X4 Pharmaceuticals Inc

Previous 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 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.

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 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 are planning to seek regulatory approval to commercialize mavorixafor for WHIM syndrome outside of the U.S. by submitting a Marketing Authorization Application (“MAA”) to the European Medicines Agency (“EMA”) by early 2025. We are also exploring additional potential commercial and distribution opportunities in geographies where we may be able to efficiently leverage our FDA approval.

Current wording

We are currently executing our U.S. launch of XOLREMDI in WHIM syndrome, including through 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 an MAA to the EMA in early 2025 seeking regulatory approval to commercialize mavorixafor for WHIM syndrome in the European Union. Such MAA was validated for processing by the EMA in January 2025. On January 13, 2025, we announced a License and Supply Agreement (“the Norgine Agreement”) with Norgine Pharma UK (“Norgine”), pursuant to which Norgine was 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 Middle East Fz LLC (“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.

Previous 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.

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, we 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 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 mid-2025.

Current wording

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 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 150 participants. We believe we are on track to complete enrollment in the 4WARD study in the third or fourth quarter of 2025.

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Previous wording

The following table summarizes the results of our operations for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table summarizes the results of our operations for the three months ended March 31, 2025 and 2024:

Previous wording

Net revenue from the sale of our drug product was $0.6 million and $1.1 million for the three and nine months ended September 30, 2024, respectively. 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. 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., 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 wording

Net revenue from the sale of our drug product was $0.9 million for the three months ended March 31, 2025. There was no product revenue during the same period in the prior year. 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. 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 been selling our drug product in the U.S. for less than one year, 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.

Previous wording

For the three and nine months ended September 30, 2024, cost of revenue of $0.2 million and $0.5 million, respectively, primarily consists of amortization of an intangible asset related to accrued and paid milestone payments associated with our Genzyme license agreement, sales-based royalty payments due under our Genzyme license agreement, and an insignificant amount of drug product direct costs. We expect that as we begin to capitalize inventory costs related to the production of our active pharmaceutical ingredient, which is the primary cost of our inventory, cost of revenue will increase per unit. Had we capitalized these research and development costs into inventory, cost of revenue would have been higher by an insignificant amount.

Current wording

For the three months ended March 31, 2025, our cost of revenue of $4.7 million primarily consisted of amortization of an intangible asset related to accrued and paid milestone payments associated with our Genzyme license agreement, sales and sublicense-based royalty payments due under our Genzyme license agreement. Cost of revenue also included $0.01 million of drug product manufacturing costs. There was no cost of revenue during the same period in the prior year.

Previous wording

Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. For the three and nine months ended September 30, 2024 and 2023, research and development costs were primarily focused on the advancement and commercialization of mavorixafor. Research and development costs include employee salaries and related expenses, preclinical and clinical development expenses, internal and third-party costs of manufacturing our drug products for use in our preclinical studies and clinical trials. Research and development expenses also include facility, depreciation and other expenses; costs related to compliance with regulatory requirements; and prior to the FDA’s approval of our drug product in the U.S., payments made under third-party licensing agreements were charged to research and development expense.

Current wording

Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. Research and development costs include employee salaries and related expenses, preclinical and clinical development expenses, internal and third-party costs of manufacturing our drug products for use in our preclinical studies and clinical trials. Research and development expenses also include facility, depreciation and other expenses; costs related to compliance with regulatory requirements; and prior to the FDA’s approval of our drug product in the U.S. in the second quarter of 2024, payments made under third-party licensing agreements were charged to research and development expense.

Previous wording

Other (expense) income, net, for three and nine months ended September 30, 2024 decreased $27.1 million and increased $2.8 million, respectively, as compared to the same periods in the prior year. The increase in other expense (decrease in other income) in the three months ended September 30, 2024 as compared to the prior period was primarily due to a significant gain recognized in the prior period due to a change in the fair value of our Class C warrants, which are accounted for as a liability at fair value, relative to a loss in the current period. These Class C warrants will continue to be measured at fair value and may continue to generate gains or losses each quarter, until they are exercised. Other (expense) income also decreased in the three and nine months ended September 30, 2024 as compared to the prior year periods due to an increase in interest expense as a result of an increase in our borrowings during the current year.

Current wording

Other income (expense), net, for three months ended March 31, 2025 increased approximately $25 million, as compared to the same period in the prior year. The increase in other income in the three months ended March 31, 2025 as compared to the prior period was primarily due to a significant gain recognized in the current period due to a change in the fair value of our Class C warrants, which are accounted for as a liability at fair value, relative to a loss in the prior period. These Class C warrants will continue to be measured at fair value and may continue to generate gains or losses each quarter, until they are exercised.

Previous wording

The income tax provision recorded for the three and nine months ended September 30, 2024 and 2023 is primarily related to our Austrian subsidiary and its Security Corporation subsidiary that holds a portion of our investment portfolio. We did not record a U.S. federal or state provision or benefit for income taxes in our consolidated statement of operations and comprehensive (loss) income for the three and nine month periods ended September 30, 2024 and 2023. For the nine months ended September 30, 2024, we generated net income and ordinary income. However, as we are projecting an ordinary loss before income taxes for the full year and have a full valuation allowance on our net operating loss carryforwards, we have not recorded a U.S. federal or state income tax expense or benefit for the three month and nine months ended September 30, 2024.

