Everyone, whoa, take their seats, please. Because we do have people on a live webcast, we want to start on time for them. Okay, two minutes. Everyone, this is your chance to turn your phones off or the ringers. Thank you. Just give me that one when it's 10. Thank you.
I can do it with a whistle, but that's really loud with the mic. Thank you, everybody, for coming to our very first Analysts and Investors Day. I appreciate you taking the time out of your day. We have a full house here in person, and I know we've got 100 or so online. I really appreciate you taking your time. My name is Allison Wey. I'm the Senior Vice President of Investor Relations and Corporate Communications. We have a really exciting story to tell today. First, I'd like to remind you that some of the matters discussed today will be forward-looking in nature and subject to risks and uncertainties. Actual results or events may differ materially from what is stated, expected, or implied. Please refer to this slide for our definition of forward-looking statements, as well as in our filings with the SEC.
In addition, we will discuss certain non-GAAP financial measures. A reconciliation of those matters is in the appendix of the slide presentation. As you can see by this slide, we have got a really busy schedule and a lot to share with you today. John Shannon, our Chief Executive Officer, will start us off by sharing an overview of Xeris and the multiple drivers that we believe will create long-term shareholder value. You will hear from several members of the management team about those specific drivers and how we can leverage our capabilities to realize our long-term potential. Steve Pieper, our CFO, will close out the formal presentation with an overview of our near and long-term financial outlook, after which we will have a Q&A session. Those of you online will be able to submit your questions via the chat.
John will provide some closing remarks, and we should wrap up this event around noon. Please note, we will have a 10-minute break about halfway through the program. We are extremely excited to have three distinguished thought leaders in the endocrinology space with us today. We have Dr. Geer right here in front of me. She is a medical director at one of the world's most prestigious hospitals based here in New York City. She specializes in caring for people with pituitary and neuroendocrine diseases, including Cushing's disease. Dr. Bianco is the Chief Research Officer and Dean of the John Sealy School of Medicine at the University of Texas Medical Branch. Among his many accomplishments, he's a former president of the American Thyroid Association. He's published extensively on thyroid hormone metabolism and action. Finally, Dr.
Celi is the Chairman of the Department of Medicine at UConn Health. His impressive resume includes research on the relationship between levothyroxine replacement therapy and gastrointestinal absorption. I am certain you will find their insights and perspectives extremely informative. Now I'd like to pass the podium over to John Shannon, Chief Executive Officer.
Thanks. Good morning, everyone. It's my absolute privilege to welcome everyone to Xeris' first-ever Analysts and Investors Day. This is a tremendous milestone for our company. Why today? Why now? I'm here to tell you that we are standing at the threshold of an amazing transformation for Xeris. We want you to see what we see as the future for this great company we have built. Who are we? Our story starts with three great commercial products making meaningful differences in patients' lives every day: Gvoke, a potentially life-saving rescue med for people with diabetes; KEVEYIS, a life-changing product for people with primary periodic paralysis; and Recorlev for hypercortisolemia and Cushing's syndrome. We're going to talk a lot about Recorlev today. We have a strong foundation of proprietary formulation technologies, XeriSol and XeriJect. This is important.
We have a deep expertise in clinical development and commercialization, which has enabled us to address serious unmet medical needs with our products. This foundation will also enable our next great product, XP-8121, for hypothyroidism, also targeting a distinct unmet medical need for patients and clinicians. Our products are more than just a proof point of our platform and our capabilities. They truly improve patients' lives. As a leadership team, it is why we work at Xeris. Personally, it is what drives me to lead this company. I am extremely proud of the exceptional management team we have assembled. We have all worked at multiple companies multiple times. We have hundreds of years of experience in drugs, biologics, devices, drug-device combos. You name it, this team has done it. We have launched and scaled numerous market-leading products, including many blockbusters.
Our operational excellence and know-how gives us confidence to take Xeris to the next level. Throughout today, you'll hear from these leaders directly about their strategies and plans. As our story continues, you should know that we're on a journey. The mission of our journey is to create the next great biopharmaceutical company. Today is not just about reflecting on how far we have come. It is about looking forward. It is our vision, our growth plans, and the bold steps we're taking to realize the full potential of this company. Our historical efforts, especially our performance in the past year, have created a launching pad for our future. Our rapid revenue growth and disciplined capital management created a strong foundation for this company, guiding to $260 million-$275 million in total revenue and generating positive adjusted EBITDA. We are at an inflection point financially and commercially.
With 85% gross margins, we are self-sustaining and generating enough cash to fund our growth organically without the need for additional capital. This is a testament to the discipline and vision of this leadership team and the scalability of our business model. Soon, Mary Beth will walk you through how we are accelerating our investments in Recorlev to capitalize on a massive market opportunity and why we see sustainable long-term growth for this brand. Here is the headline. We believe Recorlev is on a path to $1 billion. With Recorlev leading the way, our three commercial products are not only a growth engine, but a platform to fund our future, including 8121. As you will hear from Anh and Josh, 8121 has the potential to be a game changer for the millions of people living with hypothyroidism, a once-weekly formulation designed to address a very important unmet medical need.
Upon approval, we believe 8121 has the potential to deliver $1 billion-$3 billion in peak sales. From a total revenue perspective, with Recorlev on a path to reach $1 billion, we are confident we'll deliver $750 million in revenue by 2030. With the approval of 8121, we see ourselves as a multi-billion dollar revenue company in the 2035 timeframe. By the end of today, I hope you see what we see: the immense growth and value we can unlock with Recorlev and 8121, and why now is a great time to join us on the next leg of our journey. As we take you on our path to long-term value creation today, I want you to take away the following: One, we have the know-how and demonstrated our ability to execute. We are confident we will achieve our future aspirations.
Two, Recorlev's growth journey is just getting started. We are confident Recorlev is on a path to achieve $1 billion in the next 10 years. Three, our rapid revenue growth and financial strength enable self-funding. We are generating enough cash to fund this business. Four, most importantly, XP-8121 will propel Xeris as a company with the potential for another $1 billion-$3 billion and turn us into a multi-billion dollar revenue company in that 2035 timeframe. We are not the same company we were just a year ago. We are on an accelerated growth trajectory, building a company for long-term value creation, and we're just getting started. With that, I'm excited to kick off today's program. I will now turn it over to our Chief Commercial Officer, Mary Beth McNerney, who will share our commercial strategy for Recorlev and how we plan to unlock its full potential.
Thanks, John. I'm excited to share our perspective on the evolving hypercortisolism market, as well as why we see tremendous growth opportunities for our lead commercial asset, Recorlev. Let's start with the end in mind. We expect Recorlev to be a blockbuster drug, approaching a billion dollars in annual net revenue. We're bullish on Recorlev for two reasons. The first is because of what Recorlev is and how it works at its core. Recorlev is indicated for the treatment of hypercortisolism in patients with Cushing's syndrome. In a world of too much cortisol, Recorlev is unique in its approach of getting to the root of the problem and normalizing cortisol levels. The second reason for our bullishness is because of the market. This market is primed for continued growth and shows no signs of slowing down.
We're confident that Recorlev will continue to be our growth engine, addressing significant unmet needs in patients with Cushing's syndrome, as well as providing tremendous value to our shareholders. We plan to further invest in Recorlev to accelerate demand generation, to shape the market understanding of the broader implications hypercortisolism has on patients with Cushing's syndrome, and deliver long-term sustainable cash generation with highly favorable economic value. In order to understand the bigger opportunity for Recorlev, you have to first be grounded in the multi-system toll that hypercortisolism has on patients with Cushing's syndrome. As you probably know, cortisol is best known for its role in managing stress. It is not just stress that cortisol regulates. It is crucial for maintaining the body's overall balance and stability.
When you have too much cortisol in your body, it wreaks havoc on the body and causes multi-system imbalances, leading to a multitude of diseases and comorbidities. The most visibly obvious markers of hypercortisolism are physical. Patients may present with a round, puffy, quote-unquote, "moon face." They could have a fat accumulation at the base of the neck, often referred to as a buffalo hump. They can have purple stretch marks, excessive hair growth. These overt physical changes are just one of the ways in which hypercortisolism impacts patients' health. To help us better understand what it was like to live with hypercortisolism, we recently had one of our patient ambassadors share her story with our team. She was healthy in her 30s and 40s and was a marathon walking coach. In her 50s, her health started to decline.
