X4 Pharmaceuticals Inc (XFOR) 2021 Q4 法說會逐字稿

Greetings and welcome X4 Pharmaceuticals Third 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. As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Dr. Glenn Schulman, head of investor relations. Please begin.

Thank you, Operator. And good morning everyone. 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 some prepared remarks by each we will then open the call to your questions. Where we'll also be joined by our Chief Scientific Officer Art Taveras, Chief Medical Officer Diego Cadavid and Chief Operating Officer Mary DiBiase.

As a reminder, on today's call X4 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 risks to differ from those forecasted.

A description of these rights to be found in X4's most recent filings with the FCC, including our Form 10k being filed today. And now I'd like to turn the call over to Paula Ragan, president and CEO. Paula.

Thanks, Glenn. And thank you everyone for joining us on the call this morning. Before we get started I did want to officially introduce our new vice president of investor relations and corporate communications, Glenn Schulman, who you just heard from.

He has a Master's in public health and [FRMD] and an extensive public life sciences company experience, leading successful investor relations and corporate communication teams and programs.

Glenn joined us in mid-November and has been a great addition to the team. Welcome, Glenn. 2021 was an important year for X4, a year of execution across our multiple ongoing clinical trials and significant progress in dancing our lead candidate Mavorixafor closer to patients in need.

And importantly we expect 2022 to be a pivotal year for the company. A year of clinical results that will shape the future of X4 for years to come. During 2021 not only did we complete enrolment in the pivotal Phase 3 trial of Mavorixafor and WHIM syndrome for the 4WHIM trial but we also enrolled enough patients in our two earlier stage trials to achieve proof of concept for Mavorixafor and two additional rare disease indications with many thousands of patients that have great medical need for additional treatments; chronic neutropenia and Waldenstrom macroglobulinemia.

Thirty-one adults and pediatric patients have been enrolled in the 4WHIM trial, which was originally designed to enroll 18 to 28 patients. As you know, this clinical trial is evaluating the safety and efficacy of a single daily oral dose of Mavorixafor and patients with WHIM syndrome, a rare genetic immunodeficiency disorder caused by gain of function mutations to the CXCR4 receptor.

The disease is characterized by HPV associated warts, hypogammaglobulinemia, multiple types of infections and Myelokathexis; which cause leukemia and neutropenia in most patients, reducing the body's ability to mount a healthy immune response.

Results from the ongoing open label extension of our Phase 2 clinical trials on Mavorixafor and WHIM patients continues to support this indication, with data showing durable increases in [neutro-cells], lymphocytes, and monocytes, decreased frequency severity and duration of infections, fewer hospital doctor visits and sustained improvements in warts.

Mavorixafor continue to be well tolerated over a median treatment duration of almost 150 a week. We continue to anticipate top line data from the 4WHIM trial in the fourth quarter of 2022.

We ended last year with our largest ever presence at a scientific meeting, the annual meeting of the American Society of Hematology or ASH and we held the company a virtual seminar immediately following with several key thought leaders in the industry.

Our posters and abstracts at the ASH meeting contained a broad array of both clinical and scientific data, data that we believe not only further establishes X4 as a leader in the CXCR formulated research space but also with the broadening scope of the clinical potential of Mavorixafor due to its ability to collectively inhibit CXCR4.

At the meeting we shared data demonstrating the effect of Mavorixafor across multiple disease states, multiple cell types and over chronic periods of dosing. One of our posters showed for the first time that Mavorixafor is able to raise total counts of all the key white blood cells necessary to mount an appropriate immune response across a wide spectrum of disease over both short and long term treatment periods.

Data we're presented from ongoing clinical trials and Waldenstrom macroglobulinemia, (inaudible) WHIM syndrome and for the first time early data from our ongoing Phase 1B trial in patients with chronic neutropenia. These data demonstrated that Mavorixafor broadly increased white blood cells and neutrophil counts anywhere from two to six fold across all indications as well as in healthy subjects.

Early data from our Phase 1b clinical trial in chronic neutropenia mirrored these results. The demonstrated elevations in white blood cells and absolute neutrophil lymphocyte and monocyte counts across the first four patients enrolled in the trial.

As a reminder, chronic neutropenia refers to a condition of sustained or recurrent abnormally low neutrophil counts lasting at least three months. It's estimated that 6 in 10,000 people have chronic neutropenia, which can be present in a variety of severities, mild, moderate or severe. And can increase the risk of serious and recurrent infections in patients.