Current wording

The income tax provision recorded for the three months ended March 31, 2025 and 2024 is primarily related to our Austrian subsidiary. We did not record a U.S. federal or state provision or benefit for income taxes in our condensed consolidated statement of operations and comprehensive income (loss) for the three months ended March 31, 2025 and 2024.

Previous wording

Hercules Loan Agreement—We have a Loan and Security Agreement, amended from time to time, with Hercules Capital, Inc. (the “Hercules Loan Agreement”). The Hercules Loan Agreement provides for a term loan facility of up to $115.0 million, under which we have borrowed an aggregate of $75.0 million of term loans to date, including $20.0 million in new borrowings during the nine months ended September 30, 2024, representing the maximum borrowings as of September 30, 2024. The term loan facility allows for $40.0 million in additional borrowings, which includes:

Current wording

Hercules Loan Agreement—We have a Loan and Security Agreement, amended from time to time, with Hercules Capital, Inc. (the “Hercules Loan Agreement”). The Hercules Loan Agreement provides for a term loan facility of up to $107.5 million, under which we have borrowed an aggregate of $75.0 million of term loans to date, representing the maximum borrowings as of March 31, 2025. The term loan facility allows for an additional tranche of up to $32.5 million, which will be available subject to approval by Hercules Capital, Inc. (“Hercules”) in its sole discretion.

Previous wording

Going Concern—We have evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. Although we have an approved drug product, sales of our drug product over the next 12 months will not be sufficient to fund our operating expenses. Since inception, we have incurred significant operating losses and negative cash flows from operations and we expect to continue to generate operating losses and negative cash flows from operations for the foreseeable future. As of September 30, 2024, we had $135.0 million of cash, cash equivalents and short-term marketable securities, and an accumulated deficit of $475.5 million. Net cash used in operating activities was $97.9 million for the nine months ended September 30, 2024.

Current wording

Going Concern—We have evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. Although we have an approved drug product, sales of our drug product over the next 12 months will not be sufficient to fund our operating expenses. Since inception, we have incurred significant operating losses and negative cash flows from operations and we expect to continue to generate operating losses and negative cash flows from operations for the foreseeable future. As of March 31, 2025, we had $87.0 million of cash, cash equivalents and short-term marketable securities, and an accumulated deficit of $515.1 million. Net cash used in operating activities was $12.4 million for the three months ended March 31, 2025.

Previous wording

We have a covenant (the “Minimum Cash Covenant”) under our Hercules Loan Agreement that requires us to maintain a minimum level of cash of $20 million through January 30, 2025 and a minimum level of cash equal to at least 20% of outstanding borrowings under the Hercules Loan Agreement thereafter. 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 condensed consolidated financial statements. In such case, Hercules could accelerate the principal payments on the outstanding loans and we would not have sufficient cash, cash equivalents and short-term marketable securities to settle such obligations. Accordingly, management has concluded that this condition meets the standard for raising substantial doubt about our ability to continue as a going concern. We do not have adequate financial resources to fund our forecasted operating costs for at least one year after the date that these consolidated financial statements are issued. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Current wording

We have a Minimum Cash Covenant under our Hercules Loan Agreement that requires us to maintain a minimum level of cash of $15.0 million, which is equal to 20% of outstanding borrowings under the Hercules Loan Agreement. In addition, we must comply with a Performance Covenant, which includes maintaining a trailing six-month net product revenue of at least 55% of its forecast as approved by our Board of Directors. Based on our current operating plan, which includes estimates of anticipated cash inflows from the sales and licensing of our product and cash outflows from operating expenses, we believe there is a risk that we will not meet the conditions of the Performance Covenant and 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.

Previous wording

To alleviate the risk that we violate the Minimum Cash Covenant and to finance our future 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, 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.

Current wording

To alleviate the risk that the we violate the Performance Covenant and the Minimum Cash Covenant, we will need to raise additional capital, which cannot be assured, and/or modify such Performance Covenant and 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

During the nine months ended September 30, 2024, cash provided by investing activities of $75.6 million included $105 million in proceeds from the sale of a priority review voucher obtained as a result of the approval of our drug product by the FDA. Cash outflows from investing activities included $7.0 million in license payments classified as the acquisition of an intangible assets and $22.1 million of net investments in short-term marketable securities. During the nine months ended September 30, 2023, cash used in investing activities included investments in short-term marketable debt securities.

Current wording

During the three months ended March 31, 2025, cash used in investing activities of $3.1 million included net investments in short-term marketable securities. During the three months ended March 31, 2024, cash used in investing activities of $5.3 million also included investments in short-term marketable securities.

Previous wording

During 2025, assuming no changes to our current operational expectations, we expect our expenses to be relatively consistent with our current operating expenses, excluding the sale of non-financial assets. Because of the numerous risks and uncertainties associated with the future sale of our approved drug product and the research, development, and commercialization of future 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

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, we generated in 2024, excluding the sale of non-financial assets. Because of the numerous risks and uncertainties associated with the future sale of our approved drug product and the research, development, and commercialization of future 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:

Previous 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; and

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;