X4 Pharmaceuticals Q1 2024 Earnings Call Transcript

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May 7, 2024

There are 11 speakers on the call.

Operator

Annalto X4 Pharmaceuticals First Quarter 20 24 Earnings 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, Mr.

Operator

Dan Ferri from LifeSci Advisors. Thank you, Mr. Ferry. You may begin.

Speaker 1

Thank you, operator, and good morning, everyone. Thank you for joining us today. Presenting on today's call will be Doctor. Paul Aragon, Exfor's President and CEO and the company's Chief Financial Officer, Adam Mostafa. Following prepared remarks, we will open up the call to your questions and will be joined by Chief Commercial Officer, Mark Baldry Chief Medical Officer, Doctor.

Speaker 1

Christophe Arbat Engels Chief Operating Officer, Doctor. Mary Bibiasi Chief Scientific Officer, Doctor. Art Tavares and Jose Juves, Head of Corporate and Patient Affairs. As a reminder, on today's call, the company will be making forward looking statements regarding regulatory and product development and commercialization plans as well as research activities. These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted.

Speaker 1

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 was filed on March 21, 2024, and in the company's Form 10 Q, which is expected to be filed later today. I'll now turn it over to Paula Ragan. Paula?

Speaker 2

Thanks so much, Dan, and welcome, everyone. Following last week's approval of Zolremdi, it's exciting to reiterate today why this critical regulatory achievement represents a significant opportunity to improve the lives of WIM patients and offers a strong platform for the company's growth. More specifically, I'll touch on our plans for expanding Zolremdi's use in for quickly advancing into a potential larger indication chronic neutropenia. But let's start with last Monday's transformative announcements. As you know, ZolremD or mavrixiphore is now approved by the FDA for use in the U.

Speaker 2

S. In patients 12 years of age and older with WHIM syndrome is an ultra rare disease caused by dysfunction of the CXCR4 receptor which helps regulate the movement of white blood cells including neutrophils and lymphocytes throughout the body. People with WIM syndrome characteristically have low blood levels of neutrophils, neutropenia and lymphocytes lymphopenia and experienced serious and or frequent inflections that cause significant morbidities. In our pivotal Phase 3 clinical trial that supported our approval, Zolremdi, an oral selective CXCR4 antagonist improved absolute neutrophil counts and lithocyte counts, ANC and ALC and reduced the rate, duration and severity of infections in those treated versus placebo. This was the largest clinical trial to date in WHIMS syndrome enrolling 31 patients.

Speaker 2

We'd like to note that the full manuscript of these clinical results were recently published online in Blood, the Journal of the American Society of Hematology or ASH and that results from this trial and its open label extension phase or OLE were just presented last week at the annual meeting of the Clinical Immunology Society or CIS. Notably, the CIS poster revealed that long term treatment with ZolremD was associated with durable improvements in neutrophil and lymphocyte counts as well as reductions in annualized infection rate and that to date no new safety signals have been observed during the OLE phase of the trial. As with most ultra rare diseases, it can be challenging to assess the true patient prevalence as awareness is often low and patients are frequently under or misdiagnosed. And since we didn't cover this in detail last week, we thought it might be useful to remind everyone of the market size estimates that we've shared on the U. S.

Speaker 2

WIM market over the past several years. Since 2019, we've completed several robust market research studies using both qualitative and quantitative analyses to not only support our prevalence estimates, but to also better understand the WIM diagnostic journey and treatment paradigm. Across a number of methodologies, including direct market research and claims based research, we continue to validate our current estimates. And through our growing number of conversations with physicians in the field and at medical conferences, we remain very confident in our estimate that there are at least 1,000 confirmed diagnosed WIM patients today in the U. S.

Speaker 2

And now with a targeted therapy available, we expect that increased physician awareness will bring more and more focus to the WIM community, enabling earlier recognition and diagnosis, potentially expanding the number of those diagnosed with WIM over time. And as our Chief Commercial Officer, Mark Baldry, so aptly put it last week, it is well established that earlier and definitive diagnosis leads to better patient outcomes and that is ultimately our goal for the WIM community. We believe we are well positioned to not only deliver on the commercial opportunity in WIM syndrome, but to also advance our global regulatory submissions with the goal of potentially providing new options to patients across the world. Our European submission preparation in WIM are underway and we anticipate submitting a marketing authorization application or MAA for potential European approval in late 2024 or early 2025. Importantly, we'd like to review our development plans WAM and to define what success might look like as we explore the use of MAVERICK's for in the treatment of chronic neutropenia or CN.

