X4 Pharmaceuticals (ticker: NASDAQ:XFOR) has announced their fourth quarter and full year 2023 financial results, along with operational highlights. The company's New Drug Application (NDA) for mavorixafor, aimed at treating WHIM syndrome, has been submitted and accepted, with FDA approval potentially arriving by April 30th. The Phase 3 trial has successfully met its primary and several key secondary endpoints.
X4 Pharmaceuticals ended the year with a strong financial position of $115.2 million, which is expected to fund operations into 2025. The company is also preparing for the commercialization of mavorixafor, including the training of a specialized field team and engaging with payers and physicians.
Key Takeaways
- NDA for mavorixafor submitted and accepted; FDA approval anticipated by April 30th.
- Phase 3 trial for WHIM syndrome met primary and key secondary endpoints.
- Company to seek mavorixafor approval outside the US and updates on chronic neutropenia program.
- Ended 2023 with $115.2 million in financial resources, sufficient to fund operations until 2025.
- Raised over $87 million in 2023, with potential non-dilutive funding in 2024.
- Optimism for a priority review voucher due to rare pediatric disease designation.
- R&D expenses were $15.3 million in Q4 and $72 million for the full year of 2023.
- SG&A expenses stood at $9.9 million for Q4 and $35.5 million for the full year of 2023.
- Reported a net loss of $19.1 million for Q4 and $101.2 million for the full year.
- Commercialization preparations for mavorixafor are underway.
Company Outlook
- X4 Pharmaceuticals plans global Phase 2 trial sites for mavorixafor.
- Clinical trial update event expected by the end of June.
- Preparations for mavorixafor commercialization include training and marketing campaigns.
Bearish Highlights
- Net losses reported: $19.1 million for Q4 and $101.2 million for the full year of 2023.
Bullish Highlights
- Successful Phase 3 trial outcomes for mavorixafor.
- Strong cash position to support future operations and trials.
- Anticipation of FDA approval and commercial launch of mavorixafor.
Misses
- R&D and SG&A expenses increased compared to the previous year.
Q&A Highlights
- Upcoming study to include various patient groups with congenital, idiopathic, and autoimmune conditions.
- No stratification for subtypes in the study; however, additional analysis to be based on sample size.
- Screening process to include multiple measurements; no lower limit for ANC.
- Baseline for WHIM Phase 3 was around 180 cells per microliter.
- Average GCSF dose used by patients is lower than labeled dose.
- Phase 3 trial showed a 60% improvement in infections; aiming for a 40% difference in annualized infection rates.
In conclusion, X4 Pharmaceuticals remains optimistic about the future of mavorixafor, with a strong financial standing and promising clinical trial results. The company is actively preparing for potential FDA approval and the subsequent commercialization of the drug.
InvestingPro Insights
X4 Pharmaceuticals (ticker: XFOR) has been actively preparing for the commercialization of mavorixafor with a strong financial standing. As investors consider the company's prospects, here are some insights based on real-time data from InvestingPro and InvestingPro Tips:
InvestingPro Data:
- The company holds a market capitalization of $219.15 million, reflecting its current valuation in the market.
- X4 Pharmaceuticals' Price to Book ratio stands at 2.52 as of the last twelve months ending Q3 2023, indicating how the stock is valued relative to its net assets.
- Despite the optimism surrounding the company's future, the Return on Assets for the same period was -77.53%, suggesting challenges in generating profits from the company's assets.
InvestingPro Tips:
- X4 Pharmaceuticals has demonstrated a significant return over the last week, with a 56.34% price total return, highlighting recent investor confidence in the stock.
- However, the company is quickly burning through cash, a point of concern for investors as it may affect the company's ability to sustain operations without additional funding.
- It is worth noting that X4 Pharmaceuticals does not pay a dividend to shareholders, which could influence the investment decisions of income-focused investors.
Investors looking for more detailed analysis and additional tips can find them on InvestingPro. There are 11 more InvestingPro Tips available for X4 Pharmaceuticals, which can be accessed at: https://www.investing.com/pro/XFOR. For those interested in a deeper dive into the company's financial health and future prospects, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Arsanis Inc (XFOR) Q4 2023:
Operator: Greetings. And welcome to the X4 Pharmaceuticals Fourth Quarter and Full Year 2023 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 is being recorded. It is now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors. Please begin.
