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spk10: Greetings, and welcome to X4 Pharmaceuticals' first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode, and a question-answer session will follow the formal presentation. As a reminder, the conference call is being recorded. It is now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors. Please begin.
spk01: Thank you, Operator, and good morning, everyone. Presenting on today's call will be X4's President and Chief Executive Officer, Dr. Paula Regan, and Chief Financial Officer, Adam Mostafa. Following prepared remarks, we will open the call to your questions and will be 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. Description of these risks can be found in X-Force filings with the SEC, including the company's latest 10-K for the year 2022 and this quarter's Form 10-Q, which is expected to be filed today. I'd now like to turn the call over to Dr. Paula Reagan. Paula?
spk07: Thanks, Dan, and thank you, everyone, for joining us on the call this morning. We hope to make this an efficient call today and focus on what we hope will be value-building milestones throughout the rest of 2023. This is truly an exciting time at X4 as we continue to advance our lead investigational candidate, Maverick Sephora, towards commercialization and the first potential chronic neutropenic disorder, WHIM syndrome. As you know, in late 2022, we announced that our phase three clinical trial evaluating once daily oral Maverick Sephora in people with WHIM syndrome had met its primary endpoint and first key secondary endpoint. with Mavericks for achieving statistically significant and clinically relevant longer times above threshold levels for both absolute neutrophil and absolute lymphocyte counts versus placebo and demonstrating good tolerability in the trial. Subsequently, we announced that our late-breaker abstract reporting additional data from the Phase III WIM trial was accepted for oral presentation at this year's meeting of the Clinical Immunology Society, taking place from May 18th through the 21st in St. Louis. Dr. Raphael Bottolato, who is Professor of Pediatrics at the University of Brescia in Italy and an investigator in the 4WIM clinical trial, will present at 11.30 a.m. Central Time on Sunday, May 21st. Although this session will only be accessible live to the conference attendees, we will be posting the slides on our website concurrent with the presentation. Following the publication of conference abstracts by CIS on the morning of May 16th, we will be hosting an investor event later that day at 4 p.m. to present data on additional secondary endpoints from the trial, including results on infection burden, among other outcome metrics. You can register for that event on our website or through the link provided in this morning's earnings press release. Joining us for the event to comment on the Phase III results and the unmet medical needs of people with WHIM and chronic neutropenia will be a diverse panel of immunologists, hematologists, and rheumatologists, all of whom have expertise in treating immunodeficiencies, and several of whom were investigators in the 4-WHIM Phase III trial. During the May 16th event, we will be hearing commentary from Dr. Charlotte Cunningham-Rundles, a professor and immunologist at the Icahn School of Medicine at Mount Sinai. Dr. Jean Donadieu, a pediatrician in the hemato-oncology department of Trousseau Hospital in Paris, and importantly, coordinator of the French Registry for Chronic Neutropenia. Dr. Peter Neuberger, professor of pediatrics and molecular cell and cancer biology at UMass Chan Medical School. Dr. Akiko Shimomura, Professor of Pediatrics at Harvard Medical School and Director of the Bone Marrow Failure and Myelodysplastic Syndrome Program at Boston Children's Hospital, and Dr. Teresa Tarrant, Associate Professor and Director of the Clinical Immunology Laboratory at Duke University School of Medicine and Vice Chief of Translational Research for Rheumatology and Immunology. We will also be hearing unique perspectives from three individuals who have been diagnosed with WHIM and have been experiencing WHIM syndrome symptoms since birth. Finally, we are expecting Doctors Shimomura and Tarrant to join us live for Q&A following the formal presentation. During the event, we expect to be providing an update on our U.S. regulatory activities for mavericks before for the treatment of WHIM syndrome as we continue to be on track to file a U.S. new drug application early in the second half of 2023 and prepare for a potential launch in the U.S. in the first half of 2024. Concurrent with all of this, We continue to enroll participants in our ongoing Phase II trial, evaluating the safety and efficacy of Maverick Sephora for the treatment of idiopathic, cyclic, and congenital chronic neutropenia. And we believe are on track to announce clinical data and provide clarity on the scope and timing of the expected CN Phase III clinical program in the Q2-Q3 timeframe. In our release this morning, we also announced that we will be presenting a poster at CIS highlighting the results of what we believe is the first research study to assess the correlation between the incidence of serious infection events, or SIEs, and the severity of chronic neutropenia. This abstract will also be published on May 16th. Concurrent with the poster presentation, which is on Saturday, May 20th at 1.30 p.m. Central Time, we will be adding the poster to our website. As a result of our development efforts and our published data to date, we continue to believe that due to its demonstrated ability to elevate levels of white blood cells, Maverick support has the potential to be a breakthrough for those with WIMP syndrome and other chronic neutropenic disorders. We look forward to updating you on our progress throughout the year as we advance our mission to bring innovation to these patient populations in need. I'll now turn it over to our CFO, Adam Mustafa, to review the first quarter financials. Adam?