Speaker 2

To help understand the benchmark for success, I'd first like to start with what we've seen in WHIM syndrome. As I mentioned, our WHIM Phase 3 trial data were recently published in the peer reviewed journal Blood. Specifically, WIM patients were severely neutropenic at baseline with a mean ANC of less than 2 50 cells per microliter. Patients on MAVERICKSAFORT achieved increases of about 500 cells per microliter reaching ANC levels of about 800 cells per microliter on average over the 52 week trial. This increased neutrophil count of approximately 500 to 600 cells per microliter corresponded with a 60% reduction frequency versus placebo as well as reduced severity and duration of infection.

Speaker 2

Additionally, the benchmark of increasing ANC by at least 500 cells per microliter aligns well with what our CN physician experts describe as clinically meaningful. An increase of 500 cells per microliter was also the metric for success in our previously published CN Phase 1b study and has been published on by the NIH and others across various neutropenia conditions. I note this here because these results help inform our assessments of success for the ongoing Phase 2 clinical trial data in CN and our enthusiasm for advancing into the CN Phase 3 study in the first half of twenty twenty four. As with WIM patients, chronic neutropenia patients faced an increased risk of infection every single day. This risk is greatest when they are severely neutropenic or with an ANC below 500.

Speaker 2

Increasing ANC from less than 500 to between 501,000 cells per microliter correlates with a meaningful reduction in infection risk from severe to moderate. Increasing ANC to between 1,01500 correlates with a risk reduction from moderate to mild and increasing ANC above 1500 moves the patient into a normal infection risk category. Additionally, based on our market research, we believe that physicians prescribing injectable granulocyte colony stimulating factor or G CSF, currently the only therapy approved to treat severe chronic neutropenia generally target ANC levels between 1,01500. With enrollment now complete in our Phase 2 trial, we will have studied more than 20 CN patients, approximately 40% of whom have been treated with MAVERICKS-four monotherapy and the remainder with a combination of MAVERICKS-four and G CSF. We are currently planning an investor event in late June to present interim results from at least 15 participants in this study, which we anticipate will include data from those treated with MAVERICK-four as a monotherapy and those also treated with combination with G CSF.

Speaker 2

We'll be looking at increases in ANC while on treatment with mavrixifor as well as the durability of increased ANC with time on treatments in those subjects with stable background therapy. The complete data set of the CN Phase 2 study is expected later this year and we're aiming to present final results hopefully at a major medical conference at that time. More details on our planned investor event in June will forthcoming and we look forward to further defining the potential of MAVERICK's 4 in the first immune disorder beyond WIM. In the meantime, we remain on track to initiate our Phase 3 CN trial this quarter. This will be a pivotal global Phase 3 trial to evaluate the efficacy, safety and tolerability of oral once daily maverixifor with or without G CSF and people with congenital or acquired primary autoimmune and idiopathic chronic neutropenia who are experiencing recurrence and or serious infections.

Speaker 2

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. 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 and quality of life measurements among others. We continue to believe that there is a significant unmet need across this Phase 3 patient population, a market we estimate to represent approximately 15,000 people in the U. S.

Speaker 2

Alone who in many cases are being seen by the same practitioners who are also seeing those diagnosed with WIMM syndrome. With that, I'll now turn it over to our CFO, Adam Asthava to review the Q1 financials. Adam?

Speaker 3

Thanks, Paula, and thanks to all of you for being on

Speaker 1

the call with us today. At the end

Speaker 3

of the Q1 ended March 31, 2024, Exforge had $81,600,000 in cash, cash equivalents, restricted cash and short term marketable securities. We believe that these funds are sufficient to support company operations into 2025. And note that this runway estimate does not include the potential monetization of the priority review voucher we received as

Speaker 4

a

Speaker 3

expenses were $19,900,000 for the Q1, which compares to $22,100,000 for the comparable period in 2023. R and D expenses for the Q1 included $800,000 of certain non cash expenses. Our selling, general and administrative expenses were $17,400,000 for the Q1 as compared to $7,200,000 for the comparable period in 2023. SG and A expenses included $1,000,000 of certain non cash expenses for the quarter. We would like to note several factors affecting our expenses this quarter.

Speaker 3

These expenses reflect the hiring of an experienced field force now in place to drive the launch of ZorMD in the U. S. And launch preparation activities across our commercial and medical organizations. Lastly, we reported a net loss of $51,800,000 for the Q1 of 2024 as compared to $24,000,000 for the comparable period in 2023. Net losses in the current period include a non cash loss of $13,800,000 related to the company's Class C warrant liability, which is adjusted to fair value each reporting period.

