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Operator
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, Dan Ferry, a LifeSci advisor. Please begin.
Dan Ferry
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 Regan, 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 Chief Scientific Officer, Art Tavares, Chief Medical Officer, Diego Kadovid, 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. I'd now like to turn the call over to Paula Regan. Paula?
Paula Regan
Thanks, Dan, and thank you, everyone, for joining us on the call this morning. where we plan to discuss our upcoming presence at the ASH December meeting along with highlights of the recent quarter and our financial results. In doing so, we hope to convey the level of excitement here at X4 as we head into what promises to be a very catalyst-rich period for the company. As we detailed in the press release that just went out, we have had all seven of our submitted abstracts accepted for publication at ASH, with four accepted to be presented as posters. This conference will be the largest presence ever for X4 at a medical meeting and represents the culmination of several years of incredibly hard work and success across our entire organization. We also just announced that we will be hosting an Investor Day on December 16th, just following the ASH meeting, to discuss the data in greater depth and to hear from a number of prominent key opinion leaders who will help put all of these data into context. So please save the date for that X4 event. The abstracts published today on the ASH website contain a very broad array of both clinical and scientific data, data that we believe not only further establishes XFOR as a leader in the CXCR4 space, but that also supports the broadening scope of the clinical potential of our lead candidate, Maverick XFOR. As you know, Maverick XFOR is the only CXCR4 antagonist being developed in an oral, once-daily formulation. We are currently conducting three clinical trials of Mavericks 4 across a number of indications. The first is our global pivotal phase 3 trial in people with WHIM syndrome. Importantly, we achieved a major milestone in early October, completing enrollment in this phase 3 clinical trial. Thirty-one adult and pediatric patients have been enrolled in the trial, which was originally designed to enroll 18 to 28 patients with WHIM syndrome. Top line data from this trial are anticipated in the fourth quarter of 2022. WHIM is a rare inherited primary immunodeficiency caused by a variety of mutations in the CXCR4 receptor gene that cause immune cell dysregulation. This dysregulation inhibits the proper maturation process for the entire range of white blood cells and causes them to get trapped in the bone marrow, preventing healthy trafficking and systemic circulation. This results in lifelong challenges to the health and well-being of WIM patients, including severe, recurrent, and sometimes life-threatening infections, loss of lung function and hearing, and significantly increased risk to HPV-associated cancers. By correcting this CXCR4 dysfunction, Mavericks 4 has been shown to not only increase the levels of circulating neutrophils, monocytes, and lymphocytes in WIM patients, but also to reduce the number and severity of annual infections and to reduce warts caused by unchecked HPV infections. One of our abstracts accepted for poster presentation at ASH further highlights similarly positive data from our ongoing Phase II open-label extension trial in patients with WHIM and includes patient interviews that reveal that all four of the continuing study participants experienced good tolerability and beneficial treatment effects when dosed with Mavericks before long-term. Also relating to WHIM, several of the abstracts published this morning focus on WHIM-causing CXCR4 mutation variants and on the U.S. prevalence of the disease. As quick background, there have been 16 WHIM-causing CXCR4 receptor mutations identified to date, all of which have been located in the internal tail, known as the C-terminus, of the receptor. Driven by our patient identification efforts in the PPAP collaboration and clinical trial screening efforts, we have identified a host of patients with both these known CXCR4 variants and also novel CXCR4 mutations. As a result, we have been able to better learn about the disease spectrum of WHIM, both clinically and genetically, and have established research that enables the correlation of a patient's WHIM symptoms with increased CXCR4 signaling caused by genetic mutations. This is referred to as genotype-phenotype correlation. In the abstract describing a novel variant, we specifically publish on our first discovery resulting from these efforts, which describe a novel missense mutation called D84H discovered in collaboration with treating physicians and X4 scientists. The D84H mutation is the first mutation identified outside of the C-terminus of the CXCR4 receptor. And we have shown through our internal research that this mutation causes gain-of-function signaling correlating with the disease phenotype of WIM