Xeris Biopharma Holdings, Inc. (XERS) is a growth-oriented biopharmaceutical company dedicated to improving patients' lives by developing and commercializing innovative products across a range of therapies. With a diverse portfolio of commercial products and a robust pipeline of promising drug candidates, Xeris has carved out a unique niche in the highly competitive pharmaceutical industry.

Business Overview and Financial Highlights

Xeris was founded in 2011 with the goal of developing innovative pharmaceutical products using its proprietary non-aqueous formulation technologies, XeriSol and XeriJect. The company initially focused on developing a ready-to-use, liquid-stable glucagon formulation for the treatment of severe hypoglycemia in patients with diabetes. In 2018, Xeris Pharma, the predecessor to Xeris Biopharma, completed its initial public offering and began trading on the Nasdaq Global Select Market. The company used the proceeds from the IPO to advance the development of its lead product candidate, Gvoke, the ready-to-use glucagon formulation.

A significant milestone in Xeris' history came in 2021 when it acquired Strongbridge Biopharma, a company with two commercial products - Keveyis and Recorlev. This transformative acquisition expanded Xeris' commercial portfolio and pipeline. Following the Strongbridge acquisition, the combined company was renamed Xeris Biopharma Holdings, Inc. in October 2021.

Over the past few years, Xeris has faced challenges in manufacturing and supply chain disruptions, which impacted the consistent supply of its products. The company has worked to address these issues by implementing process changes with its contract manufacturing partners and investing in capacity expansion efforts. Despite these challenges, Xeris has continued to drive growth in its commercial franchises and advance its pipeline.

Financials

Financially, Xeris has weathered the challenges of the industry with resilience. As of the latest reported quarter ended September 2024, the company's total revenue stood at $60.099 million, reflecting a 12% year-over-year increase. This robust top-line performance was driven by the strong demand for Xeris' commercial products, particularly Gvoke and Recorlev.

Gvoke, a ready-to-use, liquid-stable glucagon for the treatment of severe hypoglycemia in pediatric and adult patients with diabetes aged 2 years and above, has been a standout performer. For the three months ended September 30, 2024, Gvoke net revenue increased by 29.4% to $22.94 million, driven by higher volume (21.5%) and favorable net pricing (7.9%). For the nine months ended September 30, 2024, Gvoke net revenue increased by 23.1% to $59.57 million, also due to higher volume (18.4%) and favorable net pricing (4.7%). The estimated total addressable market for Gvoke is approximately $5 billion in the United States.

Recorlev, a cortisol synthesis inhibitor for the treatment of endogenous hypercortisolemia in adult patients with Cushing's syndrome for whom surgery is not an option or has not been curative, has demonstrated impressive growth. Recorlev net revenue increased significantly by 118.9% to $17.73 million in the three months ended September 30, 2024, driven by higher volume (111.6%) and favorable net pricing (7.3%). For the nine months ended September 30, 2024, Recorlev net revenue increased by 111.0% to $41.66 million, again due to higher volume (95.2%) and favorable net pricing (15.8%). The estimated total addressable market for Recorlev is approximately $3 billion in the United States.

Xeris' third commercial product, Keveyis, the first therapy approved in the United States to treat hyperkalemic, hypokalemic, and related variants of Primary Periodic Paralysis (PPP), has faced some challenges. Keveyis net revenue decreased by 23.1% to $12.19 million in the three months ended September 30, 2024, due to lower volume (18.0%) and unfavorable net pricing (5.1%). For the nine months ended September 30, 2024, Keveyis net revenue decreased by 10.1% to $38.41 million, primarily due to lower volume (12.6%), partially offset by favorable net pricing (2.5%). The estimated total addressable market for Keveyis is greater than $0.5 billion in the United States.

Overall, Xeris' product revenue grew 27% year-over-year in the most recent quarter, while total revenue grew 12% year-over-year. The company's net income for the most recent quarter was -$5,113,000. It's worth noting that Xeris currently only sells its products in the United States.

Liquidity

The company's robust financial performance has enabled it to invest in its pipeline, with a focus on advancing its lead candidate, XP-8121, a novel formulation for once-weekly subcutaneous administration of levothyroxine. The positive results from the Phase 1 and Phase 2 studies have bolstered Xeris' confidence in the potential of XP-8121 to address the unmet needs of patients with hypothyroidism.

As of the most recent report, Xeris had over $69 million in cash. The company has raised its revenue guidance for 2024 to $198 million to $202 million, up from the previous guidance of $190 million to $200 million. Additionally, Xeris has tightened its ending 2024 cash guidance to $68 million to $72 million, from the previous range of $60 million to $75 million.

Risks and Challenges

Despite its impressive growth trajectory, Xeris is not without its challenges. The company's reliance on third-party suppliers, including single-source suppliers, for the manufacturing of its products and product candidates poses a significant risk. Any disruption in the supply chain or the inability of these suppliers to meet Xeris' requirements could adversely impact the company's ability to develop, obtain regulatory approval for, and commercialize its products.

Moreover, the highly competitive nature of the pharmaceutical industry, with the potential for new entrants and the development of competing products, could also pose a threat to Xeris' market share and profitability. The company's success will depend on its ability to maintain its competitive edge, continually innovate, and effectively navigate the regulatory landscape.

Future Outlook and Guidance

Xeris' management team has demonstrated a strong commitment to driving the company's growth and creating long-term value for shareholders. The company has provided guidance for the full year 2024, expecting to generate total revenue in the range of $198 million to $202 million, representing a 20% to 23% increase compared to the prior year.

Looking ahead to 2025, Xeris is well-positioned to continue its growth trajectory. The company anticipates a 30% year-over-year revenue growth, with expected total revenue between $255 million and $275 million. This guidance reflects the strong demand for Xeris' commercial products, as well as the potential contributions from its pipeline, including the anticipated progress of XP-8121 towards regulatory approval and commercialization. Xeris has stated that they will provide detailed financial guidance for 2025 when they release their year-end results in March.

Conclusion

Xeris Biopharma Holdings has emerged as a resilient and innovative player in the pharmaceutical industry, navigating the challenges with a steadfast focus on improving patients' lives. The company's diverse portfolio of commercial products, coupled with its robust pipeline and commitment to research and development, positions it well for continued growth and value creation. As Xeris navigates the evolving industry landscape, investors will closely monitor the company's ability to execute on its strategic initiatives and capitalize on the significant market opportunities ahead. With its strong performance in key products like Gvoke and Recorlev, and its promising pipeline leveraging proprietary formulation technologies, Xeris Biopharma Holdings appears poised for continued success in the biopharmaceutical sector.