X4 Pharmaceuticals, Inc

1. Description of Business and Summary of Significant Accounting Policies

X4 Pharmaceuticals Inc., together with its subsidiaries, also referred to in these financial statements as “we,” “us,” “our,” the “Company” and “X4,” is a biopharmaceutical company developing and commercializing novel therapeutics for the treatment of rare hematology diseases. We continue to progress our global, pivotal Phase 3 clinical trial, (the “4WARD” trial) to evaluate the efficacy, safety, and tolerability of oral, once-daily mavorixafor (with or without stable doses of G-CSF) in people with congenital, acquired primary autoimmune, or idiopathic chronic neutropenia who are experiencing recurrent and/or serious infections. The 52-week trial is a randomized, double-blind, placebo-controlled, multicenter study aiming to enroll up to 176 patients, with full enrollment expected in the third quarter of 2026. The FDA has granted Fast Track designation to mavorixafor for the treatment of chronic neutropenia. Chronic neutropenia is defined as periods lasting more than three months persistently or intermittently where there are abnormally low levels of neutrophils circulating in the blood, and may be idiopathic (of unknown origin), cyclic (episodes typically occurring every three weeks), or congenital (of genetic causation). Chronic neutropenia disorders are rare blood conditions similarly characterized by increased risks of infections and cancer due to abnormally low levels of neutrophils in the body. In all cases, the CXCL12/CXCR4 pathway is the key regulator of neutrophil release from the bone marrow. We have one commercially approved product, XOLREMDI ® (mavorixafor), which has received accelerated approval in the United States from the U.S. Food and Drug Administration (“FDA”) for use as an oral, once-daily therapy in patients 12 years of age and older with WHIM (warts, hypogammaglobulinemia, infections, and myelokathexis) syndrome, to increase the number of circulating mature neutrophils and lymphocytes. WHIM syndrome is a rare combined primary immunodeficiency and chronic neutropenic disorder. In connection with the Company’s long term strategy to successfully complete the 4WARD Phase 3 trial in patients with moderate and severe chronic neutropenia, the Company is no longer prioritizing investment in the WHIM indication. The Company is headquartered in Boston, Massachusetts.

Basis of Presentation

On April 28, 2025 the Company effected a 1-for-30 reverse stock split of its common stock (the “Reverse Stock Split”). Unless otherwise noted, all references to common stock share and per share amounts in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the Reverse Stock Split.

The accompanying unaudited interim condensed consolidated financial statements as of and for the nine months ended September 30, 2025 and 2024, respectively have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and the operating results and cash flows for such periods. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2024 included in its Annual Report on Form 10-K filed with the SEC on March 26, 2025.

The condensed consolidated balance sheet at December 31, 2024 that is presented in these interim condensed consolidated financial statements was derived from audited financial statements but does not include all disclosures required by GAAP.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including X4 Pharmaceuticals (Austria) GmbH, which is incorporated in Vienna, Austria, and X4 Therapeutics, Inc. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expenses, the accrual of operational and financial license milestones, the accrual of reserves for variable consideration related to product revenue, and the impairment or lack of impairment of long-lived assets including operating lease right-of-use assets and goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. As of the date of issuance of these condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from those estimates, and any such differences may be material to the Company’s condensed consolidated financial statements.

Liquidity

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. Although the Company has an approved drug product, licensing and sales of the Company’s drug product over the next 12 months will not be sufficient to fund the Company’s operating expenses. Since inception, the Company has incurred significant operating losses and negative cash flows from operations, and the Company expects to continue to generate operating losses and negative cash flows from operations for the foreseeable future. For the nine months ended September 30, 2025, the Company’s net loss was $55.3 million and net cash used in operating activities was $70.1 million. As of September 30, 2025, the Company had $122.2 million of cash, cash equivalents and short-term marketable securities, and an accumulated deficit of $570.6 million.

On August 13, 2025, the Company closed a private placement of shares of its common stock and, in lieu of common stock to certain investors, prefunded warrants to purchase shares of its common stock, for net proceeds of approximately $81.0 million, after deducting placement agent fees and other estimated expenses. See Note 11 for further information on this transaction. Also, on October 27, 2025, the Company closed an underwritten offering of shares of its common stock and, in lieu of common stock to certain investors, prefunded warrants to purchase shares of its common stock, for net proceeds of approximately $145.6 million, after deducting the Underwriters’ (as defined below) discounts and commissions and estimated offering expenses, which offering further extends the Company’s ability to fund its operations and financial obligations.

The Company must continue to comply with covenants under its Second Amended and Restated Loan and Security Agreement, as amended, (the “Hercules Loan Agreement”) with Hercules Capital Inc. (“Hercules”). Such covenants are described in Note 8 to these condensed consolidated financial statements. As of September 30, 2025, the Company was in compliance with all covenants under the Hercules Loan Agreement.

Based on its current operating plan, the Company believes (a) that its current cash, cash equivalents and short-term marketable will be sufficient to fund its operations for at least the next 12 months and (b) it will continue to comply with all covenants under the Hercules Loan Agreement through at least the 12-month period from the issuance date of these condensed consolidated financial statements.

