X4 Pharmaceuticals, Inc
For the period ended Dec 31, 2024. Filed Mar 26, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 26, 2025
XFOR$3.18+3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-21.
0001628280-24-012578
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-26.
0001628280-25-014805
Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 108 current paragraphs.
48 unchanged; 20 reworded; 36 added; 20 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
XOLREMDI Commercial Launch
Current report
We are currently engaged in our U.S. launch of XOLREMDI in WHIM syndrome, continuing our engagements with physicians and rare disease patient advocacy organizations and our disease-awareness campaign to further the understanding of WHIM syndrome and educate patients and physicians on the importance and benefits of early diagnosis. We have entered into agreements with a third-party logistics organization and a specialty pharmacy to support the distribution of XOLREMDI in the U.S., to mitigate barriers to product access, and to provide a suite of patient support services to help patients through their treatment journey. We submitted a Marketing Authorisation Application (“MAA”) to the European Medicines Agency (“EMA”) in early 2025 seeking regulatory approval to commercialize mavorixafor for WHIM syndrome outside of the U.S. Such MAA was accepted for processing by the EMA in January 2025. As discussed further below, on January 13, 2025, we entered into a License and Supply Agreement (the “Norgine Agreement”) with Norgine Pharma UK Limited (“Norgine”), pursuant to which Norgine is granted an exclusive license to distribute, market and sell our drug product for all indications in the European Economic Area, Switzerland, the United Kingdom, Australia and New Zealand. In February 2025, we announced that we had entered into an agreement with taiba rare to distribute and commercialize XOLREMDI for the treatment of WHIM syndrome in select Middle East and North African countries. We continue to explore additional potential commercial and distribution opportunities in geographies where we may be able to efficiently leverage any of our regulatory approvals.
Current report
The U.S. approval of XOLREMDI in the WHIM syndrome indication is the first for mavorixafor, which is an orally active, selective antagonist of chemokine receptor CXCR4, a key regulator of the movement of immune cells throughout the body. Due to its ability to increase the mobilization of white blood cells from the bone marrow into the bloodstream, we believe that mavorixafor has the potential to provide therapeutic benefit across a variety of immune system disorders in addition to WHIM syndrome.
Current report
Phase 2 Clinical Study in Chronic Neutropenia
Current report
The results from the completed six-month study showed that once-daily oral mavorixafor was generally well tolerated and durably increased participants’ absolute neutrophil counts (“ANC”) both as a monotherapy and in combination with G-CSF, the only therapy approved in the U.S. for severe chronic neutropenia. In addition, when tested in combination with G-CSF, mavorixafor treatment enabled physicians to substantially reduce G-CSF dosing while maintaining normal mean ANC levels.
Current report
Phase 3 Clinical Trial in Chronic Neutropenia
Current report
We continue to progress our global, pivotal Phase 3 clinical trial, (the “4WARD” study) 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 CN who are experiencing recurrent and/or serious infections. The 52-week trial is a randomized, double-blind, placebo-controlled, multicenter study aiming to enroll 150 participants. We believe we are on track to complete enrollment in the 4WARD study in the third or fourth quarter of 2025.
Current report
2025 Restructuring
Current report
In February 2025, we implemented a strategic restructuring of our business operations, workforce and capital spending to focus efforts on advancing mavorixafor to treat those with chronic neutropenia, while also optimizing its U.S. promotion of XOLREMDI (the “2025 Restructuring”). As part of the 2025 Restructuring, we implemented a net reduction of our employee headcount by 43 employees, or approximately 30% of our total workforce. The strategic restructuring activities include (i) discontinuing of research efforts, (ii) closing of our facility in Vienna, Austria, (iii) pausing pre-clinical drug candidate programs, (iv) scaling the U.S. commercial field team and supporting roles across our business and (v) streamlining other spending to support the ongoing clinical development of mavorixafor for the larger population of those with chronic neutropenia. We estimate that the workforce reduction will be substantially completed in the first quarter of 2025. We estimate that it will incur charges of approximately $3.0 million for severance and other employee termination-related costs, primarily in the first quarter of 2025. We expect the 2025 Restructuring will decrease annual spending by $30 to 35 million and believe it will have sufficient funds to support operations into the first half of 2026. The estimate of costs that we expect to incur related to the 2025 Restructuring as well as the decrease in annual spending, and the timing thereof are subject to a number of assumptions and actual results may differ.
Current report
We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the actions described for the 2025 Restructuring above.
Current report
On January 13, 2025, we entered into the Norgine Agreement, pursuant to which Norgine is granted an exclusive license to distribute, market and sell our product mavorixafor for all indications in the European Economic Area, Switzerland, the United Kingdom, Australia and New Zealand following regulatory approval. Pursuant to the terms of the Norgine Agreement, we received an upfront payment of €28.5 million upon signing of the agreement and could receive up to €226.0 million upon the achievement of certain regulatory, commercial and sales milestones. We will also receive escalating, double-digit royalties of up to mid-twenties on any future net sales of our drug product by Norgine. Norgine will be responsible for all market access and commercialization activities and will eventually hold all marketing authorizations in the licensed territories. We will manufacture and supply drug product to Norgine for a supply price derived from our product manufacturing cost plus a low double-teen digit margin.
