X4 Pharmaceuticals Q1 2023 Earnings Call Transcript

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May 4, 2023

There are 10 speakers on the call.

Operator

Greetings, and welcome to X4 Pharmaceuticals First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode and a question and answer session will follow the formal presentation. As a reminder, the conference call is being recorded. It is now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors. Please begin.

Speaker 1

Thank you, operator, and good morning, everyone. Presenting on today's call will be Exfor's President and Chief We will open the call to your questions and we'll be joined by Interim Chief Medical Officer, Doctor. Murray Stewart Chief Commercial Officer, Mark Baldry Chief Scientific Officer, Doctor. Art Ferris and Chief Operating Officer, Doctor. Mary DiBiase.

Speaker 1

As a reminder, on today's call, the company will be making forward looking statements regarding regulatory and product development plans as well as research activities. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in X4's filings with the SEC, including the company's latest 10 ks for the year 2022 and this quarter's Form 10 Q, which is expected to be filed today. I'd now like to turn the call over to Doctor. Paula Ragan.

Speaker 1

Paula?

Speaker 2

Thanks, Dan, and thank you, everyone, for joining us on the call this morning. We hope to make this an efficient call today and focus on what we hope will be value building milestones throughout the rest of 2023. This is truly an exciting time at for trial evaluating once daily oral mavericksof4 in people with limb syndrome had met its primary endpoint and first key secondary endpoint both absolute neutrophil and absolute lymphocyte counts versus placebo and demonstrating good tolerability in the trial. Subsequently, we announced that our late breaker abstract reporting additional data from the Phase 3 WIM trial was accepted for oral presentation at this year's meeting of the Clinical Immunology Society taking place from May 18 through 21st in St. Louis.

Speaker 2

Doctor. Raffaele Badalado, who is Professor of Pediatrics at the University of Brescia in Italy and an investigator in the FOREWIM clinical trial will present at 11:30 am Central Time on Sunday, May 21. Although this session will only be accessible live to the conference attendees, we will be posting the slides on our website concurrent with the presentation. Following the publication of conference abstract by CIS on the morning of May 16, we will be hosting an investor event later that day at 4 pm to present data on additional secondary endpoints from the trial, including results on infection burden among other outcome metrics. You can register for that event on our website or through the link provided in this morning's earnings press release.

Speaker 2

Joining us for the event to comment on the Phase 3 results and the unmet medical needs of people with WIM and chronic neutropenia will be a diverse panel of immunologists, hematologists and rheumatologists, all of whom have expertise in treating immunodeficiencies and several of whom were investigators in the FOREWAM Phase 3 trial. During the May 16 event, we will be hearing commentary from Doctor. Charlotte Cunningham Rundles, a professor and immunologist at the Icahn School of Medicine at Mount Sinai Doctor. Jean Donadue, a pediatrician in the hemato oncology department of Trussaud Hospital in Paris And importantly, coordinator of the French Registry for chronic neutropenia Doctor. Peter Neuberger, Professor of Pediatrics and Molecular Cell and Cancer Biology at UMass Chan Medical School Doctor.

Speaker 2

Akiko Shimomura, Professor of and Doctor. Teresa Tarrant, Associate Professor and Director of the Clinical Immunology Laboratory at Duke University School of Medicine and Vice Chief of Translational Research for Rheumatology and Immunology. We will also be hearing unique perspective from 3 individuals who have been diagnosed with WIM and have been experiencing WIM syndrome symptoms since birth. Finally, we are expecting doctors. Shimomura and Taryn to join us live for Q and A following the formal presentation.

Speaker 2

During the event, we expect to be providing an update on our U. S. Regulatory activities for maverixifor for the treatment of WIM syndrome As we continue to be on track to file a U. S. New drug application early in the second half of twenty twenty three and prepare for a potential launch in the U.

Speaker 2

S. In the first half of twenty twenty four. Concurrent with all of this, We continue to enroll participants in our ongoing Phase 2 trial evaluating the safety and efficacy of MAVERICK'S AFFOR for the treatment of idiopathic, cyclic and congenital chronic neutropenia, and we believe are on track to announce clinical data and provide clarity on the scope and timing of the expected CN Phase 3 clinical program in the Q2, Q3 timeframe. In our release this morning, we also announced that we will be presenting a poster at CIS highlighting the results of what we believe is the 1st research study to assess the correlation between the incidence of serious infection events or SIEs and the severity of chronic neutropenia. This abstract will also be published on May 16.

Speaker 2

Concurrent with the poster presentation, which is on Saturday, May 20, at 1:30 pm Central Time, we will be adding the poster to our website. As a result of our development efforts and our published data to date, we continue to believe that due to its demonstrated ability to elevate levels of white blood cells, MAVERICK support has the potential to be a breakthrough for those with WIMM syndrome and other chronic neutropenic disorders. We look forward to updating you on our progress throughout the year as we advance our mission to bring innovation to these patient populations in need. I'll now turn it over to our CFO, Adam Mostafa, to review the Q1 financials. Adam?

