Xeris Biopharma Q1 2025 Earnings Call Transcript

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May 8, 2025

There are 7 speakers on the call.

Operator

Good morning. Thank you for attending today's Verisk Biopharma First Quarter twenty twenty five Results Conference Call. My name is Makayah, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for your questions and answers at the end. At this time, I would like to pass the call over to our Senior Vice President of Investor Relations and Corporate Communications, Alison Way.

Operator

Alison, you may proceed.

Speaker 1

Thank you, Micaiah. Good morning, everyone. We appreciate you joining our call this morning. Today, I'm joined by John Shannon, our CEO and Steve Piper, our CFO. Earlier this morning, we issued a press release with our detailed results, which can be found on our website.

Speaker 1

After our prepared remarks, we will open the line for questions. Before we begin, I'd like to remind you that this call will contain forward looking statements concerning the company's future expectations, plans, projects and financial performance. Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those forward looking statements. For more information on our risks, please refer to our earnings release and risk factors included in our SEC filings. Any forward looking statements on this call represent our views only as of the date of this call and subject to applicable law.

Speaker 1

We disclaim any obligation to update such statements. But please note some metrics we will discuss today are presented on a non GAAP basis. We've reconciled the comparable GAAP and non GAAP figures in our earnings release. Let me pass the call over now to John for opening remarks.

Speaker 2

Thanks, Alison, and good morning, everyone. I'm excited to announce that we're off to an exceptional start this year. In the first quarter, we delivered another record breaking performance, growing total revenue by 48%, a testament to the strength of our strategy and execution. As such, we are raising the bottom end of our revenue guidance from $255 to $260,000,000 increasing our implied full year total revenue growth to nearly 32% at the midpoint of our guidance range. Our momentum is being fueled by the foundation we established in the back half of twenty twenty four.

Speaker 2

Our Q1 success was driven by continued commercial strength across our entire portfolio with RECORLEV leading the charge. RECORLEV continues to distinguish itself as our fastest growing and now our largest product, gaining traction as a uniquely differentiated therapy for patients with hyperchordicillemia and endogenous Cushing's syndrome. At the same time, Gvoke delivered steady growth supported by our ongoing efforts to enhance both awareness and compliance with the medical guidelines. Let's take a closer look at each of the products, starting with RECORLEV. In the first quarter, revenue for RECORLEV was up 141%, exceeding $25,000,000 The average number of patients on therapy grew 124% compared to the same period in 2024.

Speaker 2

This significant achievement is a direct result of the targeted investments we made last year, which were designed to support patient access, enhance healthcare provider engagement and accelerate overall brand performance. These investments have proven highly effective in driving sustained growth and establishing a strong foundation for the future. As we progress through the first half of the year, we are excited by our growth trajectory and remain confident that this momentum will continue to build. We believe RECORLEV is the right product at the right time and expect that it will continue to deliver value for patients and stakeholders alike well into the future. Turning to Gvoke.

Speaker 2

Gvoke continued to deliver steady, reliable growth, reinforcing its position as a key contributor to our commercial portfolio. Q1 revenue of nearly $21,000,000 reflected strong consistent increases in prescriptions, which were up 8% compared to Q1 last year. Our efforts to attract new prescribers while also increasing prescriptions among existing prescribers remains on pace. This growth trajectory reflects the strength of our strategic efforts to expand Gvoke's reach and highlights the value it consistently delivers to both patients and prescribers. As we look ahead, we remain confident in Gvoke's ability to sustain its current momentum as Gvoke remains an important contributor to our growth.

Speaker 2

Finally, let's talk about the durability of KEVINX. Revenues were over $11,000,000 for the quarter, growing slightly over Q4 twenty twenty four. KEVEYIS remains a key product within our portfolio, continuing to serve patients with unwavering support from the medical and patient communities. The average number of patients on KEVEYIS improved slightly in Q1, underscoring our ongoing success in identifying and engaging new PPP patients. New patient starts grew compared to the prior year period, further reinforcing this progress.