She was hospitalized for sepsis, pneumonia, as well as other serious infections. She had a knee surgery that would not heal properly, and even the orthopedic surgeon could not figure out why she was not fully recovering. She had physical changes, excessive weight gain, high blood pressure, fatigue, depression, anxiety. She developed type 2 diabetes and increasing exhaustion and illness, ultimately leading to intracranial hypertension. Yet, even for her, with so many hallmark signs and symptoms of hypercortisolism, it took her 13 years to be diagnosed, as clinician after clinician focused solely on the primary presentation and the primary complaint of the office visit that day. While this is just one story showing the broad implications that hypercortisolism has, both physically as well as emotionally, it also highlights the difficulty in diagnosing these patients. To make it even harder, not every patient presents the same.
Some may present with those hallmark visible cushingoid features. However, others, you may have no idea there's something else going on if you just looked at them visibly, unless you stop to wonder why an otherwise healthy young adult suddenly had unexplained hypertension and gained 30 lbs in less than two months with no lifestyle or diet changes. While the impacts of hypercortisolism are serious, the presentation can be varied, making diagnosing these patients difficult. For years, screening for hypercortisolism was limited to those who presented with those visible cushingoid features. There was limited active screening outside of that patient population. Estimates range for Cushing's syndrome between 20,000-26,000 patients based on prevalence data. However, today, the index of clinical suspicion is evolving. Screening is now starting to take into account the other impacts of hypercortisolism, specifically as it relates to the endocrine system and diabetes.
How might a patient in this context present? If you think about the diabetes space, insulin works. Weight loss meds should work. If a patient who's otherwise compliant is on high doses of multiple of these meds but still can't get their A1C in check or lose weight, clinicians are now beginning to stop and wonder if there's something more going on and are screening for hypercortisolism. As this evolution that you see from the gray box on the left to the middle box is largely due to incremental research and education around the broader range of impacts that hypercortisolism has on patients, recent studies have shown that up to 24% of patients with stubborn diabetes or difficult-to-control diabetes also suffer from hypercortisolism. The market is still in the early innings of finding these patients and getting them the treatment that they need.
We know that excess cortisol may also be the root problem behind other unexplained comorbidities, such as unexplained hypertension, hypercholesterolemia, depression, and other comorbidities. Understanding the prevalence of hypercortisolism in these patients, as well as the benefits of lowering cortisol secondary to these comorbidities, is an area in which we are just scratching the surface, and significantly more research and understanding needs to occur. As you think across the range of these different patient presentations, the underlying bad actor across all is too much cortisol. Cortisol is developed via a multi-step process where enzymes convert cholesterol into hormone byproducts and cortisol precursors. In Cushing's syndrome, a tumor, typically either on the pituitary or adrenal gland, causes this process to go into overdrive, creating too much cortisol for the body.
Now, medical practice says if you can get rid of the source of the problem, do it, such as the case in Cushing's syndrome. If a surgeon can find and remove the tumor, that's first-line treatment. Unfortunately, surgery is not always a silver bullet. A third to two-thirds of the time, the surgery is not curative. For others, surgery is not an option in the first place. For these patients who require medical treatment, we believe the optimal approach is still to try to get to the root of the problem and slow down the amount of cortisol that's being produced. The best analogy I can give for how Recorlev works on this process is that of a speeding car. Say you have a car going 60 in a 40.
Now, the person still needs to ultimately get to where they're going, but they have to slow down in order to get within the speed limit, such as the case when this cortisol cascade is in overdrive. Patients still need cortisol, but you want to slow down the production to bring those levels within normal range. Recorlev's approach is to slow it down throughout the process rather than just hitting at the beginning or, in the analogy of the car, slamming on the brakes at the end. Recorlev's unique mechanism of action interferes with cortisol production at the beginning, midpoint, and in the final stages of cortisol production, ultimately lowering and normalizing cortisol. You can see the results in our clinical studies. Recorlev was proven to normalize cortisol levels and improve clinical outcomes.
You can see on the chart on the left as patients' cortisol levels came down and then sustained normalization over time. While that chart is clean and nice, we know that every patient is unique. Being able to individualize therapy and monitor where you are on your path to normalization is critical to success. Recorlev allows for flexibility of dosing based on patient need, and clinicians can routinely monitor where they are on the path to normalization. Because of the interconnectedness between cortisol and the body's overall balance and stability, when you normalize cortisol levels, you impact important comorbidities associated with hypercortisolism. In our clinical studies, we saw improvements on fasting blood glucose, A1C, BMI, waist circumference. We saw improvements in depression scores, as well as lowering of both total and LDL cholesterol.
We've actually had several clinicians comment to us that the results that they saw with Recorlev are similar to that which they would have expected with a standard-of-care cholesterol med. With Recorlev, it's a yes-and. You can measure where you are from a cortisol normalization perspective and address important secondary comorbidities. Three and a half years into launch, we are just at the beginning stages of seeing Recorlev's true value unfold, and we believe we are on our way to achieving $1 billion in revenue. It's one of those magic moments to have the kind of gem that we have in Recorlev, a differentiated mechanism of action proven to get to the root of the problem in a market that's already demonstrated substantial growth and is still at the very beginning phases of its evolution.
Given the magnitude of the opportunity at hand, we plan to make stepwise investments in Recorlev to augment the brand's trajectory. Our plan has three main components. Number one, seize the current market opportunity unfolding today. Number two, take a market leader approach in defining the broader hypercortisolism opportunity and Recorlev's unique position within it. Number three, initiate strategic levers to defend the brand durability and value in the long run. Let's start with the immediate opportunity at hand. I plan to initiate a major expansion of our sales force, the first steps of which will be in motion before the end of the year. Our investment will not stop there.
We're taking a holistic approach, looking at our infrastructure needs, especially as it relates to our patient-facing team members who are critical in not only helping patients access therapy, but importantly, stay on therapy and see the benefits of normalizing cortisol levels. From a data perspective, to date, we've relied primarily on the data generated from our pivotal clinical trials. We plan to supplement this data with additional real-world evidence across a broad range of patients with hypercortisolism in order to strengthen our already differentiated value proposition with both healthcare professionals as well as the payer community. We also plan to invest in understanding Recorlev's role in treating other important secondary comorbidities associated with hypercortisolism. Given Recorlev's unique mechanism of action, we have the opportunity to look at the role Recorlev can more formally play in treating things like hypercholesterolemia as well as depression associated with hypercortisolism.
We will not do it alone. We plan to partner with the healthcare community in order to inform screening and evolve guidelines. While we are confident in our current patent protection, we will continue to defend our brands and broaden the moat around Recorlev in order to ensure a sustainable long-term value proposition. We are well-positioned as there are multiple levers we can pull in order to do this that are right in the wheelhouse of this disease state, our molecule, and our formulation technology. There are broad unmet medical conditions associated with hypercortisolism. There are considerations to take on the limitations of current delivery modalities. Because of the interplay between hypercortisolism and other diseases, synergistic combination therapies may be of value. We are bullish on our long-term value creation expectations in front of us for Recorlev. Recorlev is special.
A mechanism of action that inhibits cortisol synthesis at multiple points in the cascade incrementally differentiates Recorlev in a competitive market. Titration flexibility, as well as the ability to monitor, allows for an individualized approach to normalizing cortisol. The opportunity is ripe. The market is evolving and growing as clinicians shift from screening only those with cushingoid presentations to now taking into account other important secondary clinical biomarkers. We have the right product at the right time and have conviction on the brand durability in the long term. That is all well and good unless you can actually deliver. As John mentioned in his opening remarks, we have demonstrated quarter over quarter, year after year, that we know how to commercialize products and deliver results.
It's my mission to take the backbone of who we are as a commercial organization and continue to drive Recorlev to what we know it can be. With that, I'm honored to turn it over to Dr. Eliza Geer, who will share her clinical perspective on the impact that hypercortisolism has on patients' quality of life as well as medical practice standards. Dr. Geer?
Hi everyone. Good morning. My name is Eliza Geer, and I'm an endocrinologist at Memorial Sloan Kettering Cancer Center, where I focus on treating patients with pituitary and adrenal conditions, focusing on Cushing's. I want to thank the Xeris team for inviting me to join you guys today. I will be briefly discussing our evolving understanding of cortisol, cortisol regulation, and Cushing's syndrome. Cortisol, as we know, is an adrenal steroid hormone. On the right, you can see the normal regulation of cortisol in the body. You can see that this is what we call the hypothalamic-pituitary-adrenal axis, or HPA axis. The brain releases a hormone, CRH, which regulates the pituitary to release a hormone, ACTH. That travels in the blood to, in turn, direct the adrenal glands to make cortisol.
