our accounts receivables as of December 31, 2021 and 2020 and therefore, an allowance for doubtful accounts was not material.

132

Table of Contents

11. License and Asset Purchase Agreements

As of December 31, 2021, we were a party to the following license and other strategic agreements:

Menarini License Agreement

In December 2021, we entered into a license agreement (the “Menarini Agreement”) with Berlin-Chemie AG, an affiliate of the Menarini Group (“Menarini”), pursuant to which we granted Menarini a non-exclusive license to develop, and an exclusive license to commercialize, products containing selinexor (the “Product”), for all human oncology indications in the European Economic Area, United Kingdom, Switzerland, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan, Ukraine, Turkey, Mexico, all Central America countries and all South America countries (collectively, the “Menarini Territory”). In addition, we granted to Menarini a non-exclusive license to package and label the Product in or outside of the Menarini Territory for all human oncology indications solely to enable Menarini to commercialize the Product within the Menarini Territory.

Under the terms of the Menarini Agreement, we will use commercially reasonable efforts to develop the Product, transfer any marketing approval or authorization with respect to the Product in the Menarini Territory to Menarini and to complete any post-marketing approval or authorization studies required by a regulatory authority as a condition of maintaining the approval in any country in the Menarini Territory. Menarini is obligated to use commercially reasonable efforts to apply for and obtain marketing approval or authorization of the Product, and to obtain price or reimbursement approval for the Product after approval of the relevant marketing approval or authorization, in each country of the Menarini Territory in each indication for which we have conducted a registrational clinical trial. Menarini is also obligated to use commercially reasonable efforts at its sole cost and expense to launch and commercialize the Product in each country of the Menarini Territory in each indication for which we have conducted a registrational clinical trial.

We received an upfront cash payment of $75.0 million in December 2021 and are entitled to receive up to $202.5 million in milestone payments from Menarini if certain development and sales performance milestones are achieved. We are further eligible to receive tiered royalties ranging from the mid-teens to mid-twenties based on future net sales of the Product in the Menarini Territory. The payments owed by Menarini to us are subject to reduction in specified circumstances. Menarini will reimburse us for 25% of all documented expenses we incur for the global development of the Product during 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year.

In addition, Menarini will purchase Product from us in accordance with a supply agreement to be entered into by us and Menarini (the “Supply Agreement”). We will supply all required quantities of selinexor and Product for the Menarini Territory as set forth in the Supply Agreement.

The Menarini Agreement will continue in effect on a country-by-country basis until the last to occur among: (i) the fifteenth anniversary of the first commercial sale of the Product in the applicable country, (ii) the expiration of the last-to-expire of the licensed patent rights in the applicable country or (iii) the expiration of any regulatory exclusivity protection covering the Product in such country. However, the Menarini Agreement may be terminated earlier by either party for (i) an uncured material breach of the Menarini Agreement by the other party (A) on a country-by-country basis with respect to the country to which the breach does not affect the Menarini Agreement as a whole or (B) in its entirety if the breach affects the Menarini Agreement as a whole, or (ii) in the event of the insolvency or bankruptcy of the other party. We may also terminate the Menarini Agreement for certain patent challenges by Menarini.

We assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Menarini, is a customer. We identified the following material promises in the arrangement: the granting of a non-exclusive license to develop, and an exclusive license to commercialize, product and label the Product, as well as the initial transfer of know-how and information to Menarini. We also identified immaterial promises under the contract relating to information exchanges and participation on operating committees and other working groups that were not deemed performance obligations. As for the supply of the Product, the Menarini Agreement provides that we will supply to Menarini, and Menarini will purchase from us, all required quantities of Product for the Menarini Territory in accordance with a supply agreement to be entered into by and between us and Menarini within 90 days as from the effective date of the Menarini Agreement (the “Supply Agreement”). We determined that, for accounting purposes, the promise of the Supply Agreement represents a customer option. We also determined that the rate charged for the supply of the Product is not offered at significant and incremental discounts. Accordingly, the Supply Agreement is an option granted to Menarini that does not represent a material right and, therefore, is not a performance obligation at the outset of the arrangement. We then determined that the granting of the license and the initial transfer of know-how were not distinct from one another and must be combined as a performance obligation (the “Combined Performance Obligation”). Based on these determinations, we identified one distinct performance obligation at the inception of the contract: the Combined Performance Obligation. We further determined that the up-front payment of

133

Table of Contents

$75.0 million constituted the entirety of the consideration included in the transaction price at contract inception, which was allocated to the Combined Performance Obligation.