Dan Ferry: Thank you, Operator, and good morning, everyone. Presenting on today’s call will be X4’s Chief Executive Officer, Dr. Paula Ragan; 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; Chief Medical Officer, Dr. Christophe Arbet-Engels; Chief Operating Officer, Mary DiBiase; and Chief Scientific Officer, Art Taveras. 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 X4’s most recent filings with the SEC, including this year’s Form 10-K, which is expected to be filed after market close today. I’d now like to turn the call over to X4’s President and CEO, Dr. Paula Ragan. Paula?
Dr. Paula Ragan: Thanks, Dan. Good morning, everyone, and thank you for joining us on the call today. As we look ahead to 2024, we thought we’d take the time to reflect on all that we’ve accomplished over the past year, milestones that have set the stage for what we expect will be an incredibly exciting and truly transformative year for X4, a year where we aim to become a fully integrated research, development and commercialization company with the goal of delivering new options for rare disease patients. Throughout 2023, we hit several major milestones. Most importantly, submission and acceptance under FDA’s priority review process of our NDA seeking approval of mavorixafor, our oral targeted CXCR4 antagonist for the treatment of WHIM syndrome. As you may recall, WHIM is a rare combined primary immunodeficiency caused by genetic variations to the CXCR4 receptor. The CXCR4 pathway helps regulate the migration of white blood cells, including neutrophils and lymphocytes into the bloodstream. WHIM is named for its four most common manifestations, warts, which are typically caused by unresolved HPV infections, hypogammaglobulinemia or low levels of antibodies, infections, both viral and bacterial, and myelokathexis or retention of white blood cells in the bone marrow. Diagnosis of WHIM has historically proven challenging because only a minority of patients actually experience all four manifestations in the acronym, although not all symptoms are required for diagnosis. The most challenging burden faced by people with WHIM syndrome results from their low blood levels of neutrophils or neutropenia and low blood levels of lymphocytes or lymphopenia, which research supports are experienced by essentially all WHIM patients. As a consequence of neutropenia and lymphopenia, an estimated 92% of WHIM patients experience frequent recurrent infections that significantly impact their health and quality of life. Over time, WHIM patients with recurrent infections may experience debilitating and life-threatening complications, including increased cancer risk, irreversible end organ damage and/or sepsis. I mention this not only to emphasize the incredible burden of disease for these patients and their caregivers, but also to highlight that mavorixafor has been granted breakthrough therapy designation by the FDA, indicating their recognition of mavorixafor as a product candidate with the potential to provide substantial improvement over the standard-of-care in the treatment, diagnosis or prevention of a serious condition. So we were very pleased to have reported on the additional positive safety and efficacy results from our completed global pivotal Phase 3 trial in WHIM in May of last year and further analyses of the trial at several important medical meetings and congresses both last year and earlier this year. Publication of the full four WHIM trial results is currently pending at a highly respected international medical journal. As you know, the Phase 3 trial successfully met its primary endpoint and several key secondary endpoints with participants on mavorixafor achieving statistically significant elevations in both their neutrophil and lymphocyte counts versus placebo, and importantly, statistically significant reductions in the rate of annualized infections and clinically meaningful reductions in the severity and duration of infections versus placebo. Based on these results, we submitted our first NDA to the FDA in late August of last year, receiving notice of acceptance for priority review, setting a target PDUFA date of April 30th, which is fast approaching. As you can well appreciate, we’ve been incredibly busy preparing for this potential approval since we spoke with you last year. We’ve been having discussions with our payers, multiple meetings with FDA and finalizing our supply and distribution arrangements to be ready in the event that we receive FDA approval. Our commercial and medical affairs organizations have grown meaningfully, although prudently, as we’ve continued to build our brand marketing and sales infrastructure to increase our presence at medical meetings and engage with our targeted hematologists and immunologists that we expect to have WHIM patients under their care. We look forward to leveraging our rare disease commercial capabilities to start building the WHIM market over time, with 2024 as the year to lay the foundation for future success and looking beyond 2024 as we are successful in educating physicians, helping them identify WHIM patients and build demand for our product candidate. WHIM syndrome is a very rare form of combined immunodeficiency first described over 60 years ago in the medical literature. Given its rarity and lack of