Karyopharm Therapeutics - Chapter 11 Bidding Procedures Summary

Bidding Procedures Summary

Overview

• Karyopharm Therapeutics Inc. and its affiliate KPT Texas LLC filed Chapter 11 on Nov. 2, 2026, in the Southern District of Texas. The case rests on a prepackaged plan and restructuring support agreement (RSA) built around a business combination with stalking horse Ayrmid Ltd. The debtors are seeking approval of bidding procedures to market test that deal. Competing bids must deliver at least $335.4 million in cash net proceeds at closing. The proposed calendar sets a bid deadline of Dec. 16, 2026, an auction for Dec. 21, 2026, and a sale hearing for Jan. 11, 2027.
• The company is a commercial-stage pharmaceutical company developing first-in-class cancer therapeutics for patients with life-threatening conditions, including certain blood cancers and solid tumor malignancies. Its lead asset received initial FDA approval in July 2019 and is marketed in the U.S. under certain indications. Certain of its treatments have regulatory approvals in more than 50 territories and countries outside the U.S. and are commercially available in a growing number of countries as reimbursement approvals continue.
• The plan contains a toggle from the reorganization transaction to a sale:
  • If the debtors receive at least one qualified bid besides Ayrmid's, they will hold the auction, select a successful bid and a back-up bid, and pursue a sale; otherwise they proceed with the Ayrmid transaction.
  • The debtors intend to implement any sale through the plan and confirmation order, whether the winner is Ayrmid or another bidder. They reserve the right to close under section 363 instead, in which case they will file a proposed sale order before the sale hearing.
  • The sale hearing may be held together with the confirmation hearing.
• The procedures and orders described below are in proposed form. The debtors asked the court to approve the procedures and Ayrmid's designation at the Nov. 3, 2026, first-day hearing and deferred the bid protections to a separate Nov. 30, 2026, hearing on regular notice.
• The RSA requires entry of the bidding procedures order within three calendar days after the petition date. Missing that milestone would give rise to termination rights under the RSA and the debtors' proposed DIP financing.

Stalking Horse Bid: Ayrmid Reorganization Transaction

• Ayrmid's bid works in two steps:
  • On the plan effective date, holders of the funded debt receive 100% of reorganized Karyopharm's common equity. The funded debt consists of the first lien term loan facility, the 2028 notes and the 2029 notes.
  • Reorganized Karyopharm then combines with Ayrmid, and those holders receive 55% of the combined company (NewCo). Their stake can be diluted only by contingent equity tied to future revenues of Ayrmid's Omisirge product and by any management incentive plan.
• The funded debt holders also receive contingent value rights. These pay out based on future net sales of XPOVIO for patients with myelofibrosis.
• NewCo would enter into a new exit financing facility. Its proceeds would repay up to $50 million of new-money DIP claims in cash, and any remaining DIP claims would be satisfied in NewCo equity.
• About $14 million of general unsecured claims would be paid in the ordinary course or otherwise left unimpaired.
• The bid is set out in the RSA and the plan. It will be further documented in a merger agreement, with a substantially final form to be filed with the plan supplement.
• Consummation requires entry of the confirmation order and satisfaction or waiver of the effective-date conditions in the plan and the merger agreement.
• Under the proposed order:
  • Ayrmid's bid is deemed a qualified bid and Ayrmid a qualified bidder.
  • If no other qualified bid arrives by the bid deadline, Ayrmid's bid becomes the successful bid and the debtors proceed with the reorganization transaction under the plan.
  • Subject to the procedures and entry of the sale order, which may be the confirmation order, the debtors, the ad hoc group and Ayrmid each receive all rights and remedies under the RSA and the merger agreement, including the right to specific performance.
• The motion states that the bid is supported by the ad hoc group and the royalty investors.