Upon execution of the Menarini Agreement, the transaction price included only the $75.0 million up-front payment owed to us. We may receive further payments upon the achievement of certain milestones, as detailed above, as well as tiered royalty payments that reach mid-teens to mid-twenties based on future net sales.

The future milestones, which represent variable consideration, were evaluated under the most likely amount method, and were not included in the transaction price, because the amounts were fully constrained as of December 31, 2021. As part of our evaluation of the constraint, we considered numerous factors, including that receipt of such milestones is outside our control. Separately, any consideration related to sales-based milestones, as well as royalties on net sales upon commercialization by Menarini, will be recognized when the related sales occur, as they were determined to relate predominantly to the intellectual property and, therefore, have also been excluded from the transaction price in accordance with the sales-based royalty exception, as well as our accounting policy. We will re-evaluate the transaction price in each reporting period, as uncertain events are resolved, or as other changes in circumstances occur.

As noted above, Menarini will reimburse us for 25% of all documented expenses we incur for the global development of the Product during 2022 through 2025, provided that such reimbursements shall not exceed $15.0 million per calendar year. These amounts represent variable consideration and will be recognized as earned.

Antengene License Agreement

In May 2020, we entered into an amendment to our May 2018 license agreement (the “Original Antengene Agreement” and, as amended, the “Amended Antengene Agreement”) with Antengene Therapeutics Limited, a corporation organized and existing under the laws of Hong Kong (“Antengene”) and a subsidiary of Antengene Corporation Co. Ltd., a corporation organized and existing under the laws of the People’s Republic of China, pursuant to which we expanded the territory licensed to Antengene in the Original Antengene Agreement for the exclusive development and commercialization rights of selinexor, eltanexor and KPT-9274, each for the diagnosis, treatment and/or prevention of all human oncology indications, as well as verdinexor for the diagnosis, treatment and/or prevention of certain human non-oncology indications (“Antengene Licensed Compounds”).

Under the terms of the Amended Antengene Agreement, Antengene has the exclusive development and commercialization rights for the Antengene Licensed Compounds in mainland China, Taiwan, Hong Kong, Macau, South Korea, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, Australia and New Zealand (the “Antengene Territory”). Under the terms of the Original Antengene Agreement, we received an upfront cash payment of $11.7 million in 2018 and in June 2020 we received a one-time upfront cash payment of $11.7 million in connection with the Amended Antengene Agreement. During 2021, we recognized $29.3 million of development/regulatory milestone revenue from Antengene, as discussed further below. We are also entitled to future milestone payments from Antengene if certain development, regulatory and commercialization goals are achieved. Finally, we are also eligible to receive tiered double-digit royalties based on future net sales of selinexor and eltanexor, and tiered single- to double-digit royalties based on future net sales of verdinexor and KPT-9274 in the Antengene Territory. In addition, upon Antengene’s election and the parties’ full execution of a manufacturing technology transfer plan and satisfaction of other specified conditions for each Licensed Compound (the “Antengene Manufacturing Election”), we will grant to Antengene non-exclusive rights to manufacture the requested Antengene Licensed Compounds and products containing such compounds in or outside of the Antengene Territory solely for development and commercialization in the fields in the Antengene Territory.

As part of the Amended Antengene Agreement, Antengene also has the right to participate in global clinical studies of the Antengene Licensed Compounds and will bear the cost and expense for patients enrolled in such global clinical studies in the Antengene Territory. Antengene is responsible for seeking regulatory and marketing approvals for the Antengene Licensed Compounds in the Antengene Territory, as well as any development of the products specifically necessary to obtain such approvals. Antengene is also responsible for the commercialization of the Antengene Licensed Compounds in the Oncology Field and Non-Oncology Field, as applicable, in the Antengene Territory at its own cost and expense. Until such time as Antengene elects to manufacture its own drug substance, we will furnish clinical supplies of drug substance to Antengene for use in Antengene’s development efforts pursuant to a clinical supply agreement between us and Antengene, and Antengene's commercial supplies of drug product pursuant to a commercial supply agreement between us and Antengene, in each case the costs of which will be borne by Antengene.

