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 Pharmaceuticals' 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 call is being recorded. It is now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors. Please begin.
Dan Ferry
Thank you, Operator, and good morning, everyone. Presenting on today's call will be X4's Chief Executive Officer, Dr. Paul 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, Tego Kadavid, 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. Description of these risks can be found in X4's most recent filings with the SEC, including this quarter's 10-Q, which is expected to be filed after market close today. I'd now like to turn the call over to X4's President and CEO, Dr. Paula Regan.
Paul Regan
Paula?
Steven Willey Yeah
Thanks, Dan, and thank you everyone for joining us on the call this morning. As you've seen from our latest announcements, the past few months validated and enabled our focus here at X4. And as a result, we believe we are well positioned to deliver significant future value both to patients and to our shareholders. as we approach key milestones over the next six to 12 months. Most importantly, we completed a pipe financing in late June in a highly challenging market condition, raising gross proceeds of approximately $56 million with support from both new and existing top tier life science investors. At the same time, we entered into an amendment to our debt agreement with Hercules Capital, who also invested in the pipe, to extend the interest-only period of our loan facility by up to 12 months, pushing it out into 2024. The amendment is subject to achieving certain financial and business milestones. We estimate this amendment loan structure could result in a cash savings of up to $20 million over the interest-only period. More recently, we announced our decision to focus our efforts and resources towards advancing our lead clinical candidate, Maverick Sephora, for the treatment of chronic neutropenic disorders, including WIMP syndrome, our lead clinical indication. And while the data from our cancer programs continue to show promise, we'll be presenting an update on data from our Phase 1b trial in Waldenstrom's in just a minute. We are now pivoting our efforts towards unlocking the full value of our oncology portfolio only through potential strategic partnerships, enabling us to focus on making the largest possible impact on chronic neutropenia patients in the near term. We continue to believe that commercializing Mavericks 4 and providing a new therapeutic option to individuals with life-threatening CN disorders has the potential to revolutionize the treatment landscape, which is currently only served by injectable therapies that have been associated with high burden of treatment, dose-dependent side effects like severe bone pain, and increased cancer risk in some patients. We are therefore very excited about our upcoming expected milestones, which include the following. In late September, we're planning an investor event to present data from our now fully enrolled proof-of-concept Phase 1B clinical trial in patients with chronic neutropenic disorders. As a reminder, our lead compound, Maverick C4, is a CXCR4 antagonist being dosed in clinical trials as a once-daily oral therapy. By inhibiting the CXCR4 receptor, we have demonstrated across multiple clinical trials and multiple therapeutic indications that Mavericks 4 can help regulate white blood cells, increasing the mobilization of neutrophils, lymphocytes, and monocytes into the bloodstream. And these effects have been achieved across all patient populations studied, regardless of their CXCR4 mutation status. Mavericks 4 has also demonstrated an excellent tolerability profile across hundreds of patients, some of whom have been receiving Mavericks 4 for more than two years. Our Phase 1b clinical trial on chronic neutropenia is now fully enrolled at 25 patients, and enrollment is near final with a small number of additional patients expected. The trial examines neutrophil and other white blood cell responses to Mavericks 4 treatment. Patients in the study had a range of neutropenic conditions, including severe congenital neutropenia, idiopathic neutropenia, and cyclic neutropenia. Some patients received a standard of care called granulocyte colony stimulating factor, or GCSF, and some have not. We look forward to presenting this trial's initial full data set in patients with diverse set of CN disorders at our event in September. We expect these results will help inform the regulatory path forward for Maverick Sephora and chronic neutropenic disorders, and we look forward to sharing more of what that pathway might look like once we've gained clarity following the presentation of the data to regulatory authorities. Our next notable and certainly potentially transformative milestone will be the unveiling of our data from our pivotal phase three, four WIM trial, which is still on track for the fourth quarter. As you know, these results are expected to support our first regulatory filing in the U.S., which is now expected early in the second half of 2023. We've been very encouraged to see a high percentage of patients coming off study choosing to continue in the open label extension phase of the trial. As you may know, WIMP syndrome is a rare genetic immunodeficiency disorder caused by gain-of-function mutations in the CXCR4 receptor. WHIM is characterized by HPV-associated warts, hypogamyloid globulinemia, multiple types of infections, and myelocathexis, which causes leukemia and neutropenia in many patients, reducing the body's ability to mount a healthy immune response. X4's 4-WHIM Global Phase III Trial is the first placebo-controlled trial in WHIM syndrome. To help put the upcoming Phase III results into context, On our third quarter earnings call, we plan to discuss what success might look like from this trial, reviewing both the primary and secondary endpoints that we previously aligned on with the FDA and some additional information about our early commercial efforts, patient finding initiative, and the continued expanding landscape of the disease profiles and diagnosis of WHIM syndrome. Before I pass it over to Adam to discuss the quarter's financial results, We did want to provide a brief overview of our new