X4 Pharmaceuticals Q4 2023 Earnings Call Transcript

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March 21, 2024

There are 12 speakers on the call.

Operator

Greetings, and welcome to the X4 Pharmaceuticals 4th Quarter and Full Year 2023 Financial and Operating Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors.

Operator

Please begin.

Speaker 1

Thank you, operator, and good morning, everyone. Presenting on today's call will be X4's Chief Executive Officer, Doctor. Paula Ragan and Chief Financial Officer, Adam Mostafa. Following prepared remarks by each, we will open the call to your questions and we'll be joined by Chief Commercial Officer, Mark Baldry Chief Medical Officer, Doctor. Christophe Arbitt Engels Chief Operating Officer, Mary DiPiasi and Chief Scientific Officer, Art Tavares.

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 Exforge's most recent filings with the SEC, including this year's Form 10 ks, which is expected to be filed after market close today. I'd now like to turn the call over to X4's President and CEO, Doctor. Paula Ragan.

Speaker 1

Paula?

Speaker 2

Thanks, Dan. Good morning, everyone, and thank you for joining us on the call today. As we look ahead to 2024, we thought we'd take the time to reflect on all that we've accomplished over the past year. Milestones that have set the stage for what we expect will be an incredibly exciting and truly transformative year for X4, a year where we aim to become a fully integrated research development and commercialization company with the goal of delivering new options for rare disease patients. Throughout 2023, we hit several major milestones.

Speaker 2

Most importantly, submission and acceptance under FDA's priority review process of our NDA seeking approval of MAVERICKZIPHORE, our oral targeted CXCR4 antagonist for the treatment of WIM syndrome. As you may recall, WIM is a rare combined primary immunodeficiency caused by genetic variations to the CXCR4 receptor. The CXCR4 pathway helps regulate the migration of white blood cells including neutrophils and lymphocytes into the bloodstream. WIM is named for its 4 most common manifestations warts, which are typically caused by unresolved HPV infections, hypogamuloglobulinemia or low levels of antibodies, infections, both viral and bacterial and myelocathexis or retention of white blood cells in the bone marrow. Diagnosis of WIM has historically proven challenging because only a minority of patients actually experience all four manifestations in the acronym, although not all symptoms are required for diagnosis.

Speaker 2

The most challenging burden faced by people with WIM syndrome results from their low blood levels of neutrophils or neutropenia and low blood levels of lymphocytes or lymphopenia, which research supports our experience by essentially all WHIM patients. As a consequence of neutropenia and lymphopenia, an estimated 92% of WIM patients experience frequent recurrent infections that significantly impact their health and quality of life. Over time, WIM patients with recurrent infections may experience debilitating and life threatening complications, including increased cancer risk, irreversible end organ damage and or sepsis. I mentioned this not only to emphasize the incredible burden of disease for these patients and their caregivers, but also to highlight that MAVERICK's 4 has been granted breakthrough therapy designation by the FDA indicating their recognition of maverickifor as a product candidate with the potential to provide substantial improvement over the standard of care in the treatment, diagnosis or prevention of a serious condition. So we were very pleased to have reported on the additional positive safety and efficacy results from our completed global pivotal Phase 3 trial in WIM in May of last year and further analysis of the trial at several important medical meetings and congresses both last year and earlier this year.

Speaker 2

Publication of the full 4 WIM trial results is currently pending at a highly respected international medical journal. As you know, the Phase 3 trial successfully met its primary endpoint and several key secondary endpoints with participants on MAVERICK's for achieving statistically significant elevations in both their neutrophil and lymphocyte counts versus placebo and importantly statistically significant reductions in the rate of annualized infections and clinically meaningful reductions in the severity and duration of infections versus placebo. Based on these results, we submitted our first NDA to the FDA in late August of last year, receiving notice of acceptance for priority review, setting a target PDUFA date of April 30, which is fast approaching. As you can well appreciate, we've been incredibly busy preparing for this potential approval since we spoke with you last year. We've been having discussions with our payers, Our commercial and medical affairs organizations have grown meaningfully, although prudently as we continue to build our brand marketing and sales infrastructure to increase our presence at medical meetings and engage with our targeted hematologists and immunologists that we expect to have WIM patients under their care.

