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spk07: first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Dan Ferry from LifeSci Advisors. Thank you, Mr. Ferry.
spk05: You may begin. Thank you, Operator, and good morning, everyone.
spk00: Thank you for joining us today. Presenting on today's call will be Dr. Paula Regan, X4's President and CEO, and the company's Chief Financial Officer, Adam Mostafa. Following prepared remarks, we will open up the call to your questions and will be joined by Chief Commercial Officer, Mark Baldry, Chief Medical Officer, Dr. Christoph Arbett-Engels, Chief Operating Officer, Dr. Mary Bibiasi, Chief Scientific Officer, Dr. Art Tavares, and Jose Juves, Head of Corporate and Patient Affairs. As a reminder, on today's call, the company will be making forward-looking statements regarding regulatory and product development and commercialization 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, including this year's Form 10-K, which was filed on March 21, 2024, and in the company's Form 10-Q, which is expected to be filed later today. I'll now turn it over to Paula Regan. Paula?
spk11: Thanks so much, Dan, and welcome, everyone. Following last week's approval of Zol Remdy, it's exciting to reiterate today why this critical regulatory achievement represents a significant opportunity to improve the lives of WHIM patients and offers a strong platform for the company's growth. More specifically, I'll touch on our plans for expanding Zol Remdy's use in WHIM geographically and for quickly advancing into a potential larger indication, chronic neutropenia. But let's start with last Monday's transformative announcement. As you know, Zolremdi, or Maverick Sephora, is now approved by the FDA for use in the U.S. in patients 12 years of age and older with WIM syndrome to increase the number of circulating mature neutrophils and lymphocytes. WHIM syndrome is an ultra-rare disease caused by dysfunction of the CXCR4 receptor, which helps regulate the movement of white blood cells, including neutrophils and lymphocytes, throughout the body. People with WHIM syndrome characteristically have low blood levels of neutrophils, neutropenia, and lymphocytes, lymphopenia, and experience serious and or frequent inflections that cause significant morbidities. In our pivotal Phase III clinical trial that supported our approval, ZolRemedy, an oral selective CXR4 antagonist, improved absolute neutrophil counts and lymphocyte counts, ANC and ALC, and reduced the rate, duration, and severity of infections in those treated versus placebo. This was the largest clinical trial to date in WIM syndrome, enrolling 31 patients. We'd like to note that the full manuscript of these clinical results were recently published online in Blood, the Journal of the American Society of Hematology, or ASH, and that results from this trial and its Open Label Extension Phase, or OLE, were just presented last week at the annual meeting of the Clinical Immunology Society, or CIS. Notably, the CIS poster revealed that long-term treatment with Zol Remedy was associated with durable improvements in neutrophil and lymphocyte counts, as well as reductions in annualized infection rate, and that to date, no new safety signals have been observed during the OLE phase of the trial. As with most ultra-rare diseases, it can be challenging to assess the true patient prevalence as awareness is often low and patients are frequently under or misdiagnosed. And since we didn't cover this in detail last week, we thought it might be useful to remind everyone of the market size estimates that we've shared on the U.S. WIM market over the past several years. Since 2019, we've completed several robust market research studies using both qualitative and quantitative analyses. to not only support our prevalence estimates, but to also better understand the WHIM diagnostic journey and treatment paradigm. Across a number of methodologies, including direct market research and claims-based research, we continue to validate our current estimates. And through our growing number of conversations with physicians in the field and at medical conferences, we remain very confident in our estimate that there are at least 1,000 confirmed diagnosed WHIM patients today in the U.S. And now, with a targeted therapy available, we expect that increased physician awareness will bring more and more focus to the WHIM community, enabling earlier recognition and diagnosis, potentially expanding the number of those diagnosed with WHIM over time. And as our Chief Commercial Officer Mark Baldry so aptly put it last week, it is well established that earlier and definitive diagnosis leads to better patient outcomes, and that is ultimately our goal for the WHIM community. We believe we are well positioned to not only deliver on the commercial opportunity in WHIM syndrome, but to also advance our global regulatory