This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
Operator
Greetings, and welcome to X4 Pharmaceutical's second 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 is being recorded. It is now my pleasure to introduce your host, Kerry Galan of LifeSci Advisors. Please begin.
Kerry Galan
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 Reagan, and the company's Chief Financial Officer, Adam Mustafa. Following prepared remarks by each, we will open the call to your questions, and we will be joined by Chief Scientific Officer, Art Taveras, 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. A description of these risks can be found in XCOR's most recent filings with the SEC. I'd now like to turn the call over to Paula Regan. Paula?
Paula Reagan
Thanks, Kerry, and thank you, everyone, for joining us on the call this morning as we update you on our significant clinical progress achieved so far this year and look ahead to what is expected to be a very productive remainder of the year. As I hope you saw in our release this morning, we provided a detailed update on our Mavericks IV clinical programs and highlights of upcoming events and milestones expected through the rest of 2021. For those of you new to the XIV story, Mavericks IV is our lead candidate. It is a first-in-class small molecule antagonist of the chemokine receptor CXCR4, a receptor involved in the healthy trafficking and maturation of immune cells. With its ability to develop and mobilize white blood cells out of the bone marrow, we believe Mavrixa4 has broad potential to provide patients benefits in a variety of immunodeficiency conditions and in certain cancers. Our lead indication of WHIM syndrome which is a rare inherited primary immunodeficiency disease caused by a variety of mutations to the CXCR4 gene, we announced this morning that we have now surpassed the 18-patient minimum enrollment that is needed for primary endpoint analysis and for U.S. regulatory filing. We have now enrolled 23 patients in the Phase III trial, enabling the study to also assess potential clinical benefit of Maverick before. We will be completing enrollment this quarter while allowing for the remaining identified patients to complete screening and potentially enroll in the trial. As a reminder, our 4WIM trial is a global, pivotal, phase 3, randomized, double-blinded, placebo-controlled, multicenter study designed to evaluate the safety and efficacy of Mavarixifor in genetically confirmed WIM patients over the course of 52 weeks. with an expected open label extension period to follow. The primary endpoint for the trial, time above threshold, absolute neutrophil counts, or TAT ANC, measures the level of circulating neutrophils in a 24-hour assessment relative to a clinically meaningful threshold in response to treatment with Mavericks IV versus the TAT ANC of treatment with placebo. Secondary endpoints assess infection rates, warp burden, markers of the immune system, and quality of life, among others. With enrollment now close to complete, we are confident that we will be positioned to announce top-line data from the trial in the fourth quarter of 2022 and, if successful, intend to file for U.S. regulatory approval in the first quarter of 2023. Based on this progress and on the encouraging data that continue to come out of the open-label extension of our ongoing Phase II trial in WHIM, more of which we plan to announce later this year, we are starting to ramp up our pre-commercial planning. In addition to the new Phase II data that I just mentioned, we also plan to provide further results from WHIM patient prevalence studies later this year, results that not only help in refining our estimates of the potential opportunity for Maverick support in the WHIM indication, but that also enrich our insights into market dynamics, patient identification, and physician awareness. Our research team in Vienna has also been doing innovative work to better understand and characterize the genetics underlying WHIM syndrome, fully developing a mouse model of WHIM, for example, examining the correlation between genotype and phenotype, and also identifying a new WHIM variant. We plan to announce preliminary findings from some of this work also later this year. Turning now to our program in Waldenstrom's macroglobulinemia, which you may recall is a rare blood cancer characterized by an excess of abnormal white blood cells in the bone marrow, we announced this morning that we have fully enrolled both cohort A and B in the study with six patients each. We are very pleased to have enrolled the minimum patients in the study needed to determine the maximum safest dosing in combination with ibrutinib. We are continuing to enroll patients in the optional cohort C to expand the total number of patients on study. As a reminder here as well, this is an ongoing Phase 1b open-label, multicenter, single-arm study examining intrapatient dose