10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 001-36167

Karyopharm Therapeutics Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	26-3931704 (I.R.S. Employer Identification Number)
2 Mercer Road Natick, MA (Address of principal executive offices)	01760 (Zip Code)

(508) 975-4820

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer x
(Do not check if a
smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

As of December 16, 2013, there were 29,749,593 shares of Common Stock, $0.0001 par value per share, outstanding.

Explanatory Note

The purpose of this Amendment No. 1 on Form 10-Q/A to Karyopharm Therapeutic Inc.’s quarterly report on Form 10-Q for the quarter ended September 30, 2013, filed with the Securities and Exchange Commission on December 20, 2013 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T.

No other changes have been made to the Form 10-Q. This Amendment No. 1 speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

2

Item 6.  Exhibits.

The exhibits filed as part of this Quarterly Report on Form 10-Q/A are set forth on the Exhibit Index hereto, which Exhibit Index is incorporated herein by reference.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KARYOPHARM THERAPEUTICS INC.
Date: December 23, 2013	By:	/s/ PAUL BRANNELLY
		Paul Brannelly
		Senior Vice President, Finance & Administration
		(Principal financial and accounting officer)

4

EXHIBIT INDEX

Exhibit Number	Description of Exhibit		Incorporated by Reference			Filed Herewith
		Form	File Number	Date of Filing	Exhibit Number
3.1	Restated Certificate of Incorporation	8-K
3.2	Amended and Restated By-Laws	8-K
10.1	2013 Stock Incentive Plan	S-1/A	333-191584	10/28/13	10.3
10.2	Form of Incentive Stock Option Agreement under 2013 Stock Incentive Plan	S-1/A	333-191584	10/28/13	10.4
10.3	Form of Nonstatutory Stock Option Agreement under 2013 Stock Incentive Plan	S-1/A	333-191584	10/28/13	10.5
10.4	2013 Employee Stock Purchase Plan	S-1/A	333-191584	10/28/13	10.6
31.1	Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.	10-Q	001-36167	12/20/13	31.1
31.2	Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.	10-Q	001-36167	12/20/13	31.2
32.1	Certification of principal executive officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	10-Q	001-36167	12/20/13	32.1
32.2	Certification of principal financial officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	10-Q	001-36167	12/20/13	32.2
101.INS	XBRL Instance Document*					X
101.SCH	XBRL Taxonomy Extension Schema Document*					X
101.CAL	XBRL Taxonomy Calculation Linkbase Document*					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*					X
101.LAB	XBRL Taxonomy Label Linkbase Document*					X

*Submitted electronically herewith

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Accrued liabilities (Tables)

9 Months Ended

Sep. 30, 2013

Accrued liabilities

Schedule of accrued liabilities

	September 30, 2013		December 31, 2012
Payroll and employee-related costs	$	643	$	302
Research and development costs	621		333
Professional fees	486		—
Other	170		129
	$	1,920	$	764

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		57 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Contract and grant revenue		$ 34	$ 366	$ 601	$ 1,245
Operating expenses:
Research and development	7,738	2,997	18,763	10,429	43,146
General and administrative	1,583	672	3,405	1,824	8,337
Total operating expenses	9,321	3,669	22,168	12,253	51,483
Loss from operations	(9,321)	(3,635)	(21,802)	(11,652)	(50,238)
Other income (expense):
Interest income			1	2	3
Interest expense					(188)
Net loss	$ (9,321)	$ (3,635)	$ (21,801)	$ (11,650)	$ (50,423)
Net loss per share applicable to common stockholders-basic and diluted (in dollars per share)	$ 2,544,587	$ 1,846,859	$ 2,392,589	$ 1,672,662	$ 986,601
Weighted average number of common shares used in net loss per share applicable to common stockholders-basic and diluted (in shares)	(3.66)	(1.97)	(9.11)	(6.96)	(51.11)

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Net loss per common share

9 Months Ended

Sep. 30, 2013

Net loss per common share

Net loss per common share

5. Net loss per common share

Basic net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents or unvested restricted stock. Diluted net loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method.  For purposes of this calculation, convertible preferred stock and stock options are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.