available therapies, disease awareness amongst our targeted physician audience has historically been quite low, with no approved treatments for WHIM and only supportive care for symptomatic management, not addressing the underlying cause of the disease. With our successful Phase 3 WHIM trial recently being presented at major medical conferences, we are very encouraged that the physician community is now gaining more awareness. Additionally, we’ve experienced strong engagement with our What If It’s WHIM Disease Awareness Campaign, which is also demonstrating an even broader interest in WHIM syndrome. At the ASH Meeting in December, the organizers made a point of highlighting the need for new research and development in classical hematological diseases. At the meeting, our Chief Medical Officer, Dr. Christophe Arbet-Engels, gave a talk on the lack of innovation and the need for new treatments at the meeting. His presentation was enthusiastically welcomed by a standing room only audience. We’re also pleased to report that at the recent Quad AI Immunology Meeting in late February, not only was our abstract on the lymphocyte subset data from our four WHIM trial accepted as an oral presentation by Dr. Teresa Tarrant, an esteemed immunologist from Duke University, whom you’ve heard from our several past investor events, but Dr. Tarrant was also invited by the conference organizers to give a non-X4 sponsored talk on mavorixafor and WHIM syndrome specifically. Both of her presentations were extremely well attended, as was our What If It’s WHIM booth, all of which served to increase our visibility and enable what we believe can result in a major leap forward for patients through physician awareness and education. The X4 team working on our Congress exhibition booths have recounted many stories of physicians thanking them for drawing their attention to this disorder and they’ve reported that multiple physicians who approached us, never before having heard of WHIM syndrome, left believing they might in fact have a WHIM patient under their care. As you can imagine, we get the question often about the size of the market for WHIM in the U.S. With rare diseases that have no treatments, it’s always difficult to assess. These interactions with physicians serve to reinforce our belief that there may in fact be more WHIM patients out there beyond the thousand or so that we’ve estimated are diagnosed at present, based on claimed data and analyses. And while we eagerly await word from the FDA on our first NDA, we’re continuing to advance our plans to seek approval for mavorixafor and WHIM outside of the U.S. as well. We’ve had productive interactions with regulators in Europe and now believe we may be able to submit for EMA approval in late 2024, early 2025. We’ve had discussions with potential partners on how best to leverage our U.S. approval if received across other geographies as well. More to come on that later this year. Now turning to our chronic neutropenia program, we were able to make significant progress in advancing mavorixafor and CN during 2023 as well. Although our Phase 2 clinical trial was a little slower to enroll than we’d initially expected, we were able to learn and increase enrollment and achieve our target of at least 15 patients by early November and we continue to expect to announce additional Phase 2 results in the 15 plus trial participants in the coming months. We expect that our data to be presented will include a meaningful number of patients who are receiving mavorixafor alone, without concomitant GCSF treatment, enabling the assessment of mavorixafor as a potential monotherapy in those diagnosed with CN. We also expect that data to be presented will include information on additional participants being treated with a combination of mavorixafor and GCSF. Importantly, all of the preliminary data presented to-date and other learnings from the Phase 2 trial, along with our interactions with the FDA, have enabled us to finalize the protocol for a global, pivotal, Phase 3 clinical trial of mavorixafor and CN, and advance the initiation of this important next trial in the first half of 2024. As we’ve previously discussed, 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. We will be assessing the safety and efficacy of mavorixafor plus or minus concomitant GCSF treatment in those with congenital, autoimmune or idiopathic neutropenia. The patients included into the study will also have to present with neutropenia and symptomatic infections, despite current standard of care, including GCSF. There is a significant unmet medical need across this established Phase 3 patient population, a U.S. market we estimate to represent approximately 15,000 people. 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, quality of life measurements, among others, and of course, safety. We are in the process of initiating our global study sites and are looking forward to enrolling patients across a number of these sites beginning in the next few months. We are, as of now, planning to host a CN event before the end of June to update on both the Phase 2 trial data and CN Phase 3 trial progress, so stay tuned for more information on that. I’ll now turn it over to our CFO, Adam Mostafa, to review the fourth quarter and full year 2023 financials. Adam?
