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Greetings and welcome to X4 Pharmaceuticals First Quarter 2022 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 Dr. Glenn Schulman, Head of Investor Relations. Please begin.

Thank you, operator and good morning everyone. 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 will open the call to your questions, during which we'll also be joined by our Chief Scientific Officer, Art Taveras; Chief Medical Officer, Diego Cadavid; and Chief Operating Officer, Mary DiBiase. As a reminder, on today's call X4 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. A description of these risks can be found in X4's most recent filings with the SEC. With that, I'd now like to turn the call over to X4’s President and CEO, Dr. Paula Ragan. Paula?

Thanks, Glenn. And thank you everyone for joining us on this call this morning. On this morning's call, I'll provide a brief update on recent accomplishments, highlight a few of our important upcoming catalysts, including the readout from our Phase 3 4WHIM trial, and of course, open up the calls to any questions you may have for the team. As a reminder, our lead candidate mavorixafor, CXCR4 for antagonists, is being evaluated as an oral once daily treatment for people with rare disorders of the immune system, including people diagnosed with WHIM syndrome and chronic neutropenia, and also for those diagnosed with certain lymphoma. WHIM syndrome is a rare immune deficiency disorder caused by genetic mutations to the CXCR4 receptor. The disease is characterized by HPV associated Wart, Hypogammaglobulinemia, multiple types of infections and Myelokathexis. A pathologic bone marrow finding associated with the reduced stability of white blood cells to move from the bone marrow to the periphery. We believe that the results from the open label extension of our Phase 2 clinical trial with mavorixafor and WHIM patients continue to support the significant potential of our lead drug candidate in this indication with data showing durable TAT or a Time Above Threshold for blood level of neutrophils, lymphocytes and monocytes, decreased frequency of infection and robust and sustained improvement in warts, peace and quality of life, including reductions in doctor or how hospital visits was meaningfully improved based on our Phase 2 patient narrative. Importantly, these include the primary and secondary endpoints of our ongoing Phase 3 WHIM trial. And just as importantly, mavorixafor continues to be well tolerated over a medium treatment duration of now more than 160 weeks. We continue to anticipate that top line results from our global placebo controlled double blinded 4WHIM Phase 3 trial, which enrolled a total of 31 adolescent and adult patients will be available in the fourth quarter of this year. We intend to report on the primary endpoint, which consists of time above threshold for absolute neutrophil count and which was powered based on our findings in the Phase 2 trial, along with available secondary endpoints. The trial design and primary endpoint have been agreed upon with the FDA. Additionally, secondary endpoints evaluating sections and work burden among others, have been also discussed extensively with the FDA and their guidance has been diligently followed. We look forward to preparing and submitting the New Drug Application or NDA for submission to the agency in the second half of next year. We also continue to conduct and publish research on the underlying genetics of WHIM as we work to further characterize and expand the definition of the disease. We have built strong in-house research programs that leverage world class collaborators to advance bench-to-bedside research. By continuing to establish correlations between clinical presentation and novel genetic variants associated with WHIM, we can enhance our ability to identify undiagnosed patients, including those who may potentially benefit from mavorixafor treatments. At the upcoming European Hematology Association or EHA meeting this June, we plan to present more of this novel research. We will have a press release with more details this afternoon after the abstract embargo lifts and we hope to see you at the Congress in Vienna. As I mentioned earlier, we believe there are additional disease areas harboring patients in need, who could also potentially benefit from treatment with mavorixafor. With WHIM as our beachhead indication well on its way, we are also assessing the potential of mavorixafor at the therapy for other causes of chronic neutropenia, given the drug candidates potential for meaningful advantages over the only existing therapy. Chronic neutropenia or CN includes a number of subtypes, such as congenital, idiopathic and cyclic neutropenia, all of which we believe could benefit from treatment with mavorixafor. In our ongoing Phase 1b study, we are actively enrolling patients diagnosed with these types of CN to establish biologic activity and support future regulatory discussion. We look forward to providing both updated clinical data along with regulatory feedback during the third quarter of this year. We also announced this morning that we've completed enrollment in our ongoing Phase 1b clinical trial setting patients diagnosed with Waldenström’s Macroglobulinemia, a rare B cell lymphoma. This Phase 1b trial is designed to demonstrate safety, dose, and elucidate proof-of-concept, and mavorixafor in combination with the BTK inhibitor Ibrutinib in patients with Waldenström resulting from mutations in both their MYD88 and CXCR4 gene. This patient population continues to have reduced treatment responses due to their cancers harboring these two mutations. Doses are, 200, 400 and 600 milligrams per day were evaluated, and once cleared, eligible patients were dose escalated to receive 600 milligrams once daily. Data that we presented last December at ASH showed a 100% Overall Response Rate or ORR and sustained decreases in serum IgM, a blood marker that corresponds with cancer burden in 10 evaluable patients who cancers had confirmed MYD88 and CXCR4 mutations. Further to that, we also presented additional preclinical results, and a poster presentation at the 2022 American Association of Cancer Research or AACR annual meeting. The poster reported that combinations of mavorixafor with a broad array of BTKi inhibitors overcame bone marrow induced treatment resistance and enhanced cancer cell death in in-vitro assays of Waldenström. We expect to report results from the Phase1b clinical study which we anticipate would include at least six months of treatment data for patients on the 600 milligram dose during the second half of this year. With three readouts on the horizon, including data and chronic neutropenia from our Phase 1b study next quarter results from Waldenström Phase 1b study in the second half and 4WHIM Phase 3 in the fourth quarter, we are extremely excited for what's to come. With that brief update. I’ll now turn it over to Adam to discuss our financial results for the quarter before we open up the call for questions. 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 activities and results for the first quarter ended March 31, 2022. As of the end of the quarter, X4 has $67.7 million in cash, cash equivalents and restricted cash. We continue to expect that our cash and cash equivalents will fund our operations into the fourth quarter of 2022. Research and Development expenses were $14.1 million for the first quarter ended March 31, 2022 as compared to $12.1 million for the comparable period in 2021. Selling, general and administrative expenses were $7.7 million for the first quarter ended March 31, 2022 as compared to $5.8 million for the comparable period in 2021. Finally, X4 reported a net loss of $22 million for the first quarter of 2022, which includes approximately $1.5 million in non-cash expenses, as compared to a net loss of $18.7 million for the comparable period in 2021. We'll now open up the call for your questions. Operator?

