Hello, welcome to the Jefferies Healthcare Conference. My name is Dennis Ding, Biotech and Spec Pharma R esearch Analyst here. It's a great pleasure of having Xeris Biopharma here, specifically CEO John Shannon, as well as CFO Steve Pieper. Welcome.
Thanks, Dennis. [crosstalk]
Thanks, Dennis.
Before we go into Q&A, would love to hand it over to you, John, just to give a brief overview [crosstalk]--
Sure.
--some opening comments around the company, and just the state of affairs with Xeris today.
Yeah, thanks. For those that don't know Xeris Biopharma, we're a fast-growing commercial biopharma company. We have three commercial products in the marketplace. We just had an outstanding first quarter, with 43% revenue growth. We did $83 million in revenue. We did that on the back of some really solid first quarter growth and actually raised our guidance already, the bottom end of our guidance, this quarter. We've guided to $380 million-$390 million, which is a 30% increase Or at the midpoint. That's a 30% growth rate at the midpoint.
Like I said, we have three commercial products. We have Gvoke, which is a ready-to-use rescue pen for people with diabetes, for hypoglycemia. We have KEVEYIS, which is a rare, ultra-rare product for periodic paralysis. We have RECORLEV, which is really our growth engine. RECORLEV is for hypercortisolemia and Cushing syndrome.
In addition to those commercial products, we have a really exciting pipeline product, XP-8121, which we are on track to get that phase III study started this year. We pegged that at a $1 billion-$3 billion opportunity further out. It's a 2030 launch right now as we're looking at it, that's a $1 billion-$3 billion opportunity. Again, taking advantage of our XeriSol technology to develop a once-weekly subcutaneous version of levothyroxine.
Perfect. Maybe we can start off with RECORLEV. That is one of the most impressive growth drivers within your franchise. Talk about the progress there that you guys have made. Maybe remind us the revenue in Q1 and just how you're thinking about the rest of the year in terms of sequential growth and potential, even acceleration.
Yeah. I think Q1 was a classic typical quarter where there was a lot of early January and February typical payer resets, adjustments of deductibles, and things like that. We saw a typical quarter in that respect. March really came on strong.
The new patient starts, referrals, we set records in all of those aspects for the quarter and primarily driven by March. We saw that again sliding into April, and it's continuing into May. We have really, really solid momentum, growth going on RECORLEV, and it's all coming from the market dynamics that are going on where more and more people are being screened and detected with hypercortisolemia and Cushing's syndrome.
Mm-hmm. Okay. You guys don't formally guide on RECORLEV, is that right?
That's correct. [crosstalk]
Correct. Yeah.
You have to back into it, but is $220 million-$225 million for the full year kind of a reasonable ballpark to assume where RECORLEV should be?
Not a crazy assumption there, Dennis. I think certainly as we've expanded our investment into the commercial infrastructure as well as the field infrastructure for RECORLEV, we expect that demand to further kick up in the back half of the year, which should continue the strong growth trends for RECORLEV. really, that was underlying the raise in our guide and off a Q1 [crosstalk]--
Yeah.
--off of a strong Q1.
Okay. A big part of your initiative was essentially doubling your RECORLEV sales force, right? That pretty much happened in the beginning of 2026. Maybe talk about how you found the talent. How will you slot those in into your existing sales force? Do territories need to be redrawn, or is it just like how you're thinking about that?
Yeah. We basically doubled our total commercial footprint around RECORLEV. It goes beyond just our sales organization. We increased patient services, reimbursement services, pharmacy services, all the things you need to really be successful in this space, and in addition to our sales force. That all was complete by early January. They went through training. They were out in the field by mid-February and really starting to get going. We've done this before, these expansions, because we've been scaling with this market.
It takes six to nine months before they really start to hit their stride. As Steve talks about our RECORLEV growth, all the momentum we got right now is really still coming from prior expansions in the work we've been doing. We're really looking for a kick-up from the new expansion later in the year, back half of the year, third and fourth quarter.
We're still really excited about the growth we're already getting. All of that's underway and so where is that coming from? What it allowed us to do by expanding our sales force to almost double is to expand the reach and depth of the calls we are going on. We're calling on more clinicians, more targets, new prescribers, and then we can go deeper in the prescribers that we already call on.