Current report
Product Revenue, Net
Current report
Net revenue from the sale of our drug product was $2.6 million for the year ended December 31, 2024. There was no product revenue in the prior periods. We sell our approved drug product in the U.S. to a specialty pharmacy that dispenses the product to patients who have been prescribed our drug product by their health-care providers. We also sell our drug product through international distributors. There were no sales to international distributors for the year ended December 31, 2024. Net revenue includes reserves for distributor discounts, estimated rebates that we may owe to U.S. government payors, future co-pay assistance payments that we may owe for patients who enroll in our patient assistance program, and for potential product returns. As we have just recently launched our first drug product in the U.S. in 2024, we have limited history of returns or downstream rebates or co-pay assistance payments. Therefore, we expect to adjust these estimates quarterly as new information becomes available.
Current report
Cost of Revenue
Current report
For the year ended December 31, 2024, cost of revenue was $0.8 million. There was no cost of revenue in prior periods.
Current report
Cost of revenue primarily consists of $0.5 million of amortization of an intangible asset related to accrued and paid milestone payments associated with our Genzyme license agreement, $0.2 million of sales-based royalty payments accrued and paid under our Genzyme license agreement, and $0.1 million of drug product costs.
Current report
Research and development expenses increased by $9.6 million for the year ended December 31, 2024, as compared to the prior year primarily due to an increase in unallocated expense. Unallocated expense increased primarily due to an increase in personnel within our research and development functions, primarily inour clinical operations, biostatistics, medical affairs, manufacturing and technical, and quality organizations.
Current report
Selling, general and administrative expenses increased by $26.0 million to $61.5 million for the year ended December 31, 2024 as compared to $35.5 million in the prior year. The increase in selling, general and administrative expense was primarily due to an increase of $15.2 million in selling and marketing expenses, including increases in sales and marketing personnel and external marketing costs to support the ongoing launch activities of our approved product, XOLREMDI in the U.S. Selling, general and administrative expenses also increased due to an increase of $10.8 million in general and administrative expenses, primarily due to higher legal, corporate communications, accounting, information technology, and professional service costs associated with the ongoing commercialization of our drug product.
Current report
During the year ended December 31, 2024, we entered into contractual arrangement with a third party that transferred the rights to a Priority Review Voucher (“PRV”) awarded to the Company as a result of the FDA’s approval of XOLREMDI. The PRV was accounted for as an intangible asset with no accounting cost basis. The third party purchased the PRV for $105.0 million. As a result of the transfer of control of the PRV to the third party, the Company derecognized the associated intangible asset and recorded a gain through “gain on transfer of nonfinancial assets.” There was no such transaction in year ended December 31, 2023 and we do not expect similar PRV sales in the future.
Current report
Operating Expenses
Current report
Our operating expenses decreased by $68.6 million for the year ended December 31, 2024 as compared to the prior year. Excluding the impact of the PRV sale, operating expenses increased $36.4 million in the current year as compared to the prior year, primarily due to an increase in head count to support our U.S. launch of XOLREMDI and to support our 4WARD clinical trial. As a result of the strategic restructuring of our workforce and capital spending to focus efforts on advancing mavorixafor to treat those with chronic neutropenia, while also optimizing its U.S. promotion of XOLREMDI, we expect that our operating expenses will decrease by approximately $30.0 million to $35.0 million in 2025.
Current report
Other (Expense) Income, Net
Current report
PRV Sale— As noted above, during the year ended December 31, 2024 we sold a PRV for $105 million to a third party. We do not expect to recognize similar PRV sales in the future.
Current report
Norgine Agreement— As noted above, on January 13, 2025, we entered into the Norgine Agreement, pursuant to which we received an upfront payment of €28.5 million in January 2025. Receipt of the upfront payment obligated us to process a sublicense royalty of approximately $4.5 million to Genzyme.
Current report
Going Concern—Although we have an approved drug product, sales of the our drug product over the next 12 months will not be sufficient to fund our forecasted operating expenses. Since inception, we have incurred significant operating losses and negative cash flows from operations. As of December 31, 2024, we had $102.1 million of cash, cash equivalents and short-term marketable securities and an accumulated deficit of $515.4 million. For the year ended December 31, 2024, our net losses were $37.5 million and net cash used in operating activities of $130.9 million.