response data from the Phase 1b Mavericks IV trial in patients with Waldenstrom's macroglobulinemia, a rare B-cell lymphoma. As mentioned, we aimed to unlock the full value of our oncology portfolio only through potential strategic partnerships. We believe the favorable data from this trial will meaningfully support that potential option. Please note that we will be uploading a summary of the deck to our website with these results shortly. As detailed in today's press release, 16 patients were enrolled in the clinical trial, which is a Phase 1b open-label, multi-center, single-arm study evaluating the safety and efficacy of Maverick's score in combination with the BTK inhibitor imbrutinib in adults diagnosed with Waldenstrom's. and confirmed to have MYD88 and CXCR4 mutations, a double mutation status that has been associated with poorer responses to standard of care. Specifically, the presence of CXCR4 mutations has also been shown to negatively impact patients' responses to ibrutinib as manifested by delayed responses, inferior depth of response, and or shorter progression-free survival. In the study, all patients received oral once-daily doses of 420 milligrams of ibrutinib and escalating doses, 200 milligrams, 400 milligrams, and 600 milligrams of oral Maverick before, also once-daily. As of June 2022, 10 of the 12 evaluable patients, or 83%, had achieved a major response to therapy, which is defined as a greater than 50% rejection in serum IgM from baseline. Nine of the 12 evaluable patients had disease relapse or were refractory to prior treatments entering the study. Of these relapsed refractory patients, eight of the nine evaluable, or 89%, achieved a major response. In the treatment-naive patients, major responses were seen in all patients escalated to greater than the starting 200 milligram dose of Maverick before. Looking at the data over time, adding Mavrixibor to Ibrutinib was associated with a higher major response rate at 9, 12, and 24 months as compared to previously reported major response rates achieved with Ibrutinib monotherapy, which historically achieved a maximum of 57% major response rate at 24 months in a similar patient population. To date, treated patients have all achieved elevations in absolute neutrophil counts, or ANC, with no neutropenic events reported. This is meaningful as more than 40% of patients typically experience some decreased neutrophil counts with ibrutinib monotherapy. Interestingly, patients also experience fewer infections over time with chronic combination dosing. Assessment of infection risk is a labeled warning and precaution while on ibrutinib monotherapy. No major safety signals due to Maverick Sephora have been identified in the trials as of the data cutoff. Maverick Sephora in combination with ibrutinib showed a safety profile similar to ibrutinib monotherapy across the 16 patients, which included eight patients escalated to the highest dose of 600 milligrams of Maverick Sephora. We did want to highlight additionally that in June, Maverick Sephora was granted orphan drug designation by the US Food and Drug Administration for the treatment of patients with Waldenstrom and notably regardless of the CXCR4 mutation status. As presented at EHA earlier this year, Maverick Sephora has demonstrated in vitro the ability to disrupt the bone marrow crosstalk and increase Waldenstrom cancer cell sensitivity to treatment. regardless of CXCR4 mutation status, supporting the potential that Mavarixivora may have utility across a broad range of lymphomas. The Phase 1B clinical trial is expected to be completed in the fourth quarter of 2022 when the last patient is dosed. And with the support of our investigators, we aim to provide full and final results in a future journal publication. And finally, we also mentioned earlier With our new, sharpened focus on chronic neutropenic disorders, further clinical studies in Waldstrom's will now be subject to completing a strategic partnership. We believe these promising data, which will be uploaded to our website, support that future potential opportunity. In our July announcement, we also mentioned that further work in our preclinical oncology candidate XORP002 is concluding IND-enabling toxicology studies and that an IND filing will now be subject to completing a strategic partnership. As a reminder, OO2 is a novel small molecule CXCR4 antagonist that has been shown to cross the blood-brain barrier with potential applicability across a number of leukemias and lymphomas. In total, we believe that the Mavericks for Oncology data to date, plus the promise of our OO2 candidate, present a partnerable package of great potential and we will report on our potential success on a continued advancement of these valuable assets at the time when this potential partnership is secured. With that, I'll now turn it over to Adam to discuss our results for the quarter before we open up the call for questions. Adam?
Paul Regan
Thanks, Paula, and thanks to all of you on the call today.
Paula
As presented in our press release this morning, I will summarize our financial activities and results the second quarter ended June 30th, 2022. At the end of the second quarter, we had $48.7 million in cash, cash equivalents, and restricted cash. On June 30th, as Paul mentioned, we announced a pipe financing of approximately $56 million in gross proceeds. The financing closed on July 6th, and proceeds from the deal are not reflected in the June 30th cash number. However, including the pipe funds, are recently announced cost-cutting measures that we estimate will result in approximately $25 million in savings at the end of 2023 and the recent amendment to our loan agreement with Hercules, we have extended our cash runway guidance into the third quarter of 2023. Research and development expenses in the quarter were $13.8 million, which compares to $13.2 million for the comparable period in 2021. SG&A expenses were $6.7 million for the second quarter as compared to $5.8 million for the comparable period in 2021. Finally, X4 reported a net loss of $21.2 million for the second quarter of 2022, which includes approximately $1.5 million in non-cash expenses as compared to a net loss $19.6 million in the comparable period in 2021. We'll now open up the call for your questions. Operator?