Adam Mostafa: Thanks, Paula, and thanks to all of you for being on the call with us today. Having raised more than $87 million during 2023, comprised of a mix of equity and debt capital through an at-the-market pipe and through our expanded loan facility with Hercules, we ended 2023 with $115.2 million in cash and cash equivalents, short-term marketable securities and restricted cash. We expect that these funds will support our operations into 2025. We would like to note that we may have multiple non-dilutive sources of funding available to us throughout 2024. Given mavorixafor’s rare pediatric disease designation, we are optimistic that we’ll receive a priority review voucher, which can be used for a subsequent application or sold to another drug sponsor should mavorixafor be approved. If all goes well, we also may have additional access to milestone-based debt tranches through our Hercules facility this year and anticipate revenues from U.S. sales of mavorixafor over the course of this year and beyond. A quick recap of our 2023 financials. R&D expenses were $15.3 million and $72 million for the fourth quarter and full year ended December 31, 2023, respectively, compared to $19 million and $61.1 million for the comparable periods in 2022. Our R&D expenses included $1.1 million and $4.4 million of certain non-cash expenses for the fourth quarter and full year ended December 31st, respectively. SG&A expenses were $9.9 million and $35.5 million for the fourth quarter and full year of 2023, respectively, compared to $26.6 million and $27 million for the comparable periods in 2022. Our SG&A expenses included $1.4 million and $4.3 million of certain non-cash expenses for the fourth quarter and full year ended December 31st, respectively. Finally, we reported a net loss of $19.1 million and $101.2 million for the fourth quarter and full year ended December 31st, compared to $29.1 million and $93.9 million for the comparable periods in 2022. Net losses included $2.5 million and $8.7 million of stock-based compensation expenses for the fourth quarter and full year 2023, respectively, compared to $1.1 million and $5.2 million for the comparable periods in 2022. With that, I’ll pass it back to Paula.
Dr. Paula Ragan: Thanks so much, Adam. To conclude, as we said in the press release earlier this morning, the excitement at X4 is now palpable. We have a countdown clock on the wall as our expected PDUFA date and we could not be more energized to know that we are so close to potentially achieving our vision of delivering meaningful benefits to those with rare diseases of the immune system by gaining approval for what would be the first and only targeted therapy for the treatment of people with WHIM syndrome. And we look forward to continuing to report out on our other milestones throughout the rest of the year. We’ll now open it up to call for your questions. Operator?
Operator: Thank you. [Operator Instructions] Our first question comes from Kristen Kluska with Cantor Fitzgerald. Please proceed.
Kristen Kluska: Hi, everyone. Thanks for taking the questions and kudos. I’ve seen your team at a lot of these medical conferences, so great work getting the community aware of what’s going on there. I wanted to ask about commercialization and thoughts around CN. So the KOLs that we speak to note that even meeting some GCSF would be a huge win, but understand that in a commercial setting, patients are going to present differently, some on monotherapy maps, some on combination and some on combinations that may be less GCSF. So to account for this, what is your expectation on what the monitoring and neutrophil measured protocols would look like in a commercial setting?
Dr. Paula Ragan: Thanks, Kristen. I think what we’re hearing you explore is around neutrophil counts and chronic neutropenia and then how we are considering how best to develop the product to address the range of patients. So assuming that I got that right, we’re certainly very excited about our pending data update on the Phase 2 study coming up in the first half of this year. Of course, in our first three patients, we saw a nice durable elevation in patients with combination GCSF. Importantly, we’ll be having data on a group of monotherapy patients, so I think that’ll really help us appreciate the impact of mavorixafor for on neutrophil counts in this broader patient population, and of course, we’ll continue to study the drug in combination with G. There’s more work to do to support physicians and patients on the best hybrid combination or introduction of mav and then if and when GCSF might be needed. So hopefully I got your question.