Current report
We have a covenant (the “Minimum Cash Covenant”) under our Hercules Loan Agreement that effective January 31, 2025 requires that we maintain a minimum level of cash of $15 million, representing 20% of outstanding borrowings under the Hercules Loan Agreement. Based on our current operating plan, which includes estimates of anticipated cash inflows from product sales and cash outflows from operating expenses, we believe there is a risk that we will not meet the conditions of the Minimum Cash Covenant within the 12-month period from the issuance date of these consolidated financial statements. In such case, Hercules could accelerate the principal payments on the our outstanding loans and we potentially would not have sufficient cash, cash equivalents and short-term marketable securities to settle such obligations. Accordingly, we have concluded that this condition meets the standard for raising substantial doubt about the our ability to continue as a going concern.
Current report
Based on our cash, cash equivalents and marketable securities on hand as of December 31, 2024 and our current operating plan,
Current report
we believe that our cash, cash equivalents and marketable securities will not allow us to fund operations for at least the next 12
Current report
During 2025, assuming no changes to our current operational expectations, which include the impact of the strategic restructuring we announced in the first quarter of 2025, we expect our operating expenses to be lower than the operating expenses, excluding the sale of non-financial assets, we generated in 2024. However, because of the numerous risks and uncertainties
Current report
associated with the future sale of our approved drug product and the research, development, and commercialization of future
Current report
•our ability to obtain marketing approval for our product candidates;
Current report
Critical Accounting Policies and Estimates
Current report
Intangible Assets, Net. Definite-lived intangible assets related to capitalized milestones under license agreements are amortized on a straight-line basis, which aligns with the pattern over which the economic benefit of the intangible assets are consumed, over their remaining useful lives, which are estimated to be the remaining patent life. If our estimate of the product’s useful life is shorter than the remaining patent life, then a shorter period is used. Amortization expense is recorded as a component of cost of revenue on the consolidated statements of operations and comprehensive loss.
Current report
Revenue Recognition. We recognize revenue when our customers obtain control of the promised good, such as our drug product or licensed intellectual property rights, in an amount that reflects the consideration that we expect to receive in exchange for those goods. We performs the following five steps to determine the amount of revenue to recognize: (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, and down-stream charges; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when we satisfies the performance obligations, which is upon shipment of our drug product to the customer or delivery of licensed rights to the customer.
Current report
As part of the accounting for contracts with our customers, we make significant judgments, primarily related to the estimation of the amount of variable consideration to include in the transaction price upon delivery of our drug product or licensed rights. The variable consideration includes estimates for discounts, product returns, rebates that will be due to U.S. federal and state payors, such as Medicaid, based on agreements that we have with these payors who provide medical insurance to the end patient, and estimated co-pay assistance payments for patients who enroll in our patient assistance program. These variable payments are considered a reduction of the transaction price and must be estimated at the time our product is delivered to the customer. For our license arrangements, we will receive milestone payments based on our achievement of defined operational events or cumulative sales levels achieved. When we conclude that the achievement of such milestones is probable, we include the value of the milestone in the transaction price using the most likely amount method. For product sales, we determine the amount of variable consideration to include in the transaction price by using the expected value method. Net revenue recognized for each period is the amount for which, based on our estimate, it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, we re-evaluate 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.
Current report
See Note 2 to the consolidated financial statements.
Removed paragraphs (20)
Previous report
Our lead clinical candidate is mavorixafor, a small-molecule selective antagonist of chemokine receptor CXCR4 that is being developed as an oral, once-daily therapy. Due to its ability to increase the mobilization of mature, functional white blood cells into the bloodstream, we believe that mavorixafor has the potential to provide therapeutic benefit across a variety of chronic neutropenic disorders, including WHIM (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) syndrome, a rare, primary immunodeficiency for which there are no approved therapies.
Previous report
We are currently seeking approval from the U.S. Food and Drug Administration (“FDA”) for the use of oral, once-daily mavorixafor in the treatment of people aged 12 years and older with WHIM syndrome following the October 2023 acceptance of our New Drug Application (“NDA”) by the FDA. The FDA has granted the NDA Priority Review, establishing a goal of six months review from the date of acceptance and assigning a Prescription Drug User Fee Act (“PDUFA”) target action date of April 30, 2024. At this time, the FDA has notified us that they are not currently planning to hold an advisory committee meeting to review the filing. Due to mavorixafor’s Rare Pediatric Disease designation in the U.S. for WHIM syndrome, we are eligible to receive a Priority Review Voucher (“PRV”) that can be used to obtain Priority Review for a subsequent application or sold to another drug sponsor should mavorixafor be approved.
Previous report
The NDA is supported by our successfully completed global, pivotal, Phase 3 clinical trial (4WHIM) that evaluated the safety and efficacy of mavorixafor in people with WHIM syndrome. The 4WHIM trial met its primary endpoint and a key secondary endpoint, demonstrating statistically significant increases in time above threshold for absolute neutrophil counts (“TAT-ANC”) and time above threshold for absolute lymphocyte counts (“TAT-ALC”) in participants treated with mavorixafor versus placebo. Additional data showed that mavorixafor treatment resulted in statistically significant reductions in annualized infection rates versus placebo and clinically meaningful reductions in the both the severity and duration of infections versus placebo. Mavorixafor was generally well tolerated throughout the 52-week trial.