[Operator Instructions] Our first question will come from line of Marc Frahm from Cowen.

Hi, thanks for taking my questions. And just to start off with the CN update. And Paula, you laid out there a couple different subtypes. Can you maybe describe the types of patients you've been able to enroll so far? And therefore kind of across those different subtypes, which ones might you be able to update us on in Q3 both from a clinical perspective, but then, at least as importantly, from a regulatory perspective.

Sure, I'll start and then I'll invite Diego to chime in. But what we're aiming to do is to show the breadth of mavorixafor’s potential benefit in patients with chronic neutropenia. Those buckets, as you mentioned, are the idiopathic, cyclic, and then congenital. And I think at this point, what we can share is we're certainly feeling confident that we'll be able to share data across each of those three buckets in Q3. Again, the patient flow and numbers is always a bit ad hoc as some of these patients are cyclic neutropenia, for example, is a bit challenging just to catch the right window to explore the drug in those patients. But we're really encouraged about what we're already seeing, and maybe I'll turn it over to Diego to add.

Yes, I’ll just add that we are assured by the strong interest at all the sites, the number of potential patients, the number of patients who have consented, as well as a patient's dose, the changing the conditions of the pandemic, if making this study a move forward. So we look forward to being able to present data in Q3, as Paula said, that will give us a good sense about the potential across all these diverse indications with chronic neutropenia.

Okay, thanks, that's helpful. And then new for Adam. Appreciate the cash guidance lessen in Q4. Can you remind us the current status of the covenants on new debt and just kind of where that is?

Sure, thanks, Mark. So we have a minimum cash covenant. That cash kicks in on September 1. We have a recent amendment where if we raise at this point, another $27 million by June 30, that minimum cash number will be fixed at $30 million until we get to WHIM data where with positive WHIM data it will be $20 million. If we do not raise that capital before June 30 to net debt, will simply be six months cash burn debt, so there'll be our prior one month burn timestick that we would need to keep in terms of cash on the balance sheet at that point in time to cover the debt. So that conclude around the comment.

Our next question from the line of Mayank Mamtani from B. Riley Securities.

Hi, good morning, everybody. This is William Wood on from Mayank Mamtani. Really appreciate you taking our calls and congratulations on all the advancements that you've made. A couple of questions from us. I was wondering if you could first, could you talk to how your view the WM landscape in light of the experience of our targeted therapies. And where you may think that the third quarter readout has an opportunity to improve perception as it relates to both safety and efficacy?