Many of them have more than the one or two patients we may already have, so spending more time there and sourcing, screening, and finding more patients, and then getting them on RECORLEV is a big part of the game. We're doing both, and that's all underway. In a lot of ways, we were kind of dividing up geography, right? All the new territories are going to have some news and some existing when you do a footprint like that. It's across the country, and it really does focus on where the patients are.
Have you quantified the number of new doctors that you guys have access to with this doubling of the sales force?
Yeah. 12,000-14,000 targeted prescribers will be as part of... [crosstalk]
Going from 12,000 to 14,000.
Going from 6,000-7,000 up to 12,000- 14,000.
Okay.
Yeah.
Okay. Well, that's really impressive and I guess, how quickly does it take, because I'm assuming many of these are new relationships, right? Do you have any kind of historical data in terms of how many visits does it take before a doctor starts being comfortable with prescribing RECORLEV?
Yeah, this is our third expansion.
Third expansion.
The biggest one of the three, but our third expansion. We have a really good kind of understanding and experience in what it's going to take and how they will ramp up. It's a process where you're starting out with getting the clinician to screen and detect patients who today are on some medication that should be working, it isn't working. You find hypercortisolemia, then you got to get a referral written, then you got to get reimbursement, then you got to get them on drug. This takes time.
Like I said, that's why we look at that. The productivity starts to ramp up at six to nine months, and then it keeps ramping on to 12 into 15. Our expansions have been about every 18 months. It'll be some time before we get to peak productivity.
Sure.
It does just kind of scale up and I think we got a pretty good idea on how that path will grow.
Okay. What is your messaging to these doctors in terms of RECORLEV? Because you guys are not the only ones playing in this space. There's also Korlym and Isturisa as well. What is your messaging to doctors, and how do you position your product, or what's the points of differentiation relative to your peers?
Yeah, generally, if we find a clinician who is tracking a patient and their cortisol levels, and once they have a patient that they've got a couple tests on demonstrating them to be 1.82x upper limit of normal, then we would say to the doc, "What do you want to do with that patient?" Right? "How would you like to manage that patient?" If you want to normalize the cortisol levels and you want to be able to measure and watch those cortisol levels come down, and ultimately treat the comorbidities, then RECORLEV is the perfect choice.
We like RECORLEV from that perspective because it really does bring it down slowly and smoothly, and that's really important in this space, to be able to bring the cortisol levels in line. All the other drugs start to work a little bit better.
You start seeing benefits in all the comorbidities, whether it's diabetes, hypertension, obesity, you name it. At the same time, you know you're going after the root cause in this respect and getting cortisol levels in the right place. You want to do that kind of slowly and over time, because as you bring the cortisol levels back into normal range, all the medicines and things start working. You want to be able to be on top of that and adjusting and making sure, from a clinical standpoint, that these patients are getting all the support they need. That's a critical part of what we do.
Okay. Part of that process is dose titrating.
Yeah.
Is there any kind of color in terms of what's the average dose that patients are on across those that are treated? Is this steadily creeping up because there's probably going to be a pricing benefit, or maybe not at all, because there's just so many new patients?
We don't see it steadily creeping up. In this space, clinicians, their mindset is to start low and go slow on the titration. They'll start at lower doses, they'll go slow. If they're getting the effects they want and the impact they want, they won't rush to raise the dosing up. Right? We're bringing on so many new patients, new to therapy, new to drug, that they're all starting low and going slow. We don't really see that as a tailwind for some time.
Our growth would have to slow down, which we don't want, for that to really start to see the difference in dose going up. From our perspective, it's something we watch, it's something we look at. Right now, we don't expect the dose of our average patients and things like that to really run up really quick in the near future.
Yeah.
What's driving all this new patients getting diagnosed and driving them into the treatment funnel? What has happened over the last few years that's really sparked that?
What's really changed is the evidence that when drugs that should be working aren't working, check the cortisol. insulin works, so if you have a patient that's resistant diabetic, check their cortisol. What you'll find is some of them have cortisol levels that are two times above the upper limit of normal. If you solve that, you can solve the problem of diabetes and the resistant aspects of the diabetes. With hypertension, we're seeing more and more of this around obesity. If somebody's on a GLP-1 for three or four months and they're not losing weight, guess what? Go check the cortisol.
You might find the culprit. This is becoming more and more well-known in the community endocrinology, in the primary care space where internal medicine people are really practicing more around this space. It's fueling a lot of this market dynamic that we're all experiencing the benefits from.
