Greetings and welcome to X4 Pharmaceuticals Third 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 is being recorded. It is now my pleasure to introduce your host Dan Ferry 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'll be joined by Chief Scientific Officer, Art Taveras; Chief Medical Officer, Diego Cadavid; and Chief Operating Officer, Mary DiBiase. As a reminder, on today's call the company will be making forward-looking statements regarding regulatory and product development plans 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.

Thanks Dan and thank you everyone for joining us on the call this morning where we plan to discuss our upcoming presence at the ASH December meeting along with highlights of the recent quarter and our financial results. In doing so, we hope to convey the level of excitement here at X4 as we head into what promises to be a catalyst-rich period for the company. As we detailed in the press release that just went out, we have had all seven of our submitted abstracts accepted for publication at ASH with four accepted to be presented as posters. This conference will be the largest presence ever for X4 at a medical meeting and it represents the culmination of several years of incredibly hard work and success across our entire organization. We also just announced that we will be hosting an Investor Day on December 16th just following the ASH Meeting to discuss the data in greater depth and to hear from a number of prominent key opinion leaders who will help put all this data into context. So, please save the date for that X4 event. The abstract published today on the ASH website contains a very broad array of both clinical and scientific data. Data that we believe not only further establishes X4's leadership in the CXCR4 space, but also supports the broadening scope of the clinical potential of our lead candidate mavorixafor. As you know, mavorixafor is the only CXCR4 antagonist being developed in an oral once-daily formulation. We are currently conducting three clinical trials of mavorixafor across a number of indications. The first is our global pivotal Phase 3 trial in people with WHIM syndrome. Importantly, we achieved a major milestone in early October completing enrollment in the Phase 3 clinical trial. Thirty-one adults and pediatric patients have been enrolled in the trial which was originally designed to enroll 18 to 28 patients with WHIM syndrome. Topline data from this trial are anticipated in the fourth quarter of 2022. WHIM is a rare inherited primary immunodeficiency caused by a variety of mutations in the CXCR4 receptor gene that cause immune cell dysregulation. This dysregulation inhibits the proper maturation process for the entire range of white blood cells and causes them to get trapped in the bone marrow, preventing healthy trafficking and systemic circulation. This results in lifelong challenges for the health and well-being of WHIM patients, including severe recurrent and sometimes life-threatening infections, loss of lung function and hearing, and significantly, increased risk to HPV-associated cancers. By correcting this CXCR4 dysfunction, mavorixafor has been shown to not only increase the level of circulating neutrophils, monocytes, and lymphocytes in WHIM patients, but also to reduce the number and severity of annual infections and to reduce warts caused by unchecked HPV infection. One of our abstracts accepted for poster presentation at ASH further highlights similarly positive data from our ongoing Phase 2 open-label extension trial in patients with WHIM and includes patient interviews that reveal that all four of the continuing study participants experienced good tolerability and beneficial treatment effects with dosed mavorixafor before a long-term. Also relating to WHIM several of the abstracts published this morning focused on WHIM-causing CXCR4 mutation variants and on the US prevalence of the disease. As quick background, there have been 16 WHIM-causing CXCR4 receptor mutations identified to date, all of which have been located in the internal domain known as the C-terminus of the receptor. Driven by our patient identification efforts and the collaboration and clinical trial screening efforts, we have identified a host of patients with both these known CXCR4 variants and also novel CXCR4 mutations. As a result, we have been able to better learn about the disease spectrum of WHIM, both clinically and genetically, and had established research that enables the correlation of a patient's WHIM symptoms with increased CXCR4 signaling caused by genetic mutations. This is referred to as genotype-phenotype correlations. In the abstract describing a novel variant, we specifically publish our first discovery resulting from these efforts, which describes a novel missense mutation called D84H, discovered in collaboration with treating physicians and expert scientists. The D84H mutation is the first mutation identified outside of the C-terminus of the CXCR4 receptor. We have shown through our internal research that this mutation causes gain of function signaling correlating with the disease phenotype of WHIM patients. To look further into this newly identified mutation, we also analyzed multiple broad population genomic databases which helped us determine that the allele frequency of the D84H mutation is very high in the general population. Using the current US population and a conservative estimate of 5% to 10% of individuals who go on to develop the disease symptoms, also known as penetrants, these data support that there are at least 1,250 to 2,500 WHIM patients in the US resulting from the D84H mutation alone. We have found multiple D84H patients from different families across the world in the brief time since the discovery, which further validates the finding. We plan for further patient identification efforts to deepen the validation of the D84H prevalence estimate and to explore similarly identified CXCR4 variants that impact prevalence estimates in 2022 and beyond. Together, this