Speaker 2

KEVEYIS' resilience highlights the broader value our products bring to patients and health care providers, strengthening our commitment to delivering impactful, reliable treatment options. In addition to our strong Q1 commercial performance, I want to take a moment to highlight a key achievement from this past quarter that reflects the strength of our strategy, discipline and commitment to delivering sustained growth. In March, we proudly announced that the FDA approved our supplemental new drug application for Gvoke VialDx. This approval expands Gvoke's use as an IV administration, enabling its utilization as a diagnostic aid during radiologic examinations. In tandem with the regulatory approval, we also announced a strategic partnership with American Region to commercialize Gvoke Vialdx in The U.

Speaker 2

S. Under the terms of this collaboration, Xerus will be responsible for product supply, while American Regent will oversee commercialization efforts. The partnership is positioned to maximize the market reach and success of VialDx, particularly within the hospital and acute care settings. I want to express my sincere gratitude to the Zerus team, our partners at American Region and the broader medical community for their dedication to making this achievement possible. Together, we're continuing to deliver solutions that improve lives and advance medical practices.

Speaker 2

Building on this momentum, I'd like to highlight the progress we've made within our pipeline, particularly with XP-eight thousand one hundred twenty one. As we stated before, we are really excited about this product and the unmet medical need it can address in the hypothyroidism market. This metabolic condition affects approximately twenty million people in The U. S. We estimate that at least twenty percent of these patients do not consistently meet their clinical goal of normalizing thyroid hormone levels.

Speaker 2

And they cannot reach their goals with oral forms of therapy for a multitude of factors, all of which affect oral bioavailability. If approved, XP-eight thousand one hundred twenty one will be the first and potentially the only self administered therapy designed to overcome these obstacles. As a reminder, the development of XP-eight thousand one twenty one is made possible by our proven XEROSOL technology, a cornerstone of our innovation. Furthermore, XP-eight thousand one hundred twenty one leverages our clinical development, regulatory and commercial infrastructure while expanding our commitment to the endocrinology community. In keeping with our commitment to transparency and open communication, we are pleased to share that we will provide a more comprehensive update of XP 8,121 at our first Analyst and Investor Day scheduled on June 3.

Speaker 2

As a company, we remain focused on the three strategic priorities I outlined back in August of last year when I became CEO. As a reminder, those are: one, drive rapid and sustained growth of our commercial products through improved adoption and utilization two, manage our business with financial discipline, maintaining a healthy balance sheet and funding our growth opportunities while most importantly, not diluting shareholders and finally, enhance our communication and transparency with you, our stakeholders. We have delivered exceptional performance in Q1, further strengthening our outlook for the year ahead. By staying true to our priorities, we are well positioned and even more confident we will achieve our full year financial objectives. Before I hand the call over to Steve for a detailed financial update, I want to emphasize the importance of our first ever Analyst and Investor Day scheduled for June 3 in New York City.

Speaker 2

This event will offer an excellent opportunity to share deeper insights into our strategic vision and the promising initiatives we have planned for the future. I will be joined by several members of the Xerus management team as well as key opinion leaders. And together, we will discuss evolving market dynamics, unmet medical needs and the near and long term outlook for both Recorilev and XP-eight thousand one twenty one. We hope you'll join us for what promises to be an informative and impactful session. We will issue a follow-up press release with further details on the agenda and participation logistics in the coming weeks.

Speaker 2

And with that, I will now turn the call over to Steve, who will provide a comprehensive review of our financial performance for the quarter.

Speaker 3

Thanks, John, and good morning, everyone. We had another record breaking quarter. On a year over year basis, total revenue grew 48% to $60,100,000 while net product revenue increased 44% to $57,800,000 This strong performance marks the fourteenth consecutive quarter of greater than 20% product revenue growth, underscoring our unwavering commitment to our top priority, driving rapid and sustained revenue expansion. RECORLEV net revenue was $25,500,000 up 141% compared to last year. Sequentially, Recorlev net revenue grew $3,000,000 The average number of patients on Recorlev increased 12415% respectively.