escalation, safety, pharmacokinetics, or PK, and the pharmacodynamics, or PD, of maverixifor at doses of 200, 400, and 600 milligrams in combination with abrutinib. a BTK inhibitor, and the current standard of care for patients with Waldenstrom's. Both agents are delivered orally, once daily, in patients with confirmed MYD88 and CXCR4 mutations. While greater than 90% of patients with Waldenstrom's have acquired mutations in the MYD88 gene, a subset, about 30 to 40%, have also acquired mutations in CXCR4. there's a significant unmet need in these double mutation patients where the presence of the CXCR4 mutation can prevent patients from responding well to ibrutinib monotherapy. This can manifest as delayed responses, inferior depth of response, and or shorter progression pre-survival. These patients typically experience greater cancer burden, higher serum IgM levels, and increased risk of developing a serious emergent condition called symptomatic hyperviscosity syndrome. In our phase 1B study, patients are being followed for adverse events and change from baseline IgM and hemoglobin, PK and PD markers, which include measurements of peripheral white blood cell counts in addition to measuring clinical response. This past June, we were very pleased to present the first data from this trial in an e-poster at the 2021 European Hematology Association meeting. In the poster and on our investor day call, we presented details from the first eight patients enrolled in the study. Those data were very encouraging, with maverixifor plus abrutinib demonstrating good tolerability with robust decreases in serum IgM at the low and mid doses of maverixifor, suggesting best-in-class potential for this combination treatment. We also saw meaningful increases in hemoglobin levels, suggesting reduction in cancer burden in the bone marrow. And at six months, patients achieved median IgM level reductions of 60 to 75 percent, with one patient achieving normal IgM and two of four patients achieving greater than 50 percent reductions in serum IgM from baseline. By the end of this year, we expect to announce additional data from this Phase 1B trial in Waldenstrom, including in safety and efficacy at the highest dose of 600 milligrams of Maverick before, as well as clinical response measures. Let's turn now to our ongoing clinical program in severe congenital neutropenia, or SCN, a rare blood disorder characterized by abnormally low levels of certain white blood cells called neutrophils. We are currently conducting a Phase 1B clinical trial in SBMs, and as enrollment is continuing to progress, we expect to be able to announce some initial data from the study in the fourth quarter of this year. Interestingly, as we've continued to assess Maverick support's mechanism of action and its ability to mobilize and develop neutrophils, data continue to emerge from prior and ongoing studies that show chronic, sustained white blood cell increases across a number of patient groups treated with maverick zephyr. As a result, we are beginning to explore the potential for broader use of maverick zephyr across the larger chronic neutropenia landscape. Our initial data in SCN as part of this broader data set may facilitate these larger opportunities for maverick zephyr in chronic neutropenias. and we aim to provide more details on these exciting efforts later this year. In summary, we could not be more pleased with our progress over the first half of 2021. Despite a global pandemic, we have been able to significantly advance Mavericks4 through key clinical development milestones with commercialization in sight. As we look ahead to what we expect to be a news-rich rest of 2021, We thank all of you for your support and look forward to providing frequent updates on our continued progress. With that update, I will now turn the call over to Adam to discuss our financial results for the quarter.
Kerry
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 results for the second quarter ended June 30th, 2021. Research and development expenses were $13.2 million for the second quarter of 2021 as compared to $9.3 million for the comparable period in 2020. General and administrative expenses were $5.8 million for the second quarter of 2021 as compared to $5.3 million for the comparable period in 2020. And we reported a net loss of $19.6 million in the second quarter of 2021 as compared to a net loss of $15.1 million in the second quarter of 2020. Note that net losses include $1.8 million and $1.2 million of certain non-cash expenses for the quarters ended June 30th, 2021 and 2020, respectively. We had $96.5 million in cash cash equivalents and restricted cash as of June 30th, 2021. We continue to expect that these funds will support our operations into the fourth quarter of 2022. We'll now open up the call for your questions. Operator?
Adam
Thank you. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Steven Willie with Stiefel. Your line is now open.
