X4 Pharmaceuticals Inc (XFOR) 2021 Q1 法說會逐字稿

Greetings and welcome to X4 Pharmaceuticals First Quarter 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.

(Operator Instructions). As a reminder this conference call is being recorded. (Operator Instructions).

It is now my pleasure to introduce your host, Dan Ferry of LifeSci Advisors. Please begin.

Thank you, Operator, and good morning everyone. Thanks for joining us. Presenting on today's call will be X4's Chief Executive Officer, Dr. Paula Ragan, and 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 Dr. Diego Cadavid, Chief Medical Officer; Art Taveras, Chief Scientific Officer and Mary DiBiase, Senior Vice-President, Technical Operations and Quality.

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. The descriptions of these risks can be found in X4's most recent filings with the SEC. I would now like to turn the call over to Paula Ragan. Paula?

Thanks, Dan, and thank you everyone for joining us on the call this morning. Let me start by saying that we could not be more pleased with our accomplishments so far this year. We've achieved significant progress at our mavorixafor clinical program and successfully completed a $55 million at-the-market PIPE financing to include participation from leading biotech investors, both new to X4 as well as from existing investors.

We believe this demonstrates a strong level of investor conviction and the clinical and commercial potential of mavorixafor while also extending our expected cash runway into late 2022 and supporting our additional pipeline programs.

As mentioned on our last call, the piece of enrollment in our key clinical programs has ramped up significantly since last year. Specifically, we now expect to be able to announce an important enrollment update in our Phase 3 trial in WHIM syndrome in mid-2021. As a reminder, WHIM is a rare, inherited, primary immunodeficiency disease caused by gain of function CXCR4 mutations that prevent healthy immune cell trafficking and effective immuno surveillance.

Most patients with WHIM disease have lifelong neutropenia and lymphopenia that can result in a variety of serious chronic infections across multiple organ systems, HPV-associated lesions and increased cancer risks and other serious life impacting morbidities. Mavorixafor is our first-in-class, small molecule antagonists of the CXCR4 receptor that we believe has the potential to be the first disease-modifying therapy for the more than 3,500 potential diagnosed and undiagnosed WHIM patients in the U.S.

The 4WHIM Phase 3 trial is a global, randomized, placebo-controlled, double-blinded, multicenter study designed to evaluate the safety and efficacy of mavorixafor over a course of 52 weeks and approximately 18 to 28 genetically confirmed WHIM patients. The Phase 3 primary efficacy endpoint called time above threshold for absolute neutrophil count or TATANC compares the level of circulating neutrophils relative to a clinically meaningful threshold in response to mavorixafor treatment versus placebo.

As you may recall from our Phase 2 study and published in the journal, Blood, in 2020, mavorixafor demonstrated greater than a 600% increase in time above threshold for neutrophil count at our selected Phase 3 dose as compared to the lower doses treated for WHIM patients which gives us deep confidence in the potential success of our Phase 3 study.

Secondary endpoints include infection rates, wart burden, an assessment of immune system function and quality of life among others. At our current rate of enrollment, we continue to expect top-line data from this Phase 3 trial in 2022.

We also continue to expect to report new data from the open label extension of our Phase 2 clinical trial in WHIM later this year. We expect these data will continue to provide us insights regarding the long-term safety and durability of chronic mavorixafor treatments. Additionally, we anticipate several scientific publications that further support mavorixafor's mechanism of action and potential for disease modification as well as demonstrate a breadth of activity across the spectrum of WHIM genotypes.

Finally, we look forward to sharing new information regarding our additional WHIM prevalence research later this year. In addition to our WHIM program, we continue to make good progress in our Phase 1b trial for the treatment of Waldenstrom's Macroglobulinemia, a rare form of non-Hodgkin's lymphoma. As a reminder, this Phase 1b study is a multicenter, open label, dose escalation clinical trial that is expected to enroll approximately 12 to 18 patients.

We are very excited to have recently received notice of acceptance of our Phase 1b trial abstracts for a poster presentation at this year's Annual Congress of the European Hematology Association or EHA that would be taking place, virtually, from June 9th to June 17th. The abstract and poster will focus on initial clinical data from the ongoing Phase 1b trial of mavorixafor at the study low and mid-doses in combination with ibrutinib in the subset of Waldenstrom's Macroglobulinemia patients harboring both the MYD88 and CXCR4 mutations.

In addition to safety, pharmacokinetics and pharmacodynamic markers, the initial dataset will evaluate changes in serum immunoglobulin M or IgM and blood hemoglobin levels. It is well-established that reductions in IgM levels and increases in hemoglobin levels correlates favorably with clinical responses for the treatment in Waldenstrom's patients.