submissions with the goal of potentially providing new options to patients across the world. Our European submission preparation and WIM are underway, and we anticipate submitting a marketing authorization application, or MAA, for potential European approval in late 2024 or early 2025. Importantly, we'd like to review our development plans and upcoming milestones for Mavericks for beyond WIM, and to define what success might look like as we explore the use of Mavericks 4 in the treatment of chronic neutropenia, or CN. To help understand the benchmark for success, I'd first like to start with what we've seen in WHIM syndrome. As I mentioned, our WHIM Phase III trial data were recently published in the peer-reviewed journal Blood. Specifically, WHIM patients were severely neutropenic at baseline with a mean ANC of less than 250 cells per microliter. Patients on Maverick support achieved increases of about 500 cells per microliter, reaching ANC levels of about 800 cells per microliter on average over the 52-week trial. This increased neutrocell count of approximately 500 to 600 cells per microliter corresponded with a 60% reduction in infection frequency versus placebo, as well as reduced severity and duration of infection. Additionally, the benchmark of increasing ANC by at least 500 cells per microliter aligns well with what our CM physician experts describe as clinically meaningful. An increase of 500 cells per microliter was also the metric for success in our previously published phase 1b study and has been published on by the NIH and others across various neutropenia conditions. I note this here because these results help inform our assessments of success for the ongoing phase 2 clinical trial data in CN and our enthusiasm for advancing into the CN phase 3 study in the first half of 2024. As with WIM patients, chronic neutropenia patients face an increased risk of infection every single day. This risk is greatest when they are severely neutropenic or with an ANC below 500. Increasing ANC from less than 500 to between 500 and 1,000 cells per microliter correlates with a meaningful reduction in infection risk from severe to moderate. Increasing ANC to between 1,000 and 1,500 correlates with a risk reduction from moderate to mild, and increasing ANC above 1,500 moves a patient into a normal infection risk category. Additionally, based on our market research, we believe that physicians prescribing injectable granulocyte colony stimulating factor, or GCSF, currently the only therapy approved to treat severe chronic neutropenia, generally target ANC levels between 1,000 and 1,500. With enrollment now complete in our Phase II trial, we will have studied more than 20 CN patients, approximately 40% of whom have been treated with Mavericks IV monotherapy and the remainder with a combination of Mavericks IV and GCSF. We are currently planning an investor event in late June to present interim results from at least 15 participants in this study, which we anticipate will include data from those treated with Maverick Sephora as a monotherapy, and those also treated with combination with GCSF. We'll be looking at increases in ANC while on treatment with Maverick Sephora, as well as the durability of increased ANC with time on treatment. in those subjects with stable background therapy. The complete data set of the CN Phase II study is expected later this year, and we're aiming to present final results hopefully at a major medical conference at that time. More details on our planned investor event in June will be forthcoming, and we look forward to further defining the potential of Mavericks 4 in the first immune disorder beyond WHIM. In the meantime, we remain on track to initiate our phase three CN trial this quarter. This will be a pivotal global phase three trial to evaluate the efficacy, safety, and tolerability of oral once daily mavericks before with or without GCSF and people with congenital or acquired primary autoimmune and idiopathic chronic neutropenia who are experiencing recurrence and or serious infections. We plan to enroll approximately 150 participants in the trial, which will be a 52-week, double-blinded, placebo-controlled trial with one-to-one randomization. The primary endpoint will be a two-component endpoint comprised of both the annualized infection rate and ANC responder analysis across the study population. Secondary endpoints will include the severity and duration of infections, antibiotic use, and quality of life measurements, among others. We continue to believe that there is a significant unmet need across the Phase III patient population, a market we estimate to represent approximately 15,000 people in the U.S. alone who, in many cases, are being seen by the same practitioners who are also seeing those diagnosed with WHIM syndrome. With that, I'll now turn it over to our CFO, Adam Mustafa, to review the first quarter financials. Adam?
