X4 Pharmaceuticals (NASDAQ:XFOR) has announced its financial results for the first quarter of 2024 and provided updates on its lead drug, XOLREMDI, for WHIM syndrome and chronic neutropenia. The company reported a net loss of $51.8 million, a significant increase from the $24 million loss in the same period last year.
The earnings call highlighted the approval and upcoming expansion plans for XOLREMDI, as well as the progression of clinical trials for Mavorixafor in treating chronic neutropenia. With $81.6 million in liquidity, the company is preparing for a marketing authorization application in Europe and anticipates releasing Phase 2 trial data for Mavorixafor by late June.
Key Takeaways
- XOLREMDI approved for WHIM syndrome treatment; expansion planned.
- Phase 3 clinical trial shows improved counts and reduced infections.
- Plans to submit marketing authorization in Europe for XOLREMDI.
- Phase 2 data for Mavorixafor in chronic neutropenia expected by late June.
- Significant unmet need identified in the chronic neutropenia population.
- Q1 2024 net loss of $51.8 million, with $81.6 million in liquidity.
- Increased expenses due to XOLREMDI launch and field force hiring.
- Company to publish chronic neutropenia study data at year's end.
Company Outlook
- Anticipating European marketing authorization application for XOLREMDI by late 2024 or early 2025.
- Phase 3 trial for Mavorixafor expected to initiate in the first half of 2024.
- Specialty pharmacy distribution planned for XOLREMDI.
- Intention to sell the Priority Review Voucher (PRV) but no buyer details provided.
Bearish Highlights
- Net loss more than doubled from Q1 2023 to Q1 2024.
- Non-cash loss of $13.8 million related to Class C warrant liability.
- Additional expenses incurred from launch activities and field force hiring.
Bullish Highlights
- XOLREMDI has potential for geographic and indication expansion.
- Chronic neutropenia represents a significant market opportunity.
- Positive Phase 3 clinical trial results for XOLREMDI.
Misses
- No clear answer provided on data availability in databases like Symphony or Bloomberg.
Q&A Highlights
- At least six months of follow-up data for 15 or more patients in the Phase 2 trial.
- About 40% of patients in the trial are on monotherapy, assessing the drug's standalone benefits.
- Company did not provide specifics on PRV negotiations or potential buyers.
In conclusion, X4 Pharmaceuticals is navigating a period of significant investment in its product pipeline, particularly with the development and commercialization of XOLREMDI. The increased net loss reflects these strategic efforts, while the company remains optimistic about the potential of its treatments and the fulfillment of unmet medical needs.
The financial community will be watching closely as X4 Pharmaceuticals moves towards further clinical milestones and seeks to leverage its assets in the competitive pharmaceutical landscape.
InvestingPro Insights
X4 Pharmaceuticals (XFOR) faces a critical juncture as it advances its lead drug XOLREMDI and navigates financial pressures. An analysis of the company's financial health and stock performance reveals key insights:
InvestingPro Data indicates that X4 Pharmaceuticals holds a market capitalization of $178.85 million, reflective of investor sentiment and market interest. Despite a challenging financial landscape marked by an operating loss of $107.52 million over the last twelve months as of Q1 2023, the company's stock has experienced a strong return over the last three months, with a 40.83% price total return. This upward trajectory is further supported by a 47.77% six-month price total return, although the company's year-to-date return stands at a robust 43.11%.
InvestingPro Tips highlight that X4 Pharmaceuticals holds more cash than debt on its balance sheet, which is a positive sign for liquidity and financial flexibility, particularly as the company ramps up its marketing and clinical trial activities. Additionally, the company's liquid assets exceed its short-term obligations, providing a buffer against immediate financial strains.
However, it's worth noting that analysts do not anticipate the company will be profitable this year, and the company has not been profitable over the last twelve months. Moreover, XFOR does not pay a dividend to shareholders, which may influence investment decisions for those seeking income-generating stocks.
For readers interested in a deeper dive into X4 Pharmaceuticals' financials and stock performance, there are 9 additional InvestingPro Tips available. These tips can provide further guidance on investment decisions, and by using the coupon code PRONEWS24, readers can enjoy an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
In the competitive pharmaceutical landscape, X4 Pharmaceuticals' strategic efforts and the potential of XOLREMDI will be closely watched by the financial community. The company's ability to manage its cash burn and move towards profitability will be key factors in its long-term success.