The Amended Antengene Agreement will continue in effect on a product-by-product, country-by-country basis until the later of the tenth anniversary of the first commercial sale of the applicable product in such country or the expiration of specified patent protection and regulatory exclusivity periods for the applicable product in such country. However, the Amended Antengene

134

Table of Contents

Agreement may be terminated earlier by (i) either party for breach of the Amended Antengene Agreement by the other party or in the event of the insolvency or bankruptcy of the other party, (ii) Antengene on a product-by-product basis for certain safety reasons or on a product-by-product, country-by-country basis for any reason with 180 days’ prior notice or (iii) us in the event Antengene challenges or assists with a challenge to certain of our patent rights.

We assessed the Amended Antengene Agreement in accordance with ASC 606 and concluded that the amendment was a contract modification. We further concluded that the performance obligations under the Amended Antengene Agreement were the same performance obligations identified in the Original Antengene Agreement, including the following material promises under the contract: (i) exclusive licenses for each Antengene Licensed Compound; (ii) initial data transfers for each Antengene Licensed Compound, which consisted of regulatory data compiled by us for the Antengene Licensed Compounds as of May 2018 (the “Antengene Effective Date”); and (iii) obligations to stand-ready to provide an initial clinical supply for each Antengene Licensed Compound.

We also identified immaterial promises under the contract relating to information exchanges and participation on operating committees and other working groups. Separately, we also identified certain customer options that would create an obligation for us if exercised by Antengene, including (i) additional data transfers for each Antengene Licensed Compound, which would consist of the transfer of additional regulatory data compiled by us for each Antengene Licensed Compound after the Antengene Effective Date; (ii) obligations to provide additional clinical supply and related substance supply for each Antengene Licensed Compound upon request by Antengene; (iii) manufacturing technology transfers and licenses for each Antengene Licensed Compound under the Antengene Manufacturing Election, as detailed above; and (iv) options for a backup compound, which represents Antengene’s option to select a replacement compound in the event it elects to discontinue the development of the Antengene Licensed Compounds (the “Antengene Transfer Options”). The Antengene Transfer Options individually represent material rights, as they were offered at a significant and incremental discount. Therefore, they were further assessed as performance obligations under the Amended Antengene Agreement. Finally, we also identified certain other customer options that create a manufacturing obligation for us, including for commercial supply. These options do not represent a material right, as they are not offered at a significant and incremental discount.

In further evaluating the promises detailed above, we determined that the exclusive licenses, initial data transfers, and stand-ready obligation to provide initial clinical supply for each Antengene Licensed Compound were not distinct from one another, and must be combined as four separate performance obligations (the “Antengene Combined License Obligation for selinexor,” “Antengene Combined License Obligation for eltanexor,” “Antengene Combined License Obligation for KPT-9274” and “Antengene Combined License Obligation for verdinexor”). This is because, for each Antengene Licensed Compound, Antengene requires the initial data transfer and initial clinical supply to derive benefit from the exclusive licenses, since we did not grant manufacturing licenses to any of the Antengene Licensed Compounds at contract inception. We also determined that each of the Antengene Transfer Options represents a distinct performance obligation. Based on these determinations, we identified eight performance obligations at the inception of the Antengene License Agreement, including (i) the Antengene Combined License Obligation for selinexor; (ii) the Antengene Combined License Obligation for eltanexor; (iii) the Antengene Combined License Obligation for KPT-9274; (iv) the Antengene Combined License Obligation for verdinexor; and the four components of the Antengene Transfer Options, including (v) the material right for additional data transfer; (vi) the material right for additional clinical supply and related substance supply; (vii) the material right for manufacturing technology transfer and license; and (viii) the material right for the option for a backup compound.