There is feedback inhibition at the level of the pituitary in the brain. This is a very critical and tightly regulated system in our body. What does cortisol do? It is involved in many functions in the body. It is involved in our homeostasis. It helps mediate our circadian or daily rhythm. It helps mediate our stress response. It is very involved in metabolism, helping to convert protein to glucose when necessary. It is also very involved with our immune system and can suppress the immune system when elevated, but it also is important to reduce inflammation when needed. As I tell my patients, we do not want too little cortisol, and we do not want too much cortisol. When there is too much cortisol in the body over time, it is associated with multiple clinical consequences that are adverse and not good for the body.
How do people with Cushing's present? I'm showing on the left the very classic Cushing's patient. You all probably do not know who Minnie G. is, but Minnie G. is actually the index case of Cushing's. She presented to Harvey Cushing in 1910 with what was described as painful obesity and amenorrhea, sparked his interest in the disease, and led to his seminal report published in 1932. It has been almost 100 years that we have been learning about Cushing's, and a lot has evolved since then. Not everyone presents like Minnie G. You can see pictures of two people, real patients with Cushing's. The woman in the middle had a very long 13-year journey where she developed obesity, type 2 diabetes, anxiety, depression, and this eventually led to discovering that she had Cushing's after all those years.
The woman on the right, as you can see, does not look like a typical Cushing's patient. She was having a range of symptoms that were felt to be not related. She had weight fluctuations. She actually ended up having imaging, and some adrenal lesions were identified, what we call incidentalomas on the adrenal gland, because she did not have specific symptoms that they thought were associated with those lesions. She did have a mild case of Cushing's syndrome. You can see that each patient with Cushing's is very unique and presents differently. When I talk with my patients, I tell them we cannot rely on one single test to make the diagnosis. We have to put the whole puzzle together, all the pieces together.
The pieces include the constellation of symptoms that the person is having, their comorbidities and the trajectory of their comorbidities, any physical changes they might have, as well as the lab testing and imaging findings. We really have to put that whole picture together when we're trying to identify and diagnose someone with Cushing's syndrome. As you heard before, there are many complications of Cushing's syndrome. I won't get into too much detail, but as you can see, it affects nearly every aspect of the brain and body. Patients with Cushing's have a high risk for anxiety and depression. They often develop diabetes and weight gain, particularly visceral weight gain, which we know is the bad type of weight gain.
There's reproductive and sexual dysfunction, risk for infections, muscle weakness, risk for osteoporosis and fractures, as well as cardiac disease and other types of vascular issues like blood clots. You can see that there's a wide range of comorbidities that we need to consider when someone's presenting with Cushing's, and not only when they present, but over time after treatment. Unfortunately, not all these issues completely disappear. Many times, we're dealing with some of these comorbidities on a long-term basis. I'm showing kind of a brief overview of some points of the recent guidelines that have been published on Cushing's. On the left, you can see the 2008 Endocrine Society Guidelines, now almost 20 years ago. This focused on diagnosing Cushing's. Among other things, this is a rare disease.
At that time, there's particularly a focus on screening and looking for Cushing's in people who really have multiple and progressive features suggestive of Cushing's, or in someone who has a finding either in their adrenal or their pituitary gland, a tumor that needs further workup. In 2015, the Endocrine Society published guidelines focused on treatment. We have many or several treatment goals we need to consider for our Cushing's patients. The three kind of top broad goals are one, to normalize cortisol; two, to eliminate or at least alleviate signs and symptoms of Cushing's; and three, to treat comorbidities associated with Cushing's. More recently, our Pituitary Society published a consensus statement in 2021 that looked at both testing and treatment. Again, with testing, we need to have some suspicion or clinical judgment to initiate the workup.
We now have much more focus on medical therapy with the recent advances in the field that have given us much more options. When we're treating someone with Cushing's medically, it's a very individualized process where we need to consider their specific presentation, the severity of the disease, et cetera. Ultimately, we're aiming to normalize cortisol levels. How do we treat Cushing's? We have three main areas: surgery, radiation, and medical therapy. Surgery, for most people, is first-line therapy. When we can identify the tumor, and sometimes it's actually hard to identify the tumor because it can be very small, when we can identify it and remove it and allow the patient to achieve surgical remission, this is really the ideal situation. We use the word remission, however, not cure, because there is, unfortunately, a very high rate of recurrence after surgery.
In the middle, we have radiation. This is actually very uncommonly used for Cushing's patients. This is really reserved for people with much more aggressive tumors, which is very, we see that a lot at my hospital, relatively speaking, but in general, that is a very rare type of Cushing's. Most people with Cushing's have very small and benign tumors. Finally, medical therapy. I just said surgery is first-line therapy. When do we use medical therapy? There are actually several circumstances we need to consider medical therapy. For example, for the patient who does not have access to surgery, if surgery is delayed for some reason, or the patient declines surgery, or for the very sick patient who needs to be stabilized prior to surgery, we often treat them medically. For the patient who undergoes radiation, that can take years to take effect.
During that period of time, we need to treat them medically to control their cortisol levels. Finally, as I mentioned, unfortunately, there is a relatively high rate of persistent or recurrent disease after surgery. About 1/3 or more of patients who enter surgical remission will unfortunately develop recurrence later. These can be late recurrences 10, 15, even 20 years later. As I tell my patients, I am hoping to, they are not hoping, but I would like to know them forever. Most likely, I will know them for a very long time because we do screen people long-term, even those who are in remission, at least yearly for recurrence because of the high rate of recurrence. Getting into just a few, our kind of three main targets for medical therapy for Cushing's. You can see in purple that we have tumor-directed therapies.
These act on the receptors present in the pituitary tumor to lower its production of hormone. These are only for people with pituitary Cushing's and not for other types of Cushing's. In black or dark gray, we have our cortisol or glucocorticoid receptor blocker. This medication does not lower cortisol levels. It blocks the effect of cortisol. That is for people who have diabetes or high blood sugars associated with Cushing's and are eligible for that medication. Finally, in green, we have our steroidogenesis inhibitors. As you know, levoketoconazole or Recorlev is a steroidogenesis inhibitor. There are several advantages to this class of medication. One, they tend to be rapid. They have a rapid onset of action. They also tend to be overall highly effective medications, in part because they act on the enzymes present in our adrenal glands, which we all have.
There are enzymes present in everyone who has adrenal glands. This compares to the pituitary-directed therapies, which work on the specific receptor expression in that tumor, which can vary from one person to the next. Finally, they're an option for any type of Cushing's, whether it's pituitary, adrenal, or what we call ectopic, which is when there's a tumor elsewhere in the body. To summarize, we've learned that chronic exposure to high levels of cortisol is associated with multi-system problems and comorbidities. When we're treating someone with Cushing's, our priority is to not only normalize the cortisol level, but to really address this multifaceted burden of illness, which unfortunately isn't just for people with active disease, but this burden of disease actually can extend long-term, even after ongoing treatment. Continued education and research is needed in this field.
There are a lot of unmet needs, in particular looking at long-term outcomes in people on medical therapy over time, looking at their symptom burden. We call it the patient-reported outcomes, which is a critical piece of information of how they're doing, as well as their comorbidities. Ultimately, our goal is not just to extend the life of our patients, but to really improve their quality of life. When I'm with a patient, what I try and help them achieve is something what I call functional remission. Functional remission is achieving clinical remission plus recovery of daily functioning in the professional, social, and personal domains. Thank you.
Thank you, Dr. Geer. On behalf of the Xeris Management Team, I want to thank you for taking the time out of your very busy schedule. I know you have to get back to work, back to your patients.
We really appreciate it. We will now take a 10-minute break. What time is it? 38. 38. If in the room we could be back here at 10:45, and then we will get 10:15. 10:15. All right, 10:50. We'll be back here at 10:50. For those of you online, we will be back online at that time as well. Thank you.
Good time. If I could have everybody take their seats, please. We want to start right on time in one minute. Kevin. I did. I did. Are we good out there? Okay. Thanks, everybody. Welcome back from the break. I believe everybody should be back online as well. Thank you. All right. To start the second half of our program, we have Dr. Anh Nguye n, who's our Chief Medical Officer, and he will start up the discussion on XP-8121.