Later this year, we expect that the study will mature further, such that we should be able to present datasets regarding the determination of the final dose selection for further study and assessment of major response rates as well as ongoing safety across a range of doses. So as you can see, 2021 has been quite productive for us to date and we're looking forward to a steady flow of value adding data presentations and business milestone throughout the rest of the year.

With that update, I will now turn the call over to Adam to discuss our results for the quarter and our recent financing announcements. 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 for the first quarter ended March 31st, 2021. As of March 31st, 2021, X4 had $116.7 million in cash, cash equivalents and restricted cash.

This figure includes proceeds from the PIPE financing that we completed in mid-March. Through this at-the-market deal, we raised a gross amount of $55 million with the financing including participation from a number of new and existing leading healthcare investors. After the close of this transaction, we now expect our cash and cash equivalents will fund company operations into the fourth quarter of 2022.

Our research and development expenses were $12.1 million for the first quarter of 2021 as compared to $8.9 million for the comparable period in 2020. General and administrative expenses were $5.8 million for the first quarter of 2021 as compared to $4.7 million for the comparable period in 2020.

And we reported a net loss of $18.7 million for the first quarter of 2021 as compared to a net loss of $11.1 million for the first quarter of 2020. Note that net loss included $1.3 million of certain noncash expenses for the first quarter of 2021.

Why don't now open up the call to your questions. Operator?

Thank you. (Operator Instructions)

Our first question comes from Stephen Willey with Stifel. You may proceed with your question.

Hey, good morning. Thanks for taking the questions. Paula, I was maybe wondering if you can just kind of frame up the expectations a little bit with respect to, I guess, what kind of data we might see in the abstract when that gets released? I think it's next week and I guess how that may differ from what we could see at EHA. It sounds like you said specifically that we'll be seeing data from the low and mid-doses. Have you dose escalated patients up to that 600 mg dose yet for the escalation protocol?

Yes, so I'll try to break that all down for you, Stephen. Thank you so much for the question. So, the way to think about Waldenstrom just as a disease is obviously the heavy burden of IgM levels being excessively high, causing a lot of risks or some serious sequelae like hyperviscosity syndrome and then that massive bone disease burden from the cancer itself causing hemoglobin impact.

So for a patient, you want to see IgM dropping and hemoglobin rising as a function of being treated. So, that's really the focus of our EHA data in terms of demonstrating changes in IgM levels and hemoglobin levels that can be indicative of the combination doing better than ibrutinib alone, so really be focusing on that. There's other Phase 1b study that sort of use this paradigm as well, so I think we're consistent with giving people the dataset that can be -- that indicate our dual combination activity.

When we think about at the end of the year with ASH, it's really about response rates and those take time to mature. Actually, typically it takes about six months on treatment before patients are going for CT scans and bone marrow assessments to really complete the definition of response rate that's required in a patient population. So, that's why we just need longer time on study to be able to support that robust number of assessments across our patients.

And then finally, you did mention the 600. I mean the study is continuing to dose escalate. As you know, it's an open label study and we haven't completed all the cohorts yet, so that's why we'll be focusing on the low to mid-doses but we'll certainly share as much data as we're able to.

Okay. And, I guess, have you internally made the decision as to whether or not you're going to increase the enrollment up to -- up to 18 or I guess do you think that you're going to get a sufficient amount of data in these first 12 to kind of understand what your recommended Phase 2 dose needs to be?

Well, the trial itself incorporates a maximum tolerated dose requirement. So, the 12 to 18 builds them flexibility in the event that we have dose limiting toxicities, so that's where the flexibility comes in, Steve. It's not -- like we'll continue to try to escalate so long as the safety profile enables us to do so. The first two cohorts will reach three 600, so the vast cohort C is a bit rounding out the total number of patients, so just stay tuned on them.

Understood. And then just lastly, I'm just curious as to where things stand on severe congenital neutropenia which I don't think was a part of your prepared commentary or if it was, I may have missed it.

Yes -- no, thank you. So, the SCN trial is open and enrolling in the context of COVID especially last year and early this year, it was the most challenging study to enroll, given the short dosing timeframe. These patients are immunocompromised. The study is two weeks, so we have always try to prioritize the patient safety and their need to come into hospital for assessments.

We do expect some initial data by the end of this year but just in terms of patient numbers, what we've guided to is a smaller number of patients than obviously the total trial design. So, we will look forward to sharing what we're able to towards the end of the year.

Understood. Thanks for taking the questions and congrats on the progress.

Thank you so much.

Thank you. Our next question comes from Marc Frahm with Cowen. You may proceed with your question.

