X4 Pharmaceuticals, Inc. (NASDAQ:XFOR) Q1 2023 Earnings Call Transcript May 6, 2023

Operator: Greetings, and welcome to X4 Pharmaceuticals’ First Quarter 2023 Earnings Conference Call. [Operator Instructions] 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.

Dan Ferry: Thank you, operator. And good morning, everyone. Presenting on today’s call will be X4’s President and Chief Executive Officer, Dr. Paula Ragan; and Chief Financial Officer, Adam Mostafa. Following prepared remarks, we will open the call to your questions. And we’ll be joined by Interim Chief Medical Officer, Dr. Murray Stewart; Chief Commercial Officer, Mark Baldry; Chief Scientific Officer, Dr. Art Taveras; and Chief Operating Officer, Dr. Mary DiBiase. 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.

Description of these risks can be found in X4’s filings with the SEC, including the company’s latest 10-K 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 Dr. Paula Ragan. Paula?

Dr. Paula Ragan: 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 X4 as we continue to advance our lead investigational candidate, Mavorixafor, towards commercialization in the first potential chronic neutropenic disorder, WHIM syndrome. As you know, in late 2022, we announced that our Phase 3 clinical trial evaluating once daily, oral Mavorixafor in people with WHIM syndrome had met its primary endpoint and first key secondary endpoints, but Mavorixafor achieving statistically significant and clinically relevant longer times above threshold levels for 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 WHIM trial was accepted for oral presentation at this year’s meeting of the Clinical Immunology Society taking place from May 18th through the 21st in St. Louis. Dr. Raffaele Badolato, who is professor of pediatrics at the University of Brescia in Italy and an investigator in the 4WHIM clinical trial will present at 11:30 AM Central Time on Sunday, May 21st. 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 abstracts by CIS on the morning of May 16th, we will be hosting an investor event later that day at 4:00 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. Joining us for the event to comment on the Phase 3 results and the unmet medical needs of people with WHIM 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 4WHIM Phase 3 trial. During the May 16th event, we will be hearing commentary from Dr. Charlie Cunningham-Rundles, a professor and immunologist at the Icahn School of Medicine at Mount Sinai; Dr. Jean Donadieu, a pediatrician in the hemato-oncology department of Trousseau Hospital in Paris and importantly, coordinator of the French registry for chronic neutropenia; Dr. Peter Newburger, Professor of Pediatrics and Molecular Cell and Cancer Biology at UMass Chan Medical School; Dr. Akiko Shimamura, Professor of Pediatrics at Harvard Medical School and Director of the Bone Marrow Failure and Myelodysplastic Syndrome Program at Boston Children’s Hospital; and Dr. 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 three individuals who have been diagnosed with WHIM and have been experiencing WHIM syndrome symptom since birth. Finally, we are expecting doctors Shimamura and Tarrant to join us live for Q&A following the formal presentation. During the event, we expect to be providing an update on our US regulatory activities for Mavorixafor for the treatment of WHIM syndrome as we continue to be on track to file a US new drug application, early in the second half of 2023 and prepare for a potential launch in the US in the first half of 2024. Concurrent with all of this, we continue to enroll participants in our ongoing Phase 2 trial evaluating the safety and efficacy of Mavorixafor for the treatment of idiopathic, cyclic, and congenital chronic neutropenia, and we believe are on track to announce the 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 CIF, highlighting the results of what we believe is the first 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 16th. Concurrent with the poster presentation, which is on Saturday, May 20th 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, Mavorixafor has the potential to be a breakthrough for those with WHIM 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 quarter financials. Adam?

Adam Mostafa: Thanks, Paula, and thanks to all of you for being on the call with us today. At the end of the first quarter ended March 31, 2023, X4 had $94.4 million in cash, cash equivalents, and restricted cash. We believe that these funds are sufficient to support company operations into the second quarter of 2024. Our research and development expenses were $22.1 million for the first quarter, which compares to $14.1 million for the comparable period in 2022. R&D expenses for the first quarter included $0.8 million of certain non-cash expenses and a $5 million accrual for an in-licensing milestone payments that the company deems probable of occurring. Our selling, general, and administrative expenses were $7.2 million for the first quarter as compared to $7.7 million for the comparable period in 2022.

SG&A expenses included $0.8 million of certain non-cash expenses for the quarter. And lastly, we reported a net loss of $24 million for the first quarter ended March 31, 2023, as compared to $22 million for the comparable period in 2022. Net loss included $1.6 million of stock-based compensation expense and a $5.4 million gain for the change in fair value of our Class C warrant liability for the first quarter. And with that, why don’t we open up the call for your questions. Operator?

Operator: [Operator Instructions] Stephen Willey, Stifel.

Q&A Session

Operator: Mayank Mamtani, B. Riley Securities.

Operator: Eva Privitera, TD Cowen.

Operator: RK, H.C. Wainwright.

Operator: Kristen Kluska, Cantor Fitzgerald.

Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Dr. Ragan for any closing remarks.

Dr. Paula Ragan: 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 16th event. Have a great rest of your day. Take care.

Operator: This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.