Operator
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then 2. We will pause for a moment as callers join the queue. The first question comes from Steven Willey with Stiefel. Please go ahead.
Steven Willey
Steven Willey Yeah, good morning. Thanks for taking the questions. Maybe just a couple. On the chronic neutropenia side, are you able to say how many patients enrolled into the Phase 1B are on background GCSF? And then I know there's been some discussion around wanting to target those patients who experience some kind of given number of baseline severe infection events. And just curious if you can also kind of speak to how many patients you've enrolled meet that infection event criteria as well. And then just have a follow-up.
Steven Willey Yeah
Sure. So I'll start very high level and then I'll ask Diego to give some more detail. But just at a very high level, Steve will be having a pretty good blend of patients that are neutropenic with or without GCSF. So actually that's the most important question. So there'll be a pretty nice data set to show what Maverick Sephora is doing in neutropenic patients because ultimately that's what we're trying to achieve. And then amongst that whole bucket, there's actually a nice kind of 50-50 blend between those who are on or off GCSF. So the question is, how is the drug gonna help patients? And I think we're gonna have a nice dataset to show that target population that we aim to kind of declare some initial positivity around. And then I think the second question was around infection sort of baseline. We've collected some of that information, but ultimately this is really a response study, so to speak. So, you know, Diego, let me invite you in to give some more color on that.
Diego
Yeah, hello, Stephen. Yeah, this current study was enrolled around looking at increasing neutrophil counts in And we got, as Paula said, a pretty good number on GCSF or not on GCSF. And we look forward to presenting that data at the September event because this is a short-term treatment. We're not focused on infections, but you're right. We're looking carefully as we plan for the next study as to what is the right population. And ultimately, we know that severe infections is a really important clinical outcome, so we're looking at it carefully.
Steven Willey
Okay, that's helpful. On the Waldenstrom side, and forgive me if I missed it, but are you able to say what the median time to major response rate was? I know that there's been some interest in the notion of Mavericks for not only improving the rates of major response, but also improving the kinetics of response. Okay.
Steven Willey Yeah
I'll start and then Diego. I think the challenge for us on the time to major response, Steve, was the dose escalation design of the study, given we were starting at low dose and then folks had to get held there, et cetera, et cetera. So, I don't think, I mean, we can certainly calculate it. I think it's a bit less useful. because we were trying to conserve patient sort of exposure and dose escalation as we design this trial. So I hear you, but I don't think we'll be sharing that data because I think it's confounded by study design.
Steven Willey
Got it. And then just lastly for Adam, I guess I just want to confirm that the updated cash runway guidance doesn't assume any exercises of warrants.
Adam
That's correct, Steve. Yeah, no assumption of any warrant or any additional proceeds of any kind in that new runway.
Steven Willey
Excellent. Thanks for taking the questions.
Operator
The next question comes from Eva Privatero with Cohen. Please go ahead.
Cohen
Hi. Hi, good morning. Congratulations on the Waldensrum Stata, and thank you for taking our questions. Can you maybe tease out the major responses for Waldenstrom's? What were the VGPR rates specifically in the overall population as well as the relapse and refractory?
Steven Willey Yeah
Yes, so we have not published that. Certainly, historically, I think we had one VGPR that we have published on previously. We haven't completed this study, so that'll come in Q4, early Q4, and then we'll be publishing those full sets of results, including all the subtypes of responses, so we'll look forward to sharing that data with you in the future.
Cohen
Okay, great, thanks. And my second question pertains to the Phase 1b in severe congenital neutropenias. How long follow-up do you anticipate there will be in the September data presentation?
Steven Willey Yeah
Diego, why don't you take that one?
Diego
Yeah, Eva, thank you for the question. So as Paula mentioned earlier, we expect the study to be fully enrolled. Most of the patients were treated with a single dose, and then there is a 30-day post-dosing safety assessment. I believe we will have full or close to full data available to us to discuss in September.
Cohen
Perfect. That's helpful. So for that 30-day time point, what would you consider to be meaningful data, taking into account, you know, GCF, GCSF being available to these patients?
Diego
Yes, because they were those with mauritza, most of them for single dose. The 30-day meaningful data is mostly around the absence of any safety signals post-dose, and that We have never seen, but we're checking anyway. It is not an efficacy readout. The 30-day is around safety.
Tim
Okay, great. Helpful. Thank you.
