Q3 2025 Xeris Biopharma Holdings Inc Earnings Call
Speaker #1: Hello everyone , and thank you for joining us today for the Q3 2025 Earnings Conference . Call . My name is Sami , and I'll be coordinating your call today .
Speaker #1: During the presentation , you can register a question by pressing star , followed by one on your telephone keypad . If you change your mind , please press star , followed by two on your telephone keypad .
Speaker #1: To remove yourself from the question queue . I'd now like to hand over to your host Allison Wey Senior Vice President of Investor Relations and Corporate Communications , to begin , please go ahead .
Speaker #1: Allison biopharma .
Speaker #2: Thank you . Sammy . Good morning and welcome everyone to the biopharma third quarter 2020 Earnings call . You can find this morning's earnings release on our and our detailed financial results on the Investor Relations section of our website .
Speaker #2: Today , I'm joined by John Shannon CEO and Steve Piper , our CFO . After our prepared remarks , we will open the line for questions .
Speaker #2: Before we begin , I'd like to remind you that this call will contain certain forward looking statements concerning the company's future expectations , plans , projects and financial performance .
Speaker #2: Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those forward looking statements . For more information on our risks , please refer to our earnings Release and Risk Factors included in our SEC filings .
Speaker #2: Any forward looking statements in this call represent our views only as of the date of this call , and subject to certain applicable laws .
Speaker #2: We disclaim any obligation to update such statements . Please note that some metrics we will discuss today are presented on a non-GAAP basis .
Speaker #2: We have reconciled the comparable GAAP and non-GAAP figures in our earnings release . I'll now turn the call over to Jon for opening remarks .
Speaker #3: Thanks , Alison , and good morning , everyone . I'm excited to share that Q3 marked another record setting quarter for Xirrus . Total product revenue exceeded 74 million , representing a 40% increase year over year .
Speaker #3: As highlighted in this morning's press release , the strength of our year to date results gives us the confidence to raise the lower end of our full year total revenue guidance .
Speaker #3: We now expect total revenue for the year to be in the range of 285 and 290 million , a 42% increase at the midpoint .
Speaker #3: Our performance was fueled by robust patient demand across all three of our products , reflecting the tremendous value our therapies are bringing to patients and the consistent and outstanding execution of our team .
Speaker #3: Recorlev remained the primary growth engine , with revenue more than doubling versus the prior year . This momentum reflects a continuing expansion of new patients and prescribers .
Speaker #3: Both delivered another quarter of steady , reliable growth , demonstrating the effectiveness of our efforts to expand awareness and reinforce adherence to established medical guidelines .
Speaker #3: Keveyis outperformed our expectations , supported by new patient additions , which drove an increase in the average number of patients on therapy . Let's take a closer look at each product , starting with Recorlev .
Speaker #3: Recorlev generated revenue of $37 million in the quarter year over year increase of 109% . We continue to expand our prescriber breadth and depth as more clinicians gain experience with Recorlev and recognize the important clinical benefits .
Speaker #3: The average number of patients on therapy grew by 108% versus the same period last year , reinforcing our confidence in Recorlev position in the growing Hypercortisolemia and Cushing syndrome marketplace .
Speaker #3: Turning to Jeaveau , Gvoke delivered another solid quarter with revenue of more than 25 million , up nearly 10% from the same period last year .
Speaker #3: As we continue to educate patients and providers , we see considerable potential to reach more individuals who could benefit from having a ready to use glucagon on hand .
Speaker #3: Moving to Keveyis , Keveyis continues to serve a critical need for patients living with primary periodic paralysis . Quarterly revenue was approximately 12 million , driven by growth in the average number of patients on therapy .
Speaker #3: These results underscore what we know to be true that effective treatment of PCP requires more than just delivering a product . It requires a sustained , holistic commitment to supporting patients throughout their journey .
Speaker #3: Our continued strong commercial performance this year has enabled us to accelerate our strategic priorities . As previewed during our August call , the third quarter marked the initiation of our next commercial expansion .
