Q4 2024 Xeris Biopharma Holdings Inc Earnings Call
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Harry: Good morning, and welcome to the service Biopharma fourth quarter and full year 2020 full financial results. My name is Harry and I'll be your operator today. All lines are currently in listen only mode and there will be an opportunity for Q&A after management's prepared remarks.
Harry: We'd like to enter the queue for questions. Please all star followed by one on your telephone keypad.
Speaker Change: I'd like to hand, the call over to Allison Wey Senior Vice President of Investor Relations and corporate communications. Thank you you May proceed.
Allison Wey: Thank you Gary Good morning, everyone. We appreciate you joining our call today I'm joined by Johnson our CEO.
Allison Wey: This morning, we issued a press release with our results, which can be found on our website at.
Allison Wey: After our prepared remarks, we will open the lines for questions.
Speaker Change: Before we begin I'd like to remind you that this call will contain forward looking statements regarding the company interact presentation plans prospects and financial performance.
Speaker Change: Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those forward looking.
Speaker Change: For more information on our risk please refer to our earnings release and risk factors included in our SEC filings.
Speaker Change: Forward looking statements in this call represent our views only as of the date of this call and subject to applicable laws.
Glen: Glen any obligation to update such statements.
Glen: Please note some metrics we will discuss today I'll represent are presented in a non-GAAP basis.
Glen: We've reconciled the comparable GAAP and non-GAAP figures in our earnings.
Glen: Let me pass the call over to John for opening remarks.
Thanks, Alison and good morning, everyone.
Speaker Change: <unk> 24 was an unprecedented year of exceptional commercial execution focused pipeline development and disciplined capital management I want to thank our employees the health care 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.
Glen: Biopharmaceutical company.
Glen: Our focused execution and performance in 2024 has positioned <unk> perfectly for what I will call a transformational year in 2025.
Glen: 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 in his remarks.
Glen: I am proud to report that we exceeded our full year guidance with total revenue of over $203 million growing 24% versus last year led by strong demand for <unk> and continuing durability of the <unk> brand.
Glen: Across all three products the commercial team continued to execute our plans, resulting.
Glen: The resulting in 28% product revenue growth for the full year 2024 versus 2023.
Glen: Looking specifically at each of our products, let's start with record 11th which is rapidly becoming our flagship brand we.
Glen: We saw a record number of referrals and new patient starts, especially.
Glen: Especially in the back half of the year, representing more than $64 million in total revenue in 2024, and an impressive 118% growth versus 'twenty three.
Glen: Our focused and targeted investments in <unk> are paying off and we see this momentum continuing as we enter 2025.
Glen: Turning now to <unk>.
Glen: Have a great year. This product continues to deliver steady predictable growth on a full year basis, <unk> achieved nearly $83 million in revenue an increase of 24% versus 2023.
Glen: We saw the same increase in prescriptions totaling 265000 coming from an increase in new prescribers as well as an increasing number of repeat prescribers.
Glen: Next is <unk>.
Glen: The durability of this brand continues to impress and maintained strong support in the medical and patient community, resulting in continued dedication to the brand.
Glen: <unk> ended the year with approximately $50 million in revenue for the full year.
Glen: 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.
Glen: We achieved this principally by continuing to find new PPP patients and support their journey to brands.
In 2024, our partnership revenue held steady with approximately $6 million in other revenue as we continued to successfully deliver for our technology partners.
Glen: Moving on to our pipeline.
Glen: Specifically XP 80, 121, our phase III once weekly subcutaneous for hypothyroidism.
Glen: In 2024, we successfully completed our phase II study for XP $81 21, and generated the data we needed to progress into phase III.
Glen: In preparation for phase III, we advanced the development of our final drug formulation and device 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.
Glen: As I move on to 2025 I want to reiterate.
Glen: Yet we remain focused on the three strategic priorities I outlined back in August when I became CEO.
Glen: As a reminder, those are one we will drive rapid and sustained growth of our commercial products too.