We further determined that the up-front payment of $11.7 million, received upon execution of the Original Antengene Agreement, constituted the entirety of the consideration included in the transaction price at contract inception, which was allocated to the performance obligations based on their relative stand-alone selling prices. We determined that substantially all of the total standalone selling price in the arrangement was derived from the four Antengene Combined License Obligations for selinexor, eltanexor, KPT-9274 and verdinexor. In connection therewith, we also estimated the standalone selling price for each of the material rights within the Antengene Transfer Options, and determined that such amounts were insignificant, and, therefore, immaterial for purposes of allocation. Accordingly, we allocated the $11.7 million transaction price among the Antengene Combined License Obligations as follows: $9.4 million for selinexor, $1.1 million for eltanexor, $1.0 million for KPT-9274, and $0.2 million for verdinexor. We believe that a change in the assumptions used to determine our best estimate of the stand-alone selling prices for any of the identified performance obligations would not have a significant effect on the allocation of the underlying transaction price to the performance obligations.

Under the Original Antengene Agreement, we had already fulfilled all of our promises under the combined performance obligations for selinexor and KPT-9274 as of the effective date of the Amended Antengene Agreement. We recognized $1.0 million under the Original Antengene Agreement during the first quarter of 2020 and had recognized $9.4 million under the Original Antengene Agreement in 2019. Accordingly, the licenses to the incremental territories for selinexor and KPT-9274 were considered distinct from the promised goods and services already provided. By contrast, we had not yet fulfilled all of our promises under the combined performance obligations for eltanexor and verdinexor under the Original Antengene Agreement as of the effective date of

135

Table of Contents

the Amended Antengene Agreement. Accordingly, the licenses to the incremental territories for eltanexor and verdinexor are not distinct from promised goods and services already provided.

Based on the conclusions noted above, we updated the transaction price, which included the $1.3 million unrecognized deferred revenue from the $11.7 million upfront payment we received from Antengene under the terms of the Original Antengene Agreement, and the $11.7 million upfront payment we received from Antengene under the terms of the Amended Antengene Agreement, and allocated the total, or $13.0 million, to the remaining performance obligations based on their estimated standalone selling prices as of the effective date of the Amended Antengene Agreement. Since we had already fulfilled all of our promises under the combined performance obligations for selinexor and KPT-9274 as of the effective date of the Amended Antengene Agreement, we recognized a cumulative adjustment to license revenue of $12.7 million during the year ended December 31, 2020. We recognized $0.3 million in revenue when initial clinical supply of eltanexor was delivered to Antengene during the year ended December 31, 2021. For the remaining promises to be fulfilled under the combined performance obligation for verdinexor, none of the transaction price was allocated thereto, as it was assessed as immaterial in comparison to the other combined performance obligations under the Amended Antengene Agreement.

Finally, we also reassessed other promised goods and services within the modified contract, including customer options and material rights, ultimately concluding such promised goods and services continue to be immaterial. The future development and regulatory milestones and cost reimbursement for providing clinical and commercial supply of the Antengene Licensed Compounds, all of which represent variable consideration, were evaluated under the most likely amount method, and were not included in the transaction price at contract inception and/or through December 31, 2021, because the amounts were fully constrained as of December 31, 2021. As part of our evaluation of the constraint, we considered numerous factors, including that receipt of such amounts is outside of our control. Separately, any consideration related to sales-based milestones, as well as royalties on net sales upon commercialization of XPOVIO by Antengene, will be recognized when the related sales occur, as they were determined to relate predominantly to the intellectual property licenses granted to Antengene and, therefore, have also been excluded from the transaction price in accordance with the sales-based royalty exception, as well as our accounting policy. We will re-evaluate the transaction price in each reporting period, as uncertain events are resolved, or as other changes in circumstances occur.

During the year ended December 31, 2021, we recognized $29.3 million in net development/regulatory milestone revenue from Antengene related to commercial launch in the Antengene Territory following regulatory approval received for selinexor for the treatment of multiple myeloma and diffuse large B-cell lymphoma. Of the $29.3 million recognized, $19.5 million was recorded in other assets as of December 31, 2021. During the year ended December 31, 2020, we earned $9.8 million in regulatory milestone payments from Antengene following certain regulatory filings by Antengene for selinexor in both multiple myeloma and DLBCL indications in Australia, Singapore and South Korea. In addition, during the years ended December 31, 2020 and 2019, we recognized $13.7 million and $9.4 million, respectively, in revenue related to upfront payments under the Amended Antengene Agreement. We did not receive an upfront payment from Antengene during the year ended December 31, 2021.

