X4 Pharmaceuticals, Inc. (XFOR) Q1 2021 Earnings Report, Transcript and Summary

Greetings and welcome to X4 Pharmaceuticals First 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. [Operator Instructions]. As a reminder this conference call is being recorded. [Operator Instructions]. It is now my pleasure to introduce your host, Dan Ferry of LifeSci Advisors. Please begin.

Thank you, Operator. And good morning everyone. Thanks for joining us. Presenting on today's call will be X4's Chief Executive Officer, Dr. Paula Ragan, and the company's Chief Financial Officer, Adam Mostafa. Following prepared remarks by each, we'll open up the call to your questions. And we'll be joined by Dr. Diego Cadavid, Chief Medical Officer, Art Taveras, Chief Scientific Officer and Mary DiBiase, Senior Vice-President, technical operations and quality. 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 subjected to risks and uncertainties that may cause actual results to differ from those forecasted. The descriptions of these risks can be found in X4's most recent filing with the SEC. I'd now like to turn the call over to Paula Ragan. Paula?

Thanks Dan, and thank you everyone for joining us on the call this morning. Let me start by saying that we could not be more pleased with our accomplishments so far this year. We've achieved significant progress and our mavorixafor clinical programs and successfully completed a $55 million at-the-market PIPE financing to included participation from leading biotech investors, both new to X4 as well as from existing investors. We believe this demonstrates a strong level of investor conviction and the clinical and commercial potential of mavorixafor, while also extending our expected cash runway into late 2022 and supporting our additional pipeline programs. As mentioned on our last call, the pace of enrollment in our key clinical programs has ramped up significantly since last year. Specifically, we now expect to be able to announce an important enrollment update in our Phase 3 trial in WHIM syndrome in mid-2021. As a reminder, WHIM is a rare inherited primary immunodeficiency disease caused by gain of function CXCR4 mutations that prevent healthy immune cell trafficking and effective immuno surveillance. Most patients with WHIM disease have life on neutropenia and lymphopenia, that can result in a variety of serious chronic infections across multiple organ systems, HPV associated regions and increased cancer risk and other serious life impacting morbidities. Mavorixafor is our first-in-class small molecule antagonist of the CXCR4 receptor that we believe has the potential to be the first disease modifying therapy for more than 3500 potential diagnosed and undiagnosed WHIM patients in the U.S. The 4WHIM Phase 3 trial is a global randomized, placebo controlled double blinded, multicenter study designed to evaluate the safety and efficacy of mavorixafor over a course of 52 weeks, and approximately 18 to 28 genetically confirmed WHIM patients. The Phase 3 primary efficacy endpoint, called time above threshold for absolute neutrophil count, or TATANC, compares the level of circulating neutrophils relative to a clinically meaningful threshold in response to mavorixafor treatment versus placebo. As you may recall from our Phase 2 study and published in the journal blood in 2020, mavorixafor demonstrated greater than a 600% increase in time above threshold for neutrophil counts at our selected Phase 3 dose as compared to the lower doses treated for WHIM patients, which gives us deep confidence and the potential success of our Phase 3 study. Secondary endpoints include infection rates, work burden and assessment of immune system function and quality of life among others. At our current rate of enrollment, we continue to expect top line data from this Phase 3 trial in 2022. We also continue to expect to report new data from the open label extension of our Phase 2 clinical trial and WHIM later this year. We expect these data will continue to provide us insights regarding the long-term safety and durability of chronic mavorixafor treatments. Additionally, we anticipate several scientific publications that further support mavorixafor mechanism of action and potential for disease modification, as well as demonstrate its breadth of activity across a spectrum of WHIM genotypes. Finally, we look forward to sharing new information regarding our additional WHIM prevalence research later this year. In addition to our WHIM program, we continue to make good progress in our Phase 1b trial for the treatment of Waldenstrom's macroglobulinemia. A rare form of Non-Hodgkin's Lymphoma. As a reminder, this Phase 1b study is a multicenter open label, dose escalation clinical trial that is expected to enroll approximately 12 to 18 patients. We are very excited to have recently received notice of acceptance of our Phase 1b trial abstracts for a poster presentation at this year's annual Congress of the European Hematology Association or EHA that will be taking place virtually from June 9 to June 17. The abstract and poster will focus on initial clinical data from the ongoing Phase 1b trial of mavorixafor at the study low and mid doses in combination with an ibrutinib and the subset of Waldenström's macroglobulinemia patients harboring both the MYD8 and CXCR4 mutations. In addition to safety pharmacokinetics and pharmacodynamic markers, the initial data set will evaluate changes in Serum immunoglobulin M, or IgM and blood hemoglobin levels. It is well established that reductions in IgM levels and increases in hemoglobin levels correlate favorably with clinical responses for the treatment in Waldenstrom's patients. Later this year, we expect that the study will mature further, such that we should be able to present data sets regarding the determination of the final dose selection for further study and assessment of major response rates, as well as ongoing safety across a range of doses. So as you can see, 2021 has been quite productive for us to-date, and we're looking forward to a steady flow of value adding data presentations and business milestones throughout the rest of the year. With that update, I will now turn the call over to Adam to discuss our results for the quarter and our recent financing announcements. Adam?