patients. To look further into this newly identified mutation, we also analyzed multiple broad population genomic databases. which helped us determine that the allele frequency of the D84H mutation is very high in the generalized population. Using the current US population and a conservative estimate of 5 to 10% of individuals who go on to develop the disease symptoms, also known as penetrants, these data support that there are at least 1,250 to 2,500 WIM patients in the US resulting from the D84H mutation alone. We have found multiple D84H patients from different families across the world in the brief time since the discovery, which further validates this finding. We plan for further patient identification efforts to deepen the validation of the D84H prevalence estimate and to explore similarly identified CXER4 variants that could impact prevalence estimates in 2022 and beyond. Together, this patient identification and bench-to-bedside research along with our prior market research and our artificial intelligence research published in these ASH abstracts, continues to reaffirm our belief that WHIM is a significantly under-recognized and under-diagnosed condition, and that the true population may be much larger than is currently reported. We plan to go into more detail regarding our ongoing patient finding activities at our investor event in December, but needless to say, we are very encouraged by the results that our studies are elucidating building support and awareness to the rare disease physician community as we continue to ramp up our pre-commercial activities in advance of our expected phase three top line data, which, as I mentioned, are anticipated in the fourth quarter of 2022. Let's now shift to updates on our ongoing clinical trial in chronic neutropenia, which is an indication that nicely leverages our successful experiences with WHIM syndrome. our broader trial experiences, and input from our clinical communities. We believe the treatment opportunity for Mavericks 4 in chronic neutropenia is quickly becoming an additional key value driver for X4 based on new long-term data. Specifically, one of the ASH abstracts accepted for poster presentation demonstrates that Mavericks 4 alone or in combination with other therapies acutely and chronically increases total peripheral white blood cell counts 1.5 to 3 times baseline across a number of different diseases in both the presence and absence of the CXCR4 mutations. This suggests that Maverick Sephora could uniquely provide benefit to patients with broad chronic neutropenia conditions. And given its profile as an oral, once daily administration, we believe Maverick Sephora is positioned to potentially become standard of care in a treatment landscape only addressed currently by injectable therapies. Based on the extensive and long-term data we presented in the abstract, and based on input from our clinical advisors, we have amended our ongoing Phase 1b neutropenia trial to include a broader range of neutropenia conditions, including patients with severe and moderate neutropenia. We are now also enrolling all patients, whether or not they are being treated with the standard of care, which is granulocyte colony stimulating factor, or GCSF, and whether or not their neutropenia is caused by a genetic mutation. The trial is assessing the safety and tolerability of two weeks of dosing in cohort A and a single dose of Mavericks 4 in cohort B and measuring the effect of doses on patient neutrophil counts along with other white blood cell types. We've also modified the number of patients to be enrolled to 25, a number we believe will be sufficient to complete the goals of the trial. Our third ongoing trial with Mavericks 4 is designed to demonstrate safety dose and elucidate proof of concept in a rare B-cell lymphoma called Waldenstrom's macroglobulinemia. While greater than 90% of patients with Waldenstrom's have acquired mutations in what's called the MYD8 gene, a subset, about 30% to 40%, also have acquired mutations in CXCR4. There's a significant clinical unmet need in these double mutation patients, where the presence of the CXCR4 mutation, as with WIM patients, causes white blood cells, including their abnormal B cells, to become stuck in the bone marrow. This sequestration of cells can prevent patients from responding well to standard of care BTK inhibitor treatments. This can manifest as delayed response, inferior depth of response, and or shorter progression-free survival. Our Phase 1B trial is evaluating the safety and tolerability of Maverick for in-frontline and treatment refractory Waldenstrom patients at doses of 200, 400, and 600 milligrams in combination with ibrutinib. Both agents are delivered orally, once daily, in patients with confirmed NYDA8 and CXCR4 mutations. The study is also measuring change from baseline in IgM and hemoglobin, pharmacokinetics and pharmacodynamic markers, which include measurements of peripheral white blood cell counts in addition to measuring clinical response rates. As you may recall, this past June, we presented the first data from this initial