Greetings, and welcome to X4 Pharmaceuticals Second Quarter Financial and Operating Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder this conference call is being recorded.

It is now my pleasure to introduce your host Carey Gallant of LifeSci Advisors. Please begin. .

Thank you, operator, and good morning, everyone. Thanks for joining us. Presenting on today's call will be X4's Chief Executive Officer Dr. Paula Ragan; and the company's Chief Financial Officer Adam Mostafa.

Following prepared remarks by each, we will open the call to your questions and we will be joined by Chief Scientific Officer, Art Taveras; and Mary DiBiase, Senior Vice President Technical Operations and Quality.

As a reminder, on today's call, the company will be making forward-looking statements regarding regulatory and product development plans, as well as research activities. These statements are 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. I'd now like to turn the call over to Paula Ragan.

Paula?.

Thanks, Carey, and thank you everyone for joining us on the call this morning, as we update you on our significant clinical progress achieved so far this year and look ahead to what is expected to be a very productive remainder of the year.

As I hope you saw in our release this morning, we provided a detailed update on our mavorixafor clinical programs and highlights of upcoming events and milestones expected through the rest of 2021. For those of you new to the X4 story, mavorixafor is our lead candidate.

It is a first-in-class small molecule antagonist of the chemokine receptor CXCR4, a receptor involved in the healthy trafficking and maturation of immune cells.

With its ability to develop and mobilize white blood cells out of the bone marrow, we believe mavorixafor has broad potential to provide patients benefit in a variety of immunodeficiency conditions and in certain cancers.

Our lead indication of WHIM syndrome, which is a rare inherited primary immunodeficiency disease caused by a variety of mutations to the CXCR4 gene, we announced this morning that we have now surpassed the 18-patient minimum enrollment that is needed for a primary endpoint analysis and for U.S. regulatory filing.

We’ve now enrolled 23 patients in the Phase 3 trial, enabling the study to also assess potential clinical benefit of mavorixafor. We will be completing enrollment this quarter, while allowing for the remaining identified patients to complete screening and potentially enroll in the trial.

As a reminder, our 4WHIM trial is a global pivotal Phase 3 randomized double-blinded placebo-controlled multicenter study, designed to evaluate the safety and efficacy of mavorixafor in genetically confirmed WHIM patients over the course of 52 weeks, with an expected open-label extension period to follow.

The primary endpoint for the trial, time above threshold, absolute neutrophil counts, or TATANC, measures the level of circulating neutrophils in a 24-hour assessment relative to a clinically meaningful threshold in response to treatment with mavorixafor versus the TATANC of treatment with placebo.

Secondary endpoints assess infection rates, work burden, markers of the immune system and quality of life, among others. With enrollment now close to complete, we are confident that we will be positioned to announce top line data from the trial in the fourth quarter of 2022 and if successful, intend to file for U.S.

regulatory approval in the first quarter of 2023. Based on this progress and on the encouraging data that continue to come out of the open-label extension of our ongoing Phase 2 trial on WHIM, more of which we plan to announce later this year, we are starting to ramp up our pre-commercial planning.

In addition to the new Phase 2 data that I just mentioned, we also plan to provide further results from WHIM patient prevalence studies later this year, results that not only help in refining our estimates of the potential opportunity for mavorixafor in the WHIM indications, but that also enrich our insights into market dynamics, patient identification and physician awareness.

Our research team in Vienna has also been doing innovative work to better understand and characterize the genetics underlying WHIM syndrome, fully developing a mouse model of WHIM, for example, examining the correlation between genotype and phenotype and also identifying a new WHIM variant.

We plan to announce preliminary findings from some of this work also later this year.

Turning now to our program in Waldenstrom's macroglobulinemia, which you may recall is a rare blood cancer characterized by an excess of abnormal white blood cells in the bone marrow, we announced this morning that we have fully enrolled both cohorts A and B in the study with six patients each.