Speaker 3

Thanks, Paula, and thanks to all of you for being on the call with us today. At the end of the Q1 ended March 31, 2023, Exforge had $94,400,000 in cash, cash equivalents and restricted cash. We believe that these funds are sufficient to support company operations into the Q2 of 2024. Our research and development expenses were $22,100,000 for the 1st quarter, which compares to $14,100,000 for the comparable period in 2022. R and D expenses for the Q1 included $800,000 of certain non cash expenses and a $5,000,000 accrual for an in licensing milestone payment that the company deems probable of occurring.

Speaker 3

Our selling, general and administrative expenses were $7,200,000 for the Q1 as compared to $7,700,000 for the comparable period in 2022. SG and A expenses included 0 point For the Q1 ended March 31, 2023, as compared to $22,000,000 for the comparable period in 2022. Net loss included $1,600,000 of stock based compensation expense and a $5,400,000 gain for the change in fair value of our Class C warrant liability for the Q1. And with that, why don't we open up the call for your questions. Operator?

Operator

Thank you. We will now begin the question and answer session. The first question comes from Stephen Willey with Stifel. Please go ahead.

Speaker 4

Good morning, guys. This is Tumi on for Steve. I just have two quick questions on my end. So the first one is, Would it be possible, Adam, like would it be possible to give a little bit more detailed color on increased R and D expense? And secondly, can you guys also provide or like Has there still been ongoing discussion with potential partnerships?

Speaker 4

And Do you when do you think we'll actually hear more updates on like passing front? I think that's it on my end. Thank you very much.

Speaker 3

Sure. Thanks for the question. So the increase in the R and D line this quarter is related mostly to a $5,000,000 accrual payment. And that's for an in licensing regulatory related milestone that we deem probable of occurring. And so that's the change that you'll see there, which is of course non cash.

Speaker 3

On the partnership front, we continue to look at beneficial ways to finance the company. And that could include, for example, geographic rights types of partnerships. And when we have something material to report and update, we'll certainly do that.

Operator

The next question comes from Mayank Mamtani with B. Riley Securities. Please go ahead.

Speaker 5

Hi, this is William on for Mayank today. Congratulations on your continued success. Two questions from us One and then a follow-up. So we it's just curious if you As far as the infection data and infection rates that you'll be presenting at both the CIS and as well as your KOL, If we could provide any extra information on or color on what we might see at these two presentations? And then are these going to be largely overlapping New data or should we be expecting different data cuts from each of these presentations?

Speaker 5

And thanks. And then one follow-up.

Speaker 2

Thanks for the question. So we as we highlighted in our press release, we're looking forward to sharing more data around the burden of infection, clinicians and you'll actually get to hear their perspectives directly from the ones that we've outlined on today's call. And then in terms of and I apologize, I lost the train on your second part of that question.

Speaker 6

Different data.

Speaker 2

Oh, the different thanks, Mark. So different data in different venues. So data sets will be primarily the same. Obviously, one is more sort of oriented to the clinical communities And then one is for a broader audience with the investor communities, but effectively the data sets are going to be quite similar.

Speaker 5

Got it. That's very helpful. And then in terms of Your upcoming Phase 3 as well as I guess Phase 2 study execution, maybe if you could provide Any insight that you've gained during your FDA discussions, and what you're thinking about following Phase 2 data So, Elyse, how are your plans going forward?

Speaker 2

So for clarity, this is around the chronic neutropenia studies?

Speaker 6

Yes. Sorry about that.

Speaker 2

Yes. No worries. Thank you. So for chronic neutropenia, where we continue to guide that we'll provide Additional data in Q2 or Q3 as well as we'll have completed interactions with the agency so that we can have Clarity on a Phase 3 registration program. So those are in progress right now.

Speaker 2

We're looking forward to sharing that both the additional data, which will Primarily be focused on durability of neutrophil counts. That's a crosswalk in all of these neutropenic patients, including WIM is Looking for durable elevations in white blood cell counts including neutrophils and then the correlation with infection, we saw that very nice data with Primary neutropenia, the Phase Ib after a single dose getting that resoundingly positive results. Now we're looking forward to sharing future data that will hopefully be consistent with WIM, which is nicely durable and elevated for months on end. And then of course, the registration trial will be more of the venue that will look for

Speaker 5

Excellent. I appreciate all of that and congratulations again and thank you for taking our questions.

Speaker 2

Thank you.

Operator

The next question comes from Eva Privatera with TD Cowen. Please go ahead.

Speaker 7

Hi, good morning and thanks for taking our questions. For the Phase 2 chronic neutropenia update, what can we expect in terms of How many patients and how long the duration of follow-up?

