X4 Pharmaceuticals - Earnings Call - Q4 2024

Executive Summary

• Q4 2024 delivered accelerating XOLREMDI ramp and operational focus: product revenue rose to $1.43M (up >150% Q/Q) as the U.S. WHIM launch progressed; pro forma liquidity extended into 1H 2026 following the Norgine upfront and cost restructuring.
• Clinical execution advanced: the Phase 3 4WARD CN trial is activated at ~90% of sites; protocol was refined with FDA/EMA input (focus on ANC <1,000 and a uniform ≥500 cells/μL ANC increase component), with full enrollment expected in 3Q–4Q 2025 and top-line data in 2H 2026.
• Versus S&P Global consensus, Q4 revenue beat ($1.43M vs $1.06M*) while S&P “Primary EPS” missed (-6.00 vs -4.73*), noting methodology/share-base differences vs GAAP diluted EPS (-$0.20) reported by the company.
• Catalysts: protocol refinement and enrollment progress in CN, EMA MAA validation, ex-U.S. partnerships (Norgine upfront €28.5M; taiba rare in MENA), and restructuring driving $30–35M in annualized savings support the path to 4WARD readout and WHIM uptake in 2025–2026.

What Went Well and What Went Wrong

What Went Well

• Commercial uptake improved: net product revenue reached $1.43M in Q4 (vs $0.56M in Q3), reflecting increasing prescriber engagement and patient services; management cited payer receptivity and no discounting through specialty pharmacy.
• Strategic and financial positioning strengthened: Norgine license delivered €28.5M upfront and up to €226M in milestones (double‑digit tiered royalties), while restructuring reduces annual spend by $30–35M, extending cash runway into 1H 2026 pro forma.
• CN program de-risking: refined 4WARD protocol (moderate/severe ANC, uniform ANC endpoint) and ~90% site activation bolster confidence in achieving infection benefit and operational timelines (full enrollment 3Q–4Q 2025; top‑line 2H 2026).

What Went Wrong

• Losses widened with scale-up: Q4 net loss was -$39.8M vs -$19.1M LY, driven by higher R&D ($21.7M) and SG&A ($15.1M) as commercialization and CN Phase 3 advanced.
• Enrollment timing modestly pushed: guidance moved from “mid-2025 fully enrolled” (Q3) to “3Q–4Q 2025,” reflecting operational prudence and protocol refinements, though management does not expect material impact from excluding mild ANC patients.
• EPS optics vs S&P methodology: S&P “Primary EPS” showed a larger loss than consensus (-6.00 vs -4.73*), diverging from company GAAP diluted EPS (-$0.20); investors should note metric methodology and share-base differences.

Transcript

Operator (participant)

Greetings and welcome to the X4 Pharmaceuticals' fourth quarter and full year 2024 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, and it is now my pleasure to turn to 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, Chief Medical Officer, Dr. Christophe Arbet-Engels, and Chief Operating Officer, Mary DiBiase. 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 this year's Form 10-K, which is expected to be filed after market close today. I would 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. As expected, 2024 was a transformative year for the company and for those with WHIM syndrome, and we are very pleased to continue to deliver as we progress into 2025. As you know, we became a fully integrated company in 2024 with the U.S. approval and launch of our first product, mavorixafor, which we branded as XOLREMDI in the U.S. for the treatment of WHIM syndrome, an ultra-rare primary immunodeficiency. Our commercialization strategy remains focused on a multi-pronged approach, as is typical in the rare disease space. Over the past year, we significantly advanced disease awareness with both treating physicians and WHIM patients through a combination of in-person and digital education campaigns and through strengthened relationships with our rare disease patient advocacy group partners.