Previous report
In anticipation of a potential second quarter of 2024 U.S. launch of mavorixafor in WHIM syndrome, we have continued to build our go-to-market organization, with key hires across commercial and medical functions, increased interactions with key stakeholders and rare disease patient advocacy organizations, and launched a disease-awareness campaign aiming to further the understanding of WHIM syndrome and educate patients and physicians on the importance and benefits of early diagnosis.
Previous report
To date, we have not generated revenue from product sales. If our development efforts for our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales. We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.
Previous report
Macroeconomic Considerations
Previous report
Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and our results of operations. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors.”
Previous report
Research and development expenses were $72.0 million for the year ended December 31, 2023, as compared to $61.1 million for the year ended December 31, 2022, reflecting an increase of $11.0 million. The increase in research and development expenses in 2023 as compared to 2022 was primarily due to a $5.0 million development milestone payment under our Genzyme agreement, approximately $2 million of higher regulatory costs associated with the preparation and submission of our NDA, and additional consulting and temporary help across our research and development organization to support our NDA submission and our ongoing clinical trials. Research and development expenses also increased in 2023 due to an increase in unallocated expenses, primarily due to an increase in head count within our manufacturing, regulatory and clinical operations functions, resulting in higher compensation expenses, including stock-based compensation.
Previous report
Selling, general and administrative expenses were $35.5 million in 2023, as compared to $27.0 million in 2022, reflecting an increase of $8.5 million. The increase in selling, general and administrative expenses in 2023 as compared to 2022 was primarily due to an increase in compensation expense due to in increase in head count, higher stock-based compensation costs and higher stock appreciation rights expense. We have added personnel to our marketing and sale operations organizations in anticipation of a potential commercial launch of our drug candidate in 2024. We have also incurred third party consulting costs associated with enabling our market access infrastructure. We expect selling, general and administrative expenses will grow in the future as we continue to build out our selling, general and administrative functions.
Previous report
Goodwill Impairment
Previous report
During the year ended December 31, 2022, a third party, who had previously acquired rights to certain intellectual property from us, terminated the arrangement and transferred these rights back us and we transferred these rights to another third party in return for $0.5 million. We have no continuing involvement in any ongoing research and development activities associated with the intellectual property. We concluded that these third parties are "non-customers" as the underlying intellectual property transferred to and from these third parties supports potential drug candidates that are not aligned with our strategic focus and, therefore, are not an output of our ordinary activities. Accordingly, we classified this transaction as a “gain on sale of non-financial asset” for the year ended December 31, 2022. There was no such transaction in year ended December 31, 2023.
Previous report
Other Income (Expense), Net
Previous report
Going Concern—Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We have not yet commercialized any products. As of December 31, 2023, our cash and cash equivalents were $99.2 million, our short-term marketable securities were $15.0 million and our restricted cash balance was $1.0 million. As noted above, we have a covenant under our Hercules Loan Agreement that currently requires that we maintain a minimum level of cash of $20.0 million through January 31, 2025, subject to subsequent reductions thereafter. Based on our current cash flow projections, which exclude any benefit from the potential approval and sale of our drug candidate, and with no additional borrowings that may become available on Hercules Loan Agreement and with no additional external funding, we believe that we will not be able to maintain the minimum cash required to satisfy this covenant beginning in the first quarter of 2025. In such event, the lenders could require the repayment of all outstanding debt.
Previous report
We believe that our current cash, cash equivalents and short-term marketable securities will allow us to fund operations into the first quarter of 2025. As noted above, based on our current financial projections and assuming no benefit from the potential FDA approval of our market candidate nor the sale of a PRV, if obtained, or any additional borrowings under our Hercules Loan
Previous report
•the cost and timing of completion of commercial-scale manufacturing activities with respect to our product candidates;
Previous report
•the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own;
Previous report
•our need and ability to hire additional management and scientific and medical personnel;
Previous report
•market acceptance of our product candidates, to the extent any are approved for commercial sale;
Previous report
Critical Accounting Estimates
Previous report
There are no recently issued accounting pronouncements that may potentially cause a material impact our financial position and results of operations.
Reworded paragraphs (20)
Previous wording
We are a late clinical-stage biopharmaceutical company discovering and developing novel therapeutics for the treatment of rare diseases and those with limited treatment options, with a focus on conditions resulting from dysfunction of the immune system.
