X4 Pharmaceuticals(US:XFOR)2025-03-25 22:16PART I Business X4 Pharmaceuticals is a commercial-stage biopharmaceutical company focused on rare immune system diseases, with its lead product XOLREMDI® launched in the U.S Overview and Commercial Product The company's first product, XOLREMDI® (mavorixafor), an oral CXCR4 antagonist, was approved by the U.S. FDA in April 2024 for treating WHIM syndrome - The U.S. FDA approved mavorixafor (trade name XOLREMDI®) in April 2024 as the first drug to treat WHIM syndrome in patients aged 12 and older, with the U.S. commercial launch commencing in May 202417 - Mavorixafor is an orally available, small-molecule selective antagonist of the CXCR4 receptor, designed to increase the mobilization of white blood cells from bone marrow into the bloodstream16 - Upon FDA approval, the company was granted a Priority Review Voucher (PRV) due to the drug's Rare Pediatric Disease designation, which it sold in May 202423 Pipeline and Clinical Development Clinical development focuses on expanding mavorixafor's indications, supported by a successful Phase 3 trial in WHIM syndrome and an ongoing pivotal trial in chronic neutropenia - The pivotal Phase 3 4WHIM trial for WHIM syndrome met its primary endpoint (p<0.0001), showing mavorixafor's superiority over placebo in increasing the time patients' absolute neutrophil count (ANC) remained above the severe neutropenia threshold38 - In the 4WHIM trial, mavorixafor treatment led to a statistically significant reduction of approximately 60% in the annualized infection rate compared to placebo (p<0.01)38 - The company has initiated a pivotal Phase 3 trial (the "4WARD" study) to evaluate mavorixafor in people with congenital, acquired primary autoimmune, or idiopathic chronic neutropenia, aiming to enroll 150 participants1856 - Preclinical candidates X4P-003 and X4P-002 are currently paused as part of the 2025 restructuring plan57 Commercial Strategy and Market Opportunity The company is targeting a U.S. WHIM syndrome market of up to 3,700 patients and a larger chronic neutropenia market while expanding internationally through partnerships - Market research and an AI-driven study of insurance claims suggest there may be up to 3,700 WHIM patients in the United States28 - A retrospective analysis projects up to 48,000 people in the U.S. were living with a diagnosis of chronic neutropenia in 2021, suggesting a potential addressable market for mavorixafor of approximately 15,000 individuals4647 - The company has partnered with Norgine for commercialization in Europe, Australia, and New Zealand, and with taiba rare for distribution in the Middle East and North Africa, contingent on regulatory approvals194041 Manufacturing, Competition, and Intellectual Property The company uses a virtual manufacturing model, faces no direct oral therapy competition for its indications, and relies on a patent portfolio expiring between 2024 and 2044 - X4 relies on third-party manufacturers, with Evotec A.G. producing the active pharmaceutical ingredient (API) for mavorixafor and Catalent Inc. manufacturing the final capsule drug product636465 - The company is not aware of other companies developing oral therapies for WHIM syndrome or chronic neutropenia; the primary competition for chronic neutropenia is injectable G-CSF (filgrastim) and its biosimilars62 - The company's intellectual property portfolio includes owned and exclusively licensed patents, with issued U.S. patents covering mavorixafor and its use expected to expire between 2024 and 204489 License Agreements The company's operations depend on an in-license agreement with Genzyme for mavorixafor and key out-licensing agreements with Norgine and Abbisko for international commercialization Key License Agreement Financial Terms | Partner | Type | Key Financials | | :--- | :--- | :--- | | Genzyme | In-license | Paid $7.0M milestone in 2024. Up to $13.0M in future regulatory/sales milestones remain (as of 12/31/24). Tiered royalties (6%-12%) on net sales. | | Norgine | Out-license | Received €28.5M upfront payment (Jan 2025). Eligible for up to €226.0M in milestones and escalating double-digit royalties. | | Abbisko | Out-license | Eligible for up to $214.0M in milestones and tiered low double-digit royalties on net sales in Greater China. | Government Regulation The company navigates extensive FDA and international regulations, benefiting from Orphan Drug exclusivity while facing challenges from payor cost-containment measures - The company's products are subject to extensive regulation by the FDA and other global authorities, covering research, development, manufacturing, labeling, marketing, and post-approval monitoring96 - Mavorixafor received Orphan Drug designation, which provides seven years of exclusive marketing in the U.S. for the approved indication, and a Rare Pediatric Disease designation, which resulted in a Priority Review Voucher127129 - Sales success depends on coverage and reimbursement from third-party payors, who are increasingly implementing cost-containment measures; recent legislation like the Inflation Reduction Act (IRA) could impact future pricing and reimbursement152153161 Human Capital Following a February 2025 restructuring, the company's workforce was reduced from 143 to approximately 100 full-time employees - As of December 31, 2024, the company had 143 full-time employees169 - In February 2025, a restructuring resulted in a net reduction of 43 employees, leaving approximately 100 employees as of March 1, 2025169 Risk Factors The company faces substantial going concern risk due to a history of losses, dependence on a single product, and non-compliance with Nasdaq's minimum bid price rule - The company's history of significant losses and negative cash flows raises substantial doubt about its ability to continue as a going concern, and it will require substantial additional funding to continue operations177183186 - The business depends almost entirely on the success of its commercial product, XOLREMDI, and its development for other indications; the commercial opportunity may be smaller than anticipated176199201 - The company is currently not in compliance with Nasdaq's minimum bid price requirement of $1.00 per share, and failure to regain compliance could result in the delisting of its common stock342343 - The company relies on single third-party manufacturers for both the active pharmaceutical ingredient (API) and the finished drug product for mavorixafor, creating significant supply chain risk179280 Unresolved Staff Comments The company reports that it has no unresolved staff comments from the SEC - None370 Cybersecurity The company maintains a cybersecurity risk management program overseen by the Audit