The amounts in the table below were excluded from the calculation of diluted weighted-average shares outstanding due to their anti-dilutive effect:

					Period from
	Three Months ended		Nine Months ended		December 22, 2008
	September 30,		September 30,		(inception) to
	2013	2012	2013	2012	September 30, 2013
Convertible preferred stock	19,114,241	4,829,544	19,114,241	4,829,544	19,114,241
Special Participation Stock	—	10,000	—	10,000	—
Outstanding stock options	1,775,593	551,128	1,775,593	551,128	1,775,593
Unvested restricted stock	224,019	761,875	224,019	761,875	224,019

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Net loss per common share (Details)	3 Months Ended		9 Months Ended		57 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Convertible preferred stock
Net loss per common share
Amounts excluded from the calculation of diluted weighted-average shares outstanding due to anti dilutive effect (in shares)	19,114,241	4,829,544	19,114,241	4,829,544	19,114,241
Special Participation Stock
Net loss per common share
Amounts excluded from the calculation of diluted weighted-average shares outstanding due to anti dilutive effect (in shares)	0	10,000	0	10,000	0
Outstanding stock options
Net loss per common share
Amounts excluded from the calculation of diluted weighted-average shares outstanding due to anti dilutive effect (in shares)	1,775,593	551,128	1,775,593	551,128	1,775,593
Unvested restricted stock
Net loss per common share
Amounts excluded from the calculation of diluted weighted-average shares outstanding due to anti dilutive effect (in shares)	224,019	761,875	224,019	761,875	224,019

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Net loss per common share (Tables)

9 Months Ended

Sep. 30, 2013

Net loss per common share

Schedule of amounts excluded from the calculation of diluted weighted-average shares outstanding due to anti dilutive effect

					Period from
	Three Months ended		Nine Months ended		December 22, 2008
	September 30,		September 30,		(inception) to
	2013	2012	2013	2012	September 30, 2013
Convertible preferred stock	19,114,241	4,829,544	19,114,241	4,829,544	19,114,241
Special Participation Stock	—	10,000	—	10,000	—
Outstanding stock options	1,775,593	551,128	1,775,593	551,128	1,775,593
Unvested restricted stock	224,019	761,875	224,019	761,875	224,019

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Stock-based compensation (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		57 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Total stock-based compensation expense recognized in connection with all share-based payment awards
Total	$ 1,323	$ 156	$ 1,769	$ 329	$ 2,492
Research and development
Total stock-based compensation expense recognized in connection with all share-based payment awards
Total	949	151	1,338	305	2,013
General and administrative
Total stock-based compensation expense recognized in connection with all share-based payment awards
Total	$ 374	$ 5	$ 431	$ 24	$ 479

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Stock-based compensation (Details) (Plan)	9 Months Ended
	Sep. 30, 2013
Stock-based compensation
Number of shares of common stock authorized for issuance under the Plan	2,763,271
Number of shares available for issuance under the Plan	191,994
Stock option
Stock-based compensation
Expiration period	10 years
Stock option | Percent vesting one calendar year from vesting start date
Stock-based compensation
Vesting percentage	25.00%
Stock option | Percentage vesting on the first day of each month after one calendar year
Stock-based compensation
Vesting percentage	2.083%

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Stockholders' Equity (Details) (USD $)	1 Months Ended
	Nov. 30, 2013	Jul. 31, 2013 Series B-1 convertible preferred stock	Aug. 31, 2013 Series A-2 preferred stock	Aug. 31, 2013 Series A-3 preferred stock	Aug. 31, 2013 Series A-4 preferred stock	Sep. 30, 2013 Series B preferred stock
Stockholders' Equity
Number of shares issued and sold	6,800,000	8,636,362	6,100,000	1,764,706	1,538,461	12,500,000
Purchase price (in dollars per share)	$ 16.00	$ 2.20	$ 1.15	$ 1.70	$ 1.30	$ 2.00
Aggregate purchase price		$ 18,999,996	$ 7,015,000	$ 3,000,000	$ 1,999,999	$ 25,000,000

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Summary of significant accounting policies

9 Months Ended

Sep. 30, 2013

Summary of significant accounting policies

Summary of significant accounting policies

1. Summary of significant accounting policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2013.  The condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Prospectus filed with the SEC pursuant to Rule 424(b)(4) on November 7, 2013 (the “Prospectus”).