Thanks for taking my questions and congrats on all the progress across the multiple programs. Paula, can you remind us the different doses in the Waldenstrom's trial, just the kind of relative levels of CXCR4 inhibition that you're expecting based on the [kind] of prior work you've done with the molecule?

Sure. Actually, I would invite Art Taveras to share that. He's certainly one of our -- he's an expert in exposure and inhibition. So Art?

Yes, hi and thank you for the question. So, the exposures that we're going after are very consistent with what we've seen from our WHIM Phase 2 trial. So, the doses there of course are the 200, 400 and then ultimately 600 and the exposures seem to be adequate to cause leukocyte immobilization which is one of the key components for us to be able to have efficacy.

And so, we understand the potency of our molecule. We've measured that in many settings and we also know that we're able to achieve those exposures to inhibit CXCR4 to give us the efficacy that we're hoping to see.

I guess kind of on traditional metrics of like IC50, IC90, like what type of levels are we at?

Yes, so the IC50 from mavorixafor is 4-nanomolar and the IC90 is about 12-nanomolar.

And so Art just to crosswalk, certainly, the 400 milligrams per day gets us to the IC50 and then the IC90, we're close to that with the 600 but of course it's about maximum tolerated dose. So, that's for the window as the drug is nonlinear in terms of its exposure mark.

Okay, that's helpful. Thanks. And then, maybe on WHIM, can you, Paula, give an update on to where you are more generally on patient identification efforts, kind of where registries are at these days?

Yes, so excellent question. So on patient identification, this is where we continue to partner with existing foundation but have their own registries as well as probably have our own internal patient advocacy group that's been connecting with various sort of subgroups that have formed within the WHIM community.

So, we continue to work with them, partner with them, work with existing registries and we certainly have been formulating our own registry to support the long-term growth of mavorixafor to support these patients. So, there's a bit of a stay tuned on sort of X4's specific registry plan but know that they're in the works and we're obviously wanting to appropriately dovetail into the communities that exist today and support them via our own efforts.

And then in terms of just one patient identification, I think later this year we will be focusing on some WHIM prevalence work which we'll crosswalk into some of the broader patient identification initiatives that we have ongoing and I think will be sort of a good robust overview some of those approaches towards the second half of this year.

Okay, great. That's very helpful. Thanks.

Thank you, Marc.

Thank you. Our next question comes from RK Ramakanth with H.C. Wainwright. You may proceed with your question.

Thank you. Good morning, Paula. A quick question on mavorixafor. Most of my questions on the current expectations on the EHA, I got them. But beyond what's going on right now in the Phase 1b study, do you -- do you have a general outline as to how you would be going forward with this into the Phase 2 study and also could you kind of give us a rough timeline as to when that could happen?

Yes, so thanks, RK. I think I'll start and then I'll invite Diego to add anything but I think really for clinical drug development, what we want to determine is the activity and potential benefit of the drug in this Phase 1b as well as dose. Once we have a robust dataset in hand, it's always best to partner with the FDA and other agencies early in the process, so that would be our intent.

And then I think once we both have the FDA input and our dataset, we'll then be able to project off of where the study will launch to, in our view, it would be straight into a study that was hopefully support registration. But we really need to generate the dataset, of course, to have a mutually agreeable path forward both for the company and for regulators.

Diego, would you like to add anything?

Yes. Thank you, Paula. Also -- yes, we're actively working with leading investigators who are really interested in these population of double-mutant Waldenstrom to look at the data if it emerges and put together the best study design to present to regulators. Obviously, we have benchmarks of how ibrutinib itself was approved. That is certainly one area we're carefully addressing and looking at it but also other potential scenario. So, we will be sharing more with you and all the results (inaudible) were continuous. Thank you for the question.

Thank you. The second question is on the 4WHIM trial. We understand you're going to give us a little bit of an update regarding enrollment in the mid-year. However, considering this population and your experience so far of the trial, again similar question as to when we could see the completion of the study or would we get that update also during the major enrollment of data as to how we should think about your complete -- not only you're completing the study but your conversations with the regulators?

Yes, so maybe just as a reminder, we have shared that the existing study design which is randomized, placebo-controlled and double-blinded and it's a 12-month dosing period, has been heavily vetted by the FDA and EMA in terms of support for the design and typical power. So, we feel extremely confident with the current study design and that would be certainly enable an NDA and EMA filings from this one dataset and that continues to hold.

So, I think the excitement for us that when we provide guidance on enrollments that can readily sort of trigger people to do the math and project off of when the top-line data. So, that certainly is -- continues to be consistent with our 2022 top-line data guidance and we'll certainly look forward to being more specific in mid-2021.