Steven Willie
Hi, all. This is Ellen on for Steve. Congrats on all the progress. So you mentioned that you now have 23 patients enrolled in the Phase 3 WIN study and that there's currently patients undergoing screening. So I was just wondering, could you clarify, does that 23 number include those patients that are currently undergoing screening, or are there additional patients in addition to those 23 that you've mentioned that are in the process of being enrolled currently and then kind of related to that. So I think the trial, the protocol allows for up to 28 patients enrolled. Do you expect to enroll 28 or will it be a little bit less than that? And then I have a follow-up. Thank you.
Paula Reagan
Hi, Ellen. Thanks for the question. So the first part is we have 23 patients already enrolled, period, like they're in and moving forward in study. There are a number of patients that are also ongoing screening. We don't know yet which one of those or how many of those will qualify for the study, so we have to complete screening. And certainly our hope is to get as close to 20 as possible. But given the robust enrollment that we have to date, excuse me, and the data that will be generated from that, we're moving forward finalizing enrollment this quarter.
Steven Willie
Okay, great. Thank you. Can you provide any details as to when we might expect to see the new data from the open label extension portion of the phase two WIM trial, and then also those updates regarding patient prevalence? And then maybe to that latter point, I understand there are a few different efforts underway with regards to patient identification, including the NVTA collaboration, partnerships with patient advocacy groups, et cetera. So will that prevalence update be from kind of a holistic update from all of those efforts, or will there be one or two that are specifically the focus for that update? Thank you.
Paula Reagan
Sure. So there was the prevalence question, and then I think it was the open label extension, and those are sort of what data to expect by the end of the year. Is that correct?
Steven Willie
Yeah, and then just the timing, which you just answered there.
Paula Reagan
Yeah, sure. So we are looking forward to presenting updates by the end of the year, ideally at ASH. We've submitted our abstracts and hope there's a number of them that would be sharing great data and support with our collaborators, our clinical collaborators and research collaborators on both the WIM open label extension. And then we've actually been working on WIM prevalence, both in terms of connecting patients and genetic mutations, both in collaboration with NDTA, some of our own research that we've been working with individual investigators. So it'll be an amalgamation of some of the work that will, that have been pulled together from a number of sources. And we'll have that also at the end of the year around the ASH timeframe.
Steven Willie
Okay, great. Thank you for taking the questions and congrats on the progress this quarter. Thank you so much.
Adam
Thank you. Our next question comes from Trevor Allred with Oppenheimer. Your line is now open.
Trevor Allred
Hey, thanks for taking the question. I wanted to ask about the SCN trials. Do you know what mutation types you have enrolled so far and what mutation types you expect to enroll once you're completed there?
Paula Reagan
Sure. Thanks for the question. So maybe I can just remind you about severe congenital neutropenia. Certainly, there are some known genetic subtypes. Congenital neutropenia is also a clinical diagnosis, which can have an unknown origin, and we're being very open to enrolling both those with known and unknown mutations in the study, given the broad applicability of Maverick support that we've already been seeing across a number of patient populations. So as the data emerges, we'll certainly share with you the effects on patients with and without various mutations, but we're excited about what we've been seeing across our currently published studies, and we really think this is going to be quite interesting jumping point for the company in terms of its even broader applicability beyond these congenital neutropenias into the chronic neutropenia market.
Trevor Allred
Okay, great. And in terms of what we've seen so far with Waldenstroms and the positive results we've seen so far, do you have any expectations already for what the next trial for Waldenstroms might look like?
Paula Reagan
Thanks. No, we appreciate that. So we have yet to complete the trial ourselves. Obviously, we want to complete our safe dosing and then discuss trial designs with the agency so we don't have any specific guidance on our next steps. There's certainly been the bookends historically. There have been single-arm studies that have been supported for full approval with abrutinib as a monotherapy way back when. And then there have been, obviously, recently controlled trials where it was zanubrutinib versus abrutinib in a randomized phase three trial. So there is the full spectrum. We won't know yet until we go in with our data set in hand, and we'll probably have more information in 2022 on that.