Speaker 3

Net losses also included $1,700,000 of stock based compensation expense. And with that, why don't we open up the call for your questions. Operator?

Operator

Thank you. We will now be conducting a question and answer The first question comes from the line of Stephen Willey with Stifel. Please go ahead.

Speaker 5

Yes, good morning. Thanks for taking the questions and looking forward to the update next month. Maybe just a couple on the Phase III for me. So can you just remind us how you're specifically defining an infection event in the Phase III? And I'm assuming you'll be essentially adjudicating these events during the trial.

Speaker 5

But just wondering if you're also trying to adjudicate those events that are required to be seen in each patient during the 12 months prior to randomization?

Speaker 2

Hi, Steve. Thanks for the question. So I think I heard 3 components there. Just how are we quantifying infection rates via central adjudication sort of a subpart? And then the first one was, for the inclusion criteria, how are we assessing infections?

Speaker 2

Is that the right orientation? Okay, perfect. Christoph, do you want to take that?

Speaker 4

Sure. Yes. So we have a process during the study to educate adjudicate the infections. Patients will be reporting every adverse events of infection and the use of antibiotics or hospitalization related to these. And ultimately, the safety committee will be adjudicating reviewing and adjudicating these infections and we'll be able to count those to define the annualized infection rate.

Speaker 4

With regard to prior to the start of the study, the history of infection in this population, we have defined some criteria like the use of antibiotics, hospitalization

Speaker 6

and our criteria is to

Speaker 4

make sure that these patients have at least 2 infections in the past year before they come into the study.

Speaker 5

Okay. That's helpful. And then I guess just maybe a statistical question. Can you tell us if the underlying statistical plan accommodates a reduction of infections that could potentially be seen in the placebo arm during the trial? And I only asked the question because I know because these event rates can sometimes fall off in the setting of a trial when the level of care and patient compliance improves?

Speaker 4

So the study is randomized, and we have so patients will be randomized to placebo for treatments with active treatments with mavericks. We have evaluated with our experts, consultants at the FDA, Professor Tom Fleming. We've designed the study to power it to over 90% for the infection rates in our population. We've taken some conservative assumptions with what the FX size will be. As you remember in our wind study, we were able to show a decrease or an increase of more than 500 cells per microliter.

Speaker 4

We were able to see a decrease of 60% in our annualized infection rates. We've taken a more conservative approach in this particular population, which we estimated to be around 40%, 45%. So we feel confident that this is the statistical power and how we've set up the study and the sample size is reasonable to achieve what we're trying to achieve with this registration study.

Speaker 5

Okay. And then maybe just one more question, if I may. So I guess in the scenario where you're being used on top of GCSF, Is there consensus alignment around the threshold level of background G CSF that prescribers want patients to be kept below in order to avoid risk of transformation to AML or MDS?

Speaker 4

Yes. So there has been some publication related to this. I don't know if there is full consensus in the entire scientific community around that, but some publications have mentioned 8 microgram of G CSF per kilogram and as a threshold for malignancies, I think we in our intention clearly, we know that the DCSF is a risk for this population that is treated chronically. We believe that with MAVERICK support, we will be able to address their chronic neutropenia and potentially limit the use of G CSF. So I think that's a question for the entire scientific community and we can potentially help with our Phase III studies.

Speaker 5

Okay, very helpful. Thanks for taking the questions.

Operator

Thank you. Next question comes from the line of Edward Tanoff with Piper Sandler. Please go ahead.

Speaker 7

Great. Thank you very much. Can you hear me okay?

Speaker 2

Yes. Thanks, Ted.

Speaker 7

Great. And excited on all the progress and obviously congratulations on the recent approval. So appreciating we talked about this a little bit last week and it's still very early. What kind of information are you guys going be providing to kind of explain and highlight launch parameters as you continue to build patients? Thanks.

Speaker 2

Yes. Thanks, Ted. So obviously, we're pretty excited with ZolremD being approved and our field teams out there. I'll turn it over to Mark with maybe just some early commentary and then longer term how we'll think about communicating our progress

Speaker 8

to the Street. Mark?

Speaker 4

Thank you.