spk13: 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, 2024, X4 had $81.6 million in cash, cash equivalents, restricted cash, and short-term marketable securities. We believe that these funds are sufficient to support company operations into 2025. And note that this runway estimate does not include the potential monetization of the priority review voucher we received as a result of the FDA's approval of ZorMD in the U.S. Our research and development expenses were $19.9 million for the first quarter. which compares to $22.1 million for the comparable period in 2023. R&D expenses for the first quarter included $0.8 million of certain non-cash expenses. Our selling, general, and administrative expenses were $17.4 million for the first quarter as compared to $7.2 million for the comparable period in 2023. SG&A expenses included $1 million of certain non-cash expenses for the quarter. We would like to note several factors affecting our expenses this quarter. These expenses reflect the hiring of an experienced field force now in place to drive the launch of Zol Remedy in the U.S. and launch preparation activities across our commercial and medical organizations. Lastly, we reported a net loss of $51.8 million for the first quarter of 2024 as compared to $24 million for the comparable period in 2023. Net losses in the current period include a non-cash loss of $13.8 million related to the company's Class C warrant liability, which is adjusted to fair value each reporting period. Net losses also included $1.7 million of stock-based compensation expense.
spk05: And with that, why don't we open up the call for your questions? Operator?
spk07: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question comes from the line of Stephen Willey with Stifel. Please go ahead.
spk12: Yeah, good morning. Thanks for taking the questions and looking forward to the update next month. Maybe just a couple on the phase three for me. So can you just remind us how you're specifically defining an infection event in the phase three? And I'm assuming you'll be centrally adjudicating these events during the trial, but can you Just wondering if you're also trying to adjudicate those events that are required to be seen in each patient during the 12 months prior to randomization.
spk11: Hey Steve, thanks for the question. So I think I heard three components there. Just how are we quantifying infection rates via central adjudication, sort of a subpart. And then the first one was for the inclusion criteria, how are we assessing infections? Is that the right orientation?
spk16: We have a process during the study to educate the infections. Patients will be reporting every adverse event of infection and the use of antibiotics or hospitalization related to these and ultimately the the safety committee will be educating, reviewing and educating these infections and will be able to count those to define the annualized infection rate. With regard to prior to the start of the study, the history of infection in this population, We have defined some criteria like the use of antibiotics, hospitalization, and our criteria is to make sure that these patients have at least two infections in the past year before they come into the study.
spk12: Okay. That's helpful. And then I guess just maybe a statistical question.
spk05: Can you
spk12: Can you tell us if the underlying statistical plan accommodates a reduction of infections that could potentially be seen in the placebo arm during the trial? And I only ask the question because I know these event rates can sometimes fall off in the setting of a trial when the level of care and patient compliance improves.
spk16: So the study is randomized, and we have, so patients will be randomized to placebo four, treatments with active treatments with Mavericks of four, We have evaluated with our experts and consultants at the FDA, Professor Tom Fleming. We've designed a study to power it to over 90% for the infection rates in our population. We've taken some conservative assumptions with what the effect size will be. As you remember, in our wind study, we were able to show a decrease or an increase of more than 500 cells per microliter. We were able to see a decrease of 60% in our annualized infection rate. We've taken a more conservative approach in this particular population, which we estimated to be around 40%, 45%. So, we feel confident that this is the statistical power and how we've set up the study and the sample size is reasonable to achieve what we're trying to achieve with this registration study. Okay.
spk12: And maybe just one more question, if I may. So, I guess in the scenario where you're being used on top of GCSF, is there Is there consensus alignment around, you know, the threshold level of background GCSF that prescribers want patients to be kept below in order to avoid risk of transformation to AML or MDS?
spk02: Yeah, so there have been some publications related to this.
spk16: I don't know if there's full consensus in the entire scientific community around that, but some publications have mentioned 8 micrograms of GCSF per kilogram, and as a threshold for malignancies, I think we In our intention, clearly, we know that GCSF is a risk for this population that is treated chronically. We believe that with Mavericks before, we will be able to address their chronic neutropenia and potentially limit the use of GCSF. So I think that's a question for the entire scientific community, and we can potentially help with our phase three studies.
spk05: Okay, very helpful. Thanks for taking the questions.
spk07: Thank you. Next question comes from the line of Edward Tenhoff with Piper Sandler. Please go ahead.
spk09: Great. Thank you very much. Can you hear me okay?