Enrollment in our Phase 1b trial continues with additional data expected in the second or third quarter of 2022. It was a compelling set of consistent responses irrespective of disease state and irrespective of CXCR4 mutation status.

And an aggregate have encouraged us to think much more broadly about how Mavorixafor could impact larger numbers of patients primary immunodeficiencies, whether caused by CXCR4 mutations, as in the case of WHIM syndrome or the antagonism of the wild-time CXCR4 signaling pathway in many other cellular immunodeficiencies.

We also presented results from our ongoing Phase 1b clinical trial in people with Waldenstrom's Macroglobulinemia, a rare B-cell lymphoma that low 200 milligram and mid-level 400 milligram dosing of Mavorixafor combined with the BTK inhibitor ibrutinib, with a medium treatment duration of 272 days.

As a reminder, the Phase 1b trial is designed to demonstrate safety, dose and PDUFA date, proof-of-concept of Mavorixafor in people with Waldenstrom with significant unmet needs resulting from mutations to both their MID8 and CXCR4 antogonist.

The data showed a 100% overall response rate in the 10 evaluable double-mutation patients, sustained a decrease in serum IgM levels and a trend towards normalization of hemoglobin levels.

We also announced, this morning, that 600 milligram dose of Mavorixafor was cleared of the ongoing study. All eligible patients in Cohorts A and B for the low and mid-level cohorts are now being dose escalated to receive 600 milligrams of Mavorixafor once daily in combination ibrutinib. We expect to report updated data from this trial during the second half of the year.

At ASH last December, we also announced that our research efforts had led to the discovery of several novel WHIM causing CXCR4 mutations. The instance of which further strengthens our confidence that there are more than 3,500 WHIM patients in the U.S. alone.

More detailed data on one of these mutations, the D84H mutation was just presented the American Academy of Allergy, Asthma and Immunology, or Quad AI meeting in late February. The post for this is available on our website.

Looking forward, our participation at major medical conferences continues in 2022, where we are working hard to educate the medical community and raise awareness of WHIM. At the upcoming 2022 Clinical Immunology Society or CIS Conference we'll present, for the first time, another recently identified novel WHIM variant, the S341Y variation.

This combined with the D84H mutation are just two of the many novel WHIM variants that have been sequenced, characterized and published into the literature, stemming from our world-class research center in Vienna.

Next month at the AACR Conference, our preclinical team will be presenting new data demonstrating that additives to synergistic activity of Mavorixafor when combined with any BTK inhibitor, including zanubrutinib and ibrutinib.

With that update complete, I would like to take a little time today to share some insights in our commercial approach, as we near our first [Phase 3] clinical data in Mavorixafor for the treatment of WHIM syndrome.

The first is our early engagement with patient communities through patient advocacy. Patient voices are at the center of all decisions we make at X4. Early in the Mavorixafor clinical development process we appointed a vice president of patient advocacy to engage with patient advocacy groups long before entering the Phase 3 trial, which enabled us to understand the diverse disease journeys and unmet needs of our patients.

We worked closely with patient advocacy groups all along to develop disease awareness materials and other resources to help educate on testing resources, disease presentation, access to medical experts and treatment options available or in clinical development.

The second is our educational support and access to genetic testing to improve diagnosis. As you likely know, diagnosis and patient identification are the main challenges for rare disease. Due to the heterogeneous symptom presentation and lack of sufficient awareness, WHIM syndrome is often difficult to diagnose. This leads to long diagnosis journeys and delayed access to the symptomatic treatments that are the current standard of care.

People with WHIM Syndrome often visit numerous medical specialties before being diagnosed. As we discussed previously, we sponsor a no-charge genetic testing and counseling program, PATH4WARD, for individuals who might carry mutations associated with congenital neutropenia, including WHIM Syndrome, to aid in patient identification and to help bring patients one step closer to an accurate diagnosis.

We also employ the use of artificial intelligence and machine learning tools to enhance our understanding of the prevalence and burden of disease. WHIM is thought to be under diagnosed due to the absence of an international classification of disease or ICD-10 code. As well as inconsistent coding for key symptoms.

We have utilized artificial intelligence and machine learning platforms to identify patients with WHIM [look alike clinical types] that might have been previously undiagnosed due to inconsistent symptom presentation.

As we talked about last year, this space of WHIM is like a puzzle but with our ongoing research and that of the physician, scientists and patient communities there's increasing clarity as the understanding of the disease continues to evolve as is often the case with many rare diseases.

