X4 Pharmaceuticals, Inc.

Greetings and welcome to the X4 Pharmaceuticals First Quarter 2025 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.

Thank you, operator, and good morning, everyone. Presenting on today's call will be X-Force Chief Executive Officer, Dr. Paula Reagan, and Chief Financial Officer, Adam Mostafa. Following prepared remarks by each, we will open the call to your questions, and we'll be joined by Chief Commercial Officer, Mark Baldry, and Chief Medical Officer, Dr. Christoph Arbit Engels. As a reminder, on today's call, the company will be making forward-looking statements regarding regulatory and product development plans. 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 last year's Form 10-K and this past quarter's Form 10-Q, which is expected to be filed after market close today. Please note, that the X4 investor deck was updated this morning on the company website to include slides detailing some of the data analyses mentioned in this morning's press release and on this call today. I'd now like to turn the call over to X4's president and CEO, Dr. Paula Regan. Paula?

Thank you, Dan, and thanks to all of you for joining us this morning. The first quarter of 2025 was an extremely productive and value-building period for X4, with clinical trial advancement in chronic neutropenia, continued progress in the commercialization of Zolremdi for WHIM syndrome in the U.S., and our achievement of several significant milestones towards expanding the global potential of Mavericks 4 for patients. Let's begin with Mavericks 4 in chronic neutropenia, or CN. As you know, having successfully developed Mavericks 4, branded Zolremdi for patients with WHIM syndrome in the U.S., we are now also developing Mavericks 4 for the larger indication of chronic neutropenia. There are currently about 50,000 people diagnosed with some form of CN in the U.S. based on retrospective ICD-10 code analyses. Of those currently diagnosed with primary CN, we estimate that approximately 15,000 individuals, or about 30 to 40 percent, have remaining health challenges and continue to experience low absolute neutrophil counts, or ANCs, and recurrent infections despite available standard of care. We define this as the high unmet need CNN patient population. And it is with this population in mind that we are launching our ongoing FORWARD trial, a global pivotal phase three clinical trial evaluating the safety and efficacy of once daily oral maverick support in people with certain chronic neutropenic conditions, including primary autoimmune, idiopathic, and congenital neutropenia, and who are experiencing recurrent and or serious infections. As we reported on our last call, we're now screening and enrolling participants in over 20 countries with more than 90% of our target global trial sites being activated. Additionally, we've now finalized the trial design based on the feedback we also discussed previously from both the FDA and EMA to focus on those with the highest unmet needs, a population that matches up well with Mavericks for its targeted commercial CN patient population. The trial is enrolling with those with moderate to severe CN or ANC below 1,000 cells per microliter and experiencing two or more infections over the past 12 months. We also finalized the ANC response endpoint. The definition of ANC response is now uniform across all participants and is defined as an increase in ANC greater than 500 cells per microliter versus baseline ANC and occurring at 50% or more of the time points evaluated in the trial. The trial seeks to demonstrate statistically significant increases in ANC response and corresponding decreases in annualized infection rates between those on Mavericks 4 versus placebo. To date, the demographics of the enrolled population are balanced and representative of the target commercial CN patient populations, and baseline ANCs and historical infection rates are consistent with this high unmet need population. We recently completed some additional data analyses that further increase our confidence in the success of the forward trial. Individual patient data from both the Mavericks for Phase 3 4WIM trial and the completed Phase 2 CN trial have now been analyzed applying this just mentioned forward trial ANC response criteria. The full details of these analyses can be found in the updated investor deck that is on the front page of the investor section of our website. In summary, we created what we're calling heat maps, which detail individual ANC responses across all trial participants at all of the assessed time points. Specifically, the 4-WIM Phase III heat map provides a benchmark for ANC responses that translated into a 60% reduction in annualized infection rates when comparing Maverick support treatment to placebo. The CN Phase II heat map demonstrates the impact of Mavericks IV on durable increases in ANC across those with idiopathic, cyclic, and congenital chronic neutropenia. ANC outcomes in the CN Phase II trial look similar to ANC responses seen in the Mavericks IV arm of the 4WIM trial. When taken together, these heat map analyses provide evidence supporting the potential success of the CN