A peer-to-peer speaker program was also launched in the second half, enabling physicians to share their experiences in managing WHIM syndrome and treating with XOLREMDI. In addition, our suite of patient services, including our X4Connect and Nurse Educator programs, continue to provide access and support for patients prescribed XOLREMDI. Journal publications and presentations of clinical data at top medical meetings, including those of the American Society of Hematology, or ASH, the American Academy of Allergy, Asthma, and Immunology, or AAAAI, and the Clinical Immunology Society, have provided further visibility. We have been very encouraged by some recently received testimonials from our patients on XOLREMDI. We heard from one patient who described his, quote, "normally functioning immune system" and his significant improvement in skin infections, warts, and periodontal issues.

He said he now knows what it's like to lead a, quote, "normal" life with lower anxiety about getting sick, ability to travel, and that he, quote, "didn't know how sick he was until he finally felt better," unquote. Another patient has told us about his near-normal ANC levels, his increased energy, increased productivity, and engagement at work, and the importance of him not having to miss any family or social events anymore. It's really been quite inspiring. Our 2024 XOLREMDI sales topped $2.5 million, which covered the seven and a half months since our mid-May launch last year. Throughout 2024, we successfully engaged with all of our target top-tier immunologists and hematologists, and we expect that these efforts will continue to deliver through both increased patient finding and shortening the time to pull through to a XOLREMDI prescription.

In addition to our progress across the U.S., we've also made significant progress in our efforts to expand the potential global reach of mavorixafor and WHIM. In January, we announced that our submitted MAA was accepted by the EMA for review. With a typical 12 month-15 month review process, we would expect potential approval from the EMA as early as the first quarter of 2026. We've also entered into two international partnerships, the first with Norgine, a leading European specialty pharmaceutical company. Under this license and supply agreement, Norgine will commercialize mavorixafor for WHIM and chronic neutropenia in Europe, Australia, and New Zealand, following regulatory approvals in those areas. We received EUR 28.5 million upfront and are eligible to receive up to EUR 226 million in potential regulatory and commercial milestone payments, in addition to tiered double-digit royalties up to the mid-20% range.

We continue to believe that the Norgine deal is a great fit for us, given both their focus on rare disease and specialty markets and our shared vision of putting patients first. The second deal we announced was with a company called taiba rare, another specialty pharmaceutical company. The agreement enables taiba to use its expertise towards orphan drug marketing, sales, and distribution in the Middle East and North Africa, or MENA region. taiba will be marketing XOLREMDI for WHIM syndrome across the region. We expect that the formal approvals will be sought in Saudi Arabia and Kuwait, but in the meantime, pending any regulatory approvals, taiba expects to be able to provide XOLREMDI to WHIM patients through a named patient or compassionate use program that allows physicians to prescribe medicines approved in other countries to local patients with no other treatment options.

A lot to look forward to in WHIM, but now let's turn our continued advancement of mavorixafor to treat the larger potential indication of chronic neutropenia. During 2024, we successfully completed a Phase II clinical trial of mavorixafor across several CN disorders with and without concurrent injectable G-CSF, which is the current standard of care and the only drug approved for severe chronic neutropenia. Throughout the year, we announced both interim and then full data from this trial that we believe significantly de-risked our ongoing Phase III CN trial.

The six-month open-label clinical Phase II trial ended up enrolling 23 participants and demonstrated, one, that once daily oral mavorixafor was generally well tolerated with and without G-CSF, with no drug-related serious adverse events reported and consistent with our previous clinical studies; two, that mavorixafor treatment durably and meaningfully increased participants' mean absolute neutrophil counts, or ANC, across all study populations; and three, that physicians were willing and able to reduce the use of G-CSF in participants also treated with mavorixafor and were able to maintain mean ANC levels within the normal range. Given these positive data, we initiated a global pivotal Phase III CN trial called the 4WARD Trial last year. The 4WARD Trial is a 12-month placebo-controlled trial aiming to enroll 150 participants with congenital, acquired, primary autoimmune, or idiopathic CN who are experiencing recurrent and/or serious infections.