The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, uncertainties relating to conducting preclinical and clinical research and development, the manufacture and supply of products and product candidates for clinical and commercial use, obtaining and maintaining regulatory approvals and pricing and reimbursement for the Company’s products and product candidates, market acceptance, managing global growth and operating expenses, availability of additional capital, competition, obtaining and enforcing patents, stock price volatility, dependence on collaborative relationships and third-party service providers, dependence on key personnel, and from time to time government investigations, litigation, and potential product liability claims.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 26, 2025. Since the date of those consolidated financial statements, there have been no material changes to the Company’s significant accounting policies other than as follows:

Revenue Recognition

The Company records revenue using the guidance of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), as amended. Upon the approval by the FDA of the sales and marketing of the Company’s lead product candidate, revenue related to its sale and distribution is accounted for under ASC 606. The Company recognizes revenue when its customer obtains control of promised goods, services or licensed rights, in an amount that reflects the consideration that the Company determines it expects to receive in exchange for those goods, services or licensed rights. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the customer and contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price, adjusted for variable consideration resulting from potential returns, rebates, discounts, down-stream charges and the probability of achievement of future milestones; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when the Company satisfies its performance obligations, which is upon delivery of the finished product to the customer, delivery of services or delivery of licensed rights.

The Company currently sells its product to a specialty pharmacy, which dispenses the Company’s drug product to patients in the U.S. The Company records revenue when the specialty pharmacy obtains control over the promised good, which occurs at a point in time, typically upon delivery to the specialty pharmacy. The Company has concluded that it provides one performance obligation in its contract with the specialty pharmacy customer and for other customers in this class: the delivery of drug product that has been approved for sale and distribution by the applicable regulatory authority.

The Company has also entered into a license and supply agreement with Norgine Pharma UK Limited (the “Norgine Agreement”) (Note 3). The terms of this agreement contain multiple performance obligations, which include a) the delivery of a license, b) WHIM research and development services and c) CN research and development services. Payments to the Company under this arrangement include non-refundable, upfront license fees; regulatory and sales-based milestone payments and royalties on future product sales.

As part of the accounting for its contract arrangements, the Company makes significant judgments, primarily related to the estimation of the amount of variable consideration to include in the transaction price upon delivery of the Company’s drug product or licensed rights.

•The variable consideration for product sales typically includes estimates for discounts, product returns, rebates due to U.S. federal and state payors, such as Medicaid, based on agreements that the Company has with these payors who provide medical insurance to the end patient, and estimated co-pay assistance payments for patients who enroll in the Company’s patient assistance program. These variable payments are considered a reduction of the Company’s transaction price with its customer and are estimated using the expected value method at the time the Company’s product is delivered to the customer.

•The consideration in license agreements typically includes future regulatory milestone payments, sales-based milestone payments, and royalties on future product sales. The Company has elected to exclude sale-based milestone payments and sales-based royalties from the transaction price under the applicable practical expedient. As such, the remaining variable consideration is generally comprised of future regulatory or operational milestone payments, which are considered for inclusion in the transaction price at the outset of the arrangement and at each reporting period using the most-likely-amount method.

For arrangements which contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the estimated relative standalone selling price. The Company estimates the standalone selling price with the objective of determining the price at which the Company would sell such an item if it were to be sold regularly on a standalone basis.

Net revenue recognized for each period is the amount for which, based on management’s estimate, it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, the Company re-evaluates these estimates based on new information and actual operational trends and if necessary, adjusts these variable consideration estimates. Any such adjustments are recorded on a cumulative catch-up basis in the period of the adjustment.

Cost of Revenue

Cost of revenue consists of drug product costs, including capitalized internal direct and overhead costs associated with the manufacturing, lot release and distribution of XOLREMDI, amortization of intangible assets associated with license agreements and royalty expense. Cost of revenue may also include costs related to excess or obsolete inventory adjustment charges and abnormal manufacturing costs.

Restricted Cash

As of September 30, 2025, restricted cash related to the Vienna Austria lease is included in other current assets and restricted cash related to the Boston lease is included in other assets.

In connection with the Company’s lease agreements for its facilities in Boston, Massachusetts and Vienna, Austria, the Company maintains letters of credit, which are secured by restricted cash, for the benefit of the respective landlord. In accordance with the Company’s Hercules Loan Agreement and as further described in Note 10, the Company at all times must maintain a minimum level of cash of $15.0 million in an account or accounts in which Hercules has a first priority security interest as further described in Note 10.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the sum to the total of amounts shown in the Company’s condensed consolidated statements of cash flows as of September 30, 2025 and December 31, 2024:

Cash, Cash Equivalents, Restricted Cash and Marketable Securities

The Company’s cash equivalents consisted of money market funds invested in U.S. Treasury securities. The money market funds were valued based on quoted prices in active markets for identical assets, which represents a Level 1 measurement. All marketable securities are classified as short-term investments as all are due within one year and include investments in U.S. Treasury notes, U.S. Treasury bills and federal government agency notes. The amortized cost of each investment, individually and in aggregate, approximated fair value. The Company evaluated each marketable security for impairment that is other-than-temporary and concluded that no marketable security was impaired as of September 30, 2025 and December 31, 2024.