patient identification and bench-to-bedside research, along with our prior market research and our artificial intelligence research published in the ASH Abstracts continues to reaffirm our belief that WHIM is a significantly under-recognized and under-diagnosed condition and that the true population may be much larger than is currently reported. We plan to go into more detail regarding our ongoing patient finding activities at our investor event in December. But needless to say, we are very encouraged by the results that our studies are elucidating, building support and awareness in the rare disease physician community as we continue to ramp up our pre-commercial activities in advance of our expected Phase 3 topline data, which, as I mentioned, are anticipated in the fourth quarter of 2022. Let's now shift to updates on our ongoing clinical trial for chronic neutropenia, which is an indication that nicely leverages our successful experiences with WHIM syndrome, our broader trial experiences and input from our clinical communities. We believe that treatment opportunity for mavorixafor in chronic neutropenia is quickly becoming an additional key value driver for X4 based on new long-term data. Specifically, one of the ASH abstracts accepted for poster presentation demonstrates that mavorixafor alone or in combination with other therapies acutely and chronically increases total peripheral white blood cell counts; 1.5 to 3 times baseline across a number of different diseases in both the presence and absence of the CXCR4 mutations. This suggests that mavorixafor can uniquely provide benefit to patients with broad chronic neutropenia conditions. Given its profile as an oral once-daily administration, we believe mavorixafor is positioned to potentially become standard of care in a treatment landscape currently only addressed by injectable therapies. Based on the extensive and long-term data we presented in the Abstract and based on input from our clinical advisors, we have amended our ongoing Phase 1b neutropenia trial to include a broader range of neutropenia conditions, including patients with severe and moderate neutropenia. We are now also enrolling all patients regardless of whether they are being treated with the standard of care, which is Granulocyte Colony-Stimulating Factor or G-CSF, and whether or not their neutropenia is caused by a genetic mutation. The trial is assessing the safety and tolerability of two weeks of dosing in cohort A and a single dose of mavorixafor in cohort B and measuring the effects of doses on patient neutrophil counts along with other white blood cell types. We've also modified the number of patients to be enrolled to 25, a number we believe will be sufficient to complete the goals of the trial. Our third ongoing trial with mavorixafor is designed to demonstrate safety, dosage, and elucidate proof of concept in a rare B-cell lymphoma called Waldenstrom macroglobulinemia. While more than 90% of patients with Waldenstrom have acquired mutations in what's called the MYD88 gene, a subset of about 30% to 40% also have acquired mutations in CXCR4. There is a significant clinical unmet need in these double mutation patients where the presence of the CXCR4 mutation, as with WHIM patients, causes white blood cells, including their abnormal b-cells, to become stuck in the bone marrow. This sequestration of cells can prevent patients from responding well to standard of care BTK inhibitor treatments. Our Phase Ib trial is evaluating the safety and tolerability of mavorixafor for frontline and treatment refractory Waldenstrom patients, at doses of 200, 400, and 600 milligrams in combination with ibrutinib. Both agents are delivered orally once daily in patients with confirmed MYD88 and CXCR4 mutations. The study is also measuring change from baseline in IgM and hemoglobin pharmacokinetics and pharmacodynamic markers which include measurements of peripheral white blood cell counts, in addition to measuring clinical response rate. As you may recall, this past June, we presented the first status in this initial trial in an e-poster at the 2021 European Hematology Association Meeting. In the poster and on our investor call that day, we presented details around the first eight patients enrolled in the study. Those data were very encouraging with mavorixafor and ibrutinib demonstrating good tolerability and biomarker data suggesting best in class potential for this combination treatment. Because the cutoff date for the ASH abstract filing was so close to this event and data announcement, the ASH abstract contains a fairly modest amount of incremental data beyond what we presented at EHA. As of the abstract cutoff date of June 15, 2021, the overall response rate, which is minor response or better in the eight patients evaluated at the time, was 100% with four of the eight patients achieving a major response, which is greater than a 50% reduction in serum IgM, and one of the eight patients achieving a very good partial response, which is greater than a 90% reduction in serum IgM. We do plan to have additional data at the ASH poster with a data cutoff of mid-October and we look forward to a deeper reveal of overall response rates at the meeting and at our investor day in December. We remain very encouraged by our Waldenstrom program potential as we continue to see encouraging signals emerging across patient groups within the Phase Ib trial. So as you can see, we are very excited about the data we've revealed so far and about the expanding potential of mavorixafor, and we're really looking forward to our presentations at ASH and for our investor event just following the meeting. We'll be providing more details about the event in the coming weeks, but we currently expect it to be a two-hour virtual meeting on the morning of December 16th with participation from our expert clinical advisors. So please mark your calendars. With that update, I'll now turn it over to Adam to discuss our results for the quarter before we open up the call for questions.

