Q4 2024 X4 Pharmaceuticals Inc Earnings Call
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Greetings and welcome to the X for 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: Dan Ferry from life Science Advisors. Please begin.
Speaker Change: Thank you operator, and good morning, everyone.
Speaker Change: Presenting on today's call will be exports, Chief Executive Officer, Dr. Paul Rayner.
Speaker Change: Chief Financial Officer Stefan.
Speaker Change: Stefan.
Speaker Change: Following prepared remarks by each we will open the call to your questions.
Speaker Change: And we'll be joined by Chief Commercial Officer, Mark Baldry.
Speaker Change: Chief Medical Officer, Dr. Christoph carpet angles.
Speaker Change: <unk> operating officer, Barry Dibiase.
Speaker Change: As a reminder, on today's call the company will be making forward looking statements regarding regulatory and product development plans.
Speaker Change: These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted.
Speaker Change: A description of these risks can be found in.
Speaker Change: And exports most recent filings with the SEC.
Speaker Change: Putting this year's Form 10-K, which.
Speaker Change: Which is expected to be filed after market close today.
Speaker Change: I'd now like to turn the call over to exports President and CEO, Dr. Paula Ragan.
Speaker Change: Paul.
Speaker Change: Thank you Dan and thanks to all of you for joining us this morning.
Speaker Change: 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.
Speaker Change: As you know we became a fully integrated company in 2024 with a U S approval and launch of our first product Maverick before which we branded ethical remedy in the U S for the treatment of whim syndrome, and ultra rare primary immunodeficiency.
Speaker Change: Our commercialization strategy remains focused on a multi pronged approach as is typical in the rare disease space.
Speaker Change: Over the past year, we significantly advanced disease awareness with both treating physicians and when patients through a combination of in person and digital education campaigns and through a strengthened relationships with our rare disease patient advocacy group partners.
Speaker Change: A peer to peer Speaker program was also launched in the second half, enabling physicians to share their experiences and managing whim syndrome.
Speaker Change: In treating with the RMT.
Speaker Change: In addition, our suite of patient services, including our export connect and nurse educator programs continue to provide access and support for patients prescribed <unk> M D.
Speaker Change: Yeah, and 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, a quad AI and the clinical Immunology Society have provided further visibility.
Speaker Change: And we've been very encouraged by some recently received testimonials from our patient funds or M D.
Speaker Change: We heard from one patients who describes his quote normally functioning immune system and significant improvement in skin infections warts and periodontal issues.
Speaker Change: He said he now knows what it's like to lead a quote normal unquote life with lower anxiety about getting sick ability to travel.
Speaker Change: That he'd quote.
Speaker Change: Didn't know how sticky was until you finally felt better unquote.
Speaker Change: Another patient has told us about his near normal and sea levels have increased energy increased productivity and engagement at work.
Speaker Change: And the importance of him not having to miss any family our social events anymore.
Speaker Change: It's really been quite inspiring.
Speaker Change: Our 2024 hours old Romney sales topped $2 5 million, which covered the seven and a half months since our mid may launch last year.
Speaker Change: About 2024, we successfully engage with all of our target top tier immunologist 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 us all remedied prescription.
Speaker Change: 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 maverick's for and win.
Speaker Change: In January we announced that our submitted MAA was accepted by the EMA for review.
Speaker Change: So the typical 12 to 15 month review process, we would expect potential approval for the MAA as early as the first quarter of 2026.
Speaker Change: We've also entered into two international partnerships.
The first with nor gene a leading European specialty pharmaceutical company.
Speaker Change: Under this license and supply agreement <unk> will commercialize Mavericks for for a whim and chronic neutropenia in Europe, Australia, and New Zealand following regulatory approvals in those areas.
Speaker Change: We received $28 5 million euros upfront and are eligible to receive up to 226 million euros and potential regulatory and commercial milestone payments and.
Speaker Change: In addition to tiered double digit royalties up to the mid 20% range.
Speaker Change: Continue to believe that the <unk> 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.
Speaker Change: The second deal, we announced with where the company called Teva rare another specialty pharmaceutical company.
The agreement enables <unk> to use its expertise towards orphan drug marketing sales and distribution in the middle East and North Africa, or Mena region table.
Speaker Change: <unk> will be marketing all remedy for women syndrome across the region.
Speaker Change: We expect that the formal approvals will be sought in Saudi Arabia, and Kuwait, but in the meantime, pending any regulatory approvals Teva expects to be able to provide all remedied a whim patients three named patient or a compassionate use program that allows physicians to prescribe medicines approved in other countries to local patients with <unk>.