Biogen Asset Purchase Agreement

On January 24, 2018, we entered into an Asset Purchase Agreement (the “APA”) and Letter Agreement with Biogen MA Inc., a Massachusetts corporation and subsidiary of Biogen, Inc. (“Biogen”).

Under the terms of the APA and Letter Agreement, we sold to Biogen exclusive worldwide rights to develop and commercialize our oral SINE compound KPT-350 and certain related assets with an initial focus in amyotrophic lateral sclerosis (“ALS”) and also granted Biogen: (i) an exclusive worldwide license under certain of our intellectual property to manufacture or have manufactured KPT-350, (ii) a technology transfer package, consisting of information and our know-how regarding the manufacture of KPT-350, (iii) a right, at Biogen’s request, to have us provide transition assistance regarding manufacturing and other matters, (iv) existing inventory of KPT-350, (v) an initial supply of KPT-350, and (vi) a right, at Biogen’s request, to have us manufacture and supply the active pharmaceutical ingredient for an additional supply of KPT-350. In consideration for these rights, we received an upfront payment of $10.0 million in 2018, and we are eligible to receive additional payments of up to $142.0 million based on the achievement by Biogen of future specified development and regulatory milestones, and up to $65.0 million based on the achievement by Biogen of future specified commercial milestones. We will also be eligible to receive tiered royalty payments that reach low double-digits based on future net sales until the later of the tenth anniversary of the first commercial sale of the applicable product and the expiration of specified patent protection for the applicable product, determined on a country-by-country basis.

We and Biogen have made customary representations and warranties and agreed to customary covenants in the APA, including covenants requiring Biogen to use commercially reasonable efforts to develop KPT-350 in specified neurological indications, including ALS, in any of the U.S., United Kingdom, France, Spain, Germany or Italy. The APA will continue in effect until the expiration of all royalty obligations, provided that the APA may be terminated earlier by Biogen, subject to the requirements that

136

Table of Contents

Biogen (i) negotiate in good faith with us regarding an assignment or license back to us of the purchased assets and (ii) not transfer or license the purchased assets to a third party unless such third party assumes Biogen’s obligations to us under the APA.

We may receive further payments upon the achievement of certain regulatory and sales milestones, as detailed above, as well as tiered royalty payments that reach low double-digits based on future net sales.

The future development and regulatory milestones, which represent variable consideration, were evaluated under the most likely amount method, and were not included in the transaction price, because the amounts were fully constrained as of December 31, 2021. As part of our evaluation of the constraint, we considered numerous factors, including that receipt of such milestones is outside our control. Separately, any consideration related to sales-based milestones, as well as royalties on net sales upon commercialization by Biogen, will be recognized when the related sales occur, as they were determined to relate predominantly to the intellectual property and, therefore, have also been excluded from the transaction price in accordance with the sales-based royalty exception, as well as our accounting policy. We will re-evaluate the transaction price in each reporting period, as uncertain events are resolved, or as other changes in circumstances occur.

FORUS Therapeutics Inc. Distribution Agreement

In December 2020, we entered into an exclusive distribution agreement (“FORUS Agreement”) for the commercialization of XPOVIO in Canada with FORUS Therapeutics Inc. (“FORUS”). Under the terms of the FORUS Agreement, we granted exclusive rights to FORUS as our sole and exclusive distributor of selinexor within Canada. Pursuant to the terms of the FORUS Agreement, we received an upfront payment of $5.0 million in the fourth quarter of 2020. We are also eligible to receive additional payments if certain prespecified regulatory and commercial milestones are achieved by FORUS, as well as double-digit royalties on future net sales of XPOVIO in Canada. We have retained the exclusive production rights and will supply finished products to FORUS for commercial use in Canada.

We assessed the FORUS Agreement in accordance with ASC 606 and concluded that the contract counterparty, FORUS, is a customer. We identified the following material promises under the contract: (i) transfer of exclusive rights to distribute XPOVIO in Canada; and (ii) initial data transfer, which consisted of development and regulatory data compiled by us.

We also identified immaterial promises under the contract relating to ongoing regulatory cooperation from us in order to support FORUS in the regulatory approval process. Separately, we also identified a customer option, which is our obligation to provide commercial supply to FORUS throughout the term of the FORUS Agreement. This option does not represent a material right, as it is not offered at a significant and incremental discount.