Company Overview and History

Xeris Biopharma Holdings, Inc. (XERS) is a growth-oriented biopharmaceutical company committed to improving patients' lives by developing and commercializing innovative products across a range of therapies. With a diverse portfolio of three commercially available products and a robust pipeline, Xeris has established itself as a formidable player in the endocrinology and specialty pharmaceuticals markets.

The company's history can be traced back to its founding in 2011, when it set out to revolutionize the delivery of medicines through its proprietary formulation technologies, XeriSol and XeriJect. These non-aqueous platforms have enabled Xeris to create a range of ready-to-use, liquid-stable, and highly concentrated injectable formulations, offering patients and healthcare providers a more convenient and effective alternative to traditional drug delivery methods. In 2018, Xeris took a significant step forward by going public, using the proceeds from its initial public offering to advance the development of its lead product candidate, Gvoke.

Commercial Products

Xeris' first major commercial success came in 2019 with the launch of Gvoke, a ready-to-use liquid glucagon for the treatment of severe hypoglycemia in people with diabetes. Gvoke's unique formulation and easy-to-use administration, including its innovative auto-injector design, have quickly made it a go-to option for patients and caregivers, driving its rapid adoption and market share growth. In the third quarter of 2024, Gvoke delivered $22.9 million in net revenue, a 29% increase compared to the same period in the prior year, and its market share of the retail TRx glucagon market had grown to approximately 36% as of October 2024. The estimated total addressable market for Gvoke is approximately $5 billion in the United States.

The company's endocrinology expertise was further bolstered in 2021 with the acquisition of Strongbridge Biopharma and the addition of Recorlev, a cortisol synthesis inhibitor approved for the treatment of endogenous Cushing's syndrome. This acquisition also brought Keveyis into Xeris' portfolio, expanding the company's commercial capabilities and diversifying its revenue streams. Recorlev has been a standout performer for Xeris, with net revenue reaching $17.7 million in the third quarter of 2024, a remarkable 119% increase year-over-year. The demand for Recorlev has been fueled by its ability to safely and effectively normalize cortisol levels in patients with this rare and debilitating condition. The estimated total addressable market for Recorlev is approximately $3 billion in the United States.

Rounding out Xeris' commercial portfolio is Keveyis, the first therapy approved in the United States to treat hyperkalemic, hypokalemic, and related variants of Primary Periodic Paralysis (PPP). Despite facing generic competition, Keveyis has maintained its position as a trusted treatment option, generating $12.2 million in net revenue in the third quarter of 2024. However, this represents a 23.1% decrease compared to the same period in 2023, due to lower volume and unfavorable net pricing. The estimated total addressable market for Keveyis is greater than $0.5 billion in the United States.

Financials

Xeris' financial performance has been impressive, with the company reporting record total revenue of $54.3 million in the third quarter of 2024, a 12% increase compared to the same period in the prior year. This growth was driven by a 27% year-over-year increase in net product revenue, marking the 12th consecutive quarter of over 20% product revenue growth.

For the most recent fiscal year, Xeris reported revenue of $163.91 million, while experiencing a net loss of $62.26 million. The company's operating cash flow (OCF) for the same period was -$47.02 million, with free cash flow (FCF) at -$49.29 million.

In the most recent quarter, Xeris reported revenue of $54.27 million, representing a 12.3% increase year-over-year. The net loss for the quarter was $15.74 million, with OCF at -$8.31 million and FCF at -$8.39 million.

Looking ahead, Xeris has raised its full-year 2024 revenue guidance to $198 million to $202 million, up from the previous guidance of $190 million to $200 million. This increase reflects the strong performance of the business in the third quarter of 2024.

Liquidity

The company's strong balance sheet, with $69.4 million in cash, cash equivalents, and short-term investments as of September 30, 2024, provides ample resources to fund its continued expansion and pipeline development. Xeris has tightened its 2024 ending cash guidance to $68 million to $72 million, from the previous range of $60 million to $75 million.

Xeris' debt-to-equity ratio stands at -8.38, indicating a higher level of debt compared to equity. The company has a $200 million term loan facility with Hayfin Services LLP, of which $150 million was drawn as of September 30, 2024. Additionally, Xeris has $15.2 million in additional term loan capacity available to redeem its existing convertible notes.

The company's current ratio of 1.79 and quick ratio of 1.29 suggest a healthy short-term liquidity position, with sufficient assets to cover its short-term liabilities.

Pipeline and Future Prospects

Looking ahead, Xeris' robust pipeline holds significant promise. The company's lead pipeline candidate, XP-8121, is a novel formulation of levothyroxine for subcutaneous administration that has the potential to revolutionize the treatment of hypothyroidism. Positive topline results from a Phase 2 study were reported in October 2022, and Xeris is now preparing to engage with the FDA to discuss the path forward for a Phase 3 pivotal program.

In addition to its internal development efforts, Xeris has leveraged its XeriSol and XeriJect platforms to establish several partnerships with leading pharmaceutical companies, further expanding the reach and applications of its proprietary technologies. These collaborations not only generate valuable revenue streams but also validate the versatility and transformative potential of Xeris' formulation capabilities.

Challenges and Risks

Despite the company's impressive achievements, Xeris is not without its challenges. As with any biopharmaceutical company, Xeris faces the inherent risks of drug development, regulatory approvals, and commercialization. Additionally, the company's reliance on third-party suppliers, including single-source suppliers, and its ability to protect its intellectual property and proprietary technology could impact its long-term success. Over the past several years, Xeris has faced challenges common to many growth-stage biopharmaceutical companies, including managing its supply chain, navigating the regulatory environment, and building a commercial infrastructure to support the launch and growth of its products.

Conclusion

Nonetheless, Xeris Biopharma's strong track record of execution, innovative pipeline, and financial stability position the company as a compelling investment opportunity in the dynamic and ever-evolving landscape of the pharmaceutical industry. With its unwavering commitment to improving patient lives and its proven ability to capitalize on emerging market opportunities, Xeris Biopharma is poised to continue its trajectory as a leading player in the endocrinology and specialty pharmaceuticals space. The company's raised revenue guidance for 2024 and its consistent product revenue growth demonstrate confidence in its continued success and market expansion.