spk11: Yes. Thanks, Ted.
spk09: Great. And excited on all the progress and obviously congratulations on the recent approval. So appreciating we talked about this a little bit last week and, you know, it's still very early. What kind of information are you guys going to be providing to kind of explain and highlight launch parameters as you continue to build patients? Thanks.
spk11: Yeah, thanks, Ted. So obviously we're pretty excited with the old remedy being approved and our field teams out there. I'll turn it over to Mark with maybe just some early commentary and then longer term how we'll think about communicating our progress to the street.
spk03: Thank you. Hi, Ted. Good morning. And we had a terrific meeting at CIS in Minneapolis last week. We debuted our now approved booth and there was lots of excitement. Nice. enthusiasm around there. We were having conversations with physicians, you know in general those conversations were falling into three buckets. There are physicians who already have a WIM patient identified and so we were walking them through the label and the enrollment form. There are other physicians who are aware of WIM but are not as familiar with the disease and so we were discussing with them how to recognize the heterogeneous nature of the disease and patients in their practice and And then there are physicians who are not aware of women at all, and so this was exciting for them. So I think, you know, we'll be making progress engaging with these physicians, educating them, and at the same time engaging with payers to ensure access there. As we go through the year, we'll share more with you on how we will be tracking our progress with these different groups.
spk05: Great, thank you, and good luck with the launch.
spk06: Thanks. Thanks, Ted.
spk07: Thank you. Next question comes from the line of Kristen Kluska with Kantor Fitzgerald. Please go ahead.
spk10: Hi, good morning, everyone. Thanks for taking the question. First is on CN. Our KOL checks support that the biggest complaint from the community is really around the bone pain that comes with GCSF. So obviously no two patients in the trial are going to appear identical, but is there a certain threshold that reduction of GCSF would lead to improvements across some of this pain to make it a little bit more tolerable for patients if they were to go on a combination with MAV, which is safe and oral?
spk11: Great question. About a year ago, we actually put a little bit of data in one of our posters around this, just around what is meaningful for patients. And, of course, dose and frequency are meaningful, sort of anecdotal early information, but that 25% to 50% range would certainly sort of be meaningful to them, and anything improved on that would certainly hit it out of the park. But maybe I'll just turn it over to Christoph. I'm sure he's heard some anecdotes from the patient community as well.
spk16: Yes, so we agree on all our information, which we hear from our HEPs and KOLs, that with GCSF, bone pain is a real issue for patients. Decreasing the volume of injections, the frequency might help, and some of those patients will be helped probably by using Maverick before, especially for the one using GCSF chronically. Everyday injections, it's a real burden, and those bone pains are really having an effect on their lifestyle. So it's something that we're going to be trying to look at and trying to help patients better understand how we can use some GCSF on top of Maverick support, no GCSF at all.
spk02: We'll see where our studies will help us with that.
spk10: Okay, thanks. And on that note, is there, you know, good data out there supporting the amount or the frequency of this specifically so greater GCF usage is ultimately resulting in greater pain? And I guess for the Phase 3 experience, how is that going to help you in a potential commercial setting kind of help to outweigh some of these things? Or do you think, you know, for the first couple months it's going to be a little bit of, trial and error approaches with seeing whether you're decreasing GCSF or doing less frequent or, you know, essentially to get to that sweet spot.
spk16: Right. So I would separate the phase three study. GCSF will be stable. So our patients are stable on the chronic dose of GCSF and they remain on it or they are on monotherapy throughout the 12 months of the duration of the study. We're exploring additional studies to see how we can manage a modification of dosing regimens of GCSF. We have some experience, some in our Phase II study, and we're going to be continuing to explore how to best do this into our future programs.
spk05: Thanks very much. Thank you.
spk07: Next question comes from the line of Swam Pakula Ramakant with HC Wainwright. Please go ahead.
spk01: Thank you. Good morning, folks. Just was trying to figure out what sort of data, you know, you said you'll get to publish complete data of the chronic neutropenia studies at the end of the year. Is it just more patients or even additional data points in terms of primary endpoints and secondary endpoints we would be able to get at the end of the year compared to the June update?