Full transcript - X4 Pharmaceuticals Inc (XFOR) Q1 2024:
Operator: [Indiscernible] X4 Pharmaceuticals First Quarter 2024 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's now my pleasure to introduce your host, Mr. Dan Ferry from LifeSci Advisors. Thank you, Mr. Ferry. You may begin.
Dan Ferry: Thank you, operator, and good morning everyone. Thank you for joining us today. Presenting on today’s call will be Dr. Paula Ragan; X4’s President and Chief Executive Officer, and company’s Chief Financial Officer, Adam Mostafa. Following prepared remarks, 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; and Jose Juves. Head of Corporate & 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. Description of these risks can be found in X4’s most recent filings with the SEC, including this year’s Form 10-K, 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?
Paula Ragan: Thanks so much, Dan, and welcome everyone. Following last week's approval of XOLREMDI, it's exciting to reiterate today why this critical regulatory achievement represents a significant opportunity to improve the lives of WHIM patients and offers a strong platform for the company's growth. More specifically, I'll touch on our plans for expanding XOLREMDI's use in WHIM geographically and for quickly advancing into a potential larger indication chronic neutropenia. But let's start with last Monday's transformative announcement. As you know, XOLREMDI or Mavorixafor is now approved by the FDA for use in the US in patients 12 years of age and older with WHIM syndrome to increase the number of circulating mature neutrophils and lymphocytes. 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 WHIM 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, XOLREMDI and Oral Selective CXCR4 antagonist improved absolute neutrophil counts and lymphocyte 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 WHIM syndrome and enrolling 31 patients. 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 XOLREMDI 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 US WHIM 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 WHIM 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 1000 confirmed diagnosed WHIM patients today in the US. And now with a targeted therapy available, we expect that increased physician awareness will bring more and more focus to the WHIM community, enabling earlier recognition and diagnosis, potentially expanding the number of those diagnosed with WHIM over time. And as our Chief Commercial Officer, Mark Baldry, as we 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 WHIM community. We believe we are well positioned to not only deliver on the commercial opportunity in WHIM syndrome, but to also advance our global regulatory submissions, but the goal of potentially providing new options to patients across the world. Our European submission preparation in WHIM 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 and upcoming milestones for Mavorixafor beyond WHIM and to define what success might look like as we explore the use of Mavorixafor in the treatment of chronic neutropenia or CN. 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, WHIM patients were severely neutropenic at baseline with a mean ANC of less than 250 cells per microliter. Patients on Mavorixafor 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 in infection frequency versus placebo, as well as reduced severity and duration of infection. 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 2024. As with WHIM patients, chronic neutropenia patients phase an increased risk of infection every single day. This risk is greatest when they're severely neutropenic or with an ANC below 500. 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 1000 and 1500 correlates with a risk reduction from moderate to mild, and increasing ANC above 1500 moves a patient into a normal infection risk category. Additionally, based on our market research, we believe that physicians prescribing injectable Granulocyte Colony Stimulating Factor or GCSF, currently the only therapy approved to treat severe chronic neutropenia generally target ANC levels between 1000 and 1500. With enrollment now complete in our Phase 2 trial, we'll have studied more than 20 CN patients, approximately 40% of whom have been treated with Mavorixafor monotherapy, and the remainder with a combination of Mavorixafor and GCSF. We are currently planning an Investor Event in late June to present interim results from at least 15 participants in this study, which we participate will include data from those treated with Mavorixafor as a monotherapy, and those also treated with combination with GCSF. We'll be looking at increases in ANC while in treatment with Mavorixafor as well as the durability of increased ANC with time on treatment 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 be forthcoming and we look forward to further defining the potential of Mavorixafor in the first immune disorder beyond WHIM. 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, Mavorixafor with or without GCSF and people with congenital or acquired primary autoimmune and idiopathic chronic neutropenia who are experiencing recurrence and or serious infections. 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. The primary endpoint will be a two components endpoint comprised of both the annualized inspection rates 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 the Phase 3 patient population, a market we estimate to represent approximately 15,000 people in the US alone who in many cases are being seen by the same practitioners who are also seeing those diagnosed with WHIM syndrome. With that, I'll now turn it over to our CFO, Adam Mostafa review the first 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 31st, 2024, X4 had $81.6 million in cash, cash equivalence, restricted cash, and 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 a result of the FDA's approval of XOLREMDI in the US. Our research and development expenses were $19.9 million for the first quarter, which compares to $22.1 million for the comparable period in 2023. R&D Expenses for the first quarter included $0.8 million of certain non-cash expenses. Our selling, general and administrative expenses were $17.4 million for the first quarter as compared to $7.2 million for the comparable period in 2023. SG&A expenses included $1 million of certain non-cash expenses for the quarter. We would like to note several factors affecting our expenses this quarter. These expenses reflect the hiring of an experienced field force now in place to drive the launch of XOLREMDI in the US and launch preparation activities across our commercial and medical organizations. Lastly, we reported a net loss of $51.8 million for the first quarter of 2024 as compared to $24 million for the comparable period in 2023. Net losses in the current period include a non-cash loss of $13.8 million related to the company's Class C warrant liability, which is adjusted to fair value each reporting period. Net losses also included $1.7 million of stock-based compensation expense. And with that, why don't we open up the call for your questions. Operator?