Ayrmid's Relationship to the Capital Structure

• Ayrmid is majority-owned by funds managed by Highbridge Capital Management, LLC. Highbridge also holds loans under the first lien term loan facility and holds 2028 and 2029 notes, and it is a member of the ad hoc group of lenders and noteholders.
• Highbridge recused itself from the ad hoc group's deliberations on the marketing process and on Ayrmid's proposal. The other ad hoc group members and their advisors negotiated the reorganization transaction on behalf of the secured creditors. The debtors did not share marketing-process information with Highbridge in its role as an ad hoc group member.
• The consultation parties are the RSA's consenting stakeholders, counsel to the ad hoc group and any statutory committee, each with its advisors.
  • The Highbridge funds are excluded on sale-process matters.
  • Ayrmid and its affiliates are excluded in any capacity.
  • Any other consultation party that bids is excluded to the extent the district's complex case procedures require.

Marketing Process

• The company engaged Centerview Partners LLC in July 2025 as its exclusive financial advisor and investment banker. It officially launched the marketing process in July 2026. Before that launch, the company had already held conversations with potential buyers since Centerview's engagement, and it had marketed itself earlier with other advisors.
• The debtors contacted 35 potential acquirers and 83 potential equity investors, including both strategic and financial investors. Seventeen parties signed confidentiality agreements and received access to a data room of more than 5,500 documents. The debtors held 26 diligence sessions and other transaction-related conversations, including 10 management presentations.
• On Aug. 31, 2026, the debtors sent a process letter to about 17 parties requesting initial indications of interest by Sept. 21, 2026, for in-court or out-of-court transactions. They received five nonbinding indications by or shortly after that deadline.
• Four parties then submitted revised indications. The debtors selected Ayrmid's as the highest or otherwise best actionable proposal and kept talking with other revised-proposal parties in the days before filing to confirm that choice.
• Advisors to the ad hoc group and the royalty investors received substantially all of the information given to bidders, and the debtors also shared the proposals with them.

Bid Protections

• Break-Up Fee: 3% of a $311,432,711 bid protection base, payable in cash.
• Expense Reimbursement: Ayrmid's reasonable and documented out-of-pocket fees and expenses for negotiating and documenting the RSA, the plan and the reorganization transaction, capped at 1% of the bid protection base.
• When earned and paid, subject in each case to the terms of the RSA:
  • The protections are earned when the debtors select a bidder other than Ayrmid as the successful bidder.
  • They are paid from the proceeds within three business days after consummation of an "Acceptable Alternative Transaction" or "Alternative Restructuring Proposal," both as defined in the RSA.
  • Nothing is payable if Ayrmid, as back-up bidder, becomes the successful bidder and the reorganization transaction closes.
• Priority: if earned, the protections are allowed administrative expense claims under sections 503(b) and 507(a)(2). They rank ahead of all other administrative expenses of the kind specified in sections 503(b)(1) and 507(a), but subordinate to the DIP claims and the Carve-Out.
• Approval is deferred to the Nov. 30, 2026, bid protections hearing (subject to the court's availability), with objections due Nov. 23, 2026, at 4 p.m. (prevailing Central Time).
  • A supplemental bid protections order would govern over the bidding procedures order on the protections.
  • Until that hearing, Ayrmid's RSA obligations remain in full force, including its commitment to serve as stalking horse.
  • The RSA milestone for the bidding procedures order is satisfied whether or not that order approves the protections.
• The debtors cannot modify the bid protections without Ayrmid's prior written consent. No other bidder is entitled to a break-up fee, expense reimbursement or similar payment, and each bidder waives any such request, including under section 503(b), by submitting a bid.

Successful Bid Mandatory Conditions

• No bid other than Ayrmid's can qualify unless it meets the mandatory conditions. Each competing bid must provide for:
  • net proceeds at closing of at least $335,384,812, payable in cash from readily available funds and not subject to any financing contingency. The $18.75 million portion allocable to allowed RIFA claims may instead be paid in cash or non-cash consideration acceptable to the RIFA claim holders in their discretion, worth at least that amount;
  • payment in full in cash, on the sale effective date, of all allowed general unsecured claims, or other treatment that leaves them unimpaired, consistent with the RSA and its definition of "Acceptable Alternative Transaction";
  • payment in full in cash of the bid protections; and
  • cash funding of the plan's wind-down budget at closing.
• Each bid must include a sources-and-uses schedule showing that its cash consideration covers these conditions.