All marketable securities are classified as short-term investments as all are due within one year and include investments in U.S. Treasury notes, U.S. Treasury bills and federal government agency notes. The amortized cost of each investment, individually and in aggregate, approximated fair value. The Company evaluated each marketable security for impairment that is other-than-temporary and concluded that no marketable security was impaired as of September 30, 2025 and December 31, 2024. The Company’s cash equivalents consisted of money market funds invested in U.S. Treasury securities. The money market funds were valued based on quoted prices in active markets for identical assets, which represents a Level 1 measurement.

The following table provides amortized cost, unrealized gains and losses and the carrying amount of available-for-sale debt marketable securities as of September 30, 2025:

The following table provides amortized cost, unrealized gains and losses and the carrying amount of available-for-sale debt marketable securities as of December 31, 2024:

Liabilities Measured at Fair Value

The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:

The following table provides a roll-forward for the nine months ended September 30, 2025, of the aggregate fair values financial instruments for which fair values are determined using Level 3 inputs:

Valuation of Embedded Derivative Liability— The fair value of the embedded derivative liability recognized in connection with the Company’s Hercules Loan Agreement, which is associated with additional fees due to Hercules upon non-credit related events of default, was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of this embedded derivative liability, which is reported within other non-current liabilities on the condensed consolidated balance sheets, is estimated by the Company at each reporting date based, in part, on the results of third-party valuations, which were prepared based on a discounted cash flow model that considered the timing and probability of occurrence of a redemption upon an event of default, the potential amount of prepayment fees or contingent interest upon an event of default and the Company’s risk-adjusted discount rate of 17%. As of September 30, 2025 and December 31, 2024, the fair value of this derivative liability was $10 thousand.

Class C Warrant Liability—In December 2022, the Company issued Class C Warrants for the purchase of shares of its common stock in a public offering. The Class C Warrants are accounted for as a liability on the condensed consolidated balance sheet and are adjusted to fair value at period end through “change in fair value of warrant liability” on the condensed consolidated statements of operations and comprehensive (loss) income.

The Company calculated the fair value of the Class C Warrants using the Black-Scholes option pricing model, with the following inputs:

Net (Loss) Income Per Share

Basic net (loss) income per common share is calculated based on the net (loss) income attributable to common stockholders divided by the weighted average number of shares outstanding for the period. The calculation of diluted net (loss) income per common share excludes the potential conversion of securities, such as stock awards and warrants, using the treasury stock method, as their inclusion would have an anti-dilutive effect.

Basic and diluted net (loss) income per share was calculated as follows:

Basic and diluted weighted average shares of common stock outstanding for the three and nine months ended September 30, 2025 and 2024 includes the weighted average effect of pre-funded warrants for the purchase of shares of common stock, for which the remaining unfunded exercise price is less than or equal to $0.30 per share.

For the three and nine months ended September 30, 2025 and for the three months ended September 30, 2024, during which the Company recorded net loss, the Company’s potentially dilutive securities included outstanding stock options, employee stock purchase plan shares, unvested restricted stock units and warrants to purchase shares of common stock. These potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share, and thus they are considered “anti-dilutive.” Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same for these periods.

For the nine months ended September 30, 2024, during which the Company recorded net income, the dilutive effect of outstanding stock options, restricted stock units, employee stock purchase plan shares and warrants were calculated using the treasury stock method, whereby all such awards were assumed to be exercised at the beginning of the period. The hypothetical proceeds from such exercises, including the average unrecognized stock compensation expense for outstanding stock options and restricted stock units, were assumed to be used to purchase outstanding common stock at the average price during the period. The net share impact of dilutive securities was added to the weighted average basic common shares outstanding to calculate weighted average diluted shares outstanding.

The Company excluded the following potential shares of common stock from the computation of diluted net (loss) income per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Recently Announced Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in ASU 2023-09 require that entities on an annual basis disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items if the effect of those reconciling items that exceed a certain threshold. ASU 2023-09 also requires more disaggregated disclosures related to income taxes paid. The amendments in ASU 2023-09 become effective for the Company in its December 31, 2025 consolidated financial statements. The Company does not expect that the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements when adopted.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220) (“ASU 2024-03”) requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements in ASU 2024-03 may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company continues to evaluate the impact of ASU 2024-03.

2. Strategic Restructurings

In the first quarter of 2025, we implemented a strategic restructuring of our business operations, workforce and capital spending to focus efforts on advancing mavorixafor to treat patients with chronic neutropenia. As part of this restructuring, we (i) implemented a net reduction of our employee headcount by 43 employees, or approximately 30% of our total workforce as of February 2025, including our U.S. commercial field team, (ii) commenced the closure of our research and development facility in Vienna, Austria, (iii) paused our pre-clinical drug candidate programs and (iv) streamlined other spending to support the ongoing clinical development of mavorixafor for the larger population of patients with chronic neutropenia. We incurred charges of approximately $2.3 million for severance and other employee termination-related costs related to this strategic restructuring, of which $0.7 million is included in research and development and $1.6 million is included in selling, general and administrative expense on the accompanying condensed consolidated income statements for the nine months ended September 30, 2025.

