Xeris Biopharma Holdings, Inc. (XERS) Earnings

Management highlights

• Revenue growth: First quarter net product revenue up 43%, raising full year revenue guidance to 380-390 million with over 30% growth. • Recoralev: Commercial expansion completed, enhancing sales force and patient support, with growth driven by new patients, expected to contribute more in second half. • GVOC: Impacted by Medicare changes, but expected to recover with untapped growth potential. • Cabeas: Continued strong performance, highlighting brand durability. • Pipeline: XP81-21 progressing, on track for phase three later this year, leveraging existing technology and expertise. • Priorities: Focus on revenue growth, pipeline advancement, and disciplined financial management

Guidance

• Raised low end of total revenue guidance to 380-390 million from prior 375-390 million. • Expect R&D expenses to increase ~25 million year-over-year due to XP81-21 phase III initiation. • SG&A expenses expected to increase ~45 million, primarily from RecorLab commercial expansion. • Committed to positive adjusted EBITDA in 2026, growing vs 2025

Segment performance

First quarter net product revenue grew 43% to over 82 million. Recoralev had 95% growth, reaching 50 million (a $24 million increase), driven by record referrals and new patient starts. GVOC generated nearly $21 million, slightly below expectations due to Medicare policy changes affecting patient coverage and out-of-pocket costs, but expected to recover. Cabeas had 4% growth, with revenue ~12 million, showing brand strength. Recoralev contributed about 61% of net product revenue (50/82.5), GVOC ~25% (20.8/82.5), Cabeas ~14% (11.9/82.5)

Risks & headwinds

• Risks associated with forward-looking statements, including uncertainties causing actual results to differ from expectations. • Risks related to Medicare policy and plan changes impacting GVOC's performance. • Risks related to the success of pipeline advancements like XP81-21

Analyst Q&A

• Q: Good morning. Thanks for taking the questions and congrats on a nice quarter here. Can you maybe just help us understand a little bit more on the g vote dynamics were there any actual formulary changes in the quarter or are these strictly kind of redesigned dynamics and then if it's the latter uh can you just give us some thoughts on you know why you guys might be getting a little bit more impacted than some other assets particularly you know your competitor in the ready to use space

  A: So a couple of things there. One is there's always pay or change resets that happen in the first quarter. There's probably a couple of small changes that are in there. Nothing really big. It's primarily the Medicare resets. And as I said, that really impacted pay. deductibles, and mostly out-of-pocket costs, especially in the first quarter for GVOC. And we saw that pretty standard in the first part of the quarter, and then it started to creep back up a little bit in March, but not quite as much as we would expect. And we can see that it was primarily in Medicare. So, you know, we're confident we know where it's at and what's going on there. And then in terms of, you know, Did it affect vaccine in Medicare? Yes, it did. We can see that in the data. But overall, you know, vaccine probably has a very much a very different split of their their channel mix than we do. We are you know, we've we've always done very well in the Medicare space. And I think this hit us particularly harder than than our competitors.

• Q: And then a follow up there and then and then one on record. So just on another one there on with the with the redesign dynamics, I mean, would you expect a pretty significant recovery in the second half then as as some of these beneficiaries hit catastrophic? And then second, just on record, can you help us understand if you're seeing any benefit yet from the commercial team expansion. You know, maybe discuss the top of the funnel a little bit if there are some early indicators on, you know, some benefit from those new reps

  A: Yeah, so, you know, back to GVOC, yes, we expected to recover. We feel good about that. And, you know, there's 15 million people out there, again, that don't have a ready-to-use rescue med And and and we need to get it in their hands. So there's plenty of opportunity. We'll continue to drive that. And we feel good about the long term potential of GVOTE. With Recoralev, yes. I mean, it's you know, we saw an unbelievable start to the quarter. And driven by record new starts, record referrals at the top of the funnel, as you indicated. But understand this, we don't really think we'll see the real kind of, you know, kind of drive and expansion till later in the year. We know from prior experience, this takes six to nine months for them to really fully hit stride. And so, you know, that that real push will come more in the back half of the year.

