Executive Summary / Key Takeaways

• Accelerating Commercial Momentum: Xeris Biopharma is experiencing robust growth, driven by its three commercial products—Recorlev, Gvoke, and Keveyis—with total revenue reaching a record $72 million in Q2 2025, a 49% year-over-year increase. This strong performance has led to a raised full-year 2025 revenue guidance of $280 million to $290 million, representing 40% growth at the midpoint.
• Proprietary Technology as a Core Differentiator: The company's XeriSol and XeriJect formulation technologies are foundational, enabling stable, ready-to-use injectable and soluble therapies. This technological edge is crucial for developing innovative products like XP-8121 and maintaining a competitive advantage in niche markets.
• Strategic Investments Yielding Results: Targeted investments in Recorlev's commercial organization, including a 50% sales and patient support team expansion in mid-2024, are successfully capitalizing on the rapidly expanding hypercortisolemia market, driving significant patient and prescription growth.
• Financial Discipline and Positive EBITDA: Xeris has achieved positive adjusted EBITDA, reaching $12.5 million in Q2 2025, demonstrating operational efficiency and a commitment to self-funding growth opportunities without diluting shareholders. The company expects to maintain positive adjusted EBITDA going forward.
• Promising Pipeline and Market Expansion: XP-8121, a once-weekly subcutaneous levothyroxine for hypothyroidism, represents a transformative opportunity addressing a significant unmet medical need for 3-5 million patients. Its development leverages existing endocrinology infrastructure, positioning it as a future growth catalyst.

The Genesis of Growth: Xeris's Strategic Foundation

Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) has evolved into a dynamic commercial-stage biopharmaceutical company, strategically focused on addressing chronic endocrine and neurological diseases within the United States. Since its incorporation in 2005, the company's journey has been marked by a deliberate expansion of its product portfolio and a steadfast commitment to innovation. A pivotal moment arrived with the acquisition of Strongbridge Biopharma plc in October 2021, which significantly bolstered Xeris's commercial footprint by integrating Recorlev and Keveyis into its offerings. This strategic move, alongside the existing Gvoke franchise, solidified Xeris's position in specialized therapeutic areas.

At the heart of Xeris's competitive strategy lies its proprietary formulation technologies: XeriSol and XeriJect. These platforms are designed to overcome the inherent challenges of drug delivery, particularly for medicines that are difficult to inject or unstable in aqueous solutions. The tangible benefits of these technologies include the creation of ready-to-use, room-temperature stable, and highly concentrated injectable formulations for both small and large molecules. This technological differentiation translates directly into enhanced patient convenience, improved adherence, and potentially broader market access for therapies that might otherwise be limited by complex administration requirements. For investors, this technological moat underpins Xeris's ability to develop and commercialize unique products, offering a competitive edge in niche markets and contributing to stronger customer loyalty and recurring revenue streams.

The broader industry landscape presents both opportunities and challenges for Xeris. The hypercortisolemia market, for instance, is experiencing rapid expansion. New evidence increasingly links sustained high cortisol levels to "stubborn" chronic conditions like resistant diabetes and cardiovascular disease, prompting more widespread screening and diagnosis. Similarly, the glucagon market remains significantly under-penetrated, with an estimated 14 million at-risk patients currently unprotected by ready-to-use rescue therapies. In the hypothyroidism space, a lack of innovation for decades has left approximately 20% of the 20 million U.S. patients unable to achieve normal thyroid hormone levels with existing oral treatments, creating a substantial unmet medical need that Xeris aims to address with its pipeline asset, XP-8121.

Xeris operates in a competitive environment, facing larger, diversified biopharmaceutical companies such as Novo Nordisk (NVO), Eli Lilly (LLY), and Pfizer (PFE), as well as specialized players like Corcept Therapeutics (CORT). While larger competitors boast extensive R&D capabilities, global distribution networks, and economies of scale, Xeris differentiates itself through agility and targeted innovation. Its proprietary XeriSol and XeriJect technologies allow for potentially faster development cycles and more patient-friendly formulations compared to the broader pipelines of its larger rivals. For example, XeriSol's benefits could counter Novo Nordisk's scale by enabling faster innovation in niche markets, potentially improving Xeris's market share and pricing power in specialized segments. Against Eli Lilly, Xeris's moat exploits its broader but less targeted approach, leading to stronger gross margins for Xeris in shared areas. In the Cushing's syndrome market, Xeris's Recorlev is positioned as a best-in-class cortisol synthesis inhibitor, directly competing with Corcept Therapeutics' offerings. Xeris's ability to drive market growth in the glucagon space, as evidenced by its increasing new prescription market share, highlights its effective commercial execution against competitors who are not growing share.