Speaker #3: A key milestone in laying the foundation for future scalable growth . This initiative is centered on expanding our commercial footprint to capture the significant opportunity ahead for Recorlev .
Speaker #3: While simultaneously strengthening the operational backbone required to scale efficiently . In 2026 and beyond . This strategic expansion , nearly doubling our sales and patient support teams , will enhance our ability to reach more clinicians and serve more patients , and allows us to capitalize on the significant market opportunity ahead .
Speaker #3: Let's turn now to our pipeline in XP 8121 . Our once weekly subcutaneous form of levothyroxine . For primary hypothyroidism . XP 8121 continues to advance according to plan .
Speaker #3: Leveraging our proprietary technology and drug device development capabilities . We are creating a novel formulation and a high precision delivery system that will enable the administration across a wide array of doses .
Speaker #3: Important drug manufacturing and device validation work is in process , and we remain on track to initiate our phase three clinical trial . In the second half of 2026 .
Speaker #3: As we've stated before , we're really excited about this product and the unmet medical need it can address . While a recent . While at the recent American Thyroid Association's annual meeting , we enjoyed a large number of enthusiastic discussions with key opinion leaders who further reinforced our conviction in XP 8121 blockbuster potential .
Speaker #3: Before I turn the call over to Steve to walk through the details of our exceptional quarter , I want to leave you with this .
Speaker #3: We are focused . Our ability to deliver remarkable performance quarter after quarter highlights the value of our commercial product portfolio . The effectiveness of our strategy , and most importantly , our dedication to serving patients .
Speaker #3: With that, let me hand the call over to Steve.
Speaker #4: Thanks , John . And good morning , everyone . Before diving into our financial performance , I want to highlight the considerable progress our company has made this year .
Speaker #4: Over the past nine months . We've generated outstanding revenue growth , fueled by both robust demand for our therapies and a high performing commercial organization at the same time , our gross margin has continued to improve , underscoring the strength of our operations in the third quarter , we generated significant positive cash flow as well as net net income for the first time in the company's history .
Speaker #4: We also delivered strong adjusted EBITDA growth further demonstrating the scalability of our business and reinforcing our ability to translate consistent top line performance in a bottom line .
Speaker #4: Results . These results are a clear testament to the discipline , focus and execution across the organization , and they reinforce the solid foundation we've established for sustainable growth well into the future .
Speaker #4: Turning to our third quarter results . On a year over year basis , net product revenue increased 40% to 74.1 million , with total revenue of 74.4 million .
Speaker #4: Recorlev delivered another record quarter with net revenue of 37 million compared to the prior year . Net revenue once again more than doubled , increasing approximately 109% , driven almost entirely by patient growth of 108% .
Speaker #4: Gvoke net revenue was 25.2 million , an increase of approximately 10% compared to the same period last year . This growth was driven by a 5% increase in total Gvoke prescriptions , as well as some favorability in our gross to net net revenue was 11.9 million .
Speaker #4: We saw a modest increase in the average number of patients on therapy in the third quarter , and we continue to see a healthy pace of new patient starts , underscoring the durability of this franchise .
Speaker #4: Turning to gross margin , we delivered a significant improvement this quarter with gross margin growing to 85% , driven primarily by improved product mix research and development expenses were 7.5 million for the quarter , a $1.6 million increase versus last year .
Speaker #4: This increase primarily reflects our continued investment in our pipeline and technology platforms , selling general and administrative expenses were 46.5 million in the quarter , an increase of approximately 3% compared to prior year .
Speaker #4: The increase in SG&A primarily reflects the incremental personnel related expenses . Adjusted EBITDA for the quarter was 17.4 million , improving more than 20 million compared to the third quarter of 2020 .
Speaker #4: Four . This impressive result underscores the strength of our operating model and validates the actions we have taken to drive long term value creation .
Speaker #4: As I mentioned earlier , for the first time since the company's inception , we reported quarterly net income . This achievement highlights our growing commercial strength and operational discipline as we continue to make targeted investments across a range of growth opportunities .