In November 2013, the Company closed an initial public offering (“IPO”) of its common stock, which resulted in the sale of 6,800,000 shares of its common stock at a public offering price of $16.00 per share.  In December 2013, the Company issued 1,020,000 shares of common stock upon the exercise by the underwriters of their option to purchase additional shares at the public offering price. The Company received net proceeds from the IPO of approximately $113.7 million, after deducting underwriting discounts and estimated expenses payable by the Company.

In connection with preparing for the IPO, the Company’s Board of Directors and stockholders approved a one-for-3.3 reverse stock split of the Company’s common stock. The reverse stock split became effective in October 2013. All share and per share amounts in the condensed consolidated interim financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. In connection with the closing of the IPO, all of the Company’s outstanding convertible preferred stock automatically converted to common stock in November 2013, resulting in an additional 19,114,241 shares of common stock of the Company becoming outstanding. The significant increase in common stock outstanding in November 2013 is expected to impact the year-over-year comparability of the Company’s net loss per share calculations in future periods.

The consolidated financial statements include the accounts of Karyopharm Therapeutics Inc. (a Delaware corporation) and the accounts of NPM Pharma Inc. (“NPM”, a Canadian corporation), which was a variable interest entity requiring consolidation.  In August 2013, the Company purchased for nominal consideration from the other shareholder the 50% not owned by the Company. As a result NPM is a wholly owned subsidiary of the Company as of this date.

NPM was formed in December 2011 and was 50% owned by the Company until it became a wholly-owned subsidiary in August 2013. NPM was established to procure research and development services in connection with clinical pharmaceutical studies with Canadian vendors on the Company’s behalf.   Total NPM assets and liabilities as of December 31, 2012 are reflected on the Company’s balance sheet.  As of December 31, 2012, all assets of NPM are restricted to use to settle obligations of NPM. Liabilities of NPM are non-recourse to the Company.

Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company has completed an evaluation of all subsequent events through the date of the filing of this From 10-Q.

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Property and equipment

9 Months Ended

Sep. 30, 2013

Property and equipment

Property and equipment

3. Property and equipment

Property and equipment, net, consist of the following:

	Estimated Useful Life Years	September 30, 2013			December 31, 2012
Laboratory equipment	4	$	314		$	314
Furniture and fixtures	5	90			90
Office and computer equipment	3	85			85
Leasehold improvements	Lease term	69			44
		558			533
Less accumulated depreciation and amortization		(312		)	(206		)
Property and equipment, net		$	246		$	327

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Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Stockholders' Equity

Stockholders' Equity

6. Stockholders’ Equity

In July 2013, the Company issued and sold an aggregate of 8,636,362 shares of its series B-1 convertible preferred stock at a purchase price per share of $2.20, for an aggregate purchase price of $18,999,996.

In August 2013, the Company issued (i) an aggregate of 6,100,000 shares of its series A-2 preferred stock at a purchase price per share of $1.15, for an aggregate purchase price of $7,015,000, (ii) an aggregate of 1,764,706 shares of its series A-3 preferred stock at a purchase price per share of $1.70, for an aggregate purchase price of $3,000,000, and (iii) an aggregate of 1,538,461 shares of its series A-4 preferred stock, at a purchase price per share of $1.30, for an aggregate purchase price of $1,999,999.

In September 2013, the Company issued and sold an aggregate of 12,500,000 shares of its series B preferred stock at a purchase price per share of $2.00, for an aggregate purchase price of $25,000,000.

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Accrued liabilities

9 Months Ended

Sep. 30, 2013

Accrued liabilities

Accrued liabilities

4. Accrued liabilities

Accrued liabilities consisted of the following:

	September 30, 2013		December 31, 2012
Payroll and employee-related costs	$	643	$	302
Research and development costs	621		333
Professional fees	486		—
Other	170		129
	$	1,920	$	764