Trevor Allred
Okay, great. Thanks, all.
Paula Reagan
Thank you.
Adam
Thank you. Thank you. Our next question comes from RK with HC Rain White. Your line is open.
Paula
Thank you. This is RK from HC Rain White. It's great to see all the progress. A quick question on the variant. Paula, you said your research folks are looking at VIM variants. Can you expand on that, please?
Paula Reagan
Sure. I'll actually invite Art to share a little bit more on our strategy there. Art?
Art
Sure. Thank you, Paula. Hi, Archit. So with the Vienna team, we've been looking at the known WIM mutations, and we've also been looking at variants of unknown significance. And for us, the goal is to understand as much as possible genotype-phenotype correlations, looking at signaling, looking at internalization, and other factors that really reflect the gain-of-function activities that are seen with the mutations. We've identified a mutation in particular, which we're going to discuss later this year. in the publication, which actually has pathogenicity associated with it. We did some work in collaboration with medical doctors in the field to characterize patient cells, excuse me, patient cells to also confirm the pathogenicity that we're seeing with transfecting cells harboring those same mutations. And then we've done work where we're looking at various genomics databases and trying to understand prevalence. And so all of that put together actually suggests that now there are increased patients, or at least there are additional patients with this particular mutation, and we now know it's a pathogenic mutation. So we'll be disclosing our case later this year in a publication format, the work that we've done on that mutation and others as well.
Paula
Thanks, Art, for that. So it is potential that, you know, there could be patients that are not really being diagnosed as WIM because they don't have some of the typical symptoms that a VIM patient, as we currently define it as, have. Is that right? Is that one of the... That's right.
Art
That's right. That's our... I'm sorry. Okay.
Paula
Yeah. Great. And then on the Waldenstroms, in terms of the ongoing Phase 1b study, I don't know, Paula, if you stated anything about the timing on the next update.
Paula Reagan
Yes, we have shared we'll be giving updates by the end of the year, certainly ideally around the ASH timeframe. Hopefully our abstracts will be part of that acceptance, and we look forward to updating everybody then.
Paula
Okay, perfect. Thank you. Thank you for taking my questions.
Adam
Thank you, RK. Thank you. And our next question comes from with Roth Capital Partners. Your line is now open.
Mary DiBiase
Good morning. Thanks for taking my question. Paula, I think you mentioned that you guys have initiated some commercial activities, and I feel like you've been doing a lot of work with patient identification and then just really being involved with a lot of the patient groups. So I was just wondering what steps are you guys now taking and then how are you thinking about kind of the rolling out of activities because, you know, it is a little bit early. And then the last bit, you can just comment on how you also think about cost synergies because I think that was something else that you mentioned at one point in terms of commercialization of Mavericks before.
Paula Reagan
Sorry, could you just clarify the last part of that question? Did you say cost or I'm sorry?
Mary DiBiase
Cost synergies. Sorry, my reception is kind of poor.
Paula Reagan
Oh, no worries. I mean, maybe I'll just throw out, I mean, I think you mentioned, obviously, some of the commitments that we have ongoing in terms of patient identification, working with patient advocacy groups. Obviously, you heard of ARTS research around really understanding the connectivity between patient presentation, disease, and genotype. So we're excited about all that as we ramp towards eventual NDA filing and launch. Certainly, there's a lot of activities that we need to do to prepare for the commercial supply chain. Mary DiBiase on the phone here is managing that extremely well, getting ready to support the filing as well as commercial launch on drug products, substance, and supply chain. And then, of course, I mean, it's still, you know, two years away at this point, ideally, but we certainly have a lot of work that we're preparing in terms of supporting the branding and ultimate commercialization of the product in the U.S. and Europe to follow. I hope that helps.
Mary DiBiase
Thank you. And then just a quick follow-up here on the chronic neutropenia. I was just wondering, you know, how large could this possibly be in terms of expansion?