Thank you, Alison. Welcome back. I am pleased to present more details regarding our next meaningful growth driver, our phase III ready product candidate XP-8121, designed as a new approach for the treatment of hypothyroidism. We are very excited about this pipeline asset because there has not been a new significant innovation in the hypothyroidism disease management space in nearly 50 years. There lingers a palpable unmet need for hypothyroid patients who are poorly controlled on their oral therapy. Today, we have brought key opinion leaders to teach us about the hypothyroidism market, opportunity, the patient experience, and unmet needs within the treatment landscape. Throughout today's discussion, we will also discuss the next steps in our development and the reasons why our entire organization is energized to further advance the clinical program through confirmatory clinical studies, marketing authorization, and patient access.
The thyroid is a small gland in your neck that acts as a control center, a thermostat for your body's metabolism, how your body uses energy. It plays a critical role in regulating bodily functions through thyroid hormones it produces. These hormones influence various aspects of your health, including metabolism, growth, development, and bone maintenance. The thyroid's influence extends to the cardiovascular, digestive, and nervous systems, highlighting its importance to your overall well-being. Hypothyroidism, low thyroid hormone levels, is caused by malfunction in your gland, which leads to a deficiency of thyroid hormones. Low thyroid hormones dysregulate your metabolism and affect nearly every organ system in the body. Furthermore, the disease can be progressive, worsening in severity due to common autoimmune conditions such as Hashimoto's thyroiditis. The thyroid's regulation of metabolism is crucial. Under- and over-treatment of hypothyroidism may also worsen other diseases, as we will further explain.
An underactive or absent thyroid can lead to multiple clinical symptoms, including but not limited to fatigue, drowsiness, weight gain, constipation, and sexual dysfunction. Given the critical role of normal thyroid function, all the major organ systems are affected. Current management options remain burdensome and labor-intensive. Because of the nature of this disease, careful monitoring is required by the clinician, as the patient's disease severity may change over time. Finding balance is key. The body works best when the thyroid hormone levels stay within normal range, known as consistent control. Treatment goals are to achieve stable and adequate thyroid hormone levels measured by normalizing thyroid-stimulating hormone, TSH. TSH spurs action of the thyroid to secrete hormones.
In hypothyroidism, levothyroxine is administered currently through the oral route, and in a feedback loop, normalizes the TSH levels, as shown in the middle area on the TSH scale on your left, known as euthyroid. These patients are on a lifelong regimen of levothyroxine for hormone replacement. However, patients can easily fall out of the targeted euthyroid range due to under- and over-treatment. For this reason, additional blood work is required to monitor TSH levels. Many patients are asked to come in multiple times per year to make sure they're still within normal range, the goal range. The challenges to maintain a patient within normal consistent control are multifold and highly prevalent. On your right side of the screen, first, the oral administration route is affected by the timing of administration and food intake.
If patients are taking dietary supplements or even eat foods that are high in calcium or fiber, this can negatively affect drug absorption. If they have GI disorders such as celiac disease, inflammatory bowel disease, have had bariatric surgery, or have infections that affect the gut microbiome, absorption is also negatively affected. Lastly, just taking commonly used prescription medications can also be a confounding factor, reducing the absorption of levothyroxine. This burden impacts quality of life for patients who, as a result, may reduce their medication compliance, how and when they take their levothyroxine, and thus further undertreat their disease. Lastly, drug requirements change over time as the patient gains and loses weight. Thyroid function further decreases, or they experience other illnesses. Doctors are constantly treating a moving target.
Given all of these challenges for both the patient and physician, let's dive deeper and look at how much patients can vary in terms of their control. At any one time, approximately 20% of patients, one in five, are out of range when receiving spot checks for their TSH levels. Note this out of range was also observed in our phase II clinical study, where we screened hypothyroid patients who were on a stable regimen of levothyroxine for greater than six months. The repercussions of being out of range on spot checks cascades into a larger problem where millions of patients have inconsistent control. In fact, population health research tells us that 30%-70% of the population do not maintain normal TSH levels over time, reflecting fluctuating and erratic drug levels and persistent undertreatment and over-treatment.
Persistently being out of control, being either under- and over-treated for hypothyroidism, has long-term consequences. These are not limited to increased mortality, cardiovascular disease, such as arrhythmia and stroke, heart failure, insulin resistance, increasing risk of fractures, worsening of existing pre-existing neurocognitive decline, and accelerated aging. Poorly controlled hypothyroidism is due to confounding factors related primarily to the patient behaviors, diet, polypharmacy, and GI absorption. This results in persistent under- and over-treatment. We believe that XP-8121 securely addresses this unmet need to predictably and reliably achieve consistent control. It is a new approach to treat hypothyroidism used as a once-weekly subcutaneous injection formulated with our proprietary XeriSol technology. This innovative technology enables us to hyper-concentrate otherwise insoluble drugs into ready-to-use injectable formats. Levothyroxine cannot exist in liquid form at these ultra-high concentrations without XeriSol.
With XP-8121, we have a high-concentration levothyroxine formulation that permits us to have smooth therapeutic control over a longer duration of time. As you can see here on the top of the screen, in patients without absorption issues, the amount of drug exposure that we have been able to achieve over a week with a single dose of XP-8121 essentially overlaps the drug exposure to daily oral levothyroxine doses. Specifically, we have designed XP-8121 to avoid the frequent challenges seen with oral therapies with the convenience of a less frequent weekly injection. The subcutaneous route, bypassing gut absorption, yields a reliable, robust, and consistent drug release, a pharmacokinetic profile. Therefore, physicians can better adjust doses to minimize the risk of under- and over-treatment.
To date, we have seen that the small dose injection, volume injections associated with this weekly therapy, a fraction of a drop of water, has been well tolerated in our phase I and II clinical studies. The form factor for our pen injector offers a small volume dose with simple dosing start and titration method. For these reasons, this is why we are excited about our novel product candidate. We have the opportunity to offer poorly controlled hypothyroidism patients a new game-changing treatment option that demonstrates many comparative advantages versus the oral therapy landscape. Now, I'd like to introduce two prominent endocrinologists that we are very fortunate to have with us here today, Doctors Francesco Celi and Antonio Bianco. We will have a brief panel discussion to talk about the hypothyroidism patient journey, the current treatment landscape, as well as the outlook on future treatments.
Thank you, Doctor Celi. Thank you. Doctor Bianco.
It's a pleasure. Thank you.
And Doctor Bianco, from your experience and current research, how often do you find that your patients are unable to achieve consistent control? Treatment of hypothyroidism is all about giving the right dose of levothyroxine to patients. How do we know that we're giving the right dose?
We use a blood test, TSH, as you mentioned in your presentation. If the TSH is high, we need to increase the dose of levothyroxine. If TSH is low, we have to reduce the dose. We want to have patients with normal levels of TSH. We call them, they're controlled. These pa tients are controlled. That's good. We did a study and others did a study, and they found similar things. We found that about 20% of the patients at any given time are off control.
They're not controlled. They have TSH levels that are either high or low. You might think, 20% is not a big deal, but we have about 20 million patients with hypothyroidism in this country. 20% is about 4 million. At any given time, we have 4 million individuals, patients with hypothyroidism with uncontrolled disease, meaning they should be receiving a different dose of levothyroxine. We did another study more recently in which we looked at patients over time. We looked at the same patients over eight years. We tracked these patients and measured their TSH levels to assess the level of control of the disease. We saw that only a small number of patients, about 40% of the patients, kept the TSH levels, kept control disease for the eight years. Most patients, they fluctuated.
They experienced periods of controlled disease and not controlled disease, which is not good. I find, in my experience, that probably the number one reason for that is disruption of the absorption, meaning patients take the tablet of levothyroxine, but in the GI tract, levothyroxine is not being properly absorbed.
What do you think, Francesco? Do you see the same thing in your practice?
Yes, absolutely. Thank you. The major problem, as you alluded, is the fact that being consistent in taking levothyroxine is a real production. If we take a snapshot in time, it's okay. Take one tablet in the morning, wait 30 minutes for breakfast, and go with your life. That seems very simple as a prescription. When you open up on a lifetime, it becomes very difficult to deal with. Things happen.