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 third quarter ended September 30th, 2021. Research and development expenses were $13.2 million for the third quarter of 2021, compared to $11.4 million for the comparable period in 2020. General and administrative expenses were $5.9 million for the third quarter of 2021, compared to $5.6 million for the comparable period in 2020. We reported a net loss of $20.2 million for the third quarter of 2021 compared to a net loss of $17.4 million in the third quarter of 2020. Note that net losses include $1.5 million and $2.2 million of certain non-cash expenses for the quarters ended September 30th, 2021 and 2020 respectively. We had $77.7 million in cash, cash equivalents, and restricted cash as of September 30th, 2021. We continue to expect that these funds will support our operations into the fourth quarter of 2022. We did make some personnel announcements towards the end of the third quarter. We recently announced the appointment of Francoise de Craecker to the company's Board of Directors and the hiring of Karolyn Park to the newly created position of Vice President, U.S. Commercial. These appointments significantly strengthen our depth and breadth of commercial leadership experience and expertise, and the strategic marketing of rare disease therapeutics. In September, we announced the promotion of Dr. Mary DiBiase to the newly created position of Chief Operating Officer, reflecting her longstanding contributions to the company and the advancement of mavorixafor into global late-stage clinical development. We'll now open up the call for your questions.

And thank you. Our next question comes from Zegbeh Jallah from ROTH Capital.

Good morning. Thanks for taking my question. Congrats on the update and looking forward to the data at ASH and definitely the investor calls. I think I just have one general question here and it's just about the commercial outlook. I really like what you're doing regarding looking at expanded market opportunities. We saw you did that for WHIM and now you are looking at SCN and clinics expanding that opportunity. Can you just comment a little bit on how you're thinking about the execution on that front more broadly? And then as it relates to WHIM specifically, I just wanted to get a sense of where you think you are in terms of finding the ideal or the true number of the patients and is this a process that you expect to continue to occur even after you launched a program to kind of find additional patients that may benefit from your therapy? And also nice to see that you did bring on a VP of Commercial, which again hints at the opportunity to really focus on the commercial side of things.

Hi, Zegbeh. Thank you for your question. I'll try to cover the various points. For those familiar with the history of rare diseases, it's a well-known fact that as we introduce innovative products without existing treatments, the number of identified patients tends to increase significantly. For instance, with Genzyme's first treatment for Gaucher disease, we initially estimated around 1,000 patients, but today we have data indicating over 15,000 based on registry information. This highlights the importance of education and awareness. We believe WHIM syndrome evolving into chronic neutropenia will follow a similar trajectory. We're gaining insights into the genetics of WHIM, and identifying unique variants in current patients reflects our early understanding of the disease's clinical and genetic aspects. This represents a significant advancement for the company, reinforcing our confidence in our current estimates, and aligns with the narrative we've shared regarding Genzyme. Furthermore, we recognize that WHIM patients are a subset of chronic neutropenia. It is becoming increasingly clear that chronic neutropenia, regardless of its genetic basis, presents a substantial unmet medical need. Currently, patients receive injectable G-CSF multiple times a day or week, which is not an ideal solution. We believe we have the potential to transform treatment options with an oral once-daily medication. There is considerable opportunity for growth ahead of us, and we are just beginning our commercial journey, supported by the promising data we recently presented at ASH.

Thanks, Paula.

And thank you. And our next question comes from Leland Gershell from Oppenheimer. Your line is now open.

