X4 Pharmaceuticals Inc

1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION

X4 Pharmaceuticals, Inc. (together with its subsidiaries, the “Company”) is a biopharmaceutical company developing and commercializing novel therapeutics for the treatment of rare diseases of the immune system. We have successfully developed our first product, mavorixafor, in its first indication. Mavorixafor is an orally available, small-molecule selective antagonist of chemokine receptor CXCR4. Due to its ability to increase the mobilization of mature, functional white blood cells from the bone marrow into the bloodstream, we believe that mavorixafor has the potential to benefit people with a range of immunodeficiencies - a therapeutic market that is principally served by injectable therapies frequently associated with treatment-limiting adverse events. On April 29, 2024, the Company announced that the U.S. Food and Drug Administration (“FDA”) approved the Company’s New Drug Application (“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 12 years of age and older with WHIM syndrome (Warts, Hypogammaglobulinemia, Infections, and Myelokathexis), to increase the number of circulating mature neutrophils and lymphocytes. XOLREMDI is the first drug approved in the U.S. to treat patients with WHIM

syndrome. The Company launched XOLREMDI in May 2024 and is currently marketing the drug in the U.S. through its X4 commercial team. WHIM syndrome is a rare combined primary immunodeficiency and chronic neutropenic disorder. The Company has launched XOLREMDI in WHIM syndrome in the U.S. and has filed for regulatory approvals to commercialize mavorixafor outside of the U.S. The U.S. approval of XOLREMDI in the WHIM syndrome indication is the first for mavorixafor, which is an orally bioavailable 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, the Company believes that mavorixafor has the potential to provide therapeutic benefit across a variety of immune system disorders in addition to WHIM syndrome. The Company has completed a Phase 2 study evaluating the safety and efficacy of mavorixafor as a monotherapy and in combination with granulocyte colony-stimulating factor (“G-CSF”) in people with certain chronic neutropenic (“CN”) disorders. Results from this six-month Phase 2 study showed mavorixafor was generally well tolerated and able to durably increase study participants’ mean absolute neutrophil count (“ANC”) both as a monotherapy and in combination with G-CSF. The Company is actively enrolling participants in a global, pivotal Phase 3 clinical trial of mavorixafor (the 4WARD study) that aims to evaluate the efficacy, safety, and tolerability of oral once-daily mavorixafor with or without G-CSF in people with congenital or acquired primary autoimmune and idiopathic chronic neutropenia who are experiencing recurrent and/or serious infections. The Company is headquartered in Boston, Massachusetts.

Going Concern Assessment—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. As of March 31, 2025, the Company had $87.0 million of cash, cash equivalents and short-term marketable securities, and an accumulated deficit of $515.1 million. For the three months ended March 31, 2025, the Company’s net income was $0.3 million and net cash used in operating activities was $12.4 million.

The Company has a covenant (the “Minimum Cash Covenant”) under its Second Amended and Restated Loan and Security Agreement, as amended, (the “Hercules Loan Agreement”) with Hercules Capital Inc.(“Hercules”), that requires that the Company maintain a minimum level of cash of $15.0 million, which represents 20% of outstanding borrowings under the Hercules Loan Agreement. The Company must also continue to achieve a financial covenant (“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. Such Performance Covenant is waived during any period in which: 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 both (a) the Company maintains a Market Capitalization (as defined in the Hercules Loan Agreement) of at least $450.0 million and (b) the Company maintains Qualified Cash in an aggregate amount equal to at least 45% of loans outstanding. Based on its current operating plan, which includes estimates of anticipated cash inflows from product sales and cash outflows from operating expenses, the Company believes there is a risk that it will not meet the conditions of the Performance Covenant and 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 Company’s outstanding loans and the Company potentially 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 the Company’s ability to continue as a going concern. The Company does not have adequate financial resources to fund its forecasted operating costs for at least one year after the date that these condensed consolidated financial statements are issued. The accompanying condensed 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 condensed consolidated financial statements have been prepared on a basis that assumes the Company 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.