• Q: Hi, this is Georgia Bank on the line for Dennis Ding. Thank you so much for taking our questions. Two for me. One, despite, you know, some Q1 payer resets and any winter-related disruption, record lives you know, showed strong sequential growth. Maybe you can help unpack what's driving that underlying momentum a little bit more and what you're seeing in terms of any recovery from seasonal dynamics as you move through March and April and to May. And then given the raised low end of guidance, how much contribution from the January commercial expansion is already assumed in your outlook versus what still represents upside as the team ramps through the year

  A: Well, let me start with, you know, kind of the payer resets. I think we saw typical resets specifically around Recorlev. And then and then and then as March kicked in, we continued to grow. And that growth really comes into play with. The market dynamics. There are still there's lots and lots of people with that are being tested and screened and diagnosed with hypercortisolemia. And we're in a perfect position now with our expanded field organization to capture more and more of those patients and get them on drug. So so and we see that will continue to progress forward. throughout the year. Steve, you want to? Yeah, I'll take the, good morning, Georgia. Yeah, I'll take the second question on the guidance. So I think, you know, based on our prepared remarks, Recora Lab performed better than our initial expectations. And that's part of the reason why we, you know, raised the bottom end of our guidance. The contribution from the expanded commercial footprint was already embedded in our original guidance. And, you know, that's predicated on history, our experience with these expansions. So I think that's what's already assumed, you know, in our guidance of 380 to 390.

• Q: Hi, thanks for taking my questions and congratulations on a very good quarter. Maybe just two from me, I'll switch gears a little bit. Can you just update us on your latest capital allocation thinking, especially as things track better than anticipated? And then secondly, can you just update us on the gating factors between now and starting the 81-21 trial that needs to be done

  A: Yeah, why don't I start with 81-21? You know, as I said, we're on track. We're hitting our, you know, milestones this year. We're on track to start this trial by the start of the year. But what I've also said is that we're not going to start this trial until we have kind of the go-to-market commercial presentation ready. It's really important that we start this trial with the go-to-market presentation. So what we're doing now and what we've been doing over the last several months is really scaling up all of that, the device, the formulation, the commercial scale formulation, and then putting those two things together before we put, start the trial. So we're going to get all that stuff done prior and we're on track to do that. And again, And, you know, we'll stay on pace, and we'll share more about that later this year as we kind of do a full kind of program review later in the fall. And then, Brandon, from a capital allocation perspective, yeah, certainly the performance of the business is, you know, driving towards, you know, a healthy and in Healthier balance sheet, that gives us a lot of optionality with our business. I would say first and foremost, we're focused on reinvesting in the business for growth. So that's kind of the primary lens by which we're deciding on where to invest our next dollar. And then obviously, we have options around what we can do with our balance sheet and our capital structure in terms of debt. That's always it's always an option for us. But I'd say primarily we're focused on things that that are going to drive additional growth.

• Q: Hey, everyone. It's Jason on for Leyland. Congrats on the quarter. To what degree is there appetite to expand the pipeline beyond 8.1.21? And, you know, if there's appetite there, would that involve bringing in external innovation, something to tune it for CoreLove, or would that be more on the end of developing new molecules with the Xerosol, Xerojet technologies

  A: Jason. You just heard Steve talk about, you know, our flexibility around our capital and the fact that our performance is driving our ability to do more things. And we'll focus those things on growth. So things that can drive growth will be, you know, the areas we'll spend that capital on. And, you know, if that's future pipeline, yes. If it's external, inorganic things, yes, especially if they fit in and allow us to leverage our capabilities, both from an R&D perspective as well as from a commercial perspective. So we're looking at all those things with an eye on growth. additional growth.

• Q: Hi, good morning. Thanks for taking our question. This is Alex Von Reesman on for David. So firstly, looking at RecorLiv, can you help give us a better sense of what kinds of patients are getting the product? And how are you thinking about other subgroups of patients beyond uncontrolled hypertension and uncontrolled type 2 diabetes? And then secondly, regarding the expansion of the sales force, can you remind us how many reps you have in the field, how many doctors they're targeting, and the audience breakdown

  A: Thanks, Alex. Well, our patients are coming from, our patients are, I think I've said this before and they continue on the same path. About 60% of our patients are new to therapy, naive to drug. So most of them are, you know, firstly, first diagnosed and coming in to Recoralev. And then the rest are coming from probably switches and from the various other products on the market. In terms of, well, your next question was around- Number of reps. Oh, number of reps. And targets. Yeah. Yeah. I think we raised our targets from about seven, eight thousand to somewhere in the twelve thousand range. So we probably added about six thousand targets out there with the expansion. We're up to around 80 reps. And then we've also expanded our patient services, reimbursement services and capabilities around pharmacies. So all of those things, you know, support the revenue growth that we're seeing and are anticipating. I think you also asked another question around subgroups of patients. I think the thing to think about our patients are all of these patients have hypercortisolemia. They have cortisol levels at 1.8 above the upper limit of normal or even higher. And all of them have other comorbidities that really, you know, constitute Cushing syndrome. And it's across the board. I think, you know, obviously there's probably some skew towards diabetes, resistant diabetes, but it's really across the board, all the various comorbidities