Current wording
We are a biopharmaceutical company discovering, developing, and commercializing novel therapeutics for the treatment of rare diseases and those with limited treatment options, with a focus on conditions resulting from dysfunction of the immune system. On April 29, 2024, we announced that the U.S. FDA approved our NDA for mavorixafor, which is being marketed in the U.S. under the trade name XOLREMDI, for use as an oral, once-daily therapy in patients aged 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 (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis) is a rare combined primary immunodeficiency and chronic neutropenic disorder. Concurrent with the U.S. approval of XOLREMDI and pursuant to its Rare Pediatric Disease designation, the FDA granted us a PRV that we sold to another drug sponsor shortly thereafter.
Previous wording
We are also currently advancing mavorixafor for the treatment of people with certain chronic neutropenic disorders following positive results from a Phase 1b clinical trial of a single dose of mavorixafor in people with idiopathic, cyclic, and congenital chronic neutropenia. We are now conducting a Phase 2 clinical trial, evaluating the durability, safety, and tolerability of chronic dosing of once-daily oral mavorixafor with or without concurrent treatment with injectable granulocyte colony-stimulating factor (“G-CSF”) in the same patient population. Preliminary results from the trial showed that the first three participants experienced clinically meaningful increases in ANC. We expect to share further data from the Phase 2 trial in the second quarter of 2024. Concurrent with conducting this Phase 2 trial, we are advancing our plans for a Phase 3 trialin the first half of 2024 of mavorixafor in people with certain chronic neutropenic disorders. The planned 52-week, global Phase 3 trial is expected to be a randomized, double-blinded, placebo-controlled trial assessing the safety and efficacy of mavorixafor, with or without concomitant G-CSF, in people with idiopathic or congenital neutropenia.
Current wording
Following positive results from a Phase 1b clinical study of a single dose of mavorixafor in people with idiopathic, cyclic, and congenital chronic neutropenia (“CN”), we recently completed and announced positive results from a Phase 2 clinical study evaluating the durability of effect, safety, and tolerability of chronic dosing of once-daily oral mavorixafor with or without concurrent treatment with injectable granulocyte colony-stimulating factor (“G-CSF”) in the same patient population.
Previous wording
We believe that successfully developing mavorixafor and providing a new therapeutic option to individuals diagnosed with certain chronic neutropenic disorders has the potential to revolutionize the treatment landscape, which is principally served by injectable therapies (including G-CSF) that are frequently associated with treatment-limiting adverse events.
Current wording
We believe that successfully developing and commercializing mavorixafor to provide a new therapeutic option to individuals diagnosed with certain immunodeficiencies has the potential to revolutionize the current treatment landscape, which is principally served by injectable and infused therapies.
Previous wording
Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates, including employee salaries and related expenses, expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations (“CROs”); the cost of manufacturing drug products for use in our preclinical studies and clinical trials, including under agreements with third parties, such as consultants and contract manufacturing organizations (“CMOs”); facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance; costs related to compliance with regulatory requirements; and payments made under third-party licensing agreements. We expense research and development costs as incurred.
Current wording
Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates, including employee salaries and related expenses for personnel in our clinical operations, biostatistics, medical affairs, manufacturing and technical, quality and regulatory affairs departments; external expenses incurred in connection with the clinical development of our product candidates, including under agreements with third parties, such as consultants and contract research organizations (“CROs”); the cost of manufacturing drug products for use in our clinical trials, including under agreements with third parties, such as consultants and contract manufacturing organizations (“CMOs”); facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance; and costs related to compliance with regulatory requirements. We expense research and development costs as incurred. We capitalized as intangible assets certain milestone payments due under our key in-license agreement.
Previous wording
We expect that our research and development expenses, particularly for our mavorixafor programs, will increase over the next several years as we continue to conduct our clinical trials of mavorixafor in chronic neutropenic disorders. Research and development expenses related to our X4P-002 and X4P-003 programs was not significant in 2023 or 2022 relative to our overall research and development expenses.
Current wording
We expect that our research and development expenses, particularly for our mavorixafor programs, will be relatively consistent over the next several years as we continue to conduct our clinical trials of mavorixafor in chronic neutropenic disorders. Research and development expenses related to our X4P-002 and X4P-003 programs was not significant in 2024 or 2023 relative to our overall research and development expenses.
Previous wording
The increase in other income (expense), net, of $12.7 million for the year ended December 31, 2023 as compared to 2022 was primarily due (i) an increase in interest income earned on our marketable securities and cash equivalents due to higher invested balances and higher interest rates (ii) income resulting from the decrease in the fair value of outstanding Class C warrants, which are accounted for as a liability, due primarily to a decrease in the value of our common stock and, (iii) transaction fees incurred in 2022 that did not recur in 2023 associated with the issuance of warrants that are accounted for as liabilities, partially offset by an increase in interest expense associated with the Hercules Loan agreement due to higher borrowings and a higher effective interest rate.