To alleviate the risk that the Company violates the Performance Covenant or the Minimum Cash Covenant, the Company will need to raise additional capital, which cannot be assured, and/or modify the Performance Covenant and Minimum Cash Covenant. In addition, unless and until the Company reaches profitability in the future, it will require additional capital to fund its operations. Such additional capital 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 the Company is unable to obtain funding, it could be forced to delay, reduce, or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which would adversely affect its business prospects, or it may be unable to continue operations.

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.

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

Reverse Stock Split—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.

Unaudited Interim Condensed Consolidated Financial Statements—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 accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed consolidated financial statements are unaudited. The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. 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 the 2024 Annual Report filed with the SEC on March 26, 2025. In the opinion of management, all adjustments, consisting only of normal recurring adjustments as necessary, for the fair statement of the Company’s condensed financial position, condensed results of its operations, and comprehensive income (loss) and cash flows have been made. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2025.

Use of Estimates—The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“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 (Note 3), 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.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 a third-party (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

In connection with the Company’s lease agreements for its facilities in Massachusetts and 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 March 31, 2025 and December 31, 2024:

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. Although the Company continues to evaluate the potential impact of ASU 2023-09, 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.

3. LICENSE AND FUNDING ARRANGEMENTS

Research and Development Incentive Program

The Company participated in a research and development incentive program provided by the Austrian government whereby the Company was entitled to reimbursement by the Austrian government for a percentage of qualifying research and development expenses and capital expenditures incurred by the Company’s subsidiary in Austria. As of March 31, 2025, the amount due under the program was $0.7 million, which amount is included in research and development incentive receivable in the condensed consolidated balance sheet. During the three months ended March 31, 2025 no amounts were recorded for this program as the Company is in the process of closing the Vienna site. During the three months ended March 31, 2024, the Company recorded $0.2 million of income related to the program within the condensed consolidated statement of operations as other income.

Genzyme Agreement

In July 2014, the Company entered into a license agreement with Genzyme (the “Genzyme Agreement”) pursuant to which the Company was granted an exclusive license to certain patents and intellectual property owned or controlled by Genzyme related to the CXCR4 receptor to develop and commercialize products containing licensed compounds (including but not limited to mavorixafor) for all therapeutic, prophylactic and diagnostic uses, with the exception of autologous and allogenic human stem cell therapy. Under the terms of the Genzyme Agreement, the Company is obligated to use commercially reasonable efforts to develop and commercialize licensed products for use in the field in the United States and at least one other major market country. The Company has the right to grant sublicenses of the licensed rights that cover mavorixafor to third parties.

Under the Genzyme Agreement, the Company is obligated to make milestone payments contingent upon the achievement of certain regulatory and sales milestones with respect to licensed products. During thethree months ended March 31, 2025, a$3.0 million regulatory milestone, which had been previously accrued, was paid after receipt of the European Medicines Agency’s (“EMA”) validation of the Company’s Marketing Authorisation Application (“MAA”) for processing. The payment was recorded as a definite-lived intangible asset as discussed in Note 8. In addition, as a result of sublicense payments received in thethree months ended March 31, 2025, the Company incurred$4.5 million of royalty payments under the Genzyme Agreement. Such royalty payment was recorded as cost of revenue.

As of March 31, 2025, the Company is obligated to make future milestone payments in the aggregate amount of up to$10.0 million, including $5.0 million upon the notification by the EMA of regulatory approval of the Company’s MAA for WHIM and one-time sales milestone payments of $0.5 million,$1.5 million and$3.0 million on cumulative net sales of$50.0 million,$150.0 million and$300.0 million, respectively. As of March 31, 2025, the Company accrued$0.5 million of sales-based milestones as a component of the definite-lived intangible asset, as management has concluded that the achievement of this milestones is probable.

The Company is also obligated to pay Genzyme tiered royalties based on net sales of licensed products that the Company commercializes under the agreement. Upon the first sale of the Company’s drug candidate in the U.S., the Company incurred a royalty on annual net sales at a rate of 6%, and will incur royalties on annual net sales at a rate of 6% up to$150.0 million,10% on the portion of annual net sales between$150.0 million and$300.0 million, and 12% thereafter on annual sale over$300.0 million. The Company also incurs a 15% royalty on certain sublicense payments received from sub-licensees.

