X4 Pharmaceuticals Inc (XFOR) 2022 Q2 法說會逐字稿

Greetings and welcome to X4 Pharmaceuticals second-quarter financial and operating results conference call. (Operator Instructions) As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors. Please begin.

Thank you, operator, and good morning, everyone. Presenting on today's call will be X4's Chief Executive Officer, Dr. Paula Ragan; the company's Chief Financial Officer, Adam Mostafa. Following prepared remarks by each, we will open up the call to your questions, and we'll be joined by Chief Scientific Officer, Art Taveras; Chief Medical Officer, Diego Cadavid; and Chief Operating Officer, 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. A description of these risks can be found in X4's most recent filings with the SEC, including this quarter's 10-Q, 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?

Thanks, Dan, and thank you, everyone, for joining us on the call this morning. As you've seen from our latest announcements, the past few months validated and enabled our focus here at X4. And as a result, we believe we are well positioned to deliver significant future value, both to patients and to our shareholders as we approach key milestones over the next six to 12 months.

Most importantly, we completed a PIPE financing in late June in a highly challenging market condition, raising gross proceeds of approximately $56 million with support from both new and existing top-tier life science investors. At the same time, we entered into an amendment to our debt agreement with Hercules Capital, who also invested in the PIPE, to extend the interest-only period of our loan facility by up to 12 months, pushing it out into 2024. The amendment is subject to achieving certain financial and business milestones. We estimate this amendment loan structure could result in a cash savings of up to $20 million over the interest-only period.

More recently, we announced our decision to focus our efforts and resources towards advancing our lead clinical candidate, mavorixafor for the treatment of chronic neutropenia disorders, including WHIM syndrome, our lead clinical indication. And while the data from our cancer programs continue to show promise, we'll be presenting an update on data from our Phase 1b trial in Waldenström's in just a minute, we are now pivoting our efforts towards unlocking the full value of our oncology portfolio only through potential strategic partnerships, enabling us to focus on making the largest possible impact on chronic neutropenia patients in the near term.

We continue to believe that commercializing mavorixafor and providing a new therapeutic option to individuals with life-threatening CN disorders has the potential to revolutionize the treatment landscape, which is currently only served by injectable therapies that have been associated with high burden of treatment, dose-dependent side effects like severe bone pain, and increased cancer risk in some patients.

We are, therefore, very excited about our upcoming expected milestones, which include the following: in late September, we're planning an investor event to present data from our now fully enrolled proof of concept Phase 1b clinical trial in patients with chronic neutropenic disorders. As a reminder, our lead compound, mavorixafor is a CXCR4 antagonist being dosed in clinical trials as a once-daily oral therapy.

By inhibiting the CXCR4 receptor, we have demonstrated across multiple clinical trials and multiple therapeutic indications that mavorixafor can help regulate white blood cells, increasing the mobilization of neutrophil, lymphocytes, and monocytes into the bloodstream. And these effects have been achieved across all patient populations studied regardless of their CXCR4 mutation status. Mavorixafor has also demonstrated an excellent tolerability profile across hundreds of patients, some of whom have been receiving mavorixafor for more than two years.

Our Phase 1b clinical trial in chronic neutropenia is now fully enrolled at 25 patients and enrollment is near final with a small number of additional patients expected. The trial examines neutrophil and other white blood cell responses to mavorixafor treatments. Patients in the study have a range of neutropenic conditions, including severe congenital neutropenia, idiopathic neutropenia, and cyclic neutropenia.

Some patients receive a standard of care called granulocyte colony-stimulating factor or G-CSF and some have not. We look forward to presenting this trial's initial full dataset in patients with diverse set of CN disorders at our event in September. We expect these results will help inform the regulatory path forward for mavorixafor in chronic neutropenic disorders, and we look forward to sharing more of what that pathway might look like once we gain clarity following the presentation of the data to regulatory authorities.

Our next notable, and certainly potentially transformative milestone, will be the unveiling of our data from our pivotal Phase 3 4WHIM trial, which is still on track for the fourth quarter. As you know, these results are expected to support our first regulatory filing in the US, which is now expected early in the second half of 2023. We've been very encouraged to see a high percentage of patients coming off study, choosing to continue in the open-label extension phase of the trial.

As you may know, WHIM syndrome is a rare, genetic immunodeficiency disorder caused by a gain-of-function mutations in the CXCR4 receptor. WHIM is characterized by HPV-associated warts, hypogammaglobulinemia, multiple types of infections, and myelokathexis, which causes leukemia and neutropenia in many patients, reducing the body's ability to mount a healthy immune response.