trial in an e-poster at the 2021 European Hematology Association meeting. In the poster and on our investor call that day, we presented details from the first eight patients enrolled in the study. Those data were very encouraging with Mavericks for a plus abrutinib demonstrating good tolerability and biomarker data suggesting best-in-class potential for this combination treatment. Because the cutoff date for the ASH abstract filing was so close to this event and data announcement, the ASH, the abstract contains a fairly modest amount of incremental data beyond what we presented at EHA. As of the abstract cutoff date of June 15th, 2021, the overall response rate, which is minor response or better, in the eight patients evaluated at the time was 100%, with four of the eight patients achieving a major response, which is greater than a 50% reduction in CRM IgM, and one of the eight patients achieving a very good partial response, which is greater than a 90% reduction in CRM IgM. We do plan to have additional data at the ASH poster with a data cutoff of mid-October, and we look forward to a deeper reveal of overall response rates at the meeting and at our Investor Day in December. We remain very encouraged by our Waldenstrom's program potential as we continue to see encouraging signals emerging across patient groups within the Phase 1b trial. So as you can see, we are very excited about the data we've revealed so far and about the expanding potential of Mavericks 4, and we're really looking forward to our presentations at ASH and to our investor event just following the meeting. We'll be providing more details about the event in the coming weeks, but we currently expect it to be a two-hour virtual meeting on the morning of December 16th with participation from our expert clinical advisors. So please mark your calendars. With that update, I'll now turn it over to Adam to discuss our results for the quarter before we open up the call for questions.
Dan
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 third quarter ended September 30th, 2021. Research and development expenses were $13.2 million for the third quarter of 2021 as compared to $11.4 million for the comparable period in 2020. General and administrative expenses were $5.9 million for the third quarter of 2021 as compared to $5.6 million for the comparable period in 2020. And we reported a net loss of $20.2 million for the third quarter of 2021 as compared to a net loss of $17.4 million in the third quarter of 2020. Note that net losses include $1.5 million and $2.2 million of certain non-cash expenses for the quarters ended September 30th, 2021 and 2020, respectively. We had $77.7 million in cash, cash equivalents, and restricted cash as of September 30th, 2021. We continue to expect that these funds will support our operations into the fourth quarter of 2022. We did make some personnel announcements towards the end of the third quarter. We recently announced the appointment of Francoise de Craqueur to the company's Board of Directors, and the hiring of Carolyn Park to the newly created position of Vice President, U.S. Commercial. These appointments significantly strengthen our depth and breadth of commercial leadership experience and expertise in the strategic marketing of rare disease therapeutics. In September, we announced the promotion of Dr. Mary DiBiase to the newly created position of Chief Operating Officer, reflecting her longstanding contributions to the company. and the advancement of Mavrixifor into global late-stage clinical development. Mary Hatt served as our Senior Vice President and previously Vice President of Technical Operations and Quality, in addition to Vice President of Program and Alliance Management since joining the company in 2017. We'll now open up the call for your questions. Operator?
Operator
And thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by. We compile the Q&A roster. And once again, that is star one if you'd like to ask a question. And our next question comes from Ziba Jala from Roth Capital.
Gaucher
Good morning. Thanks for taking my questions. Congrats on the updates and looking forward to the data at ASH and the follow-up investor call. I think I just have one general question here, and it's just about the commercial outlook. I really like what you're doing regarding, you know, looking at expanded market opportunities. We saw you do that for WIM, and now you're looking at SCN and kind of expanding that opportunity. Can you just comment a little bit on, you know, how you're thinking about the execution on that front more broadly and And then as it relates to WIM specifically, I just wanted to get a sense of, you know, where you think you are in terms of finding the ideal or the true number of WIM patients. And is this a process that you expect to continue to occur even after you launch the program to kind of find additional patients that may benefit from the therapy? And also nice to see that you did bring on a VP of commercial, we should get hints at, you know, the opportunity to really focus on the commercial side of things.