We have also assembled a strong medical affairs team. Building a specialized team geared towards physician education and creating partnerships could increase awareness of WHIM syndrome as a critical [bit] to achieving our goals.

Collectively we feel passionately about empowering medical professionals and their patients to understand their unique journeys so that they can get answers and find available treatments.

Lastly and as we just mentioned, we continue to conduct research on the underlying genetics of WHIM. We have built strong in-house research programs that leverage world-class collaborations to advance bench to bedside research by continuing to establish correlations between clinical presentation and new genetic variants associated to WHIM we can improve our ability to identify undiagnosed patients including those who may potentially benefit from mavorixafor treatments in the event it gains approval.

Of course building a sustainable rare disease business is not fully rooted in supporting patients and physicians. There's much more needed beyond that that we need to deliver on and we are well on our way.

We have made great progress in adding leadership to the Company with our VP of US Commercial and our new Board Director. Both with significant life science commercialization experience. More key hires including a Chief Commercial Officer are slated for 2022.

In terms of our ultimate commercial product we have taken the appropriate steps in terms of registration and validation batches to support our NDA filing and our advancing our work to support mavorixafor for future commercial trade (inaudible) and third-party logistics providers to enable a successful US launch.

Finally and importantly, given the disease modifying impact that mavorixafor may have on this rare WHIM syndrome population they're engaging peers with research and education in the US and key European territories. All of these platforms and initiatives are working in concert to enable us to be ready to deliver for our patients in the event of our first approval.

With that update I now turn it over to Adam to discuss results for the quarter before we open up the call for questions. Adam.

Greetings and welcome to X4 Pharmaceuticals Third Quarter Financial -

Artificial learning and machine learning, often the (inaudible) clinical, great progress - great steps in European territories. With that update I now turn it over to Adam to discuss 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 activity and results for the fourth quarter ended December 31, 2021.

At the end of 2021 X4 had $83.1 million in cash, cash equivalence and restricted cash. We continue to expect that our cash and cash equivalence will fund our operations into the fourth quarter of 2022.

Research and development expenses were $12.2 million for the fourth quarter ended December 31, 2021 as compared to $12.3 million for the comparable period in 2020.

General and administrative expenses were $7.1 million for the fourth quarter ended December 31, 2021 as compared to $5.4 million for the comparable period in 2020.

Finally, X4 reported a net loss of $30.2 million for the fourth quarter of 2021 which includes approximately $11.4 million in non-cash expenses of which $9.8 million is an impairment of goodwill charge as compared to a net loss of $18.4 million for the comparable period in 2020. We'll now open up the call for your questions. Operator?

(Operator Instructions). We have a question from Stephen Willey with Stifel, your line is open.

Yes, good morning, guys, thanks for taking the question. I guess as you think about the WHIM data either we get the top line disclosure in the fourth quarter you'll subsequently be talking to payers and getting a sense of what reimbursement might look like.

Just curious as -- how that information that you get from payers and reimbursement will inform if at all the target patient population that you choose to pursue in chronic neutropenia?

I guess is there a chance here that you just select the more severe patients, I.E. those that have more than two infection events a year or those chronic G-CSF? Just wondering how you're thinking about how the WHIM data shapes the TPP for chronic neutropenia?

Hi, Steve, good morning, thank you for the question. So I think we think about it almost on two different axes. There's a patient number question, which I think the (inaudible) community is familiar with in terms of the ability to gain appropriate valued propositions for these ultra-orphan diseases.

And then it sometimes correlates with patient numbers. So with WHIM, we've tested that, and we actually think we have a fairly broad width of patient numbers. That certainly supports the current WHIM numbers that we have, and actually well beyond that.

So as additional patients, and additional indications come on we don't think that that would have any sort of pricing impact on how we go out with WHIM. So we don't think the chronic neutropenia [larger] numbers it would impact our overall pricing strategy. And then I think you're correct, ultimately what we're trying to do is answer a high unmet need.

We've shared already today that there's about 5,000 patients with chronic neutropenia that have these very severe, we call them serious infection events, at least two per year or more. And certainly in some ways those patients are as severe if not more severe than those that we've seen with WHIM syndrome.

So I think we're continuing to focus on the high unmet need and to present the value proposition that would support a uniformed pricing strategy across multiple indications.