The obligation to pay royalties for each licensed product expires on a country-by-country basis on the latest of (i) the expiration of licensed patent rights that cover that licensed product in that country, (ii) the expiration of regulatory exclusivity in that country and (iii) ten years after the first commercial sale of such licensed product in that country. Royalty rates are subject to reduction under the agreement in specified circumstances, including in any country if the Company is required to obtain a license from any third party to the extent the Company’s patent rights might infringe the third party’s patent rights, if a licensed product is not covered by a valid claim in that country or if sales of generic products reach certain thresholds in that country. If the Company enters into a sublicense under the Genzyme Agreement, the Company will be obligated to pay Genzyme a percentage of certain upfront fees, maintenance fees, milestone payments and royalty payments paid to the Company by the sublicensee. Under the Genzyme Agreement, the Company will itself manufacture and supply, or enter into manufacturing or supply agreements with Genzyme or third parties to manufacture and supply, clinical and commercial supplies of licensed compounds and each licensed product. The Company is also responsible for all costs related to the filing, prosecution and maintenance of the licensed patent rights.

The Genzyme Agreement will remain in effect until the expiration of the royalty term in all countries for all licensed products. The Genzyme Agreement may be terminated by either party with at least 90 days’ notice in the event of material breach by the other party that remains uncured for 90 days, by either party for insolvency or bankruptcy of the other party, immediately by Genzyme if the Company challenges the licensed patents, or immediately by the Company if a material safety issue arises.

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 X4 continuing to be responsible for the ongoing global, pivotal Phase 3 4WARD clinical trial evaluating mavorixafor in chronic neutropenia and cetain 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 Agreement at least one year prior to the applicable termination date of the 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 months ended March 31, 2025, the Company recorded net revenue $0.9 million for the sale of the Company’s product. No net revenue was recorded in the three months ended March 31, 2024.

The following table summarizes the balances and activity in each of the product reserve accounts for the three months ended March 31, 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 three months ended March 31, 2025.

License and Other

During the three months ended March 31, 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 three months ended March 31, 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 three months ended March 31, 2025, the Company recognized $27.6 million for the delivery of the license and $0.3 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 March 31, 2025, deferred revenue related to the Norgine Agreement was $1.8 million, of which $0.9 million was current.

5. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

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

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 March 31, 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 March 31, 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:

The following table provides a roll-forward for the three months ended March 31, 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 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 March 31, 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 and derivative liabilities” on the condensed consolidated statements of operations and comprehensive income (loss).

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

6. INVENTORY

Inventory consists of the following:

7. PROPERTY AND EQUIPMENT

Property and equipment, net consisted of the following:

Depreciation expense related to property and equipment was approximately $289 thousand and $62 thousand for the three months ended March 31, 2025 and 2024, respectively.

8. INTANGIBLE ASSET, NET

As of March 31, 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 $0.7 million for a net intangible asset of $9.8 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 March 31, 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 for thethree months ended March 31, 2025. There wasno amortization expense for the three months ended March 31, 2024. Amortization expense is recorded as a component of cost of revenue on the condensed consolidated statements of operations and comprehensive income (loss).

9. ACCRUED EXPENSES

Accrued expenses consisted of the following:

10. LONG-TERM DEBT

Long-term debt consisted of the following:

Hercules Loan Agreement

The Company entered into a Loan and Security Agreement, as most recently amended in August 2023 with Hercules Capital, Inc. (“Hercules Loan Agreement”). The Hercules Loan Agreement 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 March 31, 2025. Additional borrowings are available subject to approval of the lender 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 loans. 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. 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 March 31, 2025 was 11.7%. There wereno principal payments due or paid under the Hercules Loan Agreement during the three months ended March 31, 2025 and 2024.

As of March 31, 2025, future principal and accrued end-of-term payments of $76.2 million under the Hercules Loan Agreement are due on July 1, 2027.

11. 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.

