Terrific. Welcome, everyone, to our next session here at Oppenheimer's 35th Annual Life Sciences Healthcare Conference. I'm Leland Gershell, one of the research analysts on the biotech team here at Oppenheimer. Really pleased to have with us as our next company, Xeris. Xeris is a company that we've been covering for some time and which we're favorable on the stock. We have with us from Xeris the team, Steve Pieper and John Shannon. John Shannon is the CEO, and Steve is the company's Chief Financial Officer. We'll be getting into a discussion about the company's current business and future prospects. If you have any questions of your own, please submit those, and I'll do my best to work those in.
So I think, you know, for those who are maybe less familiar with the business, maybe, John, you can sort of, you know, run us through your current products in the market. You've got, obviously, you know, Gvoke, which is as a diabetes rescue therapy. You have Recorlev, which is an innovative differentiated drug for Cushing's. And then, of course, you also have the third product whose name I'm blanking on.
Keveyis.
Keveyis. Keveyis, sorry. Last but not least for PPP. So how have those, you know, products kind of, you know, come to form the portfolio at Xeris?
Oh, that's a great question. So you just named off and nicely talked about what they do. But we have three products, and the company was really started on the back of Gvoke. And Gvoke is that, you know, you know, it's the rescue med for diabetes. So it's a ready-to-use glucagon using our XeriSol technology. And that technology has, you know, allowed us to start that product as well as build our XP-8121, which we can talk about. The other two products we picked up as an acquisition of Strongbridge, which is Keveyis and Recorlev. Keveyis has been around for a while and actually went off patent back in August of 2000 or 2022.
'22.
We continue to, you know, hang on to that product. It's a very sticky brand. And patients and healthcare professionals continue to fight for that brand. And it's allowed us to, you know, do quite well with that as we go. Recorlev, we launched into the Cushing space. And as you talked about it, it's for hypercortisolism. And it's been a great asset for us. It's growing, you know, very nicely for us and in a market dynamic that's really allowing for a lot of, you know, future growth as well in this space. So yeah, I'll kind of stop there. And, you know, if you want to get into some of the specifics around the products, happy to do so.
Yeah, no, terrific. So Gvoke and Recorlev have been, you know, terrific growth drivers. I think, you know, Recorlev has really emerged as being, you know, a product in the hypercortisolism Cushing's space that people have been adopting. You've been investing further in the sales force there. There's been growing demand. Maybe, you know, talk a bit about, you know, how those investments are paying off as you had implemented them last year. And, you know, I think in the last quarterly report, we saw, you know, some very encouraging updates on the sales side.
Yeah, I think so. Recorlev and Gvoke are our two biggest growth drivers. I think we reported, you know, 24% revenue growth last year in our pre-announcement. We'll do earnings release in a few weeks, but Recorlev is the big driver in that growth engine. You know, again, this is a product that really picked up in the back half of the year, and it was focused, you know, on our ability to kind of see what's going on in the marketplace and invest in front of that. You know, so we added 50% to our sales organization in the third quarter, and that started to immediately pay off with us finding more patients. So we accelerated the number of referrals in the back half of the year, as well as the number of patient starts in this space.
You know, this is one of those dynamics we see that carrying forward into 2025, you know, as we start to really realize the value of those investments.
Yeah. And Recorlev, you know, which is differentiated in that it really, you know, kind of goes after direct inhibition of the synthesis pathway of cortisol. I mean, how has that been ringing with endocrinologists and other prescribers who, you know, there's a variety of therapies to choose from, right, in this space? And, you know, are you seeing patients maybe transition from what had been kind of a, you know, regular kind of off-label ketoconazole moving over to Recorlev?
Yeah, I think you hit it on the head. Recorlev is a cortisol synthesis inhibitor, so and it's, you know, its mechanism of action, it hits it in three spots, so it's an ideal candidate if you want to normalize cortisol. If you've got high cortisol levels, it's the ideal candidate. We think it's the best candidate out there, and that's where physicians are right now focused on. If they're looking at a lot of these, you know, resistant diabetes, resistant obesity, resistant hypertension, and in this Cushing space, they're testing more and more for cortisol levels. And as they find those cortisol levels, you know, high or abnormal, they're looking to start treating these patients, and we have the ideal candidate in that respect in terms of if you really want to treat the underlying cause, focus on the synthesis of cortisol and inhibit that.
Yeah. And obviously, another product in this space from another company, which works, you know, entirely differently, you know, it looks like it does have obviously an effect in terms of making people feel better, obviously approved here, but not quite the direct mechanism. Is that right?