Speaker 3

This growth reaffirms our expectation that patient demand in 2025 will meet or exceed the levels we drove in the second half of twenty twenty four. Gvoke net revenue was $20,800,000 increasing 26% versus last year. This increase was attributable to total Gvoke prescriptions growing 8% coupled with lower wholesaler purchases in Q1 twenty twenty four. KEVEYIS net revenue was $11,400,000 up slightly compared to the fourth quarter twenty twenty four. These results reflect the continued resilience of the KEVEYIS brand.

Speaker 3

Other revenue generated in the quarter was $2,300,000 As we announced in March, Xeris received FDA approval for Gvoke VialDx, which triggered a milestone payment that made up a majority of the other revenue in the quarter. As John highlighted, American Region will lead commercialization efforts for this product, while Xerus will maintain responsibility for product supply. Turning to gross margin. Gross margin in the quarter was 85%. Sequentially, gross margin improved by 200 basis points driven by favorable product mix.

Speaker 3

Research and development expenses were $7,800,000 for the quarter relatively flat compared to last year. These expenses were comprised of costs associated with XB-eight thousand one hundred twenty one and continued investment in our technology platforms and partnerships. Selling, general and administrative expenses were $44,000,000 an increase of 15% compared to prior year. The increase in SG and A expenses primarily reflects the impact from the Q3 twenty twenty four RECORLEV commercial expansion as well as other personnel related costs. Rounding out our first quarter results, I'm excited to report adjusted EBITDA in the quarter was a positive $4,400,000 in line with our commentary last quarter and further supporting our commitment to delivering positive adjusted EBITDA going forward.

Speaker 3

Our solid financial position provides us with the flexibility to advance our strategic priorities without the need for dilutive financing. These efforts underscore disciplined approach to financial management and our commitment to delivering long term value. Turning to our near term outlook and guidance. First, it's important to highlight the meaningful strides we have taken in enhancing the financial health of the enterprise. With the recent appreciation in our stock price, we accelerated the redemption of our twenty twenty five convertible notes, reducing our total debt by $15,000,000 and in turn generating interest expense savings this year.

Speaker 3

It is worth noting that there was only a partial impact of the convertible note redemption in the first quarter and the remaining portion will be reflected in our second quarter results. Second, while there has been recent speculation regarding the potential implementation of sector specific tariffs Based on the information available to us today, we do not anticipate any material impact to our operations or financial performance given the vast majority of our operations are U. S. Based. With that context, and as John mentioned earlier, we are tightening our full year revenue outlook.

Speaker 3

We are raising the bottom end of our total revenue guidance from $255,000,000 to $260,000,000 increasing our implied full year total revenue growth to nearly 32% at the midpoint of our guidance range. Further, we continue to expect a modest improvement in gross margin compared to 2024. SG and A and R and D expenses are still projected to increase modestly with a mid to high single digit growth rate relative to 2024. Lastly, I expectation that we will continue to be adjusted EBITDA positive going forward. With that, I'll now hand the call over to the operator for Q and A.

Speaker 3

Operator?

Operator

Thank you. We will now begin today's Q and A session. The first question is from the line of David Amsellem with Piper Sandler. You may proceed.

Speaker 4

Thanks. So I wanted to drill down on the growth you're seeing in Recorlev. I mean, clearly, the overall market is expanding. So I'm wondering out loud, where do you ultimately do you see peak sales potential settling out here just given the market expansion and this evolving understanding of the prevalence of hypercortisolism? That's number one.

Speaker 4

And with this market expansion, how should we think about your commercial infrastructure and the extent to which you're going to be calling on a wider audience of endocrinologists and potentially general practitioners? Thank you.

Speaker 2

Thanks, David. This is John Shannon. Let's start with your second question first. So as you know, we expanded our sales organization in the back half of last year in anticipation and and as we saw this market expansion happening with RECORLEV. So we we saw an opportunity for us to expand in that, and and we made that happen.

Speaker 2

And that's really what's driving a lot of our current growth is is is our expansion in the back half of last year. As for in terms of peak year sales, we haven't changed we haven't updated our guidance on that. We haven't given any guidance on that. But that's something that we are we'll probably give a lot more color to at our analyst and investor day in June. Not probably.

Speaker 2

We will give more color to that. And we think that's a good opportunity for us to lay that out. But we as you can imagine, like like you pointed out here, there's significant expansion going on there, and, we think there's a a great opportunity for us and Recorlev in that.