On September 17, 2025, we announced an additional strategic restructuring designed to sharpen operational focus and align resources with the Company’s long‑term strategy to successfully complete the 4WARD Phase 3 trial in patients with moderate and severe chronic neutropenia. As part of this initiative, we have further reduced our workforce by an additional approximately 50%. This workforce reduction was substantially completed in the third quarter of 2025. As part of this strategic restructuring, we incurred expenses of approximately $4.9 million for severance and other employee termination-related costs, of which $1.5 million is included in research and development and $3.4 million is included in selling, general and administrative expense on the accompanying condensed consolidated income statements for the three and nine months ended September 30, 2025.

Approximately $3.7 million of accrued severance and other employee termination-related costs are included in accrued expenses on the condensed consolidated balance sheet as of September 30, 2025. These remaining severance obligation payments are expected to be substantially completed in the fourth quarter of 2025.

The following table summarizes the Company’s liability recognized in connection with these headcount reductions:

3. License Agreements

Norgine Agreement

On January 13, 2025, the Company entered into a License and Supply Agreement (the “Norgine Agreement”) with Norgine Pharma UK Limited (“Norgine”), pursuant to which Norgine was granted an exclusive license to seek regulatory approval and distribute, market and sell the Company’s product mavorixafor (marketed by the Company as XOLREMDI in the United States) within the Field (as defined in the Norgine Agreement), in the European Economic Area, Switzerland, the United Kingdom, Australia and New Zealand (collectively, the “Territory”), following regulatory approval in the Territory. Additionally, Norgine was granted a co-exclusive license to manufacture mavorixafor for the Territory. The Company retains all rights to mavorixafor outside the Territory and specific reserved rights within the Territory. Norgine may grant sublicenses to its affiliates and certain third parties subject to the terms of the Norgine Agreement, except that it may not sublicense the commercial rights granted under the Norgine Agreement for certain countries without X4’s explicit consent.

Pursuant to the terms of the Norgine Agreement, the Company received a one-time, non-refundable, upfront payment of €28.5 million and a regulatory milestone payment of €0.5 million. The Company could receive up to approximately €20.6 million, €20.0 million and €185.0 million upon the achievement of certain regulatory, commercial, and sales milestones, respectively, or €225.6 million in aggregate. The Norgine Agreement also includes escalating double-digit royalties of up to mid-twenties on any future net sales in the Territory. The tiered royalty payments are subject to royalty stacking, and to a material reduction on a country-by-country basis if a generic version of mavorixafor becomes available in the applicable country. The Company and Norgine will collaborate closely on regulatory filings, with the Company continuing to be responsible for the ongoing global, pivotal Phase 3 4WARD clinical trial evaluating mavorixafor in chronic neutropenia and certain components of pediatric studies for WHIM. Norgine will be responsible for all market access and commercialization activities. The Company also agreed to manufacture and supply mavorixafor to Norgine. Norgine shall be required to pay a supply price to the Company for the licensed product derived from the Company’s manufacturing costs plus margin in the low teens.

Subject to customary rights of each party to earlier terminate the Norgine Agreement, the term of the Norgine Agreement continues, on a country-by-country basis, until the later of: (i) the tenth (10th) anniversary of the first commercial sale of mavorixafor, (ii) expiration of regulatory market exclusivity of mavorixafor or (iii) expiration of the last-to-expire licensed patent in such country. The term of the Norgine Agreement shall be automatically renewed for additional three-year terms unless either party provides the other party written notice of its intent not to renew the Norgine Agreement at least one year prior to the applicable termination date of the Norgine Agreement. In the event of automatic renewal, the royalty payment rate drops to a single digit royalty.

4. Revenue

Product Revenue, Net

During the three and nine months ended September 30, 2025, the Company recorded net revenue $1.6 million and $4.3 million, respectively, for the sale of the Company’s drug product in the U.S. Net product revenue was $0.6 million and $1.1 million and for the three and nine months ended September 30, 2024 following the commercial launch of the Company’s product during the second quarter of 2024.

The following table summarizes the balances and activity in each of the product reserve accounts for the nine months ended September 30, 2025.

The provision for contractual discounts provided to the Company’s customer is recorded as a reduction of accounts receivable. The provisions for co-pay assistance payments, contractual rebates and product returns are classified within accrued expenses.

The following table provides a rollforward of accounts receivable for the nine months ended September 30, 2025.

