The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes in “Item 1. Financial Statements.” References in this report to “X4,” the “Company,” “we,” “our” and “us” are references to X4 Pharmaceuticals, Inc. and its subsidiaries.
Overview
We are a biopharmaceutical company developing and commercializing novel therapeutics for the treatment of rare hematology diseases. We continue to progress our global, pivotal Phase 3 clinical trial, (the “4WARD” trial) to evaluate the efficacy, safety, and tolerability of oral, once-daily mavorixafor (with or without stable doses of granulocyte colony-stimulating factor (“G-CSF”)) in people with congenital, acquired primary autoimmune, or idiopathic chronic neutropenia (“CN”) who are experiencing recurrent and/or serious infections. As part of a complete overhaul of the clinical operating infrastructure, we have transitioned management of the 4WARD trial to a premiere Clinical Research Organization (CRO) to further strengthen the study execution and support completion of enrollment. We plan to meet with the U.S. Food and Drug Administration (“FDA”) to revisit the sample size of the 4WARD trial and expect to provide an update on our meeting with the FDA and the completion of enrollment by the end of the third quarter.
The FDA has granted Fast Track designation to mavorixafor for the treatment of CN, which is defined as periods lasting more than three months persistently or intermittently where there are abnormally low levels of neutrophils circulating in the blood, and may be idiopathic (of unknown origin), cyclic (episodes typically occurring every three weeks), or congenital (of genetic causation). CN disorders are rare blood conditions similarly characterized by increased risks of infections and cancer due to abnormally low levels of neutrophils in the body. In all cases, the CXCL12/CXCR4 pathway is the key regulator of neutrophil release from the bone marrow.
We have one commercially approved product, XOLREMDI® (mavorixafor), which has received accelerated approval in the United States from the FDA for use as an oral, once-daily therapy in patients 12 years of age and older with WHIM (warts, hypogammaglobulinemia, infections, and myelokathexis) syndrome, to increase the number of circulating mature neutrophils and lymphocytes. WHIM syndrome is a rare combined primary immunodeficiency and CN disorder. We are committed to making XOLREMDI available to patients in need in the U.S. while maintaining our focus on our long-term strategy to successfully complete the 4WARD trial in patients with moderate and severe CN.
Regulatory Update and Out-License Agreements
In January 2025, the EMA validated for processing our Marketing Authorization Application (“MAA”) seeking regulatory approval to commercialize mavorixafor for WHIM syndrome in the European Union. On April 29, 2026, the European Commission granted marketing authorization for XOLREMDI® (mavorixafor) capsules for the treatment of patients with WHIM syndrome in the European Union. Pursuant to our license and supply agreement (the “Norgine Agreement”) with Norgine Pharma UK Ltd. (“Norgine”), Norgine elected that we transfer the approved MAA to them. We completed this transfer in July 2026.
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Results of Operations
The following table summarizes the results of our operations for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 Change 2026 2025 Change
Revenue $ 8.8 $ 2.0 $ 6.8 $ 11.5 $ 30.8 $ (19.3)
Cost and operating expenses:
Cost of revenue 1.6 0.3 1.3 2.2 5.0 (2.8)
Research and development 15.1 18.4 (3.3) 30.5 36.9 (6.4)
General and administrative 8.5 9.5 (1.0) 15.5 24.6 (9.1)
Total operating expenses 25.2 28.2 (3.0) 48.2 66.5 (18.3)
Loss from operations (16.4) (26.2) 9.8 (36.7) (35.7) (1.0)
Total other income, net 0.2 0.5 (0.3) 0.3 10.3 (10.0)
Loss before income taxes (16.2) (25.7) 9.5 (36.4) (25.4) (11.0)
Provision for income taxes — — — — 0.1 (0.1)
Net loss $ (16.2) $ (25.7) $ 9.5 $ (36.4) $ (25.5) $ (10.9)
Revenue
Product Revenue, Net
Net product sales were $2.4 million and $1.7 million for the three months ended June 30, 2026 and 2025, respectively, and were $4.8 million and $2.7 million for the six months ended June 30, 2026 and 2025, respectively. Net product revenue growth over the prior year periods was primarily due to an increase in the number of patients who have been prescribed the Company’s drug product. Gross-to-net adjustments were approximately 10% in the first half of 2026. Co-pay assistance payments and rebates to U.S. government payors have comprised the majority of our gross-to-net revenue adjustments.