Speaker #4: We do expect some variability in quarterly EPs results going forward and to be clear , we remain committed to maintaining positive adjusted EBITDA even as we make these incremental investments .
Speaker #4: Moving to our near-term outlook and guidance . As John highlighted , our strong performance year to date , coupled with the momentum we are seeing in the fourth quarter , gives us the confidence to raise our full year 2025 guidance for total revenue .
Speaker #4: We are raising the low end of our previous range , which , as a reminder , was 280 to 200 and 90 million to 280 5 to 290 million .
Speaker #4: The new range represents growth of 42% at the midpoint , compared to 2020 . For additionally , as we make incremental investments in our Recorlev commercial organization and as we prepare for our phase three clinical study , start for SP 8121 and 2026 , we expect an increase in both G&A and R&D spend starting in the fourth quarter .
Speaker #4: These investments are aligned with our strategic priorities of supporting near and long term growth . Before we move to Q&A , I want to reiterate my earlier comments and emphasize our considerable progress .
Speaker #4: This year . We delivered strong top line growth once again reflecting robust ongoing demand for our therapies with gross margins around 85% , strong cash generation and significantly positive adjusted EBITDA .
Speaker #4: We continued to prove the strength of our business model . Overall , this has been a year defined by exceptional execution and transformational progress .
Speaker #4: With that , I'll turn the call over to the operator for Q&A . Operator .
Speaker #1: Thank you very much . Ask a question , please . Press star followed by one on your telephone keypad . Now , if you change your mind , please press star , followed by two .
Speaker #1: When preparing to ask your question , please ensure your device is unmuted locally . Our first question comes from Dennis Ding from Jefferies .
Speaker #1: Your line is open, Dennis. Please go ahead.
Speaker #5: Hey . Good morning . Thanks for the questions . I'd like to ask on Recorlev . Can you just please talk about the impact of the expanded sales force that you guys have implemented last year , and if productivity has ramped up yet , and as you're thinking about further expansion , what do you think those reps will be fully trained and get the productivity .
Speaker #5: And then as a follow up on record , your competitor continues to have supply issues with this specialty pharmacy . Just curious , were you able to capitalize on that in Q3 or should we see more of a tailwind from that in Q4 ?
Speaker #5: Thank you .
Speaker #3: Do you want to .
Speaker #4: Yeah . So the expansion last year , we we added we increased the size of the Recorlev commercial team by 50% . So we were at around 42 reps starting in the third quarter of last year .
Speaker #4: And as you know , it takes a little bit of time to to ramp up productivity . But I would say that , you know , starting in the first quarter .
Speaker #4: Second quarter this year , those those reps were were operating at optimal productivity . Looking ahead , we expect more of the same in terms of productivity from our next expansion and the timing of that would be , you know , we'll bring those reps on board in January .
Speaker #4: Take take some time to train them up , get them out in the field , get a couple quarters under their belt before they're there operating at at optimal productivity .
Speaker #4: John , do you want to take the competition ?
Speaker #3: Yeah , I would say we didn't see anything unusual in Q3 as it relates to where our patients were coming from . We continue to see the majority of our patients are new to therapy for recorlev and you know , the rest come from from competition all the same mix as we've seen in the past .
Speaker #3: So I would say nothing unusual . And everything's , you know , as as status quo .
Speaker #5: Okay . Thank you .
Speaker #3: Thank you .
Speaker #1: Next question comes from Chase Knickerbocker from Craig-hallum . Your line is open . Chase . Please go ahead .
Speaker #6: Good morning . Thanks for taking the questions . Congrats on the quarter . Maybe just to start on some kind of under the covers stuff on on Recorlev .
Speaker #6: Can you maybe just give us an update on kind of what you're seeing from a persistency perspective ? Any sort of help you can give us as far as kind of current discontinuation rates and how that's trended over the last couple of quarters .
Speaker #3: Yeah, Chase, I think everything's again the same as what we've had in the past. We're again adding so many new patients that that's really keeping all of those metrics in check right now.
