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Operator
Thank you for standing by. This is the conference operator. Welcome to X4 Pharmaceuticals' fourth quarter and full year 2022 earnings conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. It's now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors. Please go ahead.
Dan Ferry
Thank you, operator, and good morning, everyone. Presenting on today's call will be X4's Chief Executive Officer, Dr. Paul Reagan, and Chief Financial Officer, Adam Mostafa. Following prepared remarks, we will open up the call to your questions, and we're joined by Interim Chief Medical Officer, Dr. Murray Stewart, Chief Commercial Officer, Mark Baldry, Chief Scientific Officer, Dr. Art Tavares, and Chief Operating Officer, Dr. 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 X-Force filings with the SEC from time to time, including the company's latest 10-Q filing on November 3, 2022, and in the 10-K for 2022, which is expected to be filed after the market closed today. I'd now like to turn the call over to X-Force President and CEO, Dr. Paula Reagan. Paula?
Paul Reagan
Thanks, Dan, and thank you, everyone, for joining us on the call. As we mentioned in the press release this morning, we could not be more pleased with the progress we made in 2022 advancing our lead candidate, Maverick Sephora, towards commercialization and, most importantly, towards helping patients in need. We believe our clinical trial data continue to speak volumes, unequivocally demonstrating Maverick Sephora's ability to chronically raise circulating levels of neutrophils, lymphocytes, and monocytes. As you may be aware, following our strategic announcement last July when we tightened our focus to advance Mavericks IV in chronic neutropenic disorders, we achieved two significant development milestones, announcing positive clinical results from both our pivotal Phase III trial of Mavericks IV and WHIM syndrome and our Phase Ib clinical trial of Mavericks IV in certain chronic neutropenic disorders. Most importantly, in late November, we announced the success of our pivotal Phase III clinical trial evaluating oral Maverick Sephora in people with WIM syndrome, with the study meeting its primary endpoint and first key secondary endpoint, achieving statistically significant and clinically relevant longer times above threshold for both absolute neutrophil counts and absolute lymphocyte counts versus placebo. Maverick Sephora also demonstrated good tolerability in this robust, 52-week randomized placebo-controlled double-blinded trial. Note that Mavericks 4 is the first and only oral therapy to demonstrate durable improvements in severe chronic neutropenia and lymphopenia, the hallmarks of WIMP syndrome, which is a rare combined immunodeficiency for which there is no approved treatments. Since the November data announcement, we have continued to analyze the clinical results from the Phase 3 WHIM trial and expect to be able to present additional data from the trial at one or more medical conferences in the second quarter of 2023. We plan to host an investor call around the time of the first presentation and will update you as we have more information on the exact schedule. Importantly, these results are expected to include additional secondary and some exploratory endpoints, including assessments of infection rate, severity, duration, and types of infections, as well as the effect on patients' warp burden and certain vaccine titer data. We now have scheduled a pre-NDA meeting with the US regulatory authorities in Q2 to discuss next steps in advancing Mavericks 4 towards an NDA submission. pending input from the FDA, we continue to anticipate submitting the NDA early in the second half of this year, which we hope will lead us to our first product approval in the first half of 2024. Also last year, back in September, we presented positive data from our Phase 1B clinical trial in chronic uterpenic disorders. The study demonstrated the ability of a single oral dose of Maverick before to normalize absolute neutrophil counts, or ANC, in those with the most severe forms of neutropenia and across all chronic neutropenic disorders studied, which included idiopathic, cyclic, and congenital neutropenia. Normalization of ANC was demonstrated with Mavarixifor as a monotherapy and in combination with the only approved treatment for severe neutropenia, injectable granulocyte colony stimulating factor, or GCSF. Impressively, 100% of patients responded. We could have not hoped for more in this initial study. This early trial has now been expanded into a Phase II clinical trial to assess the long-term durability, safety, and tolerability of oral Mavericks for more broadly in those diagnosed with idiopathic, cyclic, or congenital chronic neutropenia. Participants are currently being enrolled in the Phase 2 CN trial, and we expect to be able to report clinical data from the study in Q2 or Q3 of this year. The timing of this will obviously be dependent on the rate of enrollment, and we do plan to present a robust data set when we announce the first results from this trial. These proof-of-concept data we are generating in our Phase 1-2 trials aim to unlock an even broader potential of mavericks before. one where we could potentially offer a differentiated oral and well-tolerated treatment option to upwards of 50,000 people diagnosed with CN disorders in the U.S. We also expect to be able to provide clarity on both the scope and the possible timing of our planned Phase III clinical program for Mavericks of 4 and chronic neutropenic disorders in the second or third quarter of this year. At this time, we expect the phase three trial will likely be