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Stock-based compensation (Details 3) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Stock option
Shares
Outstanding at the beginning of the period (in shares)	691,367
Granted (in shares)	1,268,757
Exercised (in shares)	(138,636)
Forfeited (in shares)	(45,895)
Outstanding at the end of the period (in shares)	1,775,593
Exercisable at the end of the period (in shares)	281,035
Vested and expected to vest at the end of the period (in shares)	1,637,094
Weighted-average price per share
Outstanding at the beginning of the period (in dollars per share)	$ 0.46
Granted (in dollars per share)	$ 4.69
Exercised (in dollars per share)	$ 2.41
Forfeited (in dollars per share)	$ 1.49
Outstanding at the end of the period (in dollars per share)	$ 3.30
Exercisable at the end of the period (in dollars per share)	$ 0.23
Vested and expected to vest at the end of the period (in dollars per share)	$ 3.30
Weighted-average remaining contractual term
Outstanding at the end of the period	9 years 3 months 18 days
Exercisable at the end of the period	7 years 8 months 12 days
Vested and expected to vest at the end of the period	9 years 3 months 18 days
Aggregate intrinsic value
Outstanding at the end of the period	$ 15,768
Exercisable at the end of the period	3,354
Vested and expected to vest at the end of the period	$ 14,555
Assumptions used to estimate fair value of each employee and non-employee stock award using the Black Scholes option pricing model
Expected dividend yield (as a percent)	0.00%	0.00%
Stock option | Minimum
Assumptions used to estimate fair value of each employee and non-employee stock award using the Black Scholes option pricing model
Expected volatility (as a percent)	85.00%	75.00%
Expected term	6 years 3 months	6 years 3 months
Risk-free interest rate (as a percent)	1.07%	0.85%
Stock option | Maximum
Assumptions used to estimate fair value of each employee and non-employee stock award using the Black Scholes option pricing model
Expected volatility (as a percent)	93.00%	92.00%
Expected term	10 years	10 years
Risk-free interest rate (as a percent)	2.74%	1.76%
Non-vested restricted stock
Aggregate intrinsic value
Issuance of non-vested restricted stock pursuant to the exercise of stock options prior to vesting	63,636
Shares
Non-vested at the beginning of the period (in shares)	362,596
Vested (in shares)	(316,535)
Non-vested at the end of the period (in shares)	46,061
Weighted-average purchase price per share
Non-vested at the beginning of the period (in dollars per share)	$ 0.04
Vested (in dollars per share)	$ 0.04
Non-vested at the end of the period (in dollars per share)	$ 0.09
Shares of non-vested restricted stock remaining from the early exercise of stock options	177,955

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Cash and cash equivalents (in dollars)	$ 52,928,000	$ 391,000
Prepaid expenses and other current assets (in dollars)	658,000	563,000
Accounts payable (in dollars)	1,749,000	1,076,000
Accrued liabilities (in dollars)	1,920,000	764,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized shares	83,500,000	35,000,000
Common stock, issued shares	2,591,333	2,123,388
Common stock, outstanding shares	2,591,333	2,123,388
NPM
Cash and cash equivalents (in dollars)		12,000
Prepaid expenses and other current assets (in dollars)		485,000
Accounts payable (in dollars)		499,000
Accrued liabilities (in dollars)		312,000
Series A convertible preferred stock
Convertible stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible stock, authorized shares	20,937,500	20,937,500
Convertible stock, issued shares	20,937,500	18,437,500
Convertible stock, outstanding shares	20,937,500	18,437,500
Convertible stock, aggregate liquidation preference (in dollars)	20,900,000
Series A-2 convertible preferred stock
Convertible stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible stock, authorized shares	6,100,000	0
Convertible stock, issued shares	6,100,000	0
Convertible stock, outstanding shares	6,100,000	0
Convertible stock, aggregate liquidation preference (in dollars)	7,000,000
Series A-3 convertible preferred stock
Convertible stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible stock, authorized shares	1,764,706	0
Convertible stock, issued shares	1,764,706	0
Convertible stock, outstanding shares	1,764,706	0
Convertible stock, aggregate liquidation preference (in dollars)	3,000,000
Series A-4 convertible preferred stock
Convertible stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible stock, authorized shares	1,538,461	0
Convertible stock, issued shares	1,538,461	0
Convertible stock, outstanding shares	1,538,461	0
Convertible stock, aggregate liquidation preference (in dollars)	2,000,000
Series B convertible preferred stock
Convertible stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible stock, authorized shares	24,100,000	0
Convertible stock, issued shares	24,100,000	0
Convertible stock, outstanding shares	24,100,000	0
Convertible stock, aggregate liquidation preference (in dollars)	48,200,000
Series B-1 convertible preferred stock
Convertible stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible stock, authorized shares	8,636,400	0
Convertible stock, issued shares	8,636,362	0
Convertible stock, outstanding shares	8,636,362	0
Convertible stock, aggregate liquidation preference (in dollars)	$ 19,000,000
Special participation stock
Convertible stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible stock, authorized shares	0	10,000
Convertible stock, issued shares	0	10,000
Convertible stock, outstanding shares	0	10,000