Sure. Given that there are so many new patients being driven to getting treated, can you just comment on, for RECORLEV, what proportion of revenue or scripts come from naive patients versus those who have switched?
Yeah. I think it's over 60% of our patients are new to therapy right now, and that's been coming up for the last year from below 50% to over 60%. That's really driven by this market dynamic of the market growing.
We're becoming more and more first line in the minds of many of the clinicians as we get out there wider and wider, calling on physicians. Yeah. It's a good dynamic. We see it going for a while. I think this is something that's still percolating. You'll probably see in a couple of weeks, ENDO, I'm guaranteed you'll see lots of discussions around this at symposium and things like that, because it's really starting to catch on with the physician community.
Can you talk a little bit about persistence? How long is a patient typically on RECORLEV? If they do switch off, what are the top three reasons?
I think when a patient gets through all of the phases of titration and normalization and that, once they're through all that, we've got patients that have been on for 10 years, coming out of our clinical trials and are still on RECORLEV. Persistence could be for a long time, forever. What we see is really in the first three to four months, that's where the work needs to be done in terms of making sure you get those patients through that, getting through a cortisol withdrawal phase. People don't feel that great when the cortisol levels come back into range.
There's a lot of different things that you have to adjust on their other meds. Getting through the first three to four months is the biggest area that we all spend time on, making sure that we can get them through that. Once we do, now we can keep them normalized f or quite a while.
That's not a dynamic that's specific to Xeris... [crosstalk]
No It would be for biologically when you're reducing cortisol.
Yeah.
Okay. How do you help patients manage some of those side effects and some of those symptoms? What are you doing? What are some of your peers doing, perhaps [crosstalk]--
This is... [crosstalk]
--to try to [crosstalk]--
Yeah, it's a... [crosstalk]
--get them to stick here?
Yeah, it's a great question. This is where all of the things you do in these rare diseases really matter. Patient services, when they opt in and they've got a patient advocate they can talk to, and before they talk to their doctor or as they're talking to their doctor, how to put that forward. Pharmacy services. They work with clinical pharmacists every day in terms of making sure we're helping and making sure this is all in doing the right thing.
Then obviously, reimbursement services are really important to make sure that they continue to get it paid for, so they can stay on drugs. All of those things are really important, and we invest heavily in that, and really focus in on that to make sure we can get through that time point and get people started and keep them on drug.
Got it. Remind me, have you given peak sales guidance for RECORLEV?
We have. We've said that we believe RECORLEV could be $1 billion by 2035.
Okay.
We laid that out last year. We're on track, maybe a little bit out of track.
Mm-hmm.
Yep.
We feel really good about that trajectory based on where the market is, what's going on in the market, and our performance to date.
Mm-hmm. Why 2035 specifically?
Well, because when we gave it out in 2025, it was 10 years. It was a straight math.
In terms of, I guess, around the IP and the patents.
Yeah.
what's going on there's been a couple of ANDA filers. Talk about what's going on there. Have you countersued, and what's been the process like so far?
Yeah. Before I go to that, but honestly, I was joking about the 2035.
Yeah.
The thing to remember about this space is you've got to scale and grow this thing. This is not hockey stick stuff, right? This is nice, steady growth, scale as you go. That's why we pointed to 2035 as well. You brought up the patent. We have four filers against us. We sued them all within days of getting the filing. We were expecting the filings. When you have a billion-dollar asset, people are going to come after it.
Here's what I'll tell you. We really feel good and strong about our patent situation. We have four patents that go till 2040, and they all point to methods of use that are truly relevant to the utilization of our drug and other drugs that these patients are on. This gives us a really strong position. We feel very strongly about our patent situation, and we will defend our patents accordingly. It's why we're not slowing down one bit in terms of driving the growth that we think we can. Doesn't change one thing for us, having these filings. We are expecting them, and we are prepared for them and ready to go.
Okay. What are, I guess, some of the bookends in terms of when a generic could launch, right? Is it 2028 on one end and then 2040 on the other end if the Paragraph IV filers lose that litigation?
I don't like to bookend it.
Yeah.
I will just give you two things. 2040, right? I will tell you that we have regulatory exclusivity till mid 2029. There's no way anything you can approve [crosstalk]--
Got it.
--before then. After that, I don't want it. I'm not going to handicap it.
Okay. Well, the midpoint of that is 2035.