Sure, I'll start. And again, I think it was Waldenström that you're asking about just to confirm?

Yes, correct.

Yes. So guidance is that we'll be sharing data second half of this year. And in terms of the competitive landscape, of course, there's a lot of a number of BTKi inhibitors, given the validation of the target that are moving forward in the pipeline. Certainly, there's two approved, two or three approved. I think, again, we continue to see the importance of adding CXCR4 antagonists across any of those BTKi inhibitors with respect to patients with the CXCR4 mutations, initially, and certainly we see broader applicability beyond that we just presented some really exciting data at AACR, which shows the breadth of activity of our drugs, not only in double mutants, but across the single now into Waldenström cells as well. And then in terms of safety, our drug is got a very positive or benign safety profile, which makes it more amenable to partner with some of these tougher treatments. So the overall therapeutic window in combination seems to say, reasonably wide when we add drugs in combination, again, favoring our approach versus what we're seeing with other combinations. But Diego, would you like to chime in and then Art as well?

Yes, I would add also that we believe mavorixafor is quite differentiated from some of the other drugs being combined. In the sense that, for example, when [Indiscernible] a lot of neutropenia, zanubrutinib also showed a lot of neutropenia. You see it with Ibrutinib, we actually have a drug that treats neutropenia. So in the context of having risk of infection and this combination treatments, ultimately, the safety of the combination will become very important for chronic treatment on indolent lymphomas. So we are quite excited about the potential of mavorixafor to real competitive candidate in that stage.

Maybe I can add a little bit starting from the neutropenia side. There's reports already in the literature that talks about ibrutinib, zanubrutinib, acalabrutinib actually showing neutropenia and lymphocytopenia. And then the corresponding increase in infections is grade three through five SAEs and AEs. And so we certainly our drug that we've measured mavorixafor in combination with Ibrutinib in our Waldenström Phase 1b trial across the patients, and we can actually see increases in all of these leukocytes. So we actually do believe that this is going to be a benefit with respect to safety, and particularly the infection safety related to neutropenia and lymphocytopenia. And then second is related to the data that we presented at AACR. And as Paula mentioned, there where we are working with a single view and wild type of CXCR4 and these are MYD88, [Alta 65 PD] mutation cells. And there, what we found is that all of the agents that we looked at these are the BTKi antagonists that are out there. So ibrutinib and zanubrutinib two commercial ones. And then LOXO-305, from Lilly, and the Merck ARQ 531. And what we found is that these agents while they work on their own, once you start to involve bone marrow, which is really where CXCR4 double mutation really starts to play, then you see that they become a bit resistant to the therapy to tumor cells become resistant to the therapy. And mavorixafor able to overcome that. So a lot of opportunities here broadens, obviously, the combinations that could be used. So it's not just ibrutinib with mavorixafor, but it could be any of these other agents, whether they're commercial currently, or potentially, the ones that are in clinical development, it broadens the opportunity across a single means, which now have upregulated CXCR4. So it's not just about the double mutants. And then the work that we're doing right now is broadening out even further to other lymphomas. So I think we have some good breadth of opportunities with mavorixafor and in the combination section could be quite a few touches with ibrutinib.

Thank you so much, really appreciate that extra information there. And also, I mean, as you presented, you've got a number of clinical trials, providing data in the second half. I was just curious where we might be able to expect to see those data coming out throughout the year.

Yes, I think we'll provide greater clarity on the different venues that we'll be sharing data, certainly with the three different milestones, so the chronic neutropenia milestone, and then the WHIM Phase 3 as well as a Waldenström, we sort of a nice drumbeat of information. And that will try to optimize to make sure the communities kind of educated and understanding the data when they roll out. So stay tuned, we'll be able to provide some more clarity on the coming months.

Our next question comes from the line of line of Swayampakula Ramakanth from H.C. Wainwright.

Thank you. This is RK from H C Wainwright and good morning, Paula and Adam. So I'm talking about the three buckets of patients under chronic neutropenia. Is the biology the same or similar among the three buckets? And you stated that you would have data among the three buckets. So assuming that the data is similar, is there a preference to go after one of them? Or what is the decision point there?