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Summary of significant accounting policies (Policies)

9 Months Ended

Sep. 30, 2013

Summary of significant accounting policies

Basis of presentation

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2013.  The condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Prospectus filed with the SEC pursuant to Rule 424(b)(4) on November 7, 2013 (the “Prospectus”).

In November 2013, the Company closed an initial public offering (“IPO”) of its common stock, which resulted in the sale of 6,800,000 shares of its common stock at a public offering price of $16.00 per share.  In December 2013, the Company issued 1,020,000 shares of common stock upon the exercise by the underwriters of their option to purchase additional shares at the public offering price. The Company received net proceeds from the IPO of approximately $113.7 million, after deducting underwriting discounts and estimated expenses payable by the Company.

In connection with preparing for the IPO, the Company’s Board of Directors and stockholders approved a one-for-3.3 reverse stock split of the Company’s common stock. The reverse stock split became effective in October 2013. All share and per share amounts in the condensed consolidated interim financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. In connection with the closing of the IPO, all of the Company’s outstanding convertible preferred stock automatically converted to common stock in November 2013, resulting in an additional 19,114,241 shares of common stock of the Company becoming outstanding. The significant increase in common stock outstanding in November 2013 is expected to impact the year-over-year comparability of the Company’s net loss per share calculations in future periods.

The consolidated financial statements include the accounts of Karyopharm Therapeutics Inc. (a Delaware corporation) and the accounts of NPM Pharma Inc. (“NPM”, a Canadian corporation), which was a variable interest entity requiring consolidation.  In August 2013, the Company purchased for nominal consideration from the other shareholder the 50% not owned by the Company. As a result NPM is a wholly owned subsidiary of the Company as of this date.

NPM was formed in December 2011 and was 50% owned by the Company until it became a wholly-owned subsidiary in August 2013. NPM was established to procure research and development services in connection with clinical pharmaceutical studies with Canadian vendors on the Company’s behalf.   Total NPM assets and liabilities as of December 31, 2012 are reflected on the Company’s balance sheet.  As of December 31, 2012, all assets of NPM are restricted to use to settle obligations of NPM. Liabilities of NPM are non-recourse to the Company.

Subsequent Events

Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company has completed an evaluation of all subsequent events through the date of the filing of this From 10-Q.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended		57 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Operating activities
Net loss	$ (21,801)	$ (11,650)	$ (50,423)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	106	92	312
Noncash consulting expense	88		788
Noncash interest expense on convertible notes			188
Stock-based compensation expense	1,769	329	2,492
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(95)	124	(658)
Other assets	(2,042)		(2,072)
Accounts payable	673	(85)	1,749
Accrued expenses and other liabilities	1,156	(243)	1,944
Deferred revenue	(66)	(100)
Net cash used in operating activities	(20,212)	(11,533)	(45,680)
Investing activities
Purchases of property and equipment	(25)	(121)	(558)
Net cash used in investing activities	(25)	(121)	(558)
Financing activities
Proceeds from issuance of common stock	340	9	362
Proceeds from the issuance of convertible notes			250
Proceeds from the issuance of preferred stock subscription		2,000
Principal payments of convertible notes			(200)
Proceeds from sale of convertible preferred stock, net of issuance costs	72,434	5,000	98,754
Net cash provided by financing activities	72,774	7,009	99,166
Net Increase (decrease) in cash and cash equivalents	52,537	(4,645)	52,928
Cash and cash equivalents at beginning of period	391	6,512
Cash and cash equivalents at end of period	52,928	1,867	52,928
Supplemental disclosure of non-cash financing activity
Conversion of notes payable to preferred stock			750
Issuance of convertible notes in satisfaction of accrued expenses			700
Issuance of preferred stock in satisfaction of preferred stock subscription	$ 13,980		$ 13,980