Phase III trial where we believe that the expected ANC responses resulting from Maverick support treatment will correspond to a significant decrease in annualized infection rates. We also continue to believe that the forward trial is rigorously designed and powered to demonstrate the impact of Mavericks for NCM. The trial is powered at greater than 95% to assess the ANC response endpoint. and the 150 participant sample size independently supports robust powering at greater than 90% for the infection rate results. As of today, we continue to anticipate full enrollment in the trial in the third or fourth quarter of 2025, which would enable disclosure of top line data in the second half of 2026. Lastly, on the CN front, we have good news from the U.S. Patent Office. We received a notice of allowance on our application, which claims include the use of Mavericks for and treating severe chronic idiopathic and autoimmune neutropenia in patients without a CXCR4 genetic variant. The patent is expected to expire in the US in March of 2041. Similar patent applications are pending in Europe, China, Japan, and Canada. To conclude, we remain confident that we'll be able to deliver on our upcoming milestones in CN, that we'll have a long-term patent protection in the indication, and that the value proposition for Mavericks IV in CN could represent a $1 to $2 billion opportunity in the U.S. alone. With that, let's turn now to our progress with Mavericks IV in WHIM syndrome. At the end of March of this year, cumulative sales of Zolrembi reached 3.5 million since our mid-May launch last year. This quarter's sales were slightly lower than those reported in the fourth quarter because of the fluctuations in the timing of inventory resupply, which causes some lumpiness to sales. This is typical with markets anchored in small patient populations and early in launch. We do expect this to even out over time with the increasing demand that we're already seeing. We are currently in the thick of conference season and continue to have fruitful engagements with all of our targeted top-tier immunologists and hematologists, increasing the visibility of WIMP syndrome. And we're seeing success in our educational efforts that support HCPs and finding WIMP patients, with new patients now representing approximately 40% of our current Zol Remedy-treated population at the end of the first quarter. In addition, we're just about to kick off our WHIM Patient Ambassador Program and hope these efforts will continue to build demand for Zil Remedy in the U.S. As we discussed on our last call, we made significant progress in our efforts to expand the potential global reach of Maverick score in WHIM during the first quarter. In January, we announced that our submitted MAA was accepted by European regulatory authorities for review. With a typical 12 to 15-month review process, we anticipate potential approval from the EMA as early as the first quarter of 2026. We also announced the completion of two international partnerships in the first quarter, the first with Nourgine, a leading European specialty pharmaceutical company, to commercialize Mavericks for Europe, Australia, and New Zealand. Norgene will be launching Maverick support for the WIM indication in the EU should we receive approval there next year, and we are working closely with them to ready for that possibility. The second partnership is with Taba Rare, another specialty pharmaceutical company to commercialize Vol Remedy in the Middle East and North Africa, or MENA region, following any approvals there. The MENA region does have a compassionate use program that allows physicians to prescribe drugs approved in other countries to local patients with no other treatment options. We'll keep you updated on our progress there. Lastly, we're continuing to advance the understanding of WHIM syndrome, as well as the impact of Mavericks 4 on the disease. We had two abstracts accepted for publication at the annual meeting of the Clinical Immunology Society, or CIS, which starts today. From the 4-WIM Phase III Open Label Extension, or OLE, we'll be presenting two-year data that demonstrate a marked clinical improvement in wart severity as assessed by a standard measurement, the clinical global impression of severity across 70 defined wart areas. We're also presenting results from the first-ever survey looking into infection burden in WIM patients. Twenty WIM patients provided responses. None were on Zolrembi at the time. The survey revealed that 60% of those under 18 years and 73% of those 18 or over reported experiencing at least one infection in the previous three months, with 25% requiring overnight hospitalizations due to infection. The study concludes that, quote, the frequency and severity of infections requiring medical care and hospitalizations underscores the urgency to proactively treat patients with WHIM syndrome. Needless to say, we're very proud to be able to have developed this first approved therapy for WHIM in the U.S. and look forward to commercial updates and continued global advancement milestones in the coming quarters. I'll now turn it over to Adam to run through our financials. Adam?