License and Other

During the first quarter of 2025, the Company entered into the Norgine Agreement. The Company analyzed the activities required under the Norgine Agreement and concluded that the arrangement was indicative of a vendor-customer relationship and would be accounted for under ASC 606. During the nine months ended September 30, 2025, the Company received a one-time, non-refundable, up-front payment of€28.5 million and a regulatory milestone payment of €0.5 million, which are included the transaction price. All other future regulatory-based milestone payments, which represent variable consideration, have been fully constrained as these are not yet considered probable. The Company has also excluded from the transaction price future royalty payments that are based on units sold by Norgine and future cumulative revenue-based milestone payments under the applicable practical expedient.

Under the Norgine Agreement, the Company’s promises include a) the delivery of a license, b) research and development services for certain components of WHIM clinical studies, c) research and development services for the global Phase 3 trial of XOLREMDI for CN, and d) the option for delivery of commercial drug supply pursuant to a manufacturing agreement. The Company assessed the above promises and determined that the option for delivery of commercial drug supply is priced at fair value, and therefore is not a material right or a performance obligation. Revenue from the delivery of manufacturing supply will be recorded when delivered at the pricing agreed to in the contract. The license was considered functional intellectual property as of the inception of the Norgine Agreement and distinct from other promises under the contract, as Norgine can benefit from the license on its own or together with other readily available resources. Each of the research and development services were considered distinct as the customer can benefit from these services together with the license transferred at the inception of the agreement. The research and development services will not modify or customize the initial intellectual property transferred at contract inception due to the late stage of development of the intellectual property. As a result, the Company identified three performance obligations: a) the delivery of the license, b) research and development services for certain components of WHIM clinical studies, and c) research and development services for the global Phase 3 trial of XOLREMDI for CN.

The Company allocated the transaction price of $29.7 million among these three performance obligations based on the Company’s best estimate of stand-alone selling price for each distinct performance obligation. The Company developed the estimated standalone selling price, at inception, for each of the three performance obligations with the objective of determining the price at which the Company would sell such an item if it were to be sold regularly on a standalone basis. The Company developed the estimated standalone selling price for the license primarily based on the probability-weighted present value of expected future cash flows. In developing such estimates, the Company applied judgment in determining the forecasted revenues, taking into consideration the applicable market conditions and relevant entity-specific factors, the probability of success, the time needed to develop XOLREMDI and the discount rate. The Company developed the estimated standalone selling price for the research and development services based on the amount a third party would pay for these services, which contemplates the level of efforts necessary to perform these services and the costs for full-time equivalent employees and expected resources to be committed plus a reasonable margin.

During the nine months ended September 30, 2025, the Company recognized $27.6 million for the delivery of the license and $0.7 million for research and development services. The license performance obligation was satisfied at a point in time upon transfer of the license to Norgine. Control of the license was transferred on the effective date of the Norgine Agreement as Norgine could begin to use and benefit from the license. For the research and development performance obligations, the Company recognizes revenue over time using an input method based on cost incurred during the period relative to the total estimated cost of the obligation. This method, in management’s judgment, is the best measure of progress towards satisfying the performance obligation as the transfer of control occurs as services are performed. The amounts received that have not yet been recognized as revenue are recorded as deferred revenue on the condensed consolidated balance sheet and will be recognized over the remaining period as the performance obligation is satisfied.

The following table summarizes the allocation of transaction price to thethree performance obligations in the Norgine Agreement based on the weighting of estimated stand-alone selling price for these performance obligations at the inception of the agreement.

As of September 30, 2025, deferred revenue related to the Norgine Agreement was $1.4 million, of which $0.6 million was current.

5. Inventory

Inventory consists of the following:

6. Intangible Assets, Net

As of September 30, 2025, the Company’s net definite-lived intangible asset, which resulted from the capitalization of certain milestone payments made or accrued related to its license agreement for the intellectual property contained in its drug product, included a gross intangible asset of$10.5 million, less accumulated amortization of $1.1 million for a net intangible asset of $9.4 million. The Company amortizes the intangible asset to cost of revenue over the remaining life of the underlying patent protecting the intellectual property through 2038.

As of September 30, 2025, amortization expense for the next five years and beyond is summarized as follows (in thousands):

The Company began amortizing its finite-lived intangible assets in April 2024 over a 14-year period based on the expected patent exclusivity period for XOLREMDI. Amortization expense totaled $0.2 million and$0.6 millionfor thethree and nine months ended September 30, 2025, respectively, and $0.2 million and $0.3 million for the comparable prior year periods. Amortization expense is recorded as a component of cost of revenue on the condensed consolidated statements of operations and comprehensive (loss) income.

7. Accrued Expenses

Accrued expenses consisted of the following:

8. Long-Term Debt

Long-term debt consisted of the following:

Hercules Loan Agreement

The Company is party to the Hercules Loan Agreement, which provides for an aggregate term loan facility of up to $107.5 million, under which the Company has borrowed an aggregate of $75.0 million of term loans, representing the maximum borrowings allowable as of September 30, 2025. Additional borrowings are available subject to approval of the Lender (as defined in the Hercules Loan Agreement) in its sole discretion.

