Xeris Biopharma Holdings, Inc. Price & Performance (XERS)

We've reconciled the comparable GAAP and non GAAP figures in our earnings pass the call over to John for opening remarks Thanks, Allison, and good morning, everyone. 2024 was an unprecedented year of exceptional commercial execution, focused pipeline development and disciplined capital management. I want to thank our employees, the healthcare community, and the patients we serve are helping us to meet or exceed all of our goals consistent with our journey to become a fast growing self sustaining biopharmaceutical company. Our focus, execution and performance in 2024 has positioned Xerus perfectly for what I will call a transformational year in 2025. Let me start with the highlights for 2024. I will cover the full year results at a high level, and Steve will provide more detail on Q4 and full year his remarks. I'm proud to report that we exceeded our full year guidance with total revenue of over $2.00 3,000,000 growing 24% versus last year, led by strong demand for 11 gVo, and continuing durability of the KEVEYIS brand.

Across all three products, the commercial team continued to execute our plans. Resulting in 28% product revenue growth for the full year 2024 versus 2023. Looking specifically at each of our products, let's start with Recorlev. Which is rapidly becoming our flagship brand. We saw a record number of referrals and new patient starts especially in the back half of the year representing more than $64,000,000 in total revenue in 2024. An impressive 118% growth versus '23.

Our focused and targeted investments in Recorlev are paying off. And we see this momentum continuing as we enter 2025. Turning now to Gevo. What a great year. This product continues to deliver steady, predictable growth. On a full year basis, Gevo achieved nearly $83,000,000 in revenue, an increase of 24% versus 2023. We saw the same increase in prescriptions totaling 265,000 coming from an increase in new prescribers as well as an increasing number of repeat prescribers. Next is KEVEYIS.

The durability of this brand continues to impress. It maintains strong support in the medical, and patient community resulting in continued dedication to the brand. KEVEYIS ended the year with approximately $50,000,000 in revenue for the full year. Although revenues declined 13% on a full year basis, we ended the year with approximately the same number of patients on therapy as we started with. [indiscernible] We achieved this principally by continuing to find new PPP patients and support their journey to brand. In 2024, our partnership revenue held with approximately $6,000,000 in other revenue as we continue to successfully deliver for our technology partners. Moving on to our pipeline. Specifically XP-eight 121. Our Phase III once weekly subcu product for hypothyroidism. In 2024, we successfully completed our Phase II study for XP-eight 121 generated the data we needed to progress into Phase three. In preparation for Phase three, we advanced the development of our drug formulation design and had ongoing discussions with the agency to ensure alignment On critical aspects of the clinical study, and a path to an eventual regulatory approval. As I move on to 2025, I want to reiterate that we remain focused on the three strategic priorities I outlined back in August when I became CEO.

As a reminder, those are: [indiscernible] [indiscernible] we will remain financially disciplined maintaining a healthy balance sheet and and funding our growth opportunities while importantly not diluting shareholders. And finally, we will enhance our communications and transparency with you, our stakeholders. So with that as a backdrop, let's talk about 2025. Clearly, our Xerus business has reached a whole new level of growth and momentum. As such, I'm excited to share that we are guiding total company revenue between $255,000,000 and $275,000,000 in 2025, representing more than 30% year over year growth at the midpoint. Let me repeat that. That's more than 30% year over year growth at the midpoint. Also in our press release for the first time, which turned positive in the fourth quarter and will continue to be positive going forward. With our exceptional top line revenue growth, attractive and improving margin profile, and planned investments to both drive our revenue growth and develop XP-eight 121 We believe adjusted EBITDA is the right metric to demonstrate we are a thriving commercial biopharmaceutical company capable of fueling its own growth. The focus and efforts that will enable such a transformative 2025 are fundamentally the same things that contributed to our exceptional growth in the second half of twenty twenty four.

