DISCLAIMER: This is a private undertaking by Reza Ganjavi, MBA. This page is not sponsored by Karyopharm. This page is not an investment advice. Do your own research.
Open Letter to Richard Paulson - 13 Feb 2024
Karyopharm has good science no doubt. And it has horrible management no doubt, at least at the financial, legal and CEO level. And if you would have listened to me a long time ago, and not been so arrogant and so weak, and changed the dysfunctional culture that you inherited including, by keeping some of the representatives of that dysfunctional culture which gave it continuity -- the company would have been in a much better shape.
Looking at what is, you have a negative cash of around 100 million. You're still spending like crazy in line with that organizational habit, the dysfunction, the spending cancer as I call it, and donating six figures and free lunches for you all, everyday, catered.
I wonder if you ever think that the value of your options could be much more than the value of those free lunches you so enjoy, and even bigger than the value of your big undeserved salaries. Undeserved because you have destroyed shareholder value and have been so utterly irresponsible, reckless, with your spending shareholder money by living a plush corporate life as though money will just drop from the trees.
That dysfunctional mindset was punished by investors whom you have consistently betrayed. You should know how those people who bought the stock at about $22 or about $15 or above $10 feel about you having betrayed them and them having been stupid to believe your stories.
So what you got going right now is a poorly selling drug because you so messed up the legal side regarding the disparagement and the political side because you guys are so clueless about that whole area, and your enemies, the huge short interest which is still there standing tall and strong did an amazing job of making sure your drug doesn't succeed. And they succeeded. Look at your weak sales.
The painful part is this is not the first time in the universe that this happens. Some of us long-term biotech investors have seen this happen before. And we warned you. Multiple of us warned you. But you were so complacent and comfortable in your fat salaries and free lunches that you just ignored it.
Selinexor is actually a great drug but very mismanaged, and I'm not blaming your sales organization, it's not their fault, it's your fault and your incompetent executives' fault.
A poorly selling drug, some cash, and a negative 100 million cash position, high interest rate picture, looming debt overhang which is especially scary given the profile of you and your CFO and your Legal Counsel who have consistently screwed up managing shareholder value.
On the other hand, you have some killer data ahead which normally one would think you would screw up just because of your incompetence based on your past horrible performance and mismanagement of other great data, as measured by shareholder value which is the ultimate criteria for measuring management performance. Any management student would understand that concept.
So this is the big picture. Poorly selling drug, a spending cancer syndrome, fat and happy and overpaid management, perhaps short-sighted management to ignore the possibility for their stock options, unless they're totally deceptive and lie to the public about their projections while deep inside they know their stock options will be worthless, I hope that's not the case because that would make you big time crooks.
And hot data coming up. And a huge short interest which has held its ground. But has proven to be vulnerable to any sudden movement in the stock. You can be sure some of the recent rally was due to short covering but they may have gone short again who knows. And you also have a potential for a buyout; Dr. Kauffman said you had overtures in the past. The horrible CEO and Board turned it down saying "not yet" (as per Dr. Kauffman), and that's when the stock was I don't know 20 times higher in price than now.
So what do you do? This is a good case perhaps for a Harvard Business School case that are taught in business schools worldwide
What should prudent Management do?
The first and foremost thing in my view is to change the culture which has gotten you into this hole. This is critical because if you don't, then the same dysfunctional culture is going to mess up future sales potential.
Mike Mano and Mike Mason in my opinion are not at a caliber to handle this. Sadly I told you this when the stock price was 10 times higher, and you arrogantly ignored it, or you were so weak to not be able to stand up to the lousy board and the strong rotten status quo.
I don't think you want to leave so we're stuck with you. But you can uproot the cancer in the culture by cutting the spending meaningfully, and not superficially, and not two years too late, and for this you need a new CFO. And you also need a new CFO who understands that as the company is bleeding cash it's absolutely imprudent, irresponsible, to make six figure donations and spend like crazy and feed yourselves daily catered lunches paid by shareholders. Remember, you're still losing money. It's not just a CFO's fault but it's your fault because the buck stops at the top and this disaster has been your doing Richard Paulson.