Borrowings under the Hercules Loan Agreement accrue interest at a variable rate equal to the greater of (i)10.15% or (ii)The Wall Street Journal prime rate plus 3.15%. In an event of default and until such event is no longer continuing, the interest rate applicable to borrowings would be increased by 4.0%. Borrowings are repayable in monthly interest-only payments through July 1, 2027, which is the maturity date of the Hercules Loan Agreement. At the Company’s option, the Company may prepay all, but not less than all, of the outstanding borrowings, subject to a prepayment premium of 1%. In addition, the Hercules Loan Agreement provides for payment of end-of-term fees of $2.8 million plus 3.5% of the aggregate principal amount of loans drawn, if any, subsequent to the most recent amendment in August 2023, payable upon the earlier of maturity or the repayment in full of all obligations under the Hercules Loan Agreement. Borrowings under the Hercules Loan Agreement are collateralized by substantially all of the Company’s personal property and other assets except for its intellectual property (but including rights to payment and proceeds from the sale, licensing or disposition of the intellectual property).

Under the Hercules Loan Agreement, the Company has agreed to affirmative and negative covenants. The Company must maintain cash, cash equivalents or liquid assets in an account or accounts in which Hercules has a first priority security interest

(“Qualified Cash”) in an aggregate amount equal to at least 20% of the aggregate principal amount of loans outstanding under the Hercules Loan Agreement, which equals$15.0 million as of the issuance of these condensed consolidated financial statements. The Company must also continue to achieve a performance covenant, which includes maintaining a trailing six-month net product revenue of at least 55% of its forecast as approved by the Company’s Board of Directors (the “Performance Covenant”). Such Performance Covenant is waived during any period in which:

(i.) the Company maintains Qualified Cash, as defined in the Hercules Loan Agreement, in an aggregate amount equal to at least 75% of loans outstanding under the Hercules Loan Agreement or

(ii.) both (x.) the Company maintains a Market Capitalization (as defined in the Hercules Loan Agreement) of at least $450.0 million and (y.) the Company maintains Qualified Cash in an aggregate amount equal to at least 45% of loans outstanding.

The Hercules Loan Agreement also restricts the Company’s ability to incur additional indebtedness, pay dividends, encumber its intellectual property, or engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses, with certain exceptions.

The Company recognized interest expense under the Hercules Loan Agreement as follows:

The annual effective interest rate on the Hercules Loan Agreement as of September 30, 2025 was 11.4%. There wereno principal payments due or paid under the Hercules Loan Agreement during the three and nine months ended September 30, 2025 and 2024.

As of September 30, 2025, future principal and accrued end-of-term payments of $76.5 million under the Hercules Loan Agreement are due on July 1, 2027.

9. Leases

The Company has lease agreements for its facilities in Boston, Massachusetts, which is the Company’s principal executive offices, and in Vienna, Austria, which was previously the Company’s research and development center. There are no restrictions or financial covenants associated with any of the lease agreements.

Vienna Austria Lease Update

The Company has an operating lease for approximately 1,200 square meters of laboratory and office space in Vienna, Austria (“Vienna Lease”), that commenced in February 2021 for a term ofseven years. On February 6, 2025, the Company announced a plan to vacate the lease and close operations. As of September 30, 2025, the Company has abandoned the Vienna Lease and has entered into an agreement with the landlord to terminate the lease effective November 30, 2025. Accordingly, the Company has accelerated the amortization of the right of use asset to zero and adjusted the remaining lease obligation to reflect the Company’s remaining lease obligation as of September 30, 2025.

The components of lease expense for the three and nine months ended September 30, 2025 and 2024 were as follows:

Maturities of lease liabilities due under lease agreements that have commenced as of September 30, 2025 are as follows (in thousands):

10. Commitments and Contingencies

The Company has agreements with contract research organizations (“CROs”) pursuant to which the Company and the CROs are conducting clinical trials. The Company may terminate these agreements by providing notice pursuant to the contractual provisions of such agreements and would incur early termination fees. The Company has agreements with contract manufacturing organizations (“CMOs”) for the production of mavorixafor for use in clinical trials and for the commercial supply of XOLREMDI. The Company’s agreement with the CMO who produces batches of drug substance for use in the Company’s clinical and commercial drug supply contains cancellation provisions that would require the Company to pay up to the full contract value upon cancellation. As of September 30, 2025, the Company has approximately $0.6 millionof such commitments in place subject to cancellation provisions.

License Agreements

See Note 5 to the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2025 for a description of licensing agreements, which commit the Company to contingent milestone and royalty fees based on future operational events.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnification obligations. The Company is not currently aware of any indemnification claims and hasnot accrued any liabilities related to such obligations in its condensed consolidated financial statements as of September 30, 2025 or December 31, 2024.

Legal Proceedings

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to any legal proceedings.