Commercial Portfolio: Driving Exceptional Performance

Xeris's commercial portfolio is demonstrating remarkable strength, with each product contributing to the company's impressive growth trajectory. The company's strategic priorities, including driving rapid and sustained growth of its commercial products, are clearly translating into financial results.

Recorlev: The Flagship Growth Driver

Recorlev, approved for Cushing's syndrome, has rapidly emerged as Xeris's fastest-growing and largest product. In the second quarter of 2025, Recorlev net revenue surged by an impressive 135.7% year-over-year to $31.4 million. For the six months ended June 30, 2025, revenue grew 138% to $57.0 million. This exceptional performance was primarily fueled by a 141.3% increase in volume due to prescription growth, with the average number of patients on therapy growing by over 122% year-over-year in Q2 2025.

Management attributes this acceleration to "deliberate and strategic investments," including a 50% expansion of its sales and patient support teams in mid-2024. This expansion is designed to capitalize on the rapidly expanding hypercortisolemia market, which is seeing increased screening and diagnosis due to new evidence linking elevated cortisol to chronic conditions like diabetes. Xeris believes Recorlev offers a "best-in-class profile" for normalizing cortisol levels, a critical advantage in this growing market. The product benefits from strong patent protection extending to 2040, with orphan exclusivity through 2028 and 2029, providing a long runway for sustained growth.

Gvoke: Consistent and Dependable Growth

Gvoke, Xeris's ready-to-use glucagon for severe hypoglycemia, continues to deliver "consistent steady growth." In Q2 2025, Gvoke net revenue increased by 17.1% year-over-year to $23.5 million, and for the six months ended June 30, 2025, it grew 21.0% to $44.3 million. This growth is driven by a steady upward trend in prescription volume, stemming from both new prescribers and increased adoption among existing ones.

The company's sales team is actively working to increase awareness and adherence to medical guidelines, aiming to protect the estimated 14 million at-risk patients who currently do not carry a rescue glucagon. Gvoke's new prescription market share reached 37% as of Q3 2024, indicating effective market penetration. The product's patent protection extends to 2036, offering a "very long runway" for continued expansion. Management also noted a favorable gross-to-net in Q2 2025, which is expected to persist through the year.

Keveyis: Durable Niche Asset

Keveyis, the therapy for Primary Periodic Paralysis (PPP), demonstrates impressive durability despite generic competition. In Q2 2025, Keveyis net revenue was $11.5 million, a 12.5% decrease year-over-year, primarily due to lower volume offset by favorable net pricing. For the six months ended June 30, 2025, revenue decreased 12.6% to $22.9 million.

Despite the revenue decline, the average number of patients on therapy saw a modest increase in Q2 2025, with new patient starts growing. This resilience is attributed to the "tremendous support system" surrounding Keveyis, which is highly valued by both patients and healthcare providers. While generic competitive pressure has led to a "modest negative impact to Keveyis net pricing," Xeris remains confident in its ability to defend the brand, maintaining a stable patient base by continuously identifying new PPP patients and retaining existing ones.

Pipeline and Partnerships: Future Value Creation

Beyond its commercial products, Xeris is actively cultivating future growth through its pipeline and strategic partnerships, leveraging its core technological strengths.

XP-8121: A Transformative Opportunity

The company is "really excited" about XP-8121, a novel, once-weekly, subcutaneous injection of levothyroxine for hypothyroidism. This product aims to address a significant unmet medical need for 3 million to 5 million U.S. patients who struggle to control their condition with daily oral therapies due to gastrointestinal absorption issues. XP-8121 leverages Xeris's proprietary XeriSol technology to develop a unique formulation and a high-precision delivery system capable of reliably administering a wide array of doses. This technological solution is critical in a market that has seen little innovation for decades despite substantial patient need.

Xeris successfully completed Phase 2 studies for XP-8121 in 2024 and is currently engaged in discussions with the FDA for a Phase 3 registrational program. The company plans to initiate patient dosing in its pivotal Phase 3 trial in 2026, with 2025 investments focused on "Phase 3 readiness." The commercial infrastructure, particularly its extensive endocrinology sales footprint and patient/payer support capabilities, is highly leverageable for XP-8121, promising efficient market entry upon approval.