Thanks, Paula. And thanks to all of you on the call today. As presented in our press release this morning. I will summarize our financial results for the first quarter ended March 31 2021. As of March 31 2021, X4 had $116.7 million in cash, cash equivalents and restricted cash. This figure includes proceeds from the PIPE financing that we completed in mid-March. Through this at the market deal, we raised a gross amount of $55 million with the financing including participation from a number of new and existing leading healthcare investors. After the close of this transaction, we now expect our cash and cash equivalents will fund company operations into the fourth quarter of 2022. Our research and development expenses were $12.1 million for the first quarter of 2021 as compared to $8.9 million for the comparable period in 2020. General and administrative expenses were $5.8 million for the first quarter of 2021 as compared to $4.7 million for the comparable period in 2020. And we reported a net loss of $18.7 million for the first quarter of 2021 as compared to a net loss of $11.1 million for the first quarter of 2020. Note that net loss included $1.3 million of certain non-cash expenses for the first quarter of 2021. Let's now open up the call to your questions. Operator.

Our first question comes from Stephen Willey with Stifel. You may proceed with your question.

Good morning. Thanks for taking the questions. Paula, I was maybe wondering if you can just kind of frame up expectations a little bit with respect to, I guess what kind of data we might see in the abstract when that gets released. I think it's next week. And I guess how that may differ from what we could see at EHA. It sounds like you said specifically that we'll be seeing data from the low and mid doses, have you dose escalated patients up to that 600 maybe dose yet, for the escalation protocol?

Yes, so I'll try to break that all down for you, Stephen. Thank you so much for the question. So the way to think about Waldenstrom's stasis disease is obviously the heavy burden of IgM levels being excessively high, causing a lot of risk first and serious to correlate like hyperviscosity syndrome. And then that massive bone disease burden from the cancer itself causing hemoglobin impact. So, for a patient, you want to see IgM dropping and hemoglobin rising as a function of being treated. So that's really the focus of our EHA data in terms of demonstrating changes and IgM levels, and hemoglobin levels, that could be indicative of the combination doing better than an ibrutinib alone. So we'll really be focusing on that there's other Phase 1b study is that, sort of use this, this paradigm as well. So I think we're consistent with giving people the data set that can be an indicator indicate our dual combination activity. When we think about at the end of the year with ASH, it's really about response rates, and those take time to mature. Actually, typically, it takes about six months on treatment before patients are going for CT scans, and bone marrow assessments to really complete the definition of response rate that's required in these patient populations. So that's why we just need longer time on study to be able to support a robust number of assessments across all our patients. And then finally, you did mention the 600. I mean, the study is continuing to dose escalate. As you know it's an open label study. And we haven't completed all the cohorts yet. So that's why we'll be focusing on the low to mid doses, but we'll certainly share as much data as we're able to.

Okay, and I guess, have you internally made the decision as to whether or not you're going to increase the enrollment up to up to 18. Or I guess, do you think that you're going to get a sufficient amount of data in these first 12 to kind of understand what your recommended Phase 2 dose need to be?

The trial itself incorporates a maximum tolerated dose requirements. So the 12 to 18 builds in flexibility in the event that we have dose limiting toxicities. So that's where the flexibility comes in, Steve, it's not like we'll continue to try to escalate so long as the safety profile enables us to do so. The first two cohorts will reach through 600. So the last cohort see is a bit rounding out the total number of patients. So just stay tuned on that.

Understood. And then just lastly, just curious as to where things stand on severe congenital neutropenia, which I don't think was part of your prepared commentary, or if it was, I may have missed it?

Yes, no, thank you. So the SCN trial is open and enrolling, in the context of COVID, especially last year, and early this year, it was the most challenging study to enroll given the short dosing timeframe. These patients are immune compromised, the study is two weeks. So we have always tried to prioritize patient safety and their need to come into hospitals for assessments. We do expect to have some initial data by the end of this year. But just in terms of patient numbers what we've guided to is a smaller number of patients than obviously the total trial design, but we'll look forward to sharing what we're able to towards the end of the year.