Speaker Change: No other treatment options.
Speaker Change: So a lot to look forward to you in a whim, but now lets turn our continued advancement of maverick's for it to treat the larger potential indication of chronic neutropenia.
During 2024, we successfully completed a phase two clinical trial of maverick's four 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.
Speaker Change: About the year, we announced both interim and then full data from this trial that we believe significantly de risks our ongoing phase III CF trial.
Speaker Change: The six month open label clinical Phase two trial ended up enrolling 23 participants and demonstrated one.
Speaker Change: That once daily oral Mavericks, four was generally well tolerated with and without G. CSF with no drug related serious adverse events reported and consistent with our previous clinical studies.
Speaker Change: To that Mavericks for treatment Durably and meaningfully increased participants mean absolute neutrophil count or ANC across all study population and three acquisitions were willing and able to reduce the use of G. CSF and participants also treated with Mavericks floor and we're able.
Speaker Change: Maintain mean AMC levels within the normal range.
Speaker Change: Given these positive data, we initiated a global pivotal phase III <unk> trial called before trial last year.
Speaker Change: The forward 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 are serious infections.
Speaker Change: More recently based on FDA and EMA guidance, we have refined and simplified the forward protocol.
Speaker Change: We are now enrolling only moderate to severe neutropenia participants or those with AMC is below 1000 cells per microliter.
Speaker Change: Given the trials infection inclusion criteria. This ANC level was already consistent with our targeted patient population for Mavericks four if approved focuses on those with the highest unmet need and consistent with almost all of the subjects already enrolled in the trial.
Speaker Change: In addition, the ANC component of the co primary endpoint, which comprises both ANC increase and in fact some benefit.
Speaker Change: We will now be uniform across all participants.
Speaker Change: This primary endpoint seeks to demonstrate that infection benefit from Mavericks, where treatment results from a durable increase in AMC of at least 500 cells per microliter over the 12 months duration of the study.
Speaker Change: As you May recall participants in our phase III trial were severely neutropenia get baseline with an average AMC well below 500 cells per microliter importantly, Mavericks four was able to rave AMC by six to 800 cells per microliter on average in the Mavericks where treatment population.
Speaker Change: Which resulted in clinical benefit and the rate duration and severity of infections in that study.
Speaker Change: For these reasons, we believe that these trial protocol refinements MCM increase our chances of success in this trial on top of what we believe to be an already highly powered and robustly designed study.
Speaker Change: We also announced this morning that the forward trial has now been activated at about 90% of our targeted sites worldwide.
Speaker Change: Given this and the average screening success rates currently being observed we expect that the 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.
Speaker Change: 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% to $35 million annually.
Speaker Change: We implemented these changes in early February to sharpen our focus on maximizing the opportunity for Mavericks four in chronic neutropenia we.
Speaker Change: We believe this is a much larger potential market opportunity for us and given the challenging macro environment. We all find ourselves inherently we believe the best path to maximizing shareholder value and to giving us the greatest chance of success.
Speaker Change: With that I'll turn it over to Adam.
Adam: Thanks, Paul.
Adam: As we disclosed in the press release. This morning, we ended 2024 with just under $103 million in cash and cash equivalents.
Adam: Pro forma for the $28 5 million euros received from <unk> 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.
Adam: We reported net <unk> revenues of $1 4 million and $2 6 million for the fourth quarter and full year 2024.
Adam: Our R&D expenditures totaled $21 7 million and $81 6 million for the fourth quarter and full year.
Adam: Which included $1 2 million and $4 3 million in noncash expenses respectively.
Adam: Our SG&A expenses were $15 1 million and $61 5 million for the fourth quarter and full year of 2024.
Adam: Which included $1 million and $3 9 million in noncash expenses respectively.
Adam: Our net loss was $39 8 million in the fourth quarter and for the full year was $37 5 million, but keep in mind. This annual figure reflects the one time sale of our priority review voucher in may of last year for $105 million.
Adam: We will now open up the call to your questions operator.
Speaker Change: Thank you at this time, if you'd like to ask a question. Please press star one on your telephone keypad, you may withdraw yourself from the queue at any time by pressing star to once again that is star one to ask a question. We will take our first question from Stephen Wiley with Stifel. Please go ahead.
Stephen Wiley: Yes, good morning, thanks for taking the questions.
Stephen Wiley: Was just wondering if you could maybe just kind of expand a little bit around the regulatory conversation.
Stephen Wiley: Regarding taking the ANC thresholds.