Boston Lease—The Company leases approximately 28,000 square feet of office space in Boston, Massachusetts (“Boston Lease”), which serves as the Company’s headquarters. Base rental payments are approximately $1.1 million annually, plus certain operating expenses. The term of the Boston Lease will continue until November 2026, unless earlier terminated. The Company has the right to renew the Boston Lease for an additional five years at the then prevailing effective market rental rate. As of March 31, 2025, the Company has not yet concluded that it will exercise this renewal option. The Company is required to maintain a security deposit in the form of a letter of credit for $0.6 million for the benefit of the landlord.

Vienna Austria Lease— 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. The annual base rent for the Vienna Lease is approximately $282 thousand. During the three months ended March 31, 2025, the Company approved a plan to vacate the lease and close operations. As of March 31, 2025, the Company continued to utilize the Vienna Lease and no lease amendments or terminations have occurred.

The components of lease expense for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Maturities of lease liabilities due under lease agreements that have commenced as of March 31, 2025 are as follows (in thousands):

12. 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 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 March 31, 2025, the Company has approximately $1.4 millionof such commitments in place subject to cancellation provisions.

License Agreements—See Note 3 for a summary of the Company’s license 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 March 31, 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.

13. COMMON STOCK, PREFERRED STOCK AND COMMON STOCK WARRANTS

Reverse Stock Split-—On April 17, 2025, the Company held a special meeting (the “Special Meeting”) to vote for the approval of an amendment to our 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 (the “Reverse Stock Split Proposal”). The Reverse Stock Split Proposal was approved by the Company’s shareholders at the Special Meeting.

On April 17, 2025, the Board of Directors approved a 1-for-30 reverse stock split of the Company’s shares of common stock (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.

Common Stock—As of March 31, 2025, the Company’s Restated Certificate of Incorporation, as amended and restated, authorizes the Company to issue 500 million shares of common stock, par value $0.001 per share. The voting, dividend, and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of any preferred stock that may be issued. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any. No cash dividends have been declared or paid to date.

Preferred Stock—As of March 31, 2025, the Company’s Restated Certificate of Incorporation, as amended, authorizes the Company to issue 10 million shares of $0.001 par value share. As of March 31, 2025 and December 31, 2024, no shares of preferred stock were outstanding.

Warrants and Pre-Funded Warrants—In connection with public and private sales of shares of its common stock, the Company has issued warrants and pre-funded warrants, which are exercisable for the purchase shares of the Company’s common stock. All outstanding warrants and pre-funded warrants are currently exercisable and do not have price reset provisions. Upon the closing of these public and private offerings, the Company received approximately 99% of the exercise price for the pre-funded warrants, for which the remaining exercise price is equal to or less than$0.30 per share. There wereno warrant exercises during the three months ended March 31, 2025.

As of March 31, 2025, the Company’s outstanding warrants and pre-funded warrants to purchase shares of common stock consisted of the following:

(a) In November 2019, the Company received $359.97 per pre-funded warrant, or $21.0 million in aggregate proceeds. Each pre-funded

warrant may be exercised for an additional $0.03 per pre-funded warrant.

(b) In March 2021, the Company received $260.70 per pre-funded warrant, or $435 thousand in aggregate proceeds. Each pre-funded warrant may be exercised for an additional $0.30 per pre-funded warrant.

(c) In November 2021, the Company received $149.10 per pre-funded warrant, or $10.0 million in aggregate proceeds. Each pre-funded warrant may be exercised for an additional $0.30 per pre-funded warrant.

(d) In March 2022, the Company received $53.70 per pre-funded warrant, or $1.4 million in aggregate proceeds. Each pre-funded warrant may be exercised for an additional $0.30 per pre-funded warrant.

(e) In July 2022, the Company received $32.82 per pre-funded warrant, or $14.5 million in aggregate proceeds. Each pre-funded warrant may be exercised for an additional $0.03 per pre-funded warrant.

(f) In December 2022, the Company received $32.97 per pre-funded warrant, or $7.5 million in aggregate proceeds. Each pre-funded warrant may be exercised for an additional $0.03 per pre-funded warrant.

(g) In May 2023, the Company received $45.57 per pre-funded warrant, or $12.6 million in aggregate proceeds. Each pre-funded warrant may be exercised for an additional $0.03 per pre-funded warrant.

14. STOCK-BASED COMPENSATION

As of March 31, 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 (the “2017 ESPP”).