Understood. Thanks for taking the questions and congrats on the progress.

Thank you so much.

Thank you. Our next question comes from Marc Frahm with Cowen. You may proceed with your question.

Thanks for taking my questions and congrats on all the progress across the multiple programs. Paula, can you just remind us the different doses in the Waldenstrom trial, just the relative levels of CXCR4 inhibition that you're expecting based on kind of all the prior work you've done with the molecule?

Sure, actually, I would invite Art to share that. He is certainly one of our experts in exposure and inhibition. So Art.

Yes. Hi. And thank you for the question. So the exposures that we're going after are very consistent with what we've seen from our WHIM Phase 2 trial. So the doses there, of course, are the 200 400 and then ultimately, 600. And the exposures are seeming to be adequate to cause leukocyte mobilization, which is one of the key components for us to be able to have efficacy. And so we understand the potency of our molecule we've measured that in many settings. And we also know that we're able to achieve those exposures to inhibit CXCR4 to give us the efficacy that we're hoping to see.

I guess you're kind of on traditional metrics of like, IC50 IC90, like what type of levels are react?

Yes. So the IC50 for mavorixafor is 4 nanomolar and the IC90 is about 12 nanomolar.

And so just across like, certainly the 400 milligrams per day gets us to the IC50, and then the IC90, we're close to that with the 600. But of course, it's about maximum tolerated dose, so that's where the window is the drug is nonlinear in terms of its exposure, Marc.

Okay, that's helpful. Thanks. Maybe on WHIM, Paula, give an update on to where you are more generally on patient identification efforts, where registries are at these days?

Yes, so excellent question. So on patient identification, this is where we continue to partner with existing foundations that have their own registries, as well as we have our own internal patient advocacy group that's been connecting with various sort of subgroups that have formed within the WHIM community. So we continue to work with them, partner with them, work with existing registries and we certainly have been formulating our own registry to support the long-term growth of mavorixafor to support these patients. So there's a bit of a stay tuned on sort of X4s, specific registry plans, but that they're in the works and we're obviously wanting to appropriately dovetail into the communities that exist today and support them via our own efforts. And then in terms of just one patient identification, I think, later this year, we will be focusing on some WHIM prevalence work, which will crosswalk into some of the broader patient identification initiatives that we have ongoing. And I think it'll be sort of a good robust overview of some of those approaches towards the second half of this year.

Okay, great. That's very helpful. Thanks.

Thank you, Marc.

Thank you. Our next question comes from RK Ramakanth with H.C. Wainwright. You may proceed with your question.

Thank you. Good morning, Paula. A quick question on mavorixafor. Most of my questions on the current expectations on the EHA, I got them. But, beyond what's going on right now, in the Phase 1b study? Do you have a general outline as to how you would be going forward with this into the Phase 2 study? And also could you kind of give us a rough timeline as to when that could happen?

Yes, so thanks, RK. I think I'll start and then I'll invite you to add anything. But I think, really, for clinical drug development, what we want to determine is the activity and potential benefit of the drug in this Phase 1b as well dose. Once we have a robust data set in hand, it's always best to partner with the FDA and other agencies early in the process. So that would be our intent. And then I think once we both have the FDA input in our data set will then be able to project off of where the study will launch to. And our view would be straight into a study that would hopefully support registration. But we really need to generate the data set, of course to have a mutually agreeable path forward, both for the company and for regulators. Diego, would you like to add anything?

Yes. Thank you, Paula. Also, - we are actively working with leading investigators, who are really interested in this a population of double mutant Waldenstrom to look at the data feed emerges and put together the best study designed to present to regulate those, obviously, we have benchmarks of how ibrutinib it itself was approved. And that is certainly one area we'll carefully addressing and looking at it, but also other potential scenarios. So we will be sharing more with you and others as they world continues. Thank you for the question.

Thank you. The second question is on the 4WHIM trial. We understand you're going to give us a little bit of an update regarding enrollment in the mi year. However considering this population and your experience so far in the trial. Again, similar question as to when we could see the completion of this study? Or would we get that update also, during the mid-year enrollment update as to, how we should think about not only or completing the study, but your conversations with regulators?

Yes, so maybe just as a reminder, we have shared that with the existing study design, which is randomized, placebo controlled and double blinded. And it's a 12-month dosing period has been heavily vetted by the FDA and EMA in terms of support for the design and statistical power, we feel extremely confident with the current study design. And that would be certainly enable an NDA and EMA filings from this one datasets, and that continues to hold. So I think the excitement for us is that when we provide guidance on enrollments that can readily sort of trigger people to do the math and project off of when the top line data. So that certainly is continues to be consistent with our 2022 top line, data guidance. And I will certainly look forward to being more specific in mid-2021.