Speaker 6

Hi, Ted. Good morning. And we had a terrific meeting at CIS in Minneapolis last week. We debuted our now approved booth and

Operator

there was lots of

Speaker 7

excitement and

Speaker 6

enthusiasm around there. We were having conversations with physicians. In general, those conversations were falling into 3 buckets. There are physicians who already have a WIM patient identified and so we were walking them through the label and the enrollment form. There are other physicians who are aware of WIM, but are not as familiar with the disease.

Speaker 6

And so we were discussing with them how to recognize the heterogeneous nature of the disease and patients in their practice.

Speaker 4

And then there

Speaker 6

are physicians who are not aware of women at all. And so this was exciting for them. So I think we'll be making progress engaging with these physicians, educating them and at the same time engaging with payers to ensure access there. As we go through the year, we'll share more with you on how we will be tracking our progress with these different groups.

Speaker 7

Great. Thank you and good luck with the launch.

Speaker 2

Thanks. Thanks, Ted.

Operator

Thank you. Next question comes from the line of Kristin Kruszka with Cantor Fitzgerald. Please go ahead.

Speaker 9

Hi, good morning everyone. Thanks for taking the questions. First is on CN, our KOL techs support that the biggest complaint from the community is really around the bone pain that comes with G CSF. So obviously no two patients in the trial are going to appear identical. But is there a certain threshold that reduction of G CSF would lead to improvements across some of this pain to make it a little bit more tolerable for patients if they were to go on a combination with mAb, which is safe and oral?

Speaker 2

Kristen, it's a great question. About a year ago, we actually put a little bit of data in one of our posters around this, just around what is meaningful for patients. And of course, dose and frequency are meaningful, sort of anecdotal early information, but that 25% to 50% range would certainly, sort of be meaningful to them and anything improved on that would certainly hit it out of the park. Maybe I'll just turn it over to Christoph. I'm sure he's heard some anecdotes from the patient community as well.

Speaker 4

Yes. So we agree all our information, what we hear from the our HEPs and KOLs that with G CSF, bone pain is a real issue for patients. Decreasing the volume of injections, the frequency might help and some of those patients will be helped probably by using MAVERICK support, especially for the one using GCSF chronically, everyday injections, it's a real burden, and it can those bone pains are really having an effect on their lifestyle. So it's something that we're going to be trying to look at and trying to help patients better understand how we can use some G CSF on top of matter except for no G CSF at all. We'll see where we our studies will help us with that.

Speaker 9

Okay. Thanks. And on that note, is there good data out there supporting the amount or the frequency of this specifically to greater GCF usage is ultimately resulting in greater pain. And I guess for the Phase 3 experience, how is that going to help you in a potential commercial setting kind of help to outweigh some of these things? Or do you think for the 1st couple of months, it's going to be a little bit of trial and error approaches with seeing whether you're decreasing GCSF or doing less frequent or essentially to get to that sweet spot?

Speaker 4

Right. So I would separate the Phase 3 study, G CSF will be stable. So our patients are stable on the chronic dose of G CSF and they remain on it or they are on monotherapy throughout the 12 months of the duration of the study. We're exploring additional studies to see how we can manage the modification of dosing regiments of BCSF. We have some experience, some in our Phase 2 study, and we're going to be continuing to explore how to best do this into our future programs.

Speaker 9

Thanks very much.

Operator

Thank you. Next question comes from the line of swam Pukula Ramakanth with H. C. Wainwright. Please go ahead.

Speaker 10

Thank you. Good morning, folks. Just was trying to figure out what sort of data you said you'll get to publish complete data at of the chronic neutropenia studies at the end of the year. So is it just more patients or even additional data points in terms of primary endpoints and secondary endpoints we will be able to get at the end of the year compared to the June update?

Speaker 2

Yes. Thanks, RK. I'll start and then Christoph can chime in. But as we mentioned in our update, we were enrolling patients through early this year. So the data at the end of the year will really let us complete the study on all patients and perhaps most importantly give us full insight into for those patients who are varying their dose of G CSF, what kind of that average outcome for those patients.

Speaker 2

We really need to let all patients complete the study so that we give them the full time to resolve and land on their stable dose of G within that 6 month window. So I think that's kind of the deepest lens or deepest component of the study that we'll be able to update towards the end of the year.

Speaker 10

Fantastic. Thank you. Thanks for taking my question.

Operator

Thank you. Next question comes from the line of Kalpit Patel with B. Riley. Please go ahead.

Speaker 8

Hi, this is Jay for Kalpit. Thanks for taking my questions. The first question is, what's your expectation for over the bar for efficacy in the upcoming data set that perhaps could drive confidence for Phase 3? What key pieces of data do you recommend investors to zoom into?