Committee, which has not materially impacted the business to date - The company has a cybersecurity program that is part of its overall enterprise risk management, with oversight provided by the Audit Committee of the Board of Directors371377 - The program includes policies, monitoring, training, and an incident response plan, managed by the Director of Infrastructure, Operations and Cybersecurity372376 Properties The company leases its corporate headquarters in Boston, Massachusetts, and laboratory and office space in Vienna, Austria - Corporate headquarters are located in a leased 28,000 sq. ft. office space in Boston, MA, with the lease expiring November 30, 2026379 - The company leases approximately 1,200 square meters of lab and office space in Vienna, Austria, with a lease expiring in March 2028380 Legal Proceedings As of December 31, 2024, the company was not a party to any legal proceedings - As of December 31, 2024, the company was not party to any legal proceedings381 Mine Safety Disclosures This item is not applicable to the company - Not applicable382 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on the Nasdaq Capital Market under "XFOR", and the company has never paid cash dividends and does not plan to in the future - The company's common stock trades on the Nasdaq Capital Market under the ticker symbol "XFOR"384 - The company has never declared or paid cash dividends and does not intend to do so in the foreseeable future386 Management's Discussion and Analysis of Financial Condition and Results of Operations The company recorded its first product revenue in 2024, but a history of losses and negative cash flow raises substantial doubt about its ability to continue as a going concern Results of Operations In 2024, the company recorded its first product revenue of $2.6 million and significantly reduced its net loss to $37.5 million due to a $105.0 million gain from a PRV sale Consolidated Statements of Operations (2024 vs. 2023) | Metric | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Product revenue, net | $2,557 | $0 | $2,557 | | Research and development | $81,643 | $72,017 | $9,626 | | Selling, general and administrative | $61,518 | $35,505 | $26,013 | | Gain on sale of non-financial asset | ($105,000) | $0 | ($105,000) | | Loss from operations | ($36,401) | ($107,522) | $71,121 | | Net loss | ($37,450) | ($101,167) | $63,717 | - The increase in SG&A expenses by $26.0 million was primarily driven by a $15.2 million increase in selling and marketing costs to support the U.S. launch of XOLREMDI410 Liquidity and Capital Resources With $102.1 million in cash as of year-end 2024, management has substantial doubt about the company's ability to continue as a going concern due to an impending debt covenant breach - As of December 31, 2024, the company had cash, cash equivalents, and short-term marketable securities of $102.1 million and an accumulated deficit of $515.4 million420 - Management has concluded that there is substantial doubt about the company's ability to continue as a going concern due to the risk of violating the Minimum Cash Covenant ($15 million) on its Hercules loan within the next 12 months421 Cash Flow Summary (2024) | Cash Flow Activity | Amount (in thousands) | | :--- | :--- | | Net cash used in operating activities | ($130,901) | | Net cash provided by investing activities | $66,990 | | Net cash provided by financing activities | $20,294 | - The company expects the 2025 Restructuring to decrease annual spending by $30 to $35 million, which it believes will provide sufficient funds to support operations into the first half of 2026400 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, X4 Pharmaceuticals is not required to provide this disclosure - As a smaller reporting company, we are not required to provide disclosure for this Item449 Financial Statements and Supplementary Data This section contains the audited financial statements, for which the auditor's report expresses substantial doubt about the company's ability to continue as a going concern - The Report of Independent Registered Public Accounting Firm from PricewaterhouseCoopers LLP includes a paragraph highlighting substantial doubt about the Company's ability to continue as a going concern491 Key Balance Sheet Data (as of Dec 31, 2024) | Account | Amount (in thousands) | | :--- | :--- | | Cash and cash equivalents | $55,699 | | Marketable securities | $46,361 | | Total Assets | $146,447 | | Long-term debt, net | $75,425 | | Total Liabilities | $124,298 | | Total Stockholders' Equity | $22,149 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosures The company reports no changes in or disagreements with its accountants on accounting and financial disclosures - None451 Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024453 - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2024456 Other Information No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the fourth quarter of 2024 - No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the three months ended December 31, 2024459 PART III Directors, Executive Officers and Corporate Governance Information for this item is incorporated by reference from the company's 2025 Proxy Statement - Information for this item is incorporated by reference from the company's 2025 Proxy Statement463 Executive Compensation Information regarding executive compensation is incorporated by reference from the company's 2025 Proxy Statement - Information for this item is incorporated by reference from the company's 2025 Proxy Statement466 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding security ownership is incorporated by reference from the company's 2025 Proxy Statement - Information for this item is incorporated by reference from the company's 2025 Proxy Statement467 Certain Relationships and Related Transactions, and Director Independence Information regarding related party transactions and director independence is incorporated by reference from the company's 2025 Proxy Statement - Information for this item is incorporated by reference from the company's 2025 Proxy Statement468 Principal Accountant Fees and Services Information regarding principal accountant fees and services is incorporated by reference from the company's 2025 Proxy Statement - Information for this item is incorporated by reference from the company's 2025 Proxy Statement469 PART IV Exhibit and Financial Statement Schedules This section lists the financial statements and exhibits filed as part of the Annual Report - This section provides an index of the financial statements and a list of all exhibits filed with the Form 10-K471474 Form 10-K Summary The company indicates that there is no Form 10-K summary - None479