JWCA advises Karyopharm Therapeutics on its $100 million term loan, $116 million secured convertible exchange, and royalty restructuring

May 2024 | read press release

Transaction Background

Karyopharm Therapeutics (“KPTI” or “the Company”) engaged J. Wood Capital Advisors (“JWCA”) to advise on the refinancing of its ~$173mm convertible due 2025

Karyopharm's objectives were to:

• Address financing overhang before it became a current liability, allowing the focus to shift to the execution of three Phase 3 programs reading out in 2025

• Extend maturity into a new 5-year despite high debt-to-cap ratio, limited stock borrow, and presence of a secured royalty creditor

• Add incremental cash to balance sheet

• Minimize covenants to maximize strategic and operational flexibility

JWCA acted as Financial Advisor to KPTI on the transaction to meet the Company’s objectives, providing the following support for the Company:

• Analyzed a range of capital structure transactions to help Company assess tradeoffs across security, leverage, dilution, and cash

• Negotiated with existing secured royalty investor to increase the Company’s refinancing flexibility for the converts coming due

• Negotiated with investors on highly customized package of secured 1st lien term loan notes, secured 2nd lien convertible notes, and warrants

• Assisted the company with investor messaging and documentation review

Results

• Karyopharm addressed ~86% of its 2025 maturity by refinancing into a combination of a new secured 1L term loan, new secured 2L convertible, and warrants

• Extends debt maturity profile by an additional 3-4 years, well beyond key pivotal data and approval catalysts, while balancing equity dilution

• Lowered existing royalty rate from 12.5% to 7.0%

• Netted $30mm in cash to the balance sheet to help extend the company’s runway through 2025 pivotal data readouts