Glen: Two we will remain financially disciplined maintaining a healthy balance sheet and funding our growth opportunities, while importantly, not diluting shareholders.
Glen: And finally, we will enhance our communications and transparency with you our stakeholders.
Glen: So with that as a backdrop, let's talk about 2025.
Glen: Clearly our zero business has reached a whole new level of growth and momentum.
Glen: As such I am excited to share that we are guiding total company revenue between 255 and $275 million in 2025.
Glen: Representing more than 30% year over year growth at the midpoint.
Glen: Let me repeat that that's more than 30% year over year growth at the midpoint.
Glen: Also on our press release for the first time, we reported adjusted EBITDA, which turned positive in the fourth quarter and will continue to be positive going forward.
Glen: With our exceptional top line revenue growth.
Glen: Tractive, an improving margin profile and planned investments to both drive our revenue growth and develop XP 80, 121, we believe adjusted EBITDA is the right metric to demonstrate we are a thriving commercial biopharmaceutical company capable of fueling its own growth.
Glen: The focus and efforts that will enable such a transformative 2025.
Glen: Are fundamentally the same things that contributed to our exceptional growth in the second half of 2024.
Glen: Starting with record low.
Speaker Change: <unk> is emerging as the right product at the right time with what we believe is a best in class profile to safely and effectively normalized cortisol levels in the treatment of endogenous hypercritical EMEA in adult patients with Cushings syndrome.
Speaker Change: The hyper cortisol linear marketplace is expanding rapidly in light of new evidence that sustained high levels of cortisol could be a factor and stubborn forms of many chronic medical conditions.
Speaker Change: Including diabetes and cardiovascular disease.
Speaker Change: As such more and more people are being screened tested and diagnosed with hyper cortisol EMEA and ultimately treated.
Speaker Change: 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 by 50%.
Speaker Change: We've already begun to see the impact of these investments and expect that they should fuel continuing growth for the foreseeable future.
Speaker Change: Moving to <unk>.
Speaker Change: Of the 15 million people on insulin or Sophont areas, we estimate that only about 1 million have a prescription for a life saving therapy such as <unk>.
Speaker Change: We continue to chip away at the total addressable patient population of 14 million people still unprotected.
Speaker Change: RG bulk sales team is working every day on behalf of these patients who based on the medical guidelines should be protected but are not.
Speaker Change: Specifically our team the <unk> team is focused on helping physicians to understand and become more compliant with the new medical guidelines in January we announced a multiyear strategic partnership with 88 to reinforce the importance of prescribing a ready to use glucagon such as <unk> for those at high risk for <unk>.
Speaker Change: Glycemia.
Speaker Change: With such a large untapped market and <unk> patent protection to 2036, we expect <unk> to steadily grow for many years to come.
Speaker Change: On the Covance.
Speaker Change: The durability of this brand remains impressive and we expect that durability to continue into 2025.
Speaker Change: We plan to continue our efforts to find new PPP patients every week and get them on <unk>. So they can enjoy the benefits of therapy.
Speaker Change: Just a brief mention of our technology partner programs.
Speaker Change: We remain committed to our technology platform and are actively working on current programs and seeking new partnerships. We continue to deliver for our partners meeting their technical and target product profile requirements.
Speaker Change: 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 will only provide updates as they advance and become more meaningful contributors to our business results.
Speaker Change: In 2025, we see our partner revenue continuing to deliver results similar to the past couple of years.
Speaker Change: Yes.
Speaker Change: Moving on to XP $81 21.
Speaker Change: As we stated before we are really excited about this product and the unmet medical need it can address and the hypothyroidism market.
Speaker Change: What is interesting about hypothyroidism treatment is that there has been no real innovation of research for decades in this metabolic condition affecting approximately 20 million people in the U S.
Speaker Change: We estimate that approximately 20% 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, including certain Gi conditions like celiac disease, taking common medications such as proton pump inhibitors.
Speaker Change: All of which affect oral bioavailability.