More recently, based on FDA and EMA guidance, we have refined and simplified the 4WARD Protocol. We are now enrolling only moderate to severe neutropenic participants or those with ANCs below 1,000 cells/µL. Given the trial's infection inclusion criteria, this ANC level was already consistent with our targeted patient population for mavorixafor. If approved, it focuses on those with the highest unmet need and consistent with almost all of the subjects already enrolled in the trial. In addition, the ANC component of the co-primary endpoint, which comprises both ANC increase and infection benefit, will now be uniform across all participants. This primary endpoint seeks to demonstrate that infection benefit for mavorixafor treatment results from a durable increase in ANC of at least 500 cells/µL over the 12-month duration of the study.

As you may recall, participants in our Phase III WHIM trial were severely neutropenic at baseline, with an average ANC well below 500 cells/µL. Importantly, mavorixafor was able to raise ANC by 600 cells/µL-800 cells/µL on average in the mavorixafor treatment population, which resulted in clinical benefit in the rate, duration, and severity of infections in that study. For these reasons, we believe that these trial protocol refinements in CN increase our chances of success in this trial on top of what we believe to be an already highly powered and robustly designed study. We also announced this morning that the 4WARD Trial has now been activated at about 90% of our targeted sites worldwide.

Given this and the average screening success rates currently being observed, we expect that this trial will be fully enrolled in the third or fourth quarter of this year, which should enable us to disclose top-line data in the second half of 2026. Before I turn over the call to Adam to discuss our financials, I do want to briefly touch on our recent strategic restructuring, where we announced that our revised business scope is expected to decrease our spending by about $30 million-$35 million annually. We implemented these changes in early February to sharpen our focus on maximizing the opportunity for mavorixafor in chronic neutropenia. We believe this is a much larger potential market opportunity for us, and given the challenging macro environment we all find ourselves in currently, we believe the best path to maximizing shareholder value and to giving us the greatest chance of success.

With that, I'll turn it over to Adam.

Adam Mostafa (CFO)

Thanks, Paula. As we disclosed in the press release this morning, we ended 2024 with just under $103 million in cash and cash equivalents. Pro forma for the EUR 28.5 million received from Norgine and the expected financial impact of the strategic restructuring announced in February, we believe we have sufficient funds to support company operations into the first half of 2026. We reported net XOLREMDI revenues of $1.4 million and $2.6 million for the fourth quarter and full year 2024. Our R&D expenditures totaled $21.7 million and $81.6 million for the fourth quarter and full year, which included $1.2 million and $4.3 million in non-cash expenses, respectively. Our SG&A expenses were $15.1 million and $61.5 million for the fourth quarter and full year of 2024, which included $1 million and $3.9 million in non-cash expenses, respectively.

Our net loss was $39.8 million in the fourth quarter, and for the full year was $37.5 million. Keep in mind this annual figure reflects the one-time sale of our priority review voucher in May of last year for $105 million. We'll now open up the call to your questions. Operator?

Operator (participant)

Thank you. At this time, if you'd like to ask a question, please press the star one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star two. Once again, that is star one to ask a question. We'll take our first question from Stephen Wiley with Stifel. Please go ahead.

Stephen Wiley (Managing Director)

Yeah, good morning. Thanks for taking the questions. I was just wondering if you could maybe just kind of expand a little bit around the regulatory conversation that was had regarding taking the ANC threshold to below 1,500 to below 1,000. Was this a discussion that was had, I guess, prior to the initiation of the trial? Is this something that FDA and, I guess, EMA came back to you with? Do you think that there's any risk around needing to potentially upsize the trial to get more of the sub-1,000 patients? I just have a follow-up.

Paula Ragan (President and CEO)

Yeah, thanks for the question, Steve. I'll pick it off with some high-level commentary and then turn it over to Christophe. I think the most important thing that we learned from our engagement with the FDA is that they're very interested in enabling our success for this trial. They've had experiences of a broader range of patients in other non-malignant heme areas that have failed. They're very interested in ensuring the trial design has maximum opportunity for success, which is why we're in alignment on focusing on the moderate to severe patients. We don't think this actually impacts our trial in terms of its pace because already the requirement was always at least two infections per year previously. We've already seen that narrow our funnel certainly more substantially than anything around ANC. Again, I think we're extremely pleased with the engagement.