Starting with Recorla. Recorlev is emerging as the right product at the right time with what we believe is a best in class profile to safely and effectively normalize cortisol levels the treatment of endogenous hypercortisolmia adult patients with Cushing syndrome. The hyperchortisolmia marketplace is expanding rapidly in light of new evidence that sustained high levels of cortisol could be a factor in stubborn forms of many chronic medical conditions. Including diabetes and cardiovascular disease. As such, more and more people are being screened tested and diagnosed with hyperchordisalemia and ultimately treated. As a reminder, we shared our view of this emerging opportunity last year. And rapidly increased our investments in our sales and patient support organizations 50%. We've already begun to see the impact of these investments and expect that they should fuel continuing growth for the foreseeable future. Moving to Gevo, Of the fifteen million people on insulin, or sulfonyureas, we estimate that only about one million have a prescription for a life saving therapy such as 14,000,000 people still unprotected. Our GVOC sales team is working every day on behalf of these patients who based on the medical guidelines should be protected but are not. Specifically, our team the Gevo team, is focused on helping physicians to understand and become more compliant with the new medical guidelines.

To reinforce the importance of prescribing a ready to use Glucagon such as GevoKioben, those at high risk for hypoglycemia. With such a large untapped market in GVOX patent protection to 02/1936, we expect Gevoque to steadily grow for many years to come. [indiscernible] The durability of this brand remains impressive. And we expect that durability to continue into 2025. We plan to continue our efforts to find new PPP patients every week and get them on KEVEYIS so they can enjoy the benefits of therapy. Just a brief mention of our technology partner programs. We remain committed to our technology platform and are actively working on and seeking new partnerships. Continue to deliver for our partners meeting their technical and target product profile requirements.

We are confident that we will continue to deliver in this manner for our current and future partners. However, because this area of our business is largely dependent on each partner's business objectives, we'll only provide updates as they advance and become more meaningful contributors to our business results. In 2025, we see our partner revenue continuing to deliver results similar to the past couple of years. Moving on to XP-eight thousand one hundred and twenty one. As we stated before, we are really excited about this product and the unmet medical need it can address in the hypothyroidism market. What is interesting about hypothyroidism treatment is that there has been no real innovation of research for decades in this metabolic condition affecting approximately twenty million people in The U. S. We estimate that approximately twenty percent of these patients do not consistently meet their clinical goal of normalizing thyroid hormone levels. And they cannot reach their goals with oral forms of therapy for a multitude of factors, like celiac disease to taking common medications such as ProtamUp. [indiscernible] All of which affect oral vial availability.

If approved 121 will be the first perhaps only self administered therapy that isn't affected by these challenges.

We are taking a very planful development approach for 121. We continue to have favorable engagement with the FDA and expect to provide a fulsome update mid year. This update will further highlight the unmet medical need the market opportunity, The Phase III study design as well as projected timing of our development program. Keeping in mind that our development of XP-eight thousand one hundred and twenty one is enabled by our very own proven Xerasol technology.

Additionally, our commercial capability is highly leverageable, including our extensive endocrinology sales footprint our proven patient, payer and channel support capabilities. That, I'm going to hand it over to Steve to review our financial results for the quarter and year provide more details on our 2025 guidance. Thanks, John.

And good morning, everyone.

Our fourth quarter twenty twenty four performance marked the end of a very successful year. And I can say that Xerus has never been financially stronger. This quarter, we ended with net product revenue of $57,000,000 and total revenue of 60,100,000.0 increasing by approximately 3435% compared to prior year.

This is the thirteenth consecutive quarter with greater than 20% product revenue growth. [indiscernible] On a full year basis, net product revenue $196,600,000 and total revenue was $203,100,000 increasing by approximately 2824% compared to prior year. Net revenue in the fourth quarter was $22,600,000 dollars a 131% increase compared to the same This growth was driven by the average number of pay increasing 123% from the same period in 2023. For the year ending 2024, Recorlev net revenue was $64,300,000 a 118% increase compared to 2023.