Speaker 2

We look forward to leveraging our rare disease commercial capabilities to start building the WIM market over time, but 2024 as the year to lay the foundation for future success. And looking beyond 2024 as we are successful in educating physicians, helping them identify WIM patients and build demand for our product candidate. WIM syndrome is a very rare form of combined immunodeficiency first described over 60 years ago in the medical literature. Given its rarity and lack of available therapies, disease awareness amongst our targeted physician audience has historically been quite low with no approved treatments for WIM and only supportive care for symptomatic management, not addressing the underlying cause of the disease. With our successful Phase 3 WIM trial recently being presented at major medical conferences, we are very encouraged that the physician community is now gaining more awareness.

Speaker 2

Additionally, we've experienced strong engagement with our What If It's WHIM disease awareness campaign, which is also demonstrating an even broader interest in WHIM syndrome. At the ASH meeting in December, the organizers made a point of highlighting the need for new research and development in classical hematological diseases. At the meeting, our Chief Medical Officer, Doctor. Christophe Arbat Engels gave a talk on the lack of innovation and the need for new treatments at the meeting. His presentation was enthusiastically welcomed by a standing room only audience.

Speaker 2

We're also pleased to report that at the recent AAAAI Immunology meeting in late February, not only was our abstract on the lymphocyte subset data from our 4 accepted as an oral presentation by Doctor. Teresa Torrent, an esteemed immunologist from Duke University, whom you've heard from our several past investor events. But Doctor. Torrent was also invited by the conference organizers to give a non X4 sponsored talk on MAVERICK 4 and WHIM syndrome specifically. Both of her presentations were extremely well attended as was our What If It's WHIM booth, all of which served to increase our visibility and enable what we believe can result in a major leap forward for patients through physician awareness and education.

Speaker 2

The X4 team working on our Congress exhibition booths have recounted many stories of physicians thanking them for drawing their attention to this disorder. And they reported that multiple physicians who approached us never before having heard of Limb syndrome, left leaving they might in fact have a Limb patient under their care. As you can imagine, we get the question often about the size of the market for WIM in the U. S. With rare diseases that have no treatments, it's always difficult to assess.

Speaker 2

These interactions with physicians serve to reinforce our belief that there may in fact be more WEM patients out there beyond the 1,000 or so that we've estimated are diagnosed at present based on claim data and analyses. And while we eagerly await word from the FDA on our first NDA, we're continuing to advance our plans to seek approval for MAVERICK, CIFOR and WAM outside of the U. S. As well. We've had productive interactions with regulators in Europe and now believe we may be able to submit for EMA approval in late 2024, early 2025.

Speaker 2

We've had discussions with potential partners on how best to leverage our U. S. Approval if received across other geographies as well. More to come on that later this year. Now turning to our chronic neutropenia program, we were able to make significant progress in advancing MAVERICK's 4 NCN during 2023 as well.

Speaker 2

Although our Phase 2 clinical trial was a little slower to enroll than we'd initially expected, we were able to learn and increase enrollment and achieve our target of at least 15 patients by early November and we continue to expect to announce additional Phase 2 results in the 15 plus trial participants in the coming months. We expect that our data to be presented will include a meaningful number of patients who are receiving mavericksofora alone without concomitant G CSF treatment, enabling the assessment of MAVERICK-sixfour as a potential monotherapy in those diagnosed with CN. We also expect that data to be presented will include information on additional participants being treated with the combination of MAVERICK-four and G CSF. Importantly, all of the preliminary data presented to date and other learnings from the Phase 2 trial along with our interactions with the FDA have enabled us to finalize the protocol for a global pivotal Phase 3 clinical trial of MAVERICK's IVCN and advance the initiation of this important next trial in the first half of twenty twenty four. As we've previously discussed, we plan to enroll approximately 150 participants in the trial, which will be a 52 week double blinded placebo controlled trial with 1 to 1 randomization.

Speaker 2

We will be assessing the safety and efficacy of MAVERICK's 4 plus or minus concomitment G CSF treatment and those with congenital, autoimmune or idiopathic neutropenia. The patients included into the study will also have to present with neutropenia and symptomatic infections despite current standard of care including G CSF. There is a significant unmet medical need across this established Phase 3 patient population. A U. S.

