Greetings, and welcome to the X4 Pharmaceuticals First Quarter 2024 Earnings Conference Call. As a reminder, this conference is being recorded.

Thank you, operator, and good morning, everyone. Thank you for joining us today. Presenting on today's call will be Dr. Paula Ragan, X4's President and CEO; and the company's Chief Financial Officer, Adam Mostafa. Following prepared remarks, we will open up the call to your questions, and will be joined by Chief Commercial Officer, Mark Baldry; Chief Medical Officer, Dr. Christophe Arbet-Engels; Chief Operating Officer, Dr. Mary DiBiase; Chief Scientific Officer, Dr. Art Taveras; and José Juves, Head of Corporate and Patient Affairs. As a reminder, on today's call, the company will be making forward-looking statements regarding regulatory and product development and commercialization 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, including this year's Form 10-K, which was filed on March 21, 2024, and in the company's Form 10-Q, which is expected to be filed later today. I'll now turn it over to Paula Ragan. Paula?

Thanks so much, Dan, and welcome, everyone. Following last week's approval of XOLREMDI, it's exciting to reiterate today why this critical regulatory achievement represents a significant opportunity to improve the lives of WHIM patients and offers a strong platform for the company's growth. More specifically, I'll touch on our plans for expanding XOLREMDI's use in WHIM geographically and for quickly advancing into a potential larger indication, chronic neutropenia. But let's start with last Monday's transformative announcements. As you know, XOLREMDI or mavorixafor, is now approved by the FDA for use in the U.S. in patients 12 years of age and older with WHIM syndrome to increase the number of circulating mature neutrophils and lymphocytes. WHIM syndrome is an ultra-rare disease caused by dysfunction of the CXCR4 receptor which helps regulate the movement of white blood cells, including neutrophils and lymphocytes, throughout the body. People with WHIM syndrome characteristically have low blood levels of neutrophils, neutropenia and lymphocytes, lymphopenia and experience serious and/or frequent infections that cause significant morbidities. In our pivotal Phase III clinical trial that supported our approval, XOLREMDI, an oral selective CXCR4 antagonist, improved absolute neutrophil count and lymphocyte counts, ANC and ALC, and reduced the rate, duration and severity of infections in those treated versus placebo. This was the largest clinical trial to date in WHIM syndrome, enrolling 31 patients. We'd like to note that the full manuscript of these clinical results was recently published online in Blood, the Journal of the American Society of Hematology, or ASH, and that results from this trial and its open-label extension phase or OLE, were just presented last week at the Annual Meeting of the Clinical Immunology Society, or CIS. Notably, the CIS poster revealed that long-term treatment with XOLREMDI was associated with durable improvements in neutrophil and lymphocyte counts as well as reductions in the annualized infection rate. And to date, no new safety signals have been observed during the OLE phase of the trial. As with most ultra-rare diseases, it can be challenging to assess the true patient prevalence, as awareness is often low and patients are frequently under or misdiagnosed. And since we didn't cover this in detail last week, we thought it might be useful to remind everyone of the market size estimates that we've shared on the U.S. WHIM market over the past several years. Since 2019, we've completed several robust market research studies, using both qualitative and quantitative analyses to not only support our prevalence estimates but to also better understand the WHIM diagnostic journey and treatment paradigm. Across several methodologies, including direct market research and claims-based research, we continue to validate our current estimates. And through our growing number of conversations with physicians in the field and at medical conferences, we remain very confident in our estimate that there are at least 1,000 confirmed diagnosed WHIM patients today in the U.S. And now with a targeted therapy available, we expect that increased physician awareness will bring more and more focus to the WHIM community, enabling earlier recognition and diagnosis, potentially expanding the number of those diagnosed with WHIM over time. And as our Chief Commercial Officer, Mark Baldry, so aptly put it last week, it is well established that earlier and definitive diagnosis leads to better patient outcomes, and that is ultimately our goal for the WHIM community. We believe we are well positioned to not only deliver on the commercial opportunity in WHIM syndrome but to also advance our global regulatory submissions, with the goal of potentially providing new options to patients across the world. Our European submission and preparation in WHIM are underway, and we anticipate submitting a marketing authorization application or MAA for potential European approval in late 2024 or early 2025. Importantly, we would like to review our development plans and upcoming milestones for mavorixafor beyond WHIM and to define what success might look like as we explore the use of mavorixafor in the treatment of chronic neutropenia or CN. To help understand the benchmark for success, I'd first like to start with what we've seen in WHIM syndrome. As I mentioned, our WHIM Phase III trial data were recently published in the peer-reviewed journal, Blood. Specifically, WHIM patients were severely neutropenic at baseline, with a mean ANC of less than 250 cells per microliter. Patients on mavorixafor achieved increases of about 500 cells per microliter, reaching ANC levels of about 800 cells per microliter on average over the 52-week trial. This increased neutrophil count of approximately 500 to 600 cells per microliter corresponded with a 60% reduction in infection frequency versus placebo as well as reduced severity and duration of infection. Additionally, the benchmark of increasing ANC by at least 500 cells per microliter aligns well with what our CN physician experts describe as clinically meaningful. An increase of 500 cells per microliter was also the metric for success in our previously published CN Phase Ib study and has been published by the NIH and others across various neutropenia conditions. I note this here because these results help inform our assessments of success for the ongoing Phase II clinical trial data in CN and our enthusiasm for advancing into the CN Phase III study in the first half of 2024. As with WHIM patients, chronic neutropenia patients face an increased risk of infection every single day. This risk is greatest when they are severely neutropenic or with an ANC below 500. Increasing ANC from less than 500 to between 500 and 1,000 cells per microliter correlates with a meaningful reduction in infection risk from severe to moderate. Increasing ANC to between 1,000 and 1,500 correlates with a risk reduction from moderate to mild. And increasing ANC above 1,500 moves the patient into a normal infection risk category. Additionally, based on our market research, we believe that physicians prescribing injectable granulocyte colony-stimulating factor or G-CSF, currently the only therapy approved to treat severe chronic neutropenia, generally target ANC levels between 1,000 and 1,500. With enrollment now complete in our Phase II trial, we will have studied more than 20 CN patients, approximately 40% of whom have been treated with mavorixafor monotherapy, and the remainder with a combination of mavorixafor and G-CSF. We are currently planning an investor event in late June to present interim results from at least 15 participants in the study, which we anticipate will include data from those treated with mavorixafor as a monotherapy and those also treated with a combination with G-CSF. We'll be looking at increases in ANC while on treatment with mavorixafor as well as the durability of increased ANC with time on treatment in those subjects with stable background therapy. The complete data set of the CN Phase II study is expected later this year, and we're aiming to present final results hopefully at a major medical conference at that time. More details on our planned investor event in June will be forthcoming, and we look forward to further defining the potential of mavorixafor in the first immune disorder beyond WHIM. In the meantime, we remain on track to initiate our Phase III CN trial this quarter. This will be a pivotal global Phase III trial to evaluate the efficacy, safety and tolerability of oral once-daily mavorixafor, with or without G-CSF, in people with congenital or acquired primary autoimmune and idiopathic chronic neutropenia, who are experiencing recurrent and/or serious infections. We plan to enroll approximately 150 participants in the trial, which will be a 52-week double-blinded, placebo-controlled trial with one-to-one randomization. The primary endpoint will be a 2-component endpoint comprised of both the annualized infection rates and ANC responder analysis across the study population. Secondary endpoints will include the severity and duration of infections, antibiotic use, and quality of life measurements, among others. We continue to believe that there is a significant unmet need across the Phase III patient population, a market we estimate to represent approximately 15,000 people in the U.S. alone, who, in many cases, are being seen by the same practitioners who are also seeing those diagnosed with WHIM syndrome.