But as the Persians say whenever you catch the fish it's fresh. It seems very odd that I would be telling you this after I told you this when the stock was 10 times higher and you ignored it and look at what happened. I hate to tell company management I told you so. This is also the case in my professional career with companies that I consult with: a couple of times when they didn't listen, they came back a couple of years later and said oh you were right.
So you have to tame this spending beast, and this management poor competence issue. You should cut another I don't know 25% of the staff, and replace some key executives.
These actions dovetail with the confidence you give to investors. That you're spending cancer is cured. That you care for shareholder value and you're not giving them the middle finger which you have for years as you destroyed their wealth. These things can lead to higher company value.
But as long as you're the same gang you can't shoot straight doing the same things you will continue to mess up. screw up the best of data, just as you have in the past.
You seem very weak Richard, and a weak CEO likes weak executives who are worse than himself. History books of biotech will not be kind to you unless you change some things as hinted above. If you don't, even the best of data will not be made into success because of management incompetence.
7 Feb 2024
One thing that people who don't know this stock well don't know is that the huge short interest was counting on the company going belly up, but the recent spike in price, and re-compliance with Nasdaq listing triggered some short covering and I doubt any short who is covering here is going to short again at these levels so that is probably providing support for the price otherwise it would have tanked back to 1 as soon as it reversed.
14 Jan 2024 - is KPTI a Buy now?
Dear StocksTrader1. Thanks for the comment. To be clear I do not provide investment advice. I can only share my opinions. You are correct. I made a huge mistake of not listening to my intuition about the lousy management team and didn't sell when my friend sold around $6 because he was fed up with Mike Mano being there (he had worked with him before) and other reasons. And I was a fool to buy at $11 after I sold at $14 just shortly before. I was a fool to believe CEO Richard Paulson and a fool to think Mike Mason the CFO would ever be effective. My first huge mistake with KPTI was a shortcoming in my DD for not checking Mike Kauffman's background before buying. Had I known he was an MD / co-founder I would not bought the stock because I knew all about Founder's Syndrome. I'm guessing Kauffman and Shacham dumped their shares in the mid-upper single digits. I dumped at 2.20 - that was very painful. To your question, I do believe it's a Strong Buy now, in my opinion.
I think the next sets of data will be solid, and there will be a run up to the data and the stock could get close to JPM and Piper's target of $5, and will strong Phase 3 data go double-digit, IF any of the following resign : Richard Paulson, Mike Mason, Mike Mano. Two of them resigning will be even better. All of them resigning can send the stock to the moon.
8 Jan 2024
2 analysts have $5 price targets (Piper and JPM) - the rest I don't know. Market makers / shorts seem to be in control. Short interest dropped a bit year end. Theoretically in normal situations stock should run up to phase 3 data during the next 6 months. The situation is not normal because management has been horrible - wasting a ton of cash and destroying shareholder value, and debt overhang combined with a weak CFO/CEO/LC. Good science and multiple potential upcoming approvals. Has the stock bottomed? Why are shorts not covering or are they? S.I. dropped slightly in 12/15 report.
This person who seems to be a medical doctor has good thoughtful posts:
Eisai Pharmaceuticals (?): MCW Cancer Scientists Make a Breakthrough in Treating Aggressive Uterine Cancer with Selinexor
Selinexor and Eribulin/HALAVEN (an Eisai drug):
“We discovered that selinexor, when combined with DNA damage-inducing chemotherapies like eribulin, showed synergistic effects and helped to potentiate the DNA damage-based therapies. DNA damage disrupts the integrity of cancer cell DNA, ultimately leading to cell death. The sequential combination of DNA damage agents followed by selinexor increased cancer cell death and reduced tumor size,” said study co-author Sunila Pradeep, PhD, associate professor of Obstetrics & Gynecology.
“Selinexor with eribulin was found to alter the expression of important transcription factors, leading to downstream changes within the tumor transcriptome. This combination demonstrated greater effectiveness than individual therapies and holds a mechanistic rationale as a novel anti-cancer strategy,” she added.
Also see a new company I'm following who's going after Alzheimer's Disease. If CT-1812 works sky is the limit. A great CEO and great science. https://www.rezamusic.com/health/cognition-therapeutics-cgtx