Speaker 4

If I may squeeze in a a follow-up. I think your your competitor has had multiple Salesforce expansions. I'm alluding to Corcept, the expansion of their commercial organization last year and then also this year. So, I guess my question is, do you anticipate further infrastructure commercial infrastructure expansion, the more recent one notwithstanding?

Speaker 2

So we like you pointed out, we've had two expansions as well. And the last one was was a a 50% expansion of our existing sales organization. So right now, we're good where we're at in terms of our infrastructure. But as this market grows and as the opportunity grows, we see an opportunity for further expansion. And when that comes, we'll see, but it will really follow the market expansion.

Speaker 4

Okay. Thank you.

Operator

Thank you. The next question is from the line of Mahzir Alimonde with Leerink Partners. You may proceed.

Speaker 5

Hi, all. This is Maisie on for Roana. Just, two from us. So the first one is, what are the primary drivers behind, the operational efficiency and the level of profitability improvement that you have? Do you feel that's sustainable as you continue to invest in the commercial organization?

Speaker 5

And then a second one would be, could you just highlight for us if you have some additional color maybe on the key development milestones and strategies for XP eight thousand one hundred twenty one that we should be focusing on and monitoring throughout the remainder of the year? Thank you.

Speaker 3

Yes. So I'll take this is Steve. I'll take the first question around the operational efficiency. Yes, I think as John laid out, one of our priorities key priorities is to remain financially disciplined. And I think we've done just that, just given the guidance that I reiterated.

Speaker 3

And it really starts with driving the growth at the top line. We're seeing significant growth, primarily from RECORLEV. You can see it in the gross margin improvement over the last couple of quarters. And then from an expense management perspective, we're keeping SG and A expenses, R and D expenses relatively in check. So I think that's creating a lot of the operational efficiency that you're seeing in our financial results.

Speaker 3

And as we guided to in March and we reiterated this morning, we expect to be adjusted EBITDA positive moving forward. So you can assume that that's going to carry on into the future.

Speaker 2

And I'll answer your question on the XP-eight thousand one hundred twenty one. The next key milestone is June 3 at our Analyst and Investor meeting. We've been talking about this. We're going to lay out what the opportunity is. We'll be bringing in key opinion leaders as well so people can understand the opportunity that we we can hit with XP eighty one twenty one.

Speaker 2

And and and in there, we'll lay out, more about the development pathway, the regulatory pathway, and that will also be able to lay out timing of various things throughout the next several years. So more to come on that. And just in a few weeks, maybe three weeks away, we'll be ready to talk about all of that.

Speaker 5

Sounds great. Thank you.

Operator

Thank you. The next question is from the line of Jason Doerr with Oppenheimer. You may proceed.

Speaker 3

Hey, this is Jason representing Oppenheimer today, and thank you for taking the question. Piggybacking off the last question, as we wait for more details on the upcoming XP program at the upcoming Investor Analyst Day, are there any details you can preview on the pivotal study design?

Speaker 2

No. I don't think we should do that. Let let's wait for the let's let's wait three more weeks. And and we we Jason, we planned this. We've been talking about this.

Speaker 2

We wanna do this all at once. We wanna lay out what the opportunity is, how we're gonna go about that opportunity. It's a real unmet medical need here, and we really think we can solve it. And we wanna be able to, you know, communicate and articulate that all in once and then help then people can understand how we're gonna develop this going forward. So, and that's why we plan to do this in an analyst investor day on June 3.

Speaker 3

The

Operator

next question is from the line of Chase Knickerbocker with Craig Hallum. I

Speaker 6

actually wanted to ask on the glucagon market here. Can you just kind of give us an update on what you're seeing competitively from your major branded competitors? It relates to kind of any impact that you've seen from any formulary strategy there. And then, just kind of on their sales strategy, are are they driving market growth as well? Or, kind of what have you seen from them competitively, from a commercial perspective?

Speaker 2

Yes. Competitively, I haven't seen much. I think this first quarter, we saw there's occasionally, every other year or every year or so, there's things that change in the formulary aspects. We saw a little bit of that in Q1. I think all of that's behind us.

