Thank you for standing by. This is the conference operator. Welcome to X4 Pharmaceuticals' Fourth Quarter and Full Year 2022 earnings conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. It's now my pleasure to introduce your host, Dan Ferry from LifeSci Advisors. Please go ahead.
Thank you, operator, and good morning, everyone. Presenting on today's call will be X4's Chief Executive Officer, Dr. Paula Ragan, and Chief Financial Officer, Adam Mostafa. Following prepared remarks, we will open up the call to your questions, and we're joined by Interim Chief Medical Officer, Dr. Murray Stewart, Chief Commercial Officer, Mark Baldry, Chief Scientific Officer, Dr. Art Taveras, and Chief Operating Officer, Dr. Mary DiBiase. 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 filings with the SEC from time to time, including the company's latest 10-Q filing on November 3rd, 2022, and in the 10-K for 2022, which is expected to be filed after the market close today. I'd now like to turn the call over to X4's President and CEO, Dr. Paula Ragan. Paula?
Thanks, Dan, and thank you everyone for joining us on the call. As we mentioned in the press release this morning, we could not be more pleased with the progress we made in 2022 advancing our lead candidate, mavorixafor, towards commercialization and, most importantly, towards helping patients in need. We believe our clinical trial data continue to speak volumes, unequivocally demonstrating mavorixafor's ability to chronically raise circulating levels of neutrophils, lymphocytes, and monocytes. As you may be aware, following our strategic announcement last July when we tightened our focus to advance mavorixafor in chronic neutropenic disorders, we achieved two significant development milestones, announcing positive clinical results from both our pivotal phase III trial of mavorixafor in WHIM syndrome and our phase I-B clinical trial of mavorixafor in certain chronic neutropenic disorders.
Most importantly, in late November, we announced the success of our pivotal phase III clinical trial evaluating oral mavorixafor in people with WHIM syndrome, with the study meeting its primary endpoint and first key secondary endpoint, achieving statistically significant and clinically relevant longer times above threshold for both absolute neutrophil counts and absolute lymphocyte counts versus placebo. Mavorixafor also demonstrated good tolerability in this robust 52-week randomized, placebo-controlled, double-blinded trial. Note that mavorixafor is the first and only oral therapy to demonstrate durable improvements in severe chronic neutropenia and lymphopenia, the hallmarks of WHIM syndrome, which is a rare combined immunodeficiency for which there is no approved treatments.
Since the November data announcement, we have continued to analyze the clinical results from the phase III WHIM trial and expect to be able to present additional data from the trial at one or more medical conferences in the second quarter of 2023. We plan to host an investor call around the time of the first presentation and will update you as we have more information on the exact schedule. Importantly, these results are expected to include additional secondary and some exploratory endpoints, including assessments of infection rate, severity, duration, and types of infections, as well as the effect on patients' wart burden and certain vaccine titer data. We now have scheduled a pre-NDA meeting with the U.S. regulatory authorities in Q2 to discuss next steps in advancing mavorixafor towards an NDA submission.
Pending input from the FDA, we continue to anticipate submitting the NDA early in the second half of this year, which we hope will lead us to our first product approval in the first half of 2024. Last year, back in September, we presented positive data from our phase I-B clinical trial in chronic neutropenic disorders. The study demonstrated the ability of a single oral dose of mavorixafor to normalize absolute neutrophil counts, or ANC, in those with the most severe forms of neutropenia and across all chronic neutropenic disorders studied, which included idiopathic, cyclic, and congenital neutropenia. Normalization of ANC was demonstrated with mavorixafor as a monotherapy and in combination with the only approved treatment for severe neutropenia, injectable granulocyte colony-stimulating factor, or GCSF. Impressively, 100% of patients responded. We could have not hoped for more in this initial study.
This early trial has now been expanded into a phase II clinical trial to assess the long-term durability, safety, and tolerability of oral mavorixafor more broadly in those diagnosed with idiopathic, cyclic, or congenital chronic neutropenia. Participants are currently being enrolled in the phase II CN trial, we expect to be able to report clinical data from the study in Q2 or Q3 of this year. The timing of this will obviously be dependent on the rate of enrollment, we do plan to present a robust data set when we announce the first results from this trial. These proof-of-concept data we are generating in our phase I, II trials aim to unlock an even broader potential of mavorixafor, one where we could potentially offer a differentiated oral and well-tolerated treatment option to upwards of 50,000 people diagnosed with CN disorders in the U.S.