Thanks, Paula, and thanks to all of you for being on the call with us today. At the end of the first quarter ended March 31, 2024, X4 had $81.6 million in cash, cash equivalents, restricted cash, and short-term marketable securities. We believe that these funds are sufficient to support company operations into 2025. Note that this runway estimate does not include the potential monetization of the priority review voucher we received as a result of the FDA's approval of XOLREMDI in the U.S. Our research and development expenses were $19.9 million for the first quarter, which compares to $22.1 million for the comparable period in 2023. R&D expenses for the first quarter included $0.8 million of certain noncash expenses. Our selling, general and administrative expenses were $17.4 million for the first quarter as compared to $7.2 million for the comparable period in 2023. SG&A expenses included $1 million of certain noncash expenses for the quarter. We would like to note several factors affecting our expenses this quarter. These expenses reflect the hiring of an experienced field force now in place to drive the launch of XOLREMDI in the U.S. and launch preparation activities across our commercial and medical organizations. Lastly, we reported a net loss of $51.8 million for the first quarter of 2024 as compared to $24 million for the comparable period in 2023. Net losses in the current period include a noncash loss of $13.8 million related to the company's Class C warrant liability, which is adjusted to fair value each reporting period. Net losses also included $1.7 million of stock-based compensation expense. And with that, why don't we open up the call for your questions.

The first question comes from Stephen Willey with Stifel.

Looking forward to the update next month. Maybe just a couple on the Phase III for me. So can you just remind us how you're specifically defining an infection event in the Phase III? And I'm assuming you'll be essentially adjudicating these events during the trial. But just wondering if you're also trying to adjudicate those events that are required to be seen in each patient during the 12 months prior to randomization?