11. Equity Transactions

Reverse Stock Split

On April 17, 2025, the Company’s stockholders approved an amendment to its Restated Certificate of Incorporation, as amended (“Certificate of Incorporation”) to combine outstanding shares of the Company’s common stock into a lesser number of outstanding shares, by a ratio of not less than one-for-fifteen and not more than one-for-thirty, with the exact ratio to be set within this range by the Board of Directors in its sole discretion. On April 17, 2025, the Board of Directors approved the Reverse Stock Split. On April 24, 2025, the Company filed an amendment to its Certificate of Incorporation to effectuate the Reverse Stock Split effective as of 12:01 a.m. Eastern Time on April 28, 2025. As a result of the Reverse Stock Split, every 30 shares of the Company’s common stock issued or outstanding were automatically reclassified into one validly issued, fully-paid and non-assessable new share of common stock, subject to the treatment of fractional shares as described below, without any action on the part of the holders. Proportional adjustments were made to the number of shares of common stock awarded and available for issuance under the Company’s equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of the Company’s outstanding stock options and other equity securities under the Company’s equity incentive plans. All outstanding warrants were also adjusted in accordance with their terms, which resulted, among other changes to the warrant terms, in proportionate adjustments being made to the number of shares issuable upon exercise of such warrants and to the exercise and redemption prices of such warrants. The shares of common stock outstanding following the Reverse Stock Split remain fully paid and non-assessable. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock.

No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive fractional shares were automatically entitled to receive cash in lieu of such fractional share. On April 28, 2025, the Company effected a 1-for-30 Reverse Stock Split. Unless otherwise noted, all references to common stock share and per share amounts in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the Reverse Stock Split.

ATM Sales Agreement

We are party to a Controlled Equity Offering SMSales Agreement (“ATM”), dated as of August 7, 2020, pursuant to which we may offer and sell shares of our common stock through one or more investment banks. To date and for the nine months ended September 30, 2025, we have sold $23.6 million and $9.0 million, respectively, of our common stock, net of offering costs, under the ATM. Pursuant to our Registration Statement on Form S-3 that became effective on August 24, 2023 and the related ATM prospectus contained therein, we may offer and sell shares of our common stock having an aggregate offering price of up to an additional $66.0 million.

Purchase Agreement

In June 2025, we entered into a common stock purchase agreement (“Purchase Agreement”) with Lincoln Park Capital Fund LLC pursuant to which Lincoln Park committed to purchase, at our request from time to time over a 24-month period, shares of our common stock having an aggregate offering price of up to $40.0 million, subject to certain limitations including a common share cap that will require shareholder approval to exceed (the “Purchase Shares”). In consideration for entering into the Purchase Agreement, the Company issued 137,099 shares of common stock (the “Commitment Shares”) to Lincoln Park as a commitment fee. The fair value of the Commitment Shares, which was consideration given to Lincoln Park in exchange for entering into the agreement and was not significant, was measured on the issuance date as determined based on the closing price of the Company’s common stock. Through September 30, 2025, the Company sold 1,297,936 common shares to Lincoln Park for aggregate proceeds of $2.2 million. The issuance of the Purchase Shares and Commitment Shares were registered pursuant to the Company’s effective shelf registration statement on Form S-3 (the “Registration Statement”), and the related base prospectus included in the Registration Statement, as supplemented by a prospectus supplement filed on June 23, 2025. During the third quarter of 2025, the Company terminated the Purchase Agreement.

Q3 2025 Private Placement

On August 11, 2025 and August 12, 2025, the Company entered into securities purchase agreements pursuant to which it agreed to issue and sell to several institutional and accredited investors (the “Investors”), in a private placement (the “Q3 2025 Private Placement”),11,040,776 shares of common stock at a price of $1.42 per share and pre-funded warrants to purchase 48,852,772 shares of common stock at a purchase price of $1.419 per pre-funded warrant (representing the price of $1.42 per share minus the $0.001 per share exercise price of each such prefunded warrant). The pre-funded warrants are exercisable, subject to certain beneficial ownership restrictions, at any time after their original issuance and will not expire. The Q3 2025 Private Placement closed on August 13, 2025. The net proceeds of $81.0 million, after deducting placement agent fees and offering expenses paid by the Company, received for the shares of common stock and the pre-funded warrants was recorded as permanent equity as the Company concluded that the shares of common stock and pre-funded warrants met the criteria for permanent equity classification.

Also, on August 11, 2025 and August 12, 2025, the Company entered into registration rights agreements with the Investors, pursuant to which the Company agreed to register for resale the common shares issued in the Q3 2025 Private Placement and the issuance of the shares of common stock underlying the pre-funded warrants held by the Investors. Such registration statement was filed on September 10, 2025 and was declared effective by the SEC on September 17, 2025. The Company has agreed to use commercially reasonable efforts to keep such registration statement effective until the date the shares of common stock sold in the Q3 2025 Private Placement and the shares of common stock underlying the pre-funded warrants covered by such registration statement have been sold or may be resold pursuant to Rule 144 without restriction.

12. Stock-Based Compensation

As of September 30, 2025, there is an aggregate of approximately 0.2 million shares of common stock available for issuance under the Company’s equity incentive plans, including 0.1 million shares of common stock remain available for issuance under the Amended and Restated 2017 Employee Stock Purchase Plan.