Hey, good morning, Paula. Thank you for the update. Congrats on all the ASH acceptances. We’re looking forward to hearing more at the meeting. A question from me kind of touching off from the prior one. I mean it seems like as we're learning more and more about mavorixafor and its data across various clinical settings, it seems like there may be no limits in terms of the ability of the content to be useful in a variety of conditions with neutropenia and with limitations on the abilities of white cells to get out of the bone marrow. As we look forward to your expansion in the chronic neutropenia setting, could you maybe relate to us just what the expanded scope of the trial may relate to in terms of the population that the trial types of patients would correspond to in terms of the U.S. population with neutropenia? Thank you.

Sure, thanks, Leland. So chronic neutropenia as a marketplace is not well understood, but we can certainly share what we know today and we've been modifying our trial to begin to address this. Severe chronic neutropenia is treated, as I mentioned, with G-CSF and we feel pretty confident today there's at least 2,000 patients on regular G-CSF dosing for their neutropenias. That is likely a profound underrepresentation of the patients that need it because of the challenges that both G-CSF has and the limitations of its label. So we think that's the beachhead, and we think it's broader than that. We do have ongoing market research there and we'll be able to present some of that in 2022. But certainly we think there's a lot of unmet needs unfortunately. These patients are not treated well with just one option, so an oral once daily could dramatically alter the treatment landscape and market potential for these patients who are somewhat forgotten.

All right. Great. Look forward to hearing more next month. Thank you.

Thank you.

Thank you. And our next question comes from Marc Frahm from Cowen & Company. Your line is now open.

Thank you for taking my questions and congratulations on all the updates. Paula, in your comments, you mentioned assessing the prevalence of WHIM patients with the D84H mutation that you've identified. Have you had a chance, beyond the case study, to review more medical records to clarify the 5% to 10% penetrance figure you've mentioned? Additionally, can you discuss the broader context of penetrance and why that range is considered appropriately conservative? As a headline, 5% to 10% might not seem very high.

Yes, this is the most challenging assumption to make when addressing any new disease area, as it involves the transition from genetics to phenotype. We have analyzed a wide range of other rare diseases. It's important to recognize that every gene presents a unique situation with distinct mutation profiles. Our strategy here has been quite conservative, using a 5% to 10% range. While we have observed higher numbers in terms of conversions from genotype to phenotype, we want to approach this carefully, as determining true prevalence will require time. Currently, we are encouraged by the results we are seeing from the patients we are identifying around that estimate. It’s a complex issue, and I appreciate you bringing it up. This is where we are starting from today.

Okay, that's helpful, thanks. Regarding Waldenstrom, there's a significant update concerning the data cutoff for the abstract compared to the last presentation. This is the first instance in which you've included some response data in addition to the IgM levels. Could you clarify the flexibility in the trial regarding when patients who need scans for their response assessment actually get those scans? Also, could you provide context for the response data included, such as when the scans were conducted and how many patients required scans for response assessment? Additionally, could you discuss the broader context of the response time observed with ibrutinib monotherapy?

Yes, so I'll ask Diego to take that. Big picture, Mark, at the end of the day, it's about the kinetics of response, I think is what you're saying. And again, I'll turn it over to Diego to provide some more context about our data.

Yes, thank you, Paula. And Mark, so the protocol originally was designed to assess a response starting at six months and then every six months. In part because you have to do whole-body CT scans which involve radiation and bone marrow biopsies. We have amended the protocol to make those scans now more frequent, every three months. I would say this update mostly was like the six-month data, which is the first look into clinical response. Different studies do it differently, but we felt that it was important to try to get more frequent assessments, and that's why we amended.

Okay, thanks. That's helpful.

Thank you. And our next question comes from Stephen Willey from Stifel. Your line is now open.

Yes. Good morning. Thanks for taking the questions. Maybe just following up on Waldenstrom. Again, understanding that the abstract cut is largely representative of what we saw at EHA. But can you speak a little bit to maybe just where patients are in terms of dose escalation in this trial? Specifically with respect to the 600 mg dose? I know that there was an intention to initiate dosing maybe in cohort C at 600 mg without that step up. Can you maybe just speak to where you are on the dose-escalation side?

Sure. Diego, would you like to take that?

Yes, sure, Stephen. Yes, so we have previously communicated, of course, that we have cleared the 200-mg dose on the 400-mg dose. We are already dosing at 600-mg and making good progress. We plan to report some of that data both in the poster as well as in the investor day. So yes, that's a focus for us to complete that enrollment. Just to remind you, once the 600 mg dose clears in cohort B, then everybody else can be escalated to 600 mg including those in cohort A and all those enrolled in cohort C.