Speaker 2

Market we estimate to represent approximately 15,000 people. The primary endpoint will be a 2 component endpoint comprised of both the annualized infection rate and ANC responder analysis across the study population. Secondary endpoints will include the severity and duration of infections, antibiotic use, quality of life measurements among others and of course safety. We are in the process of initiating our global study sites and are looking forward to enrolling patients across a number of these sites beginning in the next few months. We are as of now planning to host a CN event before the end of June to update on both the Phase 2 trial data and CN Phase 3 trial progress.

Speaker 2

So stay tuned for more information on that. I'll now turn it over to our CFO, Adam Asthafo to review the Q4 and full year 2023 financials. Adam?

Speaker 3

Thanks, Paula, and thanks to all of you for being on the call with us today. Having raised more than $87,000,000 during 2023, comprised of a mix of equity and debt $15,200,000 in cash and cash equivalents, short term marketable securities and restricted cash. We expect that these funds will support our operations into 2025. We would like to note that we may have multiple non dilutive sources of funding available to us throughout 2024. Given maverixafor's rare pediatric disease designation, we are optimistic that we'll receive a priority review voucher, which can be used for a subsequent application or sold to another drug sponsor should maverixifor be approved.

Speaker 3

If all goes well, we also may have additional access to milestone based debt tranches through our Hercules facility this year and anticipate revenues from U. S. Sales of mavriksipore over the course of this year and beyond. A quick recap of our 2023 financials. R and D expenses were 15 point $3,000,000 $72,000,000 for the Q4 and full year ended December 31, 2023 respectively, compared to $19,000,000 $61,100,000 for the comparable periods in 2022.

Speaker 3

Our R and D expenses included $1,100,000 and $4,400,000 of certain non cash expenses for the 4th quarter and full year ended December 31, respectively. SG and A expenses were $9,900,000 $35,500,000 for the Q4 and full year of 2023 respectively, compared to $6,600,000 $27,000,000 for the comparable periods in 20 22. Our SG and A expenses included $1,400,000 $4,300,000 of certain non cash expenses for the Q4 and full year ended December 31, respectively. Finally, we reported a net loss of $19,100,000 $101,200,000 for the Q4 and full year ended December 31, compared to $29,100,000 $93,900,000 for the comparable periods in 2022. Net losses included $2,500,000 $8,700,000 of stock based compensation expenses for the Q4 and full year 2023, respectively, compared to $1,100,000 $5,200,000 for the comparable periods in 2022.

Speaker 3

With that, I'll pass it back to Paula.

Speaker 2

Thanks so much, Adam. To conclude as we said in the press release earlier this morning, the excitement at X4 is now palpable. We have a countdown clock on the wall as our expected PDUFA date and we could not be more energized to know that we are so close to potentially achieving our vision of delivering meaningful benefits, those with rare diseases of the immune system by gaining approval for what would be the 1st and only targeted therapy for the treatment of people with WIM syndrome. And we look forward to continuing to report out on our other milestones throughout the rest of the year. We'll now open up the call for your questions.

Speaker 2

Operator?

Operator

Thank you. We will now conduct a question and answer session. Our first question comes from Kristin Kluska with Cantor Fitzgerald. Please proceed.

Speaker 4

Hi, everyone. Thanks for taking the questions and kudos. I've seen your team at a lot of these medical conferences. So great work getting the community aware of what's going on there. I wanted to ask about commercialization and thoughts around CN.

Speaker 4

So the KOLs that we speak to know that even leading some G CSF would be a huge win. But understand that in a commercial setting, patients are going to present differently, some on monotherapy map, some on combination and some on combinations that may be less UCSF. So to account for this, what is your expectation on what the monitoring and neutrophil measured protocols would look like in a commercial setting?

Speaker 5

Thanks, Kristen. I think, what we're hearing each explore is around neutrophil counts and chronic neutropenia and then how we are considering how best to develop the product to address the range of patients. So assuming that I got that right, we're certainly very excited about our pending data update on the Phase 2 study coming up in the first half of this year. Of course, in our first three patients, we saw a nice durable elevations in patients with combination G CSF. Importantly, we'll be having data on a group of monotherapy patients.

Speaker 5

So I think that will really help us appreciate the impact of MAVERICK's for neutrophil counts in this broader patient population. And then of course we'll continue to study the drug in combination with G. There's more work to do to support physicians and patients on the best hybrid combination or introduction of mAb and then if and when G CSF might be needed. So hopefully I got your question.