Yes, so I think our rationale is certainly there's other, G-CSF is the only approved treatments, it has been shown to offer some benefit to those patients with significant tolerability issues. And then CXCR4 antagonism is a broad mechanism as well, we've seen it to elevate white blood cell counts in any subject or patient population. So it has this tremendously broad opportunity to increase neutrophils in any form of neutropenia. You saw that in our ASH data with our idiopathic patients, those folks have unknown cause of neutropenia, and we found very robust effects. So we've kind of already checked one of the three boxes. And we'll look forward to sharing more data. But I think maybe I'll invite Art in a little bit more to talk about the mechanistic rationale for mavorixafor across these different buckets.

Yes. Hi, RK. How are you? So maybe I'll just talk a little bit about the overall chronic neutropenia landscape, if you will. And so we've been -- and maybe start from WHIM, and then also the connection back to Waldenström. So there we were focused, really on mutated CXCR4. But the work that we had done in Waldenström particular showed us that actually, it's more than just mutated even wild type CXCR4 and how that gets up regulated under various scenarios. And then certainly across and this is work that Diego had presented at ASH in December, that across all the different clinical programs that we've been doing. We see leukocyte mobilization in patients treated with mavorixafor. And we see baseline elevations of these leukocytes across the board, right. So this is actually pretty promising because it actually says it's more than just mutated CXCR4. And it's more than just the specific two diseases that we've been talking about. So now it's a broader market expansion and opportunity across other patients now with chronic neutropenia, and what we're focused on is the potential of mavorixafor to raise the neutrophil levels in those patients. And the simplest way is just take the patient and give them mavorixafor and see if they respond, or us in-vitro to be able to assess pathogenic measures. And so from the data that Diego presented in December at ASH, we're seeing that these patients do respond. So clearly, there's a CXCR4 component. And what we've always talked about is that CXCR4, and it's natural ligand CXCL12, at the heart, they are master regulator in terms of granulopoiesis and hematopoiesis general. So that's a nice connection. And it's really all about CXCR4 for us.

Fantastic. Thank you very much for that. And then on the WHIM syndrome with the data coming out in fourth quarter. So, at the same time, you folks were identifying new mutations within the CXCR4. So when you present the data or when you start to analyze the data from fourth quarter onwards, are you going to go back and look at individual, individually you're going to be looking at the mutations just to understand how broad mavorixafor can be working on and do you think there will be any mutations where mavorixafor will not be able to interact with or not able to get the get the benefit, some of these patients, I'm just trying to understand how broad you can use mavorixafor in the WHIM syndrome.

It’s Art. That's a great question. And maybe I could just share the work that we've been doing in what we call that the USS, which are really a number of CXCR4 mutations. So at this point, we've analyzed probably close to about 70 mutations, and they really cover standard different parts of the CX CXCR4 receptor. And what we find is that most of them are pathogenic. And then we know that mavorixafor four binds to all of the CXCR4 formings that we've tested so far, and so or at least blocks the binding of CXCL12 WHIM that we've tested so far. So we believe that it's going to be effective in any one of these CXCR4 mutations. And that should be irrespective of the mutation.

Ye, and I would simply add that we already tested in the context of the Phase 2 trial different mutations, and they all respond. So we're very confident between the in vitro data and our own in vivo data. And in fact, we have enrolled a breadth of mutations in the Phase 3 plan. The bottom line is we believe it will work across all mutations. And in fact, because of our chronic neutropenia, we know that it also works on the wild type. So it's a big promise to have for the first time and novel well tolerated therapy to treat people who are at risk of serious infections from chronic neutropenia.

Fantastic. That's great. One last question. On the Waldenström indication when data comes out in the second half. What are the next steps in the sense –?

Can you repeat that RK? I'm not sure what that was.

Okay. On Waldenström indication, what's the next step in the sense, once the data is presented in the second half? Would you be able to go straight into a registrational study? Or do you need to do an additional study before you go into registration?

So, obviously, we're waiting for the data to mature and then have regulatory discussions, there's really only been two drugs approved in Waldenström historically. So I think that the answer is stay tuned. Obviously, data plus regulatory input then would enable us to plan for the future. And so we will be able to, that's our milestone for the second half to provide that guidance. So looking forward to sharing more RK.

From the line of Trevor Howard from Oppenheimer.

Hey, good morning. Just want to ask if you've had any conversations with Lilly or Merck, about a combination potential and expectations for how you might advance that combo. I also want to ask if you see any potential role for mav in activated PI3K Delta syndrome.