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents (NPM restricted December 31, 2012 $12)	$ 52,928	$ 391
Prepaid expenses and other current assets (NPM restricted December 31, 2012 $485)	658	563
Total current assets	53,586	954
Property and equipment, net	246	327
Other assets	2,072	30
Total assets	55,904	1,311
Current liabilities:
Accounts payable (NPM restricted December 31, 2012 $499)	1,749	1,076
Accrued liabilities (NPM restricted December 31, 2012 $312)	1,920	764
Deferred revenue		66
Other liabilities	327	24
Total current liabilities	3,996	1,930
Commitments and contingencies
Stockholders' deficit
Common stock, $0.0001 par value; Authorized 83,500,000 shares at September 30, 2013 and 35,000,000 shares at December 31, 2012; Issued and Outstanding 2,591,333 shares at September 30, 2013 and 2,123,388 shares at December 31, 2012
Additional paid-in capital	2,639	745
Deficit accumulated during the development stage	(50,423)	(28,622)
Total stockholders' deficit	(47,784)	(27,877)
Total liabilities, convertible preferred stock and stockholders' deficit	55,904	1,311
Preferred Stock Subscription
Current liabilities:
Preferred stock subscription		8,980
Series A convertible preferred stock
Current liabilities:
Convertible stock	20,778	18,278
Series A-2 convertible preferred stock
Current liabilities:
Convertible stock	6,980
Series A-3 convertible preferred stock
Current liabilities:
Convertible stock	3,000
Series A-4 convertible preferred stock
Current liabilities:
Convertible stock	2,000
Series B convertible preferred stock
Current liabilities:
Convertible stock	48,057
Series B-1 convertible preferred stock
Current liabilities:
Convertible stock	18,877
Special participation stock
Current liabilities:
Convertible stock	$ 99,692	$ 27,258

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Subsequent Events (Details) (Subsequent event, 2013 Plan)	1 Months Ended
	Oct. 31, 2013
Minimum
Subsequent Events
Number of shares of Common Stock reserved for issuance under the Plan	969,696
Annual increase in number of additional shares authorized under the Plan through December 31, 2023	1,939,393
Percentage applied to the outstanding shares as annual increase in the number of shares authorized for issuance	0.04
Maximum
Subsequent Events
Number of additional shares authorized under the 2010 Plan	2,126,377

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Accrued liabilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accrued liabilities
Payroll and employee-related costs	$ 643	$ 302
Professional fees	486
Research and development costs	621	333
Other	170	129
Total	$ 1,920	$ 764

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events

Subsequent Events

8. Subsequent Events

In October 2013, the Company’s board of directors adopted and the Company’s stockholders approved, the 2013 Stock Incentive Plan (the “2013 Plan”). The 2013 Plan became effective immediately prior to the closing of the IPO and provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and other stock-based awards.  The number of shares of Common Stock reserved for issuance under the 2013 Plan is equal to the sum of (1) 969,696 shares plus (2) the number of shares (up to 2,126,377 shares) equal to the sum of the number of shares of Common Stock then available for issuance under the 2010 Plan and the number of shares of Common Stock subject to outstanding awards under the 2010 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2014 and continuing until, and including, the fiscal year ending December 31, 2023, equal to the least of (A) 1,939,393 shares of Common Stock, (B) 4% of the number of shares of Common Stock outstanding on the first day of such fiscal year, and (C) an amount determined by the Company’s board of directors. The Company will grant no further stock options or other awards under the 2010 Plan.

In December 2013, the Company incorporated Karyopharm Securities Corp, a wholly owned Massachusetts corporation.

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Property and equipment (Tables)

9 Months Ended

Sep. 30, 2013

Property and equipment

Schedule of property and equipment, net

	Estimated Useful Life Years	September 30, 2013			December 31, 2012
Laboratory equipment	4	$	314		$	314
Furniture and fixtures	5	90			90
Office and computer equipment	3	85			85
Leasehold improvements	Lease term	69			44
		558			533
Less accumulated depreciation and amortization		(312		)	(206		)
Property and equipment, net		$	246		$	327

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Stock-based compensation

9 Months Ended

Sep. 30, 2013

Stock-based compensation

Stock-based compensation

7. Stock-based compensation

During 2010, the Company established the 2010 Stock Incentive Plan (the “Plan”). As of September 30, 2013, the maximum number of 2,763,271 shares of the Company’s common stock authorized for issuance under the Plan may be issued in the form of stock options and other equity interests under the Plan and, of such shares, 191,994 were available for issuance under the Plan as of September 30, 2013.  Under the terms of the Plan, options and other equity interests may be granted to employees, officers, directors, consultants and advisors of the Company. The exercise price of each stock option shall be the fair market value as determined in good faith by the Board of Directors (the Board) at the time each option is granted. The Company has granted service-based options under the Plan. Service-based option grants under the Plan generally vest as follows: 25% of the shares vest one calendar year from the vesting start date, 2.083% of the shares vest on the first day of each month thereafter. The options granted under the Plan generally expire in 10 years.