spk04: Thanks, Paula, and thanks to all of you for being on the call with us today. At the end of the first quarter, ended March 31, 2023, X4 had $94.4 million in cash, cash equivalents, and restricted cash. We believe that these funds are sufficient to support company operations into the second quarter of 2024. Our research and development expenses were $22.1 million for the first quarter, which compares to $14.1 million for the comparable period in 2022. R&D expenses for the first quarter included $0.8 million of certain non-cash expenses and a $5 million accrual for an in-licensing milestone payment that the company deems probable of occurring. Our selling, general, and administrative expenses were $7.2 million for the first quarter as compared to $7.7 million for the comparable period in 2022. SG&A expenses included $0.8 million of certain non-cash expenses for the quarter. And lastly, we reported a net loss of $24 million for the first quarter ended March 31, 2023, as compared to $22 million for the comparable period in 2022. Net loss included $1.6 million of stock-based compensation expense and a $5.4 million gain for the change in fair value of our Class C warrant liability for the first quarter. And with that, why don't we open up the call for your questions? Operator?
spk10: Thank you. We will now begin the question-answer session. To join the question queue, you may press star, then one 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 two. We will pause for a moment as callers join the queue. The first question comes from Stephen Willie with Stiefel. Please go ahead.
spk08: Good morning, guys. This is Tulian for Steve. I just have two quick questions on my end. So the first one is, would it be possible, Adam, like would it be possible to give a little bit more detailed color on increased R&D expense? And secondly, can you guys also provide, or like has there still been ongoing discussion with potential partnerships And when do you think we'll actually hear more updates on, you know, like partnering front? I think that's it on my end. Thank you very much.
spk04: Sure. Thanks for the question. So the increase in the R&D line this quarter is related mostly to a $5 million accrual payment. That's for an in-licensing regulatory-related milestone that we deem probable of occurring. So that's the change that you'll see there, which is, of course, non-cash. On the partnership front, we continue to look at beneficial ways to finance the company, and that could include, for example, geographic rights types of partnerships. And when we have something material to report and update, we'll certainly do that.
spk10: The next question comes from Mayak Mamhtani with B Reilly Securities. Please go ahead.
spk02: Hi, this is William for Mayak today. Congratulations on your continued success. Two questions from us, or one and then a follow-up. I was just curious if you, as far as the infection data and infection rates that you'll be presenting it at both the CIS and as well as your KOL, if we could provide any extra information or color on what we might see at these two presentations. And then are these going to be largely overlapping in new data, or should we be expecting different data cuts from each of these presentations? And thanks, and then one follow-up.
spk07: Thanks for the question. So we, as we highlighted in our press release, we're looking forward to sharing more data around the burden of infection, which can relate to frequency, severity, and duration, among other metrics. Those are all relevant and important to clinicians, and you'll actually get to hear their perspectives directly from the ones that we've outlined on today's call. And then in terms of, and I apologize, I lost the train on the second part of that question. Oh, thanks, Mark. The different data in different venues. So the data sets will be primarily the same. Obviously, one's more sort of oriented to the clinical communities, and then one is for a broader audience with the investor communities.
spk06: But effectively, the data sets are going to be quite similar.
spk02: Got it. That's very helpful. And then, in terms of your upcoming Phase 3, as well as, I guess, Phase 2 study execution, you know, maybe if you could provide any insight that you've gained during your FDA discussions and what you're thinking about, you know, following Phase 2 data release, how your plan's going forward.
spk07: So, for clarity, this is around the chronic atropinia studies.
spk03: Yes, sorry about that.
spk07: No, no worries. Thank you. So for chronic neutropenia, we continue to guide that we'll provide additional data in Q2 or Q3, as well as we'll have completed interactions with the agency so that we can have clarity on a Phase III registration program. So those are in progress right now. We're looking forward to sharing both the additional data, which will primarily be focused on durability of neutrophil counts, The crosswalk in all of these neutropenic patients, including WIM, is looking for durable elevations and white blood cell counts, including neutrophils, and then the correlation with infection. We saw that very nice data with chronic neutropenia, the Phase I bead, after a single dose, getting that resoundingly positive result. Now we're looking forward to sharing future data that will hopefully be consistent with WIM, which is nicely durable and elevated from month on end. And then, of course, the registration trial will be more of the venue that will look for infection changes and benefits, and a similar design likely to that that you'll have seen with WHAM.
spk02: Excellent. I appreciate all that. And congratulations again, and thank you for taking our questions.
spk10: Thank you. The next question comes from Eva Privatero with TD Cowan. Please go ahead.
spk09: Hi, good morning, and thanks for taking your questions. For the Phase 2 chronic neutropenia update, what can we expect in terms of how many patients and how long the duration of follow-up? Yes, we're actively enrolling.
spk06: Oh, sorry. I'm sorry, Ava. Excuse me.