Thank you. Thank you, Paula.

Thank you.

Thank you. Our next question comes from Mayank Mamtani with B. Riley. You may proceed with your question.

Hi. Good morning, team. This is Sahil Kazmi for Mayank. Thanks for taking our questions and congratulations on all the progress. Maybe a brief one on the WHIM patient enrollment and how that sort of tracking, has an influence by your efforts in patient identification and then also on that same train of thought, how the patient identification efforts have had synergies on the SCN side and how you might think that influencing later stage trial as well?

Yes, thank you very much for that great questions. So the -- it almost like you can (inaudible) of three parallel through streams of work that do have leverage of each other. But certainly when we started the 4WHIM trial which from design and planning with, will certainly set at a timeframe at least two years ago at this point. Really in rare disease, you're working with centers of excellence, KOLs with known patients, patients that have had that long chronic unmet need and are sort of pent-up demand for innovative study.

So, that's really been the history around us in how we have enrolled, opened up site, worked with investigators and enrolled the trial. Of course, in parallel, we're playing the long game, WHIM is a rare genetic disease, undereducated and underdiagnosed in a broad clinical community as well as patient community.

So along our journey as we built our own educational awareness efforts to a great MSL team and great patient advocacy team, we've actually naturally along the way come -- unearthed new -- or newly found or newly identified WHIM patients that had been appropriately directed to clinicians to learn about our trials and also continue to kind of broaden out the overall connectivity you see patients across the community.

So, I think it's a very natural synergy but the patient identification efforts are really the long game to build the potential addressable patient populations if and when mavorixafor is approved.

And then the third question, as the SCN sort of dovetail and actually that's been a great opportunity for us. One of the positive outputs of the Invitae efforts has been the panel that we're using for free genetic testing for patients, sorry, for clinicians with patients with immunodeficiencies spends all -- a large number of congenital neutropenias of which SCN are some. So, some of that has been nicely leveraged with our ongoing studies and we've also through our patient advocacy efforts, there's a lot of overlap with some of the patient foundation communities and we've had a nice synergy in terms of education and awareness to our SCN trial as well. So, I hope that addressed your questions.

Yes, absolutely, that's really helpful. And then just maybe one more quick one on WHIM is, could you provide kind of studies that you're able to disclose a bit more color on what we might learn from incremental sort of data from this Phase 2 open-label extension that you plan to share at the end of the year, whether it be from a safety or sort of durability of response angle?

Yes, I mean the -- I think you summarized it with safety and durability but obviously the intent with supporting WHIM patients is lifelong treatment with mavorixafor. That's our expectation based on the data we know today.

So, any data that we generate under close watch around safety and durability continues to support the totality of data that would enable physicians and patients to be all comfortable with the data, of course, obviously the regulators as well. So, I think it's a -- just a bit of stay tuned and we look forward to sharing that out as it emerges.

Great. I really appreciate the time. Thanks for taking our questions.

Thank you.

Thank you. Our next question comes from Arlinda Lee with Canaccord. You may proceed with your question.

Hi guys, thanks for taking my questions. You guys alluded to [nearing] dose limiting toxicities. Could you talk a little bit about what you would expect this might be and then can you comment on whether you expect dosing to be the same across the various disease indication? Thank you.

Sure, thanks. Art, do you -- would you like to take that?

Yes, sure. Yes, so the -- in terms of mavorixafor, the data we have in -- when it is used as monotherapy, it really has been very well-tolerated. So, we don't really have any expected dose limiting toxicities directly from mavorixafor alone.

However when you use it in combination with ibrutinib, I'm sure you know there is several safety issues with chronic treatment with ibrutinib, they're all very clearly listed in the label, and when you dose in combination, we have to monitor those very carefully and see if adding mavorixafor is having any effects. So, that's mostly what we are tracking.

Regarding the -- whether we expect the same or different dose, that will depend on the data. We're confident for WHIM syndrome we have the right dose, that's the 400 milligrams per day. Waldenstrom, we are dose escalating up to 600 and based on the tolerability as well as the efficacy signal, we will choose the dose that gives the best benefit risk profile. I hope that answered your question.

Thank you.

Thank you. Our next question comes from Zegbeh Jallah with ROTH Capital Partners. You may proceed with your question.

Zegbeh, your line is on mute. Please unmute.

And I'm not showing any further question at this time. I would now like to turn the call back over to Paula Ragan for any further remarks.

Well, we'd like to say, thank you very much for joining the call today. And if you have any further questions, please don't hesitate to reach out and we hope you enjoy the rest of your day. Thank you so much again.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.