Paula Reagan
So that's an excellent question. And chronic neutropenia is a spectrum of patients. So let's first define what that means. So severe chronic neutropenia, of which are some of the patients that we're studying in our Phase 1B study, There are reports that can suggest there's about 5,000 patients in the U.S. alone with severe chronic neutropenia. Moderate chronic neutropenia is also a very significant problem. It's less well-studied and less well-defined from a clinical presentation, but you can get into the tens of thousands of patients with moderate chronic neutropenia. So that means neutrophil counts below 1,000, the severe below 500. So it's a fascinating field. These patients are very poorly understood. They certainly have high unmet need given their clinical presentations and infection rates, and we're trying to find that. You know, continue to focus on the high, you know, the spot of high unmet need at neutrophil counts, and that's where we believe Mavericks 4 can more broadly help these patients.
Operator
Thanks, Paula.
Adam
Thank you. Our next question comes from Mayank Mantani with B. Raleigh Financial. Your line is now open.
Mayank Mantani
Good morning, team. Thanks for taking our question and congrats on all the progress. So just one quick question on the recently published BMS CXR4 antibody data set. I think that was published in Blood last week by Dr. Treon also. Can you maybe speak to, you know, how that data set you look at in terms of you know, mechanistic validation, but also the kind of bar, you know, set for Maverick Sephora as you, you know, think of advancing this to late stage development next year.
Paula Reagan
Thanks for the question. And I'll start and then I'll ask Art to chime in as well. So obviously we're tremendously excited that Dr. Trian is such a strong champion of this mechanism. You know, his scientific work is the underpinnings of our understanding of the unmet needs of these patients. And we really appreciate that the study, I think, continues to demonstrate the importance of the target, given now the combination data that came out with the antibody. I think the one thing that we're struggling a little bit, there's not apples to apples correlations, I think, between his study and ours. The patient population is different, given they are not pretreated. And then secondly, some of those patients were plasmapherese during the study, just given the severity of their disease. So it does confound the interpretation of just some of those results based on, obviously, the appropriate treatment of those patients. So in terms of setting the bar, I would just highlight that's a little bit of a difficult interpretation at this point. You know, our study will use the appropriate historical benchmarks for patients who have already been pretreated, and we think that's a very relevant way to think about these data. It certainly validates the target. The patient population is slightly different, and unfortunately they have some interventions that make it a little bit complicated to crosswalk. Art, do you have any comments on that?
Art
Sure. Hi, Maya. So definitely the data really supports the value of CXEL4 antagonism in this disease space and shows obviously an improvement when in combination with the anti-cancer killing agents. And so we were actually encouraged by this. And of course, we have the oral version of CXA4 antagonist. And so in combination with the Brutinib in our very first data set that we released, actually, we do see promising results there. So we're encouraged by continuing to hit the target and this combination therapy. And I think actually we're going to continue to do well as we continue to progress with the program.
Mayank Mantani
Great. Thank you, Paula and Art. And then on the SCN phase one, you know, initial data set you're thinking of putting out in fourth quarter 2021, can you maybe just give us a little bit color on, you know, what sort of those levels you're able to go up to in this study design? And I think you mentioned that there are some ongoing trials that, you know, similarly, could have cross-reed on your approach, including in larger chronic neutropenic populations. So can you maybe expand on that a little bit more, Paula?
Paula Reagan
Sure. So the phase 1B study design is testing a single dose, which is 400 milligrams per day, the same dose as in WIM patients, because we feel like we know a lot about safety already, certainly short and long-term based on WIM. So the SCN trial for us is really important for two reasons. One, certainly as we think about specifically focusing on the label for congenital neutropenia patients with a severe profile. But we are continuing to explore and expand the inclusion criteria for the study to actually also include idiopathic neutropenia patients also on the same severity side. So we're going to have some initial data by the end of the year that will help crosswalk the severe congenital severe chronics. And then that gives us the first indication that this, you know, Mavericks 4 we know is not mutation specific. It elevates white blood cells in all people, including you and I, if we took it. The question is, how are we going to focus on the highest unmet need? This trial is an excellent trial to focus on those very severe patients, seeing what Mavericks 4 can do to elevate those neutrophil counts that they so desperately need. And then we can begin to expand from the severe population up into the moderate patients, also obviously who would have high unmet need based on their infection profiles. So it's a really exciting jumping point for us, and we'll look forward to sharing more data towards the end of the year.