spk11: Yeah, thanks, RK. I'll start and then Krista can chime in. But as we mentioned in our update, we were enrolling patients through early this year. So the data at the end of the year will really let us complete the study on all patients and perhaps most importantly give us full insight into for those patients who are varying their dose of GCSF, what kind of that average outcome for those patients. We really need to let all patients complete the study so that we give them the full time to resolve and land on their stable dose of G within that six-month window. So I think that's kind of the deepest lens or deepest component of a study that we'll be able to update towards the end of the year.
spk05: Fantastic. Thank you. Thanks for taking my question.
spk07: Thank you. Next question comes from the line of Kalpit Patel with B. Riley. Please go ahead.
spk04: Hi, this is Jay for Kalpit. Thanks for taking my questions. My first question is, what's your expectation of the bar for efficacy in the upcoming data set that perhaps could drive confidence for Phase 3? What key pieces of data do you recommend investors to zoom into?
spk11: Yeah, so I think we originally shared there's three ways that we're looking at meaningful responses in CM patients. First, it's similar to our WIM Phase 3, where increases in 500 to 600 cells per microliter showed a 60% reduction in infection rates over a 12-month study. So we think the minimum sort of clinical threshold for meaningfulness is around those same numbers for A and C. So we'll be able to place our CN data in context. Certainly number two, it's the durability of those increases in neutrophil counts over time. And then, of course, finally, we'll be applying our phase three criteria success to the subset of patients in the phase two that are relevant for the phase three to help build confidence and establish why our statistical power is where it is. So hopefully those are the three lenses for success.
spk04: Thanks. That's very helpful. My second question is that Since this trial has been for over a year, curious if we will have at least six months of follow-up for the 15 or more patients. And what's the split of a model versus of these 15 patients?
spk06: I'm sorry. Could you just repeat your question a little bit? It was just coming in and out a little bit with the volume. OK.
spk04: My second question is that since this trial has been running for over a year, so we are curious if we will have at least six months of a follow-up for the 15 or more patients, and what's the split of the model or couple of the 15 patients? Yes, please.
spk11: Yeah, so I think if I heard you correctly, you're asking for, you know, are we getting six months of patients' worth of data across at least the 15 patients and the monotherapy component of that? I mean, as you can appreciate, I would say generally, yes. There's a little bit of wiggle room in there, of course, because it's when patients come in and when we do data cuts. But there will be a very robust data set across a 15-plus patient population. And perhaps most meaningfully, there'll be, you know, as we mentioned, about 40% of those patients are on monotherapy, which I think will really help clarify the potential benefit of Mavericks for as a single agent in the patient population.
spk04: Thanks. Those are helpful. My last question is, were the scripts of WIN detectable on the database, like Symfony or Bloomberg?
spk06: Again, I'm not sure about, maybe you're talking about the database cut. I'm sorry that I didn't follow the question. Yes, I mean, when we released the, oh, yeah. Okay.
spk04: Sorry, go ahead. Where are the scripts for WIN? be tractable on the database in Symphony or Bloomberg?
spk03: No, our distribution of Zolrembi in WIM will be through our specialty pharmacy, Panther, and that's in order to be able to provide patient services to support our patients as they navigate the therapy.
spk05: Okay, that's very helpful. Thank you.
spk06: Thank you.
spk07: Thank you. Next question comes from the line of David Boats with Zach's Small Capital Search. Please.
spk15: Hey, good morning, everyone. Just a quick one from me on the PRV. I'm just curious if you could give us a sense for how many companies are out there looking to purchase a PRV, and then maybe if you characterize the negotiations and how they're going at this point.
spk14: Yeah, so as we said, we do intend to monetize the PRV shortly. It's not currently part of our cash runway guidance, but we'll certainly give an update when we're ready to do that with respect to the PRV. In terms of the market and who's out there and things like that, we won't position other companies' interests at this point.
spk05: Okay, thanks a lot. Thank you.
spk07: Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Paula Reagan for closing.
spk06: Thank you so much, Operator. Thank you to everyone for joining us today, and we hope you have a great rest of your day.
spk07: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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