We also expect to be able to provide clarity on both the scope and the possible timing of our planned phase III clinical program for mavorixafor in chronic neutropenic disorders in the 2nd or 3rd quarter of this year. At this time, we expect the phase III trial will likely be a randomized, placebo-controlled trial studying the safety and efficacy of mavorixafor on top of standard of care, with likely a primary endpoint measuring changes in neutrophil counts and secondary endpoints related to reduction in infections. We expect to know a lot more following a meeting with the FDA to specifically discuss the path forward of mavorixafor for these certain chronic neutropenic disorders.
Throughout 2022, through both our clinical and scientific research programs, we were able to gain much greater insights into mavorixafor's ability to address the unmet need in chronic neutropenic disorders, including WHIM syndrome. We are particularly pleased that almost all of our submitted abstracts were accepted for either oral or poster presentations at prominent medical conferences during the year, including the AAAAI meeting early in the year, the CIS annual meeting in spring, EHA, the NICER Symposium, and ESID over the summer, and the National Organization for Rare Disorders Summit in the fall. We also had quite the large presentation at the annual meeting of the American Society of Hematology, or ASH, in December, garnered strong interest both at our presentations and our X4 booth.
Throughout the year, our presentations not only highlighted new insights into the breadth of genotype and phenotype of people with WHIM syndrome, helping to identify both additional patients and helping to educate treating physicians, but also demonstrated new understandings into mavorixafor's mechanism of action, principally its ability to induce maturation and mobilization of white blood cells from the bone marrow into blood circulation and enabling immune surveillance and response. Our research also deepened our understanding of the diverse and significant needs of the patient community through interviews and survey engagements, and helped us define what is turning out to be a larger than expected U.S. population of patients living with chronic neutropenic disorders.
These milestones throughout the year, along with the continued support of our investors and analysts, helped us successfully complete two large financings, raising gross proceeds of more than $120 million despite continued challenging biotech market conditions. Currently, we have a strong balance sheet to help us propel our pre-commercial efforts for mavorixafor and WHIM, and further advance our mission to deliver mavorixafor to help those across a range of chronic neutropenic disorders. I'll now turn it over to our CFO, Adam Mostafa, to review the fourth quarter and full year 2022 financials. Adam?
Thanks, Paula. Thanks to all of you for being on the call with us today. As Paula mentioned, we were able to strengthen our balance sheet significantly in 2022, particularly in December, when we completed a public offering that yielded gross proceeds of approximately $65 million. That left us with $123 million in cash equivalents, and restricted cash as of December 31st. We expect that our cash will fund our operations into the second quarter of 2024. In addition, as a result of the positive top-line results from the 4WHIM clinical trial, the covenant under our loan agreement with Hercules Capital, requiring that the company maintain minimum cash of $30 million, was lowered to $20 million.
On January 6th of this year, we also entered into an agreement with Hercules that amended and restated all prior loan and security agreements, that included an extension of the interest-only payment period through the third quarter of 2024, and to further extend the interest-only period to the first quarter of 2026 if certain milestones are achieved. R&D expenses were $19 million and $61.1 million for the fourth quarter and full year ended December 31st, 2022, respectively, as compared to $12.2 million and $50.6 million for the comparable periods in 2021. Note that R&D expenses included $500,000 and $2.5 million of certain non-cash expenses for the fourth quarter and full year ended December 31st, respectively.
SG&A expenses were $6.6 million and $27 million for the fourth quarter and full year of 2022, respectively, as compared to $7.1 million and $24.7 million for the comparable periods in 2021. Note here, SG&A expenses included $0.6 million and $2.7 million of certain non-cash expenses for the fourth quarter and full year ended December 31st, respectively. Finally, we reported a net loss of $25.8 million and $90.5 million for the fourth quarter and full year ended December 31st, as compared to $30.2 million and $88.7 million for the comparable periods in 2021. Net losses include $1.1 million and $5.2 million of non-cash expenses for the fourth quarter and full year, respectively.
With that, why don't we open up the call for your questions? Operator?
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. Our first question comes from Stephen Willey of Stifel. Please go ahead.
Hi, guys. This is Tuleon for Steve. Can you guys hear me okay?
Yes. Thanks.
Okay, great. I have just two very brief questions on my end. Very first one is related to timing of phase, timing of chronic neutropenia data. Can you give us a little bit more color on shift in the timing? What are you actually planning to disclose when you disclose this data? That's my first question. Second question would be related to the partnering front. Can you give us more color on, like, the progress you've made so far on partnership front? Lastly, maybe like R&D cost. I think if I'm not correct, there is a increase. There's a peak in the R&D cost. Maybe if you could provide a little bit more color on that would be great as well. Thank you.