Speaker Change: If approved XP $81 21 will be the first and perhaps only self administered therapy that isn't affected by these challenges.
Speaker Change: We are taking a very plan full development approach for XP 80, 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.
Speaker Change: Yeah.
Speaker Change: Keeping in mind that our development of <unk> hundred 21 is enabled by our very own proven zero saw technology. Additionally, our commercial capabilities highly leverage able including our extensive endocrinology sales footprint and our proven patient payer and channel channel support capabilities.
Speaker Change: With that I'm going to hand, it over to Steve to review, our financial results for the quarter and year and provide more details on our 2025 guidance.
Steve: Thanks, John and good morning, everyone.
Steve: Our fourth quarter 2024 performance Mark the end of a very successful year and I can say that <unk> has never been financially stronger.
Steve: This quarter, we ended with net product revenue of 57 million and total revenue of $60 1 million, increasing by approximately 34% and 35% compared to prior year.
Steve: This is the 13th consecutive quarter with greater than 20% product revenue growth.
Steve: On a full year basis net product revenue was $196 6 million in total revenue was $203 1 million, increasing by approximately 28% and 24% compared to prior year.
Steve: Net revenue in the fourth quarter was $22 6, million% to 131% increase compared to the same period in 2023.
Steve: This growth was driven by the average number of patients on <unk>, increasing 123% from the same period in 2023.
Steve: For the year, ending 2024 <unk> of net revenue was $64 3, million% to 118% increase compared to 2023.
Steve: On a sequential basis, where core <unk> net revenue increased by a record $5 million in the fourth quarter.
Steve: The strategic investments, we made in the <unk> commercial organization in mid 2024, coupled with favorable and evolving market dynamics helped drive the accelerated revenue gains we saw in the back half of 2024.
Steve: <unk> net revenue was $23 3 million for the quarter and $82 8 million for the year, representing a 25% and 24% increase compared to the same periods last year.
Steve: This growth was primarily driven by an increase in total <unk> prescriptions growing 18% and 23% compared to the prior year.
Steve: <unk> net revenue for the quarter and year to date was $11 1 million and $49 5 million in the fourth quarter. We saw average patients on <unk> hold relatively steady compared to the third quarter.
Steve: We also generated $3 1 million and other revenue in the fourth quarter and for the year $6 4 million in.
Steve: In the fourth quarter, we successfully formulated a unique zero salt formulation of glucagon for beta bionics, resulting in the recognition.
Steve: And revenue.
Steve: Moving on to gross margin gross margin was 84% in the fourth quarter.
Steve: A 1% improvement compared to the same period in 2023 this.
Steve: This improvement was driven by a favorable product mix.
Steve: For the year gross margin was 82% relatively flat to prior year.
Steve: <unk> to our gross margin in the year from a favorable product mix were offset by previously reported <unk> capacity expansion costs in the third quarter 2024.
Steve: Research and development expenses were $6 1 million for the fourth quarter relatively flat compared to the same quarter of 2023 for the year research and development expenses were $25 6 million, a $3 2 million increase compared to prior year.
Steve: This increase was to support XP $81 21, and increased personnel costs for the continued investment in our technology platforms and partnerships.
Steve: Selling general and administrative expenses were $40 1 million and $163 5 million for the quarter and year, respectively, an increase of 7% and 12% compared to the same periods last year.
Steve: These increases were driven by personnel costs, primarily due to the record level commercial expansion.
Steve: In addition for the year, we incurred a onetime charge of $6 1 million in the third quarter related to the CEO succession plan and related corporate restructuring.
Steve: Rounding out our 2024 results in the fourth quarter.
Steve: We continued to maintain a very healthy cash position generating over $2 million in cash and ending the year with $71 6 million.
Steve: Looking ahead to 2025 and as we announced earlier today, we expect total revenue to be between $255 million to $275 million using.
Steve: Using the midpoint of this guidance total revenue would grow over 30% annually exceeding our growth rate in 2024.
