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 [Operator Instructions]. 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 the call to your questions and will be 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 this Company’s latest 10-Q filling on November 3 2022 and in the 10-K for 2022, which is expected to be filed after 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 3 trial of mavorixafor in WHIM syndrome and our Phase 1b clinical trial of mavorixafor in certain chronic neutropenic disorders. Most importantly, in late November, we announced the success of our Pivotal Phase 3 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 count and absolute lymphocyte counts versus placebo. Mavorixafor also demonstrated good tolerability in its 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 immuno deficiency, for which there is no approved treatments. Since the November data announcement, we have continued to analyze the clinical results from the Phase 3 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…

Thanks, Paula. And 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. And 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, cash equivalents and restricted cash as of December 31. 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 6 of this year, we also entered into an agreement with Hercules, that amended and restated all prior loan and security agreements, and 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 $61.1 million for the fourth quarter and full year ended December 31 2022, respectively, as compared to $12.2 million and $50.6 million for the comparable periods in 2021. And note that R&D expenses included $0.5 and $2.5 million of certain non-cash expenses for the fourth quarter and full year ended December 31, 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. And 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 31, respectively. Finally, we reported a net loss of $25.8 million and $90.5 million for the fourth quarter and full year ended December 31 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. And with that, why don't we open up the call for your questions? Operator?

[Operator Instructions] Our first question comes from Stephen Willey of Stifel. Please go ahead.

Hi guys, this is Julie [ph] on for Steve, can you guys hear me okay?

Yes, thanks.

Okay, great. So I have just the two very brief questions on my end. So very first one is related to 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 these data? So that's my first question. And 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 the partnership front? And lastly maybe like R&D costs, if I think if I'm not correct, there is an increase -- there's an uptick in R&D costs. So maybe if you could provide a little bit more color on that, that would be great as well. Thank you.

Sure, so I'll take the question on the CN, Q2, Q3 deliverable, and then I'll turn it over to Adam for partnering and R&D costs. So thanks for the question. So we've been continuously communicating that we have intended to -- it's an open label Phase 2 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 want to see durability as we have consistently seen across all the patient populations tested with chronic mavorixafor. So we're certainly on track to do that, obviously, more data is better. So we're giving ourselves some flexibility. We saw a very positive response last year, [due to] (ph) 25 patients worth of CN data. So 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. And that additional flexibility in the Q2, Q3 timeframe enable that to happen. So I hope that helps. And I will turn that over to Adam now around the partnering and the R&D costs.

Thank you. So 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. But 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, we 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, 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. So that's a little color on background for the R&D.

Thank you.

Our next question comes from Divya Rao of TD Cowen. Please go ahead.

Hello, thanks for taking my question. This is Divya on for Marc. I guess, on the trial in CN, do you guys expect to run the Pivotal in all chronic neutropenia, or do you expect to run separate trials for those? And I have one other question.

Sure, Murray, would like to take that?

Yes, so I mean, in Phase 1, we were able to look at the different populations congenital idiopathic and cyclical. And for a big registrational study, we'd hope to be able to include similar groups, and you can include them in the one study by stratifying. So in other words, you get balanced across the different groups. So rather than do three separate studies, you can do them all in one study by accounting for stratification.

Okay that's helpful. And then, I guess, in terms of the secondary endpoints that you plan to present, from the Phase 3 trial sometime in Q2, I guess what infection rates do you think physicians and patients will be clinically meaningful?

Sure, I'll start and then certainly ask Murray and others to chime in. But, our Phase 2 data, which align with breakthrough therapy designation in WHIM syndrome demonstrated a reduction of infection rates of about 50% after a year, we're certainly hoping that type of direction continues, we're extremely excited about the Phase 2 data, we designed a robust study for the Phase 3, and 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. But, Murray, if you want to 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. And obviously, from our Phase 2, we saw about the 40% 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, that when we present the data, we'll be presenting the data looking at the annualized infection rate, the [seeable versus active] (ph), 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. And I'm assuming that maybe you're waiting for acceptance, but what are the conferences you anticipate presenting data at, for the Phase 3 data in the second quarter? And when it comes to the chronic neutropenia readout, is it more than likely that's going to be a press release and followed up biomedical meeting, or are you targeting a specific medical meeting? Thank you so much.

Hi Ted, thanks for the great question. So 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 -- second week or so of June. We are still waiting to hear, so we're looking forward to kind of refining that type of information. So please stay tuned. And we'll try to update as soon as possible. And then, in terms of the CN data, we would expect to kind of provide some additional context around it from that just a press release, we certainly think this will be an exciting data set to inform both the KOL and the investor communities around. So we think we'll provide a more robust type of format, not likely linked to a individual conference, but perhaps an investor or R&D day on behalf of X4.

Great, that's very helpful. I am 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 [indiscernible] on 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 as WHIM syndrome?

Sure, Murray, can you take that?

Yes, so obviously, we want to use the same dataset. So within the next six to 12 months, we'll be filing in EU following on from the NDA filing.

Okay, perfect. And then 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 how you're thinking about the Salesforce engaging with different patient advocacy groups, et cetera? Thank you very much.

Sure. Thanks, Mark, would you like to take that?

Sure, thanks. Yes. 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. So 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. So that's where we are right now.

And then 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?

Mark, go ahead.

Yes, WHIM syndrome it is a form of chronic neutropenia. So everything we're learning today is really helpful foundation for us as we as we think about our strategies in chronic neutropenia and another primary, immune deficiency. So, everything we're doing now, I think, is teaching us about the unmet need, and primary immune deficiency and this can all be a help helpful for us as we as we build our plans.

Excellent. Thanks so much for taking our questions.

Our next question comes from Kristen Kluska of Cantor Fitzgerald, please go ahead.

Hi, good morning, everybody. Thanks for taking our questions. So sounds like you're planning to have a potentially robust conference attendance this year with data but similar to how we 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?

I think, Kristen it's a great question. So we actually have been publishing our market analyses and we've done some excellent work on ICD 10 codes with respect to current neutropenia. And as we generate even more deep and more refined analyses along those lines, we'll certainly look forward to publishing that data. Not 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 alignment of course with market potential, so stay tuned.

Okay, thanks. And 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?

I definitely think there's crosswalk for excitement. But I'm going to turn that over to Murray to expand on that.

The investigators, the PI's 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. So I think they can see the link between neutropenia between WHIM and CN. And they're excited about mavorixafor, I mean, historically, they've gotten GCSF, which has its limitations. And I think that 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, in this next meeting that you want to have 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?

Yes, so this is a standard pre NDA meeting. So most companies work that all companies have to have a pre NDA meeting, and we make sure we clarify the most appropriate things. So we covered all areas. So are they comfortable with the non-clinical data, are they comfortable that the data actually is shows the drug is effective and safe and has a positive risk benefit. We discuss whether there are any CMC issues and 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. Well, 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.