Thank you. Thank you, Paula.

Thank you.

Thank you. Our next question comes from Mayank Mamtani with B. Riley. You may proceed with your question.

Hi, good morning team. This is Sahil Kazmi on for Mayank. Thanks for taking our questions, and congratulations on all the progress. Maybe a brief one on the WHIM patient enrollment and how that sort of tracking has been influenced by your efforts in patient identification? And then also on that same train of thought, how the patient identification efforts have had synergies on the SPNside. And how you might think that influencing later stage trials as well.

Thank you very much for the great question. So, I'd almost like to have you consider sort of three parallel, sort of streams of work that do have less leverage with each other. But certainly when we started the 4WHIM trial, which from design and planning was certainly a set of a timeframe, at least, two years ago at this point, really, in rare disease, you're working with Centers of Excellence, KOLs with known patients. Patients that have had that lung chronic unmet need and are sort of pent-up demand for innovative study. So that's really been the history around us and how we have enrolled, opened up site work with investigators and enrolled the trial. Of course, in parallel works, we're playing the long game. WHIM is a rare genetic disease, under educated and under diagnosed and the broad clinical communities as well as patient communities. So along our journey as we built our own education and awareness efforts through a great MSL team, and great patient advocacy team, we've actually naturally along the way come on earth new or newly found or newly identified WHIM patients that have been appropriately directed to clinicians to learn about our trial, and also continue to kind of broaden out the overall connectivity between patients across the community. So I think it's a very natural synergy. But the patient identification efforts are really the long game to build the potential addressable patient populations, if and when mavorixafor is approved. And then the third question is the SPN. Sort of dovetail and actually that's been a great opportunity for us. One of the positive outputs of the NBTA efforts has been the panel that we're using for free a genetic testing for patients and - or sorry for clinicians with patients with immune deficiencies spans all a large number of congenital neutropenia as of which SPN are some system that has been nicely leveraged with our ongoing studies. And we've also through our patient advocacy efforts, there's a lot of overlap with some of the patient foundation communities, and we've had a nice synergy in terms of education and awareness to our SPN trial as well. So I hope that addressed your question.

Yes, absolutely. That's really helpful. And then just maybe one more quick one on WHIM is, could you provide kind of to the extent you're able to disclose a bit more color and what we might learn from incremental sort of data from this Phase 2 open label extension that you plan to share at the end of the year, whether it be from a safety or sort of durability or response angle?

I mean, it's I think you summarized it with safety and durability, but obviously the intense with supporting WHIM patience is lifelong treatment with mavorixafor. That's our expectation based on the data we know today. So any data that we generate under close - watch around safety and durability, continues to support the totality of data that would enable physicians and patients to be comfortable with the data. Of course, obviously, the regulators as well. So I think it's just a bit of stay tuned, and we look forward to sharing that as it emerges.

Great. Really appreciate the time. Thanks for taking our questions.

Thank you.

Thank you. Our next question goes from Arlinda Lee with Canaccord. You may proceed with your question.

Hi, guys, thanks for taking my questions. You guys alluded to mirroring mavorixafor toxicities. Could you talk a little bit about what you would expect? These might be? And then can you comment on whether you expect dosing to be the same across the various disease indications? Thank you.

Sure, thanks. Diego, would you like to take that?

Yes, sure. So in terms of mavorixafor the data we have in when it is used as monotherapy it really has been very well tolerated. So we don't really have any expected dose limiting toxicities directly from mavorixafor alone. However, when you use it in combination with ibrutinib, I'm sure you know there is several safety issues with chronic treatment with ibrutinib, they're all very clearly stating their label. And when you those in combination, we have to monitor those very carefully and see if adding mavorixafor is having any effects. So that's mostly what we are tracking. Regarding the - whether we expect the same of different dose that will depend on the data. We're confident for WHIM syndrome we have the right dose, that's the 400 milligrams per day. Waldenstrom, we are dose escalating up to 600. And based on the tolerability as well as the efficacy segment, we will choose the dose that gives the best benefit risk profile. I hope that answer your question.

Thank you.

Thank you. Our next question comes from Zegbeh Jallah with ROTH Capital Partners. You may proceed with your question. Zegbeh, if your line is on mute, please unmute. And I'm not showing any further questions at this time. I would now like to turn the call back over to Paula Reagan for any further remarks.

We'd like to say thank you very much for joining the call today. And if you have any further questions, please don't hesitate to reach out and we hope you enjoy the rest of your day. Thank you so much again.

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for participating. You may now disconnect.