On a sequential basis, Recorlev net revenue increased by a record $5,000,000 in the fourth quarter The strategic investments we made in the Recorlev commercial organization in mid-twenty twenty four coupled with favorable and evolving market dynamics, helped drive the accelerated revenue gains we saw in the back half of twenty twenty four. Gevoque net revenue was $23,300,000 for the quarter and $82,800,000 for the year, representing a 2524% increase compared to the same periods last year. [indiscernible] growing 1823% compared to prior year. KEVEYIS net revenue for the quarter and year to date $11,100,000 and $49,500,000 In the fourth quarter, hold relatively steady compared to the third quarter. [indiscernible] also generated $3,100,000 in other revenue in the fourth quarter and for the year $6,400,000 In the fourth quarter, we successfully formulated a unique Xeris formulation of glucagon for Beta Bionics. Resulting in the recognition of $1,000,000 in revenue. Moving on to gross margin. Gross margin was 84% a 1% improvement compared to the same period in 2023. This improvement was driven by a favorable product mix. For the year, gross margin was 82% relatively flat to prior year. Improvements to our gross margin in the year from a favorable product mix were offset by previously reported Gevo capacity expansion costs in the third quarter twenty twenty four.

Research and development expenses were $6,100,000 for the fourth quarter relatively flat compared to the same quarter twenty twenty three. Research and development expenses were $25,600,000 a $3,200,000 increase compared to prior year. This increase was to support XP-eight 121, and increased personnel costs for the continued investment our technology platforms and partnerships. Selling, general and administrative expenses were 40,100,000.0 and $163,500,000 for the quarter and year. Respectively, an increase of 712% compared to the same periods last year. These increases were driven by personnel costs, primarily due to the Recorlev commercial expansion, In addition, for the year, we incurred a one time charge of $6,100,000 in the third quarter related to the CEO succession plan and related corporate restructuring.

Rounding out our 2024 results, in the fourth quarter, we continued to maintain a very healthy cash position generating over $2,000,000 in cash and ending the year with $71,600,000 Looking ahead to 2025, and as we announced earlier today, we expect total revenue to be between $255 to $275,000,000 Using the midpoint of this guidance, total revenue would grow over 30% annually exceeding our growth rate in 2024. Primary drivers of this growth in 2025 will be Recorlev and Chivo and we expect KEVEYIS will continue to hold its own.

We do anticipate contribution from our partnerships which we believe will be consistent with the revenue generated over the past few years. For Recorlev. We continue to see a growing pipeline of and expect another record number of patients on therapy in the first quarter. Over the course of 2025, we expect patient demand to grow at or above what we drove in the second half of twenty twenty four. For Gevo, we expect steady prescription growth as we endeavor to serve The 14,000,000 patients that are unprotected today. Rounding out the products, for KEVEYIS, we may see continued pressure on reimbursement and net pricing, Similar to what we experienced in 2024, However, we expect patient demand to remain steady as we work to keep existing patients on therapy and add new patients to KEVEYIS.

Moving down the P and L, we expect a modest improvement in 2025 to our already attractive This improvement we expect will be driven by favorable product mix. We anticipate SG and A and R and D expenses which in total were approximately $189,000,000 in 2024 to only increase modestly. With a growth rate in the mid to high single digits compared to 2024. Our second half twenty twenty four commercial RECORLEV commercial expansion and continued investment in this brand combined with the incremental investments supporting [indiscernible] Given our strong top line growth expectations, our healthy and improving gross margin profile, our disciplined expense management and strong cash position it is clear that Xeris will turn an important financial corner in 2025 that will position the company to execute on its priorities without the need to dilute shareholders. Furthermore, in keeping with our commitment to greater transparency, are now reporting on adjusted EBITDA. This is not only an appropriate financial measure this stage, of the company's evolution, But more importantly, we believe this is an appropriate measure to assess the strength of the company's true operating performance.

It is our belief that as we report on this metric moving forward, it should provide confidence that the company is financially healthy with sufficient capital to fund our priorities. As mentioned in this morning's press release, we reported adjusted EBITDA of over $8,000,000 in the fourth quarter, and we anticipate that Xeris will be adjusted EBITDA positive on a go forward basis. In closing, Xerus has never been financially stronger. Accelerating revenue growth coupled with our attractive and approving margin profile, and disciplined capital allocation. Will result in a financially transformative 2025 for XERIS Xeris. With that, operator, please open the line for questions.

Our first question today will be from the line of Chase Nikobocko with Craig Hallum. Please go ahead. Your line is open.