Paula Regan
Hi, Zegba. Thanks so much for the question. I'll try to, you know, address those components. You know, I think, I mean, for people who understand the history of rare disease, it's the well-established story of when a product, especially an innovative product where there's no treatments, First start, the number of patients identified grows exponentially. Just using Genzyme as an example way back when as the first product in Gaucher's disease, I think at the time there were about 1,000 patients expected to be prevalent in the world, and today we know there's over 15,000 based on registry data. So it really is about education, awareness, and WHIM syndrome growing into chronic neutropenia is going to be that story as far as we believe. When we're learning more about the genetics, as you heard, finding this unique variant based on patients that are already known today is really indicative of our early understanding of the disease and how it's presenting clinically and genetically. This is a huge step forward for the company in terms of really having profound conviction in our current estimates, which will grow over time, just as I hope the story that we've shared about Genzyme And then I think when patients are a type of chronic neutropenia, we're learning more and more that chronic neutropenia as a broader umbrella, regardless of genetic foundation, is a high-end met need. Patients today are treated with injectable GCFS multiple times a day or week. It's an inadequate treatment, and we could completely revolutionize the therapeutic landscape with an oral once daily. There's a lot to grow here. We're at the start of our commercial journey and in great shape based on some of the data we've just released at ASH.
Gaucher
Thanks, Paula.
Operator
And thank you. And our next question comes from Leland Grishel from Oppenheimer. Your line is now open.
Leland Grishel
Hey, good morning, Paula. Thank you for the update. Congrats on all the ASH acceptances. Looking forward to hearing more at the meeting. Question for me, kind of touching off from the prior one, I mean, it seems like as we're learning more and more about MAV and it's the data that we're seeing in various clinical settings, it seems like there may be no limits in terms of the ability of the content to be useful in a variety of conditions with MAV. you know, neutropenia and with, you know, limitations on abilities of white cells to get out of the bone marrow. As we look forward to your expansion in the clinic neutropenia setting, could you maybe relate to us just what the expanded scope of the trial may relate to in terms of the population that the trial types of patients in the trial would have corresponded to in terms of, you know, let's say the U.S. population with neutropenia? Thank you.
Paula Regan
Sure. Thanks, Leland. So chronic neutropenia as a marketplace is not well understood, but we can certainly share what we know today, and we've been modifying our trial to begin to address this. So severe chronic neutropenia is treated, as I mentioned, with GCSF, and we feel pretty confident today there's at least 2,000 patients on regular GCSF dosing for their neutropenias. that is likely a profound underrepresentation of the patients that need it because of the challenges of both GCSF and the limitations of the label. So we think that's the beachhead. We think the broader chronic need is larger than that. We do have ongoing market research there, and we'll be able to present some of that in 2022. But certainly we think there's a lot of unmet need, unfortunately, These patients are not treated well and only have a single option. So an oral once daily, again, could dramatically alter the treatment landscape and market potential for these patients who are somewhat forgotten.
Leland Grishel
All right, great. Look forward to hearing for the next month. Thank you.
Operator
Thank you. Thank you. And our next question comes from Mark Fram from Cowan & Company. Your line is now open.
Mark Fram
Thanks for taking my questions and grab some of the updates. In your comments, you mentioned triangulating the prevalence of WIM patients with the D84H mutation that you've identified. Have you had a chance beyond the case study to go look at some more medical records to inform that 5% to 10% penetrance number that you were putting out there? Or maybe can you talk about the broader context of penetrance just to, you know, why that's an appropriately conservative number. Obviously, as a headline, 5 to 10 doesn't seem very high.