But then [crosstalk]--
But look, like [crosstalk] --
--you're really good at math, too.
--the point I'm trying to make is, this is rare disease, and even though you have Paragraph IV challengers.
Yeah.
Right, there is not a huge incentive, in our view and in our experience, for generics to step in much earlier than needed to. Right? Because you guys are growing the market, developing the market. You have these patient services. Generics don't have all that, right?
No.
So then... [crosstalk]
They can't do it. KEVEYIS is a great example of this, right? What we do for KEVEYIS is now three years into generic competition with three generics out there, and we're growing it. Right? This is another case where all the things we do around these products are as important, probably more important in the case of KEVEYIS, than the medicine itself. Right? That's an important aspect of these areas, and KEVEYIS is a great example. There's plenty others where people continue to have great success even if there was generic competition.
Okay, perfect. Maybe shifting gears to the rest of the portfolio. Gvoke [crosstalk]--
Yeah.
--right? That's been a fairly steady grower for the last several years. Talk about the fundamentals around Gvoke and what's driving patients to select that, to use that over some [crosstalk]--
Yeah, I mean... [crosstalk]
--competitive products.
Yeah, the guidelines are pretty clear, right? That anybody that's at risk of severe hypoglycemia should have a rescue glucagon. There are 15 million patients that should have one and less than 1 million do. We see Gvoke as a perfect product for those patients and there's no reason to believe that we can't continue to fuel that growth into the future.
Okay. We both know that what's in guidelines and how doctors would actually implement it or adopt it is very different, right? Ideally, every insulin prescription gets a glucagon with it, but that's not the case. Curious, it's been sort of this dynamic for the last several years. I'm just curious, what efforts are you making or other players in the industry making to kind of grow that awareness, grow that kind of one-on-one link [crosstalk]--
Got it.
--between those two products?
Yeah, I think there's two steps. First, awareness of the guidelines. Most of diabetes is treated by primary care physicians. They don't know the guidelines. Getting awareness of the guidelines, and then getting compliant with the guidelines is another challenge. The goal there is you should have every one of your patients, Doc, who's on insulin or a sulfonylurea should be protected just in case. Right?
How can I help you do that, right? Because you're not going to remember it as you see 17 patients this day every single time. Are there things we can do to help them do that? That it becomes more that standard of care that you just outlined, which is if you write insulin, it automatically goes. That effort, it's hard. We've been doing it for six years, and been growing that steadily. We think we can still do that and continue to drive that growth.
Okay. Remind us how much revenue Gvoke did in Q1?
Did $21-ish million. Yeah.
$21-ish million?
Yeah.
Okay. Were there any sort of dynamics that happened in Q1?
Yeah.
Yeah. Usually, there is a seasonal impact in the new year. I think what we saw was the seasonal impact was a little more pronounced, specifically in the Medicare channel. We're heavily indexed in with Medicare patients. It certainly had an impact on our growth in the first quarter. What we saw is actually a pretty high abandonment rate because of the out-of-pocket cost for patients at the pharmacy.
Really that's more plan redesign impact from IRA. We saw some recovery in March, modest recovery into Q2 in terms of the prescription trends starting to move up. Certainly took a little bit of a step back in the first quarter [crosstalk]--
Yeah.
--which is going to impact our full-year growth [crosstalk]--
Yeah.
--for Gvoke for sure. Like I said, there's no reason to believe that we can't get this product growing again.
Yeah f or sure.
Back to school is typically a big quarter [crosstalk]--
Yeah.
--for Gvoke. Right?
Yeah, maybe more of a first half, second half dynamic. In Q3, we see the back to school pop, the seasonal pop for all rescue glucagon in this space. It's our expectation that that trend will continue.
Okay, perfect. Then lastly, KEVEYIS, seems like it's been fairly stable, if not slightly growing, so that's great. Maybe a brief comment on that if needed.
Yeah, it gets me all excited because it's one of those areas where what we do for patients is really important, and it plays out by people still being on the brand, even with generic competition. It's a great asset where these patients need a product like KEVEYIS, and we're still able to get it to them. We are finding new patients every week. Our team works to help clinicians diagnose and find those new patients every week, and it's pretty exciting for us to get it now at a point where we're starting to grow it a little bit. So
Okay. XP-8121, that's an exciting asset that's going to phase III.
Yeah.