Good morning. Thanks for taking the questions and congrats on a record quarter here. First, kind of just on the Recorlev strength, just help us better characterize I guess specifically kind of the strength there of prescribers who are already writing what kind of growth are you seeing from them? And then what kind of growth in overall writers are you seeing basically how much of this growth is going deeper with existing writers and kind of better fitting from their growth in prescriptions as people have kind of just a better appreciation? Of this disease state. Versus you guys successfully expanding your writer base?

Hey, Chase, it's John. It's both. Like we continue to expand our writer base But you also are getting more and more writers writing more patients. So as they get comfortable and utilizing Recorlev David, and with the expansion of the sales force, that's also allowing us to get to new patients. So it's coming from all places.

You get a sense of kind of what the increase in year over year kind of prescriptions in kind of hypochordosolism is in the market. Do you have any kind of sense?

We don't. As you know that these there's no data out there that support supports exactly where all these patients are and so it's hard [indiscernible] kind of figure that out, but obviously that's why you have people in the field so that you can find these patients.

Got it. And obviously, what you're seeing so far in Q1 kind of gives you the confidence for what's a really strong guide here. Anything else you can give us just from deeper than the kind of record kind of pipeline and kind of incrementally what you're seeing even better than Q4. That's sort of thing? And then just lastly for me on KEVEYIS, how should we think about it on a year over year basis in 2025? Should we be thinking about kind of the same decline as what we saw in 2024? Or should we be kind of annualizing what we saw in Q4? Thanks.

I think to your first question, we're trying to really point what we saw in the back half of 2024 we anticipate we're going to see for all of 2025. We're seeing this acceleration and growth of our business [indiscernible] we're confident we're going to be able to do in 2025 and and even better than we did on a full year basis for 2024. So [indiscernible] So it's a lot of the same stuff that we've been executing on. And then for KEVEYIS, I think KEVEYIS may have found maybe its bottom, but we so We don't know exactly what's going to happen. But it looks like we're really holding our own. Especially as we hold on to patients.

Great. Thanks, Our next question will be from the line of Oren Livnat with H. C. Wainwright. Please go ahead. Your line is open.

Thanks taking the questions. Just first, I want to just clarify that last commentary on Recorlev growth Just so we understand you talk about growth rates consistent or better than what we saw in the latter part of 2024, are you talking about year over year patient add rates? I mean that was in the mid-one hundred and twenty five percent range. Is that what we're talking about or are we just talking about sort of sequential average quarterly revenue growth?

Yes, probably not on a growth rate percentage, right, because it's off of a higher end now. Right? So but I think on that like an absolute from an absolute perspective, I think what we saw in the back half should we expect will continue throughout 2025. We've reached kind of a new trajectory and this thing isn't slowing down.

So I would think about it more from the underlying number of patient adds rather than a growth percentage.

Okay.

It makes sense.

And in general, have there been any changes to access in that market? Obviously, the market itself is growing, but is there anything changing within it with regards to off label prescribing or lack thereof, changes in managed care positioning within that space? And also, how are you doing on sort of post initiation interaction with patients and offices with as we think about patients titrating up over time? Is that something you guys are proactively interacting with offices and patients to sort of push them to continue to check levels and optimize therapy and I have one follow-up.

So on the the first part of your question, no changes in [indiscernible] everything is pretty much the same. Obviously, there's a great opportunity and And is to help them and keep them on. And we continue to to invest in that and work on that an important aspect of helping to drive our growth.

Okay. And just lastly, obviously, you guys are really excited about 08/2021 and all been sort of waiting for a while to get that clarity. So it sounds like you're still planning to give us more midyear. Are you able to talk about now like maybe if there's anything still TBD on that front between now and mid year, up preparing how you want to roll out the reveal there, so to speak.

We're still having a dialogue With with the agency and and as we planned, this is all part of our plan here was we go to the agency, how do we work out the clinical the device, and pass of regulatory approval was a process that we've been running and we'll be prepared to talk more about exactly where that all lands by midyear.

All right. Thanks, Oren. Thanks, Oren.

The next question today will be from the line of Glenn Santangelo with Jefferies. Yes, thanks for taking my questions. Just a couple of quick financial ones. Steve, I think you said that gross margin was 84% the fourth quarter and that was up 100 basis points. Recognizing sort of what happened in the third quarter, when we look at that, that margin that gross margin expansion in 4Q, is that the right way to think about 2025 based on the mix of assumptions that you're sort of making for 'twenty five?