Steve: Primary drivers of this growth in 2025 will be record <unk> and <unk> and we expect <unk> will continue to hold its own we.
Steve: We do anticipate contribution from our partnerships, which we believe will be consistent with the revenue generated over the past few years.
Steve: For <unk>, we continue to see a growing pipeline of referrals and expect another record number of patients on therapy in the first quarter.
Steve: Over the course of 2025, we expect patient demand to grow at or above what we drove in the second half of 2024.
Steve: For <unk>, we expect steady prescription growth as we endeavor to serve the 14 million patients that are unprotected today.
Steve: Rounding out the products for <unk>, we may see continued pressure on reimbursement and net pricing similar to what we experienced in 2024.
Steve: However, we expect patient demand to remain steady as we work to keep existing patients on therapy and add new patients to <unk>.
Steve: Moving down the P&L, we expect a modest improvement in 2025 to our already attractive gross margin. This improvement, we expect will be driven by favorable product mix.
Steve: We anticipate SG&A and R&D expenses, which in total were approximately $189 million in 2024.
Steve: Two only increased modestly with a growth rate in the mid to high single digits compared to 2024.
Steve: Our second half 2024, commercial where korolev commercial expansion and continued investment in this brand combined with the incremental investments supporting XP $81 21 will primarily drive the increases in SG&A and R&D respectively.
Steve: Given our strong top line growth expectations are healthy and improving gross margin profile, our disciplined expense management and strong cash position. It is clear that <unk> will turn an important financial corner in 2025 that we.
Steve: Will position the company to execute on its priorities without the need to dilute shareholders.
Furthermore, in keeping with our commitment to greater transparency, we are now reporting on adjusted EBITDA.
This is not only an appropriate financial measure for this stage of the company's evolution, but more importantly, we believe this is an appropriate measure to assess the strength of the Companys true operating performance.
Steve: 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.
Steve: As mentioned in this morning's press release, we reported adjusted EBITDA of over $8 million in the fourth quarter, and we anticipate that <unk> will be adjusted EBITDA positive on a go forward basis.
Steve: Yes.
Steve: In closing Cerus has never been financially stronger are.
Steve: <unk> revenue growth, coupled with our attractive and improving margin profile and disciplined capital allocation.
Steve: Will result in a financially transformative 2025 for <unk>.
Speaker Change: With that operator, please open the line for questions.
Speaker Change: Thank you to ask a question. Please dial star followed by one on your telephone keypad now if you change your mind I would like to exit the queue. Please I will start followed by two and finally when preparing to ask your question. Please ensure that youll phone is on mute locally.
Speaker Change: Our first question today will be from the line of Chase Knickerbocker with Craig Hallum. Please go ahead. Your line is open.
Speaker Change: Good morning, Thanks for taking the questions and congrats on a record quarter here.
Speaker Change: First just on there are korolev strength, just help us better characterize I guess, specifically kind of the strength there.
Speaker Change: The scrubbers, who are already writing what kind of growth are you seeing from them and then what kind of growth in our overall writers are you seeing basically.
Speaker Change: How much of this growth is going deeper with existing riders and kind of benefiting from their growth in prescriptions as people have kind of just a better appreciation of this disease state versus you guys are successfully expanding your rider base.
John: Hey, Jason it's John.
Speaker Change: It's both.
Speaker Change: We continue to expand our writer base, but we also are getting more and more writers writing more patients so as they get comfortable and utilizing.
Speaker Change: <unk>.
Speaker Change: David.
Speaker Change: We begin to add more patients. So we are both happening.
Speaker Change: And with the expansion of the sales force, that's also allowing us to get to new patient. So.
Speaker Change: It's coming from all places.
Do you get a sense of kind of what the increase in year over year kind of prescriptions in.
Speaker Change: Kind of Hypercard is all of them is.
Speaker Change: In the market do you have any kind of sense.
Speaker Change: We don't I mean.