Operator
The next question comes from Mayak Mamtani with B. Reilly Securities. Please go ahead.
Mavurixifor
Good morning, team. Thanks for taking my question, and congrats on a productive quarter. So maybe just a follow-up to prior questions. You are looking at, you know, three subtypes of chronic neutropenias here, congenital, idiopathic, and cyclic. Can you help us understand how utilization of GCSF looks like in real world across those, and what sort of, at a high level, you're looking to... you know, learn in this phase one B study that at least has a, you know, helps you put a framework in place if you do decide to, you know, engage the regulators for, you know, a study focusing on one or two or all forms of these patients. And then I will follow up.
Steven Willey Yeah
I want to go ahead, Diego.
Diego
Yeah, I can, Paula, I can answer that question.
Operator
Yeah, yeah.
Diego
So in general, most of the GCSF use is for acute to prevent sequela of neutropenia in the context of chemotherapy for people with cancer. There is also use of GCSF for chronic, and it is used broadly across these three types, severe congenital, cyclic, as well as idiopathic. But many, many patients are not on chronic therapy at all, or in fact, it's used only intermittently. So this speaks to the high-end med need With Maborixafor being an oral and so far well-tolerated therapy, we are thinking forward that Maborixafor indeed could become the standard of care for chronic neutropenia. And we will be investigating to what extent you may or may not need some GCSF. And that's something that may be the case for patients that have very severe bone marrow but we believe the majority of patients could be treated with Mavurixifor, and we plan to study that over the next few months and years.
Mavurixifor
Great. And then just quickly on the VIMS syndrome phase three, you know, detail, look forward to that at the third quarter earnings call, you know, mid-November. Could we then assume that... In your top line press release, you would look to put out a very comprehensive data set of primaries and secondary endpoints, including infections, ward burden, things like that.
Steven Willey Yeah
Yeah, I'll take that. In our press release, we'll certainly be focusing on the data set that tells the story. The drug, we believe, is disease modifying. Obviously, we have a study designed with, of course, the primary and the secondary endpoints. But really what we're looking forward to is presenting a data set that helps tell the story and the impact of the drug across the various clinical aspects of the disease. So we will certainly look forward to sharing that story as it evolves.
Mavurixifor
Okay, great. And just my final question on Wallenstrom, just clarify for us, you know, just clearly from data generation standpoint, you know, what's the expectation to be able to, you know, effectively engage with a strategic? Like, could you do this starting tomorrow, or is that something you may think could make more sense once you have the fuller data set that, you know, you guys discussed earlier?
Steven Willey Yeah
Yeah, I'll start and then Adam can always chime in, but I think whenever there's exciting data, I think that's an opportunity for gaining interest from the external world. We already have some existing relationships and conversations, certainly with AbbVie, given they've given free drug to support the trial. you know, these are just sort of natural continuations of conversations that certainly are more aligned with the data, right? That's always the spark to initiate conversations, Maya, so we'll keep you posted as things, you know, evolve and where we're able to communicate. Adam, do you want to chime in anything else?
Adam
Yeah, no, I think as Paula said, we're pleased with the clinical profile of the data. We think that there's a strong future there, potential there. For us, we've We're dedicating resources and allocations toward our exciting chronic terpenia and WIM programs, but we look forward to continued progress, and we'll come back and update the market as we see how things plan out with a potential partner pursuing our oncology efforts.
Paul Regan
Thanks for taking our questions, Tim.
Tim
Once again, if you have a question, please press star, then 1.
Operator
The next question comes from Arthur He with HC Wainwright. Please go ahead.
Arthur
Good morning, Pauline, and this is Arthur He for RK. I just want to have a quick follow-up on the War Strong data. Could you remind us from these 12 evaluative patients, why they are not all escalate to the 600 milligram dose level?
Tim
Sure, Diego, do you want to take that?
Diego
Yes, I can speak to that. So there are different reasons. Some patients were enrolled and drop off rapidly for different reasons. One was having difficulty swallowing, so of course, That patient was dosed only at 200 and never escalated. There were patients who were doing really well at 400, and they were off an escalation, but they were doing already so well that they opted not to. So there is a reason for each one. But overall, most of them did escalate and remain at 600, and as you have seen from the data, getting very good results. clinical responses so we believe 600 milligrams is really well tolerated and that data will be available to any potentially interested partners as those that can be advanced into a further study thanks for the additional kind of and thank you for taking my question
Operator
As there are no more questions from the phone lines, this concludes the question-answer session. I would like to turn the conference back over to Paula Regan for any closing remarks.
Steven Willey Yeah
Well, thank you again for joining us today. As always, we appreciate your continued support of Act 4 as we look forward to important near-term milestones that we believe will bring us one large step closer to improving the lives of our patients with chronic uterpenic disorders. Thank you again, and have a great day.
Operator
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
Disclaimer