Healthcare Conference, day one. My name is Dennis Ding. I'm the Biotech Analyst here at Jefferies. I have the pleasure of having Xeris Biopharma here. We have CEO John Shannon, as well as CFO Steven Pieper here. Welcome.
Thank you.
Yeah, thanks for having us.
Maybe to kick things off, just level set us in terms of where you are as a company, and maybe talk also about the progress you have made over the last couple of years in terms of base business and how you're thinking about the pipeline. Just kind of broad strokes would be a great place to start.
Yeah, I'll do that, Steven. Thanks for having us. Xeris Biopharma is, quite honestly, a unique biopharma company. We have three great commercial products already on the market. We have Gvoke, which is a potentially life-saving rescue med for people with diabetes. We have Keveyis, which is for primary periodic paralysis and an ultra-rare condition. Recorlev is for hypercortisolemia and Cushing syndrome. Those three products have allowed us to really build this company over the last couple of years, especially in the last year. We've been delivering 13-14 quarters in a row of 20% + growth. We see that going forward and continuing into the forward. We guided this year with our commercial products to $268 million at the midpoint. That's a 32% growth rate over last year.
Very solid growth, very much led by Recorlev as our biggest growth engine. We also hit another milestone last year, which was adjusted EBITDA positive. We have said we'll continue to stay adjusted EBITDA positive going forward, which has really set us up nicely for self-funding and being able to not only fund our growth, but also our future pipeline. That's in a nutshell. Yesterday was a, we launched our first ever analyst and investor day, which anybody who hears this can go back and look at. It's still available to look at. The reason we did that was because we're at a turning point.
We're at a point where we're really looking forward into the future and the amount of value we can create specifically with Recorlev and XP-8121, which is our phase III ready asset, is really where we set ourselves up for going into the future.
Great. Maybe if you kind of rewind to yesterday and the analysts have been you guys provide some long-term guidance. Remind us what those targets are and what drove the company's decision to put that out this year or yesterday rather than holding that, having that optionality a little bit later down the road.
Yeah. As John mentioned, we were kind of at this inflection point. We're turning a corner, certainly financially. The opportunities ahead of our business are pretty transformative. We felt like now was the right time to set some longer-term goals for the company that we're confident that we can achieve. I'll reiterate our guidance for this year, $260 million-$275 million in total revenue, guiding to $750 million in total revenue by 2030. That includes contributions from all of our current products. This is within our control. Longer-term beyond that, what we've guided to is getting to $1 billion in net revenue for Recorlev by 2035. We estimate that 8121, our pipeline product, our phase III ready product, will generate $1 billion-$3 billion in net peak sales opportunity in that same timeframe.
Certainly on a pretty exciting path that as we look beyond the next 5 - 10 years for the business.
Sure. When you look at consensus in 2030 and 2035, they're sort of well below some of the targets that you put out there. I am just wondering, when you speak to investors, what is your sense in terms of the disconnect that is out there between your guys' messaging and what they understand to be the opportunity over the next five to ten years?
I think that disconnect really is related to Recorlev and the opportunity that that product has in the marketplace. That is one of the reasons why we wanted to put some longer-term guidance out there for Recorlev, as we have seen this market emerge. It is a massive market opportunity that is just emerging. Looking at hypercortisolemia and the impact it is playing on a lot of different things, including Cushing syndrome. We started to see this about a year or so ago. We started to expand into it last year. We see it as accelerating in terms of the opportunity to go after this big marketplace. With Recorlev, we really do think we have the right product at the right time. Nobody had us, including ourselves when we started with this product three years ago, saw this opportunity as big as it is today.
That was an important aspect, to be able to get that out, help people understand that, and show how we can continue to drive that. Yeah, if you add in where Recorlev is going to where people had, you would see us as certainly going to be a much bigger company by 2035 than the consensus.
Okay. From a competitive standpoint, I mean, you guys are not the only ones in Cushing's, right? When you talk about the differentiation of Recorlev, how it stacks up relative to some of the other players in the market.
Yeah. Again, this market is expanding dramatically. I would encourage anybody to go to and view the replay of our investor day because it was not only you'll hear from us, but you'll also hear from an expert in the marketplace and endocrinology talking about how this market's evolving and where Recorlev plays in it. Again, like I said, what we're finding in the marketplace is clinicians are understanding when they have a resistant situation like diabetes, resistant diabetes, where insulin's not working or they're using so much insulin. If you go back and test in those people and you look for cortisol, you will find in a lot of cases elevated cortisol. This is the same for resistant diabetes, resistant obesity, resistant hypertension, all of these areas where the drugs that you're using should be working, but they're not.