So Adam will take the DD question.

Yes, thanks for the question. We won't comment on specific names, folks who we've been talking to. But certainly we're exploring different alternatives and discussions as it relates to getting the most value from our pursuits, and strengthening our balance sheet in both oncology and in general, but we'll circle back when appropriate with any specifics in the future.

Yes, and then with respect to PI3K delta, certainly the pathway, signaling pathway overlaps with CXCR4. So there's a mechanistic rationale to support the use of mavorixafor in those patients as well. We've not yet tested specifically any patients, but it's something that we're considering for future studies.

The next question comes from the line of

Good morning, thanks for taking our questions. I just have three quick ones here. The first is about the Waldenström data. I know at that time of the last update, you had really strong responses in the relapsed refractory patients, but a little less in the frontline setting. So I was just wondering, with enrollment now complete, would you expect more patients or more relapsed refractory patients versus frontline patients. And then also regarding the 600 milligram dose that had started to be used. How should we think about the potential for that dose to kind of change the efficacy profile that we've seen for the program? And I have a couple follow up.

Yes, no, thank you for the question. We believe the potential for mavorixafor in combination with the BTKi inhibitors is broad. We chose to focus first on CX on double mutants, because they have the highest unmet need. We believe that the drug can actually be a really good add on for either frontline or relapsed refractory, and we have enrolled both in our trial, and we will report on that later in the year. I mean, as I've mentioned earlier, in vitro, we have really happy with a cellular model that show efficacy, even in Waldenström CXCR4 in the context of modeling a bone marrow niche. So this speaks to the broad potential of CXCR4 for innovation across tumors that are based in the bone marrow. So what will come next, Paula already mentioned will focus on Waldenström from the old mutants, but we believe that potential is much broader.

Thanks, Diego. And then the follow up here is just about the WHIM program, you're on track to have your NDA submitter, which is a big deal. So looking at the way the stock is performing, wondering if you could just kind of again, highlight the commercial potential talk about some of the steps that you've taken, I know you have someone had in commercials so just kind of wondering if you can just kind of speak to that a little bit and then have the last one here as well.

Sure. So in terms of the potential for mavorixafor win, we continue to guide that there's at least about 1,000 genetically confirmed or confirmed one patients in the US and possibly much more than that, in terms of the under diagnosed or undiagnosed, and we're making exceptional progress towards building that patient base education, awareness and getting ready for supporting a positive launch to the mavorixafor be approved. Our new VP of US Commercial is exceptionally strong and experienced in theory, we've got a great team on the ground already. And I think we're really revving up for a successful and ideal launch post our Phase 3 milestone this year. So stay tuned for more details. But we're excited about already the breath of diversity of patients, as Ark mentioned over 70 genetic mutations, and then also the diversity of the products potential even in chronic neutropenia beyond WHIM.

Thanks, Paula. And I don't know if you can say much about this. But this kind of said lays based on what you just ended with, regarding the broad commercial potential, I think you guys have had highlighted about 60,000 patients across the different diseases that you're looking at, you also are going to have pretty much strong proof-of-concept data across all three indications by the end of the year. And we've seen you kind of pushing to even broaden this out so more so clearly, I think that there should be some partnership interest. And so is that something that you guys are exploring, perhaps not just for one indication, but across the board, as it relates to mavorixafor, and then you can maybe comment on how you're thinking about maybe reaching ex-US opportunities.

Sure, so I mean, the world is a big place, we obviously have home field advantage in the US. And we have a drug that appears to work in WHIM and it's got some amazing sort of momentum behind it with these other indications. So there's a lot of opportunity for patients and for sort of commercial investment and return on investment. So we haven't, we won't be able to share more of how we're thinking but we're certainly believing that in the US, we can handle the commercial setting, given the build that we're already investing in and the fruits of that build, but x-US is still a part of our strategy that's evolving. And certainly there's a lot of companies that create the rate structure to support the most patients globally and also benefit the overall investment and return on that that's needed.

And I am not showing any further questions in the queue. I'd like to turn the call back over to Dr. Paula Regan for any closing remarks.

So we just like to say thank you for everyone for participating in our investor call today and thanks for the excellent questions. If you have any further follow up, please reach out to Glenn and we'd be happy to dialogue offline. Thank you again and have a great day.