Stock Option Valuation

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted:

Stock Options

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2025:

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock to the extent the stock option had a lower exercise price. There were no options exercised in 2025 and 2024. The weighted average grant-date fair value per share of stock options granted during the nine months ended September 30, 2025 and 2024 was $1.35 and $23.40, respectively.

Restricted Stock Units

The following table summarizes the Company’s restricted stock unit activity for the nine months ended September 30, 2025:

During the nine months ended September 30, 2025, the Company granted 0.3 million time-based restricted stock units to employees at the grant date fair value of $12.65 per share. These awards vest as the employee provides services to the Company over athree-year vesting period. Also during the nine months ended September 30, 2025,0.1 million outstanding performance-based restricted stock units (“PRSUs”) vested based on the achievement of an operational milestone. The Company considers the achievement of the remaining operational milestone related to outstanding PRSUs to be probable. Stock-based compensation expense has been recognized for these awards using the accelerated attribution model based on the fair value of the awards as of the date of grant and management’s best estimate of the date the probable operational milestone will be achieved. The Company updates its estimates related to the probability and timing of achievement of the operational milestones each period until the award either vests or is forfeited.

Stock-Based Compensation

Stock-based compensation expense was classified in the condensed consolidated statements of operations and comprehensive(loss) income as follows:

Stock Appreciation Rights

The following table summarizes the Company’s stock appreciation right (“SARs”) balances and activity as of September 30, 2025. The weighted average target (exercise) price of the SARs is $45.71. During the third quarter of 2025, all participants to whom SARs were granted were terminated and the vesting of certain unvested SARs was accelerated. The vested SARs of 313,856 as of September 30, 2025 are exercisable for 90 days from the termination date and will forfeit if not exercised.

13. Segment Information

We have defined our Chief Operating Decision Maker (“CODM”) as our Executive Chairman. The CODM manages the Company’s operations as a single operating segment, which comprises its single reportable segment, for the purposes of assessing performance and making operating decisions. The Company’s focus is on the research, development and commercialization of novel therapeutics for the treatment of rare diseases. The Company’s research, development and commercialization efforts are focused on its lead molecule, mavorixafor, which is being marketed in the U.S. under the trade name XOLREMDI. The CODM uses the Company’s condensed consolidated net (loss) income to monitor actual results as compared to forecast in assessing segment performance and allocation of resources.

We derive our revenue from the sale of XOLREMDI in the U.S. and from licensed rights to mavorixafor for other non-U.S. territories. We recognized $1.6 million and $4.3 million of revenue from our U.S. customer and $0.2 million and $28.3 million of revenue from our customer in the United Kingdom for the three and nine months ended September 30, 2025, respectively. The Company recognized $0.6 million and $1.1 million of revenue from its U.S. customer for the three and nine months ended September 30, 2024, respectively, andno non-U.S. revenue for the three and nine months ended September 30, 2024.

The measure of profit for the segment is net (loss) income and consisted of the following for the three and nine months ended September 30, 2025, and 2024:

(a) Other segment items primarily include cost of revenue, non-compensation departmental costs within sales, general and administrative departments, certain unallocated external costs within research and development, stock-based compensation expense, SARs compensation expense, severance expense, other income (expense), and provision for income taxes.

The CODM only receives and reviews information regarding segment assets at the consolidated level. Certain other entity-wide disclosures are included elsewhere in these condensed consolidated financials statements. As of September 30, 2025, the Company’s single operating segment had long-lived assets, including property and equipment and right-of-use assets, of $2.0 million, which were located in the U.S. As of December 31, 2024, the operating segment’s long-lived assets were $4.8 million, of which $3.2 million and $1.6 million were located in the U.S. and Austria, respectively.

14. Subsequent Events

On October 23, 2025, the Company entered into an underwriting agreement with Leerink Partners LLC, Stifel, Nicolaus & Company, Incorporated and Guggenheim Securities, LLC, as the representatives of the underwriters named therein (the “Underwriters”), to issue and sell 45,860,000 shares of the Company’s common stock at a public offering price of $2.90 per share and, in lieu of common stock to certain investors, pre-funded warrants to purchase 700,000 shares of the Company’s common stock (the “Pre-Funded Warrants”) at a public offering price of $2.899 per share, which represents the per share public offering price for the common stock less the $0.001 per share exercise price for each Pre-Funded Warrant (the “Offering”). In addition, the Company granted the Underwriters an option for a period of 30 days to purchase up to an additional 6,984,000 shares of its common stock at the public offering price, less the underwriting discounts and commissions, which the Underwriters exercised in full on October 24, 2025. The Offering closed on October 27, 2025.

The Pre-Funded Warrants will be exercisable at any time after the date of issuance. A holder of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99% or 9.99%, as applicable, of the number of shares of common stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage to a percentage not in excess of 19.99% by providing prior notice to the Company, provided that any increase will not be effective until the 61st day after such notice is delivered to the Company.

The net proceeds from the Offering, including proceeds from the exercise in full of the Underwriters’ option to purchase additional shares, were approximately $145.6 million, after deducting the Underwriters’ discounts and commissions and estimated offering expenses.