Stephen Wiley: Below 1500 to below a thousand.
Speaker Change: Was this a discussion that was had I guess prior to the initiation of the trial is this something that FDA.
Stephen Wiley: And I guess CMA came back to you is in.
Speaker Change: Do you think that theres any risk around.
Speaker Change: Needing to potentially upsize the trial to get more of the sub 1000 patients.
Speaker Change: I just have a follow up.
Speaker Change: Okay. Thanks for the question Sheila I'll kick it off with some high level commentary and I'll turn it over to Chris tossed out any of the most important thing that we learned from our engagement with the FDA is that they are very interested and enabling our success for this trial they had.
Speaker Change: Our experience is that.
Speaker Change: Broader range of patients and other non malignant team area.
Speaker Change: So they are very interested and sharing the trial design has maximum opportunity for success, which is why we're in alignment and focusing on the moderate to severe patients.
I think it's actually impacts our trial in terms of its teeth, because already the requirement with AOI of at least two infections per year. Previously we have already seen that narrow our final certainly more substantially than anything right and see but again I think we're extremely pleased with the engagement we feel that this alignment is very.
Chris: Tightly correlated now I'll turn it over to Chris to add some more color yes.
Chris: Had really positive interactions.
Speaker Change: The agencies both.
Chris: Yes.
Chris: And both are very supportive of the approach that we're taking.
Speaker Change: Regarding conveyancing in particular again non validated biomarkers. So there is a number of factors there is no consensus recommendation so.
Chris: We've taken the approach that is the most reasonable horizon.
Chris: She's actually even M&A is not asking for the E&C and looking more on the clinical last call. So infections. So again infection benefits is really with where clients produce treat here because it is the clinical outcome and to Paul's point.
Chris: We've got several meetings.
Chris: We've allowed for distributions, we've had webinars with <unk>.
Chris: More than 90 people per webinars.
Chris: Attending so we've been extremely.
Chris: Pleased with the engagement and the interest that we've received regarding this study.
Chris: <unk> conducts.
Chris: Okay and then.
Chris: I guess with the tightening up of the eligibility criteria around baseline ANC.
Chris: Would you expect that.
Chris: Essentially slow down the pace of enrollment a little bit.
Chris: I think it seems like.
Chris: <unk> may be modestly pushed out just a little bit.
Chris: Does that reflect.
Chris: The.
Chris: The tightening of that Ian C requirement.
Speaker Change: Yes, no. It is not because we never expected that patients who represents a substantial amount of patience and because of this new story of infection. These were at lower risk of infection, So and we haven't seen in our screening.
Chris: Many of these patients at all so we are.
Chris: We are really.
Having no no concern with regards to the enrollment timelines.
Chris: Okay.
Chris: Okay.
Chris: We are trying to make sure that we hit our timelines and we've.
Chris: Not seeing a lot of patients that are all with a mile.
Chris: But we want to make sure that we cover any uncertainties in the future by tier plant.
Chris: Moving aside Chinese therefore in 2025.
Chris: Understood and then maybe just a quick financial question can you just.
Chris: I think there was 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.
Chris: Andrew I'll take that one sure yes, thanks, Steve Thanks, Paul.
Speaker Change: So youll see.
Speaker Change: 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.
Speaker Change: On the specialty pharma orders that came in.
Speaker Change: As you know similar to sales that will likely be lumpy.
Speaker Change: Time.
Speaker Change: So yes, we expect particular trends that we can point to just yet.
Speaker Change: But some of that will be based on the progress and pace of demand.
Speaker Change: Of course of the year.
Speaker Change: Okay.
Speaker Change: And then just anything youre seeing on the.
Speaker Change: On the discounting front.
Speaker Change: I know, it's early it's only been a few quarters, but.
Speaker Change: On the gross to net side.
Speaker Change: Yes, Thanks Pete.
Speaker Change: Go ahead Mark.
Mark Baldry: Yes. This is mark here are you talking about discounting.
Speaker Change: With the payers.
Mark Baldry: Yes, correct.
Mark Baldry: Yes.
Mark Baldry: We have tightened distribution channel through our specialty pharmacy.
Mark Baldry: We're not we're not engaging in discounting at this time.
Speaker Change: Okay. Thanks for taking my questions.
Speaker Change: Thank you we'll take.
Speaker Change: And we will take our next question from Edson Joseph Piper Sandler. Please go ahead.
Speaker Change: Great. Thank you good morning, everyone.
Speaker Change: Sure.
