X4 Pharmaceuticals - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 delivered a decisive upside versus Street: revenue $28.81M and EPS $0.04, driven by $27.87M license revenue from the Norgine partnership and a $10.8M non-cash gain on Class C warrants; XOLREMDI product revenue was $0.94M.
• Revenue and EPS both materially beat S&P Global consensus (revenue $7.03M*, EPS -$3.75*), reflecting the timing of upfront license recognition and warrant mark-to-market; prior two quarters showed mixed results amid early U.S. launch and higher operating spend.
• Operationally, 4WARD Phase 3 CN trial is ~90% site-initiated, with full enrollment guided for Q3/Q4 2025 and top-line in 2H 2026; EU WHIM MAA validation and ex‑U.S. partnerships (Norgine, taiba rare) expand global optionality.
• Strategic restructuring announced in February is expected to cut annual spend by $30–35M; cash and marketable securities totaled $87.7M at 3/31/25, with runway into 1H 2026.
• Stock-relevant catalysts include: CN Phase 3 enrollment/milestones, EU WHIM review/launch preparations via Norgine, and U.S. WHIM commercial progress; reverse split (1-for-30) effected April 28, 2025 to cure Nasdaq bid-price deficiency.

What Went Well and What Went Wrong

What Went Well

• License monetization and ex-U.S. strategy execution: $27.9M license/other revenue recognized in Q1 from the Norgine agreement; two ex‑U.S. commercialization deals (Norgine in EU/ANZ; taiba rare in MENA) enhance geographic leverage.
• CN Phase 3 (4WARD) pacing and design rigor: ~90% of planned sites initiated; trial powered >90% for co-primary endpoints; management reiterated full enrollment Q3/Q4 2025 and topline 2H 2026; CEO: “extremely productive and value‑adding period”.
• WHIM launch traction signals: cumulative U.S. XOLREMDI sales reached $3.5M since May 2024; new patient share rising, supported by HCP/patient education; CCO noted adherence “higher than you would expect” for daily oral therapy.

What Went Wrong

• Product revenue still small and lumpy: XOLREMDI Q1 product revenue $0.94M (lower than Q4 due to inventory resupply timing and small-population dynamics), underscoring early-stage commercial adoption.
• Continued operating cost intensity: Q1 R&D $18.5M and SG&A $15.0M, though both declined y/y; Q4 2024 R&D/SG&A elevated with pre-commercial scale-up and CN development.
• Prior-quarter estimate misses on revenue/EPS amid launch ramp and spending: Q3 2024 revenue and EPS missed consensus, highlighting near-term variability before license revenue inflection [functions.GetEstimates]*.

Transcript

Operator (participant)

Stand by your program is about to begin. 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.

Daniel Ferry (Managing Director)

Thank you, Operator. 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 will be joined by Chief Commercial Officer, Mark Baldry, and Chief Medical Officer, Dr. Christophe Arbet-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 Ragan. Paula?

Paula Ragan (President and CEO)

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 XOLREMDI for WHIM syndrome in the U.S., and our achievement of several significant milestones towards expanding the global potential of mavorixafor for patients. Let's begin with mavorixafor in chronic neutropenia, or CN. As you know, having successfully developed mavorixafor, branded XOLREMDI for patients with WHIM syndrome in the U.S., we are now also developing mavorixafor 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 30-40%, 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 CN patient population, and it is with this population in mind that we are launching our ongoing 4WARD trial, a global pivotal phase III clinical trial evaluating the safety and efficacy of once-daily oral mavorixafor 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 targeted 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 mavorixafor's 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 mavorixafor 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 increased our confidence in the success of the 4WARD trial. Individual patient data from both the mavorixafor phase III for WHIM trial and the completed phase II CN trial have now been analyzed, applying this just-mentioned 4WARD 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 4WARD phase III heat map provides a benchmark for ANC responses that translated into a 60% reduction in annualized infection rates when comparing mavorixafor treatment to placebo. The CN phase II heat map demonstrates the impact of mavorixafor 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 mavorixafor arm of the 4WARD 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 mavorixafor treatment will correspond to a significant decrease in annualized infection rates. We also continue to believe that the 4WARD trial is rigorously designed and powered to demonstrate the impact of mavorixafor in CN.

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 mavorixafor in treating severe chronic idiopathic and autoimmune neutropenia in patients without a CXCR4 genetic variant. The patent is expected to expire in the U.S. 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 mavorixafor in CN could represent a $1 billion-$2 billion opportunity in the U.S. alone. With that, let's turn now to our progress with mavorixafor in WHIM syndrome. At the end of March of this year, cumulative sales of XOLREMDI 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 WHIM syndrome. We're seeing success in our educational efforts that support HCPs in finding WHIM patients, with new patients now representing approximately 40% of our current XOLREMDI 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 XOLREMDI 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 mavorixafor 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 12-15 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 Norgine, a leading European specialty pharmaceutical company, to commercialize mavorixafor in Europe, Australia, and New Zealand. Norgine will be launching mavorixafor for the WHIM 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 Taiba Rare, another specialty pharmaceutical company, to commercialize XOLREMDI 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 mavorixafor 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 4WARD 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 WHIM patients. Twenty WHIM patients provided responses; none were on XOLREMDI 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 "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?