Strategic Partnerships and Other Revenue

Xeris also generates revenue from research collaborations and royalties. In Q2 2025, royalty, contract, and other revenue grew 146.7% year-over-year to $3.8 million, and for the six months ended June 30, 2025, it increased 218.9% to $6.1 million. This significant increase was primarily driven by a one-time milestone payment from American Regent following FDA approval of Gvoke VialDx in March 2025. Gvoke VialDx expands Gvoke's use as an IV administration diagnostic aid during radiological examinations, with Xeris responsible for product supply and American Regent handling commercialization. These partnerships underscore the value of Xeris's XeriSol and XeriJect technologies in enhancing drug delivery for other biopharmaceutical companies.

Financial Strength and Outlook

Xeris Biopharma's financial performance reflects a company in a strong growth phase, underpinned by increasing operational efficiency and disciplined capital management. The company has consistently delivered greater than 20% product revenue growth for 14 consecutive quarters, a testament to its commercial execution.

In Q2 2025, total revenue reached a record $71.5 million, a 49% increase year-over-year. For the six months ended June 30, 2025, total revenue was $131.7 million, up 48.4% from the prior year. Gross margin for Q2 2025 was 82%, with the six-month period at 84%. While Q2 saw a slight dip due to non-routine Gvoke capacity expansion costs, the overall trend points to a "modest improvement" in gross margin for 2025, driven by a favorable product mix.

Operating expenses are being managed with a focus on strategic investments. Research and development expenses increased by $2.3 million (39.9%) in Q2 2025 to $8.1 million, reflecting pipeline investments, particularly for XP-8121. Selling, general, and administrative expenses rose by $4.4 million (11%) to $44.4 million in Q2 2025, primarily due to the Recorlev commercial expansion initiated in Q3 2024. Despite these investments, Xeris reported positive adjusted EBITDA of $12.5 million in Q2 2025, a nearly $13 million improvement year-over-year. This follows a positive adjusted EBITDA of $4.4 million in Q1 2025 and over $8 million in Q4 2024, signaling a sustained shift to profitability.

The company's liquidity remains robust, with cash resources deemed sufficient to sustain operations and capital expenditure requirements for at least the next 12 months from the 10-Q filing date (August 7, 2025). Net cash used in operating activities significantly decreased to $9.8 million for the six months ended June 30, 2025, from $30.7 million in the prior year, primarily due to higher sales.

Debt management has also been strategic, with $15.2 million in 2025 Convertible Senior Notes converted into common stock in March and April 2025, reducing total debt and generating interest expense savings.

Looking ahead, Xeris has raised its full-year 2025 total revenue guidance to $280 million to $290 million, representing 40% year-over-year growth at the midpoint. This upward revision reflects confidence in the accelerating demand for Recorlev and consistent performance from Gvoke and Keveyis. Operating expenses (SG&A and R&D) are projected to increase by a low to mid-teens percentage year-over-year, reflecting continued strategic investments in Recorlev's commercial footprint and XP-8121's Phase 3 readiness. Management is committed to delivering continued positive adjusted EBITDA, underscoring its ability to self-fund growth and avoid shareholder dilution.

Risks and Challenges

While Xeris's growth trajectory is compelling, investors should consider several pertinent risks. The company operates in a highly competitive biopharmaceutical market, where larger players with greater resources could intensify competition. Market volatility, global credit market instability, and geopolitical events (such as the ongoing conflicts in Russia-Ukraine and Israel-Hamas) could adversely impact the company's ability to access capital or affect its supply chain.

Xeris relies on single-source suppliers and manufacturers, making it vulnerable to disruptions. Furthermore, while management does not anticipate a material impact from potential sector-specific tariffs, given its U.S.-centric operations, any unforeseen trade policy changes could affect its cost structure. Future equity financing, if required, could lead to shareholder dilution, and new debt could impose restrictive covenants. Despite the durability of Keveyis, generic competitive pressure continues to impact its net pricing, a dynamic that requires ongoing vigilance.

Conclusion

Xeris Biopharma is firmly establishing itself as a compelling growth story in the specialized biopharmaceutical landscape. Its strategic focus on chronic endocrine and neurological diseases, coupled with its differentiated XeriSol and XeriJect technologies, provides a strong foundation for sustained expansion. The exceptional commercial performance of Recorlev, Gvoke, and the durable Keveyis brand, as evidenced by record revenues and consistent growth, validates the company's targeted investments and operational discipline.

The commitment to positive adjusted EBITDA signals a significant financial turning point, enabling Xeris to self-fund its ambitious growth initiatives, including the transformative XP-8121 pipeline asset. While competitive pressures and market risks are inherent, Xeris's technological leadership and strategic execution position it to capitalize on expanding markets and unmet medical needs. Investors should monitor the continued acceleration of Recorlev, the progress of XP-8121 into Phase 3, and the company's ability to maintain its positive adjusted EBITDA as key indicators of its long-term value creation potential.