Speaker Change: I guess I'll ask a couple questions on the launch.
Speaker Change: Can you tell us give or take how many patients are on drug right now and did you have any price increase.
Speaker Change: To start 2025 horizontal Randy.
Speaker Change: Hey, good morning, Ted.
Speaker Change: We're not giving out patient numbers at this time, because we're still building demand demand is still building.
Speaker Change: We are still engaging with physicians is building awareness and now we're actually really pivoting our efforts too.
Speaker Change: To focus on the patient community and raising awareness there as we rollout new patient campaigns and patient ambassador programs.
Speaker Change: We did take a slight price increase as is typical coming into the new year.
Speaker Change: And can you share how much habits or.
Speaker Change: Hi.
Speaker Change: 7% price increase.
Speaker Change: 7%. Thank you.
Speaker Change: I'm looking forward to a.
Speaker Change: Mark progress this year. Thanks, so much.
Ed: Thanks, Ed.
Speaker Change: And we'll take our next question from Kristen <unk> with Cantor Fitzgerald. Please go ahead.
Speaker Change: Christian Your line is open. Please go ahead.
Speaker Change: Hi.
Speaker Change: Sorry about that good morning. This is Ian on the line for questions. Thank you for taking a question.
Speaker Change: Three trial, how are you doing with the screening of these patients what percent of the patients don't go through the screening or you get them on the drug versus those who are not.
Susan: Thank you Susan.
Susan: Site activation is the first wave and as we've highlighted we're at about 90% of our target number of sites screening screening ramp is coming up very nicely and that of course patients on driving we're not really breaking down anything further beyond site activation is in terms of screen screening rate of screen failure, you other than to say well we've already observed for the last several months.
Susan: Put us on a trajectory into Q3 Q4 fall Enrolments, Chris off any other color you want to add no. We're pleased with the.
Susan: Again, very pleased we've decided explanations and kietrice as all these slides.
Susan: This training is picking up as expected so from those sites excavation. So we're in the right trajectory right.
Speaker Change: Thank you for that.
Speaker Change: And we will next go to Doug Macpherson with H C. Wainwright. Please go ahead.
Doug Macpherson: Hi, there good morning.
Doug Macpherson: Curious about any further commentary you might have on commercialization sort of.
Doug Macpherson: What you learned and experienced in the first seven or so months since launch specifically.
Doug Macpherson: I know you said youre, not giving exact patient numbers, but I think last time, we checked all of the patients in the U S had been previously enrolled in the trial. That's now continue treatment have you seen patients.
Doug Macpherson: Sort of come on treatment beyond those that had previously been in the trial.
Doug Macpherson: Have you seen.
Doug Macpherson: A decrease in diagnosis time in time from.
Doug Macpherson: Sort of initial seeing the doctor are getting on treatment.
Doug Macpherson: We will start there with that multi part question. Thanks.
Doug Macpherson: Sure. Thanks.
Doug Macpherson: Let me try and give you a bit of a flavor for what we've learned.
Doug Macpherson: Our excitement for 2025, so we came into this market, which was a market where there really were no approved therapies and very low awareness.
Doug Macpherson: Yes.
Doug Macpherson: Of the disease and so we focused on building that awareness.
Doug Macpherson: Engaging with our target physicians to really build their knowledge of whim syndrome, and increased screening and diagnosis rates and we were successful at doing that as we can.
Doug Macpherson: Came into the back end of last year.
Doug Macpherson: So we.
Doug Macpherson: Enrolled all 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 our products over time.
Doug Macpherson: We're just entering now.
Doug Macpherson: What we call conference season, and we were recently at the Quad AI Conference held 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 and so as we progress through this conference season with some additional meetings like Cif and <unk>, we're looking forward to continuing to engage with these physicians helping them.
Doug Macpherson: Identify patients in their practice and.
Doug Macpherson: This is built in demand for <unk> over time.
Doug Macpherson: Oh, great. Thanks for that and then.
Speaker Change: Looking at your commercialization agreements.
Doug Macpherson: Ex U S geographies.
Speaker Change: There is still some some regulatory.
Speaker Change: Scott hurdles at regulatory milestones to hit.
Speaker Change: With your partners in the agreements are there any sort of like clauses regarding timing or milestones for registration in order to.
Really engage with those commercial partners.
Speaker Change: I'll take that one Adam if you want to chime in afterwards, but now are yes.
Speaker Change: The next key waiver mile radius around milestones that certainly around landmark for the mall.
Well first of all in Europe, which is really we're merging connect bring us excellent and launching our products. So we're nicely on track we've already filed that.