Current wording
The increase in other (expense) income, net, of $7.2 million for the year ended December 31, 2024 as compared to 2023 was primarily due (i) lower income resulting from the decrease in the fair value of outstanding Class C warrants, which are accounted for as a liability and are remeasured to fair value each period, as compared to the prior year and, (ii) an increase in interest expense associated with the Hercules Loan agreement due to more borrowings outstanding during the current period. These increases were partially offset by higher interest income earned in the current year on our marketable security portfolio as compared to the prior year.
Previous wording
For the years ended December 31, 2023 and 2022, we recorded income tax provisions related to our Austrian subsidiary and Securities Corp. We do not expect to record a significant income tax benefit or expense for several years as we have significant net operating loss carryforwards that are fully reserved until such time as we begin to generate meaningful taxable income in our U.S. jurisdiction.
Current wording
For the year ended December 31, 2024, we recorded an income tax provision of $0.3 million related to our U.S. operations and related to our Austrian subsidiary. Our tax provision in the year ended December 31, 2023 was related to our U.S. security corporation, which holds our investment portfolio, and our Austrian subsidiary. During the current year, our U.S. entity generated taxable income due to the sale of a PRV voucher, which generated $105.0 million of taxable income, and product revenue, partially offset by available deductions, net operating loss carryforwards and available research and development credits. Our net operating loss carryforwards were limited under IRC 382 due to several qualifying changes in ownership resulting from certain of our equity financings and therefore we were not able to fully offset our taxable income in the current year. We do not expect to record a significant income tax benefit or expense for several years until such time as we begin to generate meaningful and sustained taxable income in our U.S. jurisdiction.
Previous wording
ATM Sales Agreement — We have entered into a Controlled Equity Offering SMSales Agreement (“ATM Sales Agreement”), with B. Riley Securities, Inc., Cantor Fitzgerald & Co., and Stifel, Nicolaus & Company, Incorporated (collectively the “Sales Agents”), pursuant to which we may offer and sell, at our sole discretion through one or more of the Sales Agents, shares of our common stock having an aggregate offering price of up to $75 million. To date, we have sold approximately $14.3 million of our common stock, net of offering costs, under the ATM Sales Agreement.
Current wording
ATM Sales Agreement — On August 7, 2020, we have entered into a Controlled Equity Offering SMSales Agreement (“ATM Sales Agreement”), with B. Riley Securities, Inc., Cantor Fitzgerald & Co., and Stifel, Nicolaus & Company, Incorporated (collectively the “Sales Agents”), pursuant to which we may offer and sell, at our sole discretion through one or more of the Sales Agents, shares of our common stock having an aggregate offering price of up to $75 million. To date, we have sold approximately $14.3 million of our common stock, net of offering costs, under the ATM Sales Agreement.
Previous wording
Public and Private Equity Offerings—Over the past several years we have funded our operations primarily from sales of common stock, warrants and prefunded warrants through both public offerings and private placements. In March 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $3.0 million, before offering expenses. In June 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $55.7 million, before offering expenses. In December 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a public offering for gross proceeds of $65.1 million, before offering expenses. In May 2023, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $65.0 million, before offering expenses.
Current wording
Public and Private Equity Offerings—Over the past several years we have funded our operations primarily from sales of common stock, warrants and prefunded warrants through both public offerings and private placements. For example, In March 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $3.0 million, before offering expenses. In June 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $55.7 million, before offering expenses. In December 2022, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a public offering for gross proceeds of $65.1 million, before offering expenses. In May 2023, we sold shares of common stock and, in lieu of common stock, pre-funded warrants to purchase shares of common stock in a private placement for gross proceeds of $65.0 million, before offering expenses.
Previous wording
Hercules Loan Agreement—In January 2023, we entered into a Second Amended and Restated Loan and Security Agreement (the “Second A&R Hercules Loan Agreement”) with Hercules Capital, Inc., as agent and lender, and Hercules Capital Funding IV LLC and Hercules Capital Funding Trust 2022-1, as lenders (collectively, “Hercules”). On August 2, 2023, we and Hercules entered into an amendment (the “Amendment”) to the Second A&R Hercules Loan Agreement, (as amended by the Amendment, the “Hercules Loan Agreement”), which provides for aggregate maximum borrowings of up to $115.0 million, including the $32.5 million outstanding prior to the Amendment, a $22.5 million term loan tranche drawn on the closing of the Amendment, and $60.0 million in potential additional borrowings. These additional borrowings are available upon the achievement of operational milestones, including $20 million of additional borrowings upon the approval (“Approval”) by the FDA of our NDA for mavorixafor for the treatment of WHIM syndrome. Borrowings under the Hercules Loan Agreement accrues interest at a variable rate equal to the greater of (i) 10.15% or (ii) 3.15% plus the Wall Street Journal prime rate and are repayable in monthly interest-only payments through March 1, 2025, and in equal monthly payments of principal and accrued interest from April 1, 2025 until the maturity date of the loans, which is currently October 1, 2026, subject to extension upon our achievement of certain operational milestones. The Hercules Loan Agreement requires that we maintain a minimum level of cash of $20.0 million through January 31, 2025, which amount is subsequently adjusted subject to our achievement of operational milestones.