Kristen Kluska: Yes. Thank you. And maybe if I could squeeze in a second one. For WHIM ‘s syndrome, you noted that sometimes physicians are thinking, hey, actually, maybe I do have a patient that fits the criteria for WHIM’s syndrome. Curious if you’re seeing any trends about what specifically it is about the indication that, it’s kind of putting this light bulb in their head or if you’ve heard any specific feedback there to help with your education efforts?
Dr. Paula Ragan: Yeah. I mean, I think, what the field has been sharing with us is just the general excitement because the data are so strong with an oral once daily. But I do think, some of the interesting light bulbs are around, there is no ICD-10 code. It’s a very poorly educated disease. So I’ll turn it over to our Chief Commercial Officer to add a bit more color.
Mark Baldry: Yeah. Thanks. And what’s been interesting is through our disease awareness campaign, we’ve really seen that light bulb go on as we highlight the fact that these patients can present very differently. No one WHIM patient is alike. And so this kind of dispels the whole assumption that you have to have all four symptoms to be a WHIM patient. And physicians are beginning to realize they may have more WHIM patients in their practice than they originally thought.
Kristen Kluska: Thanks very much.
Operator: The next question comes from Ed Tenthoff with Piper Sandler. Please proceed.
Ed Tenthoff: Great. Thank you very much. Really getting excited for the launch here. I have just a couple questions. Firstly, on the FDA side, appreciating that there’s not a panel, are there any final issues to resolve in terms of manufacturing visits, have you initiated labeling discussions, when do you think that happens? All those kinds of things. And then when it comes to the actual selling effort, how many reps do you anticipate to satisfy the U.S. and what do you think the kind of cost would be, annual cost for that salesforce? Thanks so much.
Dr. Paula Ragan: Sure. Our Chief Medical Officer will take your regulatory question and Mark can comment on the commercial.
Dr. Christophe Arbet-Engels: So our interactions with the FDA has been the typical interactions. We are on track for PDUFA dates on April 30th and we’re working through the regular process with the FDA.
Mark Baldry: Yeah. And assuming we get approved at the end of April, we’ll be ready to deploy a fully trained, experienced rare disease field team. We can share more details around the time of approval in terms of the size of the salesforce, but we’ll be also engaging with payers to communicate the burden of WHIM and the value proposition of mavorixafor and offering a comprehensive suite of patient support services. So patients can get access to mavorixafor as quickly as possible after approval.
Ed Tenthoff: Okay. Great. Thank you. Good luck.
Dr. Paula Ragan: Thanks, Ed.
Mark Baldry: Thank you.
Operator: Thank you. Our next question comes from Sean Lee with H.C. Wainwright. Please proceed.
Sean Lee: Hey. Good morning. This is Sean on for RK. I just have a quick question in terms of the awareness campaign. So because it’s such a rare disease, once it’s launched, would you be doing a marketing campaign targeting patients as well just to have the outreach there too so that they can start reaching out for mavorixafor?
Dr. Paula Ragan: I’m sure. Great question, of course. We encourage everyone to check the What If It’s WHIM website that’s available to the public. So certainly we are developing the tools that would be directed towards physicians, and of course, support the patient groups appropriately. I’ll turn it over to Mark for a bit more detail.
Mark Baldry: Yeah. It’s a great question. And as Paula said, we’re really building the foundations for a launch that enables the product to get to patients as quickly as possible. For clarity, we don’t expect a bolus of patients at launch. Our goal is to get patients back in to see their doctors and as we build demand for our products. So we’ll be doing marketing campaigns targeted at physicians where we expect to have WHIM patients in their practice, as well as marketing campaigns to potential patients and also educating payers on the burden of WHIM syndrome and the value proposition of mavorixafor.
Sean Lee: Great. Thank you for that.
Operator: [Operator Instructions] Our next question comes from Stephen Willey with Stifel. Please proceed.