Yeah. So obviously, the biggest product in this market space is Korlym. And they, you know, they block at the tissue level, they block the receptors for cortisol. So again, the conversation, you know, we like to have with clinicians, if you want to treat the underlying cause, you want to inhibit the synthesis of cortisol. And again, Recorlev is the ideal candidate for that.
Yep. And that product did, I think, close to, or maybe even exceeded $500 million in 2024 sales, so obviously, huge potential in this hypercortisolism market. Looking at Gvoke, and this is, as I mentioned, you know, diabetes rescue medication for patients who, you know, over control on insulin, they become hypoglycemic. You entered a market where there were some sort of legacy products, kind of kits. What has that been looking like? And what are the real advantages of a Gvoke versus, you know, those other products that, frankly, it looks like the companies aren't really even investing in their sales at this point?
Right. So obviously, with the invention of Gvoke and the launch of Gvoke, it was the first time the market, the diabetes market, had a ready-to-use rescue medication for hypoglycemia. And so this is a market that, you know, used to rely on the old chemistry kits, as we call them, where you'd have to reconstitute and be able to deliver a dose in an emergency situation. And think about, you know, a patient or a loved one either seizing or unconscious, and you're trying to mix these meds and try to make an injection. And the bottom line is people would, they would rather call 911 than try to use those old kits. Those old kits have been replaced over the last several years with Gvoke HypoPen, which is a ready-to-use rescue pen, and/or a nasal glucagon. I don't know why I'm blanking on it.
And so those two products have pretty much replaced the old kits. And now the game is really, how do we really get the number of people that today should have a rescue med on hand based on the medical guidelines and make sure that they get one just in case they have a severe hypoglycemic event? And there's about 15 million people out there that are either on insulin or sulfonylurea that, based on the medical guidelines, should have a ready-to-use glucagon. And only about a million of them do today. So our focus has been on bringing awareness and also trying to help clinicians become more in compliance with the medical guidelines. We just announced a new partnership with ADA in that respect to help drive that.
And that's really where the opportunity is, is how do we get the rest of the 14 million people today that don't have a rescue med on hand, how do we get it in their hands?
When I look at Gvoke, you know, I think of like, you know, the EpiPen, right? Like something you kind of carry on you and you can use it and, right, same kind of profile. Obviously, it's, you know, people with, you know, nut allergies and so forth, you know, often carry those. What are the sort of limitations on getting, you know, further uptake, you know, of Gvoke? Is it on the payer side? Is it having to meet certain criteria? Is it simply just awareness of having the, you know, the product being available? Lay that out for us.
It's awareness and changing from, you know, what should be the standard of care to the standard of practice. So, you know, for decades, clinicians didn't really have anything to give out. And it wasn't worth the time and energy to try to educate them and get them to not only for them to prescribe and not and then get the patient to actually pick up the old rescue kits. So now they have products and have an alternative that is easy and simple for you to educate the patients on and make sure it's in the hands of the patients. But you still have to change, you know, the practice of, oh, I keep forgetting. Oh, you're right. You know, let me remind them to pick it up. Let me, I better make sure I put that in the order set for my patients.
So it's a lot of that activity and really, you know, getting more and more of these patients protected that deserve to be protected.
Yep. Yep. And you recently signed an agreement with Beta Bionics. I think that company incidentally is looking to go public, which is great. And just, you know, what are the opportunities here, you know, for the dual kind of hormone pumps, right? Just as you think about, you know, you guys and that technology, how that can sort of, you know, fit in.
Sure. Yeah. We entered into a development agreement with them where we have developed and designed a form of ready-to-use liquid glucagon that can be administered through pumps. And that's a real important aspect, but because today you couldn't do that with traditional glucagon. And so our technology allows that. And then we formulated it specifically so that it'll work better in the pumps in terms of volume and all that kind of stuff that's really critical to be able to, you know, put it in a pump and deliver it as needed. So we did that last year. We've already delivered the formulation for them. And they're in the process of working through with the FDA and others to get that actually developed for utilization through their pump and as well as other pumps.
Yep. So maybe we'll hear some more on that. I know obviously, you know, you've got, you know, communications between the companies, but maybe down the road, we'll hear some disclosures around that advancement. And Keveyis, which thank you for the reminder. So amazing, right? This drug has been generic now for quite some time. It seems to be holding up quite well. I think the benefit of the brand is all the other ancillary things that come along with the branded medication, the hub and patient assistance and other resources. I mean, do you see this kind of continuing for the years to come? Neurologists often very skittish about changing from a brand to a generic because, you know, dose levels are very important for drug effect, you know, in neurologic conditions. What's sort of the outlook and do you sense any impact of generics that may be coming?