We are very pleased to have enrolled the minimum patients in the study needed to determine the maximum safest dosing in combination with ibrutinib. We are continuing to enroll patients in the optional cohort C, to expand the total number of patients on study.

As a reminder here as well, this is an ongoing Phase 1b open-label multi-center single-arm study examining intrapatient dose escalation, safety, pharmacokinetics or PK and the pharmacodynamics, or PD of mavorixafor at doses of 200, 400 and 600 milligrams in combination with ibrutinib a BTK inhibitor and the current standard of care for patients with Waldenstrom's.

Both agents are delivered orally once daily in patients with confirmed MYD88 and CXCR4 mutations. While greater than 90% of patients with Waldenstrom's have acquired mutations in the MYD88 gene a subset about 30% to 40% have also acquired mutations in CXCR4.

There's a significant unmet need in these double mutation patients where the presence of the CXCR4 mutation can prevent patients from responding well to ibrutinib monotherapy. This can manifest as delayed responses, inferior depth of response and/or shorter progression-free survival.

These patients typically experience greater cancer burden, higher serum IgM levels and increased risk of developing a serious emergent condition called symptomatic hyperviscosity syndrome.

In our Phase 1b study patients are being followed for adverse events and change from baseline IgM and hemoglobin PK and PD markers, which include measurements of peripheral white blood cell counts in addition to measuring clinical response.

This past June, we were very pleased to present the first data from this trial in an e-poster at the 2021 European Hematology Association meeting. In the poster and on our Investor Day call, we presented details from the first eight patients enrolled in the study.

Those data were very encouraging with mavorixafor plus ibrutinib demonstrating good tolerability with robust decreases in serum IgM at the low and mid doses of mavorixafor suggesting best-in-class potential for this combination treatment.

We also saw meaningful increases in hemoglobin levels suggesting reduction in cancer burden in the bone marrow and at six months patients achieved median IgM level reductions of 60% to 75% with one patient achieving normal IgM and two of four patients achieving greater than 50% reductions in serum IgM from baseline.

By the end of this year, we expect to announce additional data from this Phase 1b trial in Waldenstrom, including in safety and efficacy at the highest dose of 600 milligrams of mavorixafor as well as clinical response measures.

Let's turn now to our ongoing clinical program in severe congenital neutropenia or SCN, a rare blood disorder characterized by abnormally low levels of certain white blood cells called neutrophils. We are currently conducting a Phase 1b clinical trial in SCN and as enrollment is continuing to progress.

We expect to be able to announce some initial data from the study in the fourth quarter of this year.

Interestingly, as we've continued to assess mavorixafor's mechanism of action and its ability to mobilize and develop neutrophils data continue to emerge from prior and ongoing studies that show chronic, sustained white blood cell increases across a number of patient groups treated with mavorixafor.

As a result, we are beginning to explore the potential for broader use of mavorixafor across the larger chronic neutropenia landscape. Our initial data in SCN as part of this broader dataset may facilitate these larger opportunities for mavorixafor in chronic neutropenias and we aim to provide more details on these exciting efforts later this year.

In summary, we could not be more pleased with our progress over the first half of 2021. Despite a global pandemic, we have been able to significantly advance mavorixafor through key clinical development milestones with commercialization in sight.

As we look ahead to what we expect to be a news-rich rest of 2021, we thank all of you for your support and look forward to providing frequent updates on our continued progress. With that update, I will now turn the call over to Adam to discuss our financial results for the quarter.

Adam?.

Thanks, Paula and thanks to all of you on the call today. As presented in our press release this morning, I will summarize our financial results for the second quarter ended June 30, 2021. Research and development expenses were $13.2 million for the second quarter of 2021 as compared to $9.3 million for the comparable period in 2020.

General and administrative expenses were $5.8 million for the second quarter of 2021, as compared to $5.3 million for the comparable period in 2020. And we reported a net loss of $19.6 million from the second quarter of 2021, as compared to a net loss of $15.1 million in the second quarter of 2020.