Paula Regan
Yeah. Now, this is the hardest sort of assumption for any new disease area to make as you're going from genetics, you know, genotype to phenotype. So we have looked at a broad range of other rare diseases, but you can appreciate this is very much, I think, you know, every gene is a snowflake. story where there are unique profiles to mutations. So I think our approach here was really being conservative with the 5% to 10%. We've seen numbers actually quite north of that in terms of conversions from genotype to phenotype, but we want to be, you know, I think appropriately, you know, understanding the true prevalence until we start building on it. And I think today we feel very good about what we're seeing with both our patients that we're identifying and around that number. So it's a tricky one, Mark. Thanks for highlighting it. I think that's where we're starting today.
Mark Fram
Okay. That's helpful. Thanks. And then just on Walden's rooms, yeah, obviously it's not a huge update in terms of data cutoff for the abstract versus the last presentation, but this is the first time that you've included some response data, not just the IGM levels. Can you just kind of remind us that I think there's some flexibility in the trial as to when patients who require scans for their response assessment, when those scans happen, and can you kind of put in context the response data that's in there, when those scans were taken, how many patients actually needed scans for response assessment, when those scans happened, and then maybe into the broader context of the time course of response that's seen with ibrutinib monotherapy. Okay.
Paula Regan
Yeah, so I'll ask Diego to take that. I mean, big picture, Mark, at the end of the day, it's sort of about the kinetics of response, I think is what you're saying. And, again, I'll turn it over to Diego to provide some more context about our data.
Diego
Yeah, thank you, Paula and Mark. So the protocol originally was designed to assess the response starting at six months and then every six months. in part because you have to do whole-body CT scans, which is an irradiation and bone marrow biopsies. We have amended the protocol to make that now more frequent every three months. I would say this update mostly reflects the six-month data, which is sort of the first look into clinical response. Different studies do different ways, but we felt that it was important to try to get more frequent assessments, and that's why we amended it.
Mark Fram
Okay, thanks. That's helpful.
Operator
Thank you. And our next question comes from Stephen Willie from Stiefel. Your line is now open.
Stephen Willie
Yeah, good morning. Thanks for taking the questions. Maybe just following up, on Waldenstrom's, again, understanding that the abstract cut is largely representative of what we saw at EHA. But can you speak a little bit to maybe just where patients are in terms of dose escalation in this trial, specifically with respect to the 600-mig dose? And I know that there was an intention to initiate dosing maybe in cohort C at 600-migs without the step-up Can you maybe just speak to kind of where you are on the dose escalation side?
Paula Regan
Sure, Diego would like to take that.
Diego
Yeah, sure, Steven. Yeah, so we have previously communicated, of course, that we have cleared the 200 milligram dose and the 400 milligram dose. We are already dosing at 600 milligrams and make much progress. and we plan to report some of that data, both in the poster as well as in the investor day. So, yeah, that's a focus of us to complete that enrollment. And just to remind you, if the 600 milligram dose clears in cohort B, then everybody else can be escalated to 600, including those in cohort A and all those enrolled in cohort C. Okay.
Stephen Willie
And then just on, I guess, the chronic neutropenia or severe congenital neutropenia. I know these patients don't have CXCR4 mutations, but I think the intention of this program was to try to maybe correlate patient responses with some kind of genetic signature and just wondering how far along into that interrogation of that correlation will you be at time of ASH, and I guess how much more work do you need to do in order to be able to maybe refine that patient population for responders?
Paula Regan
Yeah, so I'll make one comment, and then I'm going to invite Art to talk a little bit more about mechanism, because I think it's really indicative of market potential. But we certainly have always been trying to help patients and physicians try to understand the genetic drivers of their disease, But as we just released in our ASH abstract, we have seen the benefit of Mavericks before broadly, regardless of mutation status, creating these multiple-fold increases in white blood cells, including neutrophils and lymphocytes. So there's a huge sort of swath of patients that have the low neutrophil counts and the lymphocytes counts that this drug could address. And then mechanistically, it makes a lot of sense. I'll invite Art in to talk a little bit about the mechanism of GCSF, which is standard of care, and how Maverick before really nicely synergizes and can potentially supplement or eventually replace that. So, Art, could you chime in?