Adam Mostafa (CFO)

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 XOLREMDI 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.

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 Norgine, 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 1-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 have 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-$35 million annually. We'll now open the call up to your questions. Operator?

Operator (participant)

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

Ted Tenthoff (Managing Director and Senior Research Analyst)

Great. Thank you very much. Can you give us a sense if you have any visibility into the types of patients that are being enrolled in 4WARD? Is this largely in line with what you expect and what you were enrolled in the few patients in the phase II trial? I just wanted to follow up on WHIM?

Paula Ragan (President and CEO)

I'm having a little trouble hearing you, but I think what you're looking for is more color on the enrollment profile of the CN patients and then how that connects to the commercial market. Of course, you mentioned that we're very pleased with the overall profile, but I'll turn it over to Christophe and Mark.

Christophe Arbet-Engels (CMO)

Sure. The study in itself has very specific criteria, and the profile of the patients that we are having is really good so far, and we're tracking this. What I can share as anecdotally, having met with some of the PIs 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.

Mark Baldry (Chief Commercial Officer)

Yeah.

Ted Tenthoff (Managing Director and Senior Research Analyst)

Thank you very much.

Paula Ragan (President and CEO)

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

Mark Baldry (Chief Commercial Officer)

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. What we're finding is the caseloads of patients that these physicians have are much higher than in WHIM. In WHIM, 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. We can clearly see where these patients are and the unmet need in this refractory population.

Paula Ragan (President and CEO)

Yeah. 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. Mark is seeing that pull through in terms of the higher caseloads through our market research.

Ted Tenthoff (Managing Director and Senior Research Analyst)

Great. That's very helpful. Thank you.

Paula Ragan (President and CEO)

Thank you, Ted.

Operator (participant)

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

Swayampakula Ramakanth (Managing Director and Senior Healthcare Analyst)

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?

Paula Ragan (President and CEO)

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

Swayampakula Ramakanth (Managing Director and Senior Healthcare Analyst)

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

Christophe Arbet-Engels (CMO)

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

Paula Ragan (President and CEO)

Yeah. I mean, RK, just 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. Certainly, when we go into the payer systems across the world, we want to be focusing on that, basically that high unmet need with little to no options to demonstrate the value proposition of XOLREMDI. For example, for right now in CN, XOLREMDI and WHIM maintain our price point. There is a good connection between the severity of the disease, the trial design, and the ultimate value that we think we can bring to patients.

Swayampakula Ramakanth (Managing Director and Senior Healthcare Analyst)

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

Adam Mostafa (CFO)

Yeah. Thanks, RK, to Adam. It covers WHIM and CN. It is licensed to the asset across both indications. Obviously, first will be WHIM commercially followed by CN.

Swayampakula Ramakanth (Managing Director and Senior Healthcare Analyst)

Okay. Perfect. Thanks. Thanks for taking my questions.

Paula Ragan (President and CEO)

Thank you, RK.

Operator (participant)

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

Stephen Willey (Managing Director and Senior Equity Research Analyst)

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

Mark Baldry (Chief Commercial Officer)

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. I think that speaks to the unmet need here and that these patients and physicians understand that this disease needs treatment, and XOLREMDI is the solution if it's taken appropriately. We are now actually spending a lot of time beginning to educate patients and the patient community. In fact, excited to announce that we just launched a new website yesterday. In fact, I encourage you to open your browser of choice and type in whimsyndrome.com, and you'll see our new patient education website that features WHIM patients telling their stories and also provides a lot of resources to help them on their journey with WHIM and with XOLREMDI.

Stephen Willey (Managing Director and Senior Equity Research Analyst)

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

Mark Baldry (Chief Commercial Officer)

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

Stephen Willey (Managing Director and Senior Equity Research Analyst)

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?

Mark Baldry (Chief Commercial Officer)

No, it's a month's supply at this stage.

Stephen Willey (Managing Director and Senior Equity Research Analyst)

Okay. Understanding that the forward trial is blinded, 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?

Paula Ragan (President and CEO)

Yeah. Steve, what we're targeting, as we shared, is about 150 patients enrolled. All of that has some degree of assumptions of either dropouts or screen failures, etc. We're building that funnel. I think more importantly, what we can see with the already enrolled subjects is really about their profile. Are we in good shape on the 150? That sort of sets our clock. The answer there is definitely yes. We're seeing the right blend of idiopathic, autoimmune, and congenital. It's balanced nicely. Of course, this is all blinded, but we're seeing the event rate that you would want to see early in the study to confirm our assumptions. In terms of powering, that 150 is bells and suspenders for the co-primary endpoint. I hope 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 full enrollment.

Stephen Willey (Managing Director and Senior Equity Research Analyst)

Okay. Very helpful. Thanks for taking the questions.

Paula Ragan (President and CEO)

Yeah. Thank you, Steve.

Operator (participant)

Thank you. We show no further questions at this time. I will turn the call back to Paula Ragan for closing remarks.

Paula Ragan (President and CEO)

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

Operator (participant)

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