Sure. I'll take the question on the CN, you know, Q2, Q3 deliverable, and then I'll turn it over to Adam for partnering and R&D costs. Thanks for the question. We've been continuously communicating that we have intended to, you know, it's an open label phase II study in chronic neutropenia, where we'll be presenting anywhere from a handful of patients or more, on at least a few months of chronic dosing. We wanna see durability as we have consistently seen across all the patient populations tested with chronic mavorixafor. We're certainly on track to do that. Obviously, more data is better, so we're giving ourselves some flexibility. We saw the very positive response last year due to 25 patients worth of CN data.
We're pushing ourselves as hard as we can to deliver the most robust data set for the investor community and of course, for the patients and physicians who support us. That additional flexibility on the Q2, Q3 timeframe enables that to happen. I hope that helps, and I will turn that over to Adam now around the partnering and the R&D costs.
Thank you. With respect to partnering, we continue to explore discussions. We don't have any significant update for today and don't obviously want to speak on behalf of any potential partners. It is an area that we are considering in terms of moving our drug forward and capital raising activities in the future. With respect to R&D, you did notice an increase year-over-year. Likely, that relates to clinical operations costs in the chronic neutropenia trial, which in part led to the data that we revealed back in September that Paula mentioned. It also relates to additional clinical operations and CMC costs that support both chronic neutropenia and the WHIM trial leading up to our top-line data late last year. That's a little color on some of the background for the R&D.
Yes.
Thank you.
Our next question comes from Divya Rao of TD Cowen. Please go ahead.
Hi, guys. Thanks for taking my question. This is Divya on for Mark. I guess on the trial in CN, do you guys expect to run the pivotal in all causes of chronic neutropenia, or do you expect to run separate trials for those? I have one other question.
Sure. Murray, would you like to take that?
Yeah. I mean, in the phase I, we were able to look at the different populations, congenital, idiopathic, and cyclical. For a big registrational study, we'd hope to be able to include similar groups. You can include them in the one study by stratifying. In other words, you get balance across the different groups. Rather than do three separate studies, you can do them all in one study by accounting for stratification.
Okay. That's helpful. I guess in terms of the secondary endpoints that you plan to present from the phase III trial sometime in Q2, I guess what infection rates do you think physicians and patients will deem clinically meaningful?
Sure. I'll start and then certainly ask Murray and others to chime in. Our phase II data, which aligned with Breakthrough Therapy Designation in WHIM syndrome, demonstrated a reduction of infection rates of about 50% after a year. We're certainly hoping that, you know, that type of direction continues. We're extremely excited about the phase II data. We designed a robust study for the phase III, not only, of course, infection rates, but there's a whole host of things that we've mentioned in terms of duration, severity, type. We look forward to sharing the totality of the data. Murray or Art, if you wanna chime in any further, that would be great.
The only thing to add in, so in the WHIM population, you might expect people to have an annualized infection rate of about four, and that's a mean. Some people get more than five infections, and some people get two or three infections, but the mean is about four. Obviously, from our phase II, we saw, you know, about a 4% reduction. Bear in mind that the study we did was under COVID, and there have been concerns about would we see less infections in COVID. When we present the data, we'll be presenting the data looking at the annualized infection rate to see we're very effective, and we'll look at the different components of infection, including, as Paula mentioned in the call, severity, duration, repeated infections, as well as warts, vaccine titers, quality of life, and safety.
That's helpful. Thank you.
Our next question comes from Ted Tenthoff of Piper Sandler. Please go ahead.
Great. Thank you very much. shaping up to be a very exciting year. two quick questions. I'm assuming that maybe you're waiting for acceptance, but what are the conferences you anticipate presenting data at for the phase III data in the second quarter? When it comes to the chronic neutropenia readout, is it more likely that's gonna be a press release then followed up by a medical meeting, or are you targeting a specific medical meeting? Thank you so much.
Hi, Ted. Thanks for the great questions. We're currently aiming to present either at CIS, which is in the second or third week of May, or EHA, which is in the second or third week or so of June. We are still waiting to hear, we're looking forward to kind of.
Yep
... refining that type of information. Please stay tuned, and we'll try to update as soon as possible. Then, in terms of the CN data, we would expect to kind of provide some additional context around it, so not just a press release. We certainly think this will be an exciting data set to inform, you know, both the KOL and the investor communities around. We think we'll provide a more robust type of format, not likely linked to an individual conference, but perhaps an investor or R&D day on behalf of X4.
Great. That's very helpful. Looking forward to the data and the regulatory filings. Thank you very much.