spk09: Go ahead. Yeah, what's the split of the congenital idiopathic and cyclic patients, roughly? and also the split of patients dosed with monotherapy versus the combo with GCSF.
spk07: Yeah, I mean, so we're still actively enrolling, so I can't answer any of the split questions because we've, similar to the Phase 1B, we have a nice wide funnel. And of course, we're just trying to study as broad of a population as we can. So more to come on that when we have the data. And then in terms of the number of patients, you know, I think we're aiming for somewhere between 15 and 25. We're trying to get as robust of a count as possible. We really thought the data set from the Phase 1B was valuable because you had enough across a couple buckets to be able to make some generalizations. And that's what we're aiming for. But of course, it's always about recruitment and timing. But we look forward to sharing that certainly meaningful update around durability in these patients as soon as we can in Q2 or Q3. Great.
spk09: Thanks for that. And on the Phase 3 WIM presentation, the secondary endpoints that will be presented at CIS, what level of reduction in infection rates and warp burden do you think are clinically meaningful?
spk06: Yes. I mean, I can share with you what the agency and what we saw in the Phase 2.
spk07: The agency granted us breakthrough therapy designation on the Phase 2 WHAM data, which I believe after a year showed about a 40 to 50 percent reduction in infection rates. It was a little bit of a different benchmark. Of course, because we were using patients' historicals as their controls. So, certainly, that sets the mark from an agency perspective, as they certainly view that as clinically relevant and meaningful to grant a breakthrough therapy designation. So, we'll look forward to providing the totality of data, including all of this infection information, in just a couple weeks.
spk11: Perfect. Thank you so much.
spk10: The next question comes from RK with HC Wainwright. Please go ahead.
spk05: Thank you. Good morning, Paula and Adam. This is RK from HC Wainwright. I think if I do my job right on May 16th and 21st, I should know all about VIM and Maverick so far. But at the same time, you are putting five KOLs together on the 16th. So should we expect these folks to be talking about additional neutropenic conditions where Maverick support could be used? And also, would this help you to initiate conversations regarding subtypes of SCM in the sense where SCM gets generated due to various causes? Will some color around that come up in these conversations for us to think about potential indication expansions for Maverick support?
spk06: Thanks so much, RK.
spk07: Great question. The KOLs on the call are a breadth of KOLs, U.S. and Europe, and then across the hematology, immunology, and in some cases, rheumatology, which is somewhere some of these patients are managed. So we felt we wanted to have that nice universe of experiences, commenting not only on our data in WIM, but some of them certainly have relevance in treating a larger number of chronic neutropenia patients. So for those folks that have that experience, they will be able to bring in their experiences into the conversations, and we have a few of them live on the event at the end, so they'll be able to speak, you know, from their perspectives, and certainly we'll look forward to the Q&A around that topic around future indications.
spk11: Thank you. Thank you.
spk05: Looking forward to these two events.
spk10: Yeah, thank you so much, R.K. The next question comes from Kristin Kluska with Cantor Fitzgerald. Please go ahead.
spk00: Good morning. This is Rick on for Kristin. Thank you for taking our questions. To kind of set the stage ahead of the CIS conference and WHIM, could you talk a little bit about the setting, the audience you're expecting at CIS, and how getting in front of this audience could help inform what you understand could be the prescriber community that you could be focusing on in WHIM?
spk07: Sure, so I think it is primarily immunologist. I know Mark has a team of his participating in this conference. I'll turn it over to him to provide additional color mark.
spk03: Thanks, Paul. Hi, Rick. Yeah, we're looking forward to being at CIS where a lot of our customers are planning to be. We have a number of meetings set up with key customers, and we'll have a company booth there as well, which is focused on raising disease awareness of WIM. So, you know, we think it's going to be a very valuable conference for us as the excitement builds around the release of that Phase 3 data.
spk00: Great. And maybe just one more on the CN poster presentation you announced for CIS. Could you also kind of set the stage here what we could expect potentially from this real-world patient data that you talked about? Should we be expecting mostly patients managed on GCSF? And do you plan on going into any information on genetic background for the patients in this study? Thanks.
spk07: Yeah, so it's a higher level study than that. We don't get into, obviously genetics are sometimes not even captured in electronic medical records. So it's a higher level study on the populations that are diagnosed with different types of chronic neutropenia. There's different ICD-10 codes and then there's a different ability to drill down on their clinical histories in terms of their severe infection events. So the poster really connects those dots. Is that real world evidence connecting degrees of neutropenia with severity around morbidity and potentially in some cases mortality. So we'll look forward to sharing that poster and certainly having follow-up questions as the community digests.
spk00: Excellent. Thank you very much.
spk10: This concludes the question-answer session. I would like to turn the conference back over to Dr. Reagan for any closing remarks.
spk07: Thank you so much. We appreciate everyone attending today and we certainly look forward to having everyone and hopefully your interest on our big May 16th event. Have a great rest of your day. Take care.
spk10: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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