Operator: [Operator Instructions] The first question comes from the line of Stephen Willey with Stifel. Please go ahead.
Stephen Willey: Thanks for taking the questions and looking forward to the update next month. Maybe just a couple on the Phase 3 for me. Can you just remind us how you're specifically defining an infection event in the Phase 3? And I'm assuming you'll be centrally adjudicating these events during the trial, 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.
Paula Ragan: I think I heard three components there. Just how are we quantifying infection rates via central adjudication, sort of a sub part. And then the first one was for the inclusion criteria, how are we assessing infections? Is that the right orientation?
Stephen Willey: Yes.
Paula Ragan: Christophe, you want to take that?
Christophe Arbet-Engels: We have a process during the study to educate -- adjudicate the infections. Patients will be reporting every adverse event of infections and the use of antibiotics or hospitalization related to these. And ultimately, the safety committee will be educating, reviewing, and educating these infections and will be able to count those to define the annualized infection rate. 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. And our criteria is to make sure that these patients have at least two infections in the past year before they come into the study.
Stephen Willey: 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 ask 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.
Paula Ragan: The study is randomized and we have -- so patients will be randomized to placebo or treatments with active treatments with Mavorixafor. We have evaluated with our experts consultants at the FDA prophecy counselling, 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 WHIM study, we were able to show a decrease or an increase of more than 500 cells per microliter. 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.
Stephen Willey: And then maybe just one more question, if I may. I guess in the scenario where you're being used on top of GCSF, is there consensus alignment around the threshold level of background GCSF that prescribers want patients to be kept below in order to avoid risk of transformation to AML or MDS?
Christophe Arbet-Engels: There have been some publications related to this. I don't know if there's full consensus in the entire scientific community around that, but some publications have mentioned eight microgram of GCSF per kilogram. And as a threshold for malignancies, I think, in our intention clearly we know that the GCSF is a risk for this population that is treated chronically. We believe that with Mavorixafor we will be able to address their chronic neutropenia and potentially limit the use of GCSF. I think that's a question for the entire scientific community and we can potentially help with our Phase 3 studies.
Operator: Next question comes from the line of Edward Tenthoff with Piper Sandler. Please go ahead.
Edward Tenthoff: Can you hear me okay?
Paula Ragan: Yes, thanks Ed.
Edward Tenthoff: Excited on all the progress and obviously congratulations on the recent approval. Appreciating, we talked about this a little bit last week, and it's still very early. What kind of information are you guys going to be providing to kind of explain and highlight launch parameters as you continue to build patients?
Paula Ragan: Obviously, we're pretty excited with the XOLREMDI 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 to the street.
Mark Baldry: We had a terrific meeting at CIS in Minneapolis last week. We debuted our now approved booth and there was lots of excitement nice enthusiasm around there. We were having conversations with physicians. In general, those conversations were falling into three buckets. There are physicians who already have a WHIM patient identified, and so we were walking them through the label and the enrolment form. There are other physicians who are aware of WHIM, but are not as familiar with the disease. And so we were discussing with them how to recognize the heterogeneous nature of the disease and patients in their practice. And then there are physicians who are not aware of WHIM at all. And so this was exciting for them. 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.