Speaker 4

Yes. Thank you. And maybe if I could squeeze in the second one. For Wyndham syndrome, you noted that sometimes physicians are thinking, hey, actually maybe I do have a patient that fits the criteria for WIM syndrome. Curious if you're seeing any trends about what specifically it is about the indication that it's kind of putting this light bulb in their head or if you've heard any specific feedback there to help with your education efforts?

Speaker 4

Yes.

Speaker 5

I mean, I think, what the field has been sharing with us is just the general excitement because the data are so strong with an oral once daily. But I do think some of the interesting light bulbs are around. There is no ICD-ten code. It's a very poorly educated disease. So I'll turn it over to our Chief Commercial Officer to add a bit more color.

Speaker 6

Yes, thanks. And what's been interesting is through our disease awareness campaign, we've really seen that light bulb go on as we highlight the fact that these patients can present very differently. No one WIM patient is alike. And so this kind of dispels the whole assumption that you have to have all four symptoms to be a WIM patient. And physicians are beginning to realize they may have more WIM patients in their practice than they originally thought.

Speaker 4

Thanks very much.

Operator

The next question comes from Ted Tenthoff with Piper Sandler. Please proceed.

Speaker 7

Great. Thank you very much. Really getting excited for the launch here. I had just a couple of questions. Firstly, on the FDA, appreciating that there's not a panel.

Speaker 7

Are there any final issues to resolve in terms of visits? Have you initiated labeling discussions? When do you think that happens? All those kinds of things. And then when it comes to the actual selling effort, how many reps do you anticipate to satisfy the U.

Speaker 7

S. And what do you think the kind of cost would be annual cost for that sales force? Thanks so much.

Speaker 5

Sure. Our Chief Medical Officer will take your regulatory question and Mark can comment on the commercial.

Speaker 8

Sure. So our interactions with the FDA has been the typical interactions. We are on track for PDUFA dates on April 30, and we're working through the regular process with the FDA.

Speaker 6

Yes. And assuming we get approved at the end of April, we'll be ready to deploy a fully trained experienced rare disease field team. We can share more details around the time of approval in terms of the size of the sales force. But we'll be also engaging with payers to communicate the burden of whim and the value proposition of MAVERICK for and offering a comprehensive suite of patient support services. So, patients can get access to MAVERICK's for

Speaker 9

as quickly as possible after approval.

Speaker 7

Okay, great. Thank you. Good luck.

Operator

Thanks, Ted. Thank you. Our next question comes from Sean Lee with H. C. Wainwright.

Operator

Please proceed.

Speaker 10

Hi, good morning. This is Sean on for RK. I just have a quick question in trying the awareness campaign. So because it's such a rare disease, once it's launched, would you be doing a marketing campaign targeting patients as well just to have to outreach there too so that they can start reaching out for number Xiphore?

Speaker 5

Sure. Great question. Of course, We encourage everyone to check the What If It's WIM website that's available to the public.

Speaker 6

Yes, Yes, it's a great question. And as Paula said, we're really building the foundations for a launch that enables the product to get to patients as quickly as possible. For clarity, we don't expect a bolus of patients at launch. Our goal is to get patients back in to see their doctors and as we build demand for our products. So we'll be doing marketing campaigns targeted at physicians where we expect to have WIM patients in their practice as well as marketing campaigns to potential patients and also educating payers on the burden of WIM syndrome and the value proposition of MAVERICK support.

Speaker 10

Great. Thank you for that.

Operator

Our next question comes from Stephen Willey with Stifel. Please proceed.

Speaker 9

Yes, good morning. Thanks for taking the questions. Maybe just a couple Phase III CN questions. So I think you are stratifying on CN subtype in the Phase 3. But I guess I'm just wondering how you expect those subtypes to be represented within the Phase 3 given patient eligibility criteria?

Speaker 9

And if you're enrolling in a way to get kind of a minimal representation of each of these, whether it's congenital, autoimmune or idiopathic?

Speaker 8

So yes, this is Christophe here. The included criteria will have congenital, idiopathic and or autoimmune patients. Monotherapy and on G CSF as well. We're not planning on stratifying specifically for some of those subtypes. We will do additional analysis, obviously, when we have given the sample size, we'll have a substantial number of those subtypes that we'll be able to consequently analyze.