You need to catch the metro, or you have a medical condition that requires taking other medications, and the window of time becomes much more difficult to navigate through. This is not a compliance patient. It's life. On top of that, and that's my area of interest, interaction on absorption of levothyroxine. Levothyroxine is a very sticky molecule, and it tends to attach to a positive ion. In other words, any calcium supplements, any antacid, and it needs to be absorbed in an acidic environment. Treatment with antacid medications makes a major challenge. Worse off, we need to consider that these types of medications now are over the counter. Everybody can take a PEPCID at the pharmacy because of an heartburn, and that can affect the predictability of the absorption. From the physician standpoint, we look at what can decrease the absorption.
We need to consider what can make erratic the absorption, leading to the condition whereby we start choosing this condition. Then we can talk later, maybe there are objective disorders of the gastrointestinal tract which prevent the absorption or make the absorption much more unreliable.
Thank you, Doctor Celi and Doctor Bianco. What I've heard is that the majority of patients do not have consistent control over time, three in five patients, nearly 60% in your study. The reasons for this are not purely because of one driver. It is multifold, and it can be food, diet, behavior, as well as GI absorption issues. What I'm hearing also is that the treatment journey for these patients is, again, burdensome and labor-intensive. Compliance, when and how they take the medication, even if they do a great job, can still be problematic for these patients.
Absolutely.
I mean, this is a chronic disease management. It's not a five-day course of antibiotics.
It's a life time journey. It's like diabetes. It's a lifelong journey managing.
Correct. Correct. Whatever we can do to make the treatment more patient-centered, it's the best.
Understood. Thank you. Just taking a step back, Doctor Bianco, how does hypothyroidism impact healthcare utilization? We have many patients with hypothyroidism, right?
Yes. The ideal patient is that patient that we adjust the dose, and we ask the patient to return within six months. What I'll do is I'll check again the TSH to make sure the patient is under control.
Being under control, I'll tell the patient, "Please return in a year or maybe sometimes more." Unfortunately, when the patient has an issue with the TSH, and upon return, I see that the TSH is off target, so the disease is uncontrolled, I have to ask for additional tests. I have to do a little bit of investigation, start asking questions. How much time are you taking the tablet? Are you waiting before you eat the food? What type of medication are you taking? How are you taking? How many hours apart? There is a lot of time involved in this. I have to do an education. Again, I have to explain again how we take the levothyroxine and how do we avoid all these pitfalls in terms of the absorption interference. That adds time. The patient has to return.
I'm going to check again the TSH. That is an extra burden into the health system because there will be more cost associated with the visit, with the additional tests, with returning to the appointment. It's going to decrease accessibility overall for patients into their endocrine or primary care physician practices for that matter. We all know how the health system is jammed as it is. If we can do anything we can do to minimize that visit and that extra expense, it will be greatly appreciated.
Thank you, Doctor Bianco. What I'm learning here is that from an overall health system utilization, the management of hypothyroidism, again, is burdensome, and that pragmatic working solutions would be helpful here, not only for endocrinologists, but for the larger clinical community. Understood.
Maybe, Doctor Celi, we're looking at the oral therapy landscape, and there's many different formulations, from solid pills to gel caps to syrups, right? What are the current limitations right now with the oral therapy landscape?
The limitation is that everything that goes through the mouth needs to get absorbed through the GI system. In other words, all of these good products rely on the GI absorption and, to some degree, on the potential for interference with other medications, diet, timing, adherence. What this product, XP-8121, brings is a completely different approach, literally a paradigm shift. In essence, by bypassing the gastrointestinal tract, one can expect a much more predictable absorption. Ideally, as Tony was saying, much lesser utilization of the resources, healthcare resources, simply because we know the patient's weight.
We can adjust one, 2x , and then things should go much smoother and with a predictability of absorption. Yeah, I'm really excited about this concept. Up to now, in theory, people can give IV levothyroxine, but the volume is large, so it's really not feasible doing. Parenteral administration is the last, last, last resort in patients who are exceedingly sick. This approach, subcu low volume, it's paradigm shift. Interesting.
Thank you. Working solutions which are pragmatic, easy to start and titrate is something you're interested in. Maybe closing remarks, Doctor Bianco, would you concur with this perspective, and what should new treatment options look like?
No, I think that you're absolutely right. Bypassing the gastrointestinal tract is really important. I think given that Francesco explained the multitude of things that could interfere with levothyroxine absorption, bypassing it, I think that's a great idea.
Now, you might ask, why do we need this? Why do we have to have patients under control? It is because we know that when patients are out of control, when the TSH is abnormal, we have an excess or a lack of thyroid hormone in our system, and that is bad. Most systems are sensitive to thyroid hormone, but particularly the skeleton and the heart. We want to avoid an excess and an insufficiency of thyroid hormone because what happens is the skeleton becomes weaker, prone to increase the probability of fractures. In the heart, you can have atrial fibrillation, and atrial fibrillation causes thromboembolic events and could lead to brain stroke, which is bad. I think that the consequences of having a poorly controlled patient with hypothyroidism are very serious, and we want to avoid that by all means.
Thank you, Doctor Bianco.
What I am learning here is that having more of a holistic approach around control over time is a key driver for outcomes for both of you. Is that okay? Yeah. This new route of administration, do you see benefits? I mean, maybe closing comments.
Yes, definitely. Thank you. I am really excited at the opportunity of expanding the use of testing this modality and expanding the use from patients who have objective malabsorption of levothyroxine, patients who have challenges, comorbidities, polypharmacy, that is going to be a major difference for the best.
Any closing comments? Right. Bypass the GI tract is a good idea. Sounds like a plan. Doctor Bianco, Doctor Celi, thank you again for your time. Thank you. We greatly appreciate it. Thank you. Thank you.
Now I'd like to introduce Joshua Bennett, our Vice President for Strategic Initiatives and the Global Program Lead for the XP-8121 Program.
Thank you. All right. Thank you, Eng. Thank you, Doctor Celi and Bianco. Really helpful to understand the background of the disease state and how patients are treated and what that actually looks like in terms of the research and clinical reality. Just to briefly summarize what I heard, GI challenges inhibit successful absorption of levothyroxine. Whether that's a GI condition or the medication somebody has to take for a condition, it's inhibiting control. Because of that, a decent number of patients are out of control, and that represents long-term health risk. To solve that, because of those health risks, patients and providers are making heroic efforts to try to do better, but there's a limit and new tools are needed.
I'm going to walk through this patient experience, who are the patients that we believe could most benefit, what that looks like in terms of a commercial opportunity, and how we're going to go get it done to bring this product to approval and then to market. To start, let's think about somebody. I'll call her Linda. She's 47 years old. For the last couple of years, she's been experiencing symptoms like fatigue, cold sensitivity, but she didn't think a lot of it. It's very significant in terms of her lifestyle, but she attributed it to perimenopause. She didn't think there was anything she could do about it. She finally mentions it to her primary care physician. Her physician says, "Maybe it's hypothyroidism. I'm going to test your thyroid and see if that's the cause." Labs come in. She is hypothyroid.
They confirm that the reason is autoimmune. And her physician starts her on levothyroxine. She comes back. It's a low dose. She tests again, raises the dose, tests again, raises the dose. It's a little bit cumbersome, but after a few adjustments, she finally comes back and she has normal TSH. Fantastic. Everybody feels good. We've achieved something. And that initial experience, the good news is that's what most patients experience. In the broader market, the vast majority of people who have hypothyroidism, they get diagnosed and they get treated. There are roughly 20 million patients on levothyroxine monotherapy today. The challenge is what happens after. Linda's on. She's had a good result. Her physician says, like Doctor Bianco said, "I'm there. Come back in a year." She comes back in a year. She's hypothyroid. Physician increases the dose. Comes back in a year. She's hypothyroid.
Increases the dose. At this point, her physician says, "Something else must be going on. This is outside of what I can solve." He refers her to an endocrinologist. This takes seven months. Endocrinologists see so many referrals for hypothyroidism patients, they cannot see them all easily. She eventually gets in. For the first time to her endo, she mentions, "I've also been having some stomach discomfort." She refers her to see a gastroenterologist, takes a few months to see the gastroenterologist, does a workup, gets a scope. Long process later, she gets diagnosed with ulcerative colitis, another autoimmune-related condition, starts therapy. Over time, this starts to resolve her symptoms. She gets to this point where between maybe the levothyroxine, but definitely the treatment for the UC, she starts to feel better. Her stomach feels better.