a randomized placebo-controlled trial studying the safety and efficacy of Mavericks 4 on top of standard of care, with likely a primary endpoint measuring changes in neutrophil counts and secondary endpoints related to reduction in infections. But we expect to know a lot more following a meeting with the FDA to specifically discuss the path forward of Mavericks 4 for these certain chronic neutropenic disorders. Throughout 2022, through both our clinical and scientific research programs, we were able to gain much greater insights into Mavericks4's ability to address the unmet need in chronic neutropenic disorders, including WHIM syndrome. We are particularly pleased that almost all of our submitted abstracts were accepted for either oral or poster presentations at prominent medical conferences during the year, including the Quad AI meeting early in the year. the CIS annual meeting in spring, EHA, the NICER symposium, and ESID over the summer, and the National Organization for Rare Disease Summit in the fall. We also had quite a large presentation at the annual meeting of the American Society of Hematology, or ASH, in December, and garnered strong interest both at our presentations and our X4 booths. Throughout the year, our presentations not only highlighted new insights into the breadth of genotype and phenotype of people with limb syndrome, helping to identify both additional patients and helping to educate treating physicians, but also demonstrated new understandings into Maverick Score's mechanism of action, principally its ability to induce maturation and mobilization of white blood cells from the bone marrow into blood circulation and enabling immune surveillance and response. Our research also deepened our understanding of the diverse and significant needs of the patient community through interviews and survey engagements and helped us define what is turning out to be a larger-than-expected U.S. population of patients living with chronic neutropenic disorders. These milestones throughout the year, along with the continued support of our investors and analysts, helped us successfully complete two large financings raising gross proceeds of more than $120 million despite continued challenging biotech market conditions. Currently, we have a strong balance sheet to help us propel our pre-commercial efforts for Mavericks 4 and WIM and further advance our mission to deliver Mavericks 4 to help those across a range of chronic neutropenic disorders. I'll now turn it over to our CFO, Adam Mostafa, to review the fourth quarter and full year 2022 financials. Adam?
Dan
Thanks, Paula, and thanks to all of you for being on the call with us today. As Paula mentioned, we were able to strengthen our balance sheet significantly in 2022 and particularly in December when we completed a public offering that yielded gross proceeds of approximately $65 million. That left us with $123 million in cash, cash equivalents, and restricted cash as of December 31st. We expect that our cash will fund our operations into the second quarter of 2024. In addition, as a result of the positive top line results from the 4WIM clinical trial, the covenant under our loan agreement with Hercules Capital requiring that the company maintain minimum cash of $30 million was lowered to $20 million. On January 6 of this year, we also entered into an agreement with Hercules that amended and restated all prior loan and security agreements, and that included an extension of the interest-only payment period through the third quarter of 2024, and to further extend the interest-only period to the first quarter of 2026, if certain milestones are achieved. R&D expenses were $19 million and $61.1 million for the fourth quarter and full year ended December 31st, 2022, respectively, as compared to $12.2 million and $50.6 million for the comparable periods in 2021. And note that R&D expenses included half a million dollars and $2.5 million of certain non-cash expenses for the fourth quarter and full year ended December 31st, respectively. SG&A expenses were $6.6 million and $27 million for the fourth quarter and full year of 2022, respectively, as compared to $7.1 million and $24.7 million for the comparable periods in 2021. And note here, SG&A expenses included $0.6 million and $2.7 million of certain non-cash expenses for the fourth quarter and full year end of December 31st, respectively. Finally, we reported a net loss of $25.8 million and $90.5 million for the fourth quarter and full year ended December 31st, as compared to $30.2 million and $88.7 million for the comparable periods in 2021. Net losses include $1.1 million and $5.2 million of non-cash expenses for the fourth quarter and full year, respectively. And with that, Why don't we 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'll pause for a moment as callers join the queue. Our first question comes from Steven Willie of Stifel. Please go ahead. Hi, guys.
Steven Willie
This is Tulian for Steve. Can you guys hear me okay?
Paul Reagan
Yes, thanks.
Steven Willie
Okay, great. So I have just two very brief questions on my end. So very first one is related to timing of chronic neutropenia data. Can you give us a little bit more color on shift in the timing? What are you actually planning to disclose when you disclose this data? So that's my first question. And second question would be related to the partnering front. Can you give us more color on the progress you've made so far on the partnership front? And lastly, and lastly, maybe like R&D cost. I think if I'm not correct, there is a increase, there's a peak in R&D cost. So maybe if you could provide a little bit more color on that, that would be great as well. Thank you.