Speaker 2

Yes. So we're actively enrolling. Yes. I'm sorry.

Speaker 7

Yes. What's the split of the congenital idiopathic and cyclic patients roughly and also the split of patients dosed with monotherapy versus the combo with G CSF?

Speaker 2

Yes. I mean, so we're still actively enrolling, so I can't answer any of the split questions because we've similar to the Phase 1b, we have a nice wide And of course, we're just trying to study as broad of a population as we can. So more to come on that when we have the data. And then in terms of the number of patients, I think we're aiming for somewhere between 1525 or trying to get as robust of a count as possible. We really Thought the data set from the Phase 1b was valuable because you had enough across the couple of buckets to be able to make some generalizations And that's what we're aiming for, but of course it's always about recruitment and timing.

Speaker 2

But we look forward to sharing that certainly meaningful update around durability in these patients As soon as we can in Q2 or Q3.

Speaker 7

Great. Thanks for that. And on the Phase 3 WIM presentation, and secondary endpoints that will be presented at CIS. What level of reduction in infection rates and wart Burden, do you think are clinically meaningful?

Speaker 2

Yes. I mean, I can share with you what we What's the agency and what we saw on the Phase 2, the agency granted us breakthrough therapy designation on the Phase 2 WIM data, which I believe after a year showed about a 40% to 50% reduction in infection rates. It was a little bit of a different benchmark, of

Operator

The next question comes from RK with H. C. Wainwright. Please go ahead.

Speaker 8

Thank you. Good morning, Paul and Adam. This is RK from HCVInuit. I think if I do my job right on May 16 21st, I should know all about Vim and Mavriq Sephora. But at the same time, you are putting 5 KOLs together on the 16.

Speaker 8

So should we expect these folks to be talking about Additional neutropenic conditions where MAVAXO4 could be used? And also, Would this help you to initiate conversations regarding subtypes of SEM in the sense Where SEM gets generated by due to various causes. Will some color around that Come up in these conversations, so for us to think about potential expansion indication expansions for MAVERICK support?

Speaker 2

Thanks so much, RK. Great questions. So I think the KOLs on the call are breadth of KOLs, U. S. And Europe Then across the hematology, immunology and in some cases rheumatology, which is somewhere some of these patients are managed.

Speaker 2

So we felt We wanted to have that nice universe of experiences commenting not only on our data in WIM, but some of them certainly have relevance in treating a larger So for those folks that have that experience, they will be able to bring in their experiences into the conversations. And we have a few of them live on the event at the end, so they'll be able to speak from their perspective and certainly we'll look forward to the Q and A around topic around future indications.

Speaker 8

Thank you. Thank you. Looking forward to these 2 events.

Speaker 2

Thank you so much, RK.

Operator

The next question comes from Kristen Kluska with Cantor Fitzgerald. Please go ahead.

Speaker 9

Good morning. This is Rick on for Kristen. Thank you for taking our questions. To kind of set the stage ahead of the CIS conference and WIM, could you talk a little bit The setting, the audience you're expecting at CIS and how getting in front of this audience could help inform what you understand could be the

Speaker 2

Sure. So I think at CIS, it's primarily immunologists. I know Mark has a team of his participating in this conference. I'll turn it over to him to provide additional color. Mark?

Speaker 6

Thanks, Paul. Hi, Rick. Yes, we're looking forward to being at CIS where a lot of our customers are planning to be. We have number of meetings set up with key customers and we'll have a company booth there as well, which is focused on raising disease awareness of WIM. So, we think it's going to be a very valuable conference for us as the excitement builds around the release of that Phase 3 data.

Speaker 9

Great. And maybe just one more on the CN poster presentation you announced for CIS. Could you also kind of set the stage here what we could expect potentially from this real world patient data that you talked about? Should we be expecting mostly patients managed on Managed on GCSF and do you plan on going into any information on genetic background for the patients in this study? Thanks.

Speaker 2

Yes. So it's a higher level study than that. We don't get into obviously genetics are sometimes not even captured in electronic medical records. So it is a higher level study on the populations that are diagnosed with different types of chronic neutropenia. There's different ICD-ten codes and then there's a different ability to drill down on their clinical histories in terms of their severe infection events.

Speaker 2

So the poster really connects those dots Is that real world evidence connecting degrees of neutropenia with severity around morbidity and potentially in

Speaker 9

Excellent. Thank you very much.

Operator

This concludes the question and answer session. I would like to turn the conference back over to Doctor. Reagan for any closing remarks.

Speaker 2

Thank you so much. We appreciate everyone attending today, and we certainly look forward to having everyone and hopefully your interest on our big May 16 event. Have a great rest of your day. Take care.

Operator

Thank you for participating and have a pleasant day.

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Earnings Conference Call
X4 Pharmaceuticals Q1 2023
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