Note that net losses include $1.8 million and $1.2 million of certain non-cash expenses for the quarters ended June 30, 2021 and 2020, respectively. We had $96.5 million in cash, cash equivalents and restricted cash as of June 30, 2021. We continue to expect that these funds will support our operations into the fourth quarter of 2022.

We'll now open up the call for your questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from Stephen Willey with Stifel. Your line is now open. .

Hi. This is Ellen on for Steve. Congrats on all the progress. So you mentioned that you now have 23 patients enrolled in the Phase three WHIM study and that there is complications undergoing screening.

So I was just wondering could you clarify does that 23 member include those patients that are currently undergoing screening or are there additional patients in addition to these 23 that you mentioned that are in the process of being enrolled currently? And then kind of related to that so I think the trial the protocol allows for up to 28 patients enrolled.

Do you expect to enroll 28 or will it be a little bit less than that? And then I have a follow-up, thank you. .

Hi, thanks for the question. So the first part is we have 23 patients already enrolled period like they're in and moving forward in study. There are a number of patients that were also ongoing screening. We don't know yet which one of those or how many of those will qualify for the study.

So we have to complete screening and certainly our hope is to get as close to 28 as possible. But given the robust enrollment that we have to date and the data that we expect -- that will be generated from that we're moving forward finalizing enrollment this quarter. .

Okay. Great. Thank you.

And then can you provide any details as to when we might expect to see the new data from the open-label extension portion of the Phase two WHIM trial and then also those updates regarding patient prevalence? And then maybe to that latter point I understand there are a few different efforts underway with regards to patient identification including the Invitae collaboration partnerships with patient advocacy groups et cetera.

So will that prevalence update be from kind of a holistic update from all of those efforts or will it be one or two that are specifically the focus for that update?.

Sure. So I -- there was a prevalence question and then I think it was the open-label extension and those are sort of what data to expect by the end of the year.

Is that correct?.

Yes and then just the timeline which you just answered there so. .

Yes sure. So we are looking forward to presenting updates by the end of the year ideally at ASH. We've submitted our abstracts and hope there's a number of them that would be sharing great data and support with our collaborators our clinical collaborators and research collaborators on the -- both the WHIM open-label extension.

And then we've actually been working on WHIM prevalence both in terms of connecting patients and genetic mutations both in collaboration with Invitae some of our own research that we've been working with individual investigators.

So it will be an amalgamation of some of the work that will -- that have been pulled together from a number of sources and we'll have that also at the end of the year around the ASH timeframe. .

Great. Thank you for taking the question and congrats on the buyback this quarter..

Thank you so much..

Thank you. Our next question comes from Trevor Allred with Oppenheimer. Your line is now open. .

Hey, thanks for taking the question. I wanted to ask about the SCN trials.

Do you know what mutation types you have enrolled so far and what mutation types you expect to enroll once you're completed there?.

Sure. Thanks for the question. So maybe I can just remind you about severe congenital neutropenia.

Certainly, as there are some known genetic subtypes congenital neutropenia is also a clinical diagnosis which can have an unknown origin and we're being very open to enrolling both those with known and unknown mutations in the study given the broad applicability of mavorixafor that we've already been seeing across a number of patient populations.

So as the data emerges we'll certainly share with you the effects on patients with and without various mutations, but we're excited about what we've been seeing across our currently published studies and we really think this is going to be quite interesting jumping point for the company in terms of its even broader applicability beyond these congenital neutropenias into the chronic neutropenia market.

.

Okay. Great.

And in terms of what we've seen so far with Waldenstrom's and the positive results we're seeing so far do you have any expectations already for what the next trial for Waldenstrom's might look like?.

Thanks. No, we appreciate that. So the -- we have yet to complete the trial ourselves. Obviously, we want to complete our safe dosing and then discuss trial designs with the agency so we don't have any specific guidance on our next steps. There's certainly been the bookends historically.