Paul Reagan
Sure. So I'll take the question on the CN, you know, Q2, Q3 deliverable, and then I'll turn it over to Adam for partnering in R&D cost. So thanks for the question. So we've been continuously communicating that we have intended to, you know, it's an open label phase two study in chronic neutropenia where we'll be presenting anywhere from a handful of patients or more on at least a few months of chronic dosing. We want to see durability as we have consistently seen across all of the patient populations tested with chronic Maverick before. So we're certainly on track to do that. Obviously more data is better. So we're giving ourselves some flexibility. We saw the very positive response last year to 25 patients' worth of CN data. So we're pushing ourselves as hard as we can to deliver the most robust data set for the investor community and, of course, for the patients and physicians who support us. And that additional flexibility on the Q2, Q3 timeframe enables that to happen. So I hope that helps. And I will turn that over to Adam now around the partnering and the R&D cost.
Dan
Yeah, thank you. So with respect to partnering, we continue to explore discussions. We don't have any significant update for today and don't obviously want to speak on behalf of any potential partners. But it is an area that we are considering in terms of moving our drug forward and capital raising activities in the future. With respect to R&D, you did notice an increase year over year likely that relates to clinical operations costs. in the chronic neutropenia trial, which in part led to the data that we revealed back in September that Paula mentioned. It also relates to additional clinical operations and CMC costs that support both chronic neutropenia and the WIM trial leading up to our top-line data late last year. So that's a little color on background for the R&D.
Operator
Thank you. Our next question comes from Divya Rao of TD Cowan. Please go ahead.
Paula
Hi, guys. Thanks for taking my question. This is Divya on for Mark. I guess on the trial in CN, do you guys expect to run the pivotal in all causes of chronic neutropenia, or do you expect to run separate trials for those? And I have one other question. Sure. Murray, would you like to take that?
Divya
Yeah.
Marie
So, I mean, in the phase one, we were able to look at the different populations, congenital, idiopathic and cyclical. And for a big registration study, we'd hope to be able to include similar groups. And you can include them in the one study by stratifying. So in other words, you get balance across the different groups. So rather than do three separate studies, you can do them all in one study by accounting for stratification.
Paula
Okay, that's helpful. And then I guess in terms of the secondary endpoints that you plan to present from the phase three trial sometime in Q2, I guess what inspection rates do you think physicians and patients will deem clinically meaningful?
Paul Reagan
Sure, I'll start and then certainly ask Marie and others to chime in. But our phase two data, which align with breakthrough therapy designation, and WIM syndrome demonstrated a reduction of infection rates of about 50% after a year. We're certainly hoping that, you know, that type of direction continues. We're extremely excited about the Phase II data. We designed a robust study for the Phase III. And not only, of course, infection rates, but there's a whole host of things that we've mentioned in terms of duration, severity, type. We look forward to sharing the totality of the data. But Marie or Art, if you want to chime in any further, that would be great.
Marie
The only thing to add in, so in the WIM population, you might expect people to have an annualised infection rate of about four, and that's a mean. Some people get more than five infections and some people get two or three infections, but the mean is about four. And obviously from our phase two, we saw about a 40% reduction. Bear in mind that the study we did was under COVID. and there have been concerns about would we see less infections in COVID. But when we present the data, we'll be presenting the data looking at the annualized infection rate, placebo, virus active, and we'll look at the different components of infection, including, as Paula mentioned in the call, severity, duration, repeated infections, as well as warts, vaccine titers, quality of life, and safety.
Paula
That's helpful. Thank you.
Operator
Our next question comes from Ted Santos of Piper Sandler. Please go ahead.
Ted Santos
Great. Thank you very much. Shaping up to be a very exciting year. Two quick questions, and I'm assuming that maybe you're waiting for acceptance, but what are the conferences you anticipate presenting data at for the Phase III data in the second quarter? And when it comes to the chronic neutropenia readout, Is it more likely that's going to be a press release than followed up by a medical meeting, or are you targeting a specific medical meeting? Thank you so much.
Paul Reagan
Hi, Ted. Thanks for the great question. So, we're currently aiming to present either at CIS, which is in the second or third week of May, or EHA, which is in the second or third, second week or so of June. We are still waiting to hear, so we're looking forward to kind of refining that type of information. So please stay tuned and we'll try to update as soon as possible. And then in terms of the CN data, we would expect to kind of provide some additional context around it. So not just a press release. We certainly think this will be an exciting data set to inform both the KOL and the investor communities around So we think we'll provide a more robust type of format, not likely linked to an individual conference, but perhaps an investor R&D day on behalf of X4.
Ted Santos
Great. That's very helpful. Looking forward to the data and the regulatory filings. Thank you very much.
Maya
Thanks so much, Ted.
Operator
Our next question comes from Mayank Mumtami of B Riley Securities. Please go ahead.