Speaker Change: As you know that these there is no data out there that support supports exactly where all of these patients are and so it's hard to two.
Speaker Change: Kind of figure that out, but obviously, that's why you have people in the field. So that you can find these patients.
Speaker Change: 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.
Speaker Change: Anything else you can give us just from deeper than the kind of record kind of pipeline and kind of incrementally. What you are seeing even better than Q4 that sort of thing and then and then just lastly from me on <unk>.
Speaker Change: How should we think about it on a year over year basis in 'twenty five should we be thinking about kind of the same decline as what we saw in 'twenty four or should we be kind of annualized what we saw in Q4. Thanks.
Speaker Change: I think to your first question.
Speaker Change: We're trying to really point, what we saw in the back half of 2024.
Speaker Change: We anticipate we're going to see for all of 2025, we're seeing this acceleration and growth of our business that we're confident we're going to be able to do in 2025 and <unk>.
Speaker Change: And even better than we did on a full year basis for 2004 so.
Speaker Change: So it's a lot of the same stuff that we've been executing on.
Speaker Change: And then for <unk> I think <unk> may have found maybe its bottom but.
Speaker Change: So.
Speaker Change: We don't know exactly what's going to happen.
Speaker Change: But it looks like we're really holding our own, especially as we hold on to patients.
Speaker Change: Great. Thanks, Ed.
Speaker Change: Our next question will be from the line of <unk> with H C. Wainwright. Please go ahead. Your line is open.
Speaker Change: Thanks for taking the questions just first I wanted to just clarify that last commentary on <unk> growth.
Speaker Change: Understand when you talk about growth rates consistent or better than what we saw in the latter part of 'twenty 'twenty four or are you talking about year over year patient AD rates I mean that was in the <unk>.
Speaker Change: 125% range is that what we're talking about are we just talked about sort of sequential average quarterly revenue growth.
Speaker Change: Yes, probably not on.
Speaker Change: Growth rate percentage rate, because it's off of a higher and now right. So, but I think like an absolute from an absolute perspective.
Speaker Change: I think what we saw in the back half should we expect will continue throughout 2025.
Speaker Change: We've reached kind of a new trajectory and this thing isn't slowing down or so.
Speaker Change: I would think about it more from the underlying number of patient adds rather than a growth percentage.
Speaker Change: Okay that makes sense.
And in general has there been any changes too.
Speaker Change: Access in that market, obviously, the market itself is growing but is there anything changing within it with regards to.
Speaker Change: Off label prescribing or lack thereof changes.
Speaker Change: Managed care positioning within that space.
Speaker Change: And also how are you doing this sort of post initiation.
Speaker Change: Interaction with patients and offices.
Speaker Change: As you think about patients tight trading up over time is that something that you guys are proactively.
Speaker Change: Interacting with offices and patients to sort of push them to continue to check levels that optimized therapy.
Speaker Change: Okay.
Speaker Change: So on the <unk>.
The first part of your question.
Speaker Change: No changes in reimbursement everything is pretty much the same.
Speaker Change: Obviously, there's a great opportunity in <unk> and <unk>.
Speaker Change: Once a patient is on us to help them and keep them on.
Speaker Change: We continue to invest.
Speaker Change: Invest in that and work on that as a as an important aspect of helping to drive our growth.
Speaker Change: Okay and just lastly, obviously you guys are really excited about 80, 121, and we've all been sort of waiting for a while to get that clarity. So it sounds like youre still planning to give us more in mid year.
Speaker Change: Pardon me are you able to talk about.
Now like maybe.
Speaker Change: If there is anything is still TBD on that front between now and midyear updates or is it just about.
Speaker Change: Preparing how you want to rollout the reveal there so to speak.
We're still having a dialogue with the agency and.
Speaker Change: As we planned this is all part of our plan here.
Speaker Change: How we go to the agency how do we work out the clinical the device.
Speaker Change: And and the.
Speaker Change: Path to regulatory approval.
Speaker Change: It was a process that we've been running and we'll be prepared to talk more about exactly where that all lands by mid year.