Steve, thanks for the question. So I think I heard three components there. Just how are we quantifying infection rates via central adjudication sort of a subpart. And then the first one was for the inclusion criteria, how are we assessing infections? Is that the right orientation?

Yes.

Okay. Perfect. Christophe, you want to take that?

Sure. Yes. So we have a process during the study to adjudicate the infections. Patients will be reporting every adverse event of infections and the use of antibiotics or hospitalization related to these. Ultimately, the safety committee will be reviewing and adjudicating these infections, and we'll be able to count those to define the annualized infection rate. With regard to prior to the start of the study, the history of infection in this population, we have defined some criteria like the use of antibiotics, hospitalization. Our criteria is to make sure that these patients have at least two infections in the past year before they come into the study.

Okay. That's helpful. And then I guess just maybe a statistical question. Can you tell us if the underlying statistical plan accommodates a reduction of infections that could potentially be seen in the placebo arm during the trial? And I only ask the question because I know these event rates can sometimes fall off in the setting of the trial when the level of care in patient compliance improves.

So the study is randomized, and we have randomized patients to placebo or treatment with active treatments with mavorixafor. We have evaluated with our experts, consultants at the FDA, to design a study to power it to over 90% for the infection rates in our population. We've taken some conservative assumptions with what the effect size will be. As you remember in our WHIM study, we were able to show a decrease — or an increase of more than 500 cells per microliter. We were able to see a decrease of 60% in our annualized infection rates. We've taken a more conservative approach in this particular population, which we estimate to be around 40%, 45%. So we feel confident that the statistical power and how we've set up the study and the sample size is reasonable to achieve what we're trying to achieve with this registration study.

Okay. And then maybe just one more question, if I may. So I guess, in the scenario where you're being used on top of G-CSF, is there consensus alignment around the threshold level of background G-CSF that prescribers want patients to be kept below in order to avoid the risk of transformation to AML or MDS?

Yes. So there have been some publications related to this. I don't know if there is full consensus in the entire scientific community around that, but some publications have mentioned 8 micrograms of G-CSF per kilogram and have a threshold for malignancies. I think we — in our intention, clearly, we know that the risk of G-CSF is a risk for this population that is treated chronically. We believe that with mavorixafor, we will be able to address their chronic neutropenia and potentially limit the use of G-CSF. So I think that's a question for the entire scientific community and we can potentially help with our Phase III studies.

Next question comes from the line of Edward Tenthoff with Piper Sandler.

Can you hear me okay?

Yes. Thanks, Ted.

Great, and excited on all the progress and obviously, congratulations on the recent approval. So appreciating, we talked about this a little bit last week, and it's still very early. What kind of information are you guys going to be providing to kind of explain and highlight launch parameters as you continue to build patients?

Yes. Thanks, Ted. So obviously, we're pretty excited with XOLREMDI being approved and our field teams out there. I'll turn it over to Mark with maybe just some early commentary and then longer term, how we'll think about communicating our progress to the Street.

Ted, we had a terrific meeting at CIS in Minneapolis last week. We debuted our now approved booth, and there was lots of excitement and enthusiasm around there. We were having conversations with physicians. In general, those conversations were following into three buckets. There are physicians who already have a WHIM patient identified, so we were walking them through the label and the enrollment form. There are other physicians who are aware of WHIM but are not as familiar with the disease. And so we were discussing with them how to recognize the heterogeneous nature of the disease in patients in their practice. And then there are physicians who are not aware of WHIM at all, and so this was exciting for them. So I think we'll be making progress engaging with these physicians, educating them, and at the same time, engaging with payers to ensure access there. As we go through the year, we'll share more with you on how we will be tracking our progress with these different groups.

Great. Good luck with the launch.

Next question comes from the line of Kristen Kluska with Cantor Fitzgerald.

First is on CN. Our checks support that the biggest complaint from the community is really around the bone pain that comes with G-CSF. So obviously, no two patients in the trial are going to appear identical. But is there a certain threshold that a reduction of G-CSF would lead to improvements across some of this pain to make it a little bit more tolerable for patients if they were to go on a combination with mavorixafor, which is safe and oral?

Kristen, great question. About a year ago, we actually put a little bit of data in one of our posters around this, just around what is meaningful for patients. And of course, dose and frequency are meaningful, sort of anecdotal early information, but that 25% to 50% range would certainly be meaningful to them and anything improved on that would certainly hit it out of the park. Maybe I'll just turn it over to Christophe. I'm sure he's heard some anecdotes from the patient community as well.

Yes. We agree. All our information, what we hear from our HCPs and KOLs is that with G-CSF, bone pain is a real issue for patients. Decreasing the volume of injections, the frequency might help. Some of those patients will be held probably by using mavorixafor, especially for the ones using G-CSF chronically, everyday injection; it's a real burden. Those bone pains are really having an effect on their lifestyle. So it's something that we're going to be trying to look at and trying to help patients better understand how we can use some G-CSF on top of mavorixafor, or no G-CSF at all. We'll see where we — our studies will help us with that.