Speaker 5

Yes. And just to add to Christophe's comment, the idiopathic autoimmune are essentially the same bucket. They're different words for the same group of patients and that's quite a large majority. And then there's the congenital. So we'll be able to stratify by those bigger buckets.

Speaker 5

The congenitals are so variable, it's really we're not able to stratify based on the heterogeneity of congenital. So we're stratifying across the big buckets that Christophe mentioned and also G CSF and monotherapy.

Speaker 9

Okay. And then is there a lower limit of neutrophils that a patient must have to be Phase 3 eligible? And then I guess just given the inherent variability of neutrophil counts, how many measurements do you require during the screening process prior to randomization?

Speaker 8

So yes, we do have the so the measurements first, let me start with this. We have several measurements that we're going to be looking at. For the screening, we're looking at 1 measurement on the screening and then we will establish the baseline of several hours of measurements. And the first part of the questions was, if there is a lower limit of ANC, we don't have a lower limit of ANC. There will be some patients that can be fairly low, especially in the congenital population.

Speaker 8

And we have a range that in our inclusion criteria that include those severe all the way to the mild and moderate neutropenic patients.

Speaker 5

And Steve, just as a reminder benchmark, our WIM Phase III, their baseline were about 180 cells per microliter, so quite severely neutropenic. So we would expect to be able to accommodate patients certainly well into those ranges and hopefully to see an effect similar to what we've seen in WAM. Okay.

Speaker 9

Very helpful. Thanks for taking the questions.

Operator

The next question comes from Calcutta Patel with B. Riley. Please proceed.

Speaker 11

Hi, good morning. This is Jie on for Calpit. Thanks for taking the questions. My first question is for the upcoming Phase 2 update, where we see data from patients who are on higher dose of G CSF. We believe the data staying to date were for patients less than 1 microgram per kilogram, but the approved dose of G CSF is much higher?

Speaker 11

And my second question is for the Phase III that you are planning to start. What in your view is a good delta for reduction in infection rate versus the control arm? Thank you.

Speaker 5

So we'll tag team here. I mean, so in terms of the G CSF dosing, you're incredibly sharp in assessing that the average dose of G CSF of the patients is much lower than the labeled dose. And that is practice. Unfortunately, this drug is so challenging to take and to manage that physicians and patients stay on the very low end, sometimes as low as 20% of the label dose. And again, we don't give guidance on what doses patients are on.

Speaker 5

They come in at their own stable doses. So we would expect if that's the standard of care that that's the range we'll continue to see in the trial. So I hope that addresses your first question. And then I think your second question was around, what type of infection benefit target are we aiming for in the Phase

Speaker 8

So our Phase III, I want to remind you about our wind data. Our wind data on average have seen an improvement of 60% of infections and we've taken a rather conservative approach and we're estimating with PARADAS study for 40% difference in annualized infection rate.

Speaker 11

Okay. Thank you. That's very helpful.

Operator

Thank you. At this time, I would like to

Speaker 5

questions and wish you an enjoyable rest of your day.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.

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Key Takeaways

  • X4’s lead candidate, mavrikifor, has its NDA accepted under the FDA’s priority review with a PDUFA date set for April 30, 2024, following positive Phase 3 results showing significant elevations in neutrophil/lymphocyte counts and reductions in infection rates in WHIM syndrome patients.
  • The company is scaling its commercial and medical affairs teams and running the “What If It’s WHIM” disease awareness campaign to educate hematologists and immunologists, driving identification of undiagnosed patients ahead of potential launch.
  • X4 plans to submit for EMA approval of mavrikifor in late 2024/early 2025 and is in discussions with potential partners to leverage U.S. approval in ex-U.S. markets.
  • In its chronic neutropenia program, X4 completed Phase 2 enrollment of 15+ patients (monotherapy and G-CSF combination) and expects to initiate a global Phase 3 trial in H1 2024 with ~150 participants assessing infection rates and ANC responder status over 52 weeks.
  • Financially, X4 raised over $87 million in 2023 and ended the year with ~$152 million in cash and equivalents, supporting operations into 2025 and positioning the company to access non-dilutive funding (e.g., priority review voucher, debt tranches) and early U.S. revenues.
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Earnings Conference Call
X4 Pharmaceuticals Q4 2023
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