Speaker 2

Yes. So I think we originally shared there's 3 ways that we're looking at meaningful responses in Centimeters patients. First, it's similar to our WIM Phase 3 where increases in 500 to 600 cells per microliter showed a 60% reduction in infection rates over a 12 month study. So we think the minimum sort of clinical Certainly, number 2, it's the durability of those increases in neutrophil counts over time. And then, of course, finally, we'll be applying our Phase 3 criteria success

Speaker 4

to the subset of patients in the Phase

Speaker 2

2 that are relevant for the Phase 3 to help build confidence and establish why our statistical power is where it is. So hopefully that's those are the three lenses for success.

Speaker 8

Thanks. That's very helpful. My second question is that since this trial has been for over a year, curious if we will have at least 6 months of follow-up for the 15 or more patients And what's the split of a MARLO versus of these 15 patients?

Speaker 2

I'm sorry, could you just repeat your question a little bit? It was just coming in and out a little bit with the volume.

Speaker 8

Okay. My second question is that since this trial has been running for over a year, so we are curious if we will have at least 6 months of follow-up for the 16 or more patients And what's the split of the model or couple of the 15 patients?

Speaker 2

Yes. So I think if I heard you correctly, you're asking for, are we getting 6 months of patients' worth of data across at least the 15 patients and the monotherapy component of that. I mean, as you can appreciate, I would say generally, yes. There's a little bit of wiggle room in there, of course, because it's when patients come in and when we do data cuts, but there will be a very robust data set across a 15 plus patient population. And perhaps most meaningfully, there'll be, as we mentioned, about 40% of those patients are on monotherapy, which I think will really help clarify the potential benefit of MAVERICK's for as a single agent in this patient population.

Speaker 8

Thanks. That's very helpful. My last question is, where the scripts of WIM detectable on the database like a Symphony or Bloomberg?

Speaker 2

Again, I'm not sure about maybe you're talking about the database cuts. I'm sorry that I didn't quite follow

Speaker 3

the question. Yes.

Speaker 2

Yes. So I mean when we release the yes. Okay. Sorry, go ahead.

Speaker 4

So I mean

Speaker 8

where the scripts for win detractable on the database in Symphony or Bloomberg?

Speaker 6

No. Our distribution of Zolremby in WIM will be through our specialty pharmacy Panther and that's in order to be able to provide patient services to support our patients as they navigate the therapy.

Speaker 8

Okay. That's very helpful. Thank you.

Speaker 2

Thank

Operator

you. Thank you. Next question comes from the line of David Bortz with Zacks Small Cap Research. Please go ahead.

Speaker 6

Hey, good morning, everyone. Just a quick one for me on the PRV. I'm just curious, if you could give us a sense for how many companies are out there looking to purchase the PRV? And then maybe if you could characterize the negotiations and how they're going at this point?

Speaker 3

Yes. So as we said, we do intend to monetize the PRV shortly. It's not currently part of our cash runway guidance. But we'll certainly give an update when we're ready to do that with respect to PRV. In terms of the market and who's out there and things like that, we won't position other company's interest at this point.

Speaker 3

Okay. Thanks a lot.

Operator

Thank you. Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Paula Ragan for closing

Speaker 2

remarks. Thank you so much, operator. Thank you to everyone for joining us today and we hope you have a great 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.

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Key Takeaways

  • FDA approval of Zolremdi (mavrixifor) in patients ≥12 with WHIM syndrome marks the first targeted CXCR4 antagonist, with pivotal Phase 3 data showing durable ANC/ALC improvements and a 60% reduction in infection rate versus placebo, supported by published results in Blood and long-term OLE safety data.
  • The company estimates at least 1,000 diagnosed WHIM patients in the U.S., with low current awareness suggesting potential market growth; a European MAA submission is planned for late 2024/early 2025 to expand global access.
  • In chronic neutropenia (CN), enrollment in the Phase 2 study is complete (~20 patients), and an investor event in June will present interim ANC response and durability data (monotherapy and G-CSF combination), while a pivotal global Phase 3 (n≈150) is set to start in Q2 2024 with dual primary endpoints of annualized infection rate and ANC responder analysis.
  • Financially, Exforg ended Q1 2024 with $81.6 million in cash and equivalents—funding operations into 2025—reported R&D costs of $19.9 million, SG&A of $17.4 million, and a net loss of $51.8 million (including non-cash warrant revaluation).
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