Speaker Change: Okay.
Speaker Change: Alright, I appreciate it great quarter guys. Thanks.
Speaker Change: Thanks, Dara Thanks Oren.
Speaker Change: The next question today will be from the line of Glen Santangelo with Jefferies. Please go ahead. Your line is open.
Glen Santangelo: Yes, Thanks for taking my questions. Just a couple of quick financial ones. Steve I think you said that gross margin was 84% in the fourth quarter and that was up 100 basis points.
Glen Santangelo: <unk> sort of what happened in the third quarter. When we look at that that margin is that gross margin expansion in <unk> is that the right way to think about.
Glen Santangelo: 2025 based on the mix assumptions that you're sort of making for 'twenty.
Speaker Change: Yes, yes, I think thats.
Glen Santangelo: That's a good starting assumption right, there Glen moving forward plus or minus.
Glen Santangelo: Alright, but then moving onto your expenses I mean, it seems like.
Glen Santangelo: Thank you used the word that you expect your operating expenses to be up only modestly when looking at R&D was flat in <unk> and SG&A was up about 7% so.
Glen Santangelo: How should we think about that term sort of up modestly because it starts to seem like a lot of leverage in the model, obviously, which you know, but just wanted to help us put those operating expenses into context context. Thanks.
Glen Santangelo: Yes, I think I think you hit the nail on the head Glenn that that we are creating some leverage in the P&L with our operating expenses, we continue to invest in record 11, we had some.
Glen Santangelo: <unk>.
Glen Santangelo: To SG&A in the second half as a result of the recall of expansion. So you'll get the full year effect of that in 2025, and then I think we will invest incrementally in $81 21.
Glen Santangelo: The real spend though it's worth pointing out the real bolus of spend when you start talking about clinics.
Glen Santangelo: Clinical spend will be more of a 2026 phenomenon.
Glen Santangelo: Okay. Thanks, a lot.
Glen Santangelo: Sure.
Speaker Change: The next question will be from the line of David <unk> with Piper Sandler. Please go ahead. Your line is open.
Speaker Change: Thanks, So just a couple for me number one is looking at.
Speaker Change: One of your competitors.
Speaker Change: With.
Speaker Change: With Korlym.
Speaker Change: There is significant growth.
Speaker Change: In sales and marketing spend.
Speaker Change: For for that company.
Speaker Change: A lot of it of course is supporting.
Speaker Change: This expanded market and an expanded understanding of the prevalent.
Speaker Change: Hyper cortisol or I guess, what sort of begs the question. How are you thinking about the long term spend.
Speaker Change: To support.
Speaker Change: Core lab.
Speaker Change: And do you expect significant head count expansion of the sales force.
Speaker Change: Significant overall promotional.
Speaker Change: Growth in promotional.
Speaker Change: Spend to support the product just help us understand that as.
Speaker Change: Our understanding.
Speaker Change: Of the market evolves.
Speaker Change: 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 and then number two can you just remind us how we should think about the durability and exclusivity runway.
Speaker Change: Or <unk>.
Speaker Change: That would be helpful. Thank you.
Speaker Change: Well a lot to unpack there.
Speaker Change: Yes.
Speaker Change: We see the expansion both of.
Speaker Change: Of.
Speaker Change: Of course, <unk> and and record Audi in this space as is really adding to the opportunity.
Speaker Change: Raising awareness raising testing.
Speaker Change: We will get more and more people identified and treated we see that all as positive and adding to the tailwind that that were all enjoying in this space I think thats important that that continues and it's and it's helping all of us.
Speaker Change: Really find these patients and get them on therapy.
So that's all positive and adding to the positive momentum in the space.
Speaker Change: And then what was the second part somebody exclude.
Speaker Change: Exclusivity on recall exclusivity on <unk>.
Speaker Change: I think our patents are.
Speaker Change: On a record level goes to 2040.
Speaker Change: And we have orphan exclusivity through 29.