License and Other
During the three and six months ended June 30, 2026, license and other revenue under the Norgine Agreement was primarily comprised of $5.5 million of license revenue associated with the achievement of a regulatory milestone and $1.0 million and $1.2 million, respectively, of sales of drug supply to Norgine for early-access programs and future commercial sales. License and other revenue was not significant in the three months ended June 30, 2025. For the six months ended June 30, 2025, license and other revenue was primarily comprised of $27.6 million in license revenue in connection with the delivery of a license upon the execution of the Norgine Agreement and $0.5 million for the provision of research and development services thereunder.
Cost of Revenue
Cost of revenue primarily consists of amortization of an intangible asset related to milestone payments associated with our Genzyme license agreement, cost of manufactured drug product sold, and sales-based or sublicense-based royalty payments due under our Genzyme license agreement. Cost of revenue increased $1.3 million in the three months ended June 30, 2026 as compared to the same period in the prior year due to an increase in net product sales and an increase in drug supply sales. Cost of revenue decreased $2.8 million in the six months ended June 30, 2026, as compared to the same period in the prior year, primarily due to prior year royalties due under our Genzyme license agreement associated with sublicense income from the Norgine Agreement that did not reoccur in the current period, partially offset by higher intangible amortization in the current period.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred in connection with the development of our one product candidate, including employee salaries and related expenses, clinical development expenses, and internal and third-party costs of manufacturing our drug products for use in our clinical trials. Research and development expenses also include costs related to compliance with regulatory requirements.
Substantially all of our research and development has been focused on our one product candidate, mavorixafor (X4P-001), specifically for the CN indication in the U.S. The following table shows external costs incurred by product candidate (primarily external CRO costs) and unallocated research and development costs, primarily consisting of employee salaries and related expense for our research and development organization.
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Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
(in millions)
Direct research and development expenses by product candidate:
Mavorixafor (X4P-001) $ 10.4 $ 9.4 $ 1.0 $ 20.8 $ 17.8 $ 3.0
Unallocated expense 4.7 9.0 (4.3) 9.7 19.1 (9.4)
Total research and development expenses $ 15.1 $ 18.4 $ (3.3) $ 30.5 $ 36.9 $ (6.4)
Research and development expenses decreased by $3.3 million and $6.4 million in the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year. The decrease was primarily due to lower compensation and related benefit costs as a result of strategic restructuring actions implemented in the prior year, partially offset by higher clinical costs, primarily CRO costs related to our 4WARD trial.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance, and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services.
General and administrative expenses decreased by $1.0 million and $9.1 million for the three and six months ended June 30, 2026, respectively, as compared to the same period in the prior year. The decrease for the three month period was primarily due to a reduction in legal, IT and sales and marketing costs, partially offset by higher stock-based compensation expense. The decrease for the six month period was primarily due to a significant reduction in sales and marketing expenses related to our approved drug product, a reduction in outside legal expenses, and reductions in compensation costs due to lower head count in general and administrative functions.
Other Income, Net
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 change 2026 2025 change
(in millions)
Interest income $ 2.0 $ 0.7 $ 1.3 $ 4.1 $ 1.7 $ 2.4
Interest expense (2.2) (2.2) — (4.3) (4.4) 0.1
Change in fair value of Class C warrant liability 0.5 2.6 (2.1) 0.6 13.5 (12.9)
Other income, net (0.1) (0.6) 0.5 (0.1) (0.5) 0.4
Total other income, net $ 0.2 $ 0.5 $ (0.3) $ 0.3 $ 10.3 $ (10.0)
Other income, net, decreased approximately $0.3 million and $10.0 million in the three and six months ended June 30, 2026, respectively, as compared to the same period in the prior year primarily due to lower gains in the current period on fair value adjustments related to our Class C warrants, partially offset by higher interest income on our marketable security investment portfolio.
Liquidity and Capital Resources
Sources of Liquidity
To date, we have funded our operations primarily with proceeds from sales of common stock, warrants and prefunded warrants for the purchase of our preferred stock and our common stock, sales of preferred stock, proceeds from the issuance of convertible debt and borrowings under loan and security agreements.
Public and Private Equity Offerings. Over the past several years, we have funded our operations from sales of common stock, warrants and prefunded warrants through both public offerings and private placements. For example, most recently in October
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2025 we completed an underwritten public offering of approximately 52.8 million shares of our common stock and prefunded warrants to purchase up to 700,000 shares of our common stock for net proceeds of $145.6 million, after underwriting discounts and offering expenses.
ATM Sales Agreement. On May 6, 2026, we entered into an Open Market Sale AgreementSM (“ATM”), under which we may sell up to $75.0 million of our common shares through an investment bank. Through August 6, 2026, there have been no sales of our common stock under the ATM. We terminated our previous ATM agreement on March 30, 2026.