Mayank Mumtami
Hi, good morning, team. This is for Maya. A couple of quick questions from us. First, can you remind us how you're thinking about the timeline for potential EU filing for Maverick for as well and when syndrome?
Maya
Sure, Marie, can you take that?
Marie
Yeah, so obviously we want to use the same data set. So within the next six to 12 months, we'll be filing in Europe, following on from the NDA filing.
Mayank Mumtami
Okay, perfect. And then maybe as we switch to the U.S. launch here, can you give us an update on any commercial or launch preparation activities, including how you're thinking about the field force, engaging with different patient advocacy groups, et cetera? Thank you very much.
Paul Reagan
Sure, thanks. Mark, would you like to take that?
spk00
Sure, thanks. Yeah, while we progress against our regulatory timelines, on the commercial side, we're I'm a pretty pragmatic guy, so we're starting to prepare the market, prepare the product, and prepare the company for a successful launch. So we're out with a small field team right now learning about the physicians and where we might be seeing WIM patients. We're educating on WIM disease and really trying to encourage earlier diagnosis, as we know that the earlier patients are diagnosed, the better outcomes for them. So that's where we are right now.
Mayank Mumtami
And then maybe one quick follow-up. How much of that work is there overlap with the chronic neutropenia population? You know, as you think about the future, obviously acknowledging a little bit earlier days in that program.
Maya
Mark, you want to go ahead?
spk00
Yeah, well, you know, WIMP syndrome is a form of chronic neutropenia. So everything we're learning today is really helpful foundation for us as we think about our strategies in chronic neutropenia and other primary immunodeficiency. So everything we're doing now, I think, is teaching us about the unmet need in primary immunodeficiency. And this can all be helpful for us as we build our plans.
Mayank Mumtami
Excellent. Thanks so much for taking our questions.
Operator
Our next question comes from Kristen Kliska of Cantor Fitzgerald. Please go ahead.
Kristen Kliska
Hi. Good morning, everybody. Thanks for taking our questions. So sounds like you're planning to have a potentially robust conference attendance this year with data, but similar to how we learned new insights on WIMP syndrome, genotype, phenotype, patient identification, unmet need, and other factors for both CN and WIM. Do you think we could learn additional data regarding the market opportunity at these conferences, again, in addition to some data disclosures this year?
Paul Reagan
Thanks, Kristen. That's a great question. So, we actually have been publishing our market analyses, and we've done some excellent work on ICD-10 codes with respect to chronic neutropenia. And as we generate even more deep and more refined analyses along those lines, we'll certainly look forward to publishing that data. No specific plans yet, but the team is working very hard to make sure we are defining the right population for treatment and that unmet need and align it, of course, with market potential. So stay tuned.
Kristen Kliska
Okay, thanks. And in light of the WIMP syndrome data that you presented at the end of last year, curious if you're getting any read-through in terms of getting patients and investigators excited about enrolling and also the potential in the CN program?
Paul Reagan
Oh, I definitely think there's crosswalk for excitement, but I'm going to turn that over to Murray to expand on that.
Marie
Yeah, no, the... The investigators, the PIs have been seeing the data and they're very excited by the data in WIM and already they're thinking about wanting to enrol in the CN studies. So I think they can see the link between neutropenia between WIM and CN and they're excited about Mavericks Spore. I mean historically they've got GCSF which has its limitations and I think they're excited to see a potential oral therapy for WIM and CN.
Operator
Thank you. Looking forward to seeing some of the presentations this year.
Maya
Thanks, Kristen.
Operator
Our next question comes from RK of HC Wainwright. Please go ahead.
spk09
Thank you. Good morning, Paula. I think most of my questions have been answered. Just trying to understand, you know, in this next meeting that you want to have with the FDA before you file, what sort of clarifications are you trying to get so that you're well equipped when you file?
Paul Reagan
Thanks, R.K. Murray, would you like to take that?
Marie
Yeah, so this is a standard pre-NDA meeting. So most companies, well I think all companies have to have a pre-NDA meeting and we make sure we clarify the most appropriate things. So we cover all areas. Are they comfortable with the non-clinical data? Are they comfortable that the data actually shows the drug is effective and safe and has a positive risk benefit? we discuss whether there are any CMC issues and the whole point of the pre-NDA meeting is so when we move ahead to file the FDA are not surprised by anything and we're not surprised by anything.
Maya
Thanks.
Operator
This concludes the question and answer session. I would like to turn the conference back over to Paula Reagan for any closing remarks.
Paul Reagan
Thank you, Operator. Well, as you can hopefully hear from all of our tones today, we're very excited about the year ahead and the road beyond. We thank you again for joining us today and hope you all have a wonderful day. Thank you.
Operator
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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