Okay, that's helpful. And I know you mentioned clearing the 600mg dose in Waldenstrom's. How many patients were initiated on the 600mg dose? Is that the six patients in that -- in that third cohort?

Yes, actually, this is Diego. Yes, the cohort B and the goal was to enroll six patients, and five out of six minimal with no major safety events. And that was accomplished, that's why this morning we announced that the 600 milligram, the top dose has now been cleared, and all remaining patients in the trial who were at the lower doses are being dose escalated.

So we expect at the end of -- when we report updated results in the second half everyone who is eligible will be at 600 milligrams for a number of months.

Okay. And you'll have five patients then who were initiated at the 600mg dose?

Yes. The goal was (inaudible), yes.

Okay. And then just lastly for Adam. Do you have a share count as of -- as of year-end?

Yes. So it's about 30 million basic shares outstanding. And then we have another 9 million if you include the Class A and Class B ones. And then lastly about a million of options RSUs. So 40 million or so is a good number, fully diluted.

Great. Thanks for taking the questions.

Thanks, Steve.

Our next question comes from [Mark Fram] with Cowen and Company.

Yes, thank you for taking my questions. You, Paul, with the work you've done on identifying novel mutations I guess what are your latest thoughts on how many WHIM patients actually exist in the U.S.?

Just -- mostly just reinforced your confidence in the numbers you've put out? Or are you thinking maybe those numbers need to be increased?

I think though first of all, it's a confidence first. And so, of course, these additional variants are increasing our very deep confidence in the 1,000 to 3,700 range that we have presented.

Assuming as we learn more, and we'll look forward to providing some updates even this year about the variants that we're identifying through multiple avenues. We will think about revising as we think that's appropriate.

But for now, it's really about the confidence. And again, you can appreciate we want to always go up is the strategy of the company. So confidence in that 1,000 to 3,700 is our position today. But certainly, there is probabilities that could increase that in the future.

Okay, that's helpful. And then on the SCN update that we're expecting. Just give a little bit more clarity on the number of patients we should expect? And then a follow-up that they'll likely have had versus what we saw back in December?

Yes, hi. We -- as you know we presented data on the first four patients at ASH. We are actively identifying and enrolling patients, so we are prepared to release data on more than four patients. Certainly the study is up to 25, and we are working with all the sites. There's interest in the study, and the conditions of the pandemic has improved and that's also something that is helping us.

Okay, that sounds - and then maybe one for Adam. Just the cash guidance, it seems to me kind of tied to the yearend cash balance, but you did do a private placement the other day. Is that actually included in the cash guidance? And if not, how does that impact your guidance around there? And then related to that is can you remind us what the minimum cash covenants are for some of the debt?

Sure. Yes, thanks [Mark]. So our guidance remains into the fourth quarter. That includes the six million or so you referenced that we raised since the beginning of the year, it just puts us further into the fourth quarter. On the Hercules side, we have a minimum cash covenant of six months of cash. We did recently amend it.

And if we raised $30 million from any source by June 30th, that minimum cash covenant becomes a fixed $30 million, so more flexibility, less than six months of cash currently. And that test kicks in on September 1st as we also push that test data out recently.

Okay, great. Bearable, thank you.

Sure.

Our next question comes from Mayank Mamtani with B. Riley Securities.

Good morning. Thanks to - for the detailed updates. So a couple of questions from us, just on the core main study, in terms of how you're thinking about presenting the data top-line and also the full dataset, can - will you have information on the patient level analysis and, if at all, you're targeting any medical conferences towards the end of the year?

Mayank, just to - I think we heard your question was around how are we - how and kind of what are we going to present you on the path line data, both in terms of initial top-line and then possibly at a medical conference, just to reiterate. Is that correct?

Yes.

Okay. Diego?

Hey. So the - we always aim to present a top-line data at many [conferences], so the - right now, we have not specifically pointed to what confidence, but Q4 is when we are tracking. So obviously, we'll look for the best [value] at that time to inseminate the data. We're really looking forward to it, and top-line data is [the] only part of that. The study has many other endpoints.

So through the following months, at other [conferences], we plan to disclose all the valuable data that we are collecting.

Okay. And just maybe on that, do you plan to disclose additional base-line characteristics, kind of information, now that you have a lot of information on these 31 patients that are enrolled? Will there be some more information on those patients or should we just wait until the final top-line?

Yes, so soon at an incoming conference, there will be a poster that will include baseline characteristics, so you will be able to see there the type of patients that (inaudible) to the trial. So that's coming very soon.