Okay. And then just on, I guess, the chronic Neutropenia or Severe Congenital Neutropenia. I know these patients don't have CXCR4 mutations. But I think the intention of this program was to try to maybe correlate patient responses with some kind of genetic signature. And just wondering how far along into that interrogation of that correlation will you be at time of ASH? And I guess, how much more work do you need to do in order to be able to refine that patient population for responders?

Yes, so I'll make one comment and then I'm going to invite Art to talk a little bit more about mechanism because I think it's really indicative of market potential. So we certainly have always been trying to help patients and physicians better understand the genetic drivers of their disease. But as we just released in our ASH abstract, we have seen mavorixafor broadly, regardless of mutation status, creating multiple-fold increases in white blood cells including neutrophils and lymphocytes. So there's a huge opportunity here for patients with low neutrophil counts and low lymphocyte counts that this drug could address. Mechanistically, it makes a lot of sense as well. I'll invite Art to discuss the mechanism of G-CSF, which is the standard of care, and how mavorixafor nicely synergizes and could potentially supplement or eventually replace that. So, Art, could you chime in?

Sure. Thank you, Paula. And hi, Steve. So when we first got started with SCN, we actually understood this as a collection of different mutations that did not really include CXCR4. So the question was exactly yours: whether or not mavorixafor could have any kind of benefit. We would think that it would be connected ultimately to CXCR4 upregulation. So as we started to go through and look at all the mutations that are known that trigger some kind of neutropenia in congenital and severe congenital neutropenia or chronic neutropenia, what we find is that many of them have upregulated CXCR4. Thus, that seems to be the premise of the mechanism that when you have an upregulated CXCR4, which is the underlying principle behind a lot of chronic neutropenias, then mavorixafor would essentially block the adhesion, yielding a benefit. So that’s the underlying mechanism, and it seems to correlate well with G-CSF administration. So G-CSF, as you know, downregulates the CXCL12/CXCR4 axis, increasing neutrophils in periphery. Thus, CXCR4 antagonism is inherently part of that mechanism. It aligns well with the approach that we're trying to implement, and we do expect that we're going to observe benefits in a number of patients that are not necessarily tied to CXCR4 mutations.

Okay, very interesting. Thanks for taking my questions.

Thank you. And our next question comes from Mayank Mamtani from B. Riley Securities. Your line is now open.

Hi, good morning. This is Sarah on for Mayank. Thanks for taking our questions. Several of them have been answered already, so maybe just a few quick ones. In terms of the structure of the data release, how do you anticipate disclosing the SCN and now broader Neutropenia program, as well as the top line data release from the WHIM program? Is that going to look similar to the Phase 2? And then maybe more on the commercial side, could you just talk about how there might be an overlap between the commercial preparation for WHIM and future Neutropenia indications? Any synergies that you guys are seeing on that end? Thank you.

Sure. So I think I heard sort of three or four elements to the question. So around the SCN data, we will be presenting that data in the context of some of the white blood cell and chronic administration of mavorixafor data that we've garnered over several trials. That will be included in our poster and we'll share more insights in our Investor Day on the 16th. In terms of the WHIM Phase 3, we expect top-line data in about a year. The primary endpoint, as a reminder to everyone, is a threshold for neutrophil counts, and we had a 600% increase in the Phase 2. As for how we're thinking about building the market, just addressing the market of unmet need around chronic neutropenias, including WHIM, we see WHIM as the landmark study to begin to build on a highly targeted population, which you heard is growing from a genetic WHIM type perspective and beyond that, laying on this additional patient population that’s not necessarily genetically linked but is mechanistically linked, as we know through the benefits of G-CSF. G-CSF is a life-line injectable product, sometimes multiple times a day for some of these patients, and we believe we can revolutionize that entire field with an oral once-daily starting with WHIM and expanding to the neutropenias beyond it. The commercial market landscape shows that they are treated by the same doctors who touch both areas. This connectivity is crucial for our long-term success as an organization.

Awesome, that's really helpful. Congrats on the progress.

Thank you.

Thank you. And I am showing no further questions. I would now like to turn the call back over to Paula Ragan for 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 sharing more of our scientific and clinical data in December. If you have any further questions, please don't hesitate to reach out. Thank you again and enjoy the rest of your day.

This concludes today's conference call. Thank you for participating. You may now disconnect.