Karyopharm Therapeutics Inc. (NASDAQ:KPTI) is a pharmaceutical company focused on the discovery and development of drugs for the treatment of cancer and other major diseases. The company’s primary product is XPOVIO, which is used to treat multiple myeloma and other cancers.
Karyopharm operates in a competitive landscape with peers like MacroGenics, TG Therapeutics, Heron Therapeutics, Intra-Cellular Therapies, and Agios Pharmaceuticals. Karyopharm’s Return on Invested Capital (ROIC) is -123.21%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 8.77%. This negative ROIC indicates that the company is not generating enough returns on its invested capital to cover its cost of capital. This inefficiency in capital utilization is a concern for investors.
In comparison, MacroGenics has a ROIC of -53.63% and a WACC of 12.09%, resulting in a ROIC to WACC ratio of -4.44. Although MacroGenics also struggles with negative returns, its ROIC is less negative than Karyopharm’s. This suggests that while both companies face challenges, Karyopharm’s situation is more severe.
TG Therapeutics stands out with a positive ROIC of 7.85% against a WACC of 15.27%, resulting in a ROIC to WACC ratio of 0.51. This indicates that TG Therapeutics is the only company among the peers generating returns that exceed its cost of capital. This efficiency in capital utilization makes TG Therapeutics a more attractive option for investors compared to Karyopharm and its other peers.
Heron Therapeutics, Intra-Cellular Therapies, and Agios Pharmaceuticals also have negative ROICs, with ratios of -8.34%, -10.08%, and -24.94% respectively. Their WACC figures are 8.87%, 7.29%, and 8.10%, leading to ROIC to WACC ratios of -0.94, -1.38, and -3.08. These figures highlight the broader challenge in the industry, where most companies are struggling to generate returns above their cost of capital.