Thanks so much, Ted.
Our next question comes from Mayank Mamtani of B. Riley Securities. Please go ahead.
Hi. Good morning, team. This is [Donald Kazian] for Mayank. A couple quick questions from us. First, can you remind us how you're thinking about the timeline for potential EU filing for mavorixafor as well in WHIM syndrome?
Sure. Murray Stewart, can you take that?
Yeah. Obviously we want to use the same data set. Within the next six- 2 months, we'll be filing in Europe, following on from the NDA filing.
Okay, perfect. Maybe as we, you know, switch to the U.S. launch here, can you give us an update on any commercial or launch preparation activities, including, you know, how you're thinking about the sales force engaging with different patient advocacy groups, et cetera. Thank you very much.
Sure. Thanks. Mark, would you like to take that?
Sure. Thanks. Yeah. While we progress against our regulatory timelines, on the commercial side, we're starting to... I'm a pretty pragmatic guy, so we're starting to prepare the market, prepare the product and prepare the company for a successful launch. We're out with a small field team right now learning about the physicians and where we might be seeing WHIM patients. We're educating on WHIM disease and really trying to encourage earlier diagnosis, as we know that the earlier patients are diagnosed, the better outcomes for them. That's where we are right now.
Maybe, one quick follow-up. How much of that work is there overlap with the chronic neutropenia population, you know, as you think about the future, obviously acknowledging a little bit earlier days in that program?
Sure. Mark, you wanna go ahead?
Yeah. Well, I, you know, WHIM syndrome is a form of chronic neutropenia, everything we're learning today is really helpful foundation for us as we, as we think about our strategies in chronic neutropenia and other primary immunodeficiencies. Everything we're doing now, I think, is teaching us about the unmet need in primary immunodeficiency. This can all be helpful for us as we, as we build our plans.
Excellent. Thanks so much for taking our question.
Our next question comes from Kristen Kluska of Cantor Fitzgerald. Please go ahead.
Hi, good morning, everybody. Thanks for taking our questions. Sounds like you're planning to have a potentially robust conference attendance this year with data, similar to how we've learned new insights on WHIM syndrome, genotype, phenotype, patient identification, unmet need, and other factors for both CN and WHIM, do you think we could learn additional data regarding the market opportunity at these conferences, again, in addition to some data disclosures this year?
Yes, thanks, Kristen. That's a great question. We actually have been publishing our market analyses, and we've done some excellent work on ICD-10 codes with respect to chronic neutropenia. As we generate even more deep and more refined analyses along those lines, we'll certainly look forward to publishing that data. No specific plans yet, but the team is working very hard to make sure we are defining the right population for treatment and that unmet need and align it, of course, with market potential. Stay tuned.
Okay, thanks. In light of the WHIM syndrome data that you presented at the end of last year, curious if you're getting any read-through in terms of getting patients and investigators excited about enrolling and also the potential in the CN program?
Oh, I definitely think there's crosswalk for excitement, but I'm gonna turn that over to Murray to expand on that.
The investigators, the PIs have been seeing the data, and they're very excited by the data in WHIM, and already they're thinking about wanting to enroll in the CN study. I think they can see the link between neutropenia between WHIM and CN, and they're excited about mavorixafor. I mean, historically, they've got GCSF, which has its limitations, and I think they're excited to see a potential oral therapy for WHIM and CN.
Thank you. Looking forward to seeing some of the presentations this year.
Thanks, Kristen.
Our next question comes from RK of H.C. Wainwright. Please go ahead.
Thank you. good morning, Paula. I think most of my questions have been answered. just trying to understand, you know, in this next meeting that you want to have with the FDA before you file, what sort of clarifications are you trying to get, so that you're well-equipped when you file?
Thanks, RK. Murray, would you like to take that?
This is a standard pre-NDA meeting. Most companies, well, I think all companies have to have a pre-NDA meeting, and we make sure we clarify the most appropriate things. We cover all areas. Are they comfortable with the non-clinical data? Are they comfortable that the data actually shows the drug is effective and safe and has a positive risk-benefit? We discuss whether there are any CMC issues. The whole point of the pre-NDA meeting is so when we move ahead to file, the FDA are not surprised by anything, and we're not surprised by anything.
Thanks.
This concludes the question-and-answer session. I would like to turn the conference back over to Paula Ragan for any closing remarks.
Thank you, operator. As you can hopefully hear from all of our tones today, we're very excited about the year ahead and the road beyond. We thank you again for joining us today and hope you all have a wonderful day. Thank you.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.