Karyopharm Therapeutics Files Chapter 11, Stock Falls 83%

What happened

Karyopharm Therapeutics Inc. (Nasdaq: KPTI), a Newton, Massachusetts-based drugmaker, and its subsidiary KPT Texas LLC filed voluntary petitions for Chapter 11 bankruptcy on November 2, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, according to the company's Form 8-K filed November 3.

The company's stock closed at $0.112 on the event date, down 83.08% from the prior close of $0.662, on volume of about 45.6 million shares — roughly 18 times its average volume of about 2.5 million, per the price data.

The filing states that the company's existing common stock, its 0% Series A Convertible Perpetual Preferred Stock and other existing equity interests will be cancelled under the proposed prepackaged plan, and holders will receive no distribution on account of those shares and interests.

The prepackaged plan and the stalking horse bid

Karyopharm entered the case with a restructuring support agreement signed by lenders and noteholders holding, in the aggregate, 100% of the outstanding principal of its funded debt, certain investors under its Revenue Interest Financing Agreement, certain holders of its convertible preferred stock, and Ayrmid Ltd., according to the filing.

Ayrmid, which the filing says is majority-owned by funds managed by Highbridge Capital Management, is the stalking horse bidder for a merger with the reorganized company. A stalking horse is the initial bidder whose offer sets the floor for an auction; the filing says Ayrmid is entitled to bid protections of a 3% break-up fee and expense reimbursement capped at 1% of a defined base if another bidder wins.

Under the Ayrmid term sheet described in the filing, holders of funded debt claims and the debtor-in-possession lenders would receive 100% of the reorganized company's common stock, exchanged substantially concurrently for 55% of a new company (NewCo), with Ayrmid's existing stockholders receiving the remaining 45%. Funded debt holders would also receive contingent value rights tied to future net sales of XPOVIO (selinexor) in myelofibrosis.

The filing says that before the petition date Karyopharm, advised by Centerview Partners, contacted potential counterparties, several of which signed confidentiality agreements, and received five non-binding indications of interest. The company says it determined, in consultation with advisers, that the Ayrmid transaction subject to a court-supervised market test was the best available path to maximize value.

Bidding procedures require a competing bid to be a "Qualifying Alternative Transaction" — at least $335.4 million at closing, including at least $316.6 million in cash and $18.75 million in cash or other consideration acceptable to the royalty investors — plus $13.8 million relating to unsecured claims and the bid protections, for a minimum closing payment of $363.6 million, per the filing.

What this means

A Chapter 11 filing is a reorganization under federal bankruptcy law, not a liquidation. The company keeps operating, but as a "debtor-in-possession" — a company that remains in control of its business under the supervision of the bankruptcy court. Karyopharm says it filed "first day" motions seeking customary relief to keep paying employees and vendors and avoid disruption, and a motion to approve a debtor-in-possession (DIP) financing facility, which is new money borrowed during a bankruptcy with priority over most existing debts.

A prepackaged plan means the company negotiated the terms with its major creditors and began soliciting their votes before filing. Here, Karyopharm began soliciting votes on November 2 from holders of the term loan, the 9.00% convertible senior notes due 2028, the 9.00% convertible senior notes due 2029, and the revenue interest financing claims. Voting closes November 30, 2026; the company has asked the court to schedule a confirmation hearing on or about January 11, 2027. A plan is a contract between the company and its creditors that says who gets paid what; confirmation is the judge's approval of it.

Convertible notes are corporate bonds that can be exchanged for stock at a set price. Karyopharm's 9.00% notes pay 9% a year on face value — a high coupon that reflects the company's borrowing risk. Under the proposed plan, those noteholders would not be repaid in cash but would become owners of the reorganized business, which is typical when a company's debts exceed what it can pay.

For common stockholders, the plan as filed provides nothing: existing shares are cancelled. In bankruptcy, equity sits at the bottom of the priority ladder, behind secured lenders, bondholders, and other creditors, and receives a distribution only if value remains after those claims are satisfied. The 83% one-day drop in the stock reflects the plan's terms as disclosed.

The sale process is not final. Ayrmid's offer is subject to higher bids under the court-approved procedures, and the company says the transaction is expected to close in the first quarter of 2027, subject to court approval and regulatory clearances. The filing states there can be no assurance the plan will be confirmed or the transaction completed on the terms or timeline described, or at all.