There have been single-arm studies that have been supported for a full approval with ibrutinib as a monotherapy way back when and then there have been obviously recently controlled trials where it was zanubrutinib versus ibrutinib in a randomized Phase 3. So there is the full spectrum.

We won't know yet until we go in with our dataset in hand and we'll probably have more information in 2022 on that. .

Okay, great. Thanks Paula..

Thank you. .

Thank you. Our next question comes from RK with H.C. Wainwright. Your line is open..

Thank you. This is RK from H.C. Wainwright. It's great to see all the progress. A quick question on the variant and Paula you said your research folks are looking at WHIM variants.

What is -- can you expand on that please?.

Sure. I'll actually invite Art to share a little bit more on our strategy there..

Art?.

Sure. Thank you, Paula, and hi RK.

So, with the Vienna team, we've been looking at the no-WHIM mutations and we've also been looking at variants of unknown significance and for us, the goal is to understand as much as possible, genotype-phenotype correlations, looking at signaling, looking at internalization and other factors that really reflect the gain of function activities that are seen with the mutations.

We've identified a mutation in particular, which we're going to discuss later this year in the publication, which actually has pathogenicity associated with it.

We did some work in collaboration with medical doctors in the field to characterize patient cells -- patient cells to also confirm the pathogenicity that we're seeing with transfecting cells and harboring those same mutations. And then we've done work, where we're looking at various genomic databases and trying to understand prevalence.

And so all of that put together, actually suggest that now there are increased patient or at least there are additional patients with this particular mutations and we now know, it's a pathogenic mutation. So we'll be disclosing RK, later this year in a publication format the work that we've done on that mutation and others as well..

Thanks, Art for that. So it is potential that some -- there could be patients that are not really being diagnosed as WHIM because, they don't have some of the typical symptoms that have been patient, as we currently define it as have. Is that right? Is that one of the….

Yes. That's right. Yes that's right..

One of the….

I'm sorry. Okay..

Yes. Great. And then on the Waldenstrom's, in terms of the ongoing Phase 1b study, I don't know Paula if you stated anything about the timing on the next update..

Yes we have. Sure, we'll be giving updates by the end of the year certainly, ideally around the ASH time frame..

Okay..

Hopefully, our abstracts will be part of that acceptance and we look forward to updating everybody then..

Okay. Perfect. Thank you. Thank you for taking my questions..

Thank you, RK..

Thank you. And our next question comes from Zegbeh Jallah from ROTH Capital Partners. Your line is now open..

Good morning. Thanks for taking my questions. Paula, I think you mentioned that you guys had initiated some commercial activities and I feel like you've been doing a lot of work with patient identification and then just really being involved with a lot of the patient groups.

So, I'm just wondering, what steps are you guys now taking and then how are you thinking about kind on the rolling out of activities because, it is a little bit early.

And then the last bit, if you can just comment on, how you also think about cost synergies because, I think that was something else that you mentioned at one point in terms of commercialization of mavorixafor?.

Sorry Zegbeh, could you just clarify the last part of that question? Did you say costs or I'm sorry I didn't hear?.

Cost synergies, cost synergies. Sorry my reception is kind of poor..

No worries. So I mean, maybe I'll just broadly -- I mean, I think you mentioned obviously, some of the commitments that we have ongoing in terms of patient identification, working with patient advocacy groups. Obviously, you heard of Art's research around really understanding the connectivity between patient presentation disease and genotype.

So, we're excited about all that as we ramp towards eventual NDA filing and launch. Certainly, there's a lot of activities that we need to do to prepare for the commercial supply chain.

Mary DiBiase on the phone here is managing that extremely well, getting ready to support the filing, as well as commercial launch on drug product substance and supply chain, and then of course, we're -- I mean, it's still two years away at this point ideally, but we certainly have a lot of work that we're preparing in terms of supporting the branding and ultimate commercialization of the product in the US and Europe to follow.