Yes. Yes, I think that's a that's a good starting assumption right there. Moving forward plus or minus.

Expenses, I mean, it seems like I think you used the word that you expect your operating expense to be up only modestly when looking at R and D was flat in 4Q and SG and A was up about 7%. So So how should we think about that term sort of up modest because it starts to seem like there's a lot of leverage in the model, obviously, which you know. But just sort of help us put those operating expenses into context. Thanks.

Yes, I think you hit the the nail on the head, Glenn, that that we are creating some leverage in the P and L. With our operating expenses. We continue to invest in Recorlev and we had some adds to SG and A in the second half as a result of the Recorlev expansion. So you'll get the full year effect of that in 2025. And then I think we'll invest incrementally in 08/2021 The real spend though, it's worth pointing out the real bolus of spend when you start talking about clinical spend will be more of a 2026 phenomenon.

Okay.

Thanks a lot.

Sure.

The next question will be from the line of David Amsellem with Sandler, Thanks. So just a couple for me. Number one is looking at one of your competitors, [indiscernible] [indiscernible] [indiscernible] there's significant growth in sales and marketing spend for that company And a lot of it, of course, is supporting This expanded market and expanded understanding of the prevalence of hypercortisolism, I guess what sort of begs the question, how are you thinking about the long term spend to support Recorlev, And do you expect significant headcount the sales force Do you expect significant overall promotional growth in promotional spend to support the product. Just help us understand that as our understanding [indiscernible] we have greater clarity on the extent to which this is a much bigger market. Compared to our understanding of it historically. So that's number one. Then number two, can you just remind us how we should think about the durability and exclusivity runway for Recorlev, that would be helpful.

Wow, a lot to unpack there. We see the expansions Both of of Corecept and and Recordotti in this space is really adding to the opportunity. Raising awareness raising testing, will get more and more people identified and treated. We see that all as positive. And adding to the tailwinds that that we're all enjoying in this space. I think that's important that that continues and it's helping all of us. Really find these patients and get them on therapy. So that's all the positive and adding to the positive momentum in the space. And then what was the second part? Somebody Exclusivity on Recorla. Oh, exclusivity on Recorla I think our patents are I mean, Recorla goes to 02/1940. We have orphan exclusivity through 2029. [indiscernible] [indiscernible] So again, a lot of runway here. A lot of opportunity to continue to advance this market and And the other piece of this is, [indiscernible] We have RecorLab We think Recorlev is, as I said in my remarks, the right product at the right time.

So I think we have the best in class in terms of normalizing the synthesis of cortisol which is a very important aspect to treating these patients. So I think we're it's just perfect timing for us. Us. And headcount expansion, what's your expectation longer term?

Longer term investments in Recorlev will continue as see the opportunity and we will continue to advance our investments in here. Because we said, we have plenty of runway and a really accelerating market. That says, yes, [indiscernible] How we invest I'm not going to talk about exactly how that works out over the next several months, but we definitely are are see that as one of our key priorities of investment.

All right. Thanks.

Next question will be from the line of Leila Gershell with Oppenheimer. Your line is open.

Great. Good morning.

Great to see the positive adjusted EBITDA and thanks for taking our questions. Just two from us. Just first, John, just wanted to ask about the Gevo given the updated guidelines, if you just maybe go into some detail on maybe how you're leveraging that update with respect to [indiscernible] And then also want to ask on 08/2021 as we look forward to the the unveiling of the broader plan midyear.

Would you be able to say that you at least intend to enter the kind of into Phase three potentially by the end of the year.

Yes, let me start with Gevoque and the guidelines. The guidelines are pretty clear and our job and our team is really focused on not only raising awareness of the guidelines, but also helping clinicians offices, become more compliant with the guidelines. So that we can get the 14,000,000 people today that are not protected, they're unprotected. And should be protected based on the guidelines. So our focus in those offices every day is to help those offices advance their practice in a way that can get these people protected. And our Gevo team is doing that on a day every day basis.