Art
Sure. Thank you, Paula, and hi, Stephen. So when we first got started with SCN, we actually understood this as a different or a collection of different mutations that did not really include CX04. So the question was exactly yours, is whether or not Rix4 could have any kind of benefit. And we would think that it would be connected ultimately to CX04 upregulation. And so, as we started to go through and look at all the mutations that are known that actually do trigger some kind of natural neutropenia and congenital and severe congenital neutropenia or chronic neutropenia, what we find is that so many of them have upregulated CXCO4. And so, for us, that seems to be the premise of the mechanism. that when you have an up-regulated CX-04, which is an underlying principle behind a lot of chronic neutropenias, then Maverick's-04 would be essentially blocking the adhesion, and then you can have a benefit. So that's the underlying mechanism, and it seems to correlate as well with GCSF administration. So GCSF, as you know, down-regulates the CX-012, CX-04 access, and that gives you an increase in neutrophils in the periphery. and so CX-04 antagonism is actually part of that mechanism. So it actually very much aligns with the approach that we're trying to do, and we do expect that we're going to have benefit there in the number of patients that have nothing to do with CX-04 mutation.
Stephen Willie
Okay. Very interesting. Thanks for taking the questions.
Operator
Thank you. And our next question comes from Meg Montani from B. Reilly Secure Lease. Your line is now open.
Meg Montani
Hi, good morning. This is Sahil on for Mayank. Thanks for taking our questions. A number of them have been answered, so maybe just a few quick ones. In terms of the structure of the data release, how do you anticipate disclosing from the SCN and now broader neutropenia program, as well as the, you know, top-line data release from the WIM program? Is that going to look similar to the Phase 2? And then maybe more on the commercial side, could you just talk to kind of how there might be an overlap between the commercial prep for WIM and future neutropenia indications, any synergies that you guys are seeing on that end. Thank you.
Paula Regan
Sure. So I think I heard sort of three or four elements of the question. So around the FCM data, we will be presenting that data in the context of Some of the white blood cell and chronic administration of mavericks before, data that we've garnered over several trials, so that will be included in our poster, and we'll share more insights in our investor day on the 16th. In terms of, I think you said the WIM Phase 3 data, that's certainly top-line data expected in about a year. The primary endpoint, as a reminder to everyone, it's time above threshold for neutrophil counts, and we had a 600% increase in the Phase 2, so that you know, that will be kind of the unveil will be in a year from now when the trial is completed. And then how we're thinking in totality about building the market, you know, addressing the market of unmet need around chronic neutropenias, including WIM. We see WIM as the landmark study to, you know, begin to build on a highly targeted population of which you heard is growing from a genetics and phenotype perspective. And then layering on this additional, you patient population that's not necessarily genetically linked but mechanistically linked, as we know, through the benefits of GCSF. Again, GCSF is a lifelong injectable product, sometimes multiple times a day for some of these patients. And we think we can just revolutionize that entire field with an oral once daily, starting with WIM and then expanding to the neutropenias beyond it. So the market – Footprints commercially, they are treated by the same doctors. It's very nicely leveraged from an infrastructure perspective and from a patient community perspective. We're learning across all types of neutropenias. So there's a tremendous amount of connectivity and leverage across the key touch points that we need to be long-term successful as an organization.
Meg Montani
Awesome. That's really helpful. Congrats on the progress.
Paula Regan
Thank you.
Operator
Thank you. And I am showing no further questions. I would now like to turn the call back over to Paula Reagan for closing remarks.
Paula Regan
Well, thank you again for joining us today. We look forward to seeing many of you at the various upcoming investor conferences and sharing more of our scientific and clinical data in December. If you have any further questions, please don't hesitate to reach out. Thank you again and enjoy the rest of your day.
Operator
This concludes today's conference call. Thank you for participating. You may now disconnect.
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