In connection with all share-based payment awards, total stock-based compensation expense recognized is as follows:

	Three Months ended September 30,				Nine Months ended September 30,				Period from December 22, 2008 (date of inception) to September 30,
	2013		2012		2013		2012		2013
Research and development	$	949	$	151	$	1,338	$	305	$	2,013
General and administrative	374		5		431		24		479
Total	$	1,323	$	156	$	1,769	$	329	$	2,492

Stock options

The following table summarizes stock option activity for employees and nonemployees.

	Shares		Weighted- average price per share		Weighted- average remaining contractual term (years)	Aggregate intrinsic value
Outstanding at December 31, 2012	691,367		$	0.46
Granted	1,268,757		$	4.69
Exercised(1)	(138,636	)	$	2.41
Forfeited	(45,895	)	$	1.49
Outstanding at September 30, 2013	1,775,593		$	3.30	9.3	$	15,768
Exercisable at September 30, 2013	281,035		$	0.23	7.7	$	3,354
Vested and expected to vest at September 30, 2013(2)	1,637,094		$	3.30	9.3	$	14,555

(1) Exercises include the issuance of 63,636 shares of non-vested restricted stock pursuant to the exercise of stock options prior to vesting.  The Company has the right to repurchase the unvested shares under certain circumstances.

(2) This represents the number of vested options as of September 30, 2013, plus the number of unvested options expected to vest as of September 30, 2013, based on the unvested options at September 30, 2013, adjusted for the estimated forfeiture rate

The Company estimates the fair value of each employee and non-employee stock award using the Black-Scholes option-pricing model using the following assumptions:

	Nine Months ended September 30,
	2013	2012
Expected volatility	85% - 93%	75% - 92%
Expected term (in years)	6.25 - 10	6.25 - 10
Risk-free interest rate	1.07% - 2.74%	0.85% - 1.76%
Expected dividend yield	0%	0%

Restricted stock

A summary of the Company’s non-vested restricted stock as of September 30, 2013 and changes during the nine months ended September 30, 2013 is as follows:

	Shares		Weighted- average purchase price per share
Non-vested at December 31, 2012	362,596		$	0.04
Vested	(316,535	)	$	0.04
Non-vested at September 30, 2013(1)	46,061		$	0.09

(1) Excludes 177,955 shares of non-vested restricted stock remaining from the early exercise of stock options as of September 30, 2013.

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Fair value of financial instruments

9 Months Ended

Sep. 30, 2013

Fair value of financial instruments

Fair value of financial instruments

2. Fair value of financial instruments

The Company’s financial instruments consist principally of cash and cash equivalents, accounts payable and accrued liabilities.  Fair value measurements are classified and disclosed in one of the following three categories:

Level 1 inputs	Quoted prices in active markets for identical assets or liabilities
Level 2 inputs	Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 inputs	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial instruments measured at fair value are classified below based on the three fair value hierarchy tiers described above:

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
December 31, 2012
Money market funds, included in cash equivalents	$	2	$	—	$	2	$	—
September 30, 2013
Money market funds, included in cash equivalents	$	52,901	$	—	$	52,901	$	—

The Company measures cash equivalents at fair value on a recurring basis.  The fair value of cash equivalents is determined based on “Level 2” inputs. The carrying values of cash and cash equivalents, accounts payable and accrued expenses approximate their fair values due to the short maturity of these instruments.