Speaker Change: Application with MAA with the EMA Anderson expected, though we are continuing to project.
Speaker Change: <unk>.
Speaker Change: Drew on the first half of 2006 on March nine in terms of CN.
Speaker Change: I think they recognize the value of the huge market potential that can unlock with SDN approval, so and certainly they've seen a piece that we've been making progress there. So theres no real timelines associated with that relationship that success based milestones.
Speaker Change: Cross that on both regulatory and future sales.
Speaker Change: Great. Thanks for that and then if I can sneak in one last one before I move on.
Speaker Change: Your current expected patient numbers for both women's and youth.
Speaker Change: U S ex U S.
Speaker Change: Yes, so we have not heard anything differently.
Speaker Change: And our guidance around a thousand total diagnosed patients in the U S. The Ramsey, yes. There is certainly something we're learning more about it will take some time the chronic neutropenia is certainly much more straightforward. Their ICD 10 codes that are associated with these diseases. So they are much better track over time EMR. So we feel confident with the total population.
Speaker Change: We have learned through research ICD 10 that total bucket is about 50005 zero.
Speaker Change: But we're targeting the refractory severe end of that population with our current study and that's about 15000 in the U S alone.
Speaker Change: Okay. Thank you so much for taking my questions I really appreciate it.
Speaker Change: Thank you. Thank you we'll take our next question from David bouts with Zacks small cap research.
David Bouts: Hey, good morning, everybody.
David Bouts: With I'm not sure if youre doing formal sales guidance for 2025, maybe if you could just talk a little bit about.
David Bouts: Goals sales goals for 2025, what a successful year is going to look like for <unk> for <unk> sales.
David Bouts: Good morning, Andy highlighted we're not giving a forecast, but I think what we are striving for continued increased demand because that will show the fruits of our labor in terms of the increased education and awareness I know mark and his team are already seeing a nice steady pace that you'd like to provide any color mark that would be great sure. So were talking to earlier.
David Bouts: We're really trying to build a new market here and so it starts with building awareness building.
David Bouts: Education around the disease, which is where we've really been investing our clients, particularly with the physician community. We're pivoting now and we're actually leveraging the physicians that have already got experience with the product and experience treating women patients.
David Bouts: We've initiated a speaker program a peer to peer speaker program, where those physicians can educate other physicians. So we're actually leveraging that experience and we're pivoting now to focus on the patient community building a community of interest around win so that these patients who as you heard earlier in the call. They don't they don't.
David Bouts: We really know what they don't know.
David Bouts: They've accepted a new normal so we are educating the patients now encouraging them to reengage with with their physicians and let me do that when we have activated physician and activate the patient together in the room, we have a drug that works has already worked its demonstrated.
David Bouts: Efficacy in our phase III trials, and so we quickly move through to a to a prescription and.
David Bouts: The other piece of good news there is that the.
David Bouts: The payor the payers have seen the value in this product and Theyre reimbursing this product quite quickly so that's pretty much our mission this year.
David Bouts: Alright sounds good.
Speaker Change: Quick follow up.
Speaker Change: Understand if it's too early for this data, but is there any numbers on what percentage of the patients who've come on drug have refilled.
Speaker Change: Prescription.
Speaker Change: Yeah.
Speaker Change: Yes, I mean without getting into specific numbers, we're pleased with the level of adherence and compliance. We are seeing on the product is actually higher than you would expect to see with us daily oral medication, we put that down to the success of our patient support services and strong partnership we have with our specialty pharmacy path.
Speaker Change: Sir.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay, Great and lastly on the forward trial, you talked just a second ago about total patient numbers and that kind of 50000 number versus the 15000 that youre kind of targeting with this trial do.
Speaker Change: Do you see the change in your primary outcome for this trial, maybe possibly affecting the label again, if you're approved and chronic neutropenia.
Speaker Change: No. We don't believe that there is any impact at this point in time on the label. We also have its not that this population has not been studied we have some of damage.
Speaker Change: These two as well so.
Speaker Change: Higher package will represent the entire chronic neutropenia population.
Speaker Change: Okay, great. Thanks for taking my questions.
Speaker Change: Thank you and at this time, we have no further questions I would like to turn the call back over to management for any final or closing remarks.
Speaker Change: Thank you all for joining the call today, if you have any additional questions feel free to reach out to management and thanks and enjoy the rest of your day.
Speaker Change: Thank you and ladies and gentlemen that does conclude today's conference. We appreciate your participation have a wonderful day.