Awesome. And [remember], [DNA components], [miss transmutation], the poster you had at the [Quad] conference, just about the implications of that. Does that help expand [precedence] or also at enterprise maybe more severe patients with that when [there]? Can you [describe by that]?

[84]. Sorry. Mayank, just to clarify again, I think this is in reference to the [D84H] disclosure that we had where we identified a series of patients with that. So the good news is I think that's - as I think earlier a question to that, increase our confidence and then does it change our numbers? So right now, I think we're very squarely in the camp of increasing our confidence in the 1,000 to 3,700, even just based on that one mutational [loan].

However, maybe I'll invite Art to just comment broadly on some of the additional work that we're doing on additional variants, and there'll be more data to come this year. Art?

Yes, hi Mayank. How are you doing? So, as you know, we've been characterizing a number of mutations that we've identified throughout our own research through the clinical programs, through the literature, through [in detail] the path forward program. And then we [transferred] cells and tried to characterize the pathogenicity.

So we've done that with many, tens or actually well over 50, I'll just say right now, and then we're going to be communicating that dataset throughout the year. We have the [best 341Y], which is coming up at CIS, [D84H] we presented, as you know, last year. And then as part of that, we look at the number of genomics databases and calculate what I would say is a very conservative number of prevalence.

And so for that, it actually allows us to understand the pathogenicity. We work with other people to try to communicate the details of the pathogenic findings that we're seeing, and that's all part of educating the community.

And we anticipate that there are many more patients out there with these various mutations that actually are pathogenic and demonstrate some phenotype of WHIM. So that's really about the future, and we're happy to disclose a lot of that information as we keep moving forward.

Thank you. And then my final question on Waldenstrom, great to see the 600 mg dose [clearing], can you just clarify what your target for deepening [of responses] look like now that [you're at a] higher dose and exposure is going beyond 12 months for these patients? So just -- could you just clarify what sort of MR or VGPR numbers you might be targeting?

Yes, this -- thank you for the question. So the study was designed as an intrapatient dose-escalation. Everybody started at 200 milligrams in combination with ibrutinib. Once 200 milligram was deemed safe, everybody eligible was dose-escalated to 400, and then they stay at 400 until the 600-milligram dose was deemed safe, which just happened.

And now, we have a good number of patients already at 600 and another -- a good number that are being escalated to 600. So this will result on [a variability] of exposure at 600 over time, some patients will be on it for much longer, others for shorter time.

And [overall] we believe this is really good [news]. Combination of ibrutinib with this highest-tested dose, we believe, over time gives this a possibility of having deeper, more durable, more [pronounced] clinical responses.

So over the next few months, we will be looking at all this data and we will communicate it in the second half as this data becomes available.

Thank you for taking my question.

(Operator Instructions). We have a question from the line of [Arthur He] with H.C. Wainwright. Please go ahead.

Hey, good morning, everyone. This is [Author] in for [RK]. Thanks for taking my question. So I guess I just want to follow up on the patient enrollment for the Waldenstrom study. So is -- how many patient -- total patient you [have] right now [being through] enrolled in the total study? And how many patient has been dosed for 600-milligram dose level?

Yes, the study calls for the enrollment of 12 to 18 patients. We have not communicated the exact number, but we are in a good position to meet that enrollment goal. And as I said recently, everyone eligible will be at the 600-milligram dose. And we believe that sample size at that does will give us the information we need to [key up] for the next step.

Okay, thanks. And maybe a little bit of follow up on that, is the newly enrolled patients are [folks on those are including or] naive [and] refractory [patient] or is -- [has] more [concreted] in the refractory [patient]?

So the current protocol allows for enrollment of either front lines or relapse/refractories. [There's an] effect of the label, ibrutinib is approved in the US for a front line but not in Europe. So it really depends on which site is enrolling.

But we -- as we communicated at ASH, we have been rolling both types. And we believe the combination treatment has the potential to help both types of patients.

Thank you. Thanks for taking my question.

Thank you. And I'm not showing any further questions in the queue. I will turn the call back to Paula Ragan for her final remarks.

Well, thank you again for joining us today. We look forward to seeing many of you at the various upcoming investor conferences and at medical meetings throughout the year. Please, if you have any further questions, don't hesitate to reach out to Glenn. And we hope you enjoy the rest of your day. Thanks so much.

And with that, ladies and gentlemen, we conclude our program for today. Thank you for participating. You may now disconnect.