Assets Being Sold

• The sale covers all, substantially all or a material portion of the debtors' equity and assets, through the plan or under section 363. The assets include:
  • the debtors' rights in XPOVIO (selinexor), their other product candidates and related intellectual property;
  • regulatory approvals, clinical data and know-how; and
  • inventory, contracts and license agreements.
• The assets transfer on an "as is, where is" basis, with no representations or warranties except those in the definitive documents.
• The transfer is free and clear of liens, claims and interests under sections 363(f) or 1123. Any remaining liens attach to the net proceeds in their prepetition priority.
• Each bid must specify which assets it includes or excludes and how it treats any liabilities. Bids covering multiple assets must allocate the purchase price among them.

Credit Bid

• Any creditor with a valid and perfected lien may credit bid all or part of the face amount of its claims, including as an overbid at the auction. The bid may cover only assets subject to its lien, and only to the extent the relevant agreements, the DIP orders and the Bankruptcy Code permit.
• Under section 363(k), secured parties may credit bid their secured claims, including postpetition financing claims.
• Secured parties other than the DIP lenders and the holders of prepetition funded debt claims may credit bid only if all claims senior to their liens on the relevant assets are paid in full in cash at closing.
• Treatment of credit bids:
  • A credit bid is deemed a cash bid and is not treated as inferior to a comparable cash or non-cash bid.
  • Credit bidders are deemed qualified bidders without posting a deposit, additional diligence information or preliminary bid documents.
  • Secured parties may assign their credit bid rights to an acquisition vehicle or other designee.
  • The debtors may not change these provisions, or otherwise burden a secured party, without that party's consent.
• The procedures contain two provisions that each override anything to the contrary. One deems any credit bid a qualified bid. The other bars any bid other than Ayrmid's from qualifying unless it meets the mandatory conditions, including the cash net proceeds floor.

Bid Requirements

• To get diligence access, a party must deliver:
  • an executed confidentiality agreement;
  • evidence of its financial capacity to close, such as current audited or verified financial statements or verified financing commitments;
  • evidence that it can obtain any required internal, corporate or legal authorizations; and
  • assurance that it will use the data room for purposes consistent with the procedures.
• Diligence ends at the bid deadline. The debtors may withhold business-sensitive materials from competitors or customers. They may also require indications of interest before the deadline and exclude bidders whose proposed consideration is insufficient.
• To qualify, a bid must be an irrevocable offer that, among other things:
  • includes an executed APA with a redline against the debtors' form APA, and identifies the cash and non-cash components of the price and its key valuation assumptions;
  • proves the bidder can pay, through certified financial statements, contacts for verifying financing sources, evidence of internal financial wherewithal and, if applicable, unconditional fully executed financing commitments equal to the purchase price (including cure amounts), and a pro forma capital structure;
  • is not conditioned on financing, internal approval, diligence (unless the debtors agree) or regulatory contingencies beyond those the regulatory provision allows, though it may be conditioned on the accuracy of specified representations and warranties at closing;
  • discloses every participating entity, including equity holders and financial backers of any newly formed bidder, and shows board approval of the bid;
  • commits to timely Hart-Scott-Rodino or other antitrust filings and the related fees, identifies each required governmental and third-party approval with a detailed timeline, and shows the bid is reasonably likely to close within a time frame acceptable to the debtors;
  • identifies every executory contract and unexpired lease to be assumed and assigned, with a separate adequate assurance package;
  • stays irrevocable through the auction and, if chosen as the back-up bid, until the successful bid closes, with a written commitment to serve as back-up bidder; and
  • states an expected closing date and includes as-is, independent-review and no-collusion acknowledgments.
• Review and sharing of bids:
  • The debtors will decide which bids qualify within two business days after the bid deadline.
  • They may let bidders fix deficiencies before the auction and may combine multiple bids into a single qualified bid.
  • A qualified bidder may not modify, amend or withdraw its bid without the debtors' consent, except to increase the price or otherwise improve its terms.
  • All bids go to ad hoc group counsel and the other consultation parties within the earlier of one business day or two calendar days after receipt. Confidential financing and equity commitment documents are shared on a professionals'-eyes-only basis.
• Bidders, including Ayrmid, may not communicate with each other about bids without the debtors' written authorization, and the debtors may disqualify a bidder that does. Joint bids are permitted through the debtors' advisors. Bidders also may not contact the debtors' customers, suppliers or other counterparties without consent, although RSA consenting stakeholders that are not bidders or affiliated with a bidder may communicate with potential bidders, who must give the debtors advance notice of those discussions.