Speaker Change: In 2008, 2020, and 22% to under 28, so again a lot of runway here a lot of opportunity to continue to.
Advanced this market and and the other piece of this is we are.
Speaker Change: Record 11, we think record levels as I said in my remarks, the right product at the right time.
Speaker Change: So I think we have the best in class in terms of normalizing the.
Speaker Change: A synthesis of cortisol.
Speaker Change: He is a very important aspect to treating these patients so.
Speaker Change: I think it's just perfect timing for us.
Speaker Change: And head count expansion, what's your expectation longer term.
Speaker Change: Yes.
Longer term investments in record level continue as we see the opportunity and we will continue to advance our investments in here because like we said, we have plenty of runway and really accelerating market.
Speaker Change: Says yet invest.
Speaker Change: How we invest.
Speaker Change: I'm not going to talk about exactly how that works out over the next.
Speaker Change: Several months, but we definitely R. R.
Speaker Change: See that as one of our key priorities of investment.
Speaker Change: Alright. Thanks.
The next question will be from the line of light industrial with Oppenheimer. Please go ahead. Your line is open.
Greg: Great Good morning, Greg.
Speaker Change: Great to see the light.
Speaker Change: Adjusted EBITDA and thanks for taking my question just two from us.
Speaker Change: First.
Speaker Change: John I just wanted to ask with respect to <unk> given the updated guidelines. If you could just maybe go into some detail on how you're leveraging.
Speaker Change: I'd update with respect to billing.
Speaker Change: Filling the product.
Speaker Change: And then also wanted to ask on 81 'twenty, one as we look forward to the.
Speaker Change: The unveiling of the broader planning mid year.
Speaker Change: Would you be able to say that.
Speaker Change: <unk> intend to enter the <unk>.
Speaker Change: <unk> entered into phase III.
Speaker Change: By the end of the year. Thank you.
Speaker Change: Yes, let me start with <unk>.
Speaker Change: And the guidelines the guidelines are.
Speaker Change: Pretty clear in our job and our team is really focused on.
Speaker Change: Not only are raising awareness of the guidelines.
Speaker Change: But also helping clinicians offices.
Speaker Change: Become more compliant with the guidelines.
Speaker Change: So that we can get the 14 million people today that are not protected or unprotected.
Speaker Change: And should be protected based on the guidelines. So our focus in those offices every day is to help those offices.
Speaker Change: Advance their practice in a way that can get these people protected.
Speaker Change: And our <unk> team is doing that on a day everyday basis.
Speaker Change: We see that as a long term opportunity, it's going to take effort and we continue to <unk>.
Speaker Change: Invest in that effort.
Speaker Change: 80 121.
Steve: I think Steve as Steve pointed out, yes, we're making investments this year.
Speaker Change: They're not <unk>.
Speaker Change: Super large investments they are more phase III readiness.
Speaker Change: That we can.
Speaker Change: Get started in the clinic, probably are thinking is sometime in 'twenty six.
Speaker Change: But.
Speaker Change: Yes, it's more.
Speaker Change: Phase III readiness this year.
Speaker Change: Got it thanks very much.
The next question will be from the line of Matthew I think Mohammed with Leerink partners. Please go ahead. Your line is open.
Hi, This is <unk> on for Roanna Ruiz just a couple for months I guess.
Speaker Change: Firstly as we think about the expansion with your core lab.
Speaker Change: And the recent sales expansion is there any thoughts in terms of 2025.
Speaker Change: Increasing the sales force or any changes to the commercial strategy.
Speaker Change: So.
Speaker Change: I think sitting here today, we feel pretty confident with what we have.
Speaker Change: In terms of our commercial footprint for <unk>.
That being said we've had two expansions over the last 15 months. So we'll be opportunistic as the market dynamics unfold and if we see an opportunity to invest incrementally in <unk>. This year, we'll do that.
Speaker Change: But right now sitting here today, no. We don't have any firm plans for an expansion.