You go in and you start looking. There is lots and lots of testing going on right now in the marketplace for cortisol, looking for this cortisol as the culprit. As that is happening, the first objective for clinicians is to go after the source and normalize that cortisol and normalize it in the best way you can. Because cortisol is still a very important hormone. From that perspective, clinicians will look to screen the patients and look for a tumor somewhere. They will try to remove that if they can. If everything is good, great. If not, they need a pharmacological agent. They look to the agents we have in the marketplace. This is where Recorlev comes in. I think Recorlev does the best job at, if you want to go after the synthesis of cortisol, the smoothest, easiest way to do that is with Recorlev.
It seems to be certainly catching on with clinicians to be able to solve the problem and slow down the synthesis of cortisol, getting it back in a normal range in a quick manner. That is where we play. Yeah, there are other products that are doing very well because of all the market opportunity that is going on in the space. They work differently than Recorlev. There is a place for all of them. We think we have the right product right now at the right time to really capitalize on the movement in the marketplace.
Right. If a doctor has a new patient who just got diagnosed with Cushing's, what is that doctor's decision tree in terms of figuring out which drug to put that patient on first? How does that work?
Yeah, I think most of the time they go look for the source. They try to take that on. The second thing they do is look at the different options that they have. That is where we come in. What we talk to them about is if you're looking to normalize that cortisol and block the synthesis of cortisol, the production of cortisol, then we are the best agent in that choice based on our mechanism of action. That is how we position Recorlev with them. At least half of our patients are new to therapy. Some come switching over from other agents, the other half from different agents depending on what was or was not working for people. We get a little bit from all. The first point is that they have too much production of cortisol.
Okay. In terms of clinical efficacy, how does Recorlev compare with some of the other agents? Like I appreciate that you will normalize cortisol. That is a biomarker. I am just wondering in terms of how patients feel, the diabetes, the hypertension, and things like that, or some of the other symptoms of Cushing's. How does Recorlev look relative to others? If that influences a doctor's decision to put somebody on Recorlev relative to some of the others?
I think they all look similar in terms of addressing the comorbidities. In terms of time to normalizing, that's not really what the clinicians are looking. They're looking for a smooth transition to normalizing cortisol. It's very subjective in that respect. If you go too fast, you'll get cortisol withdrawal, very simply. That's not good. If you take out all the cortisol, that's not good in some cases. Trying to do it in a way that's smooth and slows it down as opposed to just slamming on the brakes and stopping is probably the best effort. That's kind of where we fit. Mechanistically, we look like we would do that the best.
Okay. What about things like being able to manage the dose and having the flexibility to toggle the dose? We've heard from some physicians that that's kind of an important element. Do you think that is something that you guys are actively marketing around Recorlev?
Yeah. The movement out there by clinicians is straightforward. Start low and go slow in terms of the titration on these doses because you really, again, it gets back to the point I was trying to make about trying to slow it down, smooth it, do it slowly. That is what we see in the marketplace and how they treat.
Okay. Now, there's going to be a new therapy in Cushing's by the end of the year by competitor. Talk about, are you kind of, do you feel like that would put you on defense or do you think you still remain on the offensive and take more share even with the new entry? Maybe talk about just your thoughts on that compound and some of your puts and takes on that.
Yeah. It won't put us on the defense. I think more players in this marketplace is good and important. Having more people talking about testing and watching and looking for cortisol as a problem is a good thing. There is another product that is under review that may get approved by the end of the year. That one, based on what I know, is again, it's a receptor blocker. That is out in the tissue blocking cortisol. It's not really going after the underlying cause of slowing it down, the synthesis. It will be an important asset for physicians in order to treat some of these patients. From our perspective, I don't really see it as a big concern and more as an opportunity to create more noise in the marketplace, which is good.
Okay. Yeah. It gives you an opportunity to capture, to slot yourself in there if they are kind of eligible for a switch potentially. Okay. Outside of Recorlev, remind us the other two assets that you have that are commercial. How do those two drugs play into your 2030 product revenue guidance?
Yeah. In our 2030 revenue guidance, it does include contributions from both Gvoke as well as Keveyis. We still expect significant contributions from those products collectively, more so obviously from Gvoke. Yeah, we still expect Gvoke in particular to continue to grow into the future.
Okay. What is exactly driving that growth? Can you just comment on any kind of industry sort of tailwinds or trends that Gvoke could be benefiting from?