Good Faith Deposit

• Deposit: 10% of the aggregate purchase price, wired into escrow on terms reasonably acceptable to the debtors and the required consenting funded debt parties under the RSA.
  • The deposit does not become estate property.
  • Ayrmid's bid and credit bids are exempt.
  • The debtors, in consultation with the consultation parties, may waive or modify the requirement case by case, or require a larger deposit when a bid is increased.
• Return of deposits:
  • Deposits of bidders other than the successful and back-up bidders are returned within five business days after the auction.
  • The back-up bidder's deposit is returned by the earlier of five business days after closing with the successful bidder and the back-up termination date.
  • The successful bidder's deposit is applied to the purchase price at closing.
• A successful or back-up bidder that fails to close because of its own breach forfeits its deposit, and the debtors keep all other remedies.

Overbid

• Minimum Overbid Increment: at least $2 million over the starting bid in the first round. In later rounds, the debtors announce the increment over the prevailing highest bid, and they reserve the right to adjust it.

Auction

• Date: Dec. 21, 2026, at 10 a.m. (prevailing Central Time), in person or by remote video. The auction is held only if at least one qualified bid other than Ayrmid's is received.
• The debtors, in consultation with the consultation parties, choose the starting bid. Factors include:
  • total consideration;
  • closing certainty and timing, including regulatory approvals;
  • tax consequences;
  • contract assumption costs and requested APA changes;
  • employee treatment; and
  • whether the bid meets the mandatory conditions and provides value to the estates above the reorganization transaction.
• Auction rules:
  • Bidding is open, and Ayrmid may participate.
  • Each qualified bidder must have a principal with decision-making authority present.
  • A bidder that skips a round is disqualified, unless the debtors waive the requirement.
  • Each bidder must confirm on the record that it has not colluded and that its bid is a good faith offer.
• If no other qualified bid is received, the debtors will not hold the auction. They will file a notice within two business days after the bid deadline and proceed to confirm the plan and close the reorganization transaction.
• If the auction is held, a post-auction notice naming the successful and back-up bidders is due within one business day after it ends.
• The debtors' designation of a successful or back-up bid is conditioned on court approval, and any dispute over the selection of a qualified, successful or back-up bid is resolved by the court at the sale hearing.

Back-Up Bidder

• The next-highest or otherwise second-best bid becomes the back-up bid when the auction closes. It stays irrevocable until the earlier of closing with the successful bidder and the debtors' release of the bid, regardless of any earlier termination date in its APA.
• If Ayrmid is named back-up bidder, which must happen no later than the end of the auction:
  • the RSA does not terminate as to Ayrmid merely because another bid wins; and
  • Ayrmid's back-up commitment lasts until the earlier of the successful bid's closing and 110 days after the petition date.
  The proposed order provides that nothing relieves Ayrmid of its RSA obligation to serve as back-up bidder.
• If the successful bid does not close by its outside date or its agreement is terminated, the debtors may close with a back-up bidder other than Ayrmid. If Ayrmid is the back-up, they may instead confirm the plan and close the reorganization transaction. Neither path needs a further court order beyond the sale order or confirmation order.