Remind us of the timing of that and just sort of the unmet need here in hypothyroidism with an injection?
Yeah, let me start there. The market. There's 20 million people out there today that are on daily oral levothyroxine. 20 million of them. There's 3 million-5 million of them that just can't get into range because of GI absorption issues, and that is where we could really make a difference, because 8121 is a once-weekly subcutaneous version of levothyroxine, and it bypasses the GI absorption issues, plain and simple. We're excited about that.
We think just in that space, it's a $1 billion-$3 billion market opportunity. Where we're at with it, we are in the process of getting ready to start the phase III. We want to start the phase III with the actual go-to-market commercial presentation.
That's really important in this space because, this is going to be a device-drug combo, and you've got a high-concentration formulation that's going to move through a device, and you need to cover a broad range of doses in this space, and in a narrow therapeutic window. We want to get it right when we go into the phase III with this. This is a place where people sometimes get CRLs later or get delays because they couldn't hit all the doses, so they're bridging and all this kind of stuff. We're like, "No, let's do it right."
Let's get the device perfectly nailed. Let's make sure we use the commercial scaled-up formulation so that we can go into that clinical trial with the actual commercial device. We're taking our time to do that now, rather than worry about it later.
We're on track to get this started this year. Currently, we're still on track, so as soon as we're ready to go, we'll lay out more details around it. We talked about, high level, what our clinical studies look like and timeline. That timeline hasn't changed. It's still a 2030 launch.
We're looking at probably data end of 2028-ish. We're going to give a lot more details on this. We're going to do an R&D day in early fall and be able to walk through all the ins and outs that everybody wants to know, specifically around not only the market opportunity, but the work we're doing on the device and formulation, and then finally, the phase III trial.
Okay. Remind me high level, just the primary endpoint of the phase III.
To get regulatory approval, we will need to show non-inferiority to daily orals.
That'll be one of the key primaries, and we've said that in the past. We're aligned with the agency on that, and we'll get that.
Okay.
We're pretty confident we'll be able to get that [crosstalk]--
Okay.
--because levothyroxine works.
Okay. Non-inferiority at 52 weeks? How does that even work? Like you said, when you're on oral levothyroxine, your efficacy's going to wax and wane.
Yeah.
How do you capture that time within "range" of levo versus yours, which presumably should work better?
Yeah.
We have said that it's at 52 weeks, yes. There's going to be ups and downs, and so we'll be able to give all the details around that when we do our R&D [crosstalk]--
Okay.
--around those specific endpoints, primary, secondary endpoints, all that stuff.
Okay, there is a consideration around time spent within range.
Yes, for sure.
Okay.
Yeah.
Okay, is there a potential scenario where you guys could actually look better, look superior?
Yes, I hope. I always believe so.
Okay.
I'm the optimist. Yeah. [crosstalk]
Yeah.
Okay.
Yes, for sure.
Would that be implemented into the study? Appreciating you just said that non-inferiority is kind of the FDA bar.
That's the goal.
Okay. Initial thoughts on pricing?
We haven't laid that out, but I can tell you that there's a number of pricing models that you can get. To get to using the 3 million-5 million patients I talked about, and the $1 billion-$3 billion that I've talked about, you can do a number of scenarios that can get you there.
Okay, perfect. In the last minute or two, maybe talk about your cash position currently. You guys have committed to remaining EBITDA positive [crosstalk]--
Yeah.
--despite starting this massive phase III. Talk a little bit about that and just overall priorities with capital over the next few years.
Thanks for the question. I joke that Xeris has never been stronger financially. We posted gross margins of 87% in the first quarter, adjusted EBITDA positive again. We've committed to being adjusted EBITDA positive going forward. We generated net income in the first quarter as well. Our cash balance was north of $110 million. With growing adjusted EBITDA this year, that we laid out that expectation as well. It's fair to assume that our cash balance would grow in line with that as well.
Certainly gives us more optionality and flexibility to, as you pointed out, reinvest back into our business, so XP-8121 and also our commercial portfolio as well. Those are our first priorities, and certainly, we have debt. We're looking at our debt position. What can we do there to shore that up? Anything inorganic that we're always looking, but we have to find the right fit that leverages what we do well. Lots of options now that we're in the position we are financially.
Perfect. I think that's all the time that we have, so thank you guys for joining me, and have a great conference.
Thanks. [crosstalk]
Thanks, Dennis.