X4's 4WHIM global Phase 3 trial is the first placebo-controlled trial in WHIM syndrome. To help put the upcoming Phase 3 results into context, on our third-quarter earnings call, we plan to discuss what success might look like from this trial, reviewing both the primary and secondary endpoints that we've previously aligned on with the FDA, and some additional information about our early commercial efforts, patient finding initiative, and the continued expanding landscape of the disease profiles and diagnosis of WHIM syndrome.

Before I pass it over to Adam to discuss the quarter's financial results, we did want to provide a brief overview of our new response data from the Phase 1b mavorixafor trial in patients with Waldenström's macroglobulinemia, a rare B-cell lymphoma. As mentioned, we aim to unlock the full value of our oncology portfolio only through potential strategic partnerships. We believe the favorable data from this trial will meaningfully support that potential option. Please note that we will be uploading a summary of the deck to our website with these results shortly.

As detailed in today's press release, 16 patients were enrolled in the clinical trial, which is a Phase 1b open-label, multicenter, single-arm study evaluating the safety and efficacy of mavorixafor in combination with the BTK inhibitor ibrutinib in adults diagnosed with Waldenström's and confirmed to have MYD88 and CXCR4 mutations, a double mutation status that has been associated with poor responses to standard of care.

Specifically, the presence of CXCR4 mutations has also been shown to negatively impact patients' responses to ibrutinib as manifested by delayed responses, inferior depth of response, and/or shorter progression-free survival. In the study, all patients received oral once-daily doses of 420 milligrams of ibrutinib and escalating doses, 200 milligrams, 400 milligrams, and 600 milligrams of oral mavorixafor, also once daily.

As of June 2022, 10 of the 12 evaluable patients, or 83%, had achieved a major response to therapy, which is defined as a greater than 50% reduction in serum IGM from baseline. Nine of the 12 evaluable patients had disease relapse or refractory to prior treatments entering the study. Of these relapse refractory patients, eight of the nine evaluable, or 89%, achieved a major response. In the treatment-naïve patients, major response were seen in all patients escalated to greater than the starting 200 milligram dose of mavorixafor.

Looking at the data over time, adding mavorixafor to ibrutinib was associated with a higher major response rate at nine, 12, and 24 months as compared to previously reported major response rates achieved with ibrutinib monotherapy, which historically achieved a maximum of 57% major response rate at 24 months in a similar patient population.

To-date, treated patients have all achieved elevations in absolute neutrophil counts or ANC, with no neutropenic events reported. This is meaningful as more than 40% of patients typically experienced some decrease neutrophil counts with ibrutinib monotherapy. Interestingly, patients also experienced fewer infections over time with chronic combination dosing. Assessment of infection risk is a labeled warning and precaution while on ibrutinib monotherapy.

No major safety signals due to mavorixafor have been identified in the trials as of the data cutoff. Mavorixafor in combination with ibrutinib showed a safety profile similar to ibrutinib monotherapy across the 16 patients, which included eight patients escalated to the highest dose of 600 milligrams of mavorixafor. We did want to highlight additionally that in June, mavorixafor was granted orphan drug designation by the US Food and Drug Administration for the treatment of patients with Waldenström's, and notably, regardless of the CXCR4 mutation status.

As presented at EHA earlier this year, mavorixafor has demonstrated in vitro the ability to disrupt the bone marrow crosstalk and increase Waldenström cancer cell sensitivity to treatment regardless of CXCR4 mutation status supporting the potential that mavorixafor made utility across a broad range of lymphoma. The Phase 1b clinical trial is expected to be completed in the fourth quarter of 2022 when the last patient is dosed. And with the support of our investigators, we aim to provide a full and final results in a future journal publication.

And finally, we also mentioned earlier with our new sharpened focus on chronic neutropenic disorders, further clinical studies in Waldenström's will now be subject to completing a strategic partnership. We believe these promising data, which will be uploaded to our website, support that future potential opportunity.

In our July announcement, we also mentioned that further work in our preclinical oncology candidate X4P-002 is concluding IND-enabling toxicology studies and that an IND filing will now be subject to completing a strategic partnership. As a reminder, 002 is a novel, small molecule CXCR4 antagonist that has been shown to cross the blood-brain barrier with potential applicability across a number of leukemias and lymphomas.

In total, we believe that the mavorixafor oncology data to-date, plus the promise of our 002 candidates present a partnerable package of great potential, and we will report on our potential success on a continued advancement of these valuable assets at the time when this potential partnership is secured.

With that, I'll now turn it over to Adam to discuss our results for the quarter before we open up the call for questions. Adam?

Thanks, Paula, and thanks to all of you on the call today. As presented in our press release this morning, I will summarize our financial activities and results for the second quarter ended June 30, 2022. At the end of the second quarter, we had $48.7 million in cash, cash equivalents and restricted cash. On June 30, as Paula mentioned, we announced a PIPE financing of approximately $56 million in gross proceeds. The financing closed on July 6 and proceeds from the deal are not reflected in the June 30 cash number.