Employee Treatment

• Each bid must state whether the bidder will hire some or all of the employees primarily employed in connection with the acquired assets, and if so, which ones.
• Each bid must also state which employee obligations the bidder will assume, including severance, accrued paid time off, retention, bonus and other compensation and benefit obligations, whether or not those obligations relate to employees it hires. Employee treatment is one of the auction evaluation factors.

Assumption and Assignment

• The debtors will file and serve a cure notice by Nov. 13, 2026. It also serves as the plan's Article V.C notice of proposed assumption, so each counterparty gets one notice and one objection deadline.
  • Contracts listed without a cure amount carry a $0 cure.
  • Some contracts are listed at $0 because their prepetition amounts are being paid in the ordinary course under the all-trade order.
• Objection deadlines:
  • Cure objections are due 14 days after service of the cure notice, at 4 p.m. (prevailing Central Time).
  • Objections to a supplemental cure notice are due within seven days after its service.
  • Adequate assurance objections are due Jan. 4, 2027, at 4 p.m. (prevailing Central Time).
• After the auction, the successful bidder provides adequate assurance information to the debtors, who share it on a strictly confidential basis with counterparties that request it in writing, for use only in evaluating adequate assurance and supporting an objection.
• Supplemental cure notices must be served at least 21 days before the confirmation hearing for contracts assumed under the plan, and before closing for contracts assigned to a successful bidder.
• In a cure dispute, the debtors have two options:
  • assume the contract, pay the undisputed amount within five business days after closing and reserve cash for the disputed portion; or
  • adjourn the assumption until the dispute is resolved, and withdraw it if the dispute goes against them.
• The debtors are asking for contracts to be assigned despite anti-assignment or change-of-control provisions. Counterparties that do not object are deemed to consent and cannot assert additional cure amounts.

Key Dates

• All times are prevailing Central Time. The debtors may extend deadlines in consultation with the consultation parties.
• Bidding Procedures Hearing: Nov. 3, 2026, at 11 a.m.
• RSA Milestone for Entry of the Bidding Procedures Order: three calendar days after the petition date
• Cure Notice Deadline: Nov. 13, 2026
• Cure Objection Deadline: 14 days after service of the cure notice, at 4 p.m.
• Bid Protections Objection Deadline: Nov. 23, 2026, at 4 p.m.
• Bid Protections Hearing: Nov. 30, 2026 (subject to the court's availability)
• Bid Deadline: Dec. 16, 2026, at 4 p.m.
• Qualified Bid Determination: Dec. 18, 2026
• Auction (if necessary): Dec. 21, 2026, at 10 a.m.
• Post-Auction Notice: one business day after the auction concludes
• Sale Objection and Adequate Assurance Objection Deadline: Jan. 4, 2027, at 4 p.m.
• Sale Hearing (may be combined with the confirmation hearing): Jan. 11, 2027 (subject to the court's availability)
• Outside Date for Ayrmid's Back-Up Commitment: 110 days after the petition date

DIP Lender Rights

• The procedures expressly preserve the DIP secured parties' right to consent to any sale of their collateral.
• Unless the court orders otherwise, cash sale proceeds are applied under the DIP orders.
• All relief is subject to the DIP orders and budget, and the DIP orders control in any inconsistency.
• The debtors may end the sale process before selecting a successful bidder, without prejudice to the DIP lenders' rights.

Fiduciary Out and Reservation of Rights

• Nothing in the procedures requires a debtor's board to act against its fiduciary duties or applicable law.
• Until the auction closes, the debtors may:
  • consider and respond to unsolicited alternate proposals;
  • share nonpublic information under confidentiality agreements; and
  • negotiate those proposals.
  The fiduciary out does not override or modify the RSA.
• In consultation with the consultation parties, the debtors may extend deadlines, adjourn or cancel the auction, reject any bid and adjust the bid increment. They may not reduce their consultation obligations without the affected consultation party's consent.