Speaker 2

From a market growth, we're the ones driving the market growth. The market grew about 5%. We grew eight when I look at prescriptions. And that's really what we're trying to do is focus on driving market growth, getting more and more clinicians compliant with the medical guidelines and getting more and more patients protected. That's what we're doing.

Speaker 2

And by doing that, we focus on the market growth and getting these new patients protected. And we're beating that market growth right now. So that's how we attribute to what our performance is. And I'm really excited about the performance we had in Q1.

Speaker 6

Got it. And on KEVEYIS, a bit better than we had modeled, continues to hold in there. Anything from a formulary perspective there as things kind reset here in Q1? And anything else from a competitive perspective there that we should be watching through the year?

Speaker 2

Nothing from a formulary, nothing from a competitive standpoint. Steve talked about this in Q4 that we kind of found we seem to found the spot where we can really manage KEVEYIS. And we continue to find new patients every quarter, every week. And by doing that, we continue to maintain this brand pretty flat right now. So we feel really good about where where we're at with it and that we see an opportunity to continue to to maintain this pace.

Speaker 6

But just to put a finer point to it, I mean, would you would you would you would expect that, that brand is pretty consistent through the year as typically it's Q1 where we see any potential changes on formulary?

Speaker 2

Yes,

Speaker 3

typically. Although we didn't see it maybe as pronounced this quarter for KEVEYIS specifically. So yes, I think we're expecting that it would kind of live in where we saw Q1's performance for the balance of the year.

Speaker 6

Thanks. And then just last for me on just kind of the tariff side of things. Can you just kind of walk us through where your drugs are manufactured? Any additional kind of context you're willing to give there as the industry kind of prepares for potential sector specific tariffs? Thank you.

Speaker 3

Yes. Thanks, Chase, for the question. So yes, most of our operations, manufacturing operations are U. S. We are a U.

Speaker 3

S.-centric company. So, we do source some materials ingredients, OUS. But again, as I mentioned in my prepared remarks, those have been factored into our guidance. We don't expect any material impact, from the tariffs. So, and to maybe draw a more specific point, we don't source anything from China.

Speaker 6

And finished finished goods and, you know, final manufacturing is in The US?

Speaker 3

Well, yes. Yes. Yes. So no no no impact. No material impact, Chase.

Operator

Thank you. There are no further questions waiting at this time. I would like to pass the call back over to John Shinn for any closing remarks.

Speaker 2

Thank you. Q1 has been another impressive quarter for Ziros, highlighting our sustained momentum and robust performance. We remain dedicated in our commitment to accelerating sustainable revenue growth across our commercial portfolio while ensuring our products continue to improve patients' lives in meaningful ways. We are more dedicated than ever to fostering a transparent communication and strengthening our relationships with all stakeholders. And we look forward to seeing you on June 3 at our Analyst and Investor Day and appreciate your continued confidence in ZERIS Biopharma.

Speaker 2

Thank you.

Operator

Thank you all. This now concludes today's call. We appreciate your participation. Hope you all have a wonderful day, and you may now disconnect your line.

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Key Takeaways

  • Verisk Biopharma delivered a record-breaking Q1 with total revenue up 48% year-over-year to $60.1M and raised the bottom end of full-year guidance by $5M to $260M, implying 32% growth at midpoint.
  • RECORLEV revenue surged 141% y/y to over $25M with 124% growth in patients on therapy, while Gvoke and KEVEYIS achieved steady growth ($21M and $11M respectively) driven by rising prescriptions and patient starts.
  • The FDA approved Gvoke VialDx for IV diagnostic use, and Xeris partnered with American Regent for U.S. commercialization to expand market reach in hospital and acute-care settings.
  • Xeris’s pipeline flagship, XP-8121, aims to address an unmet need in hypothyroidism and will be detailed at an Analyst & Investor Day on June 3.
  • The company maintained financial discipline with positive adjusted EBITDA of $4.4M, an 85% gross margin, and reduced debt by $15M via convertible note redemption, supporting continued investment without dilution.
A.I. generated. May contain errors.
Earnings Conference Call
Xeris Biopharma Q1 2025
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