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Stock-based compensation (Tables)

9 Months Ended

Sep. 30, 2013

Stock-based compensation

Schedule of total stock-based compensation expense recognized in connection with all share-based payment awards

	Three Months ended September 30,				Nine Months ended September 30,				Period from December 22, 2008 (date of inception) to September 30,
	2013		2012		2013		2012		2013
Research and development	$	949	$	151	$	1,338	$	305	$	2,013
General and administrative	374		5		431		24		479
Total	$	1,323	$	156	$	1,769	$	329	$	2,492

Summary of stock option activity for employees and nonemployees

	Shares		Weighted- average price per share		Weighted- average remaining contractual term (years)	Aggregate intrinsic value
Outstanding at December 31, 2012	691,367		$	0.46
Granted	1,268,757		$	4.69
Exercised(1)	(138,636	)	$	2.41
Forfeited	(45,895	)	$	1.49
Outstanding at September 30, 2013	1,775,593		$	3.30	9.3	$	15,768
Exercisable at September 30, 2013	281,035		$	0.23	7.7	$	3,354
Vested and expected to vest at September 30, 2013(2)	1,637,094		$	3.30	9.3	$	14,555

(1) Exercises include the issuance of 63,636 shares of non-vested restricted stock pursuant to the exercise of stock options prior to vesting.  The Company has the right to repurchase the unvested shares under certain circumstances.

(2) This represents the number of vested options as of September 30, 2013, plus the number of unvested options expected to vest as of September 30, 2013, based on the unvested options at September 30, 2013, adjusted for the estimated forfeiture rate

Schedule of assumptions used to estimate fair value of each employee and non-employee stock award using the Black Scholes option pricing model

	Nine Months ended September 30,
	2013	2012
Expected volatility	85% - 93%	75% - 92%
Expected term (in years)	6.25 - 10	6.25 - 10
Risk-free interest rate	1.07% - 2.74%	0.85% - 1.76%
Expected dividend yield	0%	0%

Summary of the Company's non-vested restricted stock

	Shares		Weighted- average purchase price per share
Non-vested at December 31, 2012	362,596		$	0.04
Vested	(316,535	)	$	0.04
Non-vested at September 30, 2013(1)	46,061		$	0.09

(1) Excludes 177,955 shares of non-vested restricted stock remaining from the early exercise of stock options as of September 30, 2013.

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Fair value of financial instruments (Tables)

9 Months Ended

Sep. 30, 2013

Fair value of financial instruments

Schedule of financial instruments measured at fair value based on the three fair value hierarchy tiers

	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
December 31, 2012
Money market funds, included in cash equivalents	$	2	$	—	$	2	$	—
September 30, 2013
Money market funds, included in cash equivalents	$	52,901	$	—	$	52,901	$	—

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Property and equipment (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Property and equipment
Property and equipment, gross	$ 558	$ 533
Less accumulated depreciation and amortization	(312)	(206)
Property and equipment, net	246	327
Laboratory equipment
Property and equipment
Estimated useful life	4 years
Property and equipment, gross	314	314
Furniture and fixtures
Property and equipment
Estimated useful life	5 years
Property and equipment, gross	90	90
Office and computer equipment
Property and equipment
Estimated useful life	3 years
Property and equipment, gross	85	85
Leasehold improvements
Property and equipment
Property and equipment, gross	$ 69	$ 44

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Summary of significant accounting policies (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended			12 Months Ended
	Dec. 31, 2013	Nov. 30, 2013	Oct. 31, 2013	Dec. 31, 2011 NPM	Aug. 31, 2013 NPM
Summary of significant accounting policies
Number of shares of common stock sold in IPO		6,800,000
Public offering price of common shares (in dollars per share)		$ 16.00
Number of shares issued upon the exercise of option by underwriters	1,020,000
Net proceeds from the IPO	$ 113.7
Reverse stock split ratio of the common stock			0.3030
Number of shares of common stock issued upon automatic conversion of outstanding convertible preferred stock		19,114,241
Basis of Presentation
Percentage of Ownership interest not owned by the entity					50.00%
Ownership percentage (as a percent)				50.00%

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Dec. 16, 2013
Document and Entity Information
Entity Registrant Name	Karyopharm Therapeutics Inc.
Entity Central Index Key	0001503802
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		29,749,593
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Fair value of financial instruments (Details) (Recurring, USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Total
Fair value of financial instruments
Money market funds, included in cash equivalents	$ 52,901	$ 2
Significant other observable inputs (Level 2)
Fair value of financial instruments
Money market funds, included in cash equivalents	$ 52,901	$ 2