Speaker #3: So we're getting , you know , the same amount of people started the same time to get him started . You know , no real change in drop out rates , average dose , all those things we're we're too new in our in our life cycle here to see any kind of real significant changes in there .
Speaker #3: And again , there overwhelmed by the high level of new starts .
Speaker #6: Can you just remind us what kind of 6 or 12 months is kind of discontinuation rates are either for the for the condition or specifically for recorlev .
Speaker #3: I don't know exactly what they are for the condition . I , you know , I would tell you Recorlev is pretty typical to a , you know , a specialty product like this in a , you know , in a complex disease state .
Speaker #3: I think what we're seeing is as , as expected . In the space . But we haven't really disclosed any of that directly .
Speaker #6: Got it . And then maybe just as we kind of look into 2026 , you know , you've had pretty remarkable progress , particularly on the upfront this year .
Speaker #6: Would you be willing to share kind of any any thoughts as we go into 2026 . And and start having some , you know , more impressive comps to deal with ?
Speaker #6: Obviously , as we look at the impressive performance this year . Any thoughts on kind of how to set expectations as far as top line growth , either for , you know , Recorlev specifically or the or the business as a whole ?
Speaker #3: Yeah , I'll try to take that on the context of Recorlev . As you heard , we're we're investing on more expansion around Recorlev that's driven by a market that is ripe for , for expansion .
Speaker #3: There's more and more people being screened for Hypercortisolemia . We have , in my opinion , the best product for for normalizing cortisol and and we're going to , you know , we're expanding into a market that's continuing to grow as , as we're expanding .
Speaker #3: So I see , plenty of growth for Recorlev , you know , we we said back in June , we think this is on pace to be $1 billion product .
Speaker #3: And this is, you know, this is all part of our plan to get to that $1 billion.
Speaker #6: Maybe just last one for me , Steve . You know , I hear your comments as far as you know , some variability on the bottom line as far as we think about expenses on the go forward , any additional thoughts you'd be willing to give us as far as kind of when that cadence of R&D , you know , kind of should be fully reflected from an , you know , kind of enrollment perspective as it comes to the 8121 trial .
Speaker #6: I mean , should we ramp that up into mid next year ? And then that's kind of , you know , peak enrollment or , you know , just kind of give us some thoughts on particularly the R&D line next year , but also obviously SG&A , as we think about the Recorlev expansion .
Speaker #4: Yeah . Good to talk to you , Chase . As we think about , you know , I in my comments earlier , we're going to start to see some of those investments for both Recorlev and 8121 stepping up in the fourth quarter , John highlighted in his prepared remarks that we plan to start the .
Speaker #4: The trial in the second half of next year . So I think that's when you'll really start to see the spend start to ramp up , and then obviously , well into 27 , that that's probably where it'll peak off .
Speaker #4: And then in terms of , you know , the Recorlev investment , you know , we started to make some of these investments this quarter , late third quarter .
Speaker #4: But we're bringing on the reps starting in January . So that's where you're going to see another step up in SG&A spend . But again all things under the under the umbrella of supporting growth in our strategic priorities .
Speaker #4: And as as we've said , a number of times , even with these investments , we are committed to remaining adjusted EBITDA positive going forward .
Speaker #4: So that's a that's a really important point here . Is even with the significant step up in spend over the next 15 months , we will remain adjusted EBITDA positive .
Speaker #6: Got it . Thanks , John . Thanks , Steve . Sure .
Speaker #1: Our next question comes from Leland Gershel from Oppenheimer . Line is open . Please go ahead .
Speaker #7: Great . Thanks for taking the question . And our congrats on the continued progress . Just a question . You know , with regard to your longer term sales guidance .
Speaker #7: You for Recorlev just wondering if that anticipates any further build out to the sales force or if you expect that you'll be able to , achieve those targets based on your current force ?
Speaker #7: Thanks .
Speaker #3: Thanks , Leland . You know , we've we said that we're going to continue to invest over the next several years on Recorlev , and we'll need that .