Operator: Next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please go ahead.
Kristen Kluska: First is on CN, our KOL checks support that the biggest complaint from the community is really around the bone pain that comes with GCSF. Obviously, no two patients in the trial are going to appear identical, but is there a certain threshold that reduction of GCSF 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 mav, which is safe and oral?
Paula Ragan: 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. But maybe I'll just turn it over to Christophe. I'm sure he's heard some anecdotes from the patient community as well.
Christophe Arbet-Engels: Yes, we agree all our information, which we hear from the HCPs and KOLs that with GCSF bone pain is a real issue for patients. Decreasing the volume of injections, the frequency might help. And some of those patients will be held probably by using Mavorixafor especially for the one using GCSF chronically everyday injections it's a real burden. And those bone pains are really having an effect on their lifestyle. 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 GCSF on top matter except for no GCSF at all. We'll see where we our studies will help us with that.
Kristen Kluska: And on that note, is there good data out there supporting the amount or the frequency of this specifically. Greater GCSF 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 helped to outweigh some of these things or do you think for the first couple 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?
Christophe Arbet-Engels: I would separate the Phase 3 study, GCSF will be stable. So our patients are stable on the chronic dose of GCSF 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 a modification of dosing regimens of GCSF. 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.
Operator: Next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright. Please go ahead.
Swayampakula Ramakanth: Just was trying to figure out what sort of data you said you'll get to publish complete data of the chronic neutropenia studies at the end of the year. 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?
Paula Ragan: I'll start and then Chris can chime in. But as we mentioned in our update, we were enrolling patients through early this year. 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 dosage, GCSF, what kind of that average outcome for those patients. 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 six month window. I think that's kind of the deepest lens or deepest component of a study that we'll be able to update towards the end of the year.
Operator: Next question comes from the line of Kalpit Patel with B. Riley. Please go ahead.
Unidentified Analyst: This is J for Kalpit. Thanks for taking my questions. My first question is, what's your expectation of 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?
Paula Ragan: I think, we originally shared there's three ways that we're looking at meaningful responses in CN patients. First it, it's similar to our WHIM Phase 3, where increases in 500 to 600 cells per microliter showed a 60% reduction in infection rates over a 12 month study. We think the minimum sort of clinical threshold for meaningfulness is around those same numbers for ANC. So we'll be able to place our CN data in context. Certainly, number two, 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 to the subset of patients in the Phase 2 that are relevant for the Phase 3 to help build confidence and establish why our statistical power is where it is. Hopefully, those are the three lenses for success.
Unidentified Analyst: My second question is that since this trial has been for over a year, curious if we will have at least six months of follow up for the 15 or more patients and what the split of a model versus cost of these 15 patients?
Paula Ragan: 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.
Unidentified Analyst: 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 six months of a follow up for the 16 or more patients and what's the split of the model or couple of the 15 patients?
Paula Ragan: If I heard you correctly, you're asking for are we getting six months of patients' worth of data across at least the 15 patients? And the monotherapy therapy 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 Mavorixafor as a single agent in this patient population.
Unidentified Analyst: My last question is, where the scripts of wing de detectable on the database, like, symphony or Bloomberg?
Paula Ragan: Again, I'm not sure about -- maybe you're talking about the database corrects? I'm sorry that I didn't quite follow the question. I mean, when we release --
Unidentified Analyst: Where the scrapes for when XOLREMDI tractable on the database in Symphony or Bloomberg?
Christophe Arbet-Engels: Our distribution of XOLREMDI and WHIM will be through our specialty pharmacy cancer. And that's in order to be able to provide patient services to support our patients as they navigate the there.
Operator: Thank you. Next question comes on the line of David Bautz with Zacks Small Cap Research. Please go ahead.
David Bautz: Just a quick one from 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 PRV and then maybe if you characterize the negotiations and how they're going at this point.
Christophe Arbet-Engels: 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 the PRV. In terms of the market and who's out there and things like that, we won't kind of position other company's interests at this point.
Operator: Thank you. Ladies and gentlemen, we have reached the end of question on answer session. I would now like to turn the floor over to Paula Reagan for closing.
Paula Ragan: 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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