Hercules Loan Agreement. We are a party to a loan and security agreement (the “Hercules Loan Agreement”), which 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 June 30, 2026. The term loan facility requires that we make interest-only payments through maturity on July 1, 2027 and requires that we meet certain operational and financial covenants. See Note 11 to our Annual Report on Form 10-K as filed with the SEC on March 17, 2026 for a full description of our Hercules Loan Agreement.
Historical Cash Flows
The following table summarizes our cash flow activities for each of the periods presented:
Six Months Ended June 30,
2026 2025
(in millions)
Net loss $ (36.4) $ (25.5)
Adjustments to reconcile net loss to net cash used in operating activities 7.2 (9.3)
Changes in operating assets and liabilities (11.2) (7.5)
Net cash used in operating activities (40.4) (42.3)
Net cash provided by investing activities 18.3 20.0
Net cash provided by financing activities 0.1 5.6
Effect of exchange rate changes on cash, cash equivalents and restricted cash (0.1) 0.2
Net decrease in cash, cash equivalents and restricted cash (22.1) (16.5)
Cash, cash equivalents and restricted cash, beginning of period 217.9 56.5
Cash, cash equivalents and restricted cash, end of period $ 195.8 $ 40.0
Operating Activities
During the six months ended June 30, 2026, net cash used in operating activities was $40.4 million, primarily resulting from our net losses of $36.4 million adjusted for non-cash items of $7.2 million, primarily consisting of stock-based compensation, and changes in operating assets and liabilities of $11.2 million, primarily due to increases is in accounts receivable due to increases in revenue, and decreases in accounts payable and accrued expenses due to timing of vendor payments. During the six months ended June 30, 2025, net cash used in operating activities was $42.3 million, primarily resulting from net losses of $25.5 million adjusted for net non-cash income (expense) of $9.3 million, which includes a $13.5 million gain for the adjustment of our Class C warrant liability to fair value. Net cash used in operating activities also includes $7.5 million of changes to operating assets and liabilities primarily related to a reduction in accrued expenses.
Investing Activities
During the six months ended June 30, 2026 and 2025, cash provided by investing activities of $18.3 million and $20.0 million, respectively, was primarily due to net maturities and sales of short-term marketable securities.
Financing Activities
There were no significant cash flows from financing activities during the six months ended June 30, 2026. During the six months ended June 30, 2025, cash provided by financing activities of $5.6 million was primarily due to sales of
our common stock through our ATM and a common stock purchase agreement.
Capital Resources
Based on our cash, cash equivalents and marketable securities on hand as of August 6, 2026 and our current operating plan, we believe that our cash, cash equivalents and marketable securities will allow us to fund our operations and debt obligations for at least the next 12 months.
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Capital Requirements
We expect to continue to incur operating losses as we advance our lead drug candidate through the 4WARD trial. Until we reach profitability, we will need to raise additional capital, which cannot be assured, to fund our operations and meet our financial obligations beyond this period. 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 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 and may need to restructure our obligations in a court-supervised process or otherwise.
Due to 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:
•the scope, number, initiation, progress, timing, costs, design, duration, any potential delays, and results of clinical trials and nonclinical studies for our current or future product candidates, particularly our Phase 3 clinical trial of mavorixafor for the treatment of individuals with chronic neutropenic disorders;
•the outcome, timing and cost of regulatory reviews, approvals or other actions to meet regulatory requirements established by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies for our product candidates than those that we currently expect;
•our ability to obtain marketing approval for our product candidates;
•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;
•our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product or product candidates;
•our ability to establish and maintain licensing, collaboration or similar arrangements on favorable terms and whether and to what extent we retain development or commercialization responsibilities under any new licensing, collaboration or similar arrangement;
•the success of any other business, product or technology that we acquire or in which we invest;
•the costs of acquiring, licensing or investing in businesses, product candidates and technologies;
•the effect of competing technological and market developments; and
•the costs to continue operating as a public company.
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES
Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
During the three months ended June 30, 2026, there were no material changes to our critical accounting policies as reported for the year ended December 31, 2025 as part of our Annual Report on Form 10-K. See Note 1 to the unaudited interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q under the heading Recently Issued Accounting Standards Not Yet Adopted for new accounting pronouncements or changes to the accounting pronouncements during the three months ended June 30, 2026.
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Smaller Reporting Company Status
We are a smaller reporting company (“SRC”) as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K. We may take advantage of certain of the scaled disclosures available to smaller reporting companies for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.