We feel that this alignment is very tightly correlated now, and I'll turn it over to Christophe to add some more color.

Christophe Arbet-Engels (CMO)

Yeah, no, we've had really positive interactions with the agencies, both the FDA and the EMA, and both are very supportive of the approach that we're taking. With regard to ANC in particular, again, it's a non-validated biomarker, so there is a number of factors. There's no consensus or recommendations. We've taken the approach that is the most reasonable, both in our eyes and the agencies. Actually, even the EMA is not asking for the ANC and looking more at the clinical outcomes, so infections. Infections benefits is really what we're trying to demonstrate here because it is the clinical outcome. To Paula's point, we've got several investigator meetings with a lot of participations. We've had webinars with more than 90 people per webinar attending. We've been extremely pleased with the engagements and the interest that we've received regarding the study and its conduct.

Stephen Wiley (Managing Director)

Okay. I guess with the tightening up of the eligibility criteria around baseline ANC, would you expect that to potentially slow down the pace of enrollment a little bit? I think it seems like the guidance here is maybe modestly pushed out just a little bit. Does that reflect the tightening of that ANC requirement?

Christophe Arbet-Engels (CMO)

No, it is not because we never expected that mild patients would represent a substantial amount of patients. Because of the history of infections, these were at lower risk of infections. We have not seen in our screening many of these patients at all. We are really having no concern with regard to the enrollment timelines.

Paula Ragan (President and CEO)

Just to add to my point, we are trying to make sure that we hit our timelines, and we have not seen a lot of patients enroll with a mild spectrum, but we want to make sure that we cover any uncertainties in the future by, to your point, moving this out a tiny bit forward in 2025.

Stephen Wiley (Managing Director)

Understood. Maybe just a quick financial question. I think there were some comments made earlier in the year regarding having to work through maybe a little bit of additional inventory at the distributor level. Can you just kind of speak to where inventory sits now and then maybe just anything that you can say on just kind of early discounting trends that you're seeing? Thank you.

Paula Ragan (President and CEO)

Adam, do you want to take that one?

Adam Mostafa (CFO)

Sure. Yeah, thanks, Steve. Thanks, Paula. Yeah, you'll see on our balance sheet the updated inventory metric, which reflects where we are with respect to a bit of stocking up in the fourth quarter related to what translated into sales from the specialty pharma orders that came in. As you know, similar to sales, that will likely be lumpy over time. We would not expect particular trends that we can point to just yet, but some of that will be based on the progress and pace of demand over the course of the year.

Stephen Wiley (Managing Director)

Just anything you're seeing on the discounting front? I know it's early. It's only been a few quarters, but on the gross-to-net side?

Mark Baldry (CCO)

Yeah, Steve.

Adam Mostafa (CFO)

Oh, go ahead, Mark.

Mark Baldry (CCO)

Yeah, I was going to say, this is Mark here. Are you talking about discounting with the payers?

Stephen Wiley (Managing Director)

Yeah, correct.

Mark Baldry (CCO)

Yeah, no, we have a tight distribution channel through our specialty pharmacy, and we're not engaging in discounting at this time.

Stephen Wiley (Managing Director)

Okay. Thanks for taking the questions.

Operator (participant)

Thank you. We will take our next question from Ted Tenthoff with Piper Sandler. Please go ahead.

Ted Tenthoff (Managing Director and Senior Research Analyst)

Great. Thank you. Good morning, everyone. I guess I'll ask you a couple of questions on the launch. Can you tell us, give or take, how many patients are on drug right now? Did you have any price increase to start 2025 for XOLREMDI?

Mark Baldry (CCO)

Yeah, good morning, Ted. We're not giving out patient numbers at this time because we're still building demand. Demand is still building, and we're still engaging with physicians, building awareness. Now we're actually really pivoting our efforts to focus on the patient community and raising awareness there as we roll out some new patient campaigns and patient ambassador programs. We did take a slight price increase, as is typical, coming into the new year.