Current wording
Hercules Loan Agreement— We entered into a Loan and Security Agreement, as most recently amended in August 2023 with Hercules Capital, Inc, (the “Hercules Loan Agreement”). The Hercules Loan Agreement provides for an aggregate term loan facility of up to $107.5 million, less $75.0 million borrowed to date. Additional borrowings are subject to approval of the lender in its sole discretion. Borrowings under the Hercules Loan Agreement accrues interest at a variable rate equal to the greater of (i) 10.15% or (ii) 3.15% plus the Wall Street Journal prime rate and are repayable in monthly interest-only payments through March 1, 2027, and in equal monthly payments of principal and accrued interest until July 1, 2027, which is the maturity date of the loans. The Hercules Loan Agreement requires that we maintain a minimum level of cash of $15.0 million, representing 20% of outstanding borrowings under the Hercules Loan Agreement, and we must comply with certain financial performance milestones.
Previous wording
Management has concluded that substantial doubt exists about our ability to continue as a going concern for the one-year period following the issuance of our consolidated financial statements for the year ended December 31, 2023. To finance our operations, we will need to raise additional capital, which cannot be assured. Unless and until we reach profitability in the future, we will require additional capital to fund our operations, which could be raised through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations and strategic alliances. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which would adversely affect our business prospects, or we may be unable to continue operations.
Current wording
To alleviate the risk that the we violate the Minimum Cash Covenant and to finance our future operations, we will need to raise additional capital, which cannot be assured, and/or modify such Minimum Cash Covenant. Unless and until we reach profitability in the future, we will require additional capital to fund our operations, which could be raised through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements, or other collaborations and strategic alliances. If we are unable to obtain funding, we could be forced to delay, reduce, or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which would adversely affect our business prospects, or we may be unable to continue operations.
Previous wording
Operating Activities: During the year ended December 31, 2023, net cash used in operating activities was $96.5 million, primarily resulting from our net losses of $101.2 million, adjusted for noncash expenses of $4.3 million and changes in our operating assets and liabilities of $0.3 million. Noncash expenses primarily includes stock-based compensation expense of $8.7 million and non-cash lease expense of $1.6 million, partially offset by $7.1 million of non-cash gains on the change in fair value of our Class C Warrant liability. The change in operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses due to the timing of payments related to our CROs. Cash used in operating activities was higher for the year ended December 31, 2023 as compared to the prior year primarily due to higher net losses in the current year.
Current wording
Operating Activities: During the year ended December 31, 2024, net cash used in operating activities was $130.9 million, primarily resulting from our operating losses and other (expense) income, net, of $142.5 million adjusted for noncash expenses of $8.9 million and changes in our operating assets and liabilities of $2.7 million. Noncash expenses primarily include stock-based compensation expense of $8.2 million and non-cash lease expense of $1.6 million, partially offset by $1.9 million of non-cash gains on the change in fair value of our Class C Warrant liability. The change of $2.3 million in operating assets and liabilities was primarily due to an increase in accrued expenses due to the timing of an operational milestone payment related to our Genzyme license and increased accrued expenses related to our ongoing clinical trials, partially offset by increases in accounts receivable and inventory. Cash used in operating activities was higher for the year ended December 31, 2024 as compared to the prior year primarily due to higher net losses in the current year.
Previous wording
Investing Activities: During the year ended December 31, 2023, net cash used in investing activities was $14.9 million, primarily due to our net investment in short-term marketable securities. Cash used in investing activities was not significant for the year ended December 31, 2022.
Current wording
Investing Activities: During the year ended December 31, 2024, net cash provided by investing activities was $67.0 million, primarily due $105.0 million of cash from the sale of a PRV, partially offset by net investments in short-term marketable securities. Cash used in investing activities for the year ended December 31, 2023 was primarily related to net investments in short-term marketable securities.
Previous wording
Financing Activities: During the year ended December 31, 2023, net cash provided by financing activities was $88.5 million, consisting primarily of net proceeds from a private placement of our common stock, warrants, and pre-funded warrants, a $22.5 million term loan tranche drawn on the closing of the Amendment of our Hercules Loan Agreement and the exercise of outstanding warrants during the year. During the year ended December 31, 2022, net cash provided by financing activities was $117.2 million, consisting primarily of proceeds from the sale of our common stock and pre-funded warrants in two a private placements and a public offering.
Current wording
Financing Activities: During the year ended December 31, 2024, net cash provided by financing activities was $20.3 million, consisting primarily of proceeds borrowed on our Hercules Loan Agreement. During the year ended December 31, 2023, net cash provided by financing activities was $88.5 million, primarily due to $60.0 million of proceeds from the sale of our common stock and pre-funded warrants, borrowing net of repayments and issuance costs of $19.8 million on our Hercules Loan Agreement, and $8.7 million of proceeds from warrant exercises.