Now all of a sudden, she loses weight because she's not as stressed. Life is better. Turns out this whole time, she was taking over-the-counter NEXIUM. Didn't tell anybody it's over-the-counter, but now she's feeling better. She stops taking it. All of a sudden, this dose that had been increased, increased, increased to meet her needs because her weight is lower, because some of the absorption barriers are still there with the UC, but it's better resolved, and she stopped taking this conflicting medication. The dose is too high, and she becomes thyrotoxic, meaning too much thyroid hormone. Now her TSH is too low. She has AFib. They have to pull back the dose. Wow. It's six years into this journey. Linda's 53. Over this period, she's been in range about half the time she's been tested.
She's been out of range about half the time she's been tested. She's done everything asked of her. The fundamental barrier was the underlying GI condition and all the things she had to do to manage it and this long journey to treat it. When we look across the market, and the research says that roughly of these 20 million patients on levothyroxine monotherapy, 30%-70% are experiencing some version of what Linda just went through. They're not able to consistently stay within range. It's so hard to treat these patients that PCPs are trying to refer as many as 20% of their patients to an endocrinologist, often to an office that doesn't have the capacity to see them. It's a challenging situation. Given all this, it's not a surprise that many patients are dissatisfied with their therapy.
Now, some of the sources of dissatisfaction are based on having a chronic disease. We can't address those. Some of them are coming from patients who are doing everything asked of them, and they can't achieve their goal, but they're having to do a lot. The frustration comes from the physicians who are trying to do everything possible for the patient, but the patient still can't get into control. That is why we believe that XP-8121 can be a transformational opportunity for patients, for the healthcare system, and for Xeris, specifically because we see an opportunity to improve control and decrease the health risk on those patients. We think about the entire market. Some patients are out of range once. It's not an issue. Some can be sufficiently addressed with oral therapy.
Of this huge number that are out of control, we believe somewhere between 3 million-5 million are ideal candidates for 8121 in the US, defining our addressable market. Given the research we have done, that translates into peak sales of between $1 billion-$3 billion net revenues. Our confidence in that comes from the data we have generated. First, in our phase II study, we enrolled patients who were already on oral therapy, and we converted them to our product. At the end of the study, 72% of the patients said they would prefer to stay on 8121 as opposed to switching back to their oral therapy. In a large quantitative survey of prescribers, including endocrinologists and primary care, 75% said that they would prescribe 8121 to their patients with inconsistent biochemical control, and 71% said they would do it in the first year.
There is a very clear hunger for new tools to address this large patient population that is not consistently meeting their treatment goals. Given the size of this opportunity, how are we going to realize it? We're going to initiate a phase III pivotal study in 2026, targeting approval in 2030. That timeline represents the time it takes to realize a blockbuster opportunity. As Anh talked about, levothyroxine is what's called a narrow therapeutic index drug. That means accuracy is required. It means that inaccuracy creates health risk for patients, and the delivery standard for this molecule is very high. In order to deliver it, first, we had to create something, as Doctor Bianco and Doctor Celi said, not a large volume hospital infusion. That would not be viable. We had to make this a shelf-stable, ready-to-use product, highly concentrated so a patient could administer it at home.
We had to develop a device that had both very high accuracy as well as enabling all the doses that patients require for this titrated drug. That was very difficult. To be honest, if we did not have XeriSol, I do not know how we would have accomplished it. It would have been hard. I am not sure we would have done it, but with XeriSol, it was possible. That has taken time, and moving that into the study will take time, but we are confident in our approach. Second, our study, we believe, is going to be a seminal study in the treatment of hypothyroidism. To build some details of this study, it is going to be roughly 1,000 patients. They are going to be randomized on a one-to-one basis to either remain on oral therapy or try XP-8121. They will be treated for 54 weeks.
At the end of the study, success will be defined based on the percentage of patients in each arm that have normal TSH. Success will be achieved if we achieve just non-inferiority to the oral. The reason for that is twofold. First, all of the products that have been approved on market, they're safe and efficacious, but they were approved based on bioequivalence studies in healthy adults. This will be the first, if approved, monotherapy approved based on a clinical endpoint, TSH, and approved based on studying patients with hypothyroidism. In our research, what we found is, given the intuitive nature of bypassing the gut for these patients who have obstacles to control, showing, confirming that 8121 is safe and effective is sufficient for physicians to be willing to write the product for inconsistent control patients and achieve the sales projections we just shared.
In addition, I think this study has a higher probability of success, and we believe it has a higher probability of success than your typical phase III program for a couple of reasons. First, the core molecule, levothyroxine, is very well understood. It's been used safely and effectively for tens of millions of patients for decades. There's no question about its safety. There's no question that it is efficacious when the right dose is delivered. Second, XeriSol that we've used to formulate this is the same technology we used in Gvoke. Gvoke was approved with XeriSol almost six years ago and has been used safely by patients over that time period. We don't have concerns about XeriSol. Finally, our unique combination of levothyroxine and XeriSol, in our phase I and II studies, we haven't seen any concerning safety signals.
The overall clinical and safety profile is favorable. When we add a known molecule, a known formulation technology, we believe the probability of success is much higher than a typical phase III study studying a new molecular entity or an unproven novel formulation technology. To summarize, today, there are millions of patients who need something new. Of these 20 million patients on therapy today, on monotherapy today, the vast majority of them are doing fine. A lot of them can be managed with labor, but with work with adjusting oral doses. We're focused on the 3 million-5 million that cannot achieve their treatment goals. Because of that, they're at long-term health risk. My commitment is to bring this product to market to help these patients, to simplify care in the health system, and help everybody achieve their goals.
I believe we have the right approach. The molecule is proven. Our solution is innovative, and it's defendable because of the novelty of our study doing something that folks haven't done before in this field and the technological solution that we will have a significant moat, and it will be very difficult for anybody else to replicate our clinical results and achieve the same outcomes. Once we have it approved and we need to launch this product, it's a fantastic opportunity because that launch process, there are a few great attributes to this market. First, we don't need to go get new patients diagnosed. Patients are being diagnosed and treated today. We don't even need to have patients do new labs. As you heard, they're probably doing more labs than they wish they could. The diagnosis, the treatment, and the testing doesn't have to change at all.
The three to five million patients who are great targets for 8121 are easily identifiable based on the lab results that are already sitting in their charts, and they're ready to do something different, and their physicians are ready to try something different. That adds up to projected peak sales of $1 billion-$3 billion net. And this leverages capabilities that we've already built and proven in clinical development, market development, and commercialization. I'd like to hand it over to Kevin McCulloch, who's going to expand on that.
Thanks, Josh. Good morning, everyone. As we reflect on these two very special assets, Recorlev and XP-8121, which will transform Xeris in the near to intermediate term, an important question that you might be asking yourself is, can Xeris do this? Can we execute on these opportunities?
I'm here to help you to all conclude as we have that the answer to that question is absolutely yes. How, in the 10 minutes that I've been allocated, can I get all of you to where we are? First, you should know that I asked my team for more time, which they refused me. I think they were concerned I might take all of our time together. They were probably right. That denial forced me to really think, forced me to really think about how to be as clear as possible. It forced me to drive my message to a single word: leverage. To deliver on our future expectations of Recorlev and XP-8121, we will be leveraging capabilities and experience that have been successfully deployed in our collective and, in most instances, recent past.
What it will take to deliver on these opportunities should take advantage of what we've been doing, whether a function of how we apply our deep technical and development expertise, deploy our commercialization engine, or build upon our established presence in the endocrinology community. Recorlev and XP-8121 fit into an already well-oiled machine. From a technical and development perspective, our team has been here before, with years of embedded expertise that successfully created both the medicine itself and the body of evidence needed to earn approval for Recorlev in the treatment of Cushing's syndrome. We'll leverage that set of experiences for Recorlev's next wave of need. Our journey to a billion in annual sales will require increased investment, but that investment will be made into embedded capabilities. Candidly, same story for XP-8121. While other companies might balk at drug device combinations, this is what this team does.
Earning an approval for 8121 will certainly require us to successfully navigate a phase III trial. For those of you familiar with drug device development, you know how equally critical engineering, CMC, and the navigation of the regulatory review process is. Good news. We spent years building out and honing these capabilities while navigating all of what was required to earn an approval for and maintain our Gvoke HypoPen. For XP-8121, as you heard from Josh and Anh, we'll be leveraging XeriSol, the formulation technology inside of Gvoke. Fun fact that some of you might not know about us is that our name is directly related to what we do. Xeris is derived from the ancient Greek word xeros, which translates to mean dry, as in without water. Our proprietary formulation technology, XeriSol, enables us to create liquid-stable formulations, liquid-stable drug preparations without the use of H2O.