However, including the PIPE funds, our recently announced cost cutting measures that we estimate will result in approximately $25 million in savings through the end of 2023 and the recent amendment to our loan agreement with Hercules, we have extended our cash runway guidance into the third quarter of 2023.

Research and development expenses in the quarter were $13.8 million, which compares to $13.2 million for the comparable period in 2021. SG&A expenses were $6.7 million for the second quarter as compared to $5.8 million for the comparable period in 2021.

Finally, X4 reported a net loss of $21.2 million for the second quarter of 2022, which includes approximately $1.5 million in non-cash expenses as compared to a net loss of $19.6 million for the comparable period in 2021.

We'll now open up the call for your questions. Operator?

(Operator Instructions) Stephen Willey, Stifel.

Yeah. Good morning. Thanks for taking the questions. Maybe just a couple. So on the chronic neutropenia side, are you able to say how many patients enrolled into the Phase 1b are on background G-CSF? And then I know there's been some discussion around wanting to target those patients who experienced some kind of given number of baseline severe infection events. And just curious if you can also kind of speak to how many patients you've enrolled meet that infection event criteria as well. And then I have a follow-up.

Sure. So I'll start very high level on that, and then I'll ask Diego to queue -- to give some more detail, but just at a very high level, Steve, we'll be having a pretty good blend of patients that are neutropenic with or without G-CSF. So actually, that's the most important question. And so there'll be a pretty nice data set to show what mavorixafor is doing in neutropenia patients because ultimately, that's what we're trying to achieve. And then amongst that whole bucket, there's actually a nice kind of 50-50 blend between those who are on or off G-CSF.

So the question is how is the drug going to help patients? And I think we're going to have a nice data set to show that target population that we aim to kind of declare some initial some positivity around.

And then the -- I think the second question was around infection sort of baseline. We've collected some of that information, but ultimately, it was really a response study, so to speak. So Diego, let me invite you in to give some more color on that.

Yeah. Hello, Stephen. Yeah, this current study was enrolled around looking at increasing neutrophil counts. And we got, as Paula said, a pretty good number on G-CSF or not on G-CSF. And we look forward to presenting that data at the September event. Because this is a short-term treatment, we'll not focus on infections, but you're right. We're looking carefully as we plan for the next study as to what is the right population. And ultimately, we know that severe infections is a really important clinical outcome. So we're looking at it carefully.

Okay. That's helpful. On the Waldenström's side, and forgive me if I missed it, but are you able to say what the median time to major response rate was? I know that there's been some interest in the notion of mavorixafor not only improving the rates of major response, but also improving the kinetics of response.

I'll start. And then, Diego -- I think the challenge for us on the time to major response, Steve, was the dose escalation design of the study, given we are starting at low dose and then folks tend to get held there, et cetera, et cetera. So I don't think -- I mean, we can certainly calculate it. I think it's a bit less useful because we were trying to conserve patients sort of exposure and dose escalation as we design this trial. So I hear you, but I don't think we'll be sharing that data because I think it's confounded by study design.

Got it. And then just lastly for Adam. I guess I just wanted to confirm that the updated cash runway guidance doesn't assume any exercises of warrants.

That's correct, Steve. Yeah. No assumption of any warrants or any additional proceeds of any kind in that new runway.

Excellent. Thanks for taking the questions.

Eva Privitera, Cowen.

Hi. Hi, good morning. Congratulations on the Waldenström's data and thank you for taking our questions. Can you maybe tease out the major responses for Waldenström's? What were the VGPR rates specifically in the overall population, as well as the relapse and refractory?

Yes. So we have not published that. Certainly historically, I think we had one VGPR that we have published on previously. We'll certainly be kind of -- we haven't completed the study, so that will come on in Q4, early Q4. And then we'll be publishing those full sets of results, including all the subtypes of responses, so we look forward to sharing that data with you in the future.

Okay. Great. Thanks. And my second question pertains to the Phase 1b in severe congenital neutropenias. How long follow-up do you anticipate there will be in the September data presentation?

Diego, why don't you take that one?

Yeah. Eva, thank you for the question. So as Paula mentioned earlier, we expect this study to be fully enrolled. Most of the patients were treated with a single dose. And then there is a 30-day post dosing safety assessment. I believe we will have a full or close to full data available to us to discuss in September.

Perfect. That's helpful. So for that 30-day time point, what would you consider to be meaningful data taking into account GCF -- G-CSF being available to these patients?