Mayank Mantani
Great. Thanks for taking my questions, Tim.
Adam
Thank you. And our next question comes from Eva Prevatera with Cowan. Your line is now open.
spk07
Hi, thank you so much for taking my call. I have a quick question about the Waldenstrom study. Approximately how many patients will be evaluable by the next update at ASH? And can we expect to see some clinical response data at that update?
Paula Reagan
So you can definitely expect some clinical response data in our current patients that are enrolled, which, as of this press release, were actually 13. We've completed six and six in each cohort. And then there was an early patient at a low dose. And we continue to enroll and have been continuing to enroll. So as many patients as are available for their response rate, we will include that data towards the end of the year, hopefully at an ASH poster presentation or presentation.
spk07
Just a quick follow-up, what's your current thinking about what you would need to see to move into larger studies?
Paula Reagan
Sure. So we know that after six months of treatment with abrutinib alone, there's only been about a 10% VGPR rate, so that's the best response. And then there is about a 30% response rate on major responses, So we're looking obviously to beat that in the coming months and we're looking forward to sharing that data with you towards the end of the year.
spk07
Thank you.
Adam
Thank you. And our next question comes from Ben Shim with Canaccord. Your line is now open.
Ben Shim
Hi, good morning. Thanks for taking my question. Paula, I just wanted to confirm, I might have misheard, but for the SCN, Looking at, I guess, the larger moderate population, that is going to be a trial amendment as opposed to a brand new trial?
Paula Reagan
Yes, we are allowed to amend the protocol. They all have the same clinical profile, which is that severe, you know, sort of severe clinical presentations on infections and then the neutrophil counts below our required thresholds. And then we're opening up to not only congenital neutropenia patients, but there's also an ability to open it up to idiopathic or chronic to allow us to begin to study those patients as well in the study.
Ben Shim
Okay, great. I know it's a little early, but can you maybe shed a little light on what you think the FDA might be thinking as far as approvable endpoints for a potential pivotal trial?
Paula Reagan
Yeah, that's a great question. It is a little early, so I don't think we're going to yet conjecture. We'll look forward to presenting the study results. And again, just as a reminder, these are short-term dosing to really just look for the biomarker responses. And then from there, actually, we'll have to think more strategically with the FDA about how we show outcomes as the study progresses and the trials progress.
Ben Shim
Okay, and I just wanted to ask an obvious clarification question. I think you had mentioned in your SDN comments that you saw kind of a deepening of response in neutrophils, and I just want to confirm that's with patients who are on drugs, right?
Paula Reagan
Yes, so when you said deepening of response, so I haven't hinted anything at the actual results in the SDN trial, but what we can share with you across both WIM and our other studies is that Mavericks 4 has a very robust response Neutrophil elevation, whether it's short-term or long-term, we've published that obviously in our initial open-label WIM study. Some of our cancer trials are also showing this very nice and robust elevation of total white blood count as well as neutrophil counts. The missing link here for us is getting that initial data in these congenital or chronic neutropenia patients because that's going to be a great crosswalk into a patient population that's incredibly underserved.
Ben Shim
Okay, great. That's very interesting. Thanks for the color.
Adam
Thank you. Thank you. And at this time, I'm showing no further questions in the queue. I'd like to hand the call back over to Paula Reagan for any closing remarks.
Paula Reagan
Well, thank you again for joining us today. We look forward to seeing many of you at the various upcoming investor conferences and continue to update everyone on our clinical progress as we advance through this busy second half of the year. If you have any further questions, please don't hesitate to reach out, and I hope you enjoy the rest of your day.
Adam
This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
Disclaimer