Ted Tenthoff (Managing Director and Senior Research Analyst)

Can you share how much that is, or?

Mark Baldry (CCO)

It was a 7% price increase.

Ted Tenthoff (Managing Director and Senior Research Analyst)

7%. Thank you. Looking forward to more progress this year. Thanks so much.

Mark Baldry (CCO)

Thanks, Ted.

Operator (participant)

We will take our next question from Kristen Kluska with Cantor Fitzgerald. Please go ahead. Kristen, your line is open. Please go ahead.

Hi. Sorry about that. Good morning. This is Ayan on the line for Kristen. Thank you for taking our question. For the Phase III trial, how are you doing with the screening of these patients? What percent of the patients that go through the screening are you getting on the drug versus those who are not?

Paula Ragan (President and CEO)

I mean, the site activation is the first wave, and as we highlighted, we're at about 90% of our target number of sites. Screening, the screen ramp is coming up very nicely. And then, of course, patients on drug. We're not really breaking down anything further beyond site activations in terms of screening rates or screen failures, other than to say what we've already observed for the last several months will put us on trajectory of the Q3, Q4 full enrollment. Christophe, any other color you want to add?

Christophe Arbet-Engels (CMO)

No, we're pleased with the, again, very pleased with the site activations, the engagements at all these sites, and the screening is picking up as expected from those site activations. We're in the right trajectory right now.

Thank you for that.

Operator (participant)

We'll next go to Doug MacPherson with H.C. Wainwright. Please go ahead.

Doug MacPherson (Equity Research Senior Associate)

Hi there. Good morning. Curious about any further commentary you might have on commercialization, sort of what you've learned and experienced in the first seven or so months since launch specifically. I know you said you're not giving exact patient numbers, but I think last time we checked, all the patients in the U.S. had been previously enrolled in the trial that now continued treatment. Have you seen patients sort of become on treatment beyond those that had previously been in the trial? Have you seen a decrease in diagnosis time and time from sort of initial seeing the doctor into getting on treatment? We'll start there with that multi-part question. Thanks.

Mark Baldry (CCO)

Sure. Thanks. Let me try and give you a bit of a flavor for what we've learned and our excitement for 2025. We came into this market, which was a market where there really were no approved therapies and very low awareness of the disease. We focused on building that awareness and engaging with our target physicians to really build their knowledge of WHIM syndrome and increase screening and diagnosis rates. We were successful at doing that as we came into the back end of last year. We enrolled all of the patients that were in the U.S. patients that were in the clinical trial have all enrolled onto the product, and we've seen continuing building demand for the products over time.

We're just entering now what we call conference season, and we were recently at the AAAAI conference out in San Diego where we engaged with a lot of our customers, and we actually found another two or three patients that we weren't aware of. As we progress through this conference season with some additional meetings like CIS and ASPHO, we're looking forward to continuing to engage with these physicians, helping them identify patients in their practice and see the build in demand for XOLREMDI over time.

Doug MacPherson (Equity Research Senior Associate)

Great. Thanks for that. Looking at your commercialization agreements in the ex-U.S. geographies, there's still some regulatory, not hurdles, but regulatory milestones to hit. With your partners in the agreements, are there any sort of clauses regarding timing or milestones for registration in order to really engage with those commercial partners?

Paula Ragan (President and CEO)

I'll take that. Adam, if you want to chime in afterwards. No, the next key wave of regulatory milestones are certainly around WHIM approval, potential approval in Europe, which is really where Norgine can bring its excellence in launching that product. We're nicely on track. We've already filed that application with the EMA, and it's been accepted. We are continuing to project potential approval in the first half of 2026 and launch. In terms of CN, I think they recognize the value of the huge market potential that can unlock with a CN approval. Certainly, they've seen the pace that we've been making progress there. There's no real timelines associated. They're really success-based milestones and across that, both regulatory and future sales.

Doug MacPherson (Equity Research Senior Associate)

Great. Thanks for that. If I can sneak in one last one before we move on, your current expected patient numbers for both WHIM and CN, U.S., ex-U.S.?