Speaker #3: We'll need to do that to manage the patient load . So we'll have to make investments in pharmacy , patient services . All the commercial footprint it takes to be successful in this space .
Speaker #3: We'll also need to , you know , and look to start investing even more in data and and other things that can help drive more growth in this space .
Speaker #3: And position us to really capture that growth . So , so yeah , there will be investments all the way through to the end for this product .
Speaker #3: As you build $1 billion product , you you continue to scale your investments with with that growth level .
Speaker #7: Got it . And I also wanted to ask , 8121 coming through . Obviously you'll have a bump in R&D over the next couple of years as it gets through its pivotal program .
Speaker #7: But then , you know , R&D should should come back down unless there we'd be looking for maybe other candidates to be coming out of Xerisol or the company's platform to maybe fill in in the early pipeline .
Speaker #7: Thank you .
Speaker #3: That's a great question . And we , you know , one of the beauties of the business here at Cyrus is we continuously find great ways to invest in our technology , using our technology for new opportunities .
Speaker #3: 8121 is a perfect example of that . To be able to create using our Xerisol technology . Once weekly . Subcu product that can really meet an unmet medical need .
Speaker #3: So , you know , in those time frames , sure , we , you know , not prepared to say what those would be .
Speaker #3: Now , but we see it as an opportunity for us always to make incremental investments with the platforms we have and the capabilities we have to continue to drive even more growth than we've already stated in our plans .
Speaker #7: Great . Thank you very much .
Speaker #4: Thanks , Leland .
Speaker #1: Our next question comes from Brandon Foulkes from H.C. Wainwright . Your line is open . Brandon , please go ahead .
Speaker #8: Hi . Thanks for taking my questions . And congrats on the progress . Can you just remind me of the gating steps between now and the initiation of 8121 trial ?
Speaker #8: And then maybe just following on from similar questioning as you make these multi-year investments in the infrastructure behind these products , does that infrastructure ever get large enough where it makes sense to bring in additional products ?
Speaker #8: Just any comment there would be . Great . Thank you .
Speaker #3: Let me ask . Let me answer the first one on 8121 . So we've been really clear that we're planning and building a blockbuster here with with 81 , 21 .
Speaker #3: And we're taking all the necessary steps to before we start the phase three trial to , to basically make sure we've got the ready to go commercial product to take into that phase three trial .
Speaker #3: So we're right now in the middle of manufacturing scale up device verification and design . That device verification and and making sure that what we go into the clinical trial with can deliver the wide range , the wide range of doses that are necessary in this space .
Speaker #3: And and , you know , we just need to make sure that we get that done before we start the phase three trial .
Speaker #3: So that we're not going back later on and dealing with delays because , you know , we weren't able to do that . So so we're going to do this very carefully , planned fully .
Speaker #3: And we'll start that trial when all that work is done . And we can go into it with the with the commercial , the commercial presentation .
Speaker #3: Remind me on the second question was .
Speaker #4: Infrastructure leverage for business development .
Speaker #3: Yeah , of course . Yeah . The infrastructure I mean we're we're in such a growth mode right now . You know , the infrastructure is pretty much dedicated to the the brands we're driving , the growth with .
Speaker #3: But as we get a little more mature . Yeah , sure . It makes sense to to to use that infrastructure to kind of leverage even more opportunities and capabilities .
Speaker #8: Great . Thank you very much for taking my questions .
Speaker #4: Thanks , Brandon .
Speaker #1: Our next question comes from David Amsellem from Piper Sandler . Your line is open . David , please go ahead . Hi .
Speaker #9: Yes . Good morning . This is Alex on for David . Thank you for taking our question . My first question is how are you thinking about competitive dynamics for Recorlev ?
Speaker #9: To the extent that Corcept Relacorilant gains approval by the end of the year . And what are your base case scenarios for the impact of that potential entrant on Recorlev ?
Speaker #9: And then maybe also a second question just on the headcount for Recorlev , do you have any plans in the future to call in general practitioners ?
Speaker #9: And I'm sorry if I missed that earlier on the call . Thank you .