Okay. And on that note, is there good data out there supporting the amount or the frequency of this specifically, so greater G-CSF usage is ultimately resulting in greater pain? And I guess for the Phase III experience, how is that going to help you in a potential commercial setting, kind of help to outweigh some of these things? Or do you think for the first couple of months, it's going to be a little bit of a trial and error approach with seeing whether you're decreasing G-CSF or doing less frequent or essentially to get to that sweet spot?

Right. So I would separate the Phase III study; G-CSF will be stable. Our patients are stable on the same dose of G-CSF and they remain on that or they are on monotherapy throughout the 12 months of the duration of the study. We are exploring additional studies to see how we can manage modification of dosing regimens of G-CSF. We have experienced some in our Phase II study, and we're going to be continuing to explore how to best do this in our future programs.

Next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright.

Just was trying to figure out what sort of data — you said you'll get to publish complete data of the chronic neutropenia studies at the end of the year. So is it just more patients or even additional data points in terms of primary endpoints and secondary endpoints we will be able to get at the end of the year compared to the June update?

Thanks, RK. I'll start and then Christophe can chime in. But as we mentioned in our update, we were enrolling patients through early this year. The data at the end of the year will really let us complete the study on all patients and, perhaps most importantly, give us full insight into — for those patients who are varying their dose of G-CSF, what kind of that average outcome for those patients. We really need to let all patients complete the study to give them the full time to resolve and land on their stable dose of G within that 6-month window. So I think that's kind of the deepest lens or deepest component of the study that we'll be able to update towards the end of the year.

Next question comes from the line of Kalpit Patel with B. Riley.

This is for Kalpit. My first question is what's your expectation of the bar for efficacy in the upcoming dataset that perhaps could drive confidence for Phase III? What's the key pieces of data do you recommend investors to tune into?

Yes. So I think we originally shared there are three ways that we're looking at meaningful responses in CN patients. First, it's similar to our WHIM Phase III, where increases in 500 to 600 cells per microliter showed a 60% reduction in infection rates over a 12-month study. We think the minimum clinical threshold for meaningfulness is around those same numbers for ANC, so we'll be able to place our CN data in context. Certainly, number two, it's the durability of those increases in neutrophil counts over time. Finally, we'll be applying our Phase III criteria for success to the subset of patients in the Phase II that are relevant for the Phase III to help build confidence and establish why our statistical power is where it is. So hopefully, those are the three lenses of success.

That's very helpful. My second question is that since this trial has been on for over a year, curious if we will have at least 6 months of follow-up for the 15 or more patients? And what's the split of our model versus the other of these 15 patients?

I'm sorry, could you just repeat your question a little bit? It was just coming in and out a little bit with the volume.

Okay. My second question is that since this trial has been running for over a year, so we are curious if we will have at least 6 months of follow-up for the 15 or more patients? And what's the split of the model or the other of these 15 patients?

Yes. So I think, if I heard you correctly, you're asking if we are giving 6 months of patients' worth of data across at least the 15 patients and the monotherapy component of that. I mean as you can appreciate, I would say, generally, yes, there's a little bit of wiggle room in there, of course, because it's when patients come in and when we do data cuts, but there will be a very robust dataset across a 15-plus patient population and, perhaps most meaningfully, there'll be, as we mentioned, about 40% of those patients are on monotherapy, which I think will really help clarify the potential benefit of mavorixafor as a single agent in this patient population.

That's very helpful. My last question is, were the scripts of WHIM detectable on the database like Symphony or Bloomberg?

Again, I'm not sure you're about — maybe you're talking about the database cut? I'm sorry that I didn't follow the question.

No. Our distribution of XOLREMDI in WHIM will be through our specialty pharmacy, PANTHERx. And that's in order to be able to provide patient services to support our patients as they navigate the therapy.

Next question comes from the line of David Bautz with Zacks Small-Cap Research.

Just a quick one for me on the PRV. I'm just curious if you could give us a sense of how many companies are out there looking to purchase a PRV? And then maybe if you could characterize the negotiations and how they're going at this point?

Yes. As we said, we do intend to monetize the PRV shortly. It's not currently part of our cash runway guidance, but we'll certainly give an update when we're ready to do that with respect to the PRV. In terms of the market and who's out there and things like that, we won't position other company's interest at this point.

Ladies and gentlemen, we have reached the end of the question-and-answer session. I would now like to turn the floor over to Paula Ragan for closing.

Thank you so much, operator. Thank you to everyone for joining us today, and we hope you have a great rest of your day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.