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 three months ended March 31, 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 three months ended March 31, 2025 and 2024 was $14.10 and $21.90, respectively.

Restricted Stock Units— The following table summarizes the Company’s restricted stock unit activity for the three months ended March 31, 2025:

During the three months ended March 31, 2025, the Company granted 0.2 million time-based restricted stock units to employees at the grant date fair value of $13.50 per share. These awards vest as the employee provides services to the Company over athree-year vesting period. Also during the three months ended March 31, 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—As of March 31, 2025, total unrecognized compensation expense related to unvested stock options and restricted stock units was$6.3 million, which is expected to be recognized over a weighted average period of 2.5 years.

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

Stock Appreciation Rights— On November 7, 2022 and February 13, 2024 (the “Grant Dates”), the compensation committee of the Board of Directors approved special retention and recognition grants of stock appreciation rights (“SAR”) pursuant to the 2017 Plan to the Company’s President and Chief Executive Officer, Chief Financial Officer, and certain other executive officers of the Company. The SARs have a measurement price per SAR equal to $54.00 and $27.63, respectively, which was the closing price per share of the Company’s common stock on the Grant Dates, and each grant of SARs has a maximum term often years from the respective Grant Dates. Unless otherwise determined by the Board of Directors, the SARs will be settled in cash upon exercise. The settlement value will be based on the difference between the closing price of the Company’s common stock on the date of settlement less the measurement price multiplied by the number of SARs exercised. The SARs vest and become exercisable in equal annual installments on the first, second, and third anniversaries of the Grant Date, subject to the recipient remaining an employee of the Company through and including each applicable vesting date.

The following table summarizes the Company’s SARS activity for the three months ended March 31, 2025. There were no SARs granted, exercised of forfeited in the three months ended March 31, 2025.

15. INCOME TAXES

The income tax provision recorded for the three months ended March 31, 2025 and 2024 is primarily related to the

Company’s Austrian subsidiary. The Company did not record a U.S. federal or state provision or benefit for income taxes in its condensed consolidated statement of operations and comprehensive income (loss) for the three months ended March 31, 2025 and 2024.

The Company continues to maintain a valuation allowance against all remaining net deferred tax assets. The Company believes that it is more likely than not that it will not realize a future tax benefit of these attributes as the Company expects to continue to generate operating losses. Ultimate realization of any deferred tax asset is dependent on the Company’s ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. The Company will continue to monitor the valuation allowance assessment throughout the year.

16. NET INCOME (LOSS) PER SHARE

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

Basic and diluted weighted average shares of common stock outstanding for the three months ended March 31, 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 month period ended March 31, 2025, 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.

For the three months ended March 31, 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 this period.

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

17. SEGMENT INFORMATION

The Company has defined its Chief Operating Decision Maker (“CODM”) as its Chief Executive Officer. 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 primarily focused on its lead molecule, mavorixafor, which is being marketed in the U.S. under the trade name XOLREMDI, for use as an oral, once-daily therapy in patients 12 years of age and older with WHIM syndrome to increase the number of circulating mature neutrophils and lymphocytes. The CODM uses the Company’s condensed consolidated net income (loss) to monitor actual results as compared to the budget in assessing segment performance and allocation of resources.

The Company derives its revenue from sales of XOLREMDI to its specialty pharmacy customer in the U.S. and from licensed rights to mavorixafor for other non-U.S. territories. The Company recognized $0.9 million of revenue from its U.S. customer and $27.9 million of revenue from its customer in the United Kingdom for the three months ended March 31, 2025. There wasno revenue recognized in the three months ended March 31, 2024.

The measure of profit for the segment is net income (loss) and consisted of the following for the three months ended March 31, 2025, and 2024:

(a) Other segment items primarily include cost of revenue, non-compensation departmental costs withing 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 March 31, 2025, the Company’s single operating segment had long-lived assets, including property and equipment and right-of-use assets, of $4.1 million, of which $2.8 million and $1.3 million were located in the U.S. and Austria, respectively. As of December 31, 2024, the operating segment’s long-lived assets were $4.8 million, of which $3.2 million and $1.7 million were located in the U.S. and Austria, respectively.