Paula Ragan (President and CEO)

Yeah. We have not learned anything differently to change our guidance around 1,000 total diagnosed WHIM patients in the U.S. The ramp to get there is certainly something we're learning more about, and will take some time. With chronic neutropenia, it's certainly much more straightforward. There are ICD-10 codes that are associated with these diseases, so they are much better tracked over time in EMR. We feel confident with the total population that we have learned through research on ICD-10s. The total bucket is about 50,000, 5-0,000, but we're targeting the refractory severe end of that population with our current study, and that's about 15,000 in the U.S. alone.

Doug MacPherson (Equity Research Senior Associate)

Okay. Thank you so much for taking my questions. I really appreciate it.

Paula Ragan (President and CEO)

Thank you.

Operator (participant)

Thank you. We'll take our next question from David Bautz with Zacks Small Cap Research.

David Bautz (Senior Analyst)

Hey, good morning, everybody. I'm not sure if you're doing formal sales guidance for 2025. Maybe if you could just talk a little bit about goals, sales goals for 2025, what a successful year is going to look like for XOLREMDI sales.

Paula Ragan (President and CEO)

Yeah. I mean, as you highlighted, we're not giving forecasts, but I think what we are striving for is continued increased demand because that will show the sort of fruits of our labor in terms of increased education and awareness. I know Mark and the team are already seeing that nice steady pace, but if you'd like to provide any color, Mark, that would be great.

Mark Baldry (CCO)

Sure. As we were talking earlier, we're really trying to build a new market here. It starts with building awareness, building education around the disease, which is where we've really been investing our time, particularly with the physician community. We're pivoting now. We're actually leveraging the physicians that have already got experience with the product and experience treating WHIM patients. We've initiated a speaker program, a peer-to-peer speaker program, where those physicians can educate other physicians. We're actually leveraging that experience.

We're pivoting now to focus on the patient community, building a community of interest around WHIM so that these patients who, as you heard earlier in the call, they don't really know what they don't know. They've accepted a new normal. We are educating the patients now, encouraging them to re-engage with their physicians. When we do that, when we have an activated physician and an activated patient together in the room, we have a drug that works. XOLREMDI works. It's demonstrated the efficacy in the Phase III trials. We quickly move through to a prescription. The other piece of good news there is that the payers are seeing the value in this product, and they're reimbursing this product quite quickly. That's pretty much our mission this year.

David Bautz (Senior Analyst)

All right. Sounds good. A quick follow-up. I understand if it's too early for this data, but is there any numbers on what percentage of the patients who have come on drug have refilled their prescription?

Mark Baldry (CCO)

Yeah. I mean, without getting into specific numbers, we're pleased with the level of adherence and compliance we're seeing on the product. It's actually higher than you would expect to see with a daily oral medication. We put that down to the success of our patient support services and the strong partnership we have with our specialty pharmacy, PANTHERx.

Stephen Wiley (Managing Director)

Okay. Great. Lastly, on the 4WARD trial, you talked just a second ago about total patient numbers and that kind of 50,000 number versus the 15,000 that you're kind of targeting with this trial. Do you see the change in your primary outcome for this trial, possibly affecting the label again if you're approved in chronic neutropenia?

Christophe Arbet-Engels (CMO)

No, we don't believe that there is any impact at this point in time on the label. We also have, it's not that this population has not been studied. We have some of them in our CN Phase II as well. So the entire package will represent the entire chronic neutropenia population.

Stephen Wiley (Managing Director)

Okay. Great. Thanks for taking the questions.

Operator (participant)

Thank you. At this time, we have no further questions. I'd like to turn the call back over to management for any final or closing remarks.

Paula Ragan (President and CEO)

Thank you all for joining the call today. If you have any additional questions, feel free to reach out to management. Thanks, and enjoy the rest of your day.

Operator (participant)

Thank you. Ladies and gentlemen, that does conclude today's conference. We appreciate your participation. Have a wonderful day.