When it comes to commercial prowess, for those of you who've been following Xeris for the last several years, I would argue that no company our size has so successfully juggled three unique commercial products spanning three different marketplaces and delivered a growth performance that so successfully met or beat any prevailing expectations. We've successfully launched two unique products in the last five years. We intentionally chose to build our capabilities in-house rather than outsource them. This allowed us to create our own Xeris way of doing things, our own Xeris way of advocating for patients, representing the value proposition of our products, and leveraging complex analytics to optimize our promotional strategies. We haven't just tallied the cumulative years of experience of this leadership team. We've blended them together to create a better approach to building a business.
Into this purpose-built enterprise, we've already expanded multiple times, and we've done it to fuel our growth in a fiscally responsible way. We now operate from a position of strength and a granite-like foundation that could easily handle any future expansions. Through all of this, we're steadily, day by day, month by month, year by year, becoming a legitimate leader in the endocrinology community. We're extremely active in the most pressing disease state that this community manages, diabetes. Our promotion of Gvoke for nearly six years has placed us on the vanguard of the effort to ensure that as many people with diabetes at risk of a severe blood sugar low, a potential life-threatening event, carry the protection that they need at all times. As you heard from Mary Beth, our Recorlev brand is contributing much to a complex disease, the understanding of which is evolving as we speak.
When we consider the degree to which we've been investing in this community, we've been on the front lines for more than 10 years, starting with the groundbreaking work done to create a first-of-its-kind product like Gvoke, first-ever approval for Cushing's syndrome. As you heard from Eng and Josh, first in 50 years-type understandings in the management of hypothyroidism. Such investment will only increase in the years to come. As I wrap up, I want to leave you with a single critical conclusion: that the grand future success of Recorlev and XP-8121 will leverage exactly what we've built to date. More of it, for sure, but not new. There's a big difference. Thank you for your time. I'd like to invite Steve up, our CFO, who'll show you how this all rolls up financially over the next several years. Good job. Okay.
As both Mary Beth and Josh outlined, the opportunities ahead of us are transformative, truly transformative. They have the potential to meaningfully improve the lives of the patients we serve and, importantly, elevate Xeris by creating substantial shareholder value. These are not distant aspirations. We are already generating great results today, which are powered by our ability to execute and deliver consistent, exceptional revenue growth. Before I get into our longer-term outlook, I want to ground everyone in our most recent performance and 2025 guidance. Our Q1 revenue was over $60 million, marking our 14th consecutive quarter of greater than 20% product revenue growth. This is not a small sample size: 14 consecutive quarters of generating greater than 20% product revenue growth. This demonstrates a track record of consistent, reliable, and exceptional execution that really serves as the foundation for our future.
Leading this impressive execution in the first quarter was Recorlev with over $25 million in revenue. As Mary Beth highlighted, Recorlev's growth journey is just getting started. Moving beyond revenue, gross margin improved to 85%. Importantly, we reported positive adjusted EBITDA of over $4 million, the second quarter in a row reporting positive adjusted EBITDA. The company is clearly turning a financial corner in 2025. We recently raised total revenue guidance, guiding to 32% growth at the midpoint. Our optimism continues to grow as product demand trends continue to be robust into early June. Our high growth, coupled with strong and improving gross margin profile and disciplined expense management, is dropping down to generate positive adjusted EBITDA going forward. What does this all add up to as we pull back the curtain beyond 2025? We are clearly entering a new phase of growth.
We are a fully funded biopharmaceutical company. We are capable of charting our own course without the need to raise capital to fund our very bright future. Our confidence about the future of Recorlev could not be higher. Recorlev will be a significant growth driver for the company. With that as a backdrop, we expect total revenue of $750 million by 2030. This includes contributions from all of our current products, with Recorlev clearly leading the way. This anticipated revenue growth trajectory, coupled with our already strong and improving gross margin, will create significant operating leverage for the business with plenty of financial flexibility. With this expected financial flexibility, we are taking decisive actions to propel Xeris to new heights. First, as Mary Beth mentioned, we will accelerate investment in Recorlev.
As our top priority, we will allocate significant resources to it with the goals of maintaining its current momentum and establishing long-term durability of the brand. Next, we will fully fund XP-8121 through approval and launch. Our commitment to this product is unwavering. We are capable both operationally and financially to see it through its full development life cycle and ensure its successful introduction to the market as a breakthrough therapy for people with hypothyroidism. We will also strengthen our balance sheet with an improving financial profile. We will enhance liquidity and create financial flexibility without the need for dilutive financing. Before I bring the team up for Q&A, I think it is important to recap all these numbers you heard today. First, the company expects to deliver total revenue of $260 million-$275 million this year.
We expect total revenue to nearly triple to $750 million by 2030. Recorlev is on its way to a billion dollars in annual net revenue by 2035, and coupled with peak net revenue expectations for XP-8121 at $1 billion-$3 billion, Xeris is on a path to being a multi-billion dollar revenue-generating company. Our confidence in delivering on these expectations comes from the fact that this roadmap for 2025 and beyond is within our control. The underlying asset base that drives our projections is entirely our asset base. We will leverage our strengths to unlock the full potential of these assets, and we will create meaningful and lasting shareholder value. I want to personally thank you for your interest and support of Xeris over the years. I would like to invite John and Kevin back on the stage to take your questions. Thank you.
Thanks very much for holding this terrific event. That's very informative.
Thank you. First of all, thank you, guys. I think we have about 15 minutes for questions, maybe less. I will be watching that. If you guys are going to ask a question, please just state who you are and who you are affiliated with, and that will help us.
Great. Yeah, Leland Gershell with Oppenheimer. Just two questions from me. One for Mary Beth and also Steve, you touched on this, kind of looking to extend the brand durability of Recorlev. You have a few levers to pull there, presumably around IP and patents. To the extent you can share, what might those look like?
Kevin, you want to take that?
Sure. Sure. I mean, I'll try to get that for you. Just to clarify the question, it was about sort of you were asking about sort of how to extend, what our thoughts are on how to extend Recorlev.
Defend, extend Recorlev.
First and foremost, you should know that we have existing IP today that is Orange Book listed and reads to the label that runs to 2040. I want to make sure you knew about that. We'll continue to work on how to add to that IP portfolio. Additionally, I think MV was making reference to the fact that we're also going to start thinking about other ways to invest in the franchise and in the brand in order to add to its moat. Everything, as she talked about, around new indications, new product types, other formulations. I think there's a host of things we can think about in the lifecycle management. I wanted to make sure I started with, we feel really good about where we are from an IP perspective.
Now this long-term outlook and this opportunity for Recorlev requires us to think, how else and where else might we invest?
Great. Thanks. A question for Josh. Thanks for sharing the detail on the pivotal program for 8121. Just not sure if I caught it or if you had mentioned when you enroll patients, will you be looking for those, maybe stratifying for those who would enter in or out of control? Or is the expectation simply that you'll have some fraction that will go out of control more on oral than on 8121? Thanks.
We're trying to listen to that. It was hard to hear that question exactly.
People coming into the 8121 in phase III are the ones.
Coming into the study.
Yeah. Are you looking to stratify for those who come in baseline out of control? Or are you only looking? Are you taking all comers who have hypothyroidism? How should we think about that?
Yeah. I think so we're taking all comers, but they have to, they'll be screened in. There will probably be some people that will be screen failures. We'll be looking to see how we can then do other types of work with them as we go through this phase III program. They'll all be coming in. All comers will be able to come into the study. I'm looking at the guys. Yeah, they're saying yes.
Okay. Thanks very much.
Yeah.
Thanks, Leland.
I think Nik's in the back. Sorry. He's been holding his hand very carefully. Sorry.
Thank you very much. Nik Gasic, Sagard Partners. Thanks for taking the questions. Maybe first from us, what are some of the gating factors and steps that need to happen to get Recorlev to a billion dollars peak? For instance, how many new field reps would you consider adding towards the end of this year? Are you going to be using new DTC and marketing efforts? How could these strategies really expand the number of physicians you're planning to target for this launch?
Good question, Kevin. I'll let you just go right at it. Happy to try to help you with that a little bit. We haven't exactly nailed down how big we're going to get and at what pace we're going to get bigger. I wanted to clarify that. I think what we've really—you might be familiar—we expanded late last year. We started now to really see the results from that expansion. I talked a little bit about how important it is for us to establish our foundations so that we can build on top of things. Now we're feeling like we're ready for the next phase of expansion. As MV mentioned, we're going to get started on that before the end of the year.