Thanks, Paula. As we disclosed in the press release this morning, we ended the first quarter of 2025 with just under $90 million in cash and cash equivalents. We continue to believe that we have sufficient funds to support company operations into the first half of 2026. We reported net Zol Remedy revenues of just under $1 million for the first quarter of 2025. As Paula mentioned, this brings our cumulative total sales since our May 2024 launch to about $3.5 million. Our R&D expenditures totaled $18.5 million for the first quarter, and our SG&A expenses were $15 million for the first quarter. And finally, we had a small amount of net income in the first quarter due to the recognition of $28 million in license and other revenue from our partnership with Norgene, and a gain of $10.8 million on our outstanding Class C warrants, which are measured at fair value each quarter. We also note that our one for 30 reverse stock split became effective on Monday following shareholder and board approval, and we believe this should cure our current deficiency with the NASDAQ listing rules. Lastly, we've now completed the majority of the actions we laid out during our announced strategic restructuring in February. We continue to expect that these efforts will decrease our spending by about 30 to $35 million annually. We'll now open the call up to your questions. Operator,

Thank you. And at this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw your question at any time by pressing star 2. Once again, to ask a question, please press the star and 1 on your telephone keypad. We'll take our first question from Ted Sons with Piper Sandler. Please go ahead.

Great. Thank you very much. It gives us a sense if you have any visibility into the types of patients that are being enrolled in the program. Is this largely in line with what you described in that you were enrolled in the pre-precipitation case you saw, and then it's going to follow up on when

So, of course, we mentioned that we're very pleased with the overall profile, but I'll turn it over to you, Bob, and Mark.

So we have the study in itself has very specific criteria, and we have the profile of the patients that we are having is really good so far, and we're tracking this. What I can share anecdotally, having met with some of the PI and meeting with some others, is that A lot of those PIs would love to include many more patients than the patients we have into the study, and they often have all these patients waiting. They cannot change their treatment just to include them in the study, obviously, but there's a clear demand here and interest in trying to bring as many patients as possible into the studies.

Great. Thank you very much.

Sure, that's okay. Maybe Mark just has one more comment there.

Yeah, Ted, I was just going to say, you know, we're continuing to build our insights into the CN market itself and actually just completed a large survey with about 95 U.S. physicians who treat chronic neutropenia. And what we're finding is, you know, the caseloads of patients that these physicians have are much higher than in WIM. So in WIM, it's a very fragmented model, but in chronic neutropenia, it's much more concentrated, much more defined because there are distinct, definitive ICD-10 diagnosis codes. So we can clearly see where these patients are and the unmet need in this refractory population.

So I think just to quickly summarize for you, Ted, Very sick patients being enrolled in the study to enrich for success on the infection endpoint. Higher demand, both locally in the trial, because they'd love to get their patients in the trial, but of course we can't accept everybody. And then Mark is seeing that pull through in terms of the higher case flows through our market research.

Great. That's very helpful. Thank you. Thank you, Ted.

Thank you. Our next question comes from RK with HC Wainwright. Please go ahead.

Thank you. Good morning, Paula and Adam. A couple of quick questions. You know, in the patient, the amount of patients that you said who are being diagnosed with CN, which is like 50,000 people, and out of that, 15,000 are the ones that seem to be having the high unmet need. these numbers, are they just U.S. or are they worldwide?

They're just U.S., okay, yes. We did an ICD-10 code analysis and the U.S. claims data.

Okay, okay, perfect. And then from your, you know, comments to Ted's question, you know, you were stating that only very sick patients are being enrolled into the study. So I'm thinking about the label. What sort of, you know, the the target population would you be looking at on the label? Is it the very sick population or is that beyond that? And how do we define that population?