Previous wording
We have long-term lease obligations for office and laboratory space. Non-cancellable lease obligations are $1.4 million in 2024, $1.4 million in 2025, $1.3 million in 2026, and $0.3 million thereafter.
Current wording
We have long-term lease obligations for office and laboratory space. Non-cancellable lease obligations are $1.4 million in 2025, $1.3 million in 2026, and $0.3 million thereafter.
Previous wording
Agreement, we believe we would not maintain compliance with the minimum cash covenant of the Hercules Loan Agreement in the first quarter of 2025. In order to fund operations and satisfy the minimum cash covenant in the Hercules Loan Agreement, we will be required to raise additional capital, which may be through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements, the sale of a PRV that may be granted to us if we receive FDA approval of our NDA, profits generated from the sale of our drug candidate upon the receipt of FDA approval of our NDA and other collaborations and strategic alliances. During 2024 and beyond, assuming no changes to our current operational expectations, we expect our expenses to continue to increase in connection with our ongoing activities, particularly as we advance the current and anticipated clinical trials of our product candidates in development and prepare for the launch and commercialization of any product candidates. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our funding requirements. Our short term and long term funding requirements will depend on and could increase significantly as a result of many factors, including:
Current wording
months. In order to fund operations and satisfy the Minimum Cash Covenant in the Hercules Loan Agreement, we will be
Previous wording
•the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates, particularly our Phase 2 clinical trial of mavorixafor for the treatment of patients with chronic neutropenic disorders;
Current wording
• the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates, particularly our Phase 3 clinical trial of mavorixafor for the treatment of individuals with chronic neutropenic disorders;
Previous wording
•the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights covering our product candidates, including any such patent claims and intellectual property rights that we have licensed from Genzyme pursuant to the terms of our license agreement with Genzyme;
Current wording
•the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights covering our product and product candidates, including any such patent claims and intellectual property rights that we have licensed from Genzyme pursuant to the terms of our license agreement with Genzyme;
Previous wording
•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates;
Current wording
•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product or product candidates;
Previous wording
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties. We have effective universal shelf registration statements on Form S-3 registering the sale of our common stock, warrants to purchase our common stock and other securities on terms that we may determine. We have an ATM Sales Agreement with the Sales Agents, pursuant to which we have offered to sell and continue to offer to sell, at our sole discretion through one or more of the Sales Agents, shares of our common stock. We have entered into a common stock purchase agreement with Lincoln Park Capital, pursuant to which Lincoln Park Capital has committed to purchase, at our request from time to time over a 36-month period, shares of our common stock having an aggregate offering price of up to $50.0 million, of which $3.0 million have been sold to date, subject to certain limitations.
Current wording
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties. We have effective universal shelf registration statements on Form S-3 registering the sale of our common stock, warrants to purchase our common stock and other securities on terms that we may determine. We have an ATM Sales Agreement with the Sales Agents, pursuant to which we have offered to sell and continue to offer to sell, at our sole discretion through one or more of the Sales Agents, shares of our common stock. We entered into a common stock purchase agreement with Lincoln Park Capital, pursuant to which Lincoln Park Capital has committed to purchase, at our request from time to time over a 36-month period, shares of our common stock having an aggregate offering price of up to $50.0 million, of which $3.0 million have been sold to date, subject to certain limitations.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
required to raise additional capital, which may be through a combination of equity offerings, debt financings, other third-party
Current report — wording carried from elsewhere
funding, marketing and distribution arrangements, or collaborations and strategic alliances.
Current report — wording carried from elsewhere
product candidates, we are unable to estimate the exact amount of our funding requirements. Our short-term and long-term
Current report — wording carried from elsewhere
funding requirements will depend on and could increase significantly as a result of many factors, including:
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Goodwill is tested quantitatively for impairment at the reporting unit level annually in the fourth quarter, or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition or when our market value, measured as the price of our common stock multiplied by shares outstanding drops below the value of our net assets.
Previous report — wording carried elsewhere
We have determined that our company operates in a single operating segment and has a single reporting unit. To perform the quantitative test, we compare the fair value of the reporting unit to its carrying value. As we have one reporting unit, we determine its fair value based on the market approach taking into consideration the market value of the company as a whole and any control premium that might be realized upon the sale of the reporting unit. If the fair value of the reporting unit exceeds the carrying value of its net assets, goodwill is not impaired, and no further testing is required. If the fair value of the reporting unit is less than the carrying value, we measure the amount of impairment loss, if any, as the excess of the carrying value over the fair value of the reporting unit. As of December 31, 2023 we determined that goodwill was not impaired based on its quantitative test.