Speaker #3: So , you know , yes , we anticipate recalling gets approved by the end of the year . We've said this in the past , and I and I'll say it again , is we think that , you know , this is a market where there's so much opportunity and so much potential that , you know , another player in this marketplace talking about screening , detection and finding people with Hypercortisolemia is a good thing .
Speaker #3: So , so we think Relacorilant will will help the market . We know they're going to make great and there are making great investments to drive that .
Speaker #3: And we see that as an opportunity , as well . And then in terms of numbers on the on the expansion , I'll maybe .
Speaker #4: Yeah , I think it's the question was around targeting GPS . Are we going to be targeting GPS .
Speaker #3: Yeah . So you know , we we're approaching this , you know , data driven kind of approach to expansion . And and focus and and you know , we're we're the patients are is is where we will go with our our commercial footprint .
Speaker #3: And that leads you into some . You know , GP area . Most of those GPS are , you know , endo like high diabetologists things like that .
Speaker #3: So you know yeah . Yes . As we expand of course we'll be moving into those spaces to , to really , you know , go where the opportunity is .
Speaker #9: Thank you .
Speaker #1: As a reminder to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Rowana Ruiz from Leerink Partners.
Speaker #1: Your line is open . Rohana , please go ahead . Great . Good morning everyone .
Speaker #9: Thanks so follow .
Speaker #1: Up question on .
Speaker #9: Recorlev . I wanted to see if you could talk about how . much momentum you're seeing across new and repeat prescribers and just thinking ahead to 2026 .
Speaker #9: Any seasonality trends or volume growth drivers we should consider for Recorlev going forward ?
Speaker #3: So yes , we're seeing repeat prescribers and new prescribers . Come on and you know , we have momentum on both of those .
Speaker #3: You know , with 108% increase in in in in patients and prescriptions , you know , you're getting from both . So we're excited to see that momentum .
Speaker #3: We see that momentum is still very very strong . And obviously the reason why we're expanding into that that opportunity .
Speaker #4: In terms of seasonality for Recorlev , you know , maybe a little bit with deductibles that get reset in the first quarter and you see that across all of our products , really .
Speaker #4: So but I wouldn't say that that's , you know , overly material for , for Recorlev , we're not expecting it to be overly material , but , you know , we'll that's something we pay attention to every year at the first of the year .
Speaker #4: So that would be the only potential seasonality impact for Alana that I would expect for Recorlev .
Speaker #9: Yep . That makes sense . And one other question I had was just , could you talk a bit more about the franchise durability ?
Speaker #9: It seems to be continuing pretty steadily . Do you expect that to persist into next year ? And any other ? Have you been hearing anything else about competition to us ?
Speaker #3: Well , you know , we're always watching for more competition in this space , but I'm like you , I'm excited . Every time we talk about Keveyis because this is a just a great model where what we do for patients is , is really important .
Speaker #3: And , and starting with finding the patients , helping them get diagnosed for the first time , working them through treatment and and helping them stay and remain on treatment .
Speaker #3: All of those things really , really matter in this space . And and that's why Keveyis continues to hang in there . And and it remains to be a very durable asset for us .
Speaker #3: We continue to bring on new patients to brand every week , which is just really exciting in this space , because we're really making an impact on those patients in the marketplace .
Speaker #9: Make sense ? Thanks .
Speaker #1: We currently have no further questions , so I'd like to hand back to John for some closing remarks .
Speaker #3: I want to quickly thank everyone for their questions and continued interest in Xeris . As we look ahead to end to the end of 2025 , I couldn't be more proud with how our team delivered this year .
Speaker #3: We are finishing the year from a position of real strength , evidenced by our strong commercial and financial performance at the same time , we're building for the future with the foundation in place to initiate the XP 8121 phase three clinical study next year and continue .
Speaker #3: Advancing our broader strategic priorities , we believe these efforts position Xirrus exceptionally well heading into 2026 . A year where our operational momentum will continue to translate into outstanding revenue growth , profitability and long term value creation .
Speaker #3: Thanks again for joining us today and for your continued support .