So because RK, this is Christophe here, because we do have already also from the CN phase 2 experience with also other population, even if the phase 3 study includes moderate and severe patients, we are going to build a case for the label for the entire CN population, and we do have already data to support this, including from the WIM study, et cetera. So we are anticipating a broad label, but obviously this will be a matter of discussions with the FDA at the time when it comes.

Our case is to kind of crosswalk, obviously, into the value proposition. We are focusing on treating patients who are basically refractory with severe recurrent infections. That is who needs remaining treatment. And certainly when we go to the payer systems across the world, we want to be focusing on that, basically that high MNE with little to no options to demonstrate the value proposition of Zolremdi for Xtemaverick score right now. At the end, Zolremdi and women maintain our price point. So there's a good connection between the severity of the disease, the trial design, and the ultimate solution. value that we think we can bring to patients.

One last question, I'm sorry. The transaction or the agreement with Norgene that you currently have for commercialization in Europe and Australia, does that go by indication or does that go by Mavericks for period?

Yeah, thanks, RK.

So it covers WIM and CN. So it's licensed to the asset across both indications. Obviously, first would be WIM commercially followed by CN.

Okay, perfect. Thanks. Thanks for taking my questions. Thank you, RK.

Thank you. And as a reminder, it is star and one if you would like to join the queue. We will move next with Stephen Wiley with Stifel. Please go ahead. Your line is open.

Yeah, good morning. Thanks for taking the questions. I guess with the understanding that the commercial history here in WAM is a bit abbreviated thus far, is there anything that you can say about just patient persistency and compliance that you're seeing?

Sure. Good morning, Steve. Mark here.

Yeah, I mean, I think what we're pleased with is that although we're not giving out any actual numbers, we're pleased to see that compliance and adherence rates are actually higher than you would expect with a daily oral medication. And I think that speaks to you know, the unmet need here and that these patients and physicians understand that this disease needs treatment and ZolRenV is the solution if it's taken appropriately. So, we're now actually spending a lot of time beginning to educate patients and the patient community and, in fact, excited to announced that we just launched a new website yesterday. In fact, I encourage you to open your browser of choice and type in WIMsyndrome.com, and you'll see our new patient education website that features WIM patients telling their stories and also provides a lot of resources to help them on their journey with WIM and with Zolremi.

Okay. And are most patients getting a 30-day supply, or are some patients getting three months' worth of drug via a single script?

The majority of patients are on the higher dose. Of course, it's weight-based, so if a patient is of a lighter weight, they get a lighter dose.

I guess the question was, if the prescription unit size that most patients are getting, is it a month's supply, or are some patients getting three months' worth of drug with a single prescription? No, it's a month's supply at this stage. Okay. And then understanding that the forward trial is is blinded, but can you just remind us what your assumption was around patient dropout, and if there's any data that you're able to see on a blinded basis that would suggest that that assumption is holding up in the clinical trial?

Yeah, so, you know, Steve, what we're targeting, as we shared, is about 150 patients that enroll And all of that has some degree of assumptions of either dropouts or screen failures, et cetera. So we're building that funnel. I think more importantly, what we can see with the REN rule subject is really about their profile. Like, are we in good shape on the 150s? Because that sort of sets our clock. The answer there is definitely yes. We're seeing... The right blend of idiopathic, autoimmune, and congenital balanced nicely. And then, of course, this is all blinded, but we're seeing the event rates that you would want to see early in the study to confirm our assumptions. So in terms of powering, that's 150 is belts and suspenders for the co-primary endpoint. So I think that gives you some confidence. In terms of the rate, there's so many ins and outs. What we can say is certainly based on everything we're seeing, we're on track for that Q3, Q4, and full enrollment.

Okay, very helpful. Thanks for taking the questions.

Thank you, Steve. Thank you. And we show no further questions at this time. I will turn the call back to Paula Regan for closing remarks.

Well, thank you very much for joining us today. I'm happy to follow up offline with any other questions and wish you all an excellent rest of your day. Thank you.

And this does conclude today's program. Thank you for your participation. You may disconnect at any time.