Stephen Willey: Yeah. Good morning. Thanks for taking questions. Maybe just a couple Phase 3 CN questions. So, I think, you are stratifying on CN subtype in the Phase 3, but I guess I’m just wondering how you expect those subtypes to be represented within the Phase 3 given patient eligibility criteria and if you’re enrolling in a way to get kind of a minimal representation of each of these, whether it’s congenital, autoimmune or idiopathic.
Dr. Christophe Arbet-Engels: So, yes, this is Christophe here. The included criteria will have congenital, idiopathic and/or autoimmune patients. In the study, we will have the patients on monotherapy and on GCSF as well. We’re not planning on stratifying specifically for some of those subtypes, but we’ll do additional analysis obviously when we have given the sample size. We’ll have a substantial number of those subtypes that we’ll be able to consequently analyst -- analyze.
Dr. Paula Ragan: Yeah. And just to add to Christophe’s comment, that the idiopathic autoimmune are essentially the same bucket. They’re different words for the same group of patients and that’s quite a large majority and then there’s the congenital. So, we’ll be able to stratify by those bigger buckets. The congenitals are so variable, it’s really we’re not able to stratify based on the heterogeneity of congenital. So, we’re stratifying across the big buckets that Christophe mentioned and also GCSF and monotherapy.
Stephen Willey: Okay. And then is there a lower limit of neutrophils that a patient must have to be Phase 3 eligible? And then I guess just given the inherent variability of neutrophil counts, how many measurements do you require during the screening process prior to randomization?
Dr. Christophe Arbet-Engels: So, yes, we do have the -- so the measurements first. Let me start with this. We have several measurements that we’re going to be looking at. For the screening we’re looking at one measurement on the screening and then we will establish the baseline on several hours of measurements. And the first part of the questions was if there is a lower limit of ANC. We don’t have a lower limit of ANC. There will be some patients that can be fairly low, especially in the congenital population and we have a range that in our inclusion criteria that include those severe all the way to the mild and moderate neutropenic patients.
Dr. Paula Ragan: And Steve, just as a reminder of benchmark, our WHIM Phase 3, their baseline were about 180 cells per microliter, so quite severely neutropenic. So, we would expect to be able to accommodate patients certainly well into those ranges and hopefully to see an effect similar to what we’ve seen in WHIM.
Stephen Willey: Okay. Very helpful. Thanks for taking the questions.
Operator: The next question comes from Kalpit Patel with B. Riley. Please proceed.
Unidentified Analyst: Hi. Good morning. This is Jay [ph] on for Kalpit. Thanks for taking the questions. My first question is for the upcoming Phase 2 update. Where we see data from patients who are on higher dose or GCSF. Believe the data staying to-date were for patients less than 1 microgram per kilogram by the approved dose of a GCSF is much higher? And my second question is for the Phase 3 that you are planning to start. What in your view is a good delta for reduction in infection rate versus the control arm? Thank you.
Dr. Paula Ragan: So, we’ll tag team here. I mean, so in terms of the GCSF dosing, you’re incredibly sharp in assessing that the average dose of GCSF of the patients is much lower than the labeled dose and that is practice. Unfortunately, this drug is so challenging to take and to manage that physicians and patients stay on the very low end, sometimes as low as 20% of base of the labeled dose. And again, we don’t give guidance on what doses patients are on. They come in at their own stable doses. So, we would expect if that’s the standard of care, that that’s the range that we’ll continue to see in the trial. So, I hope that addresses your first question. And then I think your second question was around what type of infection benefit target are we aiming for in the Phase 3?
Dr. Christophe Arbet-Engels: So, in our Phase 3, I want to remind you about our WHIM data. Our WHIM data on average have seen an improvement of 60% of infections and we’ve taken a rather conservative approach and we’re estimating with power of that study for 40% difference in annualized infection rates.
Unidentified Analyst: Okay. Thank you. That’s very helpful.
Operator: Thank you. At this time, I would like to turn the floor back over to Paula Ragan for closing comments.
Dr. Paula Ragan: Thank you so much for joining us today. We appreciate all the attention and insightful questions and wish you an enjoyable rest of your day.
Operator: Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
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