Speaker Change: Great. Thanks, and then last one for me.
Speaker Change: On $81 21, as we think about kind of moving through the trials that needed to a potential commercial 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 can build upon as you think about commercial it kind of.
Speaker Change: Taking advantage of your already strong footprint within the endocrine space.
Speaker Change: That's exactly that's why another reason why we're so excited about 80 121 is it fits perfectly with our endocrinology footprint across <unk> and <unk> left for that matter.
Speaker Change: And and we have all of the capabilities from patient support to two channel.
Speaker Change: <unk>.
Speaker Change: And pharmacy so we.
Speaker Change: It's a perfect fit for us and and.
Speaker Change: And we will be able to.
Speaker Change: Slide it right into our existing footprint. So another exciting reason the other thing that's exciting about it is our it's our own organic development program at the aerosol technology, which we know how to use and we know how to work with.
Speaker Change: Proven NRG Evo product so.
Speaker Change: Again, it's those are two things that really are.
Speaker Change: Get us excited about.
Speaker Change: Our ability to get this to market and be successful once we get there.
Great No that makes a lot of sense. Thanks for the time.
Speaker Change: As a reminder for any further questions. Please don't staff by one now and our next question will be from the line of <unk> with H C. Wainwright. Please go ahead. Your line is open.
Speaker Change: Hey, Thanks for the follow ups I just wanted to clarify on the guidance you talked about sort of sustained positive EBITDA are you able to.
Speaker Change: Put a stake in the ground right now I'd say that for the full year.
Speaker Change: Before year end that youll be cash flow breakeven this year.
Speaker Change: And on <unk>.
Speaker Change: Just wanted to check on seasonality, obviously works in drugs that are subject to that pretty material gross to net.
Speaker Change: Changes in Q1, typically obviously youre talking about really strong patient growth and overall revenue growth. There can you just talk about the cadence and whether we should expect sequential growth quarter over quarter and net revenue you think in Q1 are like most competitors.
Speaker Change: David before we accelerated through the year. Thanks.
David: Alright, let me take the record level, one and then I'll throw Steve.
Speaker Change: The first question you asked.
Speaker Change: 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 see a little little bit of.
Slowdown in the first January February.
Speaker Change: Im frame and that starts to rebound towards the end of the quarter. So.
Speaker Change: Q1 is always always a little bit.
Speaker Change: Slower and then it picks back up so and.
Speaker Change: I don't really call. It a seasonality. It's just it's all about the payer resets and we see that across all of our products.
Speaker Change: Specifically more importantly record 11 today, it's probably feel it the malls.
Speaker Change: So arent on your cash question I think you probably picked up on the fact that we're not really guiding on cash going forward.
Speaker Change: So let me just start with one we have plenty of cash to operate the business moving forward.
Speaker Change: Hopefully clear from the guidance. We provided this morning that the company is on really solid financial ground with a really promising outlook for 'twenty five right, 30% revenue growth at the midpoint.
Speaker Change: Our guidance healthy already healthy and improving gross margins and modest operating expense growth.
Speaker Change: 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.
Speaker Change: Kind of a <unk>.
Speaker Change: Cash burn story that we have been historically and we want to focus.
Speaker Change: <unk> on the growing strength of our P&L from the operations of the business. So.
Speaker Change: That's kind of answering your question without answering it but.
Speaker Change: I think what's important is that.
Speaker Change: Really good about where this business is heading particularly in 'twenty five.
Speaker Change: Alright, thanks, so much.
Speaker Change: Thank you. This concludes Q&A I will now hand, the call back to John Shannon for closing remarks.
John Shannon: Thank you and thank you everyone for your questions.
John Shannon: 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 sets <unk> up for a transformational 2025.
John Shannon: Thank you.
John Shannon: Thank you. This concludes these arris biopharma fourth quarter and full year 2020 full financial results.
John Shannon: You may now disconnect your lines.
John Shannon: [music].
John Shannon: Okay.
Yeah.