We see that as a long term opportunity It's going to take effort and we continue to invest in that effort. 08/2021 I think Steve as Steve pointed out, yes, we're making investments This year, They're not super large investments. They're more Phase three readiness so that we can get started in the clinic probably our thinking is sometime in 2026.

But yes, it's more Phase three readiness this year.

Got it. Thanks very much.

The next question will be from the line of Mazihir Ali Mohammed with Leerink Partners. Please go ahead. Your line is open.

Hi, this is Maizey on for Roanna Ruiz. Just a couple from us. I guess, firstly, as we think about the expansion with Recorlev, how and the recent sales expansion, is there any thoughts in terms of 2025 of increasing the sales force or any changes to the commercial strategy? So I think sitting here today, we feel pretty confident with what we have. In terms of our commercial footprint for Recorlev, That being said, we've had two expansions over the last So we'll be opportunistic as the market dynamics unfold. If we see an opportunity to invest incrementally in Recorlev this year, we'll do that. But right now, sitting here today, no, we don't have any firm plans for an expansion.

Great. Thanks. And then last one for me. On 08/2021, as we think about kind of moving the trials and into a potential commercialization phase for that. How would the synergies of your current existing products play a role in that? And is that something that you guys could build upon as you think about commercial? Are you kind of taking advantage of your already footprint within the endocrine That's exactly it. That's why we're another reason why we're so excited about 08/2021 It fits perfectly with our endocrinology footprint across Gevoque and Recorla for that matter.

And And we have all the capabilities from patient support to to channel and pharmacy. So it's a perfect fit for us. And we'll be able to to slide it right into our existing footprint. So another exciting reason. The other thing that's exciting about it, it's our own organic development program. It's zero cell technology.

Which we know to use, we know how to work with and proven in our Gevo product. So So again, it's it's those are two things that really are get us excited about [indiscernible] Our ability to get this to market and be successful Great. That makes a lot of sense. Thanks for the time.

And our next question will be from the line of Oren Lipnat with H. C. Wainwright, line is open.

Hey, thanks the follow ups. I just wanted to clarify on the guidance. You talked about sort of sustained positive EBITDA. Are you able to put a stake in the ground right now and say that for the full year or before year end that you'll be cash flow breakeven this year? And on Recorlev, just want to check on seasonality. Obviously, orphan drugs are subject pretty material growth to net. Changes in Q1 typically. Obviously, you're talking about early strong patient growth and overall revenue growth there. Can you just talk about the cadence and whether we should sequential growth quarter over quarter in net revenue you think in Q1 or like most competitors should we see maybe a dividend before we accelerate into the year?

All right. Let me take the Recorlev one and then I'll throw Steve the first question you asked. Like every company, that's in especially in the rare disease space, there are resets and things that go on in the first quarter. So you you see a little little bit of slowdown in the first January, February, timeframe and that starts to rebound towards the end of the quarter.

So So Q1 is always always a little bit slower and then it picks back up.

And I don't really call it a seasonality, it's just it's all about the payer resets. And and we see that across all of our products. [indiscernible] feel at the most.

So, Oren, on your cash question, I think you probably picked up on the fact that we're not really guiding on cash going forward.

So let me just start with one We have plenty of cash to operate the business moving forward. And hopefully clear from the guidance we provided this morning that the company is on really solid financial ground with a really promising outlook for 2025, right? 30% revenue growth at the midpoint, of our guidance healthy already healthy and improving gross margins and modest operating expense growth. And obviously adjusted EBITDA moving forward, positive moving forward. So I think what we're doing what we're saying here is we're transitioning from kind of a cash burn story that we have been historically and we want to focus investors on the growing strength of our P and L. And the operations of the business. So that's kind of answering your question without answering it, but I think what's important is that feel really good about where this business is heading. Particularly in '25.

All right. Thanks so much.

Thank you. This concludes Q and A. Will now hand the call back to John Shannon for closing remarks.

Thank you.

Thank you everyone for your questions. As you just heard, the continued momentum of our commercial business our exciting pipeline, along with our unrelenting focus on execution will create even more value for our patients and our shareholders and set Xerus up for a transformational 2025.

Thank you.

Thank you. This concludes the Xeris Biopharma Fourth Quarter and Full Year twenty twenty four Financial Results.

You may now disconnect your lines.