Yes. Because they were dose with mavorixafor most of them for single dose, the 30-day. Meaningful data is mostly around the absence of any safety signals post-dose and that we have never seen, but we're checking anyway. It is not an efficacy readout. The 30 days is around safety.

Okay. Great. Helpful. Thank you.

Mayank Mamtani, B. Riley Securities.

Good morning, team. Thanks for taking our question and congrats on a productive quarter. So maybe just a follow-up to prior questions. You are looking at like three subtypes of chronic neutropenia, they are congenital, idiopathic, and cyclic. Just can you help us understand how utilization of G-CSF looks like in real world across those? And what sort of at a high level you're looking to learn in this Phase 1b study that at least has a -- helps you put a framework in place if you do decide to engage the regulators for a study focusing on one or two or all forms of these patients? And then I have a follow-up.

Why don't you go ahead, Diego?

Yeah, I can -- Paula, I can answer that question.

Yeah. Yes.

So in general, most of the G-CSF use is for acute to prevent sequela of neutropenia in the context of chemotherapy for people with cancer. There is also use of G-CSF for chronic, and it is used broadly across these three types, severe congenital, cyclic, as well as idiopathic. But many, many patients are not on chronic therapy at all or in fact, it's used only intermittently. So this speaks to the high unmet need. With mavorixafor being an oral, and so far, well-tolerated therapy, we are thinking forward that mavorixafor indeed, could become the standard of care for chronic neutropenia.

And we'll be investigating to what extent you may or may not need some G-CSF. And that's something that may be the case for patients that have very severe bone marrow, but we believe the majority of patients could be treated with mavorixafor, and we plan to study that over the next few months and years.

Great. And then just quickly on the WHIM syndrome Phase 3 detail, looking forward to that at the third-quarter earnings call assuming in mid-November. Just -- could we then assume that your -- in your topline press release, you would look to put out a very comprehensive data set of primary and secondary endpoints, including infections, wart burden, and things like that?

Yeah. I'll take that, and thanks, Mayank. We -- in our press release, we'll certainly be focusing on the data set that tells the story, right? The drug we believe is disease modifying. Obviously, we have a study design, but of course, the primary and secondary endpoints.

But really what we're looking forward to is presenting a data set that helps tell the story and the impact of the drug across the various clinical aspects of the disease. So we will we'll certainly look forward to sharing that story as it evolves.

Okay. Great. And just my final question on Waldenström's. Just clarify for us, just clearly from data generation standpoint, what's the expectation to be able to do effectively engage with the strategic, like what -- could you do this starting tomorrow or is that something you may think could make more sense once you have the fuller data set that you guys discussed earlier?

Yeah. I'll start and then Adam can always chime in, but I think we -- there's always -- whenever there's exciting data, I think that's an opportunity for gaining interest from the external world. We already have some existing relationships and conversations, certainly with AbbVie, given they have given free drug to support the trial.

So these are just sort of natural continuations of conversations that certainly are more aligned with the data, right? That's always the spark to initiate conversations, Mayank. So we'll keep you posted as things evolve and where we're able to communicate. Adam, do you want to chime in anything else?

Yeah. No. I think as Paula said, we're pleased with the clinical profile of the data. We think that there's a strong future there, potential there for us. We are dedicating resource and allocations toward more exciting chronic neutropenia and WHIM programs. But we look forward to continued progress and we'll come back and update the market as we see how things pan out with a potential partner pursuing our oncology efforts.

Thanks for taking my questions.

(Operator Instructions) Arthur He, H.C. Wainwright.

Good morning, Paula. This is Arthur in for RK. I just want to have a quick follow-up on the Waldenström data. Could you remind us from these 12 evaluable patients, why these -- they are not at all escalated to the 600-milligram dose level?

Sure. Diego, do you want to take that?

Yes. I can speak to that. So there are different reasons. Some patients were enrolled and drop off rapidly for different reasons. One was having difficulty swallowing. So of course, that patient was dosed only at 200 milligrams and never escalated. There were patients who were doing really well at 400 milligrams, and they were offered escalation, but they were doing already so well that they opted not to. So there is a reason for each one.

But overall, most of them did escalate and remain at 600 milligrams. And as you have seen from the data, getting very good clinical responses. So we believe 600 milligrams is really well tolerated and that data will be available to any potential interested partners as those that can be advanced into a further study.

Thanks for the additional color and thank you for taking my question.

As there are no more questions from the phone lines, this concludes the question-and-answer session. I would like to turn the conference back over to Paula Ragan for any closing remarks.

Thank you again for joining us today. As always, we appreciate your continued support of X4 as we look forward to important near-term milestones that we believe will bring us one large step closer to improving the lives of our patients with chronic neutropenic disorders. Thank you again and have a great day.

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