As the long-range plan unfolds, that is where we are going to start looking at how big might it eventually get. As this market continues to expand, we expect it will continue to grow and we will have to invest into it. As she mentioned, we want to invest in some of these other areas too. We want to create some new data. We want to create some new insights around where and how best to screen for patients and make appropriate use of Recorlev for those patients. It is going to be a pretty multifaceted investment into the brand in order to ensure that the journey that we spoke about is on a robust path.
Got it. That's super helpful. And then just maybe on XP-8121, which types of patients do you think are the lower-hanging fruit in terms of early adopters? And do you envision this being more of like a switch to therapy longer term, or could you capture new patient starts who are just starting levothyroxine for the first time?
Yeah. It's a great question. I mean, and I really appreciate you asking it because I think it hopefully helps to clarify a little bit of how we're looking at XP-8121 and its opportunity. We very much see, and as Josh walked through, there's a universe of plus or minus 20 million folks out there with hypothyroidism. Many of them, the majority of them, are well controlled on oral. We're talking about those who aren't well controlled first and foremost. This construct of switch or new to therapy, I think switch is really the way to think about it in the context of they're not well controlled and they're struggling with getting into control, whether they're currently on therapy or off therapy or have been on or off therapy, they're not able to otherwise get in control.
Those are the folks who would most benefit from XP-8121, and those are the folks that we would be primarily targeting for. Sure. I think you heard that from Dr. Bianco and Celi. I mean, clearly those are the places where you would start.
Yeah.
Yeah.
Hi. This is Alex von Reisemann on for David Amsellem, Piper Sandler. Just one from us. What is your desire to add assets where you could leverage your existing commercial infrastructure?
We get that question all the time. I'll start with we don't need to. You just heard the two great opportunities we have to invest in 8121 and Recorlev. That doesn't mean that if something were to fit right in on top of our infrastructure and would allow us to leverage that, as Kevin talked about, that's a key asset that we have that we can leverage, we would look at that. We don't need to. We're in a great spot where we're at today, which puts us in a good position in those situations.
We'd want something that is pretty immediately accretive as well. I think that's important.
We have several questions coming from the online.
Okay. And then we got Chase. We'll get Chase after that. You got one? You want to do one? And then we'll toss it to Chase.
All right. Chase, you can go first. I have a couple here.
Chase Knickerbocker, Craig-Hallum. Maybe just first to dig in a little bit between 8121 peak sales and your market opportunity that you defined. What are your assumptions for pricing and any analogs we should be thinking of there?
I always like to talk about pricing five years beforehand, the launch. So it's challenging to talk about pricing. But what I'll tell you right now, we obviously will talk about that in depth when we get closer to market. But what I'll tell you is we've looked at a number of ranges of prices and pricing models that are all focused on, again, that population of three to five that can't be controlled on orals today and know that we can hit those numbers between $1 billion and $3 billion with a range of pricing models. And we can get closer to that when we get closer to launch on exactly what those are and how they play out. But I don't know, Kevin, you want to add anything else?
Only to add that you used the word analog. There are a bunch of analogs out there and more of them every day in the world of once weekly sub-queue. We too have looked at those analogs. Without going into the specifics, I think there is a lot in there that could be leveraged. None are perfect, but that could be leveraged to help guide the thinking on what might be the right pricing for something that actually solves for a patient population for which there is no other solution.
Do any specific analogs come to mind?
Yeah. No, because the way even we looked through it was more through a blended approach to what have we seen across them because no one of them is perfect.
Yeah. Got it. And then just on trial design, will it be a it would not be a single 54-week read? Would there be a bunch of reads in between? Just kind of how TSH levels will be measured.
Yeah. Oh, I'm sorry. Go ahead.
No, no. Go ahead, Kevin.
No, no. Sorry.
Sorry.
Yeah. No, I love it. Go for it.
Josh made reference to the fact that we're expecting that there'll be an interim readout along the journey. I don't remember exactly where it would be relative to the 54-week mark. Of course, the sites are up. You're loading up patients. They don't all come on at once. They come on over time. Our expectation is that we would be in a position to do some interim reads.
Will there be a TSH read every six to eight weeks? Or how is it going to work exactly?
Yeah. I guess, yeah, sure. I'm getting a nod from Josh's question.
Yeah, yeah.
Those patients, sure.
Yeah. Okay. And then just last, Steve, maybe help us quantify, I guess, mostly on the R&D front, what would be required for the 8121 program. Is a dollar amount per patient a way for us to think about it? And then maybe on the SG&A side too with the rep expansion for Recorlev.
Yeah. Good question. I'll start with the end, which is we can fund all of it. Hopefully, that message came through loud and clear. We're not going to hand out specific guidance on the clinical cost. What I would guide you to is I think, Josh covered that it's 1,000 patients, 54 weeks. Importantly, we're going to make the kind of investment that you would expect with a blockbuster on the back end. It will be a material step up in R&D cost starting in 2026 and beyond. We're not going to give out specific 2026 guidance at this point. On Recorlev, I think Mary Beth touched on the fact that we're going to start the beginnings of another expansion at the end of the year.
At this point, it's not going to change our guide for 2025, but beyond 2026, again, there's going to be a material step up in investment to support the Recorlev commercial expansion.
Right.
Thanks, Chase, for your questions. Appreciate it.
All right. Several questions here, but we'll get to a few of them. How will you balance increasing investment in Recorlev with funding a large phase III study for 8121? Can you do this and be profitable?
Yes. We can. Yeah. Absolutely, we can. It is supported by the growth on the top line, right? And a really healthy gross margin profile. I cannot emphasize that enough. 85% currently and improving as our product mix changes over time. You can see how our product mix is going to change over time with some of the numbers that were shared today. That funds everything.
We said when we go adjusted EBITDA positive, we were going to stay adjusted EBITDA positive. What you saw today and how we're looking at certainly the next five years suggests that we're investing back in the business to create longer-term value, but we're not going to go negative.
Yeah.
Is Xeris open to partnerships to help shoulder the cost of the phase III?
Again, we do not have to. We are always open to partnerships. I mean, there is a real opportunity here with 8121 specifically. If there are opportunities that could add even greater value to the patient communities in this space, certainly we would be open to that.
Okay. Let me just get there. Several relating to the timing of the start of the phase III program. Is there a reason that you're specifically waiting for 2026? Could you start it sooner?
We have taken a very planful approach to how we get this product to market. Again, we see this as a blockbuster opportunity. We see it as a real opportunity to really impact patients' lives. We have been taking our time to work through all the details of a first-of-kind type study with the agency. Josh talked about it. This is complex work here, both from a drug standpoint, a delivery standpoint across a bunch of narrow therapeutic window, a very narrow therapeutic window, and a lot of dosages, right? We want to make sure that we do this in a planful way and move to the market in that respect.
That has really gotten us to a point where we really cannot start until 2026 to really make sure we have everything we need in order to go to market, to go to clinical trial with a product that will eventually go to market. I do not know if you want to add anything to that or.
I mean, other than to say, I think we too recognize it's taken time, but we think it's time well spent, right? This is what you do when you want to be really planful about how to not just create a blockbuster, but being doing seminal work in a space where there has not been work of this type done, frankly, ever. Getting that just right is an important part of setting ourselves up for success so that it goes well.
I think given the time, perhaps, John, you want to provide some closing comments?
Sure. All right. Hey, thank you, everyone, for joining us today at our first-ever investor and analyst meeting. I want to thank you guys for being here. I really want to start by thanking the Xeris employees. Their work has got us to where we are today and really has given us this launching pad for our future. Thanks to the Xeris management team for putting together the story today and being able to share it with you. Thank you to our experts, Dr. Geer, who had to leave, Dr. Bianco, Dr. Celi. Thank you. Thank you so much. Your insights are really helpful. Thank you guys for your engagement, your insightful questions, your shared enthusiasm of our journey. You heard today we are on a long-term journey and just getting started. We have strong revenue growth and the cash we need to fund our future.
We have reached a crucial inflection point, one that positions us for sustainable long-term value creation. Beyond the numbers and the milestones, the core of Xeris remains the same and unchanged. That is relentless focus on improving patients' lives. That is what drives us every day. Thank you. Thank you for your time, your support, your partnership. We look forward to continuing this journey with you. Thanks.