I hope that helps..

Thank you. And then just a quick follow-up here on the chronic neutropenia, I was just wondering, how large could this possibly be in terms of expansion..

So that's an excellent question and chronic neutropenia is -- it's a spectrum of patients. So, let's first define what that means. So severe chronic neutropenia of which are some of the patients that we're studying in our Phase 1b study, there are reports that can suggest there's about 5,000 patients in the US alone with severe chronic neutropenia.

Moderate chronic neutropenia is also a very significant problem. It's less well-studied and less well-defined from a clinical presentation, but you can get into the tens of thousands of patients with moderate chronic neutropenia. So that means neutrophil counts below 1,000, the severe are below 500. So it's a fascinating field.

These patients are very poorly understood. They certainly have high unmet need, given their clinical presentations and infection rates and we're trying to find that. Continue to focus on the spot of high unmet need at neutrophil counts and that's where we believe mavorixafor can more broadly help these patients..

Thanks, Paula..

Thank you. Our next question comes from Mayank Mamtani with B. Riley Financial. Your line is now open..

Good morning team. Thanks for taking the question and congrats on all the progress. So, just one quick question on the recently published BMS, CXCR4 antibody dataset, I think that was published in Blood last week by Dr. Treon also.

Can you maybe speak to how that dataset you look at in terms of mechanistic validation but also the kind of bar set for mavorixafor as you think of advancing this to late-stage development next year?.

Thanks for the question. And I'll start, and then I'll ask Art to chime in as well. So obviously, we're tremendously excited that Dr. Treon is such a strong champion of this mechanism. His scientific work is the underpinnings of our understanding of the unmet need in these patients. And we really appreciate that the study.

I think it continues to demonstrate the importance of the target given now the combination data that came out with the antibody. I think the one thing that we're struggling a little bit other – there's not apples-to-apples correlation, I think between his study and ours. The patient population is different, given they are not pretreated.

And then secondly, some of those patients were plasmapheresis during his study just given the severity of their disease. So it does confound the interpretation of just some of those results based on obviously the appropriate treatment of those patients.

So in terms of setting the bar, I would just highlight that's a little bit of a difficult interpretation at this point. Our study will use the appropriate historical benchmarks for patients, who have already been pretreated, and we think that's a very relevant way to think about these data.

Certainly, validates the target the patient, population is slightly different and unfortunately, there had some interventions that make it a little bit complicated to crosswalk.

Art, do you have any comments on that?.

Sure. Hi, Mayank. So definitely, the data really supports the value of CXCR4 antagonism in this disease space and shows obviously an improvement winning combination with the anti-cancer killing agents. And so we're actually encouraged by this, and of course, we have the oral version of CXCR4 antagonist.

And so in combination with ibrutinib in our very first data set that, we released, actually, we do see promising results there. So we're encouraged by continuing to hit the target and this combination therapy and I think actually we're going to continue to do well as we continue to progress with the program..

Great. Thank you, Paula and Art.

And then on the SCN Phase 1 initial dataset you're thinking of putting out in fourth quarter 2021, can you maybe just give us a little bit color on what sort of dose levels you're able to go up to in this study design? And I think you mentioned that, there are some ongoing trials that, similarly, could have cross read on your approach including in larger chronic neutropenic population.

So can you maybe expand on that a little bit more, Paula?.

Sure. So the Phase 1b study design is testing a single dose which is 400 milligrams per day, the same doses in WHIM patients, because we feel like we know a lot about safety already certainly short and long-term based on WHIM. So the SCN trial for us is really important for two reasons.

One, certainly as we think about specifically focusing on the label for congenital neutropenia patients with a severe profile, but we are continuing to explore and expand the inclusion criteria for the study to actually also include idiopathic neutropenia patients, also on the same severity side.