Yeah. Gvoke's a great story. This is a rescue med for people with diabetes. If you go low on insulin, if you go too low, it'll kill you. Gvoke is there as a protector. Our focus in this space is to protect the more than 15 million people out there that, based on the medical guidelines, should have a rescue med just in case, but don't. Only about a million of those people do. The job there is to get to the medical community and educate them about the medical guidelines, and then also get them more compliant with those medical guidelines. That's a pretty big job. The opportunity is tremendous to get this out into the hands of these patients. It's an important job for us to make sure people know that they could have a product.
Hopefully, they never need it, but they should have it. They deserve to have it just to be protected in case. We will continue to work on that. There is long-term growth there, but it takes time. It is a lot of lifting to get the medical community on board. Not on board. It is easy just to get them to remember to do it, really.
Okay. Remind us the competitive landscape in the glucagon sort of arena. Is it just Gvoke and there are others or?
There are two other what I would call ready-to-use rescues. There are the traditional emergency kits, which are still out there, and they still have a little bit of market share. There are two other players. There is a nasal and another analog of glucagon out there. This is not a be competitive type mode. Our number one objective is to just get everybody, all those 15 million people, to have a ready-to-use product. That is really the focus. I am not trying to grab share from somewhere else. There is way more opportunity in the people that do not have something than there are the people that do.
Okay. Where's the 15 million people from?
Insulin, sulfonylureas, all of them.
Okay. By your estimate, how many of those or what proportion of them actually have a glucagon rescue sort of option?
We estimate about a million, maybe a little bit less.
Okay. There's still a ton of room.
Yeah.
How do you penetrate? How do you grow that overall penetration? Is it just through education or time?
Yeah. You get in the office with the clinician and say, and this is what happens a lot of times. We see the doctor and they go, "Yeah, I agree." The next three patients that they see that day get a rescue med and then they forget tomorrow. It is a constant reminder of, "This is what you should be doing." Again, helping them understand. In some cases, when you move out to primary care, they do not know the guidelines as much. Education there and then just kind of also trying to help them. How do you adjust your practices within the office to make sure people are protected, things like that?
Is there a concentration of these prescribers either in the PCP setting or in the endocrinologist?
They're primarily endocrinology, for sure. I like to call them primary care that are high diabetology. A lot of practices can have a lot of diabetes patients. Great places to go. A clinician might see six or seven patients that day, all on insulin. Those places are very much the key places that you want to spend the most time on. That's kind of how we're designed and set up to do that.
Okay. It seems like there are a lot of education efforts that need to take place over the next several years. Is glucagon rescue therapy in the diabetes guidelines at all? Could that help?
Yes. Yeah.
Help with the education component of it?
Yeah. The guidelines are really clear there. It says that you should have all the guidelines, Endo, ADA, and ACE, and they're all the same. They basically say if you're on insulin or sulfonylureas, for example, you should have one just in case. You should have a rescue plan. You should have a rescue med. You should have a ready-to-use rescue.
Okay. Yeah. There just seems to be a very large disconnect there if it's in guidelines, if it makes sense to have a rescue medication. Yet there's only a million of these 15 million patients with one of these rescue options. There just seems to be a lot of work left to be done to actually grow that penetration.
We agree.
Yeah. We have about 10 minutes left. Maybe we can talk about the pipeline. I mean, you guys had a great segment yesterday about XP-8121 and hypothyroid. Just remind us of where you are, the phase II data that you guys had, and just sort of the timelines moving forward and when you expect that to be on the market.
Yeah. I'll give my same commercial. Go and see the webcast of yesterday because you'll see not only from the experts, two experts on thyroid, but also our clinical team and our commercial leader on that product. This is an exciting opportunity for us for the XP-8121. There's really been no innovation at all in this thyroid space for more than 50 years. We'll be the first one to really come out into the marketplace with clinical data and clinical information on and going after, and this is really important, a very important unmet medical need in this space. This is a large market. There's 20-some million people that are on daily oral thyroid replacement.
There are a lot of them, and you'll see the ranges in the data, but we estimate that there's at least 20% of them, so call it 3 million-5 million, that today cannot be in range or in control, consistent control because of the route of administration, oral. This is really important because this is a narrow therapeutic window kind of treatment. It's important that you are getting the right absorption. It just can't be achieved in the gut. It could be you have certain things like celiac disease or other things, or you're on proton pump inhibitors, or you're on over-the-counter kind of antacids and things like that. This is really important that you get back into control. Here's the thing that we learned, and you'll hear this from the experts.
It's a real problem for clinicians as well to manage these patients. You're constantly testing and adjusting doses, and you just get it right, and then all of a sudden you're overdosing, and then you're underdosing. They're constantly managing this as a real challenge. They start referring them over to endocrinology. Endocrinology is really busy these days. There's no room for these patients to be treated. To have a once-weekly sub-queue that normalizes and delivers the dose in a way that people can get in control and stay in control is a real, real opportunity. We gave out some guidance yesterday that we think, once approved, that this could be a $1 billion-$3 billion market opportunity. We're excited about that. We'll begin the clinical phase III. We've done phase I, phase II with this.