Yeah, I think a generic play has had very little impact on the brand. Because again, we're still out there. We help clinicians identify these patients. This is an ultra-rare disease. We help them get on drug and we help them stay on drug. So these are all aspects that are really important to the patient as well as to the healthcare professional. So all of that wraparound service is important. And it's causing people to fight hard for the brand against the payers, both at the patient and physician level. And we've even seen a lot of patients that were forced away to the generic who have come back to brand for those reasons.
Yeah, terrific. So yeah, it looks like we could have a very nice tail there for Xeris. Moving on to, you know, the pipeline. So we're very intrigued by a development asset that you guys have in the clinic, so-called XP-8121. And this is a subcutaneously injected levothyroxine. I think many people are familiar with Synthroid, which is an oral medication taken by many people. I think you've quoted something like 100 million, either tablets or prescriptions a year. So, you know, and women often, you know, have a lot of challenges, you know, with maintaining normal thyroid activity.
We've done, you know, some work with experts in the area, endocrinologists who agree that, you know, oral thyroid hormone can be challenging in terms of dosing and titration and keeping patients in kind of the right, you know, band, particularly when, as I mentioned, women, things like pregnancy and other life events can really affect the ease at which you can dose it. You guys have a SubQ. You know, it's interesting because, you know, most people think about going from a, you know, oral to an injectable sort of in the reverse direction, sort of as to kind of the normal course of business. But maybe in this case, it looks like it could be a real advantage. So we'd love to hear sort of your thoughts there on the opportunity for 8121.
Yeah, this is another exciting product for us because, again, it's enabled by our technology and our XeriSol capabilities. So, and this is a space that nobody's been able to do any work in. Nobody's done any work in it for decades. And there are a significant portion of people that cannot and will not be normalized on daily orals for a lot of different reasons. And, you know, the data would suggest 20% to as high as 40% of the patients are not normal on daily orals because the oral bioavailability is impacted by everything from GI issues to, you know, drug interactions with proton pump inhibitors, as well as food and other interactions, right? So very difficult to get to normal thyroid levels. So from a patient perspective, there's a tremendous amount of interest in this.
You know, it's hard if you're on this every day taking it. And when you're not getting levels right, you don't feel good. And you've got a lot of long-term, you know, morbidity risks, whether it's, you know, cholesterol, cardiovascular fractures, osteoporosis, things like that. So, and quite frankly, the daily orals just won't work in those situations. So we'll be the only one that, you know, with a once-weekly SubQ version, we'll be the only product out there that will solve for that big unmet medical need.
What was interesting to us as well is for the patients, again, it seems like a no-brainer, but on the physician side, I think what we're learning from the research and talking with endocrinologists is these patients are a real challenge for them, very labor-intensive in terms of managing these patients, whether you're changing doses, changing regimens, trying to adjust and for up and down because it worked this week, but it didn't that week, or I changed drugs. So there's a lot of work that goes into it, and the physicians were very receptive to, "Oh yeah, this could make my life easier as well because these patients are challenging."
I know you've been in discussions with FDA post the, you sort of had the initial kind of PK data last year, which was very supportive. Looked like things were behaving as you'd like. With the agency feedback, it sounds like we may hear an update as we get toward the summertime. Is that right?
Yeah, by mid-year. So we've taken a calculated iterative process with the agency and are still in discussions with them because we have a drug that for the first time will actually have TSH and T4 type data in its clinical development plan and in the label. We'll have a drug for the first time that will be SubQ versus oral. And we got a drug-device combo that you're delivering, you want to be able to deliver in a way so that people can do it at home. And, you know, you're in a narrow therapeutic window drug space.
So you want to do all this the right way and go through the process of starting a phase three trial with all the right parameters and making sure that you're going to get the kinds of things that are really important to get into the label that will help us get through the payer landscape and make it easier for physicians to be able to prescribe.
Yeah, and is there a particular, you know, obviously many patients obviously taking oral thyroxine today? Would you be looking to go for a particular segment of that population with at least the initial label, or would this really be kind of going for, you know, truly an alternative to the oral Synthroid?
I think physicians will use it in the population where they know they cannot manage these people with daily orals for sure. That's the place where they'll go. That's probably at least 20% of the people on daily orals today. Those with GI tract issues, those with proton pump inhibitors, things like that are really critical areas where they don't have an immediate opportunity for them.
Yep. No, absolutely. And obviously this takes advantage of your in-house technology. Are there any opportunities that we should be aware of with respect to, you know, either XeriSol or XeriJect? I know obviously you probably have, you know, confidential discussions on the outside, but I don't know any directions to point us in it, or should we just look forward to maybe some news flow there as we get through the year?
