X4 Pharmaceuticals(XFOR) - 2024 Q3 - Quarterly Report

Financial Performance - The company has not generated significant revenue from product sales to date and continues to face uncertainty regarding the commercialization of its product XOLREMDI [3]. - Product revenue for the three months ended September 30, 2024, was $560,000, compared to$ 0 for the same period in 2023 [28]. - The net loss for the three months ended September 30, 2024, was $36,696,000, compared to a net loss of$ 2,305,000 for the same period in 2023 [28]. - For the nine months ended September 30, 2024, the company reported a net income of $2.371 million, a significant improvement compared to a net loss of$ 82.037 million in the same period of 2023 [32]. - The comprehensive loss for the three months ended September 30, 2024, was $(36,651,000), compared to$ (2,305,000) for the same period in 2023 [28]. - The basic net loss per share for the three months ended September 30, 2024, was $(0.18), compared to$ (0.01) for the same period in 2023 [108]. Assets and Equity - As of September 30, 2024, total assets increased to $178.165 million from$ 147.258 million as of December 31, 2023, representing a growth of approximately 20.9% [26]. - Total stockholders' equity increased to $59.621 million from$ 51.099 million, a rise of approximately 16.6% [27]. - Total current assets increased to $142.972 million from$ 122.076 million, reflecting a growth of about 17% [26]. - The total stockholders' equity as of September 30, 2024, was $59,621,000, an increase from$ 51,099,000 at December 31, 2023 [29]. Cash and Liquidity - Cash and cash equivalents decreased slightly to $97.412 million from$ 99.216 million, a decline of about 1.8% [26]. - The liquidity position raises substantial doubt about the company's ability to continue as a going concern without additional funding [9]. - The company had $135.0 million in cash, cash equivalents, and short-term marketable securities as of September 30, 2024, with an accumulated deficit of$ 475.5 million [35]. - Total cash, cash equivalents, and restricted cash amounted to $98.2 million as of September 30, 2024, down from$ 100.2 million as of December 31, 2023 [50]. - The company is at risk of not meeting the Minimum Cash Covenant of $20 million required under its loan agreement, which could lead to accelerated loan repayments [36]. - The company must maintain at least$ 20.0 million in Qualified Cash until January 31, 2025, and thereafter at least 20% of the aggregate principal amount of loans outstanding under the Hercules Loan Agreement [81]. Expenses - Research and development expenses for the nine months ended September 30, 2024, totaled $59,941,000, up from$ 56,745,000 in the same period of 2023, representing a 3.85% increase [28]. - Selling, general and administrative expenses increased to $46,373,000 for the nine months ended September 30, 2024, compared to$ 25,578,000 in the same period of 2023, reflecting an increase of 81.36% [28]. - The net cash used in operating activities for the nine months ended September 30, 2024, was $97.906 million, compared to$ 68.765 million in the prior year [32]. - The company incurred a royalty on annual net sales at a rate of 6% up to $150 million, 10% on sales between$ 150 million and $300 million, and 12% thereafter [60]. Regulatory and Product Development - The FDA approved the company's New Drug Application for mavorixafor, marketed as XOLREMDI, for treating WHIM syndrome, marking the first approval for this drug [34]. - The company is currently engaged in the U.S. launch of XOLREMDI and plans to seek regulatory approvals for commercialization outside the U.S. [34]. - A global pivotal Phase 3 clinical trial (4WARD study) for mavorixafor has been initiated to evaluate its efficacy and safety in patients with chronic neutropenia [34]. - The company relies heavily on the success of its commercial product XOLREMDI and its development product candidate mavorixafor for future revenue generation [11]. Debt and Obligations - Long-term debt increased to$ 75,224,000 as of September 30, 2024, up from $54,570,000 as of December 31, 2023 [79]. - The Company has borrowed a total of$ 75,000,000 under the Hercules Loan Agreement, with an additional $20,000,000 borrowed during the nine months ended September 30, 2024, based on operational milestones [80]. - As of September 30, 2024, future principal and accrued end-of-term payments of$ 75.9 million under the Hercules Loan Agreement are due on July 1, 2027 [84]. Stock and Equity Incentives - The company granted 6,245,756 stock options during the nine months ended September 30, 2024, with a weighted average exercise price of $0.98 [101]. - As of September 30, 2024, the total unrecognized compensation expense related to unvested stock options and restricted stock units was$ 7.9 million, expected to be recognized over a weighted average period of 2.3 years [104]. - The company had 11,583,656 stock options outstanding as of September 30, 2024, with a weighted average exercise price of $1.96 [101]. - As of September 30, 2024, the company has approximately 3.9 million shares of common stock available for issuance under its equity incentive plans [98]. Miscellaneous - The company recorded a gain of$ 105 million from the sale of a Priority Review Voucher (PRV) during the nine months ended September 30, 2024 [110]. - The company recorded $0.5 million and$ 0.4 million of income related to the research and development incentive program during the nine months ended September 30, 2024 and 2023, respectively [56]. - The company maintains letters of credit secured by restricted cash totaling $788,000 as of September 30, 2024 [49]. - The company has determined that there were no triggering events necessitating an interim impairment test of goodwill during the nine months ended September 30, 2024 [51].