X4 Pharmaceuticals, Inc. (NASDAQ:XFOR) Q4 2023 Earnings Call Transcript
X4 Pharmaceuticals, Inc. (NASDAQ:XFOR) Q4 2023 Earnings Call Transcript March 21, 2024
X4 Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.1, expectations were $-0.15. XFOR isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings. And welcome to the X4 Pharmaceuticals Fourth 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. Please begin.
Dan Ferry: Thank you, Operator, and good morning, everyone. Presenting on today’s call will be X4’s Chief Executive Officer, Dr. 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, Dr. Christophe Arbet-Engels; Chief Operating Officer, Mary DiBiase; and Chief Scientific Officer, Art Taveras. 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 most recent filings with the SEC, including this year’s Form 10-K, 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, Dr. Paula Ragan. Paula?
Dr. Paula Ragan: 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. Most importantly, submission and acceptance under FDA’s priority review process of our NDA seeking approval of mavorixafor, our oral targeted CXCR4 antagonist for the treatment of WHIM syndrome.
As you may recall, WHIM 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. WHIM is named for its four most common manifestations, warts, which are typically caused by unresolved HPV infections, hypogammaglobulinemia or low levels of antibodies, infections, both viral and bacterial, and myelokathexis or retention of white blood cells in the bone marrow. Diagnosis of WHIM 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. The most challenging burden faced by people with WHIM syndrome results from their low blood levels of neutrophils or neutropenia and low blood levels of lymphocytes or lymphopenia, which research supports are experienced by essentially all WHIM patients.
As a consequence of neutropenia and lymphopenia, an estimated 92% of WHIM patients experience frequent recurrent infections that significantly impact their health and quality of life. Over time, WHIM patients with recurrent infections may experience debilitating and life-threatening complications, including increased cancer risk, irreversible end organ damage and/or sepsis. I mention this not only to emphasize the incredible burden of disease for these patients and their caregivers, but also to highlight that mavorixafor has been granted breakthrough therapy designation by the FDA, indicating their recognition of mavorixafor 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 WHIM in May of last year and further analyses of the trial at several important medical meetings and congresses both last year and earlier this year. Publication of the full four WHIM 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 mavorixafor 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 30th, 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, multiple meetings with FDA and finalizing our supply and distribution arrangements to be ready in the event that we receive FDA approval. Our commercial and medical affairs organizations have grown meaningfully, although prudently, as we’ve continued 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 WHIM patients under their care.
We look forward to leveraging our rare disease commercial capabilities to start building the WHIM market over time, with 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 WHIM patients and build demand for our product candidate. WHIM 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 WHIM and only supportive care for symptomatic management, not addressing the underlying cause of the disease. With our successful Phase 3 WHIM trial recently being presented at major medical conferences, we are very encouraged that the physician community is now gaining more awareness.
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, Dr. Christophe Arbet-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. We’re also pleased to report that at the recent Quad AI Immunology Meeting in late February, not only was our abstract on the lymphocyte subset data from our four WHIM trial accepted as an oral presentation by Dr. Teresa Tarrant, an esteemed immunologist from Duke University, whom you’ve heard from our several past investor events, but Dr. Tarrant was also invited by the conference organizers to give a non-X4 sponsored talk on mavorixafor 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. 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’ve reported that multiple physicians who approached us, never before having heard of WHIM syndrome, left believing they might in fact have a WHIM patient under their care. As you can imagine, we get the question often about the size of the market for WHIM in the U.S. With rare diseases that have no treatments, it’s always difficult to assess.
These interactions with physicians serve to reinforce our belief that there may in fact be more WHIM patients out there beyond the thousand or so that we’ve estimated are diagnosed at present, based on claimed 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 mavorixafor and WHIM 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. 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 mavorixafor and CN during 2023 as well.
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 mavorixafor alone, without concomitant GCSF treatment, enabling the assessment of mavorixafor 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 a combination of mavorixafor and GCSF. 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 mavorixafor and CN, and advance the initiation of this important next trial in the first half of 2024.
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 one-to-one randomization. We will be assessing the safety and efficacy of mavorixafor plus or minus concomitant GCSF treatment in 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 GCSF. There is a significant unmet medical need across this established Phase 3 patient population, a U.S. market we estimate to represent approximately 15,000 people. The primary endpoint will be a two-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, so stay tuned for more information on that. I’ll now turn it over to our CFO, Adam Mostafa, to review the fourth quarter and full year 2023 financials. Adam?
Adam Mostafa: Thanks, Paula, and thanks to all of you for being on the call with us today. Having raised more than $87 million during 2023, comprised of a mix of equity and debt capital through an at-the-market pipe and through our expanded loan facility with Hercules, we ended 2023 with $115.2 million 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 mavorixafor’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 mavorixafor be approved.
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 mavorixafor over the course of this year and beyond. A quick recap of our 2023 financials. R&D expenses were $15.3 million and $72 million for the fourth quarter and full year ended December 31, 2023, respectively, compared to $19 million and $61.1 million for the comparable periods in 2022. Our R&D expenses included $1.1 million and $4.4 million of certain non-cash expenses for the fourth quarter and full year ended December 31st, respectively. SG&A expenses were $9.9 million and $35.5 million for the fourth quarter and full year of 2023, respectively, compared to $26.6 million and $27 million for the comparable periods in 2022.
Our SG&A expenses included $1.4 million and $4.3 million of certain non-cash expenses for the fourth quarter and full year ended December 31st, respectively. Finally, we reported a net loss of $19.1 million and $101.2 million for the fourth quarter and full year ended December 31st, compared to $29.1 million and $93.9 million for the comparable periods in 2022. Net losses included $2.5 million and $8.7 million of stock-based compensation expenses for the fourth quarter and full year 2023, respectively, compared to $1.1 million and $5.2 million for the comparable periods in 2022. With that, I’ll pass it back to Paula.
Dr. Paula Ragan: 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 to those with rare diseases of the immune system by gaining approval for what would be the first and only targeted therapy for the treatment of people with WHIM syndrome. And we look forward to continuing to report out on our other milestones throughout the rest of the year. We’ll now open it up to call for your questions. Operator?
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