Yeah, I think when we have material relevant news on that kind of stuff, we'll let it out there. But as you know, we do work for other companies in this space. It's challenging because the work we're doing, we've been able to deliver in every single time the formulation and the target product profile they wanted. But in cases, it gets deprioritized in their development scheme. So we seem to be, we're talking a lot less about them until they show up in a meaningful way in our revenue and specifically in, you know, in a material way in our sales and our revenue numbers. So yeah, so yeah, we continue to have those. We continue to work on them. We're just, you know, being less public about what it is.
Quite honestly, the companies we're working for, they don't want us to be that public about it either. Because, you know, they also want to keep it in their pocket.
Yep. No, absolutely. And yeah, speaking of revenues, you know, great growth. I think we saw a very nice announcement out of Xeris earlier around the J.P. Morgan time, kind of a pre-announcement. So you guys will be exceeding your prior guidance. I think that implies my numbers and math are correct about a 33% year-on-year growth of the net product revenue.
About mid-20s, actually. Yeah, mid-20s.
Oh, mid-20s. Sorry, my math was not correct. But anyways, but that's still very, very obviously very healthy.
Very healthy.
Yeah. Oh, you know what it is? Because I think that may have been, yeah, yeah, because I have different lines for product. And then of course the royalty and contractor.
Yeah.
But nonetheless, still mid-20s, very good. And you guys are approaching profitability. It looks like maybe sometime as we get through 25, you're going to be kind of getting into the black. So that's obviously going to be great for, you know, both the business and also supporting, you know, your activities with R&D. How's the cash balance today, Steve? And how do you see that kind of as you get into the next few years being able to support yourselves with the current business?
Yeah.
Yeah, great question, so just to kind of put a bow on 2024, we generated revenue north of $200 million full year 2024, which, as you mentioned, exceeded guidance. We ended the year with over $70 million of cash on our balance sheet. We actually generated a positive cash flow in the fourth quarter, and you know, are feeling really good that we've got a healthy balance sheet and a business that is generating 20-plus percent growth on the top line and with no signs of slowing down. So as we think, look forward, you know, we're looking at how do we continue to fuel our top line growth and, you know, balancing that with, as you mentioned, kind of in the black and also, you know, funding XP-8121, our pipeline, and sitting here today, feel really good about our ability to do all of those things.
So I think Xeris is in as healthy a financial position as it's ever been. And we're looking forward to a really transformational 2025. And we will be providing further guidance and detailed guidance when we announce earnings in about three weeks from now. So stay tuned for that.
Yep. No, I see that. I think March 6th, you'll have your report and guidance. And I obviously look forward to hearing updates on 8121 in the coming months and how that's going to sort of shape up in the later stage development. And I think, you know, just in terms of business, you guys have been doing a great job growing sales, you know, consistently.
I think, you know, for investors who are looking at opportunities in the smaller caps, I mean, it seems like you would be attractive to both the kind of the value guys who kind of place a fine point on just sort of, you know, financial predictability and growth, but also maybe more of the, you know, biotech types who want to see some type of a, you know, development asset that can really kind of spark attention from the market and kind of, you know, get things going among that crowd. I think there's a lot to look forward to for Xeris. Really excited to be following the progress.
I appreciate you saying that, Leland. I think that's how we think about it too. We're a unique investment opportunity, especially right now, and with plenty of areas to drive value for shareholders.
Yep. Wonderful. Oh, just looking at the audience questions, which I had a few earlier that I worked in. Oh, well, somebody's asking about the Regeneron partnership. Again, I think you said what you can say, but if there's anything further to say, I'm happy to hear.
Yeah, if there's anything material that comes out of that, you know, then we will be communicating accordingly because that is one of the ones that we have spoken publicly about. And we continue to be in that relationship and we continue to do work for them. So as soon as we have something more to say about it, we will.
Great. And then one last question is, you know, you guys have been, you know, pretty much U.S. focused, but, you know, there could be international opportunities for, you know, for Xeris. Just wondering if you're looking outside the U.S. commercially or, you know, if you're going to basically kind of a, you know, North American U.S. focused play.
We as a commercial organization will stay focused on the U.S., and, you know, we'll look to a potential partner outside of the U.S. if there's opportunities for the products. I think you may have seen that we recently ended our relationship in Europe for Gvoke, primarily because there just wasn't enough value there for our distribution partner there, so, you know, in those scenarios, you know, we'll continue to try to find opportunities for our products in Europe, but through partners.
Terrific. Well, I think we'll conclude here. We're at the time. So John and Steve, thank you very much for a great discussion. Thanks to everybody who zoomed in for this session with Xeris. Wish everybody a terrific rest of the conference.
Thanks, Leland.
Thanks, Leland. Take care.
Take care.