So we're going to have some initial data by the end of the year that will help crosswalk the severe congenital, severe chronics, and then that gives us the first indication that this – mavorixafor, we know is not mutation specific. It elevates white blood cells in all people, including you and I, if we took it.

The question is how are we going to focus on the highest unmet need.

This trial is an excellent trial to focus on these very severe patients seeing, what mavorixafor can do to elevate those neutrophil counts that they so desperately need, and then we can begin to expand from the severe population up into the moderate patients, also obviously who would have high unmet need based on their infection profiles.

So it's a really exciting jumping point for us, and we'll look forward to sharing more data towards the end of the year..

Great. Thanks for taking my questions..

Thank you. And our next question comes from Eva Privitera [ph] with Cowen. Your line is now open..

Hi. Thank you so much for taking my call. I have a quick question about the Waldenstrom's study.

Approximately how many patients will be evaluable by the next update in ASH and can we expect to see some clinical response data at that update?.

So, you can definitely expect some clinical response data in our current patients that are enrolled, which as of this press release were actually 13. We've completed six and six in each cohort, and then there was an early patient at a low dose.

And we continue to enroll and have been continuing to enroll so as many patients as are evaluable for their response rate. We will include that data towards the end of the year, hopefully, at an ASH poster presentation..

Just a quick follow-up.

What's your current thinking about what you would need to see to move into larger studies?.

Sure. So we know that, after six months of treatments with ibrutinib alone, there's only been about a 10% VGPR rate. So that's the best response. And then there is about a – it's about a 30% to – 30% response rate on major responses.

So we're looking obviously to beat that in the coming months and we're looking forward to sharing that data with you towards the end of the year..

Thank you..

And our next question comes from Ben Shim with Canaccord. Your line is now open..

Hi, good morning. Thanks for taking my question.

Paula, I just wanted to confirm I might have misheard but for the SCN, looking at I guess the larger moderate population that is going to be a trial amendment as opposed to a brand-new trial?.

Yes. We are allowed to amend the protocol. They're all – they all have the same clinical profile which is that severe sort of severe clinical presentations around infections and then the neutrophil counts below our required thresholds.

And then we're opening up to not only congenital neutropenia patients but there's also an ability to open it up to idiopathic or chronic to allow us to begin to study those patients as well in the study..

Okay. Great.

I know it's a little early but can you may be shed a little light on what you think the FDA might be thinking as far as approvable endpoints for a potential pivotal trial?.

Yes. That's a great question. It's a little early. So I don't think we're going to yet conjecture.

We'll look forward to presenting the study results and again just as a reminder these are short-term dosing to really just put for the biomarker responses and then from there actually we'll have to think more strategically with the FDA about how we show outcomes as the study progresses and the trials progress..

Okay. And I just wanted to ask an obvious clarification question.

I think you had mentioned in your SCN comments, that you saw kind of a deepening of response in neutrophils and I just wanted to confirm that's with patients who are on drug, right?.

Yes. So when you said deepening at risk – so I haven't hinted anything at the actual results in the SCN trial but what we can share with you across both WHIM and our other studies is that mavorixafor has a very robust neutrophil elevation, whether it's short term or long term. We've published that obviously in our initial open-label WHIM study.

There have been some of our cancer trials are also showing this very nice and robust elevation of total white blood count as well as neutrophil counts.

But the missing link here for us is getting that initial data in these congenital or chronic neutropenia patients because that's going to be a great crosswalk into a patient population that's incredibly underserved..

Okay. Great. That’s very interesting. Thanks for the color..

Thank you..

Thank you. And at this time, I'm showing no further questions in the queue. I'd like to hand the call back over to Paula Ragan for any closing remarks..

Well thank you again for joining us today. We look forward to seeing many of you at the various upcoming investor conferences and continue to update everyone on our clinical progress, as we advance through this busy second half of the year.

If you have any further questions, please don't hesitate to reach out, and I hope you enjoy the rest of your day..

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day..