We've demonstrated that we've got the right dose. We've demonstrated the safety and efficacy of this. The agent here, which is levothyroxine, is well documented for years. This will be the first time we actually create, anybody creates, real clinical data, biomarkers, and things like that in a trial. We want to make sure that we deliver a robust amount of data so that we can truly go after this unmet medical need in the marketplace.
Remind us the phase II data.
The phase II data, we were able to show that we could take people, we take people that were normalized, and then we would un-normalize them and then bring them back with a once-weekly. We were able to do that pretty consistently with 40% less drug and fairly quickly. That was really what the proof point that we were looking to get, and so was the agency, so that we can move forward and make sure we had the right dose going into the phase III trial.
Was that a placebo-controlled trial? Was it single arm?
No. They were in control. One of the reasons it was so hard to do the study is because we had an extremely high dropout rate, a screen failure rate, sorry, of people that they thought they were in control. Then we go and test them, and they're not. They had to be in control on a daily oral. We took them out of control. We brought them back into control with a once-weekly.
Got it.
That was really the proof point for moving forward.
Okay. As you move into phase III, I believe it's supposed to start next year. Is that right?
Mm-hmm.
Okay. Can you talk a little bit about the clinical trial design, the primary endpoint, how you guys will be evaluating that, and when you think the data will read out?
Yeah. Go to the webcast again. Allison's going, "Good job, John." Yeah. What we said in there is this is going to be about a 1,000-patient trial. We'll start it next year in 2026, and we'll have it done by 2028, maybe some readouts in between. We haven't really discussed that, but people are asking about that. Looking at approval by 2030. We put numbers out there that for sure we thought we could either meet or beat in terms of our expectations out there because until we get in enrolling on this, it'll be interesting. The primary endpoint is at one year. There's a number of endpoints in there. We didn't disclose them all, but that's one of the main ones.
Because what we wanted to do is reassure that we had an endpoint that would for certain get us regulatory approval and then have a bunch of stuff around there that would really help us create a pretty dynamic label in that respect. What else can we build in there from a clinical standpoint?
Can you clarify your comments around some of the, you made a comment around interim readouts. What does that mean exactly?
I don't know other than what I just said. I mean, we talked about that as there may be time points during here where it may make sense to put data out there, but right now, I don't know what that would be.
Okay. 2026 , you start readout in 2028 , I believe.
Yeah.
Perhaps what I'm hearing or how I'm interpreting your comments is that there could be a scenario where there's a pre-specified interim at a certain amount of enrollment reaching 52 weeks, and you could take a look at the data where you wouldn't necessarily have to wait until 2028 for the data to read out. Is that fair, or is that not even on the table because it doesn't really seem that clear from your comments?
It's possible, but we haven't decided exactly where we would do that.
Okay. On the primary endpoint, you meant it is percentage of patients with normal TSH. There's an active comparator of oral levothyroxine. How is that measured exactly? Would that be measured at 52 weeks and you look at that time point, what percentage of patients are controlled between the two arms? Is it kind of because you mentioned that patients can fluctuate throughout the trial. How can you account for that?
Yeah. We didn't fully disclose all of that. We just basically laid out those endpoints. Over time, I think those will be clearer as we get closer to starting the trial. Really, the key endpoint was at 52 weeks. There are, you're taking measurements throughout. That's why depending on where things are, we could make different, depending on where we're at in terms of time points, we could look at those endpoints.
Okay. I'm assuming this is kind of like a preliminary design. You still kind of have to meet with the FDA to kind of align, or is it already aligned?
We have that all aligned. Yeah.
Okay.
Yeah.
Okay. Got it. You mentioned the opportunity here is $1 billion-$3 billion. Can you just walk us through the math around that?
Yeah. I mean, we talk about the 3 million-5 million patients. We have not gotten into pricing at all. There are analogs out there. We are not ready to discuss pricing, in what share and all that. We have not gotten into that. You could probably back into some of the math to arrive at a conclusion that the $1 billion-3 billion is a pretty solid estimate.
Yeah. The idea there is if it works, that's a big market. You launch in 2030, right? It could be transformational for the company given it'd be a new launch story for people to kind of track once we're in 2030.
No doubt.
Yeah. Okay. I think that's all the time that we have today, but thank you guys for the fireside. Hope you guys have a great day of meetings.
Thanks.
Thank you.
Thank you.